Shell Pipe Line Corp. v. Old Ben Coal Co.

677 F. Supp. 572, 27 ERC (BNA) 1436, 1988 U.S. Dist. LEXIS 283, 1988 WL 2879
CourtDistrict Court, S.D. Illinois
DecidedJanuary 14, 1988
DocketCiv. 86-4082
StatusPublished
Cited by2 cases

This text of 677 F. Supp. 572 (Shell Pipe Line Corp. v. Old Ben Coal Co.) is published on Counsel Stack Legal Research, covering District Court, S.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shell Pipe Line Corp. v. Old Ben Coal Co., 677 F. Supp. 572, 27 ERC (BNA) 1436, 1988 U.S. Dist. LEXIS 283, 1988 WL 2879 (S.D. Ill. 1988).

Opinion

MEMORANDUM AND ORDER

FOREMAN, Chief Judge:

This matter is before the Court on a Motion for Summary Judgment filed by defendant, Old Ben Coal Company (Old Ben). Plaintiff Shell Pipe Line Corporation (Shell) responded to the defendant’s motion and renewed its earlier motion for summary judgment as well. This Court previously granted summary judgment in favor of defendant on a punitive damage count, leaving the statutory damage count as the sole remaining issue. Oral argument was presented by both sides on January 11, 1988.

Factual Summary

Plaintiff Shell Pipe Line Corporation operates and maintains an oil pipeline, known as the Capline Pipeline, under a contract with the several oil companies who own the pipeline in partnership. The pipeline runs from St. James, Louisiana to Patoka, Illinois. After giving notice of its intent, defendant Old Ben Coal Company began extracting coal from beneath lands in this district where the pipeline runs using a rather new technology known as “longwall mining”. This type of mining, unlike standard room and pillar coal mining, virtually guarantees subsidence of the land above where the coal is extracted.

In order to avoid the possibility that subsidence of the land would cause a rupture of the pipeline and catastrophic business and ecological damage, Shell undertook extensive preventative measures. All told, Old Ben completed four “longwall panels” which passed under the pipeline at some point. Shell submits that the preventative measures taken to counteract possible subsidence damage from all four panels cost in excess of $750,000.00. Shell claims that under the applicable state regulations, Old Ben is liable for the costs of the preventative measures reasonably taken. Old Ben disclaims any such liability.

Previous Court Decisions

In its summary judgment motion, Old Ben raises a number of arguments in an attempt to persuade the Court that no liability attaches to Old Ben in the situation present before the Court. A number of these arguments have been dealt with previously by the Court in similar but not identical circumstances.

In Melvin v. Old Ben Coal Company (Melvin I), 610 F.Supp. 131 (S.D.Ill.1985) and Melvin v. Old Ben Coal Company (Melvin II, 612 F.Supp. 1204 (S.D.Ill.1985), this Court rejected several arguments advanced by Old Ben as reasons why no liability for subsidence damage from long-wall mining could attach to the company. In short summary, the Melvin decisions held that: (1) longwall mining is a method of extracting coal which both the federal and state regulatory agencies view as acceptable and one which contemplates “planned subsidence” as referred to in various legislative and administrative laws and regulations; (2) a mining operation which utilizes longwall mining is not exempt from all the subsidence prevention and damage provisions of the Illinois Act and permanent mining reclamation program; (3) a mine operator which holds an interim mining permit is not exempt from the subsidence prevention and damage provisions of the permanent mining reclamation program even though no subsidence provisions existed in the interim program under which the operator’s permit was granted; (4) the Illinois legislature, by enacting the Surface Coal Mining Land Conservation and Reclamation Act, “disturbed” prior Illinois case law on subsidence control, leaving waivers of surface support unenforceable when in conflict with the policy of the state regarding subsidence control.

In this case Old Ben has advanced the notion that several developments since the Melvin decisions warrant a reconsideration of the Court’s previous rulings. Although the Court is not convinced that the Melvin *574 holdings are in any way contrary to various later developments, a decision in that regard is unnecessary in view of this Court’s agreement with Old Ben’s position on another distinct issue.

Analysis

Old Ben argues that even if the Melvin holdings are still good law, the Illinois subsidence regulations promulgated under the permanent Act (Ill.Rev.Stat. ch 96-½, ¶ 7901.01 et seq.) do not subject Old Ben to liability where no actual physical damage to a structure occurred. This Court and the Illinois Department of Mines and Minerals (IDMM) agree with this position.

Shell argues that 62 Ill.Admin Reg. 1817.124 (1985) applies in this situation and mandates that Old Ben pay for preventative measures taken as damages due to subsidence. That particular regulation provides as follows:

Section 1817.124 SUBSIDENCE CONTROL: SURFACE OWNER PROTECTIONS
a) Each person who conducts underground mining activities shall adopt all measures approved by the Department under 62 Ill.Adm.Code 1784.20 to reduce the likelihood of subsidence, to prevent subsidence causing material damage, or reducing the value, or reasonably foreseeable use of surface lands, and to mitigate the effects of any such damage or reduction which may occur.
b) Each person who conducts underground mining which results in subsidence that causes material damage or reduces the value or reasonably foreseeable use of the surface lands shall, with respect to each surface area affected by subsidence:
1) Restore, rehabilitate, or remove and replace each damaged structure, feature or value, promptly after the damage is suffered, to the condition it would be in if no subsidence has occurred and restore the land to a condition capable of supporting reasonably foreseeable uses it was capable of supporting before subsidence; or
2) Purchase the damaged structure or feature for its fair market, presubsi-dence value and shall promptly after subsidence occurs, to the extent technologically and economically feasible, restore the land surface to a condition capable and appropriate of supporting the purchased structure, and other foreseeable uses it was capable of supporting before mining. Nothing in this paragraph shall be deemed to grant or authorize an exercise of the power of condemnation or the right of eminent domain by any person engaged in underground mining activities,
c)Each person who conducts underground mining activities will compensate the owner of any surface structure in the full amount of the diminution in value resulting from subsidence, by purchase prior to mining of noncancellable, premium prepaid insurance policy or other means approved by the Department as assuring before mining begins that payment will occur; indemnify every person with an interest in the surface for all damages suffered as a result of the subsidence; and, to the extent technologically and economically feasible, fully restore the land to a condition capable of maintaining reasonably foreseeable uses which it could support before subsidence.

Shell relies on that part of subsection (c) which states that an operator must “indemnify every person with an interest in the surface for all damages suffered as a result of the subsidence.” Old Ben argues that when read as a whole the regulation clearly addresses only physical damage which actually occurs. None of the regulations promulgated address the specific problem at hand according to Old Ben.

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Related

Columbia Gas Transm., L.L.C. v. The Ohio Valley Coal Co.
2019 Ohio 1004 (Ohio Court of Appeals, 2019)
Old Ben Coal Co. v. Department of Mines and Minerals
562 N.E.2d 1202 (Appellate Court of Illinois, 1990)

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Bluebook (online)
677 F. Supp. 572, 27 ERC (BNA) 1436, 1988 U.S. Dist. LEXIS 283, 1988 WL 2879, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shell-pipe-line-corp-v-old-ben-coal-co-ilsd-1988.