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Energy and Environment Monitor

Supreme Court's Answer to Certified Questions Preserves Right to Longwall Mine in West Virginia

April 19, 2018

By: Chris M. Hunter

The West Virginia Supreme Court recently issued a decision upholding the ability of mine operators to rely on severance deed waivers for the right to subside the surface without liability for common law claims and clarifying that mere subsidence damage is not, itself, a violation of the West Virginia Surface Coal Mining and Reclamation Act.

The Court was compelled to reaffirm seemingly well-settled principles of state law by a series of unpublished opinions issued by the Federal District Court for the Northern District of West Virginia, which called into question the ability of mine operators to rely on severance deeds as a legal basis for employing longwall miners. In responding to questions certified to it from the Fourth Circuit, the West Virginia Supreme Court has now held that: 

 

  1. A clear, unambiguous waiver of subjacent support prohibits a surface owner from pursuing a common law claim for loss of support arising from subsidence;
  2. Surface owners damaged by an operator’s violation of a surface mining rule, order, or permit may pursue monetary damages;
  3. Monetary damages include damages for annoyance and inconvenience;
  4. The surface owner gets to choose between the available remedies of repair of subsidence damage or compensation for diminution in value resulting from subsidence.

I.    Procedural History.

We’ve previously written about this case here. To briefly recap, in 2012, McElroy Coal Company (“McElroy”) longwall mined beneath the Schoene property.  McElroy’s mining rights derived from a 1902 severance deed granting an express right to subside the surface “without leaving any support for the overlying stratas and without liability for injury….”  The Shoenes later sued McElroy, alleging both statutory and common law claims related to subsidence damage. 

McElroy moved for summary judgment as to the common law claims, arguing that the waiver contained in the severance deed extinguished the Schoenes’ right to pursue common law claims and that their sole remedy was provided by the West Virginia Surface Coal Mining and Reclamation Act (“WVSCMRA”). In denying McElroy’s motion for summary judgement, the district court ruled that common law deed waivers of the right to subjacent support did not insulate underground mine operators from common law damage claims for subsidence where the mining technology—as opposed to the possibility of subsidence itself—was not contemplated at the time the mineral and surface were severed.  After a jury awarded the Scheones $547,000 in damages, McElroy appealed to the Fourth Circuit.  The Fourth Circuit then certified four questions relevant to West Virginia’s subsidence laws to the West Virginia Supreme Court. 

II.    The West Virginia Supreme Court’s Opinion.

        A.    Waiver of Subjacent Support.

In answering the Fourth Circuit’s first certified question, the court held that McElroy’s deed waiver was clear and unambiguous, and that the company was insulated from common law damage actions. Contrary to the Northern District court’s ruling, the State Supreme Court held there is no requirement for the technology that causes subsidence—in this case, longwall mining—to have been contemplated at the time of the severance. This ruling ensures that mine operators using longwall technology may continue to obtain mining permits under “standard” severance deeds that waive the right of subjacent support—even where the deeds predate the advent of modern longwall mining.

        B.    Remedy for Injury Under WVSCMRA.

WVSCMRA provides for a statutory claim to recover damages where a surface owner can show a coal mine operator’s violation of the Act. W.Va. Code § 22-3-25(f). WVSCMRA’s implementing state rules require mine operators to correct material subsidence damage to surface lands and either correct material damage to surface structures or compensate the surface owner for the diminution in value to such structures resulting from subside damage. A fairly significant aspect of the Court’s opinion is its observation that subsidence damage itself is not necessarily a violation of the Act.  Op., p. 19.  Rather, when underground mining causes material damage, the operator’s duty to repair or compensate is triggered; no violation occurs until the operator fails to repair or compensate. 

In this case, though, the Schoenes did not argue that the material damage itself was the violation of a rule, permit, or order; rather, they argued that McElroy violated its duty to repair or compensate “by dragging its feet and obstructing the compensation process for nearly three years.”   While it is important for the court to say definitively that material damage is not a per se statutory violation, clarity regarding precisely when an operator crosses the threshold from merely having a duty to repair or compensate to being in violation of the legal requirement to repair or compensate would undoubtedly be welcome from operators, regulators, and surface owners alike.  But the factual question of whether the Schoenes successfully proved a violation of a rule, order, or permit was not before the court. 

