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1
IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
No 17-0148
STATE OF WEST VIRGINIA ex ret ERP ENVIRONMENTAL ~n~ J1 rn Petitioners MAR 202011 ~
llORY L PERRY n CLEfiK SUPREME COURT OF APPEAlA
Of WEST VIRGINIA
vs
HONORABLE WARREN D MCGRAW Judge of the Circuit Court of Wyoming County West Virginia WEST VIRGINIA DEPARTMENT OF ENVIRONMENTAL
PROTECTION AUSTIN CAPERTON in his role as Cabinet Secretary of the West Virginia Department of Environmental Protection AVARY H amp BETTY JO BAILEY
JASON A amp RONCHESKI BAILY NEWMAN amp KATHERINE BROWN ALGIE D amp KATHERINE COOK ALGIE R amp PEGGY ANN COOK DENNIS L COOK JR amp
MICHELLE COOK DENNIS L COOK SR amp BRENDA K COOK WILLIAM C amp REGINA COOK DONNA FRALEY MAY BETH FRALEY WESTLEY amp JUDY FRALET DOYLE LEE amp PHYLLIS JOHNSONL GLEN amp MARY JOHNSON
ELIZABETH L KENNEDY WILLIAM D amp JENNY LAFFERTY MICHAEL E MARCUM PAUL MARCUM HELEN M MCHINNIS ONNIE amp VIRGINIA
PAYNTER EARL R PELPHREY LARRY amp BECKY REED EVERETT amp FREDA SMITH WILLIAM L amp JESSICA N STEPP JACQUELYN A VHITLEY BILLY
RAY WILLARD TEDDY amp DOROTHY WYKLE
Respondents
WEST VIRGINIA DEPARMENT OF ENVIRONMENTAL PROTECTION AND CABINET SECRETARY AUSTIN CAPERTONS RESPONSE IN OPPOSITION TO
VERIFIED PETITION FOR WRIT OF PROHIBITION
Jason Wandling (WVSB 9259) West Virginia Department of Environmental Protection Office of Legal Services 601 57th St SE Charleston WV 25304 Telephone 304-926-0499 Facsimile 304-926-0461 E-mail jasonewandlingwvgov Counsel for Respondents West Virginia Department ofEnvironmental Protection and Austin Caperton as Cabinet SecretalY of the West Virginia Department of Environmental Protection
TABLE OF CONTENTS
I ASSIGNMENTS OF ERROR QUESTIONS PRESENTED 1
II STATEMENT OF THE CASE 1
III SUMMARY OF THE ARGUMENT 2
IV STATEMENT REGARDING ORAL ARGUMENT AND DECISION 3
V STANDARD OF REVIEW 4
VI ARGUMENT 4
A These Respondents agree with the Petitioners regarding the standard of review to be applied in this matter 4
B The Residents properly exercised a statutory right to pursue their actions in the Circuit Court of Wyoming County 4
C The Circuit Courts Order was properly issued because Eastern and ERP were not indispensable parties and because no real property interest of Eastern or ERP was at Issue 9
D The Circuit Court of Wyoming County was authorized to enter the Order at issue because it properly had venue 11
E The Circuit Court of Wyoming County properly granted the Residents Petition for a Writ of Mandamus because it found that the WVDEP had erred in carrying out its duties with regard to water replacement and because the primary jurisdiction doctrine much like the exhaustion of administrative remedies doctrine is inapplicable to this case 12
F Patriot and Easterns bankruptcy claims do not bar the State of West VirginiaS regulatory authority 15
VII CONCLUSION 17
11
TABLE OF AUTHORITIES
West Virginia Constitution
Article III sect 10 1
West Virginia cases
Ashby v City ofFairmont 216 WVa 527 607 SE2d 856 (2004) 8
Bonafede v Grafton Feed amp Storage Co 81 WVa 313 94 SE 471 (1917) 10
Dawelle v T-aders Fed Sav amp Loan Assn 143 WVa 674104 SE2d 320 (1958) 45
Ewing v Bd ofEduc OfCity ofSummers 202 WVa 228 503 SE2d 541 (1998) 8
ODaniels v City ofCharleston 200 W Va 711 712490 SE2d 800801 (1997) 910
Oneal v Stimson 61 WVa 55156 SE 889 (1907) 10
Shobe v Latimer 162 W Va 779 253 SE2d 54 (1979) 11 12
Simpson v Stanton 119 WVa 235193 SE 64 (1937) 10
State ex rei Bd ofEduc ofCnty OfPutnam v Beane 224 W Va 31 680 SE2d 46 (2009) 10
State ex rei Chesapeake and Potomac Telephone Co ofW Va v Ashworth 190 WVa 547438 SE2d 890 (1993) 8
State ex reI Bell At- W Virginia Inc v Ranson 201 W Va 402497 SE2d 755 (1997) 1314
Staten v Dean 195 WVa 57464 SE2d 576 (1995) 4
United Fuel Gas Co v Morley Oil amp Gas Co 101 WVa 73 131 SE 713 (1926) 10
III
Wiggins v Eastern Assoc Coal Corp 178 WVa 63 357 SE2d 745 (1987) 4
West Virginia statutes
WVa Code sect 14-2-2 13 11 12
WVa Code sect 22-3-17 3 12
WVa Code sect 22-3-24 156 14
WVa Code sect 22-3A-5 5 6 7 8
WVa Code sect 22B-I-7 5
WVa Code sect 53-1-2 1
West Virginia rules and regulations
W Va R Civ P 19 2 3 9
United States Constitution
Due Process Clause of the Fourteenth Amendment to the US Constitution 1
Federal statutes
11 USC sect 362 1 15
28 USC sect 959 15
IV
I ASSIGNMENTS OF ERROR QUESTIONS PRESENTED
The Assigrunents of Error or Questions Presented are framed by the Petitioners as
1 Whether the Respondent Judge exceeded his judicial powers by exercising subjectshy
matter jurisdiction over administrative claims that were not exhausted
2 Whether the Respondent Judge exceeded his judicial powers by issuing a
mandamus order without requiring the joinder of indispensable parties burdened by the order in
violation of West Virginia law the Due Process Clause of the Fourteenth Amendment to the us
Constitution and the West Virginia Constitution Article III sect 10
3 Whether the Respondent Judge exceeded his judicial powers by issuing a
mandamus order with respect to a discretionary state agency action or by failing to decline
jurisdiction under the primary jurisdiction doctrine
4 Whether the Respondent Judge exceeded his judicial powers in violation of the
exclusive venue statutes ofWest Virginia Code sectsect 53-1-2 and 14-2-2 by issuing a mandamus order
in an action against a state agency and its employees
5 Whether the Respondent Judge exceeded his judicial powers in violation of the
automatic stay under II USc sect 362(a) by issuing a mandamus order in an action commenced
and continued with respect to property interests of a debtor in bankruptcy
II STATEMENT OF THE CASE
The underlying facts at issue in this appeal are not in dispute However these Respondents
note facts regarding two issues
First ERP acquired the permit at issue as part of the bankruptcy and subsequent sale of
assets owned previously by Patriot Coal Corporation Patriot was the parent company of Eastern
Coal Company LLC the holder of the pennit at issue in this case Patriot filed for bankruptcy
1
protection on 12 May 2015 During the bankruptcy proceedings Patriot negotiated the sale of
substantially all its assets to two separate entities Blackhawk Mining LLC and VCLF VCLF is
the parent company of Petitioner ERP VCLF acquired the Kopperston No 1 Refuse
Impoundment including the SMCRA pennit at issue in this case
Patriots Fourth Amended Plan attached a copy ofthe assets VCLF planned to buy in a
document called the VCLF Asset Purchase Agreement (APA) That document specifically lists
the Residents notice of intent to sue the WVDEP that ultimately led to the Wyoming County
Circuit Court Order at issue in this appeal as a piece of unresolved litigation to be assumed by the
purchasers of Patriots assets
The Petitioner ERP is a wholly owned subsidiary of VCLF ERP was specifically
incorporated to fulfill the reclamation obligations associated with assets VCLF purchased out of
the Patriot bankruptcy including the pennit at issue here and all of its potential liabilities
Second the Petitioner omitted the date on which ERP assumed the permit at issue in this
appeal ERP became the pennittee on 28 July 2016
III SUMMARY OF ARGUMENT
The Respondent Residents did not fail to exhaust the administrative remedies available to
them in this matter The Respondent Residents properly exercised their rights to civil claims
pursuant to West Virginia Code sect 22-3-24 The administrative proceedings that ERP alleges to
have foreclosed the Residents civil suits were initiated in fact by the Residents notices of intent
to file suit against the WVDEP
ERP insists that West Virginia Rule of Civil Procedure 19 requires that Eastern or ERP
should have been named as parties to the Residents Petition for a Writ of Mandamus Rule 19
states that any persons who claim an interest in the real property at issue are indispensable parties
2
to the proceeding W Va R Civ P 19 and Petition at 23 However the Residents Petition for
a Writ of Mandamus and the Circuit of Court of Wyoming Countys Order did not in any way
claim an interest in Eastern or ERPs real property or affect Eastern or ERPs real property
Venue was properly established in the Circuit Court of Wyoming County in accordance
with West Virginia Code sect 14-2-2 which allows citizens to file suit against the State to prevent
damage to real property in the circuit court of the county in which the real property is found
Mandamus in this instance was proper because the Circuit Court found that West Virginia
Code sect 22-3-17(a) mandates that the WVDEP shall issue a Notice of Violation in an operator is
not in compliance with a provision of a state rule or pennit The primary jurisdiction doctrine
which is essentially the same as the exhaustion ofremedies doctrine did not apply to the Residents
Petition for a Writ of Mandamus because the Circuit Court had explicit statutory authorization to
adjudicate the claims in the Petition
Lastly the Residents Petition for a Writ of Mandamus was not barred by bankruptcy law
because the automatic stay at issue lapsed before the hearing and Order at issue in this case and
further because West Virginia regulatory action against parties that seek bankruptcy protection is
not affected by the automatic stay
IV STATEMENT REGARDING ORAL ARGUMENT AND DECISION
These Respondents believe oral argument is necessary pursuant to the criteria in Rule 18(a)
of the West Virginia Rules of Appellate Procedure Oral argument under Rules 19 or 20 of the
West Virginia Rules of Appellate Procedure is appropriate because pursuant to Rule 19(a)(2) the
case allegedly involves an unsustainable exercise of discretion where the law governing that
discretion is settled The appeal also involves constitutional questions regarding a court ruling
pursuant to Rule 20(a)(3)
3
V ARGUMENT
A These Respondents largely agree with the Petitioners regarding the standard of review to be applied in this matter
These Respondents note however that the standard of appellate review of a circuit courts
order granting relief through the extraordinary writ of mandamus is de novo Staten v Dean Syl
Pt 1 195 WVa 57464 SE2d 576 (1995) This Court reviews a circuit courts underlying
factual findings under a clearly erroneous standard Id Lastly this Court reviews conclusions of
law under a clearly erroneous standard Id
B The Residents properly exercised a statutory right to pursue their actions in the Circuit Court of Wyoming County
Under the exhaustion of administrative remedies doctrine where a claim is cognizable in
the first instance by an administrative agency alone judicial interference is withheld until the
administrative process has run its course This Court has long held that [t]he general rule is that
where an administrative remedy is provided by statute or by rules and regulations having the force
and effect of law relief must be sought from the administrative body and such remedy must be
exhausted before the courts will act Syl pt 1 Daurelle v Tiaders Fed Sav amp Loan Assn Syl
Pt I 143 WVa 674104 SE2d 320 (1958)
There are exceptions to this rule This Court has held The factors courts have cited to
excuse failure to exhaust are (1) that the claim is collateral to a demand for benefits (2) that
exhaustion would be futile and (3) that plaintiffs would suffer irreparable hann if required to
exhaust administrative remedies Wiggins v Eastern Assoc Coal COp Syl Pt 6 178 WVa 63
357 SE2d 745 (1987) (This Court will not require the exhaustion of administrative remedies
where such remedies are duplicative or the effort to obtain them futile) Finally [t]he rule which
4
requires the exhaustion ofadministrative remedies is inapplicable where no administrative remedy
is provided by law Daw-elle at Syl pt 2_
In this matter however the Respondent Residents had two (and possibly three) choices
First they could submit claims to the WVDEPs Office of Explosives and Blasting pursuant to
West Virginia Code sect 22-3A-5 Second (arguably) they could pursue administrative remedies via
the Surface Mine Board (or possibly the Environmental Quality Board) pursuant to West Virginia
Code sect 22B-1-7 Third the Residents could file civil claims pursuant to West Virginia Code sect 22shy
3-24
In this case the Residents chose to file civil claims pursuant to West Virginia Code sect 22shy
3-24 As part of that process and in compliance with West Virginia law that requires 30 day notice
before filing suit against a state agency the Residents initiated WVDEPs involvement in this
matter by mailing a letter of intent to sue with an attached proposed Complaint to file in Circuit
Court to the WVDEP on 14 November 2011
In its brief however ERP insists that the Residents foreclosed their statutory circuit court
claims by submitting complaints to the WVDEP without specifying that those complaints were
contained in a notice of intent to sue the agency in circuit court Petition at 15 It strains credulity
to assert that the Residents intended to pursue administrative claims when they told the agency by
letter that they intended to sue the agency in circuit court
Subsequently the Residents civil claims in the Circuit Court of Wyoming County were
filed in accordance with sect 22-3-24 which states
(a) Nothing in this article affects in any way the rights of any person to enforce or protect under applicable law the persons interest in water resources affected by a surface mining operation
(b) Any operator shall replace the water supply of an owner of interest in real property who obtains all or part of the owners supply of water for domestic
5
agricultural industrial or other legitimate use from an underground or surface source where the supply has been affected by contamination diminution or interruption proximately caused by the surface mining operation unless waived by the owner
(c) There is a rebuttable presumption that a mining operation caused damage to an owners underground water supply if the inspector determines the following (1) Contamination diminution or damage to an owners underground water supply exists and (2) a preblast survey was performed consistent with the provisions of section thirteen-a of this article on the owners property including the underground water supply that indicated that contamination diminution or damage to the underground water supply did not exist prior to the mining conducted at the mining operation
(d) The operator conducting the mining operation shall (1) Provide an emergency drinking water supply within twenty-four hours (2) provide temporary water supply within seventy-two hours (3) within thirty days begin activities to establish a permanent water supply or submit a proposal to the secretary outlining the measures and timetables to be utilized in establishing a permanent supply The total time for providing a permanent water supply may not exceed two years If the operator demonstrates that providing a permanent replacement water supply cannot be completed within two years the secretary may extend the time frame on case-by-case basis and (4) pay all reasonable costs incurred by the owner in securing a water supply
(e) An owner aggrieved under the provisions of subsections (b) (c) or (d) of this section may seek relief in court or pursuant to the provisions of section five article three-a of this chapter
W Va Code sect 22-3-24 (emphasis added)
In this case the Residents never initiated the administrative claims process pursuant to
West Virginia Code sect 22-3A-S That statute in its entirety states
(a) The office of explosives and blasting shall establish and manage a process for the filing administration and resolution of claims related to blasting
(b) Claims which may be filed and determined under the provisions of this section shall be those arising from both of the following
(1) Damage to property arising from blasting activities conducted pursuant to a permit granted under article three of this chapter and
