CHARLESTON - Proponents of lawsuit reform in West Virginia say a case filed by a prison inmate over a popular soda maker's formula is a prime example of how such frivolous suits are casting a cloud over the state's business climate.
In September, Owen Silvious, a Virginia citizen who is currently residing in a federal correctional institution in Butner, N.C., sued Coca-Cola Company, alleging it violated the West Virginia Consumer Credit Protection Act.
More specifically, Silvious alleged that Coca-Cola violated the act by causing to be manufactured, bottled, distributed and sold products that -- by his own revelation -- do not contain the "original formula" invented in the 1880s.
He argued in his original complaint, filed Sept. 23, 2011 in the U.S. District Court for the Northern District of West Virginia, that the original formula invented by chemist J.S. Pemberton in Atlanta, Ga., in 1886 has been modified or altered at least 12 times, and that Coca-Cola hasn't used the original formula in its cans or bottles since at least 1905.
Silvious contended the company's use of the words "original formula" on its cans and bottles are therefore deceptive.
For 65 years, he alleged, he was tricked into thinking he was consuming the original recipe.
Because he was led to believe the Coca-Cola he had purchased for all of those years was the original, Silvious argued that the "false representation" caused him an "ascertainable loss."
"The Coca-Cola Company has committed and continues to commit one of the largest corporate deceptions upon the American consumers, including this court, this judge and the court personnel, including plaintiff, by using and continuing to use the words 'original formula' on its cans and bottles, knowing very well that the Coca-Cola in those cans and bottles does not contain the 'original formula' invented by Dr. Pemberton in 1886," Silvious wrote in his 12-page complaint.
According to the filing, he demanded a $1,536,000 judgment against Coca-Cola for the 1,920 cans and/or bottles he purchased in Berkeley, Gilmer, Grant, Hampshire, Hardy, Jefferson, Monongalia, Morgan, Pendleton and Randolph counties.
Silvious argued that the cans and/or bottles he bought contained a total of 7,680 violations of the WVCCPA, warranting a civil penalty of $200 each.
He also demanded that the federal court order Coca-Cola to either stop using the words "original formula" on its cans and bottles, or to place the word "modified" or "altered" before the phrase.
District Judge John Preston Bailey, in an April order, dismissed Silvious' consumer protection complaint.
Bailey sided with lawyers for Coca-Cola, which argued that the inmate's lawsuit should be dismissed under the so-called Three Strikes Rule.
Under the rule, if a prisoner has "on three or more occasions, while incarcerated or detained in any facility, brought an action or appeal in a court of the United States that was dismissed on the grounds that it was frivolous, malicious or fails to state a claim upon which relief may be granted," he cannot bring another civil action.
In Silvious' case, four other previous actions he filed were found to be frivolous, in addition to 14 additional cases he filed that were eventually dismissed on statute of limitations grounds, voluntarily dismissed in the face of a motion to dismiss, dismissed for failing to follow proper procedural requirements, or for failure to prosecute.
Bailey also concluded that Silvious failed to present "any factual allegations to support his conclusory allegations of injury."
In addition, the judge ruled that the prisoner's claim must fail because the statute of limitations has run.
Claims under the WVCCPA must be brought within four years of accrual. As a general rule, an action accrues upon injury, or when a reasonable person knew or should have known about the injury.
By Silvious' own admission, the soda he began drinking more than 65 years ago did not contain a list of the ingredients that were in the Coca-Cola.
"It is axiomatic that one cannot receive something different than what he bargained for when he never knew the true nature of that which he believed he had bargained," Bailey explained in his April 5 order.
The judge noted that Silvious did not file the action until March 2011 -- more than six years after his last alleged purchase in January 2005.
Silvious -- despite the federal court's clear-cut ruling -- has since filed a notice of appeal with the U.S. Court of Appeals for the Fourth Circuit, looking to continue the fight.
Richie Heath, executive director of West Virginia's Citizens Against Lawsuit Abuse, said Wednesday that the case underscores the "unfortunate reality" that the state's courts have to deal with such "ridiculous, frivolous" cases.
"It should serve as a timely reminder that lawsuit abuse has a very real impact on our legal system. Frivolous lawsuits waste precious time and resources for both the people targeted by such baseless claims and our courts," he said.
"It took nearly seven months to dismiss this particular case, which Judge Bailey found had no facts to support it. And this apparently isn't the first frivolous lawsuit filed by the plaintiff, so imagine the tens of thousands of dollars that have been wasted by just this single, serial plaintiff."
But the lawsuit, itself, touches on bigger issues in the state's legal system, Heath said.
"Our state's generous consumer protection act -- which could have allowed an excessive monetary recovery for a potentially technical violation of the act -- seemingly enticed the out-of-state plaintiff to file suit in West Virginia," he said.
Also, West Virginia law does too little to discourage the filing of out-of-state lawsuits that have been rejected by other states, he said.
"The plaintiff in this case is a Virginia resident serving time in North Carolina, and his lawsuit involves an out-of-state company. The only connection for filing the lawsuit in West Virginia in the first place was the plaintiff's assertion that he bought a can of soda in a West Virginia gas station," Heath explained.
If Silvious had actually had a lawyer -- he filed in forma pauperis affidavits so that he didn't have to pay filing fees -- he could have easily dragged the case out longer, Heath noted.
Heath said this is a common problem with consumer protection acts that allow damages every instance a "deceptive" advertisement takes place.
"What often occurs is that lawyers and/or 'consumer organizations' spend countless hours looking for technical violations that appear in ads, and then they file a lawsuit," he explained.
"With ads often running hundreds, and thousands of times, the statutory violation can result in millions in 'damages' even though the plaintiffs were never injured by the technical violation. This case is a prime example of that."
Heath added, "Next time you buy a soda, think about how we all pay for the cost of lawsuit abuse when we buy a product or a service."