UNITED STATES DISTRICT COURT WESTERN DISTRICT OF VIRGINIA ROANOKE DIVISION JAMES C. JUSTICE III; A & G COAL CORP.; CHESTNUT LAND HOLDINGS, LLC; BLUESTONE COAL CORPORATION; DYNAMIC ENERGY, INC.; FRONTIER COAL COMPANY; JUSTICE ENERGY COMPANY, INC.; KENTUCKY FUEL CORPORATION; NATIONAL COAL, LLC; PAY CAR MINING, INC.; PREMIUM COAL COMPANY, INCORPORATED; S AND H MINING, INC.; and TAMS MANAGEMENT, INC., 7:19cv381 Case No. ______________________ COMPLAINT FOR DECLARATORY JUDGMENT Plaintiffs, v. OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT, UNITED STATES DEPARTMENT OF THE INTERIOR, Defendant. Plaintiffs, A & G Coal Corp., Bluestone Coal Corporation, Chestnut Land Holdings, LLC, Dynamic Energy, Inc., Frontier Coal Company, Justice Energy Company, Inc., Kentucky Fuel Corporation, National Coal, LLC, Pay Car Mining, Inc., Premium Coal Company, Incorporated, S and H Mining, Inc., Tams Management, Inc. and James C. Justice III, by counsel, and for their Complaint for Declaratory Judgment, respectfully state as follows: 1 Case 7:19-cv-00381-GEC Document 1 Filed 05/17/19 Page 1 of 12 Pageid#: 1 I. THE PARTIES, JURISDICTION AND VENUE A. The Parties 1. Plaintiff James C. Justice III (“Jay Justice”) is an individual residing in Roanoke, Roanoke County, Virginia. Jay Justice is the “Controller” of the “Justice Mining Entities” (as that phrase is defined below) for purposes of enforcement of surface mining reclamation and enforcement laws and regulations by the Defendant. 2. Plaintiff A & G Coal Corp. (“A & G”) is a Virginia corporation with its principal place of business in Roanoke, Virginia and doing business or having done business in Wise and Dickenson Counties, Virginia that was the subject of various assessments by the Defendant. 3. Plaintiff Chestnut Land Holdings, LLC (“Chestnut”) is a Delaware limited liability company with its principal place of business in Roanoke, Virginia and doing business or having done business in Tazewell County in Virginia that was the subject of various assessments by the Defendant. 4. Plaintiff Bluestone Coal Corporation (“Bluestone”) is a West Virginia corporation with its principal place of business in Roanoke, Virginia and doing business or having done business in West Virginia that was the subject of various assessments by the Defendant. 5. Plaintiff Dynamic Energy, Inc. (“Dynamic”) is a West Virginia corporation with its principal place of business in Roanoke, Virginia and doing business or having done business in West Virginia that was the subject of various assessments by the Defendant. 6. Plaintiff Frontier Coal Company (“Frontier”) is a Delaware corporation with its principal place of business in Roanoke, Virginia and doing business or having done business in West Virginia that was the subject of various assessments by the Defendant. 2 Case 7:19-cv-00381-GEC Document 1 Filed 05/17/19 Page 2 of 12 Pageid#: 2 7. Plaintiff Justice Energy Company, Inc. (“Justice Energy”) is a West Virginia corporation with its principal place of business in Roanoke, Virginia and doing business or having done business in West Virginia that was the subject of various assessments by the Defendant. 8. Plaintiff Kentucky Fuel Corporation (“Kentucky Fuel”) is a Delaware corporation with its principal place of business in Roanoke, Virginia and doing business or having done business in Kentucky that was the subject of various assessments by the Defendant. 9. Plaintiff National Coal, LLC (“National Coal”) is a Tennessee limited liability company with its principal place of business in Roanoke, Virginia and doing business or having done business in Tennessee that was the subject of various assessments by the Defendant. 10. Plaintiff Pay Car Mining, Inc. (“Pay Car”) is a West Virginia corporation with its principal place of business in Roanoke, Virginia and doing business or having done business in West Virginia that was the subject of various assessments by the Defendant. 11. Plaintiff Premium Coal Company, Incorporated (“Premium”) is a Tennessee corporation with its principal place of business in Roanoke, Virginia and doing business or having done business in Tennessee that was the subject of various assessments by the Defendant. 12. Plaintiff S and H Mining, Inc. (“S & H”) is a Tennessee corporation with its principal place of business in Roanoke, Virginia and doing business or having done business in Tennessee that was the subject of various assessments by the Defendant. 13. Plaintiff Tams Management, Inc. (“Tams”) is a West Virginia corporation with its principal place of business in Roanoke, Virginia and doing business or having done business in West Virginia that was the subject of various assessments by the Defendant. (The Plaintiffs in 3 Case 7:19-cv-00381-GEC Document 1 Filed 05/17/19 Page 3 of 12 Pageid#: 3 this action other than James C. Justice III are sometimes referred to as the “Justice Mining Entities.”) 14. Defendant, Office of Surface Mining Reclamation And Enforcement (“OSMRE”), is an administrative agency within the United States Department Of The Interior tasked with enforcement of surface mining reclamation and enforcement laws and regulations. B. Jurisdiction And Venue 15. This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §1346 in that this is a civil action against the United States. 