New York City courts are No. 2 in the latest Judicial Hellholes® rankings of the nation’s worst courts, released today by the American Tort Reform Foundation. After a year of rampant lawsuit abuse, mounting fraud schemes, and novel liability claims targeting tech titans, the city barely missed the top spot, coming in second to Los Angeles.
Mayor-elect Zohran Mamdani is poised to intensify this litigation trend. Transition team co-chair and former Federal Trade Commission Chair Lina Khan recently signaled that City Hall will pursue aggressive lawsuits against leading tech firms. ATRF warns that with political leaders eager to broaden liability and a judiciary embracing novel claims, New York City’s courts are likely to see even more headline-grabbing cases.
Every New Yorker pays a $2,534 annual “tort tax” — that’s more than $10,000 per year for a family of four and an 8.5% increase when compared with the previous year. Excessive litigation also leads to nearly 430,000 jobs lost across the state each year.
Novel Product Liability for Tech & Auto Companies
The courts broke new ground this year by permitting novel product liability claims against tech companies. In a landmark case, a judge allowed a parent’s wrongful death suit to proceed against TikTok and Instagram after a subway surfing tragedy, advancing claims for defectively designed algorithms, failure to warn, and negligence.
“While this is an undeniably tragic circumstance, expanding product liability in this manner opens the floodgates for lawsuits blaming online platforms for real-world harm,” said Tiger Joyce, president of the American Tort Reform Association. “This judge could have applied existing law fairly and consistently, but instead chose to stretch the law and embrace new theories that could have sweeping, unintended consequences across entire industries.”
Courts are also weighing whether they can impose an unprecedented duty of care on automakers by holding them liable for criminal thefts, even if the vehicles meet all applicable federal and state safety requirements. The New York Court of Appeals heard oral arguments in October.
“Fraudemic” Plagues the Courts
New York City is a hotspot for unsupported, exaggerated, and suspicious lawsuits, where courts are a playground for opportunistic trial lawyers and fraudsters to coordinate complex schemes, spanning multiple industries. Many companies are beginning to fight fraud with federal RICO lawsuits, but ATRF notes that this rise in RICO filings is indicative of a complete system failure.
“RICO lawsuits shouldn’t be necessary to achieve accountability, but New York City’s courts are so entrenched in fraud and abuse that businesses are left with no other choice,” Joyce said. “It’s not just legal jargon — this is a real and growing crisis driving up insurance rates, inflating housing costs, and siphoning away billions from the economy. Unfortunately, some judges perpetuate the problem by failing to hold bad actors accountable.”
Fraud schemes often target foreign-born workers with limited English proficiency, sometimes pressuring them into invasive surgeries to enhance claims. Victims are often left in debt to predatory lenders due to the prevalence of lawsuit lending in these schemes. A recent report from the Partnership for New York City further highlights how the state’s liability laws and expansive court decisions worsen the affordability crisis.
“To maintain the integrity of our civil justice system and to properly equip judges and parties in litigation with the facts, the legislature must subject lawsuit funding contracts to discovery, and disclosure to the court. As the saying goes, ‘sunlight is the best disinfectant,’” said Tom Stebbins, Executive Director of the Lawsuit Reform Alliance of New York.
Persistent Problems Clog Courts and Bog Businesses Down: New York City courts remain popular for asbestos claims, ADA suits that target small businesses, and bogus food and beverage class actions. Mid-year data for 2025 shows a nearly 25% increase in asbestos filings, which continue to produce nuclear verdicts® as evidenced by a record-breaking $117 million verdict in May.
“New Yorkers deserve a legal system that protects — not exploits — them,” Joyce said. “When judges allow unethical practices to flourish and lawmakers refuse to act, honest New Yorkers foot the bill for the city’s Judicial Hellhole® reputation. Without action, the city will remain a magnet for legal gamesmanship and a national embarrassment.”
State lawmakers in Albany continue exacerbating problems by pushing bills to expand liability, earning the legislature the title of “Lawsuit Inferno” for the second consecutive year.
The full 2025-2026 rankings and report are available at JudicialHellholes.org.
