USF&G Insurance Company of Mississippi v. George K. Walls ( 2000 )

IN THE SUPREME COURT OF MISSISSIPPI
NO. 2002-IA-00185-SCT
USF&G INSURANCE COMPANY OF MISSISSIPPI
v.
GEORGE K. WALLS AND ROXIE ANN WELLS
DATE OF JUDGMENT: 05/16/2000
TRIAL JUDGE: HON. PERCY L. LYNCHARD, JR.
COURT FROM WHICH APPEALED: PANOLA COUNTY CHANCERY COURT
ATTORNEYS FOR APPELLANT: LUTHER T. MUNFORD
FRED L. BANKS, JR.
JANE E. TUCKER
CHARLES G. COPELAND
MICHAEL WAYNE BAXTER
ATTORNEYS FOR APPELLEES: RICHARD T. PHILLIPS
THOMAS ALAN WOMBLE
NATURE OF THE CASE: CIVIL - OTHER
DISPOSITION: REVERSED AND RENDERED - 06/10/2004
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
BEFORE SMITH, C.J., GRAVES AND DICKINSON, JJ.
GRAVES, JUSTICE, FOR THE COURT:
¶1. Roxie Ann Wells and George K. Walls were in a car wreck. Roxie sued George, whose insurer
was USF&G Insurance Company of Mississippi. USF&G paid Roxie $22,632.50 for the loss of her 1995
Chrysler Concorde, since George had rear-ended her with his 1991 GMC pickup. This claim was paid
before any personal injury claim of Roxie was examined.
¶2. Then Roxie attempted to recover from USF&G for her injuries. She was informed that George’s
policy had a single limit coverage of only $25,000 per accident–or just a little over two thousand dollars
coverage left for that one accident. Roxie argued that the coverage was deficient under Mississippi
statutory levels, and in a novel move, George agreed with her. Roxie dismissed her complaint against
George, and together the two filed suit in chancery court against USF&G. However, we do not have
before us today a complicated question of policy limits and insurance law. Instead, in their suit Roxie and
George invoked an ancient Mississippi doctrine that has long been disfavored.
¶3. Roxie and George filed suit in the Chancery Court of Panola County not just on behalf of themselves,
but also “on behalf of a clearly ascertainable class of others similarly situated.” This “class” allegedly
consisted of USF&G insureds and those who were injured by USF&G insureds. The title of the complaint
called it a “Class Action Complaint for Equitable and Injunctive Relief and Actual and Punitive Damages.”
¶4. USF&G objected to the complaint and moved for summary judgment, arguing that class actions
could not exist under Mississippi law. Despite its objections, the chancellor denied summary judgment and
certified the plaintiff class. We granted USF&G’s petition for interlocutory appeal, see M.R.A.P. 5, which
asks one question: does Mississippi recognize “equitable class actions” in chancery, despite an omission
of Rule 23 from our Rules of Civil Procedure? After a review of the history of the law, we answer that
question in the negative.
DISCUSSION
¶5. “Mississippi is one of only three states that never adopted Rule 23 as a part of their state rules of civil
procedure.” Richard T. Phillips, Class Action & Joinder in Mississippi, 71 Miss. L.J. 447, 453
(2001) (“Phillips”). “The other states which have no Rule 23 state court class actions, Virginia and New
Hampshire, both expressly recognize ‘equitable class actions’ . . . in consumer litigation.” Id. at 453 n.14.
2
It has been theorized that Mississippi coped with the absence of a codified Rule 23 in three ways: “(1) the
mass aggregation of individual claims under Rules 20 and 42 of the Rules of Civil Procedure, (2) the
‘ancient equitable remedy’ of the ‘equitable class action’ and (3) where all else fails, the prosecution of
select individual cases for punitive damages.” Phillips, at 455.
¶6. It sounds a bit irrational to speak of Mississippi’s “adoption” of Rule 23 after remarking how
Mississippi does not have class actions. Yet a rule was adopted—after a fashion. When the Rules of Civil
Procedure went into effect on January 1, 1982, they read (and still read):
Rule 23. Class actions. [Omitted].
Rule 23.1. Derivative actions by shareholders. [Omitted].
