ThePopTort

Energy Barons Uphold the Dangerous Workplace Tradition

Don Blankenship, Massey Energy’s former CEO (also known as “[o]ne of the most reprehensible bosses in recent history”), today goes to trial. The charges stem from the 2010 West Virginia Upper Big Branch coal mine explosion “that killed 29 workers, the U.S. industry’s deadliest in almost four decades.”  (See some of our earlier coverage here, here, including how the families who sued were compensated. ) Writes Slate, “He will be brought to justice for allegedly shunning coal mine safety rules, conspiring to conceal safety violations, and lying to the U.S. Securities and Exchange Commission and company shareholders.” (Interesting contrast to the U.S. Department of Justice’s “hands-off” attitude towards GM executives responsible for far more deaths.)

Miners’ safety is at the forefront of this trial, and interestingly, notes Bloomberg, “Massey Energy was one of a handful of mining and energy companies that tied its chief executive officer’s bonus to safety performance in 2010."

Blankenship had his bonus cut by about $150,000 [the year of the mine explosion] for failing to meet safety goals. He still got a $669,000 award because only 10.5 percent of his annual bonus was tied to safety.

“If 90 percent of your bonus can be achieved with full disregard to health and safety, that’s an underwhelming link,” Anne Simpson, senior portfolio manager and director of corporate governance at the California Public Employees’ Retirement System, the largest U.S. pension, said of typical executive-compensation practices. “Particularly in an industry where health and safety is absolutely the foundation of the company’s license to operate, its reputation, its operational risk and, of course, ultimately financial success.”

In fact, as Bloomberg shows, there doesn’t seem to be any correlation at all between this kind of compensation incentive and worker safety. The incentives were pretty weak at Massey and Blankenship even flunked those (although he got an eight-figure package when he “retired.”)

Let’s not spend too much time on that crook and instead keep the focus where it should be – on the workers who are injured or killed producing energy for the rest of us.  Sadly, things don’t seem to be getting much better for them. For example, “A new report suggests oil-field work has never been more dangerous.” Last year was, according on one article, "one of the deadliest years for oil and gas workers."

Earlier this month, the Bureau of Labor Statistics said 142 oil and gas workers died in 2014, a 27 percent jump from 2013, when 112 workers died.

That 2014 number may even increase when the final federal breakdown is released in April, said Rebecca Reindel, senior safety and health specialist with AFL-CIO.

The labor group releases an annual report on worker safety and tracks fatalities and injuries in many employment categories. Reindel said she was jolted by the rise in oil and gas deaths.

"Oil and gas deaths are the highest we've seen them, possibly ever (recorded), definitely the highest going back to 2003," she said.

Actually, all of this is in line with the dismal state of worker safety generally.  As FairWarning reported just a couple weeks ago,

More Americans died on the job last year, with the increase concentrated among older employees as well as self-employed and contract workers. Preliminary federal figures released today for 2014 put the workplace death total at 4,679, up 2 percent from the final count of 4,585 for 2013.

The new figures amount to the highest preliminary death total in six years, and the total will almost certainly grow by the time final numbers for 2014 are issued in the spring.

As for Blankenship himself, he seems bad or worse, as well. I mean, just as a person on Earth. Apparently, “[h]e released a self-made ‘documentary saying that the Upper Big Branch disaster was an ‘act of God’ caused when miners struck a hidden natural gas pocket and not the result of defective equipment and procedures, as investigators have found.” He faces 30 years in prison.

DuPont and the Civil Trials They Hoped Would Never Happen

 

Back in 2008, we wrote about an extraordinary class-action case brought by 80,000 people against DuPont USA, which had knowingly “polluted water supplies of two West Virginia and four Ohio water districts with a chemical used to manufacture Teflon, called C-8,” and tried to cover it up.  

It was an important settlement, requiring the company to stop poisoning people and, among other things, “install filtration systems in contaminated water districts.”  But it didn’t cover compensatory damages for people who were sick and dying.  Area residents and DuPont employees had cancers, diseases and children born with severe birth deformities at unusually high rates but no epidemiological study yet existed tying their diseases to C-8.  At least not yet.

