LAWSUIT: Justice’s coal companies didn’t fulfill coal contract

July 11, 2018

CHARLESTON — Two coal companies owned by Gov. Jim Justice’s family breached a contract with an exporting company, according to a complaint filed in federal district court last week.

Xcoal Energy & Resources, a Pennsylvania company, filed the lawsuit against Justice and two of his family companies, Southern Coal Corp. and Bluestone Energy Sales Corp., at the end of May. A redacted, “public version” was filed July 2 in U.S. District Court in Delaware, where both of Justice’s companies are incorporated. Both businesses are based in Roanoke, Virginia.

The lawsuit lists Jim Justice, Bluestone Energy Sales Corp. and Southern Coal Corp. as defendants.

Justice and his office have said the governor was handing over day-to-day control of his coal holdings and businesses to his son and daughter. According to Justice’s 2018 financial disclosure statement filed with the West Virginia Ethics Commission, neither Bluestone Energy Sales Corp. nor Southern Coal Corp. are in a blind trust. During his campaign in 2016, NPR reported that Justice owed about $2.6 million in delinquent federal mine safety penalties.

According to the complaint, Xcoal and Bluestone entered into an agreement in 2017 that said Bluestone would supply Xcoal with 30,000 net tons of metallurgical grade coal monthly over 24 months, totaling 720,000 tons. The Performance Guarantee Agreement was between Xcoal, Southern Coal Corp. and Jim Justice, the complaint says.

Xcoal only received 24,000 tons of coal over seven months between November 2017 and May, the complaint says. That leaves 696,000 tons left to be delivered at $9.88 per ton — $6.9 million in all. In the complaint, Xcoal asks for damages, plus attorneys’ fees, costs and expenses.

In a response, lawyers for Justice and the two companies denied the allegations, and said that Xcoal and its owner, Ernie Thrasher, placed “unreasonable commercial demands for coal shipments from Bluestone that went beyond the scope of the parties’ agreements in the (Coal Supply Agreement).”