New Hearing Held in Coal Case

West Virginia Top Court Revisits Appeal in Suit After Pair of Recusals

March 13, 2008

CHARLESTON, W.Va. -- West Virginia's highest court held a new hearing yesterday in a case involving the nation's fourth-largest coal company by revenue, after photos showing the court's chief justice with the company's chief executive in Monaco upended the case in January.

Chief Justice Elliott "Spike" Maynard recused himself from the case after his vacationing with Massey Energy Co. CEO Don Blankenship became public.

The state's Supreme Court of Appeals originally decided in November by a 3-2 vote to overturn a $50 million jury verdict against Massey. It later set the decision aside. One of the two dissenters, a justice who had called Mr. Blankenship "stupid," has also recused himself. A third justice, whose campaign was supported by $3 million from Mr. Blankenship, is staying on the bench for the case.

The court, with two replacement justices for the case, is expected to issue its ruling by the end of June.

West Virginia is one of seven states to elect all its judges on a partisan basis, a system that some critics say makes it too easy for wealthy businesspeople to influence the judicial system.

The case has fueled debate about when judges should recuse themselves. U.S. Supreme Court Justice Antonin Scalia refused to disqualify himself from a case involving Vice President Dick Cheney, although the two had gone duck hunting together. Justice Scalia argued that Mr. Cheney was sued in his official capacity.

Meanwhile, federal investigators have interviewed court employees to learn more about the Monaco vacation, according to two court employees and a lawyer briefed on the case. Representatives of the U.S. attorney's office in the Southern District of West Virginia and the Federal Bureau of Investigation declined to comment on whether their offices have opened investigations.

Mr. Blankenship declined interview requests through a spokesman. Justice Maynard has denied any wrongdoing and said he recused himself to avoid the appearance of impropriety.

The case itself was filed a decade ago by a now-bankrupt coal company called Harman Mining Co. Harman claimed Massey forced it and its owner into bankruptcy by committing fraud and illegally interfering with its business, including buying a band of coal reserves around Harman's mine, making it less attractive to a potential buyer. In 2002, a West Virginia jury agreed and said Massey had to pay Harman $50 million, which with interest now stands at $76 million.

In its November ruling, the Supreme Court of Appeals said that verdict was fair but threw it out, saying the issues had been resolved in an earlier lawsuit.

A lawyer for Harman's former president then filed a motion to disqualify Justice Maynard after getting an anonymous tip to pick up an envelope that contained photographs of the judge and Mr. Blankenship on vacation together.

The photos were carried in newspapers across West Virginia. Editorials blasted the justice and pressured him to step down from the case. Justice Maynard, a Democrat up for re-election to a second term this year, has made available an American Express bill for airline tickets and his hotel stay but hasn't released any other receipts related to the trip.

Some have played down the connection between Mr. Blankenship and Justice Maynard. Steven Roberts, president of the West Virginia Chamber of Commerce, said it would be natural in such a small state for the two men to know each other. "What I understand is that they were talking to each other and found out that they were going to be in the same place at the same time and ended up having some get-togethers," he said.

Meanwhile, Justice Larry Starcher, one of the two dissenters in November, also agreed to step down from the case. Justice Starcher has claimed that Mr. Blankenship bought a seat on the court, referring to the CEO's $3 million in campaign support for Justice Brent Benjamin in 2004. Justice Benjamin, a Republican who was in the three-vote majority in November, has said Mr. Blankenship's support has no impact on his ability to judge cases.

Republican state Sen. John Yoder said Mr. Blankenship had every right to spend several million dollars on a judicial election because the state system allows that. "I just think that the rules need to be changed, and the system is wrong," said Mr. Yoder.

During yesterday's oral arguments, the two sides again focused on the jurisdiction issue that proved critical in November. Massey's lawyers argued that a related earlier case tried in Virginia had resolved the issues in this case, while Harman's attorneys said the issues tried in West Virginia were different.

Copyright 2008