A few weeks ago the U.S. Supreme Court dealt a blow to the lawsuit industry in Bristol-Myers Squibb Co. v. Superior Court of California. In an 8-1 decision, the Court ruled against mass joinder of plaintiffs in state court litigation where the plaintiffs have no connection to the forum state outside the defendant’s home state.

The decision reminds Mississippi litigators of the Mississippi Supreme Court’s 2004 decision in Janssen that was the death knell of the jackpot justice era. Before Jannsen, Mississippi was the major leagues of litigation. After Janssen, the mass tort industry moved all their cases to California, Missouri and other states.

Here is the excerpt from the U.S. Supreme Court’s opinion that I found most interesting:

Our straightforward application in this case of settled principles of personal jurisdiction will not result in the parade of horribles that respondents conjure up. See Brief for Respondents 38-47. Our decision does not prevent the California and out-of-state plaintiffs from joining together in a consolidated action the the States that have general jurisdiction over BMS. BMS concedes that such suits could be brought in either New York or Delaware. Se Brief for Petitioner 13. Alternatively, the plaintiffs who are residents of a particular State–for example, the 92 plaintiffs from Texas and the 71 from Ohio–could probably sue together in their home States….

The Supreme Court is like the Bad News Bears. They should never assume anything.

I don’t know about Texas and Ohio, but plaintiffs definitely can’t sue together in Mississippi. We don’t have mass joinder or a state court Rule 23 for class actions.

Also, lawyers who specialize in products liability have been telling me that Mississippi courts–or at least federal courts in Mississippi–are starting to rule that there is no long-arm jurisdiction over companies like BMS in Mississippi, even in individual actions. They also say that the prospects of suing a company like Ford Motor Co. in its home state are….unappealing.

It’s easy for most Mississippi litigators to sit back and say, “so what? this won’t affect me.” I remember lawyers who said that when the state enacted tort reform. They did not recognize the threat to their practice resulting from an over-supply of lawyers and a drastically lower litigation docket. Many of them are no longer practicing law. The fallout killed their practices.

So I’m not going to say: “so what? this won’t affect me.” It’s a bad sign for litigators–even Mississippi litigators who don’t export cases or litigate cases in other states.

You know all those lawyers on your recent flight to or from Atlanta? Many of them were working on mass joinder cases pending in other states. If most of that litigation gets shut down, there will be even more lawyers back in Mississippi competing for the same shrinking case load. Think ripple effect.

And keep in mind, national litigation firm Susman Godfrey was already reducing contingency work even before this decision in response to expectations of changes resulting from a Republican White House and Congress. The forecast is that things are going to keep getting worse for litigators.

As a litigator, the most depressing aspect of this decision is that it solidifies the trend. Ten years ago, veteran lawyers in Mississippi were fond of saying that things would eventually swing back to the left. That hasn’t happened. Things have swung much further to the right. And the momentum is still heading in that direction. This trend has a lot of litigators depressed.

Their prediction for litigators:

Blogger Kenneth Jost wrote a post Sunday about the U.S. Supreme Court’s rulings limiting class action lawsuits. By Monday, Jost updated the post to mention new Court decisions deemed hostile to civil litigation.

On the issue of class actions, Jost discussed recent Court rulings that allow corporations to circumvent class actions through the use of arbitration clauses. Jost views this as unfair:

…but Congress approved Rule 23, the class action rule in the Federal Rules of Civil Procedure, to allow some forms of mass litigation to ensure effective vindication of legal rights. Brian Fitzpatrick, a civil litigation expert at Vanderbilt Law School, said the latest decision continued a series of Roberts Court rulings that allow companies to use arbitration to protect themselves from class actions. “There is little future” for class actions, he warned.

Of course, we’ve never had class actions in state court in Mississippi. So this just means that federal jurisdiction is becoming more like Mississippi. Who would have thought it?

Incidentally, I predict that Congress will eventually ban pre-dispute arbitration provisions. I don’t think this law is imminent, but expect to see it before I retire.

Unlike the titles to many of my posts, this is not a rhetorical question. I really don’t know the answer.

The background is that a couple of weeks ago the U.S. Supreme Court ruled in a 5–4 decision in the Citizens United case that corporations can freely spend money in federal election campaigns. Pandomonium among liberals ensued, with Keith Olbermann nearly stroking out on live TV. But don’t worry. If anything happens to Olbermann, Ben Affleck is willing to take over.

Here are links to Citizens United coverage by the Wall Street Journal and NMC.

Am I wrong that corporations were already finding ways to funnel all the money they wanted into election campaigns? For instance, this article discusses corporations funneling millions of dollars into elections via the U.S. Chamber of Commerce.

The article states:

The Chamber has a several-pronged approach in its campaign to eviscerate the public’s right to take the country’s more detested industries to court. One is to funnel major industry money into state election campaigns, especially races involving judges and state Attorneys General.

On September 11, 2001, a most unfortunate day for a major news story to appear, the Wall Street Journal ran an eye-opening article by Jim VandeHei about how some of this country’s largest corporations were pouring millions of dollars into the Chamber, allowing companies to hide behind the Chamber’s logo while the group did their dirty work.

Last fall, for example, Wal-Mart Stores Inc., DaimlerChrysler AG, Home Depot Inc. and the American Council of Life Insurers all kicked in $1 million each for one of the chamber’s special projects: a TV and direct-mail advertising campaign aimed at helping elect business-friendly judges.

