Last Thursday, the Mississippi Supreme Court ruled in favor of the insured homeowners in the Corban v. USAA case.  This important case had been anxiously awaited by homeowners and lawyers since it was argued on June 9, 2009.  At issue in the Corban case was the Anti-Concurrent Causation ("ACC") clause.  You may recall that it was this particular portion of homeowners' policies that insurance companies relied on to deny claims where it was difficult to distinguish wind versus water damages.  As I have said many times previously, insurance policy provisions such as the ACC clause should be declared void as against the public policy of the State of Mississippi.  The Supreme Court did not go that far, but did declare that the ACC clause cannot be used in the manner that State Farm, Allstate, Nationwide and USAA had used it to deny legitimate claims. 

The Corban decision comes too late for many Katrina victims who have already settled their claims based on the fear that our courts would find that the insurance compasnies were right in denying their claims.  However, it will speed settlement of the remaining claims.  Perhaps more importantly, the Corban decision has provided a roadmap for the proper adjustment of wind/water claims after the next hurricane.  The next step is to have the legislature adopt the reasoning of the Supreme Court and adopt the National Association of Insurance Commissioners Model Code for adjustment of claims.  Only Mississippi and Alabama have failed to adopt this model code at this point.  Therefore, I will be filing a bill seeking adoption of the NAIC Model Code 900-1.

Here is an article concerning Chinese Drywall and the problems litigants are likely to have getting the manufacturers in court. 

http://www.sunherald.com/business/story/1634085.html

I am involved in representing homeowners who have this product in their homes.  The have had repeated air conditioner failures, appliance failures, wiring problems, and many have had to throw out nearly new flat-screen televisions because the drywall emits hydrogen sulfide or sulfur hydroxide, which destroys the soft metals found in these items.

I will be involved in presenting information at town hall type meetings to be held at the Waveland Civic Center, the Orange Grove Public Library in Gulfport, and the Pascagoula Public Library on October 5th,6th and 7th respectively.  Please attend if you would like more information about Chinese Drywall and the problems it causes. 

Here is a story from the Sun-Herald concerning the housing situation on the Mississippi Gulf Coast. 

http://www.sunherald.com/199/story/1628764.html

I am not sure if there is a shortage or a glut of low to moderate income housing.  However, I have been informed that of the $350 million Mississippi received from the federal government for such housing after Katrina, less than $10 milion has been spent.  I intend to follow up on this issue and get some answers.  If this information is correct, and if we still have elderly and working poor residents of the Coast who don't have adequate housing, we need to see how fast we can spend the rest of that money.
 

Here is a link to an article about how the poor economy in Mississippi is affecting an important part of Mississippi Government.

http://www.commercialappeal.com/news/2009/sep/22/courts-looking-at-april-shutdown/

Clearly, something must be done to prevent the Court system from ceasing to function.  The question is from where will the money come?  Now that Governor Barbour has cut the education budget, everything is on the table. 

Budget negotiators are meeting in Jackson over the next two weeks to try to sort out the 2011 fiscal year recommendations.  No one thinks that it will be any easier this year to stitch together a budget given the lackluster revenue reports and the dismal prognostications.  However, there is some sense of hope to be derived from the national indicators signalling that the recession is ending, though Mississippi generally lags behind national economic trends.  All-in-all, it appears that we are in for another year or tough times in terms of the State Budget

http://www.clarionledger.com/article/20090902/COL0412/909020321/1171/OPINION/Petitions-aside--GOP-killed-Voter-ID-during-2009-session

Petitions aside, GOP killed Voter ID during 2009 session

Sid Salter • ssalter@clarionledger.com • September 2, 2009

I recently returned from Winston-Salem, N.C. where I attended the Southern Legislative Council’s annual meeting.I had been asked to serve as Chairman for this year’s meeting of the Gulf and Atlantic States Regional Task Force held in conjunction with the annual meeting of the Southern Legislative Council. As Chairman of the task force, I was afforded the opportunity to determine the topics of discussion at the Gulf and Atlantic States Task Force meeting which were the Coastal Community Resilience Index and FEMA’s Community Rating System.Both of these issues impact the National Flood Insurance Program rating received by a community as well as the private insurance market.Clearly, these topics are extremely important for all coastal states.Invited speakers who addressed the task force on these matters were Dr. Tracie Sempier of the Mississippi-Alabama Sea Grant Consortium and Mr. Berry Wiliams, who is the former North Carolina State Coordinator for the National Flood Insurance Program.I am honored to have been invited to chair the task force for another year and will lead the group through its 2010 meeting in Charleston, S.C.

