Pre-Paid Faces New Round of 'Jackpot Justice'

Pre-Paid Legal Services PPD will soon test its legal savvy in a "judicial hellhole" known for its runaway jury awards.

The company -- which heartily promotes "equal justice for all" -- had hoped to block hundreds of unhappy customers from the courtroom and force them into arbitration instead. But the Mississippi Supreme Court ruled on Thursday that a brief arbitration clause, printed in nine-point font near the end of the company's six-page contract, fails to eliminate a customer's right to a jury trial.

"There was no notice, no discussion and no negotiation of the arbitration agreement," the state Supreme Court ruled. "Further, based upon the language in this clause, we do not find that an average citizen would realize that he or she is giving up his or her right to a trial by jury under the broad, general language contained in the Pre-Paid Legal expense agreement."

Pre-Paid must now defend itself in court against hundreds of Mississippi customers who believe they were defrauded by the company and should receive hundreds of millions of dollars in damages as a result. The company faces its first test less than six weeks from now in a Holmes County trial court that was recently labeled one of 10 "judicial hellholes" by the American Tort Reform Association. It will later defend itself against a similar lawsuit filed in another court that appears on that same list.

"We're about 39 days away from the first trial," Doug Minor, a plaintiffs' attorney at Pigott Reeves Johnson & Minor, told TheStreet.com on Thursday. "We'll be seeking other trial dates as soon as possible and hope to schedule at least one more trial before the end of the year."

As a matter of policy, Pre-Paid does not comment for stories by TheStreet.com, because the company believes the coverage is negatively biased.