CHARLESTON — Lawyers for Gov. Jim Justice say compelling him to disclose his financial information in a federal dispute over almost $2 million would violate his privacy and could be used against him in his bid for U.S. Senate.
“The information Xcoal seeks in discovery is sufficiently sensitive — and coveted by the news media and Gov. Justice’s political adversaries — that Gov. Justice has a well-founded concern for its confidentiality,” lawyers for Justice wrote this month in a filing in U.S. District Court in Delaware.
A teleconference meant to work out conflicts over financial records for Justice and his companies is tentatively scheduled for 2:15 p.m. today unless the parties can work out some agreement before then. Then again, they’ve been battling more broadly in federal court for more than five years.
That’s just hours before Justice is the subject of a fundraising reception in Washington, D.C., for his U.S. Senate race. The 5 p.m. fundraiser at the Republican National Senatorial Committee headquarters today is hosted by Senate Minority Leader Mitch McConnell, Sen. Shelley Moore Capito and others.
Even as Justice is embarking on the high-profile race that could cannonball directly into incumbent Democrat Joe Manchin, his financial network is under strain from local courts to federal cases.
His lawyers highlighted the interconnectivity in the case with Xcoal, a supplier trying to collect the remainder of a multi-million dollar judgment.
Xcoal wants to know more about Justice’s ability to pay, but the governor’s lawyers say others would want to know that, too.
“As a candidate in an electoral race that could determine control of the United States Senate during an era of bitterly divided partisan politics, Gov. Justice has both: (a) a realistic concern that any personal financial information he provides to Xcoal in discovery may be leaked, hacked, or otherwise made public; and (b) a compelling basis to seek heightened protections for his personal financial information.”
The dispute with Xcoal over a supply deal has bounced from federal court to appeals court and back to federal court, now coming to a head over whether and how Justice and his companies would pay the
$2 million.
Xcoal originally sued Justice and two of his companies, Bluestone Energy Sales Corp. and Southern Coal Corp., in 2018 over a breached agreement to deliver 720,000 net tons of metallurgical-grade coal for shipment overseas.
Xcoal has already won the case but is trying to get the money that the court system says it’s owed. In 2021, U.S. District Judge Leonard Stark ruled that Xcoal was owed about
$6.8 million in damages — an amount that later increased to $10 million in interest and fees.
The appeals court agreed with that ruling. Xcoal wound up collecting $8.1 million from a surety bond, but it’s still trying to collect the remainder.
“Despite repeated demand, Defendants have not indicated that the payment of this amount is forthcoming,” lawyers for Xcoal have written to the judge.
On June 14, lawyers for Xcoal wrote to ask Stark “to compel Defendant Justice to issue full written responses and produce all documents responsive” to earlier discovery requests.
Xcoal’s lawyers contended, “Gov. Justice is not immune to the discovery requests simply because he is running for office.”
Justice, a two-term Republican governor, has dozens of business holdings listed on his annual state ethics disclosures. The governor has not placed most of his family’s holdings in a blind trust but has repeatedly said the responsibility of running the businesses has been passed on to Jay and adult daughter Jill Justice.
Over the years, Justice has consistently pointed toward his business acumen as a political attribute. The owner of The Greenbrier resort was once considered West Virginia’s only billionaire, but Forbes downgraded him following major debt disputes.
Late last week, lawyers for Justice filed a second letter objecting to the disclosure of Justice’s financial information in the Xcoal case. In it, Justice requested that the court either defer discovery of the governor’s personal financial information until discovery from other defendants is completed or apply extra protective measures to reduce the risk that the information be made public.
“These measures — the latter especially — will not prejudice Xcoal but will help ensure that Governor Justice’s personal financial information remains safe from prying eyes,” wrote lawyers for Justice.
In their own second letter to the judge, lawyers for Xcoal again contended that running for office is no reason to hold off on submitting the financial information. The lawyers for Xcoal also called the proposed additional security measures “extraordinary and incredibly burdensome.”
“Gov. Justice’s letter also ignores the most obvious solution to his purported concerns — instead of continuing to flout his obligations to Xcoal, Gov. Justice could simply pay the remaining judgment amount of $1,917,222.32, plus post-judgment interest,” they wrote.
The lawyers for Xcoal said it’s important to move ahead because of the other financial headwinds faced by Justice’s companies.
“For this reason alone the Court should deny Gov. Justice’s request to defer discovery of his personal finances. It is critical that Xcoal be afforded its rightful opportunity to immediately locate assets and recover the remaining amount due, as there is a substantial risk that such assets may be liquidated in the very near future.”
