Second Justice Company Steps in to Pay $1.23 Million Fine

Jun 10, 2019

Federal prosecutors have agreed to drop a motion seeking to hold West Virginia Gov. Jim Justice and his son, Jay Justice, personally accountable for a $1.23 million civil penalty levied against one of the family’s coal businesses, Justice Energy Company, Inc.

In an order filed Friday in the U.S. District Court for the Southern District of West Virginia, attorneys for Justice Energy proposed that another Justice company, Bluestone Resources, Inc., will pay the fine.

 

In exchange, federal prosecutors agreed to withdraw a motion seeking a court ruling that the Justices be held personally responsible for the civil contempt fine levied on Justice Energy because the company is, in effect “a shell corporation with no real independent and separate corporate existence.

 

U.S. Attorney for the Southern District of West Virginia Mike Stuart in a court filing last week said after deposing company executives, including the governor’s son, federal prosecutors concluded the Justices were in practice “the alter egos” for the company and should be required to pay the fine.

In a statement regarding the settlement, Bluestone Resources CEO Tom Lusk expressed gratitude toward the U.S. attorney’s office and said “despite this disproportional penalty, the Justice Family has once again stepped up to pay an obligation.”

The Friday order, signed by U.S. District Judge Irene Berger, lays out a timeline for Bluestone Resources to pay the $1.23 million fine, which stems from a 2013 case over unpaid business debts to Virginia-based James River Equipment.

The company sued Justice Energy to recover roughly $150,000 in unpaid fees for mining equipment, services and parts. Two years after being ordered to pay the debt, and after company representatives repeatedly failed to show up for court hearings, Berger held Justice Energy in contempt of court to the tune of $30,000 per day, totaling $1.23 million. Justice Energy appealed the fines, but lost in 4th U.S. Circuit Court of Appeals last August.

Under the new order, Bluestone Resources will make three, $410,000 payments to satisfy the civil fine on behalf of Justice Energy.

The U.S. attorney's office retains the right to refile the “alter ego” motion should Bluestone Resources fail to make the payments, according to the order.

The first payment is due June 17.