Roiled State Supreme Court to Review Taxation of Major Industry
(Originally Published by Tax Analysts: "Roiled State Supreme Court to Review Taxation of Major Industry," State Tax Notes, Nov. 19, 2018, pp. 691-698.)
By Michael E. Caryl
In West Virginia, an important legal battle over the methods for taxation of a major industry is soon to be waged before the state’s supreme court, whose own institutional turmoil is the subject of daily media reports. In five essentially identical cases  from four counties,  the state tax commissioner and county tax authorities are asking the court to reverse the holdings of those counties’ circuit court business court divisions.  The lower court decisions overruled as excessive, arbitrary, and lacking constitutional uniformity the commissioner’s ad valorem property tax assessments for natural gas wells owned by two of the state’s major producers. 
At the same time, the state supreme court is in a historically unique state of flux because of the West Virginia Legislature’s recent adoption of articles of impeachment against every justice; federal felony convictions against two of them; charges by the Judicial Investigation Commission against one of them; and the concurrent suspension, retirement, or resignation of three of the justices.  However, before exploring the substantive merits of the cases, the applicable rules and historic patterns of judicial review, or the court’s own drama, a summary of the cases’ backgrounds is in order.
In the consolidated cases, the business court divisions held that the assessed (taxable) values of the taxpayers’ natural gas wells in the respective counties exceeded the values mandated by law.  The taxable values were first set by the state tax commissioner, approved by the respective county assessors, and affirmed by the respective county commissions sitting as boards of assessment appeals. 
In each case, the business court held that the commissioner’s appraisal practices of imposing a maximum fixed dollar amount for allowable operating expenses, and his omission of many categories of expenses incurred to bring the produced gas to its first point of sale, had the effect of significantly overvaluing the properties. Moreover, the court found that because the commissioner’s practice was intentional and systematic, the assessments violated both the equal and uniform taxation provision of the West Virginia Constitution and the equal protection clause of the U.S. Constitution.
Those rulings represent not only a highly favorable outcome for the taxpayers and others in the oil and gas industry, but the questions they decided are an example of the complex business tax issues that the supreme court contemplated when it established the business court division. Thus, these appeals involve not only the fundamental question whether a major West Virginia industry can expect its property to be objectively and fairly valued for tax purposes but also the practical efficacy of the business court system itself. To appreciate the stakes in these cases, one must both analyze their substantive legal issues and understand the judicial context in which they will be decided.
The Merits of the Tax Cases
West Virginia’s constitution requires that “subject to exceptions . . . taxation shall be equal and uniform throughout the state, and all property, both real and personal, shall be taxed in proportion to its value to be ascertained as directed by law.”  In the exercise of that constitutional authority, the Legislature has directed that, for tax purposes, property “shall be assessed annually . . . at sixty percent of its true and actual value, that is to say, at the price for which the property would sell if voluntarily offered for sale by the owner thereof, upon the terms as the property, the value of which is sought to be ascertained, is usually sold, and not the price which might be realized if the property were sold at a forced sale.” 
To implement those constitutional and statutory mandates, the Legislature directed the State Tax Department to promulgate regulations, in the form of legislative rules to establish procedures for classes of property, including natural resource property.  Finally, in that same statutory scheme, the primary authority and initiative to determine the taxable values of different classes of property was allocated between either the locally elected county assessors or the department. Thus, for industrial and natural resource property, the department sets the taxable values, and the county assessors are responsible for the valuation of all other types of property. 
For producing natural gas wells, the legislative rules mandate the use of a version of an income approach to determine their taxable value.  The rules require the department to apply “a yield capitalization model to the net receipts (gross receipts less royalties paid less operating expenses)” for this purpose. 
The aspects of the department’s use of that method that were the focus of the litigation were:
• the department’s use of both a fixed percentage and a fixed dollar amount of gross receipts as a maximum amount of operating expenses that were deductible in determining net receipts;
• the department’s use of different points in the production process to measure gross receipts and deductible operating expenses; and
• whether similar aspects of other more general statutory tax schemes also applicable to both natural gas producers and other taxpayers are relevant to determining the taxable value of the producers’ gas wells.
The governing regulations provide that in applying the yield capitalization method, the deduction of operating expenses from gross receipts shall be based on average annual industry operating expenses determined by a department survey of these expenses conducted every five years.  The department’s practice was to use the data to establish both a fixed dollar amount and, by comparing that amount to actual gross receipts data for the most recent year for all producing wells, derive a percentage of expenses to receipts that would be allowed as a deduction in applying the yield capitalization method to each well.