16. This Court has personal jurisdiction over OSMRE because the Defendant is an agency of the United States. 17. Venue is appropriate in this Court pursuant to 28 U.S.C. §1391(e)(1) because the Defendant is an agency of the United States and a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated, in this District—in particular the mining or related activities of several of the Justice Mining Entities of the companies which are located in this District including, but not limited to, A & G and Chestnut, and Jay Justice individually, in this District were subject to enforcement decisions that are part of the parties’ overall settlement agreement this action seeks to enforce. II. FACTUAL ALLEGATIONS 18. In the months and years leading up to April 2019, the OSMRE assessed various fines, special reclamation fees, penalties, and issued other notices and orders against the Justice Mining Entities. 4 Case 7:19-cv-00381-GEC Document 1 Filed 05/17/19 Page 4 of 12 Pageid#: 4 19. For what is believed to be the first time ever, the OSMRE also wrongfully assessed a series of individual assessments against Jay Justice personally, allegedly relating to activities of the Justice Mining Entities. 20. By April 2019, OSMRE had asserted fines, penalties and assessments against each of the Justice Mining Entities and against Jay Justice personally. (See Exhibit A, partially redacted chart of underlying fines, penalties and assessments, attached and incorporated here by reference.) 21. In an effort to resolve the charges listed in Exhibit A in a manner that would ensure that the needed mine reclamation work was performed, while keeping the Justice Mining Entities solvent and actively in business, and while also generating and/or preserving hundreds of jobs associated with the reclamation work and the other ongoing business of the Justice Mining Entities, representatives of the parties agreed to hold a meeting in early April, 2019. 22. On April 8, 2019, Jay Justice and Tom Lusk, COO of the Justice Mining Entities, met with Michael Castle, the Field Office Director of the Knoxville and Lexington Field Offices of OSMRE, and Mark Snyder, also with OSMRE, in Knoxville. The discussions during that meeting were recounted in later correspondence from counsel for the Justice Mining Entities (attached as Exhibit B and incorporated by reference), as follows: Jay Justice and Tom Lusk met with Mike Castle and Mark Snyder without counsel. They discussed the penalties against the companies and the individual penalties against [Jay] Justice. They also discussed the abatement of cited conditions and reclamation work. Mr. Castle emphatically emphasized that he is focused on completing the field work. Mr. Castle then explained that, because there is no ongoing operation and the companies are not obtaining any financial benefit through non-compliance, he believes he has the authority to compromise the penalty assessments. [Jay] Justice then proposed that the companies work to complete the reclamation work in lieu of the penalty assessments and that the penalty assessments be reduced by the cost of the reclamation 5 Case 7:19-cv-00381-GEC Document 1 Filed 05/17/19 Page 5 of 12 Pageid#: 5 work. If the total penalties are not reduced below $250,000.00 [two hundred fifty thousand dollars] by the cost of the reclamation work, [Jay] Justice proposed that the companies pay $250,000.00 [two hundred fifty thousand dollars] over twelve months to satisfy the remaining penalty assessments. This meeting concluded with [Jay] Justice agreeing to pay the AML and special reclamation fees over twelve months. (Exhibit B, p. 1.) Mr. Castle and Jay Justice both agreed to the foregoing terms. 23. After lunch on the same day, the four initial conferees were joined by their respective attorneys. The following discussions were held in the presence of attorneys: Mr. Castle indicated that the OSM wanted the penalties to be reduced by the cost of the reclamation on a dollar for dollar basis. You [John Austin, Field Solicitor in the Knoxville Field Office of the Department of the Interior] mentioned during this meeting that you [Mr. Austin] would like to have some form of collateral, or some type of guarantee, that the companies would satisfy their obligations under any agreement. We [the Justice Mining Entities] agreed to provide you with the financial documents upon your request. (Exhibit B, p. 2.) 24. Jay Justice and Mr. Lusk met again with Mr. Castle and Mr. Snyder after the meeting with their respective attorneys, and discussed as follows: [Jay] Justice and Mr. Castle discussed whether collateral would ultimately be necessary. Mr. Castle indicated that he would discuss this issue with [Mr. Austin] and that he did not believe collateral would be required to resolve the matter. During this meeting, it was agreed that Mr. Lusk would work with Mr. Snyder to prioritize the work in the field. [Jay] Justice agreed that he would place equipment in the field by May 1, 2019 to complete the work and he met this deadline. He also agreed to complete the work by October 31, 2019 weather permitting. (Exhibit B, p. 2.) Mr. Castle and Jay Justice again both agreed to the foregoing terms. 