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CHARLESTON -- The U.S. Attorney for the Western District of Virginia believes nine of the 23 companies owned by Gov. Jim Justice should not be dropped from a mine safety fine suit.
The U.S. Attorney's Office filed a response Tuesday to a motion filed by nine Justice-owned to dismiss them from a complaint jointly filed in May with the U.S. Mine Safety and Health Administration.
Justice-owned Double Bonus Coal Co., Dynamic Energy, Frontier Coal Co., Justice Energy Co., Justice Highwall Mining, Keystone Services Industries, M&P Services, Nufac Mining Co. and Pay Car Mining Co. filed a motion to dismiss July 9.
The nine companies contend the U.S. Attorney and federal courts in Virginia have no jurisdiction. They claim to be headquartered in Daniels in Raleigh County and are not incorporated in Virginia or operate any coal mines in Virginia.
Tom Lusk, chief operating office of Bluestone Resources, filed a sworn affidavit affirming the location of these companies. He also said the accounting functions for these companies happen in West Virginia.
In Tuesday's response, U.S. Attorney Thomas Cullen threw Lusk's sworn affidavit back in his face. According to Cullen, four of the nine companies stated in May 2019 that their principal place of business is Roanoke, Va.
Dynamic Energy, Frontier Coal, Justice Energy and Pay Car Mining were four of 12 Justice-owned companies that filed suit for declaratory judgement May 17 -- 10 after the U.S. Attorney and MSHA filed their suit -- against the U.S. Office of Surface Mining, Reclamation, and Enforcement.
The companies, which share the same legal representation as the U.S. Attorney/MSHA suit, want the court to require the Office of Surface Mining and Reclamation Enforcement to live up to an agreement to settle various fines, penalties and reclamation fees. Using screengrabs for the previous court filing, Cullen showed multiple instances where these four companies list Virginia as their business location.
"Indeed, the OSMRE complaint was signed by that same attorney who signed the present motion to dismiss," Cullen wrote. "In the OSMRE complaint, the (companies) state that Dynamic Energy, Frontier Coal, Justice Energy, and Pay Car Mining each have their principal places of business in Roanoke, Virginia."
According to Cullen, four Justice-owned companies trying to get out from under the mine penalty complaint have previously filed federal court cases in Virginia.
"On Sept. 30, 2016, Dynamic Energy, Justice Highwall, Nufac Mining and Pay Car Mining filed a consent decree in this court regarding Clean Water Act violations explicitly accepting this court's jurisdiction because many of the defendants 'are located, reside, and/or are doing business' here," Cullen wrote.
Cullen also points to the sworn testimony of Jay Justice, son of Gov. Justice and manager of Justice's coal companies while his father is as governor. In his testimony, Jay told federal investigators to speak with Stephen Ball, vice president and general counsel for Justice Energy a company that was held in civil contempt in U.S. District Court in the Southern District of West Virginia.
According to Cullen, Ball told investigators that several Justice-owned companies, including parent company Bluestone Resources, are operated out of Roanoke, Va. Ball's testimony also shows the multiple Justice-owned companies operate as one unit through Bluestone Resources.
"Ball's testimony highlights the intimate nature of the parent-subsidiary relationship between Bluestone and (Justice's companies)," Cullen wrote. "In addition to accounting services, Bluestone supplies administrative and financial services for (the companies), maintains a group insurance policy for its subsidiaries, files a consolidated tax return for all its subsidiaries, and supplies the funds to pay the limited employees of Justice Energy."
"(The nine companies') stunning assertion now that they have no ties to the Western District of Virginia is negated by the ample evidence to the contrary," Cullen said.
The U.S. Attorney's Office and MSHA filed a civil action May 7 against 23 Justice-owned coal companies for $4.8 million in unpaid mine penalties. The 23 companies were issued 2,297 citations and civil penalties by federal mine inspectors between 2014 and 2019. The federal government is seeking $3.9 million, plus $821,386 in administrative costs and interest.
Steven Allen Adams can be contacted at sadams@newsandsentinel.com.