Plaintiff attorneys are wasting no time taking advantage of unified Democratic control of Richmond. The stakes for Virginians are high as many Democrats seek to turn the state into Illinois on the Potomac. Will Gov. Abigail Spanberger check her Legislature's anti-business instincts?
An early test is how she addresses a flurry of bills that would unleash trial attorneys. One bill would establish a procedure for bringing class actions in state courts. Virginia is among the few states that don't allow plaintiffs to bring class actions alleging violations of state law in state court. This is one of the state's biggest draws for businesses.
The legislation is the first part of a one-two punch. House of Delegates Speaker Don Scott, a partner in one of the state's most prominent plaintiff firms, and his trial bar allies are also spearheading legislation that would increase the cap on bonds that defendants are required to post in order to appeal a verdict in a damage lawsuit to $200 million from $25 million.
This would limit the ability of many businesses to appeal unfair or excessive judgments and encourage them to settle with plaintiffs to prevent a potentially jackpot verdict that would be too costly to appeal. The legislation's goal is to deny defendants the right to appeal and legal due process, which is protected by the U.S. Constitution.
Recall how New York Attorney General Letitia James tried to stop Donald Trump from appealing a dubious civil fraud verdict by demanding he post a $454 million appeal bond. An appeals court later reduced the bond to $175 million. New York is an outlier because it lacks a bond cap, but most states set caps between $25 million and $50 million.
Small businesses slapped with hefty damages, regardless of the merit of the claims, might have no choice except to file for bankruptcy. An increased bond requirement could also force larger businesses to settle for awards far larger than they otherwise might agree to since they have to weigh the higher costs of appeal. Springtime for trial attorneys could be around the corner.
The legislation is likely to be a priority in the statehouse. Former GOP Gov. Glenn Youngkin vetoed similar bills, and plaintiff attorneys are lobbying hard. Mr. Scott recently hired his legal partner Jeffrey Breit as his chief-of-staff. Senate majority leader Scott Surovell and minority caucus chair Mark Obenshain are also plaintiff lawyers.
Ms. Spanberger campaigned as a moderate on a gauzy platform of improving "affordability." Making it easier for plaintiff attorneys to raid businesses will increase costs for Virginians and set the state on a slippery slope to Springfield.