COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 661
(By Senators Fanning and Ross)
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[Originating in the Committee on the Judiciary;
reported April 3, 2001.]
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A BILL to amend and reenact section one, article eleven-a, chapter
four of the code of West Virginia, one thousand nine hundred
thirty-one, as amended; and to further amend said article by
adding thereto two new sections, designated sections four and
five, all relating to providing a limit of two hundred million
dollars on the maximum appeal bond that can be required in
litigation in which an appellant is a signatory to a tobacco
settlement; providing for applicability; and exceptions.
Be it enacted by the Legislature of West Virginia:
That section one, article eleven-a, chapter four of the code
of West Virginia, one thousand nine hundred thirty-one, as amended,
be amended and reenacted; and that said article be further amended
by adding thereto two new sections, designated sections four and
five, all to read as follows:
ARTICLE 11A. LEGISLATIVE APPROPRIATION OF TOBACCO SETTLEMENT FUNDS
§4-11A-1. Legislative findings and purpose.
(a) On the twenty-third day of November, one thousand nine
hundred ninety-eight, tobacco product manufacturers entered into a
settlement agreement with the state. This "master settlement
agreement" releases those manufacturers from past, present and
specific future claims against them in return for payment of annual
sums of money to the state, obligates the manufacturers to change
their advertising and marketing practices and requires the
establishment by the manufacturers of a national foundation for the
interests of public health.
(b) The revenues received pursuant to the master settlement
agreement are directly related to the past, present and future
costs incurred by the state for the treatment of tobacco-related
illnesses. The purpose of this article is to preserve the revenues
received from the settlement.
(c) The receipt of funds in accordance with the master
settlement agreement shall be deposited only in accordance with the
provisions of this article.
(d) West Virginia receives approximately seventy million
dollars in revenue each year under the terms of the master
settlement agreement with the tobacco manufacturers. This revenue
is used to fund programs of vital importance to the people of West Virginia, and the Legislature finds that it is in the best interest
of the people of this state to protect these revenues.
§4-11A-4. Limitation on appeal bond.
The bond that any appellant who is a signatory or a successor
to a signatory of the master settlement agreement may be required
to post to stay execution on a judgment during an appeal in any
cause of action shall be set in accordance with the provisions of
section fourteen, article five, chapter fifty-eight of this code
and the West Virginia rules of civil procedure: Provided, That an
appeal bond may not exceed one hundred million dollars for
compensatory damages and one hundred million for punitive damages
unless the appellee proves by a preponderance of the evidence that
the appellant or appellants are purposefully dissipating or
diverting assets outside of the ordinary course of its business to
the effect that the ability to pay the ultimate judgment is
impaired. For purposes of this section, multiple judgments
resulting from cases that have been consolidated or aggregated for
purposes of trial proceedings shall be treated as a single
judgment.
§4-11A-5.Applicability.
The provisions of section four of this article apply to all
actions pending in the courts of this state on the effective date
of this section and to any action filed in this state on or after the effective date.
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(NOTE: The purpose of this bill is to protect the state's
stream of revenue from tobacco companies under the master
settlement agreement and related settlement agreements by placing
a limit on the maximum appeal bond that must be posted by the
tobacco companies to stay execution on a judgment during the
pendency of an appeal.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
§§4-11A-4 and 5 are new; therefore, strike-throughs and
underscoring have been omitted.)