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

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Things are moving along in the A&O entities bankruptcy proceeding in Chicago. Here is an interesting motion that A&O filed asking the bankruptcy court the allow A&O to borrow from the cash values of the policies in order to pay the premiums. Here is the policy list attached to the motion. According to the motion, A&O's life insurance policies have a face value of $178 million, but cash value of only $3 million. That does not sound like a lot of cash value for $178 million in policies. The motion also states that all of A&O's "reserve funds" for policy premium payments were given to Prestige Title and are now tied up in the Colson litigation.

In the Colson litigation, A&O and Russell Mackert stated that A&O deposited $4.6 million with Prestige Title in February 2008. The money was to be used to pay the premiums on A&O's 57 policies. The monthly premiums on the policies was $120,000. When Colson and Prestige's accounts were frozen in early 2009, there should have been around $3 million left to pay A&O's premiums. At $120,000 a month, that's 25 months worth of premiums left in early 2009. But since we are now deep into 2009, there would still be only around 15 months of premiums left from "all" of A&O's reserve funds--not a lot of time when you are waiting for people to die of natural causes so you can collect the face amount of the policies. So it looks like the Colson litigation only accelerated A&O's implosion rather than causing it.

What was A&O going to do at the end of 2010 when its "investments" imploded? More importantly, where did all the investors' money go? A Forbes article estimated that A&O investors are out tens of millions. A single investor is out $10 million and there are other known individual investors who are out over $1 million. What happened to all that money? Is the bankruptcy trustee going to track it? Is the justice department? 

The second biggest mystery involving A&O after the question of where the money went is: who actually owns A&O?   Judge Sul Ozerden kept asking that question in the Colson litigation and never got an answer before he remanded the case to state court. There, as in the bankruptcy proceeding, A&O and Mackert claim that Physician's Trust LLC bought A&O, asked Mackert to manage it and then disappeared. Literally. The supposed owner of A&O paid millions for the company to Adley Wahab and his partners and then disappeared without a trace? And they can't be found? That makes no sense and just defies all credibility. I don't believe it. No one believes it. I suspect that one day the truth will emerge, and I can't wait to hear it.     

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I love NMC's comment about the latest quotes from the Eaton v. Frisby case:

The lawsuit has been put on hold as Yerger allows Frisby attorneys to try to determine if Peters improperly influenced DeLaughter and Eaton officials knew about it.

Alan Perry, an attorney for Frisby, said he couldn’t discuss Yerger’s ruling because much of the case is under seal.

Don McGrath, spokesman for Eaton Corp., said that if the Peters 1-3 documents are released they will demonstrate the communication was innocent.

“Eaton did not know Ed Peters was providing this correspondence with the court,” McGrath said. “We didn’t have him to do anything improper.”

I like the juxtaposition here– lawyers for Frisby refused to comment because much of the case (including the three documents in this order) is under seal, and a spokesman for Eaton talks anyway and tells us why he contends the documents under seal mean.  And you know what? I’m not buying what he’s selling.

Me neither. The funny thing is that Perry is not comfortable talking because Eaton (the other party) is filing everything under seal. But Eaton's McGrath comments every time they call him and it usually amounts to "trust us". Eaton reminds me of Kurt Russell in the movie used cars: 

Mam, this didn't used to be a taxi cab. That's yellow primer.

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Last Friday former Gulfport mayor Brent Warr pleaded guilty to one count of making a fraudulent claim after Hurricane Katrina. Here is the Sun-Herald article on the plea. But the guilty plea looks like a good deal for Warr:

Under the plea agreement, prosecutors dropped 19 other charges against Brent Warr and all 20 against his wife, Laura. Brent Warr was sentenced to three years probation and was ordered to pay $9,558 in restitution.

So no jail time for Warr and the government drops 39 of 40 charges against Warr and his wife. This was obviously a great deal for the Warrs--a huge win. The Warrs should be very happy with the job that their attorney, Joe Sam Owen of Gulfport, did in negotiating this deal.

When the government indicted the Warrs last spring I criticized it in this post. At the time, I had determined that the public on the Coast sympathized with the Warrs and felt like the government basically entrapped them by encouraging home owners to make claims even if they weren't sure they were eligible. For the government to basically let the Warrs take a walk, it looks like they had second thoughts about the wisdom of the prosecution and the chances for a win before a jury that would have been sympathetic to the Warrs.

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This post at Ya'll Politics raises this Washington Times article about the $6.2 million budget shortfall for the American Association of Justice (AAJ), which is the organization of the plaintiffs bar. The article states:

The trial lawyers lobby has been awash in debt and bleeding members - just as it embarks on a national campaign to block any clampdown on medical malpractice lawsuits as part of President Obama's health care overhaul.......

The most striking evidence of its financial woes is a swift decline in income, which resulted in a more than $6.2 million deficit in its operating budget for the fiscal year ending July 31, 2008, the most recent year for which data are available.

