Mississippi Litigation Review & Commentary

Mississippi Litigation Review & Commentary

Comments on the Latest Developments in Mississippi Civil Litigation

Philip is a trial attorney based in Jackson, Mississippi with a diverse civil litigation practice.

PERS Earns 9.24% Investment Return in 2016

Posted in Mississippi Public Employer's Retirement System (PERS)

The Public Employees’ Retirement System of Mississippi (PERS) had a great year in 2016 earning a 9.24% return on its investments. Here is the PERS Investment Report for the period ending December 31, 2016. That’s well above the 7.75% assumed return for meeting future obligations to state retirees. This is good news.

The bad news is that PERS Executive Director Pat Robertson has previously stated that PERS actually needs to earn 13% to get back to where it is 80% funded. Even at 80%, that would leave a 20% underfunded hole that someone would have to fill.

Some actuaries have questioned the assumption that an 80% funded pension plan is healthy. These experts argue that while 80% funded may or may not be ok under the circumstances, the goal should always be 100% funded. Otherwise, someone (government or retirees) will have to fill the gap.

But at least things are improving.

Monday morning update:  This Bloomberg article by Danielle DiMartino Booth calls the public pension crisis too big for markets to ignore. It notes that government pensions are unfunded by $1.9 trillion. The article describes public pensions’ assumed rate of investment return as “fantasy figures.”

An Interesting Decision Involving Inadvertent Production

Posted in General

In February a federal district court in Virginia issued this opinion on a motion to disqualify counsel for using inadvertently produced documents. Here’s what happened factually:

In an effort to share information electronically, Thomas Cesario, a Senior Investigator for Nationwide Insurance Company, (“Nationwide”), which owns Harleysville, uploaded video surveillance footage of the fire loss scene, (“Video”), onto an internet-based electronic file sharing service operated by Box, Inc. Cesario then sent an email containing a hyperlink to the Box, Inc., internet site, (“Box Site”), by which Wes Rowe of the National Insurance Crime Bureau, (“NICB”), could access the file containing the Video using the internet and download the Video. The Video was placed on the Box Site, and the hyperlink to the Box Site sent by email to Rowe on September 22, 2015. The email to Rowe stated: “Here is the link to access the video” and provided the hyperlink….

Harleysville concedes that any person who used the hyperlink to access the Box Site had access to the electronic information stored there. The information was not password protected. Harleysville also concedes that any person who had access to the internet could have accessed the Box Site by simply typing in the url address in a web browser….

Defense counsel issued a Subpoena Duces Tecum, dated May 24, 2016, to NICB requesting NICB’s entire file related to the fire. On or about June 23, 2016, NICB sent defense counsel electronic copies of all documents and information it had received from Harleysville, including a copy of the September 22, 2015, email from Cesario to Rowe containing the hyperlink to the Box Site. That same day, defense counsel, without the knowledge or permission of Harleysville or its counsel, used the hyperlink to gain access to the Box Site, which now contained the Claims File. Defense counsel downloaded the Claims File and reviewed it without ever notifying Harleysville’s counsel that they had accessed and reviewed potentially privileged information.

Harleysville’s counsel moved to disqualify defense counsel when they learned that defense counsel accessed the claims file and didn’t tell anyone.

The Court found that Harleysville waived any claim of attorney-client privilege with regard to the information on the Box Site. The court reasoned that the material was not password protected and that:

the information uploaded to this site was available for viewing by anyone, anywhere who was connected to the internet and happened upon the site by use of the hyperlink or otherwise. In essence, Harleysville has conceded that its actions were the cyber world equivalent of leaving its claims file on a bench in the public square and telling its counsel where they could find it. It is hard to image an act that would be more contrary to protecting the confidentiality of information than to post that information to the world wide web.

The Defendant’s victory was short lived. The Court ruled that defense counsel should have disclosed that they had the information and sanctioned defense counsel the cost of the parties in obtaining the court’s ruling.

My Take:

The Court got it egregiously wrong on the finding that the privilege was waived. In the age of electronic discovery, production and communication, there will be instances when something is inadvertently sent to someone. Most of the time, it will be the fault of support staff–even though the supervising attorney bears ultimate responsibility.

There are a lot of ways this can happen. I’ve seen emails and faxes go to the wrong people, redacted pdfs become unredacted when produced and a few pages of privileged material in voluminous electronic production not pulled.

It happens. And I believe it occasionally happens to all of us who use modern technology in our practices.

