DOJ Files Suit Against Gov. Justice's Family Companies Over Mine Violation Debts
Updated May 8, 2019 at 2:45 p.m.
The U.S. Department of Justice has filed a civil lawsuit against 23 coal companies owned by the family of West Virginia Gov. Jim Justice, seeking more than $4.7 million in unpaid fines and fees for mine safety and health violations.
The delinquent fines were brought to light by investigations by NPR and the Ohio Valley ReSource as the Justice companies’ overdue debts ballooned from just under $2 million in 2014 to more than $4 million in 2018.
The lawsuit was announced Tuesday by U.S. Attorney Thomas Cullen of the Western District of Virginia and David Zatezalo, the head of the Mine Safety and Health Administration, or MSHA.
In a news release, the DOJ said the 23 companies named in the lawsuit incurred nearly 2,300 mine safety and health violations over the last five years. According to a 2019 financial disclosure filed with the West Virginia Ethics Commission, all 23 companies are owned by the Justice family.
The civil complaint says the companies failed to pay nearly $4 million in penalties associated with those violations. The companies are located across five states: Virginia, West Virginia, Tennessee, Alabama and Kentucky.
The DOJ said the Justice-owned companies ignored multiple demands by MSHA, the Department of Treasury, and the U.S. attorney’s office to pay the delinquent debts.
“As alleged in the complaint, the defendants racked up over 2,000 safety violations over a five-year period and have, to date, refused to comply with their legal obligations to pay the resulting financial penalties,” Cullen stated in the news release. “This is unacceptable, and, as indicated by this suit, we will hold them accountable.”
“MSHA stands with the Department of Justice in seeking to hold mine operators responsible for the penalties they owe,” Zatezalo said in the same release. “Failure to pay penalties is unfair to miners who deserve safe workplaces, and to mine operators who play by the rules.”
Michael Carey, a lawyer who represents the Justice companies, said in an interview that the Justices have been actively negotiating with both the U.S. attorney's office and MSHA and felt blindsided by the suit.
"The Justice companies are frustrated that the U.S. attorney’s office decided to go through with this litigation at this point because we’ve been negotiating with them to resolve this matter for several months now," he said.
Carey also repeated an oft-cited concern from the Justice family that a large chunk of the assessed fines referenced in the complaint were accrued when some of the companies the Justice family currently owns were controlled by Russian mining company Mechel OAO.
In May 2009, Mechel OAO purchased Bluestone Coal Company from Justice. In 2015, Justice bought the company back. The metallurgical mining company has operations in West Virginia’s McDowell and Wyoming counties.
Carey said "approximately 50 percent of the fines that have been assessed are in relation to when the Russians operated the property."
"We believe there is a basis to contest those and we simply don’t owe it simply because we bought it," he said. "But that was part of the ongoing negotiation."
However, an Ohio Valley ReSource analysis of delinquent debt information casts doubt on that argument.
Last month, an Ohio Valley ReSource analysis of federal mine safety data found that the Justice family companies owed $4.3 million in delinquent debt for mine safety violations. That meant the Justice companies had by far the highest delinquent mine safety debt in the U.S. mining industry. And it was also far more than the companies owed when Justice ran for governor in 2016, when he pledged to make good on such debts.
In 2016, an investigation by NPR, the ReSource and partner station West Virginia Public Broadcasting found that Justice’s mines owed $2.6 million in overdue mines safety fines, as well as millions more in unpaid tax debt.
Then-candidate Justice said those debts would be paid.
“When it all really boils right down to it we’re taking care of them,” Justice said at a rally announcing his gubernatorial bid. “We’ll absolutely y’know, take, make sure that every one of them is taken care of.”
But the ReSource analysis of 2018 MSHA data shows that more than four years after that initial investigation, the Justice companies — now mainly controlled by the governor’s children, James Justice III and Jillean Justice — had allowed that debt to grow.
The investigation also addressed the Justice companies’ claim that Mechel OAO is responsible for much of the debt from overdue fines. The ReSource analysis examined debt for violations assessed to owners at the time of the initial violation. The debts associated with violations assessed to those mines while they were owned by Mechel are not included in the $4.3 million total that MSHA data show the Justice companies are responsible for. Even if the Justice companies are successful in their argument regarding the debt incurred by Mechel OAO, that would represent a small portion of the overall sum the companies owe.