Compass Lexecon’s Client A.T. Massey Coal, Inc. Obtains Successful Result in Lost Profits Jury Trial

Compass Lexecon’s President Professor Daniel R. Fischel Testifies at Trial

This case involved a lawsuit brought by Harman Corporation and its CEO Hugh Caperton (“Plaintiffs”) against A.T. Massey Coal, Inc. (“Massey” now owned by Alpha Natural Resources) (“Defendant”). Plaintiffs accused Massey of tortious interference and fraudulent actions which allegedly rendered Plaintiffs unable to continue in the business of mining and selling coal, caused them to lose their assets and all the profits they would have earned from 1998 to 2008, and caused them to eventually become insolvent. Plaintiffs and their experts claimed Plaintiffs suffered over $100 million in projected lost profits. Plaintiffs also sought other damages including unspecified punitive damages. Defendant’s counsel, Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C., retained Compass Lexecon and its President, Professor Daniel R. Fischel, to analyze the lost profits and other damages claims of Plaintiffs and their experts.

The case ultimately was tried before a jury in state court in Grundy, Virginia. At trial, Professor Fischel testified that Plaintiffs’ experts improperly ignored Harman’s track record of losses and contemporaneous evidence of Harman’s desperate financial condition, and that contrary to Plaintiffs’ experts’ unduly optimistic characterization of Harman’s future financial performance, Harman was facing a serious risk of bankruptcy and was unlikely to survive. Therefore, their estimates of Harman’s lost profits and other damages were contrary to the real world economic evidence and therefore implausible.

On May 23, 2014, the jury returned a verdict for Plaintiffs but only awarded damages of $5 million, a tiny fraction of the claimed amount. Because Plaintiffs were already awarded $6 million in an earlier breach of contract trial involving related conduct, damages in this latest proceeding may ultimately turn out to be zero.

Massey’s victory is particularly significant because in another earlier trial where Massey was represented by different counsel involving the same tortious interference claims with a similar but smaller damage claim, Plaintiffs obtained a favorable jury verdict of $75 million including interest. That judgment was ultimately reversed because of a determination that the case was improperly tried in the wrong forum thus leading to the most recent retrial in Virginia.

Professor Fischel was assisted by Rajiv Gokhale, Jessica Mandel, and Jonathan Polonsky of Compass Lexecon’s Chicago office. We worked with the trial team of Kevin Huff (lead trial counsel), Silvija Strikis, Michael Guzman, Daniel Bird, and Leslie Pope and others from Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C. who successfully represented Massey. We also worked closely with Mark Hansen from the same firm in the case.