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Fed up, O'Keefe expanded his lawsuit to accuse Loewen of offering the settlement in bad faith and of engaging in predatory trade practices by seeking monopoly control of local markets. For his lead trial attorney, he hired Willie Gary, a personal-injury attorney from Stuart, Florida, with the persuasive powers of a Pentecostal preacher. Gary, who accepts only cases capable of boiling the conscience of a jury, knew the O'Keefe saga would play well in rural Mississippi. "This case," he says, "is about gouging moms and pops who saved their life savings just to be able to be put away nicely."
What Loewen's attorneys never seemed to grasp was that Gary had turned a bloodless contract dispute into an indictment of the new death-care industry, and that a Mississippi jury would view the industry's practices with less delight than would the company's stockholders. "It was bad," chuckles Glenn Millen, a retired Siemens electrical engineer who served as jury foreman. "If we'd had guns in there, we'd have probably been shooting."
Although ostensibly a defense witness, John Wright, whose sale of his Wright & Ferguson Funeral Home had triggered the legal dispute, confirmed that prices at the home climbed in the wake of Loewen's acquisition. Earle Banks, a state legislator and owner of the People's Funeral Home, a black funeral home in Jackson, described how Loewen had doubled and tripled prices on a common model of burial vault--the 4,200-lb. copper-lined Wilbert concrete "triune"--that wholesaled for $940. Loewen's Wright & Ferguson home charged $1,920. In Corinth, where Loewen owned three homes that once gave it a monopoly over the white funeral business, Loewen's homes charged $2,860.
Ray Loewen denied that his company automatically raised prices. Rather, he said, the company concentrated on raising overall revenue through cost cutting and remerchandising. But Lorraine Magrath, former regional comptroller for Loewen, testified that raising prices was company policy, a policy she claimed was part of the reason she resigned. The repeated increases were "a problem for me," she testified; she believed that the increases should stop, "that at some point we should say, 'The price is high enough.' "
JUST ANOTHER BODY
Eight of the 12 jurors wanted to destroy the company by levying a $1 billion judgment in compensatory and punitive damages. Other, more reasonable members finally talked the billion-dollar club down to a compromise--a mere $500 million. Loewen, unable to raise the $625 million bond required by the state before it could appeal, considered filing for bankruptcy but earlier this year negotiated a settlement with O'Keefe's lawyers totaling $175 million in cash, stock and a promissory note payable over 20 years.
This was a trying time for Ray Loewen. He did his best to diminish the importance of the verdict, racing around the country meeting with securities analysts, trying to restore confidence in the company and its stock. In a conference phone call this spring with leading analysts, he pledged to grow the company at an even more aggressive pace. He concluded the session, gushing, "It is just so refreshing to be able to have an open, forthcoming, positive call with you all. We will do our best to make you very happy throughout the year."