Legal reform crucial for businesses, State Chamber survey shows

By Justin Anderson | Mar 16, 2009



CHARLESTON – An opinion survey of business leaders conducted or the West Virginia Chamber of Commerce shows an overwhelming majority of the respondents believe state government leaders need to enact legal reform to preserve jobs and keep the state's economy stable.

With Chesapeake Energy nixing more than 200 jobs in Kanawha County and blaming the state's legal system, and the state losing more jobs by the day, the state Chamber says the results are telling.

"Clearly, continued reform of West Virginia's legal system is a top priority of businesses and job providers in the state" said state Chamber President Steve Roberts in a statement. "Given the current economic situation and recent job declines, our state leaders should focus on the needs and concerns of the very people responsible for growing the economy and creating jobs, West Virginia businesses."

Eighty-one percent of the respondents cited "legal reform" as one of the top three most pressing issues facing state government leaders in their quest to keep jobs from disappearing during the ongoing recession. Forty-six percent of the respondents believed legal reform was the most pressing issue.

There has been some debate recently about whether the state really deserves to be called a "judicial hellhole" by groups such as the American Tort Reform Association and the U.S. Chamber of Commerce's Institute for Legal Reform. The Chamber's ILR owns The West Virginia Record.

Steve Cohen, who heads up the West Virginia Citizens Against Lawsuit Abuse group, says lawmakers, who are midway through their legislative session should pay attention to the survey.

"The anti-business climate is a real tragedy for workers in our state and their families," Cohen said. "In these challenging economic and budgetary times, legal reform will help attract jobs to our state at a cost of nothing."

Besides the legal climate, 18 percent of the respondents to the Chamber survey said cutting business taxes is the most pressing issue, while 17 percent cited employee health care costs; 15 percent said workforce preparedness needed to improve; and 5 percent said keeping the unemployment compensation tax stable is most crucial.

Nearly half of the respondents said it was likely that they would be reducing their workforce in West Virginia over the year.

Sixty-two percent of the respondents thought the state was heading in the right direction to address these matters while the rest thought the state was headed in the wrong direction.

Eighty percent of the respondents believed that Gov. Joe Manchin was "very" or "somewhat" effective in addressing the concerns of the state's businesses.

By contrast, 82 percent believed that the justices on the state Supreme Court were "not very" or "not at all" effective in addressing those concerns.

"This speaks well for the governor and affirms the positive steps he has taken not only to help employers, but also to make important changes for our state," Roberts said. "At the same time, the survey results underscore the importance placed on legal reform by our state's employers and reveal that a strong majority view the Supreme Court as being ineffective in addressing key concerns."

Manchin has called for a committee to study possible changes to the state's legal system. Those changes may include an intermediate appellate court that would give full review to all appeals.
Right now, only a petitioner is required to file a brief in an appeal. An intermediate appellate court could make it mandatory for both the petitioner and the respondent to file briefs to be considered.

Business leaders have been calling for this type of mandatory appellate structure because of incidents of huge punitive awards to plaintiffs.

Sixty-two percent of the respondents to the Chamber survey believe that there should be some kind of limit on punitive awards. Another 34 percent looked favorably on having an "automatic right to appeal."

In pulling the jobs from Kanawha County, Chesapeake Energy blamed the state Supreme Court's refusal to hear arguments in a case that resulted in a nearly $400 million settlement with well owners in Roane County.

Critics of the intermediate appellate court system say that the caseload in West Virginia does not justify an extra level of judiciary. Proponents, meanwhile, say fairness justifies its creation.

Manchin has called for automatic right to appeal when there are big punitive verdicts awarded.

Manchin has also called for a temporary hike in the tax paid by employers into the state's unemployment compensation trust fund, which is taking a hit because of an increased number of claimants.

Lawmakers want to make the hike permanent. Now, employers pay a tax on the first $8,000 paid to an employee. Some lawmakers want to tax the first $9,000.

Forty-three percent of respondents to the Chamber's survey had a very unfavorable view of raising this tax.

The survey was conducted by Mark Blankenship Enterprises and was made available to "thousands" of businesses, business owners and executives.

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