Latest salvos launched in summary judgment campaign

Lawyers braved the mid-day sun July 18 to appear before a legislative committee in Richmond to discuss changing the rules for summary judgment practice in Virginia state courts.

House Courts of Justice committee chair Del. Dave Albo, R-Fairfax, convened the committee to consider House Bill 1138, carried over from the 2012 legislative session. The bill, sponsored by Del. Chris Head, R-Roanoke, would amend Virginia Code § 8.01-420 to allow summary judgment motions to be supported by depositions, pleadings, interrogatory answers, admissions on file or affidavits.

Each side made its best case about what’s best for business in the commonwealth.

Businesses large and small need shortcuts so they won’t face full-blown trials for frivolous lawsuits, proponents of change say. The opponents counter that Virginia state courts do not have the resources to cope with the “federalization” of civil law practice into a document-heavy “motions” practice.

The legislators expressed some frustration about how to get beyond the “talking points” to hear debate of specific ways to improve the system for early termination of meritless lawsuits.

Using depositions has been a sticking point in modern Virginia practice. Virginia state courts actually allowed depositions in support of summary judgment motions  until 1973, according to University of Virginia Law Professor Kent Sinclair. Sinclair laid out the history of summary judgment practice in the commonwealth and compared state and federal summary judgment practice, to start the committee hearings before the standing-room-only crowd.

In 1973, the General Assembly passed Code § 8.01-420 in response to the 1971 Virginia Supreme Court decision in Leslie v. Nitz. Since then, there have been multiple attempts to open up summary judgment practice to allow wider use of the fruits of discovery to dispose of a lawsuit without a trial. In 2004, the proposal was part of a tort reform package.

Virginia remains the only state or federal jurisdiction that restricts deposition use on summary judgment.

If a head-count were all that counted in the July18 hearing, the businesspersons would have beat out the trial lawyers, when supporters of HB 1138 were asked to stand in a show of strength.

Barry DuVal, president and CEO of the Virginia Chamber of Commerce, introduced about a dozen speakers, including representatives of Dominion Resources, Norfolk Southern, Capital One, Titan America, CSX and Huntington Ingalls. The committee also heard from representatives of smaller companies. A roll call of associations such as the Virginia Association of Defense Attorneys, Virginia Health Care Association and the Retail Merchants Association, also spoke for the bill.

Jeff Palmore spoke for Gov. Bob McDonnell’s office, and Deputy Attorney General Wesley Russell represented Attorney General Ken Cuccinelli’s office, both in support of the bill. Each executive sponsored similar legislative proposals when they served in the General Assembly.

Supporters of HB 1138 recounted tales of lawsuits gone wrong. For instance, Joe R. Wilson said Permatreat Inc., the small Fredericksburg pest control business he started that has grown into a company that wins contracts to treat Capitol buildings, was sued in 2008 for treble damages in a fraud case. His insurance company refused to defend the suit until he hired a lawyer to take on the carrier. Ultimately the suit was dismissed, but not until Wilson’s company had spent thousands of dollars to defend the claim, as his policy had a $25,000 deductible.

Norfolk lawyer Lisa O’Donnell, president of the Virginia Trial Lawyers Association, led the opposition.

“Be careful what you wish for,” O’Donnell said. She cited multiple studies that already rank Virginia among the top business-friendly states, in rankings whose reviews include the state’s tort system.

O’Donnell and other VTLA members said the statutory change would drive up costs for everyone in the civil justice system, including the courts. O’Donnell contrasted her own medical malpractice and personal injury practice with her partner’s federal court employment practice.

Her partner takes lots of depositions, knowing she’ll need them to combat the summary judgment motion that inevitably comes from the other side. “She conducts depositions to prove her case. I do depositions for discovery,” O’Donnell said.

O’Donnell says under current Virginia practice, she doesn’t need to spend the money to depose her own witnesses because she already knows what they will say. A change could require both sides to spend more time and money deposing everybody for a summary judgment mini-trial.

Even in jurisdictions with a more wide-open summary judgment practice, only about 30 percent of the cases in which summary judgment motions are filed actually see the case resolved at that stage, several speakers said.

Charlottesville lawyer Ed Lowry, a commercial litigator, said his practice area is “obscenely expensive” and lawyers routinely advise clients there will be a premium to pursue a case in federal rather than state court, attributable to summary judgment practice.

“A small litigant can be crushed with the expense of litigation. Larger corporations, if they can conceive of it, they can afford it. We have to consider this if we want to protect small businesses in Virginia,” Lowry said.

Former Culpeper Circuit Judge Jack Berry returned to private practice in Charlottesville earlier this year. Fresh from the bench, he reminded the committee that Virginia doesn’t have a well-developed e-filing system and Virginia trial judges don’t have law clerks who can pore over the trolley-loads of documents filed to support summary judgment motions, documents that have to be carefully reviewed because summary judgment means the end of the line for one side. Disappointed parties in Virginia can’t count on the appeal of right available in federal court.

Reviewing summary judgment motions “is grueling and time-consuming without clerks,” Berry said. There are “lots of safeguards in place” in Virginia. “The balance has been struck.”

That balance includes active use of demurrers and other discovery tools, plaintiffs’ lawyers said. Although references to depositions are verboten in summary judgment motions, parties can take a deposition, and then use the information obtained to fashion requests for admission that can support a summary judgment motion.

Committee members said each side had good arguments but tended to talk past each other.

The two sides “didn’t address each other,” said Del. Rob Bell, R-Albemarle, who also has a private law practice. Bell and other lawyer-legislators seemed to understand first-hand the arguments about increased costs. “We know there are cases you can’t bring in federal court because of the expense,” he said. He wants to preserve a system where “the plaintiff with a righteous small case can find a venue,” and not just give “another tool to a defendant to raise costs to a righteous plaintiff by making them defend against summary judgment.”

But “we’ve tried since 2004 to pass something,” with no luck. “What’s the way to deal with specious pleadings” after they’ve survived demurrer, he asked.

Del. Greg Habeeb, R-Salem, also was less that satisfied with “anecdotes about bad cases” and “bad results.” He challenged the proponents to “identify the actual problem, show us the data” to demonstrate the current system is slower or more costly.

Albo issued his own challenge, asking the two sides to make an effort to thrash out some compromise, as trial lawyers and doctors have done with the medical-malpractice cap issue.

Such talks could lead to further hearings on the carryover bill, or a new bill to be introduced in the 2013 session.