Blankenship Gets 1 Year In Prison & $250,000 fine – both the maximum possible for conspiring to block safety measures before Massey Mine Blast that killed 29 workes 6 years ago

Blankenship blaming nature didn’t fly with the federal judge:

Wounds reopen as ex-coal chief gets one year in prison for collapse that killed 29 killed in mine by Jonathan Mattise, The Associated Press, April 6, 2016, Calgary Herald

CHARLESTON, W.Va. — Standing before a federal judge, former coal company executive Don Blankenship expressed sorrow for the families of 29 men killed in his coal mine six years ago but contended that he committed no crime.

“I just want to make the point that these men were proud coal miners. They’ve been doing it a long time. And they’d want the truth of what happened there to be known,” Blankenship said Wednesday before advancing his theory that an act of nature, not negligence, caused the deadly explosion in his mine.

The judge told him to stop talking about the explosion and handed down the stiffest sentence allowed for his misdemeanour conviction: one year in prison and a $250,000 fine.

Blankenship’s words stung for the families on hand who lost loved ones in the Upper Big Branch Mine explosion, the deadliest U.S. mining disaster in four decades, and some of them yelled at him as he exited the courthouse into a swarm of TV cameras.

Tommy Davis, who lost three family members in the 2010 tragedy and worked at the mine that day himself, started talking over the reporters and lawyers.

“Hey, Don. This is Tom,” his voice cracking. “It’s been six years — six years I missed my son, my brother, my nephew. How come you never came to apologize to me personally? How come you never asked to see me?”

“He ain’t apologized to none of us,” added Robert Atkins, whose son Jason died in the explosion.

“We buried our kid because of you. … That’s all I got is a goddamn tombstone,” Atkins said.

About a half-dozen law enforcement officers swarmed around Blankenship and ushered him into a van that drove him away.

One day after the sixth anniversary of the disaster, the sentencing gave families closure and reopened wounds.

A federal jury convicted Blankenship on Dec. 3 of a misdemeanour conspiracy to violate mine safety standards at Upper Big Branch. The jury acquitted him of felonies that could have extended his sentence to 30 years.

The trial wasn’t about what caused the explosion, and the judge made that painstakingly clear. U.S. District Judge Irene Berger also ruled that family members couldn’t speak at Wednesday’s sentencing for similar reasons, saying they weren’t eligible for restitution and the cause of the explosion wasn’t up for debate in the case.

At Upper Big Branch, four investigations found worn and broken cutting equipment created a spark that ignited accumulations of coal dust and methane gas. Broken and clogged water sprayers then allowed what should have been a minor flare-up to become an inferno.

Blankenship disputes those reports. He believes natural gas in the mine, and not methane gas and excess coal dust, was at the root of the explosion.

Blankenship rose from a meagre, single-mother Appalachian household to become one of the wealthiest, most influential figures in the region and in the coal industry, and someone who gives back to the community, the judge noted Wednesday.

“Instead of being able to tout you as one of West Virginia’s success stories, however, we are here as a result of your part in a dangerous conspiracy,” Berger said.

During the trial, prosecutors called Blankenship a bullish micromanager who meddled in the smallest details of Upper Big Branch. They said Massey’s safety programs were just a facade — never backed by more money to hire additional miners or take more time on safety tasks.

Blankenship’s attorneys believe he shouldn’t have gotten more than a fine and probation, and have promised to appeal. They embraced Blankenship’s image as a tough boss, but countered it by saying he demanded safety and showed commitment to his community, family and employees.

Though Blankenship received the harshest penalties possible for the conspiracy, U.S. Labor Secretary Thomas Perez, prosecutors and the family members said the punishment didn’t fit the crime.

“I miss my family. (Blankenship) hugged his,” Davis said. “And all he gets is a year. (The judge) has done great; she gave him what she can give him. But there need to be stricter, more harsh penalties for people like that who put greed and money over human life.” [Emphasis added]

BREAKING: Blankenship Gets 1 Year In Prison For Massey Mine Blast by Cara Salvatore, April 6, 2016, Law360

Law360, New York (April 6, 2016, 12:22 PM ET) — One day after the sixth anniversary of a deadly Massey Energy mine explosion, former Massey CEO Don Blankenship was sentenced Wednesday to serve 12 months and pay a $250,000 fine — both the maximum possible — for conspiring to block safety measures before the blast.

U.S. District Judge Irene Berger, who oversaw Blankenship’s trial, handed down the sentence Wednesday in her West Virginia courtroom, according to a spokesman for the U.S. Attorney’s Office for the Southern District of West Virginia. [Subscription req’d]

Alpha Natural Resources Seeking $28 Million From Blankenship by Daniel McDonald, March 9, 2016, dailynewsx

Ex-coal baron Donald Blankenship, facing as long as a year in prison over his conviction for flouting mine-safety rules, may take a bigger hit if a judge makes him pay $28 million in restitution for expenses tied to a fatal mine explosion six years ago.

Alpha Natural Resources Inc. is asking a federal judge in West Virginia to order Blankenship, former chief executive of the company’s Massey Energy unit, to compensate the company for legal expenses and fines stemming from the 2010 Upper Big Branch blast that killed 29 workers. Federal prosecutors are backing the company’s request and Blankenship is fighting it, according to court filings.

Jurors in Charleston, West Virginia, convicted Blankenship in December of a misdemeanor conspiracy charge of ignoring safety standards in Massey mines.

