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Saturday, April 17, 2010

Lawsuits Filed Against Massey Energy

The Wall Street Journal

Labor Department Asks for Independent Review of MSHA Mine Probe

The Labor Department said Friday that it has asked an independent team of occupational safety experts to examine the U.S. Mine Safety and Health Administration's internal review of its actions at the West Virginia mine where 29 workers were killed in an explosion last week.

In a written statement, Labor Secretary Hilda Solis said she has asked the National Institute for Occupational Safety and Health to identify a team with relevant experience to provide an independent analysis of MSHA's internal review. Ms. Solis said that while she is confident that MSHA will conduct "a thorough and complete review" of its own actions at the Upper Big Branch mine in the period leading up to the April 5 explosion, an independent analysis of the review is needed "to ensure accountability." She added that both the MSHA internal review and the independent analysis of that review will be made public.

"This independent evaluation will help ensure that we're doing everything we can to protect the health and safety of America's miners," Ms. Solis said.

Two lawsuits were filed against Massey Energy Co. in the wake of the April 5 accident, one by the widow of a miner and another by a shareholder group.

Marlene Griffith, the widow of William I. Griffith, filed a suit alleging that "reckless and negligent conduct" by Massey resulted in Mr. Griffith's death. The eight-page complaint seeking damages under West Virginia's wrongful death statute was filed in Raleigh County Circuit Court Thursday and names Massey as well as its subsidiaries Performance Coal and Massey Coal Services as defendants.

Separately, a Massey shareholder filed a complaint in Kanawha County Circuit Court against CEO Don Blankenship and Massey's board of directors, alleging that they failed to ensure the company complied with worker safety laws and ignored "red flags" in the months leading up to the accident.

The complaint, filed by lawyers Thursday, alleges that Mr. Blankenship and other board members "have caused and will continue to cause severe injury" to Massey by "consciously ignoring" the company's legal obligations and exposing the company to "a substantial threat of monetary liability." The suit seeks unspecified damages as well as reimbursement for the costs of bringing the complaint.

The complaint was brought by Manville Personal Injury Settlement Trust, a New York-based trust that owns more than 1,000 shares of Massey common stock. The trust settled a similar lawsuit in 2008 over Massey's handling of environmental and safety issues. As part of that settlement, Massey agreed to increase oversight of the coal company's environmental and safety compliance.

A spokesman for Richmond-based Massey couldn't be reached Friday to comment on the lawsuits. In a recent statement, the company defended its safety practices and said, "We strive to be in compliance with all regulations at all times." The company has 30 days after being served with the complaints to respond in court, according to a West Virginia attorney.

The accident at the Upper Big Branch mine in Montcoal, West Va., is the worst coal mining disaster in 40 years. On Thursday, the Mine Safety and Health Administration released a preliminary report on the accident and noted that the mine had "a significant history of safety violations" and that the mine and Massey were being watched closely by the agency.

The lawsuit brought by Ms. Griffith says that William Griffith began working as a coal miner in 1974, shortly after graduating from high school, and that he began working for Performance Coal in 1992 at the Upper Big Branch mine.

Mark Moreland, a Charleston, West Va., attorney representing Mr. Griffith's estate, said in an interview that Mr. Griffith's family wanted to have representation during ongoing investigations of the accident. "Massey will have a representative at all those investigations, and our client felt that they deserved representation," he said.

The complaint includes inspection-related material previously released by MSHA. "We looked at the history of this mine through the MSHA Web site and it's clear that Massey and Performance were operating in a reckless manner," Mr. Moreland said.