Included in the $374 million settlement that DuPont agreed to pay was $70 million for a community health and education project and $30 million to fund a health study, juried by independent, court-appointed epidemiologists, to evaluate the health effects of C-8.  DuPont even agreed not to contest the panel’s conclusions even if they found a general causal connection between C-8 and health effects - the basis for any possible future injury claims.

Why would DuPont agree to such a thing?  Well, DuPont probably thought they had nothing to fear.

At the time, given the difficulty of the study, finding a link seemed improbable. Establishing such a connection would require a very large pool of data- larger than is typically collected from a single rural community.

But what they didn’t anticipate was clever lawyering by the plaintiffs’ attorneys they were fighting. Here is what happened next (as explained in a long-format expose, which appeared this week in the Huffington Post):

This conundrum weighed heavily on attorney Harry Deitzler, who lives in Parkersburg and serves as a local liaison to plaintiffs. ‘I knew the reason DuPont settled the case and agreed to assign this panel of epidemiologists was because they didn’t think they were ever in this lifetime going to find links,’ Deitzler told me. “But I didn’t want to face people and say, ‘Hey, we got this huge settlement and everybody only gets 600 bucks.’”

Then one night, a solution came to him. “It was like God reached out from the sky and tapped into my brain,” he recalls. The plaintiffs would use the $70 million health and education fund from the settlement to pay people $400 each to participate in the epidemiological study.

As a result of the strategy, roughly 80% of the residents in the effected water districts participated in the epidemiological study, making it “far more likely the panel of epidemiologists would be able to correlate C-8 exposure with particular diseases.” Paul Brooks, the doctor who oversaw the program, explained, “I think it messed up a lot of people at DuPont’s lives that we devised this wild system. These hillbillies threw a rock in DuPont’s machine.”

And it worked. The results of the study were so overwhelming that not even experts funded by DuPont could ignore them. 

In 2012, the epidemiologists concluded that a “probable link exists” between the chemical and at least 6 diseases: kidney cancer, testicular cancer, ulcerative colitis, thyroid disease, pregnancy-induced hypertension, and hypercholesterolemia.

This scientific discovery, made possible by the overwhelming community participation in the epidemiological study, provided the link victims needed to show that C-8 was responsible for the cancers, diseases, and deformities that effect thousands in the community.

This month, trial begins on the first of 3,500 personal injury cases that have now been filed against DuPont. We will keep you posted.

Who’s the Wuss Now?

Earlier this year, Oliver Stone, one of Hollywood’s more courageous film directors, railed against President Obama for being spineless.  The same has been said of other Democrats, of course.  Now it’s Hollywood  - Sony Pictures, more specifically - who's being disparaged for this trait, while President Obama and his party seemed to have suddenly found some backbone.

First Hollywood.  It’s been said that Hollywood caters to 16-year-olds. All I know is that Hollywood makes a lot of dumb comedies.  The film The Interview was probably one of them, although we’ll never know now that Sony “caved” and won’t release it. Interesting that it took this act for the words  “Hollywood” and “spineless” to be suddenly linked in headlines, like this from the The Huffington Post: SPINELESS: Sony, Theaters Cave To Terror Threat.

The same day that happened, however, President Obama stood up to the right and restored diplomatic relations with Cuba. Governor Andrew Cuomo stood up to the oil and gas industry and banned fracking in New York.  Not only that, two major federal criminal indictments came down charging corporate executives with major corporate crimes. 

Yesterday,

Law enforcement agents swooped in during predawn raids … and arrested executives and former staffers of a Framingham [MA] compounding pharmacy blamed for producing tainted drugs that killed dozens in one of the deadliest medication contamination cases in US history.…

Some defendants could face life in prison. Prosecutors called the case an “unprecedented” national tragedy, and the indictments ended two years of waiting for patients and families desperate for justice.

 “Production and profit were prioritized over safety,” US Attorney Carmen M. Ortiz said during a packed news conference in her offices at the John Joseph Moakley Courthouse in South Boston.

