NCPA - National Center for Policy Analysis


May 14, 2008

For most of the past 30 years, Mississippi has ranked as one of the poorest as well as one of the most litigious states; the two statistics are related.  Four years ago, Mississippi transformed itself from judicial hell hole to job magnet, a story that is instructive for other states trying to attract jobs in turbulent economic times.  The lessons here are especially timely, because the pro-growth tort reform trend that was once spreading across the country may soon reverse course, says economics writer Stephen Moore.

Shortly after winning the gubernatorial election in 2003 by running on a tort-reform platform, Haley Barbour (R) stitched together a coalition of doctors, business groups, taxpayers and even unions to roll back the trial lawyer lobby.

The law that eventually passed was every trial lawyers' worst nightmare: capping awards for noneconomic damages and preventing a plaintiff's attorney seeking to bring a class-action from venue shopping.  Almost overnight, the flow of lawsuits began to dry up and businesses started to trickle in:

  • Federal Express invested $1 billion in a new facility in the state.
  • Toyota chose Mississippi over about a dozen other states for a new $1.2 billion, 2,000-worker auto plant.
  • About 60,000 new jobs have arrived in four years -- not a small number in a workforce of about 1.3 million -- and a sharp improvement from the 30,000 jobs lost in the four years before Barbour took office.
  • Since the law took effect, medical malpractice lawsuits have fallen by nearly 90 percent, which in turn has cut malpractice insurance costs by 30 percent to 45 percent.

Other benefits of Mississippi's tort reform:

  • The state unemployment rate is down to about 6 percent from nearly 9 percent.
  • Last year, Mississippi's per capita income growth was 6.7 percent, third highest of the 50 states.

Source Stephen Moore, "Mississippi's Tort Reform Triumph," Wall Street Journal, May 10, 2008.

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