6 Case 7:19-cv-00381-GEC Document 1 Filed 05/17/19 Page 6 of 12 Pageid#: 6 25. OSMRE consistently and clearly held out Mr. Castle as the agency’s agent and representative for purposes of negotiating a settlement of the parties’ disputes regarding payment of the assessments and fines levied against the Justice Mining Entities. Mr. Castle, in turn, consistently and clearly maintained that he, not the attorneys for OSMRE or the Department of the Interior, was empowered to negotiate agreements such as the one referenced above and in the attached correspondence. 26. Mr. Castle’s predecessor, Earl Bandy (retired) was also always held out by OSMRE to be the authoritative and binding voice of OSMRE as it related to that agency’s oversight of the Justice Mining Entities. Mr. Castle’s position has always been held out as one having actual authority when it comes to the Justice Mining Entities’ dealings with OSMRE. 27. Mr. Castle also expressed to Jay Justice that Mr. Castle’s supervisor, Thomas Shope, Regional Manager of the Appalachian Region of OSMRE, approved the parties’ agreement. The Appalachian Region of OSMRE encompasses all the states where the Plaintiffs had operations that are the subject of the parties’ agreement. 28. Mr. Austin merely suggested alternative or supplemental terms to the parties. Mr. Austin’s suggestions or requests were not held out by OSMRE or Mr. Castle to be essential to the parties’ final agreement. Mr. Castle instead told Jay Justice not to worry about Mr. Austin’s requests for information or collateral. 29. Jay Justice and the Justice Mining Entities left the three meetings held on April 8, 2019 believing an agreement had been reached as to all material terms. Mr. Lusk thereafter spent time in the field on April 15 – 18, 2019 with Mr. Snyder and agreed on the reclamation work that would be completed and a timeframe. 7 Case 7:19-cv-00381-GEC Document 1 Filed 05/17/19 Page 7 of 12 Pageid#: 7 30. Counsel for the Justice Mining Entities wrote Mr. Austin on April 26, 2019 and invited him to request any additional financial information necessary to effectuate the parties’ agreement. Following that correspondence, Mr. Austin went two weeks without requesting any financial information or requesting collateral in any form or amount. 31. In the meantime, and in reliance upon the terms of the parties’ agreement reached April 8, 2019 (the “Settlement Agreement”), the Justice Mining Entities had already begun to incur significant expense in mobilizing equipment and commencing the reclamation work OSMRE had requested. Before the end of April 2019, the Plaintiff’s had already commenced their performance under the Settlement Agreement, and have continued performing in accordance with that Agreement to this day. 32. Between April 8, 2019 and early May, 2019, Mr. Castle and Mr. Shope, among others with OSMRE, were copied on emails and correspondence between counsel for the parties discussing the implantation of the parties’ Settlement Agreement, and at no time did any officers or representatives of OSMRE express any reservations about the finality and enforceability of the Settlement Agreement. 33. In the week of May 6, 2019, the government’s attitude toward the Justice Mining Entities noticeably soured. The Mine Health and Safety Administration (“MSHA”), even though it was party to a tolling agreement with the Justice Mining Entities, brought suit against some of those entities in apparent violation of the tolling agreement, early in the week of May 6, 2019. 34. This event led to Mr. Austin contacting counsel for the Justice Mining Entities to relay his assumption that the filing of the MSHA suit meant that the Justice Mining Entities would be unable to perform their duties under the Settlement Agreement. When told that his assumption was totally unfounded and that the Justice Mining Entities still intended to abide by 8 Case 7:19-cv-00381-GEC Document 1 Filed 05/17/19 Page 8 of 12 Pageid#: 8 the Settlement Agreement, Mr. Austin suddenly renewed his requests for collateral and financial information. 35. On or about May 12, 2019, less than one business day after the foregoing request, the Justice Mining Entities agreed to provide the requested collateral and financial information, even though they did not believe it was a prerequisite to OSMRE’s performance under the terms of the Settlement Agreement. 36. On May 15, 2019, Mr. Austin wrote counsel for the Justice Mining Entities and denied the existence of any agreement to abate or otherwise reduce the fines and assessments reference in Exhibit A—a complete and unforeseeable reversal of the OSMRE’s position. Instead, Mr. Austin claimed, for the very first time in the parties’ discussions, that Mr. Castle had never had authority to bind OMSRE to the terms of the Settlement Agreement. (See Exhibit C, attached and incorporated here by reference.) Instead of abiding by the Settlement Agreement, Mr. Austin announced he was proceeding to instruct the Department of Justice to sue to collect the fines and assessments referenced in Exhibit A. 37. By virtue of the May 13, 2019 letter from Mr. Austin, OSMRE has entirely reneged on the Settlement Agreement. This, despite the fact that OSMRE held out Mr. Castle as having apparent and actual authority, despite the fact that the Justice Mining Entities relied to their detriment on the position adopted by Mr. Castle that there was a binding Settlement Agreement, and despite the Justice Mining Entities’ partial and continuing performance of their duties and responsibilities pursuant to the Settlement Agreement, which without a doubt had to be politically driven. 