The Supreme Court in a statement released Wednesday said it is changing Rule 8 of the Mississippi Rules of Appellate Procedure so that defendants in all cases would not be required to post 125 percent of the punitive damage award as bond pending appeal.
“We thought Rule 8 needed to be amended as it pertained to punitive damages for the protection of small businesses in Mississippi,” said Supreme Court Chief Justice Edwin Pittman of Hattiesburg in the news release. “We’ve had some very high punitive damage awards in Mississippi and across the nation. Courts intend to be fair to all parties.”
Various efforts to lower the required bond have failed in recent years in the Legislature and through the initiative process. In Mississippi, through the initiative process, people can bypass the Legislature and place an issue directly on the ballot if the supporters of the change can gather the required number of signatures.
Proponents of tort reform, especially businesses, have complained that requiring such a high bond to appeal jury verdicts to higher courts in civil lawsuits is unfair. The required bond, they contend, makes it difficult to afford to appeal the jury decision.
“We did not want a case to be settled simply because of the bond,” Pittman said. The news release did not say how many of the nine members of the Supreme Court supported the rules change.
Under the change in Rule 8, if a defendant is appealing punitive damages, the bond may be the lower of 125 percent of the punitive damages awarded or 10 percent of the net worth of the defendant.
The news release went on to say that the required bond should not exceed $100 million unless there are unusual circumstances. Normally, those unusual circumstances would be a large punitive award against a company.
Jerry McBride, president of the Mississippi Manufacturers Association, said of the court action, “We feel like this is a small step in the right direction. Punitive damage awards in Mississippi are still a very serious matter. Even with the small amount of relief, you can still be put out of business by a large award.”
The Mississippi Manufacturers Association represents 1,800 manufacturers, processors, fabricators and distributors.
Lance Stevens, a Jackson attorney and president of the Mississippi Trial Lawyers Association, said while he did not think Rule 8 needed to be changed, he did not believe the court’s action was unreasonable.
“We didn’t want a blanket reduction that didn’t consider the particular facts of each case,” Stevens said.
Stevens pointed out the trial judge has always had the authority to set the bond at less than 125 percent of the punitive damages for just cause.