CHARLESTON, W.Va. — A federal judge says a company owned by Gov. Jim Justice and his family continues to flout court directives even though it is already in contempt.
U.S. District Judge Irene Berger has ordered Justice Energy to provide greater financial information by Jan. 25 and to make its employees available for depositions by Feb. 15.
The order was filed Wednesday and applies to a $1.23 million contempt order for Justice Energy. The filing was first reported by the Charleston Gazette-Mail.
Berger attached a pointed footnote to the order.
“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.”
When Justice became governor in 2017, he placed responsibility of his business operations with his grown children. The officers of Justice Energy are son Jay and daughter Jill.
But governor Justice’s financial disclosure form with the state Ethics Commission has continued to list ownership in dozens of companies, including Justice Energy.
This is 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.
The federal government’s efforts to collect on the $1.23 million contempt sanction date back to a case first filed Nov. 6, 2013.
A federal lawsuit filed by James River Equipment 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.
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.
“The Court notes that piercing any corporate veil is an extraordinary remedy, and unnecessary at this point to achieve the plaintiff’s intended results in this case,” Berger wrote in a Jan. 5, 2016, order.
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, 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.
Berger also ordered regular status updates.
Those status updates have continued, with no indication the debt is any closer to being paid.
For a while, attorneys for Justice Energy cited a federal appeal as the reason. But that appeal was rejected July 11, 2017. A second attempt at a federal appeal also failed.
This Dec. 7, Berger ordered both sides to submit a status report within 15 days.
Lawyers for Justice Energy wrote in their own Dec. 21 filing, “Defendant is currently in the process of examining available funds and assets and gathering information to provide to the U.S. Attorney’s Office in that regard.”
But U.S. Attorney Mike Stuart, who represents the U.S. Department of Justice in its attempt to collect, wrote in a separate Dec. 21 filing that his office had not yet received adequate financial information.
The filing included a Nov. 28 letter from Stuart to lawyers representing Justice Energy Company. In it, Stuart raised the question of whether Justice Energy has the ability to pay.
“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.