38. As the Plaintiffs previously made OMSRE and its attorneys aware, preceding litigiously instead of in accordance with the Settlement Agreement harms the operations of a 9 Case 7:19-cv-00381-GEC Document 1 Filed 05/17/19 Page 9 of 12 Pageid#: 9 dozen or so mining companies, and risks the jobs of hundreds of workers on the pending reclamation projects. 39. The abrupt turnaround by the government in its attitude toward this matter is inexplicable and raises the question whether untoward political or other pressure from sources presently unknown has been brought to bear on OMSRE, perhaps from other federal agencies or political adversaries of the Justice family. The repudiation of the Settlement Agreement may have resulted from inappropriate inter-agency influence between MSHA and OSMRE. Discovery will be necessary to establish why OMSRE so rapidly changed its position. 40. In any event, OMSRE’s conduct in reneging on the Settlement Agreement creates a legitimate dispute and justiciable controversy that requires the intervention of the Court to resolve. COUNT I (Declaratory Judgment) 41. Plaintiffs repeat and reallege each and every allegation set forth in the preceding Paragraphs of this Complaint as if fully set forth herein. 42. A real and justiciable controversy exists between the Plaintiffs and the Defendant regarding whether those parties entered into an enforceable Settlement Agreement. 43. Because OSMRE has stated that it intends to disregard the parties’ Settlement Agreement and initiate litigation against the Plaintiffs on the underlying assessments, fees and penalties that are the subject of the Settlement Agreement, there also exists an immediacy to the need for an adjudication and declaratory judgment regarding the enforceability of the Settlement Agreement. 44. If OSMRE is permitted to litigate and otherwise pursue the underlying assessments, fees and penalties without there first being an adjudication and declaratory 10 Case 7:19-cv-00381-GEC Document 1 Filed 05/17/19 Page 10 of 12 Pageid#: 10 judgment regarding the enforceability of the Settlement Agreement, the Plaintiffs will suffer economic and other real damages. Any suit filed by the government in contravention of the Settlement Agreement would create a false impression and arguably be defamatory in that it would cause harm to the business and personal reputations of the Plaintiffs. 45. The Plaintiffs are therefore entitled to a declaratory judgment pursuant to 28 U.S.C. 2201 that the Settlement Agreement is valid and enforceable against OSMRE and that OSMRE should take no further steps regarding the underlying assessments, fees and penalties. WHEREFORE, the Plaintiffs respectfully request Judgment on their Complaint herein as follows: A. A Judgment on Count I for a declaratory judgment as outlined herein; B. Trial by jury on all counts so triable; and C. Such further relief as Plaintiffs appear entitled, in addition to the costs and disbursements of this action. Respectfully submitted, /s/ Aaron B. Houchens AARON B. HOUCHENS (VSB #80489) AARON B. HOUCHENS, P.C. 111 East Main Street P.O. Box 1250 Salem, Virginia 24153 Telephone: (540) 389-4498 Facsimile: (540) 339-3903 aaron@houchenslaw.com And 11 Case 7:19-cv-00381-GEC Document 1 Filed 05/17/19 Page 11 of 12 Pageid#: 11 RICHARD A. GETTY (Pro Hac Vice Admission pending) C. THOMAS EZZELL (Pro Hac Vice Admission pending) and MARCEL RADOMILE (Pro Hac Vice Admission pending) THE GETTY LAW GROUP, PLLC 1900 Lexington Financial Center 250 West Main Street Lexington, Kentucky 40507 Telephone: (859) 259-1900 Facsimile: (859) 259-1909 Email: rgetty@gettylawgroup.com Email: tezzell@gettylawgroup.com Email: mradomile@gettylawgroup.com COUNSEL FOR PLAINTIFFS ctepld0571 12 Case 7:19-cv-00381-GEC Document 1 Filed 05/17/19 Page 12 of 12 Pageid#: 12                 EXHIBIT A Case 7:19-cv-00381-GEC Document 1-1 Filed 05/17/19 Page 1 of 4 Pageid#: 13 2018400997 1101953 119030 8- COAL CORP 1 2018300059 8-4013?01 BLUESTONE COAL CORP 2018400058 3-4013?01 STONE CORP 2017400463 8-4013?01 BLUESTONE COAL CORP 81 1 3?01 CORP 8-4013?01 BLUESTONE COAL CORP LLC HOLDINGS LLC LLC HOLDINGS LLC 1 LLC 2016400251 8-4020-96 DYNAMIC ENERGY INC INC 2017300226 8402096 DYNAMIC 11/15/2017 ENERGY INC 20160241095 7 INC 2018300265 FRONTIER COAL CO FRONTIER COAL CO 1 18090000014 150367 JUSTICE 3/15/2019 418090000006 150367 JUSTICE 10/31/2018 1 418090000010 1/15/2019 -I1 11 1 1/1 1 1/1 ? 