Mississippi Litigation Review & Commentary

Mississippi Litigation Review & Commentary

Comments on the Latest Developments in Mississippi Civil Litigation

For Mississippi native son and attorney Philip Thomas, blogging about law, politics and topical issues in the state extends a conversation he’s been... More

I’m Not Buying the Dan Jones – Butler Snow Conspiracy Theory

Posted in Politics in Mississippi

Former Governor Ronnie Musgrove published this story on Huffington Post yesterday accusing the IHL Board of firing University of Mississippi Chancellor Dan Jones because he doesn’t like the Butler Snow law firm. Really. I did not see this one coming.

From the article:

Since Jones’ hiring, [Gov. Haley] Barbour has taken two highly lucrative positions. Without missing a beat, he returned to his pre-gubernatorial position as head of Washington, DC lobbying firm, the BGR Group. He also took an equity position at the law firm, Butler Snow, in Ridgeland, MS – a suburb of the state’s capitol of Jackson.

When Barbour left office, Butler Snow was the third largest law firm in town. Since then, Butler Snow has taken hundreds of millions of dollars in state contracts. Now they are one of the largest firms in the nation…..

Butler Snow could be considered the ‘for-profit’ arm of our state government…..

Hundreds of millions – if not billions – flow through their hallowed halls in legal fees for health care contracts, research grants, bond issuances, buildings contracting, the list is too long to count. Even in a poor state that chronically underfunds education, we’re talking a mountain of untapped billable hours for a firm like Butler Snow.

Dan Jones was standing at the gates of a gold mine, but he wasn’t a Butler Snow man. He wasn’t a Barbour or Bryant man.

My Take:

If nothing else, this is a great article for Butler Snow. If the firm is perceived to be that powerful, this will drive even more legal work their way.

But I don’t buy the conspiracy theory. It sounds more like sour grapes. It would be kind of like Burger King telling you why McDonald’s sucks. Consider the source.

Start out with the fact that Gov. Musgrove is also now a private practice attorney who is a competitor of Butler Snow. Assuming that everything he says is true, would he do anything different if this was a Democratic controlled state and he had the influence that Barbour has? Hasn’t Gov. Musgrove used his connections and influence to get business?

That’s what big law firms do. They hire people with influence who they hope will bring business to the firm. Not only is that how things work, there is nothing wrong with it.

Musgrove didn’t have a problem taking a job with Copeland Cook. And I bet he used his contacts and influence to bring in business for that firm and his current firm.

Also, there is too much exaggeration here. Yes Butler Snow has transitioned itself from a Mississippi law firm to one with a national presence. With over 300 attorneys, it’s a big firm. But you’d have to have a very loose definition to call it one of the largest firms in the nation. Maybe it will get there. Hell, I hope so. It would be great for the Jackson area.

But right now, Butler Snow is a growing regional firm with a national presence. The firm has done an amazing job of not only weathering the Mississippi legal industry depression, but thriving while other firms struggle to remain alive.

I’m not sure how much credit Haley Barbour should get for that. It seems to me that the wheels were already in motion before Barbour arrived. I’d give most of the credit to Don Clark and the rest of the firm’s leadership, along with “female powerbrokerChristy Jones building a national litigation practice.

A few weeks ago, someone emailed me that a Butler Snow lawyer had lost a big trial in Philadelphia. My response was “that’s impressive.” “That they lost?” “No, because it’s big time for Mississippi lawyers to be trying cases in the Northeast.” There is no shame in losing a trial. It’s impressive that they were in that game.

I don’t know how much legal work Butler Snow gets from government related work. But I know enough about law firm economics to know that its not billions or hundreds of millions of dollars. If Butler Snow is getting billions of dollars in legal fees through State contracts–and it’s not–why would it need to get Dan Jones fired? Wouldn’t this argument make more sense if Butler Snow was getting no work from the State?

Not to mention the fact that IHL Board Member Alan Perry is an attorney who has always worked for big law firms that compete with Butler Snow. Why in the world would he want to fire Jones just to help one of his firm’s biggest competitors?

I agree that the Jones firing wreaks of politics. But it’s a political appointment. So that’s going to happen.

I don’t have an opinion yet on the Jones firing. Except for the Haley Barbour – Butler Snow angle. I’m not buying that one.

Court of Appeals to Decide Caps?