The biggest hit to its books was in membership dues, which dropped from $28.6 million in 2005 to $19.2 million in 2008, according to the annual AAJ financial report for that fiscal year filed with the Internal Revenue Service.

The article also quotes former president of the Mississippi Association of Justice Joey Diaz:

"That is our number-one priority: to strengthen our membership," said Joey Diaz, a member of the AAJ executive committee, speaking by phone from his law office in Madison, Miss. "We have a number of people working on membership and we have reversed that [downward] trend and are starting to move forward again."

The fact that AAJ is hurting due to decreased memberships and donations is not surprising. Plaintiff lawyers are not making as much money as they were five to ten years ago. Some aren't making any money, at least not on contingency cases. A decade ago there were many mass tort-like cases where lawyers on both sides made a ton of money: asbestos, fen phen, tobacco, life insurance sales practice litigation, etc... Juries and appellate courts were also considered more plaintiff friendly. This meant that there were more plaintiff lawyers willing to file cases, including medical malpractice and products liability cases against auto manufacturers and other corporations. For whatever reason, cases during that era often settled for large amounts or were tried with a large jury verdict. Now, you hardly ever hear of a big settlement. And the big verdicts, at least in Mississippi, are in the seven figures rather than eight or nine. I suspect it's similar in most states.

With juries and judges becoming more conservative, many plaintiff lawyers have gone out of business or returned to their divorce or criminal defense practices. Those lawyers probably no longer feel that supporting AAJ matters to their practice. Most of the plaintiff lawyers who survived the downturn find themselves working harder, taking bigger risks and making less money. Some of these lawyers probably also no longer feel like supporting AAJ matters. 

Ultimately though, a demise in the AAJ is bad for all Americans. The Chamber and other public relations and lobbying efforts funded by corporate America dwarf the efforts of the AAJ. Who do you think can spend more on lobbying: (1) "rich" plaintiff lawyers; or (2) GE, Citi, Exxon, Ford, Microsoft, etc? Look at what the executives of those corporations are making in compensation and ask yourself, are there any plaintiff lawyers making that kind of money? In fact, look at this link to the insider transactions at Exxon in just the last few months.

Just in a few month period Exxon executives were steadily selling millions in stock. Stock that they apparently were able to buy in the form of exercised stock options at $40 a share and immediately sell at $70 a share. I know, I know. They gotta pay to keep their talent. I'm sure highly paid corporate executives are just itching to start their own small business. So if the corporations can pay that kind of money to executives, imagine what they can pay to fund efforts to shut down lawsuits that cost money and interfere with the corporation's ability to pay executives, errr, reward shareholders. And I'm not picking on Exxon. Look at insider transactions of other big corporations and you will see the same thing as far as compensation and stock sales. While GE owned CNBC and other mass media talk Americans back into the stock market, corporate insiders are net sellers at unprecedented levels. But back to the AAJ.

The AAJ, despite being clearly over-matched, provides balance to the huge influence of big business. I believe that the vast majority of Americans want there to be balance. Except for the fringe nuts on both ends of the political spectrum, most Americans believe that opposition helps keep things honest. Or as Haley Barbour described in a recent speech, on the up and up. Hopefully, lawyers who are pulling out of AAJ will keep this in mind and contribute to the cause.    

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I recently subscribed to the National Law Journal and was a little disappointed at its focus on the D.C. legal scene. So it was much to my surprise that the latest issue contained this nice article on Jackson firm Watkins & Eager. The headline is "Small Mississippi firm makes big name for itself." Of course with 73 lawyers, Watkins & Eager is one of the largest firms in Mississippi. The focus of the article is the fact that the firm represents many blue chip corporations. The article mentions attorneys Michael Ulmer, David Ayers and Paul Stephenson.

The article quotes William Goodman III and mentions how between 1998 and 2004, the firm was swamped with litigation. Those years were definitely a high water mark for litigators in Mississippi, and perhaps the nation. I will have more on that point on a later post about the AAJ's budget shortfall.

Unfortunately, the article is basically a fluff piece with no coverage of pressing questions about Watkins & Eager's firm culture, such as its rejection of the business casual dress code adopted by all the other big firms in Jackson.

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The Sun-Herald reported on Sunday about a rare defamation trial taking place in the Harrison County Circuit Court in Biloxi. You can read the article here.

In the lawsuit the father-son owners of a Lucedale construction company (Heath Hudson and Gerald Hudson) are suing Coast TV station WLOX. Anyone who has lived on the Coast in the last thirty years will recognize the players: long time sports anchor A.J. Giardina and news director Dave Vincent. The Hudsons allege that in 2006 WLOX ran a story that stated that the Hudson's construction company performed shoddy work and then walked off a job before completion. The Hudsons claim that the project owner was behind in payments when they pulled off the job and that WLOX knew that the allegations in the story were false.

