MISSISSIPPI LEGISLATURE
2004 1st Extraordinary Session
To: Judiciary A
By: Representative Moak
AN ACT TO BRING FORWARD SECTIONS 11-1-63 AND 11-1-64, MISSISSIPPI CODE OF 1972, FOR PURPOSES OF AMENDMENT RELATED TO INNOCENT SELLER REVISIONS; TO PROVIDE RATES FOR COPIES OF MEDICAL RECORDS THAT MAY BE CHARGED BY MEDICAL PROVIDERS AND FACILITIES; TO PROVIDE FOR CLASS ACTIONS; TO REQUIRE STATEWIDE PUBLICATION OF RECALL NOTICES; TO PROVIDE SANCTIONS FOR FRIVOLOUS REMOVALS; TO AMEND SECTION 11-1-65, MISSISSIPPI CODE OF 1972, TO REVISE EXCEPTIONS FROM PUNITIVE DAMAGES; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 11-1-63, Mississippi Code of 1972, is brought forward as follows:
11-1-63. Subject to the provisions of Section 11-1-64, in any action for damages caused by a product except for commercial damage to the product itself:
(a) The manufacturer or seller of the product shall not be liable if the claimant does not prove by the preponderance of the evidence that at the time the product left the control of the manufacturer or seller:
(i) 1. The product was defective because it deviated in a material way from the manufacturer's specifications or from otherwise identical units manufactured to the same manufacturing specifications, or
2. The product was defective because it failed to contain adequate warnings or instructions, or
3. The product was designed in a defective manner, or
4. The product breached an express warranty or failed to conform to other express factual representations upon which the claimant justifiably relied in electing to use the product; and
(ii) The defective condition rendered the product unreasonably dangerous to the user or consumer; and
(iii) The defective and unreasonably dangerous condition of the product proximately caused the damages for which recovery is sought.
(b) A product is not defective in design or formulation if the harm for which the claimant seeks to recover compensatory damages was caused by an inherent characteristic of the product which is a generic aspect of the product that cannot be eliminated without substantially compromising the product's usefulness or desirability and which is recognized by the ordinary person with the ordinary knowledge common to the community.
(c) (i) In any action alleging that a product is defective because it failed to contain adequate warnings or instructions pursuant to paragraph (a)(i)2 of this section, the manufacturer or seller shall not be liable if the claimant does not prove by the preponderance of the evidence that at the time the product left the control of the manufacturer or seller, the manufacturer or seller knew or in light of reasonably available knowledge should have known about the danger that caused the damage for which recovery is sought and that the ordinary user or consumer would not realize its dangerous condition.
(ii) An adequate product warning or instruction is one that a reasonably prudent person in the same or similar circumstances would have provided with respect to the danger and that communicates sufficient information on the dangers and safe use of the product, taking into account the characteristics of, and the ordinary knowledge common to an ordinary consumer who purchases the product; or in the case of a prescription drug, medical device or other product that is intended to be used only under the supervision of a physician or other licensed professional person, taking into account the characteristics of, and the ordinary knowledge common to, a physician or other licensed professional who prescribes the drug, device or other product.
(d) In any action alleging that a product is defective pursuant to paragraph (a) of this section, the manufacturer or seller shall not be liable if the claimant (i) had knowledge of a condition of the product that was inconsistent with his safety; (ii) appreciated the danger in the condition; and (iii) deliberately and voluntarily chose to expose himself to the danger in such a manner to register assent on the continuance of the dangerous condition.
(e) In any action alleging that a product is defective pursuant to paragraph (a)(i)2 of this section, the manufacturer or seller shall not be liable if the danger posed by the product is known or is open and obvious to the user or consumer of the product, or should have been known or open and obvious to the user or consumer of the product, taking into account the characteristics of, and the ordinary knowledge common to, the persons who ordinarily use or consume the product.
(f) In any action alleging that a product is defective because of its design pursuant to paragraph (a)(i)3 of this section, the manufacturer or product seller shall not be liable if the claimant does not prove by the preponderance of the evidence that at the time the product left the control of the manufacturer or seller:
(i) The manufacturer or seller knew, or in light of reasonably available knowledge or in the exercise of reasonable care should have known, about the danger that caused the damage for which recovery is sought; and
(ii) The product failed to function as expected and there existed a feasible design alternative that would have to a reasonable probability prevented the harm. A feasible design alternative is a design that would have to a reasonable probability prevented the harm without impairing the utility, usefulness, practicality or desirability of the product to users or consumers.
