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

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Background

Before Christmas I reported the plaintiff’s verdict for $80,000 in Madison County Circuit Court in the Robertson v. Russell case. My initial impression was that the result was a loss for both sides. I still feel that way.

Facts

The facts of the case were typical for an alienation of affection case (or any example of infidelity). The plaintiff and his long-time wife were in a typical marriage: stable, but certainly without the passion of a new relationship. The defendant was in a similar marriage. The defendant and plaintiff’s wife began an affair, leading to the divorce of both couples. Plaintiff and defendant’s wife later married. There were some lurid details involving the affair, but again, fairly typical for instances of infidelity.

In summary, marriage is boring. Hell, being a responsible grown-up is boring. Affairs are exciting—at least that’s what people who have had them tell me. The fact that the cheaters later married doesn’t prove anything—except for maybe that being single in the South is un-fulfilling. 

Reason that the Verdict was a loss for the Plaintiff:  The verdict was a loss for the Plaintiff because the amount was too low to make the case worthwhile from the Plaintiff’s side. The case involved a week long trial, a lot of discovery and expert witnesses on both sides. Assuming that Plaintiff’s expenses in the case were $30,000, that leaves $50,000 before attorney’s fees. Assuming a 40% attorney’s fee, that leaves the Plaintiff with $30,000. In my opinion it would not be worth $30,000 to have to re-live the failure or your marriage for several years while the case was pending and sit through a week long trial where the defendant’s natural defense was to attack the plaintiff. I’m not sure what amount that would be worth, but $30,000 isn’t close.

Reason the the Verdict was a loss for the Defendant: The verdict was a loss for the Defendant because he has to pay the Plaintiff $80,000 on top of Defendant’s own attorney’s fees and expenses. My estimate is that the Defendant spent north of $100,000 out of his own pocket in attorney’s fees and expenses. Insurance does not cover alienation of affection cases. I can’t characterize a case where the Defendant is out of pocket at least $180,000 as a win.

In addition, a survey of reported verdicts in alienation of affection cases shows that the Defendant was lucky to escape a large verdict in the high six figures at least. In 1999 in Bland v. Hill the Mississippi Supreme Court affirmed a $200,000 verdict from a Lee County case. In 2007 in Fitch v. Valentine, the Mississippi Supreme Court affirmed a $754,500 verdict from a Marshall County case. In 2008 in Pierce v. Cook the Court affirmed a $1.5 million verdict from a case in Rankin County.

Defendant in Roberston v. Russell was found by the jury to have done the same thing as the defendants in the above three cases, but the jury awarded less in damages. It would be easy for a different 12 people to return a much higher verdict for the same conduct.

My point is that the Defendant should have tried to settle the case, but never did. He lost at least $180,000 on top of his own time and stress and could have lost much more. If the Defendant wants to call himself a winner because he could have lost more, he certainly has that right. Many losing players leave the casino every day with the same mind-set—happy that their loss was not worse. But they still lost.

Should the Trial Court have conducted a punitive damages evidentiary hearing?:

Another problem for the Defendant's case is that absent the Supreme Court  abolishing the cause of action, the case may come back from appeal for a punitive phase. The trial judge did not allow a punitive phase in the case, despite the fact that there was a punitive claim and admitted adultry.

The failure to conduct a punitive phase seems to violate the Supreme Court’s directives set out in Bradfield v. Schwartz. In that case, the Court reversed the trial court for not proceeding with a punitive phase after a plaintiff’s verdict in a case with a punitive claim. The Court explained the proper procedure in a case with a punitive damages claim:

If the jury awards compensatory damages, then an evidentiary hearing is conducted in the presence of the jury. At the close of this second phase of the trial, via an appropriate motion for a directed verdict, the judge, as gatekeeper, then ultimately decides whether the issue of punitive damages should be submitted to the trier-of-fact (jury). If the judge, from the record, should determine, as a matter of law, that the jury should not be allowed to consider the issue of punitive damages, a directed verdict shall be entered in favor of the defendant on the issue of punitive damages, and the case will end. If, on the other hand, the judge should allow the issue of punitive damages to be considered by the jury, then the jury, upon being properly instructed by the judge on the punitive damages issue, may decide to award punitive damages, and if so, in what amount, or the jury may decide not to award punitive damages. [HN8] If the jury should award punitive damages, then, prior to entry of the final judgment on an award of punitive damages, the judge, pursuant to Miss. Code Ann. § 11-1-65(1)(f)(I), shall "ascertain that the award is reasonable in its amount and rationally related to the purpose to punish what occurred giving rise to the award and to deter its repetition by the defendant and others," by considering the factors set out in Miss. Code Ann. § 11-1-65(1)(f)(ii)(1-4). While the statute does not envision that the judge could increase the amount of the jury's punitive damages award, the judge could unquestionably, consistent with the statute, reduce the amount of the jury's punitive damages award. ¹⁰ Finally, just as in any other case, the judge will ultimately decide, via the appropriate post-trial motions, whether it was error to submit the punitive damages issue to the jury. 

