Case Study: Trial Lawyers, Inc. And West Virginia
November 4, 2008
In a new update of its invaluable Trial Lawyers, Inc. series, the Manhattan Institute lifts the rock on the unholy alliance between West Virginia’s Attorney General’s office and the state’s trial bar, and the devastating impact it has had on West Virginia’s economy. Legal Newsline has a summary and the full report can be found here. Among the report’s conclusions:
- There is an unholy alliance between the Attorney General’s office and the West Virginia trial bar.
According to the report, West Virginia Attorney General Darrell McGraw has turned his office into “a major division of Trial Lawyers, Inc.’s West Virginia operations.” Over the past three years alone, Mr. McGraw has hired trial lawyers to act as “special assistant attorneys general” in more than 25 cases.
In 2001, four trial lawyer firms hired by Attorney General McGraw raked in over $3 million in legal fees from a single settlement. “It was later reported that those same firms had given $47,500 to McGraw’s reelection campaigns.” No word yet on whether Justice at Stake will come out in favor of “merit” selection for Attorney General.
- Tort-friendly judges can turn states into “judicial hellholes.”
“West Virginia’s judges have repeatedly opened the state’s courthouse doors to plaintiffs’ lawyers from the nation at large” – using lax venue standards to allow out-of-state plaintiffs and defendants to sue out-of-state corporations. “Says circuit court judge Arthur Recht: ‘West Virginia was a ‘field of dreams’ for plaintiffs’ lawyers. We built it and they came.’”
“In 2006, the West Virginia supreme court of appeals ruled that out-of-state plaintiffs could sue an out-of-state manufacturer for injuries sustained out of state that were attributable to one of its products, so long as a West Virginia company had sold or distributed it. This decision was remarkable for the court’s brazen refusal to apply the statute that the West Virginia legislature enacted to rein in the courts.”
- No injury, no problem – at least in West Virginia.
“West Virginia is the only state in the nation in which plaintiffs who may have been exposed to dangerous substances can recover cash awards without showing that there was an actual injury.”
- Abusive litigation drives away business investment.
The report details the decision by Chesapeake Energy Corporation to abandon plans to build a $35 million regional headquarters in Charleston, WV after the state Supreme Court of Appeals decided not to review a $405 million verdict against the company – including $270 million in punitive damages. “A corporate spokesman called the court’s decision ‘stunning’ and noted that it ‘sends a profoundly negative message about the business climate in the state.’”
- Tort reform works.
In 2001 and 2003, the West Virginia legislature passed medical liability reform laws to deal with a medical liability crisis that was driving doctors out of the state and bankrupting insurers who wrote policies in West Virginia. By 2004, medical liability claims had fallen 69 percent from their highs. By 2005, insurance companies began lowering their premiums.