Lawyers in paradise: Mississippi has a reputation as a haven for trial lawyers pursuing mega-lawsuits. Businessmen, doctors and insurers are seeking reform, particularly caps on damages

0 Comments | Insight on the News, August 12, 2002 | by Tim Lemke

Mississippi, renowned for its majestic antebellum homes, flowering magnolias and fried catfish, also is known as the "Lawsuit Capital of the World"--the state where businesses fear to tread and where many doctors can't buy malpractice insurance. Huge jury verdicts are common, as are massive cases involving hundreds of plaintiffs suing drug companies and tobacco manufacturers.

"There is a great need for civil-justice reform in this state, period," says David Allen, chief executive of Mississippi Blood Services and head of Mississippians for Economic Progress. "There is a crisis in Mississippi with our civil-justice system as a whole."

A Harris Interactive survey in January of corporate lawyers across the country ranked Mississippi's civil-justice system last among the states. The average Mississippian pays $264 a year to fund litigation there.

A unique aspect of the Mississippi system, and the biggest thorn in the side of many business leaders, is a measure called joinder, officially known as Rule 20. Under this rule, which has been upheld by the state Supreme Court, cases with similar circumstances, including those from out of state, can be pooled. As a result, trial lawyers file cases with as many as a thousand plaintiffs, many of whom reside outside Mississippi.

Litigators and judges who support the rule say it is an efficient way of quickly finding verdicts or settlements in cases that otherwise would clog the court system. "It's good because more cases get resolved quickly," says Shane Langston, head of the Mississippi Trial Lawyers Association. "Plaintiffs don't have to wait for case number 9,999."

But opponents of joinder argue that the rule is abused. Doctors and small businessmen are pulled into a case simply to ensure that it is litigated in the state, which has no cap on noneconomic damages. In turn, insurance is excessively high because actuaries can't set rates, say critics of the system.

"I'm uninsurable because of where I practice, not what I practice," says Robert Lewis, an internist who until this year had been sued once, a case he won. In 2002, he has been pulled into four cases. Colleague David McGraw, a general-practitioner, had gone 23 years without a lawsuit filed against him. This year, he was named in three. "It's constantly in the back of your mind: `How can I keep from getting sued?'" says McGraw.

Medical Assurance Co. of Mississippi, the only remaining malpractice carrier in the state, has been forced to raise rates a minimum of 10 percent for all doctors, with surgeons and OB/GYNS seeing 20 to 30 percent increases. Last year, the company received 370 requests for insurance, the most in more than a decade. Through March, it had received 450 requests. "These are the same doctors that have been here for 20 years," says Chief Executive Mike Houpt. "We've had to be much more selective because of the litigious environment we're operating in right now."

At Field Memorial Community Hospital, the only full-fledged hospital servicing Wilkinson and Amite counties, three doctors will be without malpractice insurance at the end of July. The policy of an additional doctor runs out Sept. 1.

"We're still out on a limb," says Ricardo Nimo, an internist at Field Memorial. "We still have no coverage at this point. I never thought I'd find myself in this situation."

The situation has become so dire that administrators of the state-owned hospital are on the verge of making drastic changes to keep the doctors there and the facility open. Their plan is to take advantage of a Mississippi law that caps liability for state employees at $500,000--that is, to restructure the doctors' contracts to make them employees of the state, rather than independent contractors. "To say that we don't have a problem in Mississippi, I think the evidence would beg to differ with that opinion," says Brock Slabach, Field Memorial's administrator.

Business leaders also are advocating reform. The U.S. Chamber of Commerce has cautioned its members against doing business in the state, citing the lack of tort-reform laws, and has been campaigning on behalf of pro-reform candidates for the state Supreme Court.

Small businesses have suffered the most from the tort system, say critics. The most publicized case is of the Bankston Drug Store, the only pharmacy in the town of Fayette. Both Hilda Bankston, who owned the store until 1999, and Traci Swilley, the owner now, have been named in dozens of lawsuits against drug companies for the sole purpose of bringing the cases into Jefferson County, which has become notorious because of large verdicts and numerous settlements. Neither Bankston nor Swilley has paid anything in verdicts or settlements, and they never have been held liable by the court. But they have faced the stress of hiring lawyers and have found it increasingly difficult to find affordable insurance.

"When they're getting dragged into court time and time and time again, who suffers?" asks Ron Aldridge, head of the Mississippi chapter of the National Federation of Independent Businesses. "Well there's no doubt that little, small business suffers tremendously from the cost in time and stress."