Pittston Coal Company: Tort Law

On February 26th 1972, Dam 3 of the Buffalo Mining Company a subsidiary of the Pittston Coal Company, failed resulting in a flooding of the Buffalo Creek Hallow. The disaster caused property damage, wrongful death, and psychic impairment. West Virginia prohibited any dam built any dam built over “fifteen feet in height across any stream or watercourse without a prior determination by the state that it is safe” (15). The state’s failure to properly enforce this law gave Pittston the ability to claim the disaster was an act of God; this was supported by President Nixon who referred to this as a natural disaster (187). In his testimony Mr. Spotte, head of the Pittston Coal Group, stated the accident was a natural occurrence beyond the company’s control. However he admitted that this particular dam (3) was not built in the custom of the company other dams lacking a spillway system. This failure to ensure a standard constituted a negligent breach of duty (134-137).

Arnold & Porter chose to sue Pittston rather than the Buffalo Mining Company because the value of the corporation allowed for adequate compensation to the victims. Author and head lawyer for the plaintiffs, Gerald M. Stern, writes that the original goal was sue to sue for $21 million for the disaster to have a material effect on the cooperation (51). To avoid responsibility Pittston attempted to prove that the Buffalo Mining Company was an independent corporation with its own board of directors. The lawyers for the plaintiffs disproved this claim by arguing the Buffalo Mining Company never held formal meetings of the board of directors and was not independent of the parent company. During this case Pittston’s Oil division had applied to build an oil refinery in Maine. The ...

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...awarded by a jury, this motion was denied by the judge. In the end Arnold & Porter lowered their desired settlement from $21 million to $15 million, Pittston offered $13 million. The two parties reach a settlement for $13.5 million, $8 million of which was for psychic-impairment.

In their defense Pittston made attempts to distort the truth. They tried to separate themselves from the Buffalo Coal Company the subsidiary company which operated the failed dam. Pittston had the equity to compensate the plaintiffs while the Buffalo Coal Company was not valued high enough to give victims compensation. The lawyers from Arnold & Porter chose to sue the parent company because it was necessary to reach an adequate settlement. Psychic-impairment was used by the plaintiffs because it would give them the most compensation, and made up for the maximum amount state law allowed.