State of West Virginia, Ex rel 3M Company v. Jay Hoke and Patrick Morrisey ( 2020 )

IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
September 2020 Term
FILED
_______________
November 23, 2020
released at 3:00 p.m.
No. 20-0014 EDYTHE NASH GAISER, CLERK
_______________ SUPREME COURT OF APPEALS
OF WEST VIRGINIA
STATE OF WEST VIRGINIA, EX REL.
3M COMPANY, F/K/A MINNESOTA MINING AND
MANUFACTURING COMPANY,
MINE SAFETY APPLIANCES COMPANY, and
AMERICAN OPTICAL CORPORATION,
Petitioners
v.
HONORABLE JAY HOKE, JUDGE
OF THE CIRCUIT COURT OF LINCOLN COUNTY, and
STATE OF WEST VIRGINIA ex rel.
PATRICK MORRISEY, ATTORNEY GENERAL,
Respondents
________________________________________________________
Petition for a Writ of Prohibition
WRIT DENIED
________________________________________________________
Submitted: September 2, 2020
Filed: November 23, 2020
Bryan J. Spann, Esq. Patrick Morrisey
Robert H. Akers, Esq. Attorney General
Thomas Combs & Spann, PLLC Curtis R.A. Capehart
Charleston, West Virginia Deputy Attorney General
Andrew J. Detherage, Esq. Charleston, West Virginia
Barnes & Thornburg LLP Sean McGinley, Esq.
Minneapolis, Minnesota DiPiero Simmons McGinley &
Counsel for Petitioner 3M Company Bastress, PLLC
Charleston, West Virginia
Counsel for the Respondent
Marc E. Williams, Esq.
Melissa Foster Bird, Esq.
Christopher Smith, Esq.
Nelson Mullins Riley & Scarborough
Huntington, West Virginia
Counsel for American Optical
Corporation
M. Trent Spurlock, Esq.
Dinsmore & Shohl, LLP
Louisville, Kentucky
J.H. Mahaney, Esq.
Dinsmore & Shohl, LLP
Huntington, West Virginia
Counsel for Mine Safety Appliances
Company
JUSTICE HUTCHISON delivered the Opinion of the Court.
CHIEF JUSTICE ARMSTEAD and JUSTICE JENKINS concur and reserve the
right to file a separate Opinion.
SYLLABUS BY THE COURT
1. “In determining whether to entertain and issue the writ of prohibition
for cases not involving an absence of jurisdiction but only where it is claimed that the lower
tribunal exceeded its legitimate powers, this Court will examine five factors: (1) whether
the party seeking the writ has no other adequate means, such as direct appeal, to obtain the
desired relief; (2) whether the petitioner will be damaged or prejudiced in a way that is not
correctable on appeal; (3) whether the lower tribunal’s order is clearly erroneous as a matter
of law; (4) whether the lower tribunal’s order is an oft repeated error or manifests persistent
disregard for either procedural or substantive law; and (5) whether the lower tribunal’s
order raises new and important problems or issues of law of first impression. These factors
are general guidelines that serve as a useful starting point for determining whether a
discretionary writ of prohibition should issue. Although all five factors need not be
satisfied, it is clear that the third factor, the existence of clear error as a matter of law,
should be given substantial weight.” Syllabus Point 4, State ex rel. Hoover v. Berger, 199
W. Va. 12, 483 S.E.2d 12 (1996).
2. “In determining whether to grant a rule to show cause in prohibition
when a court is not acting in excess of its jurisdiction, this Court will look to the adequacy
of other available remedies such as appeal and to the over-all economy of effort and money
among litigants, lawyers and courts; however, this Court will use prohibition in this
discretionary way to correct only substantial, clear-cut, legal errors plainly in contravention
of a clear statutory, constitutional, or common law mandate which may be resolved
i
independently of any disputed facts and only in cases where there is a high probability that
the trial will be completely reversed if the error is not corrected in advance.” Syllabus
Point 1, Hinkle v. Black, 164 W. Va. 112, 262 S.E.2d 744 (1979).
3. “Where a cause of action is based on tort or on a claim of fraud, the
statute of limitations does not begin to run until the injured person knows, or by the exercise
of reasonable diligence should know, of the nature of his injury, and determining that point
in time is a question of fact to be answered by the jury.” Syllabus Point 3, Stemple v.
Dobson, 184 W. Va. 317, 400 S.E.2d 561 (1990).
4. “In tort actions, unless there is a clear statutory prohibition to its
application, under the discovery rule the statute of limitations begins to run when the
plaintiff knows, or by the exercise of reasonable diligence, should know (1) that the
plaintiff has been injured, (2) the identity of the entity who owed the plaintiff a duty to act
with due care, and who may have engaged in conduct that breached that duty, and (3) that
the conduct of that entity has a causal relation to the injury.” Syllabus Point 4, Gaither v.
City Hosp., Inc., 199 W. Va. 706, 487 S.E.2d 901 (1997).
5. “Under the discovery rule set forth in Syllabus Point 4 of Gaither v.
City Hosp., Inc., 199 W. Va. 706, 487 S.E.2d 901 (1997), whether a plaintiff ‘knows of’ or
‘discovered’ a cause of action is an objective test. The plaintiff is charged with knowledge
of the factual, rather than the legal, basis for the action. This objective test focuses upon
whether a reasonable prudent person would have known, or by the exercise of reasonable
ii
diligence should have known, of the elements of a possible cause of action.” Syllabus
Point 4, Dunn v. Rockwell, 225 W. Va. 43, 689 S.E.2d 255 (2009).