Posted in Mississippi Court of Appeals, Mississippi Supreme Court

In 2012 I wrote about a $3.5 million verdict in a Hinds County medical malpractice case that implicates Mississippi’s legislative caps. The case is now almost fully briefed in the appellate court and will presumably be decided later this year.

Here is the appellant’s brief.

Here is the appellees’ brief.

Anderson discusses the case here.

In a somewhat surprising development, the Supreme Court assigned the case to the Court of Appeals. One take on the assignment is that it is a way for the Supreme Court to dodge deciding the caps. But a review of the docket filings does not really support that argument.

The Court assigned the case to the Court of Appeals after the appellants filed their brief, but before the appellees filed their cross-appeal challenging the constitutionality of the caps. The appellant’s brief focuses on garden-variety appeal issues like admissibility of evidence and jury instructions.

The appellant’s response to the appellees’ motion to move the case back to the Supreme Court argues that the caps should not be in play. The response states:

…the judgment below must be reversed due to multiple errors under settled law. The constitutional question plaintiffs intend to argue on their cross-appeal will never need to be reached.

And that’s normally the way the cases come down. The Court decides the appeal based on other issues and doesn’t ever get to the caps argument. That, or the cases settle before the Court rules.

Image result for caps

Please remove your cap

You’ve got caps 

So the med-mal caps are in play in this case. Will they be decided? History tells us probably not.

I believe this is the only pending case challenging the med-mal caps. I think there is one looming case (Walls v. Pyro discussed in this earlier post) challenging the regular caps statute, but that case is in the post-trial motion phase and has not made it to High Street yet.

And then you’ve got the dreaded double-caps argument

The appellants make the dreaded double-caps argument. Under the double-caps argument, if a jury awards more than the caps in non-economic damages, then the Court should reduce the verdict to the amount of the caps and then reduce it again based on defendant’s percentage of fault.

In this case the jury’s verdict for non-economic damages was $2 million. Judge Kidd reduced it to $500,000 pursuant to the med-mal caps. The defendant/appellee argued that Judge Kidd should have reduced it by another 25%, since defendant was apportioned 75% of the fault. The technical argument appears to be that caps should be applied before apportionment.

My Take:

I’m surprised that the appellants didn’t argue that they should also get to take the plaintiffs out back and beat the crap out of them.

The double cap argument is hogwash. I don’t see the Court buying it. It would almost be funny, except for the fact that they may can scrape up a vote or two for it. Maybe.

This argument reminds me of the defense lawyer adage from the years when plaintiffs never won on appeal that “there’s not an argument I can make that [he’s now a former justice] won’t buy.

On another note, it would have been helpful if the appellees had labeled the issues in their brief’s table of contents in a more descriptive manner than “Issue I”, etc. Want to know what page they discuss the caps argument? Start flipping pages.

The appellants’ brief has a better table of contents.

Defense Verdict: Tallahatchie County Products Liability Case

Posted in Verdicts in Mississippi

On February 17, 2015 a Tallahatchie County jury rendered a defense verdict in Laws v. Louisville Ladder, Inc. The plaintiff alleged that a ladder was defective because the rivet hold on the bottom step was damaged when it was punched, rendering the ladder unreasonably dangerous. The jury disagreed.

Here is the Final Judgment. The jury’s vote was 10-2 for Louisville Ladder. Image result for ladders

Paul Williams represented the plaintiff. David C. Dunbar of Dunbar Monroe in Ridgeland and James Silverstein with Kean Miller in New Orleans represented Louisville Ladder.

Judge Jimmy McClure presided in the case.

My Take:

I don’t know about you, but at my age, every time I climb a ladder I think: “this could go really bad.”

March Miss. Jury Verdict Reporter Preview

Posted in Verdicts in Mississippi

Here is a preview of the verdicts detailed in the February issue of the Mississippi Jury Verdict Reporter:

  • $1 million verdict- Hinds County premises liability case covered here (3/5/15);
  • $160,000 verdict (minus 20% fault)- Jackson County car wreck case (2/29/15);
  • defense verdict- Hattiesburg federal court bar fight case covered here and here (2/11/15);
  • defense verdict- Warren County medical malpractice case (2/11/15);
  • defense verdict- Harrison County car wreck case (2/27/15);
  • defense verdict- Madison County truck loading negligence case (1/27/15); and
  • defense verdict- Harrison County termite treatment negligence case (2/27/15).

My Take:

Do people even file civil cases north of the Jackson area anymore?

