W.Va. settlements don't end Alpha's legal troubles

AP News
Posted: Jan 11, 2012 4:32 PM
W.Va. settlements don't end Alpha's legal troubles

Wrongful death lawsuits brought by the families of the 29 men killed in West Virginia's Upper Big Branch mine disaster have been resolved, but that doesn't mean the days in court are over for coal producer Alpha Natural Resources.

The U.S. Department of Justice is still considering whether to pursue criminal prosecution of individuals who ran the southern West Virginia mine before it exploded on April 5, 2010, causing the nation's worst mine disaster in 40 years.

And when it bought out Massey Energy for $7.1 billion last summer, Alpha also inherited a civil lawsuit by Massey shareholders who say the mine's former operator misled them about its safety record before the explosion. That case is pending in federal court in Beckley.

So far, only one person has been criminally charged in the blast that led to the demise of Massey and the departure of its former chief executive, Don Blankenship. Former Upper Big Branch security chief Hughie Elbert Stover was convicted in November of lying to investigators and trying to destroy mine records. He is awaiting sentencing.

U.S. Attorney Booth Goodwin said Wednesday a team of attorneys, agents and analysts continues to gather evidence, but he wouldn't predict whether charges may be filed or when. Under federal law, prosecutors have five years to bring a criminal case.

"It's a matter of reaching a point in the investigation ... where we have the evidence to prove beyond a reasonable doubt that a federal crime has been committed, and if so, who committed it," he said.

The public may think that three separate investigations into the explosion have provided federal prosecutors with a ready-made case, Goodwin said.

"The reality is that the allegations in these reports would require much more investigation to bring and win criminal convictions," he said.

Goodwin says that's why his office began its own probe within days of the explosion.

Investigations by the federal Mine Safety and Health Administration, the United Mine Workers of America and an independent panel appointed by former Gov. Joe Manchin have all agreed on what caused the blast.

They determined that Massey allowed highly explosive methane gas and coal dust to accumulate, and that worn and broken cutting equipment created the spark that ignited the fuel. Broken and clogged water sprayers allowed a mere flare-up to turn into an inferno that ripped through miles of underground tunnels, killing men instantly.

In its final report, MSHA said the root cause of the explosion was Massey's "systematic, intentional and aggressive efforts" to conceal life-threatening problems. MSHA said mine managers went so far as to maintain two sets of pre-shift inspection books _ an accurate one for itself, and a fake one to throw off inspectors.

"But those other investigations weren't criminal investigations," Goodwin said, "and they weren't conducted under the very high standards that we have to meet."

On Tuesday, a lawyer for the estates of two dead miners said that Alpha had wrapped up nearly five days of mediation and resolved all the outstanding wrongful death cases. Alpha has declined comment, saying the discussions with the victims' families are confidential. It did not respond to questions Wednesday, either.

Several victims' families and their attorneys also have declined to discuss details, including the amounts to be paid.

Alpha has, however, repeatedly made clear that it's eager to shed the "legacy" problems of Massey and move forward.

Last fall, it cut a $35 million deal to end a long-running case with some 600 southern West Virginia residents who blamed Massey for poisoning their wells with coal slurry.

In December, Alpha reached a $210 million settlement with Goodwin's office that spares the corporation criminal prosecution for Upper Big Branch but leaves individuals on the hook for their conduct.

That agreement also requires Alpha to invest $48 million in a mine-safety research trust and spend an additional $80 million to improve safety at all of its mines with the latest technology.

By investing in safety initiatives, "they show they are trying to improve safety as well as rid themselves of Massey," said Bruce Dial, a mining industry consultant from Pineville, N.C.

Alpha's eagerness to settle outstanding cases is not surprising, Dial says, and he predicts the company will "more than likely" work out similar deals in any remaining lawsuits _ all with an eye to bolstering its corporate image.

"Alpha is trying to improve what the public sees of them," he said. "If they have a bad public image, then people don't want to get involved with the company."

New York attorney Joel Bernstein represents shareholders in the class-action case, which accuses Massey of violating the Securities Exchange Act. The investors say Massey repeatedly claimed to be one of the safest operators in the industry, regularly touting safety achievements and leading them to believe that safety was a corporate priority.

The Upper Big Branch investigations have since concluded Massey regularly put production and profits before the health and welfare of its workers.

Bernstein said Wednesday the recent settlements match Alpha's public statements "about wanting to clean up," but he wouldn't predict what that means for other cases.

"Every case that remains will rise or fall on what the parties think are the merits and the risks to proceeding," he said, "versus the certainty of settlement."