CHARLESTON — The West Virginia Supreme Court of Appeals has ruled that a nearly-10-year-old case before the Business Court Division was rightfully dismissed.
The case involved the West Virginia Investment Managment Board (WVIMB) and the West Virginia Consolidated Public Retirement Board (WVCPRB) against the Variable Annuity Life Insurance Company (VALIC).
The Supreme Court found the plaintiffs' arguments futile, according to a June 5 opinion. Justice Beth Walker authored the majority opinion. Justice Robin Jean Davis agreed and authored a separate opinion.
The case was initially filed in 2009 in federal court, sent to circuit court and eventually sent to the Business Court Division.
The WVCPRB and VALIC entered into a contract in 1991 that offered defined contribution plan enrollees, who were public school teachers, a "high-yield, fixed annuity investment,"according to the opinion.
The Legislature then passed a bill in 2008 that permitted those enrollees to transfer their retirement funds to the Teachers Retirement System (TRS), and the overwhelming majority of teachers opted to do so.
When this occurred, the state requested liquidation of the investments of the transferring members from VALIC and other fund providers in the amount of $248 million.
VALIC agreed to do so at 20 percent per year over a five-year period or it would take a fee of $11.2 million if the state took the entire amount immediately, according to the decision.
The circuit court granted summary judgment to VALIC in the case, and the WVIMB and WVCPRB appealed to the Supreme Court the first time.
The Supreme Court reversed the summary judgment ruling and then referred the case to the Business Court at that time. The parties attempted to mediate but that proved unsuccessful. The matter was scheduled for arbitration.
Arbitration took place March 7-9, 2017, and the panel determined that WVCPRB and WVIMB were not entitled to withdraw the full amount of the funds without the fee.
"Despite agreeing that the panel's order would be binding and non-appealable, petitioners then applied to this court for a writ of prohibition and filed a corresponding and complementary appeal," the opinion states.
The court affirmed the decision of the Business Court Division to dismiss the case.
In her concurring opinion, Davis agreed but wrote a separate opinion to note that the parties agreed to have a judge serve as both the mediator and as a judge on the arbitration panel.
"The record also indicates that the parties were told prior to the mediation that they should not disclose anything during that proceeding which they did not want the mediator to know during the arbitration proceeding," Davis wrote. "Under these facts, the petitioners again waived any alleged procedural error."
West Virginia Supreme Court of Appeals case number: 17-0486