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This news story originally provided by The Herald-Dispatch

July 27, 2005

Massey CEO sues W.Va. governor in federal court

Associated Press Writer

CHARLESTON, W.Va. (AP) -- Massey Energy Co.'s Don Blankenship on Tuesday sued Gov. Joe Manchin in federal court alleging Manchin violated his free speech rights by threatening to retaliate for Blankenship's opposition to a proposed pension bond constitutional amendment.

The lawsuit was filed in Charleston against Manchin personally and in his official capacity as governor. The lawsuit seeks unspecified damages and a order prohibiting Manchin from threatening retaliatory governmental investigation or regulation of Massey or Blankenship, the company's president and chief executive officer.

The lawsuit alleges Manchin violated Blankenship's First Amendment free speech rights by threatening to enforce state laws selectively against Blankenship and Massey in retaliation for Blankenship's public opposition "on matters of public interest."

The lawsuit mentions Blankenship's opposition to Manchin's coal severance tax hike and Blankenship's opposition to the 2004 re-election bid of Supreme Court Justice Warren McGraw, who lost. But it focuses on the Manchin-Blankenship disagreement over the pension bond amendment.

The governor wanted to sell up to $5.5 billion in bonds to shore up state pension programs. The bond sale proceeds would have been invested, and the return was to be applied toward pension-fund shortfalls.

State voters on June 25 rejected the plan 54 percent to 46 percent.

Manchin in early June said Blankenship should expect tougher state scrutiny of his business affairs since he launched a media campaign against Manchin's pension bond proposal. Blankenship said the bond sale was not necessary because the state can afford to make annual payments into the pension systems.

"I think that is justified now, since Don has jumped in there with his personal wealth trying to direct public policy," Manchin said at an appearance at an American Electric Power event in Putnam County.

Manchin administration officials have since said Manchin was referring to general scrutiny someone could expect when they make themselves a public figure.

The lawsuit said Manchin's ad campaign for the bond amendment "devoted a disproportionate amount of its resources to negative public comments and advertisements against plaintiff (Blankenship), including inaccurate characterizations of plaintiff as an outsider who was simply interested in raising taxes and who sought revenge for the recent raise in severance taxes."

The lawsuit continued, "Members of the governor's staff even made inquiries at the office of the West Virginia secretary of state regarding plaintiff's residency." The lawsuit says Blankenship is a Mingo County resident.

The lawsuit also notes that although the state Department of Environmental Protection granted Massey subsidiary Goals Coal Co.'s permit to build a second coal silo near an elementary school in Raleigh County, Manchin ordered his senior staff to investigate "possible safety concerns" at the site.

"These same concerns had already been raised by various interest groups without any meaningful response from the governor prior to the special election and the permit approval," the lawsuit said. It alleges Manchin was not worried about safety but was retaliating for the defeat of the bond amendment.

On Tuesday, West Virginia state regulators canceled the permit and ordered the company to demolish work already done on the structure's foundation.

The lawsuit said as a result of Manchin's threats, a potential Massey landlord has said it is reluctant to enter into a lease with Massey.

Because Massey is a public company and Blankenship has fiduciary duties as its officer and director, "The governor's threats pose a difficult dilemma, in which plaintiff is forced to choose between continuing to exercise his First Amendment rights on the one hand and protecting the business affairs of Massey from retaliatory government scrutiny on the other," the lawsuit said.

Carte Goodwin, Manchin's general counsel, said, "The governor was saddened to learn of the filing of this frivolous lawsuit. Gov. Manchin is committed to fulfilling his oath to the people of West Virginia to faithfully discharge the duties of his office and intends to vigorously defend this lawsuit."

Manchin will respond to allegations in the lawsuit "at the appropriate time," Goodwin said in a news release.

Massey, based in Richmond, Va., is West Virginia's largest coal producer.


Associated Press reporter Lawrence Messina contributed to this story.


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