News
January 27, 2008
Massey appeals $220 million verdict from Northern Panhandle

As expected, Massey Energy Co. and a Massey subsidiary have appealed a $220 million jury verdict against them to the state Supreme Court.

Wheeling-Pittsburgh Steel Corp. won the verdict July 2 after a five-week trial before a Brooke County jury. The jury decided that Massey improperly failed to deliver 104,000 tons of metallurgical coal a month, as required under a contract through 2010 with the steel company.

Massey and its subsidiary, Central West Virginia Energy, transferred sales to customers willing to pay more for the high-quality coal, including overseas customers, according to legal documents filed in the case.

The appeal was filed Tuesday. Massey asks the Supreme Court to dismiss the $220 million jury verdict or to order a new jury trial. It argues no punitive damages - which were $100 million in this case - or other penalties should be attached to a verdict related to a breach of contract.

In a statement released shortly after the verdict, Massey CEO Donald L. Blankenship said, "We firmly believe we operated within the terms of our coal supply contract. We recognized that a trial in Wheeling Pitt's back yard would be challenging, but we were still surprised at the outcome."

Massey believes its pending appeal "may result in a significant reduction in damages," according to a written statement the company filed with the U.S. Securities and Exchange Commission the day after the jury verdict.

Wheeling-Pitt, which became part of Esmark Inc. in November, filed the lawsuit in April 2005 for damages related to the costs of buying replacement coal, as well as for damages to coke ovens forced to shut down.

Massey's appeal of the Wheeling-Pitt verdict could raise the same questions as those raised by Harman Mining and its owner, Hugh Caperton, after the Supreme Court overturned a $76.3 million Boone County jury verdict against Massey.

The Supreme Court ruled 3-2 in favor of Massey in November. But earlier this month, lawyers for Caperton and Harman filed two dozen photographs with the court that showed Blankenship vacationing in Europe with Supreme Court Chief Justice Elliott "Spike" Maynard.

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