CHARLESTON – A surety bond provider has less than two weeks to show a New York federal judge why she shouldn’t dismiss its case involving West Virginia Gov. Jim Justice and his family’s coal companies.
On July 2, U.S. District Judge Mary Kay Vyskocil denied a motion for judgment by Federal Insurance Co. In the filing, she asked the Indiana-based company to show why she shouldn’t dismiss the case because of “apparent lack of subject matter jurisdiction.”
Federal Insurance claimed the case could be filed in the Southern District of New York because it involves parties from different states. All of the defendants are based in West Virginia or Virginia.
In the original complaint filed last June, Federal Insurance claims it lost more than $8 million when the defendants violated an indemnity agreement related to a 2021 court judgment against them in a separate matter.
Federal said Justice and the coal companies agreed they would indemnify Federal against all liability and expenses after it issued the bond. Federal says the agreement includes signatures from Justice and son James C. “Jay” Justice III, who oversees the family’s coal companies.
The governor and his family businesses have been busy in the legal system in several courts across the country of late.
Last week, a Kentucky tobacco warehouse company asked a federal judge for relief in a case in which two Justice companies were ordered to pay more than $18 million. New London Tobacco Market Inc. sought the assistance after some Justice business assets were targeted for receivership to satisfy a ruling in another federal case.
New London Tobacco Market and Fivemile Energy LLC were awarded $16.99 million for lost tonnage royalties in August plus fees and interests. In its latest filing, New London said it fears losing money because of the Justice companies’ legal woes, noting a Delaware federal court ruling that could limit its ability to collect on the judgment because the sale of shares of Bluestone Minerals Inc. was approved by the Delaware judge.
The June 20 ruling in Delaware followed Caroleng Investments Limited filing a day earlier that said Bluestone Resources has paid very little on a $10.1 million judgment from May 2020.
And in May, a Virginia federal judge approved the sale of a Bluestone Resources helicopter for $1.4 million to satisfy a debt to Caroleng.
Also last week, the Justice family and its businesses announced a settlement with Virginia-based Carter Bank & Trust, which had sought more than $300 million. The bank said the Justice family had paid off almost $8 million of the $302 million debt at the end of the first quarter of 2024.
Justice, a Republican, is nearing the end of his second term as governor. State law makes it impossible for him to run for a third term, but he is the GOP nominee for the U.S. Senate seat being vacated by Sen. Joe Manchin (I-W.Va.). Justice will face Democratic nominee and Wheeling Mayor Glenn Elliott in this fall’s general election, which is scheduled for November 5.
