White, Linda E.

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University of Kentucky

Journal of Natural Resources & Environmental Law Volume 5 Issue 3 Journal of Mineral Law & Policy, volume 5, issue 3 Article 14 January 1990 Valid Existing Rights: Balancing the Interests Linda E. White Office of the Attorney General, State of Colorado Follow this and additional works at: https://uknowledge.uky.edu/jnrel  Part of the Administrative Law Commons Right click to open a feedback form in a new tab to let us know how this document benefits you. Recommended Citation White, Linda E. (1990) "Valid Existing Rights: Balancing the Interests," Journal of Natural Resources & Environmental Law: Vol. 5 : Iss. 3 , Article 14. Available at: https://uknowledge.uky.edu/jnrel/vol5/iss3/14 This Article is brought to you for free and open access by the Law Journals at UKnowledge. It has been accepted for inclusion in Journal of Natural Resources & Environmental Law by an authorized editor of UKnowledge. For more information, please contact UKnowledge@lsv.uky.edu. brought to you by COREView metadata, citation and similar papers at core.ac.ukprovided by University of KentuckyValid Existing Rights: Balancing theInterestsLINDA E. WHITE*I. REGULATION BY OBJECTIVE: GENERAL COMMENTSAt best, governmental regulations are complex, tedious toread, and difficult to apply no matter what the subject matterof the regulation. Regulations become more comprehensible,however, when the objective is known. Like the "King's Peace"the objective is best defined by the conditions which should existwhen the regulations are followed.Once such an objective is defined, some flexibility must bebuilt into the regulatory system to address each situation. Thisis accomplished by promulgating regulations which are moregeneral than specific, which are not conceived to address everysituation the regulatory authority can imagine, but rather aresufficiently encompassing to address situations which cannot atthe time be imagined.A limitation on flexibility, however, is certainty. That is,regulations must be specific enough to prevent confusion as towhat is required under the law. The ideal environmental regu-lations allow industry to accurately assess the economics of aproposed operation while those affected by the operation areable to assess its effect on the environment.It is especially important that national standards be suffi-ciently stringent to enforce the objective expressed in the law.This is critical to the emergence of an enlightened standard ofbehavior as to those regulated, as well as the regulatory authorityand the environmental community.* First Assistant Attorney General, Office of the Attorney General, State ofColorado (Head of Water Unit). B.A. 1972, M.A. (Humanities) 1976, State Universityof New York at Buffalo; J.D. 1976, State University of New York at Buffalo LawSchool.The views expressed herein are those of the author and are not necessarily thoseof the State of Colorado or any of its agencies.JOURNAL OF MINERAL LAW & POLICYA stringent national standard allows for the development ofwhat I refer to as a "corporate sensibility." Corporate sensibilitymay be defined as the allowance for altruistic behavior withinthe framework of an organization which exists solely for thegeneration of profit.' Altruistic behavior on the part of a busi-ness organization is best described as any activity not related togenerating a profit, but rather to alleviating negative effectscaused by the profit-generating activity. All the niceties of mit-igation and reclamation fall into this category.Corporations and other businesses can afford altruistic be-havior only to the extent that the burden it creates is borneproportionately by its competitors. This is particularly true innational markets in which a competitive disadvantage (e.g. morestringent environmental regulations) in the state in which thecorporation is doing business hinders the corporation's abilityto offer its product at a competitive price in the national orinternational market. 2Lack of a national standard as to regulation and enforcementleads to a destructive process which I refer to as "environmentalleveraging." State government attorneys are likely to be familiarwith this concept. For example, an enforcement action is broughtby the state regulatory authority to enforce an environmentallaw or regulation more stringent than those imposed in otherstates with similar resources. If the company against which en-forcement is sought lacks a good defense, it may then respondwith a legal argument sufficient to delay, but probably not towin in the state forum.The company may then apply various kinds of pressure tothe regulatory authority. It may convey a message in settlementnegotiations, discovery responses, or by exerting political influ-ence, that it will take its operations elsewhere if it cannot com-pete, and, furthermore, that the regulation sought to be enforcedis a major element of its inability to compete. A threat of filingbankruptcy is not uncommon, particularly when the adequacyof a bond is an issue.This ploy is especially effective in economically depressedareas where every job counts; and, in defense of the company'sI refer here to for-profit corporations such as those engaged in coal extraction.2 This situation is specifically addressed in the Surface Mining Control and Rec-lamation Act of 1977 (SMCRA), Pub. L. No. 95-87, 91 Stat. 445 (codified at 30 U.S.C.