6. “A five-step analysis should be applied to determine whether a cause
of action is time-barred. First, the court should identify the applicable statute of limitation
for each cause of action. Second, the court (or, if questions of material fact exist, the jury)
should identify when the requisite elements of the cause of action occurred. Third, the
discovery rule should be applied to determine when the statute of limitation began to run
by determining when the plaintiff knew, or by the exercise of reasonable diligence should
have known, of the elements of a possible cause of action, as set forth in Syllabus Point 4
of Gaither v. City Hosp., Inc., 199 W. Va. 706, 487 S.E.2d 901 (1997). Fourth, if the
plaintiff is not entitled to the benefit of the discovery rule, then determine whether the
defendant fraudulently concealed facts that prevented the plaintiff from discovering or
pursuing the cause of action. Whenever a plaintiff is able to show that the defendant
fraudulently concealed facts which prevented the plaintiff from discovering or pursuing the
potential cause of action, the statute of limitation is tolled. And fifth, the court or the jury
should determine if the statute of limitation period was arrested by some other tolling
doctrine. Only the first step is purely a question of law; the resolution of steps two through
five will generally involve questions of material fact that will need to be resolved by the
trier of fact.” Syllabus Point 5, Dunn v. Rockwell, 225 W. Va. 43, 689 S.E.2d 255 (2009).
iii
7. “Statutes which are remedial in their very nature should be liberally
construed to effectuate their purpose.” Syllabus Point 6, Vest v. Cobb, 138 W. Va. 660, 76
S.E.2d 885 (1953).
8. Under the West Virginia Consumer Credit and Protection Act, a cause
of action by the Attorney General accrues, and the statute of limitation in West Virginia
Code § 46A-7-111(2) (1999) begins to run, from the time the Attorney General discovers
or reasonably should have discovered the deception, fraud, or other unlawful conduct
supporting the action. Determining that point in time is generally a question of fact.
iv
HUTCHISON, Justice:
In this petition for a writ of prohibition, we are asked to review a routine
circuit court order permitting the Attorney General of West Virginia (“Attorney General”)
to amend a complaint, and granting the Attorney General’s motion to sever the counts in
the complaint for discovery and trial. In part, the circuit court’s order permits the parties
to conduct discovery regarding whether the discovery rule tolled the statute of limitation
on the Attorney General’s claim that the defendants violated the West Virginia Consumer
Credit and Protection Act (“the CCPA”). The order also allows the parties to discover and
present evidence on whether the defendants committed multiple, willful violations of the
CCPA, such that the circuit court might consider imposing multiple civil penalties.
This Court has “clearly stated that extraordinary remedies [like the writ of
prohibition] are reserved for really extraordinary causes” and “are not available in routine
circumstances.” State ex rel. Vanderra Res., LLC v. Hummel, 242 W. Va. 35, 40, 829
S.E.2d 35, 40 (2019) (cleaned up). The circuit court’s order is preliminary, and merely
permits the parties to conduct discovery and raise detailed arguments on a developed record
at the summary judgment stage. As we discuss below, we see nothing to say the circuit
court erred as a matter of law, let alone exceeded its legitimate powers. Accordingly, we
deny the defendants’ petition for a writ of prohibition.
1
I. Factual and Procedural Background
The Attorney General filed the instant case in August 2003, against three
defendants (who are the petitioners before this Court): 3M Company (formerly known as
Minnesota Mining and Manufacturing Company); Mine Safety Appliances Company; and
American Optical Corporation. The Attorney General amended the complaint in 2005, but
the allegations in the amended complaint are like those in the original complaint.
The central allegation in the Attorney General’s case is that each of the
defendants designed, manufactured, and then delivered respirators and dust masks in West
Virginia that did not do what they were supposed to do: protect workers from dust-related
illnesses. The Attorney General asserts that each defendant knew its products did not work
as advertised. Despite that knowledge, each defendant engaged in a scheme to hide, from
both employers and workers, the limitations and defects of their own products as well as
those they discovered in the products of the other defendants and competitors. The
Attorney General claims that “the design of the [defendants’] respirators/dust masks was
so poor and negligent that it encouraged non-use.”
The Attorney General asserted six different causes of action against the
defendants, claims that fall into two categories. In the first category, the Attorney General
2
asserted five broad, tort-based causes of action: negligence, strict liability, breach of
implied warranty, negligent misrepresentation, and a claim for punitive damages. 1
Second, and important to our review, the Attorney General contended that
the defendants had violated the CCPA. The Attorney General maintained that the
2
defendants “made untrue, deceptive or misleading representations of material facts . . . and
omitted and/or concealed material facts . . . regarding the appropriate use and safety of their
respiratory protection devices.” These “misrepresentations and omissions” by the
defendants were, according to the Attorney General, “likely to and did deceive and/or
confuse West Virginia citizens, employers and their employees into using the [d]efendants’
respiratory protection devices.”
The Attorney General alleged the defendant manufacturers: (1) were
1
negligent because they knew that their dust masks could meet government standards in the
1970s and 1980s and “yet still failed to provide adequate respiratory protection to prevent
the diseases they were marketed as preventing”; (2) were liable for strict tort liability,
because they knew or should have known that their products were “defective, unsafe and
unreasonably dangerous for their intended and/or foreseeable uses”; (3) were liable for
breaching an implied warranty, because the masks were neither safe for their intended use
nor of merchantable quality as warranted by the defendants; (4) were liable for negligent
misrepresentation, because they “made express warranties, and material representations in
sales literature, advertisements and through sales promotional communications, that they
knew were false”; and (5) were liable for punitive damages, because the defendants knew
the users of their products “could and did contract progressive, irreversible lung diseases
because of the products’ leakage of significant amounts of pneumoconiosis producing
dust,” and yet maliciously, willfully, and wantonly disregarded safety and concealed
evidence of defects and deficiencies in their products.
See generally, W. Va. Code § 46A-1-1 to -8-102.
2
3
In the years after the suit was filed, the breadth of relief sought in the
Attorney General’s original and amended complaints caused problems with the production
of discovery. Specifically, the Attorney General sought damages because the State of West
Virginia had allegedly spent hundreds of millions of dollars in the past, and would spend
hundreds of millions of dollars in the future, on workers’ compensation benefits for tens of
thousands of current and former workers with occupational pneumoconiosis (that is,
diseases of the lungs like silicosis and black lung that are caused by inhaling dust). The
3
Attorney General’s complaint sought to recover the monies paid out by the State in
response to injuries to workers caused by the defendants’ products.
