Rick Heath

January 5, 2010

"Bob took exception to this," Richie Heath told Putnam Rotarians today. "He was a resident of Huntington, and he felt there were a lot of good areas in Huntington. And he asked, 'Why, not?'"

His boss replied, "We simply can't afford it. We'll get killed with all the lawsuits and regulatory costs." So they located over on the other side of the river in Ohio.

"This really struck a nerve with Bob," said Heath. "So he and several others in business that he knew got together and tried to get involved. And that spawned the grassroots effort of people concerned about lawsuit abuse in the state."

Heath is Executive Director of the resulting organization, West Virginia Citizens Against Lawsuit Abuse, which now claims 30,000 members in the state.

For the eighth year in a row, Heath said, West Virginia has been named by the American Tort Reform Foundation as a "judicial hellhole."

WVCALA is now "going beyond the lawsuit message, not only to highlight the damage and costs of frivolous litigation, but to talk about solutions, about ways people can become active on this front.

"Our main purpose," he said, "is to educate the public and raise public awareness on this issue, whether it's a lawsuit against your local school board and your school costs having to go to defend against that lawsuit rather than going into the classroom."

Defense is managed through the state Board of Risk, and agencies not cooperating may lose insurance coverage. The state often elects to pay off a claim rather than defend. Regardless of merits, it's cheaper and easier to pay the plaintiffs just to go away. Lawyers get paid. The judge's workload is reduced. The insurance rate rises for the local school board, but the public is none the wiser.

"In Huntington, insurance costs have gone up 300 percent in the last decade from having to defend so much against people injured in area parks.

"Until four or five years ago . . . not a lot of people were aware of the fact that West Virginia elects all of its judges.

"What you have is a judiciary, motoring along on its own, and not a lot of people aware of the impact it has on our lives."

The negative reputation of our legal system affects the state's business climate, said Heath. "Forbes magazine ranks us as one of the worst business and regulatory climates in the nation; CNBC has ranked us as having the worst business climate in the nation; U. S. News & World Report in 2008 had a list of seven worst places to start a business, and West Virginia was on that list.

"Our lawsuit climate is an important factor in whether or not job providers are going to locate here. And the reputation of our state, whether perceived or real, plays an important role.

"We have so much to offer," said Heath, "in terms of great labor and low costs of doing business, if we can fix these areas, we can encourage job providers to come here."

Heath noted the recent efforts of Gov. Manchin's Independent Commission on Judicial Reform.

Two major topics have come out of that report: (1) Our method of judicial selection, and (2) an automatic right of appeal.

"West Virginia selects all of its judges, from magistrate all the way up through the Supreme Court, by partisan election," Heath told the group. "That may be great for a legislative race, but when you appear [before a judge] and the lawyer opposing you has contributed to [that judge's] campaign, that raises a lot of questions about the fairness of the system."

West Virginia is one of only two states that doesn't have an automatic right of appear, he continued. "That means if you have a case in a Circuit Court, and there is a ruling against you, you can petition for an appeal to the Supreme Court but they don't have to grant you an appeal. So there's a chance there may be a legal error, and not have the case heard on appeal." (West Virginia is the only state which does not provide an absolute right of appeal from a final judgment of a lower court.)

That is a recommendation of the Commission, said Heath, that the state set up an intermediate court of appeals, "that could hear more cases and grant everybody an automatic right of appeal."

The economy is down, and budgets are tight, said Heath. "But the costs of an intermediate court must be weighed against the costs of not doing anything.

"If you don't have things like an automatic right of appeal where you can have legal errors corrected, you're also talking about businesses not locating here.

"This is going to be debated in the upcoming legislative session. I notice that the state Chamber [of Commerce] has already issued a release today of their top ten solutions for 2010, and judicial and legal reforms were right up front."