There should be no waiver of privileges when the communication or production was not intentional. This profession is stressful enough without trick-bag ‘gotcha’ waivers when something was inadvertently communicated or produced. I believe that my opinion on this is supported by FRE 502 and Fed. R. Civ. P. 26. I believe that this judge got it wrong.

I also disagree with the Court’s characterization of using cloud storage like Box or Dropbox as making something available to anyone on the internet. That’s pretty close to the same as saying that anyone can access the judge’s bank accounts by typing in the log-in and password. I don’t think someone can surf the web into other people’s cloud storage.

The Court’s ruling on the sanctions was not a big surprise. Judges hate sneaky lawyering. The defense lawyers should have disclosed the inadvertent production.

Attorneys should think long and hard about doing something that could be interpreted as sneaky. People remember it. Forever. It’s not a reputation you want to build your career around.

Artificial Intelligence to Make Lawyers Obsolete?

Posted in General

This Jason Koebler article in the Atlantic speculates on the Rise of Robolawyers. Don’t laugh. I believe it’s coming.

From the article:

…The most successful robolawyer yet was developed by a British teenager named Joshua Browder. Called DoNotPay, it’s a free parking-ticket-fighting chatbot that asks a series of questions about your case—Were the signs clearly marked? Were you parked illegally because of a medical emergency?—and generates a letter that can be filed with the appropriate agency. So far, the bot has helped more than 215,000 people beat traffic and parking tickets in London, New York, and Seattle. Browder recently added new functions—DoNotPay can now help people demand compensation from airlines for delayed flights and file paperwork for government housing assistance—and more are on the way.

It seems reasonable that one day parties will plug facts into a computer that will spit out the value of a personal injury case.

When this technology first comes out, it will be highly criticized in the legal industry. Advertising lawyers will tell people not to take the company’s offer. But then people will realize that the computer only has to get them to 60% or 67% of the amount a lawyer would recover to pocket the same amount. Plus, a computer will do as good a job valuing cases as lawyers litigating for 2 years—at a fraction of the cost.

To the extent the computer is wrong, the parties will make up for it by not having huge legal fees.

I don’t know if we are talking 5 years or 50. Probably somewhere in between.

Hopefully, I’ll be retired and hiking full time when it happens. Because it’s going to make tort reform look like a blip on the radar by comparison as far as killing legal industry jobs.

Sid Salter Explains Who Picks Next 5th Circuit Judge

Posted in 5th Circuit Court of Appeals, National Politics

This Sid Salter column in the Clarion-Ledger does an excellent job explaining why Thad Cochran will likely pick the replacement for retiring 5th Circuit Court of Appeals Judge Grady Jolly. The column includes a fascinating story on how then Rep. Trent Lott tried to influence the appointment that went to Judge Jolly in 1981.

In a nutshell, senators recommend to the president who to appoint for federal judge slots. This dates back to at least the days that James Eastland was chair of the Senate Judiciary Committee.  Lott tried to influence the pick in 1981, but Senator Cochran got his man: Judge Jolly.

Salter expects it to be the same this time:

Clearly, there will be many Mississippi Trump supporters who believe they will exert great influence over who get the judicial nomination. But history suggests we can expect Jolly’s successor, as was Jolly in 1982, to be an appointee approved by Cochran.

Salter’s column did not speculate who Cochran might want in that position. The most obvious person is District Judge Dan Jordan. It is believed that Senator Cochran was instrumental in Jordan’s appointment to the bench.

I don’t think members of the Bar would quibble with Jordan’s appointment. District Judge Sul Ozerden would also be a good choice. Both are fairly young and were appointed by Republicans. Jordan probably has an advantage over Ozerden because Ozerden is from Lott’s backyard on the Coast.

In any event, whoever gets appointed will have big shoes to fill. Lawyers can always count on a hot bench when they draw Judge Jolly on their panel. He seems to love his job and his enthusiasm makes oral argument fun for the lawyers.

Judge Jolly also gave the best speech to Jackson Young Lawyers that I ever heard. This was over 20 years ago. He went down the list of all the judges on the 5th Circuit and identified who their political connection was that led to their appointment. It was fascinating on multiple levels.

Federal Tort Reform on the Horizon?

Posted in National Politics, Tort Reform

The Washington Post reported last week on Republican efforts to pass federal tort reform in Congress. Proponents of the bills espouse the same untrue talking points that the Chamber has been saying for over a decade.