18090000018 150367 JUSTICE INC 2018400202 ENERGY CO INC 2018200997 ENERGY INC 20160241098 TICE ENERGY CO INC 2018300228 898-0883 KENTUCKY FUEL CORP 2017300248 898-0775 KENTUCKY FUEL 11/15/2017 CORP Case Document 1-1 Filed 05/17/19 Page 2 of 4 Pageid#: 14 O-2017400239 898-0775 KY 156503 2017 4 O-2018100234 898-0775 KY 156503 2018 1 O-2018200233 898-0775 KY 156503 2018 2 A-20170241076 KY 156503 2018 1 A-20170245076 WV 156503 2018 1 C-C18090171003 TN-023 TN 251162 C-C18090171004 3250 TN 251162 C-C18090281003 TN-020 TN 251162 C-C18090461002 3255 TN 251162 C-C18090461003 3256 TN 251162 C-C18090535001 3249 TN 251162 C-C18090535002 3249 TN 251162 C-C18090535003 3249 TN 251162 C-C18090560002 TN-021 TN 251162 C-C18090560004 TN-021 TN 251162 C-N17090461002 3255 TN 251162 C-N18090171003 TN-023 TN 251162 C-N18090171004 3250 TN 251162 C-N18090281003 TN-020 TN 251162 C-N18090461005 3256 TN 251162 C-N18090535001 3249 TN 251162 C-N18090535006 3249 TN 251162 C-N18090560002 TN-021 TN 251162 C-N18090560004 TN-021 TN 251162 C-N18090560007 TN-021 TN 251162 C-N18090535008 3249 TN 251162 O-2018300243 U-4010-98 WV 158356 2018 3 O-2018400238 U-4010-98 WV 158356 2018 4 O-2017300263 U-4010-98 WV 158356 2017 3 O-2017400254 U-4010-98 WV 158356 2017 4 O-2018100249 U-4010-98 WV 158356 2018 1 O-2018200248 U-4010-98 WV 158356 2018 2 C-N18090546004 3237 TN 036315 C-N18090560008 3236 TN 036315 C-C17090534001 3183 TN 036315 C-C17090546001 3237 TN 036315 C-C18090171001 3233 TN 036315 C-C18090171002 3241 TN 036315 C-C18090281001 3143 TN 036315 C-C18090281002 2872 TN 036315 C-C18090534001 3183 TN 036315 C-C18090534003 3183 TN 036315 KENTUCKY FUEL CORP KENTUCKY FUEL CORP KENTUCKY FUEL CORP KENTUCKY FUEL CORP KENTUCKY FUEL CORP NATIONAL COAL LLC NATIONAL COAL LLC NATIONAL COAL LLC NATIONAL COAL LLC NATIONAL COAL LLC NATIONAL COAL LLC NATIONAL COAL LLC NATIONAL COAL LLC NATIONAL COAL LLC NATIONAL COAL LLC NATIONAL COAL LLC NATIONAL COAL LLC NATIONAL COAL LLC NATIONAL COAL LLC NATIONAL COAL LLC NATIONAL COAL LLC NATIONAL COAL LLC NATIONAL COAL LLC NATIONAL COAL LLC NATIONAL COAL LLC NATIONAL COAL LLC PAY CAR MINING INC PAY CAR MINING INC PAY CAR MINING INC PAY CAR MINING INC PAY CAR MINING INC PAY CAR MINING INC PREMIUM COAL CO INC PREMIUM COAL CO INC PREMIUM COAL CO INC PREMIUM COAL CO INC PREMIUM COAL CO INC PREMIUM COAL CO INC PREMIUM COAL CO INC PREMIUM COAL CO INC PREMIUM COAL CO INC PREMIUM COAL CO INC 2/15/2018 5/15/2018 8/15/2018 5/15/2018 5/15/2018 9/30/2018 9/30/2018 8/31/2018 9/30/2018 10/15/2018 7/15/2018 9/30/2018 11/15/2018 6/30/2018 10/15/2018 11/30/2017 8/31/2018 8/31/2018 6/30/2018 8/31/2018 7/15/2018 10/15/2018 6/15/2018 7/15/2018 11/15/2018 2/28/2019 2/15/2019 11/15/2017 2/15/2018 5/15/2018 8/15/2018 2/15/2019 2/15/2019 9/30/2018 4/15/2018 6/30/2018 7/15/2018 8/31/2018 8/31/2018 9/30/2018 11/30/2018 Case 7:19-cv-00381-GEC Document 1-1 Filed 05/17/19 Page 3 of 4 Pageid#: 15 C-C18090546001 3237 TN 036315 C-C18090534002 3046 TN 039561 PREMIUM COAL CO INC PREMIUM COAL CO INC PREMIUM COAL CO INC PREMIUM COAL CO INC PREMIUM COAL CO INC PREMIUM COAL CO INC PREMIUM COAL CO INC PREMIUM COAL CO INC PREMIUM COAL CO INC PREMIUM COAL CO INC PREMIUM COAL CO INC PREMIUM COAL CO INC PREMIUM COAL CO INC PREMIUM COAL CO INC PREMIUM COAL CO INC PREMIUM COAL CO INC PREMIUM COAL CO INC PREMIUM COAL CO INC PREMIUM COAL CO INC S & H MINING INC C-C18090560001 3236 TN 036315 C-C18090560003 3240 TN 036315 C-N17090534001 2873 TN 036315 C-N17090534005 3183 TN 036315 C-N17090546004 3237 TN 036315 C-N18090171001 3233 TN 036315 C-N18090171002 3241 TN 036315 C-N18090281001 3143 TN 036315 C-N18090281002 2872 TN 036315 C-N18090534004 3183 TN 036315 C-N18090534005 3183 TN 036315 C-N18090534008 3138 TN 036315 C-N18090546002 3237 TN 036315 C-N18090546003 3237 TN 036315 C-N18090560001 3236 TN 036315 C-N18090560003 3236 TN 036315 C-N18090560005 3240 TN 036315 C-N19090546001 3237 TN 036315 C-N17090534004 2283066 TN 039561 S & H MINING INC 2/28/2018 3046 TN S & H MINING INC 10/31/2018 C-N18090534007 039561 9/30/2018 6/30/2018 9/30/2018 11/15/2017 9/30/2018 4/15/2018 6/30/2018 6/30/2018 8/15/2018 6/30/2018 7/15/2018 8/15/2018 10/31/2018 6/30/2018 8/15/2018 6/15/2018 7/15/2018 7/15/2018 11/30/2018 O-2017200338 S-5013-00 WV 250162 2017 2 TAMS 8/15/2017 MANAGEMENT INC O-2017200338 S-3009-98 WV 250162 2017 2 TAMS 8/15/2017 MANAGEMENT INC O-2017200338 S-3018-09 WV 250162 2017 2 TAMS 8/15/2017 MANAGEMENT INC O-2017300331 S-3009-98 WV 250162 2017 3 TAMS 11/15/2017 MANAGEMENT INC O-2017300331 S-4013-01 WV 250162 2017 3 TAMS 11/15/2017 MANAGEMENT INC O-2017400316 S-3009-98 WV 250162 2017 4 TAMS 2/15/2018 MANAGEMENT INC WV 250162 2018 2 TAMS 7/31/2018 MANAGEMENT INC A-20170241077 Case 7:19-cv-00381-GEC Document 1-1 Filed 05/17/19 Page 4 of 4 Pageid#: 16                 EXHIBIT B Case 7:19-cv-00381-GEC Document 1-2 Filed 05/17/19 Page 1 of 4 Pageid#: 17 LAW OFFICES CAREY, SCOTT, DOUglAS & Kessler, PLLC 901 CHASE TOWER 707 VIRGINIA STREET, EAST P. O. BOX 913 CHARLESTON, WV 25323 MICHAEL W. CAREY ROBERT E. DOUGLAS JOHN A. KESSLER S. BENJAMIN BRYANT DAVID R. POGUE TELEPHONE (304) 345-1234 TELEPHONE (304) 342-1111 FACSIMILE (304) 342-1105 May 13, 2019 John Austin, Esquire United States Department of the Interior – Office of the Solicitor 800 S. Gay Street, Suite 800 Knoxville, TN 37929 Re: Justice Companies Outstanding OSM Assessments Dear Mr. Austin: I am writing to follow up on our conversation from Friday May 10, 2019 and to confirm our agreement to all material terms of a settlement of outstanding OSM liabilities as set forth in my letter of April 26, 2019. This agreement follows meetings which occurred on April 8, 2019 in Knoxville. Prior to our meeting, Jay Justice and Tom Lusk met with Mike Castle and Mark Snyder