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CLEANING UP THE COURTS
Federal reform sweeps class action suits from Illinois’ cluttered dockets.
When President Bush made tort reform a key part of his
second term’s domestic agenda in 2004—presaging the successful
passage of the first major federal tort reform bill in a decade—he
debuted his legal-reform road show in that county-court poster child for
runaway litigation, Madison County, Illinois.[82]
At the time, Madison County had been named the nation’s worst “Judicial
Hellhole” for three straight years.[83]
The county’s courts well deserved the title. On top
of its role as a national center for asbestos litigation and one of the
country’s most favorable venues for malpractice suits, Madison County
had emerged as the forum of choice for Trial Lawyers, Inc.’s class
action litigators. By their sheer size, class action suits—cases
aggregating thousands, if not millions, of plaintiffs into a single claim—can
force deep-pocketed corporate defendants to capitulate and settle, no
matter how trivial or specious the suit, rather than risk trial in forums
like Madison County.[84] The process nets millions
of dollars for the lawyers—and pennies (or less) for their clients.[85]
The steady stream of verdict and settlement money from
downstate Illinois courts had long allowed Trial Lawyers, Inc. to be a
generous campaign contributor, and the judges of Madison County could
rely almost exclusively on contributions from plaintiffs’ lawyers
to bankroll their election bids (see “Buying Justice,” pages
14–15).[86] This corrupt dynamic epitomizes
what billionaire trial lawyer Dickie Scruggs has fondly labeled the “magic
jurisdiction,” where the “judiciary is elected with verdict
money” and where “it’s almost impossible to get a fair
trial if you’re a defendant.”[87]
Evolution of a Magnet Court
Once Trial Lawyers, Inc. had established Madison County’s
reputation as a mega-verdict venue, class action filings there skyrocketed,
rising a staggering 5,000 percent from 1998 to 2003.[88]
Filings in neighboring, similarly pro-litigation St. Clair County soon
followed suit, rising 1,100 percent from 2002 to 2004 alone.[89]
During 2003 and 2004, Madison County judges gave the go-ahead to nearly
200 class action suits, the highest per-capita rate in the nation.[90]
Like a magnet, the county was attracting speculative filings from around
the country.
Leading the charge was Brad Lakin, the county’s most
frequent class action filer, who followed a simple and effective business
model: identify a standard industry practice; dig upa plaintiff supposedly
injured by that practice; craft a nationwide class action against the
major players in that industry; and tailor the details of the suit to
prevent removal to a federal court.[91] Lakin would
then punch out “cookie cutter” suits—reiterating the same
charges against scores of different defendants, in batch after batch of
identical pleadings, right down to the misspellings and typographical
errors.[92]
 The hallmark of these Madison and St. Clair class actions—and
what cements the counties’ status as magic jurisdictions—was
that filings typically involved out-of-state claims, led by out-ofstate
plaintiffs, often even invoking out-of-state law. One Madison County judge
certified a nationwide class action brought by two unhappy Barbie-doll
collectors against California-based Mattel for manufacturing too many
special-edition Barbies—and seeking damages for a nationwide class
of plaintiffs under California’s consumer-protection laws.[93]
In another case, Madison County judge Philip Kardis green-lighted a national
class action case by Christopher Gridley alleging fraud against State
Farm Mutual Automobile Insurance Company; Gridley was a resident of Louisiana,
had purchased his car and his auto insurance in Louisiana, and State Farm’s
alleged fraud had taken place in Louisiana.[94] The
threat posed by Madison County’s class action courts to the national
system of interstate commerce was very real indeed: a small-town judge
and jury could perform end runs around the laws of other states, and even
Congress, rewriting the rules for consumers all over the country.[95]
A Change for the Better?
