CHARLESTON – A bill aimed at limiting lawsuits filed by out-of-state residents was signed into law, drawing praise and criticism from several groups following the issue.
House Bill 2956 was signed by Gov. Joe Manchin on Wednesday, the last day he could sign or veto legislation passed in the recently ended legislative session.
The U.S. Chamber of Commerce and West Virginia Citizens Against Lawsuit Abuse had urged Manchin to veto the so-called venue bill, saying it isn't strong enough. The state Chamber of Commerce and the West Virginia Trial Lawyers Association, meanwhile, were urging for him to sign the measure.
"The failure of the legislature and governor to fix West Virginia's venue problem heaps a new load of sarcasm on the state slogan, "Open For Business,'" said Steve Cohen, executive director of WV CALA. "Having a weak venue reform law invites the wrong kind of business -- out-of-state lawsuits that take away West Virginia jobs and waste our tax dollars."
The president of the WVTLA said his group is happy Manchin signed the bill.
"It keeps West Virginia courts for West Virginia citizens," Jeff Jones said Thursday. "It keeps out-of-state residents from coming in and clogging up our courts.
"It also shows that the West Virginia Chamber and the Trial Lawyers Association can work together on meaningful issues for the state of West Virginia."
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 case at the heart of this issue -- Morris vs. Crown Equipment and Jefferds -- centered on a plaintiff who lived and worked in Virginia. He filed suit in 2004 in Kanawha Circuit Court claiming he suffered an injury operating a forklift at work.
Morris 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 that 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."
Last month, the U.S. Chamber said the bill, which was unanimously passed by both chambers of the Legislature, told The Record that the proposal simply isn't strong enough. The U.S. Chamber owns The Record.
"The West Virginia Legislature passed strong venue reform in 2003, which courts have subsequently thrown out," Larry Akey, spokesman for the U.S. Chamber's Institute for Legal Reform, said. "The legislation that has just passed is not as strong as the 2003 law."
Akey said several attorneys think the just-passed legislation, which is on Manchin's desk, will open up West Virginia courts to out-of-state suits that would not otherwise be admitted.
"In addition, we think this legislation gives undue deference to the plaintiff's choice of venue that the current statute does not give," he said. "In short, this may be worse than no bill at all."
Akey said the true result of the bill wouldn't be known until the courts had a chance to rule on it.
"But that's a risk not worth taking," he said. "A better alternative is to reject this legislation and start again next time the legislature meets.
The state Chamber and the state Trial Lawyers Association were supporting the bill, which was the result of negotiations between leaders of those two groups and legislators.
"We are very quick to say we wanted more," state Chamber President Steve Roberts said last month. "This was all the Legislature was wiling to negotiate. It was, at the time, was our belief that this was an acceptable bill. And having participated in the negotiations, we are sticking by the bill. We're doing that because it's the bill we and the other parties agreed to."
Jones, president of the WVTLA, agreed.
"What we did was look at how the law is in West Virginia, and we took into consideration Justice (Joseph) Albright's opinion in the Crown Equipment case," he said last month.
In the Crown Equipment and Jefferds case, Jeremiah "Bart" Morris hooked his claim to West Virginia by suing the distributor of the forklift as well as the manufacturer. Jefferds does business as Homestead Materials Handling Company. A phone book shows numbers for Jefferds in Nitro, St. Albans and Cross Lanes. He filed the suit over a leg injury he suffered at an Alcoa factory in Virginia.
Kanawha Circuit Judge Tod Kaufman dismissed the defendants in 2004. Morris appealed under the Privileges and Immunities Clause.
Last 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.