Shareholders who say they were deliberately misled about Massey Energy's safety record in the years before the Upper Big Branch mine disaster won't be ready for a June 7 hearing because they lack access to key evidence.
In a motion to waive current deadlines in their federal lawsuit, the shareholders say that evidence remains off limits because of the ongoing criminal investigation into the Upper Big Branch mine disaster.
Institutional investors led by the Massachusetts Pension Reserves Investment Trust say they're negotiating with the U.S. attorney's office to release at least some evidence, but they told U.S. District Judge Irene Berger late last week they need more time to work out a deal.
Their lawsuit contends Massey executives repeatedly lied to investors before the worst U.S. mining disaster in four decades killed 29 men, artificially inflating stock prices between 2008 and 2010. Only after the April 2010 explosion did they learn the extent of the problems.
The lead prosecutor in the Upper Big Branch investigation, Assistant U.S. Attorney Steve Ruby, said his office is trying to "find a process that will let the civil case go forward without affecting our investigation."
"We haven't said no," he said Tuesday. "We'll either work it out or know that we can't work it out" by the end of June.
Ruby declined to comment on the status of the investigation but said it is ongoing.
The mine's former superintendent, Gary May, will be sentenced in August for conspiracy to defraud the federal government and is cooperating with federal prosecutors. He is accused, among other things, of disabling a methane gas monitor and falsifying records.
Former security chief Hughie Elbert Stover, meanwhile, is appealing his conviction for lying to investigators and attempting to destroy records. He was sentenced in February to three years in prison — one of the stiffest punishments ever handed down in a mine safety case.
Massey and its subsidiaries are now owned by Virginia-based Alpha Natural Resources.
In March, Berger denied a motion to dismiss the shareholders' case.
They sued Massey within a month of the disaster, arguing the company had repeatedly claimed to be one of the safest operators in the industry. By regularly touting safety achievements, Massey led them to believe safety was a corporate priority.
The investors say they learned otherwise after the blast, when news media began reporting the long history of violations at Upper Big Branch. Four separate investigations have since revealed that Massey routinely ignored standard safety practices and systematically hid violations and problems from inspectors.
The Mine Safety and Health Administration shut Upper Big Branch down 48 times in 2009, but the laws allowed Massey to resume production when problems were fixed. Between Jan. 1, 2009, and April 5, 2010 — the day of the blast — MSHA cited 645 violations and imposed penalties of more than $1.2 million.
The investors say they didn't know about them.
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