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NM’s venue statute makes shopping for juries legal

A00_jd_28jun_forum-shoppingCopyright © 2015 Albuquerque Journal

Whether it’s called justice for the “little guy” or stacking the deck, attorneys filing wrongful death lawsuits stemming from events that occurred elsewhere are flocking to Santa Fe and Las Vegas, N.M., with hope juries there will give clients much bigger verdicts than would juries in other parts of New Mexico.

While elusive verdict and settlement data can’t prove their hopes true, a jury in Santa Fe this year did return the largest verdict in state history, $165 million against FedEx for a crash that occurred near Las Cruces, and verdicts of more than $50 million from Santa Fe haven’t come as a shock to the legal community.

Plaintiff’s attorneys say that not only is the practice legal, but it’s also necessary to get fair trials for grieving families and prompt change in companies mistreating New Mexican communities.

But civil defense attorneys and industry advocates say it’s a trend that is exploiting state law and giving New Mexico a reputation as anti-business.

A 2014 report from the U.S. Chamber of Commerce ranked New Mexico as having one of the 10 worst lawsuit climates for business in the nation. And a claims data report from Zurich, a billion-dollar insurance company that does business in New Mexico, ranked the state as having the highest per-hospital patient rate of medical malpractice lawsuits and the second-highest per-patient amount awarded by juries in the nation.

Legislators have twice tried to change the law to constrain lawsuit locations, including a bill that failed this year, and they plan to try again.

Common practice

Looking for an advantageous place to file a civil lawsuit is called forum or venue shopping, and it is a common and accepted legal step.

For instance, attorneys for a man claiming a medical malpractice incident learn that he has a bad reputation in his small town and know that selected jurors there will likely know about the reputation, so they want to file the lawsuit in another jurisdiction.

From the defendant’s side, attorneys for the local hospital being sued would likely want to keep that lawsuit in the local community, where employees, their families and clients might favor the hospital.

If the man survived the alleged malpractice, New Mexico law would limit where he could file to three places: where the incident happened, where he lives or where the business is registered.

But if the man dies, a 1996 state law says the plaintiff can pick a fourth option where to file: where the personal representative for the man’s estate lives.

A personal representative is both a figurehead of the lawsuit, and an intermediary between the family and the attorney. Often a family member will serve in this role.

But since the law says anyone may serve as a personal representative, attorneys may find or hire a personal representative in any jurisdiction they choose, allowing the lawsuit to be brought there.

Two prize destinations

Plaintiff and defense attorneys acknowledge a widely held perception that juries in Santa Fe and Las Vegas are more willing to rule against corporations and return big judgments for the plaintiff.

While verdict and settlement data is not collected to prove this perception, attorneys filing suits often hire personal representatives in those two districts.

“It is true that there are many plaintiffs’ attorneys who do prefer to have their cases tried in counties such as San Miguel, Rio Arriba and Santa Fe, compared to other venues that are perceived to be more conservative,” said Journal pollster Brian Sanderoff, demographer, jury consultant and president of Research & Polling Inc.

More people in Santa Fe tend to report being more educated, liberal and Anglo than areas in the southern parts of the state, Sanderoff said. The population in Rio Arriba and San Miguel counties report as more native Hispanic and feeling more empowered by heavy participation in local government than Hispanics in southern New Mexico.

“Some plaintiffs’ attorneys believe these Northern New Mexicans are more suspicious and skeptical of large corporations,” Sanderoff said. “South and eastern New Mexico is much more conservative socially and politically than north-central New Mexico, and some attorneys believe that conservative juries or a jury with people like that are more likely to believe in things like personal responsibility and less likely to render large compensatory awards or punitive damage awards.”

Protecting a ‘little guy’

Kathy Love, incoming president of the New Mexico Trial Lawyers Association, acknowledges that attorneys do file suits in northern jurisdictions to access their more plaintiff-friendly juries, but that it’s not done in a “sneaky or nefarious way.” It’s done, she said, to protect the “little guy” from big corporations that have hefty resources or from a skewed jury pool that won’t give the case a fair hearing.

