High Stakes for Mississippi Tort Reform

On June 3 Mississippi legislators were entering the third week of a special session called by Gov. Haley Barbour to consider comprehensive civil justice reform. They were back in Jackson just days after completing their regular session, and the early signs were not promising.

Every day was the same, as lawmakers proceeded to take up and reject a procession of competing tort reform measures. Perhaps attitudes would shift over Memorial Day weekend. Unfortunately, when legislators got back to the Capitol that Tuesday, the House immediately passed a bill that included an insurance rate freeze.

You probably know how this story ends.

But let’s step back and look at how we got to this point in the first place, with the national media spotlight shining on the “judicial hellholes” found in certain Mississippi trial courts, where tort reform and its link to economic development became the centerpiece of a gubernatorial campaign, where the insurance commissioner had to literally beg insurance companies to do business in his state. What are the forces that can lead to the deterioration of a state’s judicial climate, and, once identified, how can insurers help lead the charge for reform?

While Mississippi historically had conservative judges and juries, the situation was starting to change by the1990s, as the state became a more favorable venue for plaintiffs to successfully file mass tort and aggressive claims litigation. Asbestos litigation arising out of the shipyards in Jackson County in the late 1970s created a wealthy, aggressive and politically active plaintiffs’ trial bar. They quickly learned that there were certain counties in Mississippi where juries felt disenfranchised and were prone to return large verdicts for the plaintiffs. A natural turnover from the old conservative trial judges to younger more liberal judges removed the judicial safeguards and opened some of these “magic counties” for exploitation.

Trial lawyers throughout the country began to bring their mass tort cases to Mississippi. Outdated venue and joinder rules, and the absence of a class action procedure, allowed plaintiffs from all over to pile into single cases with hundreds of plaintiffs. The state Supreme Court also changed, providing less certainty that outrageous verdicts would be set aside on appeal. The result was multi-million dollar verdicts in pharmaceutical, environmental, banking, insurance, and other litigation.

Finally, the national media was paying attention to the state’s judicial system, a 2002 special legislative session on the topic produced modest reforms to both medical liability and general civil actions. But the business community kept the heat on, and the stage was set for the 2003 elections and Republican gubernatorial candidate Haley Barbour focus on the nexus between legal climate, economic development and job creation.

The rest, as they say, is history.

The warning signs had grown big enough so everyone from the New York CEO to the drugstore owner in Meridian knew that it was time for active involvement by the business community in the political process. As did many others, AIA and our members signed on as early and strong supporters of Barbour, in addition to backing Lt. Gov. Amy Tuck (R) and key legislative leaders. Their victories in November, and Gov. Barbour’s unwavering focus on achieving meaningful tort reform contributed significantly to passage of a bill on June 3.

Changing a state’s liability climate also extends to supporting the right judicial candidates. We are now more involved in state judicial elections, and there has been substantial improvement in the Mississippi Supreme Court in the last two years. The majority of the Court is now moderate-conservative and more conservative decisions are beginning to correct some of the lawsuit problems. With four of nine seats on the Supreme Court up in 2004 there is a real possibility to move the Court back to its historical conservative nature.

Another key to our success fight for tort reform in Mississippi was the unity among the business and insurance community.

Leading groups within the state, such as Mississippians for Economic Progress, the Mississippi Economic Council, and the Independent Insurance Agents of Mississippi implemented strong public affairs and grassroots programs to educate voters and keep the pressure on legislators. We put together a strong lobbying team with a simple—if powerful—agenda: passage of a comprehensive bill that included venue and joinder reform, caps on non-economic damages, fair share liability, and innocent seller defense.

Yes, this story has a happy ending.

The House and Senate approved a landmark civil justice reform bill that should lead to a civil justice environment in Mississippi that is once again fair and balanced—a welcome development for insurers and their customers.

Cecil Pearce is vice president of the Southeast region for the American Insurance Association (www.aiadc.org/).

Topics Mississippi