U.S. Chamber seeks veto on venue bill

By Chris Dickerson | Mar 16, 2007

CHARLESTON -- The U.S. Chamber of Commerce is urging Gov. Joe Manchin to veto a bill that would limit lawsuits filed by out-of-state residents.

The Chamber says House Bill 2956, which was unanimously passed by chambers of the Legislature during the just-ended regular session, say the proposal isn't enough.

Proponents of the bill counter that the reforms in the bill, if nothing else, are better than none.

If passed, the bill would allow defendants sued in civil cases to seek to have the suit removed to another more appropriate venue. The judge then would decide if such a move was warranted.

"The national business community is concerned with statutes like this
one,'' Larry Akey, a spokesman for the U.S. Chamber's Institute
for Legal Reform, told The Associated Press. "It influences decisions that they make about the location and expansion of their businesses.''

The U.S. Chamber has been outspoken about West Virginia's court system for years. The West Virginia Record is owned by the U.S. Chamber of Commerce.

And for years, groups such as the state Chamber of Commerce and West Virginia Citizens Against Lawsuit Abuse, have argued that out-of-state plaintiffs too frequently use West Virginia courts to obtain large judgments in lawsuits.

Anthony Majestro, who is on the board of the West Virginia Trial Lawyers Associaion, said last month that he thinks the bill is a fair compromise between the state Chamber and his group.

"I think we ended up with a bill that is fair to both the businesses and the consumers in the state," he said. "I think it's a good example of how, by working together, we can find common ground.

"This came about because (House Speaker Rick) Thompson said, 'I want you to come up with solution to this issue.' We got where we did in large part due to his initiative and his direction."

Brenda Nichols-Harper, vice president and general counsel for the state Chamber, has described the bill as "not enough, but it's the best we can do."

Majestro said he thinks the bill is balanced.

"We think it's going to get the job done," he said. "When you balance it out, you let the judge decide where the fairest most logical place for the trial is."

The case at the heart of this issue -- Morris vs. Crown Equipment and Jefferds -- centered around a plaintiff who lived in Virginia and worked in Grottoes, Va. He filed suit in 2004 in Kanawha Circuit Court claiming he suffered an injury operating a forklift at work.

He claimed damages from Crown Equipment as the forklift manufacturer and Jefferds Corporation as the distributor responsible for service. Crown Equipment and Jefferds Corporation moved to dismiss, relying on a law the Legislature passed in 2003 tha provided that nonresidents could not sue "unless all or a substantial part of the acts or omissions giving rise to the claim asserted occurred in this state."

Kanawha Circuit Judge Tod Kaufman dismissed the defendants in 2004. Morris appealed under the Privileges and Immunities Clause.

In June, the state Supreme Court of Appeals ruled that the 2003 law was unconstitutional, saying restrictions on out-of-state plaintiffs were unconstitutional.

In December, the United States Supreme Court refused to review an appeal of the state Supreme Court decision.

That means Jeremiah "Bart" Morris of Virginia can continue to pursue his injury claim against Crown Equipment and Jefferds Corporation in West Virginia.

In the state Supreme Court ruling in June, West Virginia Chief Justice Robin Davis and Justices Larry Starcher and Joseph Albright agreed that the 2003 law was unconstitutional.

"There is a strong constitutional disfavoring of the categorical exclusion of nonresident plaintiffs from a state's courts under venue statutes when a state resident would be permitted to bring a similar suit," Starcher wrote in the majority opinion.

Justice Brent Benjamin found no constitutional violation but agreed that Morris could pursue his claim in West Virginia. Justice Spike Maynard dissented, declaring that the majority eviscerated a statutory safeguard against abuse of West Virginia courts.

In Crown Equipment's petition to the U.S. Supreme Court last year, attorney Thomas Cullen of Baltimore wrote that courts consistently dismiss cases in which the only connection to the state is the location of a defendant's incorporation.

"Here, while Jefferds is incorporated in West Virginia, its office in Verona, Va., was responsible for every activity involving the subject forklift," he wrote, noting that the forklift never had been in West Virginia. He wrote that all witnesses were presumably in Virginia, beyond the subpoena power of a West Virginia court.

"The case presently before the Court is precisely the type of lawsuit which the statute was intended to prevent," Cullen wrote, adding that Morris chose to sue in West Virginia because its courts have adopted a system of comparative liability, while Virginia adheres to a stricter doctrine of contributory negligence.

Kane in his petition for Jefferds Corporation deplored "magnet jurisdictions" with liberal tort laws, plaintiff friendly procedures and generous juries.

He called the decision of the Justices in Charleston "an abandonment of all rules of statutory interpretation and judicial restraint."

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