(2) The damage is incurred by a claimant who is the owner or occupant of the property
6
(c) The claims process established by the office of explosives and blasting shall include the following
(1) An initial detennination by the office of the merit of the claim and
(2) An arbitration process whereby the claim can be detennined and resolved by an arbitrator in a manner which is inexpensive prompt and fair to all parties The office shall propose rules for legislative approval in accordance with article three chapter twenty-nine-a of this code for the development of standards for establishing rules relating to the initial claim detennination and the arbitration process provided in this subsection
(d) If the operator disagrees with the initial detennination made by the office and requests arbitration then the following shall apply
(1) Any party may be represented by a representati ve of their choice
(2) At the request of the claimant the office shall provide the claimant with representation in the arbitration process which representation shall not necessarily be an attomey-at-Iaw and
(3) If the claim is upheld in whole or in part then the operator shall pay the costs ofthe proceeding as well as reasonable representation fees and costs of the claimant in an amount not to exceed one thousand dollars
(e) Participation in the claims process created by this section shall be voluntary for the claimant However once the claimant has submitted a claim for detennination under the provisions of this section it is intended that the finding of the office if not taken to arbitration shall be final If arbitration is requested it is intended that the results of such arbitration shall be final The office shall provide written notification to the claimant of the provisions of this subsection and shall secure a written acknowledgment from the claimant prior to processing a claim pursuant to the provisions of this section
(f) The operator shall pay any claim for which the operator is adjudged liable within thirty days of a final detennination If the claim is not paid within thirty days the director shall issue a cessation order pursuant to section sixteen article three of this chapter for all sites operated by the operator
(g) No pennit to mine coal shall be granted unless the pennit applicant agrees to be subject to the tenns of this section
(h) To fulfill its responsibilities pursuant to this section the office may retain the services of inspectors experts and other persons or finns as may be necessary
7
W Va Code sect 22-3A-5 (1999) (repealed June 9 2016)
The Residents did not submit their claims to the WVDEPs Office of Explosives and
Blasting pursuant to West Virginia Code sect 22-3A-5 There is nothing in the record that reflects
that the Residents specifically sought WVDEP investigation pursuant to that code section or
otherwise sought resolution of their claims pursuant to West Virginia Code sect 22-3A-5 The record
does not contain a document created by the Residents that request an investigation and subsequent
arbitration by the WVDEP Office ofExplosives and Blasting Conversely the record does contain
the Residents initiating letter notifying the WVDEP that the Residents intended to sue the agency
Simply put no authority exists to support ERPs assertion that merely submitting citizen
complaints to the WVDEP irrevocably invoked the jurisdiction of the WVDEPs Office of
Explosives and Blasting and the arbitration requirement contained in West Virginia Code sect 22shy
3A-5 (1999) Furthermore no authority exists to support ERPs assertion that merely submitting
citizen complaints to the WVDEP irrevocably invoked administrative review before the
environmental boards tasked with reviewing agency action
This fundamental factual issue short circuits ERPs arguments that rely on Ewing v Ed of
Educ OCity oSummers 202 WVa 228 503 SE2d 541 (1998) State ex rei Chesapeake and
Potomac Telephone Co oJw Va v Ashworth 190 WVa 547438 SE2d 890 (1993) and Ashby
v City 0 Fairmont 216 WVa 527 607 SE2d 856 (2004) In each of those cases the
complainants invoked claims that specifically called for administrative resolution In this matter
the Residents from the start invoked claims they intended to pursue in circuit court
ERP cannot submit any evidence that the Residents ever submitted claims to the WVDEPs
Office of Explosives and Blasting or filed Notices of Appeal with the Surface Mine Board or the
8
Environmental Quality Board Accordingly this Court should hold that the Residents properly
exercised their statutory rights to pursue their water claims in circuit court
C The Circuit Courts Order was properly issued because Eastern and ERP were not indispensable parties and because no real property interest of Eastern or ERP was at issue
This Court should uphold the Circuit Courts Order because the Residents Petition for a
Writ ofMandamus and the subsequent hearing did not violate Eastern or ERPs due process rights
and did not result in an order that placed restraints on the real property of a third party
ERP insists that West Virginia Rule of Civil Procedure 19 requires that Eastern or ERP
should have been named as parties to the Residents Petition for a Writ of Mandamus Rule 19
requires that any persons who claim an interest in the real property at issue are indispensable
parties to the proceeding W Va R Civ P 19 and Petition at 23 This argument fails at the outset
because the Residents Petition for a Writ of Mandamus and the Circuit of Court of Wyoming
Countys Order did not in any way claim an interest in Eastern or ERPs real property or affect
Eastern or ERPs real property
Contrary to ERPs assertions this Court held in 0 Daniels v City of Charleston that
When a court proceeding directly affects or detennines the scope of rights or interests in real
property any persons who claim an interest in the real property at issue are indispensable parties
to the proceeding Any order or decree issued in the absence of those parties is null and void
ODaniels v City of CIz areston Syl Pt 2200 W Va 711 712490 SE2d 800 801 (1997)
(emphasis added)
o Daniels does not stand for the proposition that as here potential parties such as Patriot
Eastern or ERP must be joined as indispensable parties where as admitted by ERP personal
property is at issue There is no real property at issue in this case at least insofar as ERP is
9
concerned The only real property at issue in this case belongs to the Residents Accordingly
OBrien does not apply to this case
Every case cited by the o Daniels court -- Bonafede v Grafton Feed amp Storage Co 81
WVa 31394 SE 471 (1917) United Fuel Gas Co v Morley Oil amp Gas Co 101 WVa 73 131
SE 713 (1926) Oneal v Stimson 61 WVa 551 56 SE 889 (1907) -- involved real property
There is no West Virginia authority that makes the same statement about personal property and
there are certainly no West Virginia cases that bar a circuit court from granting a petition for a writ
ofmandamus that requires a state agency to order an action that might cause a corporation to spend
money in order to comply
ERPs broader due process argument also fails This Court holds that The due process of
law guaranteed by the State and Federal Constitutions when applied to procedure in the courts of
the land requires both notice and the right to be heard State ex reI Bd ofEduc of Cnty Of
Putnam v Beane Syl Pt 2 224 W Va 31 680 SE2d 46 (2009) (quoting Simpson v Stanton
SyJ Pt 2 119 WVa 235 193 SE 64 (1937)
As shown infra Eastern and its corporate successor ERP were aware of the Residents
proposed petition for writ of mandamus as early as 2011 and took part from the beginning of the
investigation process with the Residents and the WVDEP To the extent ERP complains that its
corporate predecessor failed to protect its interests by refusing to intervene in the proceedings
below it is bound by the terms of its agreement with Patriot and Eastern A corporate successor
may not avoid a prior liability simply because it subsequently decides it doesnt care for a part of
the deal ERPs due process argument fails because it had (1) notice and (2) had a right to be heard
before the Circuit Court of Wyoming County
10
Accordingly this Court should uphold the Circuit Courts Order because the Residents
Petition for a Writ of Mandamus and the subsequent hearing did not violate Eastern or ERPs due
process rights and did not result in an order that required impennissible restraints on the real
property of a third party
D The Circuit Court of Wyoming County was authorized to enter the Order at issue because it properly had venue
The Circuit Court of Wyoming County unquestionably had venue pursuant to West
Virginia Code sect 14-2-2 That statute states in its entirety
(a) The following proceedings shall be brought and prosecuted only in the circuit court of Kanawha County
(1) Any suit in which the governor any other state officer or a state agency is made a party defendant except as garnishee or suggestee
(2) Any suit attempting to enjoin or otherwise suspend or affect a judgment or decree on behalfof the State obtained in any circuit court
(b) Any proceeding for injunctive or mandamus relief involving the taking title or collection for or prevention of damage to real property may be brought and presented in the circuit court of the county in which the real property affected is situate
This section shall apply only to such proceedings as are not prohibited by the constitutional immunity of the State from suit under section thirty-five article VI of the Constitution of the State
W Va Code sect 14-2-2 (emphasis added) The underlying suit in which the plaintiffs alleged that
mining operations located near their homes contaminated their well water was a proceeding in
injunctive and mandamus relief against the WVDEP and Secretary Huffman that sought relief for
the prevention of damage to real property By its own tern1s the statute expressly provides the
Circuit Court of Wyoming County with venue and jurisdiction over the claim
This Court has ruled squarely on this issue in Shobe v Latimer 162 W Va 779 253 SE2d
54 (1979) In Shobe the plaintiffs sought a declaratory judgment holding that a water contract
11
between the West Virginia Department of Natural Resources and a public seIVice district was
illegalld The lower court granted a motion to dismiss holding that the Circuit Court ofKanawha
County did not have venue to adjudicate a claim based in Grant County West Virginiald This
Court disagreed holding that an action regarding stream rights was an allegation involving the
taking or damage to real property within in the meaning of WVa Code sect 14-2-2(b) and that
venue was proper in the circuit courts of either Kanawha or Grant County ld at 794 63 Such is
the case in the underlying matter the plaintiffs in the underlying Wyoming County action were
free pursuant to West Virginia Code sect 14-2-2 to choose between Kanawha and Wyoming County
Circuit Court Accordingly this Court should turn aside ERPs arguments regarding the authority
of the Circuit Court of Wyoming County
Accordingly this Court uphold the Circuit Courts Order because it had venue to detennine
the merits ofthe Residents Petition for a Writ of Mandamus
E The Circuit Court of Wyoming County properly granted the Residents Petition for a Writ of Mandamus because it found that the WVDEP had erred in carrying out its duties with regard to water replacement and because the primary jurisdiction doctrine much like the exhaustion of administrative remedies doctrine is inapplicable to this case
The Circuit Court of Wyoming County found as a matter oflaw that the WVDEP erred by
failing to order water replacement as alleged in the Residents Petition for a Writ of Mandamus
By granting the Petition the Court held that the WVDEP had a legal duty pursuant to West
Virginia Code sect 22-3-17(a) to order water replacement for the Residents Appendix at 8 The
Circuit Court also agreed with the Residents that West Virginia Code sect 22-3-17(a) mandates that
the WVDEP shall issue a Notice ofViolation in an operator is not in compliance with a provision
ofa state rule or pennit which constitutes a non-discretionary duty W Va Code 22-3-17(a)
12
The Circuit Court also correctly disregarded the primary jurisdiction doctrine This Court
has described the primary jurisdiction doctrine as follows
1 Where an administrative agency and the courts have concurrent jurisdiction of an issue which requires the agencys special expertise and which extends beyond the conventional experience ofjudges the doctrine ofprimary jurisdiction applies In such a case the court should refrain from exercising jurisdiction until after the agency has resolved the issue The courts decision whether to apply the primary jurisdiction doctrine is reviewed on appeal under an abuse of discretion standard
2 In detennining whether to apply the primary jurisdiction doctrine courts should consider factors such as whether the question at issue is within the conventional experience ofjudges whether the question at issue lies peculiarly within the agencys discretion or requires the exercise of agency expertise whether there exists a danger of inconsistent rulings and whether a prior application to the agency has been made
State ex reI Bell AII-1yen Virginia Inc v Ranson Syl Pts 1 and 2 201 W Va 402404497
SE2d 755 757 (1997)
The Circuit Courts action in this case meets the test established in Ranson because the
Residents primary argument for a writ ofmandamus before the Circuit Court was that the agency
had already resolved the issue to the agencys satisfaction In this case though the question at
issue undoubtedly lies peculiarly within the WVDEPs expertise and discretion the Circuit Court
detennined it had sufficient conventional experience to render its own decision on the merits of
the evidence presented to it during the hearing on the Residents petition for a wTit of mandamus
The Circuit Court in its Order based its decision on a consideration of the WVDEPs evidence
and findings but also on those of the testimony of the Residents expert witness and their own
testimony
Ultimately this Court in Ranson elected to not apply the primary jurisdiction doctrine
noting that this concept is essentially the same as exhaustion of administrative remedies
13
Not unlike the exhaustion of remedies doctrine the doctrine of primary jurisdiction is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties citations omitted)
Ranson 201 W Va 410497 SE2d 763lndeed the terms primary jurisdiction and exhaustion
of remedies though separate and distinct legal concepts are often confused and used
interchangeably ld at FN 6 (internal citation omitted)
The primary jurisdiction doctrine and the exhaustion of administrative remedies doctrine
do not apply in this matter because the circuit courts ofWest Virginia are granted explicit statutory
authority by West Virginia Code sect 22-3-24 to decide the claims raised in the Residents Petition
for a Writ of Mandamus as discussed infra To insist as does ERP that this Court should abstain
from deciding an issue that the Legislature has detennined is explicitly within the jurisdiction of
the circuit coqrts is incorrect
ERP argues that a danger of inconsistent rulings and other concerns (Petition at 35)
requires the application of the primary jurisdiction doctrine in this case That argument disregards
the fact that the only dispute arising out of the Residents Petition is currently pending before this
Court There are no other potential inconsistent rulings
Lastly ERP argues that the Circuit Courts Order violates the doctrine of primary
jurisdiction essentially because the Circuit Court did not expressly address the doctrine ofprimary
jurisdiction even though it was not raised in the Circuit Court proceedings There is no
requirement that a circuit court make an express finding on its own accordingly the absence of
such analysis is not reversible error
Accordingly this Court should uphold the Circuit Courts Order regarding the Residents
