By STEVE COHEN
CHARLESTON — It was a heady day last year when a major U.S. company broke ground in West Virginia’s capital for a new regional headquarters, promising $35 million investment in the Mountain State and 2,500 new jobs.
Today that investment – and the attendant jobs – is gone.
Thousands of new jobs fell victim to a broken lawsuit system and the state legislature’s inability to clarify state law.
Governor Manchin made several assurances to Chesapeake Energy’s C.E.O. Aubrey McClendon at the groundbreaking:
1) a “guarantee we won’t let you down”
2) West Virginia would be”the best partner you ever had”
3) “we’ll work hard to make a return on your investment”
McClendon remained committed to West Virginia despite a $405 million verdict against Chesapeake in a Roane County trial court over royalty payments. A Manchin-backed bill to clarify some ambiguity in the law on which the verdict was based died in the Legislature.
But when the Supreme Court denied the company’s appeal, Manchin’s three-pronged pledge rang hollow.
Chesapeake retreated. No new jobs for West Virginia from a multi-million dollar investment.
Interestingly, West Virginia just months earlier retreated from the “Open for Business” slogan Manchin proudly promoted in his debut State of the State address, at which McClendon, seated in the House of Delegates gallery, was reverently acknowledged by the governor.
The flight of business from West Virginia over a broken lawsuit system is reflected in observations from numerous outside groups.
Just this spring the Institute for Legal Reform in Washington, D.C., rated the state’s legal climate the nation’s worst for the third straight year.
Since 2002 the American Tort Reform Foundation has branded West Virginia a “judicial hellhole.”
Forbes Magazine places West Virginia last in the nation for jobs, citing its courts.
Funny how Virginia, just across the border, is the best state for jobs.
When a leading chemical manufacturer closed its doors in the capital city’s Kanawha Valley a few years ago, their plant manager called West Virginia the most litigious state in the nation. About that time West Virginia doctors were on the verge of a mass exodus, fleeing serial suers from the personal injury bar.
Why the resistance to change? Say you were a personal injury lawyer in the recent verdict against DuPont. You would share in a $135 million payout for the lawyers alone. No wonder the lawsuit industry bankrolled the campaigns of House Speaker Rick Thompson, top taker of their cash.
When Thompson named lawmakers to the Judiciary Committee, two-thirds of his appointments were recipients of personal injury lawyer campaign checks.
The verdicts against Chesapeake and DuPont, in fact, were included in a recent National Law Journal piece about the nation’s biggest over the past year. Along with a judgment against Massy Energy, three of the seven fattest awards in the entire country over the past year were delivered in West Virginia courtrooms.
Saving Chesapeake’s West Virginia plans could have been simple. For one, their day in court ended at the trial level. Due process abruptly stopped there.
New Hampshire is the only other state where a litigant can get one and only one shot in the state system.
West Virginia is also one of only 11 states with no intermediate level of appeals court. If the state’s high tribunal is unwelcoming, your only other remedy is to hope the U.S. Supreme Court will decide to fit your case into their schedule.
Without reform look for more vanishing jobs in West Virginia. Two of the five seats on the Supreme Court are on the November ballot.
Unless Charleston attorney Beth Walker wins one of them, the personal injury lawyers’ philosophy will take firm hold of the Court and there may be a waiting list for moving vans.
Cohen is executive director of West Virginia Citizens Against Lawsuit Abuse.