Caperton refiles Massey suit in Virginia

By Jessica M. Karmasek and Chris Dickerson | Nov 11, 2010

Caperton CHARLESTON -- Former coal mine operator Hugh Caperton on Tuesday refiled a lawsuit against Richmond, Va.-based Massey Energy Co.

Caperton

Blankenship

CHARLESTON -- Former coal mine operator Hugh Caperton on Tuesday refiled a lawsuit against Richmond, Va.-based Massey Energy Co.

The suit, filed in Buchanan Circuit Court in Grundy, Va., by Caperton and Harman Development, Harman Mining, and Sovereign Coal Sales, seeks to recover damages similar to those that a Boone County, W.Va., jury awarded Caperton and his companies in 2002.

Following a seven-week jury trial, the Boone County jury had awarded Caperton and his companies $50 million based on the coal company's "interference with contractual relations, fraudulent misrepresentation and fraudulent concealment."

However, that verdict was overturned three times by the West Virginia Supreme Court of Appeals.

The new complaint states that it was filed in Buchanan County, Va., "not because they believe this is the most appropriate venue for this dispute, but because the Supreme Court of Appeals of West Virginia had ruled that this action may be heard only in this court."

It was Caperton's original 1998 lawsuit that inspired a John Grisham novel, "The Appeal," and prompted the U.S. Supreme Court to issue a new standard for judges to recuse themselves.

Former West Virginia Supreme Court Justice Spike Maynard stepped aside in 2008 from the case after photographs had emerged showing him on vacation alongside Massey CEO Don Blankenship.

Current Justice Brent Benjamin also recused himself after the nation's high court ruled last year that he shouldn't have ruled on the coal company's appeals because Blankenship had spent nearly $3 million supporting his election.

The new suit seeks $56.4 million in damages for Caperton and $33 million in compensatory damages and $1.5 million in punitive damages for the three companies.

According to the complaint, the action was filed "for compensatory and punitive damages arising out of the tortious interference and fraudulent actions of the Defendant, as found by a jury and judge in West Virginia, which caused Plaintiffs to lose the ability to continue in the business of mining and selling coal, caused the loss of essentially all of the corporate Plaintiffs' assets, caused the corporate Plaintiffs to lose all profits they would have earned in 1998 and thereafter, caused the corporate Plaintiffs to become insolvent with no ability to engage in business, and caused Plaintiff Caperton to suffer significant individual injury, including loss of income, damage to reputation, and the inability to continue working in his chosen profession."

Caperton alleges in the complaint that Massey acquired a company that had a long-term relationship with his companies, "directed it to take steps" to put him out of business, lulled his companies into "a false sense of security with misrepresentations," put his companies out of business and "caused a loss of over 100 union mining jobs," among other things.

The former coal mine operator says Massey Energy did so "for the sole purpose of interfering with and utterly destroying for all time any and all business relations with (Caperton and his companies)."

The newly filed complaint also says Caperton's personal credit rating has been adversely affected and that his personal annual income has went from more than $1.3 million to $60,000.

Bruce Stanley, a Pittsburgh lawyer who represents Caperton, told the Wall Street Journal that he refiled the case because the West Virginia high court's rulings didn't address the merits of the case.

"The reason the case was dismissed was improper venue," Stanley told the paper. "Venue is not a decision on the merits."

On Wednesday, Massey vice president and general counsel Shane Harvey said the company hadn't yet received a copy of the complaint.

"Mr. Caperton's claims have been rejected by the West Virginia court system multiple times, and we hope that his attorneys have not decided to waste more resources by seeking to bring a meritless case back to the Virginia court system," Harvey said in a statement.

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