Petition for a Writ of Mandamus
14
F Patriot and Easterns bankruptcy claims do not bar the State of West Virginias regulatory authority
ERPs arguments regarding the Patriot bankruptcy proceedings are similarly unfounded
Patriots most recent bankruptcy case ended in October 2015 with the entry of the confinnation
order which occurred well before the December 2015 hearing in the Circuit Court of Wyoming
County at issue here That order dissolved the automatic stay in place and replaced it with a new
set of injunctions none of which were applicable at the time of the hearing on the writ of
mandamus in the underlying matter Further confinnation orders have no effect whatsoever on
state law enforcement Eastern was required to continue to comply with state environmental law
Pursuant to 28 USc sect 959(b) a debtor is required to perfonn any and all acts necessary in order
to effectuate compliance with State Law environmental obligations Furthennore 11 USc sect
362(b)(4) expressly exempts the enforcement of any police or regulatory law enforcement action
from the automatic stay See 11 USc sect 362(b)(4)
A ruling such as the one sought by ERP in this matter would throw State enforcement of
all State laws related to debtors operating under an automatic stay into disarray It is absurd to
suggest that the State of West Virginia through the WVDEP is unable to enforce environmental
laws against companies operating within the State pursuant to West Virginia law simply because
a mining company seeks bankruptcy protection Furthennore ERP asks this Court to maintain that
not only are West Virginia executive law enforcement agencies not able to order compliance with
State law against debtors but also that the circuit courts of West Virginia are unable to order
compliance That is not the law
On May 12 2015 Easterns parent company Patriot Coal Corporation and some of its
affiliates including Eastern filed a petition with the United States Bankruptcy Court for the
Eastern District ofVirginia under chapter 11 oftitle 11 ofthe United States Code (US Bankruptcy
15
Court ED Va Case No 15-32450 (KLPraquo During the course of the bankruptcy proceedings
Patriot negotiated the sale of substantially all of its assets to two separate entities Blackhawk
Mining LLC (Blackhawk) and VCLF VCLF proposed to acquire the Kopperston No1 Refuse
Impoundment including the SMCRA permit at issue in this case
In accordance with the Bankruptcy Courts Scheduling Order on September 18 2015
Patriot filed the Fourth Amended Disclosure Statement for the Debtors Fourth Amended Joint
Plan ofReorganization Pursuant to Chapter 11 of the Bankruptcy Code and the Debtors Fourth
Amended Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code
The Fourth Amended Plan attached a copy of the VCLF Asset Purchase Agreement
(APA) The VCLF APA definitively establishes Appellant ERPs liability for the water
replacement order at issue in this case The Fourth Amended Plan itself lists the SMCRA notice
that ultimately led to the Wyoming County Circuit Court Order at issue in this appeal as a piece
of unresolved litigation to be assumed by the purchasers of Patriots assets
Furthem10re Section 203 of the APA Assumed Liabilities states that VCLFIERP shall
assume all Liabilities associated with the Transferred Pem1its as well as liability for regulatory
violations and obligations on or in relation to the Purchased Assets or the Transferred Permits
arising post-Closing
Additionally Schedule 308(a)-(b) to the VCLF APA expressly lists all liabilities
associated with the Purchased Assets and again includes the May 2015 SMCRA notice from
owners ofproperties near the Kopperston mine alleging adverse impacts to groundwater resources
Schedule 313 lists all pending litigation associated with the Purchased Assets and yet again lists
the Kopperston SMCRA notice
16
ERP is a wholly owned subsidiary of VCLF incorporated to fulfill the reclamation
obligations associated with assets VCLF purchased out of the Patriot bankruptcy ERP became
the penn it holder of the pennit associated with this appeal ERPs assumption of the water
replacement liability at issue in this appeal is not just a matter of a contractual obligation between
two private parties rather its liability also arises by operation of the Bankruptcy Courts
Confinnation Order
Accordingly this Court should uphold the Circuit Courts Order in this matter because it
was not barred by bankruptcy law
VII CONCLUSION
In conclusion these Respondents respectfully request this Court enter an Order denying
ERPs Petition for a Writ of Prohibition
WEST VIRGINIA DEPARMENT OF ENVIRONMENTAL PROTECTION and SECRETARY AUSTIN CAPERTON by counsel
West Virginia Department of Environmental Protection Office of Legal Services 601 57th St SE Charleston WV 25304 Phone 304-926-0499 Fax 304-926-0461 Email jasonewandlingwvgov
17
CERTIFICATE OF SERVICE
I Jason Wandling certify that I served this Response in Opposition to Verified Petition for
Writ of Prohibition on 20 March 2017 by depositing a true copy thereof in the United States mail
postage prepaid addressed as follows
John J Meadows (WVSB 9442) Peter J Raupp (WVSB 10546) Devon J Stewart (WVSB 11712) Steptoe amp Johnson PLLC 707 Virginia Street East Chase Tower Seventeenth Floor PO Box 1588 Charleston WV 25326-1588 Phone 304-353-8154 Fax 304-353-8180 Email J ohnM eadowssteptoe-johnsoncom
PeterRauppsteptoe-johnsoncom DevonStewartsteptoe-johnsoncom
Honorable Warren D McGraw Judge PO Box 581 100 Main and Bank Streets Pineville WV 24874 Phone 304-732-7047 Fax 304-732-7047
Kevin W Thompson (WVSB 5062) David R Barney Jr (WVSB 7958) Thompson Barney 2030 Kanawha Blvd E Charleston WV 25311 Phone 304-343-4401 Fax 304-343-4405 Email kthompsonthompsonbarneycom
dbameythompsonbameycom
TABLE OF CONTENTS
I ASSIGNMENTS OF ERROR QUESTIONS PRESENTED 1
II STATEMENT OF THE CASE 1
III SUMMARY OF THE ARGUMENT 2
IV STATEMENT REGARDING ORAL ARGUMENT AND DECISION 3
V STANDARD OF REVIEW 4
VI ARGUMENT 4
A These Respondents agree with the Petitioners regarding the standard of review to be applied in this matter 4
B The Residents properly exercised a statutory right to pursue their actions in the Circuit Court of Wyoming County 4
C The Circuit Courts Order was properly issued because Eastern and ERP were not indispensable parties and because no real property interest of Eastern or ERP was at Issue 9
D The Circuit Court of Wyoming County was authorized to enter the Order at issue because it properly had venue 11
E The Circuit Court of Wyoming County properly granted the Residents Petition for a Writ of Mandamus because it found that the WVDEP had erred in carrying out its duties with regard to water replacement and because the primary jurisdiction doctrine much like the exhaustion of administrative remedies doctrine is inapplicable to this case 12
F Patriot and Easterns bankruptcy claims do not bar the State of West VirginiaS regulatory authority 15
VII CONCLUSION 17
11
TABLE OF AUTHORITIES
West Virginia Constitution
Article III sect 10 1
West Virginia cases
Ashby v City ofFairmont 216 WVa 527 607 SE2d 856 (2004) 8
Bonafede v Grafton Feed amp Storage Co 81 WVa 313 94 SE 471 (1917) 10
Dawelle v T-aders Fed Sav amp Loan Assn 143 WVa 674104 SE2d 320 (1958) 45
Ewing v Bd ofEduc OfCity ofSummers 202 WVa 228 503 SE2d 541 (1998) 8
ODaniels v City ofCharleston 200 W Va 711 712490 SE2d 800801 (1997) 910
Oneal v Stimson 61 WVa 55156 SE 889 (1907) 10
Shobe v Latimer 162 W Va 779 253 SE2d 54 (1979) 11 12
Simpson v Stanton 119 WVa 235193 SE 64 (1937) 10
State ex rei Bd ofEduc ofCnty OfPutnam v Beane 224 W Va 31 680 SE2d 46 (2009) 10
State ex rei Chesapeake and Potomac Telephone Co ofW Va v Ashworth 190 WVa 547438 SE2d 890 (1993) 8
State ex reI Bell At- W Virginia Inc v Ranson 201 W Va 402497 SE2d 755 (1997) 1314
Staten v Dean 195 WVa 57464 SE2d 576 (1995) 4
United Fuel Gas Co v Morley Oil amp Gas Co 101 WVa 73 131 SE 713 (1926) 10
III
Wiggins v Eastern Assoc Coal Corp 178 WVa 63 357 SE2d 745 (1987) 4
West Virginia statutes
WVa Code sect 14-2-2 13 11 12
WVa Code sect 22-3-17 3 12
WVa Code sect 22-3-24 156 14
WVa Code sect 22-3A-5 5 6 7 8
WVa Code sect 22B-I-7 5
WVa Code sect 53-1-2 1
West Virginia rules and regulations
W Va R Civ P 19 2 3 9
United States Constitution
Due Process Clause of the Fourteenth Amendment to the US Constitution 1
Federal statutes
11 USC sect 362 1 15
28 USC sect 959 15
IV
I ASSIGNMENTS OF ERROR QUESTIONS PRESENTED
The Assigrunents of Error or Questions Presented are framed by the Petitioners as
1 Whether the Respondent Judge exceeded his judicial powers by exercising subjectshy
matter jurisdiction over administrative claims that were not exhausted
2 Whether the Respondent Judge exceeded his judicial powers by issuing a
mandamus order without requiring the joinder of indispensable parties burdened by the order in
violation of West Virginia law the Due Process Clause of the Fourteenth Amendment to the us
Constitution and the West Virginia Constitution Article III sect 10
3 Whether the Respondent Judge exceeded his judicial powers by issuing a
mandamus order with respect to a discretionary state agency action or by failing to decline
jurisdiction under the primary jurisdiction doctrine
4 Whether the Respondent Judge exceeded his judicial powers in violation of the
exclusive venue statutes ofWest Virginia Code sectsect 53-1-2 and 14-2-2 by issuing a mandamus order
in an action against a state agency and its employees
5 Whether the Respondent Judge exceeded his judicial powers in violation of the
automatic stay under II USc sect 362(a) by issuing a mandamus order in an action commenced
and continued with respect to property interests of a debtor in bankruptcy
II STATEMENT OF THE CASE
The underlying facts at issue in this appeal are not in dispute However these Respondents
note facts regarding two issues
First ERP acquired the permit at issue as part of the bankruptcy and subsequent sale of
assets owned previously by Patriot Coal Corporation Patriot was the parent company of Eastern
Coal Company LLC the holder of the pennit at issue in this case Patriot filed for bankruptcy
1
protection on 12 May 2015 During the bankruptcy proceedings Patriot negotiated the sale of
substantially all its assets to two separate entities Blackhawk Mining LLC and VCLF VCLF is
the parent company of Petitioner ERP VCLF acquired the Kopperston No 1 Refuse
Impoundment including the SMCRA pennit at issue in this case
Patriots Fourth Amended Plan attached a copy ofthe assets VCLF planned to buy in a
document called the VCLF Asset Purchase Agreement (APA) That document specifically lists
the Residents notice of intent to sue the WVDEP that ultimately led to the Wyoming County
Circuit Court Order at issue in this appeal as a piece of unresolved litigation to be assumed by the
purchasers of Patriots assets
The Petitioner ERP is a wholly owned subsidiary of VCLF ERP was specifically
incorporated to fulfill the reclamation obligations associated with assets VCLF purchased out of
the Patriot bankruptcy including the pennit at issue here and all of its potential liabilities
Second the Petitioner omitted the date on which ERP assumed the permit at issue in this
appeal ERP became the pennittee on 28 July 2016
III SUMMARY OF ARGUMENT
The Respondent Residents did not fail to exhaust the administrative remedies available to
them in this matter The Respondent Residents properly exercised their rights to civil claims
pursuant to West Virginia Code sect 22-3-24 The administrative proceedings that ERP alleges to
have foreclosed the Residents civil suits were initiated in fact by the Residents notices of intent
to file suit against the WVDEP
ERP insists that West Virginia Rule of Civil Procedure 19 requires that Eastern or ERP
should have been named as parties to the Residents Petition for a Writ of Mandamus Rule 19
states that any persons who claim an interest in the real property at issue are indispensable parties
2
to the proceeding W Va R Civ P 19 and Petition at 23 However the Residents Petition for
a Writ of Mandamus and the Circuit of Court of Wyoming Countys Order did not in any way
claim an interest in Eastern or ERPs real property or affect Eastern or ERPs real property
Venue was properly established in the Circuit Court of Wyoming County in accordance
with West Virginia Code sect 14-2-2 which allows citizens to file suit against the State to prevent
damage to real property in the circuit court of the county in which the real property is found
Mandamus in this instance was proper because the Circuit Court found that West Virginia
Code sect 22-3-17(a) mandates that the WVDEP shall issue a Notice of Violation in an operator is
not in compliance with a provision of a state rule or pennit The primary jurisdiction doctrine
which is essentially the same as the exhaustion ofremedies doctrine did not apply to the Residents
Petition for a Writ of Mandamus because the Circuit Court had explicit statutory authorization to
adjudicate the claims in the Petition
Lastly the Residents Petition for a Writ of Mandamus was not barred by bankruptcy law
because the automatic stay at issue lapsed before the hearing and Order at issue in this case and
further because West Virginia regulatory action against parties that seek bankruptcy protection is
not affected by the automatic stay
IV STATEMENT REGARDING ORAL ARGUMENT AND DECISION
These Respondents believe oral argument is necessary pursuant to the criteria in Rule 18(a)
of the West Virginia Rules of Appellate Procedure Oral argument under Rules 19 or 20 of the
West Virginia Rules of Appellate Procedure is appropriate because pursuant to Rule 19(a)(2) the
case allegedly involves an unsustainable exercise of discretion where the law governing that
discretion is settled The appeal also involves constitutional questions regarding a court ruling
pursuant to Rule 20(a)(3)
3
V ARGUMENT
A These Respondents largely agree with the Petitioners regarding the standard of review to be applied in this matter
These Respondents note however that the standard of appellate review of a circuit courts
order granting relief through the extraordinary writ of mandamus is de novo Staten v Dean Syl
Pt 1 195 WVa 57464 SE2d 576 (1995) This Court reviews a circuit courts underlying
factual findings under a clearly erroneous standard Id Lastly this Court reviews conclusions of
law under a clearly erroneous standard Id
B The Residents properly exercised a statutory right to pursue their actions in the Circuit Court of Wyoming County
Under the exhaustion of administrative remedies doctrine where a claim is cognizable in
the first instance by an administrative agency alone judicial interference is withheld until the
administrative process has run its course This Court has long held that [t]he general rule is that
where an administrative remedy is provided by statute or by rules and regulations having the force
and effect of law relief must be sought from the administrative body and such remedy must be
exhausted before the courts will act Syl pt 1 Daurelle v Tiaders Fed Sav amp Loan Assn Syl
Pt I 143 WVa 674104 SE2d 320 (1958)
There are exceptions to this rule This Court has held The factors courts have cited to
excuse failure to exhaust are (1) that the claim is collateral to a demand for benefits (2) that
exhaustion would be futile and (3) that plaintiffs would suffer irreparable hann if required to
exhaust administrative remedies Wiggins v Eastern Assoc Coal COp Syl Pt 6 178 WVa 63
357 SE2d 745 (1987) (This Court will not require the exhaustion of administrative remedies
where such remedies are duplicative or the effort to obtain them futile) Finally [t]he rule which
4
requires the exhaustion ofadministrative remedies is inapplicable where no administrative remedy
is provided by law Daw-elle at Syl pt 2_
In this matter however the Respondent Residents had two (and possibly three) choices
