Supreme Court: Coal Giant’s Campaign Dollars Pose Risk of Bias

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When the CEO of coal giant Massey Energy poured $3 million into a campaign to unseat a West Virginia judge four years ago, he knew the winner of that election would likely decide a $50 million lawsuit against his company, the U.S. Supreme Court says.

Massey’s candidate, Brent Benjamin, squeaked by with a victory in 2004. A few months later, the new Justice Benjamin heard Massey’s lawsuit appeal and joined a 3-2 ruling in the coal giant’s favor.

That connection between judge and defendant was so extraordinary that novelist John Grisham used it as real life inspiration for his courtroom thriller “The Appeal.”

And today, the U.S. Supreme Court weighed in with a ruling that should send a chill through all judges who find themselves facing cases that involve their campaign donors.

The court ruled 5-4 that Benjamin faced enough “risk of actual bias” in the Massey case that he should have stepped down to ensure a fair trial: 

In an election decided by fewer than 50,000 votes, [Massey CEO Don] Blankenship’s campaign contributions—in comparison to the total amount contributed to the campaign, as well as the total amount spent in the election—had a significant and disproportionate influence on the electoral outcome.

And the risk that Blankenship’s influence engendered actual bias is sufficiently substantial that it “must be forbidden if the guarantee of due process is to be adequately implemented.” …

Although there is no allegation of a quid pro quo agreement, the fact remains that Blankenship’s extraordinary contributions were made at a time when he had a vested stake in the outcome.

Just as no man is allowed to be a judge in his own cause, similar fears of bias can arise when—without the consent of the other parties—a man chooses the judge in his own cause. And applying this principle to the judicial election process, there was here a serious, objective risk of actual bias that required Justice Benjamin’s recusal.

The Supreme Court sent the Caperton v. Massey case back to the West Virginia court for a new ruling.

With its majority opinion, the Supreme Court also set an outer boundary for judges to recuse themselves for cases and it also encouraged more legislative reform within the states, says Doug Kendall, president of the Constitutional Accountability Center.

“This is the right answer for these particular facts,” he said. “A CEO can’t provide 60 percent of the resources for a judge’s campaign and then have the judge rule on their case.”

However, four of the nine Supreme Court justices – John Roberts, Antonin Scalia, Thomas Alito and Clarence Thomas – disagreed.

Their argument, essentially, was that the ruling questioned the integrity of judges and left too many questions unanswered about when judges must step down from cases (they list 40 questions, starting with “How much money is too much money?”). Roberts wrote for the minority:

This will inevitably lead to an increase in allegations that judges are biased, however groundless those charges may be.

There is a “presumption of honesty and integrity in those serving as adjudicators.” We have thus identified only two situations in which the Due Process Clause requires disqualification of a judge: when the judge has a financial interest in the outcome of the case, and when the judge is presiding over certain types of criminal contempt proceedings.

Scalia, in his own dissent, seems to bolster the majority opinion, though that wasn’t his intent:

What above all else is eroding public confidence in the Nation’s judicial system is the perception that litigation is just a game, that the party with the most resourceful lawyer can play it to win, that our seemingly interminable legal proceedings are wonderfully self-perpetuating but incapable of delivering real-world justice. The Court’s opinion will reinforce that perception.

Actually, it’s real cases like Massey’s that reinforce that perception.

The $3 million that Blankenship spent on that judicial election – a$1,000 maximum campaign contribution, plus $500,000 spent independently on direct mailings and ads and about $2.5 million to finance an organization that opposed the sitting judge and supported Benjamin – was 300% more than the amount spent by Benjamin’s own campaign. If elected judges instead step down from cases in which they could have a conflict – cases involving big campaign donors, for example – that will fade as an issue.

Kendall hopes that states will take the Supreme Court’s ruling and improve their judicial ethics laws, particularly the 39 states in which judges are elected rather than appointed on merit.

“What this should do is prevent coal companies and others from the worst circumstances, like you find in a John Grisham novel, and encourage states like West Virginia to solve this problem more holistically through limits on campaign expenditures,” Kendall said.

The Caperton v. Massey appeals started after a jury in 2002 found Massey liable for fraudulent misrepresentation, concealment and legal interference with existing contracts involving mine developer Hugh Caperton and found the company liable for $50 million in compensatory and punitive damages.

The state trial court said Massey had “intentionally acted in utter disregard of [Caperton’s] rights and ultimately destroyed [Caperton’s] businesses because, after conducting cost benefit analyses, [Massey] concluded it was in its financial interest to do so.” With interest, Massey now owes Caperton close to $83 million.

As the case heads back to West Virginia, Massey thinks the court will still side in its favor, even with a different judge on the case.

"While we are disappointed in the outcome of the Court’s close vote, our outlook about the ultimate resolution of this legal matter remains positive," Massey General Counsel Shane Harvey said in a statement. "We believe that any new examination of the same facts and same laws by new justices should yield the same result as before."

Bruce Nilles, director of the Sierra Club’s Beyond Coal Campaign, called case "a stark reminder of the lengths Big Coal will go to to circumvent the law."

“The $3 million Massey spent in the West Virginia case is small change compared to the well over $10 million that the industry has already spent on Capitol Hill to weaken climate legislation and prevent a move to clean energy," Nilles said.

"The Supreme Court has made it clear that justice can not be bought, and we shouldn’t let our future be either. It’s up to Congress now to make sure Big Coal does not buy its way out of a clean energy bill; failing to clean up old, dirty power plants will keep us from realizing the full potential of a clean energy economy.”