In re Massey Energy Co. Securities Litigation
Status: Ongoing Case
Litigation against Massey Energy continues in this securities case, as the court denied the defendant’s motion to dismiss. Allegations include Massey’s failure to implement safety practices and improvement initiatives, which led to a staggering decline of Massey’s shares after the April 2010 mine explosion.
On January 10, 2011, the Commonwealth of Massachusetts Pension Reserves Investment Trust ("Massachusetts PRIT") was appointed lead plaintiff in In re Massey Energy Co. Securities Litigation. Judge Irene C. Berger in the Southern District of West Virginia approved Massachusetts PRIT's selection of Labaton Sucharow to serve as co-lead counsel on behalf of purchasers of the publicly traded common stock of Massey Energy Company ("Massey" or the "Company") between February 1, 2008 and July 27, 2010 (the "Class Period"). On March 11, 2011, Massachusetts PRIT filed a Consolidated Amended Complaint asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
As alleged, during the Class Period Massey embarked on "safety improvement initiatives" to bolster public perception and present a new corporate image following a deadly fire at one of its coal mines in 2006. Massey revamped a program coined "S-1, P-2, M-3," which meant "safety first, production second, and measurement third." Massey repeatedly reassured investors that the Company had put its sordid past behind it and "pull[ed] together to create a culture of safety."
However, Massey had two faces during the Class Period: a public face, shown by what defendants told investors about Massey's safety practices and improvement initiatives; and a private face, reflected in what they and others at Massey actually did and did not do with regard to safety.
On April 5, 2010, 29 miners died in an explosion at Massey's Upper Big Branch mine at Montcoal in Raleigh County, West Virginia. News of the explosion, subsequent criminal indictments, and Congressional testimony have revealed to the public that Massey had not become an "industry leader in safety" at all.
By July 27, 2010, Massey shares had hit a new low—representing a staggering decline that reduced Massey's market capitalization by more than $3 billion and caused massive losses to the class.
Defendants filed motions to dismiss the Consolidated Amended Complaint on April 25, 2011. Briefing on the motions to dismiss and other related motions was completed on July 25, 2011. On September 28, 2011, the Court granted Plaintiffs' Motion to Partially Lift the PSLRA Discovery Stay, allowing partial discovery by Plaintiffs during the pendency of the Defendants' motions to dismiss—a significant victory for Plaintiffs. On March 28, 2012, the Court denied Defendants' motions to dismiss and granted Plaintiffs' related motion to strike certain exhibits submitted by Defendants in support of their motions to dismiss.