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W.Va. court won't hear appeal in Massey case
Saturday, May 24, 2008

The parent of Wheeling-Pittsburgh Steel won an important victory yesterday when the West Virginia Supreme Court declined to hear an appeal of the $220 million judgment the struggling steel company won last summer from Massey Energy.

Richmond, Va.-based Massey said it would consider appealing the judgment to the U.S. Supreme Court. Massey estimates the judgment has grown to about $260 million because of interest earned since a Brooke County, W.Va. jury ruled for Wheeling-Pitt in July.

The case is one of two involving Massey that sparked allegations of bias on West Virginia's highest court because of Massey CEO Don Blankenship's ties with two justices. One of the judges, Chief Justice Elliott Maynard, lost a bid for re-election in primary elections held earlier this month.

Photos showing Mr. Blankenship vacationing with Justice Maynard on the French Riviera in July 2006 were filed with West Virginia's Supreme Court in January. Justice Maynard subsequently withdrew from considering Massey cases.

Lawyers for Wheeling-Pitt also asked Justice Brent Benjamin, who replaced Justice Maynard as chief justice, to step down. They argued he benefitted from more than $3 million Mr. Blankenship spent on the 2004 supreme court election, when Justice Benjamin won his seat. Justice Benjamin declined to recuse himself.

Wheeling-Pittsburgh and Mountain State Carbon, a Follansbee, W.Va., coke plant it co-owns with Russian steelmaker Severstal, sued Massey in 2005 for violating a coal supply agreement.

"We said all along that, after a very long trial, the jurors in this case did the right thing. Today's decision affirms their verdict," said David Fawcett, the Pittsburgh attorney who represented Wheeling-Pitt.

Since the verdict, Wheeling-Pitt has merged with Esmark, a Chicago Heights, Ill. steel processor. Severstal and Essar Steel Holdings of India are currently waging a battle to acquire Esmark for $17 per share. Esmark backs Essar while the United Steelworkers union supports Severstal.

Esmark still faces a lawsuit brought by ArcelorMittal, which is seeking more than $540 million in damages over the failed sale of its Baltimore steel mill to Esmark and its partners last year. An Esmark-led coalition wanted to purchase the mill for $1.35 billion. ArcelorMittal sold the mill to Severstal this month for $810 million, excluding debt.

Wheeling-Pitt lost $158 million in the first nine months of last year. After the merger, Esmark reported a 2007 loss of $9 million, or $2.15 per share.

Esmark shares closed yesterday at $18.44, unchanged.

Len Boselovic can be reached at lboselovic@post-gazette.com or 412-263-1941.
First published on May 24, 2008 at 12:00 am