Gov. Jim Justice, Babydog and his wife, Cathy, attend the State Fair of West Virginia in Lewisburg on Aug. 10, 2024. (Office of the Gov. Jim Justice | Courtesy photo)
In a new filing this week, attorneys for 23 coal companies owned by Gov. Jim Justice and his family argue that a federal court cannot put the companies in contempt for nonpayment of fines due to them being unable to pay the fines.
The memorandum — filed Tuesday with the U.S. District Court for the Western District of Virginia and first reported by West Virginia MetroNews’ Brad McElhinny — comes after the federal government moved earlier this month to put the companies in contempt due to them owing nearly $600,000 for mine health and safety fines racked up at the companies’ coal mines over the last decade.
That debt, at one point, totaled about $5.13 million from hundreds of health and safety violations incurred. Under an agreement made between the companies and the government in 2020, the debt was due to be paid in full by March 31, 2024. A monthly payment plan was set up in 2020 for the companies to honor their debt, but over the last year — and at other periods since the agreement was made — payments have been spotty, wired late and often not made in full.
In Tuesday’s filing, attorneys for the Justice companies say the failure to pay came from one simple reason: they are “not financially viable.”
“While the [companies] have not entirely satisfied their obligations under the Consent Judgment, this is not due to a willful violation of the Court’s order,” the memorandum reads. “Instead, the [companies] have an inability to pay the current amounts due.”
Because of this inability, the attorneys argue, it would be inappropriate for the federal court to rule in favor of the government and put the companies in contempt as such sanctions should not be used to collect money for delinquent payments.
According to the memorandum, the companies’ financial troubles have been “well-documented” and are “well known” to the government based on other filings. The Justice companies’ attorneys said that these financial struggles are not “self-induced,” and as such, putting them in contempt would be “a step too far.”
“Unfortunately, the global coal market, extraneous business factors, and financial constraints constantly frustrate [the companies’] business activities and make their primary business — mining coal — almost impossible to do,” the memorandum reads. “Without active and significant mining operations, [the companies] are not financially viable, and this makes compliance with the payment terms an impossibility.”
One company named in the proceedings, Southern Coal Corporation, has been ruled insolvent and “has millions of dollars in judgments currently pending against it” in other federal cases, according to the memorandum. Another, Kentucky Fuel Corporation, has no assets and has recorded millions of dollars in losses from at least 2015 to 2018.
Other companies that the government is seeking to get payment from, the Justice family attorneys wrote, “face similar financial situations.”
The Justice-owned coal companies are some of the largest assets in the family’s sprawling business conglomeration. The ongoing financial woes at the companies are just one example of recent challenges faced by the family’s business empire, as issues have continued to rise against The Greenbrier Hotel Corporation, another Justice-owned company and operator of The Greenbrier Hotel, another large asset held by the family.
On Thursday, the Justice family announced it reached an agreement with Beltway Capital to halt a previously scheduled public auction of The Greenbrier Hotel. A hearing that was scheduled for Friday regarding the auction was canceled, as well as the auction itself. Now, the corporation is obligated to make a payment — the amount of which has not been disclosed — to Beltway by Oct. 24, which will end the proceedings against The Greenbrier.
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