W. Va. SC lets Massey off $50 million hook, Starcher furious

John O'Brien Nov. 21, 2007, 4:55pm




CHARLESTON, W. Va. - More than half of the West Virginia Supreme Court justices said Wednesday it agreed with a Boone County jury award of more than $50 million against Massey Energy, but had no choice but to drop it.

For that, the majority was subjected to two scathing opinions by the dissenting justices.

In a 3-2 decision, Massey escaped the financial obligation that had ballooned to about $75 million with interest and stemmed from a coal contract dispute with Harman Mining Co., as the majority ruled the Virginia-based company had no standing to bring the action against Massey in West Virginia.

To that decision, dissenting Justice Larry Starcher, a fierce public critic of Massey CEO Don Blankenship, replied, "Horse puckey!"

"At the outset, we wish to make perfectly clear that the facts of this case demonstrate that Massey's conduct warranted the type of judgment rendered in this case," Chief Justice Robin Davis wrote in the majority opinion. "However, no matter how sympathetic the facts are, or how egregious the conduct, we simply cannot compromise the law in order to reach a result that clearly appears to be justified.

"(T)he law simply did not permit this case to be filed in West Virginia."

Harman Mining started a 10-year metallurgical coal supply contract in 1992 with Wellmore Coal, which was eventually purchased, along with parent company United Coal, by Massey in 1997. Massey subsequently broke the contract.

In the contract was a forum-selection clause which required all actions stemming from the agreement to be brought in Buckhanan County, Va. The "(a)greement, in all respects, shall be governed, construed and enforced in accordance with the substantive laws of the Commonwealth of Virginia. All actions brought in connection with this Agreement shall be filed in and decided by the Circuit Court of Buchanan County, Virginia..." the contract read.

Still, Harman filed suit in both Buckhanan County and Boone County in 1998, asserting claims of tortious interference with existing contractual relations, tortious interference with prospective contractual relations, fraudulent misrepresentation, civil conspiracy, negligent misrepresentation and punitive damages.

In 2002, a Boone County jury found Massey liable for tortious interference, fraudulent misrepresentation and fradulent concealment and decided on an award of $50,038,406, which included punitive damages.

By comparison, the Virginia jury returned with a verdict of $6 million. Harman argued that because that suit dealt with breach of contract and the Boone County jury awarded damages in tort, both should be allowed. Harman also claimed Massey was not subject to the contract's forum-selection clause, as it was not a third-party beneficiary. The majority disagreed.

Filling out the majority were justices Spike Maynard and Brent Benjamin. Benjamin's 2004 campaign to unseat Warren McGraw received several million dollars from Blankenship, which drew the ire of Starcher.

Starcher accused Blankenship of buying a seat on the Supreme Court and called him "stupid" and "a clown."

For that, Massey has sued the state Supreme Court because Starcher will not recuse himself from pending Massey cases -- "I'm certainly not afraid of him," Starcher has said.

In his dissent, Starcher wrote, "Let's not forget why the jury's verdict was justified: the jurors looked Mr. Blankenship in the eye and concluded that he was lying, and that Mr. Caperton was telling the truth.

"The majority opinion says: 'That doesn't matter' - it all should have been handled in Virginia. To which argument, one must respond: 'Horse puckey!'"

Starcher called his colleagues' decision both morally and legally wrong.

"Now three members of this Court have ruled that even though it is a fact that Don Blankenship illegally took over $60 million dollars from Hugh Caperton -- he can get away with it scot-free. Talk about crime in the suites!" Starcher wrote.

He also made mention of his quarrel with Blankenship.

"As a constitutional officer elected by the people, I have a right and duty to speak out about the administration of our justice system, including the conduct of judicial elections," he wrote. "I can have opinions, and still do my job fairly. I do decry murder and domestic violence and I speak out on it, and I also sit as a judge and hear cases involving people who are charged with those offenses.

"I am one judge voting on this case who can say that I owe nothing to Mr. Blankenship one way or another. He did nothing to hurt or hinder my election. He did not fund my campaign, nor am I a social friend of his.

"It has been amusing for me to see Mr. Blankenship trying with all his might to create the circumstances where I would be forced to step aside and let him have in toto the kind of Court he wants. For example, he has said he will be 'targeting' me in the next election if I run. Fortunately, the public can see through this kind of transparent foolishness, just as a West Virginia jury saw through his lies in court.

"What is sad is that a majority of this Court is telling a West Virginia jury that their work to bring about justice was a complete waste."

Justice Joseph Albright also filed a dissenting opinion, though his focused more on the legal nuts and bolts of the case.

He says a 1977 Virginia statute allows plaintiffs to file contract claims and tort claims concerning the same matter in separate lawsuits, calling the majority "flat-out wrong."

"The long and the short of it is that the adjudication of the contract action in Virginia, resulting ultimately in a recovery of about $6 million, did not affect the rights of the plaintiffs in the action sub judice to recover damages in tort in a separate action, under either Virginia or West Virginia law," he wrote.

He also called the majority's opinion "a result-driven effort to excuse without penalty an egregious exercise of raw economic power which a West Virginia jury has found seriously injurious to the plaintiffs in the case, deserving of substantial redress under the law.

"(T)he unnecessarily broad and sweeping language of the opinion and the syllabus points could close the courthouse doors of this State to citizens with meritorious claims, unwittingly caught up in these 'forum-selection clause' contracts, designed in most cases to give some litigants advantages over others and, under the majority's analysis, applicable in some cases to litigants not even party to the contracts containing the 'forum-selection clauses,'" he added.

"This is all accomplished by adopting by judicial fiat 'new law' not previously found in West Virginia's jurisprudence and applying that 'new law' at every turn in the manner most likely to yield the result of overturning the jury's verdict and the judgment of the lower court giving effect to that verdict."

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