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;
KENTUCKY FUEL CORPORATION;
NATIONAL COAL, LLC;
PREMIUM COAL COMPANY,
INCORPORATED;
S AND H MINING, INC.; and
TAMS MANAGEMENT, INC.,

Civil Action No. 7:19-cv-00381

Plaintiffs,
AMENDED COMPLAINT
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, Kentucky Fuel Corporation, National Coal, LLC, Premium Coal Company, Incorporated, S
and H Mining, Inc., Tams Management, Inc. and James C. Justice III, by counsel, and for their
Amended Complaint for Declaratory Judgment and Other Relief, respectfully state as follows:
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

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 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 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 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

doing business or having done business in West Virginia that was the subject of various
assessments by the Defendant.
5.

Plaintiff Kentucky Fuel Corporation (“Kentucky Fuel”) is a Delaware corporation

doing business or having done business in Kentucky that was the subject of various assessments
by the Defendant.
6.

Plaintiff National Coal, LLC (“National Coal”) is a Tennessee limited liability

company doing business or having done business in Tennessee that was the subject of various
assessments by the Defendant.
7.

Plaintiff Premium Coal Company, Incorporated (“Premium”) is a Tennessee

corporation doing business or having done business in Tennessee that was the subject of various
assessments by the Defendant.
8.

Plaintiff S and H Mining, Inc. (“S & H”) is a Tennessee corporation doing

business or having done business in Tennessee that was the subject of various assessments by the
Defendant.

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 9.

Plaintiff Tams Management, Inc. (“Tams”) is a West Virginia corporation doing

business or having done business in West Virginia that was the subject of various assessments by
the Defendant. (The Plaintiffs in this action other than James C. Justice III are sometimes
referred to as the “Justice Mining Entities.”)
10.

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

11.

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.
12.

This Court has personal jurisdiction over OSMRE because the Defendant is an

agency of the United States.
13.

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 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
14.

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.

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 15.

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.
16.

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.)
17.

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.
18.

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

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 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.
19.

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.)
20.

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.

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 21.

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.
22.

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.
23.

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.
24.

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.
25.

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.

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 26.

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.
27.

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.
28.

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.
29.

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.
30.

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

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 the Settlement Agreement, Mr. Austin suddenly renewed his requests for collateral and financial
information.
31.

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.
32.

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.
33.

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.
34.

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

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 dozen or so mining companies, and risks the jobs of hundreds of workers on the pending
reclamation projects.
35.

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.
36.

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)
37.

Plaintiffs repeat and reallege each and every allegation set forth in the preceding

Paragraphs of this Complaint as if fully set forth herein.
38.

A real and justiciable controversy exists between the Plaintiffs and the Defendant

regarding whether those parties entered into an enforceable Settlement Agreement.
39.

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.
40.

If OSMRE is permitted to litigate and otherwise pursue the underlying

assessments, fees and penalties without there first being an adjudication and declaratory

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 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.
41.

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;

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

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 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
mwepld0753

CERTIFICATE OF SERVICE
I hereby certify that on this 23rd of August 2019, I electronically filed the foregoing with
the Clerk of the Court using the CM/ECF system, and the foregoing was sent via U.S. mail to the
following:
Thomas T. Cullen, Esq.
United States Attorney
United States Attorney’s Office for the Western District of Virginia
BB&T Building
310 First Street, S.W. Room 906
Roanoke, VA 24008
540-857-2250
Fax: 857-2179
/s/
Aaron Balla Houchens___

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