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

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Yesterday's Wall Street Journal ran this editorial tilted “Mississippi Justice on Email”. The article makes a poor attempt to connect the Scruggs State Farm litigation to Attorney General Jim Hood's request to Congress that it rewrite federal law to allow Mississippi to sue Gulf Oil Spill companies in state court. In attempting to make a connection that is not there, the editorial made several comments that are insulting and unfair to the Mississippi legal system.

To be clear, I'm not defending Hood's tactics with State Farm. I'm not a Hood apologist and I have criticized him several times on this blog. Suffice it to say that Hood probably could have handled the State Farm litigation better. But that does not mean that there is a connection between the State Farm litigation and the oil spill litigation.

Consider these statements in the editorial:

• It turns out that Mr. Hood was so tight with the Mississippi tort mob that he turned to them for help to refute our arguments that he was . . . in bed with the Mississippi tort mob.
• Mississippi is famed for its jackpot justice, and as the emails reveal, Mr. Hood and his cabal work together to squeeze settlements from their targets.
• As with the Katrina litigation, the Pascagoula lawsuit society is hoping for the mother of all jackpots against Big Oil. If the AG can keep this litigation at home, he can use the powers of his office to work with this crew to hit another gusher.
• BP and the other companies involved in the spill will be writing big checks no matter where the cases are adjudicated, and rightly so. But Mr. Hood offered no compelling reason in his Congressional testimony that the lawsuits against the oil giant belong outside of federal court. The only reason would be to allow Mr. Hood and his "friends" greater ability to stack the deck against industry and the rule of law.

First, reference to a “Mississippi tort mob” is a little much. Some lawyers—fewer than 10–-broke the law. They got caught. They were disbarred and went to jail. The characterization of a “tort mob” suggests a massive conspiracy and a legal system run amuck. That is not the case in Mississippi.   

Second, while Mississippi is known for jackpot justice, that's history. Germany is known for military aggression, but that doesn't mean that France and Poland should prepare for invasion. The combination of tort reform and, to a larger extent, the Mississippi Supreme Court changing the law on joinder and appellate bonds ended “jackpot justice.” There are even defense verdicts coming out of Jefferson County, once the epicenter of jackpot justice. It has literally been years since I have heard one person who actually practices in the system say that the Mississippi legal system is plaintiff biased. Maybe the Journal should devote its time to containing the spread of communism from the Soviet Union.

Third, what the heck is the Pascagoula lawsuit society? And is the fact that Mississippi plaintiff lawyers are pursuing oil spill litigation any different from other affected states? The Journal agrees that: “BP and the other companies involved in the spill will be writing big checks no matter where the cases are adjudicated, and rightly so.” So what's wrong with lawyers representing oil spill victims?

Fourth, there is nothing inherently wrong with Hood trying to get a home field advantage in oil spill litigation. The oil companies are also trying to get a home field advantage by having the cases heard in federal court in Houston. Mississippi's legal system is not crooked and locating the oil spill litigation in Mississippi would not “stack the deck” any more—or less—than locating it in Houston.

Mississippi's judicial system is an easy target for a New York based newspaper. But its continuing criticism of a legal system that is not broken is unfair.     

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Today's Wall Street Journal contained an article on plans that states have to recover oil spill related losses from BP. Mississippi Attorney General Jim Hood seems to have a handle on the scope of the possible litigation:

Mississippi Attorney General Jim Hood has sought advice from state university researchers, economists and lawyers to assess the environmental and economic damage the spill has caused to the state.

Mr. Hood said the process could take three or more years before he could present BP with the final bill because the issues aren't straightforward. For instance, hotel capacity along the coast may be similar to last year's but rooms now are occupied by clean-up workers instead of money-spending tourists.

Mississippi has already received $25 million from BP to pay for costs from the spill and another $25 million for its local governments that are grappling with an array of economic issues brought on by the slick that has washed ashore.

"We're first going to ask BP to pay what we can come up with and hopefully we can negotiate with them," Mr. Hood said. "But I'm losing faith quickly."

His advance planning includes strategies for a lawsuit against BP in state court. "I certainly don't want to be thrown into the mix with thousands of other claims" in federal courts, Mr. Hood said.

General Hood: (1) is consulting experts to assist in quantifying damages; (2) has a realistic estimate on the length of the impact (3 or more years); (3) is trying to first resolve the issue through negotiation; and (4) is planning litigation strategy in the event that negotiations with BP fail.

Hood's handling of the situation looks very good. And much better that Governor Barbour's, whose failure to publicly recognize the scope of the disaster is facing growing criticism. 

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In 2007 State Farm sued Attorney General Jim Hood. Here is the Complaint. State Farm does not like Jim Hood. No one likes State Farm. When State Farm filed the lawsuit, it filed this motion to seal the case. The Court later unsealed the case.

In 2008 Sate Farm and Hood settled and the Court dismissed the case. Here is the order. The terms of the settlement agreement were confidential and the court ordered that they remain under seal.

