How can you sue for losses when you’ve actually enjoyed gains?

Some ballroom dance instructors read the obituaries, looking for widows they can call up on the phone after a decent interval and sell dance lessons to.

Some thieves read the obituaries, too, looking for funeral times that will indicate when relatives of the deceased are at the ceremonies and their homes can be safely burglarized.

Some personal injury attorneys chase ambulances, looking for accident victims they can persuade to file lawsuits against parties alleged to be responsible for their mishaps.

It’s not pretty, but that’s how these people operate.

A little shy of two years ago, a coal mine owned by a subsidiary of Massey Energy exploded, killing 29 workers. The stock market price for Massey shares plummeted, dropping 11 percent the very next day, down to $48.45 per share. Halfway through the following month, it reached a low of $33.29.

Sure enough, within seven weeks of the incident, a New York law firm and Charleston’s James Humphreys & Associates filed a class action lawsuit on behalf of pension funds invested in Massey, accusing the company’s top executives of negligently ignoring dangerous conditions at their subsidiary’s mine.

Their argument, apparently, is that the price of the stock would not have fallen if not for the explosion, that the explosion should not have happened, and that Massey shareholders deserve to be compensated for their financial loss.

Leaving aside the fact that investments are inherently risky and that explosions are a well-known hazard for mining companies, there’s a big problem with these two recently consolidated suits: the price of Massey stock shot back up soon after they were filed.

By January of 2011 it had risen to $57, at which point Alpha Natural Resources bought the company for $7.1 billion in cash and stock, paying $69 per share.
If the shareholders ever had a case, it went out the window when Massey stock recovered its value and the company was sold for a substantial profit.