Courts and consequences
News Service May. 30, 2008, 11:00am
Lawsuit abuse and its repercussions got real this week as Chesapeake Energy suddenly tubed plans to expand in West Virginia.
A company spokesman blamed our state Supreme Court, which days earlier announced it wouldn't hear Chesapeake's appeal of the record $405 million verdict issued against it in Roane County in February 2007.
In addition to new executive jobs and the prestige of such a corporate presence in the Mountain State's largest city -- the company is one of America's largest natural gas producers -- also lost was $35 million in direct local investment. That is what the company planned to spend building its headquarters in Charleston. Now, it won't.
In our view the Chesapeake verdict -- including $270 million in punitive damages -- was grossly excessive and should be overturned. That the state Supreme Court has declined to offer its own interpretation of a verdict so unusual that it ranked as third-largest in the U.S. last year, is indefensible.
One troubling fact is that one of the plaintiff lawyers leading the suit, Scott Segal, is married to Justice Robin Davis. She recused herself from all related discussions. But in the name of inspiring confidence in our justice system, would it really have been too much for the remaining justices to explain their reasoning to the people of this state?
If $270 million in punitive damages is a fair amount, what isn't? How high is too high? Should there be any limits on jury awards?
They're among the many questions that our High Court could have answered but won't have to now.
Meanwhile, instead of investing in West Virginia, Chesapeake will keep investing in lawyers. That includes its own, who will now gear up for an appeal to the U.S. Supreme Court.
And then there's the plaintiff's lawyers, including Mr. Segal and Marvin Masters, who stand to pocket $130 million-plus if the verdict is upheld.
There's your trade-off. West Virginia loses jobs equal to $20 million in annual payroll while a few trial lawyers may become rich beyond their wildest dreams.