CHARLESTON, W.Va. — This seems awkward.

On one side is the former West Virginia Republican Party chairman, now in his role as the chief federal prosecutor for southern West Virginia.

On the other side is the Republican chief of West Virginia’s executive branch, in his capacity as the head of a sprawling family business.

The two are about to collide in a longstanding federal court case involving more than a million dollars in fines.


U.S. Attorney Mike Stuart

U.S. Attorney Mike Stuart, the former party chairman, filed a motion last week to intervene in James River Equipment vs. Justice Energy Company Inc.

“The Court has assessed a civil penalty on defendant Justice Energy Company, Inc., which has now become a debt owed to the United States,” Stuart’s office wrote last Wednesday.

“The United States now needs to formally intervene and appear as an intervening party in this civil action for the purpose of collecting this debt owed to the United States.”

U.S. District Judge Irene Berger the next day issued an order granting the motion.

This is another twist in a tangled case.

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.

One significant staffing connection remained as the coal company ownership transitioned from Mechel back to Justice. Roman Semenov, who had been general counsel under Mechel, was retained in the same role during the transition.

As the struggle continued for James River to receive the $156,112 judgment, the company in late 2015 filed a motion for contempt.

That motion also included a request to “pierce the corporate veil” of Justice Energy and to imprison its corporate officers and directors until the payment was made.

At the time, Berger declined to go that far.

But the judge did grant 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.

The appeals singled out Semenov, the general counsel who had bridged the two ownership groups, for either not receiving or for failing to communicate to other officers the court filings during that period.

The appeals also took issue with the $30,000-a-day penalty that had added up to the $1,230,000 fine, 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 Nov. 28 letter 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.

Stuart also requested the court’s permission to “discover and compel the production of financial information so that the United States can proceed to find and locate potential financial assets.”

Judge Irene Berger

Last month, Berger ordered Justice Energy to provide greater financial information by Jan. 25 and to make its employees available for depositions by Feb. 15.

But most notable was a footnote that Berger included on the filing.

“The Defendant’s decision to simply ignore Court orders, deadlines and obligations precipitated the imposition of the contempt sanction,” Berger wrote.

“Continuing to flout the Court’s directives is not a strategy likely to engender positive results.”

This is one of multiple lawsuits against the governor and his family businesses indicating financial pressures over longstanding debt.

For example, in a separate ongoing case, a U.S. marshal was authorized to collect $1,022,380.01 from James. C. Justice Companies, Southern Coal Corporation and Kentucky Fuel Corporation.

The marshal was tasked with checking multiple banks holding Justice funds to see if any money is available.

That was one of several cases, public broadcasting has reported, in which companies owned by Justice refused or failed to pay even after being compelled in the court system.

Office of the Governor

Jim Justice

Last month on MetroNews’ “Talkline,” Justice suggested Judge Berger’s rulings may be politically motivated.

“I believe the judge has penalized us and not listened to what I think should have been reasonable. But the judge is being very, very punitive to us,” the governor said.

“And I guess that’s a thing that’s in the rights of the judge, and the judge probably thinks she’s doing the right thing. And I don’t understand what is motivating this whole thing, whether it be political bias or whatever it may be but I can tell you we’ve gotten some pretty tough rulings, that’s for sure.”

Stuart and Justice came face to face at a public policy event last fall, about the time the federal court action was heating up.

The U.S. attorney and the governor appeared together during a Dec. 3 press conference in Huntington to boost drug recovery efforts.

Justice picked up a microphone and paid compliment to Stuart, who stood close by.

“Absolutely, he’s our U.S. Attorney for Southern West Virginia, the governor said, “and this is a good man, a really good man.”

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