Gov. Jim Justice’s family companies have been ordered to pay $35 million in a lawsuit over a coal mining contract.
On Monday, U.S. District Judge for the Eastern District of Kentucky Gregory F. Van Tatenhove entered a memorandum opinion and order.
The judgment stems from a 2012 lawsuit filed by New London Tobacco Market Inc., which said Justice’s companies, James C. Justice Companies Inc. and Kentucky Fuel Corp., had breached a contract to mine coal. Among other things, Justice’s companies were accused of failing to pay minimum royalty payments and monthly retainer fees, and committing fraud.
In an amended complaint filed in September 2017, Justice’s companies were accused of transferring assets “with the intent to hinder, delay or defraud Plaintiffs as creditors of Justice Companies.” The lawsuit mentions a series of properties Justice’s companies transferred, including land in North Carolina and South Carolina.
Lawyers for New London Tobacco Market Inc. believed, they wrote, that Justice’s companies intended to “convert real property to cash or other assets that will be difficult to trace or that can be dissipated or hidden, with the intent to hinder, delay or defraud Plaintiffs and other creditors.”
The $35 million judgment is specifically for lost retainer fees, lost tonnage royalties, compensatory damages and punitive damages. As of June 26, 2019, Justice’s companies owed $970,000 in unpaid retainer fees, which increase by $10,000 on the first of each month — meaning they now owe $1 million. They also owe nearly $17 million in lost tonnage royalties, $20,000 for compensatory damages and $17 million in punitive damages.
“Attorneys representing the Justice companies are immediately going to ask the District Judge to correct clear errors in the opinion, and if needed, we’ll file an appeal with the Sixth Circuit Court of Appeals. Unfortunately, the judge did not take into account indisputable evidence showing that the plaintiffs misled several companies — not just the Justices — about the quality of the coal in dispute. Like any business, the Justice companies have an obligation to our employees — especially our coal miners — to fight unjust litigation that has the potential to harm our operations. We’re confident the opinion will be reversed,” said Richard Getty, an attorney for the Justice companies.
A lawyer for New London Tobacco Market Inc. did not respond to requests for comment.
The judgment is among several instances in which Justice’s family companies have been ordered to pay delinquent fees and penalties stemming from lawsuits.
In August, nonprofit newsroom ProPublica and the Charleston Gazette-Mail detailed how Justice’s Greenbrier resort illustrates how the governor’s public and private interests intersect, posing potential conflicts of interest for Justice.