RICHMOND, Va. – The 4th U.S. Circuit Court of Appeals ruled Wednesday that Gov. Joe Manchin is not entitled to immunity in a suit brought against him by Massey Energy CEO Don Blankenship, affirming an earlier District Court ruling.

To read the opinion, click here.

The court, based in Richmond, Va., ruled that U.S. District Judge John Copenhaver correctly denied Manchin's motion to dismiss the suit filed by Blankenship in July 2005. That means Blankenship's civil rights suit against the governor can proceed.

"I think it's good," Blankenship told The Record on Wednesday. "We now can go to the next step and get to the bottom of this and find out what really happened.

"I believe that for the state or the nation to move forward, you have to have open debate. You should be able to say what you want and not worry about the consequences."

Blankenship had sued Manchin alleging that the governor had violated his First Amendment rights by threatening to retaliate with increased government scrutiny of his coal operations after Blankenship had poured millions into a campaign to defeat a pension bond amendment backed by Manchin. Blankenship sought a ruling finding that Manchin had violated his rights and a court order forbidding retaliation.

In January, Copenhaver barred Blankenship from seeking damages against Manchin in his official capacity as governor. Manchin appealed, and it was heard in October. The opinion was issued Wednesday.

"This appeal requires us to determine whether a sitting governor is entitled to qualified immunity for allegedly threatening a political rival and prominent businessman during a press conference concerning a bond issue before West Virginia voters," Fourth Circuit Judge Roger Gregory wrote in the opinion, which was joined by James R. Spencer, Chief U.S. District Judge for the Eastern District of Virginia, who was sitting by designation. "Because we find that the facts as alleged establish that the governor threatened imminent adverse regulatory action and that a reasonable public official in his position would know that such a threat is unlawful, we hold that the governor is not entitled to immunity from this suit at the motion-to-dismiss stage.

"Accordingly, we affirm the ruling of the district court."

The opinion paints the story.

In February 2005, the West Virginia legislature passed a bond amendment to the state constitution. If approved by voters, the amendment would have permitted the sale of over five billion dollars worth of state general-obligation bonds to fund underfunded pension and disability plans for teachers, judges, and other public employees.

The amendment was placed before the voters in a special election on June 25, 2005. Blankenship opposed the amendment and began to publicize his opposition through interviews and the financing of television, radio, and direct-mail advertising. Manchin ublicly campaigned in support of the amendment, including, according to the complaint, running negative advertisements portraying Blankenship as an outsider and using staff to ask the West Virginia Secretary of State about Blankenship's residence.

On June 17, 2005, the Governor appeared at an American Electric Power plant in Putnam County, West Virginia, in part to promote the bond amendment. After his speech, he took media questions. Blankenship alleges that some of Manchin's answers "threatened [Blankenship] by warning that the government would scrutinize the affairs of [Blankenship] and Massey even more closely in light of [Blankenship's] decision to participate in the public debate over the pension bond amendment."

Manchin is quoted as remarking, "I think that [additional scrutiny] is justified now, since [Blankenship] has jumped in there [the bond debate] with his personal wealth trying to direct public policy."

On June 25, 2005, voters rejected the bond amendment. Blankenship alleges that in retaliation for his campaign against the amendment, Manchin "used state government resources to reinforce his threat against [Blankenship] and Massey."

According to the opinion, the state Department of Environmental Protection on June 30, 2005, approved a Massey permit application to build a coal silo in Raleigh County. Despite the approval, Manchin allegedly ordered members of his staff to meet with DEP and other regulatory officials to investigate possible safety concerns with regard to the silo site. Blankenship maintains Manchin ignored these safety concerns when other groups raised them previously and initiated the investigation "not out of concern for the safety of residents, but instead, in retaliation for [Blankenship's] campaign against the bond amendment."

On July 26, 2005, Blankenship filed his complaint against Manchin seeking declaratory, injunctive and compensatory relief, as well as attorneys' fees. In response, Manchin filed a motion to dismiss, alleging that Blankenship's complaint fails to state a claim of retaliatory action in violation of the Constitution; that Blankenship lacks standing to assert the claim; that the claims are barred by qualified immunity; that monetary damages based in Manchin's official capacity are barred by the Eleventh Amendment; and that injunctive relief is inappropriate.

On Jan. 18, 2006, the district court denied the motion in all respects, except for dismissing the compensatory damages claim against Manchin in his official capacity.

The district court characterized the relationship between Manchin and Blankenship as "best exhibited by the fact that the industry in which the [Appellee] finds himself is also one over which the state exercises robust oversight powers."

The district court then concluded that the complaint adequately alleged threats suggesting imminent adverse regulatory action because of Manchin's remarks that Blankenship justifiably should expect tougher scrutiny of his business affairs. In addition, the district court noted that discovery would reveal whether Manchin's actions in ordering his staff to meet with DEP officials was an accompanyingact of retaliation against Appellee.

Taking these factors together, the district court held that the alleged threats and retaliatory conduct would deter a person of ordinary firmness from exercising her First Amendment rights.

Further, the district court held that "a reasonable governor would have known that Manchin's alleged actions violated clearly established law. Finding a constitutional violation of a clearly established right, the district court denied the application of qualified immunity."

"Because Massey is an industry leader in a heavily regulated industry, we can draw an inference in favor of the Appellee that Massey is subject to near-constant regulatory oversight, and any 'additional' scrutiny could be applied immediately," the court wrote. "Indeed, the Appellee's complaint supports this conclusion by alleging the actual investigation ordered by the Governor a mere five days after voters rejected the bond amendment.

Thus, rather than an opinion or prediction, Manchin's remarks are reasonably construed as threats that, as a result of Blankenship's speech, Massey would be subject to greater regulation than prior to Blankenship's remarks, or than its competitors faced. Such a threat, directed towards an individual who is the head of a company in a highly regulated industry, constitutes an intimation of imminent adverse regulatory action …"

Manchin General Counsel Carte Goodwin told The Associated Press the governor is disappointed.

"The governor remains confident that this nuisance suit will ultimately end in the governor's favor," Goodwin told The AP.

Blankenship told the AP that he doesn't see this as a nuisance suit.

"I think that they realize that it's not a nuisance lawsuit," he said. "Freedom of speech in the United States is a pretty important issue.

"I think people know I've been pretty outspoken, but yes, I've been concerned about my right to free speech."

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