The Hudsons' attorneys are Jim Waide of Tupelo and former Mississippi Supreme Court Justice Chuck McRae. WLOX is represented by Trent Favre and Henry Laird of Watkins Ludlam's Gulfport office. The judge is newly appointed Circuit Court judge John Gargiulo of Gulfport. The trial began on Tuesday and is expected to conclude this week.

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Back in July I agreed with Alan Lange that, contrary to published reports, Christi McCoy will not be appointed U.S. Attorney for the Northern District of Mississippi. This week Patsy Brumfiled with the Northeast Daily Journal again predicted that McCoy will get the nod:

Informed sources say the U.S. Department of Justice has begun its work on President Obama's nomination of a new U.S. Attorney for North Mississippi.

Reports continue to say the choice will be Booneville native Christi R. McCoy, 40, who practices in Oxford.

I have not heard anything to change my July prediction that McCoy is not going to get the appointment. It might not matter anyway. At the rate that President Obama is making appointments it might be President Huckabee who gets to fill this slot.

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A federal jury in New Orleans yesterday returned a defense verdict in the first trial involving claims that FEMA trailers exposed the plaintiffs to dangerous fumes. Here is the AP story on the verdict.

Mississippi residents will remember the steady migration of the trailers heading south on I-55 in the Fall of 2005 after Katrina. Tens of thousands of Coast and South Louisiana residents who lost their homes in Katrina moved into the trailers. There are now hundreds of lawsuits involving allegations that the trailers contained unsafe levels of formaldehyde, which caused health problems. A juror in the case told the press that the plaintiffs never had the "smoking gun" that proved their case.

Although the verdict was only in one case, the verdict was huge for the defendants. With hundreds of similar cases pending, neither side can afford the costs of trying every case. The results in the first few trials dictate whether the inevitable settlement will be on terms favorable to the plaintiffs or defense. Some plaintiff lawyers walk away from mass litigation after only one trial defeat. Others may hang in longer and take another case or two to trial, but at some point there is a limit to the amount of time and money that a plaintiff attorney can put into a losing case. A case like this probably had over $100,000 in expenses that the plaintiff's attorneys had to pay out of pocket and has now loss. Not to mention all the time that they had invested in the case. That puts a lot of pressure on the plaintiff's lawyers in a bell whether trial like this. 

Plaintiff lawyers are simply under more pressure than the defense lawyers in a big trial. That's just a fact.

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A Hinds County jury awarded a total of $4 million to a Jackson couple who were assaulted and beaten in 2008 in their room at the In Town Suites on I-55 in North Jackson. The case was tried before Judge Tommie Green. Plaintiff's counsel was Ashley Ogden of Jackson. Defense counsel was Wade Manor and another attorney with Scott, Sullivan Streetman and Fox of Ridgeland. The jury awarded $2 million to each of the two plaintiffs.

I watched a good portion of this trial and there really was no defense. Someone severely beat the two Plaintiffs in their room at the hotel. The former hotel manager testified that he quit because he feared for his life after having a gun put to his head in an earlier robbery. The manager testified that he begged for security. The corporation that owned the hotel would not grant the manager's requests for armed security, stating that it was not in the hotel's budget. The manager testified that the hotel netted $700,000 in profit in 2007, which was the year before the assault. 

Several police officers testified that there was a major crime problem at the hotel that hotel ownership did not address. The defendant argued that lighting and peep holes in doors was security and that there were inconsistencies in the two plaintiffs' accounts of what happened. Defense counsel seemed to be suggesting that the plaintiffs knew their attackers and were doing something wrong. But the defendant put on no evidence to support this theory. Defendants can occasionally win cases with suspicion and innuendo rather than hard evidence, but it did not happen this week in Hinds County.   

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Judge Davidson's opinion authorizing the delivery of materials related to Ed Peters' grand jury testimony in the DeLaughter criminal case to Judge Barbour (presides over Frisby employees' criminal trial) and Judge Yerger (presides over Eaton v. Frisby civil case) has been reported on multiple sites. Here is the AP newspaper article, and posts by NMC here and here. There is a link to Judge Davidson's opinion in the second NMC post. Judge Davidson's opinion states that there is authority to support requiring disclosure of the information.

Unfortunately for the public, the information will be provided to the judges under seal. Judge Yerger has already shown a tendency to seal evidence related to DeLaughter-Peters in the civil case even when the justification appears real thin. It will probably be easier for him to seal material from a grand jury investigation, which normally remains confidential.

The most interesting element of the story is the capacity for Eaton's spokesperson to continually stick his foot in his mouth. Eaton spokesman Don McGrath is quoted in the articles:

"We in no way hired [Peters] to influence Judge Delaughter or any other judge on Eaton's behalf," McGrath said. "We feel that our case is very strong, and I think the government's case is very strong."

You would think that Eaton would do a better job in screening McGrath's quotes. Here, he should have said that Peters wasn't hired to "improperly" influence Judge DeLaughter. Lawyers are most definitely hired to influence judges. Isn't that how cases are won? By influencing judges and juries? There is nothing wrong with hiring lawyers to influence judges--it's when you hire a lawyer to improperly influence a judge that you get into trouble.

