With a big hearing scheduled for Wednesday in the case over his residency, Gov. Jim Justice’s family businesses faced more legal troubles this week, with the dismissal of a case The Greenbrier resort filed against its insurance companies and the threat of a lawsuit by environmental groups over water pollution at one of the family’s coal mines.
Justice’s family company, Bluestone Coal, was among a group of coal companies that received a notice of intent to sue for alleged environmental violations Tuesday from a coalition of environmental groups.
The companies received the notice one day after a U.S. district court judge dismissed a lawsuit in which several Justice entities related to The Greenbrier claimed insurance companies had failed to pay the entities the more than $100 million in claims it made over damage the resort sustained during the June 2016 flood.
The company’s Red Fox Mine, in McDowell County, repeatedly has violated the Clean Water Act and its state Department of Environmental Protection permit, plus the federal Surface Mining Control and Reclamation Act, state Surface Coal Mining and Reclamation Act and state mining permit, the letter, signed by lawyers for the environmental groups, says.
The mine repeatedly has discharged too much selenium, the letter says. According to a chart included in the letter, Red Fox Mine repeatedly discharged selenium above the approved limit between July 2018 and February 2019 — a violation of its Clean Water Act permit.
“The excessive selenium discharges are contributing to the impairment of the receiving streams,” the notice says, citing a DEP list that says Horsepen Creek and Big Creek, which receive runoff from the site, are impaired for selenium. These alleged violations also are regarding the site’s surface mining permit.
If the company doesn’t stop violating its permit in 60 days, the letter says, the groups will bring a citizen lawsuit against Bluestone.
The other companies violated the Clean Water Act and Surface Mining Control and Reclamation Act at their 15 facilities, according to letters sent to those companies. Other companies named include: Murray American Energy; Southeastern Land LLC; Lexington Coal Co.; American Bituminous Power Partners; Mepco Inc.; Eagle Natruium LLC; Black Castle Mining Co.; and Consol.
“These notice letters make clear that every stage of the coal cycle is irredeemably dirty,” Peter Morgan, senior attorney for the Sierra Club’s Environmental Law Program, said in a prepared statement. “Worse, the notice letters also make clear that federal and state regulators continue to look the other way while communities suffer.”
Bluestone has 60 days to fix the alleged problems and to tell the environmental groups how the company plans to do so. In the letter, the groups also offered to meet with Bluestone to try to resolve any environmental issues over the next 60 days.
In the Greenbrier matter, U.S. District Judge Joseph Goodwin on Monday dismissed the lawsuit brought by Greenbrier Hotel Corp., Old White Charities Inc., Justice Family Group LLC, and other Greenbrier and Justice-affiliated entities in U.S. District Court for the Southern District of West Virginia.
Goodwin dismissed the case without prejudice, meaning the plaintiffs may file a new lawsuit in the future.
In his opinion, Goodwin said the Greenbrier-affiliated plaintiffs failed to serve the lawsuit to the defendant insurance companies within 90 days, as required by law.
The parties, Goodwin said, indicated they were approaching negotiations to resolve the issues of the case before the case got to the point where parties collected and exchanged evidence. The plaintiffs had asked for an extension of the deadline to serve the defendants if negotiations didn’t work out.
The plaintiff companies haven’t “even attempted to show” good cause for their failure to timely serve the defendants, Goodwin said, even going as far as to say their efforts “have been directed at avoiding” serving the defendant companies with the lawsuit.
In the lawsuit, organizations affiliated with The Greenbrier resort sued 38 insurance companies and insurance-affiliated individuals claiming the companies have only paid a fraction of the more than $100 million in claims the organizations have made regarding damages the resort and other properties sustained during the June 2016 flood and subsequent losses related to The Greenbrier Classic PGA Tour golf tournament.
The plaintiffs also claim lack of payment on losses related to property development of a ski resort at The Greenbrier.
In the lawsuit, the plaintiffs said they have filed more than $107 million in claims related to damages at the resort, but the companies have paid about $37 million.
Because of the companies’ refusal to honor their obligations and pay the claims, the “Plaintiffs — and in particular Greenbrier Hotel — have been brought to near financial insolvency and have been unable to fulfill certain of their financial obligations.”
The plaintiffs also claimed the insurance companies acted in bad faith in establishing the policy and immediately after the flood.
To date, Justice has not put a handful of his companies, including the Greenbrier Hotel Corp., into a blind trust, even though he holds public office. Justice publicly has stated his children, Jay and Jillean, are overseeing operations of his companies.
Justice is not directly named as a plaintiff in the lawsuit, but his name is mentioned in the original complaint.
The case asks for damages to be paid to the plaintiffs and “their principals, including James C. Justice, II.”