Judge Rules Justice Owes $29m+ To Surety Bond Provider As Other Liabilities Mount

A federal judge has ruled that United States Sen. Jim Justice, R-W.Va., owes a Tennessee-based surety bond provider over $29 million amid other mounting legal and financial liabilities enveloping him and his family business empire.

The judge found Justice owes just over $29 million to Lexon Insurance Company comprised of unpaid debt and collateral obligations plus prejudgment interest dating back to July 2023 after Justice in 2018 and 2019, when he was governor, guaranteed to Lexon in agreements that his coal companies would timely pay sums of $5 million and $20 million, respectively.

U.S. District Judge Waverly Crenshaw Jr. ruled in the District Court for the Middle District of Tennessee that Justice owed the $29 million-plus in an Oct. 30 filing that followed an August trial on damages the court awarded to Lexon in December 2024. Lexon sued Justice alone in July 2023, making a breach of contract claim it said resulted from Justice's obligations being triggered by his coal companies defaulting on payment obligations they incurred after Lexon issued surety bonds.

State regulators typically require coal mining companies to get a bond to secure their obligations under a permit, while the surety receives compensation through premiums in exchange for undertaking the obligations. The bond provider often requires, as Lexon did, collateral as security should the company default on its obligations and indemnification against losses and expenses incurred stemming from the bond.

Justice's newly determined eight-figure debt comes after the IRS issued him and his wife Cathy Justice tax lien notices filed with the Greenbrier County clerk last month indicating they owe over $8 million in unpaid taxes for assessments that span more than a decade.

Meanwhile, Justice's family business conglomerate faces intensifying legal fights from environmentalist groups claiming it has left mine reclamation responsibilities unfulfilled in Virginia and trustees of a mine workers' benefits plan looking to collect after a 2023 federal court finding of nearly six years of premiums unpaid by Justice companies.

Spokespeople for Justice's Senate office and a Justice family attorney did not respond to requests for comment.

Justice guaranteed payment in 2018 and 2019 agreements

Five Justice coal companies and an affiliate asked Lexon in early 2018 to release to them $5 million of collateral it was holding in connection with some surety bonds while they were in default on premium obligations, according to court filings.

What followed was a March 2018 agreement in which Lexon agreed to deliver $5 million in collateral to the coal firms, which in exchange agreed to post new collateral covering $5 million within six months and pay a $3 million debt within two months, according to court documents. Justice personally guaranteed in the agreement that the obligations would be met, per court filings.

But the companies failed to provide the $5 million in new collateral and only paid just over $1 million of the $3 million debt by the agreement deadlines, according to court filings.

Rather than take legal action at that point, Lexon agreed to amend the pact in February 2019 by requiring the coal companies to replenish Lexon's collateral account to $20 million, pay outstanding premiums then due and stay current on premiums accruing under indemnity agreements with Lexon, according to court documents. Justice again personally guaranteed in the agreement that the obligations would be met, per filings.

The coal firms delivered $4.21 million in premium payments but didn't make any premium payments as required by the amended agreement after March 2021, according to filings.

Justice had pledged in his personal guaranty to pay Lexon the total amount unpaid if any coal company failed to pay any amount due under any indemnity agreement, per filings. Lexon sent Justice a default notice in July 2023 demanding $20 million in new collateral and over $6.7 million in premiums owed, plus additional premium amounts still accruing and all costs incurred by Lexon and interest, according to court documents.

Judge rejected Justice challenge of debt parameters

Crenshaw shot down Justice's contention that his amended agreement with Lexon defined total indebtedness at a fixed amount of roughly $3.5 million, finding it was subject to changing values based on the amount of premiums owed by the coal companies.

"Senator Justice's interpretation continues to ignore the context in which the Amended Agreement was signed," Crenshaw wrote in his ruling.

Crenshaw dismissed testimony from Stephen Ball, executive vice president of and in-house counsel for the companies, that he never would have recommended the coal companies sign the amended agreement or Justice sign the guaranty if it wasn't a fixed, known number.

The judge in part cited Ball's personal ties and investment in the companies' and Justice's success, which he found made his testimony "less credible." Crenshaw noted Ball has been employed by Justice's family since he graduated from law school over 20 years ago.

"His personal relationship is obvious, as is his bias," Crenshaw wrote.

Crenshaw observed in his ruling that Ball had admitted at trial that it was Justice's son, James "Jay" Justice III, who Sen. Justice chose not to call to testify at trial, that negotiated the terms of the amended agreement and guaranty on behalf of the family's coal companies and the elder Justice.

Lexon's exposure on the companies' bonds totaled roughly $112 million as of the Aug. 20-21 date of the trial, according to Crenshaw's ruling.

The Justice companies named in court documents are James C. Justice Companies, Inc., Justice Family Group, LLC, Kentucky Fuel Corp., Mechel Bluestone, Inc., and Southern Coal Corp.

A Nashville, Tennessee-based attorney for Lexon, Brant Phillips of national law firm Bass, Berry & Sims, said in a statement Crenshaw showed "careful attention to the details" in what Phillips called a "[c]omplex" contract dispute.

"[H]is decision reaffirms that the law should apply equally to everyone no matter how high-ranking the person on one side of the case may be," Phillips said.

'We are so sick of this Justice family's mines'

The Justice family's Roanoke, Virginia-based A&G Coal Corp. faces a legal challenge in a Virginia federal court from environmentalists who say the firm has failed to comply with a January 2023 court-approved consent agreement in which it agreed to complete reclamation on surface mine permits in that state.

The accusation comes in a lawsuit filed by Southern Appalachian Mountain Stewards, Appalachian Voices and the Sierra Club that alleged failure to timely reclaim three surface mining operations in Wise County, Virginia in violation of federal and state mine cleanup regulations.

The environmentalist groups have sought new mine permit reclamation deadlines, a requirement that A&G Coal give up any revenue acquired through coal removal at any of the sites and stipulated penalties for noncompliance, which they calculated had totaled $900,000 as of Sept. 30, 2024 due to failure to finish reclamation at two sites.

The groups have pointed to February 2025 testimony Ball gave in another court case to contend the Justice-controlled companies have enough money to satisfy the terms of the consent agreement. A&G has said it lacks income or cash to finance operations to fund reclamation obligations.

That testimony came in a case stemming from a lawsuit filed by the federal government in 2019 alleging nearly two dozen Justice family coal companies owed $5.13 million in delinquent mine safety fines.

The Justice companies paid that debt off, according to a May 2025 court filing, one year after the debt was due in full under a payment plan the companies agreed to in April 2020.

In the February 2025 testimony, Ball said affiliate companies under the Justice family business umbrella provide loans to Southern Coal or its subsidiaries to complete reclamation work required by permits.

Ball testified another Justice company, Tams Management Inc., began active surface mining operations in Raleigh County in fall 2024 with an investment of hundreds of thousands of dollars and costs covered by an "intercompany advance."

Ball later indicated that Justice companies sometimes pay the debts of other Justice firms, with Jay Justice making the ultimate decision on which creditors get paid first.

Environmentalists say Ball's testimony is evidence that Justice coal firms can and should do more to clean up their mine sites.

"We are so sick of this Justice family's mines wrecking our mountains, waters, and communities," Taysha DeVaughan of Southern Appalachian Mountain Stewards, a resident of Big Stone Gap, Virginia, downriver from A&G operations, said in a statement released by Appalachian Voices. "At some point, there has to be accountability. We want Jay Justice to cough up the money needed in order to hire local workers to reclaim these mines. It's the right thing to do for everyone involved."

Court order moved toward property seizure in benefits case

Last month, a federal court issued an order against three Justice coal companies moving toward seizing property to satisfy a $150,000-plus judgment against them in favor of trustees of a mine workers' benefits plan.

The court issued the order against the Justice family-controlled firms after finding in 2023 they were liable for nearly six years of unpaid premiums under a union retiree health benefit plan.

The order filed Oct. 14 is a writ of execution listing debt totaling $154,484 against Bluestone Coal Corp., Bluestone Industries, Inc. and Keystone Service Industries, Inc., in the case against them filed by trustees of a United Mine Workers of America benefit plan.

A writ of execution is a court order used to enforce money judgments by setting up a transfer of property. Law enforcement personnel carry out a writ, typically by seizing the property.

Justice's business portfolio has been marred by property seizure before.

Last year, after a years-long legal fight, Justice's Bluestone Resources, Inc. surrendered a helicopter in response to Caroleng Investments Ltd., a British Virgin Islands firm, and Indiana-based 1st Source Bank going after the company's assets in court. Caroleng and 1st Source drew up sale and surrender terms after the former said the Justice firm failed to pay a roughly $13 million judgment and 1st Source also claimed interest in the helicopter.

In addition to the federal tax lien notices from the IRS indicating Jim and Cathy Justice owe over $8 million in unpaid taxes for assessments that span more than a decade, the West Virginia Tax Division issued three tax lien notices to the Justice family-controlled Greenbrier Hotel Corp. and Greenbrier Sporting Club Inc. filed with the Greenbrier County clerk in September indicating roughly $1.36 million in unremitted taxes.

Justice has claimed without evidence that legal proceedings looking to collect reported debts from his business interests have been part of a political conspiracy to sabotage his 2024 Senate candidacy, despite the unmet financial obligations tied to him extending in some cases to tax assessment years before he even became governor in 2017.

Justice pledged that he would put his children in charge of his family's business operations upon becoming West Virginia's governor in 2017. He has suggested in court proceedings and interviews after he became governor that he remains familiar with his coal companies' operations.

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