July 23, 2024

The Nerve Archive

Where Government Gets Exposed

Businesses with ‘deep pockets’ targeted in SC lawsuits

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Update: Circuit Court judge Daniel Hall on 9/27/22 reversed himself and ordered that the Parker’s convenience store company be tried together with other defendants in a lawsuit stemming from a 2019 fatal boat crash with ties to ex-Hampton County lawyer Alex Murdaugh, whose legal troubles have made national headlines. Hall also scheduled a civil trial for Jan. 9 in Hampton County in the boat-crash case – the same month in which Murdaugh could face a criminal trial in neighboring Colleton County in connection to the 2021 shooting deaths of his wife, Maggie, and son Paul, who had faced criminal charges in the boat crash.

A longstanding South Carolina law can result in big verdicts against defendants in civil cases, with critics contending it often is used to target successful businesses that had relatively little fault.

Attention to the “joint-and-several” liability law has been heightened in recent months with a high-profile, wrongful-death case involving once-prominent Hampton County attorney Alex Murdaugh, who also is facing murder charges in the shooting deaths of his wife and son – part of an ongoing legal saga that has captivated the nation.

Critics say the state law, which was last amended in 2005, is unfair to businesses named as defendants in lawsuits because they can be required to pay entire verdicts even if they were far less than responsible for the alleged wrongs. Supporters contend the law was intended to allow plaintiffs to collect the full amount of awarded damages.

Last year, S.C. Sen. Shane Massey, R-Edgefield, introduced a bill that would require juries or judges to determine fault in civil cases based on percentages assigned to all named plaintiffs and defendants, as well as other responsible “nonparty persons or entities.”

The law as it stands now doesn’t specifically allow juries or judges to consider nonparties – typically persons, businesses or other entities not named as defendants – when assigning percentages of fault on verdict forms. Under the law, a listed defendant found to be 51% responsible can be required to pay all the awarded damages.

And in cases involving alcohol, including, for example, a pending lawsuit involving Murdaugh and a convenience store company in connection to a 2019 fatal boat crash, a defendant with just 1% responsibility could wind up being required to pay the entire verdict, legal observers say.

“Nobody should be responsible for more than the damage that person causes,” Massey, an attorney who is the Senate majority leader and Senate Rules Committee chairman, told The Nerve when contacted recently. “If I cause injury to somebody else, I should be responsible, but I should be responsible only for what I caused, not for what someone else caused.”

Massey’s proposal would move South Carolina closer to Georgia’s model of awarding damages, known as “comparative negligence.” In stark contrast, neighboring North Carolina is one of a few states that generally follows the rules of “contributory negligence,” meaning plaintiffs can’t recover damages if they are even 1% at fault.

South Carolina followed a contributory-negligence model until the state Supreme Court ended it in a 1991 ruling.

Massey, whose practice areas include civil litigation and insurance defense, said he believes the comparative-negligence model is “more appropriate,” adding, “If you’re 10% responsible yourself, that shouldn’t mean you get nothing when someone else was 90% responsible.”

Currently, plaintiffs can’t collect any damages if they are found to be at least 51% responsible.

The Nerve’s review of several national studies by defense firms found that South Carolina is among about half of the states that follow a “modified” joint-and-several liability or “varied” liability model.

Massey’s bill never made it out of the Senate Judiciary Committee last year. Asked if he plans to reintroduce it for next year’s legislative session, Massey, who is listed as the legislative representative for the South Carolina Defense Trial Attorneys’ Association, replied: “It may be the exact same thing; it may be a little bit different. But the issue itself, I will introduce.”

Tort reform is a top priority for the South Carolina Policy Council – The Nerve’s parent organization – to keep the state “competitive for business and jobs, as well as promoting a sense of fairness,” said Dallas Woodhouse, the organization’s executive director.

“South Carolina needs a reasonable, fair and predictable legal environment that does not unfairly and randomly pick winners and losers,” Woodhouse said in a prepared statement. “Reform has been needed for a long time, but the Murdaugh boat crash case has created a new momentum for needed change in the name of fairness and justice.”

In the statewide June Republican primary election, voters were asked to respond to the following related advisory question: “In a situation where there is more than one person responsible for damages in a lawsuit, do you support changing South Carolina law so that each person should pay damages based on that person’s actual share of fault?”

More than 315,000 voters, or nearly 87% of the total, said “yes” to the question, according to State Election Commission results.

Big verdict costs

The South Carolina Chamber of Commerce on its website says it supports Massey’s bill, which had five co-sponsors, including current Senate president Thomas Alexander, R-Oconee.

“South Carolina needs to base fault on a fair share of liability, not the deepest pocket,” the chamber said in its 2022 “Competitiveness Agenda.” It noted that the U.S. Chamber of Commerce’s Institute for Legal Reform has ranked the Palmetto State’s “lawsuit climate” 37th in the nation, calculating that legal costs statewide equate to $2,802 per household.

