Waiting game begins for damages cap fight

June 19th, 2011 No comments

The Mississippi Supreme Court last week heard oral arguments about the constitutionality of the state’s $1 million cap on non-economic damages in civil cases.
It’s a case whose decision will affect with equal extreme Mississippi’s business community and its plaintiffs’ bar.
The case that spawned Tuesday’s hearing – Sears & Roebuck Co. v. Lisa Learmonth – centers on a car wreck involving Learmonth, the plaintiff, who claims she was injured when she collided with a Sears van driven by one of the company’s employees. Learmonth was awarded about $4 million in punitive damages in the federal court trial, but the trial judge reduced that amount to conform with the $1 million cap. Learmonth’s attorneys appealed to the Fifth Circuit Court of Appeals in an attempt to get the jury’s verdict as it related to the $4 million punitive damages upheld; Sears cross-appealed asking for a new trial, claiming it wasn’t liable for the accident in which Learmonth was injured. The Fifth Circuit then certified the constitutionality of the cap to the Mississippi court.
Keeping intact the separation of powers and the right to a jury trial were the cornerstones of the arguments made by Learmonth’s attorneys.
“A recovery cannot be limited by hamstringing a jury,” said Kevin Hamilton, of Meridian. The damages cap is separate from “statutory creatures” like the Tort Claims Act and the guidelines for settling a worker’s compensation claim, both of which have limits on punitive damage payments.
Frank Citera, who represented Sears at the hearing, said the cap does not remove a remedy for a plaintiff. It simply sets “an outer limit” for a remedy a jury can award.
Justice Jim Kitchens, asked Citera, “Who is this cap working for? The business community? It’s not working for people with catastrophic injuries.”
The cap was the centerpiece of 2004’s tort reform, which Gov. Haley Barbour made the cornerstone of his first campaign. Barbour and business associations and trade groups said the cap’s removal would return Mississippi to the reputation the state had pre-tort reform as a judicial hellhole. Opponents have built their rebuttal around the constitutionality of the cap, claiming that the Legislature has no authority to tell juries how much to award or not to award in civil cases.

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Pascagoula officials mull options as Court mulls fate of tax law

June 19th, 2011 No comments

The Mississippi Supreme Court heard oral arguments last week related to a property tax distribution dispute between the City of Pascagoula and Jackson County.

While city officials await the high court’s decision, they’re mulling their options in the event the ruling doesn’t go their way.

The fight over the allocation of ad valorem tax revenue generated by new facilities at Pascagoula’s Chevron refinery began in 2007 toward the end of the legislative session, when language that changed the distribution formula was attached to an appropriations bill. The bill essentially diverted portions of ad valorem revenue from the new refinery and liquefied natural gas facility from the Pascagoula City School District, where the facilities are located, to the Jackson County School District.

The city school district sued the county in an effort to keep that new money from flowing to the county. A Jones County chancellor ruled in favor of the county, and the city appealed to the Mississippi Supreme Court.

The city has argued that ad valorem tax revenue generated in its school district should stay in its district. County schools counter that it badly needs the anticipated $4 million to $5 million in annual revenue to operate its district and implement the five-year plan it recently developed.

Frank Corder, who as a Pascagoula City councilman is one of the plaintiffs in the lawsuit, told the Mississippi Business Journal last week that diverting money from city schools to county schools is “robbing Peter to pay Paul.

“It’s a money-grab. Their whole argument is that we’re being greedy. They just want what’s ours.”

For now, Corder said, the city will wait to see what the state Supreme Court decides. Until then, they’re hoping to line up support to change the distribution law in next year’s legislative session. Sen. Michael Watson, R-Pascagoula, whose district includes parts of the city but is mostly made up of Jackson County, did not return a message left on his cell phone last week. Efforts to reach Rep. Brandon Jones, D-Pascagoula, were also unsuccessful.

The county, Corder said, has already divvied up the first payment in new ad valorem revenue, whose amount was approximately $100,000.

