Gov. Jim Justice’s coal companies want to get out of paying more than $2.5 million in penalties for environmental violations.
Meanwhile, the federal government is going after the coal firms for allegedly not making payments they agreed to settling a lawsuit contending that they failed to pay mine safety fines.
The U.S. Department of Justice on Thursday filed a motion in the U.S. District Court for the Western District of Virginia saying the coal companies are two months behind in payments. The DOJ also says the firms have been consistently late in monthly payments under an April 2020 consent order in which they agreed to pay $5.13 million to cover mine safety fine debt.
Just a day earlier, three of those coal companies asked the same court to suspend its own order, issued last month, for them to pay $2.54 million in penalties. The court found that the companies violated a Dec. 2016 consent agreement with federal, Alabama, Tennessee and Virginia environmental regulators by failing to maintain water pollution control permits for sites in Alabama and Tennessee and that Southern Coal Corp. and Premium Coal Co. failed to complete necessary stabilization work on time at three Tennessee sites.
The coal companies argued in part that they can be trusted to pay stipulated penalties ordered by the court if their planned appeal of the Dec. 7 order is unsuccessful.
“Simply put, there is no factual basis to believe that Southern Coal will not fully pay the stipulated penalties, if it should lose this case on appeal,” Southern Coal, Premium Coal and Justice Coal of Alabama LLC said in their motion to stay the monetary portions of the Dec. 7 order.
In their Thursday motion asking the court to order the coal companies to comply with the consent order in the safety fine debt case, the feds said the companies had not made the required monthly payments for December or January, despite multiple inquiries to companies’ legal counsel.
The consent order required the coal companies to make payments of $102,442 on or before the first day of every month until their $5.13 million debt is paid in full.
That debt was accrued after federal mine safety regulators issued at least 2,297 citations to the companies for mine safety violations from May 2014 to May 2019.
The companies didn’t make their payment for November until Monday, the feds said. In the 21 months since the April 2020 consent order, 15 payments have been late, according to the Department of Justice.
The coal companies argued in their Wednesday filing that Chief U.S. District Judge Michael Urbanski erred in his Dec. 7 ruling that they must pay $2.54 million in penalties for environmental violations within 30 days. The companies contend that their 2016 consent agreement with environmental regulators should not be interpreted as requiring that they maintain and comply with water pollution control permits.
The companies had argued before Urbanski’s ruling that, even if the consent decree required water pollution control permit compliance, the plaintiffs were entitled only to stipulated penalties for the defendants’ failure to submit timely renewal applications for three sites in Alabama, as they were the only permits requiring renewal that were in effect at the time of the alleged violations.
Urbanski was unpersuaded, noting in his Dec. 7 order that, if the consent decree did not bar the defendants from operating sites without water pollution control permits, they could avoid the consent decree’s stipulations by simply allowing their permits to expire.
“[A]dopting the defendants’ proposed interpretation of the Consent Decree would generate absurd results,” Urbanski wrote.
The Governor’s Office did not respond to requests for comment on the cases. Legal counsel for the Justice family did not provide comment. Attorneys for the Department of Justice, and Alabama, Tennessee and Virginia, did not respond to requests for comment. A spokeswoman for the Tennessee Attorney General’s Office declined comment. A spokesman for the U.S. Attorney’s Office for the Western District of Virginia deferred comment to the Department of Justice in Washington, D.C., which did not respond to a request for comment.
In November, a Kentucky circuit court judge ruled that Gov. Justice, his adult son, James “Jay” Justice III, and seven of their coal companies must pay $2.99 million for violating a 2019 mine cleanup agreement they entered into with Kentucky environmental regulators.
Judge Thomas Wingate also allowed the Kentucky Energy and Environment Cabinet to collect interest on the penalty from the Justices and their coal companies, poised to potentially raise the penalty by hundreds of millions of dollars. The penalty is 8% per day from Sept. 1, 2015, until paid in full.
The order, handed down in Franklin County Circuit Court, requires the Justices and their companies to complete mine reclamation on permits under the 2019 agreement and cover expenses and attorney fees incurred by the Energy and Environment Cabinet in going after them in court.
Wingate held that the Justices are required to pay interest on the civil penalty at 8% per day from Sept. 1, 2015, until paid in full under a provision in an agreement between the companies and environmental regulators that requires interest to be calculated at 8% per day from the date of breach until payment is received.
The judge noted that the agreed date of breach is Sept. 1, 2015, rejecting the defendants’ argument that the rate is unenforceable. The companies have contested that ruling.
In a statement Friday, Kentucky Energy and Environment Cabinet spokesman John Mura noted that the matter is still pending before Franklin County Circuit Court.
“[T]he cabinet’s position in the litigation has not changed,” Mura said in an email.
The governor said he would put his adult children in charge of his family’s business operations upon taking office in 2017. The West Virginia Secretary of State’s Office lists Justice III as president and the governor’s daughter, Jillean Justice, as director of Southern Coal Corp. and other family coal companies.
The Justice family’s financial troubles have spilled over into court repeatedly in recent months.
In September, Justice said Bluestone Resources, one of his family-controlled coal companies, had offered Credit Suisse $300 million, and half of the value of the Justices’ coal companies, to settle about $740 million in outstanding loans with the company.
The Justice family’s companies had been in talks with Credit Suisse at least since May, after the downfall of British-based Greensill Capital, which loaned the family companies $850 million in May 2018.
Forbes removed Justice from its list of billionaires last year because of his debt.