The big news in West Virginia is Wheeling Pittsburgh Steel Corporation’s verdict on Monday for nearly $220 million against Massey Energy Corporation and one of its subsidiaries, Central West Virginia Energy Company. Following a month long trial in Wellsburg, Brooke County, the jury awarded Wheeling Pitt $119.85 million for its compensatory claims and $100 million in punitive damages. I wrote about the trial last month, when Massey chairman Don Blankenship testified.
Wheeling Pitt claimed that Massey and its subsidiary breached a contract to provide Wheeling Pitt with 104,000 tons of metallurgical-grade coal per month for its coke ovens. Ken Ward, Jr.’s article in yesterday’s Charleston(WV) Gazette gives some background.
In reaction to the verdict, Blankenship said that, "We recognized that a trial in Wheeling Pitt’s backyard would be challenging, but we were still surprised at the outcome." His comment parallels what I wrote, in questioning what effect his testimony would have on the jury. Now we know: apparently not much, at least in Massey’s favor.
Without knowing whether there were any settlement discussions or how productive they may have been, unless Wheeling Pitt’s demand was astronomical, I’m not sure how Massey justified going to trial. Massey removed the case initially on the grounds that Wheeling Pitt’s Chapter 11 bankruptcy reorganization in 2000 conferred federal jurisdiction, but later withdrew its opposition to Wheeling Pitt’s motion to remand. So Massey knew that if the case went to trial, the jurors in Brooke County were far more likely to be sympathetic to Wheeling Pitt.
Massey has already promised to appeal, hoping to obtain a "more appropriate and favorable decision on appeal." Already the verdict is having an effect on Massey’s bottom line. It announced that its second quarter earnings would be affected because it had budgeted only $16 million to cover any loss, and now must increase that number to account for the amount of the verdict.
In any event, the jury didn’t deliberate for too long, considering the trial lasted about a month. The lawyers gave their closing arguments on Monday, and the jury returned its verdict about 9:30 p.m. the same day.