On June 16, surrounded by representatives of the medical community and others who fought a long battle for the passage of legislation that effectively ends lawsuit abuse in Mississippi, Gov. Haley Barbour signed the Tort Reform Act of 2004. The new law takes effect September 1.
Among the key provisions included in House Bill 13: strong venue reform; reasonable limits on non-economic damage awards ($500,000 for the medical industry and $1 million for general businesses); strong joint and several liability reform; strong innocent retailer provisions; and sensible protections against punitive damages for medium and small businesses.
That same day, the Wall Street Journal posted an editorial hailing Mississippi’s landmark legislation: “Doctors have fled or quit practicing, 71 insurance companies have pulled out, and a recent study by a local business group predicted the loss of 10,000 more jobs by 2009 without some legal reform.”
“There’s no such thing as perfect legislation, but the tort reform legislation Mississippi lawmakers passed in the special session is an enormous step forward, and an improvement from what we had before,” said Tupelo physician J. Edward Hill, M.D., president-elect of the American Medical Association. “The Mississippi State Medical Association (MSMA) worked very, very hard along with the business community and with the help of many people in the State Legislature to get that done. They should be highly commended.”
MSMA president Steve Parvin, M.D., said Mississippi physicians are happy with the new law, but remain concerned about the cost and availability of medical malpractice insurance rates.
“Will the insurance companies come back into the state and write insurance that physicians can afford? If they don’t, then more work needs to be done,” he said.
Mississippi insurance commissioner George Dale said the new law should improve both factors, but not anytime soon.
“It’ll take a while,” said Dale. “The insurance industry doesn’t react very fast on anything. There are a number of lawsuits that still have to work themselves through the system under the old law. We have gotten calls from companies that write other forms of insurance that have indicated they are going to return to the marketplace, and we have letters on file from two major players in the insurance market. They’ve thanked us for our efforts on tort reform and are ready to come back.”
Hill predicted it would take five to seven years to find out if the new law would have any true impact in the liability premium levels for physicians.
“If we’d gotten a lower cap on non-economic damages, the impact would have been sooner,” he said. (The Mississippi business community had lobbied for a $250,000 cap on non-economic damages.)
The new law will hopefully slow down physician early retirements and relocations out-of-state, said Parvin.
“Because of the legal climate, I had friends leaving the state who were young people in their early 30s and 40s, not physicians nearing retirement age,” he said. “Most physicians in Mississippi are very loyal to the state and don’t want to leave, but when you’re paying $100,000 for medical malpractice insurance, you can’t afford to stay here. The new law will hopefully deter older people in restrictive practices from early retirement, but we won’t know until we see what happens in the market.”
Even though business groups across the state are cheering the good news, the Mississippi Supreme Court remains the ultimate rule-making authority over the state court system.
On May 13, the state’s highest court took an important step in curbing the abuse of mass tort litigation in the state when it reversed a $48-million judgment against Janssen Pharmaceutica Inc. and Johnson & Johnson (J&J), and separately reaffirmed a previous ruling ordering separate trials for plaintiffs taking a prescription drug.
“The Supreme Court’s recent decision about Janssen Pharmaceutica will help us short-term, and legislative changes will help us long-term,” said Parvin. “The ruling significantly changed the legal climate as far as trying to reduce a lot of this ‘mad tort,’ as we call it, where doctors are being sued to get venue in state courts perceived as much more favorable, instead of federal courts, where they should be tried.”
On June 14, the Mississippi Supreme Court and the Mississippi College School of Law co-sponsored a class action symposium to gather information to assist the Supreme Court in making a determination whether to adopt a class action rule, and if so, how to craft the rule. Panelists were divided over whether the need exists for a class-action rule, with several pointing out that it could be used in consumer litigation to benefit plaintiffs with small claims who could not afford to bring suit alone.
“Mississippi needs to add a class action rule,” said Don Barrett, a plaintiff attorney from Lexington. “For a wrong, there must be a remedy.”
Plaintiff attorney Dick Scruggs of Oxford said Mississippi is the only state that does not have some sort of class action rule. “There is no justifiable reason that the citizens of Mississippi shouldn’t have the same rights and remedies of every other state and the federal courts,” he said. “We are leaving Mississippi residents who are generally poor and vulnerable to consumer abuse and business abuse (with problems) which would otherwise go unaddressed.”
Gary Garfield, vice president and general counsel of Bridgestone/Firestone North American Tire, who does not condone class action in a mass tort suit, said that by allowing it, “you are affecting the substantive rights of not only the defendant, but the substantive rights of unrepresented class defendants.”
House Judiciary B Committee chairman Ed Blackmon (D-Canton), who tried to bar passage of comprehensive tort reform legislation during the regular and special legislative sessions, said he opposes adoption of a class action rule modeled on federal Rule 23.
“I hope we stay as far away from the Rule 23 as we can,” he said. “Instead, I think our focus ought to be on an intrastate MDL (multi-district litigation).”
Supreme Court Chief Justice James W. Smith Jr. said the matter had been under consideration for months, along with a few other possible rule changes. He also said he would not make a hasty decision, but would solicit views and opinions from the bench and bar and carefully ponder all input on the issue before making a decision on whether to adopt class action Rule 23 of the Federal Rules of Civil Procedure.
In November, four of the nine state Supreme Court seats will be up for grabs: District 1 (Central), Position 1, now held by Justice William Waller Jr.; District 1 (Central), Position 2, now held by Justice James E. Graves Jr.; District 2 (Southern), Position 3, now held by Justice Michael Randolph; and District 3 (Northern), Position 3, now held by Justice George C. Carlson Jr. The position held by Justice Waller has a 14-month delay between election and the beginning of the term. Only two of the nine Supreme Court positions have that delay. The other is the position held by Justice Jess Dickinson, who had to wait 14 months to take office after the November 2002 election, in which he defeated Justice Chuck McRae.
MSMA’s Political Action Committee (PAC) has pledged support of incumbents justices Waller and Carlson, and Randolph, appointed in April by Gov. Haley Barbour. In the District 1, Position 2 race, the PAC supports Graves’ opponent Sumac Richardson.
Tort lawyers are expected to pour money into the state in support of judicial candidates who might be relied on to find parts of the new tort law illegal under the state constitution.
“We realize how crucial these Supreme Court elections are,” said Parvin. “Everybody knows how hard we worked to help get Justice Jess Dickinson elected. That one election really made a huge impact, and we’re already seeing benefits. We’ll work hard to try to elect four justices we believe will be fair. We’re not asking anybody to do anything special for the medical community. We just want fairness.”
Contact MBJ contributing writer Lynne W. Jeter at firstname.lastname@example.org.