State Wage Protection Law Trumps "Perpetual" Standby Letter Of Credit

LexisNexis ( December 26, 2016, 3:20 PM EST) -- Sometimes UCC rules conflict with other state statutes and the courts need to determine which statute controls.  In a recent decision, the West Virginia Supreme Court has ruled that the state's Wage Payment Collection Act (WPCA) preempted the UCC rule that allows standby letters of credit to be designated and enforced as "perpetual."  In reaching its decision, the court employed standard tenets of statutory construction.  We agree with the decision.    The West Virginia case.  In International Union of Operating Engineers v. L.A. Pipeline Construction Co., 786 S.E.2d 620, 89 UCC Rep. 2d 862 (W. Va. 2016), the West Virginia high court was presented with the following certified question: Does a "Perpetual Irrevocable Letter of Credit/Wage Bond obtained pursuant to the Wage Payment Collection Act remain in effect until terminated with the approval of the Commissioner of the Division of Labor, as provided by the WPCA, or does it automatically expire five years from its date of issuance, regardless of whether it has been  terminated with the Labor Commission's approval, as provided by the Uniform Commercial Code?  ...