Two executives of Gov. Jim Justice’s sprawling family business have been held in civil contempt by a federal judge for concealing financial information in a long-running litigation.
The governor’s son, Jay Justice, and Steven Ball, an attorney for various Justice family-owned companies, were ordered to pay fines of $250 per day until the court can provide financial details and determine they have fully complied with the order. U.S. District Judge Gregory Van Tatenhove issued the order in Kentucky on Friday, saying, “These officers must be held accountable. They will not chase the wind any more.”
Judge Van Tatenhove’s order reserved the right to impose harsher sanctions if officers do not comply.
Governor Justice owns a 60 percent stake in Bluestone Resources, the majority shareholder of which is his family, according to the company’s organizational chart, but the order does not mention him. Governor Justice’s disclosure documents filed with the State Ethics Commission show he has financial interests in dozens of companies, including Kentucky Fuel, which is at the center of the case. The court order cites the governor’s past position as a director on the tight-knit group that oversees Kentucky Fuel.
Justice, a Republican Senate candidate, has repeatedly pushed back against media questions about financial conflicts of interest. “When we get to a point where things are just completely absurd, just completely ridiculous, just like fake news, and it just goes on and on and it never stops, we need to move in a different direction,” Justice said at a press conference about such questions last week.
The federal sanctions order marks the 744th in a dispute involving Justice’s Kentucky Fuel, which has been battling FiveMile Energy and affiliate New London Tobacco Market in a mineral lease dispute since 2012. FiveMile won $18 million in federal court in Kentucky, but collection has been stalled by years of delays.
Judge Van Tatenhove referred to that history at the beginning of his ruling.
“Since the beginning of this lengthy and bitter litigation, Defendants have waged a delay campaign. Their continued unwillingness to cooperate has already resulted in reprimands, sanctions and ever-mounting financial liabilities in the form of attorneys’ fees and expenses,” he wrote.
Corporate filings with the West Virginia Secretary of State’s office list Jay Justice as Kentucky Fuel’s president and Ball as its vice president. The governor’s daughter, Jill Justice, is listed as a director, but the court has concluded so far that she has had little involvement or knowledge in Kentucky Fuel’s operations.
Five Mile’s lawyers allege that Justice family officials “fraudulently transferred assets to the defendant corporations in an attempt to prevent them from ultimately receiving judgment.” New London and Five Mile have sought post-judgment discovery covering recovery, possible fraudulent transfers and evidence that corporations such as Kentucky Fuel are alter-ego entities of the Justice family.
Justice’s lawyers opposed the discovery requests on several grounds. They sought to limit the amount of discovery that they would have to provide about Justice, and they argued that the extensive nature of Justice’s asset holdings would create an undue burden for discovery, and that much of Justice’s holdings were irrelevant to the litigation.
Federal Magistrate Judge Hanley Ingram in Kentucky disagreed and ruled against the judges. In a discovery order two years ago, Judge Ingram found that “Steven Ball and Jay Justice have not met their burden of proving they cannot comply with discovery orders.”
“Defendants have not clearly and specifically explained why they failed to comply with various elements of the discovery orders. Moreover, Defendants have not pointed to factors beyond their control that prevented them from complying. In other words, Defendants’ failure to comply was self-inflicted.”
In this latest filing, Judge Van Tatenhove was reviewing Ingram’s conclusions.
“In this particular case, Defendants have continually evaded and obstructed post-judgment discovery. In May 2021, Judge Ingram ordered Defendants to respond to interrogatories and produce relevant documents, but Defendants have refused,” Van Tatenhove wrote.
The judge continued, “The purpose of post-judgment discovery was to discover facts supporting the alterity finding. Defendants acted unjustly with the sole purpose of preventing Plaintiffs from discovering their evidence.”
Judge Van Tatenhove found that the per diem fines imposed on Jay Justice and Steven Ball were appropriate until they fully complied with discovery as ordered by Magistrate Ingram.
“Should the Defendants fail to comply with Judge Ingram’s discovery orders, or if Messrs. Justice and Ball fail to comply with this Court’s orders, the Court reserves the authority to consider any other further relief it deems appropriate.”
