Big verdict against Massey will stand

John O'Brien Dec. 1, 2008, 1:27pm


WASHINGTON (Legal Newsline) - The U.S. Supreme Court has decided not to hear the larger of two recent appeals involving Massey Energy and the West Virginia courts system.

Massey was appealing a $220 million Brooke County verdict against it, one of the largest in the country in 2007. Both the state Supreme Court and the U.S. Supreme Court declined to review the $100 million punitive damages award.

The Supreme Court did not offer an explanation. West Virginia Supreme Court Justice Larry Starcher recently said his court made a mistake not accepting the appeal.

"We are disappointed because we felt our case was worthy of the Court's review, but we understood from the start that the Court accepts only a very limited number of cases every year," said M. Shane Harvey, Massey Energy Vice President and General Counsel.

Wheeling-Pittsburgh Steel claims one of Massey's subsidiaries breached a coal supply contract, causing the company to purchase coal at higher prices.

The state Supreme Court voted unanimously not to hear the appeal. Recently, West Virginia Gov. Joe Manchin urged the state Supreme Court to hear DuPont's $381 million appeal because he felt large punitive damage awards warranted a closer look.

DuPont's appeal has been accepted.

The U.S. Supreme Court will hear arguments in another Massey case in February or March. The owner of a bankrupt coal company, Hugh Caperton, says West Virginia Supreme Court Justice Brent Benjamin should have disqualified himself when Massey Energy's appeal of a $50 million verdict in favor of Caperton's company proved successful.

Massey CEO Don Blankenship spent more than $3 million promoting Benjamin in his 2004 race against former Justice Warren McGraw, brother of state Attorney General Darrell McGraw, through an organization called "For the Sake of the Kids."

A Boone County jury awarded $50 million to Caperton in his case against Massey, a dispute over a broken coal supply contract.

However, the state Supreme Court overturned the verdict in Nov. 2007 with a 3-2 vote, then again by the same vote after Chief Justice Spike Maynard recused himself.

Photographs had surfaced of Maynard and Blankenship on vacation in Monaco. The two, lifelong friends from Mingo County, said they were coincidentally vacationing at the same place at the same time, and Maynard provided documentation to show he paid his own way.

Caperton, throughout, complained that Benjamin should have taken himself off the case. Starcher agreed, recusing himself in the hopes Benjamin would do the same.

"The motion seeking disqualification comes over three years after the 2004 election and focuses entirely on that election," Benjamin wrote. "It contains nothing about this Justice's record on the Court.

"There are no allegations that this Justice has or has had any relationship with Mr. Blankenship or any party in this litigation, or that he ever represented Mr. Blankenship or any Massey company in his 22-plus years of private practice. Nor is this Justice aware of any basis by which this Justice should disqualify himself."

The Harman case drew amicus briefs from Public Citizen, the Brennan Center for Justice at New York University School of Law, the Washington Appellate Lawyers Association, the American Bar Association and the Committee for Economic Development.

All those briefs were in favor of review.

Former U.S. Solicitor General Theodore Olson is representing Caperton.

From Legal Newsline: Reach John O'Brien by e-mail at

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