MORGANTOWN, W.Va. -- Institutional shareholders in the former Massey Energy Co. want the state Supreme Court to revive a lawsuit they filed two weeks after the Upper Big Branch mine disaster.
Lawyers for the California State Teachers' Retirement System, Amalgamated Bank and Manville Trust are asking the justices to overturn a 2011 dismissal order and send their case back to Kanawha County Circuit Court. Oral arguments are set for Wednesday morning in Charleston.
The lawsuit accused Massey of violating a 2008 settlement agreement aimed at making its operations safer. The shareholders had originally sued Virginia-based Massey in 2007, saying it routinely failed to comply with environmental and worker safety laws.
Under the settlement, Massey said it would embrace a new corporate governance agreement and make safety a priority. Then the mine near Montcoal exploded in April 2010, killing 29 men in the worst U.S. mining disaster in four decades.
Two men are already behind bars for their actions at the mine, and the disaster is the focus of a continuing criminal investigation by the Justice Department.
The shareholders renewed their lawsuit 11 days after the blast and demanded that Kanawha County Circuit Judge James C. Stucky hold Massey in contempt of the 2008 settlement. The shareholders argued they were entitled to pursue damages from more than a dozen Massey officials, including former CEO Don Blankenship and members of the board of directors.
Massey's market value fell by $975 million within two days of the explosion.
But Stucky dismissed the shareholders' claim, ruling that the settlement agreement was invalidated the day Alpha Natural Resources bought Massey for $7.1 billion in June 2011. Thousands of shareholders, he said, overwhelmingly approved the sale, effectively giving up their rights to control Massey going forward.
"Plaintiffs are now FORMER shareholders," the judge wrote. "<t40>...<t$> The legal effect of the merger is no different than if, for example, plaintiffs had sold their Massey shares in the market, not in connection with the merger."
Alpha is now the sole shareholder in Massey, which is now known as Alpha Appalachia Holdings Inc. for legal purposes. Its former mines and related operations function as Alpha ventures.
In all, Alpha runs 55 mines and 18 preparation plants in West Virginia, and about 45 mines and seven loadout facilities in Virginia, Kentucky, Pennsylvania and Wyoming.