Mr. Caperton was the owner of a coal company that operated Harman mine. He sued Massey, which

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Mr. Caperton was the owner of a coal company that operated Harman mine. He sued Massey, which is a very large and powerful energy company. The suit was brought against Massey for a number of reasons. First, Massey bought another coal company called Wellmore Coal. Prior to the takeover, Wellmore Coal had bought Caperton’s high-grade coal and blended that coal with its own, later selling the product to a steel company called LTV. After the takeover, Massey cut Caperton’s high-quality coal out of the mix and tried to sell the cheaper product to LTV. However, LTV refused the new, low-grade coal. Thus, Massey took steps not only to make Caperton’s land and business look undesirable but to ruin his business completely so that LTV had no opportunity to work with Caperton or Harman mine unless Massey owned it. Massey pushed LTV to alter contracts in ways that would financially hurt Caperton’s business, and then Massey bought land around the mine to make the area unappealing to potential buyers of the mine. Massey finally offered to buy Caperton’s business and mine at a huge discount. Massey told Caperton not to sue, as Massey had the resources to spend $1 million a month to fight the bankrupt company. When Caperton did sue, the lower court found Massey liable for $50 million in damages. In 2008, Massey appealed to the supreme court of appeals of West Virginia; however, the judge had special ties with the CEO of Massey. Specifically, the CEO had donated $3 million to secure Justice Benjamin’s seat when he had campaigned for the supreme court of appeals. Caperton immediately motioned for Justice Benjamin to excuse himself from the case, but the court dismissed the motion, with Benjamin voting for the majority. The court then moved to dismiss the $50 million and reverse the case. Caperton finally appealed to bring the case to the Supreme Court. What do you think the Supreme Court decided? Do you think it believed that the involvement of Justice Benjamin in the case was unethical? Do you think the CEO of Massey was contributing to the campaigns of high justices to create political ties and thus garner political support?

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Dynamic Business Law

ISBN: 9781260247893

5th Edition

Authors: Nancy Kubasek, M. Neil Browne, Daniel Herron, Lucien Dhooge, Linda Barkacs

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