The reporter has some great descriptions of the facts of some of these cases. Very entertaining.

PERS Investment Stupidity

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

Last week in this post I criticized the investment allocation for Mississippi PERS. In that post I noted that PERS is investing in foreign and junk bonds:

The PERS 2014 financial report explains that the portfolio’s fixed income investments are a departure from the System’s previous U.S. investment grade only bond portfolio structure. The fund is now investing in non-U.S. and high yield debt. (See. p. 79). Another name for ‘high yield debt’ is junk bonds.

What I left out was the purported reason for this investment strategy:

In an effort to better position the debt portfolio to weather the effect of future interest rate increases, the System sought better diversification by increasing its allocations to non-US and high yield debt.

So the reason for the loading up on foreign and junk bonds is to position the portfolio for future interest rate increases. How might that work in a world of rising interest rates? Tuesday’s market action gives us an indication.

On Tuesday the Dow dropped 332 points (1.85%). The reason? A fear of future interest rate hikes. From Reuters:

U.S. stocks dropped on Tuesday, giving the S&P 500 its biggest decline in two months, on increasing views the Federal Reserve may raise rates as soon as June.

It would seem that if PERS wanted to position itself for interest rate increases, it would reduce its exposure to equities.

But how did foreign and junk bonds do on Tuesday? The Barclay’s high yield debt junk bond ETF (JNK) was down .23%. The Powershares foreign bond ETF (PICB) was down .39%. That’s not so bad, right?

But what about US treasuries, which PERS sold to buy foreign and junk bonds. The long-term treasury ETF (TLT) gained 1.32% yesterday.

Therefore, at least on Tuesday, PERS would have been better off doing the opposite of what it did if it was really investing based on expected increases in future interest rates. And yesterday was not unique. When the market fears an imminent rate increase, stocks get pounded and US treasuries increase in value.

So what is really going on? Consider Kingfish’s comment to the post last week:

The problem is the Fed is manipulating interest rates and the money supply to encourage the stock market. Trust me, PERS wants to diversify but the Fed is making it hard for them to do so.

I think he’s right. PERS is positioning itself for continued Fed manipulation of interest rates. That’s been a winning bet for six years. Of course PERS is not being honest in its investment reports, but that’s not my point.

The problem for PERS is that manipulated markets are risky. We’ll have to wait and see what happens. But arguably, betting on a manipulated market is like betting on a ponzi scheme and hoping that you aren’t the sucker who loses his money. Of course even under that reasoning, at some point you have to take your money out and wait for the crash.

What if the market loses faith in the Fed’s ability to manipulate? LOOK OUT BELOW. It could be a situation where all asset classes lose value. Cash would be the winner. PERS currently has about 1% in cash.

But it could be that like on Tuesday and during the financial crisis, the money moves to US treasuries, causing them to gain in value. Image result for frightened

PERS in all in on Fed manipulation. If the Fed loses control, PERS is toast. If the people investing PERS money really wanted to diversify, they would raise the cash allocation and the allocation of US treasuries.

It’s time to take some money off the table and wait for the next real opportunity. This is shaping up as a pigs get slaughtered scenario.

$1 Million Jury Verdict in Hinds County Premises Liability Case

Posted in Hinds County Circuit Court, Verdicts in Mississippi

On Thursday a Hinds County jury rendered a $1 million verdict in Clark v. Arlington Properties, Inc. 

The case involved a car-jacking of a woman on May 23, 2013 at the Park at Moss Creek Apartments in northeast Jackson off Ridgewood Road. It was a gated property. The gate was supposed to be closed 24/7. But the gate was left open at night. The plaintiff was a thirty year old nurse who was a tenant at the complex. She was coming home from work at 1:00 a.m. and was attacked at gunpoint and robbed in the parking lot and her car stolen.

Before the attack, there was evidence of monthly carjackings in the complex’s parking lot from January 2013 to May 2013. All the car-jackings occurred at night against female tenants. Image result for car jacking

Testimony showed a pattern of violent crimes on the property. A witness testified that the prior manager requested three armed guards to monitor the front gate and patrol the property. When the Company refused, the manager quit because the property was unsafe.

In January 2013, the new manager made the same request for security; it was again denied. After the request, there continued to be regular carjackings in the parking lot until the plaintiff was car-jacked.

Testimony showed that the security gate was always broken and open, the security lights were out and two of the three security cameras at the front gate were broken for weeks before the attack. The manager testified she requested two armed security guards (one to be stationed at the gate and one to patrol the property). She also testified she was scared to live there.

