Mississippi Litigation Review & Commentary : Mississippi Personal Injury Lawyer & Attorney : Phillip W. Thomas Law Firm : MS Litigation Review & Commentary

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Forbes.com has a good article on the business of big law firms and the pressure on firms to change the way that they do business. According to the article, the global economic crisis is accelerating trends that will alter the structure of law firms and the way that they do business. The article covers a lot of ground including the importance of "leverage" to law firm profitability, firm management and the expected trend away from the billable hour. Here are some of my favorite passages:

Law firms refer to the ratio of partners to associates as "leverage." In good times, the arrangement produces strong profits, but when revenues fall, highly leveraged firms can find it particularly difficult to sustain all those associates. As a result, if revenues at a law firm decline 10%, profits can fall 30%

"Most large firms are leveraged up for big deals. With no big deals coming through the door, there's not a lot of work for associates so firms have to [cut] employees. There's definitely going to be a sea change in the law industry as a result of the credit crisis."

Beyond staffing, Borghese says firms face pressure from clients to move away from a payment model based on hourly rates. "Billable hours will always be here, but you will see more of a movement toward retainers and fixed fees."

Susan Hackett, general counsel of the ACC, says the new approach to value is necessary because law firms had become so expensive that their fees often outstripped the value of the problem they were brought in to resolve. "You can have many lawyers and paralegals all billing on a matter worth $50,000 of exposure adding up to a grand total of $250,000. That's crazy."

 In many firms, he notes, the highest fee-producing lawyer is viewed as a good lawyer and is automatically chosen to run the practice group, whether or not he or she is an effective manager.

One thing that the article gets wrong is its suggestion that clients always want alternative billing and lawyers always resist by demanding hourly billing. There have been several instances where I have proposed flat fees to corporate or insurance clients. In each instance the client rejected the concept  and we stuck to hourly billing. I have yet to see in-house counsel embrace alternative billing in my practice.  

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Last week the Mississippi Court of Appeals affirmed a $2.1 million verdict against Goodyear Tire and Rubber Company in a defective tire case in Copiah County. The Associated Press later botched its analysis of the Court's decision.

This week a unanimous Court of Appeals affirmed a 2005 Washington County jury verdict in favor of Goodyear in Oliver v. Goodyear Tire and Rubber Co. Judge Lee wrote the Court's opinion. Goodyear's defense counsel was a team of lawyers from Watkins & Eager that included David Ayers and Jimmy Wilkins.

The facts of the two cases were similar in some respects. In both cases the vehicle was speeding when a tire burst, leading to an accident where the un-belted driver was thrown from the vehicle and died. But that is where the similarities end. In the Copiah County case, the tire was new and had been properly maintained and serviced, including a few days before the accident. In the Washington County case, there was "considerable testimony at trial" that the decedent failed to properly maintain the tire. These differences apparently made a big difference in the trial court verdicts.

In the Washington County case the jury disagreed on whether the tire was defective, but unanimously agreed that a defective tire was not the proximate cause of the accident. The Court of Appeals can make a compelling argument that it is fair to everyone when it affirms a verdict against Goodyear one week and affirms a verdict for Goodyear the next week. Notice that as in the decision last week, the Court did not agree or disagree with the jury. Instead, the Court evaluated whether there was reversible error and determined that there was not. It will be interesting to see if this decision gets any press, since defense verdicts and appellate decisions affirming defense verdicts typically receive less press that plaintiff's verdicts.  

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How would you feel if you were sentenced to two years in prison for speeding because murder has gotten out of hand? Chances are you wouldn't like it, since a petty offense like speeding doesn't have anything to do with serious crimes. But the U.S. Chamber of Commerce and tort reform supporters commit a similar bait-and-switch when pushing the tort reform agenda.

An April 28 Bloomberg article discusses the Chamber's renewed push for tort reform and cites shocking statistics about the unfairness of arbitration proceedings for employees and consumers. The Chamber's tort reform advertisements are pure propaganda. The Chamber cites lawsuits that sound frivolous. But the Chamber does not seek remedies that hold filers of frivolous lawsuits accountable. Instead, it seeks to put caps on recoveries in all cases, including for victims in legitimate cases with large damages. It's like arguing that you should be put in jail for speeding because there is a murder problem. The public does not understand this distinction, which is how the Chamber wants it.

Tort reform passed in Mississippi years ago. The public does not understand what legislation passed or what it means. I have yet to meet a client or potential client who understood that tort reform caps damages for meritorious cases. Everyone just assumes that it only affects frivolous lawsuits, since that's what the Chamber and other tort reformers talk about. Unfortunately, there has been no organization with the funding or marketing acumen to educate the public on the Chamber's propaganda. 

