As federal strip mine regulators were preparing to sue West Virginia Gov. Jim Justice’s family companies for failing to pay environmental fines, his companies sued them first.
Justice’s son, Jay, and a dozen of the family’s mining companies filed a lawsuit against the Department of the Interior’s Office of Surface Mining Reclamation and Enforcement on Friday in U.S. District Court for the Western District of Virginia, in Roanoke. The lawsuit comes two weeks after the federal Mine Safety and Health Administration sued Justice’s coal companies for about $4.8 million in mine safety penalties and fines — which Justice’s firms claim prompted the DOI to prepare to sue.
According to the lawsuit, Justice’s companies thought they’d made a deal with the OSMRE to resolve the companies’ unpaid penalties and reclamation fees. The companies claim the federal government reneged on the agreement. The lawsuit includes a chart of about 115 outstanding debts due to the OSMRE in Virginia, West Virginia, Tennessee and Kentucky, but columns are redacted.
The OSMRE did not respond to questions about the lawsuit, including how much the companies owe, or for what.
In April, Jay Justice, who operates the family companies, and Tom Lusk, COO of Justice Mining Entities, met with officials from the OSMRE over lunch to talk about the penalties, the lawsuit states. The OSMRE agreed to reduce the penalties if the companies did reclamation work. Jay Justice said he’d put equipment in the field by May 1, the lawsuit says.
John Austin, the field solicitor in the DOI’s Knoxville office, asked for collateral, or some sort of guarantee the companies would satisfy their obligations. Michael Castle, the field office director of OSMRE’s Knoxville and Lexington offices who also is a former state regulator and longtime industry consultant, said it wouldn’t be required, the lawsuit states.
“Mr. Castle instead told Jay Justice not to worry about Mr. Austin’s requests for information or collateral,” the lawsuit says.
Justice’s mining company officials left the meetings assuming they’d made a deal, the lawsuit states. The companies wrote to Austin asking if he needed financial information, but he didn’t respond, according to the lawsuit.
The first week of May, “the government’s attitude toward the Justice Mining Entities noticeably soured,” the lawsuit says, when MSHA sued Justice’s coal companies for about $4.8 million in mine safety penalties and fines.
Austin wrote to the companies asking for collateral. In an email to a lawyer for Justice Mining Entities, he said OSMRE didn’t have the authority to enter the settlement agreement and that he’d instruct the Department of Justice to sue to collect the unpaid fines.
“I need to reiterate what you and your clients have been told: Neither OSMRE nor any of its employees nor the attorneys representing the Secretary of the Interior have the authority to settle a debt owed to the United States that exceeds $100,000 without the approval of the U.S. Department of Justice,” Austin wrote to company lawyers.
Two days later, lawyers for the companies filed their lawsuit.
“The abrupt turnaround by the government in its attitude toward this matter is inexplicable and raises the question whether untoward political or other pressure from sources presently unknown has been brought to bear on OMSRE, perhaps from other federal agencies or political adversaries of the Justice family,” the lawsuit states.
The lawsuit comes amid a federal investigation that has included subpoenas to the state departments of Commerce and Revenue seeking documents about the state’s relationship with some of Justice’s private businesses. Last month, Ohio Valley ReSource said the companies owe more than $4 million to the federal government in mine safety violations.
Justice’s lawyers did not respond to phone calls seeking information about the lawsuit Tuesday, but one of his companies, Bluestone Energy Group, sent out a news release Monday night.
“We don’t want to have to go to court to get the government to do the right thing and live up to its end of the bargain, but we can’t sit back and let the government take advantage of our good faith efforts to resolve this matter,” Jay Justice said in the news release.