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Coal company can’t dump waste water into mine

Rationale for an injunction: actions render mines worthless

Consolidation Coal Co.’s Buchanan No. 1 mine is by far the largest in the state.

Big enough, in fact, that the mine accumulates so much water that pumping it directly into the Levisa Fork of the Big Sandy River would put more chloride and iron in the stream than it can safely absorb.

In recent years, the company has instead pumped the mine water into three abandoned mines.

However, the Supreme Court of Virginia ruled on June 6 in Levisa Coal Co. v. Consolidation Coal Co. (VLW 008-6-052) that the company has no right to dispose of the water in the third mine, for which Levisa Coal Co. has the mineral lease. The reasoning of the opinion would appear to apply to the other two mines. Another entity, three limited liability partnerships known collectively as Big Vein, has the mineral lease for the first two mines, Beatrice and VP1.

Consolidation no longer is pumping water into the first two mines, and a suit seeking $3.25 billion in damages is pending in Buchanan County Circuit Court.

The case involving the third mine, known as VP3, is moving faster because Levisa sought a preliminary injunction to block Consolidation from pumping water into it. Levisa also asked for a declaratory judgment that Consolidation had no right under a somewhat complex series of deeds and leases to dump the water into VP3.

40-year-old lease

In 1968, Levisa granted Consolidation’s wholly owned subsidiary, Island Creek Coal Co., the right to remove coal from the mine, along with the right to “dump water and refuse on said premises” that Levisa “owns and has the right to lease.”

Although Island Creek stopped mining coal in 1998, the lease is still in effect. Levisa does not contend that Island Creek is in violation of the lease, but it asserts that recoverable deposits of coal and coal bed methane remain on the site.

Because the water pumped from Buchanan mine was rendering those deposits worthless, Levisa’s attorneys contended it is entitled to an injunction to stop the dumping. Consolidation countered that Island Creek had the right to allow it to pump water into VP3 and to convey that right to its parent.

Buchanan County Circuit Judge Keary R. Williams held a two-day hearing in November 2006 and granted Consolidation’s motion to strike Levisa’s evidence on the claim for injunction. He also found that Consolidation had a right to dump the water into the mine.
The Supreme Court ruled that Williams was wrong on both counts. Island Creek’s lease from Levisa allowed it to dump water only from the property covered by the lease, Justice Lawrence L. Koontz Jr. wrote for a unanimous court. It did not allow the dumping of water from other property, Koontz said.

But Koontz said disposing of the case on a motion to strike left the high court with an insufficient record to decide whether Levisa Coal is entitled to injunctive relief. The issue on remand is entitlement to a permanent injunction because grounds for temporary relief already has been established, he said.

“In that regard, the circuit court may have the benefit of additional evidence on the issue of the damages that inundation of the VP3 Mine may cause to Levisa Coal’s interests in the gaseous mineral estate associated with the VP3 min and the adjoining strata,” Koontz wrote.

“Similarly, Consolidation Coal must be afforded the opportunity to present evidence to support its contention that Levisa Coal has an adequate remedy at law in the form of monetary damages … ,” he said.

He noted that Levisa has “a high burden of showing that the failure to enjoin the alleged improper action will result in irreparable harm for which the law will afford [it]no adequate remedy.” That burden is somewhat lessened because the case involves an interest in real estate rather than personal property, he said.

J. Scott Sexton, a Roanoke attorney who represents Levisa Coal, said the litigation has been colored by concern that an injunction might require Consolidation to shut down the mine.

Sexton and Everette G. Allen Jr., a Richmond attorney who represents Consolidation, said the company is considering a treatment plant that would remove the chloride so that the mine water could be discharged into the Levisa Fork rather than stored in the mines.

Allen said he expects to file a petition to have the Supreme Court reconsider the decision. The petition will contend that the factual record was inadequate because the case was resolved on a motion to strike and that a necessary party, Island Creek, was not named as a defendant in the case.

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