House Bill 90

AN ACT TO AMEND SECTION 11-11-3, MISSISSIPPI CODE OF 1972, TO REVISE VENUE IN CIVIL ACTIONS; TO AMEND SECTION 11-1-64, MISSISSIPPI CODE OF 1972, TO REVISE THE INNOCENT SELLER LAW; TO AMEND SECTION 11-1-65, MISSISSIPPI CODE OF 1972, TO REVISE THE CAP ON PUNITIVE DAMAGES; TO AMEND SECTION 11-1-60, MISSISSIPPI CODE OF 1972, TO CAP NONECONOMIC DAMAGES IN ALL CIVIL ACTIONS; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 11-11-3, Mississippi Code of 1972, is amended as follows:

11-11-3. (1) Civil actions of which the circuit court has original jurisdiction shall be commenced in the county where the defendant resides or in the county where the alleged act or omission occurred or where the event that caused the injury occurred. Venue shall be proper as to each and every named defendant and plaintiff. If the venue is improper as to any party, then the claims involving that party shall be severed and transferred to a county where venue is proper as to such claims, or dismissed without prejudice if there exists no county of proper venue.

(2) If a civil action is brought in an improper county, such action may be transferred to the proper county pursuant to Section 11-11-17.

SECTION 2. Section 11-1-64, Mississippi Code of 1972, is amended as follows:

11-1-64. (1) In any civil action alleging damages caused by a product, a product seller other than a manufacturer shall not be liable for a latent defect if the seller is a mere conduit who purchased the product from a reputable manufacturer. It is the intent of this section to insulate innocent sellers who are not actively negligent from forum-driven lawsuits.

(2) A product seller shall not be considered to have failed to exercise reasonable care with respect to a product, based upon an alleged failure to inspect the product, if there was no reasonable opportunity to inspect the product; or the inspection, in the exercise of reasonable care, would not have revealed that the product was defective.

(3) Nothing in this section shall be construed to eliminate any common law defense to an action for damages caused by a product.

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SECTION 3. Section 11-1-65, Mississippi Code of 1972, is amended as follows:

11-1-65. (1) In any action in which punitive damages are sought:

(a) Punitive damages may not be awarded if the claimant does not prove by clear and convincing evidence that the defendant against whom punitive damages are sought acted with actual malice, gross negligence which evidences a willful, wanton or reckless disregard for the safety of others, or committed actual fraud.

(b) In any action in which the claimant seeks an award of punitive damages, the trier of fact shall first determine whether compensatory damages are to be awarded and in what amount, before addressing any issues related to punitive damages.

(c) If, but only if, an award of compensatory damages has been made against a party, the court shall promptly commence an evidentiary hearing before the same trier of fact to determine whether punitive damages may be considered.

(d) The court shall determine whether the issue of punitive damages may be submitted to the trier of fact; and, if so, the trier of fact shall determine whether to award punitive damages and in what amount.

(e) In all cases involving an award of punitive damages, the fact finder, in determining the amount of punitive damages, shall consider, to the extent relevant, the following: the defendant's financial condition and net worth; the nature and reprehensibility of the defendant's wrongdoing, for example, the impact of the defendant's conduct on the plaintiff, or the relationship of the defendant to the plaintiff; the defendant's awareness of the amount of harm being caused and the defendant's motivation in causing such harm; the duration of the defendant's misconduct and whether the defendant attempted to conceal such misconduct; and any other circumstances shown by the evidence that bear on determining a proper amount of punitive damages. The trier of fact shall be instructed that the primary purpose of punitive damages is to punish the wrongdoer and deter similar misconduct in the future by the defendant and others while the purpose of compensatory damages is to make the plaintiff whole.

(f) (i) Before entering judgment for an award of punitive damages the trial court shall ascertain that the award is reasonable in its amount and rationally related to the purpose to punish what occurred giving rise to the award and to deter its repetition by the defendant and others.

