In re Massey Energy Company Derivative and Class Action Litigation

Massey Energy Company (defendant), a large coal mining corporation, had a documented history of openly disregarding safety regulations and clashing with regulators, including a 2008 settlement of a prior derivative suit over the board's alleged breach of fiduciary duty — after which Massey's corporate culture didn't meaningfully change. In April 2010, an explosion at a Massey mine killed 29 miners; investigations by the West Virginia governor and federal mine-safety regulators concluded the explosion resulted from Massey's chronic noncompliance with safety regulations. Massey stockholders (plaintiffs) filed another derivative suit, alleging the board and CEO knowingly kept violating safety regulations and endangering miners even after facing prior criminal liability and a settled derivative suit over the same underlying problem.