Greenbrier owner says some lawyers switched sides, now suing him

By Steve Korris | May 28, 2010

CHARLESTON -– The Greenbrier resort owner James Justice claims lawyers for some of the coal companies he sold last year improperly switched sides and sued him.

The Supreme Court of Appeals will hear arguments June 1, on his petition to disqualify the Pittsburgh firm of Buchanan Ingersoll and Rooney from pursuing the suit.

"If there is a clearer case requiring disqualification of counsel, defendants have not seen it," James McQueen of Charleston wrote to the Justices.

Buchanan lawyers responded that the sale of Justice's companies to Russian steelmaker Mechel OAO wiped out any conflict of interest.

In 2008, Buchanan lawyers sued Justice's Bluestone Coal and Bluestone Coal Sales in Ohio County circuit court, on behalf of Mountain State Carbon.

Mountain State, owner of a coke plant in Follansbee, sought to enforce a contract calling for Bluestone to supply metallurgical coal that Bluestone mined at Keystone.

Four of Justice's 29 companies had paid the Buchanan firm about $250,000 in three years to defend them against similar allegations.

Justice's general counsel, Stephen Ball, told Buchanan lawyers he objected.

The lawyers told Ball they would no longer represent Justice's companies.

Bluestone moved to disqualify them as counsel for Mountain State.

The firm answered that although it represented four of Justice's companies, it didn't represent the Bluestone companies.

Circuit Judge James Mazzone denied the motion, ruling he couldn't ignore corporate distinctions that Justice created and preserved.

Mazzone ruled that the sale of the companies to Mechel rendered the matter moot.

McQueen appealed in February, hoping to roll all 29 companies into a unit.

"Buchanan either knew or should have known that the same individuals it had represented, and that had for years looked to it for legal counsel and guidance, would be the ones who would serve as key witnesses, who would have to be cross examined, and whose veracity would be challenged," he wrote.

He wrote that Justice continues to control all decisions relating to coal supply cases, and any liability remains with him and his family.

He warned that Buchanan would use confidential information against Bluestone.

"Buchanan was privy to issues via its prior representation of Bluestone Coal that are at the forefront of the current litigation," he wrote.

"Buchanan's diligent representation of Mountain State will require it to discredit its former client and the very claims and defenses that were previously advanced by Buchanan on behalf of Bluestone," he wrote.

The Mechel merger did not impact the litigation, he wrote.

"The parties to this lawsuit are unchanged. The same factual and legal issues remain," he wrote.

In March, Mark Hornak of the Buchanan firm answered that the firm started representing Mountain State in 2005.

He wrote, "The trial court would have had to impose lawyer-client relationships where none were intended to exist, upon business entities that never sought such relationships, and upon the firm."

He wrote that there were no common facts, agreements or theories in the Mountain State case and previous cases involving Justice's companies.

He wrote that the contracts, the correspondence and the people involved were neither confidential nor hard to discern.

After hearing the dispute, the Supreme Court of Appeals will hear no more oral arguments until September.

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