New York City, long accustomed to the spotlight, achieves a less-than-enviable No. 4 ranking in this year’s Judicial Hellholes® report — a troubling, yet familiar, revelation.
The American Tort Reform Foundation’s latest report highlights concerns spanning lawsuit abuse under the Americans with Disabilities Act, allowing predatory lawsuit loans, nuclear verdicts, abusive food and beverage litigation, and impacts of the state’s outdated scaffold law. Meanwhile, pending legislation in Albany seeks to expand liability in wrongful death lawsuits statewide, casting a shadow over the city’s legal landscape.
Tom Stebbins, Executive Director of the Lawsuit Reform Alliance of New York, said “Every industry in New York, our small businesses, doctors, hospitals, and local governments are drowning in expensive litigation. The state leads the nation in abusive, lawyer driven lawsuits filed under the Americans With Disabilities Act. Our courts are the top jurisdiction for ridiculous class action lawsuits that consistently benefit lawyers instead of consumers. As we grapple with city and state budget cuts, reduced tax receipts, skyrocketing healthcare costs, and our small business owners continue to navigate the fall out from the pandemic, the last thing New York needs is more lawsuits and more money wasted on liability. But the New York State legislature isn’t getting the message. Lawmakers in Albany are proposing bills to actually make it easier and more lucrative for lawyers to file class action lawsuits, and they’re sending a bill to Governor Hochul that will devastate the healthcare system and increase insurance costs for every New Yorker. Albany needs to focus on making our lives better, not making wealthy trial lawyers even richer.”
While ADA Title III lawsuit filings nationwide decreased 24% in 2022, filings in New York federal courts increased 14%. In the first half of 2023, New York had 36% more filings than California, historically the most popular state for such lawsuits.
ATRF says small businesses particularly are impacted, especially with increasing website accessibility lawsuits. In the past, ADA cases focused on physical locations. But with attention shifting to digital accessibility claims, and serial testers exploiting legal nuances, small shops must navigate complex legal terrain. New York is the epicenter of this litigation trend – 70% of ADA digital accessibility claims nationwide were filed in New York last year.
“Very few claims involve individuals facing real injury from lack of access,” Tiger Joyce, president of the American Tort Reform Association said. “Most cases are filed by firms and serial plaintiffs making vague, conclusory allegations.”
The U.S. Supreme Court had a chance to weigh in on ADA “serial testers” this year – individuals who file duplicative lawsuits claiming various violations of the ADA. Ultimately, the plaintiff voluntarily dismissed the case; it’s unclear whether the Supreme Court will issue an opinion.
While New York’s outdated “scaffold law” contributed to the state’s Judicial Hellholes® designation in the past, ATRF points to a novel legal obstacle in potentially staged injury claims in New York City. The centuries-old law imposes strict liability for gravity-related injuries.
“The scaffold law, originally intended to protect construction workers, devolved into an unfortunate price of doing business in New York, accompanied by a lack of accountability for workers’ negligence or recklessness,” Joyce said. “Lawmakers can revise this law to allow businesses to operate without the threat of crippling legal action while maintaining reasonable worker protections.”
ATRF says the scaffold law is a driving factor behind many of the nuclear verdicts for which New York City’s become a hot spot — damage awards that exceed $10 million — citing several of the year’s high-dollar awards from in the latest Judicial Hellholes® report.
The report also points to manipulation tactics, like “anchoring,” which trial lawyers use to drive up awards. New York law permits requesting specific dollar amounts for damages. So, lawyers suggest unreasonably large award amounts before juries, which then becomes an “anchor” point in juries’ minds.
In 90% of the cases where trial lawyers asked juries to award more than $20 million, the jury awarded at least the level requested.
“New York’s generous liability laws result in excessively high awards,” Joyce said. “The economic impact of these verdicts is significant, burdening businesses and slowing economic growth.”
Data reveals that New Yorkers pay a “tort tax” of more than $2,013 each year – one of the highest in the nation. Meanwhile, more than 375,000 jobs are lost every year due to excessive tort costs.
“Lawmakers in Albany seem unaware of the impacts on everyday New Yorkers of the state’s deteriorating legal system,” Joyce said. “Rather than addressing these issues, they pursue more liability-expanding legislation, meaning New York City may remain a Judicial Hellhole® indefinitely.”
After Democratic Gov. Kathy Hochul vetoed the Grieving Families Act last year, legislators passed a similar version once again. The bill would expand the state’s wrongful death laws, allowing unlimited and subjective damages for grief or anguish, potentially increasing both wrongful death lawsuits and accompanying awards, according to ATRF.
It would also make the state an outlier in its approach to wrongful death liability. Most states allowing subjective damages for emotional harm impose limits, especially in medical malpractice cases, but the bill includes no such caps. This year’s Judicial Hellholes® report also includes a “Closer Looks” section analyzing trending expansion of state wrongful death acts.
Trial lawyers know New York City is a haven for lawsuit abuse and invest millions on ads to recruit more clients. In 2022, spending on nearly 757,000 local legal services TV ads across New York state media markets exceeded $55 million, with around 60% of the spending concentrated in New York City.
For a comprehensive dive into New York City’s legal woes in the full section in this year’s Judicial Hellholes® report, visit JudicialHellholes.org.
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