The Defendants denied liability until the day of trial and then admitted liability for the company and manager. However, the manager refused on the stand to admit liability.

The Plaintiff suffered from physical injuries, PTSD, and anxiety. She was treated for two years for her mental and physical issues, incurred $6,000.00 in medical bills and had a future medical treatment plan of $75,000.00. She also incurred lost wages.

Plaintiff’s counsel were Ashley Ogden, Jim Smith and Tyler Royals of Odgen and Associates in Jackson. Defense counsel were Bill Eckert and Emile Bagneris of Ungarino and Eckert out of New Orleans.

Judge William Gowan presided in the case.

PERS Lunacy Continues

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

Here are the asset allocations for the Mississippi Public Employees Retirement System as of December 31, 2014: PERS Asset Allocation 12-31-14.

U.S. Equities – 35.80% Image result for frightened

Non-U.S. Equities – 21.51%

Global Equity – 6.03%

Real Estate – 10.22%

Fixed Income – 20.63%

Private Equity – 4.77%

Cash – 1.04%

Over 60% of the portfolio is in the stock market. That’s really aggressive. But it’s even worse than that.

The PERS 2014 financial report explains that the portfolio’s fixed income investments are a departure from the System’s previous U.S. investment grade only bond portfolio structure. The fund is now investing in non-U.S. and high yield debt. (See. p. 79). Another name for ‘high yield debt’ is junk bonds.

So we’ve got the conservative part of the investment portfolio invested in junk bonds. The problem with this is that if the financial markets go into turmoil, junk bonds will crash along with the stock market. In that scenario, safety would in U.S. government bonds, which would appreciate in value.

Private equity is not conservative either. Same for real estate.

With an 8% investment assumption and an extremely aggressive asset allocation, PERS is priced for perfection and living on the edge of a cliff. With this type of investment strategy there will be some bad years in investment performance. REALLY BAD. 30% bad. Maybe worse.

Another 1999 or 2008 like financial market calamity would crush PERS.

This is foolish.

Justice King Shoots Gay Marriage Opponents in the Gut

Posted in Mississippi Supreme Court

Last week’s Order and two written objections in Mississippi’s gay divorce case is fascinating from both a procedural and substantive standpoint. Here is the Court’s order.

The legal issue in the case is whether a gay Mississippi resident who was lawfully married in another state may obtain a divorce in Mississippi. The State of Mississippi–maintaining its time honored tradition of being on the wrong side of history–says no.

The State argues that since Mississippi does not recognize same sex marriages, it can’t grant same sex divorces. A humorous twist on this argument raised by Justice Dickinson at oral argument was the question of whether Mississippi should be encouraging same sex divorces based on its public policy againt same sex marriage.

The Court did not decide the issue. Instead, the Court asked for more briefing on the question of:

 In light of Mississippi’s public policy of not allowing or recognizing a marriage between two persons of the same gender, what rational basis supports the interpretation or application of a law or constitutional provision so as to prohibit Mississippi courts from granting a divorce to a Mississippi resident who was lawfully married in another state to a person of the same gender? 

Six justices agreed with the Order. Justice Chandler disagreed, without indicating how he would vote on the issue. Justice King disagreed with a 25 page opinion explaining why Mississippi’s ban on same sex marriage violates the Equal Protection Clause. Justice Kitchens joined Justice King’s opinion.

Footnote 4 of Justice King’s opinion presents a real problem for gay marriage opponents. The footnote is to the following:

The State argues that Mississippi’s laws pass muster under rational basis review, justifying them with the responsible procreation theory, tradition [Mississippi code for bigotry], and a ‘wait and see approach.’ It also argues that Windsor stands for the proposition that states control the definition of marriage.  

Here’s the footnote (in part):

Miscegenation statutes were justified on eerily similar grounds…

Ouch! That’s just not very sporting. Lumping discrimination of gays in with Mississippi’s embarrassing history of racial discrimination is sort of like standing here while someone bad mouths the United States of America. Image result for same sex marriage

I get the Court wanting to let this issue play out in the U.S. Supreme Court–if that’s what is going on here as Justice King argues. And I’m not going to quibble with it. The issue does need to be resolved by the U.S. Supreme Court.

But we all know where this is going. Same sex marriage (and divorce) will soon be legal in all 50 states. The sky will not fall. It will just be another bad tradition biting the dust.