Rule 23.2. Actions relating to unincorporated associations. [Omitted]
¶7. The numbering is a byproduct of the patterning of the Mississippi Rules of Civil Procedure after the
Federal Rules of Civil Procedure, which do have class actions. SeeOwens v. Thomae, 759 So. 2d 1117,
1121 n.2 (Miss. 1999). The comment to Mississippi Rule 23 was meant to convey our reluctance to adopt
the elaborate mechanisms of the class action, since “[f]ew procedural devices have been the subject of
more widespread criticism and more sustained attack—and equally spirited defense—than practice under
Federal Rule 23 and its state counterparts.” Miss. R. Civ. P. 23 cmt.1
1
The Mississippi Rules of Civil Procedure were themselves the subject of “sustained attack”
and “spirited defense” in their adoption phase. The Rules were adopted unilaterally by a majority of the
Supreme Court over the wishes of the legislature. William H. Page, Constitutionalism and Judicial
Rulemaking: Lessons from the Crisis in Mississippi, 3 Miss. C.L. Rev. 1, 6-7 (1982). The furious
“legislature immediately began to consider a proposal to remove the pro-Rules justices” in February of
1982, “using a near-forgotten provision of the state constitution.” Id. at 6-7. The matter died down
after a few months, with no justice removed from office. Id. at 7-9. The justices were Chief Justice
Neville Patterson, Presiding Justice L.A. Smith, Jr., and Justices Robert P. Sugg, Armis Hawkins, and
Harry G. Walker; Presiding Justice Stokes V. Robertson, who was the sixth Justice who concurred in
the majority opinion, had retired at the end of the previous year. Dennis Camire, Senators
introduce measure to fire chief justice and 4 associates, CLARION-LEDGER, Jan. 15, 1982, at
A3.
3
¶8. Yet the comment was ambiguous. The first sentence reads: “[c]lass action practice is not being
introduced into Mississippi trial courts at this time.” (emphasis added). For it is a matter of fact and law
that “class actions were recognized in Mississippi as a matter of general equity jurisdiction long before
adoption of the Mississippi Rules of Civil Procedure,” so no introduction was necessary. Phillips, at 455
(emphasis added). See also Marx v. Broom, 632 So. 2d 1315, 1322 (Miss. 1994) (noting that “[p]rior
to the enactment of the Rules of Civil Procedure, this Court recognized the possibility of class action suits
as a matter of general equity jurisdiction in chancery court under limited circumstances”). This has long
been accepted. The “lawyer’s bible” of chancery practice in Mississippi, Mississippi Chancery
Practice, details the ambiguity. 2 “It was not necessary to introduce class action, as it already existed.”
Griffith, Mississippi Chancery Practice, § 130 (2000) (“Griffith”) (emphasis added).
¶9. Furthermore, “[t]he Mississippi Code has long provided and still provides for costs in class action
suits in the Mississippi chancery courts.” Phillips, at 458 (emphasis added); see also Griffith, at § 130
(“[p]rovision is made for costs in class actions”). Miss. Code Ann. § 11-53-37 (Rev. 2002) , adopted in
1948, specifies:
Where a party hereafter institutes a suit for the benefit of himself and all others
similarly situated, and thereby there is in such suit recovered or preserved property or
a fund for the common benefit, the chancery court may make an allowance to such
party of the reasonable costs incurred, which costs shall include the necessary
disbursements, and reasonable solicitor's fees, out of the property recovered or preserved
for the common benefit.
(emphases added). Section 11-53-37 presents a conflict with Rule 23.
¶10. Three commentators have noted the statute’s existence and simply relied upon the section as
evidence that Mississippi has class action suits at equity. See Geoffrey P. Miller & Lori S. Singer,
2
“Judge Griffith’s excellent work,” Mississippi Chancery Practice, was termed the “‘lawyer’s
bible’” in Johnson v. Brewer, 427 So. 2d 118, 124 (Miss. 1983).
