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Supreme Court amends rule regarding appeal bond in civil damage award cases

May 9, 2001

The Mississippi Supreme Court has placed limitations on the amount of bond that a defendant can be required to post during an appeal of a punitive damages award.

Before the change, Rule 8 of the Mississippi Rules of Appellate Procedure required that a defendant post 125 percent of the value of a damage award as bond pending an appeal, unless the trial judge found justification for a lesser amount.

In its revision, the Supreme Court said that if the defendant is appealing a PUNITIVE damages award, the bond may be the lower of:

• 125 percent of the total amount of punitive damages OR;

• 10 percent of the net worth of the defendant seeking appeal, as determined by applying generally accepted accounting principles to the defendant's financial status as of December 31 of the year prior to the entry of the judgment for punitive damages OR;

• Absent unusual circumstances, the total amount of the required bond or equivalent security for any case as to punitive damages shall not exceed $100 million.

The rule change does not limit any damage award. The rule applies only to the bond that may be required to be posted while a damage award is on appeal.

The bond is known as a supersedeas bond. The rule at issue is Rule 8 of the Mississippi Rules of Appellate Procedure.

Supreme Court Chief Justice Edwin L. Pittman noted that no motion or petition in any case was pending before the court to amend Rule 8. The court decided to make the change.

Pittman said concern about financial strain on small businesses in the face of potential large punitive damage awards prompted the rule change.

"We did not want a case to have to be settled simply because of the bond," Pittman said.

"We thought Rule 8 needed to be amended as it pertained to punitive damages for the protection of small businesses in Mississippi. We've had some very high punitive damage awards in Mississippi and across the nation. Courts intend to be fair to all parties," Pittman said.

Trial courts also have the power to set the bond pending appeal at something less than 125 percent of the overall damage award. Language that allows that discretion remains unchanged. The rule says the trial court "shall require the giving of security by the appellant in such form and in such sum as the court deems proper, and for good cause shown may set a supersedeas bond in an amount less than the 125 percent required in cases under Rule 8 (a)."

The rule change was issued Thursday, April 26. The ruling, listed as No. 89-R-99027-SCT, In Re: Mississippi Rules of Appellate Procedure, is available on the Supreme Court's web site at Click on the Decisions button and pull up the April 26 hand-down list.

For more information, contact Beverly Pettigrew Kraft, court public information officer, at 601-354-7452, or by pager at 601-929-0184.