(g) (i) The manufacturer of a product who is found liable for a defective product pursuant to paragraph (a) shall indemnify a product seller for the costs of litigation, any reasonable expenses, reasonable attorney's fees and any damages awarded by the trier of fact 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.
(ii) Subparagraph (i) shall not apply unless the seller has given prompt notice of the suit to the manufacturer within ninety (90) days of the service of the complaint against the seller.
(h) Nothing in this section shall be construed to eliminate any common law defense to an action for damages caused by a product.
SECTION 2. Section 11-1-64, Mississippi Code of 1972, is brought forward as follows:
11-1-64. (1) A defendant whose liability is based solely on his status as a seller in the stream of commerce may be dismissed from a products liability claim as provided in this section.
(2) This section shall apply to any products liability claim in which another defendant, including the manufacturer, is properly before the court and from whom recovery may be had for plaintiff's claim.
(3) A defendant may move for dismissal under this section within one hundred eighty (180) days from the date an answer or other responsive pleading is due to be filed or at such later time as may be permitted by the court for good cause shown. The motion shall be accompanied by an affidavit which shall be made under oath and shall state that the defendant is aware of no facts or circumstances upon which a verdict might be reached against him, other than his status as a seller in the stream of commerce.
(4) The parties shall have sixty (60) days in which to conduct discovery on the issues raised in the motion and affidavit. The court for good cause shown, may extend the time for discovery, and may enter a protective order pursuant to the rules of civil procedure regarding the scope of discovery on other issues.
(5) Any party may move for a hearing on a motion to dismiss under this section. If the requirements of subsections (2) and (3) of this section are met, and no party comes forward at such a hearing with evidence of facts which would render the defendant seeking dismissal under this section liable on some basis other than his status as a seller in the stream of commerce, the court shall dismiss without prejudice the claim as to that defendant.
(6) No order of dismissal under this section shall operate to divest a court of venue or jurisdiction otherwise proper at the time the action was commenced. A defendant dismissed pursuant to this section shall be considered to remain a party to such action only for such purposes.
(7) An order of dismissal under this section shall be interlocutory until final disposition of plaintiff's claim.
SECTION 3. Any medical provider or hospital or nursing home or other medical facility shall charge no more than the following amounts to patients or their representatives for photocopying any patient's records: Twenty Dollars ($20.00) for pages one (1) through twenty (20); One Dollar ($1.00) per page for the next eighty (80) pages; Fifty Cents (50¢) per page for all pages thereafter. Ten percent (10%) of the total charge may be added for postage and handling. Fifteen Dollars ($15.00) may be recovered by the medical provider or hospital or nursing home or other medical facility for retrieving medical records in archives at a location off the premises where the facility/office is located.
SECTION 4. (1) One or more members of a class may sue or be sued as representative parties on behalf of all only if (a) the class is so numerous that joinder of all members is impracticable, (b) there are questions of law or fact common to the class, (c) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (d) the representative parties will fairly and adequately protect the interests of the class.
(2) An action may be maintained as a class action if the prerequisites of subsection (1) are satisfied, and in addition:
(a) The prosecution of separate actions by or against individual members of the class would create a risk of:
(i) Inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class, or
(ii) Adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests; or
(b) The party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole; or
(c) The court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. The matters pertinent to the findings include: (i) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (ii) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (iii) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (iv) the difficulties likely to be encountered in the management of a class action.
(3) (a) As soon as practicable after the commencement of an action brought as a class action, the court shall determine by order whether it is to be so maintained. An order under this subdivision may be conditional, and may be altered or amended before the decision on the merits.
(b) In any class action maintained under subsection (2)(c), the court shall direct to the members of the class the best notice practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort. The notice shall advise each member that (i) the court will exclude the member from the class if the member so requests by a specified date; (ii) the judgment, whether favorable or not, will include all members who do not request exclusion; and (iii) any member who does not request exclusion may, if the member desires, enter an appearance through counsel.
(c) The judgment in an action maintained as a class action under subsection (2)(a) or (2)(b), whether or not favorable to the class, shall include and describe those whom the court finds to be members of the class. The judgment in an action maintained as a class action under subsection (2)(c), whether or not favorable to the class, shall include and specify or describe those to whom the notice provided in subsection (3)(b) was directed, and who have not requested exclusion, and whom the court finds to be members of the class.
(d) When appropriate (i) an action may be brought or maintained as a class action with respect to particular issues, or (ii) a class may be divided into subclasses and each subclass treated as a class, and the provisions of this rule shall then be construed and applied accordingly.
