Tuesday, December 1, 2009

Caperton V. Massey: The Last Word?

Justice Workman has filed her dissent:

 Neither the sheer length of the majority's opinion, nor the large number of cases cited (but erroneously applied), nor even its expansive conclusory statements, can obfuscate its lack of sound legal reasoning and its result-driven approach.

In enunciating eight major new points of law and applying them retroactively (with no opportunity for the parties to make a record under the new law), scrapping mountains of prior precedent that give deference to the finders of fact below (and instead making new factual determinations at this level), rewarding the defendant (whose conduct is seemingly recognized by all as reprehensible) the spoils of its fraudulent acts, and then characterizing the result as “equitable,” the majority has turned West Virginia jurisprudence on its ear.

Specifically, the majority holds that Massey, despite engaging in wide-ranging fraudulent conduct, both in connection with the 1997 Coal Supply Agreement (“the CSA”), as well as separate and apart from it, is entitled to benefit from the forum-selection clause not
only with regard to matters relating to the CSA, but even with respect to actions completely unconnected to that contract. The majority reaches this conclusion despite the fact that the forum-selection clause is contained in a contract to which Massey was not a party, with which Massey tortiously interfered, and under which Massey never acted in good faith. In so doing, the majority not only deprives the plaintiffs of the substantial damages awarded to them by the rightful finders of fact, a Boone County jury, but also leaves them with no legal recourse by which to address Massey's extensive pattern of fraudulent conduct. It similarly eliminates any recovery for the plaintiffs' numerous creditors in the three pending bankruptcy cases, to whom most of the judgment would have gone. Not least among those creditors are the Harman Companies' union miners who lost their jobs as a result of Massey's fraudulent conduct, and the Harman Companies' hundreds of retirees, to whom the Harman Companies previously paid pensions and medical benefits.
Because the majority unjustly strips Massey's victims of their rightful verdict by creating extensive new law and manipulating the existing law to achieve the end result, I dissent on the following grounds...
She concludes:

 In sum, because Massey engaged in a wide-ranging fraudulent scheme to destroy the Harman Companies and Mr. Caperton for its own financial gain, and because many of the acts engaged in by Massey to further that scheme bore absolutely no relation to the CSA, legal claims based on those acts should not be controlled by the forum-selection clause. Furthermore, under Farmland and Armco, even claims that partially relate to the fraudulent declaration of force majeure should be exempt from the forum-selection clause, because, given the wide-ranging scope of Massey's conduct in furtherance of that scheme, the “gist” of the plaintiffs' suit exceeds the scope of the CSA. For these reasons, the forum- selection clause should not be enforced in this case.

Furthermore, the majority's new standard of review is inappropriate, given that its new test for determining the enforceability of forum-selection clauses requires findings of fact. Where a circuit is asked to make factual determinations, this Court should afford those determinations the deference traditionally given. Incredibly, the majority not only fails to give deference, but chooses to make those findings of fact itself by applying its new forum-selection clause test in this case and, in doing so, it deprives the plaintiffs of their due process right to present evidence to establish that the forum-selection clause should not be enforced.

Thus, I oppose the majority's decision to retroactively apply the new principles of law relating to forum-selection clauses, a decision that deprives the plaintiffs and other victims of Massey's conduct of any possible redress. Indeed, even under the majority's newly stated retroactivity test, retroactive application is inappropriate in the instant case because the majority's new principles of law were not “clearly foreshadowed,” and applying them to this case produces a “substantial inequitable result.” For these reasons, I respectfully dissent.

(Mike Frisch)


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