without counsel. They discussed the penalties against the companies and the individual penalties against Mr. Justice. They also discussed the abatement of cited conditions and reclamation work. Mr. Castle emphatically emphasized that he is focused on completing the field work. Mr. Castle then explained that, because there is no ongoing operation and the companies are not obtaining any financial benefit through non-compliance, he believes he has the authority to compromise the penalty assessments. Mr. Justice then proposed that the companies work to complete the reclamation work in lieu of the penalty assessments and that the penalty assessments be reduced by the cost of the reclamation work. If the total penalties are not reduced below $250,000.00 by the cost of the reclamation work, Mr. Justice proposed that the companies pay $250,000.00 over twelve months to satisfy the remaining penalty assessments. This meeting concluded with Mr. Justice agreeing to pay the AML and special reclamation fees over twelve months. Mr. Castle then indicated he would discuss this proposal with you and Mr. Henson and we would reconvene after lunch. After lunch, we met with our respective clients present and I conveyed to you the offer that was memorialized in writing on April 26, 2019. During this meeting, Mr. Castle indicated that the OSM wanted the penalties to be reduced by the cost of the reclamation on a dollar for dollar basis. You mentioned during this meeting that you would like to have some form of collateral, or some type of guarantee, that the companies would satisfy their obligations under any agreement. We agreed to provide you with the financial documents upon your request. Case 7:19-cv-00381-GEC Document 1-2 Filed 05/17/19 Page 2 of 4 Pageid#: 18 Mr. John Austin May 13, 2019 Page 2 After our meeting concluded, Mr. Justice and Mr. Lusk met again with Mr. Castle and Mr. Snyder. I understand that Mr. Justice and Mr. Castle discussed whether collateral would ultimately be necessary. Mr. Castle indicated that he would discuss this issue with you and that he did not believe collateral would be required to resolve the matter. During this meeting, it was agreed that Mr. Lusk would work with Mr. Snyder to prioritize the work in the field. Mr. Justice agreed that he would place equipment in the field by May 1, 2019 to complete the work and he met this deadline. He also agreed to complete the work by October 31, 2019 weather permitting. At this point, my clients believed an agreement had been reached as to all material terms. Mr. Lusk thereafter spent time in the field on April 15-18, 2019 with Mr. Snyder and they agreed on the work that would be completed and a timeframe. My letter of April 26, 2019 followed and concluded by inviting you to request any additional information necessary. Following my April 26, 2019, correspondence, you never requested any specific financial information and never requested collateral in any specific form or any specific amount. We next discussed this matter on May 10, 2019, at which time I asked what was necessary to finalize the agreement. In response, you said that the companies must provide financial statements and collateral to secure payment of the penalty assessments (or reclamation with costs up to the amount of the penalty assessments). The timing of this request is surprising considering my April 26, 2019 correspondence offered to provide additional information upon request. We did not hear anything from you in this regard until May 10, 2019. Now it is our understanding that the Department of Justice is involved and is preparing litigation against the companies and individuals. The timing of the involvement of the Department of Justice in this matter is likely no coincidence considering the action filed last week to collect allegedly delinquent mine safety and health assessments. This is particularly surprising considering that my clients left Knoxville on April 8 with an agreement as to all material terms and Mr. Castle and Mr. Snyder were satisfied with both the terms and the plans for the work in the field after Mr. Snyder’s meeting with Mr. Lusk. After you stated on May 10, 2019 that financial statements and collateral would be required, we worked through the weekend to meet these requests and now specifically agree to provide financial statements and collateral to secure the payment of the cost of reclamation up to the amount of the penalty assessments. The companies have recently obtained a verbal commitment from a lender that will allow the companies to provide a letter of credit in the amount of the outstanding penalties. This letter of credit will be used to secure payment of the penalty assessments (or reclamation with costs up to the amount of the penalty assessments) and will secure the payment of the $250,000.00 penalty if the penalty assessments are not reduced to less than $250,000.00 by the reclamation cost. We can immediately move forward with the letter of credit as soon as we have an executed agreement we can share with our lender. Additionally, I will need you to provide me all of the counterpart information from OSM so that it can be listed on the letter of credit. If still necessary, we will provide you with the most recent financial