Thus, for the 2016 tax year, in determining the value of each producing gas well, the department allowed a deduction from gross receipts of the well’s actual operating expenses equal to the lesser of $150,000 or 20 percent of its reported production.  As an arithmetic result of the fixed dollar limitation on expenses, wells whose gross receipts exceeded $750,000 were not allowed to deduct 20 percent, but those with lower gross receipts could deduct a higher percentage, unless, as was likely the case, their actual annual expenses exceeded the $150,000 limit.
This nonuniform treatment was further exacerbated by the fact that, when conducting its survey of operating expenses, the department expressly excluded significant components of expenses that were necessarily incurred by horizontal well operators to process, compress, and bring the gas to its first point of sale.  Rather, only so-called lifting expenses to bring vertically or horizontally extracted gas to the well head were included in the department’s survey.  However, because of the physical nature of horizontally extracted gas, the steps of gathering, compressing, and transporting to a field line point of sale are essential to yielding a marketable product. Nevertheless, in measuring the gross receipts used in the yield capitalization model, amounts received when the gas was first actually sold were used for both horizontal and vertical wells.
As a result, the department’s method overstated the net receipts on which it based the operating wells’ values by arbitrarily limiting the dollar amount of operating expenses and by mixing, for horizontal wells, incompletely accounted for operating expense category apples with full gross receipts oranges. Further, in applying its legislative rules to all gas wells, regardless of their vertical or horizontal configuration, the department arbitrarily oscillated between use of both a fixed dollar amount and a fixed percentage of gross receipts and use only of the fixed dollar amount to set the maximum amount of operating expenses it would allow as a deduction to determine net receipts. In defending its use of the latter, the department contended that its calculation of the percentage was to merely “observe the relationship between reported operating expenses and gross receipts.” 
For reasons the department appears not to fully recognize, using such a percentage to calculate accurate values is suspect and can hardly justify use of the fixed dollar limit in the valuation formula. Thus, it is clear that operating expenses are more precisely tied to the volume of production units than they are to gross receipts — the latter of which is also a function of radically shifting natural gas prices.  However, that fact, in the context of applying an income approach to valuation, does nothing to mitigate the blatant arbitrariness of using a fixed dollar amount to limit the amount of expenses deductible from actual gross receipts.
Moreover, in the face of significant industry data supporting a much larger increase in the operating expense deduction limitation, for one tax year at issue, the department arbitrarily changed the fixed dollar amount it allowed as a deduction for each well’s operating expenses from $150,000 to $175,000.  For subsequent tax years, but referring to the natural gas price declines in 2014-2015, the department raised the deductible operating expense percentage for vertical gas wells from 30 percent to 45 percent, while leaving the limitation for horizontal wells, the gas from which was sold in the same declining market, at 20 percent.  Although both adjustments are small steps toward improved
accuracy, they do nothing to honor the principle that we have a system of laws, not of men.
Although not mentioned in the business court division ruling, the parties, in their respective briefs, defend their conflicting interpretations of the governing rules through competing references to more general tax schemes applicable to the natural gas production industry and other businesses and individuals. First, after citing a case construing the state’s long-repealed business and occupation (gross receipts) tax, for the proposition that tax deductions are a matter of “legislative grace,” the department accuses, without basis, both the court and the taxpayers of attempting to improperly engraft the net income principle of the state’s corporation net income tax onto the entirely different property tax scheme, using an income method to set taxable values.  In that same brief, the department analytically reverses itself and asserts that because West Virginia’s personal income tax law only allows, without violating the equal and uniform provisions of the state’s constitution, fixed dollar standard deductions but no itemized deductions regardless of income level, the taxpayers cannot complain about the fixed dollar limit on their operating expense deductions for property tax purposes. 
To those contentions, the taxpayers — though purporting to adopt natural resource producers’ direct use exemption rules in sales tax law to give meaning to the term “point of sale” — raise a salient point. They show that the department’s reference to the severance tax regime’s allowance of a fixed gross receipts percentage for deduction of expenses from that tax’s base is — unlike its use in the property tax— not subject to a fixed dollar limitation, and, thus, actually supports the taxpayers’ position on that point.  Apparently recognizing the difficulties these comparisons can present, the department then argued that because the Legislature allowed a fixed percentage deduction of expenses from the severance tax base of some gas production (not sold at the well head), the absence of such an allowance in the property tax law strongly implies a legislative intent not to allow a deduction for those expenses in similar circumstances for property tax purposes. 
