THEIR VIEW: Bad legal climate -- not bad geography -- holds our state back

By The West Virginia Record | Aug 31, 2010


CHARLESTON -- It's no surprise that the newest leader of West Virginia's personal injury bar, Michael J. Romano, thinks our state's legal climate is fine as is.

The fact that personal injury lawyers like lawsuits is not breaking news. However, it was quite interesting to read Mr. Romano's recent guest column in The West Virginia Record on what really hurts West Virginia's job prospects -- too many mountains!

For Romano and the personal injury bar, West Virginia's ongoing economic woes appear to stem from a lack of flat land, rather than an abundance of job-killing lawsuits. But the facts just don't support his case.

If geography is the chief factor deterring West Virginia's economic development, then why isn't the state of Colorado suffering a similar fate? With its own mountainous terrain, Colorado recently ranked as the third best state for business in CNBC's annual rankings. Colorado's success is aided by having the fourth best legal & regulatory frameworks in the nation.

Colorado also ranks eighth among all 50 states in the Institute for Legal Reform's annual State Liability Systems Ranking Study -- a ranking which West Virginia University Economics Professor Russell Sobel has found to have a direct relationship with a state's economic growth. States with better legal rankings experience higher incomes and faster economic growth. West Virginia ranks dead last on the State Liability Systems Ranking Study, and our average annual income has unsurprisingly ranked 48th or 49th for the better part of two decades.

West Virginia's personal injury bar would have you believe that this is a problem of "perception," and not reality. They want you to ignore that just about every reputable legal and business ranking available (Forbes Magazine, U.S. News & World Report, CNBC, etc.) casts our state as unfriendly to businesses and jobs. In support of their case, they typically cite the law review of law professor Elizabeth Thornburg, whose conclusions have been questioned by several state lawmakers as "junk data."

However, Professor Sobel's research confirms that it is the state's out-of-step legal and regulatory framework, rather than its beautiful mountains, that keeps our economy from booming. A comparison of the citizens of West Virginia's border counties to those living just across our state lines -- with virtually identical demographics and geography -- shows that Mountain State residents are, on average, more than $2,000 poorer!

As Sobel and other scholars have noted, there are many significant and indisputable facts about our state legal climate that clearly put West Virginia outside of the legal mainstream, thus hurting the job prospects for state workers.

It is unquestionable that West Virginia currently has the most restrictive appeals process in the nation. As Gov. Joe Manchin's Independent Commission on Judicial Reform has noted, West Virginians do not have the right to an automatic appeal of potential legal errors committed at the trial court level. This means that many West Virginia workers and their families are denied their day in appeals court.

The state's 100 percent discretionary appeals process has been rejected by every other state in the nation, and has resulted in the loss of hundreds of jobs and millions of dollars in investment for West Virginia. Contrary to Mr. Romano's claims, "fear of litigation" in West Virginia is quite real given the current appeals process.

When Chesapeake Energy halted construction on its proposed $40 million regional headquarters in Charleston, the company cited our state's lack of an automatic right of appeal, and not our geography, as the primary reason for its pull-out. Chesapeake Energy CEO Aubrey McClendon noted that "until West Virginia's judicial system provides fair and unbiased access to its courts for everyone, a prudent company must be very cautious in committing further resources in the state."

This sentiment is echoed by most other local job providers. A recent survey of businesses across the state shows that much-needed legal reform is the most important issue for West Virginia job providers. And a whopping 82% of surveyed West Virginia businesses believe that the West Virginia Supreme Court is "not very" or "not at all" effective.

The lack of an intermediate appeals court also presents a problem for our state. West Virginia is currently one of only ten states in the nation without such a court. And while the West Virginia Supreme Court is currently revising its appellate rules, a meaningful right of appeal is not likely to occur in the absence of an intermediate appeals court. By its own admission, the state Supreme Court is already one of the busiest appellate courts in the nation.

Another area of concern is the state's court-created medical monitoring standard, which allows plaintiffs to file questionable lawsuits without any proof of injury. Supreme Court Justice Menis Ketchum -- a practicing personal injury lawyer prior to joining the court -- recently warned that "[i]f we do not modify or abolish the medical monitoring law, the plaintiffs' lawyers ... will wreak enormous economic harm on West Virginia's economy. They will collect millions in fees and return to their out-of-state residences leaving the West Virginia economy in shambles."

Meanwhile, Attorney General Darrell McGraw has become one of the most controversial public figures in West Virginia thanks to his practice of appointing private personal injury lawyers, who frequently contribute to his political campaigns, to no-bid legal contracts to pursue lawsuits on behalf of the state. McGraw's actions give the appearance of cronyism, while raising numerous ethical questions.

A recent West Virginia Law Review article authored by leaders of the American Tort Reform Association notes "the fact that McGraw has not so much as received a reprimand," suggesting that this "illustrates just how disturbing West Virginia's legal environment is."

Clearly, these are real problems, and not just "perceptions," that are facing West Virginia's job providers, workers and their families. Retired U.S. Supreme Court Justice Sandra Day O'Connor, Gov. Joe Manchin and Justice Menis Ketchum are but a few of the notable officials who have called for reforms of West Virginia's legal system.

We can't afford to sweep this problem under the rug, and pretend it doesn't exist as the trial lawyers suggest. Rather, we must work together to enact meaningful legal reforms that curb abusive lawsuits while protecting the rights of all West Virginians to have their day in court.

Heath is executive director of West Virginia Citizens Against Lawsuit Abuse.

Editor's Note: The West Virginia Record is owned by the U.S. Chamber's Institute for Legal Reform.

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