In Eaton v. Frisby Ed Peters did not: originate the case, file an entry of appearance, appear as counsel on any pleadings, draft any briefs or other pleadings, appear at any depositions or appear at any hearings. So what was his job, Eaton?

We do know that Eaton did not like Special Master Jack Dunbar's rulings in the case and Ed Peters worked as an intermediary between Judge DeLaughter and Larry Latham and that DeLaughter unilaterally replaced Dunbar with Latham, until Latham smelled a rat and reported the whole thing to Judge Yerger. This falls outside the category of properly influencing a judge. Eaton will of course claim that it did not know what Peters was doing. It is unknown what Peters may say about this. But it brings one back to the question: what did Eaton think Peters was doing?  

I have not read a quote from Eaton giving a logical and coherent reason for its hiring Peters. Let's face it, everyone knows that Eaton hired Peters because of his relationship with DeLaughter. If Eaton denies this fact, it is going to damage all other arguments that Eaton makes. It's guilt by association: this Peters argument is hogwash, so the rest of your arguments must be hogwash too. And Eaton did not have to deny that it hired Peters to help with DeLaughter. All it had to say was that Eaton hired Peters because of his credibility with DeLaughter, but that everything was supposed to be on the up and up. If Peters did something improper, Eaton did not know or approve. But Eaton appears to be beyond making this assertion at this point and is stuck with arguments that no one believes.    

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Someone emailed to me the Complaints in three lawsuits on file in Harris County Texas against A&O Life and related individuals and entities. You can link to the Complaints in each case below.

1.  Mora v. A&O Resources, et al.

2.  Boutte v. Peoples, et al.  (involving an investment of over $10 million)

3.  Hubenak v. Capital One, et al.

Here is the link to the recent Forbes article on the A&O debacle. Forbes estimates the potential investors loss as being in the tens of millions. There have been unconfirmed comments on this blog that the FBI is investigating A&O and its principals.

Forbes describes the allegations of the Hubenak case as follows:

Take the case of Avin Hubenak of Fort Bend County, Texas, who in 2004 transferred $1.4 million, the entire balance of his Chevron retirement funds following a 29-year career at Chevron Corp., to an IRA at Hibernia Bank. At the time, Hubenak's investment consultant at Hibernia was Allmendinger, who suggested an A&O product as a suitable investment.

Allmendinger, who would soon leave the bank to concentrate on A&O full time, represented to Hubenak a guaranteed annual return backed by the Costa Rican bonding firm of 12%, or $2.24 million, by January 2009, according to a lawsuit Hubenak filed in Texas state court in June. Hubenak did not receive any payment in January 2009 and claims to be “the victim of a fraudulent and illegal scheme designed to steal his retirement funds.”

There are many defendants in all three cases. This is important, since it is not likely that investors will be able to recover their money from the A&O entities, which are in bankruptcy, or the A&O principals. Russell Mackert is a defendant in two of the cases and Adley Wahab in one.

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Brian Bailys, who is with a life settlement advisory firm in Ohio, asked me to post the following message to A&O Life investors:

Attention A&O investors:

We are a life settlement advisory firm based in Cleveland Ohio.  We have worked with many previous bankruptcies and receiverships, offering unbiased advice to investors who have been victimized by incompetent or dishonest fund managers.  We have helped new investors purchase assets out of bankruptcies and we have helped investors recover some of their “lost” investments in these schemes.  Our principals are directly responsible for recovering over $15 million for investors who could have otherwise lost all of their investment.  While our past performance is not a guarantee of future success, we are confident that we can provide sound advice work through this matter. Please call  Brian Bailys at 216-509-7900 if you would like to discuss your case.

Disclaimer: Philip Thomas has no affiliation or connection with Life Settlements Insights or anyone connected with it. Posting this message is not an endorsement, but hopefully the company can assist A&O investors. As always, perform your due diligence.

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Friends keep mentioning to me that they read blogs by running through a list of blogs that they have bookmarked. This requires them to visit each blog site independently, regardless of whether the blog contains new content. If this is you, you are WAY behind. You need to be using a reader device. Trust me on this, it's like when you got a remote control for your TV or buttons on your phone instead of the rotary dial. Life is just better with a reader.

Here is a video that explains Google Reader:  

Download a reader and subscribe to this blog and any other blogs that you read, such as Ya'll Politics, Ipse Blogit, Jackson Jambalaya and NMC. There are thousands of blogs. Readers allow you to greatly expand the number of blogs that you can follow in a short period of time. Rather than visit each individual site, you go to your reader and read all the blogs that you subscribe to directly from your reader. Most importantly, the reader shows whether a blog has a new post, so you don't have to frequently visit sites that are not regularly updated.

I currently subscribe to over 30 blogs on my reader. The reader allows me to easily monitor new posts. Without the reader, there is no way that I could monitor all these sites. Try a reader. You'll like it.