Finally, in another reach far outside the court’s actual analysis, or the taxpayers’ arguments, the department cites, though it’s also legally irrelevant, the breakdown of expenses in some of the taxpayers’ public filings for federal securities law purposes.  The department argues that since the taxpayer separately stated, for those reporting purposes, the amounts of its lifting expenses incurred to bring the horizontally produced natural gas to the well head and those incurred to gather, process, compress, and transport a marketable product at its point of first sale, the distinctions between those two categories are also meaningful for valuation in a state ad valorem property tax scheme. To that point, one might simply apply the department’s own theory of determining legislative intent, namely that since the members of the Legislature are presumed to be aware of securities laws, omission of reference to these reports for property tax valuation purposes must be intentional.
These arguments are being advanced in the pending appellate court proceedings. However, the court’s deliberations will also be subject to other important influences. The context in which the supreme court deliberates about these important tax cases will include not only long-standing and occasionally conflicting rules of judicial review but also a troubling, decades-long pattern of anti-taxpayer rulings in these types of cases. Another potential issue is the decidedly unsettled circumstances of a court struggling to regain the public’s confidence regarding its independence and integrity.
Judicial Review and Pattern of Business
Property Tax Appeal Rulings
As explained, regardless of whether the department or the county assessor has determined the taxable value of the particular type of property, all taxpayer challenges to those values commence with a review by the institutionally biased and seriously conflicted governing body of the county in which the property is situated.  If the taxpayer is not satisfied with the predictably adverse ruling,
review may be sought before the circuit court, which, though generally functioning as a trial court, sits as an appellate body in which the standard of review is de novo as to the law. Regarding factual questions the test is whether there was substantial evidence in the record to support the county commission’s ruling. 
From there, the precedent is clear that, in cases where the lower court acts as an appellate court and reverses the county commission due either to errors of law or the absence of substantial evidence supporting the commission’s decision, the supreme court should reverse a lower court ruling only if it contains an error of law or if the supreme court finds no substantial evidence to support it. 
Within those broad standards of review is a presumption in favor of the correctness of the department’s valuation, along with standards of construction and validity for legislative rules. The department’s factual findings are entitled to deference.  Indeed, determinations of tax valuations by assessors or the department are presumed correct absent clear and convincing evidence to the contrary.  Even as to appellants’ contentions of legal error, which are generally subject to de novo review by an appellate court, West Virginia has its own version of Chevron-style deference so that interpretations of ambiguous or omitted substantive portions of statutes and rules made by the public agency charged with their execution and administration are entitled to deference.  Finally, deference to administrative agency discretion in resolving ambiguities and substantive omissions “will not be disturbed upon judicial review absent a showing of abuse of [that] discretion.” 
To the contrary, the taxpayers here could have argued, or the supreme court could remember, concerning the department’s creation of a fixed dollar limitation on deductible operating expenses, its own express admonition that, notwithstanding the rules of deference, they are not to enable an overt change of the substantive meaning of statutes or legislative rules under the “guise of ‘interpretation.’”  That rule clearly applies to the department’s interpretations in tax cases.  If statutory construction is appropriate due to ambiguity or silence on an essential point, West Virginia follows the rule that substantive statutes governing the imposition of taxes (but not tax procedures) are strictly construed against the taxing authority and in favor of the taxpayer. 
Given those potentially conflicting presumptions and rules of construction, in these cases the supreme court will have many hooks on which to hang its decisional hat —regardless of whether it affirms or reverses the business court. To assess the likely outcome in this case, it is useful to consider both the court’s historic pattern of favoring local taxing authorities in business property tax appeals and the potential implications of its own institutional turmoil.
A review of the last six decades or so of West Virginia Supreme Court cases involving the taxable value of business taxpayers’ property reveals a distinct, virtually unbroken pattern of taxpayer losses.  Tellingly, in the only two of those property tax rulings to be reviewed by the U.S. Supreme Court (in a consolidated decision), the West Virginia Supreme Court’s holdings against the business taxpayers were reversed on equal protection grounds in a unanimous 9-0 vote. 
