$5M award granted in Massey case

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Two Pittsburgh attorneys who represent a client they say was bankrupted by coal company Massey Energy and its former CEO Don Blankenship are considering an appeal after a Virginia jury awarded their client $5 million in damages, far short of the estimated $83 million they were seeking.

Reed Smith attorneys David Fawcett and Bruce Stanley said the verdict won’t cover the bulk of the debt and other expenses their client, Hugh Caperton, took on after Massey and Mr. Blankenship drove Mr. Caperton’s coal business into bankruptcy in 1998.

The Buchanan County jury verdict, announced late Friday, is the latest milepost in a 16-year saga that has taken Mr. Caperton to the West Virginia Supreme Court three times as well as to the U.S. Supreme Court and Virginia’s supreme court.

The jury awarded $1 million in damages to Mr. Caperton and $4 million to his Harman Development Corp. and two affiliates. With interest that the jury based on when the case was filed in 2010, the verdict is worth about $6.3 million.

It comes in addition to a $6 million award Mr. Caperton received in 2001 from a Virginia court when he sued for breach of contract.

“It won’t even begin to pay the bills for either party,” Mr. Stanley said of Friday’s verdict.

Harman Development is facing more than $30 million in bankruptcy debt, including pension and retiree health care claims brought by the United Mine Workers union, Mr. Stanley said.

Mr. Caperton originally sued Massey in 1998 in Boone County, W.Va., claiming the Richmond, Va.-based mining company’s interference in Harman’s businesses caused them to collapse. A jury awarded him $50 million in 2002, but Massey appealed the case to the West Virginia Supreme Court, which threw the verdict out in 2007.

The high court reheard the case in 2008 after Mr. Blankenship’s close ties to two of the state supreme court justices were disclosed. One of the justices recused himself from the second hearing, but the other, Justice Brent Benjamin, did not. Justice Benjamin, who ruled against Mr. Caperton, was elected in 2004 with the help of $3 million in campaign contributions from Mr. Blankenship.

After the state supreme court ruled against Mr. Caperton a second time, he went to the U.S. Supreme Court, which ruled Justice Benjamin should have stepped aside because of the campaign contributions. That decision sent the case back to the West Virginia Supreme Court for a third hearing. Mr. Caperton lost again.

In the meantime, the April 2010 explosion at Massey’s Upper Big Branch mine in West Virginia that killed 29 miners led to Mr. Blankenship’s ouster. A federal criminal investigation into the blast continues.

Massey was sold in 2011 for $7 billion to Alpha Natural Resources, which assumed many of Massey’s liabilities, including Mr. Caperton’s lawsuit.

After the third reversal in West Virginia, Mr. Fawcett and Mr. Stanley brought the business interference claims against Massey in Virginia. The Buchanan County court originally threw the case out. But Mr. Caperton appealed to the Virginia Supreme Court, which ordered the lower court to conduct a trial.

Mr. Stanley and Mr. Fawcett are considering filing post-trial motions, including one that would object to the judge’s decision not to let the jury hear much of the evidence about how Massey and Mr. Blankenship destroyed Mr. Caperton’s business.

“The jury was operating in the blind on many of the key facts,” Mr. Stanley said.

Alpha issued a statement saying that it was pleased that “the jury determined that the facts in this case did not warrant anything close to the excessive award the plaintiffs were seeking.”

Mr. Stanley said he and Mr. Fawcett would consider an appeal if they do not prevail on the pretrial motions.

Len Boselovic: 412-263-1941 or lboselovic@post-gazette.com.

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