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The consequences of long-running debts worsened for U.S. Sen. Jim Justice’s coal companies in two federal courts Monday.
In Kentucky, a federal judge ordered two of the first-term Senate Republican’s coal companies to pay nearly $650,000 in attorney fees and expenses plus interest dating back to a 2020 judgment against them. The judge also fined Justice’s son, James C. “Jay†Justice III, and another Justice coal company executive $1,000 per day for not complying with an order to share financial information, plus another nearly $200,000 in attorney fees and expenses.
In New York, a surety bond provider told a federal court Sen. Justice and four of his coal firms owe over $8.4 million to cover a bond payment and other fees and expenses.
Judge blasts Justice firms for ‘delay and obstruction’
Sen. Jim Justice, R-W.Va., speaks during a Jan. 16, 2025, Senate confirmation hearing.
A judge in the U.S. District Court for the Eastern District of Kentucky wrote in an order issued Monday that the 13-year-old case yielding the daily fines for Jay Justice and fellow Justice coal firm executive Stephen Ball “has been marked by delay and obstruction on the part of the Defendants.â€
The Roanoke, Virginia-based defendants, Kentucky Fuel Corp. and James C. Justice Companies Inc., have failed to comply with a court order to share evidence in the case, District Judge Gregory Van Tatenhove wrote in his Monday ruling. That failure has persisted even after the court found Justice and Ball in contempt of court in a July 2024 ruling that fined them $250 per day amid that noncompliance, Van Tatenhove indicated.
Van Tatenhove acknowledged a report from the plaintiffs, New London Tobacco Market Inc. and New London agent Fivemile Energy LLC, that the Justice companies produced two ledger reports in October. But Van Tatenhove agreed with the plaintiffs that that move was “relatively de minimis compliance,†saying it appeared to have taken the Justice firms fewer than 10 minutes to procure and provide.
Observing the defendants’ delays in fulfilling the court mandates to provide financial information and complying with their contempt penalties, Van Tatenhove wrote “the Court must further escalate the consequences for failure to comply.â€
Van Tatenhove ordered Justice and Ball to pay, as part of their contempt sanction, $194,528 in attorney fees and expenses previously awarded to compensate the plaintiffs in their pursuit of post-judgment evidence regarding the Justice companies.
Justice and Ball must each pay the Kentucky Eastern District Court $1,000 a day, increased from $250 a day, per Van Tatenhove’s order, because the companies haven’t complied with an order to share evidence in the case. Justice and Ball are required to pay the monetary sanctions until they fully comply with the order as determined by the court.
Firms said they had no revenue
In another order, Van Tatenhove ordered the two Justice coal companies to pay $648,366 in attorney fees and expenses plus post-judgment interest starting in April 2020, when the court entered a default judgment against the defendant companies and awarded damages to the plaintiffs.
The plaintiffs had filed a motion to recoup attorney fees and expenses not yet awarded in previous orders. Van Tatenhove rejected the defendants’ argument the fees were old and that the motion was untimely.
New London Tobacco Market and Fivemile Energy brought the case in 2012 after Kentucky Fuel failed to mine coal under an agreement following the plaintiffs’ assignment of rights to mine coal in eastern Kentucky to the defendants in exchange for a cut of the mined coal.
The Justice firms already have been found to owe more than $18 million to the plaintiffs.
In May 2023, U.S. Magistrate Judge Hanley Ingram ordered Jay Justice and Ball to appear for depositions. Van Tatenhove in July 2024 wrote he found “unconvincing†the companies’ “attempt to receive a ‘get out of jail free’ card†by arguing they retroactively answered the plaintiffs’ discovery requests through depositions at which they were ordered to appear.
More than four years later, Van Tatenhove noted the defendants still hadn’t provided responses, identified their affiliate companies or provided information about transactions with those companies. They also hadn’t supplied responsive documents that include records from 2010 to 2015 and records of transactions between them and affiliate companies, the judge said.
Kentucky Fuel and James C. Justice Companies said in a previous case filing they had “no operations, revenues, or unencumbered assets†in response to a request to hold them in contempt for nonpayment of attorney fees and expenses totaling $194,258.
Bond provider seeks $8.4M
Indiana-based surety bond provider Federal Insurance Co. on Monday indicated in a U.S. District Court for the Southern District of New York filing it would file a motion for a judgment against Bluestone Resources Inc. and other Justice coal companies that it says owe it over $8.4 million.
Federal Insurance contended the Justice coal firms owed just shy of $8.3 million comprising a bond payment, plus over $120,000 in attorney fees, as of Dec. 31, 2024.
Federal Insurance, which filed the lawsuit in June 2023, has said it lost $8.1 million because Sen. Justice and his companies violated an indemnity agreement.
The company’s lawsuit is connected to another in which a Pennsylvania coal marketing company says Justice’s business empire has failed to abide by a seven-figure court judgment against it.
The coal marketing company, XCoal Energy & Resources, told another federal court that Sen. Justice and two of his family coal companies haven’t indicated that $1.9 million was forthcoming following a 2021 court finding that a Justice coal company violated a coal supply agreement.
In March 2021, the U.S. Court for the District of Delaware ruled Latrobe, Pennsylvania-based Xcoal was entitled to $6.8 million and later increased that amount to just over $10 million after accounting for interest and attorney’s fees and costs.
Xcoal later collected $8.1 million from a bond issued as Justice and his family’s Bluestone Energy Sales Corp. and Southern Coal Corp. unsuccessfully appealed the judgment.
In its June 2023 complaint, Federal Insurance said Justice, Bluestone Energy Sales and Southern Coal are liable for the $8.1 million after Federal named them as principals and Xcoal the obligee in a May 2021 indemnity agreement.
Federal said that Justice and the coal companies agreed to indemnify Federal against all liability and expenses incurred by Federal due to having issued the bond, citing the indemnity agreement included as a court exhibit. The agreement includes signatures from Sen. Justice and Jay Justice as president of the coal companies.
Long string of Justice financial woes
Woes have been mounting throughout Justice’s personal and business finances.
Virginia-based Carter Bank scheduled an auction of Greenbrier Sporting Club property last year to help satisfy a nine-figure Justice family debt to the bank.
The auction was later canceled, and the Justice family and the bank announced the settlement of the dispute, in which the bank has sought $300 million-plus in debt admitted by the Justices.
The Justice family’s Greenbrier Hotel Corp. was accused in August 2024 of being four months delinquent in contributions to a health insurance fund serving union workers by the Greenbrier Council of Labor Unions before a settlement agreement was reached between the health fund and the company.
Last year, federal marshals seized a helicopter owned by Justice’s Bluestone Resources in response to Bluestone not paying any of a roughly $13 million 2021 judgment against it.