It’s my understanding that in Robertson the trial court refused to allow the case to proceed into an evidentiary hearing after the jury awarded compensatory damages. If so, the case should be coming back on appeal for an evidentiary hearing on punitive damages, unless the Supreme Court abolishes the alienation of affection cause of action. This is good news and bad news for both sides.

For the Plaintiff, the good news is that he may get a punitive phase with a different and probably better jury. The bad news is that based on the trial court’s past ruling, it will probably direct a verdict on punitive damages after the evidentiary hearing. If I represented the Plaintiff, I would ask the Supreme Court on appeal to rule that the issue of punitive damages must be submitted to the jury because there was evidence of an adulterous affair.

In Bland v. Hill the Court suggested that in alienation of affection cases the question of punitive damages hinges on whether there was sex involved in the affair:

It is clear that the reason Buddy wanted to put on proof of adultery is to obtain a punitive damage instruction. This Court has held that [HN9] in cases of adultery malice is presumed.  Walter v. Wilson, 228 So. 2d 597, 598 (Miss., 1969). Buddy cites to Walter, but in Walter the plaintiff was suing for alienation of affections and criminal conversation. Criminal conversation, when it was a viable claim, required proof of a sexual relationship between the alienated spouse and the defendant. In the case sub judice, Buddy was suing only for alienation of affections. Bland was not on notice that he would have to defend against accusations of adultery until after the discovery deadline. Buddy did not proffer any direct evidence, and this Court procedurally bars this claim.

For the Defendant, the good news is that the gate-keeping judge doesn’t believe that punitive damages are warranted in the case. The bad news is the defendant is going to be spending a lot more money in attorney’s fees and there may be a different judge when the case returns from appeal, since Judge Richardson is rumored to be considering retirement.  

Should Mississippi Abolish the Alienation of Affection Cause of Action?:  I raise this question because many people do not believe in the cause of action and there have been dissenting and concurring opinions in the Court calling for the cause of action to be abolished. Justice McCrae called for the action to be abolished in a dissenting opinion in Bland v. Hill, asserting that the courts should get out of the business of policing broken hearts.  

More recently Justice Dickinson called for the elimination of the action in a lengthy concurring opinion in Fitch v. Valentine. Justice Dickinson noted that 42 states do not recognize the action and gives several logical reasons supporting its elimination. One of the noted reasons in the problem with quantifying damages in the cases:

The awarding of damages presents another distinct problem in these actions, as no clear standards for compensating the plaintiff exist. Wyman, 615 P.2d at 455. This opens the door for quasi-punitive damage awards, disguised as actual damages, which are usually tainted by passion and prejudice. O'Neil, 733 P.2d at 698. Of course, I can hardly blame jurors for struggling with this cause of action. The theory of recovery, itself, is flawed. Fundermann, 304 N.W.2d at 791.

Another practical problem with the cause of action is that it prolongs hostilities between individuals who often have to continue to deal with each other due to having children together and who would be better served by burying the hatchet as quickly as possible.

I am in Justice Dickinson’s camp on the cause of action. I’m not a fan of the theory, but it is the law in Mississippi until the Supreme Court or Legislature say otherwise.  

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On Wednesday the Clarion-Ledger reported a $500,000 verdict against University of Mississippi Medical Center (“UMC”) in a Hinds County Circuit Court bench trial. Judge Tommie Green presided in the case and rendered the verdict.   

The case resulted from the 2005 death of 28–year old Tamika Foster less than 48 hours after the emergency delivery of a baby. The case appeared to focus on UMC’s failure to consult a hematologist despite a low blood platelet count. The article explains:

An autopsy determined Foster died as a result of myocardial ischemia with arrhythmia, secondary to thrombotic thrombocytopenia purpura with a history of HELLP.

Thrombotic thrombocytopenia purpura, a much more deadly illness than HELLP, was never diagnosed prior to Foster's death, Green said

Medical experts have defined TTP as a rare disorder where small blood clots form suddenly throughout the body, leading to a sharp decrease in the number of platelets in the blood stream.

