Court Overturns $76M Massey Judgment

The 3-2 ruling finds that a clause in the 1997 contract between Harman Mining Co. and a coal operator later acquired by Massey should have determined the forum for the resulting dispute.

The majority also found that a 2001 civil trial in Virginia stemming from the same contract, which ended in a $6 million verdict in Harman's favor, should have pre-empted the 2002 Boone County case.

But the ruling also accepts many of the allegations of unfair and deceptive dealing that Harman said forced it and its president, Hugh Caperton, into bankruptcy.

"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," the majority found. "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."

While the Boone County jury awarded Harman $50 million in damages, post-verdict interest swelled the judgment amid delays in filing the appeal. Wednesday's ruling vacates the entire judgment and directs Circuit Judge Jay Hoke to dismiss the case against Massey and its Wellmore Coal Corp. subsidiary. The ruling virtually bars Harman and Caperton from refiling the case.

Chief Justice Robin Davis wrote the 64-page opinion, which includes 37 footnotes and sets eight new legal precedents mostly addressing forum-selection clauses in contracts.

Justices Larry Starcher and Joseph Albright dissented in the case, and each filed separate opinions blasting the majority's conclusions.

Starcher called the ruling "morally and legally wrong."

"It steals more than $60 million dollars from a man who was the victim of a deliberate, illegal scheme to destroy his business," Starcher wrote. "It uses erroneous legal reasoning to justify an immoral result."

Albright called the 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."

A lawyer for Harman called the decision disappointing, painful and unjust.

"A jury of Boone County citizens, where Massey does a bulk of its business in West Virginia, concluded that fraud had been committed and tortuous acts conducted," Bruce Stanley said. "Today, Massey's scot-free."

Massey spokesman Roger Hendriksen said the company was pleased with the ruling. He declined immediate comment on the majority's findings regarding Massey's conduct toward Harman and Caperton.

Massey is the nation's fourth-largest coal producer by revenue, and operates 19 mining complexes in West Virginia, Kentucky and Virginia.

The Harman case was marked by Massey's attempt to remove Starcher from hearing it. Company lawyers cited a series of public comments in which the justice criticized or ridiculed Massey, its alleged environmental record, Blankenship and his political activities.

The latter includes the 2004 independent campaign in which Blankenship estimates he spent $3.5 million to unseat Supreme Court Justice Warren McGraw, a Democrat, and elect Republican Brent Benjamin in his place.

Starcher remained on the case as did Benjamin and Justice Elliott "Spike" Maynard, a friend of Blankenship's since childhood.

Massey has also sued the state Supreme Court to challenge its rules for handling recusal requests. A federal judge recently refused to dismiss that lawsuit, and it remains pending.