If Hugh Caperton’s litigation against Massey Coal were a cat, it would now be entering its sixth or seventh life, thanks to a ruling Thursday by the Supreme Court of Virginia.
Long ago, in 1998 to be exact, the West Virginia coal mining executive launched his case against Massey, which Caperton accused of driving his mining business into ruin. According to Caperton and his lawyers at Reed Smith, when Massey acquired a company Caperton supplied with coal, it aborted Caperton’s supply agreement with the acquired company, put Caperton’s business on the brink of collapse, then reneged on tentative offers to buy Caperton’s operations. Caperton sued Massey’s subsidiary in Virginia state court for breaching the original supply contract and won a $6 million jury verdict. But he also brought tort claims against Massey in West Virginia, since that’s where he lived and where his fateful meetings with Massey’s then chief, Don Blankenship, took place. Caperton believed that Blankenship meant to destroy him, and a state-court jury in West Virginia apparently agreed. In 2002, it awarded Caperton more than $50 million in punitive and compensatory damages.
The West Virginia Supreme Court of Appeals, however, was more kindly disposed toward Blankenship and Massey. A lot more kindly disposed. As it would later emerge, one judge on the state high court had vacationed with Blankenship on the French Riviera. Another had received $3 million in contributions from Blankenship in his campaign for a seat on the Supreme Court – more than the combined contributions of all the rest of the judge’s supporters. Despite recusal efforts by Caperton and Reed Smith, the West Virginia high court struck down the verdict in 2007 on the grounds that a forum selection clause in Caperton’s original supply contract required him to bring any claims in Virginia – and because Caperton had already obtained a judgment in Virginia, his tort claims were barred under the doctrine of res judicata.
On reconsideration motions, two high court judges recused themselves, but not the judge elected with the help of Blankenship’s money. In its second ruling on Caperton’s jury verdict, the West Virginia Supreme Court once again struck the jury verdict. Reed Smith continued to argue that Caperton’s due process rights had been violated, both at the state high court and in a petition for certiorari at the U.S. Supreme Court. The Supreme Court eventually accepted the case and ruled in 2009 that Caperton was right. It reversed the state Supreme Court and sent the case back down for reconsideration.
Astonishingly, on the case’s third round at the West Virginia high court, Caperton’s verdict was once again bounced. The judges concluded for the third time that the forum selection clause in Caperton’s original supply contract with the company Massey had acquired required that all of his claims be litigated in Virginia, even though his tort suit against Massey didn’t involve that contract or conduct by anyone connected with it on Massey’s side.