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Point of Law has this post about Governor Barbour speaking about the judicial bribery scandal in Mississippi. The original question appeared to be about tort reform, but Barbour worked in the scandal:

BARBOUR: I don't think it was related to the tort reform, but as you know, some of the more prominent plaintiffs' lawyers in my state got into trouble. ...

I hate it. It's bad for the court system, it's bad for everybody. One of the things I really believe is, the public has to think the legal system is on the up and up. I mean, that's just really, really important.

Once in my career, I was the deputy chairman of the International Democrat Union, which despite its name - Democrat and Union - is the organization of conservative parties of the world that President Reagan started with Mrs. Thatcher and Chancellor Kohl. And I was struck by how much people in other parts of the world realized the importance of the rule of law in America. And it is not that way everywhere. There are advanced countries that are very prosperous that don't have nearly the confidence, faith and commitment to the rule of law that we do.

And for us, an advantage for us is the little guy generally believes that the court system is on the up and up.

All of sudden we get judges getting convicted of taking bribes and lawyers, good lawyers - they may have been plaintiffs' lawyers and they may be on the other side from me, and politically and everything else - but they're good lawyers. To me it's sad, 'cause it's bad for what we all ultimately want in America, and we do want the rule of law, and we want a system that let's us progress. 

But the tort reform battle and the actual enactment of tort reform I don't think had any role in that. It was other stuff. Most of the litigation had actually started before.

MEESE: I understand that. I have always felt that, to some extent at least, the tremendous amount of money that came to be involved, and the way that the trial lawyers were holding their seminars and dealing themselves, led to the arrogance that led to people like Dickie Scruggs and Bill Lerach to have the bribes and so on...that the money in effect was so great for these trial lawyers that it almost corrupted the system and that's what led to some of these things that we've talked about.

BARBOUR: It's maybe a monetary takeoff on "Power corrupts and absolute power corrupts absolutely."

I don't always agree with Barbour, but he is dead on with his comments that it is important that the public believe in the integrity of the judicial system. The same applies for the bar. As a litigator, I realize that my client will not always win. But it is imperative that we be able to trust the process. Of course, according to DOJ there is no public interest in the judicial bribery scandal.

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The Clarion-Ledger ran an article today on the lawsuit filed in Oxford seeking to expand the House of Representatives from the current 435 members to either 932 or 1,761 members. I've got to go with Representative Gregg Harper on this one:

Some, including 3rd District Republican Rep. Gregg Harper of Pearl, think the restructuring would cost too much money.

With rank-and-file members earning $174,000 per year, taxpayers pay more than $75 million per year total in salaries. If there were 932 congressmen, the overall amount would increase to more than $162 million. If there were 1,761 representatives, the total taxpayer cost could be more than $300 million.

"Clearly, this concept would greatly increase the size and cost of our federal government at a time when we should be reducing spending," Harper said.

My law school constitutional law professor George Cochran also commented on the suit. Below are his comments and my take:

Ole Miss constitutional law professor George Cochran calls the suit "innovative," but questions how successful it will be.

Translation: It's a wing nut lawsuit and they are going to lose. Oxford is where innovative lawsuits go to die. They should have filed in San Francisco or Manhattan.

"I'm not sure the right defendants are being sued," Cochran said. "There are a lot of procedural hurdles that could lead to a dismissal."

Translation: This one will be over quick.

Cochran said he wasn't sure who the right defendant would be until he did more research. He said, however, the federal courts may not want to make a ruling on this case because typically the judicial branch cannot tell the legislative what to do and vice-versa.

It would be like a federal judge ruling the war in Iraq is unconstitutional, Cochran said. "That's just not going to happen," he said.

Translation: If this case were an animal, it would be a squirrel.

Cochran also believes the court would take into consideration the cost, as well as how difficult the restructuring would be if the lawsuit were successful.

Translation: Just what Americans don't want--more Washington bureaucrats.

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Forbes published an article today on A&O Life. You can access the article here. The article contains a lot of new information on A&O, including the fact that one investor is stuck for over $10 million. The article states: 

The biggest single lawsuit against A&O so far has been filed by Eric Boutte over a $10 million investment made by a Houston trust created for the benefit of his brother, Allen Boutte, and his family. In another case, Countrywide Financial has been sued because its employees brokered A&O life settlement investments to a customer.

Forbes writer Nathan Vardi even talked to Adley Wahab and Provident Capital Indemnity, the Costa Rica bond company that A&O is blaming for investors not getting paid:

In a statement to Forbes, Eduardo Montero, an executive officer at Provident Capital Indemnity, says the company “has no pending obligations with A&O whatsoever.” In another statement, Minor Vargas Calvo, who has been identified in court documents as Provident's owner, says the company has been unable to make bond payments because it has been unable to identify the beneficiary of the bonds. Calvo says Mackert has not proven that Shepherd Capital Management legitimately represents A&O. “How can (Provident) be blamed of not paying the bond if there is no legitimate beneficiary?” asks Calvo in an e-mail.