The case was decided in a bench trial because the Mississippi Tort Claims Act requires bench trials in lawsuits against government entities, which includes UMC. The Act also places a hard-cap recovery limit of $500,000 for both economic and non-economic damages. Judge Green set the Plaintiff’s damages at $1.2 million and then reduced the verdict to $500,000 to comply with the Tort Claims Act.

David Dunbar of Jackson represented the Plaintiff. Walter Johnson of Watkins Eager in Jackson represented UMC.

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In this October post, I discussed the vacant 5^th Circuit Court of Appeals slot and mentioned Justice James Graves as a candidate to fill the position. Since then, President Obama’s administration has moved at its typical slow pace in filling the position. With the President’s White House Counsel leaving the administration at the end of the year, it appears unlikely that the announcement of a nominee is imminent.

It’s my understanding that Justice Graves remains on a growing list of candidates. Other names mentioned as candidates, in no particular order, include:

1. Hinds County Circuit Court Judge Winston Kidd,
2. Hinds County Chancery Court Judge Denise Owens,
3. former Hinds County Circuit Court Judge Robert Gibbs,
4. Jackson attorney Doug Minor,
5. Assistant U.S. Attorney Felicia Adams, and 
6. Circuit Court Judge Margaret Carey-McRae.

It sounds like Judge Winston Kidd is Congressman Bennie Thompson’s candidate. But each of the other candidates have their own supporters in political circles or the bar. I have not heard of Congressmen Gene Taylor or Travis Childers supporting a candidate. Taylor is known to stay out of appointment debates. Childers is rumored to have focused on pushing for Oxford attorney Christi McCoy to be named U.S. Attorney for the Northern District. But McCoy is unlikely to get the nod.

It is believed that some of the 5^th Circuit candidates have been interviewed over the phone by the White House.  

A huge question is when will the White House make an announcement. To see how long this could go on, look at the vacant U.S. District Court seat that has long been presumed to be going to Jackson attorney Carlton Reeves. The seat has been vacant for years and Reeves has been the only known candidate since Obama’s election more than a year ago. But the White House has yet to make an announcement and appears to be in no hurry to make an appointment.

If the White House follows a similar pace with the 5^th Circuit nominee, we will be still be talking about this vacancy this Summer, and perhaps later.

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Saturday’s Clarion-Ledger ran this article on the Eaton v. Frisby case, focusing on the fact that most pleadings in the case are being filed under seal. When I looked at the file a few months ago there was no legitimate justification for sealing nearly the entire court file. Eaton—the party that hired Ed Peters—is behind all the sealed pleadings with the backing of Judge Swan Yerger.  

There were a few interesting quotes in the article. First, this one by Frisby attorney Ed Blackmon:

Blackmon said he doesn't expect an end to the case anytime soon, and added during an interview earlier this month, "I think the case is about to take a dramatic turn."

"I can't say anything about what is going on because everything is under seal," he said. "It's an unprecedented sealing of all documents." 

 A dramatic turn? Given the back story in this case, a dramatic turn will be a huge news event. Blackmon is right that the sealing of all documents in this case is wrong unprecedented.

Also interesting was this quote from Eaton spokesperson Don McGrath:

"We didn't have him (Peters) to do anything improper," McGrath said. "We want to see this come to an end. We want our day in court."

McGrath said Peters only became involved in 2007. "We in no way asked Ed Peters to try to influence Judge DeLaughter or any other judge," McGrath said.

If that sounds familiar, it should. McGrath said the same thing in August, as discussed in this post. McGrath has a script and he sticks to it.

I would like to see Eaton and McGrath answer these two questions:

1. exactly who told you that you should hire Ed Peters? 
2. what was the reason(s) you were given for why you should hire Peters?

There are legitimate possible reasons for Eaton to hire Peters. But Eaton has not publicly identified any of those reasons and its stated reason that it hired Peters because of his trial prowess is not believable. Peters was never going to try that case for Eaton. He might have sat at counsel table, but that would have been to influence Judge DeLaughter—not actually try the case.

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The MLR staff of one is going to take a break over the holidays. I am going to spend the next several days enjoying the holidays with my family.

I do not plan to post updates at my normal pace until after the new year. Have a safe and enjoyable holiday season.

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According to the National Law Journal, the average hourly rate for U.S. law firms rose 2.5% in 2009 to $372. The average rate is $457 for partners and $282 for associates.