On the other hand, in the only reported decision during those same decades involving the tax valuation of an individual’s residence, the pro se taxpayer won a reversal of the circuit court’s decision affirming the county commission’s assessment.  Although that pattern is difficult to regard as a mere coincidence, discerning an underlying reason for it necessarily requires a degree of informed speculation.
One might suggest that the pattern of rulings in these cases reflects a correlation between the long-standing practice of partisan election of judges and the well-recognized legal limitations on the revenue-raising authority of other elected county officials. That is, those who have to compete in partisan elections to maintain their chosen employment positions may, at least subconsciously, indulge in a degree of favoritism toward those who are also local elected officials and rely on limited resources to execute the functions of government.  The potential for such favoritism is hardly mitigated
by the fact that, until recent times, all West Virginia Supreme Court justices and most elected local officials were members of the same political party. 
Moreover, there is considerable tension between the presumption in favor of administering agency interpretations and the quasi-judicial holdings of the institutionally biased county commissions and the rules of construction favoring taxpayers in the event of legal ambiguity. As a result, rather than offering insight into how these cases may be objectively decided, those readily conflicting factors simply confirm that there are disparate bases on which the court can justify its ruling regardless of the considerations involved.
Indeed, although there is no published record of it, there should be little doubt that the business bar’s support for including complex tax appeals in the business court’s jurisdiction was motivated in part by a perceived need for a more independent review of county commission property tax cases.  Since it was anticipated that the business court would be assigning members of its relatively small panel of circuit judges (seven out of 74 judges) to hear these cases statewide, the likelihood of having a judge review a case from the circuit in which he or she is elected would be rather small. 
Uncertain Makeup of Court Deciding
Because of the impeachment proceedings, Judicial Investigation Commission charges, and federal criminal convictions of justices of the West Virginia Supreme Court, the court’s composition has changed since June. Sitting for the first time since the shakeup, it now consists of two of the remaining elected justices, Elizabeth Walker and Margaret Workman, and Justices Timothy Armstead and Evan Jenkins, who were appointed by Gov. Jim Justice (R) to serve until a special election is held. The fifth seat is filled by an elected trial judge, Paul T. Farrell, who was appointed to fill the vacancy caused by the suspension of Justice Allen Loughry.
Because of the major interruption in the court’s schedule, oral arguments in the consolidated tax cases are unlikely to be heard until well after the possible impeachment trials of Workman and Loughry and the November 6 special election.  The ballot for that election consists of 10 candidates for each of two of the vacant seats, one to serve through 2020 and the other through 2024. As a result, Walker is the only justice certain to sit on the panel that hears these cases.
The other two justices, former lawmakers Armstead and Jenkins, were elected to their legislative offices as Republicans, and were appointed by Justice after he changed his party affiliation to Republican within a year of being elected. The two appointments have been criticized as being overly partisan for judicial offices, which are supposed to be filled on a nonpartisan basis. However, given that the two appointees are running in the nonpartisan election, winning those seats could overcome a perception of partisanship regarding their appointments.
Moreover, there are other issues that may affect who, among the nearly two dozen known possibilities, will be the other four justices hearing arguments and ruling on these tax cases. And because Business Court Judge Christopher Wilkes is one of the candidates for election, if successful, he would be expected to recuse himself from participating in the review of his own ruling.
Moreover, Jenkins was recently represented in an unsuccessful proceeding to block his appointment to the court by the same law firm that represented the taxpayers in the property tax cases. As a result, an objection to his sitting on the court in a separate matter involving one of the taxpayers (Antero) has already been raised. Thus, Jenkins — if he is still serving at the time the tax appeals are heard — could find himself the subject of a recusal motion on similar grounds.
Because of the major impact the appeals will have on the natural gas industry’s economic prospects in West Virginia, and given that industry’s major current and potential future contribution to the state’s economy, there will be few more significant cases decided by the West Virginia Supreme Court in the coming year.  However, as described here, the forces that will bear on the outcome of the appeals involve far more than the simple legal merits and the general rules of judicial review. Rather, between an extraordinarily consistent history of rulings against businesses in these cases and the even more extraordinary circumstances roiling the court itself, the stakes in terms of the rule of law could not be greater for the state, its business community, and its citizens.
See Docket Nos. 18-0121, 18-0122, 18-0123, 18-0124, and 18-0125. respectively.
The counties are Lewis, McDowell, Doddridge, and Ritchie.