In 2009 Ya'll Politics, joined by three television stations, moved to intervene in the case in order to obtain the terms of the settlement agreement. State Farm did not object. General Hood did. Here is Hood's Response to the Motion to Unseal the agreement.

Hood's response states several times that the Court ordered that the settlement agreement be sealed upon a showing of good cause. I have looked for something in the record confirming that statement, but have not found it. Maybe I just missed it.

It seems that Hood views the terms of the settlement agreement as politically embarrassing. But open access to court proceedings should take precedent over politics.  

It is bad form and bad law for court files to be sealed without an evidentiary basis for a finding of good cause in the record. An example is Judge Yerger's unexplained sealing of all relevant pleadings in the Eaton v. Frisby case pending in Hinds County.  In the good old days newspapers viewed themselves as the guardians of public access to the courts and challenged improper sealing of court files and court proceedings. Now, newspapers can't afford to pay the lawyers to make the challenges.

I would like to see Judge Bramlette grant the motion for two reasons. First, it would reverse the trend of unexplained sealing of court files and confidentiality orders not supported with evidence. Second, it would start a trend of new media (a blog) successfully challenging secrecy in the courts. 

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Y'all Politics broke the story on Hinds County Chancery Court Judge Denise Owens denying State Auditor Stacey Pickering's motion for disbursement of settlement funds in the Mississippi v. Microsoft case and approving the disbursement of $10 million in attorney's fees in the case. Here is the Order and the Clarion-Ledger's article.

Earlier posts on Hood v. Pickering disputes are here and here.

Pickering's office announced plans to appeal the ruling in the Worldcom. MCI case, but not Judge Owens' ruling in the Microsoft case.

It's politics as usual--on both sides.

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On Friday Attorney General Jim Hood announced that he will run for re-election in 2011. As stated in the Clarion-Ledger’s article, the big news with Hood’s announcement is that it ends speculation that he will run for governor in 2011. Hood's decision is a smart one, even if Hood does want to run for governor.

Hood is only forty-seven and has plenty of time to run for governor. With the Hood being a Democrat and the Republican party currently dominating in Mississippi, now is not the time for Hood to give up the office he has for one that he may not win.

The Ledger article points out the commissioner of public safety Steve Simpson may run for A.G.:

Steve Simpson, the commissioner of public safety, said last year that he might run for attorney general in 2011. He could not immediately be reached Friday for comment.

Simpson would presumably run as a Republican. I suspect that Hood would easily beat Simpson. Simpson is from the Coast. Al Hopkins, who is also from the Coast, ran against Hood in the last election and lost. I don’t see Simpson gaining significantly more traction than Hopkins.

Hood promised to continue his good works as A.G.:

"My decision will allow me to continue our hunt for child pornographers and Internet predators; to protect our elderly citizens; and to shield our residents from corporate wrongdoers," Hood said.

Hopefully, Hood will increase prosecutions against nursing homes that abuse and neglect their elderly residents.

Meanwhile, Sunday’s Clarion-Ledger reported on the current state of the Mississippi Democratic party:

Democratic insiders paint a picture of a fractured and unorganized party divided by racial tension and lacking the necessary discipline, leadership and money to make an impact next year in statewide races.

The reasons for the poor Democratic showing in Mississippi are many and complicated. Republicans will probably dominate state-wide elections for many years to come. Jim Hood is the exception, and he may not be able to climb to a higher office than A.G. 

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 Former State Auditor and current Lieutenant Governor Phil Bryant’s (R) lawsuit that challenged the payment of attorney’s fees to lawyers who Attorney General Jim Hood (D) hired to sue MCI is clearly politically motivated. So naturally current Auditor Stacey Pickering (R) denied that the suit is politically motivated, as reported in the Clarion-Ledger on Saturday:

[Hood’s attorney Fred] Krutz said he thinks the auditor's office waited two years to go after the attorneys fees because the case is politically motivated.

"It was always about politics," he said.

Pickering denies that's the case. "It is our belief that precedent is on our side," he said. "Any money recovered would be public funds."

Pickering is a politician. Most people assume that most acts by politicians are politically motivated. The odds that Bryant’s lawsuit against Hood was politically motivated are somewhere north of 99%.

The MCI case resulted in $100 million in cash and $7 million in property paid to Mississippi. Former Mississippi attorney Joey Langston’s law firm received a $14 million attorney’s fee in the case, which MCI paid. 

Hinds County Circuit Court Judge Winston Kidd threw the case out last week finding that:

Since the subject attorney's fees were not paid by the state and did not come out of any state funds, this Court finds that there is absolutely nothing improper or illegal about MCI's payment of attorney's fees to the Langston Law Firm," Kidd's ruling states.

I previously criticized aspects of Hood’s hiring outside counsel, particularly his hiring Texas lawyers who made a huge campaign contribution to Hood. But Hood is right in this case. The argument that a lawyer already hired and paid must give the fee back is thin. Even thinner is the argument that it’s the Legislature’s job to dole out the fee. The Legislature’s job is to pass laws—not administer attorney’s fees in a lawsuit.

