United States District Court, S.D. West Virginia, Charleston
WEST VIRGINIA HOSPITALITY AND TRAVEL ASSOCIATION, INC., a West Virginia Not-for-Profit corporation, on behalf of all of its adversely affected members, and as assignee of certain of its adversely affected members, Plaintiff,
AMERICAN WATER WORKS COMPANY, INC., a Delaware corporation; AMERICAN WATER WORKS SERVICE COMPANY, INC., a New Jersey corporation; WEST VIRGINIA-AMERICAN WATER COMPANY, a West Virginia corporation; EASTMAN CHEMICAL COMPANY, a Delaware corporation; and GARY SOUTHERN, an individual, Defendants.
MEMORANDUM OPINION AND ORDER
T. COPENHAVER, JR. UNITED STATES DISTRICT JUDGE
is plaintiff West Virginia Hospitality and Travel
Association, Inc.'s ("Hospitality") petition
for a prejudgment order of attachment for certain real
property of defendant Gary Southern, filed November 11, 2016.
court recently recited the facts of this case as it pertains
to Southern in the order denying Hospitality's motion for
partial summary judgment, entered March 15, 2018. Reproducing
those facts here would be needlessly duplicative, and, for
present purposes, the following summary will suffice.
January 9, 2014, a liquid mixture containing crude
methylcyclohexanemethanol ("MCHM"), which is itself
a mixture comprised of 1% methanol, leaked from tanks owned
by Freedom Industries, Inc. ("Freedom"), into the
Elk River near Charleston, West Virginia. (ECF #103, at 2.)
The MCHM traveled downstream, penetrated the filtration
system of a West Virginia American Water ("American
Water") plant, and entered the water supply of customers
across nine counties. (Id. 2-3.) American Water thus
issued a "Do Not Use Order" that prohibited water
service for nine days. (Id.)
served on Freedom's board of directors from March 2010 to
December 2013, at which time he became the company's
president. (Id. 3.) Hospitality is a West Virginia
not-for-profit comprised in part of businesses impacted by
the MCHM leak. (Id. 6.) Hospitality, on behalf of
its adversely-impacted members and as assignee of the claims
of some of those members, claims that it suffered and
continues to suffer economic and non-economic harms stemming
from the MCHM leak. (Id.) Regarding Southern,
Hospitality contends that Southern is jointly and severally
liable for at least $12 million in damages and costs.
(Affidavit of Carol Fulks in Support of Attachment
("Fulks Aff.") ¶¶ 4, 7; Affidavit of
Buddy Butler in Support of Attachment ("Butler
filed the pending petition on November 11, 2016, seeking
prejudgment attachment of Southern's real property
pursuant to Federal Rule of Civil Procedure 64 and chapter
38, article 7 of the West Virginia Code. (Pet. 3.)
Specifically, Hospitality petitions the court to authorize
the issuance of an order of attachment for two properties
belonging to Southern in Marco Island, Florida, where
Southern is a resident. (Fulks Aff. ¶ 6.) Southern
objects to the attachment, insisting that West Virginia's
attachment statute lacks extraterritorial reach and that, at
any rate, attachment is unnecessary. For reasons stated
below, the court agrees that the state's attachment
statute cannot reach out-of-state property, and
Hospitality's petition must be denied.
to Federal Rule of Civil Procedure 64, a federal court
litigant may utilize the attachment statute of "the law
of the state where the court is located." In West
Virginia, "[t]he remedy by attachment, being authorized
alone by statute and in derogation of the common law, and,
moreover, being summary in its effects and liable to be
abused and used oppressively, its application will be
carefully guarded by the courts and it will be confined
strictly within the limits prescribed by the statute."
DeLung v. Baer, 118 W.Va. 147, 189 S.E. 94, 95
(1936) (quoting Delaplain & Co. v. Armstrong &
Ulrich, 21 W.Va. 211, 213 (1882)). A plaintiff in West
Virginia seeking "to recover damages for any wrong"
may file an affidavit requesting prejudgment attachment of a
defendant's property, W.Va. Code § 38-7-1, including
real property, id. § 38-7-7.
grounds upon which an order of attachment may issue"
include, inter alia, "[t]hat the defendant . .
. is a nonresident of" West Virginia. Id.
§ 38-7-2(a). Hospitality pursues attachment on this
ground because Southern is a Florida resident. (Pet. 9; Fulks
Aff. ¶ 5.) As earlier noted, Hospitality seeks to attach
Southern's two properties located there. (Fulks Aff.
argues that West Virginia's attachment statute has no
extraterritorial reach such that Hospitality cannot use it to
attach his out-of-state property. (See Obj. 3-8.)
The court agrees. While there is no case from West
Virginia's highest court precisely on point, there is
ample authority by that court to support the principle that
prejudgment attachment of real property located in another
state is not within the jurisdiction of a court situated in
this state even though the court, as here, has personal
jurisdiction of the defendant against whom the prejudgment
attachment is sought.
Pennsylvania Railroad Co. v. Rogers, the Supreme
Court of Appeals of West Virginia "observed that courts
have no extraterritorial jurisdiction over either persons or
property in attachment suits." 52 W.Va. 450, 44 S.E.
300, 302 (1903). The Supreme Court of Appeals continued:
Jurisdiction over persons and property in any state is
confined to the persons and property within the territorial
bounds of the state. No court within it can exercise
jurisdiction beyond it. To exercise it over persons or
property in another state would be an unwarrantable
assumption and arrogation of unlawful authority, entitled to
no respect on the principle of comity, but meriting rebuke
and resistance as a wanton abuse of power. A judgment
rendered in any state against a person or property over which
the court has no jurisdiction is not entitled to full faith
and credit in other states, but its validity may be
questioned on jurisdictional grounds, and its enforcement
resisted; for, not being by due process of law, it is
entitled to no regard, even in the state where it is
rendered; and it may be impeached collaterally anywhere.
Id. (internal quotation marks omitted) (quoting
Waples on Attachment § 648). By the same token it is
held that a circuit court of this state "can obtain
jurisdiction by attaching the property of a nonresident
debtor located in the county." Gee v. Gibbs,
162 W.Va. 821, 824-26, 253 S.E.2d 140, 142-43 (1979); see
also Atkins v. Evans, 76 W.Va. 17, 84 S.E. 901, 901-02
(1915) ("Though the court may have jurisdiction of the
parties in the main action, it must also acquire a
jurisdiction over the property or debt sought to be ...