West Virginia Supreme Court Decision Clears the Way for Legal Reform

by Steptoe & Johnson PLLC

On June 16, 2017, the Supreme Court of Appeals of West Virginia delivered its opinion in the matter of Martinez v. Asplundh Tree Expert Co., which involved consideration of whether two key pieces of West Virginia’s Legislative reform of 2015 would be applied to currently pending civil actions.  The Supreme Court of Appeals accepted two certified questions from the United States District Court for the Northern District of West Virginia regarding whether West Virginia Code §§ 55-7-3E and 55-7-29, which both became effective on June 8, 2015, would apply to civil actions that were filed before June 8, 2015.  The West Virginia high court, in a 3-2 decision, ruled that the statutory language in each provision made clear the Legislature’s intent to remedy West Virginia’s standing as a judicial outlier and that, because the statutory sections were remedial in nature, the provisions should be applied to all actions that proceed to trial after June 8, 2015.  The Court took due notice of the language in each code section in reaching its ultimate conclusion.

The West Virginia Legislature passed West Virginia Code § 55-7-29 in an effort to create a statutorily proportional relationship between the amount of compensatory damages that a plaintiff may recover to the amount of punitive damages awarded by a jury.  The statute was intended to remedy the all-too-frequent scenario in West Virginia in which juries make relatively small awards of compensatory damages only to then award significant sums in punitive damages.  West Virginia Code § 55-7-29(c) provides that “[t]he amount of punitive damages that may be awarded in a civil action may not exceed the greater of four times the amount of compensatory damages or $500,000, whichever is greater.” 

Similarly, West Virginia Code § 55-7E-3 was enacted to return West Virginia to the mainstream of jurisdictions regarding awards of compensatory front pay damages.  In short, West Virginia Code § 55-7E-3 abrogates the holding of Mason County Board of Education v. State Superintendent of Schools and its progeny that allowed for unmitigated back and front pay, terms that are generally defined as the wages and benefits the former employee would have earned into the future but for the cessation of his/her employment with the defendant, where the employee established that his/her adverse employment action was malicious in nature.  In practice, this led to the former employee having the opportunity to receive both the wages he/she would have earned with the former employer and the wages that he/she eventually earned with the subsequent employer.  This scenario equated to a double-recovery for a plaintiff in employment actions.  West Virginia was the only jurisdiction to allow for this type of recovery. 

In ruling that the aforementioned code provisions apply to all cases that are currently pending, the Supreme Court of Appeals noted that plaintiffs have no vested right to a particular measure of damages and that these code provisions were remedial in nature.  The Court highlighted that a “remedial statute improves or facilitates remedies already existing for the enforcement or [sic] rights of redress of wrongs, as opposed to an enactment extinguishing a cause of action or barring a party from prosecuting a cause of action that affects substantive rights and, therefore, is not remedial.”  The Court summarized the issue by writing that West Virginia Code §§ 55-7E-3 and 55-7-29 are remedial statutes that do not impact a vested or substantive right, making them applicable irrespective of when the cause of action accrued or when the lawsuit was filed.

The Martinez decision is important because it gives employers the immediate benefit of these 2015 legal reforms.  Otherwise, the beneficial effect may have been delayed for years as pending cases wind their way through the court system.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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