Four law firms reported average partner billing rates of $1000 or more. The article quoted someone as saying that those rates typically came with specialized practices and close relationships with high-ranking government officials.

From viewing the list of firms that responded to the survey, it appears that the survey is reflective of average rates at the nation's largest firms. It does not appear to be a comprehensive survey that truly reflects the average rate among all attorneys in the U.S.

The highest rates in Mississippi that I am aware of are in the $500 per hour range. But most lawyers in the state charge significantly less.  

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On Friday a Madison County jury awarded Dan Roberston $80,000 in his alienation of affection trial against Dr. George Russell. I view this result as a loss for both sides.

I will have more to say about this verdict next week.

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Are you a litigation attorney? Are you on Facebook and/or Myspace? Do you even know what they are? You better. Use of social networking web sites such as Facebook and MySpace is now so common that issues related to these sites must be considered throughout the litigation process.

Wikipedia describes Facebook as:

Facebook is a social networking web site that is operated and privately owned by Facebook, Inc. Users can add friends and send them messages, and update their personal profiles to notify friends about themselves. Additionally, users can join networks organized by city, workplace, school, and region.

Myspace is another social networking site that is less popular than Facebook, but still a major player in social networking.

It is now common for lawyers to perform Facebook and Myspace research on the opposing party and witnesses in a case to look for evidence that can be used against the person. It is so pervasive, that lawyers should be looking at the social networking pages of their own clients in order to see what is there and to be prepared to deal with it.

There are other potential social networking issues that can arise in connection with trial. In Florida, judges and lawyers cannot be Facebook friends because “online ‘friendships’ could create the impression that lawyers are in a special position to influence their judge friends.”

I have talked with lawyers who are worried about a juror going home and researching parties on social network sites. What if a juror does that and discovers that the juror has a mutual friend with the party or belongs to the same club or religious group? Could that impact the juror’s decision in the case?

The same goes for lawyers researching potential jurors before a jury is put in the box. Social network sites can provide a wealth of information on how a person views life.

Within a couple of years I expect these issues to be so prevalent that social network sites are addressed by the Court and parties in voir dire. It would not surprise me if Courts instructed jurors to restrict their use of these sites during trial to make sure that the juror did not discover a personal connection to a party not known during voir dire.

How would you like to spend a week trying a complicated expert-intensive case, only to have a mistrial declared because a juror discovers a connection with a party on Facebook? Or the lawyers for a party discover the connection and ask for a mistrial deep into the trial? That would suck.

I am not aware of a mistrial due to social networking issues that arose during a trial. But I will be shocked if it has not happened or does not happen soon.

Litigators must be savvy of these issues, regardless of their personal feelings about social networking sites. Old timers  who pride themselves on being Internet ignorant better educate themselves on these issues, or they risk making a client unhappy when they do not spot a problem on the horizon.

Litigation departments in big firms would be smart to have mandatory in-house CLE’s to educate the firm’s lawyers on these issues. You can ignore the 800 pound gorilla that is social media, but you do so at your own peril. 

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On Wednesday a Madison County County Court jury returned a verdict of $856,510 for Jackson area developer Mark Jordan in an eminent domain case against the State of Mississippi involving two acres of land. Here is the Clarion-Ledger article on the verdict.

The State took the took the two acres from Jordan pursuant to the state’s eminent domain laws. Jordan agreed that the State could take the land, but disagreed with Jordan’s demand of $1.5 million. The State valued the land at close to $800,000, so the verdict was a win for the State. Of course, collecting over $400,000 per acre for vacant land in a non-urban area does not sound like a loss for Jordan.

The land is located near the intersection of Steed and Sunnybrook roads, across the interstate from Renaissance at Colony Park in Ridgeland. The State needs the land for a new interstate interchange.

 Jordan’s attorneys included Larry Jones and Brandon Jolly of Baker Donelson.

While the jury deliberated, the alienation of affection trial in Roberston v. Russell continued down the hall. I watched a good bit of that trial yesterday. It’s funny how attentive a jury is in an alienation of affection trial. There was no dozing off after lunch. There will probably be a verdict in the case today. Dr. Russell and his former wife are expected to testify today.

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Attorney General Jim Hood filed this motion to amend his complaint in a case against numerous manufacturers of vitamins for conspiracy and price-fixing. A copy of the proposed amended complaint is attached to the motion. The case is pending in the plaintiff “hotbed” of Rankin County Chancery Court.

According to the Complaint, the manufacturers already paid substantial fines to the federal government. Other states filed similar cases and many have settled, as reported here.

