Bureau of Mines of Maryland v. George's Creek Coal & Land Co.

• Citation: 272 Md. 143,321 A.2d 748
• Decision Date: 03 July 1974
• Docket Number: No. 261,261
• Parties: , 7 ERC 1001, 86 A.L.R.3d 1, 4 Envtl. L. Rep. 20,822 BUREAU OF MINES OF MARYLAND et al. v. The GEORGE'S CREEK COAL AND LAND COMPANY et al.
• Court: Maryland Court of Appeals

Page 143

272 Md. 143

321 A.2d 748, 7 ERC 1001, 86 A.L.R.3d

1, 4 Envtl. L. Rep. 20,822

BUREAU OF MINES OF MARYLAND et al. v. The GEORGE'S CREEK COAL AND LAND COMPANY et al.

No. 261.

Court of Appeals of Maryland.

July 3, 1974.

Henry R. Lord, Deputy Atty. Gen. (Francis B. Burch, Atty. Gen., Baltimore, on the brief), and Warren K. Rich, Sp. Asst. Atty. Gen., Annapolis, for appellants.

William Walsh, Cumberland (Walsh, Walsh & Reinhart, Cumberland, and Stephen R. Pagenhardt, Oakland, on the brief), for appellees.

Thomas B. Eastman, Baltimore, on the brief, amicus curiae for Citizens Coalition on Surface Mining and The Maryland Conservation Council, Inc.

Argued before MURPHY, C. J., SINGLEY, SMITH, DIGGES and LEVINE, JJ., and JERROLD V. POWERS and RICHARD P. GILBERT, Special Judges.

MURPHY, Chief Judge.

Whether the State of Maryland, by legislative enactment, has taken private property for public use without the payment of just compensation is the central issue presented by this appeal.

In 1931, George's Creek Coal Company, Inc. conveyed a tract of land located in Garrett County, Maryland, consisting of 8,621 3/4 acres, to T. H. and F. B. McMillen. The deed excepted from its operation and reserved to the grantor company 'all the coal, clay and other minerals, and all the oil and gas . . . (underlying the property), together with the right to enter in, upon and under said land and to mine, excavate and remove all said coal, clay and other minerals, and said oil and gas' (the mineral rights). The deed also reserved to the grantor company the right to construct designated facilities and erect specified structures on the land in connection with its mineral rights, and provided that the grantor would not be liable 'for the breaking or subsidence of the surface of said land or for any injury or damage done to the overlying surface thereby or to anything therein or thereon, by the exercise of the rights hereby excepted and reserved, whether or not the same be caused by or due to the negligent manner in which said mining operations are conducted or said rights are exercised.'

In 1937, the McMillens conveyed 5,685 acres of their land (the McMillen tract) to the United States, subject to the mineral rights exception and reservation in favor of George's Creek Coal Company. In 1952, George's Creek Coal Company conveyed all its property in Allegany and Garrett Counties, including all mineral rights excepted and reserved under its 1931 deed to the McMillens, to The George's Creek Coal and Land Company (George's Creek). In 1954, the United States conveyed the McMillen tract to the State of Maryland, subject to the exception and reservation of mineral rights; that property is now a part of the Savage River State Forest (the State Forest). In 1968, in Department of Forests and Parks v. George's Creek Coal & Land Co., 250 Md. 125, 242 A.2d 165 (1968), we held that the reservation of mineral rights in the McMillen tract included the right to remove the coal by the open-pit or strip mining method-a method then defined by Maryland Code (1957, 1967 Repl.Vol.) Art. 66C, § 658(a) to include auger mining and to mean 'the mining or recovery of bituminous coal by removing the strata or material which overlies or is above the coal deposit or seam in its natural condition.'

On July 1, 1969 George's Creek leased to the Buffalo Coal Company (Buffalo) 'all the coal (which it owned in Allegany and Garrett Counties) together with mining and surface rights necessary for the removal of said coal . . . except such parts thereof from which coal cannot be removed economically by the strip mining method, auger mining method or deep mining method, together with the right to mine coal herein leased by the strip mining method, auger mining method or deep mining method.' In order to mine coal by the open-pit or strip method, Buffalo was required by the provisions of Article 66C, § 661(a) to first obtain a license from the Bureau of Mines for a prescribed fee and to renew that license annually on January 1 of the next succeeding year. In addition to the license requirement, open-pit mining operators were required by the provisions of Article 66C, § 662(a), then in effect, to obtain from the Bureau of Mines:

'. . . a permit for each separate operation, which permit when issued is valid until the operation is completed or abandoned, unless it is sooner suspended by the Director of Bureau of Mines.'

Consistent with this latter requirement, Buffalso applied for a permit to the Maryland Bureau of Mines to strip mine 50 acres of land in the State Forest, included within which was part of the McMillen tract; the permit (No. 161) was issued on July 2, 1969, and was thereafter amended a number of times prior to July 1, 1973 to authorize strip mining on a total of 275 acres in the State Forest.