First they could submit claims to the WVDEPs Office of Explosives and Blasting pursuant to
West Virginia Code sect 22-3A-5 Second (arguably) they could pursue administrative remedies via
the Surface Mine Board (or possibly the Environmental Quality Board) pursuant to West Virginia
Code sect 22B-1-7 Third the Residents could file civil claims pursuant to West Virginia Code sect 22shy
3-24
In this case the Residents chose to file civil claims pursuant to West Virginia Code sect 22shy
3-24 As part of that process and in compliance with West Virginia law that requires 30 day notice
before filing suit against a state agency the Residents initiated WVDEPs involvement in this
matter by mailing a letter of intent to sue with an attached proposed Complaint to file in Circuit
Court to the WVDEP on 14 November 2011
In its brief however ERP insists that the Residents foreclosed their statutory circuit court
claims by submitting complaints to the WVDEP without specifying that those complaints were
contained in a notice of intent to sue the agency in circuit court Petition at 15 It strains credulity
to assert that the Residents intended to pursue administrative claims when they told the agency by
letter that they intended to sue the agency in circuit court
Subsequently the Residents civil claims in the Circuit Court of Wyoming County were
filed in accordance with sect 22-3-24 which states
(a) Nothing in this article affects in any way the rights of any person to enforce or protect under applicable law the persons interest in water resources affected by a surface mining operation
(b) Any operator shall replace the water supply of an owner of interest in real property who obtains all or part of the owners supply of water for domestic
5
agricultural industrial or other legitimate use from an underground or surface source where the supply has been affected by contamination diminution or interruption proximately caused by the surface mining operation unless waived by the owner
(c) There is a rebuttable presumption that a mining operation caused damage to an owners underground water supply if the inspector determines the following (1) Contamination diminution or damage to an owners underground water supply exists and (2) a preblast survey was performed consistent with the provisions of section thirteen-a of this article on the owners property including the underground water supply that indicated that contamination diminution or damage to the underground water supply did not exist prior to the mining conducted at the mining operation
(d) The operator conducting the mining operation shall (1) Provide an emergency drinking water supply within twenty-four hours (2) provide temporary water supply within seventy-two hours (3) within thirty days begin activities to establish a permanent water supply or submit a proposal to the secretary outlining the measures and timetables to be utilized in establishing a permanent supply The total time for providing a permanent water supply may not exceed two years If the operator demonstrates that providing a permanent replacement water supply cannot be completed within two years the secretary may extend the time frame on case-by-case basis and (4) pay all reasonable costs incurred by the owner in securing a water supply
(e) An owner aggrieved under the provisions of subsections (b) (c) or (d) of this section may seek relief in court or pursuant to the provisions of section five article three-a of this chapter
W Va Code sect 22-3-24 (emphasis added)
In this case the Residents never initiated the administrative claims process pursuant to
West Virginia Code sect 22-3A-S That statute in its entirety states
(a) The office of explosives and blasting shall establish and manage a process for the filing administration and resolution of claims related to blasting
(b) Claims which may be filed and determined under the provisions of this section shall be those arising from both of the following
(1) Damage to property arising from blasting activities conducted pursuant to a permit granted under article three of this chapter and
(2) The damage is incurred by a claimant who is the owner or occupant of the property
6
(c) The claims process established by the office of explosives and blasting shall include the following
(1) An initial detennination by the office of the merit of the claim and
(2) An arbitration process whereby the claim can be detennined and resolved by an arbitrator in a manner which is inexpensive prompt and fair to all parties The office shall propose rules for legislative approval in accordance with article three chapter twenty-nine-a of this code for the development of standards for establishing rules relating to the initial claim detennination and the arbitration process provided in this subsection
(d) If the operator disagrees with the initial detennination made by the office and requests arbitration then the following shall apply
(1) Any party may be represented by a representati ve of their choice
(2) At the request of the claimant the office shall provide the claimant with representation in the arbitration process which representation shall not necessarily be an attomey-at-Iaw and
(3) If the claim is upheld in whole or in part then the operator shall pay the costs ofthe proceeding as well as reasonable representation fees and costs of the claimant in an amount not to exceed one thousand dollars
(e) Participation in the claims process created by this section shall be voluntary for the claimant However once the claimant has submitted a claim for detennination under the provisions of this section it is intended that the finding of the office if not taken to arbitration shall be final If arbitration is requested it is intended that the results of such arbitration shall be final The office shall provide written notification to the claimant of the provisions of this subsection and shall secure a written acknowledgment from the claimant prior to processing a claim pursuant to the provisions of this section
(f) The operator shall pay any claim for which the operator is adjudged liable within thirty days of a final detennination If the claim is not paid within thirty days the director shall issue a cessation order pursuant to section sixteen article three of this chapter for all sites operated by the operator
(g) No pennit to mine coal shall be granted unless the pennit applicant agrees to be subject to the tenns of this section
(h) To fulfill its responsibilities pursuant to this section the office may retain the services of inspectors experts and other persons or finns as may be necessary
7
W Va Code sect 22-3A-5 (1999) (repealed June 9 2016)
The Residents did not submit their claims to the WVDEPs Office of Explosives and
Blasting pursuant to West Virginia Code sect 22-3A-5 There is nothing in the record that reflects
that the Residents specifically sought WVDEP investigation pursuant to that code section or
otherwise sought resolution of their claims pursuant to West Virginia Code sect 22-3A-5 The record
does not contain a document created by the Residents that request an investigation and subsequent
arbitration by the WVDEP Office ofExplosives and Blasting Conversely the record does contain
the Residents initiating letter notifying the WVDEP that the Residents intended to sue the agency
Simply put no authority exists to support ERPs assertion that merely submitting citizen
complaints to the WVDEP irrevocably invoked the jurisdiction of the WVDEPs Office of
Explosives and Blasting and the arbitration requirement contained in West Virginia Code sect 22shy
3A-5 (1999) Furthermore no authority exists to support ERPs assertion that merely submitting
citizen complaints to the WVDEP irrevocably invoked administrative review before the
environmental boards tasked with reviewing agency action
This fundamental factual issue short circuits ERPs arguments that rely on Ewing v Ed of
Educ OCity oSummers 202 WVa 228 503 SE2d 541 (1998) State ex rei Chesapeake and
Potomac Telephone Co oJw Va v Ashworth 190 WVa 547438 SE2d 890 (1993) and Ashby
v City 0 Fairmont 216 WVa 527 607 SE2d 856 (2004) In each of those cases the
complainants invoked claims that specifically called for administrative resolution In this matter
the Residents from the start invoked claims they intended to pursue in circuit court
ERP cannot submit any evidence that the Residents ever submitted claims to the WVDEPs
Office of Explosives and Blasting or filed Notices of Appeal with the Surface Mine Board or the
8
Environmental Quality Board Accordingly this Court should hold that the Residents properly
exercised their statutory rights to pursue their water claims in circuit court
C The Circuit Courts Order was properly issued because Eastern and ERP were not indispensable parties and because no real property interest of Eastern or ERP was at issue
This Court should uphold the Circuit Courts Order because the Residents Petition for a
Writ ofMandamus and the subsequent hearing did not violate Eastern or ERPs due process rights
and did not result in an order that placed restraints on the real property of a third party
ERP insists that West Virginia Rule of Civil Procedure 19 requires that Eastern or ERP
should have been named as parties to the Residents Petition for a Writ of Mandamus Rule 19
requires that any persons who claim an interest in the real property at issue are indispensable
parties to the proceeding W Va R Civ P 19 and Petition at 23 This argument fails at the outset
because the Residents Petition for a Writ of Mandamus and the Circuit of Court of Wyoming
Countys Order did not in any way claim an interest in Eastern or ERPs real property or affect
Eastern or ERPs real property
Contrary to ERPs assertions this Court held in 0 Daniels v City of Charleston that
When a court proceeding directly affects or detennines the scope of rights or interests in real
property any persons who claim an interest in the real property at issue are indispensable parties
to the proceeding Any order or decree issued in the absence of those parties is null and void
ODaniels v City of CIz areston Syl Pt 2200 W Va 711 712490 SE2d 800 801 (1997)
(emphasis added)
o Daniels does not stand for the proposition that as here potential parties such as Patriot
Eastern or ERP must be joined as indispensable parties where as admitted by ERP personal
property is at issue There is no real property at issue in this case at least insofar as ERP is
9
concerned The only real property at issue in this case belongs to the Residents Accordingly
OBrien does not apply to this case
Every case cited by the o Daniels court -- Bonafede v Grafton Feed amp Storage Co 81
WVa 31394 SE 471 (1917) United Fuel Gas Co v Morley Oil amp Gas Co 101 WVa 73 131
SE 713 (1926) Oneal v Stimson 61 WVa 551 56 SE 889 (1907) -- involved real property
There is no West Virginia authority that makes the same statement about personal property and
there are certainly no West Virginia cases that bar a circuit court from granting a petition for a writ
ofmandamus that requires a state agency to order an action that might cause a corporation to spend
money in order to comply
ERPs broader due process argument also fails This Court holds that The due process of
law guaranteed by the State and Federal Constitutions when applied to procedure in the courts of
the land requires both notice and the right to be heard State ex reI Bd ofEduc of Cnty Of
Putnam v Beane Syl Pt 2 224 W Va 31 680 SE2d 46 (2009) (quoting Simpson v Stanton
SyJ Pt 2 119 WVa 235 193 SE 64 (1937)
As shown infra Eastern and its corporate successor ERP were aware of the Residents
proposed petition for writ of mandamus as early as 2011 and took part from the beginning of the
investigation process with the Residents and the WVDEP To the extent ERP complains that its
corporate predecessor failed to protect its interests by refusing to intervene in the proceedings
below it is bound by the terms of its agreement with Patriot and Eastern A corporate successor
may not avoid a prior liability simply because it subsequently decides it doesnt care for a part of
the deal ERPs due process argument fails because it had (1) notice and (2) had a right to be heard
before the Circuit Court of Wyoming County
10
Accordingly this Court should uphold the Circuit Courts Order because the Residents
Petition for a Writ of Mandamus and the subsequent hearing did not violate Eastern or ERPs due
process rights and did not result in an order that required impennissible restraints on the real
property of a third party
D The Circuit Court of Wyoming County was authorized to enter the Order at issue because it properly had venue
The Circuit Court of Wyoming County unquestionably had venue pursuant to West
Virginia Code sect 14-2-2 That statute states in its entirety
(a) The following proceedings shall be brought and prosecuted only in the circuit court of Kanawha County
(1) Any suit in which the governor any other state officer or a state agency is made a party defendant except as garnishee or suggestee
(2) Any suit attempting to enjoin or otherwise suspend or affect a judgment or decree on behalfof the State obtained in any circuit court
(b) Any proceeding for injunctive or mandamus relief involving the taking title or collection for or prevention of damage to real property may be brought and presented in the circuit court of the county in which the real property affected is situate
This section shall apply only to such proceedings as are not prohibited by the constitutional immunity of the State from suit under section thirty-five article VI of the Constitution of the State
W Va Code sect 14-2-2 (emphasis added) The underlying suit in which the plaintiffs alleged that
mining operations located near their homes contaminated their well water was a proceeding in
injunctive and mandamus relief against the WVDEP and Secretary Huffman that sought relief for
the prevention of damage to real property By its own tern1s the statute expressly provides the
Circuit Court of Wyoming County with venue and jurisdiction over the claim
This Court has ruled squarely on this issue in Shobe v Latimer 162 W Va 779 253 SE2d
54 (1979) In Shobe the plaintiffs sought a declaratory judgment holding that a water contract
11
between the West Virginia Department of Natural Resources and a public seIVice district was
illegalld The lower court granted a motion to dismiss holding that the Circuit Court ofKanawha
County did not have venue to adjudicate a claim based in Grant County West Virginiald This
Court disagreed holding that an action regarding stream rights was an allegation involving the
taking or damage to real property within in the meaning of WVa Code sect 14-2-2(b) and that
venue was proper in the circuit courts of either Kanawha or Grant County ld at 794 63 Such is
the case in the underlying matter the plaintiffs in the underlying Wyoming County action were
free pursuant to West Virginia Code sect 14-2-2 to choose between Kanawha and Wyoming County
Circuit Court Accordingly this Court should turn aside ERPs arguments regarding the authority
of the Circuit Court of Wyoming County
Accordingly this Court uphold the Circuit Courts Order because it had venue to detennine
the merits ofthe Residents Petition for a Writ of Mandamus
E The Circuit Court of Wyoming County properly granted the Residents Petition for a Writ of Mandamus because it found that the WVDEP had erred in carrying out its duties with regard to water replacement and because the primary jurisdiction doctrine much like the exhaustion of administrative remedies doctrine is inapplicable to this case
The Circuit Court of Wyoming County found as a matter oflaw that the WVDEP erred by
failing to order water replacement as alleged in the Residents Petition for a Writ of Mandamus
By granting the Petition the Court held that the WVDEP had a legal duty pursuant to West
Virginia Code sect 22-3-17(a) to order water replacement for the Residents Appendix at 8 The
