Fourth Circuit Certifies Business Conspiracy Question To Virginia Supreme Court

Virginia Lawyers Weekly reports that the Fourth Circuit is asking the Virginia Supreme Court to answer two questions about the interpretation of Virginia's Business Conspiracy Statute.

The first question is whether an allegation of tortious interference with contract or business expectancy can serve as the basis for a statutory conspiracy claim.  The second question is whether a two-year or five-year limitations period applies to a tortious interference claim.

The case, Dunlap v. Cottman Transmissions Systems, LLC, was brought by the owner of a transmission shop who alleged that local competitors and others conspired to get a franchisor to force him out of business.  The Eastern District of Virginia dismissed the lawsuit, and the shop owner appealed.  Instead of addressing the issues on appeal, the Fourth Circuit decided that it would be best to ask the Virginia Supreme Court to answer the unresolved questions of state law pursuant to Rule 5:40 of the Rules of the Supreme Court of Virginia.

Interestingly, the Fourth Circuit panel that issued the ruling included former Supreme Court Justice Sandra Day O'Connor, who was sitting on the panel by designation.  In this day and age, Supreme Court Judges are frequently accused of judicial activism by those who disagree with their rulings.  Justice O'Connor's decision to certify a question to a state court instead of resolving it herself is perhaps the epitome of judicial restraint and moderation.

The issues raised in this case are interesting and noteworthy for attorneys practicing business litigation.  There is generally a lack of case law regarding statutory business conspiracy claims.  I recently had a case in state court that involved similar issues, but the claims against my clients were dismissed without the court having to resolve these questions.

The Fourth Circuit's opinion explained why it was certifying these two issues thusly:

The reason to certify the first issue is straightforward: The Virginia Supreme Court’s recent decision in Station #2 signals obvious skepticism about business conspiracy claims predicated on contract disputes, but we are unable to ascertain with certainty how far that skepticism extends.

On the one hand, Station #2 clearly represents an important change in Virginia’s business conspiracy law, and we agree with the district court that this case raises concerns of the kind addressed there.

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On the other hand, there are plausible reasons to limit Station #2’s holding to actual breach of contract claims, and to distinguish tortious interferences with contract or business expectancy.

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The reason to certify the second question is even more straightforward: The question which statute of limitations to apply to tortious interference claims is a pure legal issue that has not been settled by the Virginia Supreme Court. Virginia applies a two-year statute of limitations to claims regarding personal injuries and a five-year statute of limitations to claims regarding injuries to property. See, e.g., Willard, 262 Va. at 478. But that distinction can be hard to draw, and the Virginia Supreme Court has previously disagreed with how this Circuit has attempted to articulate it. See id. at 479 (rejecting the test applied in Brown v. Am. Broad. Co., 704 F.2d 1296, 1303-04 (4th Cir. 1983)). As with the previous issue, we believe that this question at bottom concerns an ambiguity in the Virginia Supreme Court’s recent precedent that is best resolved by that Court.