M & J Coal Co. v. U.S., 94-5081

Decision Date15 February 1995
Docket NumberNo. 94-5081,94-5081
Parties, 63 USLW 2523, 25 Envtl. L. Rep. 20,600 M & J COAL COMPANY and Monongah Development Company, Plaintiffs-Appellants, v. The UNITED STATES, Defendant-Appellee.
CourtU.S. Court of Appeals — Federal Circuit

Edgar F. Heiskell, III, Charlestown, WV, argued, for plaintiffs-appellants.

Jeffrey P. Kehne, Environment & Natural Resources Division, Dept. of Justice, Washington, DC, argued, for defendant-appellee. With him on the brief were Lois J. Schiffer, Acting Asst. Atty. Gen., James E. Brookshire, Gregory D. Page and Albert M. Ferlo, Jr. Also on the brief were Thomas A. Bovard, Jean R. Goldfarb and John Jasper, Office of Sol., U.S. Dept. of Interior, Washington, DC, of counsel.

Before MAYER, Circuit Judge, BENNETT, Senior Circuit Judge, and LOURIE, Circuit Judge.

LOURIE, Circuit Judge.

M & J Coal Company and Monongah Development Company (collectively "M & J") appeal from a judgment of the United States Court of Federal Claims granting the government's motion for summary judgment. M & J Coal Co. v. United States, 30 Fed.Cl. 360 (1994). Because M & J failed to establish that the government's action in regulating its coal mining operations effected a taking of private property without compensation in violation of the Fifth Amendment to the United States Constitution, we affirm.

BACKGROUND

This regulatory takings case involves the Surface Mining Control and Reclamation Act of 1977 ("SMCRA"), which regulates mining practices and techniques. See 30 U.S.C. Secs. 1201-1328 (1988). SMCRA authorizes the Department of the Interior to prohibit mining operations that endanger public health and safety or harm the environment. In relevant part, SMCRA provides as follows:

When, on the basis of any Federal inspection, the Secretary 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. Sec. 1271 (1988).

In this case, we address the question whether the Department of the Interior's Office of Surface Mining Reclamation and Enforcement ("OSM"), acting pursuant to its authority under SMCRA, may regulate coal operations that are endangering the public health or safety without effecting a taking of property requiring the payment of just compensation under the Fifth Amendment. A complete statement of the undisputed facts is reported in the opinion of the Court of Federal Claims. To the extent necessary, we repeat those facts below.

Between 1904 and 1920, owners of approximately seven hundred acres of land in the mountainous region of Lincoln District, Marion County, West Virginia, sold to various coal companies for valuable consideration the right to mine the Pittsburgh seam of coal beneath the surface of their property. The owners sold these rights through various mineral severance deeds, some of which included the right to mine "without being liable for any injury or damage done to the overlying surface, or to anything therein or thereon."

By 1966, the Consolidated Coal Company, Inc. ("Consolidated") had acquired all the rights to mine the Pittsburgh seam from these coal companies. Consolidated mined fifty to sixty percent of the Pittsburgh seam coal using a technique known as "room-and-pillar" mining, whereby pillars of coal were left standing to support the surface above the mine. Subsequently, Pittsburgh Coal Works, Inc. ("PCW") acquired the right to mine the coal and pillars left by Consolidated.

In July 1981, the Monongah Development Company acquired from PCW the right to extract the coal that the earlier operators had left in place to support the roof of a mine known as the "Monongah mine." Two independent businessmen, Charles Sorbello and John Markovich, estimated that, by using newly developed mining techniques, they could remove approximately 75,000 to 100,000 tons of coal per year between 1985 and 1989 from the Monongah mine. In making their estimate, they assumed that they could subside 1 the surface above the mine on the properties for which the original owners had conveyed that right. For those surfaces required to be protected by existing state law, they planned to leave coal pillars in place having a 15-degree angle of draw in order to M & J began mining without the permit required by West Virginia law. Although it had applied for a transfer of the permit earlier held by PCW, the transfer did not take effect until March 28, 1986. M & J planned to adopt PCW's subsidence control plan, which called for a 15-degree angle of draw under the structures required to be protected by state law. However, M & J did not submit its plan to the state of West Virginia until April 14, 1986 and the state did not approve the plan until April 25, 1986.

                support the surface. 2  Sorbello then purchased all the corporate stock of the Monongah Development Company.  In late 1985, Sorbello and Markovich formed the M & J Coal Company for the purposes of mining and selling the coal.  M & J Coal invested approximately $500,000, based on the expectation of recovering $400,000 per year from its mining and selling operations
                

In March 1986, two neighboring residents complained to the West Virginia Department of Energy (WVDOE) that M & J's mining operations had damaged their properties. Following a joint investigation by state and federal inspectors, the state issued a Notice of Violation (NOV) against M & J for mining without a permit and without notifying all affected surface owners of the mining and the possibility of subsidence. 3

One resident contacted OSM to complain of the subsidence and described extensive damage to his property. The resident reported that the needle on his gas meter was "spinning wildly," that a section of the gas line adjacent to the gas meter had been severed, and that his water line to the public water supply was broken. In addition, the electric wires leading to his house were stretched "as tight as a fiddle string." The resident expressed concern about the possibility of a gas explosion and its effects on the safety of his family and neighbors. Mining operations had caused large cracks to develop in the surface of his property and a neighbor's dog had fallen into a crack to its death. The resident believed that neighborhood children were at risk of similar harm.

OSM officials visited the scene and consulted with the WVDOE, which replied that M & J was in compliance with all applicable state statutes, rules, and regulations, and that the state would not take any enforcement action against M & J. Nevertheless, OSM believed that the public was at risk of injury from large cracks in the ground, collapsing structures, and breaks in gas, water, and electrical lines. Thus, exercising its authority under SMCRA, OSM issued a cessation order against M & J "for a condition, practice, or violation creating an imminent danger to the health and safety of the public." The order required that M & J protect the public from surface cracks, restore the subsided land's pre-subsidence capacity to support structures and previous uses, and mine pursuant to a revised subsidence control plan. OSM approved a plan requiring a greater angle of draw under the protected structures and protection of single family dwellings.

M & J sought administrative review of OSM's order. See 30 U.S.C. Sec. 1275(a)(1) (1988). In June 1988, the Department of the Interior's Office of Hearings and Appeals (OHA) upheld OSM's action as a valid exercise of its authority pursuant to SMCRA on the ground that M & J's mining activities had created an imminent danger to the health or safety of the public. The OHA noted that OSM would have been "grossly remiss" in its enforcement role had it not ordered cessation M & J appealed to the Department of the Interior's appellate tribunal, the Interior Board of Land Appeals (IBLA), which affirmed the OHA. The IBLA rejected M & J's claim that its mining had not caused the subsidence and found that the subsidence "present[ed] a graphic picture of an imminent danger situation." M & J Coal Co. v. OSM, 115 IBLA 8, 23 (1990). M & J did not appeal from the decision of the IBLA.

of M & J's mining operations. M & J Coal Co. v. OSM, Docket No. CH 6-15-R (1988).

Despite the new subsidence control plan, M & J's mining operations continued to cause damage in the region. During the next four years, cracks appeared in other residents' properties, the town of Worthington's water tank subsided, and a section of Route 218 4 subsided. The damage necessitated the excavation of a gas line and the repair of electric lines adjacent to Route 218. Worthington's mayor later testified at trial that she and an independent engineering consultant were concerned that the damage would impair the town water tank's stability. The mayor testified that loss of the water tank "would be a dangerous situation because it would discontinue water service for general and...

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