At the 1972 Session of the General Assembly of Maryland, Senate Bill 261 was introduced for the purpose, as expressed in its original title, 'to ban strip mining on land owned by the State . . ..' The Bill added a new subsection to Article 66C, § 662 ('Permit Generally') to follow immediately after § 662(a). As originally introduced, the Bill was to take effect on July 1, 1972, and prohibited the issuance, extension or renewal of any permit to mine coal by the open-pit or strip method on any land owned by the State. During its progress through the General Assembly, the Bill was amended by adding thereto the language appearing in capital letters:

'662. (a-1)(1) The Bureau of Mines shall not issue, extend or renew any permit to mine coal by the open-pit or strip method on any land owned by the State of Maryland whether the ownership includes the mineral rights incident to the land or not, EXCEPT IF THE FAILURE OF THE BUREAU TO ISSUE, EXTEND OR RENEW A PERMIT WILL INVOLVE THE TAKING OF A PROPERTY RIGHT WITHOUT JUST COMPENSATION IN VIOLATION OF THE CONSTITUTION OF THE UNITED STATES OR THE CONSTITUTION OF MARYLAND AND SUFFICIENT FUNDS HAVE NOT BEEN APPROPRIATED BY THE GENERAL ASSEMBLY

TO PAY SUCH COMPENSATION. FUNDS AVAILABLE UNDER PROGRAM OPEN SPACE MAY BE USED BY THE STATE TO PURCHASE OR OTHERWISE PAY FOR SUCH PROPERTY RIGHTS.

'(2) Any person who mines coal by the open-pit or strip method without a permit issued by the Bureau of Mines shall be guilty of a misdemeanor punishable by a fine of not less than $1000 nor more than $10,000 or by imprisonment for not more than two years, or by both fine and imprisonment. Each day a violation hereunder exists shall be a separate offense.

'(3) In addition to any fine imposed by a violation of this section, every person convicted hereunder shall pay to the Director a sum sufficient to reclaim the area mined.'

The Bill's title was also amended to conform with the amendment to the body of the Bill; the title amendment appears in capital letters:

'. . . to ban strip mining on land owned by the State IN CERTAIN INSTANCES, TO PROVIDE THAT CERTAIN FUNDS MAY BE USED FOR THE PURCHASE OF PROPERTY RIGHTS and providing penalties for the violation thereof.'

Senate Bill 261, as amended, was enacted as Chapter 355 of the Acts of 1972, and originally codified as Code, Article 66C § 662(a-1). Significantly, the Bill's effective date was also amended from July 1, 1972 to July 1, 1973.

On June 1, 1973, Buffalo sought a further amendment of its strip mining permit (No. 161) to encompass additional acreage in the State Forest. By letter dated June 19, 1973, the Bureau of Mines informed Buffalo that the provisions of Chapter 355 required 'the stoppage of all open-pit mining of State-owned land as of July 1, 1973' and directed Buffalo to terminate its strip mining operations in the State Forest.

On June 28, 1973, George's Creek and Buffalo filed a Bill of Complaint for Declaratory Relief in the Circuit Court for Garrett County; they sought a declaration, among others, (a) that Chapter 355 did not require that all strip mining operations cease as of July 1, 1973; (b) that Buffalo's right to strip mine on land covered by Permit No. 161 prior to July 1, 1973 was not affected by the Act; (c) that Chapter 355 provided an exception to its proscription of the issuance of strip mining permits where the failure to issue such permits would result in an unconstitutional taking of property, and that since the prohibition of strip mining on the McMillen tract would constitute such a taking, Chapter 355 permitted such operations to continue until and unless just compensation had been paid; and (d) that if Chapter 355 was interpreted so as not to provide such an exception, but required either the prohibition of strip mining operations on land covered by Permit No. 161 as of July 1, 1973, or the denial of amendments to that permit to allow strip mining on other areas of the McMillen tract after that date, it would constitute a taking of property without payment of just compensation in violation of the state and federal constitutions. Answering the Bill of Complaint, the State maintained that Chapter 355 was a proper exercise of its police powers, that it required that all strip mining on State-owned land cease on July 1, 1973, and that such a prohibition did not constitute a taking of the property of George's Creek and Buffalo, requiring monetary compensation.

Evidence was adduced at the trial which showed that strip mining operations necessarily involve the disturbance of large amounts of land; that Buffalo utilizes bulldozers, draglines, shovels, and frontend loaders in its strip mining operations; that when stripping a new area, Buffalo clears the surface to the base soil, removing all trees and vegetation; that the cleared surface material is bulldozed to the out-slope of the toe of the soil; that the topsoil is saved and is usually pushed off with the bulldozer to the high wall said after this area is cleared of vegetation; that follwoing removal of the topsoil, the dragline will begin a cut and the rock and overburden above the coal is stripped...