4
Nonpecuniary Class Action Settlements, 60 Law & Contemp. Probs. 97, 146 (1997) (under the
table “State Rules,” showing that Mississippi “[r]ecognizes [a] common fund by statute,” citing to Section
11-53-37); Phillips, at 458; Kurt A. Schwarz, Note, Due Process and Equitable Relief in State
Multistate Class Actions afterPhillips Petroleum Co. v. Shutts, 68 Tex. L. Rev. 415, 450 n.84 (1989)
(offering that while “Mississippi has no formal rule [pertaining to class actions] . . . section 11-53-37
permits costs and attorneys’ fees in successful class suits”).
¶11. The original version of the Encyclopedia of Mississippi Law also “recognized that in limited
circumstances, class action suits might be possible within the general equity jurisdiction of the chancery
court.” J. Jackson, M. Miller, R. Morton, and J. Matheny, Civil Procedure, in 2 Ency. of Miss. Law
§ 13:59 (J. Jackson & M. Miller eds. 2001).3 It is also written that “[g]enerally . . . the class action remains
an available remedy only in chancery[,] from whence it sprang.” T. Jackson Lyons, Corporations, in
3 Ency. of Miss. Law § 22:222 (J. Jackson & M. Miller eds. 2001) (citing Griffith).
¶12. The conflict between the absence of class actions in Mississippi and Section 11-53-37 has also not
gone unnoticed in jurisprudence outside of our court.4 When the Fifth Circuit considered a class action
challenge to Mississippi’s procedures for involuntary commitment of adults to state mental institutions, it
examined in dicta the existence—or lack thereof—of class actions under state law. See Chancery Clerk
of Chickasaw County, Miss. v. Wallace, 646 F.2d 151, 155 (5th Cir. 1981). Speaking of class
actions, the district court noted that “‘[t]here is no way to get that kind of suit into the state courts.’” Id.
3
The cumulative update of the Mississippi Practice Series notes that Booth erases the class action
at equity.
4
Whatever the impact of the statute, it has been expressly held not to apply to attorneys’ fees in
public service litigation under the so-called “private attorney general rule.” Fordice v. Thomas, 649 So.
2d 835, 845 (Miss. 1995), overruled on other grounds by USPCI of Miss. Inc. v. State ex rel.
McGowan, 688 So. 2d 783 (Miss. 1997).
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at 155 n.8. ¶13. Yet the Fifth Circuit pointed to Section 11-53-37 as evidence there might be class
actions, since the statute “allow[s] Mississippi courts to award attorney's fees from the common fund
generated in a class suit.” Id. That court also offered Section 75-24-15(4) as evidence that class actions
might exist; that statute provides that “[n]othing in this chapter shall be construed to permit any class action
or suit, but every private action must be maintained in the name of and for the sole use and benefit of the
individual person.” The Fifth Circuit argued that a “provision expressly prohibiting consumer class actions
. . . [would] thereby imply[] availability of the class action mechanism.” Wallace, 646 F.2d at 155
n.8 (emphasis added). The ancient maxim of “expressio unius est exclusio alterius” was thus quietly
evoked—which acknowledges the inference that items not mentioned are excluded by deliberate choice,
not inadvertence.
¶14. That court also held that “Mississippi Supreme Court decisions lend support to this assessment,”
pointing to an older line of cases rejecting the certification of classes, but not the conception of class
actions. Id. The Fifth Circuit’s opinion and all the cases it relied upon were reported before Mississippi’s
adoption of the Rules of Civil Procedure.
¶15. Rule 81(f) of the Mississippi Rules of Civil Procedure provides that “[i]n applying these rules to any
proceedings to which they are applicable, the terminology of any statute which also applies shall, if
inconsistent with these rules, be taken to mean the analogous device or procedure proper
under these rules.” Section 11-53-37 uses terminology—class action suits at equity—which is
inconsistent with the omitted Rule 23.
¶16. Rule 81 dictates that any inconsistency be resolved in favor of the “analogous device or procedure
proper under these rules,” but there is no analogous device. There is a contradiction; on one side stands
our established case law, which recognized class actions at equity, and our statute, which provides for costs
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in class actions suits. On the other side stands our Rules of Civil Procedure, which omit class actions, and
our recent jurisprudence, which do not recognize class actions at equity.
