Massey victorious as controversial $50M case comes to end in W.Va.

By John O'Brien | Nov 12, 2009

Blankenship CHARLESTON -- For a third time, the West Virginia Supreme Court has overturned a $50 million verdict in a case that called into question when a justice should recuse himself or herself.





CHARLESTON - For a third time, the West Virginia Supreme Court has overturned a $50 million verdict in a case that called into question when a justice should recuse himself or herself.

This time, it was even more decisive.

West Virginia's justices voted 4-1 Thursday to reverse the Boone County award in favor of Harman Mining, which had twice complained about which justices participated in the case.

A 3-2 decision in 2007 in favor of Massey overturned the verdict before Harman owner Hugh Caperton complained about the relationship between Massey CEO Don Blankenship and then-Justice Spike Maynard. The two had been photographed together in Monaco, where they claim they had been vacationing separately at the same time.

In March 2008, the justices (minus Maynard) again voted 3-2 in favor of Massey, and Caperton complained that Justice Brent Benjamin shouldn't have participated because Blankenship spent millions of dollars supporting his 2004 campaign.

The issue came before the U.S. Supreme Court in March, and it ruled in a 5-4 vote that Benjamin should have recused himself, setting the stage for a third decision.

That decision came Thursday. Only Justice Margaret Workman dissented.

The majority ruled the forum-selection clause that required any legal disputes stemming from a 1997 contract to be brought in a county Buchanan County, Va., was valid, just as the two previous decisions had.

"(T)he forum-selection clause utilized mandatory language that identified the jurisdiction wherein disputes would be tried," wrote acting Chief Justice Robin Davis, who wrote all three majority opinions.

"The forum-selection clause of the 1997 (coal supply agreement) states in plain language that it applies to '(a)ll actions brought in connection with this agreement.' Due to the inclusion of the phrase 'all actions,' we perceive no intent by the parties to this agreement to limit in any way the type of actions to which it applies.

"Thus, for example, it would apply equally to contract claims, tort claims and statutory claims, so long as such claims are 'brought in connection with' the 1997 CSA."

In addition to Davis, Justices Menis Ketchum, Thomas McHugh and James Holliday (a senior status judge serving as Benjamin's replacement) made up the majority. Workman reserved the right to file a dissenting opinion.

Caperton asserted that it is unfair to enforce the forum-selection clause because the case had been fully litigated in West Virginia and the statute of limitations on his claim had run out in Buchanan County.

"We reject this reasoning as it would effectively divest appellate courts of their appellate jurisdiction over a lower court's denial of a motion to dismiss based upon a forum-selection clause as it relates to tort claims," Davis wrote.

In response to Thursday's opinion, Massey VP and General Counsel Shane Harvey issued a comment.

"We have always stated that the West Virginia Supreme Court's initial decision in favor of Massey was correct, the essential facts in this case have not changed, and no legal arguments were presented by our opponent that would have merited reversal," Harvey said. "The Court's decision represents a total vindication of Massey Energy's longstanding legal position. We are pleased that this decision today brings this lengthy legal proceeding to an appropriate close."

Blankenship had spent about $3 million through a political action committe in 2004 to unseat incumbent Justice Warren McGraw. Benjamin eventually defeated McGraw.

After Maynard's recusal, Harman's attorneys relentlessly pushed Benjamin to step down from the case. Benjamin said he had no financial interest in the outcome and refused.

Then-Justice Larry Starcher, an outspoken critic of Blankenship's, voluntarily stepped down with the hope it would inspire Benjamin to do the same. It did not.

Starcher had wrote a dissenting opinion after the first 3-2 vote.

"Let's not forget why the jury's verdict was justified: the jurors looked Mr. Blankenship in the eye and concluded that he was lying, and that Mr. Caperton was telling the truth," Starcher wrote.

"The majority opinion says: 'That doesn't matter' -- it all should have been handled in Virginia. To which argument, one must respond: 'Horse puckey!'"

The U.S. Supreme Court ruled Caperton's due process rights were violated.

"Under our precedents there are objective standards that require recusal when 'the probability of actual bias on the part of the judge or decisionmaker is too high to be constitutionally tolerable,'" Justice Anthony Kennedy wrote for the majority.

"Applying those precedents, we find that, in all the circumstances of this case, due process requires recusal."

Chief Justice John Roberts dissented.

"(T)he court enlists the Due Process Clause to overturn a judge's failure to recuse because of a 'probability of bias,'" Roberts wrote. "Unlike the established grounds for disqualification, a 'probability of bias' cannot be defined in any limited way.

"The court's new 'rule' provides no guidance to judges and litigants about when recusal will be constitutionally required. This will inevitably lead to an increase in allegations that judges are biased, however groundless those charges may be."

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