Attorneys can't switch sides, W.Va. SC rules

Steve Korris Jun. 24, 2010, 9:30am


CHARLESTON, W.Va. (Legal Newsline) - Pittsburgh attorneys who represented the coal companies of Jim Justice can't switch sides and represent a client suing his companies, the West Virginia Supreme Court of Appeals has ruled.

The justices on Wednesday disqualified Buchanan Ingersoll & Rooney as counsel for Mountain State Carbon in an Ohio County suit against Bluestone Coal and Bluestone Coal Sales.

They granted a writ of prohibition against Circuit Judge James Mazzone, who ruled last year that Buchanan Ingersoll hadn't created a conflict of interest.

Chief Justice Robin Davis wrote that the firm's previous work allowed its lawyers to anticipate Justice's defense against Mountain State Carbon.

"This strategy indicates that Buchanan Ingersoll used information it obtained from its former representation of Bluestone Coal to the detriment of its former client," she wrote.

She rejected the firm's argument that the dispute turned moot when Justice sold his coal companies to Mechel, a Russian company.

She wrote that Justice retained control of the litigation and maintained responsibility for debts of the companies before and after the sale to Mechel.

"While the ultimate corporate parent for the Bluestone companies has changed, no alterations in the companies' status impact the instant litigation," she wrote.

Justice owned 29 companies and ran them from an office in Beckley.

Mountain State Carbon owns and operates a coke plant in Follansbee.

In 2005, Buchanan Ingersoll began representing Justice's companies and Mountain State.

In 2007, Bluestone Coal Sales agreed to supply all the coal Mountain State needed. Bluestone Coal guaranteed the agreement.

In 2008, Buchanan Ingersoll notified Justice that it would decline to represent Bluestone Coal in a specific matter.

Buchanan Ingersoll filed suit for Mountain State against the Bluestone companies two weeks later, claiming Bluestone Coal Sales failed to deliver as the agreement required.

The Bluestone companies moved to disqualify Buchanan Ingersoll, and Mazzone denied the motion last November.

Justice petitioned the Supreme Court of Appeals for relief, and he won.

Davis wrote that an attorney can't represent a party with interests adverse to a former client in a matter that relates to the prior representation unless the former client consents.

She wrote that Kathleen Goldman of Buchanan Ingersoll represented Bluestone Coal in a Greenbrier County suit.

She wrote that the Greenbrier County case and the Mountain State case both concerned agreements to supply coal from the Keystone Mine.

"Legally, the two representations are nearly identical," she wrote.

Bluestone Coal's defense in Greenbrier County required it to reveal confidential agreements to counsel, she wrote.

For Mountain State, she wrote, Buchanan Ingersoll requested documents regarding its Greenbrier County defense before the Bluestone companies answered the complaint.

It was apparent that Buchanan Ingersoll possessed enough knowledge from its prior representation to anticipate Bluestone Coal's defense, she wrote.

She scoffed at the firm's claim that Bluestone Coal waived objections to subsequent representations in a letter on Jan. 17, 2008.

She wrote, "This argument would be compelling were it not for one simple, fatal flaw: Bluestone Coal never signed any such waiver letter!"

Bluestone Industries signed it, she wrote, and it focused only on cases involving Wheeling Pittsburgh Steel Corporation.

David Givens, of Flaherty, Sensabaugh and Bonasso in Wheeling, and Jared Tully, of Frost Brown Todd in Charleston, represented the Bluestone companies.

So did Barry Hunter and Rebekah Ballard, of Frost Brown Todd in Lexington, Ky.

Mark Hornak of Buchanan Ingersoll represented Mountain State. So did David B. Cross and David F. Cross of Wellsburg.

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