        C.    Damages Recoverable Under WVSCMRA.

W.Va. Code § 22-3-25(f) provides an action for “damages” upon a showing of a WVSCMRA violation. Citing Black’s Law Dictionary, the court found that the term, “damages,” refers to monetary compensation for an injury to person or property.  Op., p. 25.  Thus, the court held that a claim for “damages” for a violation of WVSCMRA includes monetary damages and is not limited to the specific injunctive relief spelled out in the statute or rules.  The court did not, however, specify whether damages are available to surface owners for emotional distress or whether a jury may consider punitive damages.

        D.    Election of Remedies.

Finally, the court addressed the question of who gets to choose between repair of the damages or compensation for diminution of value: the surface owner or the operator? Both parties agreed that West Virginia law was silent on this issue.  McElroy argued that West Virginia’s surface mining rules (W.Va. Code St. R. §§ 38-2-16.c & 16.c.2) mirrored federal surface mining regulations and that the court should, therefore, defer to guidance from the Federal Office of Surface Mining, which has stated consistently that the choice between alternative remedies should be given to the operator.  In addressing McElroy’s arguments regarding federal law, the court stated that West Virginia’s program need not be identical to the federal program—it need be only “at least as stringent” as the federal program. Op., p. 27, fn. 7.  But the court failed to acknowledge that, since 1994 West Virginia law has prohibited state agencies from adopting state rules that are more stringent than parallel federal rules except where the agency has made an express finding of the need to do so. See W.Va. Code § 22-1-3a.

The Schoenes, on the other hand, argued that the court should resolve the issue in their favor by interpreting the Act broadly and liberally in favor of providing surface protection for landowners. The court noted that seven of the eight purposes of the Act (W.Va. Code § 22-3-2(b)(1)-(8)(1994)) were related to protecting the public from the impacts of coal mining and ultimately held that the surface owner of the damaged structures gets to choose between repair or compensation.  Op., pp. 30-31. 

III.    Dissenting Opinions.

Justice Ketchum and Justice Workman both filed dissenting opinions. Justice Ketchum dissents from the ruling that the deed insulated the operator from a common law claim. He would have affirmed the district court’s ruling that the damage release in the severance deed does not extend to damages caused by technologies not contemplated at the time of severance.  In support of his dissent, he cites the “extensive research” that the trial judge did to determine that longwall mining was unknown in Marshall County at the time of severance. Justice Ketchum did not, however, discuss the fact that the Plaintiffs had conceded this issue at the district court level, meaning the trial court judge performed his own research and made his ruling without giving the parties the opportunity to respond or to supplement the record with evidence regarding mining technology used in the area at the time the deed waiver was executed.

Also, in a separate opinion, Justice Workman dissents from what she viewed as a failure of the majority to clearly answer the certified questions about what statutory actions are allowed. Justice Workman views WVSCMRA’s citizen suit provision (§ 22-3-25) as providing two distinct causes of action: one compelling compliance with a rule, order, or permit and one for damages resulting from a violation of a rule, order, or permit. The remedy for proving entitlement to enforcement of a rule, order, or permit is simply enforcement of the rule, permit, or order, plus the potential to recoup the costs of litigation in the action to compel compliance.  See Dissenting Op. at 8, citing W.Va. Code § 22-3-25(d).  Broad monetary “damages,” on the other hand, are only available under the citizen suit provision for established violations of the Act.   Id. citing W.Va. Code § 22-3-25(f).  Justice Workman also chastises the majority for not addressing the question of whether a mere dispute about repair value is tantamount to a violation of the Act, notwithstanding the fact that the issue was not directly raised as a certified question.  Id., pp. 7-8, fn. 4.

This article was authored by Christopher M. Hunter, Jackson Kelly PLLC
 

 

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