“South Carolina businesses are paying for many of these costs through high liability insurance premiums, as well as litigation costs,” according to the chamber’s website.

In a written statement to The Nerve, Lauren Sheets Jarrell, a spokeswoman for the American Tort Reform Association, said her organization supports a “proportionate liability system.” As an example, she said a defendant found by a jury to be 20% responsible for a plaintiff’s injury would have to pay no more than 20% of the entire verdict.

Jarrell said the ATRA also supports more “moderate” reforms, such as banning plaintiffs from using joint-and-several liability to recover non-economic damages, and preventing the standard from being applied to co-defendants found liable for less than a certain percentage – 25% as an example – of the total harm to the plaintiff.

Asked about joint-and-several-liability verdicts involving big companies, Massey told The Nerve, “Just because they have more money doesn’t mean they ought to pay more for something that they didn’t cause.”

Verdicts against companies can run into the millions.

A Richland County jury last year, for example, returned a $32 million verdict against two companies – Kraft Heinz, one of the world’s largest food and beverage companies; and Metal Masters Inc. – relating to the cancer death of Kathy Weist. The total award included $10 million in punitive damages against Kraft Heinz.

Weist’s family alleged the cancer was caused by years-long exposure to asbestos fibers brought home on work clothes worn by her husband, Robert Weist, who worked as an insulator at the Louis Rich industrial facility in the 1980s, and other relatives, court records show. The defendants in court papers denied liability.

After the trial, the two companies reached an undisclosed settlement with Robert Weist, who was the representative of his wife’s estate, according to a court order filed in July of this year.

Grossly negligent?

In at least one of the Murdaugh civil cases, joint-and-several liability has become an issue, though there hasn’t been a trial yet.

In March 2019, Renee Beach filed a lawsuit in Hampton County as the representative of the estate of her 19-year-old daughter, Mallory Beach, who died in an early morning boat crash the month before at a bridge near Parris Island in Beaufort County.

The initial complaint named multiple defendants, including Alex Murdaugh and his son, Paul Murdaugh, then 19, who was charged with driving a boat under the influence in Beach’s death; and the Parker’s convenience store company, whose founder and CEO is Greg Parker.

Alex Murdaugh was charged in July this year with murder in the June 2021 shooting deaths of his wife, Maggie, and son Paul, whose bodies were found at their Colleton County hunting estate. He also faces dozens of criminal counts accusing him of stealing millions over the years from legal clients and others, according to media reports.

One of the attorneys representing Parker’s in the civil case is S.C. House speaker Murrell Smith, R-Sumter, court records show. The Nerve last week sought comment from Smith; Nicolette Walters, Smith’s House press secretary, said in a written response that he was not immediately available.

The lawsuit alleges a Parker’s store clerk illegally sold alcohol to the then-underage Paul Murdaugh, who became intoxicated before the fatal boat crash involving Beach, who was a passenger in the boat operated by Murdaugh.

There were four other passengers in the boat, owned by the Murdaugh family, at the time of the crash, according to court records. The Parker’s company is a defendant in several related suits.

The suit filed by Beach’s mother contends that Parker’s, based in Savannah, Ga., was “grossly negligent” in connection with her daughter’s death. Among other things, the company failed to adequately train and supervise the employee who sold the alcohol to Paul Murdaugh, and didn’t have adequate employee-training policies, according to the suit.

An amended complaint filed in February alleges Alex Murdaugh and his wife knew or should have known that their son Paul would “drink to excess and drive vehicles,” including their boats.

The suit seeks a joint-and-several liability verdict against the defendants for unspecified actual and punitive damages, plus costs and attorneys’ fees. Several defendants in the initial complaint settled for a total of $1.7 million, according to media reports; the latest court documents list the Parker’s company; Alex Murdaugh; his older son, “Buster” Murdaugh; and representatives of the estates of Paul and Maggie Murdaugh as defendants.

In an amended answer filed in March, Parker’s said its cashier couldn’t have known in advance that Paul Murdaugh was underage, given that he used a driver’s license belonging to his older adult brother, Buster; or that the younger Murdaugh would later consume alcohol and “drive a boat while under the influence.”

The company also contends that Alex Murdaugh and other defendants knew or should have known of Paul Murdaugh’s “reputation of, proclivity for and actual excessive alcohol drinking and negligent, grossly negligent and reckless conduct.”

In addition, Parker’s alleges in its response that Beach, “with knowledge of the risk(s), voluntarily exposed herself to and assumed the risk(s) of injury and death”; that she “contributed” to her own death; and that Parker’s liability, if any, should be “reduced in proportion” to her “own negligence.”