3
West Virginia’s workers’ compensation laws contain the following
definition of “occupational pneumoconiosis”:
Occupational pneumoconiosis is a disease of the lungs
caused by the inhalation of minute particles of dust over a
period of time due to causes and conditions arising out of and
in the course of the employment. The term “occupational
pneumonconiosis” includes, but is not limited to, such diseases
as silicosis, anthracosilicosis, coal worker’s pneumoconiosis,
commonly known as black lung or miner’s asthma,
silicotuberculosis (silicosis accompanied by active
tuberculosis of the lungs), coal worker’s pneumoconiosis
accompanied by active tuberculosis of the lungs, asbestosis,
siderosis, anthrax, and any and all other dust diseases of the
lungs and conditions and diseases caused by occupational
pneumoconiosis which are not specifically designated in this
section meeting the definition of occupational pneumoconiosis
set forth in this subsection.
W. Va. Code § 23-4-1(d) (2018).
4
In response to this broad request for relief, the defendants served discovery
requests asking for information about each of the tens of thousands of workers supposedly
injured by their products. For instance, the defendants asked the State to identify each
injured worker; each employer that employed the worker; the instructions received by each
worker “regarding the proper fit and use of the respirators . . . and identity of the person
providing such instruction;” “the facial hair worn” each time a worker used one of
defendants’ respirators or masks; and each worker’s “history of tobacco use, including
cigarettes, cigars, snuff and/or chewing tobacco.” The Attorney General resisted producing
much of this information.
The record suggests that, beyond the parties’ discovery dispute, there were
few hearings and little movement on this case after 2003.
4
This case arises from a December 2016 motion by the Attorney General. In
that motion, the Attorney General asked the circuit court for two things: permission to
again amend its complaint, and an order severing the CCPA cause of action from the
As the circuit court said in one hearing in 2015, “it’s been awhile since I’ve
4
looked at this [case] because it lead its own lifestyle for a while, went other places, did
other things and now it’s back, you know, sort of like a prodigal son it’s home.” The circuit
court’s comment refers to the fact that the defendants removed the case to federal court,
which later remanded the case back to the circuit court. Thereafter, the parties focused
much of their attention on a similar lawsuit against the same defendant manufacturers in
Kentucky. There, a few of the same attorneys assisting the Attorney General in the instant
case filed suit on behalf of a handful of individuals, and discovery produced nearly half-a-
million pages of documents. The parties suggest that much of this discovery generated in
Kentucky will now be used by the Attorney General to establish the State’s case.
5
remaining tort-based causes of action for trial. The Attorney General pointed out that the
CCPA sought a remedy different from, and vastly less complicated than, the remedies
available under the five tort claims. The remedy under the CCPA, W.Va. Code § 46A-7-
111(2) (1999), is for the circuit court to impose “a civil penalty for [the defendants]
willfully violating this chapter.” The remaining claims (negligence, strict liability, etc.)
were essentially subrogation claims that, if successful, would result in common law
remedies based upon traditional concepts of tort law.
By granting the motion to sever and permitting only the CCPA claims to go
to trial, the Attorney General asserted the circuit court would greatly simplify the case. The
trial issues would focus narrowly on the allegations regarding the defendants’ conduct
rather than on the varying injuries to thousands of individuals. According to the Attorney
General, the trial questions would be narrowed to:
1. Whether the defendants’ products were sold in West
Virginia;
2. The number of sales by the defendants within the State;
3. Whether misrepresentations were made by the defendants
relevant to the products;
4. Whether the misrepresentations violated the CCPA; and
5. The level of the civil penalty to be imposed by the circuit
court for each individual sale of a dust mask or respirator
relative to which misrepresentations, lies and/or fraudulent
statements were made.
Furthermore, the Attorney General argued that severing the CCPA claims would render
irrelevant discovery issues
6
relative to any aspect of injury, causation, medical expense,
other potential causes of disability, amounts paid for medical
care and/or compensatory benefits . . . [and] also render[]
irrelevant any medical records of any worker’s compensation
claimant whose claim might provide a predicate basis for the
assertion of the State’s subrogation rights.
The defendants responded to the Attorney General’s motion and argued that
the Attorney General was making “yet another attempt to avoid answering Defendants’
discovery requests.” Additionally, and for the first time, the defendants argued that
permitting the Attorney General to amend the CCPA claims would be “futile” because
those claims were barred by the relevant statute of limitation, West Virginia Code § 46A-
7-111(2) (1999). That section provides that a circuit court is precluded from imposing a
civil penalty for violations of the CCPA “occurring more than four years before the action
is brought.” The defendants asserted that much of the Attorney General’s evidence
concerned advertising statements made by the defendants in the 1970s and 1980s.
Moreover, the defendants claimed that they stopped making or selling the defective masks
in 1998, five years before the Attorney General filed this suit.
The circuit court conducted a hearing on the Attorney General’s motion to
amend the complaint and sever the CCPA claims in October 2017, and then asked the
parties for additional briefing. After receiving that briefing, the circuit court conducted
another hearing in August 2019.
On October 28, 2019, the circuit court entered an order granting the Attorney
General’s motion to amend the complaint. The circuit court noted that Rule 15(a) of the
7
West Virginia Rules of Civil Procedure provides that permission to amend “shall be freely
given when justice so requires.” The circuit court found that the amended complaint did
not substantively alter the State’s claims and that the defendants would not be unreasonably
prejudiced by the amendment, “given the early procedural posture of this matter.”
In its order, the circuit court also granted the Attorney General’s motion to
sever the CCPA claim from the other tort-based claims, to “serve the dual purposes of
avoiding delay and promoting judicial economy because it will allow the case to proceed
to trial expeditiously by dispensing with certain discovery issues concerning the State’s
common law claims.” The circuit court specifically addressed defendants’ argument that
the Attorney General’s CCPA claims were “futile” and “time-barred.” First, the circuit
court concluded that the defendants’ timeliness argument was based upon factual assertions
outside the pleadings and that extremely limited discovery had, thus far, been conducted
on the issue. The circuit court also noted that any statute of limitation at issue might be
tolled by the discovery rule. Moreover, the circuit court ruled that additional discovery
was needed on the discovery rule question, and determined that the issue “would be more
properly addressed” when the case was mature in a motion for summary judgment pursuant
to Rule 56(c) of the Rules of Civil Procedure.