If the Supreme Court does rule in favor of the city, city officials will evaluate its options for recouping it, Corder said, but that would depend on the legal expenses required to do so. The City Council has also authorized its school officials to seek other revenue streams related to ad valorem taxes, and not necessarily from businesses or homes within the city school district.

“(The law) allows for that,” Corder said. “We don’t want that, but if that’s the game we have to play, we’ll play it.”

Jackson County Schools superintendent Dr. Barry Amacker said the district’s enrollment is up about 600 students over pre-Katrina numbers, and the $4 million to $5 million the district is set to receive in money from the city would help fund a new middle school and a new upper elementary school that are a part of the five-year plan.

“I’m not trying to sound like we’re crying over here, but funding is a serious issue,” Amacker said, adding that the district’s annual budget hovers in the $60 million range. “We have several building projects that really need to happen. This would really help us get those jump-started, not to mention to shore up the loss of revenue from the past couple years.”

The concept of revenue sharing among public education entities is nothing new, Amacker said, pointing to the Mississippi Adequate Education Program, which takes general fund revenue collected from across the state and distributes it to school districts based on a formula that leans heavily on enrollment. Amacker admitted, however, that the Chevron allocation law is the only instance of which he is aware that takes ad valorem tax revenue generated from one specific entity in one school district and distributes it to another.

Going forward, Corder said the biggest problem would be the law’s failure to account for equipment at Chevron that will depreciate in value, lowering the amount of ad valorem revenue the city would receive from Chevron’s main facility, which pumps about $14 million annually into city schools coffers.

Corder couldn’t rule out the possibility of a future millage increase to make up the difference.

“Our taxpayers will be punished,” he said. “And taxpayers (in the county school district) will most likely see a reduction in their millage because of the revenue that we’re generating.”

What makes the allocation fair, Amacker said, is that the redistribution formula only addresses new investment at Chevron, and holds harmless the revenue Pascagoula has received from the main facility since it opened in the early 1960s.

“Pascagoula has been getting all of the (Chevron) money forever. They’re still going to get it. We’re still getting a very small amount of the big picture. Our kids deserve it. If we were taking something off of Pascagoula’s table, that would be different.”

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River ports start recovery process, begin crunching the clean-up numbers

June 19th, 2011 No comments

Varying degrees of recovery started last week at ports along the Mississippi River.

Having spent the better part of a month underwater, there were similar plans of action at each: Assess the damage, get it repaired and resume normal operations as quickly as possible.

The steel loading facility at the Greenville Port opened LAST Wednesday, said executive director Tommy Hart, but it will be this week at the earliest that the grain loading facility can come back online.

“Before we do that, we have to inspect the railroad track,” Hart said.

Hart, whose port closed May 2, began the process LAST Wednesday with FEMA officials of evaluating the cost of clean-up.

“You’ve got to carefully qualify that,” Hart said. “The issue I have is that a lot of this damage really won’t show up until weeks and months into the future, especially in our road and rail and dock services.”

That was the case after the flood of 2008, when the railroad tracks took on water and later split once operations resumed, the ground beneath them weakened from having been submerged for a prolonged period.

Hart would like to avoid that this time around, or at least have some financial help if and when a similar scenario occurs. Most assistance programs have a shelf life of only a few weeks.

“It’s just going to increase our maintenance costs, and there’s no assistance for that, not that I’m aware of,” Hart said. “We’re going to see if considerations can be given for that. Then, of course, you get into the position of having to prove that the damage was caused by the flood.”

In lost business alone, Hart estimated the port took a hit between $300,000 and $400,000 “just in terminal revenue,” which does not take into account that money being turned over down the supply chain once it leaves the facility.

“We had several companies that had to close completely. A lot of them were a mile and a half away from land. They were completely underwater.”

At the Vicksburg Port, last Monday afternoon marked the first time water levels allowed engineers to inspect almost every part of the facility. Port executive director Wayne Mansfield said the railroad that runs to the terminal, an overhead crane and storage warehouses seemed to have suffered the most damage. No part of the port has reopened since closing in the first week of May.