The indictment alleges that New England Compounding and Medical Sales Management Inc. — a company that shared ownership with NECC and provided it with sales and administrative services — constituted a criminal “enterprise” under the federal racketeering law.

 “Let me be clear: Actions like the ones alleged in this case display not only a reckless disregard for federal health and safety regulations but also an extreme and appalling indifference for human life,” acting US Associate Attorney General Stuart Delery said.

And another federal indictment was unsealed relating to Freedom Industries’ January chemical spill that contaminated the Elk River in Charleston, West Virginia, leaving “300,000 residents around West Virginia's capital without usable water for drinking and bathing for days.” 

The federal indictment charges former Freedom Industries presidents Gary Southern and Dennis P. Farrell and two others with failing to ensure that the company operated in a reasonable and environmentally sound manner the steel tank that leaked the coal-cleaning chemical.

Southern also faces federal fraud charges related to the company's bankruptcy case. Freedom filed for the protection eight days after the Jan. 9 leak into the Elk River in Charleston. …

U.S. Attorney General Eric Holder said in a statement that the tank conditions at Freedom Industries "were not only grievously unacceptable, but unlawful. They put an entire population needlessly at risk. As these actions make clear, such conduct cannot, and will not, be tolerated."

This all follows the earlier indictment of Don Blankenship, the longtime chief executive officer of Massey Energy, who was indicted on charges that he orchestrated the routine violation of key federal mine safety rules at the company’s Upper Big Branch Mine prior to an April 2010 explosion that killed 29 miners.  As we noted in our earlier coverage of this case, CEO indictments almost never happen. 

Seems like a perfect set up for a Colbert segment.  What shall we do without him? 

(And what shall you do without us for a couple weeks?  We'll be off for the holidays.  See you all next year!) 

'Citizens Against Lawsuit Abuse' Just Won Our Award!

Awards season has begun.  (Poor Angelina Jolie, whose film was just shut out of the SAG awards on top of newly-released unkind hacked Sony emails. Hopefully her luck changes soon.)

But we do have one lucky award recipient to tell you about right now!  In fact, we couldn’t be more excited to announce the winner of our first “Tort System Triumphs” Award - to none other than our (former?) foes at various corporate fronts known as "Citizens Against Lawsuit Abuse"!

You’re probably saying “huh” right about now.  After all, CALA’s mission is to represent and support laws to benefit major corporations and industries seeking to escape liability for the harm they cause everyday Americans. 

But like all Americas, we like a good redemption story.  And based on what we’ve seen this week, the CALA’s more than qualify.

Take a look at this story out of the East Texas CALA called CALA issues tips to keep litigation out of Christmas stocking:

“By keeping a few simple tips in mind, you can keep a lump of coal or a lawsuit out of your stockings and make sure your holidays shine,” said Diane Davis of East Texans Against Lawsuit Abuse.

If hosting a holiday party, Davis suggests taking responsible measures to create a safe event, including transportation and safeguards to keep guests from over-indulging.…

Hazel Meaux of Texans Against Lawsuit Abuse said party-goers should be encouraged to take personal responsibility for their own actions.

Tips include, “For parties in your home, plan transportation for your guests, including designated drivers or cabs for a safe ride home, and have ample and appealing nonalcoholic beverages for your designated drivers.”

Lawsuits foster safety?  Wow, that’s what we say!  Excellent observation and very good safety advice, CALA. 

Similarly, the West Virginia CALA says, 

Whether in a business or home setting, party hosts should make sure hazards are minimized. Unfortunately, some holiday party guests could experience injuries such as tripping over a strand of holiday lights, falling on a dance floor or slipping on an icy sidewalk. Potentially much worse, someone consuming too much alcohol could be involved in an auto accident..  

While holiday partygoers and hosts alike should act responsibly and know their limits, people need to know that many risks cannot be eliminated entirely. But planning ahead and hosting a safe holiday party is the best defense.

So let's all thank the CALA's for explaining how the civil justice system works, how the prospect of tort liability protects us all from harm whether or not we ever go to court. And I am thrilled that we all now agree that deterring unsafe practices is a critical function of the U.S. civil justice system.  Without potential lawsuits, the nation – or at least your holiday party - would be a pretty unsafe place.

