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In Mississippi, deal with funeral home giant helped sway a jury


©St. Petersburg Times, published October 25, 1997

JACKSON, Miss. -- In the fall of 1995, the Loewen Group, a Canadian funeral home giant, found itself in a legal battle with a lone undertaker. Jeremiah J. O'Keefe, a 72-year-old white man, had been tending to Mississippi's dead at his family's funeral home since he was a boy.

O'Keefe sued Loewen, portraying it as a corporate monster swallowing up funeral homes in selected markets to run mom-and-pop shops, including his, out of town.

The fight had nothing to do with a partnership the Loewen Group had recently negotiated many miles away with the National Baptist Convention USA.

Or so it seemed.

Loewen could not have imagined its existence would be at risk in a matter of weeks, at least in part because of the convention's false claim of more than 8-million members.

In a country courtroom, lawyers -- six on one side, seven on the other -- skirmished through two months of testimony. Company chairman Raymond Loewen, who found himself defending his ownership of a yacht equipped with a helicopter landing pad, was pitted against O'Keefe, a war hero, former mayor of Biloxi and family man whose 51-year marriage had produced 13 children. One-by-one they stood as O'Keefe introduced them to the jury.

Into the fray stepped a last minute witness for Loewen: the Rev. Eddie Jones, an "executive administrative" assistant for the National Baptist Convention from St. Petersburg.

He seemed a minor witness, but his arrival changed everything.

Weeks earlier, Loewen had cut a deal with the convention to open a new market. As part of the deal, NBC president Henry J. Lyons endorsed the white conglomerate as the "death care provider of choice" for millions of black Americans, people who traditionally buried their own. In exchange, NBC pastors and other officials would get a share of the profits from the burial plots they sold.

Now Jones was in the Mississippi courtroom to tell the jury of eight blacks and four whites how Loewen was encouraging economic "empowerment" for black Baptists.

His testimony was to be brief.

Q. Tell us something about the National Baptist Convention USA?

A. National Baptist Convention USA is the oldest, largest Afro-American religious organization in the country

Q. Are the 8-million members of the National Baptist Convention, are their considerations included in this (deal with Loewen)?

A. Absolutely.

Q. Did the idea of the economic development and marketing plan, did that come from Loewen?

A. No, the idea of economic development and economic empowerment came from Dr. Henry J. Lyons. He's always stressed the importance and significance of our participation as a group of people to share in the profits

Time for cross-examination.

And that, says O'Keefe attorney Mike Allred, was when the anti-Loewen lawyers took the once irrelevant National Baptist Convention deal "and beat them to death with it."

O'Keefe's lawyers said the deal was set up in a way that would allow Loewen to exploit the Baptists and reap huge profits.

They called in a funeral home owner with a law degree to testify as an expert. He swiftly analyzed the contract and concluded that Lyons "flat out didn't know what he was doing" when he agreed to such a rotten deal.

In his closing words to the jury, O'Keefe's chief lawyer pounded away still more. Loewen had committed the oldest of sins -- greed, said Florida lawyer Willie E. Gary. "This is money they're going to get off 8.2-million African-Americans," Gary said, "a contract that was clearly, without question, unfair to those members, and you know it."

The jury returned with a verdict against Loewen. The penalty was crushing: $100-million in compensatory damages, $160-million in punitive damages.

Wait, the judge said. The jury was not supposed to set punitive damages until another round of argument about Loewen's net worth.

Again, Willie Gary's argument focused on the NBC deal and its dire implications for those 8.2-million Baptists. He called an economist, who concluded Loewen was worth far more than the $411-million the company was claiming.

Why was that number so wrong?

Because it doesn't include the value of the contract with the National Baptist Convention, the economist replied. "With their 8.2-million members, if they touched a fraction of that amount (the contract) would be worth at least $3-billion."

The jury returned with a new damage award: $500-million, the highest in state history.

How much had the National Baptist Convention deal affected the trial's outcome?

"It played a material role in moving this game from a 66-to-nothing thrashing to a historically unprecedented 326-to-nothing bloodbath," said Allred, the lawyer. "I think it played a role in adding a zero to the figure."

The verdict sent Loewen's stock into a dive. Loewen faced the possibility of bankruptcy. Finally, the company paid a $175-million settlement.

The company, which boasts 17,000 employees, 1,000 funeral homes and 400 cemeteries, is still trying to recover from Jackson, Miss.

The company will not say how much it paid the NBC during the two-year contract. Nor will it say how much it actually earned in sales from NBC members. Loewen abruptly ended the deal with the NBC last month.

It has turned over its NBC files, including information about the size of the convention, to investigators in Florida, company spokesman David Laundy said. "The membership numbers would have relevance to the process and procedures we used to launch this program and that is part of the investigation."

©Copyright 2006 St. Petersburg Times. All rights reserved.