Damages cap ruling could invite another challenge

money_rgbThe Fifth Circuit Court of Appeals ruled in late February that Mississippi’s $1 million cap on non-economic damages arising from civil litigation does not violate the state constitution’s separation of powers clause.

The appeals court issued the ruling in response to the Mississippi Supreme Court’s decision not to rule on the matter last summer. The state court said then that to do so would be to engage in speculation.

The argument originated in federal court in Aberdeen. Plaintiff Lisa Learmonth was injured in a wreck with a Sears van, and sued the company. The jury awarded Learmonth $4 million in damages, but the presiding judge reduced the award to comply with the state’ cap. Learmonth’s attorneys, as part of a cross appeal, asked the Fifth Circuit to render the cap unconstitutional, arguing that that the law passed by the Legislature improperly infringed on a jury’s right to decide how much should be awarded to whom.

The appeals court rejected that argument, but in doing so, might have left the cap vulnerable to another kind of constitutional challenge.

Toward the end of the 25-page opinion, Judge Carolyn Dineen King writes that Learmonth’s attorneys “overlooked the possibility that, at least under some circumstances, the Mississippi Constitution’s Due Process Clause or Remedy Clause might impose substantive constraints on the legislature’s authority to cap compensatory damages.”

Due process prevents the taking of life, liberty or property without due process of law. The Remedy Clause contains two guarantees: that courts be open, and that those injured have a remedy by due course of the law.

For a party to argue an issue on appeal, it has to be “preserved” in a lower court, meaning it must part of the arguments presented there. Neither due process nor the remedy clause was part of the issues Learmonth’s attorneys raised to the Fifth Circuit.

Mississippi College School of Law professor Matt Steffey said in an interview last week that arguments based on due process are typically a “last line of defense.”

“When you do not have a more specific constitutional provision to rely on, you rely on the vague and majestic language of due process.”

The Learmonth case could be an exception, Steffey said, because the plaintiff was deprived of a jury award because of the cap, which was part of the tort reform package legislators passed about a decade ago. The cap was considered one of the centerpieces of the reform, with supporters saying it was needed to guarantee liability insurance premiums would stay reasonably priced and to ensure predictably in jury awards.

“I think a due process argument could be stronger in this context than it is generally,” Steffey said.

“The interesting part of the due process argument is what if the Legislature reduced the noneconomic damages to a dollar and left people without a substantial remedy? Then due process and remedy clause arguments become very attractive.”

Steffey said it’s likely the due process arguments will eventually be made in front of the Mississippi Supreme Court. The Fifth Circuit certified the question of the cap’s constitutionality to the state court, asking them to settle the matter as part of Learmonth’s appeal. Last August, though, the state court declined to do so, saying in an opinion that to settle the matter would be to engage in speculation.

Steffey said it’s likely the state court will have to address the issue eventually, because it will be presented in a “straight-forward constitutional manner” and those arguing the issue will be sure to preserve it for appeal.

“One might infer that because the (Mississippi Supreme Court) declined the certified question, there’s a lack of unanimity on how the cap is viewed. If there were unanimity, it seems like you might have gotten an answer on the certified question.”

>> MBJ legal expert Oliver Diaz discusses ruling with MBJ-TV.

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