Book details fall of Harman Mining and tactics of Massey Energy
Paul J. Nyden
The Charleston Gazette
(MCT) The Price of Justice: A True Story of Greed and Corruption. By Laurence Leamer. New York: Times Books/Henry Holt and Co., 433 pages. Hardcover, $30.
If you go: Author Laurence Leamer, along with Mingo County native and Pittsburgh lawyer Bruce Stanley, will appear at 2 p.m. on Saturday, May 18 at Taylor Books, 226 Capitol St., Charleston. They will attend another program and free reception at 6:30 p.m. at Chief Logan State Park near Logan.
CHARLESTON, W.Va. — Appalachian coal miners have experienced increasing difficulties over the past 30 years: stagnating wages, lower pensions, reduced health benefits, dangerous working conditions and few new job opportunities.
One major cause of those difficulties has been the efforts by A.T. Massey Coal, later renamed Massey Energy, and its president Don Blankenship to weaken the United Mine Workers and to take over or force out of business smaller coal companies, many of which were union operations. Massey’s efforts began in the early 1980s at the Elk Run mine in Boone County and Rawl Sales in Mingo County.
The tragic story of Hugh Caperton’s Harman Mining and Sovereign Coal Sales in Grundy, Va., captures what has happened.
It is among the troubling stories in the new book “The Price of Justice: A True Story of Greed and Corruption” by former New York Times reporter Laurence Leamer.
Blankenship forced Caperton and Harman into bankruptcy back in 1998, prompting Caperton to file two lawsuits against Massey.
Caperton won $6 million in the Buchanan County Circuit Court in Grundy, Va. in May 2001, a verdict limited to the “lost profits for 1998” suffered by Caperton after Massey bought United Coal in July 1997 and forced Caperton to close his mines. When the Virginia Supreme Court approved the verdict, it was worth $6.6 million with interest.
Caperton and Harman filed a second lawsuit against Massey in Boone County, where its subsidiaries United Coal and Wellmore Coal were based. That case involved wider issues, focusing on Blankenship’s efforts to force Caperton out of business permanently.
Caperton and Harman won a $50 million verdict from a Boone County jury in 2002.
But this case is still being fought, even after the West Virginia Supreme Court overturned the Boone County jury verdict — now worth more than $75 million with interest — three different times.
Harman refiled the case in Virginia, and in April, the Virginia Supreme Court ruled the Buchanan Circuit Court must hear it. While the West Virginia Supreme Court ruled that the case first filed in Boone County was too similar to the first suit, the Virginia Supreme Court ruled the two cases have different content and raise different issues.
Leamer tells the story of Pittsburgh lawyers Bruce Stanley, who grew up in Mingo County and worked as a newspaper reporter in Williamson before getting a law degree, and David B. Fawcett, whose father and grandfather were both lawyers. Both work for prominent Pittsburgh firms — Stanley for ReedSmith and Fawcett for Buchanan Ingersoll.
Fawcett and Stanley also previously represented clients in two other lawsuits against Blankenship and Massey.
Wheeling-Pittsburgh Steel hired Fawcett to sue Massey after it violated its 10-year contract to supply the company with high-quality metallurgical coal. Instead, Massey began selling its met coal to buyers willing to pay higher prices, exporting much of it to steel producers in foreign countries. After a four-month trial that ended in July 2007, Fawcett won $220 million in damages for Wheeling-Pitt. When the U.S. Supreme Court rejected Massey’s appeal, Massey paid the troubled West Virginia steel company $267 million, including interest.
Stanley sued Massey on behalf of the widows of two coal miners killed during a fire in its Aracoma mine in Logan County. Using government inspection reports and testimony from other miners, Stanley proved Massey had forced its Aracoma miners to work under unsafe conditions. The size of the settlements paid to the widows were never made public.
In this book, Leamer recounts the collapse of Harman Mining.
