Wilkes & McHugh Test New Practice Area in Arkansas

Andy McCumber of Tampa, Fla., has faced the Wilkes & McHugh law firm as much as any lawyer in the firm’s home state, and he thought he knew the founder Jim Wilkes’ business plan pretty well.

When he learned that the firm’s Little Rock office had filed a class-action suit against computer-maker Hewlett Packard over the functionality of a Microsoft Windows operating system, McCumber started to chuckle.

“That is a complete shock,” he said.

John Maxey of Jackson, Miss., defends nursing homes against the negligence and abuse litigation that has traditionally been Wilkes & McHugh’s bread and butter. He was similarly surprised to hear that the Little Rock office has filed three class-action suits questioning the roaming fees charged by cell phone companies.

“That’s a total departure from what I’ve seen in Mississippi,” Maxey said.

Roger Glasgow, who defends nursing homes for the Wright Lindsey & Jennings law firm in Little Rock, isn’t surprised. Early this year, when momentum for tort reform was clearly building in the Arkansas Legislature, Glasgow said he asked a Wilkes & McHugh lawyer what the firm would do if caps on punitive damages disrupted its highly successful model for nursing home litigation.

“This lawyer said, ‘Well, we’re already working on that. We’re going to get into class-action civil litigation,'” Glasgow said.

Wilkes & McHugh lawyers declined numerous requests for comment on this article. McCumber, Maxey and Glasgow all said the firm’s expansion into class-action law makes sense, especially after the passage of tort reform legislation in Florida in May 2001, Mississippi in October 2002 and Arkansas last March.

“The money’s drying up in the nursing home business, so you’ve got to move on to something else,” Glasgow said. Plus, he said, representing consumers against large corporations “matches their theme — ‘profits over people’ — that they use in the nursing home cases already.”

“Jim Wilkes is all business, for all this talk of reforming nursing homes,” McCumber said.

“There’s no reason [Wilkes & McHugh] wouldn’t be able to diversify because they’ve built up quite a reserve of fees,” Maxey said.

Ironically, it was Wilkes & McHugh’s stunning $78.4 million verdict against a Mena nursing home — $63 million of which was punitive damages — that supercharged the tort reform movement in Arkansas. Even after being reduced to $26 million ($21 million in punitive damages) by the state Supreme Court, the case stands as the largest tort verdict in Arkansas history.

Class-action cases would not be affected by Arkansas’ Civil Justice Reform Act of 2003, which, among other things, placed a $1 million cap on punitive damages in tort cases such as personal injury, wrongful death, medical malpractice or nursing home negligence.

Comfort Zone

Wilkes & McHugh’s Web site (www.wilkes-mchugh.com) lists six areas of practice: nursing home abuse and neglect, medical malpractice, “serious” auto accidents, wrongful death, toxic torts and insurance fraud. In this instance, insurance fraud refers to fraud by insurance carriers who refuse to pay benefits, not fraudulent claims against insurers.

Although it attracted little attention, Wilkes & McHugh apparently started testing the waters of class-action litigation as early as last August. That’s when founding partner James B. McHugh and a lawyer from the Little Rock office, Susan Nichols, filed suit against Hewlett Packard in Phillips County Circuit Court.

Late last year, Wilkes & McHugh hired lawyer Brian G. Brooks away from the consumer protection division of the Arkansas Attorney General’s office. He has been added to the plaintiff’s team in the Hewlett Packard case and is the only attorney common to all of the cell phone cases.

“I think that’s kind of his role over there, to take these kind of cases and run with them,” said Kevin Crass, a partner at Friday Eldredge & Clark in Little Rock. He is defending both HP and Alltel Communications Inc. of Little Rock, the wireless subsidiary of Alltel Corp. that is the subject of one of Wilkes & McHugh’s class-action suits challenging roaming fees.

While tort reform may have encouraged Wilkes & McHugh to branch out in a new direction, Crass thinks there’s a particular reason the firm began its experimentation with class-action in Arkansas: state Supreme Court decisions that have made Arkansas an attractive jurisdiction for class-action complaints filed in state court.

“I suspect they are doing it here for the same reason attorneys from other states are coming here to do this,” Crass said.

Last year, a study by the U.S. Chamber of Commerce ranked Arkansas as the sixth-easiest state in which to have a case certified as a class-action lawsuit.

All four of the known consumer class-action complaints that Wilkes & McHugh has filed in Arkansas were originally filed in state courts. The cases against HP and Alltel as well as one against Cingular Wireless LLC were filed in Phillips County Circuit Court, while AT&T Wireless was sued in Pulaski County Circuit Court.

All three cell phone companies have been successful in having their cases transferred out of state courts and into U.S. District Court in Little Rock. But Crass’ similar attempt to transfer the Hewlett Packard case to federal court failed.

“They want to stay in state court as much as they possibly can because they can get more provincial juries and the judges may be a little bit more lenient,” Glasgow said.

Negligence claims filed against nursing homes have generally been successful in generating either an attractive settlement or a favorable jury award, usually within a year. Class-action law, Glasgow said, requires a large, long-term investment with much less certainty of a payoff. Class-action cases that do pay can generate enormous fees for the plaintiff’s attorneys.

Advertising

Crass said he hadn’t noticed any Wilkes & McHugh advertisements in search of HP computer owners to join the class of plaintiffs in that case. But after the cell phone suits were filed — two on March 20 in Helena and one on March 23 in Little Rock — Wilkes & McHugh took out half-page ads in the Arkansas Democrat-Gazette seeking cell phone users who think they may have been charged improper roaming fees.

The firm also continues to advertise for potential clients with claims of nursing home abuse or neglect.

Under Arkansas’ version of tort reform, incidents of harm that happened after the act was adopted on March 25 are subject to a $1 million cap in punitive damages. The wording of the television ad suggests that Wilkes & McHugh is primarily interested in cases that would not be subject to that cap, but those would also have to fall under the two-year statute of limitation on medical malpractice claims or three-year statute of limitation on negligence claims.

“That’s a salvage operation,” Glasgow said. “They have squeezed almost all of the blood out the turnip, but there may be a few drops left. And this is their strategy for getting those last few drops.”

To read about the firm’s challenge of roaming fees, click here.