On January 6, 2020, the defendants filed the instant petition pursuant to this
Court’s original jurisdiction seeking a writ of prohibition to halt enforcement of the circuit
court’s October 28, 2019, order.
8
II. Standard of Review
The defendants argue that the circuit court clearly erred in its interpretation
of West Virginia Code § 46A-7-111(2) and exceeded its jurisdiction when it permitted the
Attorney General to go forward on its CCPA claims. This Court has held that
“[p]rohibition lies only to restrain inferior courts from proceeding in causes over which
they have no jurisdiction, or, in which, having jurisdiction, they are exceeding their
legitimate powers and may not be used as a substitute for [a petition for appeal] or
certiorari.” Syl. pt. 1, Crawford v. Taylor, 138 W. Va. 207, 75 S.E.2d 370 (1953). When
the challenge goes only to a trial court’s abuse of legitimate powers, we apply the following
guide:
In determining whether to entertain and issue the writ of
prohibition for cases not involving an absence of jurisdiction
but only where it is claimed that the lower tribunal exceeded
its legitimate powers, this Court will examine five factors: (1)
whether the party seeking the writ has no other adequate
means, such as direct appeal, to obtain the desired relief; (2)
whether the petitioner will be damaged or prejudiced in a way
that is not correctable on appeal; (3) whether the lower
tribunal’s order is clearly erroneous as a matter of law; (4)
whether the lower tribunal’s order is an oft repeated error or
manifests persistent disregard for either procedural or
substantive law; and (5) whether the lower tribunal’s order
raises new and important problems or issues of law of first
impression. These factors are general guidelines that serve as
a useful starting point for determining whether a discretionary
writ of prohibition should issue. Although all five factors need
not be satisfied, it is clear that the third factor, the existence of
clear error as a matter of law, should be given substantial
weight.
Syl. pt. 4, State ex rel. Hoover v. Berger, 199 W. Va. 12, 483 S.E.2d 12 (1996).
9
The remedy of prohibition is generally not available when the petition for
relief is based upon material facts that are in dispute. “[T]his Court will use prohibition in
this discretionary way to correct only substantial, clear-cut, legal errors plainly in
contravention of a clear statutory, constitutional, or common law mandate which may be
resolved independently of any disputed facts and only in cases where there is a high
probability that the trial will be completely reversed if the error is not corrected in
advance.” Syl. pt. 1, in part, Hinkle v. Black, 164 W. Va. 112, 262 S.E.2d 744 (1979)
(emphasis added).
III. Discussion
In this case, the defendants challenge the circuit court’s interpretation of
West Virginia Code § 46A-7-111(2), which for simplicity we refer to as “Section 111(2).”
That subsection of the CCPA, adopted by the Legislature in 1999, consists of two
sentences. The defendants challenge the circuit court’s interpretation of both of those
sentences. The statute provides:
The Attorney General may bring a civil action against a
creditor or other person to recover a civil penalty for willfully
violating this chapter, and if the court finds that the defendant
has engaged in a course of repeated and willful violations of
this chapter, it may assess a civil penalty of no more than
$5,000 for each violation of this chapter. No civil penalty
pursuant to this subsection may be imposed for violations of
this chapter occurring more than four years before the action is
brought.
10
The defendants assert three reasons that the circuit court’s interpretation of
Section 111(2) was clear error that exceeded its legitimate powers. First, the defendants
argue that the circuit court improperly interpreted the second sentence of Section 111(2) to
permit the statute of limitation to be tolled by a discovery rule. Second, the defendants
assert that the circuit court improperly construed the penalties that can be imposed by a
court under the first sentence of Section 111(2). Third and finally, the defendants claim
that, by severing the CCPA claims, the circuit court has improperly precluded the
defendants from conducting individual discovery regarding the alleged injuries to
thousands of West Virginians, injuries that might be relevant to the amount of civil
penalties imposed by the court under Section 111(2).
We consider these three arguments in turn.
A. The Discovery Rule under the Consumer Credit Protection Act
The defendants argue that the circuit court ignored the clear language of
Section 111(2) and improperly applied a discovery rule. The statute provides that “[n]o
civil penalty pursuant to this subsection may be imposed for violations of this chapter
occurring more than four years before the action is brought.” The defendants argue the
meaning of Section 111(2) is clear: no civil penalty may be imposed for violations of the
CCPA occurring more than four years before the action was brought, regardless of when
those violations were discovered. The defendants maintain that the Attorney General is
pursuing consumer protection claims for violations that allegedly took place in the 1970s
11
and 1980s, and that the facts will plainly show that all of the claims for which the Attorney
General seeks relief occurred more than four years before this case was filed in 2003.
The Attorney General responds that the discovery rule tolls the statute of
limitation contained in Section 111(2). Because the application of the discovery rule is
generally a question of fact, and because no discovery has been conducted on the question
of whether the State’s case is timely, the Attorney General urges that we find that the circuit
court did not err and, therefore, reject the defendants’ petition for a writ of prohibition.
To avoid harsh results from the mechanical application of a statute of
limitation, courts developed and applied the “discovery rule” to equitably toll the limitation
period until after a plaintiff discovers the factual basis of a cause of action. Under the
discovery rule, “a plaintiff’s duty to file suit is not triggered until the plaintiff knows, or by
the exercise of reasonable diligence should have known, of a cause of action against the
defendant.” Dunn v. Rockwell, 225 W. Va. 43, 51, 689 S.E.2d 255, 263 (2009). When a
cause of action is based on fraud, “the statute of limitations does not begin to run until the
injured person knows, or by the exercise of reasonable diligence should know, of the nature
of his injury, and determining that point in time is a question of fact to be answered by the
jury.” Syl. pt. 3, Stemple v. Dobson, 184 W. Va. 317, 400 S.E.2d 561 (1990).
This Court uses the following definition of the discovery rule:
under the discovery rule the statute of limitations begins to run
when the plaintiff knows, or by the exercise of reasonable
diligence, should know (1) that the plaintiff has been injured,
(2) the identity of the entity who owed the plaintiff a duty to
12
act with due care, and who may have engaged in conduct that
breached that duty, and (3) that the conduct of that entity has a
causal relation to the injury.