The Complaint alleges that over a many-year period the manufacturers of vitamins conspired to fix prices in violation of antitrust and other laws. The Complaint seeks to recoup money paid by Mississippians. Maybe they can get free vitamins thrown into the deal, like when Kramer got free coffee to settle his case on Seinfeld.

Hood hired several Mississippi lawyers to pursue the case, including Richard Schwartz, Brent Hazzard, Precious Martin, Lee Abraham and John Gadow.

It sounds like the kind of case that is very interesting if you are actually involved in it, but boring when you are not. Sort of like a complex commercial case.  

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On December 7, 2009 Natchez Regional Medical Center filed a fifty-three page Complaint against Quorum Health Resources and two Quorum employees (Jeffrey Wesselman and Michael Anderson) who formerly served as the CEO and CFO of NRMC. Here is the Complaint, which NRMC filed in federal court in the Western Division for the Southern District of Mississippi.

NRMC announced the lawsuit last March, as I reported here.

Quorum had a contract to manage NRMC. NRMC’s Complaint alleges that Quorum, Wesselman and Anderson committed fraud and gross mis-management of NRMC. The central allegation of the Complaint is that Quorum and its employees falsely reported to the NRMC board of trustees that the hospital was profitable when in fact, the hospital was actually losing money. The Complaint alleges that the false reports were made so that NRMC would renew Quorum’s management contract. Under the contract, NRMC paid Quorum $200,000 per year and covered the salary and costs associated with the CEO and CFO.

Allegations that Quorum mismanaged the hospital include that Quorum:

• directed NRMC to enter into contracts with physicians that violated federal Stark Laws;
• failed to increase medical services rates to reflect market conditions, resulting in millions of dollars in lost revenue;
• excessively staffed NRMC;
• directed NRMC to purchase supplies from vendors with relationships with Quorum;
• mismanaged physician contracts;
• accounting irregularities and misrepresentations; and
• other mis-management.

The Complaint provides many factual details to support the allegations.

The pleaded causes of action are:

1. breach of fiduciary duty;
2. breach of contract;
3. breach of duty of good faith and fair dealing;
4. negligence;
5. fraud;
6. negligent misrepresentation;
7. aiding and abetting breach of fiduciary duty;
8. fraudulent transfers under Mississippi Uniform Fraudulent Transfers Act; and
9. corporate waste.

NRMC’s attorneys are John Maxey and Kelly Hollingsworth of Maxey Wann and William Ryan and Kevin Hroblac of the Whiteford Taylor firm in Baltimore.

So far no attorney has appeared for Quorum.

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The alienation of affection trial in Robertson v. Russell starts in Madison County Circuit Court in Canton on Tuesday. Judge Samac Richardson will preside over the trial.

The defendant is a Jackson doctor who had an affair and later married the plaintiff's wife. The two worked at the same hospital and worked out together at the same health club in Madison. The affair led to the divorce of both the original couples. Dr. Russell broke off the affair while he tried to save his marriage, but resumed it after his wife left him and moved out of state.

All alienation of affection cases involve salacious testimony, and this one will be no exception. This would be a good case to watch for persons with an interest in the cause of action.

Plaintiff's attorneys are John Giddens of Jackson and Stephen Maggio of Gulfport. Dr. Russell's attorneys are Dale Danks and Michael Cory of Jackson.

I will post more about this case after the jury's verdict.

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A Tunica County jury failed to reach a verdict after deliberating into the early morning hours Saturday in a products liability case against Ford Motor Co., resulting in a mistrial.

Unfortunately, I do not know much about the alleged defect. I believe the case involved a vehicle catching on fire after a crash.

The trial judge had a capital murder trial starting on Monday, resulting in the jury having to deliberate late into the night Friday before the mistrial was declared.  

Plaintiff’s attorneys were Ralph Chapman and Dennis Sweet. Ford’s lawyers included Barry Ford and Robert Walker from Baker Donelson and out-of-state lawyers.

This follows Ford’s defense verdict in Jefferson County in October.

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NMC and Will Bardwell are stating that with today’s 5^th Circuit partial reversal of Paul Minor’s conviction, the remaining portion of the conviction may hinge on the honest services fraud conviction. Here is what the WSJ Blog said about honest services fraud earlier this week:

The days of the honest services fraud law — for years a go-to statute for federal prosecutors — appear likely to be numbered.