Here is coverage on the decision on TBA. I wonder what NMC would have written on this decision?

The Imagined Racial Divide

Posted in General

The Dedmond gang hate crime murder, put into historical context by Judge Carlton Reeves, evokes tremendous sadness about the nation’s racial divide. It is a divide that is very real; and completely illusory.

Large segments of our population–white and black–believe that people of the opposite race are different from them. People often cling to this belief despite overwhelming contrary evidence. black v.s white

When people of different color do get to know one another, they see that their only difference is skin color. But rather than questioning their underlying racial beliefs, people think this one person they know is different instead of questioning their entire belief system.

Frankly, I’ve known that white people do this for most of my life. White people often maintain their racial prejudice with this line of thinking: “the black person that I got to know and is my friend is different from other black people.”

This allows people to have friends of the other race and maintain underlying prejudices. When you think about it, this makes no sense. But it undeniably happens.

For a long time I just assumed that only white people rationalized in this way. Turns out, I was wrong. I’ve learned in the last decade that black folks do the same thing.

My legal assistant is black. She’s told me on more than one occasion that friends or family who she introduced me to were surprised that I was a nice guy. They just assumed that, since I was white, I was a jerk.

A similar thing happened a few years ago when I played in a regular poker game where I was usually the only white person at the table. My friend who hosted the game later told me that the other players had agreed that I was so cool, they almost forgot I was white.

The thing is, I’m not that cool. I’m just a normal dude.

In many towns you can walk into a sports bar and see a table of black guys sitting near a table of white guys. They’d be speaking the same language, watching the same games, eating the same food, drinking the same beer, and flirting with the same waitresses.

The conversations at those two table would be EXACTLY the same. Mostly talk about the game on television, sprinkled in with complaints about work, wives, etc…

Over the course of the game, they would even talk to the dudes at the other table about the game and share in each other’s jokes about what they were watching together on television. At the end of the night, they would all go home thinking those guys at the other table were a lot different from them. Despite the fact that for the last few hours, those other guys were doing the exact same thing they were.

On Saturday the black guys might tailgate outside a JSU game. The white guys might tailgate in Starkville or Oxford. Many of them wouldn’t dream of hanging out with each other, what with all their differences and all.

We have a very real racial divide. And it’s complete bullshit.

It wouldn’t even be that big a deal if it didn’t lead to tragic results. Like in the Dedmond case. A man was killed because of imagined differences.

While it is racism, it’s not your father’s racism. Today, people who some would categorize as racist would have been viewed as liberal-commie nuts in 1960.

Why? Because they aren’t racist towards all member of the opposite race. Just the one’s they don’t know. Which other than a few people, is everyone.

It is both sad and frustrating. And it’s going to be prevalent for a long time.

Death of the Billable Hour?

Posted in General

Chase Bryan recently blogged about the billable hour system and alternative fee arrangements. A barrier to alternative fee arrangements is in-house lawyers who are afraid of change:

…a former outside lawyer and now a general counsel at a large company, expressed skepticism about alternative fee agreements. He said that everyone talks about alternative fees deals but folks rarely actually agree to engage in them. He relies on the default of hourly fee arrangements because it is familiar.

That’s consistent with my experience. I’ve proposed flat fees to corporate clients who weren’t comfortable with the concept because they had never done it before.

Corporate America is largely built on the backs of employees who do not want to rock the boat. Changing the way your outside attorneys bill would rock the boat–so companies usually maintain the status quo.

The legal industry is slow to change. I suspect that alternative billing will continue to grow, but at an extremely slow rate. Perhaps one day there will be a tipping point that speeds it up.

Another great defense-side idea that has been slow to adopt is resolution counsel who are separate from litigation counsel. I’ve seen this concept used a few times and am impressed with it. Having resolution counsel whose sole job is to try to settle the case eliminates the inherent tension between a defense lawyer’s need for work and the benefit of settlement for clients.

It’s a topic for its own post, but the concept of resolution counsel makes more sense than ever. The value of cases has dropped so much over the last 10-15 years that the exposure levels usually do not justify spending six figures to defend cases.

That made sense back when many cases settled in seven figures. Who cared if defense counsel billed $250,000 if they beat the settlement value down from $2 million to $1 million? That’s how it worked in the litigation boom.

Not so much today when those same can be resolved in the low to mid six figures. Perhaps I’ll post more of my thoughts on this topic later.