CHARLESTON — U.S. Attorney Mike Stuart reports that authorities have finished deposing representatives of a company owned by West Virginia’s governor over a $1.23 million federal penalty.
The point is to determine what means Justice Energy has to pay the debt.
Stuart and representatives of Justice Energy Company submitted a joint status report on Friday.
“In addition, the United States has requested documentation regarding equipment owned and disposed of by Justice Energy Company since January 1, 2016,” lawyers wrote. “That documentation is in the process of being completed and should be completed soon.
“After those matters have been completed, the United States will determine what collection efforts it will undertake to recover the penalty imposed by the court.”
Justice Energy is one of the companies owned by the family of Gov. Jim Justice.
Justice took office as governor in 2017. He never has put most of his companies in a blind trust, but has said his son, Jay, has responsibility for the coal operations. Jay Justice, whose full name is James C. Justice III, is listed as president of Justice Energy.
The federal prosecutor and lawyers for Justice Energy wound up in this position after U.S. District Judge Irene Berger ran short on patience on a lawsuit that has been in federal court since 2013.
“The Defendant’s decision to simply ignore Court orders, deadlines and obligations precipitated the imposition of the contempt sanction,” Berger wrote in early January.
“Continuing to flout the Court’s directives is not a strategy likely to engender positive results.”
A federal lawsuit filed by James River Equipment Nov. 6, 2013, alleged that Justice Energy failed to pay for parts, equipment and service.
At the time, all that was owed was $148,496.14.
On Jan. 21, 2014, the court granted James River’s motion for default and awarded $156,112, an amount that included damages.
But Justice Energy failed to pay and its representatives failed to appear at a series of hearings.
This was at a time when the company was still owned by the Russian Energy company Mechel OAO. Justice had sold to Mechel in May 2009 for $568 million and then bought it back in 2015 for $5 million.
As the struggle continued for James River to receive the $156,112 judgment, the company in late 2015 filed a motion for contempt.
The judge granted the contempt motion and ordered Justice Energy to be fined $30,000 a day until it could demonstrate compliance with the earlier order.
By Feb. 26, 2016, as Justice was warming up for the Democratic primary race for governor — as a Democrat at the time — the situation had barely improved.
But the two parties had worked out a payment plan, and Berger agreed.
She ordered the judgment of $1,230,000, representing the total amount of the sanction from her earlier order.
Justice Energy twice appealed to the Fourth Circuit U.S. Court of Appeals.
One aspect of the appeals took issue with the $30,000-a-day penalty that had added up, saying it was unclear how the judge arrived at that amount and contending it was an abuse of discretion.
Twice, judges with the Fourth Circuit ruled against Justice Energy. “We have reviewed the record and find no reversible error,” judges wrote in the second dismissal.
The dismissals circled the case back to Berger’s courtroom, where the judge has asked for updates on paying the fine.
The U.S. Attorney’s Office was charged with checking on the progress of the payments.
That led to an eye-opening court filing late this past December.
The filing included a letter last Nov. 28 from Stuart to lawyers representing Justice Energy Company. Stuart wrote that it’s unclear whether Justice Energy has enough money to pay the fine.
“Based on my conversation with you, as counsel for Justice Energy Company, Inc., there was some suggestion that Justice Energy Company, Inc., may not have the financial resources to pay the sanctions imposed by the court,” Stuart wrote.
That filing included a request to depose employees and representatives of Justice Energy.
Federal prosecutors filed notice that they would take depositionsMarch 14 of Jay Justice; Stephen W. Ball, a lawyer for Justice’s companies; and James T. Miller, another officer of Justice’s companies.
Berger last week ordered the U.S. Attorneys and lawyers for Justice Energy to provide a status update.
