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Gov. Jim Justice’s Companies Have Now Reached $140 Million in Lawsuit Settlements and Judgments Over Unpaid Bills

A company owned by West Virginia Gov. Jim Justice agreed to a $4.4 million settlement over missed coal shipments. ProPublica previously reported that Justice’s businesses were sued dozens of times for millions in unpaid bills.

West Virginia Gov. Jim Justice on Aug. 18. One of his companies has agreed to a multimillion-dollar legal settlement. (Courtesy of Justice)

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This article is co-published with Mountain State Spotlight, a new nonprofit newsroom covering West Virginia.

A company owned by West Virginia’s billionaire governor has agreed to a multimillion-dollar legal settlement in a case over missed coal shipments, adding at least $4.4 million to the tally of judgments and settlements involving Jim Justice’s business empire.

A document filed Tuesday in U.S. District Court in the Southern District of New York indicates that Justice’s Southern Coal Sales Corp. has resolved a case brought by Essar Steel Algoma over the shipments for a Canadian steel mill.

The suit was filed more than three years ago and is part of a barrage of litigation over the last three decades that targeted Justice’s sprawling collection of coal mines, agricultural holdings and luxury resorts.

A May investigation by ProPublica documented more than $128 million in judgments and settlements to resolve those cases. The analysis identified hundreds of lawsuits against Justice companies, including dozens brought by workers, vendors, business partners and government agencies, all alleging they weren’t paid.

The total in judgments and settlements now exceeds $140 million, with the Essar Steel Algoma case, a $2.8 million judgment in Texas in May over financing of a bulldozer and a $3.9 million judgment in October 2019 over a loan default to a New Jersey financing firm.

Justice, a Republican who is running for reelection in November, is listed by Forbes as a billionaire. As governor, he has refused to put most of his business entities into a blind trust as prior governors have done. While his adult children have day-to-day control over the operations, the governor continues to guide the family empire, including showing up at legal proceedings.

Justice has repeatedly said that his role as governor poses no conflict, adding that he wants nothing from the state for his businesses or family. Last week, ProPublica and Mountain State Spotlight reported that one of the governor’s coal companies could receive a substantial break on pollution fines as a result of a proposed settlement reached with the West Virginia Department of Environmental Protection, whose administrator he appointed. The coal company’s lawyer said there was nothing improper about the settlement.

Justice’s lawyers did not respond to a request for comment on the Essar Steel Algoma settlement. When asked about such cases in the past, the governor has emphasized that he and his companies always pay what they owe. An appeal is pending in one major case, a $35 million judgment against Justice's companies in a coal royalty payment suit in Kentucky.

In numerous cases examined by ProPublica, however, plaintiffs have had to go back to court to try to collect after either winning a case against a Justice company or settling. More than a dozen cases were filed against Justice companies since he took office in January 2017, and several name the governor as a defendant.

Filings in the Essar Steel Algoma case are among recent pieces of litigation in which lawyers trying to recover money have argued that Justice, his companies and his family operate what amounts to a complex corporate shell game, moving money from one part of the empire to another to avoid liabilities.

Lawyers for Essar Steel Algoma alleged, for example, that Southern Coal was effectively drained by other Justice entities, leaving it “purposefully judgment proof” in litigation.

Justice’s attorneys denied that, saying the steel firm had a “gross misunderstanding of how affiliate entities operate in the coal industry.”

“Indisputably, it is an owner’s prerogative to infuse capital into his own company or companies to ‘keep them afloat’ and the coal industry, in particular, experiences ups and downs that require such support.”

In May, a federal judge in New York denied a motion by the Justice companies to dismiss the case, rejecting what she called an “everyone is doing it” defense. Two months later, the parties informed the court they had reached a tentative settlement.

Details of that deal were spelled out in a court filing on Tuesday.

Under the settlement, the Justice companies can make a one-time payment of $4.4 million or they can pay the steel company $5.75 million over three years. That settlement value can also be reduced if Southern Coal delivers certain amounts of coal to Essar Steel Algoma by certain dates. The amounts of coal involved were redacted from the copy of the settlement agreement that was made publicly available by the court.

A spokeswoman for Essar Steel Algoma declined to comment on the settlement.

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