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Future of business at risk?

State Supreme Court ruling will affect all economic development going forward

Politics, money and emotion formed a combustible mix in the halls of the state Capitol the early part of the 2000s as the business community and plaintiffs’ attorneys and their interests waged war over tort reform.

The battle lines were simple: The business community claimed Mississippi’s legal climate had for too long stifled any significant economic growth and threatened to hurl the state into a severe doctor shortage. The astronomical amounts of money juries were awarding to plaintiffs in civil cases, went the argument, made liability insurance unaffordable for everybody but those with the deepest of pockets.

Plaintiffs’ attorneys, and their Democratic supporters in the Legislature, countered that the big business lobby valued profits over people. If businesses were so concerned about handing over piles of cash to those they wronged, they said, the obvious solution was to treat people better than they had been.

After years of fighting, two governors and countless dollars spent on lobbying both sides of the issue, supporters of tort reform claimed a significant victory in the summer of 2004, when the Legislature squeezed through, and Gov. Haley Barbour signed, statutes that put a cap on non-economic damages that arose from civil actions. For non-medical related lawsuits, the cap was $1 million. For lawsuits brought against doctors and medical providers, non-economic damage awards could not exceed $500,000.

Six years after the dust settled, it is being kicked up again. 

The Mississippi Supreme Court will hear oral arguments June 8 in Ronnie Lee Lymas vs. Double Quick Inc., in a case legal experts say puts the non-economic damages cap to its first serious constitutional test.

In 2007, Lymas was involved in an altercation at a Double Quick gas station and convenience store in Belzoni. He was shot multiple times. He sued Double Quick, claiming the company, which has a chain of stores across Mississippi, did not do enough to protect its customers from harm. He won a $4.1-million jury verdict in Humphreys County Circuit Court, but the judge lowered the verdict to comply with the damages cap.

On June 8, his attorneys will try to resurrect the original verdict before the Supreme Court.

The case has gotten the attention of virtually every business association and trade group in the state, many of which have filed friend of the court briefs on behalf of Double Quick.

“After all those years, finally a constitutional challenge (to the cap) is getting to the Mississippi Supreme Court,” said Canton attorney Robert Montgomery, who’s representing some of the business groups. “You’ve got two issues here. One, a significant number of business groups, which I did not represent, have filed (friend of the court) briefs on the premises liability question. That is, what duties or what standards should be imposed on the property owner to protect their customers or visitors to the property.

“The other thing hinges on the constitutionality of the $1-million cap on the non-economic damages. It’s sort of a culmination of interest and a building of interest over really almost a decade of trying to stabilize things. That’s why you had such significant interest and why so many joined in the brief. It’s the largest number that I know anything about that’s ever joined in a brief.”

Several business owners and heads of associations the Mississippi Business Journal contacted declined comment, referring a reporter to Montgomery or other counsel.

Ron Aldridge, who directs the Mississippi chapter of the National Federation of Independent Businesses, said if the legal teeth of the damages cap were weakened and the premises liability considerations strengthened, it would financially devastate many of his members.

“Particularly in this economic environment, we’re almost like we were (before tort reform) from the standpoint of lots of businesses having to close or doctors leaving the state,” Aldridge said. “You’re going to end up in a worse situation (with an unfavorable ruling from the Court) because you’ve got so many businesses just right on the edge of staying open.

“When I walk into a business just the other day, and he tells me his sales for the first two weeks of May are $8, and this is a business that a few years ago would do $20,000 in a month, it’s simple math. Every dollar is crucial. It won’t take but one case to put you out of business.”

The Mississippi Association for Justice, whose website says it represents “people, not corporations,” also filed a friend of the court brief. Officials there had not returned phone calls seeking comment by the time the Mississippi Business Journal went to press last week. Joe Tatum, the Jackson attorney representing Lymas, also did not respond to messages seeking comment.

Legal experts agree that, because this is the first constitutional test Mississippi’s damages cap will undergo, the Court’s ruling on the matter will set precedents for it and for premises liability issues that will hold for decades, and guide the state’s tort climate for at least that long.

Montgomery said there’s a possibility that, even though it’s not part of the legal question in this case, that whatever the Court decides regarding the $1-million damages cap could govern the use and application of the $500,000 damages cap associated with medically-related lawsuits.

“I think the plaintiffs have an uphill battle, given the kind of ideological orientation of the Supreme Court currently,” said Matt Steffey, professor at Mississippi College School of Law in Jackson. “While it’s not as uniformly and overwhelmingly pro-business as it was before the last election cycle, it still is more pro-business generally speaking than it is pro-plaintiff.

“That said, the interesting part from an academic perspective and a policy perspective is that the open-courts provision of the Mississippi Constitution is something plaintiffs’ attorneys frequently cite as kind of a countervailing constitutional value against things such as the cap on non-economic damages. The difficulty is there’s very little authority interpreting the open-courts provision. It’s one of these rather kind of nebulous, open-ended policy statements that invites interpretation in a way. The question will boil down to whether the majority of the Supreme Court thinks that, because of that, because of some separation of powers analysis, there are countervailing constitutional constraints on the ability of the Legislature to regulate jury verdicts or the like.

“On the other hand, people on the other side – business groups, tort reform advocates – will say that it is the Legislature’s traditional and historic role to regulate questions of liability, that it is in fact a legislative function.”

Because there is no current precedent to guide the Court as to the question of the constitutionality of the damages cap, Steffey said it’s likely the case will draw a number of opinions beyond a simple majority opinion and a dissent from justices once they hand down their rulings.

“The court, I think, can go one of three ways: They can say that (the imposing of a cap on non-economic damages) is quintessentially a legislative function and that there’s no judicially enforceable limit that comes from the open-courts provision. There’s the opposite view, which is that the open-courts provision invalidates virtually all limits of this kind. Then there will be kind of a middle ground, which suggests that there may be some judicially enforceable limits on what the Legislature can do, but because this isn’t anything like a total ban on access to courts, that it’s constitutional whatever the context of the open-courts provision is.”

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