The Supreme Court on Tuesday expressed deep skepticism about the law, suggesting it was too vague to be constitutional.

and:

Justices across the court’s ideological spectrum seemed in agreement that the concept of honest-services fraud was so broad as to sweep almost any white lie or self-serving act into the purview of prosecutors.

and:

And if the law is struck down in full? Expect defendants convicted under the law to rush the courthouse door. Striking down the honest-services crime would trigger “an earthquake within the criminal justice community,” said David Seide, a former federal prosecutor now with Curtis Mallet-Prevost Colt & Mosle LLP in Washington. Defendants convicted under the statute “will be able to say their convictions need to be reversed,” he said.

The 5^th Circuit remanded Minor’s case for re-sentencing by Judge Wingate. With a possible over-turning of honest services fraud law before the Supreme Court, Paul Minor could soon be walking out of prison or the courthouse.

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The book Kings of Tort, by Alan Lange and Tom Dawson, appears to disclose the terms of Ed Peters’ immunity deal with the government.

On page 199, the book states that in exchange for immunity, “Peters would surrender his law license, resign from the bar permanently, and forfeit all monies received from Scruggs and Langston, in addition to [throwing Bobby DeLaughter under the bus] testifying truthfully.” That’s it.

Ironically, while DOJ continues to refuse to disclose Peters’ agreement because there is “no public interest” in it, Dawson disclosed the terms of the agreement in a book that has garnered wide public interest.  

It appears that Dawson wrote the section of the book covering the Scruggs prosecution, including Peters’ role in the case. The book states that “immunity for Peters was a travesty of justice tough call.” The book justifies the decision by asserting that Peters corroborated Balducci’s information in the DeLaughter bribery case and caused Joey Langston to plead guilty and testify against Scruggs. It states that without Peters’ testimony, a Scruggs II [DeLaughter case] prosecution would not have been be possible.

This assertion, along with the decision to grant Peters immunity, does not make sense. The book provides little factual support for the conclusion and other facts cited in the book do not support the assertion that the Scruggs II prosecution depended on Peters. 

Elsewhere, the book suggests that Langston, who was not involved in the scheme to bribe Judge Lackey, did not trust Scruggs and was eager to reach a deal with the government before Scruggs turned on him. The book also states that the government was holding a RICO prosecution over Langston’s head, which could have led to a divestiture of much or all of Langston’s wealth earned from his law practice. Obviously, getting to keep his money would have been a huge motivation for Langston agreeing to plead guilty and cooperate.

In Scruggs I Balducci immediately confessed and cooperated, leading to the disclosure of the DeLaughter bribe in Scruggs II. Patterson and Backstrom also quickly agreed to play ball with the government, according to the book. Patterson was involved in the DeLaughter bribery and could corroborate Balducci’s testimony. Langston was approached next and was eager to cooperate as well, according to the book.  

The book does not cite facts that make it sound like the government needed Peters to get to Langston. Instead, it looks like they could have gotten to Langston with Balducci's and Patterson’s testimony. From there, they could have gotten to Peters with the testimony of Balducci, Langston and Patterson. Then, Peters would have had to turn on DeLaughter in order to reduce Peters’ prison sentence. Immunity to one individual was not necessary.

In addition, there are other reasons that the theory that granting Peters immunity was necessary does not make sense. If the Scruggs II prosecution depended on Peters, then Peters could have kept his protege Bobby DeLaughter out of jail and on the bench simply by keeping his mouth shut. And since there would have been no Scruggs II prosecution, Peters would have kept his law license and the money he was paid for bribing DeLaughter and kept Langston and everyone else from being prosecuted in Scruggs II.

Again, this does not make sense. If this were true, then Peters would have kept his mouth shut.  

My interpretation of this is that Dawson is making a poor attempt to justify a bad decision. If all these guys were so eager to plead guilty, then the government did not need to give anyone immunity. There were rumors that the government lawyers panicked and hastily agreed to grant Peters immunity. Conspiracy theorists will have more sinister explanations, but I do not buy an argument that the government lawyers were tainted in favor of Peters. It appears to have been either a poor decision made in haste, or there is more to the story than disclosed in the book.

I recognize that it’s easy to criticize a decision on the back-end when everyone knows what eventually happened. But Dawson should be able to justify the decision in the book and did not.         

The book spreads the blame for the admittedly bad controversial decision among the entire prosecution trial team, which included Dawson, Asst. U.S. Atty. Bob Norman and Asst. U.S. Atty. Dave Sanders, and U.S. Attorney Jim Greenlee.

For prior posts about my efforts to obtain the Peters immunity agreement from DOJ see here, here, and here.