¶17. Our modern jurisprudence—that is, after the 1982 adoption of the Rules–has apparently not been
clear enough to alert practitioners and the bench that class actions no longer exist at equity. In Marx we
upheld a trial court decision that “there was no class action available in this case.” 632 So. 2d at 1322
(emphasis added). Since “the lower court made specific, supportable findings that the requirements for a
class action were not met,” the claim was barred “[e]ven if this basis [for the claim] was available.”
Id. (emphases added). We also noted that while we once “recognized the possibility of class action suits
as a matter of general equity jurisdiction in chancery court under limited circumstances,” that was “[p]rior
to the enactment of the Rules of Civil Procedure.” Id. (emphasis added).
¶18. Nearly a decade later we were even more definitive. Am. Bankers Ins. Co. of Fl. v. Booth,
830 So. 2d 1205, 1209 (Miss. 2002), perceived “equitable class action[s] in chancery court” as more a
legal “experiment” attempted by ambitious lawyers than an established legal fact in Mississippi. Through
a review of cases, we determined that this “Court did not look with favor on class actions and allowed
them only under rare circumstances,” most notably where “‘plaintiffs sought injunctive or other equitable
relief in chancery court against governmental entities.’” Id. at 1211 (quoting Guthrie T. Abbott & Pope
Mallette, Complex/Mass Tort Litigation in State Courts in Mississippi, 63 Miss. L.J. 363, 393
(1994)). The cause of action was rejected, since class actions at equity “did not” survive “the adoption
of the Rules.” Id. (emphasis added). However, neither Marx nor Booth considered Section 11-53-37.
¶19. Section 11-53-37 is simply a relic from the time when class actions at equity were permitted in
chancery court. While this is problematic, this “Court [should be] mindful that it has the exclusive power
to make rules of practice, procedure[,] and evidence.” Claypool v. Mladineo, 724 So. 2d 373, 388-89
7
(Miss. 1998) (emphasis added).
¶20. The conflict in Claypool is illustrative. At issue in that case was whether the Legislature could enact
statutes that created privileges that might “impede both the discovery portions of the Mississippi Rules of
Civil Procedure and the privileges enumerated in the Mississippi Rules of Evidence.” Id. at 377. The
Court held that “where the Legislature enacts a statute creating a privilege it should be upheld, unless it
conflicts with either the Mississippi Rules of Civil Procedure or the Mississippi Rules of Evidence.” Id. at
388-89.
¶21. The case at hand Section 11-53-37 explains how attorney’s fees would be awarded in class
actions in chancery. The only issue it directly addresses is the awarding of attorney fees if there was an
equitable class action. If and when we choose to adopt a class action rule, Section 11-53-37 will become
operable again, as it was decades ago. It serves no function at this moment in time because there are no
class actions under the Mississippi Rules of Civil Procedure, whether in circuit or chancery court. There
is no direct conflict between the omission of Rule 23 and the Mississippi Code because Section 11-53-37
only provides for attorney’s fees if there is a class action.
¶22. At best, this statute raises an inference of the existence of class actions. However, an inference is
not tantamount to a class action provision. Our Rules of Civil Procedure “apply to all civil proceedings”
in circuit and chancery court. M.R.C.P. 81 (emphasis added); M.R.C.P. 1. Since there is no rule or
statute which expressly or impliedly provides for class actions, we are compelled to conclude that they are
not permitted in any legal proceedings in our state courts. Thus, the chancery court erred in concluding
otherwise.
CONCLUSION
¶23. This Court has the exclusive power to make rules of practice, procedure, and evidence.
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Accordingly, as we have not made a rule which provides for class actions, they are not a part of Mississippi
practice–chancery, circuit, or otherwise. We reverse the judgment of the chancery court denying summary
judgment and certifying the plaintiff class, and we render judgment for USF&G.
¶24. REVERSED AND RENDERED.
SMITH, C.J., WALLER AND COBB, P.JJ., AND DICKINSON, J., CONCUR.
CARLSON AND RANDOLPH, JJ., CONCUR IN RESULT ONLY. EASLEY, J.,
CONCURS IN PART AND DISSENTS IN PART WITHOUT SEPARATE WRITTEN
OPINION. DIAZ , J., NOT PARTICIPATING.
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