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Caperton appeals verdict in Massey Coal case

By Paul J. Nyden

Hugh Caperton, who has argued for the past 17 years that Massey Energy forced his coal companies into bankruptcy, filed a motion in the Buchanan County Circuit Court in Grundy, Virginia, on Friday, asking for a new trial in his lawsuit there.

On May 23, a Grundy jury awarded Caperton $5 million in damages in a legal dispute than began in 1997 with A.T. Massey Coal Co. taking over Caperton’s existing coal contract.

The verdict included $4 million for Harman Mining and Caperton’s other companies and $1 million for Caperton personally.

That verdict was much lower than the $90 million in compensatory damages and interest that Caperton and his companies requested at the end of last month’s three-week trial before Judge Henry Vanover.

Lawyers for Massey, which Alpha Natural Resources purchased for $7.1 billion in 2001, filed a post-trial motion on Friday asking that the $5 million verdict be set aside completely, giving Caperton no money at all.

When Alpha bought Massey, it assumed various potential financial losses, including payments to Caperton.

Alpha, the nation’s third largest coal company, bought Massey in the wake of the tragic explosion that took the lives at 29 miners at the Upper Big Branch mine on the Raleigh-Boone country border on April 5, 2010.

Caperton’s companies, which he operated with union miners, were: Harman Development Corp, Harman Mining Corp. and Sovereign Coal Sales Inc.

On August 1, 2002, a Boone County jury awarded Harman Mining and Caperton $50 million in damages from Massey.

The West Virginia Supreme Court then overturned that verdict three different times, claiming Caperton should have filed the case in Virginia, where his mines were located.

But the Boone County jury saw definite ties to West Virginia. The jury determined Caperton was forced to shut down his operations in Buchanan County after Massey illegally broke a contract Caperton had signed to sell metallurgical coal to LTV Corp., a Pittsburgh steel company.

Caperton marketed Harman’s coal through Wellmore Coal, a company in Boone County. After Massey purchased Wellmore on July 31, 1997, Massey President Don L. Blankenship quickly began working to shift Caperton’s coal-supply contracts to Massey’s own nonunion mines in Boone County.

Caperton argued Massey put his mining operations out of business, forcing them to declare bankruptcy.

Caperton won $6 million in 2002 from a previous case he filed in Virginia, seeking compensation for economic losses for the first year after Harman Mining was forced to shut down.

In that case, the Virginia Supreme Court unanimously overturned a Buchanan County jury decision that had awarded Caperton and his companies no compensation.

On Friday, the motion filed by Alpha’s lawyers stated the court and both parties in the lawsuit agreed that “any verdict for Harman would be offset by the $6 million judgment paid to Harman in the prior Virginia contract action.

“Because the jury awarded Harman $4 million in compensatory damages, there is no balance due and payable by Massey and judgment for Harman should be entered for zero dollars,” Alpha’s post-trial motion stated.

Alpha’s lawyers, some of whom worked for Massey previously, also argued, “Harman cannot recover damages based on the business plan of a hypothetical enterprise, rather then the actual operations” of Caperton’s mines.

In its 2002 decision, the Boone County jury considered the long-term economic impacts of Massey forcing Harman out of business, including losses to Caperton, his companies, his debtors and coal miners he employed.

The West Virginia Supreme Court then held three different hearings in the case, deciding in Massey’s favor each time.

The first decision was overturned after it became publicly known that the late Supreme Court Judge Elliott “Spike” Maynard had taken a vacation with Blankenship along the Riviera in France.

The second decision was overturned because Supreme Court Judge Brent Benjamin did not recuse himself from the case, even though he won his 2004 election after Blankenship spent $3 million of his own money backing Benjamin while the Caperton case was pending.

The motion Harman filed on Friday for a new trial argued that the Grundy jury’s “small award of damages does not begin to compensate Harman for the injury sustained by it at the hands of Massey …

“Failure to grant a new trial on damages, therefore, will result in an improper and unfair windfall to Massey.”

Harman’s motion also argued Judge Vanover blocked them from introducing documents and calling witnesses during last month’s trial that could have “showed evidence of Harman’s debt and evidence showing that monies recovered here would go into bankruptcy court for distribution to the Harman Companies’ creditors.”

The motion also argued that Vanover’s rulings in last month’s trial “prevented the jury from having sufficient evidence to appreciate and assess the full nature and scope of the Harman Companies’ injuries.”

The motion added: “Hiding behind the court’s rulings, Massey falsely minimized the amount of harm suffered by Harman.”

Lawyers for Caperton stated they tried to present evidence to the jury about the “production and revenue that Alpha and [other companies] generated from those same coal reserves … But the jury was not permitted to hear this relevant evidence.”

Caperton and his companies want the court to hold a new trial about the financial damages suffered from Massey’s actions in taking over Wellmore Coal and cutting off Harman’s existing coal supply contracts.

Caperton filed a separate motion, asking for a new trial to compensation him for damages he suffered personally.

“Caperton should have been permitted to present his personal claim for lost income to the jury,” the motion states.

Reach Paul J. Nyden at

pjnyden@wvgazette.comn

or 304-348-5164.


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