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West Virginia

West VirginiaDespite the fact that the latest ranking of Judicial Hellholes features ongoing madness in California courts and a historic corruption conviction with connections to New York City’s asbestos court, the biggest headline from this year’s report may be: West Virginia Is No Longer a Judicial Hellhole!

Most jurisdictions, much less an entire state, would not celebrate a Watch List citation, either. But such a designation for the Mountain State, a perennial Judicial Hellhole for many years, represents a significant, even joyous achievement owed to historic legal reforms enacted by state lawmakers in 2015.

Of course, with the state’s high court notoriously inclined to expand liability, and with no intermediate level appellate court, the long-term impact of these reforms
remains to be seen as legal challenges are likely. But an uncertain future should not mute in the near-term well- deserved congratulations for a bipartisan majority of West Virginia lawmakers and a governor who decided to put the needs of jobseekers and job creators ahead of the job destroyers of the plaintiffs’ bar.

REFORM FINALLY COMES TO THE MOUNTAIN STATE

Speaker Armstead

Speaker Armstead

Sen. Pres. Cole

Sen. Pres. Cole

For many years, civil justice reform could not be achieved in West Virginia because of the power and in uence wielded by plaintiffs’ lawyers serving in the legislature. But after voters on Election Day in 2014 decided to make a political course correction, the legislature, under strong leadership by Senate President Bill Cole and House Speaker Tim Armstead, made adoption of meaningful reforms a top priority in 2015. The legislature ended its session with several major achievements addressing areas that were sources of concern, including:

  • Fairly allocating fault. The legislature abolished the state’s antiquated and unfair rule of joint liability, which had required defendants that were 30% or more at fault for an injury to potentially pay 100% of a plaintiff’s damages. Now, individuals and businesses sued in West Virginia will typically pay damages in proportion to their level of responsibility for an injury. The law also ensures that juries can consider the responsibility of all parties that may have contributed to an injury, not just those named in a lawsuit.
  • Reducing the potential for excessive punitive damage awards. The legislature limited punitive damages to the greater of four times the amount of compensatory damages or $500,000. The new law also requires “clear and convincing evidence” of “actual malice toward the plaintiff or a conscious, reckless and outrageous indifference to the health, safety and welfare of others” to support an award of punitive damages, and it permits a defendant to request that the jury separately consider liability and punitive damages.
  • Reasonably limiting medical liability. Lawmakers required courts to reduce damage awards in medical liability cases to re ect compensation the plainti has or will receive for the same injury from others such as private insurers and Medicaid, tightened expert witness requirements, tied the state’s limit on noneconomic damages to in ation, and included additional healthcare professionals and facilities within the noneconomic damage limits.
  • Cracking down on abuses in asbestos litigation: The legislature required plaintiffs’ lawyers suing solvent companies in the tort system to disclose any claims also filed with asbestos bankruptcy trusts on behalf of the same client. This newly established transparency will prevent plaintiffs’ lawyers from hiding evidence that their client’s injury was caused by sources other than the companies they name as defendants and reduce the potential for fraud. The legislature also precluded individuals who allege exposure to asbestos or silica from proceeding with a lawsuit unless they develop a medically-recognized condition. This law will preserve limited resources for those who actually become sick and prevent questionable claims generated through mass screenings and fraud.
  • Bringing rationality to the state’s consumer protection law. The legislature amended the law to require a plaintiff to show that a violation caused an actual out-of-pocket loss. The law also avoids inconsistency and over-regulation by excluding from coverage any act or practice permitted or regulated by a federal or state agency, and provides any party with the right to a jury trial.
  • Overturning an obvious expansion of liability. The legislature restored the longstanding rule that property owners are not subject to liability for “open and obvious” dangers after a 2013 high court decision, highlighted in a previous edition of this report, abolished the commonsense rule. A separate law preserved the rule that landowners have no duty to protect those who trespass on their property.
  • Preserving workers’ compensation for on-the-job injuries. The legislature tightened requirements for workers to sue employers outside the no-fault workers’ compensation system, which ordinarily provides compensation for work-related injuries. West Virginia courts had broadened the standard for “deliberate intent,” which, when shown, subjects employers to lengthy litigation.