The Bloomberg article also cites a study that found what many lawyers have long suspected, that arbitrators favor business interests in the hopes of getting hired in future cases:

Alexander Colvin, a labor professor at Cornell University, published a study in January that examined employment dispute statistics from the American Arbitration Association. Employees won 31.6 percent of the time if the employer had no other case with AAA; 16.9 percent of the time if the employer had more than one case with AAA; and 12 percent of cases where an employer and a particular arbitrator were involved in cases more than once.

Colvin worries that “repeat player bias” is at work, with arbitrators favoring employers in hopes of being selected for future hearings

Of course, the Chamber argues for arbitration with claims that it is quicker, cheaper and just as fair as a court proceeding. In a previous post I criticized the costs of arbitration, but now there is solid evidence that arbitration is unfair in addition to being expensive. There is currently an arbitration fairness act pending in Congress that would ban pre-dispute arbitration agreements in some consumer agreements, such as nursing home admission agreements. Look for the Chamber's propaganda push to fight this legislation. You can bank on the fact that the Chamber's ads will be based on its frivolous lawsuit bait and switch tactics. 

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On Thursday the Mississippi Supreme Court affirmed two jury verdicts.

The first was Young v. Guild, which was a medical malpractice case against a psychiatrist. The plaintiff alleged that the defendant was negligent in failing to prevent the suicide of one of his patients. In 2004 a jury in the Circuit Court of Yazoo County rendered a defense verdict at the end of a three day trial. Defense counsel was Whit Johnson and plaintiff's counsel was Ronald Kirk. The Court affirmed the judgment with Justice Chandler authoring the majority opinion joined by Justices Carlson, Randolph, Kitchens and Pierce. Justice Graves concurred in the result only and Justice Lamar dissented in an opinion joined by Justice Dickinson.

The appeal issues involved jury instructions, apportionment and the admission of evidence. The Court found that the plaintiff waived apportionment by not raising it in an interrogatory response, that the jury instructions were proper and that the trial court did not abuse its discretion in the evidentiary rulings. The dissent argued that the trial court's jury instructions did not properly set forth plaintiff's theory of the case. It's pretty rare for me to believe that jury instructions materially altered the outcome of a trial, so I am putting this case in the category of "move along folks, there's not much to see here." It looks like the defendant won fair and square. 

The second case was Horseshoe Casino v. Mitchell, which was a casino slip and fall case that resulted in a January 2008 jury verdict and judgment for the plaintiff in the amount of $56,000 in the Circuit Court of  Tunica County. Unaccustomed to losing, the casino appealed. To me, if you are going to appeal a $56,000 jury verdict you should be real sure that there was error, since the attorney's fees and expenses in connection with the appeal will be significant. There is a reason that appeals courts aren't deciding many appeals from county court.

The main issue on appeal was whether the trial court properly excluded evidence of a collateral source. The Court found that there is a narrow impeachment exception to the collateral source rule, but the trial court correctly did not apply the exception in this case. Justice Randolph wrote the Court's majority opinion. Justice Dickinson wrote a concurring opinion. Justice Kitchens wrote a dissent joined by Justice Waller that argued that there should be no exceptions to the collateral source rule. The main take away from this case is that unlike on the casino floor, the casino can actually lose at the courthouse.

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The Clarion-Ledger website contains the A.P. story on the $2.1 million verdict against Goodyear Tire and Rubber Co. that I discussed in an earlier post. While the AP correctly stated the facts of the case, it misstated the ruling of the Mississippi Court of Appeals.

The statement that I have trouble with is the following:

The young men’s families — and a jury — blamed the accident on a faulty tire on the Chevrolet Camaro rather than excessive speed and the beer the men had been drinking.

The Mississippi Court of Appeals agreed this week and upheld a $2.1 million verdict against Goodyear Tire and Rubber Co. and Big 10 Tire Co.

The Court of Appeals neither agreed nor disagreed with the jury's verdict. Instead, the Court considered the issues raised on appeal by Goodyear and found that there was no reversible error. The Court was required by law to give deference to the jury's decision and could only reverse if there was no evidence to support the prevailing party and reasonable jurors could not have ruled in the prevailing parties' favor. Since the jury found for the plaintiffs, the Court was required to consider the evidence in the light most favorable to the plaintiffs.  Applying this standard, the Court found that the jury's decision was supported by sufficient credible evidence to support the verdict.