Circuit Court also agreed with the Residents that West Virginia Code sect 22-3-17(a) mandates that
the WVDEP shall issue a Notice ofViolation in an operator is not in compliance with a provision
ofa state rule or pennit which constitutes a non-discretionary duty W Va Code 22-3-17(a)
12
The Circuit Court also correctly disregarded the primary jurisdiction doctrine This Court
has described the primary jurisdiction doctrine as follows
1 Where an administrative agency and the courts have concurrent jurisdiction of an issue which requires the agencys special expertise and which extends beyond the conventional experience ofjudges the doctrine ofprimary jurisdiction applies In such a case the court should refrain from exercising jurisdiction until after the agency has resolved the issue The courts decision whether to apply the primary jurisdiction doctrine is reviewed on appeal under an abuse of discretion standard
2 In detennining whether to apply the primary jurisdiction doctrine courts should consider factors such as whether the question at issue is within the conventional experience ofjudges whether the question at issue lies peculiarly within the agencys discretion or requires the exercise of agency expertise whether there exists a danger of inconsistent rulings and whether a prior application to the agency has been made
State ex reI Bell AII-1yen Virginia Inc v Ranson Syl Pts 1 and 2 201 W Va 402404497
SE2d 755 757 (1997)
The Circuit Courts action in this case meets the test established in Ranson because the
Residents primary argument for a writ ofmandamus before the Circuit Court was that the agency
had already resolved the issue to the agencys satisfaction In this case though the question at
issue undoubtedly lies peculiarly within the WVDEPs expertise and discretion the Circuit Court
detennined it had sufficient conventional experience to render its own decision on the merits of
the evidence presented to it during the hearing on the Residents petition for a wTit of mandamus
The Circuit Court in its Order based its decision on a consideration of the WVDEPs evidence
and findings but also on those of the testimony of the Residents expert witness and their own
testimony
Ultimately this Court in Ranson elected to not apply the primary jurisdiction doctrine
noting that this concept is essentially the same as exhaustion of administrative remedies
13
Not unlike the exhaustion of remedies doctrine the doctrine of primary jurisdiction is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties citations omitted)
Ranson 201 W Va 410497 SE2d 763lndeed the terms primary jurisdiction and exhaustion
of remedies though separate and distinct legal concepts are often confused and used
interchangeably ld at FN 6 (internal citation omitted)
The primary jurisdiction doctrine and the exhaustion of administrative remedies doctrine
do not apply in this matter because the circuit courts ofWest Virginia are granted explicit statutory
authority by West Virginia Code sect 22-3-24 to decide the claims raised in the Residents Petition
for a Writ of Mandamus as discussed infra To insist as does ERP that this Court should abstain
from deciding an issue that the Legislature has detennined is explicitly within the jurisdiction of
the circuit coqrts is incorrect
ERP argues that a danger of inconsistent rulings and other concerns (Petition at 35)
requires the application of the primary jurisdiction doctrine in this case That argument disregards
the fact that the only dispute arising out of the Residents Petition is currently pending before this
Court There are no other potential inconsistent rulings
Lastly ERP argues that the Circuit Courts Order violates the doctrine of primary
jurisdiction essentially because the Circuit Court did not expressly address the doctrine ofprimary
jurisdiction even though it was not raised in the Circuit Court proceedings There is no
requirement that a circuit court make an express finding on its own accordingly the absence of
such analysis is not reversible error
Accordingly this Court should uphold the Circuit Courts Order regarding the Residents
Petition for a Writ of Mandamus
14
F Patriot and Easterns bankruptcy claims do not bar the State of West Virginias regulatory authority
ERPs arguments regarding the Patriot bankruptcy proceedings are similarly unfounded
Patriots most recent bankruptcy case ended in October 2015 with the entry of the confinnation
order which occurred well before the December 2015 hearing in the Circuit Court of Wyoming
County at issue here That order dissolved the automatic stay in place and replaced it with a new
set of injunctions none of which were applicable at the time of the hearing on the writ of
mandamus in the underlying matter Further confinnation orders have no effect whatsoever on
state law enforcement Eastern was required to continue to comply with state environmental law
Pursuant to 28 USc sect 959(b) a debtor is required to perfonn any and all acts necessary in order
to effectuate compliance with State Law environmental obligations Furthennore 11 USc sect
362(b)(4) expressly exempts the enforcement of any police or regulatory law enforcement action
from the automatic stay See 11 USc sect 362(b)(4)
A ruling such as the one sought by ERP in this matter would throw State enforcement of
all State laws related to debtors operating under an automatic stay into disarray It is absurd to
suggest that the State of West Virginia through the WVDEP is unable to enforce environmental
laws against companies operating within the State pursuant to West Virginia law simply because
a mining company seeks bankruptcy protection Furthennore ERP asks this Court to maintain that
not only are West Virginia executive law enforcement agencies not able to order compliance with
State law against debtors but also that the circuit courts of West Virginia are unable to order
compliance That is not the law
On May 12 2015 Easterns parent company Patriot Coal Corporation and some of its
affiliates including Eastern filed a petition with the United States Bankruptcy Court for the
Eastern District ofVirginia under chapter 11 oftitle 11 ofthe United States Code (US Bankruptcy
15
Court ED Va Case No 15-32450 (KLPraquo During the course of the bankruptcy proceedings
Patriot negotiated the sale of substantially all of its assets to two separate entities Blackhawk
Mining LLC (Blackhawk) and VCLF VCLF proposed to acquire the Kopperston No1 Refuse
Impoundment including the SMCRA permit at issue in this case
In accordance with the Bankruptcy Courts Scheduling Order on September 18 2015
Patriot filed the Fourth Amended Disclosure Statement for the Debtors Fourth Amended Joint
Plan ofReorganization Pursuant to Chapter 11 of the Bankruptcy Code and the Debtors Fourth
Amended Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code
The Fourth Amended Plan attached a copy of the VCLF Asset Purchase Agreement
(APA) The VCLF APA definitively establishes Appellant ERPs liability for the water
replacement order at issue in this case The Fourth Amended Plan itself lists the SMCRA notice
that ultimately led to the Wyoming County Circuit Court Order at issue in this appeal as a piece
of unresolved litigation to be assumed by the purchasers of Patriots assets
Furthem10re Section 203 of the APA Assumed Liabilities states that VCLFIERP shall
assume all Liabilities associated with the Transferred Pem1its as well as liability for regulatory
violations and obligations on or in relation to the Purchased Assets or the Transferred Permits
arising post-Closing
Additionally Schedule 308(a)-(b) to the VCLF APA expressly lists all liabilities
associated with the Purchased Assets and again includes the May 2015 SMCRA notice from
owners ofproperties near the Kopperston mine alleging adverse impacts to groundwater resources
Schedule 313 lists all pending litigation associated with the Purchased Assets and yet again lists
the Kopperston SMCRA notice
16
ERP is a wholly owned subsidiary of VCLF incorporated to fulfill the reclamation
obligations associated with assets VCLF purchased out of the Patriot bankruptcy ERP became
the penn it holder of the pennit associated with this appeal ERPs assumption of the water
replacement liability at issue in this appeal is not just a matter of a contractual obligation between
two private parties rather its liability also arises by operation of the Bankruptcy Courts
Confinnation Order
Accordingly this Court should uphold the Circuit Courts Order in this matter because it
was not barred by bankruptcy law
VII CONCLUSION
In conclusion these Respondents respectfully request this Court enter an Order denying
ERPs Petition for a Writ of Prohibition
WEST VIRGINIA DEPARMENT OF ENVIRONMENTAL PROTECTION and SECRETARY AUSTIN CAPERTON by counsel
West Virginia Department of Environmental Protection Office of Legal Services 601 57th St SE Charleston WV 25304 Phone 304-926-0499 Fax 304-926-0461 Email jasonewandlingwvgov
17
CERTIFICATE OF SERVICE
I Jason Wandling certify that I served this Response in Opposition to Verified Petition for
Writ of Prohibition on 20 March 2017 by depositing a true copy thereof in the United States mail
postage prepaid addressed as follows
John J Meadows (WVSB 9442) Peter J Raupp (WVSB 10546) Devon J Stewart (WVSB 11712) Steptoe amp Johnson PLLC 707 Virginia Street East Chase Tower Seventeenth Floor PO Box 1588 Charleston WV 25326-1588 Phone 304-353-8154 Fax 304-353-8180 Email J ohnM eadowssteptoe-johnsoncom
PeterRauppsteptoe-johnsoncom DevonStewartsteptoe-johnsoncom
Honorable Warren D McGraw Judge PO Box 581 100 Main and Bank Streets Pineville WV 24874 Phone 304-732-7047 Fax 304-732-7047
Kevin W Thompson (WVSB 5062) David R Barney Jr (WVSB 7958) Thompson Barney 2030 Kanawha Blvd E Charleston WV 25311 Phone 304-343-4401 Fax 304-343-4405 Email kthompsonthompsonbarneycom
dbameythompsonbameycom
TABLE OF AUTHORITIES
West Virginia Constitution
Article III sect 10 1
West Virginia cases
Ashby v City ofFairmont 216 WVa 527 607 SE2d 856 (2004) 8
Bonafede v Grafton Feed amp Storage Co 81 WVa 313 94 SE 471 (1917) 10
Dawelle v T-aders Fed Sav amp Loan Assn 143 WVa 674104 SE2d 320 (1958) 45
Ewing v Bd ofEduc OfCity ofSummers 202 WVa 228 503 SE2d 541 (1998) 8
ODaniels v City ofCharleston 200 W Va 711 712490 SE2d 800801 (1997) 910
Oneal v Stimson 61 WVa 55156 SE 889 (1907) 10
Shobe v Latimer 162 W Va 779 253 SE2d 54 (1979) 11 12
Simpson v Stanton 119 WVa 235193 SE 64 (1937) 10
State ex rei Bd ofEduc ofCnty OfPutnam v Beane 224 W Va 31 680 SE2d 46 (2009) 10
State ex rei Chesapeake and Potomac Telephone Co ofW Va v Ashworth 190 WVa 547438 SE2d 890 (1993) 8
State ex reI Bell At- W Virginia Inc v Ranson 201 W Va 402497 SE2d 755 (1997) 1314
Staten v Dean 195 WVa 57464 SE2d 576 (1995) 4
United Fuel Gas Co v Morley Oil amp Gas Co 101 WVa 73 131 SE 713 (1926) 10
III
Wiggins v Eastern Assoc Coal Corp 178 WVa 63 357 SE2d 745 (1987) 4
West Virginia statutes
WVa Code sect 14-2-2 13 11 12
WVa Code sect 22-3-17 3 12
WVa Code sect 22-3-24 156 14
WVa Code sect 22-3A-5 5 6 7 8
WVa Code sect 22B-I-7 5
WVa Code sect 53-1-2 1
West Virginia rules and regulations
W Va R Civ P 19 2 3 9
United States Constitution
Due Process Clause of the Fourteenth Amendment to the US Constitution 1
Federal statutes
11 USC sect 362 1 15
28 USC sect 959 15
IV
I ASSIGNMENTS OF ERROR QUESTIONS PRESENTED
The Assigrunents of Error or Questions Presented are framed by the Petitioners as
1 Whether the Respondent Judge exceeded his judicial powers by exercising subjectshy
matter jurisdiction over administrative claims that were not exhausted
2 Whether the Respondent Judge exceeded his judicial powers by issuing a
mandamus order without requiring the joinder of indispensable parties burdened by the order in
violation of West Virginia law the Due Process Clause of the Fourteenth Amendment to the us
Constitution and the West Virginia Constitution Article III sect 10
3 Whether the Respondent Judge exceeded his judicial powers by issuing a
mandamus order with respect to a discretionary state agency action or by failing to decline
jurisdiction under the primary jurisdiction doctrine
4 Whether the Respondent Judge exceeded his judicial powers in violation of the
exclusive venue statutes ofWest Virginia Code sectsect 53-1-2 and 14-2-2 by issuing a mandamus order
in an action against a state agency and its employees
5 Whether the Respondent Judge exceeded his judicial powers in violation of the
automatic stay under II USc sect 362(a) by issuing a mandamus order in an action commenced
and continued with respect to property interests of a debtor in bankruptcy
II STATEMENT OF THE CASE
The underlying facts at issue in this appeal are not in dispute However these Respondents
note facts regarding two issues
First ERP acquired the permit at issue as part of the bankruptcy and subsequent sale of
assets owned previously by Patriot Coal Corporation Patriot was the parent company of Eastern
Coal Company LLC the holder of the pennit at issue in this case Patriot filed for bankruptcy
1
protection on 12 May 2015 During the bankruptcy proceedings Patriot negotiated the sale of
substantially all its assets to two separate entities Blackhawk Mining LLC and VCLF VCLF is
the parent company of Petitioner ERP VCLF acquired the Kopperston No 1 Refuse
Impoundment including the SMCRA pennit at issue in this case
Patriots Fourth Amended Plan attached a copy ofthe assets VCLF planned to buy in a
document called the VCLF Asset Purchase Agreement (APA) That document specifically lists
the Residents notice of intent to sue the WVDEP that ultimately led to the Wyoming County
Circuit Court Order at issue in this appeal as a piece of unresolved litigation to be assumed by the
purchasers of Patriots assets
The Petitioner ERP is a wholly owned subsidiary of VCLF ERP was specifically
incorporated to fulfill the reclamation obligations associated with assets VCLF purchased out of
the Patriot bankruptcy including the pennit at issue here and all of its potential liabilities
Second the Petitioner omitted the date on which ERP assumed the permit at issue in this
appeal ERP became the pennittee on 28 July 2016
III SUMMARY OF ARGUMENT
The Respondent Residents did not fail to exhaust the administrative remedies available to
them in this matter The Respondent Residents properly exercised their rights to civil claims
pursuant to West Virginia Code sect 22-3-24 The administrative proceedings that ERP alleges to
have foreclosed the Residents civil suits were initiated in fact by the Residents notices of intent
to file suit against the WVDEP
ERP insists that West Virginia Rule of Civil Procedure 19 requires that Eastern or ERP
should have been named as parties to the Residents Petition for a Writ of Mandamus Rule 19
states that any persons who claim an interest in the real property at issue are indispensable parties
2
to the proceeding W Va R Civ P 19 and Petition at 23 However the Residents Petition for
a Writ of Mandamus and the Circuit of Court of Wyoming Countys Order did not in any way
claim an interest in Eastern or ERPs real property or affect Eastern or ERPs real property
Venue was properly established in the Circuit Court of Wyoming County in accordance
with West Virginia Code sect 14-2-2 which allows citizens to file suit against the State to prevent
damage to real property in the circuit court of the county in which the real property is found
Mandamus in this instance was proper because the Circuit Court found that West Virginia
Code sect 22-3-17(a) mandates that the WVDEP shall issue a Notice of Violation in an operator is
not in compliance with a provision of a state rule or pennit The primary jurisdiction doctrine
which is essentially the same as the exhaustion ofremedies doctrine did not apply to the Residents
Petition for a Writ of Mandamus because the Circuit Court had explicit statutory authorization to
adjudicate the claims in the Petition
