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Energy and Environment Monitor

Federal Court In WV Voids Severance Deed Waiver Because Longwall Mining Not Contemplated In 1902

February 18, 2016

By: Robert G. McLusky

Surface owners have the right of “subjacent support”—to have their surface left intact—unless that right has been waived. In West Virginia, the right of support can be waived expressly (by saying that mineral owner has no obligation to support the surface and no liability for failing to support it) or by necessary implication (by granting all of the coal and right to remove all of the coal).  Early last century, the State Supreme Court observed that it is “common knowledge in the coal fields that removal of all of a seam of coal … is likely to cause surface disturbance.” Simmons v. Star Coal & Coke Co,. 167 S.E. 737 (W.Va. 1933). See also Griffin v. Fairmont Coal Co., 59 W.Va. 480 (1905). 

McElroy Coal Co. has mining rights under a 1902 severance deed. The deed included a grant of the coal mining rights:

Together with all the rights and privileges necessary and useful in the mining and removing of the said coal, including the right of mining the same without leaving any support for the overlying stratas and without liability for any injury which may result to the surface from the breaking of said strata….

(Emphasis supplied.) This is an example of an “express” waiver of damages for subsidence.  In Schoene v. McElroy Coal Co., 2016 WL 397636 (N.D. W.Va. January 29, 2016), though, Judge John Preston Bailey held that this language does not insulate McElroy from a common law claim for damages caused by longwall mining.  The court determined that longwall mining was not contemplated at the time of the severance deed in Marshall County, West Virginia and, therefore, liability for longwall-induced damage was not extinguished by the severance deed.

The court’s application of the “contemplation” rule was unique. The concept has been used in the past to invalidate the use of so-called broad form deeds to authorize surface mining.  The logic of those cases was that surface mining is of relatively recent origin and is so different than underground mining in its effects that its use could not have been contemplated when surface and minerals were severed at the turn of the last century.  However, the application of the contemplation rule has generally been rejected as a means of challenging mine technologies which, while themselves not existing at the time of the severance deed, create damages (subsidence) which were known to exist at the time of severance.

What is even more surprising is that the court rendered its ruling even though the plaintiffs agreed with McElroy that the deed language cited above barred their common law claim.  McElroy filed a motion for summary judgment, arguing that the deed waiver barred plaintiffs’ common law claim for subsidence damages.  In their response, the plaintiffs agreed as follows:

The Plaintiffs agree, after additional discovery, research and consideration, that the matters for resolution in this case are much more limited than those originally pled in their Complaint and Amended Complaint. The Plaintiffs now agree, and do not dispute, that there is a waiver of subjacent support included within the title chain to their property.  The Plaintiffs, therefore, acknowledge and agree that they cannot pursue traditional common law property damage claims related to the mining operations conducted under their property.  The Plaintiffs therefore agree that Count 1 of their complaint would not be viable claim for trial purposes in this matter. 

(Emphasis supplied.) The court, however, refused to accept what it characterized as a stipulation between the parties, stating that:

While the parties are free to stipulate facts, this Court does not believe that the parties can stipulate to legal principles which the Court believes to be erroneous. This Court will not apply law which it believes to be improper.

The court then apparently conducted its own legal research and factual inquiry into historic mine practices to construct an argument never advanced by the parties. Beyond upsetting settled law, the opinion will play havoc with property rights lawyers.  The court observed that:

This court is not suggesting that the validity of the waiver prevents the mining of the coal. The Lessors clearly intended for the coal to be removed.  The holding is limited to a ruling that the coal producer must pay the landowner for all of the damage caused by the mining operations.

Id. at n. 9.  What this means about the allowable forms of mining is unclear.  It is impossible to tell from the opinion whether the court simply did not consider injunctive relief because the mining had already occurred, whether the court believed that injunctive relief is inappropriate where damages are available as a remedy or whether the court meant to say that only mining that does not contemplate subsidence can go forward. 

McElroy has submitted a request that the court reconsider its decision or allow McElroy to take an immediate appeal to the Fourth Circuit Court of Appeals.

This article was authored by Robert G. McLusky, Jackson Kelly, PLLC.

 

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