Fourth Circuit Court of Appeals Upholds Ramaco Jury Verdict

The United States Court of Appeals for the Fourth Circuit has upheld a jury verdict and reinstated contract damages awarded by the jury after a three-week trial in July 2021.

Two years ago, Bailey & Glasser, LLP, on behalf of Ramaco Resources, Inc., won $7.6 million in contract damages in a lawsuit against insurance companies indirectly owned by Chubb INA Holdings, Inc. The lawsuit stemmed from Chubb's denial of insurance coverage after the collapse of a coal storage silo, which occurred at Ramaco’s Elk Creek coal complex in West Virginia on November 5, 2018.

The case was litigated in the United States District Court for the Southern District of West Virginia. The verdict included $7.6 million in compensatory damages and an additional $25 million for aggravation and inconvenience. After the jury trial was concluded, however, the district court reduced the contract damages and award of prejudgment interest believing the evidence could not support a conclusion that the critical “Period of Restoration” – during which Ramaco’s expenses and lost income were covered – could extend beyond November 30, 2018. Indeed, the district court reduced the verdict to $1.8 million in contract damages and further held that, because of the reduction, Ramaco had not “substantially prevailed” on its insurance lawsuit. As a result, the district court held that Ramaco was not entitled to any damages for aggravation and inconvenience. 

The Fourth Circuit disagreed on both points, finding, “There was indeed substantial evidence to support the jury’s conclusion.” It further explained:

“[W]e conclude that the district court misread how the policy defines the ‘period of restoration.’ Normally such an error would require that we remand. Here, though, we need not. The district court properly instructed the jury on how to determine the period of restoration. The court’s misreading only occurred post-trial when it changed course and entered judgment as a matter of law, reducing the jury’s award. Based on the evidence presented, the jury reasonably concluded that the period of restoration lasted well beyond November 30. So we need only reinstate the jury’s award.”

In addition, the Fourth Circuit confirmed that Ramaco had “substantially prevailed,” meaning it is entitled to both attorneys’ fees and additional damages for aggravation and inconvenience. The Fourth Circuit did not disturb the trial court’s reasoning that the previous $25 million award for such damages appeared punitive, remanding instead for a second trial on that category of damages.

The Bailey Glasser trial team included lawyers Brian Glasser, Nick Johnson, Becky Pomeroy, Joshua Hammack, Michael Murphy, and Christopher Smith. The appeal was not handled by Bailey & Glasser, LLP. The trial team fought hard and won important victories in the trial court, including ensuring that the jury was properly instructed on the law and that the critical evidence was admitted at trial. The trial team also submitted post-trial briefing that closely mirrors the Fourth Circuit’s reasoning.

Said Practice Area Leader and lead trial counsel Nicholas Johnson: “we are happy that Ramaco’s jury verdict was reinstated, and we were honored to have fought tenaciously on its behalf through trial.”

Ramaco is an operator and developer of metallurgical coal in southern West Virginia, southwestern Virginia, and southwestern Pennsylvania.