Syl. pt. 4, Gaither v. City Hosp., Inc., 199 W. Va. 706, 487 S.E.2d 901 (1997). “This
objective test focuses upon whether a reasonable prudent person would have known, or by
the exercise of reasonable diligence should have known, of the elements of a possible cause
of action.” Syl. pt. 4, in part, Dunn, 225 W. Va. at 46, 689 S.E.2d at 258.
In Syllabus Point 5 of Dunn, this Court established a five-step analysis that
courts should undertake in deciding whether an action is precluded by a statute of
limitation:
A five-step analysis should be applied to determine
whether a cause of action is time-barred. First, the court should
identify the applicable statute of limitation for each cause of
action. Second, the court (or, if questions of material fact exist,
the jury) should identify when the requisite elements of the
cause of action occurred. Third, the discovery rule should be
applied to determine when the statute of limitation began to run
by determining when the plaintiff knew, or by the exercise of
reasonable diligence should have known, of the elements of a
possible cause of action. . . . Fourth, if the plaintiff is not
entitled to the benefit of the discovery rule, then determine
whether the defendant fraudulently concealed facts that
prevented the plaintiff from discovering or pursuing the cause
of action. Whenever a plaintiff is able to show that the
defendant fraudulently concealed facts which prevented the
plaintiff from discovering or pursuing the potential cause of
action, the statute of limitation is tolled. And fifth, the court or
the jury should determine if the statute of limitation period was
arrested by some other tolling doctrine. Only the first step is
purely a question of law; the resolution of steps two through
five will generally involve questions of material fact that will
need to be resolved by the trier of fact.
13
225 W. Va. at 46, 689 S.E.2d at 258. The Attorney General suggests that under the third
element of Dunn, the discovery rule prevented the statute of limitation from running on the
CCPA claims. 5
To be clear, the general rule is that the statute of limitation in Section 111(2)
begins to run against the Attorney General when the violation of the CCPA occurs and the
right to file an action has obviously accrued. The defendants assert that the Legislature’s
silence can be construed as intent, and so argue that the absence of a discovery rule in
Section 111(2) establishes that the Legislature clearly intended for no discovery rule to
apply to CCPA actions. But see, Griffith v. Frontier W. Virginia, Inc., 228 W. Va. 277,
285, 719 S.E.2d 747, 755 (2011) (“[L]egislative silence does not constitute statutory
ambiguity.”). They argue that the circuit court plainly erred when it permitted the Attorney
General to go forward and develop evidence regarding whether the discovery rule delayed
the statute of limitation in this case. We disagree.
If the State is not entitled to the benefit of the discovery rule, then the
5
Attorney General suggests that the fourth element of Dunn tolls the statute of limitation,
because the Attorney General intends to show that the defendants fraudulently concealed
facts that prevented the State from discovering or pursuing its CCPA claims. The
defendants do not challenge this argument by the Attorney General. See generally, London
v. Green Acres Tr., 765 P.2d 538, 545-46 (Ariz. Ct. App. 1988) (Under the Arizona
Consumer Fraud Act, “The statute of limitations may be tolled when claims are not timely
brought due to some concealment or wrongdoing on the part of defendants. Since the
defendants here took affirmative action that would cause the barring of the plaintiffs’
claims, the court should not allow defendants to hide behind the statute of limitations.”).
14
Those jurisdictions that have considered this question have found that the
discovery rule does apply to statutory deceptive trade and consumer credit protection law
claims:
[T]he consensus seems to be that a cause of action under a
consumer protection act begins to run from the time the
consumer discovered or reasonably should have discovered
the deception, fraud, or other unlawful conduct. Of course,
even if the consumer discovers the deception or fraud, the
defendant cannot raise the statute of limitations as a defense if
the consumer was effectively prevented from bringing suit
within the limitations period by the continuing fraud or false
statements of the defendant.
1 Howard J. Alperin, Roland F. Chase, Consumer Law Sales Practices and Credit
Regulation § 139 (2020) (emphasis added). 6 See also, Reeves v. Teuscher, 881 F.2d 1495,
Some states explicitly incorporate a discovery rule into their consumer
6
protection acts. See, e.g., Bodin v. B. & L. Furniture Co., 601 P.2d 848, 849 (Ore. 1979)
(“actions under the [Oregon] Unfair Trade Practices Act “shall be commenced within one
year from the discovery of the unlawful method, act or practice.”). In those states that do
not have a statutory rule, a review of the case law reveals that courts still conclude that the
equity-based discovery rule applies:
In accord with the general rule that a statute of limitations
commences to run upon the accrual of the cause of action, that
is, when the cause of action becomes complete so that the
aggrieved party could begin and maintain his lawsuit, the
courts have held that the statute of limitations generally begins
to run on an action under state deceptive trade practice or
consumer protection acts when the cause or right of action has
accrued or arisen. Thus, reasoning that no cause of action
could have accrued before the entire scope of the improper
actions is made known to the defrauded party, . . . the courts
held that the limitations periods in actions based upon
deceptive trade practice or consumer protection statutes
Continued . . .
15
1501 (9th Cir. 1989) (tolling statute of limitation under the Washington Consumer
Protection Act until “the person discovers the facts constituting the fraud. . . . Knowledge
will be inferred if the party in due diligence could have discovered the fraud.”); Tiismann
v. Linda Martin Homes Corp., 610 S.E.2d 68, 69 (Ga. 2005) (Under the Georgia Fair
Business Practices Act, a cause of action “does not accrue within the statute of limitations
until the violation of the statute occurs and plaintiff is entitled to bring an action and seek
a remedy.”); Hermitage Corp. v. Contractors Adjustment Co., 651 N.E.2d 1132, 1135 (Ill.