Adley Wahab refused to comment, except to say “I sold my interest in the company two years ago.” When asked if he felt remorse for A&O investors Wahab said: “Absolutely.” Wahab's lawyer said his client denied any wrongdoing. Allmendinger's lawyer declined to comment.

The article describes the picture of A&O as "chilling." I suspect that the A&O story will get more interesting for casual observers. For investors, the handwriting is on the wall.

Great job by Forbes writer Nathan Vardi.

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A few weeks ago I made a Freedom of Information Act request to the Department of Justice seeking a copy of the government's immunity agreement with Ed Peters. DOJ refused my request. Here is a copy of DOJ's refusal letter. According to the DOJ, I am not entitled to the information because Peters did not consent and there was no showing that the public disclosure outweighs Peters' privacy interests. My request letter to the DOJ did not identify a public interest for the disclosure. My limited research on  the topic, however, suggests that this is not the type of private information that the privacy act was designed to protect. In addition, it's my understanding that the government should produce the information with the private information redacted.

The suggestion  that the public in not interested in the Peters immunity deal is a joke. I suspect that the DOJ does not want to produce the agreement because it is embarrassed that DOJ granted Peters immunity. My informal reading of public opinion both in and outside the bar is that Peters should have been prosecuted.

Rather than go straight to an appeal I am going to try to clean up DOJ's objections by submitting another request. If that request is denied I will appeal. In the meantime, if anyone already has the Peters immunity deal and is willing to share it with me I would appreciate it.

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The Meeting of Creditors for the bankruptcy proceeding of the A&O Life entities is scheduled for October 14, 2009 at the Office of the U.S. Trustee, 8th Floor, Room  804, Chicago, Illinois. Here is the Notice. The debtors are required to attend the meeting, but I do not know who may attend on behalf of the A&O entities. Russell Mackert is probably the person who should be there, since his is the only name associated with the entities for the last several months. Keep in mind that in the Colson litigation A&O was unable or unwilling to identify for the Court the owners of A&O, as I discussed in this earlier post. It will be interesting to see how many A&O investors attend the creditor's meeting. 

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I previously wrote about the recent $3.3 million verdict in a Rankin County Circuit Court 18-wheeler wrongful death case where a drunk trucker ran a red light and killed someone. Here is a copy of the judgment in the case, as well as the final order dismissing the co-defendant.

The jury's verdict was for $3,333,189.00. It was a general verdict form, so there was no break-down of the verdict into separate categories. The judgment states that $612,500 was previously paid to the plaintiff on behalf of the losing defendants (Joe Ed Carter and M&A Trucking, Inc.). Therefore, the Court reduced the verdict to $2,720,689 and the judgment was for that amount. The case was filed in 2000, so the tort reform caps do not apply to the judgment.

I do not know what any potential appeal issues are, but Judge Samac Richardson is not reversed often and the plaintiff's attorney (John Toney) is very respected in the legal community. Also, Rankin County juries are as conservative as they get. I would be very surprised if this case is reversed on appeal. 

Here is a link to the Mississippi Department of Corrections' profile on Mr. Carter. It states that Mr. Carter was sentenced to 20 years in prison for vehicular homicide and 15 years for aggravated assault.

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A few weeks ago in this post I speculated that 5th Circuit Court of Appeals Judge Rhesa Barksdale would soon take senior status. The Clarion-Ledger confirmed the news in this article today. Judge Barksdale will continue to work, but will hear a reduced case load.

This creates an opening on the 5th Circuit. Currently on the 5th Circuit from Mississippi are Barksdale, Judge Grady Jolly and Judge Leslie Southwick. Since all three are conservative, the vacancy gives President Obama the chance to appoint the only non-conservative Mississippian on the 5th Circuit. But I am hearing that a Mississippian may not get the slot at all with it instead going to someone from Louisiana. I hope that is not the case.

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The Washington Post ran this story today that warned of the risks in life settlement investments, such as those sold by A&O Life Funds. The article states:

The latest growing exotic investment promotion is in what are called "life settlements" or "senior settlements" or "viatical settlements." They're ghoulish products by any name.

Although they can be marketed and sold legally, the products are so complex and opaque that they are prone to fraud, including: Ponzi schemes; phony life expectancy evaluations; inadequate premium reserves that increase investor costs; and false promises of large profits with minimal risk, according to the North American Securities Administrators Association, which represents state securities regulators.

Life settlements made it to the association's most recent list of the top 10 investor traps.

If you're an individual investor and you've received a pitch to invest in life settlements, there's much to beware. Head and Leimberg said life settlements are not appropriate for individual investors.

"It's pretty darn speculative if you are going to be able to collect on that individual policy," Head said.

Leimberg added that only highly sophisticated investment groups such as hedge funds or pension funds should be buying this investment product.

