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Judge finds no merit in Justice’s request to shield financial disclosures because of U.S. Senate run

A federal judge says Gov. Jim Justice has to provide financial information in a long-running lawsuit, finding no merit in Justice’s position that such disclosures could be used against him in his run for U.S. Senate.

U.S. District Judge Leonard Stark of Delaware issued an oral order today that Justice has to issue full written responses and produce all responsive documents in a dispute over paying a judgement of nearly $2 million to the Xcoal supply company.

The judge denied a request by Justice’s lawyers to defer turning over the financial records or to establish additional steps to keep the information from being public.

Now, Justice has to provide full written responses to questions about the finances and produce all documents responsive to requests no later than July 5.

“Governor Justice’s objections lack merit. He identifies no authority for his contention that he should not have to provide discovery (or, at least, should not have to provide discovery until after his co-defendants do so) because he is a declared candidate for political office,” Stark wrote.

Justice had made his run for U.S. Senate a central reason for not disclosing his financial information in the federal case.

In recent filings, lawyers for Justice said compelling him to disclose his financial information in a federal dispute over almost $2 million would violate his privacy and could be used against him in his Senate campaign.

“The information Xcoal seeks in discovery is sufficiently sensitive — and coveted by the news media and Governor Justice’s political adversaries — that Governor Justice has a well-founded concern for its confidentiality,” lawyers for Justice wrote this month in a filing in U.S. District Court in Delaware.

A teleconference meant to work out conflicts over financial records for Justice and his companies had been scheduled for 2:15 p.m. Wednesday, although the judge’s order included canceling that. Judge Stark said it would not be necessary once he had reviewed the written filings by both sides and found no merit in Justice’s position.

This all comes just as Justice is the subject of a fundraising reception in Washington, D.C., for his U.S. Senate race. The 5 p.m. Wednesday fundraiser at the Republican National Senatorial Committee headquarters is hosted by Senate Minority Leader Mitch McConnell, Senator Shelley Moore Capito and others.

The two events aren’t directly related, but they show how his financial, legal and political situations are intertwined.

Even as Justice is embarking on the high-profile race that could cannonball directly into incumbent Democrat Joe Manchin, his financial network is under strain from local courts to federal cases.

His lawyers highlighted the interconnectivity in the case with Xcoal, a supplier trying to collect the remainder of a multi-million dollar judgement.

Xcoal wants to know more about Justice’s ability to pay, but the governor’s lawyers say others would want to know that too.

“As a candidate in an electoral race that could determine control of the United States Senate during an era of bitterly divided partisan politics, Governor Justice has both: (a) a realistic concern that any personal financial information he provides to Xcoal in discovery may be leaked, hacked, or otherwise made public; and (b) a compelling basis to seek heightened protections for his personal financial information.”

The dispute with Xcoal over a supply deal has bounced from federal court to appeals court and back to federal court, now coming to a head over whether and how Justice and his companies would pay the $2 million.

Xcoal originally sued Justice and two of his companies, Bluestone Energy Sales Corp. and Southern Coal Corp., in 2018 over a breached agreement to deliver 720,000 net tons of metallurgical- grade coal for shipment overseas.

Xcoal has already won the case but is trying to get the money that the court system says it’s owed. In 2021, Judge Stark ruled that Xcoal was owed about $6.8 million in damages — an amount that later increased to $10 million in interest and fees.

The appeals court agreed with that ruling. Xcoal wound up collecting $8.1 million from a surety bond, but it’s still trying to collect the remainder.

“Despite repeated demand, Defendants have not indicated that the payment of this amount is forthcoming,” lawyers for Xcoal have written to the judge.

On June 14, lawyers for Xcoal wrote to ask Judge Stark “to compel Defendant Governor Justice to issue full written responses and produce all documents responsive” to earlier discovery requests.

Xcoal’s lawyers contended, “Governor Justice is not immune to the discovery requests simply because he is running for office.”

Justice, a two-term Republican governor, has dozens of business holdings listed on his annual state ethics disclosures. The governor has not placed most of his family’s holdings in a blind trust but has repeatedly said the responsibility of running the businesses has been passed on to Jay and adult daughter Jill Justice.

Over the years, Justice has consistently pointed toward his business acumen as a political attribute. The owner of The Greenbrier resort was once considered West Virginia’s only billionaire, but Forbes downgraded him following major debt disputes.

Late last week, lawyers for Justice filed a second letter objecting to the disclosure of Justice’s financial information in the Xcoal case. In it, Justice requested that the court either defer discovery of the governor’s personal financial information until discovery from other defendants is completed or apply extra protective measures to reduce the risk that the information be made public.

These measures—the latter especially—will not prejudice Xcoal but will help ensure that Governor Justice’s personal financial information remains safe from prying eyes,” wrote lawyers for Justice.

In their own second letter to the judge, lawyers for Xcoal again contended that running for office is no reason to hold off on submitting the financial information. The lawyers for Xcoal also called the proposed additional security measures “extraordinary and incredibly burdensome.”

“Governor Justice’s letter also ignores the most obvious solution to his purported concerns – instead of continuing to flout his obligations to Xcoal, Governor Justice could simply pay the remaining judgment amount of $1,917,222.32, plus post-judgment interest,” they wrote.

The lawyers for Xcoal said it’s important to move ahead because of the other financial headwinds faced by Justice’s companies.

“For this reason alone the Court should deny Governor Justice’s request to defer discovery of his personal finances. It is critical that Xcoal be afforded its rightful opportunity to immediately locate assets and recover the remaining amount due, as there is a substantial risk that such assets may be liquidated in the very near future.”





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