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CHARLESTON -- Hoping to shield his company's financial condition from the prying eyes of media and political opponents, a federal judge ruled Tuesday that Gov. Jim Justice must supply any relevant data requested by a company seeking money due from a previous federal case.
Judge Leonard P. Stark of the U.S. District Court for the District of Delaware issued an oral order Tuesday approving a motion by Pennsylvania-based Xcoal Energy and Resources to compel Justice to provide responsive documents in its lawsuit against Justice-owned Bluestone Energy Sales Corp.
Stark also denied a motion by Justice to either defer discovery in the case or put in place protective measures to keep financial records for Justice's massive business empire from being publicly released as part of the case. Stark said attorneys for Justice were served with discovery requests on March 22, but did not object to the requests until May 3, a few days after Justice announced his candidacy for the Republican nomination for U.S. Senate in the 2024 elections.
"(Justice) identifies no authority for his contention that he should not have to provide discovery...because he is a declared candidate for political office," Stark said. "Nor does he provide any evidence, or any persuasive reasoning, for his insistence...that the governing protective order (which was agreed to by all parties and has governed discovery in this case for five years, a period during which the defendant has served as governor of West Virginia, an office for which he was a candidate and was re-elected to during the pendency of this litigation) is somehow insufficient to protect his confidential information."
John A. Sensing, an attorney for Justice, wrote a letter to the court last week urging Stark to grant their motion to defer discovery, citing the sensitivity of the financial information and Justice's Senate race. Sensing cited concerns about hacking or the leaking of information to the press and political opponents.
"…The documents and information that Xcoal seeks are both highly confidential and highly coveted by the media and Gov. Justices' political adversaries," Sensing wrote. "...That protective order was entered nearly five years ago and was not designed to protect the personal financial information of a candidate for the United States Senate in the months preceding an extremely politically charged election."
The U.S. Court of Appeals for the Third Circuit issued an opinion July 21, 2020, upholding an earlier judgment by the district court for the District of Delaware in favor of Xcoal after the Justice-owned companies filed an appeal of that judgment. According to court filings, Xcoal accused Bluestone and Southern Coal of breaching a 2017 agreement to provide hundreds of thousands of tons of coal to Xcoal for export overseas.
Justice's companies argued Xcoal first breached the contract and tried to show a pattern of companies trying to get out of contracts with Justice-owned companies and then suing them first. A U.S. District Court judge determined that the claims of the Justice companies had no merit and that Xcoal was the injured party, ordering the Justice family to pay Xcoal $6.8 million. Penalties and court costs have increased that to more than $10 million.
While Xcoal was able to collect more than $8 million owed to it through a surety bond, the company is now seeking the remaining $2 million owed to it by Justice's companies. Also last month, the U.S. District Court for the Southern District of West Virginia issued writs of execution to the U.S. Marshals Service for Justice and son Jay Justice and two Justice-owned companies for $88,866 in attorney fees awarded to Xcoal.
"...As Xcoal correctly points out, Gov. Justice '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,'" Stark said. "In short, the Court agrees entirely with Xcoal when it writes: 'There is no dispute that Xcoal is entitled to take post-judgment discovery in aid of execution, and that Gov. Justice, as a judgment debtor, is required to fully respond to the same. Gov. Justice is not immune to the discovery requests simply because he is running for office.'"
U.S. Rep. Alex Mooney, R-W.Va., is one of three Republican challengers to Justice in next year's Republican Senate primary seeking the seat held by Sen. Joe Manchin, D-W.Va. Mooney Campaign Manager John Findlay cited the Xcoal case as another example why voters should not support Justice.
"It's difficult to keep pace with the ever-expanding scandals coming from Jim Justice," Findlay said in a statement Tuesday evening. "West Virginians need conservative Alex Mooney to serve West Virginia in the United States Senate, not an irresponsible liberal like RINO Jim Justice in the U.S. Senate."
Justice has frequently claimed that he no longer is involved with the day-to-day operations of 111 companies he controls, seven of which are in blind trusts according to his most recent financial disclosures with the state Ethics Commission. His son Jay manages the coal and agricultural businesses and daughter Jill runs the hospitality businesses and the Greenbrier Resort.
Speaking during his weekly administration briefing from the Capitol Tuesday afternoon, Justice said voters should pay attention to his job performance as governor and ignore the issues with his businesses.
"Judge me for what I'm doing as your governor. Absolutely leave our family's business to my son and daughter," Justice said. "Let them do their jobs. At the end of the day, see where it comes out."
Justice and his family-owned companies are facing multiple lawsuits by creditors seeking payment for hundreds of millions of dollars. A decision from one federal court said Justice's companies are liable for six years of unpaid healthcare premiums for retired miners and a new federal lawsuit on behalf of the Office of Surface Mining Reclamation and Enforcement seeks $7.6 million in civil penalties and unpaid abandoned mine lands fees.
Justice has called these cases "political," being brought by the Justice Department on behalf of President Joe Biden. He likened his legal problems to those of former president Donald Trump, who pleaded not guilty last week to multiple charges for failing to turn over secret classified documents to federal authorities.
"I guarantee you without any doubt in the world that the Biden administration knows that I'm coming to the Senate and it's going to flip the entire Senate," Justice said. "Absolutely when we do that, the Republicans are going to take control of the Senate and God knows we need to do exactly that. What does the Biden administration do? Exactly what they've done against President Trump. They weaponize agencies to come after you."