§§ 1201-1328 (1988)). See SMCRA § 101(g), 30 U.S.C. § 1201(g).[VOL. 5:657BALANCING THE INTERESTSposition it could have some merit in certain situations. It isdifficult to be certain of the environmental effects of this situ-ation. However, it is quite possible that stringency beyond thenational standard could allow local economic pressure exertedthrough political influence to limit the effectiveness of enforce-ment actions. While federal oversight prevents this practice fromcompletely eroding enforcement, the problems it creates for stateregulatory authorities waste scarce resources which could bemore constructively used elsewhere.A national standard can provide solid environmental protec-tion for all states while avoiding the pitfalls of state-by-statestandards.II. OBJECTIVES UNDER THE SURFACE MINING CONTROL ANDRECLAMATION ACT (SMCRA)General principles for drafting are useful only if combinedwith actual experience in the area to be regulated. If this ap-proach is used, and a reasonable balancing of interests devel-oped, litigation can often, or even usually, be avoided.Objectives applicable to valid existing rights (VER) issues areset forth in the Surface Mining Control and Reclamation Act of1977 (SMCRA):It is the purpose of the Act to-(a) establish a nationwide program to protect society and theenvironment from adverse effects of surface coal mining op-erations;(b) assure that the rights of surface landowners and otherpersons with a legal interest in the land or appurtenancesthereto are fully protected from such operations;(c) assure that surface mining operations are not conductedwhere reclamation as required by this act is not feasible;(d) assure that surface coal mining operations are so conductedas to protect the environment;(f) assure that the coal supply essential to the Nation's energyrequirements, and to its economic and social well being isprovided and strike a balance between protection of the envi-ronment and agricultural productivity and the Nation's needfor coal as an essential source of energy .... 3SMCRA § 102, 30 U.S.C. § 1202 (1982).1989-901JOURNAL OF MINERAL LAW & POLICYThe Office of Surface Mining Reclamation & Enforcement(OSMRE) has set forth its general objective in the discussion ofits proposed VER rule:4OSMRE intends to develop rules that are compatible withSMCRA, unambiguous, reasonable to administer, and, instriking a reasonable balance between legitimate competinginterests, reflective of good public policy and Congressionalintent.These objectives provide a framework on which to evaluatethe proposed regulations. As in a large number of governmentalregulations, the word balance appears both in the purpose setforth in the statutes,' and the preamble to OSMRE's 1988 pro-posed VER rule, quoted above.III. MEETING THE OBJECTIVES: OPTION 1: OWNERSHIP ANDAUTHORITYOf the two options provided in the 1988 proposed VERregulation, only Option 1 meets the stated objective.A. Avoidance of TakingsFifth Amendment takings of private property are avoided tothe extent possible under this option. As compared to Option 2,fewer rights to mine should be affected since, under Option 1,the right to mine need exist only at the time prohibitions becomeeffective. Under Option 2, however, the right to mine must beenhanced by necessary permits and the additional, and usuallysubstantial, investment required to obtain such permits.Whether a taking of VER has occurred under Option 1 wouldbe determined under state law. The same state law that governedthe expectations of investors can be used to measure what, ifany, compensable taking has occurred as a result of applyingthe standard in Option 1.The complexity of making the determination of whether ataking has occurred requires that state law be applied. Theproblem has been recognized by the Colorado Supreme Court:What constitutes a taking has proved to be a problem ofconsiderable difficulty . . . There is no set formula for deter-53 Fed. Reg. 52,379 (1988).SMCRA § 102, 30 U.S.C. § 1202(0 (1982)[VOL. 5:657BALANCING THE INTERESTSmining when justice and fairness require economic injuriescaused by public action be compensated by the govern-ment ....6The nuances of regulatory takings as opposed to inversecondemnation, and requirements concerning compensation canbe argued within the framework of a substantial body of lawwhich evolved in the process of addressing local conditions.There is a lengthy discussion of these issues in The Mill v. Stateof Colorado7.The existence of a well-developed body of law governingwhat constitutes ownership and authority and the conditions fordetermining a taking is a clear advantage of Option I overOption 2. The case law in existence which would be used tointerpret Option 2, on the other hand, is much more limited,and would permit less flexibility for the regulatory authority toaddress each individual situation.B. Applying Option 1 in the Permitting ProcessState agencies do not usually have the authority to makedeterminations of property disputes. Therefore, if a state agencywere confronted with an application that did not contain a