The bill that is getting the most attention is one that would cap non-economic damages in medical malpractice cases at $250,000. Why is this needed? To stop frivolous lawsuits, according to the bill’s proponents.

This reasoning makes no sense. Unfortunately, reporters never ask how capping damages in the cases with the most merit will deter frivolous lawsuits.

Capping non-economic damages at $250,000 is not much different than capping them at $0. The math of a medical malpractice case doesn’t work from the plaintiff’s side with a $250,000 cap on non-economic damages. There will be no medical malpractice lawsuits within 10 years if this bill passes.

I have no idea where all these terrible medical malpractice lawsuits are happening. Certainly not in Mississippi, where the $500,000 cap combined with ‘tort reformed’ juries has killed the practice area.

I’m not certain at all that the medical community would vote to abolish medical malpractice lawsuits. This and other tort reform bills are being pushed by professional tort reformers–people whose job it is to lobby for tort reform. Lobbyists have turned into the most powerful people in Washington.

Long term, I foresee a public backlash on this kind of stuff. But I don’t see it happening during my career.

The other day I was talking to a lawyer about the question of where the age line is for Mississippi litigators in private practice. Above a certain age, it’s probably best to try to stick it out and squeeze as many more decent years out as possible. Below a certain age, it’s probably best to find an in-house job and/or move. We decided somewhere in the 40’s.

Time to Move the Coast Railroad Tracks North of I-10

Posted in National Politics, Politics in Mississippi

As reported in the Sun Herald, a train collided with a bus in Biloxi on Tuesday, killing four people and injuring over 30 more. A terrible tragedy for sure.

Unfortunately, no one who has lived on the Coast is surprised. How many crossings are there between Back Bay and Bay St. Louis? Hundreds? They’ve been a hazard my whole life. When we were in junior high and would get our driver’s licenses soon, the railroad sent employees to talk at the school about the danger of trying to beat a train.

Not that me, my brother, or my sister needed the warning. Our mother grew up across the highway from the Southern Railroad. She often scared us with graphic stories about what happens when you don’t beat the train. It worked. I don’t trust crossing guards to be working properly.

But now maybe there is a solution for the Coast. President Trump wants to spend gazillions of dollars on infrastructure projects. Here’s an infrastructure project: move the Coast’s train tracks north of I-10. Then pave the current tracks and make it a recreation trail.

Mississippi’s political leaders should be able to get this done. Senator Cochran is chair of the Senate Appropriations Committee. And President Trump owes Governor Bryant for acting as a surrogate and hitting the campaign trail when most Republicans wouldn’t.

It would be a great use of federal money. It would help people and businesses on the Coast that lose productive time waiting on trains to pass. It would save lives. It would provide many jobs. It’s a no brainer. Unfortunately, it probably makes too much sense to actually happen.

Not the PERS Reform We Were Looking For

Posted in Mississippi Public Employer's Retirement System (PERS)

Geoff Pender at the Clarion-Ledger reported last week on the Mississippi Legislature passing a bill allowing PERS to pay its director and chief investment officer as much as it wants. From the article:

The cap is currently $183,240, or 150 percent of the governor’s salary of $122,160.

Current PERS Director Pat Robertson announced this week that she plans to retire in mid- to late-2018. Sen. Barbara Blackmon, who handled House Bill 1301 — to make “technical revisions” to the state’s retirement systems — said a study showed the PERS director and chief investment officer don’t make as much as their counterparts in other states in the region.

Supporters of the measure say the PERS board needs to be able to offer a competitive salary to hire a capable new director….

With the cap lifted, the PERS board would set the salary for a new director.

Lawmakers debated whether a director of PERS, which is underfunded like many public retiree systems and has seen lackluster results from investments for years, should make a salary larger than the cap. Several lawmakers, on both sides of the argument, used Ole Miss and Mississippi State University football coaches’ salaries — $400,000 a year in state funds — as an analogy to PERS.

Sen. Sean Tindell of Gulfport had the right idea:

Tindell said he was voting for the bill to allow a competitive salary, but urged his colleagues to more closely monitor PERS.

“We can’t keep sticking our head in the sand like an ostrich,” Tindell said. “If we don’t do something about it, it’s going to bankrupt the state.”

My Take:

I’m actually agnostic on this bill despite my constant criticisms of PERS. In the grand scheme of things, whether they pay the PERS director $183,000 or $500,000 is not going to make a difference in the survival or PERS.