The port’s T-dock, the primary loading and unloading platform, is in relatively good shape, and had been given the green light for use. “We’ve got a bunch of barges stacked up on it,” Mansfield said.

Water levels need to fall to about 43 feet — flood stage is 42 feet — before engineers can reach the bridge crane, something Mansfield hopes will happen early this week.

“Our engineers are working on a preliminary report right now, based on what they’ve been able to inspect so far,” Mansfield said. “I don’t know when we’ll have any of the repairs completed. I hope to have the engineers report (Monday) so we can start looking at some of the costs. But we’ll have to do it in a phased process.”

Only two out of about 50 industries that use the port — LeTourneau Technologies and the International Paper Mill — had to shut down, Mansfield said.

Mansfield didn’t have an exact figure for business interruption costs, but said it would likely be a “minimum of $500,000. Then you have all the indirect costs, like your trucks and rail to move the product.”

The facility that made it the cleanest to the other side of the flood was the Natchez-Adams County Port. Anthony Hauer, port director, said the liquid loading dock was the only infrastructure that took on any water “but the best we can tell so far is that it didn’t have any damage to it.” The liquid loading dock was built to a slightly lower elevation than the concrete general cargo docks.

What little threat the port had of closing evaporated when the Morganza and Bonnet Carre spillways were opened in Louisiana, Hauer said.

“The roadways were never closed, we worked our distribution and warehousing as if it was just another day. We never went underwater.”

The news wasn’t nearly as good in Yazoo City. The Yazoo County Port along the Yazoo River closed in late April, said Henry Cote, executive director of the Yazoo County Chamber of Commerce.

Its timeline for reopening is less certain than its counterparts along the Mississippi River, because the Yazoo River’s banks are sinking along with the water.

“Right now my biggest problem is we’ve got a massive land slide and erosion around the liquid dock and the dry dock,” Cote said. At press time Cote hoped an engineering group with sonar capabilities could evaluate the extent of the erosion late last week. At least some dredging will have to be done before barge traffic can resume, he said.

“We just won’t know how much until the sonar is put on it. What I do know is that dredging is very, very expensive and not an easy process to get through.”

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Next phase of tort damages cap fight? The waiting game

June 14th, 2011 No comments

The Mississippi Supreme Court heard oral arguments Tuesday morning about the constitutionality of the state’s $1 million cap on non-economic damages in civil cases.

Magnolia Marketplace isn’t a lawyer, so you’re not going to find much in the way of legal analysis or a prediction here on which way the court rule.

What is clear is that there probably is no single issue for Mississippi’s business community more important than this one. It’s probably equally important to Mississippi’s plaintiffs’ bar.

The case that spawned Tuesday’s hearing – Sears & Roebuck Co. v. Lisa Learmonth – centers on a car wreck involving Learmonth, the plaintiff, who claims she was injured when she collided with a Sears van driven by one of the company’s employees. Learmonth was awarded about $4 million in punitive damages in the federal court trial, but the trial judge reduced that amount to conform with the $1 million cap. Learmonth’s attorneys appealed to the Fifth Circuit Court of Appeals in an attempt to get the jury’s verdict as it related to the $4 million punitive damages upheld; Sears cross-appealed asking for a new trial, claiming it wasn’t liable for the accident in which Learmonth was injured. The Fifth Circuit then certified the constitutionality of the cap to our Supreme Court.

If you’re scoring at home, Chief Justice Bill Waller and Presiding Justice Jess Dickenson were the most active as far as questioning the attorneys from both sides. Both seemed a little more skeptical of the argument made by Sears’ attorneys, that the cap did not violate the right to a jury trial, and that the cap did not violate constitutionally outlined separation of powers among the branches of government.

Keeping intact the separation of powers and the right to a jury trial were the cornerstones of the arguments made by Learmonth’s attorneys.

