Blankenship v. Manchin

• Court: U.S. District Court — Southern District of West Virginia
• Writing for the Court: Copenhaver
• Citation: Blankenship v. Manchin, 410 F.Supp.2d 483 (S.D. W.Va. 2006)
• Decision Date: 18 January 2006
• Docket Number: No. CIV.A.2:05-0606.,CIV.A.2:05-0606.
• Parties: Don BLANKENSHIP Plaintiff v. Joe MANCHIN, III, in his individual capacity and in his official capacity as Governor of the State of West Virginia, Defendant.

Page 483

410 F.Supp.2d 483

Don BLANKENSHIP Plaintiff v. Joe MANCHIN, III, in his individual capacity and in his official capacity as Governor of the State of West Virginia, Defendant.

No. CIV.A.2:05-0606.

United States District Court, S.D. West Virginia, At Charleston.

January 18, 2006.

COPYRIGHT MATERIAL OMITTED

Julie A. Pence, W. Henry Jernigan, Jr., Dinsmore & Shohl, Charleston, WV, Patrick J. Slevin, Robert D. Luskin, Patton Boggs, Washington, DC, for Plaintiff.

Adam K. Levin, Mitchell E. Zamoff, Hogan & Hartson, Washington, DC, Barbara H. Allen, Office of the Attorney General, Billie Jo Streyle, Charles R. Bailey, Bailey & Wyant, Charleston, WV, for Defendant.

MEMORANDUM OPINION AND ORDER

COPENHAVER, District Judge.

Pending are defendant's motions (1) to dismiss, and (2) to stay discovery pending a ruling on the motion to dismiss. The motions were filed respectively on September 13 and October 31, 2005. The court ORDERS that plaintiff's motion for leave to file a surreply, filed November 4, 2005, be, and it hereby is, granted.

I.

The defendant contends that this "action is a politically motivated publicity stunt with no basis in law or fact.... [that] should be di[s]missed at the threshold." (Def.'s Mem. in Supp. at 1). At this early stage of the litigation, the court is not at liberty to make value judgments concerning the parties' respective factual positions. As discussed more fully within, the court is required instead to "`assume the truth of the material facts as alleged in the complaint.'" Jackson v. Birmingham Bd. of Educ., 544 U.S. 167, 125 S.Ct. 1497, 1503, 161 L.Ed.2d 361 (2005) (quoting Summit Health, Ltd. v. Pinhas, 500 U.S. 322, 325, 111 S.Ct. 1842, 114 L.Ed.2d 366 (1991)). As noted by the leading commentators on the Federal Rules of Civil Procedure, "the purpose of a motion under Federal Rule 12(b)(6) is to test the formal sufficiency of the statement of the claim for relief; the motion is not a procedure for resolving a contest between the parties about the facts or the substantive merits of the plaintiff's case." 5B Charles A. Wright and Arthur R. Miller, Federal Practice and Procedure § 1356 (3d ed.2004).

In accordance with these principles for handling defenses interposed during the infancy of a civil action, the court fully credits, as it must, plaintiff's version of the events.

II.

Plaintiff Don Blankenship is a citizen of Mingo County, West Virginia. (Compl.¶ 6). He is the chairman, chief executive officer, and president of Massey Energy Company ("Massey"). (Id.). Massey, a non-party, is one of the largest coal producers and employers in West Virginia. (Id. ¶ 9). Defendant Joe Manchin III is the governor of the State of West Virginia and residing necessarily in Kanawha County. (Compl. ¶ 7).

Plaintiff has been a very active, recent participant in West Virginia politics. In 2004, he contributed substantial sums of money to oppose the re-election bid of Warren McGraw, then a sitting justice on the West Virginia Supreme Court of Appeals. (Id. ¶ 9) In 2005, plaintiff publicly opposed legislation supported by the defendant to finance workers' compensation benefit plans through an increased coal severance tax. (Id.)

Later in 2005, plaintiff distinguished himself as a vocal, and well-financed, opponent of the defendant's plan to sell $5.5 billion in bonds to cover state pension programs ("bond proposal" or "plan"). (Id. ¶ 10). The bond proposal required voter ratification at a special election on June 25, 2005. (Id.) In the months leading up to the special election, a "contentious statewide campaign was waged between proponents of the ... [bond proposal] and those who opposed" it. (Id. ¶ 13).

Beginning in early June 2005, plaintiff voiced his opposition to the bond proposal through a variety of media outlets and interviews. (Id. ¶ 14). Among other things, he personally financed television, radio, and direct mail advertisements encouraging rejection of the bond proposal. (Id.) Plaintiff also personally phoned the defendant to inform him of his opposition to the plan. (Id.)

The defendant launched a corresponding campaign in support of the plan. (Id. ¶ 15). As part of that effort, it is alleged that the defendant:

devoted a disproportionate amount of... resources to negative public comments and advertisements against Plaintiff, 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. Upon information and belief, during the course of the campaign, members of the Governor's staff even made inquiries at the office of the West Virginia Secretary of State regarding Plaintiff's residency.

(Id.).

Some of the referenced public comments came on June 17, 2005, during defendant's appearance at American Electric Power Company's John Amos plant in Putnam County. (Id. ¶ 16). Following a brief speech, the defendant entertained media inquiries. During those comments, "the Governor threatened Plaintiff by warning that the government would scrutinize the affairs of Plaintiff and Massey even more closely in light of Plaintiff's decision to participate in the public debate over" the bond proposal. (Id.) The defendant was quoted as saying "`I think that is justified now, since Don has jumped in there with his personal wealth trying to direct public policy.'" (Id. ¶ 16) (quoting Ken Ward, Jr., Manchin Still Sparring Over Pension Bond Bid, Charleston Gazette, 2005 WLNR 9764145 (Jun. 18, 2005)).¹

In context, the above-cited news article provides as follows:

Gov. Joe Manchin continued Friday to spar with Massey Energy President Don Blankenship over the governor's multi-million-dollar pension bond proposal. The governor said Blankenship, who has launched a personal campaign against the bond plan, should expect tougher scrutiny of his business affairs.

"I think that is justified now, since Don has jumped in there with his personal wealth trying to direct public policy," Manchin said.

. . . . .

After his brief speech at AEP's pollution-control project announcement at its John Amos Power Plant outside St. Albans, Manchin was quizzed repeatedly by reporters about his pension bond battle with Blankenship.

In a later interview, Manchin declined to say if he thought Blankenship was "a good corporate citizen."

"I'm not going to sit here and try to rag on anyone," Manchin said.

"I truly appreciate and value every business person who creates jobs in our state," the governor said. "[But] I want Don to use his creative energies in a good, positive manner."

Manchin said he was puzzled that Blankenship would not agree to serve on a pension bond advisory committee before launching his campaign against the governor's proposal.

"The most frustrating thing going on is that there's a person who has been very successful financially in the business world, and when someone asked him to be a part of a positive movement in West Virginia, he said, `No.'"

When asked, Manchin said that Blankenship's campaign against the pension bonds should and will prompt even more scrutiny of Blankenship, who is arguably already the state's highest-profile coal executive.

"If you want to throw yourself into public policy, your record is open," the governor said.

Manchin declined to personally offer any specific criticisms of the way Massey or Blankenship has operated, except to note that the company has had numerous run-ins with state environmental regulators.

"I think there have been many violations that hopefully they've been able to correct," the governor said.

Ken Ward, Jr., Manchin Still Sparring Over Pension Bond Bid, Charleston Gazette, 2005 WLNR 9764145 (Jun. 18, 2005) (emphasis supplied).

On June 25, 2005, voters rejected the bond proposal. (Compl. ¶ 18). On June 30, 2005, the West Virginia Department of Environmental Protection ("DEP") gave preliminary approval to Massey's application for several permits, including one to build a second coal silo in Raleigh County. (Id. ¶ 19). Plaintiff contends this preliminary approval indicates the proposed silo satisfied all statutory and regulatory prerequisites. (Id.)

Plaintiff alleges that the defendant "publicly ordered members of his senior staff to meet thereafter with DEP representatives, the Department of Health and Human Resources and the West Virginia Office of Miners' Health, Safety and Training to investigate alleged `possible safety concerns' related to the site." (Id. (quoted authority omitted)). Counsel advised the court at the scheduling conference on December 15, 2005, that the defendant so directed his staff the same day DEP gave its preliminary approval.² Plaintiff contends "[t]hese 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." (Id.) Plaintiff thus concludes, on "information and belief, the Governor caused this investigation not out of concern for the safety of residents, but instead, in retaliation for Plaintiff's campaign against the" bond proposal. (Id.)

Plaintiff further alleges that "a potential landlord of Massey informed [it] that it would be reluctant to enter into a lease with Massey because, based on the Governor's threats, Massey might be the subject of retaliatory regulatory sanctions that would impair Massey's ability to perform on any lease." (Id. ¶ 20). Based upon these two factual predicates, plaintiff summarizes the nature of his claim in paragraph 21 of the complaint:

The Governor's threat to cause state regulators to investigate and exercise greater scrutiny over Plaintiff and Massey in retaliation for Plaintiff's public opposition to the ... [bond proposal] interfered with and restrained Plaintiff in the exercise of his First Amendment right to free speech. Because Massey is a publicly traded corporation, to which Plaintiff owes fiduciary duties as an officer and director, the Governor's threats...