There is still more work to be done in the legislature. An important bill that would have codified West Virginia Attorney General Patrick Morrissey‘s sound transparency policy with respect to his office’s hiring of outside counsel passed the Senate with significant bipartisan support, but the session ended before it could be considered in the House of Delegates. Unless these reforms are placed into law, the AG’s office, under future office holders, is at risk of again using no-bid pay-to-play contracting to employ an army of plaintiffs’ lawyers. The legislature also had not addressed other outlier rulings. Examples include a court decision allowing cash awards to uninjured people who bring speculative medical monitoring claims and another ruling that rejected the widely accepted principle that drug companies have an obligation to educate doctors, not directly warn patients, of potential side e ects of their products. The Legislature should consider reforms to ensure damage awards in personal injury cases are commensurate with actual medical costs incurred, and do not allow awards of in ated phantom damages. Concern also persists that litigants in West Virginia do not have the degree of appellate review that is available in other states.

HIGH COURT STILL EXPANDING LIABILITY

Despite recent legislative achievements, the liability-expanding decisions of the state’s high court continue to exert a drag on the state’s economy (though not as severe as the coal industry’s collapse). Last year’s Judicial Hellholes report focused on a series of unsound rulings by the West Virginia Supreme Court of Appeals. As noted above, the legislature has since overturned one of those rulings by restoring the open and obvious danger doctrine.

While the legislature worked hard to fix the unfairness created by the state high court’s past rulings, the court kept doing what it’s known to do. In May 2015, it allowed individuals who become addicted to pain killers to sue the doctors who prescribed the drug and the pharmacies that distributed it. In so doing, the court rejected the principle that a person who engages in criminal conduct, such as fraud, forgery and deception in obtaining narcotics from doctors, cannot recover damages. Instead, the court found that such unlawful conduct may only reduce the plaintiff’s recovery. As Justice Ketchum wrote in dissent, “The majority’s ruling permitting criminal plaintiffs to maintain these civil lawsuits ignores common sense and will encourage other criminals to file similar lawsuits in an attempt to profit from their criminal behavior.”

WEST VIRGINIA MESH MDL UPDATE

A special section on page 52 of last year’s Judicial Hellholes report provided extensive coverage of the rise of pelvic mesh litigation and the trial lawyer marketing that helps drive it. West Virginia also happens to be home to seven related federal multidistrict litigation (MDL) actions, which pull cases from federal districts across the nation for pre-trial procedures. ( e MDL method of case management is more fully discussed in a Closer Look on p. 54.)

Last year we reported that more than “60,000 of these [pelvic mesh] claims are pending before Judge Joseph R. Goodwin of the U.S. District Court for the Southern District of West Virginia.” That number this year has climbed above 83,000 total cases transferred to or filed within the seven pelvic mesh MDLs. Judge Goodwin has effectively closed 11,353 of these cases, but more than 72,000 are still pending.

KEEPING A CLOSE WATCH

As noted above, West Virginia’s move this year from the ranks of Judicial Hellholes to the less onerous Watch List is a welcomed development given its civil justice system’s troubled past. But numerous challenges and problems persist, even as the state moves in the right direction. Senate President Bill Cole, who was so instrumental in driving 2015’s round of legislative tort reforms, has announced a run for governor in 2016 and has already won support from many there who hope to modernize the state’s economy and make it more welcoming to business.

Similarly, Morgantown attorney Beth Walker has announced her candidacy for the only seat on the state’s high court that will be contested in 2016. Incumbent Justice Brent Benjamin hopes to hold o Walker’s bid and win another 12-year term. But because Benjamin’s often sided with the high court’s liability-expanding majority, Walker has created early buzz and has begun to draw support.

Finally, lawmakers are already ambitiously preparing more civil justice reform bills for 2016’s legislative agenda. Among other measures, they are expected to consider establishment of a much needed intermediate level appellate court. Currently, because the state’s high court can choose not to hear a case, West Virginia litigants are the only ones in the country without an absolute right of appeal. Of course, the wealthy trial lawyers who profit by chasing jobs and tax revenue out of West Virginia still deny the state has ever had a lawsuit problem, and they can be counted on to fight additional reforms tooth and nail.