AG asked to be part of coal suit

A federal judge has invited Virginia Attorney General Ken Cuccinelli to weigh in on a coal rights case in Southwest Virginia, even as Cuccinelli continues to defend his office’s actions in a similar lawsuit pitting landowners against large energy companies.

U.S. District Judge James P. Jones of Abingdon opened the door Aug. 1 to allow Cuccinelli to defend the constitutionality of a state law that, as interpreted by coal companies, would expand the rights of those companies to fill abandoned mines with waste water from other mining operations.

The issues could affect thousands of landowners in Buchanan County, according to the lawyer for the plaintiffs in Graham v. Consolidation Coal Co.

At issue: The right to store waste

The plaintiff landowners claim they are owed damages for the way Consolidation Coal Co. is using the empty mine space under their land. CONSOL acknowledges it pumped water out of a working mine and placed it into empty spaces, called “mine voids,” left by the removal of coal in a closed mine.

The coal rights for the plaintiffs’ properties were sold in 1887, but the landowners say they are entitled to  damages because the coal company had no right to later pump millions of gallons of allegedly contaminated water into the empty mine space underneath their land.

The same dumping practice led to a 2008 Virginia Supreme Court opinion limiting the rights of coal companies and a later $75 million settlement between CONSOL and other landowners.

Company relies on new language

The General Assembly shifted the playing field in 2012 with House Bill 710, allowing mine owners to fill the voids with waste material from any mine. If the property in question no longer has a mining permit, the coal company has to pay “reasonable compensation” for the consent of the landowner.

The bill passed the House and Senate with margins of about 2-to-1.

Sen. Phillip R. Puckett, D-Tazewell, said he pushed for changes to benefit landowners. As passed, the bill says the coal company “must, in good faith, negotiate with the land owners to determine just and proper compensation,” Puckett said in a constituent report. If the two sides do not agree, the landowner can go to court and a judge can determine fair compensation, Puckett said.

Landowners rely on prior law

The four landowners say the statute does not apply to them because their rights were established before the General Assembly began legislating the use of mine voids. They sued for trespass and other claims in January, asking for millions in damages. They say the contaminated water under their land interferes with their ability to sell the coal, natural gas and coal bed methane that remains.

The landowners claim their rights were established when their predecessors sold the coal rights, well before the General Assembly passed the first law allowing the use of mine voids in 1981. The current statute still contains a proviso that it does not affect “contractual obligations and agreements” formed before July 1, 1981.

The landowners said the ownership of the empty mine space reverted to them once the coal company finished its mining operation and sealed the mine, unaffected by later statutes.

The coal company contended the current statute controls because the severance deed for the coal rights was not a “contractual obligation or agreement.”

The landowners counter that the coal company’s interpretation of the law makes it unconstitutional, with the law effectively transferring a “bundle of ownership rights” from the landowner to the coal owner. Such a transfer would be an illegal “taking” under the constitution, and would violate other constitutional provisions, the landowners say.

State invited to weigh in

With the landowners and the coal company butting heads over the constitutional issue, the court decided the state should have a chance to speak up.

Using a procedure provided by the U.S. Code, Jones certified to Cuccinelli that the constitutionality of a state statute was called into question and permitted the state to intervene to defend the statute.

Under the federal rules, Cuccinelli has 60 days to intervene if he chooses. His deadline would be Sept. 30.

Case invites comparison to existing controversy

Cuccinelli already is smarting from criticism related to his office’s last foray into a coalfields constitutional question.
In June, another federal judge said she was shocked by emails that appeared to show a staff lawyer in Cuccinelli’s office offering enthusiastic support for energy companies fighting gas royalty claims by landowners.

Cuccinelli’s office was involved in that case to defend the constitutionality of another state law, but the office also had an interest in getting gas ownership interests resolved promptly, a spokesman said. Cuccinelli has acknowledged the tone of the emails was “a bit overzealous,” but he has said the staffer did nothing wrong in sharing the information with lawyers for the energy companies.

The state inspector general is investigating whether the staffer overstepped any boundaries in offering legal advice to the energy companies.

Cuccinelli’s opponent in the Nov. election for governor, Terry McAuliffe, has run television ads focusing on the “overzealous” emails and CONSOL’s $86,000 contribution to Cuccinelli’s campaign.

The issue sparked a scathing Sept. 1 editorial in The Virginian-Pilot, which in turn prompted a sharp retort from Cuccinelli’s office.

The mine void lawsuit issue also will “no doubt” find its way into the gubernatorial debate, said T. Shea Cook, the lawyer for the landowners seeking damages from CONSOL.

Cook did not respond to requests for further comment.

Cuccinelli’s office said it was still reviewing Jones’ invitation to intervene.

A request for comment directed to a member of CONSOL’s legal team went unanswered by press time.