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Coal hard cash

Judge Recommends Overturning Former Coal CEO’s Conviction



Former Massey Energy CEO Don Blankenship departs the Robert C. Byrd United States Courthouse following the second day of jury deliberation in Charleston, W.Va., Wednesday, Nov. 18, 2015. Photo: Walter Scriptunas II / AP Photo

A federal judge Monday entered an order recommending former Massey Energy CEO Don Blankenship’s conviction for his role in the Upper Big Branch Mine explosion be set aside.

Blankenship served a one-year prison sentence for a misdemeanor charge for conspiring to violate federal mine safety standards. The April 5, 2010 explosion at the Upper Big Branch Mine in Montcoal, West Virginia, killed 29 men.

In the 60-page Proposed Findings and Recommendation document filed in the U.S. District Court for the Southern District of West Virginia, Magistrate Judge Omar Aboulhosn agreed with Blankenship’s arguments that attorneys for the U.S. government failed to turn over evidence that was favorable to the former CEO and could have exonerated him.

In the order, Aboulhosn said it was clear errors were made by the United States, however, attempts by Blankenship, who is referred to as “the Movant” in the document, to characterize the actions as malicious were unfounded.

“A detailed and thorough review of the evidence in this case clearly shows that, while errors were made and that those errors, when collectively reviewed, could have resulted in a different verdict, the undersigned did not find that the actions taken by the United States were malicious or done in bad faith,” he wrote. “The record does not establish a scintilla of evidence that then-United States Attorney Booth Goodwin and then-AUSA Steven Ruby acted in bad faith or with malice towards the Movant.”

In total, about 1,000 documents were released by prosecutors after the trial. They included emails between Mine Safety and Health Administration employees related to violations at the Upper Big Branch Mine and 61 “Memoranda of Interviews,” or witness statements.

Aboulhosn wrote there is “no question” Blankenship’s constitutional rights were violated when the government failed to turn over evidence and thus committed a Brady violation. That refers to a rule established by the 1963 U.S. Supreme Court case, Brady v. Maryland. The rule requires prosecutors to turn over any exculpatory evidence, or evidence that could absolve the defendant.

In previous filings related to the case, Aboulhosn noted that Blankenship said, “that his conviction continues to cast ‘an ongoing cloud over [Movant’s] professional and personal life.’”

If the recommendations are approved, Blankenship’s record would be wiped clean. He could also seek civil restitution.

Attorneys for the government and Blankenship have two weeks to file responses to the recommendations. U.S. District Judge Irene Berger will make the final ruling.

This article was originally published by West Virginia Public Broadcasting.

Coal hard cash

Paychecks Cut For W.Va. Blackjewel Miners; KY, VA Miners Still Waiting



The motto of the Kentucky coal miner protest “No Pay We Stay” demonstrated that the protestors didn’t plan on abandoning the train tracks near Pikeville until they were paid the wages they’d already earned. Photo: Curren Sheldon

This article was originally published by the Ohio Valley ReSource.

West Virginia employees of coal operator Blackjewel LLC have received their final paychecks more than two months after the company declared bankruptcy on July 1.

In an agreement reached last week between the Department of Labor and the company, Blackjewel cut paper checks for all owed wages to a few dozen employees working at the company’s Pax Mine in Fayette County, West Virginia.

While good news for former West Virginia employees, about 1,000 miners in Kentucky and Virginia are still owed millions of dollars in back wages.

Christina Burgess’ husband, Greg, ran heavy equipment at the Pax Mine. The 20-year coal mining veteran had been laid off before, but the family had never before experienced the fallout from a paycheck bouncing, as Greg’s did in early July.

“It’s been unreal,” Christina Burgess said.

The Burgess family received Greg’s owed wages late last week, but is still waiting for the check to clear a bank hold.

Blackjewel’s bad check created a series of challenges. The first few unemployment checks the family received went straight to the bank to get the account out of the red. In total, Christina said Blackjewel’s bankruptcy has cost her family about $3,000 in penalties and fees.

Greg quickly found new work after the Pax Mine closed and the family had some money saved in preparation for a downturn in the local industry. Christina said she empathizes with younger miners who were hit hard by Blackjewel’s sudden bankruptcy.

As one of the administrators for the Blackjewel Employees Stand Together Facebook group, she has heard many stories of families unable to pay their bills as a result of not being paid by Blackjewel. She expects the fallout from Blackjewel’s bad checks to have long-term consequences as well.

“Everybody that’s involved in this right now their credit score has been damaged because of this,” Christina said. “And that’s hard to come back from when you when your credit starts going down.”

She said she reached out to more than three dozen West Virginia state senators and Attorney General Patrick Morrisey, but heard nothing back. She said she feels abandoned by West Virginia lawmakers who were slow to advocate on behalf of stiffed workers in the bankruptcy court and haven’t pushed utility companies or others to offer leniency to struggling Blackjewel families.