Hope you enjoy your award, CALA's, and happy holidays.  We thank you.  All the partiers who won’t be killed or injured because of our civil justice system thank you too!

Mine Crimes

“Too Big to Jail” is a book about the rarity of corporate criminal prosecutions.  CEO indictments almost never happen. But with every rule there are exceptions, and a big one just happed in West Virginia.  Writes the Charleston Gazette,

Don Blankenship, the longtime chief executive officer of Massey Energy, was indicted Thursday on charges that he orchestrated the routine violation of key federal mine safety rules at the company’s Upper Big Branch Mine prior to an April 2010 explosion that killed 29 miners.

A federal grand jury in Charleston charged Blankenship with conspiring to cause willful violations of ventilation requirements and coal-dust control rules — meant to prevent deadly mine blasts —during a 15-month period prior to the worst coal-mining disaster in a generation.

The four-count indictment, filed in U.S. District Court, also alleges that Blankenship led a conspiracy to cover up mine safety violations and hinder federal enforcement efforts by providing advance warning of government inspections.…

The indictment also alleges that, after the explosion, Blankenship made false statements to the U.S. Securities and Exchange Commission and the investing public about Massey’s safety practices before the explosion.…

Blankenship pressured Upper Big Branch management to violate safety standards in favor of maximizing production and profits, the indictment alleges. One mine manager received a handwritten note from Blankenship in March 2009 “chastising him” for “insufficient attention to cost-cutting,” telling the manager, “You have a kid to feed. Do your job,” the indictment alleged. That same mine manager at Upper Big Branch was told, when he wasn’t producing as much coal as Blankenship demanded, “I could Khrushchev you. Do you understand?”

You can read the indictment here.

Notes the Associated Press,

"It's a big deal to charge a CEO, so prosecutors will need witnesses on the inside who can describe what the practices and the culture of the company were like," [University of Virginia law professor Brandon L.] Garett said. He said that testimony likely will come from some of the former Massey officials who have pleaded guilty and cooperated with the government.

One of those individuals is David Hughart, whom we covered in March 2013.  Hughart, who pled guilty to two counts of conspiracy, implicated Blankenship “in what appears to be a widespread corporate practice of warning coal miners about surprise inspections.” 

I don’t know if it's coincidence of just irony, but as Blankenship’s indictment was announced, NPR put out an incredible 2-part story resulting from a “joint investigation by NPR and Mine Safety and Health News,” which “found that thousands of mine operators fail to pay safety penalties, even as they continue to manage dangerous — and sometimes deadly — mining operations. Most unpaid penalties are between two and 10 years overdue; some go back two decades. And federal regulators seem unable or unwilling to make mine owners pay.”  And the report begins by featuring the story of one Jack Blankenship, whose mining story progressed a big differently than Don’s:  

Jack Blankenship was pinned facedown in the dirt, his neck, shoulder and back throbbing with pain.

He was alone on an errand, in a dark tunnel a mile underground at the Aracoma Alma coal mine in Logan County, W.Va., when a 300-pound slab of rock peeled away from the roof and slammed him to the ground. As his legs grew numb, he managed to free an arm and reach his radio. For two hours, he pressed the panic button that was supposed to bring help quickly.

"I couldn't hardly breathe," Blankenship remembered four years later. "I'd black out and come to. I was waiting to die. I'd already had my little talk with God."

Aracoma Alma and then-owner Massey Energy had a history of serious safety problems, including falling rock. In the two years before Blankenship's accident, the mine was cited by federal regulators more than 120 times for rock fall violations, according to records from federal regulators. That included inadequate roof support and deficient safety checks for loose rock.…

"Most folks out there, including me, are totally shocked when they find out that ... you can actually just sit around and not pay the fine and keep producing coal and put money in the bank," said Tim Bailey, Blankenship's attorney and a West Virginia native with three generations of coal miners in his family.

Retiring U.S. Sen. Jay Rockefeller, D-W.Va., said [Don] Blankenship and the mines he once operated "treated miners and their safety with callousness and open disregard. As he goes to trial, he will be treated far fairer and with more dignity than he ever treated the miners he employed. And, frankly, it's more than he deserves."