statements for the companies which the OSM contends owe penalty assessments. The Justice family appreciates Mr. Castle’s willingness to meet and work through these issues and his professionalism throughout this process. We believe this agreement will accomplish the primary goal of ensuring that the conditions on the ground comply with the law. As previously Case 7:19-cv-00381-GEC Document 1-2 Filed 05/17/19 Page 3 of 4 Pageid#: 19 Mr. John Austin May 13, 2019 Page 3 mentioned, this agreement will allow the companies to complete the reclamation while at the same time continuing to operate and saving approximately 450 jobs. I understand from discussions with your office last week that the filing of one or more complaints is imminent. This is of grave concern and bewilderment to my clients. We believe it is unnecessary, as we have now met every term you requested to settle this matter. If this file has been forwarded to the Department of Justice, I request that this correspondence be immediately provided to the individuals working on this matter and that they be notified we have agreed to all of the OSM’s settlement demands. Additionally, please immediately provide me with their names and contact information. Sincerely, /s/ Michael W. Carey Michael W. Carey cc: Mike Castle John Henson, Esquire Tom Lusk James C. Justice, III Case 7:19-cv-00381-GEC Document 1-2 Filed 05/17/19 Page 4 of 4 Pageid#: 20                 EXHIBIT C Case 7:19-cv-00381-GEC Document 1-3 Filed 05/17/19 Page 1 of 3 Pageid#: 21 United States Department of the Interior k) OFFICE OF THE SOLICITOR ?g Knoxville Field Office TAKE PRIDE 800 3. Gay Street, Suite 800 ERICA Knoxville, Tennessee 37929 E-mail: john.austin@sol.d0i.gov Telephone: (865) 545-4955 May 15, 2019 Michael W. Carey Carey, Scott, Douglas Kessler, PLLC P. 0. BOX 913 Charleston, WV 25323 Dear Mr. Carey: This is in response to your letter dated May 13, 2019, and the emails that you sent as a further explanation of that letter. I acknowledged receipt of your letter by email to Chris Pence on 05-13?19 at 4:26 pm. I need to reiterate what you and your clients have been told: Neither OSMRE nor any of its employees nor the attorneys representing the Secretary of the Interior have the authority to settle a debt owed to the United States that exceeds $100,000.00 without the approval of the US. Department of Justice (DOJ). See 31 U.S.C. 9711 and 31 CPR. 902.1. Therefore, notwithstanding your clients? assertion about a deal they believe they made with OSMRE, there is not nor has there been an authorized agreement with the United States to settle the monetary debts of your clients for $25 0,000.00, or for any other amount. Yesterday afternoon, a letter authorizing to ?le suit against the Justice Companies et al. on behalf of the Department of the Interior was signed and sent (the end of a process that has taken months to accomplish the MSHA lawsuit plays no part in referral to DOJ). If your clients want to settle these cases before suit is ?led, please make an offer that we can discuss with DOJ. If you decide to make an offer, we recommend that you provide collateral to guarantee the full performance of any proposed settlement. In addition, as we explained in our face-to-face meeting in April, in order to settle these claims, we will require ?nancial statements and any other information you can provide that will demonstrate a settlement is in the best interests of the citizens of the United States. We will also need documentation of your belief that a settlement will preserve 450 jobs. Case Document 1-3 Filed 05/17/19 Page 2 of 3 Pageid#: 22 We have suggested on more than one occasion that a showing of good faith will bene?t your clients if they intend to pursue settlement. For instance, they can show good faith by continuing to abate the environmental Violations that exist in Tennessee and by making good on the settlement agreement negotiated on their behalf in 2017 by Zachary Wright (copy attached). We look forward to working out a settlement with you, your clients, and We are standing by to answer any questions you might have. Sincerely, 2 JOPMUSTIN, F-ield Solicitor Case Document 1-3 Filed 05/17/19 Page 3 of 3 Pageid#: 23 JS 44 (Rev. 0 7:19cv381 CIVIL COVER SHEET ) The JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. (SEE INSTRUCTIONS ON NEXT PAGE OF THIS FORM.) I. (a) PLAINTIFFS DEFENDANTS James C. Justice III, A & G Coal Corp., Chestnut Land Holdings, LLC; Bluestone Coal Corp., Dynamic Energy, Inc., see attached sheet (b) County of Residence of First Listed Plaintiff Roanoke City Office of Surface Mining, Reclamation and Enforcement, United States Department of the Interior County of Residence of First Listed Defendant (EXCEPT IN U.S. PLAINTIFF CASES) NOTE: (c) Attorneys (Firm Name, Address, and Telephone Number) Aaron B. Houchens, Aaron B. Houchens, P.C., 111 East Main Street, P.O. Box 1250, Salem, Virginia 24163, (540) 389-4498, see attached sheet II. BASIS OF JURISDICTION (Place an “X” in One Box Only) 1 2 U.S. Government Plaintiff 3 U.S. Government Defendant 4 (IN U.S. PLAINTIFF CASES ONLY) IN LAND CONDEMNATION CASES, USE THE LOCATION OF THE TRACT OF LAND INVOLVED. Attorneys (If Known) III. CITIZENSHIP OF PRINCIPAL PARTIES (Place an “X” in One