Everyone by now has probably heard of (and hopefully been outraged by) the multi-million dollar lawsuit filed by a West Virginian against McDonalds. Apparently they failed to hold the cheese on his burger.
West Virginia has a sad reputation in the business world as a "judicial hell-hole." The State Legislature has repeatedly failed to tighten up West Virginia's legal system. This results in a condition where corporations have to spend millions to fight frivolous lawsuits. Some simply decide to bypass the state altogether.
One almost did so. Oklahoma City based Chesapeake Energy planned to build its Eastern Division headquarters in Charleston. This would spearhead its efforts to develop West Virginia's natural gas resources. However a Roane County court awarded $404 million in damages to a group of people who claimed Columbia Gas shortchanged them in royalties. $134 million was for actual damages while $270 million was assessed to punish the company.
This verdict nearly convinced Chesapeake to bypass West Virginia. Governor Joe Manchin promised to convince the legislature to pass laws addressing royalty payments. The governor's entreaties seemed to work and Chesapeake plans to move into its new headquarters in 2009. It is obvious that businesses want to invest here and will come even if the governor only promises to try to help. Imagine what real tort and tax reform would do for the State of West Virginia.
Chesapeake Energy's move into Charleston does have benefits for all West Virginians. They will employ a substantial number of people in high paying jobs. Corporate headquarters will bring in white collar employment while developing the gas fields will increase opportunities for blue collar workers. The increased tax receipts and market ripple effects will strengthen the state as a whole. If Chesapeake has a positive experience in Charleston, that could convicne other corporations to locate major operations in West Virginia. The state has to approach this opportunity intelligently and use increased tax revenues due to Chesapeake Energy to benefit home grown business owners. Only with native capital and industry can West Virginia truly build a sound economy.
And only with a business friendly tort and tax system can we have a prosperous future. A Republican State Legislature is necessary for West Virginia to even start to pursue real reforms that will give us a strong and diverse economy. In a recent special session, Democrats in the State Legislature blocked the Manchin backed billto correct the royalty issue. Democrat Carrie Webster of Kanawha County among others expressed pride in their non-passage of this bill that will mean many new jobs in the state. No one should be surprised because Democrats have blocked development and investment in West Virginia for almost three generations now, even when urged to by more moderate members of their own party!
Without a Republican Legislature, West Virginia will continue to struggle. Period.
No comments:
Post a Comment