The problem, he said, is the insured may live longer than expected, significantly reducing investors' expected returns. And the person could live so long that investors are left having to pay the insurance premiums for years just to maintain the policy.

Click the link above to read the entire article.

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Matt Eichelberger at Ipse Blogit has this outstanding post taking issue with Governor Barbour's latest tort reform scare tactic that I wrote about here.  Eichelberger notes:

Now, having practiced in the civil arena before, I can assure you that pre-suit notice, in reality, does nothing more to help settle a case than the filing of a complaint does. It's just a trap to ensnare unwary citizens and keep them from getting justice when they are harmed by a state actor. Period.

and:

Here are the number of physicians in Mississippi by year from 1998 through 2007:

1998 - 5,133
1999 - 5,232
2000 - 5,399
2001 - 5,544
2002 - 5,680
2003 - 5,820
***TORT REFORM ENACTED***
2004 - 5,872
2005 - 5,872
2006 - 5,890
2007 - 5,961

Anyone notice anything odd? For all the hue and cry from tort reform proponents about doctors leaving Mississippi and the health care crisis that would ensue, we had growth in the number of physicians in Mississippi during the 6 years leading up to tort reform, and in fact, we have had less growth since tort reform.

Meanwhile, yesterday the Clarion-Ledger proved what a joke it is as a newspaper with this editorial, which takes Barbour's bait hook, line and sinker, without being able to explain why Barbour is right. Having a good outdoors writer, cartoonist and sports writer does not make a good newspaper.

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I received sad new today for A&O Life investors. Last week the company and related entities filed for Chapter 11 bankruptcy protection in Illinois. Here are the petitions filed by A&O Life and A&O Resources. Also filing bankruptcy were A&O Bonded Life Assets and A&O Bonded Life Settlements. It appears that the companies' creditors are their "investors." Russell Mackert is listed on the forms as being involved in the filings. Needless to say, I am not surprised.

I am not in a position to provide legal advice to A&O investors. However, I can tell you that if I were an A&O investor I would be hiring an investment fraud lawyer in the area where an agent sold me the investment and I would sue the agent(s) who sold it to me. If A&O was a big scam it's going to be like the Madoff scandal where the investors are not able to recover their money from A&O. The agents who sold the policies, however, will likely have insurance coverage that will cover a claim against the agent. If I were an investor, I would also be raising hell with the Securities and Exchange Commission and the Department of Justice.

Here is a list of  people associated with A&O who I believe to be agents who sold the investments for the company. If you are an agent and are on this list and feel like that you are also a victim of A&O, then I am sorry. But you are partially responsible for putting your clients in these investments and in my opinion, you should be held liable for your role. People have gone to jail in Mississippi for acting as agents in what turned out to be investment fraud schemes. What happened here to A&O investors is an example of why agents and brokers carry liability insurance.

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The Clarion-Ledger reported in this story on Monday about Governor Barbour's attempt to politically scare the Mississippi Supreme Court into reversing a near-unanimous opinion. Here is the Governor's amicus brief filed with the Mississippi Supreme Court. Here is the Supreme Court's opinion in Price v. Clark. As an initial comment, the Court's decision in Price that filing a lawsuit tolls the running of the statute of limitations was clearly correct and is consistent with the laws of civil procedure in states throughout the nation. The Court's decision in Price has nothing to do with the merits of the case. The defendants can still win on the merits through a summary judgment motion or as the result of a trial.

The shocking aspect of the Governor's brief is the fact that the Governor admits that the real purpose of the pre-suit notice requirement is to impose a penalty on plaintiffs who do not successfully navigate the pre-suit notice mine field:

The Legislature cannot have intended to establish a pre-suit notice requirement but virtually no penalty for non-compliance.

This is a bombshell. The Governor of Mississippi is stating that the state's tort reform laws contain a designed trap to eliminate cases on behalf of unsophisticated plaintiffs who do not properly jump through a set of hoops before filing suit. That was not supposed to be a reason for the notice requirements. Previously, the only reason given to justify the pre-suit notice requirements was that it would give a defendant a chance to investigate a case and settle it before incurring the expense of defending the lawsuit. This reason was already suspect, since defendants never actually try to settle a case after receiving notice, but before suit is filed. Representative Ed Blackmon correctly observed in  the Ledger's article:

The current law requires people who are injured to provide parties certain information with the hopes of settlement before litigation is filed, he said. "I don't know of a single case settled during that time. It's once in a blue moon."

What's happening instead, he said, is Mississippi is reverting to "the dark days when it was a crap shoot whether parties could even get in the courthouse."

What really happens is medical defendants wait to see if the plaintiff navigates the pre-suit notice mine field. In many instances, the defense starts the case by filing a ridiculous motion to dismiss asserting a twisted and absurd reason that the statutory notice provisions were not complied with. The pre-suit notice requirements are complicated and trip up competent lawyers. Regular people who try to assert a lawsuit on their on behalf don't have a prayer. Only after the initial motion to dismiss is resolved will a defendant even think about trying to settle the case--regardless of the merits of the case.  

