Molinary v. Powell Mountain Coal Co., Inc., 91-0007-B.

• Decision Date: 24 May 1995
• Docket Number: No. 91-0007-B.,91-0007-B.
• Citation: 892 F. Supp. 136
• Parties: Jo D. MOLINARY, Trustee of the Susan Pruitt Cloud Land Trust, Plaintiff, v. POWELL MOUNTAIN COAL COMPANY, INC., d/b/a Wax Coal, Defendant.
• Court: U.S. District Court — Western District of Virginia

892 F. Supp. 136

Jo D. MOLINARY, Trustee of the Susan Pruitt Cloud Land Trust, Plaintiff, v. POWELL MOUNTAIN COAL COMPANY, INC., d/b/a Wax Coal, Defendant.

No. 91-0007-B.

United States District Court, W.D. Virginia, Big Stone Gap Division.

May 24, 1995.

Walton Davis Morris, Jr., Charlottesville, VA, Daniel Robert Bieger, Copeland, Molinary & Bieger, P.C., Abingdon, VA, for Jo D. Molinary.

Timothy Ward Gresham, Penn, Stuart, Eskridge & Jones, Abingdon, VA, Stephen M. Hodges, Penn, Stuart, Eskridge & Jones, Abingdon, VA, for Wax Coal Co., Powell Mountain Coal Inc.

MEMORANDUM OPINION

WILSON, District Judge.

This is a class action citizen suit for damages pursuant to § 520(f), 30 U.S.C. § 1270(f), of the Surface Mining Control and Reclamation Act (SMCRA), by class representative Jo. D. Molinary (Molinary) against Powell Mountain Coal Company, Inc., d/b/a Wax Coal (Wax Coal).¹ The class — known as the "Pruitt heirs"—owns more than a 99 percent undivided interest in the surface-rights to a fifty acre tract of land located in Lee, County, Virginia that Wax Coal auger mined without lawful authority. The Virginia Division of Mined Land Reclamation (DMLR) issued Wax Coal a permit to auger mine the property but later revoked that permit and ordered the property reclaimed when it determined that Wax Coal's "right of entry" documents failed to list all record surface owners. This court submitted a single factual question to the jury for its resolution—whether Molinary had proven by a preponderance of the evidence that Wax Coal was wilful, reckless, or grossly negligent in failing in its permit application to list all the surface owners and in failing to supply documentation that it had the legal authority to extract coal from the Pruitt heirs tract by the auger mining method. The jury found, in effect, that Wax Coal misled DMLR. The court memorializes various rulings and awards damages in accordance with the jury's findings.

I.

In February of 1990, Wax Coal applied to DMLR for a permit to conduct surface coal mining operations in an area that included part of the tract in question, known as the Pruitt heirs tract. The tract is mountainous and has little commercial value apart from timber and mineral rights. Years before the advent of the SMCRA, the area augured had been surfaced mined by parties unrelated to Wax Coal. The area had not been reclaimed, except by nature, leaving a bench and highwall. Members of the class use the property primarily for recreational purposes — hunting, hiking, camping and the like. Wax Coal owns the mineral rights by virtue of an 1887 severance deed. Wax coal also has an approximate .14% undivided interest in the surface estate. Class members owned the rest. In its application, Wax Coal listed "Pruitt Heirs" as the surface owners of the tract but failed to list the individual owners. Wax Coal also informed DMLR that it had obtained a legal opinion that no lease was required from the surface estate's other owners. Operating on that information, DMLR issued a permit to Wax Coal. Wax Coal then mined, despite strong on site objections by numerous class members, 4423.51 tons of clean coal by the auger mining method from the tract and sold it for $190,122.46. It also hauled 12,321.70 tons of coal from other tracts across the Pruitt heirs' tract.

In November 1990, DMLR determined that Wax Coal had acquired its permit in violation of the state permit requirements — specifically, that Wax Coal's right-of-entry documents failed to list all record owners. As a result, DMLR revoked Wax Coal's permit, issued a cessation order against Wax Coal, and ordered Wax Coal to reclaim the tract.² On January 16, 1991, Molinary filed the present suit under the SMCRA's citizen suit provisions, § 1270(f), for alleged damages from Wax Coal's mining operation before the permit was revoked.

II.

Wax Coal contends that "paper violations"—violations in the permitting process as distinguished from violations of environmental performance standards — are not actionable under 30 U.S.C. § 1270(f). The court finds that contention only partially correct. Section 1270(f) makes actionable all violations of rules, regulations, orders or permits issued under the SMCRA that result in injury.³ It makes no distinction between violations in the permitting process that result in injury from permit violations or violations of environmental performance standards that result in injury. The key is injury. If there is no attendant injury to property, there is no right of action under § 1270(f). Thus, trivial, immaterial omissions by permit applicants are not actionable. Conversely, significant, material violations — those that result in real harm are actionable. The wrongful mining of land through manipulation of or deception in the permitting process is no "mere" paper violation; it is, thus, a violation actionable under § 1270(f).

