West Virginia recently passed two common sense reform bills. HB 2678 drops pre- and post-judgment interest to an annually determined simple interest rate based on the Federal Reserve discount plus 2%, with a floor of 4% and a cap of 9%. HB 2850 provides protections for product retailers, dealers, and other non-manufacturer sellers against product liability claims.

Prior to HB 2678’s reforms, West Virginia required lawsuit defendants to pay interest at the Federal Reserve secondary discount rate plus 3%, but with interest at a minimum of 7%.  This arbitrary minimum interest rate had no connection to the current real-world economic reality and served as a damages windfall to plaintiffs and a penalty to defendants. HB 2678, signed into law March 30, 2017, reforms the interest calculation to require an annually determined simple interest rate using the Fifth Federal Reserve District’s secondary discount rate in effect on January 2 of each year plus 2%, with a floor of 4% and a cap of 9%. This reform brings West Virginia’s interest calculation back to reality and effectively serves the true purpose of pre- and post-judgment interest, which is to compensate a plaintiff for the lost time value of their expenditures during litigation. This reasoned reform in West Virginia continues the legislative trend across the country to bring pre- and post-judgment interest rates in line with real world marketplace conditions.

HB 2850, signed in to law April 26, 2017, protects plaintiffs from dragging retailers, dealers, and other non-manufacturer sellers into product liability lawsuits. HB 2850 still allows plaintiffs to sue sellers if they have some culpability, as delineated in the bill, that would suggest they should be a party to the action. Prior to HB 2850, sellers were often defendants in product liability lawsuits where they simply sold a product to a buyer and played no true role in the dispute. Nonetheless, sellers were required to incur legal fees and other litigation expenses to defend themselves against these arbitrary claims. This placed an undue burden on seller businesses and took their attention away from effectively running their businesses. After the passage of HB 2850, plaintiffs will still be able to bring their claims against their true targets, manufacturers. However, Innocent sellers are now spared the expense and stress of defending against product liability claims to which they have no true role. This common sense legislation will prevent plaintiffs from forum shopping by bringing litigation, truly targeted against manufacturers, in plaintiff friendly jurisdictions where the innocent seller is the only connection.

Both of these bills are a step in the right direction by the West Virginia Legislature. Defendants no longer have to worry as much that the juice is running on plaintiff’s expenditures while a case is being litigated. Innocent sellers of products can now focus their time, money, and attention on effectively running their businesses and contributing to the West Virginia economy rather than worrying about becoming parties to product liability lawsuits really aimed at manufacturers.  Both bills make common sense and sense for West Virginia.