Few thought that the politically powerful chief executive of West Virginia’s Massey Energy would face criminal charges stemming from a 2010 explosion that killed 29 workers at the Upper Big Branch coal mine. But a November grand jury indictment took cynics by surprise. The indictment’s accusations are many. Don Blankenship, Massey’s CEO, is charged with conspiracy to willfully violate mandatory mine safety and health standards, conspiracy to defraud the United States (by dishonestly impeding enforcement and oversight of the federal government’s Mine Safety and Health Administration (MSHA)), making false statements in Massey’s filings with the federal Securities and Exchange Commission (SEC), and securities fraud.

Since the indictment, various media organizations have asked the court to lift a gag order, which barred release of court filings and blocked the parties’ attorneys from speaking to the media about the case. On January 7, U.S. District Judge Irene Berger of the Southern District of West Virginia partially lifted the gag order, allowing some court documents to be made available. But Judge Berger’s order also extended the ban on court documents dealing with the facts of the case, and similarly extended the ban on attorneys speaking to the press. The reason for the gag order is to ensure that the intense publicity surrounding the case does not taint prospective jurors and compromise Blankenship’s trial.

Most recently, the court delayed the trial date, from January 26 to April 20. Blankenship had sought to delay his trial for a year.

The Blankenship indictment is notable for several reasons, not the least of which is that it demonstrates that executives of mining companies who participate in efforts to avoid enforcement of public safety standards cannot rely on the historical precedent that such matters are handled without criminal indictments. The prospect of criminal sanctions being “on the table” is an added consideration for company executives engaged in mining. For this reason alone, the upcoming trial will be watched closely by mining companies.

Another interesting aspect of the indictment, aside from the accusations of impeding agency oversight, is that there were two counts of making false statements in SEC filings. The statements alleged to be false include those that Massey “does not condone violations of MSHA regulations,” and that Massey “strives to be compliant with all regulations at all times.” While it is unsurprising that accusations of impeding a federal regulatory agency give rise to criminal sanctions, the fact that broad statements made in SEC filings could cause criminal sanctions is not as obvious. These two counts will make mining companies more careful about the information they set forth in SEC filings.

A third reason the criminal indictment is notable is that the crux of the accusations regarding impeding federal enforcement was that Blankenship had a direct hand in mine management. Specifically, Blankenship is accused of leaning on lower-level mine managers to stop addressing safety problems and instead focus on increasing coal production. The indictment is a warning to mining executives: to exert pressure to ignore safety problems on employees is to risk criminal sanctions.

The indictment’s impact is not limited to the mining industry. The criminal accusations could readily be applied to any company that impedes public-safety or environmental regulators. At stake in this trial is to what degree such impediment rises to the level of criminality.

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Author: Eb Garrison