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That system – in which litigants don't always have the ability to appeal nine-figure punitive awards and elected appellate judges sometimes choose not to recuse themselves from cases involving their top campaign contributors and vacation companions – could come under the scrutiny of the U.S. Supreme Court this term.

The high Court will consider whether to take up three large West Virginia punitive damages cases. Two involve multi-million dollar verdicts that the Supreme Court of Appeals of West Virginia – the state's only appellate court – declined to review.

A third involves a large punitives award that the state's high court did review and reverse. But the decision came under fire because of the involvement of one member of the court with the victorious party.

The losers in all three cases are now appealing to the U.S. Supreme Court to weigh in on a state system they claim is a breeding ground for due process violations.

"The system in West Virginia allows cases in which substantial punitive damages judgments are imposed to go unreviewed," said attorney Andrew Frey. Frey is a partner at the New York office of Mayer Brown and filed the certiorari petition in one of the cases, Central West Virginia Energy Co. v. Wheeling-Pittsburg Steel, No. 08-217.

Thriller plotlines

The facts in these cases read like the plotlines of paperback legal thrillers.

In one, Caperton v. A.T. Massey Coal Co., 08-22, the CEO of Massey Coal contributed $3 million to the election campaign of state Supreme Court of Appeals Justice Brent Benjamin while the company was preparing to appeal a $50 million verdict against it. The contribution was more than half the total amount spent on the campaign.

Benjamin won a seat on the court, but rejected a motion to recuse himself from considering the company's appeal, even though he had also been photographed vacationing with the CEO on the French Riviera.

He later cast the deciding vote in the court's 3-2 decision overturing the verdict against the company.

Veteran Supreme Court litigator and former U.S. Solicitor General Theodore Olsen, now a partner at the Washington, D.C. office of Gibson, Dunn & Crutcher, represents the opposing party.

He said the issue of elected justices ruling on the cases of campaign contributors is one the Supreme Court needs to hear, especially because judges are elected in 39 states.

"The improper appearance created by money in judicial elections is one of the most important issues facing our judicial system today," Olson said. "A line needs to be drawn somewhere to prevent a judge from hearing cases involving a person who has made massive campaign contributions to benefit [that] judge."

In both Wheeling-Pittsburg and a third case, NiSource v. Tawney, No. 08-229, large punitive damage awards are also in dispute.

In Wheeling-Pittsburg, $100 million of the $219 million verdict was punitive. In Tawney $270 million of the $404 million verdict was in punitive damages.

In both cases, the state appellate court denied petitions for appeal without comment and without a hearing, although justices with connections to the parties did recuse themselves. The losing parties claim that these high punitive awards should not be allowed in contract disputes, and that the lack of review constitutes a due process violation.

In all but two states – West Virginia and Virginia – losing parties can appeal as of right under either the state constitution or a state statute.

But while Virginia does not provide for an appeal as of right, there is a $350,000 statutory cap on punitive damages awards.

That leaves West Virginia as the only state where multi-million-dollar punitive awards may be denied review.

"The outlier status of West Virginia is important" in the U.S. Supreme Court's determination of whether to take these cases, Frey said.

"In due process cases, the Supreme Court looks at tradition [and] practices that depart from tradition and from the norms of what of what is considered fair in most legal systems today," he said.

Jeffrey V. Mehalic, a litigator and appellate attorney in Charleston, W. Va., has been closely following these cases on his West Virginia Business Litigation blog.

He said that out-of state or federal litigators who are used to appealing as of right are often taken aback by the state's appellate system.

"If this is all that you have known, it doesn't seem as odd or as daunting as if you've practiced elsewhere," Mehalic said. "But it really is a shock to lawyers from other jurisdictions [when] they realize that no matter how aggrieved their client may be by the result of a verdict, there is no review as a matter of right."

The U.S. Supreme Court is expected to decide whether to take up these cases by December.

Look for updates on Lawyers USA's website and on our blog, DC Dicta.

Questions or comments can be directed to the writer at kimberly.atkins@lawyersusaonline.com