Now we know as a result of Governor Barbour's brief that the real reason for pre-suit notice requirements in Mississippi is to obtain dismissal of cases with merit. Indeed, a case without merit is destined to be thrown out by the court anyway. This is sordid and wrong. Justice is supposed to be blind and everyone is supposed to have a fair shot in the court system. Govenor Barbour, on the other hand, wants the deck stacked in favor of insurance companies and big business.   

As I discussed in this post back in March, the Supreme Court's changes to multi-party joinder laws had a huge impact in reducing the number of cases against doctors where the doctors should not have been named as defendants. The other major factor with tort reform was the caps on non-economic damages. Pre-suit notice provisions were not a factor at all in reducing lawsuits. They have simply become a mechanism for cases with merit to be dismissed--a mechanism that Govenor Barbour wants to preserve.

If the Supreme Court revisits its decision in Price it should rule that the pre-suit notice requirements are unconstitutional and unenforceable. As support for its ruling the Court should point to the statement in Governor Barbour's brief.

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I ask people all the time if they read the Dilbert comic strip. Invariably the answer is no. I love Dilbert. Although the strip is set in a corporate office setting, lawyers who have worked in big firms will get many of the jokes because big firms operate like big corporations. After all, who likes an unproductive meeting more than a big law firm? And don't all big firms have dead weight partners like the pointy hair boss in Dilbert? But Dilbert is not just for defense lawyers. Both plaintiff and defense lawyers can learn something by reading Dilbert. Here is a link to the Dilbert website, where you can review the strips. The strip from Sunday September 6, 2009 is a great example of what I love about Dilbert.

The fact that individuals in big corporations do not want to make decisions is a recurring theme in Dilbert. And it's often true. How many defense lawyers have waited months to get a decision from their client? The bigger the decision, the less one person wants to make it. As a general rule, plaintiff lawyers have no concept that this is how insurance companies and other corporations operate. Plaintiff lawyers assume that the defense lawyer can make one phone call and get a million dollars in settlement authority for a mediation tomorrow. That's not how it works, even in cases with clear liability and large damages.

In big corporations one person does not want to be held accountable for making a big decision--like paying a lot of the company's money to settle the case. They don't want to have to defend the decision when someone up the food chain questions it. In big cases this can lead to a couple of things. First, delay. With delay maybe the case is assigned to someone else or an unlikely defense is spotted. Regardless, for many individuals managing litigation in a big corporation the pros of delay far outweigh the cons.

A second thing that indecision leads to is group think. Many times it takes a meeting to make a big decision. That way, no one person can be held responsible for the decision. Who should participate in the meeting? As many people as possible, since no one who was in the meeting can criticize the decision. But it takes time to schedule the meeting, leading to more delay. Delay and group think are big reasons that trial dates drive settlements. Sometimes everyone on the defense side will know that the company is going to settle the case, but the process has to run its course. With a trial date approaching, the decision can't be delayed any longer.

The fact that defense costs and expenses can reach six figures usually does not outweigh the factors that cause delay. Defense costs are a cost of doing business. They are bills that have to be paid. For corporations with a lot of litigation, one case will not significantly affect the yearly defense costs. One reason for this is that many defense lawyers are going to bill their eight hours every day. If the company settles this case, then the lawyer is just going to work a different file. Corporations don't like to talk about this, but I think they know it.

In contrast to defense costs, a settlement is a voluntary payment to a plaintiff. Settlements do not have to be made. High defense costs can be blamed on the plaintiff lawyer for filing a frivolous case, the defense lawyer for over-billing, or even the judge for making bad rulings. Paying too much to settle a case, however, is more likely to be blamed on the person in the company who made the decision.   

 Ironically, the stars in the corporate world are the employees who are willing to speak out and make big decisions. You would think that all the employees would recognize this fact and act accordingly, but they don't. Most act like scared sheep. In just a few panes, Dilbert captures the essence of these principles.

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Here is the jury's verdict form in the near $16 million verdict against Kia Motors in federal court in Greenville on Friday. The verdict included $5,570,000 in economic damages and $10 million in non-economic damages. The non-economic award will presumably be reduced to $1 million due to Mississippi's statutory cap on non-economic damages.

From the form of the verdict it appears that the defect at issue in the trial was a faulty seat belt in a 2001 Kia Sportage. The injuries were to a minor named Jaleesa Willis and her mother Martha Willis was the plaintiff in the case on Jaleesa's behalf. The jury apportioned Kia 100% of the fault. The trial judge was Judge Allen Pepper.

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I have a report of a $16 million jury verdict today in federal court in Greenville against Kia Motors. The case is presumably a products case involving a defective auto. Defense counsel was David Ayers and Robert Ireland of Watkins & Eager in Jackson.  Plaintiff's counsel was Ralph Chapman from Clarskdale. I am trying to get more information.