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$1 billion lawsuit by West Virginia governor’s businesses against their banker gets bumped to Virginia

A federal judge has ruled that a $1 billion lawsuit filed by the network of businesses owned by Gov. Jim Justice and his family against their longtime banker should be transferred to the Western District of Virginia.

U.S. District Judge Frank Volk of the Southern District of West Virginia filed the order today.

Carter Bank & Trust, the defendant, had pushed for the move to federal court in Roanoke, contending that’s near the bank’s headquarters and where members of the board of directors live. Moreover, a move to Virginia would get the case out of the state where the family business patriarch is the governor and a leading candidate for U.S. Senate.

Gov. Jim Justice

The Justices contended West Virginia makes sense as a venue because it’s the home of Jim Justice and his wife Cathy, who are plaintiffs, it’s the headquarters of several of the Justice businesses involved in the case and that that much of the collateral at stake with Carter is in West Virginia.

Volk’s order took all that into consideration and determined that Western Virginia makes the most sense.

“First, several fact witnesses — including all of Defendants’ witnesses as well as Jay Justice and in-house counsel for several of the Justice Entities, Stephen W. Ball, — reside in the Western District of Virginia,” Volk wrote.

And, “The relevant loan documents, forbearance agreements, release and reaffirmation agreements, and other Relationship Documents were all negotiated in, drafted in, and delivered to Carter Bank in the Western District of Virginia.”

As a practical matter, Volk concluded, “Most of the Justice Entities operate from White Sulfur Springs, West Virginia. White Sulphur Springs is approximately 59 miles from our Beckley Federal Courthouse but only 82 miles from a Western District of Virginia courthouse in Roanoke. Plaintiffs thus reside almost as close to the Western District of Virginia as this Court.”

The Justice companies filed federal suit last November, contending Carter Bank & Trust of Martinsville, Va., has engaged in unfair business practices, kneecapping the Justice family businesses. Justice contends Carter Bank made its lending philosophy stricter — and unfair — after a long and mutually beneficial business relationship.

In the battle over venue, Carter’s lawyers wrote that over a six-year period, the Justices signed about 350 documents including promissory notes, guaranties, loan agreements, releases and other contracts — each containing a forum-selection clause designating the federal court in the Western District of Virginia or the state court in Martinsville, Va. — as the mandatory venues for any disputes between parties.

Volk, in today’s order, described anticipation that most of the witnesses and evidence are located in the Western District of Virginia.

“And inasmuch as Carter Bank’s assets are exposed in this litigation, an adverse outcome would deeply affect Virginia’s economy, with Carter Bank’s headquarters, sixty-nine branches, and hundreds of employees there located.”

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