PERRY/5th Circuit gives win to tort reformers
Wednesday, March 6, 2013 12:00 AM
Last week a three judge panel of the U.S. Fifth Circuit Court of Appeals delivered a victory to Mississippi's tort reform proponents by ruling the $1 million cap in noneconomic damages did not violate the Mississippi Constitution's jury trial guarantee or separation of powers doctrine.
The story began on a road in Philadelphia, Miss., when a van operated by a Sears, Roebuck and Company employee collided with the vehicle driven by Lisa Learmonth. Learmonth sued Sears in federal court and was awarded $4 million in damages. Sears appealed the verdict as excessive and during appeal both sides stipulated the damages: about $100,000 went to past medical expenses with another $480,000 to future medical expenses; $1.2 million in damages were awarded to compensate Learmonth for lost wage earning in the future; the remainder, $2.2 million, was for noneconomic damages.
While economic damages - medical expenses, loss of earnings, property repairs, loss of employment and other quantifiable losses - are not capped, noneconomic damages in Mississippi were capped at $1 million by the legislature in 2004. Noneconomic damages are subjective losses for pain and suffering, emotional distress and loss of enjoyment of life. Punitive damages designed to punish are not included in noneconomic damages.
Sears pointed to this cap to have the $2.2 million in noneconomic damages reduced to the $1 million cap. Learmonth argued that reduction violated the Mississippi Constitution.
The three judge panel, made up of the Circuit's Chief Justice Carl Stewart (appointed by President Bill Clinton), Justice Carolyn Dineen King (appointed by President Jimmy Carter) and Justice Priscilla Owen (appointed by President George W. Bush), determined Learmonth's arguments failed to make her case.
The opinion, written by Justice King, notes the Mississippi legislature by imposing the damage cap "has not invaded the jury's factfinding role" and the Mississippi Supreme Court "has historically recognized the legislature's authority to alter legal remedies." The Court continued, "To accept that the constitutional separation of powers prohibits the legislature from limiting a legal remedy would be to prohibit the legislature from enacting practically any change to substantive law."
The Court did suggest other avenues that might impact the caps writing Learmonth, "overlooked the possibility that, at least under some circumstances, the Mississippi Constitution's Due Process Clause or Remedy Clause might impose substantive constraints on the legislature's authority to cap compensatory damages." The Court notes Learmonth made those arguments early on but failed to properly renew them on this appeal.
The ruling will bring uniformity and predictability to cases in Mississippi federal courts and could be impactful on Mississippi trial courts and courts of appeal where the tort reform fight continues.
Several other cases dealing with the constitutionality of the caps remain pending in Mississippi. In Tanner v Eagle Oil, a Jasper County circuit judge ruled the cap on non-economic damages unconstitutional in a $36 million jury verdict concerning an oil rig injury in which $27 million was non-economic damages. In Carter v Interstate Realty Management, involving the death of a child in an apartment fire, a Coahoma County circuit judge declared the cap unconstitutional in a jury verdict of $7.5 million in which $6.5 million was non-economic. In Hinds County, Glover v Brooks breaks the $500,000 cap pertaining to medical malpractice cases with $1.5 million in non-economic damages. Another test of the medical malpractice caps, Celmons v USA, is in federal court for Mississippi's Southern District and involves $5.45 million in non-economic damages.
In recent years, the Mississippi Supreme Court twice declined to address the constitutionality of the caps both in a certified question by the Fifth Circuit in the Learmonth case, and in another much-watched case: Lymas v Double Quick. In the former, the Court ruled the parties stipulating the damages did not necessarily reflect the jury's decision and so it could not determine whether the cap was breached. In the latter, the Court ruled against the plaintiff making the cap moot.
The Fifth Circuit reasoning could provide added strength and momentum to those on the Mississippi Supreme Court who believe the caps are constitutional. As an elected body, issues of excessive lawsuit verdicts against businesses and health providers has played a major role in the campaigns of those on the Court including independent expenditures and issue advocacy efforts uncoordinated with the campaigns. Justices thought to be favorable to ruling the damage caps constitutional have been supported by business and medical interests; while justices thought to be inclined to rule the damage caps unconstitutional have been supported by trial lawyer interests.
(As a matter of personal disclosure, in past years I worked with Mississippians for Economic Progress which advocates for civil justice reform.)
Both business and trial lawyer interests will be watching how Mississippi courts rule in the future, but for the moment, this is a huge win for the tort reform side.
Brian Perry is a partner with Capstone Public Affairs, LLC. Reach him at email@example.com or @CapstonePerry on Twitter.