The Court could not and did not simply read the trial transcript and decide whether the Court thought that the jury got it right. Appellate judges do not substitute their assessment of the evidence for the jury's assessment. The Court's fifty-six page opinion cited substantial evidence that supported the jury's verdict. If the Court had found reversible error, it likely would have been related to jury instructions or other procedural rulings by the trial court. This would have resulted in a new trial, not a judgment in favor of Goodyear. It would be nice to see the news media recognize this important distinction.

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On Tuesday the Mississippi Court of Appeals affirmed a $2.1 million Copiah County Circuit Court jury verdict in favor of three plaintiffs against Goodyear Tire and Rubber Company. Judge Forrest Johnson presided over the trial because Judge Lamar Pickard recused himself from the case. Judge King wrote the majority opinion, which was fifty-six pages long. Judges Griffis and Barnes dissented without an opinion and Judge Carlton wrote an opinion concurring in result only. It looks like plaintiff's lead counsel at trial was Mike Allred and Goodyear's was Michael Baxter of Copeland Cook.

The case involved a car crash that killed one young man and injured two others. The driver was intoxicated and the car was traveling at between 88-92 mph when a back rear tire failed and the car crashed. It was undisputed that there was a tire failure. Plaintiff argued that there was a breach of warranty because the tire should have been safe up to 112 mph, but fell apart because of the car's speed. Goodyear argued that the tire hit an object that caused the failure and that the driver could have averted the crash if he had been sober.

The Court rejected all eight of Goodyear's appeal issues, which covered the water front. One interesting point was that the trial judge granted more than one form of the verdict instruction. One was a general verdict form and another was for apportionment of fault to the driver. The jury returned its verdict in general form with no allocation of fault. It makes sense to have more than one form of the verdict form for that situation, but I have always thought in terms of there having to be only one form of the verdict instruction and cannot recall having a trial with more than one.

Another interesting issue involved a jury instruction that Goodyear objected to, but the Court found that the objection was not specific enough and was therefore waived.

It will not be surprising to see the Supreme Court take this case given the size of the verdict and numerous issues. If so, Justice Kitchens will not participate, since he was one of the plaintiffs' attorneys.

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Week before last there were two civil trial going on in Warren County Circuit Court at the same time. In Bougois v. Magnolia Marine Transport the jury returned a plaintiff's verdict of $1,697,000. The plaintiff injured his back on a barge in 2001 when he was 42 years old. He had two surgeries and was permanently disabled. he alleged that Magnolia Marine failed to provide him with a dolly that he needed to safely perform his job, leading to his injury. The plaintiff's attorney was Kelly Loyacono of Vicksburg. Defense counsel was Ernie Lane of Oxford.

The other trial was a med-mal case with a lawyer as the named plaintiff. The jury returned a defense verdict for the doctor.

These two verdicts illustrate the fact that it is easier to obtain information about plaintiff verdicts than it is for defense verdicts. Defendants win as many trial as plaintiffs, perhaps more. But the cases that make it into the newspaper are the ones involving large awards to the plaintiff.

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On Thursday the Mississippi Supreme Court affirmed a $6,925,000 judgment against Franklin Corporation, which is a furniture manufacturer. $5 million of the verdict was for punitive damages. Here is the opinion and the Clarion-Ledger article reporting the decision. The initial Ledger article incorrectly states that the judgment was for $3.76 million. Justice Randolph wrote for the Court, with Justices Graves and Dickinson writing concurring opinions. There was no dissent.

The Circuit Court of Calhoun County (Judge Howorth) rendered the judgment in July 2007. The jury's verdict was $9.5 million and the trial court reduced the amount to $6.925 million before entering the judgment. The four plaintiffs alleged that they suffered injuries as a result of Franklin's use of a hazardous glue in its facility and failure to adequately ventilate the facility.

The bulk of the Court's opinion on appeal dealt with the issue of whether Franklin could be liable outside the workers' comp. act under the intentional tort exception. The Court sided with the trial court's determination that there was a fact question for the jury on the claims of battery and intentional infliction of emotional distress. If the Court had found that workers' comp. was the exclusive remedy, the plaintiffs would not have been able to recover anything in circuit court.

This will be a controversial decison. Employers are going to hate the decision, since most would have assumed that workers' comp. would have been the exclusive remedy for the employees. The Supreme Court's response to that probably would be that they were just applying Mississippi statutory law and that it is the legislature's job to change the law.