I also recently attended the 3^rd Annual America’s Energy Coast Leadership Forum held in Biloxi on July 29, 2009.The forum was sponsored by America’s Wetland Foundation and brought together a diverse coalition of industry and environmental leaders including Shell, the Nature Conservancy, Chevron, Ducks Unlimited, BG North America, the National Wildlife Federation, the Texas General Land Office, the Mississippi Department of Marine Resources, and many others.Officials from the U.S. Department of Transportation, the U.S. Fish and Wildlife Service, the U.S. Department of Energy Minerals and the U.S. Army Corps of Engineers discussed conflicting federal policies.During a question and answer period, I took the opportunity to ask the U.S. Army Corps of Engineers General present if he could assure the people of South Mississippi that the Corps plan for levies and dikes in South Louisiana would not have the effect of creating higher storm surge to Coastal Mississippi.The Corps representative and Dr. Bill Walker of the Mississippi DMR both maintained that the concerns of Coastal Mississippi would be taken into account.Nevertheless, I urge everyone in South Mississippi to follow the development of the Corps plan for South Louisiana closely as it will no doubt effect us in some manner.

In a similar vein, the U.S. Congress has appropriated $439 million for (among other things) the restoration of Mississippi’s 45 mile-long stretch of barrier islands.Here is a link to the online version of a recent Sun-Herald article on this issue: 

http://www.sunherald.com/local/story/1546896.html

In addition to restoration of the barrier islands to pre-Camille conditions, the following additional items are included in the appropriation:

• Implementation of breakwater structures for surge protection.
• Deer Island restoration to pre-1900 footprint.
• Restoration of 10,000 acres of coastal marshes, beaches and forests.
• Restoration of historical water flow to coastal watersheds.
• Submerged aquatic vegetation restoration.
• Oyster reef restoration and enhancement.

This is great news and should help to provide greater storm protection to the Mississippi Gulf Coast when completed.

In addition to the foregoing events, I have had the pleasure to attend several recent ground-breakings and ribbon-cuttings in Bay St. Louis, Waveland and Pass Christian.After what has seemed like a painfully slow four years during which most public works projects were in the form of infrastructure, it is now possible to visualize progress through real “bricks and mortar” above-ground work.It is truly an exiting time for our communities, though there is still much to be done.

I continue to be very proud to serve as your State Senator.If I can ever be of assistance to you do not hesitate to contact me.

The House and Senate have finally reached a compromise on the 2010 budget after months of wrangling.  But, Governor Barbour is refusing to call a special session to allow the legislature to adopt the compromise budget agreement.

Read the Clarion-Ledger story on the governor's position here:

http://www.clarionledger.com/article/20090622/NEWS/90622023/Barbour+nixes+budget+plan++won+t+call+special+session

It is nothing new for our governor to consider the Mississippi Legislature to be superfluous and believe that he can run the government alone.  However, it is astounding that he could jet in from Paris, France long enough to tell Mississippians "no" to a 2010 budget deal that the legislature has worked on for months, only to jet back off to Iowa to campaign. 

We have the ability to keep the train from running off the tracks and can't take the steps necessary because Governor Barbour won't allow it.  Make no mistake, the legislature would pass the compromise budget and the governor knows it.  Instead, Governor Barbour has chosen to orchestrate a deadlock over the 2010 budget, to orchestrate a premature end to the legislative session, and to create the situation Mississippians currently find themselves in.  Governor Barbour, I ask that you call the legislature back immediately so that we can pass the budget before services needed by so many Mississippians cease to be provided.  Only you can stop the train from running off the tracks now.