1995) (When the discovery rule is applied to a state consumer fraud action, it “delays the
commencement of the relevant statute of limitations until the plaintiff knows or reasonably
should know that he has been injured and that his injury was wrongfully caused.”); Nash
v. Motorola Commc’ns & Elecs., Inc., 385 S.E.2d 537, 538 (N.C. App. 1989) (Statute of
limitation for fraud under unfair trade practices act is tolled until “the time the fraud is
discovered or should have been discovered with the exercise of reasonable diligence.”);
Richards v. Powercraft Homes, Inc., 678 P.2d 449, 450 (Ariz. Ct. App. 1983) (Under state
consumer fraud act, “statute of limitations runs from the time the aggrieved party should
have discovered the fraud in the exercise of reasonable care and diligence.”); Spellings v.
commenced to run from the time the complained-of actions
were or should have been discovered.
Jay M. Zitter, “When Statute of Limitations Commences To Run On Action Under State
Deceptive Trade Practice or Consumer Protection Acts,” 18 A.L.R. 4th 1340 § 1 (1982)
(emphasis added). See also, Angela Agee Hatton, “Statutes of Limitations Under the
Deceptive Trade Practices-Consumer Protection Act,” 39 Baylor L. Rev. 293, 299 (1987)
(In Texas consumer protection or deceptive trade practices act cases, “the statute of
limitations begins to run when the injury is first discovered, or should have been
discovered, rather than when the extent of the damages is finally determined.”).
16
Lawyers Title Ins. Corp., 644 S.W.2d 804, 808 (Tex. App. 1982) (Under the deceptive
trade practices act, “[a] cause of action for fraud accrues when the injured party discovers
or should have discovered the fraud.”). See also, Knapp v. Am. Gen. Fin. Inc., 111 F. Supp.
2d 758, 765 (S.D.W.Va. 2000) (applying discovery rule to the West Virginia Unfair Trade
Practices Act).
“The purpose of the CCPA is to protect consumers from unfair, illegal, and
deceptive acts or practices by providing an avenue of relief for consumers who would
otherwise have difficulty proving their case under a more traditional cause of action.” State
ex rel. McGraw v. Scott Runyan Pontiac-Buick, Inc., 194 W. Va. 770, 777, 461 S.E.2d 516,
523 (1995). Hence, we have recognized that the CCPA is a “remedial” statute. Id. “A
remedial statute improves or facilitates remedies already existing for the enforcement or
rights of redress of wrongs[.]” Martinez v. Asplundh Tree Expert Co., 239 W. Va. 612,
618, 803 S.E.2d 582, 588 (2017). “Statutes which are remedial in their very nature should
be liberally construed to effectuate their purpose.” Syl. pt. 6, Vest v. Cobb, 138 W. Va.
660, 661, 76 S.E.2d 885, 887 (1953). Accord, State ex rel. McGraw v. Scott Runyan
Pontiac-Buick, Inc., 194 W. Va. at 777, 461 S.E.2d at 523 (“Where an act is clearly
remedial in nature, we must construe the statute liberally so as to furnish and accomplish
all the purposes intended.”).
In light of these authorities, we conclude that under the West Virginia
Consumer Credit and Protection Act, a cause of action by the Attorney General accrues,
and the statute of limitation in West Virginia Code § 46A-7-111(2) (1999) begins to run,
17
from the time the Attorney General discovers or reasonably should have discovered the
deception, fraud, or other unlawful conduct supporting the action. Determining that point
in time is generally a question of fact.
The Attorney General contends that numerous factual issues exist regarding
when the State knew or should have known that the defendants committed their alleged
violations of the CCPA. Additionally, the Attorney General argues, under Syllabus Point
five of Dunn, that there is evidence that the defendants “fraudulently concealed facts which
prevented the [State] from discovering or pursuing the potential cause of action” under the
CCPA, evidence that would also toll the statute of limitation. The circuit court noted that
the question of whether the statute of limitation in Section 111(2) was tolled by the
discovery rule or by the fraud of the defendants depends on the facts that, as of yet, have
not been explored by the parties in discovery. We concur. Thus, on the record presented,
we conclude that the circuit court’s decision to permit the parties to develop their evidence
and present it anew in competing motions for summary judgment or at trial was not
erroneous.
B. Civil Penalties under the CCPA
The defendants argue that the circuit court improperly interpreted the penalty
provisions of Section 111(2). The defendants assert that this case implicates actions they
committed in the 1970s, 1980s, and 1990s. The defendants contend that the circuit court
is retroactively applying a new, higher penalty adopted by the Legislature in 1999 to
18
violations that predate 1999 in an unlawful and unconstitutional manner. To understand
the defendants’ argument, we must compare the original version of Section 111(2) enacted
in 1974 to the version of the statute adopted in 1999.
In 1974, the Legislature adopted Section 111(2) and provided that, in an
action by the Attorney General under the CCPA, a court “may assess a civil penalty of no
more than five thousand dollars.” See 1974 Acts of the Legislature, ch. 12. We examined
7
this statutory language in State By & Through McGraw v. Imperial Marketing, 203 W. Va.
203, 506 S.E.2d 799 (1998), a case where the Attorney General sought civil penalties
against Suarez Corporation Industries (“Suarez”), a company that mailed thousands of
fraudulent sweepstake solicitations to West Virginians. The circuit court awarded the
Attorney General a permanent injunction to stop the solicitations, as well as “a $500,000
civil penalty against Suarez payable in the event Suarez were to fail to abide by the
injunction order[.]” 203 W. Va. at 208, 506 S.E.2d at 804.
W. Va. Code § 46A-7-111(2) (1974) provided:
7
The attorney general may bring a civil action against a
creditor or other person to recover a civil penalty for willfully
violating this chapter, and if the court finds that the defendant
has engaged in a course of repeated and willful violations of
this chapter, it may assess a civil penalty of no more than five
thousand dollars. No civil penalty pursuant to this subsection
may be imposed for violations of this chapter occurring more
than four years before the action is brought.
19
Suarez appealed in Imperial Marketing and argued that, despite the finding
that Suarez committed thousands of violations of the CCPA, the 1974 version of Section
111(2) limited the circuit court to only imposing one, solitary $5,000 penalty for Suarez’s
entire course of conduct. This Court did not directly address Suarez’s argument. In a per
curiam opinion, the Court set aside the circuit court’s civil penalty because “the silence of
the final order . . . with respect to how the amount of $500,000 was determined . . .
precludes any meaningful review of the penalty by this Court.” 203 W. Va. at 214, 506
S.E.2d at 810. As a separate opinion explained, the Court took issue “not [with] the amount
of the penalty, but the lack of explanation as to how the penalty was determined.” 203 W.
