Norton Rose Fulbright achieves notable win in Supreme Court of Virginia

A Norton Rose Fulbright litigation team representing construction engineering and management company Montalla, LLC won on all counts in the Supreme Court of Virginia, overturning a trial court decision that had dismissed the firm’s complaint on sovereign immunity grounds and reversing the Virginia Court of Appeals decision, affirming the trial court.

This decision in Montalla, LLC v. Commonwealth of Virginia, et al. on May 9, 2024 marks the most extensive discussion of sovereign immunity by the Supreme Court of Virginia in the last 30 years.

The appeal involved the reach of sovereign immunity. Significant disputes originated after NXL Construction Company, Inc. (“NXL”) entered a series of contracts with the Commonwealth of Virginia. NXL ultimately settled these disputes, via mediation, but then assigned its interests to Montalla, which pursued claims against the Commonwealth based on the Commonwealth’s conduct during NXL’s underlying contracts and during mediation. The circuit court sustained the Commonwealth’s plea in bar of sovereign immunity and dismissed all counts of Montalla’s complaint.

After the Virginia Court of Appeals affirmed the decision, the Supreme Court of Virginia granted Montalla’s Petition for Appeal. In its opinion, the Supreme Court of Virginia engaged in an extensive discussion of the scope of sovereign immunity under Virginia law. The Supreme Court of Virginia then explained why the doctrine of sovereign immunity did not apply to any of Montalla’s claims because they were all contract-based claims, reversing the decision of the Court of Appeals, and remanding the matter back to the circuit court for further proceedings.

Thomas Coulter and Brian Stolarz (Washington, DC) comprised Norton Rose Fulbright’s team, which received support from McGuireWoods on the appeal.