(4) (a) When a person sues or is sued as a representative of a class, the court must, at an early practicable time, determine by order whether to certify the action as a class action.
(b) An order certifying a class action must define the class and the class claims, issues or defenses and must appoint class counsel under subsection (9).
(c) An order under this subsection may be altered or amended before final judgment.
(d) (i) For any class certified under this section or the court may direct appropriate notice to the class.
(ii) For any class certified under this section, the court must direct to class members the best notice practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort. The notice must concisely and clearly state in plain, easily understood language:
1. The nature of the action;
2. The definition of the class certified;
3. The class claims, issues or defenses;
4. That a class member may enter an appearance through counsel if the member so desires;
5. That the court will exclude from the class any member who requests exclusion, stating when and how members may elect to be excluded; and
6. The binding effect of a class judgment on class members under this section.
(e) The judgment in an action maintained as a class action under subsection (3)(a) or (3)(b), whether or not favorable to the class, shall include and describe those whom the court finds to be members of the class. The judgment in an action maintained as a class action under subsection (3)(c), whether or not favorable to the class, shall include and specify or describe those to whom the notice provided in subsection (4)(b) was directed, and who have not requested exclusion, and whom the court finds to be members of the class.
(f) When appropriate (i) an action may be brought or maintained as a class action with respect to particular issues, or (ii) a class may be divided into subclasses and each subclass treated as a class, and the provisions of this rule shall then be construed and applied accordingly.
(5) In the conduct of actions to which this rule applies, the court may make appropriate orders:
(a) Determining the course of proceedings or prescribing measures to prevent undue repetition or complication in the presentation of evidence or argument;
(b) Requiring, for the protection of the members of the class or otherwise for the fair conduct of the action, that notice be given in such manner as the court may direct to some or all of the members of any step in the action, or of the proposed extent of the judgment, or of the opportunity of members to signify whether they consider the representation fair and adequate, to intervene and present claims or defenses, or otherwise to come into the action;
(c) Imposing conditions on the representative parties or on intervenors;
(d) Requiring that the pleadings be amended to eliminate therefrom allegations as to representation of absent persons, and that the action proceed accordingly;
(e) Dealing with similar procedural matters. The orders may be combined and may be altered or amended as may be desirable from time to time.
(6) A class action shall not be dismissed or compromised without the approval of the court, and notice of the proposed dismissal or compromise shall be given to all members of the class in such manner as the court directs.
(7) (a) (i) The court must approve any settlement, voluntary dismissal or compromise of the claims, issues or defenses of a certified class.
(ii) The court must direct notice in a reasonable manner to all class members who would be bound by a proposed settlement, voluntary dismissal or compromise.
(iii) The court may approve a settlement, voluntary dismissal or compromise that would bind class members only after a hearing and on finding that the settlement, voluntary dismissal or compromise is fair, reasonable and adequate.
(b) The parties seeking approval of a settlement, voluntary dismissal or compromise must file a statement identifying any agreement made in connection with the proposed settlement, voluntary dismissal or compromise.
(c) In an action previously certified as a class action, the court may refuse to approve a settlement unless it affords a new opportunity to request exclusion to individual class members who had an earlier opportunity to request exclusion but did not do so.
(d) (i) Any class member may object to a proposed settlement, voluntary dismissal or compromise that requires court approval.
(ii) An objection made under this subsection may be withdrawn only with the court's approval.
(8) A court of appeals may in its discretion permit an appeal from an order of a district court granting or denying class action certification under this rule if application is made to it within ten (10) days after entry of the order. An appeal does not stay proceedings in the district court unless the district judge or the court of appeals so order.
(9) (a) Unless a statute provides otherwise, a court that certifies a class must appoint class counsel.
(b) An attorney appointed to serve as class counsel must fairly and adequately represent the interests of the class.
(c) In appointing class counsel, the court:
(i) Must consider:
1. The work counsel has done in identifying or investigating potential claims in the action;
2. Counsel's experience in handling class actions, other complex litigation and claims of the type asserted in the action;
3. Counsel's knowledge of the applicable law; and
4. The resources counsel will commit to representing the class;
(ii) May consider any other matter pertinent to counsel's ability to fairly and adequately represent the interests of the class;
(iii) May direct potential class counsel to provide information on any subject pertinent to the appointment and to propose terms for attorney fees and nontaxable costs; and
(iv) May make further orders in connection with the appointment.
(d) The court may designate interim counsel to act on behalf of the putative class before determining whether to certify the action as a class action.
(e) The court may appoint one or more individual attorneys or one or more law firms as class counsel which the court determines is best able to represent the interests of the class.
