Court Directs Justice Family Coal Firms to Compensate Liberty Mutual Unit with $1M Payment

A federal judge has mandated that coal companies owned by U.S. Senator Jim Justice’s family pay over $1 million in unpaid workers’ compensation premiums owed to Liberty Mutual. This ruling comes five years after an audit revealed that these employers had underpaid their premiums.

Justice, who previously served as the governor of West Virginia, has a long-standing history as a coal mine owner and operator. His family controls eight companies in Virginia and West Virginia that sought coverage through LM Insurance Corp. via West Virginia’s assigned risk workers’ compensation plan, as indicated in court documents.

In 2021, LM Insurance canceled a set of policies due to nonpayment of premiums, collectively referring to the affected companies as the Bluestone companies. An audit revealed that these firms owed nearly $1.8 million in premiums, according to the complaint filed by LM.

In early 2022, the employers made a payment of $50,000. Subsequently, LM sought partial summary judgment from the federal court in western Virginia, demanding that the Justice family’s companies pay the remaining premiums owed. The Bluestone defendant companies did not contest this motion, leading Judge Michael Urbanski to rule in favor of LM last week.

“Accordingly, it is ORDERED that JUDGMENT be entered for Plaintiff LM Insurance Corporation in the amount of $1,023,732.88, jointly and severally against Defendants Bluestone Resources, Inc., Ranger Fuel Coal Corporation, Blackstone Energy Ltd., Bluestone Coke, LLC, Southeast Cotton, Inc., Bluestone Industries, Inc., Justice Energy Company, Inc., and Kentucky Fuel Corporation,” the judge stated.

This breach of contract by the coal companies occurred during a period when workers’ compensation costs were declining in West Virginia and across most states. In 2024, while serving as governor, Justice highlighted the 20^th consecutive year of decreasing workers’ comp rates, as recommended by the National Council on Compensation Insurance. Both the voluntary and assigned risk markets saw reductions in rates.

According to a survey by the Oregon Department of Consumer and Business Services, West Virginia ranked as the 2^nd-lowest state in the nation for workers’ compensation costs in 2022.

Last week’s court order is not the first legal challenge faced by the Justice companies, which have been described as “troubled” amid a decline in U.S. coal consumption. In 2024, Justice’s Southern Coal Corp. settled a lawsuit with another workers’ comp carrier, BrickStreet Mutual Insurance. The federal court had ordered the company to pay over $500,000 to BrickStreet, which succeeded West Virginia’s state-run comp insurer. BrickStreet contended that the coal company had failed to contribute to a loss fund and had not reimbursed the insurer for claims and expenses, violating their contractual obligations.

Photo: Then-Gov. Justice at his 2023 State of the State address. (AP Photo/Chris Jackson, File)

A federal judge has mandated that coal companies owned by U.S. Senator Jim Justice’s family pay over $1 million in unpaid workers’ compensation premiums owed to Liberty Mutual. This ruling comes five years after an audit revealed that these employers had underpaid their premiums.

Justice, who previously served as the governor of West Virginia, has a long-standing history as a coal mine owner and operator. His family controls eight companies in Virginia and West Virginia that sought coverage through LM Insurance Corp. via West Virginia’s assigned risk workers’ compensation plan, as indicated in court documents.

In 2021, LM Insurance canceled a set of policies due to nonpayment of premiums, collectively referring to the affected companies as the Bluestone companies. An audit revealed that these firms owed nearly $1.8 million in premiums, according to the complaint filed by LM.

In early 2022, the employers made a payment of $50,000. Subsequently, LM sought partial summary judgment from the federal court in western Virginia, demanding that the Justice family’s companies pay the remaining premiums owed. The Bluestone defendant companies did not contest this motion, leading Judge Michael Urbanski to rule in favor of LM last week.

“Accordingly, it is ORDERED that JUDGMENT be entered for Plaintiff LM Insurance Corporation in the amount of $1,023,732.88, jointly and severally against Defendants Bluestone Resources, Inc., Ranger Fuel Coal Corporation, Blackstone Energy Ltd., Bluestone Coke, LLC, Southeast Cotton, Inc., Bluestone Industries, Inc., Justice Energy Company, Inc., and Kentucky Fuel Corporation,” the judge stated.

This breach of contract by the coal companies occurred during a period when workers’ compensation costs were declining in West Virginia and across most states. In 2024, while serving as governor, Justice highlighted the 20^th consecutive year of decreasing workers’ comp rates, as recommended by the National Council on Compensation Insurance. Both the voluntary and assigned risk markets saw reductions in rates.

According to a survey by the Oregon Department of Consumer and Business Services, West Virginia ranked as the 2^nd-lowest state in the nation for workers’ compensation costs in 2022.

Last week’s court order is not the first legal challenge faced by the Justice companies, which have been described as “troubled” amid a decline in U.S. coal consumption. In 2024, Justice’s Southern Coal Corp. settled a lawsuit with another workers’ comp carrier, BrickStreet Mutual Insurance. The federal court had ordered the company to pay over $500,000 to BrickStreet, which succeeded West Virginia’s state-run comp insurer. BrickStreet contended that the coal company had failed to contribute to a loss fund and had not reimbursed the insurer for claims and expenses, violating their contractual obligations.

Photo: Then-Gov. Justice at his 2023 State of the State address. (AP Photo/Chris Jackson, File)