The business court division is a statewide panel of selected circuit court judges established by the West Virginia Supreme Court in 2012. See W.Va. Code section 51-2-15. While the division’s primary jurisdiction is limited to business versus business disputes and excludes “disputes with government organizations and regulatory agencies,” an exception is made for “complex tax appeals.” Trial Court Rules section 29.04(a)(3).
One of the taxpayers, Antero Resources Corp., accounted for more than 34 percent of the state’s large and growing natural gas production in 2017. The other, Consol Energy Inc. d/b/a CNX Gas Co. LLC, was the state’s eighth largest natural gas producer in 2017. West Virginia Oil & Natural Gas Association (WVONGA), “WVONGA Gas Facts 2018.” In 2017 natural gas property ad valorem taxes represented 10 percent of all regular West Virginia property taxes. WVONGA, “WVONGA Gas Facts 2018,” Classified Assessed Valuations Taxes Levied, 2017 Tax Year.
The impeachment articles and criminal charges against the justices all relate to conduct of their administrative duties. They include excessive and fraudulent spending for their private benefit, intentional violations of state salary statutes, failing to adopt policies governing expenditures of public funds, and in the case of former Chief Justice Alan Loughry, the predictable derivative counts of mail fraud, wire fraud, perjury, suborning perjury, and witness tampering.
Except for Docket No. 18-0125, which involves Antero’s assessments for tax years 2016 and 2017, the other four cases involve the taxpayers’ 2016 tax assessments.
As discussed below, the State Tax Department is responsible both for establishing and applying a method for determining the taxable values of natural resource property. Once the values are thus determined, any legal challenges are first reviewed by the governing body of the county in which the subject property is located. W.Va. Code sections 11-3-24 and 11-3-24b.
W.Va. Const., Art. X, section 1.
W.Va. Code section 11-3-1.
W.Va. Code section 11-1C-5a. Specific valuation rules are proposed by the State Tax Department. Following a public comment period and before taking effect, they must be authorized in a final form by the Legislature. W.Va. Code section 29A-3-11.
W.Va. Code sections 11-1C-5 and -10. However, as to whether the primary valuation duty belongs to county assessors or the department, all parties are obliged to follow the legislative rules. W.Va. Code sections 11-1C-5a, and -7(a).
W.Va. Code R. Title 110, Series 1J.
W.Va. Code R. section 110-1J-4.1.
W.Va. Code R. section 110-1J-4.3. The same process is used to ascertain production decline rates, which represent the objectively measured natural rate of annual decline of production volume determined by an industry survey and by reported production data. W.Va. Code R. section 110-1J-4.4.
For the 2017 tax year in Docket No. 18-0125, while the 20 percent operating expenses limitation was still applied by the department, the fixed dollar limit was raised to $175,000. See discussion infra, note 20.
The regulations state that the “gross receipts . . . shall be reduced by the annual operating expenses.” W.Va. Code R. section 10-1J-4.6.1. Gross receipts are defined as “total income received from production on any well, at the field line point of sale, during a calendar year before subtraction of any royalties and/or expenses.” W.Va. Code R. section 110-1J-3.8. Operating expenses are defined as “only those ordinary expenses related to the maintenance and production of natural gas . . . [and] do not include extraordinary expenses, depreciation, ad valorem taxes, capital expenditures or expenditures relating to vehicles or other tangible personal property not permanently used in the production of natural gas.” W.Va. Code R. section 110-1J-3.16.
Due to innovations in gas well drilling technology commonly referred to as ‘fracking,’ major natural gas reserves, otherwise trapped in various underground formations, can now be economically accessed. As a result, instead of the vertical methods to which the industry was formerly limited, extraction of such reserves via horizontal drilling methods is now possible.
Tax Department Reply Brief, Docket No. 18-0124, at 4.
Between January 4, 2013, and October 5, 2018, natural gas market prices fluctuated between $6.1/mmBTU and $1.7/mmBTU, a range of over 350 percent. See InfoMine data.
Though public comment and supporting data indicated a 38 percent average operating expense to gross receipts ratio, and an average expense of $720,000 per horizontal well, the Department raised the allowable operating expense per well to only $175,000. Although the expense deduction for the far less productive vertical wells in the CNX cases was limited to 30 percent or $5,000, the legal issues presented were the same as for horizontal wells.
Respondent’s Brief, Docket No. 18-0124, at 25.
Tax Department’s Brief, Docket No. 18-0124, at 21-22.
Id. at 31-32.
Respondent’s Brief, Docket No. 18-0124, at n.78 n.86.