clearindication of ownership and authority, or if the applicant'sownership and authority were contested by third parties, theissue would have to be decided by a state court. As a practicalmatter it would be necessary for the agency to obtain a stipu-lation extending the deadlines triggered in SMCRA by the filingof an application.8The applicant would then seek a declaratory order in court,the state agency being a nominal party in the action, and thecase could proceed to final decision with minimal participationby the state. The agency's action as to the ownership and au-thority issues would be guided by the court's decision.Option 2, on the other hand, would place a greater burdenon the state agency since the agency would make a decision priorto receiving guidance from court. In addition, because courtsordinarily defer to agency expertise in matters concerning per-6 Board of County Commissioners v. Flickeringer, 687 P.2d 975 (Colo. 1984).Nos. 87CA0502, 87CA0838 (1989) (appeal pending).8 SMCRA § 510, 30 U.S.C. § 1260 (1988). In the absence of such a stipulation,the agency could simply deny the permit.1989-901JOURNAL OF MINERAL LAW & POLICYmitting, it would be more likely to play an active role in ensuinglitigation.In general, applying Option I would conserve agency re-sources and keep agency focus on reclamation rather than legalissues.C. Method of MiningOne issue which must be addressed in Option I is the ap-parent confusion over the phrase "by the method he intends touse.'' 9 The mining technology to be employed should not beconfused with what should be an analysis of rights connectedwith surface mining or underground mining. It appears thatsubsidence is the real concern; however, the subsidence problemmust be specifically addressed. This cannot be done in the limitedsense intended under the phrase "method he intends to use."Therefore, I suggest that the phrase be clarified by addingafter it "that is, either underground or surface." To simplydelete the phrase might give rise to an argument that SMCRAhad preempted clauses in deeds which provided for either surfaceor underground mining, thus expanding VER beyond originallimitations.III. COLORADO PERSPECTIVEA. General ConcernsNo litigation has taken place under Colorado's "all permitstest" for VER. This is probably because mining in Colorado isnow done primarily on public land. Few structures are likely tobe affected. In addition, subsidence is less dramatic since, ingeneral, Colorado coal seams are overlain by harder rock thanseams in eastern states.A major concern for Colorado in the development of VERregulations is the need to develop consistent regulations to gov-ern the numerous mines extracting minerals other than coal.Case law which arises under VER regulation applicable to coalwill probably be cited as controlling for subsequent cases in-volving other types of mines. To what extent parallel or consis-tent VER regulations for both coal and other minerals areo 53 Fed. Reg. 52,374, 52,377 (1988).[VOL. 5:657BALANCING THE INTERESTSnecessary has not been investigated or analyzed. Subsidence is-sues not yet addressed in federal rulemaking would probably bea major consideration as to whether parallel regulations can beconsidered.B. Water RightsNo discussion of a Colorado perspective could be completewithout mentioning water rights.Where water rights will be impacted by mining it may wellbe that an economic analysis of the proposed operation's effecton water rights will be dispositive of all other issues. That is, ifvaluable water rights would be seriously impacted by the pro-posed operation it may well be uneconomic to mine. An analysiswould have to be site specific and include not only the rightdirectly affected, but also the rights of others deriving from theexisting hydrologic regime. Some factors to be considered are:effect on the aquifer or stream system, altered pattern of returnflows, change in place of diversion or use, and existing exchangesthat could be impacted.Water rights appear to be protected by the provisions ofSMCRA Section 71710 however, in National Wildlife Federationv. Hodel,I1 this protection was limited. A panel of the D.C.Circuit held that the requirement to replace affected water sup-plies was not applicable to underground mines. 12 This limitationleaves a major gap in water rights protection since such rightsmay be damaged as much by underground mines as surfacemines, with the predictability of such damage being more diffi-cult to determine before the beginning of the mining.Again, proposed subsidence regulations will be a major fac-tor in the economic analysis as the more subsidence is limited,the less likely it becomes that a water right will be impacted.Conversely, as subsidence is limited the taking issue becomes agreater concern, and a regulatory taking might then exist whereunder less stringent subsidence regulations the operation wouldsimply have not been economically feasible." SMCRA § 717, 30 U.S.C. § 1307 (1988).This section deals with water rights and replacement, and requires the coal mine operatorto replace the water supply under certain conditions.839 F.2d 694 (D.C. Cir. 1988)2 Id. at 753.1989-901

Valid Existing Rights: Balancing the Interests

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