It appears that the budget conferees have reached a tenative agreement on the 2010 budget.  The critical issue has been the amount of a hospital tax.  Below is a press release from Lt. Governor Phil Bryant confirming the "deal":

FOR IMMEDIATE RELEASE                                                    

June 21, 2009 

 

FOR MORE INFORMATION:                                                              

Mick Bullock 601-359-3200                           

MBULLOCK@SENATE.MS.GOV

www.ltgovbryant.com

 

LIEUTENANT GOVERNOR BRYANT COMMENTS ON A FAIR AND RESPONSIBLE BUDGET

 

JACKSON – Today the Mississippi Senate and House leadership tentatively agreed upon a nearly $6 billion state budget for 2010. The issue of funding Medicaid with reoccurring revenue sources remains unresolved. However Lt. Governor Bryant was pleased with the progress emphasizing a budget that uses real numbers, does not anticipate the Governor having to make further cuts in general services for 2010, and moves $60 million forward to 2011.

 

“This budget has taken a lot of hard work and time but it has been worth the fight,” Lt. Governor Bryant commented. “The three principles that I have continued to talk about are a cornerstone to this balanced budget. Principles for a balanced budget include a need to use real numbers, does not force the Governor to make further cuts in basic services for 2010 and setting aside $60 million for 2011.

 

We are continuing our work to fund Medicaid at a reasonable amount. This is the last step in completing the budget process before the end of the fiscal year.  I appreciate the hard work and dedication of the Senate and House budget chairman through this very challenging process.”

 

The balanced budget was independently reviewed by the LBO (Legislative Budget Office) for its accuracy. The Mississippi Senate will reconvene at a time set by the Governor in his call to a special session. 
####
I have heard from sources in the room with the negotiators that Senator Hob Bryan (D-Amory) got involved and was instrumental in reaching an agreement with the House negotiators.  THANKS Senator Bryan!  There is still work to be done, but it looks like Mississippi government will continue to operate after June 30, 2009.

The Mississippi Supreme Court heard argument in the Corban v. USAA case on June 9, 2009.  This is the first case to be argued before the Mississippi Supreme Court addressing the wind/water issue.  In addition to the Plaintiff homeowners and their insurance company, there were several Amicus Curiae, or friend of the court parties allowed to present argument.  Nationwide Insurance Company sent an attorney from Washington, D.C. to argue on its behalf and Attorney General Jim Hood had counsel there as well.  The case was heard by the full court, rather than the usual panel of three judges.

One of the preliminary issues to be determined is which party has the burden of proving whether the claim is excluded under the insurance policy in effect.  As you know, I have tried and failed for two years to have the burden placed squarely on the shoulders of the insurance industry through legislation.  Apparently, the USAA lawyer came close to ackowledging that his client bore that burden in the Corban case.  However, he argued that when wind and water act concurrently, the claim must be excluded under the anti-concurrent cause exclusion.  I have also filed legislation to have such provisions made illegal by statute, but have been unsuccessful to date.

Brian Martin of Congressman Gene Taylor's office offers an excellent explanation of the tortured logic used by the insurance attorneys in their agrument.  His comments can be found on Slabbed, a great blog on issues affecting Coastal Mississippi:

http://slabbed.wordpress.com/2009/06/15/about-the-video-of-oral-arguments-in-corban-v-usaa/

Keep a close watch for the decision in this case as depending on how it comes out, it will cause many cases to settle.  It will also have a profound effect on how claims are resolved after our next hurricane. 

The Mississippi Legislature is currently embroiled in a battle over the 2009 budget. Currently, budget negotiations appear to be stalled as a result of Senate and House disagreement over how to resolve the Medicaid issue. Governor Barbour wants Mississippi hospitals to pay $90 million to cover a deficit in the Medicaid budget rather than using federal stimulus money.  In support of this argument, Governor Barbour points out that the hospitals formerly paid this amount and argues that they should resume these payments.  He takes the position that it is an issue of fairness and maintains that paying the $90 million was originally the hospitals’ idea anyway.  Through the Senate’s lead conferee, Appropriations Chairman Alan Nunnelee, the Senate has adopted the governor’s position.  I happen to disagree with his position on this important matter.