Given the state of affairs in Madison County, it’s
little wonder that President Bush made class action reform the first major
economic effort of his second term. The resulting federal Class Action
Fairness Act, signed into law in February 2005,[96]
has put a damper on some of the most flagrant forum shopping and is a
major reason why Madison County dropped from the Number One spot to Number
Four on the American Tort Reform Association’s Judicial Hellhole
list in 2005, while St. Clair County dropped from Number Two to Number
Five.[97]
One Madison County judge
certified a class action against
Mattel for manufacturing too
many special-edition Barbies.
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In addition, a shakeup in the state judiciary has had
a major impact on Madison County’s class action problem. In 2004,
the most expensive judicial race in American history saw Republican judge
Lloyd Karmeier defeat plaintiffs’ lawyer and former appellate-court
judge Gordon Maag to win a seat on the Illinois Supreme Court, a seat
that for 34 years had been held by Democratic judges beholden to the trial
bar.[98] Soon after, that court overturned two out-of-state
class action plaintiff verdicts, and in the Christopher Gridley case,
ruled that Illinois’ consumer-protection law does not apply to transactions
that take place outside the state.[99] (Gridley’s
chastened lawyers say that they’ll refile their case in his home
state of Louisiana.)[100]
The Karmeier election confirmed that Illinoisans increasingly
recognize the need for legal reform. This dawning public awareness was
made manifest in May 2005, when members of a Madison County jury openly
questioned why a Missouri plaintiff should be able to file suit in Illinois.[101]
Presiding judge Nicholas Byron was so rattled that he declared a mistrial.[102]
Byron—who received 81 percent of his 2002 reelection campaign funds
from the trial bar—was recently dismissed as chief judge of the county’s
civil division, yet another positive indicator of Madison County’s
prospects.[103]
So there are growing signs that Madison County’s
free ride for class action forum shoppers is over. Despite a stampede
to the courthouse in the days before the Class Action Fairness Act took
effect—over 80 class action suits were filed in downstate Illinois
courts the week before President Bush signed the bill[104]—the
law nearly halved the class actions filed in Madison County in 2005, and
only one class action has been filed there so far this year (see graph).[105]
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FEDERAL FAIRNESS
Early last year, after trial-lawyer crony and former Democratic
minority leader Tom Daschle had been voted out of his U.S. Senate
seat, 18 Democrats defied the lawyers’ lobby and voted with
Senate Republicans to pass the long-stalled Class Action Fairness
Act (CAFA).[106] Signed into law in February
2005, CAFA has put the brakes on some of the rampant forum shopping
that passes for civil justice in Madison and St. Clair Counties
and in other class action mills around the country.
 The new federal law doesn’t entirely remove the class action
racket from state courts. It does, however, force big, national
suits—those involving over $5 million in damages and more than
100 plaintiffs, a third or more of whom are from out of state—into
federal court,[107] where pleading standards
are tougher and judges appointed for life are not indebted to trial-lawyer
political contributors.
By establishing federal jurisdiction when at least one-third of
plaintiffs are from out of state,[108] CAFA
also puts the kibosh on some tried-and-true ploys to block removal
to federal court. Under earlier jurisdictional rules, if at least
one defendant and one plaintiff were from the home state, the case
could not be removed to federal court. Class action attorneys typically
abused this pre-CAFA “diversity jurisdiction” rule by,
for instance, suing a local pharmacy in a broader lawsuit against
a big out-of-town drugmaker.[109]
Finally, CAFA sets limits on attorneys’ fees in class action
settlements.[110] Settlements like the 2002
Madison County verdict that dispensed $80 in coupons to class members
while forking over $84.5 million to lawyers are a thing of the past
in federal court.[111]
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82. See Press Release, President Discusses Medical
Liability Reform (Jan. 5, 2005), available at http://www.whitehouse.gov/news/releases/2005/01/20050105-4.html.
83. See American Tort Reform Foundation, Judicial Hellholes 14
(2004).