LOVE: Practice is not "sneaky or nefarious"

LOVE: Practice is not “sneaky or nefarious”

“So if they don’t want to sue in the same small town where the hospital that killed their child delivers hundreds of babies, employes hundreds of people and treat thousands … well, I say more power to them,” Love said of clients who chose to file a suit using a hired personal representative. “You are the little guy vs. the big guy.”

And juries in northern New Mexico tend not to be friendly to the big guys.

“We find that juries in Santa Fe are skeptical of big corporations. There are fewer jurors who are entrenched in medical or corporate jobs,” she said.

The largest award against a business ever in the state was handed down in Santa Fe in January. In that case, the jury awarded $165.5 million to the families of three Texans killed in a crash with a FedEx truck outside of Las Cruces.

That case was filed in Santa Fe because FedEx had a registered presence there, not because of the personal representative role, but the case could have been filed in Las Cruces or the victims’ residence of El Paso.

Love said that, while the perception has historically been that Santa Fe and Las Vegas are more plaintiff-friendly than other parts of the state, a recent $67 million jury verdict in Las Cruces in one of her firm’s cases shows that perception might be shifting.

“I think that the tide is changing, and now citizens everywhere are skeptical of insurance companies and corporations that maximize profit over safety,” she said.

Attorney Dennis Murphy in Santa Fe works as a personal representative. He said the perception is changing from northern vs. southern districts to rural vs. urban districts.

“There have been some huge verdicts in Roswell, and 10 years ago, you would never hear of such things,” Murphy said. “Those rural communities tend not to be as financially generous.”

But it hasn’t shifted yet.

In the same case in which her firm won $67 million in Las Cruces, Love’s firm filed suits against the same defendants in Santa Fe. Still, Love said filing the suits in Las Cruces would be “taking a chance.”

‘Forum fabrication’

The state’s coalition of civil defense attorneys, who represent people and businesses being sued, says perception of how much money a client can get out of a jury shouldn’t have any part in deciding where to file cases.

They also say that, if plaintiffs can show a genuine reason they can’t get a fair hearing in their local community, there is a way to move cases to a neighboring jurisdiction instead of hiring someone who lives in a targeted venue.

“I call it forum fabrication,” said John Bannerman, a defense attorney active in recent legislation aimed at tightening the venue statute. “It’s totally unfair, and it’s being done just to enhance judgments.”

He says a cursory survey of court records since 2005 shows more than 400 cases that have used hired personal representatives in Santa Fe and Las Vegas that otherwise would had to have been filed elsewhere.

Sean Garrett, president of the New Mexico Defense Lawyers Association, calls this practice venue manipulation and warns that, not only does it unfairly burden businesses with higher judgments than local communities would, but it also burdens court systems in Santa Fe and San Miguel counties and is inconvenient to small businesses that must travel hours to defend their case.

GARRETT: Trend burdens court systems

GARRETT: Trend burdens court systems

And, Garrett said, it is often small businesses that are sued, not just large corporations.

Another main complaint from Garrett is the discrepancy between where a suit can be filed if the person is alive and where it can be filed if the person dies. He says the law should be the same for both scenarios.

“The problem is that it essentially gives unfettered access to any venue, which is contrary to the purpose of the venue statute and quite different from cases where the plaintiff has not passed away,” Garrett said.

Garrett and his association filed a brief with the Supreme Court when the court was hearing an appeal in a case involving a personal representative hired to establish venue.

The court acknowledged in several cases it has heard that the current laws allow more open forum shopping, but that it is up to the Legislature to change the statute.

Bannerman said economic consequences on top of inherent unfairness of “venue fabrication” mean it’s time for the Legislature to change the statutes.

He worked on legislation in the last session along with numerous associations, including the New Mexico Association for Commerce and Industry, New Mexico Hospital Association, New Mexico Medical Society, New Mexico Restaurant Association, New Mexico Health Care Association, New Mexico Mining Association, and New Mexico Oil and Gas Association.

The bill, HB 395, did not make it out of House Safety and Civil Affairs Committee under Chairman Bill Rehm, R-Albuquerque.

“The only reason they are selecting this personal representative is the lawyer they hired told them they might get them a higher verdict if they file in Santa Fe,” Bannerman said. “The question isn’t whether or not it’s legal. Is it something the citizens want?”