Rith Energy, Inc. v. United States

44 Fed. Cl. 108, 29 Envtl. L. Rep. (Envtl. Law Inst.) 21389, 146 Oil & Gas Rep. 193, 48 ERC (BNA) 1951, 1999 U.S. Claims LEXIS 146, 1999 WL 428008
CourtUnited States Court of Federal Claims
DecidedJune 25, 1999
DocketNo. 92-480 L
StatusPublished
Cited by9 cases

This text of 44 Fed. Cl. 108 (Rith Energy, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rith Energy, Inc. v. United States, 44 Fed. Cl. 108, 29 Envtl. L. Rep. (Envtl. Law Inst.) 21389, 146 Oil & Gas Rep. 193, 48 ERC (BNA) 1951, 1999 U.S. Claims LEXIS 146, 1999 WL 428008 (uscfc 1999).

Opinion

OPINION

WIESE, Judge.

The question presented in this case is whether the Government’s rejection of plaintiffs proposed mining plan, combined with the prohibition on all mining operations that that rejection occasioned, effected a taking of plaintiffs property for which just compensation is now owing under the Fifth Amendment of the United States Constitution. The issue is before us on cross-motions for summary judgment. Based on the parties’ written and oral presentations, we conclude that no compensable taking has occurred and accordingly direct the entry of judgment in the Government’s favor.

BACKGROUND

The Surface Mining Control and Reclamation Act of 1977

Title 30 of the United States Code, section 1201(c)(1994), sets forth Congress’ finding that:

[110]*110(c) many surface mining operations result in disturbances of surface areas that burden and adversely affect commerce and the public welfare by destroying or diminishing the utility of land for commercial, industrial, residential, recreational, agricultural, and forestry purposes, by causing erosion and landslides, by contributing to floods, by polluting the water, by destroying ñsh and wildlife habitats, by impairing natural beauty, by damaging the property of citizens, by creating hazards dangerous to life and property by degrading the quality of life in local communities, and by counteracting governmental programs and efforts to conserve soil, water, and other natural resources____

In recognition of these many concerns, Congress enacted the Surface Mining Control and Reclamation Act of 1977 (“SMCRA”) with the express objective, among others, of establishing “a nationwide program to protect society and the environment from the adverse effects of surface coal mining operations.” 30 U.S.C. § 1202(a). Towards this end, SMCRA charges the Office of Surface Mining Reclamation and Enforcement (“OSM”) with the task of regulating the surface coal mining industry by prohibiting mining operations that endanger public health and safety or harm the environment. SMCRA provides in relevant part as follows:

When, on the basis of any Federal inspection, the Secretary [of Interior] or his authorized representative determines that any condition or practices exist, or that any permittee is in violation of any requirement of this [Act] or any permit condition required by this [Act], which condition, practice, or violation also creates an imminent danger to the health or safety of the public, or is causing, or can reasonably be expected to cause significant, imminent environmental harm to land, air, or water resources, the Secretary or his authorized representative shall immediately order a cessation of surface coal mining and reclamation operations or the portion thereof relevant to the condition, practice, or violation____ Where the Secretary finds that the ordered cessation of surface coal mining and reclamation operations, or any portion thereof, will not completely abate the imminent danger to health or safety of the public or the significant imminent environmental harm to land, air, or water resources, the Secretary shall, in addition to the cessation order, impose affirmative obligations on the operator requiring him to take whatever steps the Secretary deems necessary to abate the imminent danger or the significant environmental harm.

30 U.S.C. § 1271(2) (1994).

The Regulatory Process

On June 29, 1985,almost eight years after the passage of SMCRA, plaintiff, Rith Energy, purchased two leases to surface-mine coal on about 250 acres of land situated along the Sewanee and Richland coal seams in Tennessee. At the time it acquired these leases, plaintiff was aware that its mining operations would invade the rock strata overlying the aquifer that supplies the local community with its drinking water — those geologic formations known as the Sewanee Conglomerate, the Newton Sandstone, and the White-well Shale.

In August 1985, plaintiff, pursuant to SMCRA, applied for a surface-mining permit.1 SMCRA required plaintiff to obtain soil samples to determine the level of toxicity in the soil to be mined, and to prepare a Toxic Materials Handling Plan (“handling plan”) explaining how it would treat any overburden2 that exhibited a potential to cause acid mine drainage (“AMD”).3 With [111]*111the assistance of a mining consultancy firm, plaintiff obtained and submitted three soil samples, two showing a pH level of approximately 5.2 and one showing a pH level of 3.4, thus indicating a relatively low potential for AMD. Along with these samples, plaintiff also submitted a handling plan which explained that any overburden exhibiting the potential to produce AMD would be mixed and regraded with a much larger volume of non-toxic material in order effectively to buffer the potential for AMD. The plan further indicated that all surface drainage from the disturbed areas of the mine-site would be passed through a sediment pond for treatment before discharge from the property.

Based on these several representations, on January 3, 1986, OSM issued a “Finding of No Significant Impact,” meaning that plaintiffs mining operations were expected to “produce little or no adverse change in the prevailing hydrologic balance ....” OSM then issued plaintiff a five-year permit to mine the Sewanee and Richland coal seams, with plaintiffs mining operations beginning immediately thereafter.

On March 25, 1986, OSM, acting in response to complaints both from local area residents and a regional environmental protection group, decided to re-sample the overburden in plaintiffs permit area. The test results obtained from these new soil samples revealed an overburden that was approximately 250% more acidic than indicated by the pH levels recorded in the test data that had accompanied plaintiffs permit application. Further, the potential neutralization factor of the soil, i.e., the soil’s capacity to offset the acidic overburden, was found to be nearly zero, thus indicating a roughly 500% variance from the earlier-reported data. On the basis of these changed findings, OSM concluded that the potential for AMD posed a significantly greater danger to the environment and to the public health and safety than first thought. Accordingly, on June 27,1986, OSM suspended plaintiffs permit to mine the Sewanee seam pending submission of a new handling plan — a plan sufficient to address the increased AMD hazards evident in the soil chemistry as well as satisfy the requirements for an acceptable reclamation of the mine-site.

In July 1986, while the re-permitting process was underway, plaintiff received approval to mine a portion of the Richland seam— an area where mining could occur without disturbing the overburden above the Sewanee seam. Rith continued to mine this section of its property until May 1987, when OSM finally ordered plaintiff to cease all mining operations.4

Between June 1986 and September 1988, plaintiff submitted a series of handling plans to OSM. Each resulted in the issuance of a [112]*112Technical Deficiency Letter indicating OSM’s rejection of the plan for lack of technical adequacy.

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44 Fed. Cl. 108, 29 Envtl. L. Rep. (Envtl. Law Inst.) 21389, 146 Oil & Gas Rep. 193, 48 ERC (BNA) 1951, 1999 U.S. Claims LEXIS 146, 1999 WL 428008, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rith-energy-inc-v-united-states-uscfc-1999.