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More facts emerged this week from the Kroger beating case. The Plaintiff presented the following evidence against Kroger at trial:

1. The assailant told his two accomplices that he had "hit" the Kroger twice previously in the past few months.
2. Kroger had two incident reports for parking lot muggings where the assailant's description matched the assailant in this case.
3. Kroger paid to have off-duty JPD and Hinds S.D. deputies patrol the store to guard against shop lifters. There had been no violent crimes in the store.
4. Kroger had an unarmed security guard in the parking lot who had no power to arrest individuals. The parking lot security cost half ($10.00 per hr.) what the in store security cost. ($17.00-20.00 per hr.).
5. Kroger could have had armed off-duty law enforcement officers in the parking lot at no extra cost by stationing the security guard in the store and the police officer or deputy in the parking lot.
6. Kroger gave its customers no warning of the recent history of violent crimes in the parking lot.
7. At trial Kroger blamed the victim for attempting to defend herself and keep the assailant from taking her purse.

It's amazing to me that anyone can criticize this verdict.

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A Madison County jury awarded a plaintiff $1.9 million today in a car accident case. The verdict may be the largest verdict in the history of the county. The trial judge was Judge William Chapman.

The plaintiff's medical bills were approximately $200,000 and there were over $1 million additional economic damages. The plaintiff's attorney was John Davidson of Jackson.

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On Friday a Hinds County Circuit Court jury rendered a $2.5 million verdict for Linda Knox, a 62 year old woman who in 2007 was severely beaten in the parking lot of the Kroger Grocery Store on I-55 in northeast Jackson. Ms. Knox was hospitalized for two weeks following the attack and was permanently blinded in one eye. Her two attackers targeted older women in shopping center parking lots. Ms. Knox's attorneys were Rocky Wilkins and Ashley Ogden of Jackson. Kroger's attorney was Bill Luckett of Clarksdale.

Viewing the comments to the story on the Clarion-Ledger's website , there is sympathy for Kroger's defense, which the Ledger described as follows: 

But Luckett said there was no way Kroger could have prevented "crazy, drugged out thugs" from carrying out the attack.

Luckett said one of those charged in the crime said they had driven around the parking lot looking for a female to snatch her purse.

"Look at it as an unfortunate event that happened on Kroger's lot," Luckett said.

I'm going to argue the other side of the coin on this one. Businesses on the I-55 corridor in Jackson invite customers in and take their money, but never disclose that there is a history of crime activity in their parking lots. There are many purse snatchings and similar assaults in the parking lots of these businesses. Most do not make the news. Visit that Kroger and I promise you that you will never see a sign that says: "Warning! Crazy drugged out thugs beat up an old lady in the parking lot last week. Shop at your own risk." Businesses like Kroger should either disclose the crime history on their premises or provide protection for their customers.

To get a verdict in a premises liability case the plaintiff must prove that the defendant was on notice of a dangerous condition. Ms. Knox and her attorneys presumably met this burden. I doubt that Ms. Knox knew about the crime wave in the Kroger parking lot--most people do not. Kroger knows this and likes it that its customers do not know, otherwise they might drive out to the Wal Mart. The critics of this verdict would not give Kroger or another business their sympathy if they were attacked in the parking lot of a business with an undisclosed history of crime activity.

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The legal industry is being hit hard by the recession. Several blogs provide daily updates and there is a  layoff tracker at LawShucks.com : 

Major law firms are turning out to be just as susceptible to general economic conditions as every other industry. Historically, layoffs by top-tier firms were kept quiet and were done on a one-off basis. We’re trying to shed a little light on the situation.

As of March 31, 2009, there have been over 9,946 people laid off by major law firms (4,046 lawyers / 5,905 staff) since January 1, 2008. For the first quarter of 2009, 7,999 (3,149 lawyers, 4,850 staff), 3,677 in March alone (1,334 attorneys, 2,343 staff).

Subscribe to the blog Above the Law on your google or other reader and prepare to be depressed. The site provides daily updates from mega-firms complete with bootlegged emails announcing that the ax has been dropped.

It appears that the site defines major law firms as huge firms based in major cities. I do not believe that any firm with a presence in Mississippi fits their criteria for a major firm, but the recession is being felt everywhere. There is no doubt that Mississippi firms, attorneys and support staff are suffering. Hiring by law firms in Mississippi is down. There are rumors around town about layoffs, particularly of contract attorneys and staff. I have also heard that law school graduates are finding it very difficult to find a paying job in the legal field.       

In the litigation arena Mississippi began its recession a good five years ago with the change in joinder law, tort reform and a conservative supreme court sending mass tort plaintiff lawyers in search of greener pastures in other states. Katrina related litigation helped, but those cases have mostly been resolved. There are just not as many big cases in Mississippi as 5-10 years ago, with cases like Eaton v. Frisby being the exception. And no one I know sees that changing anytime soon. 

