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W.Va. governor-affiliated companies sue federal government for discarding deal

West Virginia Gov. Jim Justice's son and several companies affiliated with the family sued the federal government, alleging it had reneged on an agreement that would have allowed the entities to complete reclamation work to offset some of the financial penalties brought against them.

The U.S. Office of Surface Mining Reclamation and Enforcement, or OSMRE, had assessed fines and penalties against Jay Justice and the companies, which the suit collectively refers to as the Justice Mining Entities, leading up to April, according to a May 17 filing with the U.S. District Court for the Western District of Virginia. The complaint claims the office wrongfully assessed individual assessments against Jay Justice related to the companies' activities. It also includes a partially redacted chart of about 115 outstanding debt cases brought against Justice companies.

The governor's family's coal companies have faced numerous legal and financial allegations over the years. The government recently filed a lawsuit against Justice companies to collect the unpaid debt owed for federal mine safety and health law violations as well.

Jay Justice and Tom Lusk, COO of the Justice Mining Entities, met with two OSMRE representatives April 8 to try to resolve some of the charges. They came to a settlement agreement to reduce some of the penalties assessed to the entities based on reclamation work completed, according to the complaint.

Over the next month or so, the parties' attorneys corresponded about implementing the settlement agreement, "and at no time did any officers or representatives of OSMRE express any reservations about the finality and enforceability" of the agreement, the plaintiffs state. On May 15, one of the OSMRE representatives denied the agreement's existence, which the plaintiffs said was "a complete and unforeseeable reversal of the OSMRE's position."

An OSMRE representative said the other officials did not have the authority to bind the agency to the settlement's terms, the filing states. The representative also said he was instructing the U.S. Department of Justice to sue and collect the fines and assessments issued.

"The abrupt turnaround by the government in its attitude toward this matter is inexplicable and raises the question whether untoward political or other pressure from sources presently unknown has been brought to bear on OMSRE, perhaps from other federal agencies or political adversaries of the Justice family," the filing states. "The repudiation of the settlement agreement may have resulted from inappropriate inter-agency influence between [the U.S. Mine Safety and Health Administration] and OSMRE."

The plaintiffs asked the court to determine whether the settlement agreement is enforceable and prevent the OSMRE from taking further steps with regard to the fees and assessments until a declaratory judgment is made.

The OSMRE directed questions to the U.S. Department of Justice, which declined to comment on the lawsuit. In a May 15 letter to Justice's counsel, a U.S. Interior Department official wrote that the OSMRE, its employees, or attorneys representing the Interior Department do not have the authority to settle a debt of more than $100,000 owed to the U.S. without approval from the Justice Department.

"Therefore, notwithstanding your clients' assertion about a deal they believe they made with OSMRE, there is not nor has there been an authorized agreement with the United States to settle the monetary debts of your clients for $250,000, or for any other amount," the letter states.

On May 14, a letter was signed and sent that authorized the Department of Justice to sue the companies on behalf of Interior, the official wrote. The Justice entities have the option to settle the cases before the suit is filed.