Va. at 219, 506 S.E.2d at 815 (Starcher, J., concurring).
The separate opinion in Imperial Marketing also directly addressed Suarez’s
argument (and the argument of the defendants in this case) that Section 111(2) “only
authorizes one, total civil penalty of $5,000.00 upon a finding that a sweepstakes solicitor
has ‘engaged in a course of repeated’ violations.” 203 W. Va. at 219, 506 S.E.2d at 815.
The opinion flatly rejected the proffered interpretation of Section 111(2), explained that
the statute “clearly assumes that a civil penalty may be imposed for each, individual
violation of the Consumer Credit and Protection Act,” and cited cases from other
jurisdictions that “consistently held that a civil penalty may be imposed for each individual
violation of a consumer protection statute.” Id. Suarez had committed at least 17,563
separate violations of the CCPA, and so the separate opinion made the following
suggestion to the Legislature:
20
[E]ven though Suarez bilked West Virginia consumers out of
$975,389.02 through repeated, willful conduct, it argues it
should only have to pay one $5,000.00 fine. As the majority
opinion suggests, there is a facial appeal to this argument
because the statute says a circuit court may impose a “civil
penalty of no more than five thousand dollars,” and does not
clearly say the court can assess a “civil penalty of no more than
five thousand dollars for each violation of this chapter.” The
Legislature should act to clarify W.Va.Code, 46A-7-111(2)
with the addition of the italicized text, so that this insulting
argument does not rear its ugly head in the future.
Id. 8
The concurring opinion pointed out the absurd result that is compelled by
8
the argument that only one penalty could be imposed per case under Section 111(2):
I do not believe that Suarez has thought its argument
through to its logical conclusion. Assuming Suarez’s argument
was correct, to avoid the argument in this case the Attorney
General would have had to file 17,563 separate lawsuits to
maintain an action for civil penalties for each violation. Since
this one lawsuit has generated enough paperwork to fill two
bankers boxes, 17,563 lawsuits would likely have a similar
result—thereby filling the courthouse with over 35,000 boxes
of paper. Additionally, the Attorney General would, as in this
one single case, be entitled to collect the attorneys’ fees and
costs incurred from the extra work necessary to the filing and
prosecution of these extra lawsuits. This is to say nothing for
the extra litigation costs that Suarez would have incurred, and
would have added a considerable sum to the $87,815,000.00
fine that the circuit court could have imposed in the 17,563
lawsuits. I do not believe that the Legislature intended such a
complicated or expensive result.
State By & Through McGraw v. Imperial Mktg., 203 W. Va. at 219 n.6, 506 S.E.2d at 815
n.6.
21
It appears that the Legislature accepted the Court’s 1998 invitation to clarify
Section 111(2), because in 1999, the Legislature added the precise language suggested in
Imperial Marketing. Section 111(2) was modified from providing that a circuit court “may
assess a civil penalty of no more than five thousand dollars” to its current language: a
circuit court “may assess a civil penalty of no more than five thousand dollars for each
violation of this chapter.” W.Va. Code § 46A-7-111(2) (1999).
In the instant case, the defendants misread our decision in Imperial
Marketing. They claim that this Court accepted Suarez’s argument and definitively ruled
that, under the 1974 version of Section 111(2), a trial court could impose only a single
penalty of up to $5,000 for an entire course of willful violations of the CCPA. From this
faulty supposition, the defendants assert that for a widespread pattern of violations of the
CCPA before the 1999 amendment to Section 111(2), only a single penalty could be
imposed; and that after the 1999 amendment, multiple penalties could be imposed, one for
each willful violation. The defendants therefore conclude that any ruling by the circuit
court in this case imposing penalties for each violation must be a retroactive application of
the 1999 amendment.
The defendants, unfortunately, misunderstand the Court’s opinion in
Imperial Marketing. Again, the Court never reached the holding suggested by the
defendants; it merely set aside the circuit court’s civil penalty order because the order
contained no reasoning that showed how the suspended penalty was calculated. The
separate opinion explained the fallacy with the exact argument that is now being proffered
22
by the defendants, and demonstrated that the 1974 version of Section 111(2) did, in fact,
permit imposition of a civil penalty up to $5,000 for each and every proven, willful
violation of the CCPA. 9 The Legislature simply amended Section 111(2) in 1999 to clarify
this conclusion so that future defendants – like the defendants in this case – would not make
the same argument that the defendant made in Imperial Marketing.
10
9
As one consumer protection law treatise notes, this is the general rule:
While the argument could be made that a penalty should be
assessed only for each separate type of deceptive trade
practice, no matter how many times it is repeated with different
consumers, most courts will assess a separate penalty for each
transaction that involves an unlawful method, resulting
sometimes in a rather large multiplication of the penalty.
Dee Pridgen & Richard M. Alderman, Consumer Protection and the Law § 7:19 (2019).
Another treatise on consumer protection law reaches the same conclusion:
The amount of the civil penalty which may be recovered
. . . varies from state to state, but most state acts authorize
imposition of a civil penalty in the range of $5000 to $10,000,
with some as high as $25,000. Thus, the civil penalty is used
to deter future violations of the act in most states, and in some
states to punish for past violations. The court has discretion in
assessing the maximum amount of the penalty, but in those
cases where there are numerous individual violations, as where
false advertising is repeated over a long period of time, or
where many consumers are defrauded, the accumulated
penalties can be rather steep.
1 Howard J. Alperin, Roland F. Chase, Consumer Law Sales Practices and Credit
Regulation § 159 (2020).
This Court reached a similar conclusion interpreting a comparable statute
10
in Darby v. Davis Coal & Coke Co., 74 W. Va. 295, 81 S.E. 1124 (1914). There, a statute
prohibited a landowner or tenant from “removing coal within 5 feet of the line dividing
said land from that of another,” and imposing “a penalty of $500 from any person violating
Continued . . .