(f) The order appointing class counsel may include provisions about the award of attorney fees or nontaxable costs.
(10) In an action certified as a class action, the court may award reasonable attorney fees and nontaxable costs authorized by law or by agreement of the parties as follows:
(a) A claim for an award of attorney fees and nontaxable costs must be made by motion, subject to the provisions of this subsection, at a time set by the court. Notice of the motion must be served on all parties and, for motions by class counsel, directed to class members in a reasonable manner.
(b) A class member, or a party from whom payment is sought, may object to the motion.
(c) The court may hold a hearing and must find the facts and state its conclusions of law on the motion.
(d) The court may refer issues related to the amount of the award to a special master or to a magistrate judge.
SECTION 5. Any product sold or distributed in Mississippi by any manufacturer or distributor licensed to do business or doing business in Mississippi shall publish statewide notice of any recall of any product or its component parts within thirty (30) days of the recall. Any manufacturer or distributor who fails to provide notice of a recall as required by this section shall, upon conviction, be fined Fifty Thousand Dollars ($50,000.00) for each violation. The Attorney General shall enforce compliance with the provisions of this section.
SECTION 6. In any case originally filed in state court, then removed to federal court, and then remanded back to state court, a party may seek sanctions against the removing party and the court, upon hearing the motion, may impose sanctions if the court finds that the removal was frivolous.
SECTION 7. 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) (a) In any civil action where an entitlement to punitive damages shall have been established under applicable laws, no award of punitive damages shall exceed the following:
(i) Twenty Million Dollars ($20,000,000.00) for a defendant with a net worth of more than One Billion Dollars ($1,000,000,000.00);
(ii) Fifteen Million Dollars ($15,000,000.00) for a defendant with a net worth of more than Seven Hundred Fifty Million Dollars ($750,000,000.00) but not more than One Billion Dollars ($1,000,000,000.00);
(iii) Ten Million Dollars ($10,000,000.00) for a defendant with a net worth of more than Five Hundred Million Dollars ($500,000,000.00) but not more than Seven Hundred Fifty Million Dollars ($750,000,000.00);
(iv) Seven Million Five Hundred Thousand Dollars ($7,500,000.00) for a defendant with a net worth of more than One Hundred Million Dollars ($100,000,000.00) but not more than Five Hundred Million Dollars ($500,000,000.00);
(v) Five Million Dollars ($5,000,000.00) for a defendant with a net worth of more than Fifty Million Dollars ($50,000,000.00) but not more than One Hundred Million Dollars ($100,000,000.00); or
(vi) Four percent (4%) of the defendant's net worth for a defendant with a net worth of Fifty Million Dollars ($50,000,000.00) or less.
(b) For the purposes of determining the defendant's net worth in paragraph (a), the amount of the net worth shall be determined in accordance with Generally Accepted Accounting Principles.
(c) The limitation on the amount of punitive damages imposed by this subsection (3) shall not be disclosed to the trier of fact, but shall be applied by the court to any punitive damages verdict.
(d) The limitation on the amount of punitive damages imposed by this subsection (3) shall not apply to actions brought for damages or an injury resulting from an act or failure to act by the defendant:
(i) If the defendant was convicted of a felony under the laws of this state or under federal law which caused the damages or injury; or
(ii) While the defendant was under the influence of alcohol or under the influence of drugs other than lawfully prescribed drugs administered in accordance with a prescription.
(e) The exceptions provided in paragraph (d) shall not apply to an employer of a person acting outside the scope of such person's employment or responsibility as an agent or employee.
(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) * * * This section shall not apply to:
(a) Contracts;
(b) Libel and slander; * * *
(c) Causes of action for persons and property arising out of asbestos;
(d) Sexual battery of a minor;
(e) Rape;
(f) Race-based hate crimes;
(g) Illegal abortions;
(h) Acts of terrorism or treason;
(i) Desecration of a church;
(j) Abuse or willful neglect of the aged or inform;
(k) Embezzlement of retirement or investment funds from any pension plan, employee welfare benefit plan, 401(k), individual retirement account or substantially similar investment option;
(l) Intentional and unwarranted denial of insurance benefits; and
(m) Deprivation of federal or state constitutional rights, including, but not limited to, the right to bear arms.
Further, this provision shall not apply where supervisory personnel of the subject employee had actual or constructive knowledge of the conduct warranting punitive damages, participated in any manner in the conduct, concealed such conduct from law enforcement officials or the general public or otherwise ratified the conduct.
SECTION 8. 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.