Judge: KY can collect $2.9 million from W.Va. Gov. Jim Justice on mining violations
Kentucky regulators can collect a $2.9 million penalty from West Virginia Gov. Jim Justice for violations at Eastern Kentucky coal mines, a judge has ruled.
Interest on that penalty could push the total significantly higher.
Under the order, the state is entitled to take bonds posted to cover reclamation work at several Justice mines and revoke their permits, and it requires the Justice companies to finish the reclamation.
The companies also have to pay the state’s costs in pursuing the case against them and will be listed in a federal violator system that will prevent them from getting new permits or amending existing permits until the violations are cleared up.
Franklin Circuit Judge Thomas D. Wingate entered the order Tuesday, granting every request by the state Energy and Environment Cabinet in its effort to get Justice companies to clear up reclamation and environmental violations at several mines in Eastern Kentucky.
Most of the sites are surface mines.
Jay Justice, Jim Justice’s son, recently announced plans to resume mining and reclamation work at four surface mines in Pike, Knott and Harlan counties and hire an estimated 150 people. The reclamation work can continue, said Lexington attorney Richard A. Getty, who represents the Justices.
“It’s always been our intent to complete this work,” Getty said of reclaiming the mines.
The cabinet said the Justice companies do not have the required right of entry to mine coal at the four sites Justice mentioned in his news release, according to information available to the agency.
The road to this week’s ruling goes back years.
In August 2014, Jim and Jay Justice and several companies made a deal with the state to correct hundreds of violations, many that the Justices had inherited in buying bankrupt coal companies.
The work included cleaning out ponds designed to keep sediment out of streams, stabilizing landslides, fixing drainage problems, monitoring water quality and eliminating highwalls.
Highwalls are sheer walls left when a company cuts a large notch in the side of a mountain to reach coal. Federal law requires restoring the approximate original contour of the slope.
The state sued the Justices and seven of their companies in 2015, arguing they had not fixed all the problems as required under the 2014 deal.
That led to years of litigation and negotiation that resulted in another deal in April 2019 for the Justices to complete reclamation at several mines.
The agreement included deadlines to finish the work at five mines and required the Justices to post a $2.9 million letter of credit to cover penalties left over from the 2014 settlement, though it allowed them to get back the money if they kept enough workers on the payroll.
Jim and Jay Justice are personally, jointly liable for the $2.9 million penalty under the agreement.
In September, the Energy and Environment Cabinet asked Wingate to rule that the Justices had defaulted on the deal, arguing they had missed deadlines to finish the reclamation work.
The Justices said they had not been able to meet the deadlines because of the economic downturn and safety concerns caused by the coronavirus pandemic that flared in early 2020.
They asked for more time to finish the work and proposed releasing the $2.9 million to cover reclamation work, saying that was the most effective way to get the job done.
Wingate wasn’t persuaded, saying that the pandemic was not a justifiable reason for not finishing the work.
The Justices had been aware of the violations for many years before the pandemic started, but the sites “have not been touched since before the COVID-19 pandemic began,” Wingate said.
The judge also noted that Gov. Andy Beshear specifically exempted mining from shutdown orders he issued to try to stem the spread of the coronavirus.
“Thus, the Commonwealth has never interfered, even while navigating an unprecedented pandemic, with Defendants’ ability to conduct mining work,” Wingate said.
The cabinet said in a court filing that there had been 605 bond releases on reclamation work by other companies at Kentucky mines since January 2020, indicating it was possible to continue such work during the pandemic.
Wingate said it was “somewhat incredible” that the Justices asked to not only be released from the $2.9 million penalty owed from the 2014 agreement, but to use it for reclamation work they’re obligated to complete.
The $2.9 million civil penalty from the settlement at issue includes interest of 8 percent a day since September 2015, which could push the bill hundreds of millions of dollars higher.
Attorneys for the Justices argued that the interest rate was a mistake.
However, Wingate rejected the argument that the rate was a mistake, noting it was mentioned twice in the original 2014 order that was made part of the 2019 deal.
Getty and Steve Ruby, a West Virginia attorney for the Justices, said in an interview that they don’t think the state intends to try to collect half a billion dollars from the Justices.
That total would be so large it would violate the Eighth Amendment to the U.S. Constitution, which bars excessive fines, they said.
“It’s the definition of an excessive fine,” Ruby said.
This story was originally published November 10, 2021 at 1:56 PM.