Nevertheless, the court views § 1270(f) as a potential source of conflicting adjudications between the courts on the one hand, and the state and federal regulatory authorities responsible for administering the SMCRA on the other. Congress did not intend for the courts to usurp the regulatory authority and discretion of the Secretary and the states under the guise of the citizen suit provisions of § 1270(f). This case, however, does not expand the parameters of congressionally authorized citizen suits by entangling the court in the administrative prerogatives of the Secretary or DMLR. Wax Coal surfaced mined without lawful authority; DMLR revoked Wax Coal's permit and ordered it to reclaim the land; and a jury found that Wax Coal acted wilfully or recklessly or without regard for the consequences of its actions.⁴

III.

The SMCRA requires permit applicants seeking to surface mine coal on property where the mineral estate has been severed from the surface estate to submit the written consent of the surface owner or a conveyance that expressly grants or reserves the right to surface mine. 30 U.S.C. § 1260(b)(6)(A) & (B). Virginia's regulatory program implementing the provisions of SMCRA requires an applicant to list the name and address of each legal or equitable owner of the surface estate and to describe the legal rights permitting the applicant to enter and surface mine. Va Regs. §§ 480-03-19.778.13(e) and 480-03-19.778.15(b). Wax Coal maintains that its failure to supply complete "right of entry" information is immaterial because its co-ownership of the surface rights and its deed to the coal gave it the right to mine coal by the auger method without the consent of all surface owners. The court disagrees.

In Virginia, a tenant in common cannot change or alter the common property to the detriment of his cotenants without his cotenants' consent. The court finds Chosar Corporation v. Owens, 235 Va. 660, 370 S.E.2d 305 (1988), instructive. In Chosar, a group of cotenants owning a fractional interest in a 61-acre tract sought to enjoin Chosar Corporation — an 85 percent owner—from mining the tract and from hauling coal across the land. The court held that "the extraction of coal from the ... tract is a material and continuing destruction of the very substance of the mineral estate. Chosar had no right to remove coal from the common property without the consent of the remaining surface owners." 370 S.E.2d at 307-08. Accordingly, in the present case, Wax Coal, a negligible .14% owner of the surface estate, had no right by virtue of its cotenancy to auger mine the Pruitt heirs tract without the consent of the remaining surface owners.

Wax Coal also contends that the language of the 1887 deed gave it the right to mine coal by the auger method. The court, once again, disagrees. In Phipps v. Leftwich, 216 Va. 706, 222 S.E.2d 536 (1976), the Virginia Supreme Court held that a coal severance deed executed before the advent of surface mining technology in the area where the land is located conveys only the right to remove coal by underground methods. According to the Virginia Supreme Court:

There is uncontradicted evidence that strip mining was unknown in Dickenson County in 1902 and that the only method of mining then recognized in the area was underground mining, such as shaft, deep, or drift mining. Thus, underground mining was the only kind of coal mining within the contemplation of the parties to the 1902 deed, and therefore, the broad language of the deed is applicable only to underground mining.

Phipps v. Leftwich, 222 S.E.2d at 540 (emphasis added). In Phipps, the severance deed for the Dickenson County, Virginia tract was executed in 1902 — almost fifteen years after the deed was executed that created the coal estate at issue in this case in nearby Lee county, Virginia. It follows that the only rights that the severance grantor conveyed were (1) the coal in place and (2) the right to remove it by underground mining methods. The severance grantor retained the right to use the surface without interference from the mineral owner, other than those surface effects associated with underground mining methods that did not remove subjacent support for the surface. See Stonegap Colliery Co. v. Hamilton, 119 Va. 271, 89 S.E. 305, 310 (1916).⁵ For the reasons stated, Wax Coal's violations of the permitting process were material.

IV.

The parties have submitted the issue of damages to the court. At an earlier stage of the case, Wax Coal moved in limine for the court to articulate the method for determining the measure of damages. The court found that motion premature. Nevertheless, the court noted:

Assuming that Molinary's allegations are true, and Molinary proves that Wax Coal acted willfully, the appropriate measure of damages might include any actual damage as well as any benefit Wax Coal derived from the unlawful use of the land. However, at this juncture, any determination as to how to measure that benefit would be premature. Moreover, on a fully developed factual record a more appropriate remedy might

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