23
Accordingly, we find no clear error in the circuit court’s decision to permit
the parties to proceed with discovery on the Attorney General’s request for civil penalties
under Section 111(2) for each violation of the CCPA that the defendants may allegedly
have committed.
C. Discovery Issues
The Attorney General asserts that the defendants violated the CCPA when
they engaged in “unfair or deceptive acts or practices in the conduct of any trade or
commerce” within the State of West Virginia. W. Va. Code § 46A-6-104 (1974). West
Virginia Code § 46A-6-102(7) (2015) contains sixteen definitions of “[u]nfair methods of
competition and unfair or deceptive acts or practices,” including this one:
(M) The act, use or employment by any person of any
deception, fraud, false pretense, false promise or
misrepresentation, or the concealment, suppression or
omission of any material fact with intent that others rely upon
such concealment, suppression or omission, in connection with
the sale or advertisement of any goods or services, whether or
not any person has in fact been misled, deceived or damaged
thereby[.]
said section.” Id. The defendant removed coal from within five feet of the line in three
different places, and the plaintiff sought three separate penalties. “Counsel for the
defendant insist that they constitute but one violation of the statute.” Id. This Court
rejected the defendant’s interpretation, holding that “a fair interpretation of the statute
makes each encroachment a separate wrong and gives plaintiffs a right of action for as
many different penalties.” 74 W. Va. at 297, 81 S.E. at 1125.
24
W. Va. Code § 46A-6-102(7)(M) (emphasis added). The circuit court concluded that this
highlighted language prevents “any inquiry into any issue other than whether or not the
[d]efendants engaged in conduct that was determined to be in violation of that statute.”
The defendants argue that, with this one sentence, the circuit court committed
clear error and violated ideals of fundamental fairness because it “severely narrowed the
scope of evidence that Defendants could develop and present” in defending against the
Attorney General’s CCPA claims. The defendants concede that under Section 111(2) a
circuit court can impose a civil penalty if it “finds that the defendant has engaged in a
course of repeated and willful violations of” the CCPA. W. Va. Code § 46A-7-111(2).
The defendants maintain, however, that the circuit court’s calculation of the amount of the
civil penalty requires findings regarding the consequences triggered by the defendants’
actions. For a circuit court to make proper findings of fact to support a civil penalty, the
defendants contend they should be permitted to conduct discovery and present evidence on
the degree of harm their actions caused, like learning how many of their respirators were
actually used by workers or how many workers saw or relied on the defendants’ alleged
misrepresentations.
The Attorney General responds that the defendants’ argument ignores the
plain language of the CCPA, which imposes liability for misrepresentations “whether or
not any person has in fact been misled, deceived or damaged thereby[.]” W. Va. Code §
46A-6-102(7)(M). The Attorney General asserts that the amount of civil penalties under
25
the CCPA depends upon the deliberateness of the actions by the defendants, not upon the
consequences resulting from those actions.
Section 111(2) vests the circuit court with discretion to impose penalties for
willful violations as it deems appropriate under the circumstances of each case. See, e.g.,
State v. Cardwell, 718 A.2d 954, 964 (Conn. 1998) (the Connecticut Unfair Trade Practices
Act “vest[s] the trial court with discretion to award relief and impose penalties as it deems
appropriate under the circumstances of each case.”). The focus of civil penalties under
Section 111(2) of the CCPA is on the specific conduct of the defendant against whom civil
penalties are sought. The CCPA is intended to deter deceptive practices and to protect
West Virginia consumers from fraud, and the goal is to protect the public as a whole. As
one state court found in interpreting a similar civil penalty statute, “Because the CCPA’s
civil penalty requirement is intended to punish and deter the wrongdoer and not to
compensate the injured party, the CCPA is intended to proscribe deceptive acts and not the
consequences of those acts.” May Dep’t Stores Co. v. State ex rel. Woodard, 863 P.2d 967,
972 (Colo. 1993).
“This Court is not at liberty to read into a statute that which simply is not
there.” Kasserman & Bowman, PLLC v. Cline, 223 W. Va. 414, 421, 675 S.E.2d 890, 897
(2009). Accord, Banker v. Banker, 196 W. Va. 535, 546-47, 474 S.E.2d 465, 476-77 (1996)
(“It is not for this Court arbitrarily to read into [a statute] that which it does not say. Just
as courts are not to eliminate through judicial interpretation words that were purposely
included, we are obliged not to add to statutes something the Legislature purposely
26
omitted.”) The extensive individualized discovery that the defendants wish to pursue is,
under the clear terms of West Virginia Code § 46A-6-102(7)(M), irrelevant to the State’s
CCPA claim and to the defendants’ defense. The civil penalties sought in the Attorney
General’s CCPA claim are intended to punish the defendants for engaging in allegedly
deceptive acts, and to deter future similar unlawful acts. If the circuit court imposes civil
penalties under Section 111(2), it will, within its discretion, base them solely upon whether
the defendants’ actions constituted “a course of repeated and willful violations,” and not
upon the consequences of those actions. It therefore cannot be a denial of fundamental
fairness or due process if the circuit court narrows the issues for trial, and precludes the
parties from conducting discovery on irrelevant matters regarding the effects of the
defendants’ actions, effects such as whether individual West Virginia workers were “in
fact . . . misled, deceived, or damaged” by the defendants’ alleged misrepresentations.
The circuit court’s reasoning adroitly focuses the parties’ attention upon the
goal of the CCPA, which is to protect consumers from unfair or deceptive acts or practices.
The order avoids expensive, irrelevant, and unnecessary discovery about “whether or not
any person has in fact been misled, deceived or damaged” by those acts or practices. We
see no error in the circuit court’s interpretation of the CCPA.
IV. Conclusion
The circuit court’s October 28, 2019, order does nothing more than allow a
routine amendment to the Attorney General’s complaint, and a routine severance of issues
27
for discovery and trial. We see nothing in the order to compel the conclusion that the trial
court has no jurisdiction or, having such jurisdiction, exceeded its legitimate powers.
Accordingly, we must deny the defendants’ petition for a writ of prohibition.
Writ denied.
28