“This unprecedented attempt to add Draconian penalties to an offense that Congress has classified as a misdemeanor and Alpha has no right to recover any of these expenditures from Mr. Blankenship,” the former executive’s lawyers said in a March 7 filing.

Steve Hawkins, a spokesman for Bristol, Virginia-based Alpha, declined to comment Tuesday on the restitution request.

Blankenship is slated to be sentenced April 6 by U.S. District Judge Irene Berger and faces a maximum sentence of a year in jail plus a fine. His lawyers contend that fine is capped at $250,000, but the government says Berger can rely on a law that sets the criminal penalty based on twice the financial gain or loss generated by the conspiracy.

Blankenship, who was acquitted of two counts of securities fraud, has vowed to appeal his conviction. Jurors concluded he orchestrated a conspiracy to ignore mine-safety standards to speed up coal production. The verdict was a rare instance of the U.S. holding a chief executive accountable for fatalities in the workplace.

In court filings, prosecutors said they support Alpha’s request to recoup more than $13 million for costs of its internal investigation of the Upper Big Branch disaster, $4.3 million to cover legal costs rung up by employees who cooperated with the government’s probe and prosecution of Blankenship and $10 million in fines paid by Alpha over the incident.

Blankenship’s lawyers countered in court filings that Alpha doesn’t qualify as a victim entitled to compensation and allowing such an award would trample on the former coal executive’s constitutional rights.

The criminal case is U.S. v. Blankenship, 14-cr-00244, U.S. District Court, Southern District of West Virginia (Charleston). [Emphasis added]

Massey Investors Say Bankruptcy Doesn’t Stay Mine Blast Suit by Matt Chiappardi with additional reporting by Cara Salvatore, March 8, 2016, Law360

Law360, Wilmington (March 8, 2016, 8:45 PM ET) — Shareholders suing Massey Energy Co. brass for poor safety standards that culminated in the deadly Upper Big Branch mine disaster urged the Delaware Chancery Court late Monday to push forward with the case, despite arguments from buyer Alpha Natural Resources that its bankruptcy puts the litigation on ice.

In a letter to Chancellor Andre G. Bouchard, the shareholders’ attorney Cynthia A. Calder of Grant & Eisenhofer PA argued that the main allegations in the complaint — which not only accuses Massey brass of “brazen disregard” for mining safety laws, but also challenges Massey’s acquisition by Alpha as a hasty decision to avoid liability — are direct class action claims against Massey leadership and not the company itself.

Because Massey, as an entity, is not involved in that portion of the litigation, then Chapter 11’s automatic stay, which can halt litigation unless approved by the bankruptcy court, does not apply, she said.

There is a derivative component to the shareholders’ complaint, but that was pled as an alternative to the direct claims in case the court decided the merger locked Massey stockholders out of the litigation. Even if the court does decide the claims are derivative and not direct, thus making Massey a nominal defendant, the result would only enhance the Alpha bankruptcy estate, not disrupt it, Calder argued.

“Massey has seized on that ‘just in case’ derivative count to contend that the entire proceeding is subject to the automatic stay,” Calder wrote. “We respectfully request that the hearing go forward as to the direct claim.”

The Massey shareholder case, now nearly 6 years old, was first filed in the Chancery Court in 2010, shortly after the Upper Big Branch coal mine explosion in West Virginia that killed 29 workers. The suit targets the purportedly systematic disregard for mining laws and safety regulations at the company, which the investors said not only led to the disaster but also sunk Massey’s value by roughly $2 billion.

The lawsuit was expanded about six months later to also include claims connected to Alpha’s $7 billion purchase of Massey, arguing that the transaction was a raw deal for shareholders and was partly motivated by a desire to dispose of derivative liability and dodge regulatory scrutiny by partnering with a company that had a better relationship with authorities.

An attempt to have the court block the merger failed in 2011, and the case was later put on hold for several reasons, including the federal probe of the company and the indictment of former Massey CEO Don Blankenship in 2014 on charges he created a lax safety culture that led to the deadly explosion.

In December 2015, a federal jury found Blankenship guilty of blocking safety measures, but cleared him of charges he lied to the U.S. Securities and Exchange Commission.

With the Blankenship criminal case in the rearview mirror, suing shareholders tried to restart their lawsuit, but Massey’s buyer has balked, noting in a letter to the court that Alpha filed for Chapter 11 protection in August and that the litigation was barred by bankruptcy’s automatic stay.

The communication prompted Monday’s letter from Calder, who wondered what relevance the automatic stay would have, because the claims were clearly meant to be primarily direct and aimed at the individual defendants. Those claims cannot be blocked from moving forward, she said.

In his letter to the court, Alpha’s attorney Donald J. Wolfe, Jr. of Potter Anderson & Corroon LLP contended that the case law the shareholders relied on to support reviving the lawsuit was based on a merger where the acquiring company was extinguished.

But in this instance, Massey survived, albeit as a wholly owned subsidiary of Alpha, making the shareholders’ citations irrelevant, Wolfe said. The case thus cannot go forward until permission is received from the bankruptcy court in Virginia, he argued.

Representatives for the Alpha-side defendants did not immediately respond to requests for comment Tuesday.

 

The case is In re: Massey Energy Co. Derivative and Class Action Litigation, case number 5430, in the Court of Chancery of the State of Delaware. [Emphasis added]

 

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