“They could have at least came in and said, you know, ‘don’t send turn off notices for the power bills, give them a little leeway,’” she said. “Nothing. We didn’t receive anything.”

The Pax mine is now owned by Tennessee-based Contura Energy. About 1,000 Blackjewel employees in Virginia and Kentucky are still awaiting millions of dollars in owed wages. A protest on the railroad tracks in Harlan County is in its eighth week.

Millions of dollars worth of coal mined by former Blackjewel employees is sitting in railcars. The Department of Labor says the coal is “hot goods” and can’t be moved or sold until the workers who mined it are paid for their work.

Last week, the bankruptcy court in West Virginia overseeing the case gave the Labor Department, Blackjewel, and Blackjewel Marketing and Sales (BJMS) — buyer of the disputed coal — until Sept. 23 to submit a series of briefs to the court. A final set of briefs is due Oct. 1.

The judge said he expects to review the documents “swiftly” and rule soon after whether the coal should remain sitting until the Blackjewel workers who mined it are fully paid, or if it can be sold.

BJMS has proposed paying $1.4 million for the coal. The Labor Department says back wages owed to workers directly involved in producing the “hot goods” coal in Kentucky and Virginia totals more than $3 million.

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Coal hard cash

Timeline for Briefs Set in Blackjewel ‘Hot Goods’ Case, Miner Pay Remains Murky



Protesting miners blocked the tracks in the morning fog. Photo: Sydney Boles/Ohio Valley ReSource

The federal judge presiding over coal operator Blackjewel LLC’s bankruptcy has set a timeline in the “hot goods” dispute over millions of dollars worth of coal sitting in railcars in Kentucky and Virginia.

Frank Volk, chief U.S. bankruptcy judge for the Southern District of West Virginia, gave the Labor Department, Blackjewel and Blackjewel Marketing and Sales (BJMS) — buyer of the disputed coal — until Sept. 23 to submit a series of briefs to the court. A final set of briefs is due Oct. 1.

Volk said he expects to review the documents “swiftly” and rule soon after whether the coal should remain sitting until the Blackjewel workers who mined it are fully paid, or if it can be sold.

While the timeline provides some clarity about the future of the coal in question, Friday’s hearing highlighted continued uncertainty about if and how hundreds of miners across the region will be paid millions of dollars in owed wages. 

The Labor Department says the coal is “hot goods.” Under the federal Fair Labor Standard Act, workers must be paid at least minimum wage or the things they produce can’t legally be moved or sold. More than 1,000 former Blackjewel employees across West Virginia, Kentucky and Virginia are still awaiting their final paychecks more than two months after the company declared bankruptcy. 

“The FLSA has put the prohibition in place to discourage employers from benefiting from the uncompensated work of the employees,” Samantha Thomas, associate regional solicitor for the Labor Department, told the court during the Friday status hearing. “It’s about making sure that employers that actually abide by the law are not unfairly treated — because here’s BJMS and Blackjewel being able to profit off of the fact that [sic] they’re able to move coal that they didn’t really pay for in terms of workers being paid for their work.”

Volk asked the Department of Labor about its “end game” for the coal sitting on the tracks. 

Thomas said that in the case the judge does affirm the coal cannot be moved, the agency would hope Blackjewel, BJMS or “another party” would step up and pay the owed wages so the coal would no longer be considered “hot goods.”

BJMS attorney Sean George told the court it was extremely unlikely BJMS would do that.  

“My understanding, candidly with all, is that there is no possibility that BJMS is going to pay more than $1.4 million that it’s agreed to pay,” he said.

BJMS and Blackjewel argue not allowing the coal to be sold deprives the court from using the proceeds to pay creditors, including workers. The two companies have agreed BJMS will pay $1.4 million for the coal, and if sold, have agreed to set the money aside for possible use to pay owed wages. During a hearing earlier this month, the companies also argued the coal is degrading in the railcars and losing value. 

“That sounds like the end game is to inflict economic duress on the parties by prohibiting the movement of coal,” said Scott Kane, an attorney with Squire Patton Boggs, representing Blackjewel. “Certainly the debtors will argue that in these particular circumstances, that doesn’t further anyone’s interest, including the interests of the employee creditors, who are owed those FLSA wages.”

In a notice filed Thursday, the Department of Labor noted back wages owed to workers directly involved in producing the “hot goods” coal in Kentucky and Virginia totals more than $3 million. 

“In other words, the wages for the uncompensated work that resulted in the production of the hot goods at issue total more than $3 million – more than double the amount Blackjewel and BJMS ask this Court to force DOL to accept and to release the coal,” agency attorneys wrote

A temporary restraining order against the rail cars in Kentucky issued in district court is set to expire on Sept. 20. The Labor Department said it’s open to shifting the Kentucky railcars to allow work at the nearby mine to restart if approved by a judge. 

Sam Petsonk, an attorney representing Appalachian Blackjewel workers, told the court in addition to the train being blocked by court order, dozens of miners, now in their seventh week of protest, are camped on the railroad tracks blocking the train. 

