Recent Decisions
Doris Michael et. al. v. Appalachian Heating, LLC and State Auto
Supreme Court creates new “bad faith” lawsuits under West Virginia Human Rights Act
January 2010 Term
The Michael decision serves as an example of judicial activism at its worst. Five years after the West Virginia Legislature eliminated “bad faith” lawsuits – which had become a frivolous filing tool used by some greedy personal injury lawyers for the purpose of harassing defendants into settling questionable claims – the West Virginia Supreme Court created a massive loophole for future “bad faith” lawsuit filings in the state.
In the Michael case, a majority of the Court held that plaintiffs can now file “bad faith” lawsuits against a defendant’s insurer for settlement practices that allegedly violate the West Virginia Human Rights Act. The new cause of action stretches the letter of West Virginia law beyond reason, as the West Virginia Human Rights Act “was never intended to and does not address the subject of insurance.”
Writing in dissent, Justice Thomas McHugh referred to the Michael decision as “illogical,” and questioned the Court’s “rush to create a new cause of action.”
Justice Menis Ketchum warned of the devastating impact the Court’s new cause of action could have on our state courts:
“What I foresee, in the future, is that the Human Rights Act will be subjected to the same abuse that maligned the Unfair Trade Practices Act. A handful of litigators will unleash a flood of lawsuits alleging discrimination in the settlement of a third-party property damage claims…and in most of those cases, the evidence of ‘discrimination’ will be entirely spurious.”
While the West Virginia Legislature saw fit to ban such abusive lawsuits, the state Supreme Court has once again acted as a super-legislature opening our state courts to future lawsuits. Only time will tell the full impact this judge-made law will have on our state.
Perrine vs. E.I. DuPont De Nemours & Company
Supreme Court denies punitive damages for medical monitoring claims
January 2010 Term
In one of the most anticipated decisions in recent terms, a divided West Virginia Supreme Court ruled on numerous legal issues surrounding one of the seven largest verdicts in the nation for 2007 – most significantly the application of West Virginia’s controversial medical monitoring standard, which allows plaintiffs to recover damages despite having suffered no actual physical injury.
In the Perrine case, an environmental class-action lawsuit was filed against DuPont and other businesses seeking damages and medical monitoring costs associated with alleged exposure to hazardous substances from one of the largest zinc smelter facilities in the United States.
A Harrison County jury found DuPont liable for nearly $400 million in damages, including approximately $130 million for future medical monitoring of the uninjured plaintiffs.
On appeal, the West Virginia Supreme Court reduced the $380 million-plus verdict by nearly $100 million, finding specifically that punitive damage awards are improper for medical monitoring claims in which plaintiffs have failed to prove any actual harm.
In a stirring partial dissent, Justice Menis Ketchum criticized West Virginia’s medical monitoring standard further – writing that the plaintiffs presented no evidence whatsoever proving the required elements of West Virginia’s medical monitoring law. Justice Ketchum called for a massive overhaul of West Virginia’s medical monitoring law, noting that:
“If we do not modify or abolish our medical monitoring law, the plaintiffs’ lawyers from the DuPont case will wreak enormous economic harm on West Virginia’s economy. They will collect millions in fees and return to their out-of-state residences leaving the West Virginia economy in shambles.”
The Perrine decision has highlighted a sharp divide on the West Virginia Supreme Court over the merits of West Virginia’s much-criticized medical monitoring law. Absent legislative action, future court decisions will ultimately decide the fate of such questionable lawsuits.
Click here to read Justice Ketchum’s dissent in the Perrine decision.
Benson vs. AJR, Inc.
Supreme Court affirms damages award for employee fired for cocaine abuse
January 2010 Term
In perhaps another blow to West Virginia job providers, the state Supreme Court has found that an employer can be held to the terms of an employment contract even when its employee has committed a material breach of that employment contract.
In the Benson case, AJR fired one its employees — a safety supervisor — for failing a drug test. The employee’s test result was more than three times the established limit which indicates drug use and impairment. The company was later sued by the employee, who claimed that he was owed damages for breach of contract.
Though a West Virginia jury found that the plaintiff had, through his drug use, committed a material breach of contract, AJR was still held liable for the remainder of the plaintiff’s salary under the contract.
The Supreme Court’s decision to affirm damages against AJR should give job providers pause before terminating employees for drug abuse. As former Supreme Court Justice Spike Maynard wrote in one of the Court’s previous decisions in the case:
“What a terrible message this sends to small West Virginia employers and businesses! This Court tells this company that it should not have fired an employee who…admitted that he used cocaine…reported to work with cocaine in his system… [and] was the SAFETY DIRECTOR of the company!! Appalling!”
WV CALA will continue to monitor court decisions, and highlight the impact those decisions have on West Virginia’s efforts to attract job providers to the state.
Click here to read Justice Maynard’s previous dissent in the Benson case.
Peters vs. Rivers Edge Mining, Inc.
State S.Ct. Sends Mixed Messages on Workers’ Comp. Fraud
January 2009 Term
The West Virginia Supreme Court of Appeals’ process for reviewing punitive damage awards has been a hot topic in recent months. West Virginia is one of only two states in which litigants don’t have an automatic right of appeal – an oddity that has resulted in an astonishing lack of review for several multi-million-dollar awards.