Hugh Caperton, a second cousin of former Gov. Gaston Caperton, bought the Harman Mine near Grundy, Va., in January 1993. The mining complex had operated since the 1930s, when it employed 1,000 miners. When Caperton re-opened it, he hired 125 union miners.
The mine operated successfully, supplying coal to Wellmore Coal, a subsidiary of United Coal, based in Boone County. United sent most of Harman’s high-quality metallurgical coal to LTV Corp. steel operations near Pittsburgh.
Then, in July 1997, Massey bought United. In August, Wellmore told Caperton it would drop its coal purchases from a minimum of 573,000 tons required under Harman’s 10-year contract with Wellmore, to 205,707 tons.
The ensuing problems — including private meetings when Caperton mistakenly revealed his difficulties and future mining plans to Blankenship — ended up forcing Harman to declare bankruptcy in May 1998.
“The Price of Justice” focuses many chapters on the West Virginia Supreme Court, especially on the opinions and rulings issued by Justices Robin Davis, Brent Benjamin and Elliott “Spike” Maynard.
During the 2004 Supreme Court election, Blankenship contributed $3 million of his own money to buy television ads to help elect Brent Benjamin, a Republican, to a 12-year term. Benjamin ended up beating incumbent Warren McGraw, a Democrat.
That 2004 election, Leamer writes, “was not about ideas, not good versus evil, not liberalism versus conservatism. It was about money and power. If Benjamin won the election, he would be beholden to Blankenship and his contributions. If McGraw won, he would be beholden to certain trial lawyers.”
When the “trial lawyers’ organization filed its election report, it appears that two or three major donors may have given at least $500,000 apiece,” Leamer states.
After winning the 2004 election, Benjamin voted against Massey in several cases. But, Leamer points out, “his was not the crucial vote” in any of these cases. Benjamin voted for Massey in the Harman case, before the U.S. Supreme Court ruled he had to recuse himself because of the money Blankenship spent to elect him.
The 2008 Supreme Court election saw new controversies, when Maynard was running for a second 12-year term.
Maynard, a guaranteed vote for Blankenship and Massey, withdrew from sitting on the ongoing Caperton case after photographs were published showing him and Blankenship on vacation, with their girlfriends, along the French Riviera. Those photographs also played a role in Maynard’s losing the Democratic primary.
“The Price of Justice” discusses ongoing contacts — widely considered to be unethical — between Maynard and Blankenship when the Boone County verdict was being appealed to the state Supreme Court.
In November 2007, Charleston lawyer Scott Segal hosted a fundraiser at his home that raised more than $100,000 for Maynard. Segal is married to Robin Davis, another Supreme Court justice, who played a central role in the court’s three votes against awarding damages to Caperton and Harman Mining.
In the wake of the April 2010 explosion at Upper Big Branch Mine on the Raleigh-Boone County border that killed 29 miners, Blankenship resigned and Massey Energy was sold to Alpha Natural Resources in January 2011.
Then Gov. Joe Manchin commissioned a study into the Upper Big Branch tragedy, chaired by J. Davitt McAteer, a former head of the U.S. Mine Safety and Health Administration.
That report, Leamer writes, “spoke about the Massey culture, which, as Fawcett saw it, had bankrupted such companies as Harman and Wheeling-Pitt, destroyed the environment, and killed its own employees and neighbors.
“The report also criticized the political climate in West Virginia, detailing how it supported Massey’s behavior and was complicit in the Upper Big Branch tragedy.”
Leamer will visit Southern West Virginia on Saturday, May 18, to talk about the book.
Accompanied by Bruce Stanley, Leamer will speak at Taylor Books, at 226 Capitol Street in downtown Charleston, at 2 p.m. Leamer and Stanley will then visit Chief Logan State Park, four miles north of Logan, at 6:30 p. m., for another program and free reception.
Reach Paul J. Nyden at email@example.com or 304-348-5164.
(c) 2013 The Charleston Gazette (Charleston, W.Va.)
Visit The Charleston Gazette (Charleston, W.Va.) at www.wvgazette.com
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