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Back on March 9 I had a post about the Eaton v. Frisby case and called it a mess worth watching. Hinds County Circuit Court Judge Swan Yerger made watching the case harder last Thursday by closing the courtroom to the press and public. In doing so, Judge Yerger apparently disregarded state Supreme Court rules for closing a court from the public. Jimmy Gates from the Clarion-Ledger objected, but was thrown out. The apparent justification for closing the courtroom was:

Yerger said attorneys for both sides agreed it should be closed to the media and the public.

On Sunday the Clarion-Ledger's Ronnie Agnew wrote a scathing criticism of  Judge Yerger's decision:

How can the public have confidence in the judicial system when shenanigans that took place Thursday continue to occur, when people in charge of upholding the law conveniently ignore what the law states?

The events of Thursday represent a travesty of justice and Senior Judge Swan Yerger, no newcomer to the bench, ought to know the law better than with the judgment he showed that day. Yerger is hearing a $1 billion theft of trade lawsuit where officials at Eaton Aerospace contend five employees revealed trade secrets when they went to work for a North Carolina competitor.

While I'm not going to go so far as to call it a travesty of justice, Mr. Agnew has a point. The Eaton v. Frisby case is probably the biggest case pending in Hinds County, perhaps in the whole state. The parties are litigating the case at the expense of the taxpayers, who fund the judicial system. If Eaton and Frisby are not comfortable airing their dispute in public, then they should agree to a private arbitration where they pay the decision maker and can set whatever ground rules they want. There are strong public policy reasons favoring open courts, and parties should not be able to disregard those policies and close a court by agreement.  

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The Clarion-Ledger had the following blurb today stating that Judge Vollor is stepping down after twenty years on the bench:

Circuit Judge Frank Vollor of Vicksburg will retire May 31 after 20 years on the bench.

Vollor, 60, said he is stepping down for economic reasons. Gov. Haley Barbour will appoint someone to fill the unexpired term, which ends in December 2010.

Judge Vollor's circuit includes Warren, Issaquena and Sharkey counties. Judge Isadore Patrick is also a Circuit Judge for the circuit.

With twenty years of service Judge Vollor, is eligible for full state retirement benefits. He can collect those benefits while also working in private practice. I do not know what his plans are, but as an experienced and respected trial court judge he can probably work all he wants as a mediator.

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 A Canadian Medical Association article compiles statistics from several studies regarding medical malpractice and the compensation of its victims. Studies show the following:

In 2004, Healthgrades, an independent health care ratings company.... [examined] 37 million patient records from all 50 states, representing 45% of all US hospital admissions, found 195,000 hospital deaths from preventable medical errors annually between 2000 and 2002, (www.healthgrades.com).

In 1990, Harvard researchers examined more than 30,000 randomly selected records from New York hospitals. They concluded that 1% of patients were negligently injured, while only 4% of those who were injured, sued.

Harvard researchers [concluded that jury awards and settlments were fair] when they examined files from 1452 malpractice claims (NEJM 2006;354[19]:2024-33). Almost three-quarters had outcomes consistent with their merit. Only 10% of patients received payouts in the absence of error, while 16% received no payout despite the presence of error. "Portraits of a malpractice system that is stricken with frivolous litigation are overblown," the researchers concluded. The system performs "reasonably well" in dismissing such lawsuits and in compensating the injured.

The article also cited studies that show that jury awards are keeping up with the costs of medical care and are not out of line.

Attorneys who represent medical malpractice victims will not be surprised by these statistics. Experienced med-mal attorneys decline to accept the vast majority of cases that they review. Of the cases accepted, the negligence appears clear with substantial damages. But even with stringent screening, med-mal cases are difficult to win with juries looking for reasons to find for the physician or hospital.

There is also a "circle the wagons" mentality among physicians in Mississippi. This results in open hostility by physicians to plaintiffs and their attorneys, even from doctors who are not defendants in the case. In addition, Mississippi physicians almost never admit that another physician was negligent or that negligence caused the victim's injuries. This stacks the deck in favor of medical defendants in Mississippi.  

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There is a good Bloomberg analysis of the recent pro-consumer decisions by the U.S. Supreme Court. Among the key points:

The Wyeth case illustrated one of the challenges companies face in some Supreme Court cases: persuading members of the court’s conservative wing to limit the powers of state courts and legislatures.

Clarence Thomas, a justice who typically joins the court’s conservatives on social issues, sided with the pro-consumer majority in the Wyeth case. Thomas wrote that the high court shouldn’t block state product-liability lawsuits simply because they interfere with federal objectives.

Similarly, Thomas and Justice Antonin Scalia, another conservative on social issues, have said the Constitution doesn’t put any limits on damage awards.

The entire article is available at the above link.