In Peters, the state Supreme Court attempted to provide some clarity to this area of the law – holding that all West Virginia punitive damage awards will subject to judicial review moving forward. Unfortunately, the Court’s ruling in Peters raises serious questions about what exactly will be considered a “meaningful and adequate review” as required by law. The Supreme Court’s majority opinion also fails to specify in depth the misconduct which allegedly warranted the punitive damage award – leading job providers to speculate as to whether or not they may be “punished” for engaging in otherwise lawful conduct.
Ultimately, the W.Va. Supreme Court upheld a $1 million punitive damage award against Rivers Edge Mining for its “suspicion” that an employee had filed a fraudulent workers’ compensation claim, even though state law expressly encourages efforts to combat fraud. The plaintiff was apparently working at a pallet company he owned while on “temporary total disability benefits.”
WV CALA worries that the Peters decision could have enormous effects on West Virginia workers and job providers. The ambiguous standard set forth by the Court could encourage the filing of future fraudulent workers’ compensation claims – something that actually hurts those injured workers who truly deserve compensation. The unclear standard of liability could further discourage job providers from locating in our state, something that West Virginia can ill afford in these tough economic times.
Tawney vs. Columbia Natural Resources
Chesapeake Energy Decision Drives Away Jobs
May 22, 2008
One of the state Supreme Court’s most controversial rulings in the last year was its decision not to hear an appeal of a $405 million damages verdict against Chesapeake Energy and other natural gas companies.
As a result of the Court’s refusal to hear an appeal of the Tawney verdict, Cheseapeak Energy put on hold plans to locate its Eastern Regional Headquarters in Charleston. The company eventually decided to relocate and/or eliminate hundreds of other jobs located in West Virginia. The Supreme Court’s decision played a key part in that decision.
“At that time, we realized that until West Virginia’s judicial system provides fair and unbiased access to its courts for everyone, a prudent company must be very cautious in committing further resources in the state. Even though the state Supreme Court’s decision was not the primary reason for the reorganization, it did play a significant role in our decision.” Aubrey McClendon, Chesapeake Energy CEO
The Tawney decision clearly raised awareness about the need for some sort of mandatory right of appeal in West Virginia. Currently, West Virginia is one of only two states that doesn’t allow its citizens an automatic right of appeal.
Check out WV CALA’s web ad, which illustrates the impact of the Tawney verdict.
Morris vs. Crown Equipment Corp.
W.Va. Supreme Court strikes down venue reform laws.
January 2006 Term
Not too long ago, West Virginia’s courts were a favorite of the nation’s personal injury lawyers for filing asbestos lawsuits – resulting in thousands of out-of-state plaintiffs and their lawyers filing lawsuits here at the expense of West Virginia taxpayers. In response, the West Virginia Legislature passed a “venue reform” law in 2003 to help stop the flood of out-of-state cases. Even the personal injury lawyer senator leading the judiciary committee supported this law to prevent outsiders from taking advantage of our courtrooms.
Sadly, a majority of the West Virginia Supreme Court recently struck down the important venue reforms in the case of Morris v. Crown Equipment Corp.
In the Morris case, a Virginia resident was injured on the job while operating a forklift at his place of employment, also in Virginia. The machinery was actually made in Ohio and serviced out-of-state as well. The worker sued in West Virginia, but a circuit court judge said the 2003 state law required him to toss the case out.
Four of our Justices ruled, in effect, to force West Virginia taxpayers to pay for our courthouses to be filled up with cases from out-of-state personal injury lawyers representing out-of-state plaintiffs. All of these out-of-state intruders will be seeking to make a buck off of West Virginia’s out-of-control legal system. The Supreme Court’s new decision striking down the legislature’s venue law opens the door once again to more jackpot justice and litigation tourism.
The United States Supreme Court declined to hear an appeal of the Morris decision, and the West Virginia Legislature has since passed a reform bill which is less effective at keeping our state courts clogged with out-of-state plaintiffs.
As a result, West Virginians are now faced with the prospect of waiting behind out-of-state plaintiffs to have their day in court. In one recent Kanawha County filing, 898 of the 900 listed plaintiffs were from out-of-state.
Bower vs. Westinghouse
West Virginia’s Unusual “Medical Monitoring” Decision
January 1999 Term
While this decision is now nearly ten years old, its ramifications are felt to this day. West Virginia’s medical monitoring standard is cited as a primary reason for our state’s “judicial hellhole” status.
Even though hundreds of years of legal tradition assumes a person cannot file a lawsuit without evidence of injury, Justice Warren McGraw authored the Supreme Court’s ruling stating just the opposite. Justice McGraw’s Bower vs. Westinghouse ruling created a new type of lawsuit for West Virginia based on the fear of injury, what some call the “No-Proof, No-Problem!” lawsuit.
While some states allow courts to order medical monitoring after a plaintiff has been found to be actually harmed, the McGraw rule allows lawsuits based solely on fear. Also, even though the term, medical monitoring, suggests there might be a healthcare benefit to the McGraw rule, plaintiffs are able to take cash awards based on their fear of injury lawsuits without getting any medical monitoring or treatment.
This example of judicial activism by the West Virginia Supreme Court places our state far outside our national legal mainstream.
Click here to read Justice McGraw’s majority opinion
Click here to read Justice Maynard’s dissent