Lastly the Residents Petition for a Writ of Mandamus was not barred by bankruptcy law
because the automatic stay at issue lapsed before the hearing and Order at issue in this case and
further because West Virginia regulatory action against parties that seek bankruptcy protection is
not affected by the automatic stay
IV STATEMENT REGARDING ORAL ARGUMENT AND DECISION
These Respondents believe oral argument is necessary pursuant to the criteria in Rule 18(a)
of the West Virginia Rules of Appellate Procedure Oral argument under Rules 19 or 20 of the
West Virginia Rules of Appellate Procedure is appropriate because pursuant to Rule 19(a)(2) the
case allegedly involves an unsustainable exercise of discretion where the law governing that
discretion is settled The appeal also involves constitutional questions regarding a court ruling
pursuant to Rule 20(a)(3)
3
V ARGUMENT
A These Respondents largely agree with the Petitioners regarding the standard of review to be applied in this matter
These Respondents note however that the standard of appellate review of a circuit courts
order granting relief through the extraordinary writ of mandamus is de novo Staten v Dean Syl
Pt 1 195 WVa 57464 SE2d 576 (1995) This Court reviews a circuit courts underlying
factual findings under a clearly erroneous standard Id Lastly this Court reviews conclusions of
law under a clearly erroneous standard Id
B The Residents properly exercised a statutory right to pursue their actions in the Circuit Court of Wyoming County
Under the exhaustion of administrative remedies doctrine where a claim is cognizable in
the first instance by an administrative agency alone judicial interference is withheld until the
administrative process has run its course This Court has long held that [t]he general rule is that
where an administrative remedy is provided by statute or by rules and regulations having the force
and effect of law relief must be sought from the administrative body and such remedy must be
exhausted before the courts will act Syl pt 1 Daurelle v Tiaders Fed Sav amp Loan Assn Syl
Pt I 143 WVa 674104 SE2d 320 (1958)
There are exceptions to this rule This Court has held The factors courts have cited to
excuse failure to exhaust are (1) that the claim is collateral to a demand for benefits (2) that
exhaustion would be futile and (3) that plaintiffs would suffer irreparable hann if required to
exhaust administrative remedies Wiggins v Eastern Assoc Coal COp Syl Pt 6 178 WVa 63
357 SE2d 745 (1987) (This Court will not require the exhaustion of administrative remedies
where such remedies are duplicative or the effort to obtain them futile) Finally [t]he rule which
4
requires the exhaustion ofadministrative remedies is inapplicable where no administrative remedy
is provided by law Daw-elle at Syl pt 2_
In this matter however the Respondent Residents had two (and possibly three) choices
First they could submit claims to the WVDEPs Office of Explosives and Blasting pursuant to
West Virginia Code sect 22-3A-5 Second (arguably) they could pursue administrative remedies via
the Surface Mine Board (or possibly the Environmental Quality Board) pursuant to West Virginia
Code sect 22B-1-7 Third the Residents could file civil claims pursuant to West Virginia Code sect 22shy
3-24
In this case the Residents chose to file civil claims pursuant to West Virginia Code sect 22shy
3-24 As part of that process and in compliance with West Virginia law that requires 30 day notice
before filing suit against a state agency the Residents initiated WVDEPs involvement in this
matter by mailing a letter of intent to sue with an attached proposed Complaint to file in Circuit
Court to the WVDEP on 14 November 2011
In its brief however ERP insists that the Residents foreclosed their statutory circuit court
claims by submitting complaints to the WVDEP without specifying that those complaints were
contained in a notice of intent to sue the agency in circuit court Petition at 15 It strains credulity
to assert that the Residents intended to pursue administrative claims when they told the agency by
letter that they intended to sue the agency in circuit court
Subsequently the Residents civil claims in the Circuit Court of Wyoming County were
filed in accordance with sect 22-3-24 which states
(a) Nothing in this article affects in any way the rights of any person to enforce or protect under applicable law the persons interest in water resources affected by a surface mining operation
(b) Any operator shall replace the water supply of an owner of interest in real property who obtains all or part of the owners supply of water for domestic
5
agricultural industrial or other legitimate use from an underground or surface source where the supply has been affected by contamination diminution or interruption proximately caused by the surface mining operation unless waived by the owner
(c) There is a rebuttable presumption that a mining operation caused damage to an owners underground water supply if the inspector determines the following (1) Contamination diminution or damage to an owners underground water supply exists and (2) a preblast survey was performed consistent with the provisions of section thirteen-a of this article on the owners property including the underground water supply that indicated that contamination diminution or damage to the underground water supply did not exist prior to the mining conducted at the mining operation
(d) The operator conducting the mining operation shall (1) Provide an emergency drinking water supply within twenty-four hours (2) provide temporary water supply within seventy-two hours (3) within thirty days begin activities to establish a permanent water supply or submit a proposal to the secretary outlining the measures and timetables to be utilized in establishing a permanent supply The total time for providing a permanent water supply may not exceed two years If the operator demonstrates that providing a permanent replacement water supply cannot be completed within two years the secretary may extend the time frame on case-by-case basis and (4) pay all reasonable costs incurred by the owner in securing a water supply
(e) An owner aggrieved under the provisions of subsections (b) (c) or (d) of this section may seek relief in court or pursuant to the provisions of section five article three-a of this chapter
W Va Code sect 22-3-24 (emphasis added)
In this case the Residents never initiated the administrative claims process pursuant to
West Virginia Code sect 22-3A-S That statute in its entirety states
(a) The office of explosives and blasting shall establish and manage a process for the filing administration and resolution of claims related to blasting
(b) Claims which may be filed and determined under the provisions of this section shall be those arising from both of the following
(1) Damage to property arising from blasting activities conducted pursuant to a permit granted under article three of this chapter and
(2) The damage is incurred by a claimant who is the owner or occupant of the property
6
(c) The claims process established by the office of explosives and blasting shall include the following
(1) An initial detennination by the office of the merit of the claim and
(2) An arbitration process whereby the claim can be detennined and resolved by an arbitrator in a manner which is inexpensive prompt and fair to all parties The office shall propose rules for legislative approval in accordance with article three chapter twenty-nine-a of this code for the development of standards for establishing rules relating to the initial claim detennination and the arbitration process provided in this subsection
(d) If the operator disagrees with the initial detennination made by the office and requests arbitration then the following shall apply
(1) Any party may be represented by a representati ve of their choice
(2) At the request of the claimant the office shall provide the claimant with representation in the arbitration process which representation shall not necessarily be an attomey-at-Iaw and
(3) If the claim is upheld in whole or in part then the operator shall pay the costs ofthe proceeding as well as reasonable representation fees and costs of the claimant in an amount not to exceed one thousand dollars
(e) Participation in the claims process created by this section shall be voluntary for the claimant However once the claimant has submitted a claim for detennination under the provisions of this section it is intended that the finding of the office if not taken to arbitration shall be final If arbitration is requested it is intended that the results of such arbitration shall be final The office shall provide written notification to the claimant of the provisions of this subsection and shall secure a written acknowledgment from the claimant prior to processing a claim pursuant to the provisions of this section
(f) The operator shall pay any claim for which the operator is adjudged liable within thirty days of a final detennination If the claim is not paid within thirty days the director shall issue a cessation order pursuant to section sixteen article three of this chapter for all sites operated by the operator
(g) No pennit to mine coal shall be granted unless the pennit applicant agrees to be subject to the tenns of this section
(h) To fulfill its responsibilities pursuant to this section the office may retain the services of inspectors experts and other persons or finns as may be necessary
7
W Va Code sect 22-3A-5 (1999) (repealed June 9 2016)
The Residents did not submit their claims to the WVDEPs Office of Explosives and
Blasting pursuant to West Virginia Code sect 22-3A-5 There is nothing in the record that reflects
that the Residents specifically sought WVDEP investigation pursuant to that code section or
otherwise sought resolution of their claims pursuant to West Virginia Code sect 22-3A-5 The record
does not contain a document created by the Residents that request an investigation and subsequent
arbitration by the WVDEP Office ofExplosives and Blasting Conversely the record does contain
the Residents initiating letter notifying the WVDEP that the Residents intended to sue the agency
Simply put no authority exists to support ERPs assertion that merely submitting citizen
complaints to the WVDEP irrevocably invoked the jurisdiction of the WVDEPs Office of
Explosives and Blasting and the arbitration requirement contained in West Virginia Code sect 22shy
3A-5 (1999) Furthermore no authority exists to support ERPs assertion that merely submitting
citizen complaints to the WVDEP irrevocably invoked administrative review before the
environmental boards tasked with reviewing agency action
This fundamental factual issue short circuits ERPs arguments that rely on Ewing v Ed of
Educ OCity oSummers 202 WVa 228 503 SE2d 541 (1998) State ex rei Chesapeake and
Potomac Telephone Co oJw Va v Ashworth 190 WVa 547438 SE2d 890 (1993) and Ashby
v City 0 Fairmont 216 WVa 527 607 SE2d 856 (2004) In each of those cases the
complainants invoked claims that specifically called for administrative resolution In this matter
the Residents from the start invoked claims they intended to pursue in circuit court
ERP cannot submit any evidence that the Residents ever submitted claims to the WVDEPs
Office of Explosives and Blasting or filed Notices of Appeal with the Surface Mine Board or the
8
Environmental Quality Board Accordingly this Court should hold that the Residents properly
exercised their statutory rights to pursue their water claims in circuit court
C The Circuit Courts Order was properly issued because Eastern and ERP were not indispensable parties and because no real property interest of Eastern or ERP was at issue
This Court should uphold the Circuit Courts Order because the Residents Petition for a
Writ ofMandamus and the subsequent hearing did not violate Eastern or ERPs due process rights
and did not result in an order that placed restraints on the real property of a third party
ERP insists that West Virginia Rule of Civil Procedure 19 requires that Eastern or ERP
should have been named as parties to the Residents Petition for a Writ of Mandamus Rule 19
requires that any persons who claim an interest in the real property at issue are indispensable
parties to the proceeding W Va R Civ P 19 and Petition at 23 This argument fails at the outset
because the Residents Petition for a Writ of Mandamus and the Circuit of Court of Wyoming
Countys Order did not in any way claim an interest in Eastern or ERPs real property or affect
Eastern or ERPs real property
Contrary to ERPs assertions this Court held in 0 Daniels v City of Charleston that
When a court proceeding directly affects or detennines the scope of rights or interests in real
property any persons who claim an interest in the real property at issue are indispensable parties
to the proceeding Any order or decree issued in the absence of those parties is null and void
ODaniels v City of CIz areston Syl Pt 2200 W Va 711 712490 SE2d 800 801 (1997)
(emphasis added)
o Daniels does not stand for the proposition that as here potential parties such as Patriot
Eastern or ERP must be joined as indispensable parties where as admitted by ERP personal
property is at issue There is no real property at issue in this case at least insofar as ERP is
9
concerned The only real property at issue in this case belongs to the Residents Accordingly
OBrien does not apply to this case
Every case cited by the o Daniels court -- Bonafede v Grafton Feed amp Storage Co 81
WVa 31394 SE 471 (1917) United Fuel Gas Co v Morley Oil amp Gas Co 101 WVa 73 131
SE 713 (1926) Oneal v Stimson 61 WVa 551 56 SE 889 (1907) -- involved real property
There is no West Virginia authority that makes the same statement about personal property and
there are certainly no West Virginia cases that bar a circuit court from granting a petition for a writ
ofmandamus that requires a state agency to order an action that might cause a corporation to spend
money in order to comply
ERPs broader due process argument also fails This Court holds that The due process of
law guaranteed by the State and Federal Constitutions when applied to procedure in the courts of
the land requires both notice and the right to be heard State ex reI Bd ofEduc of Cnty Of
Putnam v Beane Syl Pt 2 224 W Va 31 680 SE2d 46 (2009) (quoting Simpson v Stanton
SyJ Pt 2 119 WVa 235 193 SE 64 (1937)
As shown infra Eastern and its corporate successor ERP were aware of the Residents
proposed petition for writ of mandamus as early as 2011 and took part from the beginning of the
investigation process with the Residents and the WVDEP To the extent ERP complains that its
corporate predecessor failed to protect its interests by refusing to intervene in the proceedings
below it is bound by the terms of its agreement with Patriot and Eastern A corporate successor
may not avoid a prior liability simply because it subsequently decides it doesnt care for a part of
the deal ERPs due process argument fails because it had (1) notice and (2) had a right to be heard
before the Circuit Court of Wyoming County
10
Accordingly this Court should uphold the Circuit Courts Order because the Residents
Petition for a Writ of Mandamus and the subsequent hearing did not violate Eastern or ERPs due
process rights and did not result in an order that required impennissible restraints on the real
property of a third party
D The Circuit Court of Wyoming County was authorized to enter the Order at issue because it properly had venue
The Circuit Court of Wyoming County unquestionably had venue pursuant to West
Virginia Code sect 14-2-2 That statute states in its entirety
(a) The following proceedings shall be brought and prosecuted only in the circuit court of Kanawha County
(1) Any suit in which the governor any other state officer or a state agency is made a party defendant except as garnishee or suggestee