84. Cf. Richard A. Epstein, class acTIons: The need for a hard
second look, Manhattan Inst. Civ. Just. Rep. no. 4 (Mar. 2002), available
at http://www.manhattan-institute.org/pdf/cjr_04.pdf.
85. See, e.g., Lester Brickman, Anatomy of Madison County (Illinois)
Class Action: A Study of Pathology, Manhattan Inst. Civ. Just. Rep.No.
6 (Aug. 2002), available at
http://www.manhattan-institute.org/pdf/cjr_06.pdf.
86. See Generally Illinois Lawsuit Abuse Watch/IllinoisCivil Justice
League, Justice For Sale: The Judges of Madison County (Oct. 3, 2002)
[hereinafter Justice For Sale].
87. Scruggs, supra note 10.
88. See American Tort Reform Foundation, supra note 20,
at 22.
89. See id. at 26.
90. See id. at 21.
91. See John H. Beisner & Jessica Davidson Miller, Class Action
Magnet Courts: The Allure Intensifies, Manhattan Inst. Civ. Just. Rep.
No. 5, at 3 (July 2002), available at http://www.manhattan-institute.org/pdf/cjr_05.pdf.
92. Sanford J. Schmidt, Debate Renews in Wake of Record Class Action
Filings, Telegraph (Alton, Ill.), Jan. 4, 2004.
93. See Steve Korris, Barbie Suit Settles in Madison County,
Madison County Rec., June 29, 2005.
94. See Gridley v. State Farm Mutual Ins. Co., 840 N.E.2d 269 (Ill.
2005).
95. See BeIsner, supra note 91, at 7-8.
96. 28 U.S.C. §§ 1332(d), 1453, 1711-1715 (2006); see
Press Release, President Signs Class-Action Fairness Act of 2005 (Feb.
18, 2005), available at http://www.whitehouse.gov/news/releases/2005/02/20050218-11.html.
97. American Tort Reform Foundation, supra note 20, at 7, 10–11.
98. See Douglas L. Whitley, Improvements on the Judicial Front,
sTar (Tinley Park, Ill.), Nov. 6, 2005.
99. Price v. Phillip Morris, Inc., No. 96236, 2005 Ill. LEXIS 2071 (Ill.
2005); Avery v. State Farm Mutual Auto. Ins. Co., 805 N.E.2d 801 (Ill.
2005); Gridley, 840 N.E.2d 269.
100. Chicago Automobile Trade Associastion, CATA Bulletin (Dec. 5, 2005).
101. Paul Hampel, Jurors Battle Image of Plaintiff Paradise, St.
Louis Post-Dispatch, June 26, 2005, at C1.
102. American Tort Refom Foundation, supra note 20, at 22.
103. See Justice For Sale, supra note 86, at 4; Ann Knef,
Stack to Head Madison County’s Civil Division, Madison County
Rec., July 18, 2006.
104. See Paul Hampel, Reality May Stymie Desired Effects,
St. Louis Post-Dispatch, Feb. 19, 2005.
105. See Shruti Date Singh, Madison County Goes Quiet, Crain’s
Chicago Bus., Sept. 11, 2006.
106. S. 5, 109th Cong. (1st Sess. 2005) (enacted) (codified as 28 U.S.C.
§§ 1332(d), 1453, 1711-1715 (2006)), roll–call vote available
at http://www.senate.gov.
107. See id. at § 4; 28 U.S.C. § 1332(d)(2)–(4).
108. See id.
109. See, e.g., Testimony by Hilda Bankston, Senate Committee on
the Judiciary, July 31, 2002, cited in John H. Beisner et.al., One Small
Step for a County Court . . . One Giant Calamity for the National Legal
System, Manhattan Inst. Civ. Just. Rep. No. 7, at 15 (Apr. 2003).
110. S. 5, 109th Cong. § 3; 28 U.S.C. § 1712.
111. Trisha L. Howard, Lawyers Profit Most in Suit, St. Louis Post-Dispach,
March 31, 2004, at A1.
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