If Bryant and Pickering do not like the system, then they should lobby the Legislature to change it—not file grandstanding lawsuits that cost the taxpayers money.

How much money? Both Hood and Pickering hired outside counsel in this case, who are paid by taxpayers—not MCI. Pickering’s lawyers alone cost the State $340,000 for a loss—with Pickering promising to take his gamesmanship to the Mississippi Supreme Court. The appeal will cost the State an additional six figures in attorney's fees. 

There is a big difference from the outside counsel fee in the MCI case and in Bryant/ Pickering's lawsuit:

• In the MCI case taxpayers paid nothing for outside counsel.
• In the Bryant/ Pickering case taxpayers paid hundreds of thousands for outside counsel.
• In the MCI case Mississippi won.
• Bryant/ Pickering lost their case.
• The MCI case made valid claims against a crooked corporation.
• Bryant/ Pickering's case made novel claims that lost.   

In the MCI case, Hood hired a Mississippi law firm that recovered $107 million for Mississippi from a crooked corporation. Hats off to Jim Hood on this one. I’m sure that money has come in handy over the last view years given the State’s terrible budget crisis.

Pickering needs to stop the taxpayer bleeding and shut this lawsuit down.

Voters who are tired of the political gamesmanship need to remember this episode when Bryant runs for governor and Pickering runs for whatever he decides to run for next.

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Don't miss Marshall Ramsey's dead-on cartoon of the Jim Hood vs. Big Business rivalry that was discussed in this article in the Sunday Clarion-Ledger.

The article was a weak effort. It quoted a Texas lawyer who made millions after being hired by Hood to represent Mississippi and a Chamber employee whose job it is to beat the drum for big business and rail against anyone like Jim Hood who stands up to business interests. The article did not quote anyone who even pretends to be objective on the issue.

Here is Ramsey's cartoon from today's paper:

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Last week Attorney General Jim Hood announced an $18.5 million settlement with Eli Lilly & Co. based on the company’s improper marketing of Zyprexa in Mississippi. Here is an L.A. Times article about the settlement.

In this post in December, I described a ruling in the case for Eli Lilly as basically throwing out the case. I was wrong. In retrospect, my opinion on the decision was influenced by posts on blogs that are cheerleaders for the pharmaceutical industry. 

These blogs are good sources of information regarding the latest decisions in pharmaceutical cases. The problem is that they offer no objectivity. They are typically written by lawyers who are industry honks who want to look like true believers for the industry in order get hired in more cases. Every decision is either a big win for the industry or wrongly decided by a stupid judge. In the future, I will try to do a better job of using these blogs for information on recent decisions while ignoring the commentary.

Here are amounts recovered by some of the other states who settled Zyprexa cases:

• Idaho– $13 million
• Utah- $24 million
• West Virginia– $22 million
• Connecticut– $25.1 million
• South Carolina– $45 million

There is no doubt that the ruling hurt Mississippi’s claim and reduced the state’s recovery in the case. But the ruling was not a disaster for Mississippi.

It still looks bad for Jim Hood that one of the firms handling the case was a Texas firm (Bailey Perrin) that donated $75,000 to Hood. That looks like a pay-for-play situation. The Texas firm and a Mississippi firm (McCraney Montagnet & Quin) will divide a $3.7 million attorney fee in the case.

But with Mississippi in a budget crisis and Governor Barbour cutting the budget regularly, General Hood will not have to apologize for adding revenue to state coffers.    

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Plaintiff’s attorneys are seeking an $8.3 million attorney’s fee following a $40 million settlement between Microsoft and the State of Mississippi stemming from allegations that Microsoft monopolized the personal computer market in Mississippi. Here is a copy of the Petition to Approve Fees. The amount of the attorney's fee must be approved by the trial court in the case.

Plaintiff’s counsel who stand to benefit in the case are Brent Hazzard of Jackson, Susman Godfrey of Houston, Boies Schiller of New York, Precious Martin of Jackson, John Gadow of Jackson and Richard Schwartz of Jackson.

The Petition states that the requested fee represents 7.5% of the total gross settlement. According to the Petition, Plaintiff’s counsel paid over $1.7 million in out-of-pocket expenses over the course of the litigation and expended millions of dollars worth of attorney time in the case. Mississippi State Auditor Stacey Pickering filed an objection to the fee claiming that a special legislative appropriation is required to pay Plaintiff’s counsel the fee specified in their contract with Attorney General Hood.

The dispute seems to be political. A 7.5% contingency fee is not a big fee. Mississippi Republicans have been critical of A.G. actions going back to the days of Governor Fordice trying to stop the tobacco litigation asserted by Attorney General Mike Moore. It would be interesting to see what would happen if a Republican became Attorney General. Would Republicans continue to criticize the A.G. hiring outside counsel to represent the State? Or would the criticism end and the only real difference be the political affiliation of the outside lawyers being hired by the A.G. to represent the State?    

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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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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.