Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, February 25, 1995 TAG: 9502270042
SECTION: VIRGINIA PAGE: B-3 EDITION: METRO
SOURCE: JAN VERTEFEUILLE STAFF WRITER
DATELINE: LENGTH: Medium
Southmountain Coal Co., whose negligence led to a mine explosion that killed eight workers, should be fined $3.6 million even though the company no longer operates, prosecutor Tom Bondurant told a federal judge.
Attorneys for Southmountain argued that the company has no assets, an assessment a probation officer concurred with in his presentencing report. The company stopped mining in Wise County after the December 1992 explosion.
Last summer, Southmountain pleaded guilty to five felony counts and eight misdemeanor charges that it didn't perform required safety checks and then falsified records to say it did.
Its parent company, Apple Coal Co., was indicted in December along with William Ridley Elkins, who worked with the coal company and who, the government alleges, ran the mine.
U.S. District Judge Samuel Wilson said he will issue a written opinion setting the fine.
The explosion was caused when methane gas, allowed to build up because of mining law violations, was ignited by a cigarette lighter carried into the mine by one of the blast's victims. Southmountain admitted that its mine foreman did not conduct required weekly searches of employees for smoking materials. The company also failed to follow federal ventilation guidelines, which the government said was the primary cause of the explosion.
The fine is based in part on sentencing guidelines. But the company's willful violation of mining laws amounted to involuntary manslaughter, which means the judge is not bound by guidelines for part of the sentence and can award more.
Arguments Friday centered on Southmountain's connection to Apple Coal. A special agent of the Mine Safety and Health Administration testified that the two companies shared equipment, were owned by the same people and transferred money back and forth.
Apple still has mines in Kentucky, and the government wants to go after its assets to collect the Southmountain fine.
If Apple assets cannot be considered, any fine against the inactive Southmountain would go unpaid, with the company likely dissolving to avoid the fine. If no fine is levied, Southmountain could choose to begin operations again.
``It sends a message: If your corporation gets in trouble, you get out of trouble by bankrupting the corporation,'' Bondurant said.
Southmountain attorney Warren Upton argued that Apple's assets should not be taken into account. Judge Wilson assured him that Friday's hearing was to determine the proper fine and that another hearing would have to be held to determine whether the companies were connected closely enough so that Apple could be held liable for Southmountain's fine.
by CNB