Very little anecdotal observations of the cap were made. The one that stood out the most came from Justice Jim Kitchens, who asked Sears counsel, “Who is this cap working for? The business community? It’s not working for people with catastrophic injuries.” Kitchens, it should be noted, sounded the most unconvinced of the nine justices that the cap was constitutionally sound, even though he asked maybe six questions during the 90-minute hearing.

The cap was the centerpiece of 2004’s tort reform, which Gov. Haley Barbour made the cornerstone of his first campaign. Barbour and business associations and trade groups said the cap’s removal would return Mississippi to the reputation the state had pre-tort reform as a judicial hellhole. Opponents have built their rebuttal around the constitutionality of the cap, claiming that the Legislature has no authority to tell juries how much to award or not to award in civil cases.

For both sides, it comes down to money. Businesses don’t want their liability insurance premiums to rise with the removal of the cap. Plaintiff lawyers would love nothing more than for 8- and 9-figure compensatory damage awards to return.

And so now they wait.

Categories: Haley Barbour, News, Politics Tags:

Watkins: Farish Street NOT “back on the shelf”

June 8th, 2011 1 comment

A story in today’s Clarion-Ledger that said work on the Farish Street development in Jackson had halted has caused quite a stir.

Magnolia Marketplace just got off the phone with David Watkins, who spoke to us on his cell phone while he walked around Farish Street.

Here’s the gist of what he told us: The story, he said, is “totally off the mark. We are absolutely not shut down. We’re out here working every day.”

Watkins added that the B.B. King Blues Club and Itta Bena restaurant, Zac Harmon’s Subway Lounge, Flagrant Sports Lounge and a cigar store would open as scheduled.  

“They’re  all this year,” he said.

So there’s that. We’ll have an expanded story in next week’s MBJ so be on the lookout.

Categories: Economic development, News Tags:

Elevance heads to Natchez, brings 165 new jobs

June 7th, 2011 No comments

Gov. Haley Barbour has just announced in Natchez that Illinois-based Elevance Renewable Sciences has purchased the old Delta BioFuels facility. The company will revamp and expand the 800,00 square-foot building so it can make its specialty chemicals for use in personal care products, detergents, plastics, lubricants and a few other things.

Magnolia Marketplace first reported Friday night that there would be a “major” economic development announcement in Natchez today. For Natchez, 165 new jobs over a five-year, multi-phased rollout would qualify as major. The Natchez and Adams County area has spent the past decade watching its major industries leave town, with probably the most crushing blow coming in 2001 when the International Paper mill shut down.

Here’s the full release from Barbour’s office:

NATCHEZ – Gov. Haley Barbour and executives from Elevance Renewable Sciences Inc., creator of high-performance renewable specialty chemicals for use in personal care products, detergents, plastics and lubricants, announced today the company has acquired the Delta BioFuels facility in Adams County. The company intends to convert the facility to a biorefinery and derivatives operation in a multi-phase project that will involve an investment of more than $225 million and will create 165 full-time jobs over the next five years, in addition to 300 construction jobs.
 
“Elevance’s decision to locate here in Mississippi results in a significant investment in the area and its economy, as well as in the local workforce,” Gov. Barbour said. “Job creation and retention is vital to a healthy economy, and I thank the company for creating these new jobs for southwest Mississippi’s residents. I am delighted to welcome Elevance to Natchez and Adams County.”
 
Elevance plans to expand the existing 800,000-square-foot refinery, which is located in Natchez, in multiple phases over the next five years. The result will be a world-scale biorefinery and derivatives operation.
 
“We are pleased to be coming to southwest Mississippi to build our first North American manufacturing facility. We plan on deploying Elevance’s innovative technology here to bring competitive manufacturing and high-value jobs back to the United States,” said K’Lynne Johnson, chief executive officer of Elevance. “These operations will complement our joint venture with Wilmar International in Asia and expand our global footprint. By building biorefineries in multiple geographies, we are responding to our customers’ demands for innovative environmentally friendly products in a cost-effective and scalable way.”
 
