Whitesburg KY

Massey case will get new hearing


West Virginia’s Supreme Court has voted unanimously to reconsider its reversal of a $76.3 million judgment against Massey Energy Co., in a case roiled by conflict of interest allegations directed at the justices.

The 5-0 decision handed down on Jan. 24 erases November’s ruling that had overturned a 3-2 verdict won by Harman Mining Co. and its president, Hugh Caperton, in a coal contract dispute with Massey.

Chief Justice Elliott “Spike” Maynard did not take part in last week’s action. He recused himself after the release of vacation photos showing him with Don Blankenship, Massey’s chairman, president and chief executive officer, while the judgment was headed for appeal.

Hampshire County Circuit Judge Donald Cookman replaced Maynard for the rehearing peti- tion. Justices Brent Benjamin and Larry Starcher also took part, having weathered allegations of bias regarding Massey as well.

The Supreme Court will hear arguments in the case March 12, and will allow written pleadings from each side, court spokeswoman Jennifer Bundy said.

In a statement, Massey said it respects “the Court’s decision to take another look at this case.”

“We remain confident, however, that the Court will ultimately uphold its prior decision,” the statement said. “While there has been a great deal of media attention regarding this case, nothing has changed the facts or the law that the Court will consider in reaching its final decision.”

While calling for Starcher and Benjamin to step down from the case, lawyers for Caperton and Harman said “the grant of rehearing should not come as a surprise given recent events.”

“The question now is whether the court will use the rehearing to deliver justice by affirming the jury’s verdict and the trial judge’s orders,” their statement said.

A 2002 Boone County jury concluded that Massey hijacked a coal supply contract from Harman, plunging both it and Caperton into bankruptcy. The verdict awarded $50 million to Harman and Caperton, with posttrial interest swelling the amount to $76.3 million.

While agreeing that Massey’s misconduct justified the verdict, November’s ruling concluded the entire case was negated by a clause in the underlying coal contract and by an earlier, related lawsuit filed in Virginia.

The Virginia case had yielded a $6 million verdict against a Massey subsidiary in favor of Harman.

After asking the court to reconsider, Caperton filed dozens of photos that included several showing Maynard and Blankenship together in Monaco in July 2006. By that time, the Supreme Court had already fielded a half-dozen matters stemming from Massey’s announcement the previous year that it planned to appeal the verdict.

Maynard and Blankenship later said they had met up on the Riviera while on separate vacations and that their longtime friendship was no secret. After calling allegations of impropriety “nonsense,” the chief justice agreed last week to disqualify himself.

“The mere appearance of impropriety, regardless of whether it is supported by fact, can compromise the public confidence in the courts,” Maynard wrote. “For that reason – and that reason alone – I will recuse myself from this case.”

Harman had joined the bid for Maynard’s recusal by then, while also asking Benjamin to step down. A Republican, Benjamin was elected in 2004 after Blankenship spent millions on ads that promoted his candidacy by attacking his Democratic opponent.

Benjamin refused, and as acting chief justice appointed Cookman in Maynard’s stead.

Massey had earlier alleged bias by Starcher, citing a series of public comments attacking the company and Blankenship. Some of those statements addressed the 2004 campaign.

In last week’s order, Starcher said he sought a chance for both he and Benjamin to consider stepping down, “but taking time for that possibility was rejected by the majority.”

“I have an absolute right and duty to comment publicly on that issue, although my language should have been more temperate, I admit,” the order said. “But I can separate that opinion from my understanding of the law.”

Starcher also noted the ad campaign that benefited Benjamin, but said that “he, I am sure, also sincerely believes he can separate that fact from his understanding of the applicable law.”

Lawyers for Harman and Caperton cited Starcher’s comments in urging the joint recusal of Starcher and Benjamin.

“The Court would gain great credibility, public confidence in the judicial system would be restored, and the litigants would take great comfort that justice will be done,” their statement said.

Benjamin did not comment in the three-page order. Justice Robin Davis, who wrote the November opinion, granted the rehearing because of Maynard’s recusal, it said.

The Monaco photos grabbed national headlines. Starcher has since asked for an independent probe to examine other allegations he said “raise extremely serious legal and ethical issues.” While providing no details in his Jan. 22 memo to court administrators, Starcher said he is prepared to share what he knows with investigators.

The justices discussed the memo during a Jan. 24 conference and “are, of course, taking a studied and deliberate approach to this issue,” Bundy said. “I have no resolution to report.”

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