InsideCounsel » July 2008
Case Highlights Perils of Elected Judgeships
As Caperton v. Massey Energy wended its way through the courts in West Virginia, critics of judicial elections held it up as a case study in the conflicts of interest—real or perceived—that elected judges can confront. The West Virginia Supreme Court twice considered the case with three of the five justices facing conflicts that were doozies.
The case started out as a rather straightforward business dispute between one of the nation’s largest coal companies and a small company that claimed unfair competition. But it quickly became an issue of judicial ethics when photos of Chief Justice Elliot “Spike” Maynard partying with Massey CEO Don L. Blankenship on the French Riviera emerged shortly after the high court had ruled for Massey in the case.
The court agreed to rehear the case, and Maynard disqualified himself from the second hearing. Another state Supreme Court Justice, Larry Starcher, recused himself from the second go-round after he called Blankenship a “clown.” And Justice Brent D. Benjamin refused to step aside when the court re-heard the case, even though Blankenship had contributed more than $3 million to Benjamin’s election campaign.
In April, the court, newly reconstituted with two temporary judges, upheld the state high court’s original verdict, which tossed out a $75 million judgment against Massey. The plaintiff plans a U.S. Supreme Court appeal.
Between the issue of recusals, the millions of dollars at stake and the now-infamous photos, it’s easy to lose sight of the case itself, according to Jeffrey V. Mehalic, a solo practitioner in Charleston, W. Va., who has followed the case for years. “The facts outside of the trial have overwhelmed the merits of the case,” he says.
Blistering Dissent
The litigation began in the 1990s when Hugh Caperton, who owned a small company named Harman Mining, claimed that Massey drove Harman out of business. In 2002, a circuit court jury found that Massey, the fourth largest coal company in the United States, committed fraudulent concealment, fraudulent interference and tortious interference. It awarded Harman $50 million. Massey appealed, arguing among other issues that the West Virginia Circuit Court was not the proper venue. In 2005, the circuit court denied the post-trial motions. The case then came before the West Virginia Supreme Court for the first time.
Last November, the state high court, citing among other issues the forum-selection clause contained in Harman’s contract, voted 3-2 to overturn the $50 million jury verdict—which had grown to more than $75 million with accrued interest over the years.
In that original ruling, Starcher issued a blistering dissent. “The majority opinion is morally wrong because it steals more than $60 million dollars from a man who was the victim of a deliberate, illegal scheme to destroy his business. The majority opinion is legally wrong because it uses erroneous legal reasoning to justify an immoral result,” he wrote.
The high court decided to hear the case again, though, after the 2006 photos of Blankenship and Maynard emerged. The exotic location of the photos enhanced the controversy, according to Mehalic. “There are two guys in Monte Carlo, and they were perceived to be living it up,” he says.
Once the court agreed to rehear the case, Maynard and Starcher eventually stepped aside.
Caperton called for Benjamin to recuse himself, but Benjamin decided to hear the case—and served as acting chief justice, since Maynard was not presiding. The court again ruled 3-2 to throw out the original verdict against Massey.