The Mississippi Development Authority worked with company and local officials to help facilitate the project. Through the Mississippi Industry Incentive Financing Revolving Fund, MDA provided assistance for upgrades at the Natchez/Adams County Port, as well as a $25 million loan to the company. Additionally, the county provided assistance for upgrades to the port to support this project.
 
“Today marks a milestone for Natchez and Adams County, and I couldn’t be more pleased that Elevance has chosen to locate its newest operations here,” said MDA Executive Director Leland Speed. “This announcement reinforces the fact that Mississippi has a business climate in place to meet the needs of any company. I thank Elevance for its investment in Natchez, Adams County and the entire state of Mississippi, as well as for its confidence in and commitment to Mississippi’s workers.”
 
Headquartered in Bolingbrook, Ill., Elevance Renewable Sciences Inc. creates valued specialty chemicals from natural oils. Using a Nobel Prize-winning technology called olefin metathesis, the company creates high performance ingredients for use in personal care products, detergents, fuels, lubricants and other specialty chemicals markets. To learn more about Elevance, please visit the company’s website at
www.elevance.com.

“Major” economic development announcement in Natchez Tuesday

June 3rd, 2011 No comments

A source who spoke to Magnolia Marketplace Friday evening on the condition of anonymity said Gov. Haley Barbour will be in Natchez on Tuesday for a “major” economic development announcement at 1 p.m.

The source did not provide dollar figures or job numbers. But according to the Natchez Democrat newspaper, the Adams County Board of Supervisors met with Natchez, Inc. executive director Chandler Russ, Adams County Port director Anthony Hauer and port attorney William McGehee Jr. recently in executive session to discuss an economic development prospect. McGehee told the Natchez Democrat in an article published June 1 that supervisors hoped to make an announcement soon.

“It’s going to be big,” the source said Friday night.

Natchez and Adams County, like other spots along the Mississippi River, have dealt with record flooding the past month. It was unclear Friday night if the new industry had anything to do with the port or operations along the Mississippi River. If the port’s director and its attorney had recently met with supervisors to discuss new industry, there’s a decent chance that it does.

If we get anything new over the weekend, we’ll post it.

Categories: 2011 flood, Economic development, News Tags:

Speed sues Hosemann to keep eminent domain off ballot (Updated)

June 3rd, 2011 No comments

Mississippi Development Authority interim executive director Leland Speed has sued Secretary of State Delbert Hosemann, in an attempt to keep the eminent domain petition off November’s ballot.

If you’ll recall, the petition seeks to prevent the taking of private land for private development. It keeps in place the state’s authority to seize private land for public-use projects, like streets or bridges.

Nearly 120,000 people signed petitions to get the issue on the ballot. Hosemann certified the results last year.

The Mississippi Development Authority and Gov. Haley Barbour were adamantly against the notion of eliminating the state’s authority to use eminent domain for private economic development. Barbour and Gray Swoope, Speed’s successor at MDA, warned that projects like Toyota wouldn’t be in Mississippi if the law were changed.

Following a failure to change the law in the Legislature, a petition drive led by the Mississipi Farm Bureau Federation commenced, and the issue was set for the November ballot, until Thursday afternoon.

A hearing on the matter is scheduled for July 25 in Hinds County Circuit Court.

Pamela Weaver, spokesperson for Hosemann, just told Magnolia Marketplace that he would not comment beyond a statement, in which he said he intended to follow state law and place the initiative on the ballot, unless otherwise ordered by the Mississippi Supreme Court.

We’ve left a message on the cell phone of an MDA spokesperson, which wasn’t immediately returned.

For what it’s worth, Magnolia Marketplace several months ago polled the major contenders in the governor’s race — Phil Bryant, Dave Dennis, Bill Luckett, Johnny Dupree and Hudson Holliday — and they were of one mind: Eminent domain should be employed only for projects of direct public use, and that doesn’t include private economic development. Bryant, Dennis and Holliday each signed the petition to get the initiative on the ballot.

If and when we hear something from the MDA, we’ll post it. Rest assured, though: This is going to be a fight.

