Five coal companies in the struggling business empire of Sen. Jim Justice, R-W.Va., and his family are again failing to provide retirees health care coverage in violation of a collective bargaining agreement, according to a new federal court filing.
Retirees and the United Mine Workers of America said in a court filing Wednesday the Justice companies are failing to timely process and pay outstanding medical bills that providers have submitted to the companies’ current health administrator per a union retiree benefit plan.
The reported failures are the latest in a yearslong string of intermittent lapses in contractually promised health care and prescription drug coverage that retirees have said resulted in the loss of critical medications.
In another Wednesday federal court filing, a Kentucky tobacco warehouse company and an affiliated firm said two Justice coal company executives, including Justice’s son, James C. “Jay†Justice, have stopped paying a daily contempt fine amid their noncompliance with a court order to share evidence in the case. Two Justice coal companies different from those in the retiree health coverage case have persisted in failing to respond to requests to disclose required company information, according to the plaintiffs.
“Now is the time to end this charade,†the plaintiffs, New London Tobacco Market Inc. and Fivemile Energy LLC, told the Kentucky federal court in Wednesday’s filing.
Retirees: We’re on hook for potential collections
In their court filing, four Justice coal company retirees and the UMWA said the companies not processing or making payments on medical bills that providers have submitted to health insurance administrator Health Comp are subjecting retirees to potential financial collection actions.
The companies are thus violating a 2021 consent order in the case requiring them to follow a 2016 collective bargaining agreement, according to the filing. The agreement obliged the companies to provide uninterrupted health care and prescription drug coverage for eligible retirees and their dependents.
The UMWA has said Justice coal companies have allowed intermittent lapses in contractually promised prescription drug coverage for 250 to 300 recipients in recent years. Four retirees and the UMWA sued the companies in 2019 to enforce the agreement.
The retirees and UMWA asked the U.S. District Court for the Southern District of West Virginia to award damages covering any out-of-pocket expenses incurred by the retirees and their dependents and direct the companies to pay attorneys’ fees.
Stephen Ball, general counsel of Justice’s White Sulphur Springs-based Bluestone Resources Inc., said in an email to the Gazette-Mail Thursday the company is investigating the plaintiffs’ claims.
“[I]f there are any outstanding issues we will work with the UMWA to resolve any such issues,†Ball wrote. “We look forward to continuing a positive partnership between Bluestone and the UMWA.â€
Ball declined further comment.
Justice’s Senate communications director, Will O’Grady, did not respond to a request for comment.
Retirees, UMWA: In Aug., companies made payments
The retirees and UMWA told the court last August the Justice companies had made payments on outstanding health benefit claims and had reimbursed retirees for payments the individuals made to providers or pharmacies, resulting in the court denying the plaintiffs’ previously made motion to hold the companies in contempt of court.
Steven Ruby, a Justice coal company attorney, previously told the Gazette-Mail that prescription payments through a third-party administrator sometimes have been unavailable. In those cases, Ruby said, the companies have paid the cost.
Ruby has said he could not explain the cause of repeated critical prescription health coverage lapses.
Long history of health coverage lapses
Retirees and their dependents began contacting the UMWA about unpaid medical and prescription drug bills in late 2017, according to the union.
The companies told the UMWA they were switching insurance carriers. In March or April 2018, new insurance cards were issued to the companies’ retirees, the union said in a June 2019 letter to Justice’s Bluestone Energy Group.
Members continued going without treatment and refraining from filling prescriptions after the new insurance cards were distributed, the union said in the 2019 letter, reporting some members learned from their insurance provider that their claims were covered but the companies’ self-funded account lacked money to pay the bills.
In January 2020, the four miners and the union reached a deal with Justice Energy Company, Keystone Service Industries, Bluestone Coal, Double-Bonus Coal Company and Southern Coal Corporation to resolve the miners’ motion for a preliminary injunction ordering the companies to provide medical and prescription drug benefits.
Over the next 14 months, the parties worked to resolve outstanding claims until reaching an agreement in March 2021.
Less than six weeks later, the union and the four retired miner plaintiffs told a federal judge the companies again were failing to provide drug coverage.
In June 2021, the union and retirees submitted another filing alleging the companies had allowed a lapse in drug coverage for the 10th time in less than nine months.
The following month, the plaintiffs withdrew a motion for contempt they filed against the companies after conferring with them, according to a court filing. They indicated they would renew their motion if the companies failed to comply with a March 2021 order from District Judge David Faber requiring the companies to provide uninterrupted health care and prescription drug coverage to retirees and their dependents.
The UMWA has told the court that retirees have been given no warning that their drug coverage would be canceled.
Justice firm heads said to owe $158K-plus in fines
In their Wednesday court filing, New London Tobacco Market and Fivemile Energy said Jay Justice and Ball underpaid and then stopped paying $250 daily contempt fines for each that took effect last August and were increased to $1,000 in February.
The companies said Jay Justice and Ball failed to pay daily fines from October 16 through March 13 and owed $158,000 as of Wednesday, growing at a rate of $2,000 per day.
The fines, per an order from District Judge Gregory Van Tatenhove, were a response to their failure to share information in the case.
“[T]he direct disobedience of these officers confirms that they were the culpable parties all along,†the plaintiffs said of the two Justice coal company executives in the case in the District Court for the Eastern District of Kentucky.
New London Tobacco Market and Fivemile Energy brought the case in 2012 after Kentucky Fuel failed to mine coal under an agreement following the plaintiffs’ assignment of rights to mine coal in eastern Kentucky to the defendants in exchange for a cut of the mined coal.
The Justice firms already have been found to owe more than $18 million to the plaintiffs.
In May 2023, U.S. Magistrate Judge Hanley Ingram ordered Jay Justice and Ball to appear for depositions. Van Tatenhove in July wrote he found “unconvincing†the companies’ “attempt to receive a ‘get out of jail free’ card†by arguing they retroactively answered the plaintiffs’ discovery requests through depositions at which they were ordered to appear.
More than four years later, Van Tatenhove noted the defendants still hadn’t provided responses, identified their affiliate companies or provided information about transactions with those companies. They also hadn’t supplied responsive documents that include records from 2010 to 2015 and records of transactions between them and affiliate companies, the judge said.
Filing: Ledger entry falsely upped debt to Sen. Justice
The plaintiffs said in Wednesday's filing that two ledger reports, one for each defendant - Kentucky Fuel Corp. and James C. Justice Companies Inc. - they were provided begin nearly five years after the time period the defendants were ordered to produce, starting in October 2019.
The filing alleged the defendants’ tax returns and other documents prepared from a general ledger show Jay Justice owes James C. Justice Companies nearly $32 million for shareholder loans made to him.
Ledgers prove the defendants have withheld “obviously responsive†documents about previously undisclosed asset transfers structured by Jay Justice and Ball to deplete the defendants’ assets, the filing contends.
The filing cites two April 2022 ledger entries the plaintiffs say show that despite James C. Justice Companies entered a what appeared to be a Virginia land transfer as a total loss in a 2016 asset disposal report, its affiliate sold the property six years later for a $10.1 million profit.
James C. Justice Companies then used the proceeds as its own to pay down Virginia-based Carter Bank and falsely entered a corresponding entry increasing its debt to Sen. Justice by roughly $9.6 million, the filing alleges.
Troubles have piled up across Justice’s finances
Sen. Justice’s personal and business woes continue to mount.
Carter Bank scheduled an auction of Greenbrier Sporting Club property last year to help satisfy a nine-figure Justice family debt to the bank.
The auction was later canceled, and the Justice family and the bank announced the settlement of the dispute, in which the bank has sought $300 million-plus in debt admitted by the Justices.
The Justice family’s Greenbrier Hotel Corp. was accused last August of being four months delinquent in contributions to a health insurance fund serving union workers by the Greenbrier Council of Labor Unions before a settlement agreement was reached between the health fund and the company.
Last year, federal marshals seized a helicopter owned by Justice’s Bluestone Resources in response to Bluestone not paying any of a roughly $13 million 2021 judgment against it.
