Caperton v. A.T. Massey Coal Co., Inc.

• Decision Date: 12 November 2009
• Docket Number: No. 33350.,33350.
• Citation: 690 S.E.2d 322
• Court: West Virginia Supreme Court
• Parties: Hugh M. CAPERTON, Harman Development Corporation, Harman Mining Corporation, and Sovereign Coal Sales, Inc., Plaintiffs Below, Appellees, v. A.T. MASSEY COAL COMPANY, INC., Elk Run Coal Company, Inc., Independence Coal Company, Inc., Marfork Coal Company, Inc., Performance Coal Company, and Massey Coal Sales Company, Inc., Defendants Below, Appellants.

690 S.E.2d 322

Hugh M. CAPERTON, Harman Development Corporation, Harman Mining Corporation, and Sovereign Coal Sales, Inc., Plaintiffs Below, Appellees, v. A.T. MASSEY COAL COMPANY, INC., Elk Run Coal Company, Inc., Independence Coal Company, Inc., Marfork Coal Company, Inc., Performance Coal Company, and Massey Coal Sales Company, Inc., Defendants Below, Appellants.

No. 33350.

Supreme Court of Appeals of West Virginia.

Submitted Following Remand September 8, 2009.

Decided November 12, 2009.

Dissenting Opinion of Justice Workman November 30, 2009.

Syllabus by the Court

1. "This Court's review of a trial court's decision on a motion to dismiss for improper venue is for abuse of discretion." Syllabus point 1, United Bank, Inc. v. Blosser, 218 W.Va. 378, 624 S.E.2d 815 (2005).

2. Our review of the applicability and enforceability of a forum-selection clause is de novo.

3. Where the disqualification of a Justice of this Court, either by decision of the United States Supreme Court or by his or her personal decision made after an opinion has been issued by this Court, renders the decision of this Court a tie vote, then the Chief Justice or Acting Chief Justice of this Court may, in his or her discretion, assign a senior justice, senior judge, or circuit judge to serve in the place of the disqualified justice pursuant to Art. VIII, § 2 of the West Virginia Constitution and Rule 29(g) of the West Virginia Rules of Appellate Procedure.

4. Determining whether to dismiss a claim based on a forum-selection clause involves a four-part analysis. The first inquiry is whether the clause was reasonably communicated to the party resisting enforcement. The second step requires classification of the clause as mandatory or permissive, i.e., whether the parties are required to bring any dispute to the designated forum or are simply permitted to do so. The third query asks whether the claims and parties involved in the suit are subject to the forum-selection clause. If the forum-selection clause was communicated to the resisting party, has mandatory force and covers the claims and parties involved in the dispute, it is presumptively enforceable. The fourth, and final, step is to ascertain whether the resisting party has rebutted the presumption of enforceability by making a sufficiently strong showing that enforcement would be unreasonable and unjust, or that the clause was invalid for such reasons as fraud or overreaching.

5. There are two types of forum-selection clauses: mandatory and permissive. A mandatory forum-selection clause contains clear language indicating that jurisdiction is appropriate only in a designated forum. A permissive forum-selection clause authorizes litigation in a designated forum, but does not prohibit litigation elsewhere.

6. The determination of whether a forum-selection clause is mandatory or permissive requires an examination of the particular language contained therein. If jurisdiction is specified with mandatory terms such as "shall," or exclusive terms such as "sole," "only," or "exclusive," the clause will be enforced as a mandatory forum-selection clause. However, if jurisdiction is not modified by mandatory or exclusive language, the clause will be deemed permissive only.

7. To determine whether certain claims fall within the scope of a mandatory forum-selection clause, the deciding court must base its determination on the language of the clause and the nature of the claims that are allegedly subject to the clause.

8. A range of transaction participants, signatories and non-signatories, may benefit from and be subject to a forum selection clause. In order for a non-signatory to benefit from or be subject to a forum selection clause, the non-signatory must be closely related to the dispute such that it becomes foreseeable that the non-signatory may benefit from or be subject to the forum selection clause.

9. In determining whether to extend full retroactivity to a new principle of law established in a civil case that does not overrule any prior precedent, which is an issue that was not addressed in Syllabus point 5 of Bradley v. Appalachian Power Co., 163 W.Va. 332, 256 S.E.2d 879 (1979), the following factors will be considered. First, we will determine whether the new principle of law was an issue of first impression whose resolution was clearly foreshadowed. Second, we must determine whether or not the purpose and effect of the new rule will be enhanced or retarded by applying the rule retroactively. Finally, we will determine whether full retroactivity of the new rule would produce substantial inequitable results.

D.C. Offutt, Jr., Stephen Burchett, Randall L. Saunders, Ryan Q. Ashworth, Offutt, Fisher & Nord, Huntington, WV, for the Appellants.

Robert V. Berthold, Jr., Christina L. Smith, Berthold, Tiano & O'Dell, Charleston, WV, David B. Fawcett, Buchanan Ingersoll & Rooney, Pittsburgh, PA, for the Appellees, Harman Development Corporation, Harman

Mining Corporation, and Sovereign Coal Sales, Inc.

Bruce E. Stanley, Tarek F. Abdalla, Reed Smith LLP, Pittsburgh, PA, for the Appellee, Hugh M. Caperton.

Bradley J. Pyles, Pyles, Turner & Mick, LLP Logan, WV, for Amicus Curiae United Mine Workers of America.

DAVIS, Acting Chief Justice:

The Appellants herein and defendants below, A.T. Massey Coal Company, Inc., and various of its subsidiaries, appeal from a March 15, 2005, order entered in the Circuit Court of Boone County, which denied their post-judgment motions for judgment as a matter of law, a new trial, or remittitur, in response to the entry of a judgment of more than $50 million in favor of the appellees herein, and plaintiffs below, Hugh M. Caperton, Harman Development Corporation, Harman Mining Corporation and Sovereign Coal Sales, Inc. In this appeal, A.T. Massey Coal Company and its subsidiaries allege numerous errors that purportedly occurred throughout the proceedings below.

This case is presently before this Court on remand from the United States Supreme Court.¹ Based upon our thorough consideration of the parties' arguments, the relevant case law, and the record on appeal, this Court concludes, based upon the existence of a forum-selection clause contained in a contract that directly related to the conflict giving rise to the instant lawsuit, that the circuit court erred in denying a motion to dismiss filed by A.T. Massey Coal Company and its subsidiaries. Accordingly, we reverse the judgment in this case and remand for the circuit court to enter an order dismissing, with prejudice, this case against A.T. Massey Coal Company and its subsidiaries.

I. FACTUAL HISTORY

Central to the dispute underlying this appeal is the Harman Mine, an underground coal mine located in Buchanan County, Virginia, that produced very high quality metallurgical coal. Prior to 1993, Harman Mine was owned by Inspiration Coal Corporation (hereinafter referred to as "Inspiration") through three subsidiaries: Harman Mining Corporation (hereinafter referred to as "Harman Mining"), Sovereign Coal Sales, Inc. (hereinafter referred to as "Sovereign"), and Southern Kentucky Energy Company (hereinafter referred to as "Southern"). For many years, all of the coal from the Harman Mine had been sold to Wellmore Coal Corporation (hereinafter referred to as "Wellmore"), a subsidiary of United Coal Corporation. In April 1992, Sovereign and Southern entered a coal supply agreement (hereinafter referred to as "the 1992 CSA") with Wellmore. Under the 1992 CSA, Wellmore was to purchase from Sovereign and Southern approximately 750,000 tons of coal per year for a period of ten years.

In 1993, Hugh M. Caperton (hereinafter referred to as "Mr. Caperton"), a plaintiff below and appellee herein, formed Harman Development Corporation² (hereinafter referred to as "Harman Development").³ In that same year, Harman Development purchased the three previously mentioned subsidiaries of Inspiration: Harman Mining,⁴ Sovereign⁵ and Southern, and thereby became the owner of the Harman Mine.⁶ Harman Development, Harman Mining, and Sovereign are all plaintiffs to this action below, and are appellees herein (hereinafter collectively referred to as "the Harman Companies"). In 1997, in order to fund improvements to the Harman Mine, the Harman Companies sold all the Harman Mine reserves to Penn Virginia Corporation, and then leased back those reserves that could be mined in a cost-effective manner.

From the time the Harman Companies became owners of the Harman Mine until 1997, coal from the Harman Mine was purchased by Wellmore in accordance with the 1992 CSA. Prior to the expiration of the 1992 CSA, in March of 1997, a new CSA with a higher price per ton of coal (hereinafter referred to as "the 1997 CSA") was negotiated between Sovereign, Wellmore, and Harman Mining.⁷ The 1997 CSA was to be in effect for a period of five years, commencing retroactively on January 1, 1997. It included, among other things, a force majeure clause,⁸ and a forum-selection clause requiring that "[a]ll actions brought in connection with this Agreement shall be filed in and decided by the Circuit Court of Buchanan County, Virginia."⁹

During the course of the 1992 CSA, and at the time the 1997 CSA was executed, one of Wellmore's primary customers was LTV Steel (hereinafter referred to as "LTV"). Wellmore sold and shipped nearly two-thirds of the coal it purchased from the Harman Companies to LTV's coke plant located in Pittsburgh, Pennsylvania.¹⁰ On July 19, 1997, LTV announced that it intended to close its Pittsburgh coke plant due to a change in emissions regulations promulgated by the Environmental Protection Agency.

A.T. Massey Coal Company (hereinafter referred to as "Massey"), a defendant below and appellant herein, had tried unsuccessfully for several years to sell its West Virginia mined coal directly to LTV.¹¹ Due to its lack of success in selling to LTV on its own, Massey determined to acquire LTV's supplier, Wellmore, and its parent...