UPDATE: MDA spokesperson Melissa Medley just returned our call. She said that agency would have no comment on Speed’s lawsuit since he filed it as an individual, and not in his official capacity as interim executive director of the MDA.

We just got off the phone with Speed’s assistant, who said he was out of town and wouldn’t return until Monday around lunchtime. We’ll try to catch up with him then.

State Port reopens after collision in shipping channel

May 23rd, 2011 No comments

There’s a story we wrote for this week’s Mississippi Business Journal that takes a look at the possibility the State Port of Gulfport could see some increased ship traffic due to flooding issues at the Port of New Orleans.

Mississippi’s port was shut down entirely late last week for something that had nothing to do with flooding or New Orleans, after a 660-foot container vessel collided with a 163-foot pogy boat owned by Texas-based Omega Protein. The pogy boat sank. Three of the 16 crew drowned; their bodies were recovered over the weekend.

Here’s where the port comes in: The two vessels were in the Gulf Shipping Channel when they collided, so instead of continuing toward Texas, it circled back to the port’s harbor as authorities sorted out exactly what happened. While dive crews searched for the crew members, the U.S. Coast Guard shut down all inbound and outbound traffic at the port.

Don Allee, executive director of the Mississippi State Port Authority, told Magnolia Marketplace Monday morning that the Coast Guard decided early Sunday morning to reopen the port with restrictions. The main restriction, Allee said, limited ship traffic to daylight hours only.

The restriction will most likely remain in place until the sunken pogy boat is either recovered or moved out of the GSC.

“It’s probably safe to say that once the vessel is removed, normal operations will continue,” Allee said, estimating that would happen within the week, though the exact timetable is strictly up to the Coast Guard. He added that the port does have lighted buoys that could line the GSC “under perfect conditions” that would allow nighttime shipping.

Two vessels were scheduled to arrive Monday at the port, and they  had already been given the all-clear from the Coast Guard, Allee said. The Eurus London, the container ship involved in the collision, left Gulfport Sunday morning with its load of bananas headed for Texas.

“The sunken boat doesn’t prevent much from happening,” Allee said.

Categories: 2011 flood, News, State Port of Gulfport Tags:

Flood economic impact numbers are trickling in

May 16th, 2011 No comments

Two professors released Thursday afternoon a preliminary report that begins to try to gauge the economic impact of the Mississippi River flood.

The report by Dr. Michael Hicks, director of Ball State University’s Center for Business and Economic Research, and Dr. Mark Burton, director of transportation economics at the University of Tennessee’s Center for Transportation Research, estimates the total financial impact for the Greater Memphis area to be $753 million.

That takes into account damage to commercial structures, commercial equipment, residential structures, residential contents and an “other damages” category that covers crop losses, public infrastructure and utility repair costs, emergency response costs and telecommunications repair costs. The figures are based on flood damage models developed for waterways in Mississippi and Tennessee over the last decade, and have been used in assessing damage from Hurricane Katrina, the River flood of 2008 and the Pakistani floods of 2010. Hicks and Burton point out that the estimates represent whole hog losses, not just those from insured areas, and that insurance companies will likely have a different impact number once they start their damage assessments.

Specifically, the Memphis figures were derived using historical data from the upper Mississippi River flood of 1993, which did to the Midwest what the River is currently doing to Mississippi and will eventually do to Louisiana.

Magnolia Marketplace emailed Hicks and Burton to see if they planned to look specifically at anywhere in Mississippi.

“We might, but the actual extent of the flood location is a bit fluid (if you’ll pardon the pun),” Hicks wrote in an email Monday morning.

Hicks went on to estimate that up and down the Mississippi — from Minnesota to New Orleans — damage costs would reach between $7 billion and $9 billion.

“This will mostly be clustered in residential structures and contents and business structures and equipment,” Hicks wrote. “I think the public infrastructure element will be less than in other comparable circumstances (with the exception of those areas very proximal to opened floodgates, where the speed of water flow will severely damage roadways).”

Categories: 2011 flood, News Tags: