By KEN WARD JR.
CHARLESTON, W.Va. — A federal appeals court on Tuesday upheld a $1.23 million contempt-of-court fine issued to Gov. Jim Justice’s family coal company in a lawsuit filed against the company by an equipment vendor.
The 4th U.S. Circuit Court of Appeals dispensed with Justice Energy’s appeal of the fine with a two-page order.
In February 2016, U.S. District Judge Irene Berger, in Beckley, fined Justice Energy $1.23 millionafter the company failed to respond — for more than a month — to Berger’s order finding it in contempt.
The underlying case had been filed by James River Equipment, which alleged that Justice Energy owed it about $150,000 for mining equipment.
James River and Justice Energy had worked out a settlement on the debt, but Berger held Justice Energy in contempt for not responding to court orders and failing to appear at hearings.
“The defendant has indisputably violated or failed to comply with several court orders,” Berger wrote. “The defendant is clearly in contempt.”
At the time, Justice Energy — an umbrella for the governor’s family mining operations — was owned by the Russian Energy company Mechel OAO. Justice had sold to Mechel in May 2009.
Justice has a lengthy history of unpaid taxes, fines and other debts, including $15 million in unpaid taxes and fines documented by National Public Radio in October 2016, just weeks before last year’s gubernatorial election.
However, in its appeal brief, Justice Energy said, “The vast majority of events giving rise” to the James River lawsuit and contempt fine, occurred while Justice Energy was owned and operated by Mechel. After Justice bought back the company in February 2015, it retained a top officer and lawyer who “failed to advise the officers and directors of Justice Energy of key rulings in this matter,” the appeal brief said.
The Governor’s Office has said Justice was handing over day-to-day control of his coal holdings to his son and of his hospitality businesses, including The Greenbrier resort, to his daughter.
The 4th Circuit appeal ruling was handled by a three-judge panel that consisted of Judges J. Harvie Wilkinson III, Henry F. Floyd, and Pamela Harris.
Wilkinson was appointed by President Ronald Reagan and Harris by President Barack Obama. Floyd was appointed to a federal district court by President George W. Bush and elevated to the 4th Circuit by Obama.
Justice Energy had argued that the fine amounted to a criminal penalty, but the 4th Circuit concluded that it was civil in nature. Berger had fined the company $30,000 per day for each of 41 days she determined Justice Energy to have been in contempt of court.
“The district court plainly designed the imposition of the per diem fine to coerce Justice Energy’s compliance with the district court’s discovery order, a purpose consistent with one of the primary aims of civil contempt,” the 4th Circuit said.
The appeals court said it did not have jurisdiction to hear the appeal because it was not brought by Justice Energy in connection with an appeal from a final judgment in the underlying lawsuit.
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