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A Hinds County jury returned a $1 million verdict this week for a plaintiff who was beaten by a Wackenhut security guard in a McDonald’s restaurant located on Highway 80 in Jackson after a dispute with the manager over a cup of ice.

The plaintiff was allegedly a homeless man who was intoxicated at the time of the incident. He claimed to be a frequent customer of the McDonald’s. The plaintiff was arguing with the manager when the Wackenhut guard used force to remove plaintiff from the store. Plaintiff claimed to suffer a broken shoulder and other injuries.

The jury was shown a video of the attack. The Wackenhut guard shoved the plaintiff out the doors of the store, causing the plaintiff to fall and hit his head. The guard then followed the plaintiff out and stomped on the plaintiff, causing his shoulder to shatter. 

The defense argued that the use of force was justified and that plaintiff had a knife, but several witnesses testified that they did not see the plaintiff with a knife. 

The jury deliberated for 2 hours and 45 minutes and apportioned 75% of the fault to Wackenhut and its guard and 25% to McDonald's.

The entire verdict was for compensatory damages. The plaintiff did not request punitive damages.

Plaintiff’s counsel were Rocky Wilkins and Ashley Ogden of Jackson.

 Michael Wolf and Smith Boykin of the Page Kruger firm represented the Wackenhut guard. Matt Taylor of the Streetman firm represented Wackenhut. Jason Strong and Garner Berry of the Daniel Coker firm represented McDonald's.    

Judge Winston Kidd presided over the case.

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Forbes has released a new A&O related article, this one focusing on Adley Abdulwahab. Here is a link to the article, which includes a photograph of Wahab.

The article begins with a recounting of the October raid of Wahab’s home, but quickly begins taking shots at A&O investors:

Armed officers from the U.S. Marshals Service swarmed into an elaborately decorated $1.5 million home in Spring, Tex. early one Saturday morning in October. Inside they found Adley Abdulwahab, 34, and his family. The Abdulwahabs were allowed to gather a few personal belongings and then escorted out the door. The house was seized and became part of a tussle among hundreds of victims desperate to recoup anything they can from Abdulwahab's investment scams--ruses so brash and, in retrospect, so unbelievable as to raise doubts about the sanity of investors.

The article suggests that Wahab and A&O front man Russell Mackert funneled the missing investor’s money to Wahab’s off-shore bank accounts:

Where did the other tens of millions of dollars that are missing from A&O and W Financial go? Starting in the summer of 2007 Abdulwahab transferred $12.6 million to an account controlled by Mackert, court documents say. Mackert then funneled millions to Abdulwahab's own offshore accounts, according to these documents. The Securities & Exchange Commission sued Abdulwahab, claiming he fraudulently sold securities through W Financial, and obtained a $15 million judgment against him in October.

The article concludes by calling A&O investors “gullible” for believing that the company would deliver guaranteed returns of 12%.

I disagree with this assessment. How many A&O investors dealt with Wahab? My guess is close to zero. A&O used life insurance agents from across the country who had long standing relationships with clients to sell the "investments.” The investments were not sold by boiler room salesman who were cold-calling suckers. They typically were sold to people who knew and trusted the salesman based on a long-standing relationship.

Many life insurance agents also hold themselves out as investment advisers. Many are licensed to broker sales of securities. This makes the agents even more trustworthy when they reccommend an investment to a long-time client.

I would agree that investors were gullible if they believed in a guaranteed 50% or more, but 12%? That’s not a crazy high number. Particularly when sold by someone who an investor knew and trusted. The agents who sold these policies are much more responsible for the losses than investors, but the Forbes article places no blame on the sales agents.  

Were Bernie Madoff’s investors gullible suckers? Were the Stanford Financial investors suckers? What about investors in WorldCom and Enron?

Or are the SEC and state regulatory systems not doing enough to police investment fraud and protect investors? Isn't that their job?  Did they do their job here in a timely fashion?             

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I have just learned of a November 30, 2009 letter to A&O Life investors from the U.S. Postal Inspection Service that states that it, along with the FBI and IRS, are investigating A&O for mail fraud. It's about time!

Here is a copy of the letter and questionnaire.

I cannot wait to see where the federal investigation goes. For people who don't know, federal investigations are serious business. Federal investigators and prosecutors are usually smart, talented and tenacious in their prosecutions. In addition, they are backed by the resources of the United States government. The vast majority of federal targets are convicted.

I do not expect A&O wrongdoers to escape prosecution or convictions.

