WEST VIRGINIA RECORD

CHARLESTON -- A new survey of potential West Virginia jurors reveals they think lawsuits hurt the state's economy and job market.

The survey, conducted by Charleston-based Mark Blankenship Enterprises, found that 45 percent of those potential jurors questioned say lawsuit have a negative impact on the economy and job market. Of those, 24 percent believe lawsuits have a "very negative" impact, while 21 percent say the impact is "somewhat negative."

One in four, or 25 percent, say lawsuits have "no impact" and 13 percent think they have a "positive impact."

"This is an important finding for all litigators to understand especially when considering the heightened economic concern respondents also express" said Mark Blankenship, president of MBE.

It's also should be noted that the survey was taken just prior to Chesapeake Energy's announcement last month that it was not building its much-anticipated Eastern Division headquarters in Charleston.

Chesapeake officials cited the state Supreme Court's refusal to hear its appeal of a $405 million verdict against it.

The survey also questioned eligible jurors about the economy.

More than two-thirds (67 percent) of those questioned believe the economy and job market of West Virginia will "get worse" or "remain the same" during the next four years.

"There isn't a lot of confidence among respondents in the short-term economy of West Virginia," Blankenship said. "When 7 in 10 express this kind of economic concern and nearly 1 in 2 (45 percent) believe lawsuits have a negative impact on the economy and job market, attorneys have a difficult task of identifying these pre-existing biases when selecting their juries."

The random sample telephone survey was of 400 West Virginians who are registered voters and/or licensed drivers. The sampling variation on a survey of 400 respondents is plus or minus 4.9 percent at a 95 percent confidence level

Blankenship said it was an independent survey meant to assist attorneys in understanding the attitudes and opinions of potential jurors as they develop litigation strategies. He said the results of the survey do not reflect the opinions of MBE and are meant only to provide insights into public opinion.

According to MBE, interviewers used a random-digit dialing procedure to interview respondents. The numbers are generated by computer to achieve maximum representation in all West Virginia counties. This technique is designed to produce a sample of registered voters that is representative of the entire population in such areas as age, gender, race and family income. Both listed and unlisted telephone households had an equal chance of being selected in the sample.

Chesapeake had planned to invest as much as $35 million in building its headquarters. But now, it only will continue to lease space in Charleston and plans to appeal the verdict to the U.S. Supreme Court.

In February 2007, a Roane Circuit Court jury imposed about $134.3 million in compensatory damages and $270 million in punitive damages against defendants in the case of Tawney, et al. v. Columbia Natural Resources.

CNR is a former NiSource Inc. subsidiary, which was sold in 2003. NiSource, Columbia Energy Group and Chesapeake Appalachia LLC were named as defendants in the lawsuit. Oklahoma City-based Chesapeake Energy bought Columbia Natural Resources of Charleston in November 2005 for $2.2 billion.

The plaintiffs in the case, natural gas royalty owners, filed the lawsuit in early 2003 alleging that CNR underpaid royalties by deducting a portion of post-production costs incurred to gather and transport gas to interstate pipelines and by not paying market value for gas produced under all leases, even those providing for payment based on actual proceeds received for the gas. Plaintiffs sought the alleged royalty underpayment and punitive damages.

The defendants believe CNR operated in good faith and that there is no valid basis for any award of punitive damages, "let alone the unwarranted and unreasonable levels granted in this case."

"NiSource believes the verdict in the case is clearly excessive and should be set aside by the trial court or overturned on appeal," the company said in a press statement. "The result, if left standing, would set a precedent that is contrary to existing law and could undermine the legal underpinnings of nearly every natural gas royalty contract in the state.

"As such, the decision not only affects the defendants, but also potentially harms every natural gas producer in West Virginia and could have a negative impact on future oil and gas development."

In another statement, Chesapeake said it also was "surprised and disappointed" by the verdict.

"If allowed to stand, the verdict would have far-reaching negative implications for all gas producers in West Virginia and would reinforce the hostile legal environment all businesses face in West Virginia," the company said. "A judgment has not yet been entered in the case. Important motions must be filed and considered by the trial court before judgment is entered. When judgment is entered, Chesapeake will analyze the judgment and decide the proper course of action including any appeal."

The jury award was one of the seven largest in the country in 2007. West Virginia courts produced two others, including a $220 Brooke County verdict against Massey Energy. The Supreme Court also refused to hear Massey's appeal in that case.

West Virginia was recently ranked last in a polling of corporate defense lawyers arranged by the U.S. Chamber of Commerce, the owner of The West Virginia Record.

The state has also been dubbed a "judicial hellhole" by the American Tort Reform Association every year since 2002.