When Don Blankenship quit in December 2010, we covered the story of his golden payout, walking away with “$2.7 million, a free house for life, millions more in deferred compensation, and a ‘salary continuation retirement benefit’ of $18,241-a-month that will continue for 10 years after his departure at the end of the year.…Per W. Olstad, a lawyer with CtW Investment Group, a shareholder group that has pushed for Blankenship to step down, [called it], '[A]n egregious payout. It’s way beyond what he's earned. Given how destructive his mismanagement has been, he simply does not deserve it.'”

Well now, he may be spending 31 of those golden years in another kind of “free house”. Yet that won’t be his only legacy.  Notes the Gazette,

For years, Blankenship has been not only a powerful voice in the coal industry but a power broker whose involvement in West Virginia politics could cut both ways. At a time when a major verdict against Massey was headed for the state Supreme Court, his personal funds helped defeat then-Justice Warren McGraw’s re-election effort and his personal friendship with Blankenship likely helped cost then-Justice Spike Maynard his seat on the court. Some Republican operatives who helped engineer their party’s takeover of both houses of the West Virginia Legislature in this year’s election got their start working for Blankenship-funded political efforts.

Workers Are Underpaid All Over the Place

Who knew the New York Times had a sexist underbelly?  Like the rest of the world we’re just speculating here, but yesterday’s abrupt firing of New York Times top editor Jill Abramson over possible complaints about pay disparity has made us realize something: the struggles shared by many Americans to be paid fairly for their work is also shared by the Executive Editor of the New York Times!  (And if that’s true, what hope is there for the rest of us?)  The New Yorker's Ken Auletta writes:

As with any such upheaval, there’s a history behind it. Several weeks ago, I’m told, Abramson discovered that her pay and her pension benefits as both executive editor and, before that, as managing editor were considerably less than the pay and pension benefits of Bill Keller, the male editor whom she replaced in both jobs. “She confronted the top brass,” one close associate said, and this may have fed into the management’s narrative that she was “pushy,” a characterization that, for many, has an inescapably gendered aspect.

See lots more about this here.

Of course, she's not the only one.  Coincidently, today, hundreds of fast food workers decided to strike in “dozens of U.S. cities” trying to get a barely decent wage - $15 an hour – and the right to form a union.

Restaurants such as McDonald's, Burger King, Wendy's and KFC are being targeted. The strike, targeting the $200 billion fast-food industry at a time of intense competition, is aimed at directing consumer attention to the low wages of most fast-food workers. The one-day campaign continues protests launched 18 months ago.

As the workday was getting underway in New York, employees at a McDonald's near Penn Station chanted "unfair wages" as others beat drums and blew trumpets.

In fact, these fast food strikes are happening all over the world today.  Meanwhile, check out some of the other companies that have been caught cheating their U.S. workers this week:

“A Walmart contractor that operates many of the retailer's distribution centers has agreed to pay $21 million in backpay to warehouse workers in California who claim they were systematically shorted on pay for years.”

The Lincoln Rehabilitation Center in Decatur, Illinois “has paid $67,000 in back wages after failing to properly compensate employees for overtime.

“Two New Jersey ship repair companies — Bayonne Dry Dock and Repair Corp. and Coastwide Material Supply Corp. — paid $277,565 in unpaid wages and liquidated damages for distribution to 224 workers who worked for the firms at the Military Ocean Terminal in Bayonne, N.J., the Department of Labor reported."

"The United States Department of Labor released a report on Thursday that found Black Bear Burritos, LLC to be in violation of the Fair Labor Standards Act. According to the Department of Labor, $232,295 in back wages is owed to 105 employees from two different restaurants in Morgantown [West Virginia]."

You know that Karl Marx saying, “workers of the world unite?  Maybe he was onto something.

