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Suit led by Jay Justice claims OSM broke settlement deal, preempts another federal lawsuit

CHARLESTON, W.Va. — Companies owned by the family of Gov. Jim Justice have filed a lawsuit against the federal Office of Surface Mining, apparently preempting another impending lawsuit by the U.S. Department of Justice.

The lawsuit by Justice companies contends the agency acted in bad faith by reversing course on a settlement deal. Lawyers for the Justice companies also insinuate the federal government may be acting out a political vendetta.

This is the second legal showdown this month between Justice companies and an agency of the federal government over defaulting penalties.

A separate lawsuit by the U.S. Department of Justice and the Mine Safety and Health Administration was filed on May 7. That one contended Justice companies owe $4.7 million for 2,297 citations over five years.

That action is an aspect of why Justice companies contend they are being treated unfairly.

Gov. Jim Justice

Governor Justice described unnamed political forces on May 8 when reporters asked for his reaction to the MSHA lawsuit.

“You know, we’re getting ready to go into an election year. You don’t really know where stuff comes from,” the governor said. “But at the end of the day, we’ll take care of our obligations. We always have and we always will.”

The lawsuit filed May 17 by Justice companies against the Office of Surface Mining Reclamation and Enforcement also makes reference to possible political motives.

The lawsuit contends the two parties had agreed to settle fines, reclamation fees and penalties when that agency suddenly started playing hardball.

“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 OSMRE, perhaps from other federal agencies or political adversaries of the Justice family,” the lawsuit states.

The lawsuit was filed in U.S. District Court for the Western District of Virginia. Senior Judge Glen Conrad was assigned.

Documents within the filing allude to a possible impending lawsuit against Justice companies by the U.S. Department of Justice on behalf of OSM. If so, that would mirror the earlier lawsuit on behalf of MSHA.

An attached May 13 letter by Mike Carey, a lawyer for Justice and his companies, is addressed to the U.S. Department of Interior.

“I understand from discussions with your office last week that the filing of one or more complaints is imminent,” Carey wrote. “This is of grave concern and bewilderment to my clients. We believe it is unecessary, as we have now met every term your requested to settle this matter.

“If a file has been forwarded to the Department of Justice, I request that this correspondence be immediately provided to the individuals working on this matter and that they be notified we have agreed to all of the OSM’s settlement demands.”

Carey also represents the Justice companies on the MSHA lawsuit. And he represents the Governor’s Office on the lawsuit over whether Justice violates the state Constitution’s requirement to reside at the seat of government. Plus the Governor’s Office used Carey’s firm last year to investigate its own Department of Commerce.

A response to Carey by the Department of the Interior on May 15 also alludes to an impending federal lawsuit.

“Yesterday afternoon, a letter authorizing DOJ to file suit against the Justice Companies on behalf of the Department of Interior was signed and sent (the end of a process that has taken months to accomplish — the MSHA lawsuit plays no part in DOI’s referral to DOJ),” wrote John Austin of the Interior department.

“If your clients want to settle these cases before suit is filed, please make an offer that we can discuss with DOJ.”

The lawsuit filed by Justice companies contends another federal lawsuit would further damage the companies’ reputation.

“Any suit filed by the government in contravention of the Settlement Agreement would create a false impression and arguably be defamatory in that it would cause harm to the business and personal reputations of the Plaintiffs,” lawyers for the Justice companies wrote.

This has resulted from dozens of violations by several Justice companies recorded by OSM in recent years. A spreadsheet in the filing lists 114, but does not indicate their nature or a dollar value.

Eleven of the violations name Jay Justice, the governor’s son who runs the coal operation.

“For what is believed to be the first time ever, the OSMRE also wrongfully assessed a series of individual assessments against Jay Justice personally, allegedly relating to the activities of the Justice Mining Entities,” according to the lawsuit by Justice companies.

Negotiations by Justice company representatives, including Jay, and officials with OSM picked up in early April, according to the lawsuit.

The lawsuit says Jay Justice and Tom Lusk, chief operating officer of Justice Mining Entities, met with Michael Castle, the field office director for OSM in Knoxville and Lexington, plus Mark Snyder, also with OSM.

The lawsuit indicates they meet several times April 8, sometimes with counsel and sometimes without.

Much of the conversation focused on Justice companies completing reclamation work in lieu of financial penalties. Part of the negotiation focused on whether the companies would need to provide additional financial information or collateral.

By late that month, according to Justice companies, significant expense had been expended to move equipment and start the reclamation work.

This month, according to Justice companies, the attitude of the federal government seemed to change.

“In the week of May 6, 2019, the government’s attitude toward the Justice Mining Entities noticeably soured,” lawyers for the company stated, noting the lawsuit that was filed by MSHA and the Department of Justice.

That filing prompted Austin of the Department of Interior to question whether Justice companies would be able to perform their duties under the settlement agreement, according to the Justice lawsuit.

In the May 15 letter, Austin stated that there had not been an authorized agreement to settle the penalties with OSM.

“I need to reiterate what you and your clients have been told: Neither OSMRe nor any of its employees nor the attorneys representing the Secretary of the Interior have authority to settle a debt owed to the United States that exceeds $100,000 without the approval of the U.S. Department of Justice.”

The Justice companies contended that playing hardball will mean the loss of mining jobs.

“As the plaintiffs previously made OMSRE and its attorneys aware, preceding litigiously instead of in accordance with the Settlement Agreement harms the operations of a dozen or so mining companies and risks the jobs of hundred of workers on the pending reclamation projects,” Justice company lawyers wrote.

The Department of Interior would like proof. It wants financial statements and any other information the company can provide to demonstrate a settlement is in the best interest of citizens.

“We will also need documentation of your belief that a settlement will preserve 450 jobs.”

Justice lawsuit vs OSM (Text)

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