Suit by Justice-owned companies dismissed
CHARLESTON — An effort by companies owned by Gov. Jim Justice to force a federal regulator to abide by an alleged settlement for fines, penalties and fees came to a close Tuesday when a judge agreed to dismiss the case.
Senior U.S. District Judge Glen Conrad ruled in favor of a motion to dismiss a lawsuit filed by Justice’s companies against the federal Office of Surface Mining, Reclamation and Enforcement. Conrad dismissed the case without prejudice, meaning that it can be filed again at a later date.
In his memorandum decision, Conrad said the Roanoke Division of the U.S. District Court for the Western District of Virginia had no jurisdiction and that the U.S. Court of Federal Claims is the proper venue for the lawsuit. The Federal Claims Court hears contract disputes between federal agencies and private entities as determined by the Tucker Act.
“(Justice’s companies) seek enforcement of a purported contract with a value well over $10,000,” Conrad wrote. “As a result, this court has no jurisdiction to hear this suit under the Tucker Act and the Little Tucker Act.”
Jay Justice, son of Gov. Jim Justice, and 12 Justice-owned companies filed suit against OSMRE last May seeking a declaratory judgement. The filing alleged that the OSMRE agreed to settle various fines and penalties with Justice’s coal companies in early April 2019.
Justice’s companies claimed that Jay Justice and another company executive met on April 8, 2019, with Michael Castle and Mark Snyder, both OSMRE officials representing the Knoxville and Lexington field offices. The Justice company executives offered to pay OSMRE $3 million in 12 monthly payments of $250,000 per month. The OSMRE officials said they would discuss the proposal, but tentatively agreed.
On May 15, 2019, Justice’s companies received a letter from the attorney for the U.S. Department of the Interior, which oversees OSMRE. The letter stated neither the Interior Department nor OSMRE had the authority to accept any deal for more than $100,000 without first seeking the approval of the U.S. Department of Justice.
In his ruling Tuesday, Judge Conrad said he decided to dismiss the case rather than transfer the case to the Federal Claims Court because there was no contract between Justice’s companies and OSMRE as alleged by Justice.
“Federal law limits the ability of government officers to enter settlement agreements, like the one at issue in this case,” Conrad wrote.
“The court concludes that (Justice’s companies) have failed to allege that Castle had actual authority to enter into the purported settlement agreement… As a result, the parties did not comply with the statutory and regulatory requirements of settling a claim with the United States. There was, thus, no enforceable agreement.”
The lawsuit came 10 days after the U.S. Attorney for the Western District of Virginia and the U.S. Mine Safety and Health Administration filed suit on May 7, 2019, against 23 Justice-owned companies seeking $4.8 million in unpaid mine safety penalties. Between May 3, 2014, and May 3, 2019, the 23 companies named in the suit were issued 2,297 citations and civil penalties by federal mine inspectors.
Conrad, also the judge in that case, issued an order April 2 accepting an agreement between the Justice-owned companies and Thomas Cullen, U.S. Attorney for the Western District of Virginia. Justice’s companies agreed to pay $5.1 million to the U.S. government, issuing a one-time payment of $212,909.44 on April 15, and paying $102,442 per month by the first of every month until the $5.1 million is paid in full.