Mining for Safety

I don’t know if all the facts listed on the “North Dakota Fun Facts and Trivia” website are true, but it kinda makes sense that when your state’s official beverage is milk, you are probably living in “the safest” state in the nation.”  So that’s why last week’s new “Death on the Job” report from AFL-CIO seemed so shocking to us and a lot of other people.  The AFL found that when it comes to workers, North Dakota is now the deadliest state in the nation, and it seems we have the mining, oil and gas industries and all that new hydro-fracking to thank!  (Perhaps the state beverage should be changed to “contaminated ground water.”)  Writes the AFL,

[T]oo many workers remain at serious risk of injury, illness or death as workplace tragedies continue to remind us. These tragedies are all preventable.

The 2013 explosion at a West, Texas fertilizer plant killed 15 people, most of them volunteer emergency responders, and was caused by an unregulated chemical industry. The 2010 explosion at Massey Energy Upper Big Branch in West Virginia killed 29 miners. The 2010 BP Transocean Gulf coast rig explosion killed 11 workers and caused a major environmental disaster.…

North Dakota had the highest fatality rate in the nation (17.7 per 100,000 workers) followed by Wyoming (12.2), Alaska (8.9), Montana (7.3) and West Virginia (6.9).  

Ah, #5 West Virginia and its mining accidents. This was a big ThePopTort topic during the hey day of the Massey Energy Upper Big Branch mine explosion (like here, here).  We thought fatal mining accidents, particularly in West Virginia and particularly caused by companies with extensive safety violations, was part of the distant past.  Then this happened last night: 

Two miners were killed last night at a Patriot Coal operation in Boone County where federal officials said last year they would increase enforcement because of a pattern of serious violations and unreported worker injuries.

Federal and state officials this morning confirmed the deaths occurred at Patriot’s Brody Mine No. 1 in the Wharton area.

Killed were Eric D. Legg, 48, of Twilight, and Gary P. Hensley, 46, of Chapmanville, said Amy Goodwin, a spokeswoman for Gov. Earl Ray Tomblin.…

A statement from [the Mine Safety and Health Administration] MSHA referred to the incident as a “ground failure,” while the state Office of Miners’ Health, Safety and Training’s initial report called it a “coal outburst.” Both descriptions suggest the incident was not simply a roof fall, but involved pressures from above ejecting rock and coal material from the mine walls onto the workers.

 Writes the New York Times,

The Brody mine has a history of federal citations for safety violations, according to inspection reports on the safety and health administration website dating to January 2011. Federal officials notified Patriot in October that the mine exhibited “repeated violations of mandatory health or safety standards.”

Forty-six citations, including 16 in 2013 and 2014, were for unwarrantable failure to comply with safety rules, which the agency defines as “aggravated conduct constituting more that ordinary negligence.”

Such violations generally refer to safety hazards in which “it was plain or obvious — ones that the operator knew or should have known about and did not correct,” said Tony Oppegard, a lawyer in Lexington, Ky., who is a former adviser to the head of the federal mine safety administration and a mine-safety prosecutor for Kentucky’s Office of Mine Safety and Licensing.

 And the Charleston Gazette writes,

In October 2013, federal officials cited the operation for a “pattern of violations,” as part of a stepped-up enforcement program that the Obama administration began following the deaths of 29 miners at Massey Energy’s Upper Big Branch Mine in April 2010.

MSHA said that its inspectors had cited more than 250 “significant and substantial” violations during the 12-month period that ended Aug. 31. An MSHA audit of the mine’s records found that injuries resulted in nearly 1,800 lost-work days at the mine, 367 of which were from eight injuries that the company did not report to MSHA. A separate audit in 2012 found 29 injuries that were not reported.

In a prepared statement at the time of MSHA’s action, St. Louis-based Patriot Coal said that it had acquired Brody effective Dec. 31, 2012, and that many of the violations cited by MSHA occurred prior to that time. Patriot said that it had made major safety improvements at the operation.

(Uh, two people were just killed. Hate to know what an "unsafe" mine would look like to this company.)

The AFL is calling for more “funding and staffing at OSHA and MSHA … to provide for enhanced oversight of worksites and timely and effective enforcement [and] improvements in the Mine Safety and Health Act … to give MSHA more authority to enhance enforcement against repeat violators and to shut down dangerous mines.” 

One might ask: What exactly are they waiting for?