(ii) In determining whether the award is excessive, the court shall take into consideration the following factors:

1. Whether there is a reasonable relationship between the punitive damage award and the harm likely to result from the defendant's conduct as well as the harm that actually occurred;

2. The degree of reprehensibility of the defendant's conduct, the duration of that conduct, the defendant's awareness, any concealment, and the existence and frequency of similar past conduct;

3. The financial condition and net worth of the defendant; and

4. In mitigation, the imposition of criminal sanctions on the defendant for its conduct and the existence of other civil awards against the defendant for the same conduct. (2) The seller of a product other than the manufacturer shall not be liable for punitive damages unless the seller exercised substantial control over that aspect of the design, testing, manufacture, packaging or labeling of the product that caused the harm for which recovery of damages is sought; the seller altered or modified the product, and the alteration or modification was a substantial factor in causing the harm for which recovery of damages is sought; the seller had actual knowledge of the defective condition of the product at the time he supplied same; or the seller made an express factual representation about the aspect of the product which caused the harm for which recovery of damages is sought.

(3) In all civil actions where an entitlement to punitive damages shall have been established under applicable laws, no award of punitive damages shall exceed the greater of three (3) times the amount of the total compensatory damages awarded to the plaintiff in an action or Three Million Dollars ($3,000,000.00); however, if the defendant is an individual or a business with less than fifty (50) full-time employees, an award of punitive damages shall not exceed two (2) times the amount of the plaintiff's compensatory damages or Two Million Dollars ($2,000,000.00) or three percent (3%) of such defendant's net worth, whichever is less, unless the finder of fact and court find by clear and convincing evidence that the defendant acted with criminal intent to cause serious physical bodily injury. This restriction shall not be disclosed to the trier of fact, but shall be applied by the court to any punitive damages verdict.

(4) Nothing in this section shall be construed as creating a right to an award of punitive damages or to limit the duty of the court, or the appellate courts, to scrutinize all punitive damage awards, ensure that all punitive damage awards comply with applicable procedural, evidentiary and constitutional requirements, and to order remittitur where appropriate.

(5) Subsections (1) and (2) of this section shall not apply to:

(a) Contracts;

(b) Libel and slander; or

SECTION 4. Section 11-1-60, Mississippi Code of 1972, is amended as follows:

11-1-60. (1) For the purposes of this section, the following words and phrases shall have the meanings ascribed herein unless the context clearly requires otherwise:

(a) "Noneconomic damages" means subjective, nonpecuniary damages arising from death, pain, suffering, inconvenience, mental anguish, worry, emotional distress, loss of society and companionship, loss of consortium, bystander injury, physical impairment, injury to reputation, humiliation, embarrassment, loss of the enjoyment of life, hedonic damages, other nonpecuniary damages, and any other theory of damages such as fear of loss, illness or injury. The term "noneconomic damages" shall not include damages for disfigurement, nor does it include punitive or exemplary damages.

(b) "Actual economic damages" means objectively verifiable pecuniary damages arising from medical expenses and medical care, rehabilitation services, custodial care, disabilities, loss of earnings and earning capacity, loss of income, burial costs, loss of use of property, costs of repair or replacement of property, costs of obtaining substitute domestic services, loss of employment, loss of business or employment opportunities, and other objectively verifiable monetary losses.

(c) "Provider of health care" means a licensed physician, psychologist, osteopath, dentist, nurse, nurse practitioner, physician assistant, pharmacist, podiatrist, optometrist, chiropractor, institution for the aged or infirm, hospital, licensed pharmacy or any legal entity which may be liable for their acts or omissions.

(2) (a) In any civil action compensation for the noneconomic damages suffered shall not exceed the amount of Two Hundred Fifty Thousand Dollars ($250,000.00).

It is the intent of this section to limit all noneconomic damages to the above.

(b) The trier of fact shall not be advised of the limitations imposed by this subsection (2) and the judge shall appropriately reduce any award of noneconomic damages that exceeds the applicable limitation.

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SECTION 5. This act shall take effect and be in force from and after July 1, 2004, and shall apply to all causes of action filed on or after that date.