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Massey Energy Expects Q3 Loss, CEO Continues Stoking Fires of Hell With Own Product
September 17, 2010 02:53 PM
LAND OF THE LOSS
Shares of coal producer Massey Energy Co. dropped today, after company executives said more stringent regulatory enforcement has affected profitability, and that it expects a third-quarter operating loss.
Stricter regulations are far from the worst thing in the world for an outfit like Massey, which racked up 3,011 citations in 2009 before the April, 2010 explosion at Massey's Upper Big Branch mine, which killed 29 people.
We touched on Massey's history a while back, and it seems appropriate to take a look at the Massey story once again.
Attorney Brett Emison, of Lexington, Missouri’s Langdon & Emison called Massey’s recent history “a story great novels are made of,” and, in fact, it truly is. Massey CEO Don Blankenship’s successful attempt to “buy” a West Virginia Supreme Court judge was the basis for John Grisham's 2008 legal thriller,
In 2002, a West Virginia jury awarded the now-defunct Harman Coal $50 million after finding Massey liable for “fraudulent misrepresentation, concealment, and tortious interference” related to a canceled coal-delivery contract that put Harman out of business.
Massey appealed the ruling.
Two years later, the case was headed to the West Virginia Supreme Court of Appeals. While waiting for the case to be heard, West Virginia’s judicial elections were underway, and a lawyer named Brent Benjamin was running against incumbent justice Warren McGraw, whom Blankenship considered anti-business and believed would uphold the lower court’s ruling against Massey.
Blankenship formed a group called “And for the Sake of the Kids,” which raised $3 million for Benjamin’s campaign -- more money than any other group, including Benjamin’s own campaign committee -- and proceeded to paint McGraw as a radical, liberal liar who was soft on crime.
Surprise! McGraw was defeated and the new Justice Benjamin -- now West Virginia’s chief justice -- twice cast the deciding vote to throw out the judgment that had awarded $50 million to Harman Coal, after refusing to recuse himself from the case, as requested by Harman’s President Hugh Caperton. (In a related note, Justice Elliott "Spike" Maynard, who was also on the panel hearing the case, recused himself after photographs of him and Blankenship vacationing together in the French Riviera were made public.)
“Massey operates with impunity,” Brett Emison told Minyanville. “They go ahead and ignore regulations because when they’re called into the courtroom and lose a case, they know they can buy their way out of it.” (Emison wasn't involved in this case or any other case pertaining to Massey.)
Certainly, other mining companies like Peabody Energy, Arch Coal, Consol Energy, and Alpha Natural Resources see their fair share of problems -- extracting coal from the earth is a tough business. But Massey seems to exist in a league of its own.
On June 8, 2009, in a 5-4 ruling, the United States Supreme Court found that Justice Benjamin’s failure to recuse himself from the Harman case violated the Fourteenth Amendment of the Constitution, depriving Harman Coal’s right to due process.
Justice Anthony Kennedy wrote, “Not every campaign contribution by a litigant or attorney creates a probability of bias that requires a judge’s recusal, but this is an exceptional case.”
“The really surprising thing here is that it was a 5-4 decision,” Emison points out. “That means four Supreme Court justices said there’s nothing wrong with buying a judge. Chief Justice Roberts basically said it really wasn’t a big deal.”
In an editorial, the
New York Times
agreed, writing that the idea that there were four dissenting opinions at all was “alarming” and noted that “Chief Justice Roberts is fond of likening a judge’s role to that of a baseball umpire. It is hard to imagine that professional baseball or its fans would trust the fairness of an umpire who accepted $3 million from one of the teams.”
What did Don Blankenship have to say about the Harman case?
Unless you have comprehensive health coverage, don’t ask him. When an ABC News reporter tried to interview Blankenship about it in the parking lot of a Massey Energy office, Blankenship responded, "If you're going to start taking pictures of me, you're liable to get shot," before grabbing for the camera.
Calls to Massey Energy for comment were not returned.
No positions in stocks mentioned.
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