(2) Any suit attempting to enjoin or otherwise suspend or affect a judgment or decree on behalfof the State obtained in any circuit court
(b) Any proceeding for injunctive or mandamus relief involving the taking title or collection for or prevention of damage to real property may be brought and presented in the circuit court of the county in which the real property affected is situate
This section shall apply only to such proceedings as are not prohibited by the constitutional immunity of the State from suit under section thirty-five article VI of the Constitution of the State
W Va Code sect 14-2-2 (emphasis added) The underlying suit in which the plaintiffs alleged that
mining operations located near their homes contaminated their well water was a proceeding in
injunctive and mandamus relief against the WVDEP and Secretary Huffman that sought relief for
the prevention of damage to real property By its own tern1s the statute expressly provides the
Circuit Court of Wyoming County with venue and jurisdiction over the claim
This Court has ruled squarely on this issue in Shobe v Latimer 162 W Va 779 253 SE2d
54 (1979) In Shobe the plaintiffs sought a declaratory judgment holding that a water contract
11
between the West Virginia Department of Natural Resources and a public seIVice district was
illegalld The lower court granted a motion to dismiss holding that the Circuit Court ofKanawha
County did not have venue to adjudicate a claim based in Grant County West Virginiald This
Court disagreed holding that an action regarding stream rights was an allegation involving the
taking or damage to real property within in the meaning of WVa Code sect 14-2-2(b) and that
venue was proper in the circuit courts of either Kanawha or Grant County ld at 794 63 Such is
the case in the underlying matter the plaintiffs in the underlying Wyoming County action were
free pursuant to West Virginia Code sect 14-2-2 to choose between Kanawha and Wyoming County
Circuit Court Accordingly this Court should turn aside ERPs arguments regarding the authority
of the Circuit Court of Wyoming County
Accordingly this Court uphold the Circuit Courts Order because it had venue to detennine
the merits ofthe Residents Petition for a Writ of Mandamus
E The Circuit Court of Wyoming County properly granted the Residents Petition for a Writ of Mandamus because it found that the WVDEP had erred in carrying out its duties with regard to water replacement and because the primary jurisdiction doctrine much like the exhaustion of administrative remedies doctrine is inapplicable to this case
The Circuit Court of Wyoming County found as a matter oflaw that the WVDEP erred by
failing to order water replacement as alleged in the Residents Petition for a Writ of Mandamus
By granting the Petition the Court held that the WVDEP had a legal duty pursuant to West
Virginia Code sect 22-3-17(a) to order water replacement for the Residents Appendix at 8 The
Circuit Court also agreed with the Residents that West Virginia Code sect 22-3-17(a) mandates that
the WVDEP shall issue a Notice ofViolation in an operator is not in compliance with a provision
ofa state rule or pennit which constitutes a non-discretionary duty W Va Code 22-3-17(a)
12
The Circuit Court also correctly disregarded the primary jurisdiction doctrine This Court
has described the primary jurisdiction doctrine as follows
1 Where an administrative agency and the courts have concurrent jurisdiction of an issue which requires the agencys special expertise and which extends beyond the conventional experience ofjudges the doctrine ofprimary jurisdiction applies In such a case the court should refrain from exercising jurisdiction until after the agency has resolved the issue The courts decision whether to apply the primary jurisdiction doctrine is reviewed on appeal under an abuse of discretion standard
2 In detennining whether to apply the primary jurisdiction doctrine courts should consider factors such as whether the question at issue is within the conventional experience ofjudges whether the question at issue lies peculiarly within the agencys discretion or requires the exercise of agency expertise whether there exists a danger of inconsistent rulings and whether a prior application to the agency has been made
State ex reI Bell AII-1yen Virginia Inc v Ranson Syl Pts 1 and 2 201 W Va 402404497
SE2d 755 757 (1997)
The Circuit Courts action in this case meets the test established in Ranson because the
Residents primary argument for a writ ofmandamus before the Circuit Court was that the agency
had already resolved the issue to the agencys satisfaction In this case though the question at
issue undoubtedly lies peculiarly within the WVDEPs expertise and discretion the Circuit Court
detennined it had sufficient conventional experience to render its own decision on the merits of
the evidence presented to it during the hearing on the Residents petition for a wTit of mandamus
The Circuit Court in its Order based its decision on a consideration of the WVDEPs evidence
and findings but also on those of the testimony of the Residents expert witness and their own
testimony
Ultimately this Court in Ranson elected to not apply the primary jurisdiction doctrine
noting that this concept is essentially the same as exhaustion of administrative remedies
13
Not unlike the exhaustion of remedies doctrine the doctrine of primary jurisdiction is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties citations omitted)
Ranson 201 W Va 410497 SE2d 763lndeed the terms primary jurisdiction and exhaustion
of remedies though separate and distinct legal concepts are often confused and used
interchangeably ld at FN 6 (internal citation omitted)
The primary jurisdiction doctrine and the exhaustion of administrative remedies doctrine
do not apply in this matter because the circuit courts ofWest Virginia are granted explicit statutory
authority by West Virginia Code sect 22-3-24 to decide the claims raised in the Residents Petition
for a Writ of Mandamus as discussed infra To insist as does ERP that this Court should abstain
from deciding an issue that the Legislature has detennined is explicitly within the jurisdiction of
the circuit coqrts is incorrect
ERP argues that a danger of inconsistent rulings and other concerns (Petition at 35)
requires the application of the primary jurisdiction doctrine in this case That argument disregards
the fact that the only dispute arising out of the Residents Petition is currently pending before this
Court There are no other potential inconsistent rulings
Lastly ERP argues that the Circuit Courts Order violates the doctrine of primary
jurisdiction essentially because the Circuit Court did not expressly address the doctrine ofprimary
jurisdiction even though it was not raised in the Circuit Court proceedings There is no
requirement that a circuit court make an express finding on its own accordingly the absence of
such analysis is not reversible error
Accordingly this Court should uphold the Circuit Courts Order regarding the Residents
Petition for a Writ of Mandamus
14
F Patriot and Easterns bankruptcy claims do not bar the State of West Virginias regulatory authority
ERPs arguments regarding the Patriot bankruptcy proceedings are similarly unfounded
Patriots most recent bankruptcy case ended in October 2015 with the entry of the confinnation
order which occurred well before the December 2015 hearing in the Circuit Court of Wyoming
County at issue here That order dissolved the automatic stay in place and replaced it with a new
set of injunctions none of which were applicable at the time of the hearing on the writ of
mandamus in the underlying matter Further confinnation orders have no effect whatsoever on
state law enforcement Eastern was required to continue to comply with state environmental law
Pursuant to 28 USc sect 959(b) a debtor is required to perfonn any and all acts necessary in order
to effectuate compliance with State Law environmental obligations Furthennore 11 USc sect
362(b)(4) expressly exempts the enforcement of any police or regulatory law enforcement action
from the automatic stay See 11 USc sect 362(b)(4)
A ruling such as the one sought by ERP in this matter would throw State enforcement of
all State laws related to debtors operating under an automatic stay into disarray It is absurd to
suggest that the State of West Virginia through the WVDEP is unable to enforce environmental
laws against companies operating within the State pursuant to West Virginia law simply because
a mining company seeks bankruptcy protection Furthennore ERP asks this Court to maintain that
not only are West Virginia executive law enforcement agencies not able to order compliance with
State law against debtors but also that the circuit courts of West Virginia are unable to order
compliance That is not the law
On May 12 2015 Easterns parent company Patriot Coal Corporation and some of its
affiliates including Eastern filed a petition with the United States Bankruptcy Court for the
Eastern District ofVirginia under chapter 11 oftitle 11 ofthe United States Code (US Bankruptcy
15
Court ED Va Case No 15-32450 (KLPraquo During the course of the bankruptcy proceedings
Patriot negotiated the sale of substantially all of its assets to two separate entities Blackhawk
Mining LLC (Blackhawk) and VCLF VCLF proposed to acquire the Kopperston No1 Refuse
Impoundment including the SMCRA permit at issue in this case
In accordance with the Bankruptcy Courts Scheduling Order on September 18 2015
Patriot filed the Fourth Amended Disclosure Statement for the Debtors Fourth Amended Joint
Plan ofReorganization Pursuant to Chapter 11 of the Bankruptcy Code and the Debtors Fourth
Amended Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code
The Fourth Amended Plan attached a copy of the VCLF Asset Purchase Agreement
(APA) The VCLF APA definitively establishes Appellant ERPs liability for the water
replacement order at issue in this case The Fourth Amended Plan itself lists the SMCRA notice
that ultimately led to the Wyoming County Circuit Court Order at issue in this appeal as a piece
of unresolved litigation to be assumed by the purchasers of Patriots assets
Furthem10re Section 203 of the APA Assumed Liabilities states that VCLFIERP shall
assume all Liabilities associated with the Transferred Pem1its as well as liability for regulatory
violations and obligations on or in relation to the Purchased Assets or the Transferred Permits
arising post-Closing
Additionally Schedule 308(a)-(b) to the VCLF APA expressly lists all liabilities
associated with the Purchased Assets and again includes the May 2015 SMCRA notice from
owners ofproperties near the Kopperston mine alleging adverse impacts to groundwater resources
Schedule 313 lists all pending litigation associated with the Purchased Assets and yet again lists
the Kopperston SMCRA notice
16
ERP is a wholly owned subsidiary of VCLF incorporated to fulfill the reclamation
obligations associated with assets VCLF purchased out of the Patriot bankruptcy ERP became
the penn it holder of the pennit associated with this appeal ERPs assumption of the water
replacement liability at issue in this appeal is not just a matter of a contractual obligation between
two private parties rather its liability also arises by operation of the Bankruptcy Courts
Confinnation Order
Accordingly this Court should uphold the Circuit Courts Order in this matter because it
was not barred by bankruptcy law
VII CONCLUSION
In conclusion these Respondents respectfully request this Court enter an Order denying
ERPs Petition for a Writ of Prohibition
WEST VIRGINIA DEPARMENT OF ENVIRONMENTAL PROTECTION and SECRETARY AUSTIN CAPERTON by counsel
West Virginia Department of Environmental Protection Office of Legal Services 601 57th St SE Charleston WV 25304 Phone 304-926-0499 Fax 304-926-0461 Email jasonewandlingwvgov
17
CERTIFICATE OF SERVICE
I Jason Wandling certify that I served this Response in Opposition to Verified Petition for
Writ of Prohibition on 20 March 2017 by depositing a true copy thereof in the United States mail
postage prepaid addressed as follows
John J Meadows (WVSB 9442) Peter J Raupp (WVSB 10546) Devon J Stewart (WVSB 11712) Steptoe amp Johnson PLLC 707 Virginia Street East Chase Tower Seventeenth Floor PO Box 1588 Charleston WV 25326-1588 Phone 304-353-8154 Fax 304-353-8180 Email J ohnM eadowssteptoe-johnsoncom
PeterRauppsteptoe-johnsoncom DevonStewartsteptoe-johnsoncom
Honorable Warren D McGraw Judge PO Box 581 100 Main and Bank Streets Pineville WV 24874 Phone 304-732-7047 Fax 304-732-7047
Kevin W Thompson (WVSB 5062) David R Barney Jr (WVSB 7958) Thompson Barney 2030 Kanawha Blvd E Charleston WV 25311 Phone 304-343-4401 Fax 304-343-4405 Email kthompsonthompsonbarneycom
dbameythompsonbameycom
Wiggins v Eastern Assoc Coal Corp 178 WVa 63 357 SE2d 745 (1987) 4
West Virginia statutes
WVa Code sect 14-2-2 13 11 12
WVa Code sect 22-3-17 3 12
WVa Code sect 22-3-24 156 14
WVa Code sect 22-3A-5 5 6 7 8
WVa Code sect 22B-I-7 5
WVa Code sect 53-1-2 1
West Virginia rules and regulations
W Va R Civ P 19 2 3 9
United States Constitution
Due Process Clause of the Fourteenth Amendment to the US Constitution 1
Federal statutes
11 USC sect 362 1 15
28 USC sect 959 15
IV
I ASSIGNMENTS OF ERROR QUESTIONS PRESENTED
The Assigrunents of Error or Questions Presented are framed by the Petitioners as
1 Whether the Respondent Judge exceeded his judicial powers by exercising subjectshy
matter jurisdiction over administrative claims that were not exhausted
2 Whether the Respondent Judge exceeded his judicial powers by issuing a
mandamus order without requiring the joinder of indispensable parties burdened by the order in
violation of West Virginia law the Due Process Clause of the Fourteenth Amendment to the us
Constitution and the West Virginia Constitution Article III sect 10
3 Whether the Respondent Judge exceeded his judicial powers by issuing a
mandamus order with respect to a discretionary state agency action or by failing to decline
jurisdiction under the primary jurisdiction doctrine
4 Whether the Respondent Judge exceeded his judicial powers in violation of the
exclusive venue statutes ofWest Virginia Code sectsect 53-1-2 and 14-2-2 by issuing a mandamus order
in an action against a state agency and its employees
5 Whether the Respondent Judge exceeded his judicial powers in violation of the
automatic stay under II USc sect 362(a) by issuing a mandamus order in an action commenced
and continued with respect to property interests of a debtor in bankruptcy
II STATEMENT OF THE CASE
The underlying facts at issue in this appeal are not in dispute However these Respondents
note facts regarding two issues
First ERP acquired the permit at issue as part of the bankruptcy and subsequent sale of
assets owned previously by Patriot Coal Corporation Patriot was the parent company of Eastern
Coal Company LLC the holder of the pennit at issue in this case Patriot filed for bankruptcy
1
protection on 12 May 2015 During the bankruptcy proceedings Patriot negotiated the sale of
substantially all its assets to two separate entities Blackhawk Mining LLC and VCLF VCLF is
the parent company of Petitioner ERP VCLF acquired the Kopperston No 1 Refuse
Impoundment including the SMCRA pennit at issue in this case
Patriots Fourth Amended Plan attached a copy ofthe assets VCLF planned to buy in a
document called the VCLF Asset Purchase Agreement (APA) That document specifically lists
the Residents notice of intent to sue the WVDEP that ultimately led to the Wyoming County
Circuit Court Order at issue in this appeal as a piece of unresolved litigation to be assumed by the
purchasers of Patriots assets
The Petitioner ERP is a wholly owned subsidiary of VCLF ERP was specifically
incorporated to fulfill the reclamation obligations associated with assets VCLF purchased out of
the Patriot bankruptcy including the pennit at issue here and all of its potential liabilities