Conversely, why is someone who makes more money better? Do states with the highest paid directors and investment officers have the best investment returns? I’m going to take a wild guess and say no.

What PERS needs that could make a huge difference is an executive director and investment officer who are ruthlessly committed to cutting the fund’s expenses and management fees. If someone could get those expenses and fees lower it would make a huge long term difference in the bottom line. Just reducing them by a few tenths of a percent would more than offset much higher salaries.

Here’s a quote on this topic from the book Global Asset Allocation: A Survey of the World’s Top Investment Strategies, by Meb Faber:

…while we are all busy paying close attention to our portfolio’s particular allocation of assets, the greatest impact on our portfolios may be something we fail to notice altogether. In this case, the so-called ‘gorilla’ are the fees that we often fail to consider. In one shocking example, we find the best performing strategy underperforms the worst strategy when we tack on advisory fees. Ultimately, smart investing requires that we not only monitor asset allocation, but of equal weight, we focus on the advisory fees associated with the investment strategy.

That’s something we all need to remember for our personal investments, including retirement accounts and 401(k’s). Do you check the expense ratios of the funds your money is invested in?

I can’t put my finger on the post, but I recall Kingfish identifying some fat in PERS expenses that could be trimmed. Here’s an article talking about how Warren Buffett has identified management fees as a problem for public pensions.

The football coach analogy is stupid. The football programs at Ole Miss and State earn huge profits for the schools. A good football team increases enrollment and is a boon for the local economies of Oxford and Starkville. A winning football team is going to return a lot more for the university and town than they pay the coach.

And there aren’t enough great football coaches to go around, so the best command premium pay. I don’t want to turn this into a football coach post, but the media doesn’t understand the business of hiring a firing football coaches. A coach is only as valuable as his ability to fire up the base to buy season tickets. The media bitches about LSU firing Les Miles despite his winning record. But the LSU AD is looking forward at prospective ticket sales–not at the trophy case. Firing Les was business–not personal.

Back to PERS. PERS directors and investment officers aren’t like SEC football coaches; they’re like lawyers. I suspect there are plenty of good directors and investment officers to go around. You could probably walk down the street to Millsaps and find people qualified on the faculty.

But whatever. The pay is not really that important, as alluded to by Sen. Tindall. What’s important is that PERS is going to crash and no one is doing anything about it.

$271,000 Jury Verdict in Leflore County Medical Malpractice Trial

Posted in Verdicts in Mississippi

On December 17, 2016 a Leflore County jury returned a plaintiff verdict for $271,000 in Johnson v. Kronfol. The verdict included $46,000 in economic damages and $225,000 in non-economic damages. Here is the Final Judgment and Jury Verdict.

Here is plaintiff’s Johnson Second Amended Complaint.

Plaintiff alleged that she contracted sepsis as a result of a temporary hemodialysis catheter that defendant ordered and later failed to remove or order removed. Plaintiff dismissed the hospital and another physician before trial.

Plaintiff’s expert witness was Dr. Orlando Gutierrez, a nephrologist from UAB. Defendant’s experts were Dr. Gary Davis of Jackson Nephrology and the Defendant.

Chynee Bailey of Columbus represented the plaintiff. Gene Parker of Vicksburg represented the defendant. Circuit Judge Carol White-Richard presided.

My Take:

Good win for the plaintiff. In the current litigation climate, it’s hard to get a plaintiff verdict in any medical malpractice case.

Gene Parker is an excellent trial lawyer, so it was no doubt a hotly contested case. The defendants can’t win them all regardless of who the attorney is.

$900,000 Jury Verdict- $500,000 Judgment in Jefferson County Silica Trial

Posted in Verdicts in Mississippi

On Tuesday a Jefferson County jury returned verdicts of $800,000 in actual damages and $100,000 in punitive damages in Sampson v. Mississippi Valley Silica Co.

The jury apportioned 50% fault to Miss. Valley Silica, which presumably lowers the judgment in the case to $500,000.

Patrick Malouf and Johnny Givens with Porter & Malouf in Ridgeland and Dennis Sweet of Jackson represented the plaintiff.

Mike Simmons, Lakeysha Greer Isaac and Mark Goldberg with Cosmich Simmons in Jackson represented the Defendant.

Circuit Judge Lamar Pickard presided.

My Take:

Silica litigation? Who knew that’s still a thing?