Manville Personal Injury Settlement Fund v. Don L. Blankenship, 231 W. Va. 637

Massey Energy Company, a Delaware corporation with institutional shareholders including Manville Trust, Amalgamated Bank, and CalSTRS, faced a 2007 derivative action alleging fiduciary breaches related to environmental and mine-safety laws.
The 2008 Stipulation of Settlement and Corporate Governance Agreement settled the derivative action and required enforcement of reforms to Massey’s governance for five years.
In 2010, an Upper Big Branch Mine explosion killed 29 miners, with subsequent investigations noting systematic safety failures; the contempt petitions arose from alleged noncompliance with the 2008 settlement order.
Alpha Natural Resources acquired Massey in 2011; Massey was renamed Alpha Appalachia Holdings and Massey’s board was replaced by Alpha-nominated directors.
After the merger, petitioners ceased to own Massey shares, and Alpha became Massey’s sole shareholder; the 2008 settlement was to be enforced derivatively for Massey.
The circuit court dismissed the contempt petitions for lack of standing, ruling Delaware law applied and that petitioners held no continuing derivative rights post-merger.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether petitioners have standing to pursue contempt post-merger	Manville (and affiliates) continued derivative rights.	Merger eliminared standing; petitioners no longer Massey shareholders.	Petitioners lack standing under Delaware law.
Whether the contempt petitions allege direct or derivative claims	Petitioners seek direct damages for shareholders.	Claims are derivative to Massey.	Pleadings are derivative; no direct shareholder claims.
Choice of law governing standing and derivative claims	West Virginia settlement law should govern.	Delaware law governs standing due to merger.	Delaware law applies for standing and derivative analysis.
Whether merger challenges warranted discovery on fraud/inequity	Merger pretext, discovery needed.	Pleading failed to meet Rule 9(b) particularity; discovery not warranted.	No merit to fraud claim; discovery not warranted.
Whether the court reached merits or only standing			Court affirmed dismissal on standing without reaching merits.

Ross v. Bernhard, 396 U.S. 531 (U.S. 1970) (derivative action: corporation is real party in interest)
Lewis v. Anderson, 477 A.2d 1040 (Del. 1984) (continuous ownership requirement for derivative suits)
Findley v. State Farm Mut. Auto. Ins. Co., 213 W.Va. 80 (W.Va. 2002) (standing doctrine in WV; injury must be to plaintiff or corporation)
Tooley v. Donaldson, Lufkin & Jenrette, Inc., 845 A.2d 1031 (Del. 2004) (recovery in derivative suit goes to the corporation)
Reeves v. Transport Data Communications, Inc., 318 A.2d 147 (Del. Ch. 1974) (standing; injury analysis in corporate context)
In re Syncor International Corporation Shareholders Litigation, 857 A.2d 994 (Del. Ch. 2004) (derivative standing and claims in corporate reorganizations)
State ex rel. Elish v. Wilson, 189 W.Va. 739 (W.Va. 1993) (state-law choice for standing in derivative actions)