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Last night Ya’ll Politics reported a ruling by a New York federal judge that basically threw out Attorney General Jim Hood’s lawsuit against Eli Lilly & Co. over off-label marketing of the anti-psychotic drug Zyprexa. Ya'll linked this report from Legal Newsline. Here is the actual 117 page opinion in the case.

This looks like a disaster for General Hood. First, Mississippi loses and collects nothing while other states settled similar claims and made substantial recoveries:

“Of the 12 states that did not settle their claims against Eli Lilly in a 33-state, $62-million agreement five have already made their settlements official and others have tentative agreements. The states that have settled are:

-Connecticut settled for $25.1 million;

-West Virginia settled for more than $22 million ($6.75 went to outside counsel hired by state Attorney General Darrell McGraw);

-Idaho settled its case for $13 million ($2.5 went to outside counsel hired by state Attorney General Lawrence Wasden);

-Utah settled for $24 million (more than $4 million went to outside counsel hired by state Attorney General Mark Shurtleff); and

-South Carolina settled for $45 million (more than $6.5 million went to outside counsel hired by state Attorney General Henry McMaster).

Eli Lilly has paid $1.4 billion to settle federal civil and criminal claims stemming from alleged off-label marketing.

The payment also benefited the Medicaid programs of more than 30 states that collectively received approximately $362 million.”

Eli Lilly hemorrhaged money to settle the Zyprexa claims and Mississippi, with its budget in ruins, gets nothing.

Second, as if the loss was not bad enough, the article revealed that Hood’s hand-picked outside counsel donated substantial money to Hood:

Bailey Perrin, which donated $75,000 to Hood, is also representing the states of Arkansas, Pennsylvania and Louisiana.

$75,000??? From a law firm in Texas? Why in the world, other than the obvious reason, would a law firm in Texas be donating $75,000 to the Mississippi Attorney General? Did they also donate $75,000 to the A.G.’s in Arkansas, Pennsylvania and Louisiana?

According to the Court’s opinion, Mississippi was also represented by William Quinn of Booneville (now Ridgeland). Quinn was working for Joey Langston at the time of Langston’s downfall and is generally credited for master minding the State’s claim against Worldcom that resulted in a $14 million fee for Langston.  

This is more ammunition for Hood’s critics in general, and the critics of the State’s system of allowing the A.G. to hire and pay outside counsel in particular.

I do not have a problem with the A.G. hiring outside counsel, in theory. But a Texas firm who donated $75,000 to Hood? Let’s be honest—that does not look good. There are plenty of good lawyers in Mississippi who could represent the State and need the work. But there is probably a shortage of non-incarcerated (former) Mississippi lawyers who donated $75,000 to Hood.

Hood is going to end up giving his critics enough ammunition to get the State Legislature to enact a law that restricts the A.G.’s ability to hire outside counsel.  

As for Hood’s political future, there are no threats on the horizon to his position as A.G. But for a higher office such as governor, the $75,000 donation from Texas lawyers may do more harm than good.  

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In November the American Association of Justice published this report identifying five myths about medical negligence (malpractice).

The identified myths are:

1. there are too many frivolous malpractice lawsuits;
2. malpractice claims drive up health care costs;
3. doctors are fleeing;
4. malpractice claims drive up doctors’ insurance premiums; and
5. tort reform lowers insurance rates.

Note: Yesterday's Natchez Democrat contained this article by attorney Sam Gwin that covered some of these issues in Mississippi.

The AAJ report then debunks each myth. Key points include:

• medical negligence causes 98,000 hospital deaths per year;
• there have been steady declines in the last decade in the number of malpractice lawsuits and the amounts of settlements and verdicts;
• the vast majority of filed medical negligence cases have merit;
• the amount spent to defend and compensate victims of medical negligence is .3% of health care costs;
• much of the “defensive medicine” is performed to generate more revenue for health care providers; and
• insurance premium levels are generally the same in states with damages caps as states without damages caps.

I would add another myth to this list: the myth that damages caps affect frivolous lawsuits. This might be the biggest myth of all. Proponents of damages caps argue that they are needed to address frivolous lawsuits, but it's cases with merit and severe damages that caps impact.

The public does not understand this. The public believes that caps affect frivolous cases and are surprised when you explain that caps restrict the recovery of victims of catastrophic injuries to an amount that is less than full compensation.

I am not convinced that damages caps will be permanent. At some point, there could be public backlash similar to what has happened with consumer arbitration. I have no doubt that the public supports legitimate attacks on frivolous suits. I do not believe that an informed public would support damages caps. Both courts and legislatures have a tendency to gravitate to public opinion.