“It is miners themselves who continue day by day to also, in their own capacity, apart from the injunction, to block the movement of that train,” he said. “They wanted that action to reflect their intentions and preferences and interests as to whether it is in their interest for this coal to move before the back payment is made.”

The miners have pledged to remain on the tracks until they are paid.

This article was originally published by West Virginia Public Broadcasting.

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Coal hard cash

Blackjewel Miners Block Railroad To Demand Pay From Bankrupt Coal Company



Protesting miners blocked the tracks in the morning fog. Photo: Sydney Boles/Ohio Valley ReSource

This article was originally published by Ohio Valley ReSource.

Some coal miners left without pay by the bankruptcy of coal company Blackjewel LLC are protesting by blocking a coal train in eastern Kentucky. 

The stand-off began early Monday when five miners blocked the train from leaving the Cumberland, Kentucky, plant. Despite police asking them to leave, miners spent the night blocking the railroad to protest Blackjewel moving coal while miners have yet to be paid. 

Blackjewel miner Bobby Sexton traveled from Corbin, Kentucky, to support his fellow miners who, like himself, have not received their last paycheck from the company, which filed for chapter 11 bankruptcy on July 1. 

“We want answers, we want our money, we want paid,” Sexton said. “We’re gonna make a stand.”

Miners assemble on railroad tracks to block a shipment of coal from a Blackjewel mine. Photo: Sydney Boles/Ohio Valley ReSource

The standoff follows a tumultuous month for the country’s sixth-largest coal producer and its 1,700 employees. Blackjewel controls 24 active coal mines and processing and prep facilities in Kentucky, Virginia and West Virginia and two large surface mines in Wyoming. 

The unfolding bankruptcy proceedings have been chaotic. While most of the company’s Wyoming employees have received back wages, the majority of the company’s 1,110 Appalachian miners have not been paid. 

Appalachian employees are owed nearly $11.8 million in payroll and taxes, as well as $1.2 million in employee retirement contributions.

On Friday, a federal bankruptcy court approved a plan by Blackjewel to begin the sale process of the company’s mines and equipment. Tennessee-based Contura Energy Inc. will be the “Stalking Horse Purchaser,” or initial bidder, for three of Blackjewel’s surface mines — the Belle Ayr and Eagle Butte mines in Wyoming and the Pax Mine in Fayette County, West Virginia.

A hearing is set for Saturday to complete all sales. 

Fed Up

By mid-morning Tuesday, retired union miners were showing up to the train tracks in solidarity. Food and water donations poured in and many passing cars honked in a show of support. 

Stanley Sturgill came from Lynch, Kentucky, to stand with the protesting Blackjewel miners. Sturgill said he’s been a member of the United Mine Workers of America for 41 years and thought it was important to support the non-union workers. 

A supporter with a protest sign made from a pizza box. Photo: Sydney Boles/Ohio Valley ReSource

“If the trains get out that’s more money for the company and nothing for the coal miners and they have shafted these coal miners,” he said. “It’s terrible they … left them high and dry. They can’t go to doctors, they can’t eat  — that’s why we’re trying to help them.”

Reached by phone, former Blackjewel CEO Jeff Hoops said he’s frustrated too.

“I’m as frustrated as they are,” he said. “I no longer work for Blackjewel, I resigned more than a month ago so I have no idea what’s going on there. I’m really sorry that it’s reached this point.” 

A spokesperson for Blackjewel did not respond to a request for comment but instead sent a link to a website with summary updates on the bankruptcy proceedings.

According to a document on the site, Blackjewel received approval Friday for an additional $2.9 million in debtor-in-possession financing which will be used to extend health insurance and workers compensation policies.  

The company is also terminating the Blackjewel 401(k) plan “which will make it possible for employees to access their hard-earned savings to the extent necessary,” according to an updated document posted on July 30.

Standing Firm

Kentucky state Rep. Adam Bowling, a Republican who represents Bell County and parts of Harlan County, brought sandwiches to the site Tuesday morning. He said state and county resources are flowing to displaced Blackjewel miners, but officials have few options for helping employees get owed wages.

“This should not happen,” he said, adding that he supports the miners’ protest. “The coal mine operators are trying to move the coal that these coal miners actually dug. They’re trying to move it out for the profits and all these guys want is pay for the work that they’ve done.” 

Miner Shane Smith drove 74 miles each way to work at Blackjewel’s D-21 mine in Harlan County. Standing on the tracks, the father of six said he scraped together change to travel to the protest. 

Smith said he has tried unsuccessfully for weeks to access money in his 401K. 

“If they can load a train out they can give us our money,” he said. 

He and the other miners said they’re prepared for a long stand. Billy Sexton said he feels he has no choice.

“My family’s hungry, and I’m gonna do whatever it takes to feed them,” Sexton said. “I don’t know if I’ll go home if they don’t pay us. I’ll sit here until whenever.”

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