Box for Plaintiff (For Diversity Cases Only) PTF Citizen of This State 1 Federal Question (U.S. Government Not a Party) Diversity (Indicate Citizenship of Parties in Item III) 2 2 Incorporated and Principal Place of Business In Another State 5 5 Citizen or Subject of a Foreign Country 3 3 Foreign Nation 6 6 Click here for: Nature of Suit Code Descriptions. TORTS 110 Insurance 120 Marine 130 Miller Act 140 Negotiable Instrument 150 Recovery of Overpayment & Enforcement of Judgment 151 Medicare Act 152 Recovery of Defaulted Student Loans (Excludes Veterans) 153 Recovery of Overpayment of Veteran’s Benefits 160 Stockholders’ Suits 190 Other Contract 195 Contract Product Liability 196 Franchise REAL PROPERTY 210 Land Condemnation 220 Foreclosure 230 Rent Lease & Ejectment 240 Torts to Land 245 Tort Product Liability 290 All Other Real Property PERSONAL INJURY 310 Airplane 315 Airplane Product Liability 320 Assault, Libel & Slander 330 Federal Employers’ Liability 340 Marine 345 Marine Product Liability 350 Motor Vehicle 355 Motor Vehicle Product Liability 360 Other Personal Injury 362 Personal Injury Medical Malpractice CIVIL RIGHTS 440 Other Civil Rights 441 Voting 442 Employment 443 Housing/ Accommodations 445 Amer. w/Disabilities Employment 446 Amer. w/Disabilities Other 448 Education 1 and One Box for Defendant) PTF DEF Incorporated or Principal Place 4 4 of Business In This State Citizen of Another State IV. NATURE OF SUIT (Place an “X” in One Box Only) CONTRACT DEF FORFEITURE/PENALTY PERSONAL INJURY 365 Personal Injury Product Liability 367 Health Care/ Pharmaceutical Personal Injury Product Liability 368 Asbestos Personal Injury Product Liability PERSONAL PROPERTY 370 Other Fraud 371 Truth in Lending 380 Other Personal Property Damage 385 Property Damage Product Liability PRISONER PETITIONS Habeas Corpus: 463 Alien Detainee 510 Motions to Vacate Sentence 530 General 535 Death Penalty Other: 540 Mandamus & Other 550 Civil Rights 555 Prison Condition 560 Civil Detainee Conditions of Confinement 625 Drug Related Seizure of Property 21 USC 881 690 Other LABOR 710 Fair Labor Standards Act 720 Labor/Management Relations 740 Railway Labor Act 751 Family and Medical Leave Act 790 Other Labor Litigation 791 Employee Retirement Income Security Act BANKRUPTCY 422 Appeal 28 USC 158 423 Withdrawal 28 USC 157 PROPERTY RIGHTS 820 Copyrights 830 Patent 835 Patent - Abbreviated New Drug Application 840 Trademark SOCIAL SECURITY 861 HIA (1395ff) 862 Black Lung (923) 863 DIWC/DIWW (405(g)) 864 SSID Title XVI 865 RSI (405(g)) FEDERAL TAX SUITS 870 Taxes (U.S. Plaintiff or Defendant) 871 IRS—Third Party 26 USC 7609 IMMIGRATION 462 Naturalization Application 465 Other Immigration Actions OTHER STATUTES 375 False Claims Act 376 Qui Tam (31 USC 3729(a)) 400 State Reapportionment 410 Antitrust 430 Banks and Banking 450 Commerce 460 Deportation 470 Racketeer Influenced and Corrupt Organizations 480 Consumer Credit 485 Telephone Consumer Protection Act 490 Cable/Sat TV 850 Securities/Commodities/ Exchange 890 Other Statutory Actions 891 Agricultural Acts 893 Environmental Matters 895 Freedom of Information Act 896 Arbitration 899 Administrative Procedure Act/Review or Appeal of Agency Decision 950 Constitutionality of State Statutes V. ORIGIN (Place an “X” in One Box Only) 1 Original Proceeding 2 Removed from State Court 3 Remanded from Appellate Court 4 Reinstated or Reopened 5 Transferred from Another District 6 Multidistrict Litigation Transfer (specify) Cite the U.S. Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity): 8 Multidistrict Litigation Direct File 28 U.S.C. Section 1346, 2201 VI. CAUSE OF ACTION Brief description of cause: Declaratory Judgment to enforce Settlement Agreement VII. REQUESTED IN COMPLAINT: VIII. RELATED CASE(S) IF ANY DATE CHECK IF THIS IS A CLASS ACTION UNDER RULE 23, F.R.Cv.P. (See instructions): DEMAND $ JUDGE N/A CHECK YES only if demanded in complaint: Yes No JURY DEMAND: DOCKET NUMBER SIGNATURE OF ATTORNEY OF RECORD /s/ Aaron B. Houchens, Esq. 05/17/2019 FOR OFFICE USE ONLY RECEIPT # 0423Case 3145327 AMOUNT $400.00 APPLYING IFP 1-4 Filed 05/17/19 JUDGE Conrad JUDGE 7:19-cv-00381-GEC Document Page 1 of 1MAG. Pageid#: 24 7:19cv381 Continuation of Civil Cover Sheet, 1. (a) Plaintiffs James C. Justice III, A&G Coal Corporation., Chestnut Land Holdings LLC, Bluestone Coal Corp., Dynamic Energy, Inc., Frontier Coal Company., Justice Energy Co., Inc., Kentucky Fuel Corporation, National Coal, LLC, Pay Car Mining, Inc., Premium Coal Company., Inc., S & H Mining, Inc., and TAMS Management, Inc. Continuation of Civil Cover Sheet, 1. (c) Attorneys AARON B. HOUCHENS AARON B. HOUCHENS, P.C. 111 East Main Street P.O. Box 1250 Salem, Virginia 24153 Telephone: (540) 389-4498 Facsimile: (540) 339-3903 Email: aaron@houchenslaw.com and RICHARD A. GETTY (Pro Hac Vice Admission pending) C. THOMAS EZZELL (Pro Hac Vice Admission pending) MARCEL RADOMILE (Pro Hac Vice Admission pending) THE GETTY LAW GROUP, PLLC 1900 Lexington Financial Center 250 West Main Street Lexington, Kentucky 40507 Telephone: (859) 259-1900 Email: rgetty@gettylawgroup.com Email: tezzell@gettylawgroup.com Email: mradomile@gettylawgroup.com Case 7:19-cv-00381-GEC Document 1-5 Filed 05/17/19 Page 1 of 1 Pageid#: 25