 

There are two serious flaws in the governor’s argument. First, while Governor Barbour insists that the 2009 Medicaid budget has a $90 million deficit, in reality there is no deficit because the American Recovery and Reinvestment Act (“ARRA”) funds make up any short fall for two years.  That having been said, there is, generally speaking, a deficit in the 2009 budget which must be addressed.

 

Second, it is a bit misleading to leave the impression that nothing has changed since the hospitals originally advanced the idea that they could pay $90 million into the Medicaid program.  In fact, much has changed since that idea was promoted.  According to Sam Cameron of the Mississippi Hospital Association (“MHA”), “MHA did, indeed, devise the intergovernmental transfer (IGT) model that worked very well for Mississippi for over 15 years.  That plan, however, was disallowed by the Federal Centers for Medicare and Medicaid Services (CMS) in 2005.”  There is also an important distinction between the IGT model and the plan that the governor now proposes.  The MHA designed IGT model was not a taxation model. The current model supported by Governor Barbour is a taxation model which imposes additional taxes on Mississippi hospitals.  In direct contradiction of Governor Barbour’s statements on this matter, Mr. Cameron says that “the current taxation model being proposed by the Governor and the Division of Medicaid is not and was never a proposal supported or designed by MHA.”

 

I have been informed that aggregately, Mississippi’s hospitals send the Division of Medicaid approximately $150 million each year to assist in funding the State matching portion of the Medicaid program.  That amount seems fair.  Would an additional $90 million tax on our hospitals be more fair?  Perhaps.  How much of that $90 million in additional taxes would be passed on to patients?  If the answer to that question doesn’t get your attention, consider how Governor Barbour’s proposed hospital assessment would affect the bottom line of your local hospital’s budget.  Gulfport Memorial would see approximately $6 million in additional taxes, Biloxi Regional would pay an additional $1.8 million in taxes, and Hancock General would see about $330,000.00 in additional taxes.  I submit that these community-owned facilities with budgets already strained to the breaking point could not stand additional taxes of this magnitude.

 

It is important to note that with respect to the Medicaid funding issue, the Senate established its position over a month ago when it voted in support of phasing in a hospital assessment of $30 million in 2010, $60 million in 2011, and $90 million in 2012.  However, the Senate position was that these assessments would only become effective if Federal stimulus funds are not sufficient to cover the Medicaid shortfall. The MHA agreed with this proposal.  Now, the MHA appears ready to agree to pay $60 Million per year in additional taxes.  Likewise, the House appears ready to reach a compromise on an assessment in the neighborhood of $50 million per year.  One would think that given these facts, an agreement on the budget would be eminent.

 

Apparently, the dispute is about more than the amount of tax to be imposed on Mississippi hospitals.  The MHA wants legislative protections that would prevent the governor from changing reimbursement rates which, if implemented could result in the net payment made by hospitals being much higher than whatever amount they agree to pay initially.  The Senate’s (governor’s) position is that there should be no strings attached to the amount of tax imposed.  In other words, we will not agree that reimbursement rates will remain unchanged in the future.  Hospitals say they must have this protection and the governor says they can’t have it.  Until this issue is resolved, the only way a 2009 budget can be crafted is by cutting more from the budgets of individual state agencies, including education and law enforcement.

 

Mississippi must have a balanced budget for fiscal year 2009.  It would be politically expedient to simply adopt the governor’s plan and move on.  However, to do so would shortchange patients and the hospitals in which they seek treatment in our communities. The legislature has been thrown a lifeline by virtue of the federal stimulus money.  This should make it easier to reach an agreement.  Mississippians are asking if the hospitals can agree to pay around $60 million in additional taxes, and the House agrees to something in the neighborhood of what the hospitals will accept, why can’t the budget conferees agree?  This is a valid question deserving of an answer.