After the Massey Energy coal mining company lost a $50 million verdict to a competitor, CEO Don Blankenship spent $3 million electing a friendly judge to West Virginia's Supreme Court of Appeals who went on to cast the deciding vote in a case that overturned the verdict.
But yesterday the U.S. Supreme Court handed a setback to Massey and other companies that use their financial clout to influence the judiciary, with a ruling that elected judges must recuse themselves from cases involving big campaign contributors.
The case goes all the way back to 1998, when Hugh Caperton of West Virginia's Harman Mining Corp. sued a Massey affiliate for fraud. Four years later, a lower court awarded Caperton $50 million in damages.
Massey appealed to West Virginia's high court -- and in an effort to ensure a ruling favorable to the company Blankenship contributed $3 million to the campaign of Brent Benjamin (photo above), who successfully challenged incumbent Justice Warren McGraw in 2004.
Caperton's attorneys asked Benjamin -- who is now the court's chief justice -- to recuse himself from the case, but he declined. The court went on to rule in Massey's favor twice by a 3-2 vote, with Benjamin casting the deciding vote both times.
"Just as no man is allowed to be a judge in his own cause, similar fears of bias can arise when -- without the consent of the other parties -- a man chooses the judge in his own cause."
Joining Kennedy in the ruling were Justices Stephen Breyer, Ruth Bader Ginsburg, David Souter and John Paul Stevens. In dissent signed by fellow conservatives Samuel Alito, Antonin Scalia and Clarence Thomas, Chief Justice John Roberts argued that the ruling would damage public confidence in the judiciary:
The Court's new "rule" provides no guidance to judges and litigants about when recusal will be constitutionally required. This will inevitably lead to an increase in allegations that judges are biased, however groundless those charges may be. The end result will do far more to erode public confidence in judicial impartiality than an isolated failure to recuse in a particular case.
The case now returns to the West Virginia courts. Adding in the interest, the judgment in the original case has now grown to over $82 million.
"At its core, the Caperton case was about the inherent conflict of interest when our elected officials depend on or are aided by large campaign contributions and excessive spending in the electoral process," said Nick Nyhart, president of Public Campaign, a nonprofit that promotes public financing of elections. "Americans know that campaign contributions from wealthy special interests impact the policy decisions made by Congress on matters that affect the life and well being of all of us."
Massey's stock was down 6% in yesterday afternoon's trading on the New York Stock Exchange, while other coal company stocks were down between 2 and 4%, Reuters reports.
The high court's ruling is the latest in a series of recent setbacks for Richmond, Va.-based Massey. Last month Ohio State University President E. Gordon Gee resigned from Massey's board under pressure from activists who argued that his promotion of sustainable energy was incompatible with Massey's reliance on mountaintop removal mining.
And earlier this year, Santa Clara University in California divested its holdings in Massey because of the company's record of environmental destructiveness. The company has also been the target of nonviolent protests over its environmentally destructive business practices.
(Photo of Chief Justice Brent Benjamin from the West Virginia Supreme Court of Appeals)