BECKLEY – The lawsuit filed by shareholders of Massey Energy over the explosion at the Upper Big Branch mine that killed 29 workers is headed to mediation.

On July 18, U.S. District Judge Irene Berger entered an order that stays discovery and any further prosecution in the matter for 180 days while the two sides enlist the services of a mediator.

The fatal blast occurred in April 2010 and was the result of Massey’s top executives ignoring dangerous conditions at their mines, says a complaint filed seven weeks after the incident. Massey subsidiary Performance Coal owned the mine, which is located in Raleigh County.

Pension funds filed two separate lawsuits that have now been consolidated into one. U.S. District Berger entered an order on Jan. 10 doing so.

The parties submitted a stipulation to mediate on July 16. It says they have attempted to settle the lawsuit since December 2011 but have not been able to.

“(T)he parties have been unable to resolve their dispute and have reached a stage in the negotiations where they believe that enlisting the services of a mediator would facilitate further progress in settlement negotiations,” the stipulation says.

The sessions will likely take place in Boston. The lead plaintiff is the Commonwealth of Massachusetts Pension Reserves Investment Trust.

Alpha Natural Resources bought Massey in 2011 for $7.1 billion in cash and stock.

The day after the Upper Big Branch Mine exploded, Massey’s shares dropped 11 percent to $48.45.

As the month went on and more dangerous safety practices were alleged, Massey’s stock went to $36.63. Around that time, the first shareholder lawsuit was filed by the Commonwealth of Massachusetts Pension Reserves Investment Trust.

It claimed stockholders were misled by false statements about Massey’s safety records.

By May 17, 2010, the stock stood at a new low of $33.29.

However, the stock was up to $57 in January 2011 when Alpha decided to buy the company. It paid $69 per share in the acquisition.

Berger named New York’s Labaton Sucharow and California firm Robbins Gelller Rudman & Dowd as co-lead counsel for the class, while James Humphreys & Associates was named liaison counsel for the class.

The United States also asked for a stay of discovery until Jan. 15 in order to protect the integrity of its criminal investigation of Massey.

“Individual defendants in this civil action may be, or may become, subjects or targets in the criminal investigation,” U.S. Attorney for the Southern District of West Virginia R. Booth Goodwin’s office argued.

“At present, these individual defendants have no access to the vast majority of the evidence material to the criminal investigation. They do not know, in other words, what information might be in the government’s possession.

“If civil discovery goes forward, that will change. The individual defendants will be able to use the civil discovery process to obtain much of the evidence that is at the heart of both this matter and the criminal investigation.

“With that evidence, they will be able to draw informed conclusions about key details of the government’s case – to learn what the government knows.

“That information could, in the worst case, allow the individual civil defendants to shape their own statements to the criminal investigation or to influence the testimony of other witnesses, thus obstructing the criminal investigation.”

From the West Virginia Record: Reach John O’Brien at jobrienwv@gmail.com.




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