CHARLESTON — The West Virginia Supreme Court of Appeals granted a writ of prohibition to prohibit the enforcement of a March circuit court order that denied a motion to dismiss for lack of personal jurisdiction.
The Supreme Court ruled that Blue Cross Blue Shield was entitled to the writ of prohibition, vacating the order from Judge Shawn Nines, presiding judge of the state's Business Court Division, and denying their motion to dismiss for lack of personal jurisdiction.
Chief Justice Tim Armstead authored the majority opinion. Justice John Hutchison dissented and authored a separate opinion.
"In this original jurisdiction proceeding, Petitioners, out-of-state Blue Cross Blue Shield Plans ... ask this Court to prevent the enforcement of the circuit court’s March 27, 2020, order, and to grant the requested writ of prohibition dismissing them from the underlying civil action for lack of personal jurisdiction," Armstead wrote. "The Blues contend that there is no allegation or evidence showing that they developed or maintained a substantial relationship with West Virginia or purposefully engaged in any forum-related conduct that gave rise to the claims asserted by Respondent MedTest Laboratories."
Armstead wrote that the Blue defendants argued that "any attempt to exercise specific jurisdiction violates the limits due process imposes."
The court found that after reviewing everything, they would grant the requested writ of prohibition.
In October 2018, Highmark West Virginia, the Blue Cross Blue Shield health plan operating in West Virginia, sued MedTest, a laboratory testing company in West Virginia, alleging that it billed Highmark WV for independent laboratory and diagnostic service that MedTest didn't do. It sought to recover more than $6 million.
MedTest filed a counterclaim, naming the Blue defendants as third-party defendants, alleging the Blue defendants conspired with Highmark WV.
The Blue defendants sought to have the case dismissed, claiming lack of personal jurisdiction, asserting that they don't have relevant jurisdictional contacts in West Virginia. The circuit court rejected that argument.
"The Blues are not actively transacting business in West Virginia via their websites, nor is there an allegation that they are directly contacting West Virginia residents via their websites," Armstead wrote. "We therefore conclude that the Blues did not purposefully avail themselves of the privilege of conducting business in West Virginia based on MedTest being listed as an in-network provider on their websites."
The court found that the circuit court erred by concluding that the Blue defendants purposefully availed themselves of the privilege of conducting business in West Virginia.
"For this reason, we also reject the circuit court’s determination that because MedTest pled a claim for conspiracy, 'it has undoubtedly established jurisdiction here,'" Armstead wrote. "The circuit court’s order does not address this issue in depth."
Hutchison disagreed with the majority.
"I respectfully dissent from the majority’s opinion," Hutchison wrote. "I believe that sufficient allegations were asserted that the foreign third-party-defendant 'Blues' had a contractual arrangement with Highmark of West Virginia ... such that Highmark was acting as the agent of the Blues in West Virginia."
Hutchison wrote that he felt the complaint sufficiently alleged that the Blue defendants were conspiring with Highmark in West Virginia in a manner that caused harm to MedTest in West Virginia.
"Given that the majority opinion was focused on the lack of evidence regarding whether the Blues purposely availed themselves of West Virginia’s jurisdiction through Highmark, they should have sent the case back to the circuit court and allowed the parties to conduct jurisdictional discovery," Hutchison wrote.
Hutchison said he was dismayed with the majority's opinion and its refusal to permit jurisdictional discovery to occur.
"The agency and conspiracy theories of jurisdiction are certainly fact-intensive approaches to showing purposeful availment," Hutchison wrote. "Without conducting any analysis, the majority opinion brusquely declares that jurisdiction over the Blues is inappropriate. At a minimum, I would have permitted the parties to conduct discovery."
Marc Williams of Nelson Mullins in Huntington was the lead counsel for the out-of-state petitioner companies during oral arguments, and he was assisted by Don Parker of Spilman Thomas Battle in Charleston.
West Virginia Supreme Court case numbers: 20-0296, 20-0297