Tax Department’s Reply Brief, Docket No. 18-0124, at 7-8.
Tax Department’s Brief, Docket No. 18-0124, at 5-6, 9 and 19-20; Id. at 8.
Supra note 7. In West Virginia, the elected three- or five-member county commission statutory structure manifests a combination of executive, legislative, and judicial powers and lacks institutional checks and balances. The commission legislates by the adoption of county ordinances, executes all fiscal and administrative aspects of county government, and, as in these cases, sits as a trial court of record in property tax disputes. See Caryl, “The Illusion of Due Process in West Virginia’s Property Tax Appeals System: Making the Constitution’s Promise a Reality,” 98 W.Va. L. Rev. 301 (1995).
Liberty Coal Co. v. Bassett, 150 S.E. 745 (W.Va. 1929). See also other authorities cited in Respondent’s Reply Brief, Docket No. 18-0124, at 12, n. 39.
CB&T Operations Co. Inc. v. Tax Commissioner, 564 S.E.2d 408 (W.Va. 2002).
Western Pocahontas Properties Ltd. v. County Commission of Wetzel County, 431 S.E.2d 661 (W.Va. 1993).
See, e.g., Appalachian Power Co. v. State Tax Department, 466 S.E.2d
424 (W.Va. 1995).
In re Assessment Against American Bituminous Power Partners LP, 539
S.E.2d 757 (W.Va. 2000).
Consumer Advocate Division v. Public Service Commission, 386 S.E.2d
650 (W.Va. 1989).
Syncor International Corp. v. State Tax Commissioner, 542 S.E.2d 479 (W.Va. 2001); and CNG Transmission Corp. v. Craig, 564 S.E.2d 167 (W.Va. 2002) (both quoting Consumer Advocate, 386 S.E.2d 650).
Consolidation Coal Co. v. Krupica, 254 S.E.2d 813 (W.Va. 1979).
Although many property tax appeals considered by the West Virginia Supreme Court over that 60-year period have involved more procedural or purely legal questions (e.g., application of exemptions), the 19 cases in which the primary issue was discretion in valuation have uniformly been decided against the business taxpayer. See, e.g., American Bituminous Partners, 539 S.E.2d 757. Ten of these cases arose in the current millennium and five in the 1990s. This distinct skewing of the incidence of these cases toward recent times is attributable in part to the fact that the $50,000 statutory minimum jurisdictional amount of taxable value for supreme court review has never been adjusted for inflation. W.Va. Code section 11-3-25.
In re 1975 Tax Assessments Against Oneida Coal Co., 360 S.E.2d 560 (W.Va. 1987); cert. granted, Allegheny Pittsburgh Coal Co. v. County Commission of Webster County; rev’d 488 U.S. 336 (1989).
Wright v. Banks, 753 S.E.2d 100 (W.Va. 2013). The dearth of cases involving the taxable values of individuals’ residences is even more certainly due to the $50,000 minimum appealable value. W.Va. Const. Art. X, section 1.
In a case upholding the constitutionality of the $50,000 appeal jurisdictional minimum, the supreme court acknowledged that very consideration. In its unanimous opinion in Bookman v. Hampshire County
Commission (455 S.E.2d 814 (W.Va. 1995)), the court observed that “after all, property taxes are the preeminent support of local services . . . and, therefore, it would bespeak an untutored knowledge of human nature to discount entirely the possibility of local bias against large landowners.”
The effect of the 2016 statutory change to nonpartisan elections of both circuit court judges and supreme court justices remains to be seen. W.Va. Code section 3-1-17.
Trial Court rule 29.04, definitions (a)(3).
In each of the subject tax cases, the presiding Business Court Division Judge Christopher Wilkes is elected in the 23rd Circuit Court, while the cases are from the 3rd, 8th, and 26th circuits.
Loughry is unlikely to be reinstated for the remainder of this term given his October 12 conviction on 11 felony charges (he is appealing), a scheduled Senate impeachment, and multiple charges by the Judicial Investigations Commission. If his seat is vacated, it will then be filled by gubernatorial appointment until a special election in May 2020.
As an industry, natural gas and oil producers provide West Virginia’s highest paid jobs, averaging $84,000 per year for its current 38,311 employees, which head count is expected to grow by 55 percent over the next four years. James Casto, “Oil and Gas Industry Energizing W.Va. Economy,” The State Journal, Sept. 24, 2018.