Panel votes to drop big coal firms from lawsuits
The Workers' Compensation Fund Performance Council voted Friday to drop 25 big coal companies from lawsuits seeking to collect nearly $200 million in unpaid premiums and interest.
The council's unanimous vote was a recommendation to Employment Programs Commissioner William Vieweg. During an afternoon press conference in the governor's office, Vieweg praised the council's resolution as well-written.
Vieweg released a copy of the resolution just after Gov. Cecil Underwood signed a new Workers' Compensation Fund bill that makes it easier for injured workers to qualify for "permanent total disability benefits."
Jim Bowen, president of the West Virginia State Labor Federation, AFL-CIO, and Bill Raney, president of the West Virginia Coal Association, negotiated language in the bill for the past three months.
The negotiations between Bowen and Raney also included the Performance Council's action to stop the legal action against big coal companies, including A.T. Massey Coal Co., Bluestone Coal Corp., National Mines Co., Island Creek Coal Co. and USX Corp.
Bowen said 35 lawsuits will be pursued against small contractors hired by big coal companies to mine coal for them.
During the press conference, House Speaker Robert Kiss, D-Raleigh, and Senate President Earl Ray Tomblin, D-Logan, praised Bowen and Raney for their work in negotiating the compromise.
Kiss said Raney and Bowen worked "to structure a compromise that will benefit the whole state."
Steve White, executive director of the Affiliated Construction Trades Foundation, criticized the deal.
"These suits should go to trial," White said on Friday. "No one has answered the question as to how anyone let these contractors get hundreds of millions of dollars in debt.
"I can't believe it occurred without the assistance of the major corporations who were benefiting from it," White said. "Now, unpaid premiums will have to be picked up by existing businesses and workers."
The ACT Foundation is a coalition of trade unions representing building and construction workers throughout West Virginia.
Business leaders have also privately criticized the compromise negotiated by Bowen and Raney. Critics include members of the West Virginia Chamber of Commerce and West Virginia Manufacturers Association.
The compromise, they say, offers no benefits to employers who regularly pay their Workers' Compensation premiums. The compromise does include a six-month amnesty period for delinquent employers, allowing them to avoid interest and penalty payments.
The legislation Underwood signed also restored PTD benefits to surviving spouses of injured workers for two years after their deaths.
Employers have also been promised rate reductions of between 1 percent and 2 percent.
At the press conference, Underwood said, "The signing of this compromise bill signals a new era in labor, business and government relations in West Virginia. ...
"They found common ground to provide relief to employers and enhance benefits to injured workers," Underwood said.
The deal to remove major coal companies from the lawsuits was discussed in an executive session the Performance Council held at the Charleston Civic Center on March 5.
Pauline Hanson, from the ACT Foundation, objected to that secret session. Her objection was overruled.
The Performance Council's resolution to dismiss big coal companies from the lawsuits was introduced by Thad Epps, a retired Union Carbide spokesman, and seconded by Fred Tucker, a retired United Mine Workers official.
Other council members who voted to dismiss big coal companies included labor representatives Everett Sullivan, Paul Thompson and Richard Humphreys, as well as business representatives Chris Jarrett and Gene F. Bailey.
Jarrett, president of West Virginia/American Water Co., said on Friday: "After examining all the facts and all the issues, the council made a good decision. ... The [Workers' Compensation] Division did not have all its ducks in a row. It was a gray area."
The resolution criticized the lawsuits for being "founded upon certain complex theories of law which are without precedence in the field of Workers' Compensation law in West Virginia."
Major coal companies have routinely been held responsible for environmental violations by contractors, under the 1977 federal Surface Mining Control and Reclamation Act. During the 1990s, several major West Virginia coal companies spent millions of dollars to pay fines and perform reclamation work for problems left by contractors.
The resolution also criticized the cost of the lawsuits. "Outside litigation expenses to date have totaled $3 million. ... The Division may expect to incur ongoing outside litigation expenses of $30,000 per month."
The first lawsuit, filed against Bluestone Coal Co. owned by James Justice II of Beckley, was scheduled to go to trial last July before McDowell County Circuit Judge Booker Stephens, but was delayed at the coal company's request.
Other defendants who will benefit from Friday's decision are: Eaglehawk Carbon Inc., owned by James O. Bunn, and three companies - Hampden Coal Co., Chafin Branch Coal Co. and Gilbert Imported Hardwoods - owned by James "Buck" Harless.
Several major coal companies were never sued, including: Arch Mineral Corp., Ashland Coal Co., Cannelton Coal Co. and Cyprus-Amax Coal Co.