After Paul Murdaugh bought alcohol at a Parker’s store near Ridgeland, he and other minors in his group traveled by boat to several nearby locations – where alcohol was consumed by or was made available to them – according to the initial complaint filed by Beach’s mother.

An amended answer filed Thursday by Parker’s in a related civil suit alleges that the six boaters, described collectively as “the Partiers,” “crafted a premeditated plan for a night of illegal, underage drinking and boating.”

“Each Partier purposely and intentionally and without regard for their own safety or the safety of others assumed the risk of injury and/or death by getting on the boat repeatedly throughout the evening despite clear and actual knowledge that Paul Murdaugh was drunk and impaired,” according to the latest filing.

In earlier court filings, Parker’s requested that a jury determine the percentage of fault among the plaintiff and all other potentially responsible parties, regardless of whether they were named as defendants in the case.

But in a motion filed last month, Parker’s asked that it be tried separately from the other defendants, arguing that the “unprecedented national and international sensationalism by the media of the Murdaugh family and the continued association of the Murdaugh Defendants with Parker’s” would deprive the company of a fair trial.

In opposing the motion, Beach’s mother in court papers said the company’s “real purpose” is to “escape the application of joint and several liability which applies in this case.”

Circuit court judge Daniel Hall earlier this month granted Parker’s motion, though he didn’t give any reasons in his short written order, and set Oct 10 as the trial date. Last week, Beach’s mother asked Hall to reconsider his order, contending in her motion that he misunderstood “how joint and several liability works.”

“Because of the astronomical net worth of Parker’s, there is likely no verdict that Parker’s cannot satisfy,” according to the motion for reconsideration.

On its website, Parker’s describes itself as a “70-store company with state-of-the-art convenience stores” in South Carolina and Georgia. Greg Parker, the founder and CEO of Parker’s and Parker’s Kitchen, “stands apart as one of America’s leading business innovators,” the site says.

Parker told The Wall Street Journal for a story last month that he is pushing the S.C. Legislature to change the joint-and-several liability law.

“You say, ‘Well, wait a minute. If I’m one-millionth of 1% responsible, I can be held 100% liable?'” Parker said for the story. “How does that work? That’s not fair.”

Reforms needed

In an interview last week with The Nerve, Gray Culbreath, who is a longtime Columbia attorney and former president of the state Defense Trial Attorneys’ Association, said while there is a common perception in large-verdict cases that it’s “the big company versus the individual,” an individual can be “caught up in this, too.”

He gave an example of a four-car wreck in which the most at-fault driver settled with the plaintiff, and “ultimately the guy who’s left standing at the end of the day is the one who’s got the most insurance coverage.”

Culbreath, who is a partner in the law firm of Gallivan White Boyd, is not involved in the civil case involving Murdaugh and Parker’s.

Under state law, any settlements in advance of a civil trial have to be deducted from the total verdict against all remaining co-defendants, Culbreath said, explaining that percentages of fault assigned to the remaining co-defendants and plaintiff are applied to the reduced total award.

The law also allows a defendant required to pay a full award under joint-and-several liability to sue other liable defendants for recovery of the overpayment, though Culbreath said certain conditions have to be met.

Culbreath said in 2015 he argued the first case before the S.C. Supreme Court dealing with an interpretation of the 2005 amended state law, explaining his focus then was on the “ambiguity of who can go on the verdict form.”

In a 2017 ruling in that case, the majority of justices said the Legislature intended to allow allocation of fault among “only parties to a lawsuit, not nonparties.” In his dissent, then-acting justice Costa Pleicones said he believed that “we must permit a jury or fact-finder to make a fair and logical apportionment of 100% of fault,” including nonparties who are not named defendants “regardless of that party’s immunity from liability.”

The Supreme Court also addressed related issues in another 2017 ruling, though it didn’t provide any broader interpretation of the law, ruling that the “policy decision belongs to the legislature, and the legislature has crafted the provisions of the Act as it sees fit.”

Asked whether South Carolina should adopt a pure comparative-negligence model in determining damages, Culbreath told The Nerve, “I think if we did that, it would resolve some of these things once and for all,” noting there have been “too many unanswered questions” with the 2005 amended law.

He acknowledged, though, that any reform legislation, such as Massey’s bill introduced last year, likely would face opposition from plaintiffs’ lawyers.

“The way I know how the world works, you don’t get an all-or-nothing sort of bill over at the General Assembly,” Culbreath said. “There’s always a little negotiation, tweaking.”

But, he added, “That’s what ended up being the problem and why there’s debate about it now.”

Brundrett is the news editor of The Nerve (www.thenerve.org). Contact him at 803-3948273 or rick@thenerve.org. Follow him on Twitter @RickBrundrett. Follow The Nerve on Facebook and Twitter @thenervesc.

Nerve stories are free to reprint and repost with permission by and credit to The Nerve.

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