Indeed, that year the Chamber raised over $5 million targeting judges in Michigan, Mississippi, Ohio, Indiana and Alabama who had, according to the Journal, “rendered verdicts against one or more of the companies contributing to the effort.”

No wonder secrecy is a hallmark of the U.S. Chamber/ILR’s strategy when getting involved in these electoral races. Indeed, the organization sometimes goes to great lengths to keep its involvement and funding a secret.

This leaves me wondering about what will be the practical difference in the new law, if any.

Stop and ask the first nine people you pass on the street if it would be fair for a judge to decide the case of someone who contributed $3 million to the judge’s campaign and chances are, all nine people will tell you that it would be unfair. But at the U.S. Supreme Court, that very issue garnered the slimmest 5-4 majority decision that the judge in question should have recused himself.

The case was Caperton v. A.T. Massey Coal Co. Here is the Court’s opinion. If you don’t like reading judicial opinions, then read John Grisham’s The Appeal , which was based on the case. The Court’s majority opinion reached the correct result and I agree with this observation by the New York Times:

Indeed, the only truly alarming thing about Monday’s decision was that it was not unanimous. The case drew an unusual array of friend-of-court briefs from across the political spectrum, and such an extreme case about an ethical matter that should transcend ideology should have united all nine justices.

The purpose of our nation’s justice system is to right the wrongs. The majority opinion did that, as noted by the Los Angeles Times:

In ruling that a justice on West Virginia’s highest court should have recused himself from a case involving a campaign benefactor, the U.S. Supreme Court has righted an egregious wrong. More important, the 5-4 decision will encourage judges to avoid both the appearance and the reality of conflicts of interest.

It is disturbing that Chief Justice Roberts and three other hard line conservatives would sanction a clear wrong. The dissent raises the possibility of cases being flooded with motions for recusal. But isn’t that better than judicial elections being flooded with special interest cash from individuals and groups who know that the Supreme Court will allow an appellate judge to decide the case of a party who contributed millions to the judge’s campaign? Plus, I’m not buying the dissent’s argument. How many motions for recusal will be filed based on campaign contributions measured in the thousands or less? Especially since the majority opinion makes clear that recusal would not be required in most instances.

The case hits close to home in Mississippi given the recent judicial bribery scandal. In February a Mississippi Bar Task Force established to make recommendation to strengthen public confidence in the legal system issued this report that concluded that money was the root of public mistrust in the legal system. With respect to Mississippi Supreme Court elections the task force stated:

For some twenty years each election has seen huge amounts of money spent, money largely contributed by donors who have a direct stake in the outcome of judicial decisions.

The Task Force recommended that future justices of the Mississippi Supreme Court should be appointed in order to address this problem. The Task Force is correct, as is the majority’s opinion in Caperton.

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

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

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

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

The entire article is available at the above link.

The Supreme Court issued a one sentence order today dismissing the appeal of an $80 million punitive damages verdict in a tobacco case against Philip Morris. There are stories on the decision here and here. The plaintiff’s actual damages were $800,000.

Business interests hoped that the Court would use the case to set a firm limit on punitive damages. The Court did not, however, apparently accepting the Oregon Supreme Court’s finding that Philip Morris’ conduct was “extraordinarily reprehensible.”

The practical effect of the ruling is that it will weaken defense arguments that punitive damages are limited to a single digit ratio compared to the plaintiff’s actual damages. Here, the actual-punitive ratio was about 100 to 1. This makes it hard for a defendant in a case with a modest actual damages award to argue that its punitive exposure is capped no matter how bad its conduct was. I like the flexibility that the decision leaves courts to evaluate punitive damages awards.

I have reviewed several blogs discussing the U.S. Supreme Court’s new drug preemption opinion in Wyeth v. Levine. My favorite is at the WSJ blog. Their analysis of the decision is concise and not slanted towards either side.

In its February 23, 2009 opinion section the Clarion-Ledger refers to a pending U.S. Supreme Court case out of West Virginia that involves whether an elected judge must recuse himself/ herself from cases involving one of the judge’s political contributors. Here is the editorial.

The case is straight out of John Grisham’s The Appeal. A defendant lost a $50 million verdict, appealed and contributed $3 million to a supreme court candidate while the appeal was pending. The candidate won, refused to recuse himself from the contributor’s case and voted to overturn the verdict. The Ledger states:

Mississippi’s current quagmire of judicial corruption cases – interposed against a decade of tort reform battles that have pitted big spending trial lawyers against bigger spending business and medical interests in judicial elections – will focus much attention on the high court decision in the West Virginia case.

Regardless if the contributions come from attorneys arguing cases before the judge or from business/medical interests whose assets are at risk in cases, concerns about impartial judges are real.

The Ledger lays all this out and then does not take a position on what should be done.

It will be a crying shame if the Supreme Court does not find a constitutional violation when judges decide cases involving large campaign contributors. In federal court non-elected judges recuse themselves from cases involving companies whose stock the judge owns. Similar rules should apply to state court cases when there is any concern of impartiality, such as large campaign contributions.

I would like to see two things in Mississippi to return the public faith in the judiciary and legal system:

1. an appointed judiciary system; and
2. rules prohibiting the hiring or association of an attorney on a case because of a perceived personal relationship between the attorney and the judge.

The first proposal would have to involve the legislature. But the second proposal could be imposed by the Mississippi Supreme Court by adding a rule to the Mississippi Rules of Professional Conduct.