Mississippi Tort Reform at 10 Years

Former Gov. Barbour says state was facing ‘health care crisis’ with doctors and hospitals unable to afford insurance and afraid to practice because of lawsuits.

As the 10th anniversary of Mississippi’s 2004 “tort reform” — limits on lawsuits — nears, supporters say the changes provided stability for doctors and businesses.

But opponents say they limited citizens’ rights to their day in court and fair compensation.

Regardless, it altered politics in Mississippi.

“Hospitals were closing maternity wards,” said former Republican Gov. Haley Barbour, who led the charge in 2004 on tort reform. “There was a health care crisis. There was a gigantic number of liability lawsuits, and insurance premiums had skyrocketed for doctors and hospitals. … Every small business in Mississippi was one lawsuit away from bankruptcy. … Businesses would not consider coming to Mississippi because of lawsuit abuse.”

By the early 2000s, Mississippi had become known as a lawsuit haven, where sympathetic juries and judges handed out huge awards. Medical, insurance, business and political forces joined to push for lawsuit reform. One round, after bitter fighting, was passed by the state Legislature in 2002, but these groups were pushing for more. Barbour made tort reform a key platform in his first run for office in 2003.

With the 2004 reforms, passed after a mostly partisan fight, Mississippi became one of the first states to cap noneconomic and punitive damages. The Legislature also changed venue and joint liability rules and passed provisions to protect “innocent sellers” and landowners.

Various reports in recent years have shown large drops in medical lawsuits and doctors’ insurance premiums, and in the number of tort cases filed — down to about 3,500 in 2012, compared to more than 10,600 in 2002.

State Rep. David Baria, former president of the state trial lawyers association — now the state Association for Justice, said some reforms were still needed in 2004, but that the courts could have mandated some changes and enforced existing rules. He said the plaintiffs’ bar was willing to negotiate others.

But Baria said the ’04 measures were really focused on caps that prevent those wronged from receiving fair compensation and politics. He said the changes allow businesses to take an “actuarial approach” instead of solving safety issues for consumers. He said the changes have reduced medical malpractice lawsuits, but only because few lawyers will take them on, even if a patient has been obviously harmed through negligence.

“If you’re an insurance company or large corporation, tort reform was a raging success,” Baria said, “but not so much if you’re someone who’s been injured.”

“It wasn’t about frivolous lawsuits and did nothing whatsoever to stop frivolous lawsuits,” Baria said. “This was about the largest lawsuits. … Barbour pitched more tort reform as needed to promote economic development … If you track the number of jobs, we’ve seen a net loss. Look at them any way you want, tort reform was not positive on job creation.”

Barbour and other pro tort reform groups — including the Mississippi Economic Council and state Medical Association — are planning a May 14 conference in Jackson celebrating the 2004 tort reform passage.

Barbour said the changes have helped the state land businesses and jobs, including the Toyota plant.

“Toyota said publicly — wrote a letter to me, the lieutenant governor and the speaker of the House — that they would not consider Mississippi as long as we had that kind of lawsuit abuse,” Barbour said.

“The tort reform law that the Legislature passed and I signed into law does not prevent anyone from filing a lawsuit,” Barbour said. “Not one person loses the right to sue. But it sets rules that level the playing field.”

Barbour notes that, before the changes were passed, Jefferson County — which made national news as a lawsuit haven — “had more plaintiffs in mass tort lawsuits than the entire population of the county, and virtually none of those were from Mississippi.”

“We had a pharmacy in Jefferson County that would get sued in every one of those fen-phen (diet drug) cases, and they had to close,” Barbour said. “Nobody ever got a judgment against the owner, but she had to close or go broke winning lawsuits.”

“Medical liability insurance premiums have fallen more than 60 percent, with most of that drop in the first three or four years,” Barbour said. “The number of medical liability suits filed against doctors dropped by more than 90 percent in one year.”

But Baria said the effects of tort reform are also being seen by injured people “in virtually every big case.” And he said large companies are now weighing the cost of fixing problems against what they know would be limited punitive or pain-and-suffering damages.

Baria said it’s now more difficult to settle cases for legitimate claims because businesses are willing to gamble on going to trial because of caps, and that businesses now start negotiations at “zero” instead of reasonable amounts for obvious damages.

Baria said, “Doctors have always won about 90 percent of their cases,” and that “most lawyers who might have looked at taking med-mal cases before won’t even look at them, just refer them to the few who still do.”

But Barbour said other states are looking at Mississippi as a model of lawsuit reform, and medical care has improved as a result.

“Sharkey-Issaquena (counties), a county-owned hospital, had closed the emergency room because they couldn’t pay the liability insurance premiums,” Barbour said. “Doctors had quit delivering babies, had quit doing certain kinds of surgeries. There was at the time only one neurosurgeon between Jackson and Memphis who would do emergency surgery. … People were having to drive an hour for someone having a baby, and bad things can happen in an hour.”

Besides its impact on civil justice in Mississippi, tort reform had a profound impact on state politics, as outside groups poured millions of dollars into the state to fight or elect judges and sway public sentiment on “jackpot justice.” Opponents made the term “trial lawyer” a household, dirty word. The fight helped Republicans by weakening a powerful base of support for Democrats, plaintiffs lawyers and a main source of political contributions.

“The plaintiffs lawyers were very, very, very powerful,” Barbour said. And a lot of people thought since this was the worst state for lawsuit abuse that it would be impossible to overcome those people who were getting fabulously wealthy off it,” Barbour said. “But we did. The grassroots won.”

Baria says the movement wasn’t grassroots, but “a coordinated, multi-year campaign, well planned and well designed and well funded.” He said the tort reform forces wanted caps on damages and “to keep trial lawyers from becoming wealthy and contributing to Democratic candidates.”

“It’s pretty easy to demonize trial lawyers, and unfortunately, the injured people we deal with don’t have a lot of power and influence,” Baria said. “People dislike all trial lawyers, except for their own.”

Barbour said: “The tort reform bill we passed clearly helped Republicans, but it passed 78-39 in the House, so 20-something Democrats voted for it at a minimum. I don’t single it out as a principal reason (for Republicans taking the state House), but it was consistent with legislation that was passed that helped Republicans make gains over the next two elections.”

2004 tort reform

Lawmakers, after long and sometime bitter and partisan debate, passed the “2004 Tort Reform Act,” which greatly changed Mississippi’s civil litigation. The changes included:

• Caps on damages: The law limited noneconomic, or pain-and-suffering damages to $500,000 on medical liability cases and $1 million in other civil cases. It also reduced caps on punitive damages for defendants, based on their net worth.

• Joint and several liability: The law did away with joint and several liability, limiting damages defendants could face to the fraction for which they were at fault.

• Venue: Created stricter rules for establishing venue, or where a case can be brought and tried. For instance, doctors can only be sued in their home county.

• Product and premise liability: Added protection to “innocent sellers” of products and protects property owners from liability.

Results

Several groups in recent years have issued reports on the effects of Mississippi’s tort reform, including:

• Doctors’ insurance premiums: The Medical Assurance Co. of Mississippi, the state’s medical liability insurer covering about 75 percent of doctors, reports premium rates have plummeted. A doctor’s premium was $4,000 in 1999, peaked at nearly $10,000 in 2004, dropped back down to $4,000 by 2009 and is about $3,500 now.

• Medical liability lawsuits: In 2011, Obstetrics & Gynecology reported on Mississippi medical liability lawsuits for MACM insured doctors and found: