CHARLESTON — Companies owned by Gov. Jim Justice and managed by his family were ordered Friday to pay more than $1 million in fees and penalties in a blistering rebuke by a federal judge. The law firm representing Justice’s family, which was also sanctioned and fined, said the ruling was terrible and they would appeal.
Judge Gregory Van Tatenhove with the U.S. District Court for the Eastern District of Kentucky Southern Division, released a memorandum decision and order Friday dismissing a motion for reconsideration and oral argument by Kentucky Fuel Corp. and James C. Justice Companies, Inc., after the court ordered the companies in a ruling last year to pay New London Tobacco Market and Five Mile Energy $35 million for failing to pay required royalty payment and retainer fees.
As part of the ruling, Tatenhove ordered Justice’s companies to pay $982,399 to the three law firms representing NLTM and Five Mile Energy, plus $59,098 in fees and expenses for the two companies directly. The total amount of fees and expenses come to $1,041,497.
“(Justice’s companies) apparently equate ‘due process’ with success on the merits,” Tatenhove said. “Nothing is fair unless decided in their favor. Defendants began this litigation with the same opportunities for discovery and presentation of evidence as any other litigant, but they have squandered these opportunities with poor strategic decisions and contumacious, combative conduct.”
Tatenhove also sanctioned the attorney for Justice’s companies, Richard Getty, and his firm, the Getty Law Group based in Lexington, Ky. Getty and his law firm were ordered to pay $10,000 to NLTM and Five Mile Energy within 30 days of Friday’s ruling. Tatenhove also admonished Getty “not to present misleading and frivolous arguments to the Court in the future.”
In his ruling, Tatenhove said it was improper for Getty to file a rule 59 motion for reconsideration of the September order, which can only be filed to correct errors of law, newly discovered evidence, a change in controlling law or to prevent injustice. Tatenhove accused Justice’s attorneys of using the rule 59 motion to relitigate the case again and to slow it down.
“Rule 59 ‘is not an opportunity to re-argue a case,’ and yet (Justice’s attorneys) begin by requesting ‘that the Court review whether the entry of default judgment…denied Defendants their due process rights,” Tatenhove wrote. “Defendant’s persistence on this point calls to mind the mythological Hydra — it feels as though every time the Court addresses this argument in one motion, it appears again in two others.”
At issue is a report submitted to the court and relied on by NLTM and Five Mile Energy. The author of the report, Robert Conaway, died before the Getty Law Firm joined the case to represent Justice’s companies. Getty argued the report was unreliable. Tatenhove did not agree.
“(Getty) had ample opportunity to contest entry of the report or to poke holes in its reliability,” Tatenhove wrote. “Defendants would have had ample opportunity to depose Mr. Conway before the discovery cut-off and before he passed away, but they never noticed him for a deposition.”
NLTM and Five Mile Energy filed a complaint against Kentucky Fuel and James C. Justice Companies in 2012. Kentucky Fuel paid $50,000 in retainer fees in May 2011 as part of a contract to mine coal, but made no payments since then. Justice’s attorneys argued the coal was of such a low quality that it was nearly impossible to mine and sell.
Getty, whose law firm didn’t join the case until July 2018, said Tatenhove’s ruling was unfair and didn’t take into account when his firm took over the case.
“It’s a terrible opinion, he ignored all the points we made,” Getty said in a telephone interview Saturday. “The opinion is replete with factually inaccuracies and mistakes, like I should have taken the disposition of a person that was already dead before I took the case. It’s a badly written opinion.”
Getty disputed the sanctions from Tatenhove. He said his firm has represented the Justices in a professional manner and he has never been sanctioned before in his legal career, receiving an AV-rating from the Martindale-Hubbell peer review rating system for attorneys. Getty formed his own law firm in 1998.
“I think it’s totally unwarranted,” Getty said. “I’ve been AV-rated since out of law school. I’m astounded…he would tell me to pay $10,000.”
Getty said he would appeal the decision to the U.S. Sixth Circuit Court of Appeals.
“We will be appealing everything. On the sanctions, we’ll be paying the money to the court pending appeal,” Getty said. “We haven’t gotten a break from the beginning with this judge and the magistrate judge.”
“If the Sixth Circuit takes the time to look into the record and really master the record, it will be reversed. I just pray we get a good panel.”