Second the Petitioner omitted the date on which ERP assumed the permit at issue in this
appeal ERP became the pennittee on 28 July 2016
III SUMMARY OF ARGUMENT
The Respondent Residents did not fail to exhaust the administrative remedies available to
them in this matter The Respondent Residents properly exercised their rights to civil claims
pursuant to West Virginia Code sect 22-3-24 The administrative proceedings that ERP alleges to
have foreclosed the Residents civil suits were initiated in fact by the Residents notices of intent
to file suit against the WVDEP
ERP insists that West Virginia Rule of Civil Procedure 19 requires that Eastern or ERP
should have been named as parties to the Residents Petition for a Writ of Mandamus Rule 19
states that any persons who claim an interest in the real property at issue are indispensable parties
2
to the proceeding W Va R Civ P 19 and Petition at 23 However the Residents Petition for
a Writ of Mandamus and the Circuit of Court of Wyoming Countys Order did not in any way
claim an interest in Eastern or ERPs real property or affect Eastern or ERPs real property
Venue was properly established in the Circuit Court of Wyoming County in accordance
with West Virginia Code sect 14-2-2 which allows citizens to file suit against the State to prevent
damage to real property in the circuit court of the county in which the real property is found
Mandamus in this instance was proper because the Circuit Court found that West Virginia
Code sect 22-3-17(a) mandates that the WVDEP shall issue a Notice of Violation in an operator is
not in compliance with a provision of a state rule or pennit The primary jurisdiction doctrine
which is essentially the same as the exhaustion ofremedies doctrine did not apply to the Residents
Petition for a Writ of Mandamus because the Circuit Court had explicit statutory authorization to
adjudicate the claims in the Petition
Lastly the Residents Petition for a Writ of Mandamus was not barred by bankruptcy law
because the automatic stay at issue lapsed before the hearing and Order at issue in this case and
further because West Virginia regulatory action against parties that seek bankruptcy protection is
not affected by the automatic stay
IV STATEMENT REGARDING ORAL ARGUMENT AND DECISION
These Respondents believe oral argument is necessary pursuant to the criteria in Rule 18(a)
of the West Virginia Rules of Appellate Procedure Oral argument under Rules 19 or 20 of the
West Virginia Rules of Appellate Procedure is appropriate because pursuant to Rule 19(a)(2) the
case allegedly involves an unsustainable exercise of discretion where the law governing that
discretion is settled The appeal also involves constitutional questions regarding a court ruling
pursuant to Rule 20(a)(3)
3
V ARGUMENT
A These Respondents largely agree with the Petitioners regarding the standard of review to be applied in this matter
These Respondents note however that the standard of appellate review of a circuit courts
order granting relief through the extraordinary writ of mandamus is de novo Staten v Dean Syl
Pt 1 195 WVa 57464 SE2d 576 (1995) This Court reviews a circuit courts underlying
factual findings under a clearly erroneous standard Id Lastly this Court reviews conclusions of
law under a clearly erroneous standard Id
B The Residents properly exercised a statutory right to pursue their actions in the Circuit Court of Wyoming County
Under the exhaustion of administrative remedies doctrine where a claim is cognizable in
the first instance by an administrative agency alone judicial interference is withheld until the
administrative process has run its course This Court has long held that [t]he general rule is that
where an administrative remedy is provided by statute or by rules and regulations having the force
and effect of law relief must be sought from the administrative body and such remedy must be
exhausted before the courts will act Syl pt 1 Daurelle v Tiaders Fed Sav amp Loan Assn Syl
Pt I 143 WVa 674104 SE2d 320 (1958)
There are exceptions to this rule This Court has held The factors courts have cited to
excuse failure to exhaust are (1) that the claim is collateral to a demand for benefits (2) that
exhaustion would be futile and (3) that plaintiffs would suffer irreparable hann if required to
exhaust administrative remedies Wiggins v Eastern Assoc Coal COp Syl Pt 6 178 WVa 63
357 SE2d 745 (1987) (This Court will not require the exhaustion of administrative remedies
where such remedies are duplicative or the effort to obtain them futile) Finally [t]he rule which
4
requires the exhaustion ofadministrative remedies is inapplicable where no administrative remedy
is provided by law Daw-elle at Syl pt 2_
In this matter however the Respondent Residents had two (and possibly three) choices
First they could submit claims to the WVDEPs Office of Explosives and Blasting pursuant to
West Virginia Code sect 22-3A-5 Second (arguably) they could pursue administrative remedies via
the Surface Mine Board (or possibly the Environmental Quality Board) pursuant to West Virginia
Code sect 22B-1-7 Third the Residents could file civil claims pursuant to West Virginia Code sect 22shy
3-24
In this case the Residents chose to file civil claims pursuant to West Virginia Code sect 22shy
3-24 As part of that process and in compliance with West Virginia law that requires 30 day notice
before filing suit against a state agency the Residents initiated WVDEPs involvement in this
matter by mailing a letter of intent to sue with an attached proposed Complaint to file in Circuit
Court to the WVDEP on 14 November 2011
In its brief however ERP insists that the Residents foreclosed their statutory circuit court
claims by submitting complaints to the WVDEP without specifying that those complaints were
contained in a notice of intent to sue the agency in circuit court Petition at 15 It strains credulity
to assert that the Residents intended to pursue administrative claims when they told the agency by
letter that they intended to sue the agency in circuit court
Subsequently the Residents civil claims in the Circuit Court of Wyoming County were
filed in accordance with sect 22-3-24 which states
(a) Nothing in this article affects in any way the rights of any person to enforce or protect under applicable law the persons interest in water resources affected by a surface mining operation
(b) Any operator shall replace the water supply of an owner of interest in real property who obtains all or part of the owners supply of water for domestic
5
agricultural industrial or other legitimate use from an underground or surface source where the supply has been affected by contamination diminution or interruption proximately caused by the surface mining operation unless waived by the owner
(c) There is a rebuttable presumption that a mining operation caused damage to an owners underground water supply if the inspector determines the following (1) Contamination diminution or damage to an owners underground water supply exists and (2) a preblast survey was performed consistent with the provisions of section thirteen-a of this article on the owners property including the underground water supply that indicated that contamination diminution or damage to the underground water supply did not exist prior to the mining conducted at the mining operation
(d) The operator conducting the mining operation shall (1) Provide an emergency drinking water supply within twenty-four hours (2) provide temporary water supply within seventy-two hours (3) within thirty days begin activities to establish a permanent water supply or submit a proposal to the secretary outlining the measures and timetables to be utilized in establishing a permanent supply The total time for providing a permanent water supply may not exceed two years If the operator demonstrates that providing a permanent replacement water supply cannot be completed within two years the secretary may extend the time frame on case-by-case basis and (4) pay all reasonable costs incurred by the owner in securing a water supply
(e) An owner aggrieved under the provisions of subsections (b) (c) or (d) of this section may seek relief in court or pursuant to the provisions of section five article three-a of this chapter
W Va Code sect 22-3-24 (emphasis added)
In this case the Residents never initiated the administrative claims process pursuant to
West Virginia Code sect 22-3A-S That statute in its entirety states
(a) The office of explosives and blasting shall establish and manage a process for the filing administration and resolution of claims related to blasting
(b) Claims which may be filed and determined under the provisions of this section shall be those arising from both of the following
(1) Damage to property arising from blasting activities conducted pursuant to a permit granted under article three of this chapter and
(2) The damage is incurred by a claimant who is the owner or occupant of the property
6
(c) The claims process established by the office of explosives and blasting shall include the following
(1) An initial detennination by the office of the merit of the claim and
(2) An arbitration process whereby the claim can be detennined and resolved by an arbitrator in a manner which is inexpensive prompt and fair to all parties The office shall propose rules for legislative approval in accordance with article three chapter twenty-nine-a of this code for the development of standards for establishing rules relating to the initial claim detennination and the arbitration process provided in this subsection
(d) If the operator disagrees with the initial detennination made by the office and requests arbitration then the following shall apply
(1) Any party may be represented by a representati ve of their choice
(2) At the request of the claimant the office shall provide the claimant with representation in the arbitration process which representation shall not necessarily be an attomey-at-Iaw and
(3) If the claim is upheld in whole or in part then the operator shall pay the costs ofthe proceeding as well as reasonable representation fees and costs of the claimant in an amount not to exceed one thousand dollars
(e) Participation in the claims process created by this section shall be voluntary for the claimant However once the claimant has submitted a claim for detennination under the provisions of this section it is intended that the finding of the office if not taken to arbitration shall be final If arbitration is requested it is intended that the results of such arbitration shall be final The office shall provide written notification to the claimant of the provisions of this subsection and shall secure a written acknowledgment from the claimant prior to processing a claim pursuant to the provisions of this section
(f) The operator shall pay any claim for which the operator is adjudged liable within thirty days of a final detennination If the claim is not paid within thirty days the director shall issue a cessation order pursuant to section sixteen article three of this chapter for all sites operated by the operator
(g) No pennit to mine coal shall be granted unless the pennit applicant agrees to be subject to the tenns of this section
(h) To fulfill its responsibilities pursuant to this section the office may retain the services of inspectors experts and other persons or finns as may be necessary
7
W Va Code sect 22-3A-5 (1999) (repealed June 9 2016)
The Residents did not submit their claims to the WVDEPs Office of Explosives and
Blasting pursuant to West Virginia Code sect 22-3A-5 There is nothing in the record that reflects
that the Residents specifically sought WVDEP investigation pursuant to that code section or
otherwise sought resolution of their claims pursuant to West Virginia Code sect 22-3A-5 The record
does not contain a document created by the Residents that request an investigation and subsequent
arbitration by the WVDEP Office ofExplosives and Blasting Conversely the record does contain
the Residents initiating letter notifying the WVDEP that the Residents intended to sue the agency
Simply put no authority exists to support ERPs assertion that merely submitting citizen
complaints to the WVDEP irrevocably invoked the jurisdiction of the WVDEPs Office of
Explosives and Blasting and the arbitration requirement contained in West Virginia Code sect 22shy
3A-5 (1999) Furthermore no authority exists to support ERPs assertion that merely submitting
citizen complaints to the WVDEP irrevocably invoked administrative review before the
environmental boards tasked with reviewing agency action
This fundamental factual issue short circuits ERPs arguments that rely on Ewing v Ed of
Educ OCity oSummers 202 WVa 228 503 SE2d 541 (1998) State ex rei Chesapeake and
Potomac Telephone Co oJw Va v Ashworth 190 WVa 547438 SE2d 890 (1993) and Ashby
v City 0 Fairmont 216 WVa 527 607 SE2d 856 (2004) In each of those cases the
complainants invoked claims that specifically called for administrative resolution In this matter
the Residents from the start invoked claims they intended to pursue in circuit court
ERP cannot submit any evidence that the Residents ever submitted claims to the WVDEPs
Office of Explosives and Blasting or filed Notices of Appeal with the Surface Mine Board or the
8
Environmental Quality Board Accordingly this Court should hold that the Residents properly
exercised their statutory rights to pursue their water claims in circuit court
C The Circuit Courts Order was properly issued because Eastern and ERP were not indispensable parties and because no real property interest of Eastern or ERP was at issue
This Court should uphold the Circuit Courts Order because the Residents Petition for a
Writ ofMandamus and the subsequent hearing did not violate Eastern or ERPs due process rights
and did not result in an order that placed restraints on the real property of a third party
ERP insists that West Virginia Rule of Civil Procedure 19 requires that Eastern or ERP
should have been named as parties to the Residents Petition for a Writ of Mandamus Rule 19
requires that any persons who claim an interest in the real property at issue are indispensable
parties to the proceeding W Va R Civ P 19 and Petition at 23 This argument fails at the outset
because the Residents Petition for a Writ of Mandamus and the Circuit of Court of Wyoming
Countys Order did not in any way claim an interest in Eastern or ERPs real property or affect
Eastern or ERPs real property
Contrary to ERPs assertions this Court held in 0 Daniels v City of Charleston that
When a court proceeding directly affects or detennines the scope of rights or interests in real
property any persons who claim an interest in the real property at issue are indispensable parties
to the proceeding Any order or decree issued in the absence of those parties is null and void
ODaniels v City of CIz areston Syl Pt 2200 W Va 711 712490 SE2d 800 801 (1997)
(emphasis added)
o Daniels does not stand for the proposition that as here potential parties such as Patriot
Eastern or ERP must be joined as indispensable parties where as admitted by ERP personal
property is at issue There is no real property at issue in this case at least insofar as ERP is
9
concerned The only real property at issue in this case belongs to the Residents Accordingly
OBrien does not apply to this case
Every case cited by the o Daniels court -- Bonafede v Grafton Feed amp Storage Co 81
WVa 31394 SE 471 (1917) United Fuel Gas Co v Morley Oil amp Gas Co 101 WVa 73 131
SE 713 (1926) Oneal v Stimson 61 WVa 551 56 SE 889 (1907) -- involved real property
There is no West Virginia authority that makes the same statement about personal property and
there are certainly no West Virginia cases that bar a circuit court from granting a petition for a writ
ofmandamus that requires a state agency to order an action that might cause a corporation to spend
money in order to comply
ERPs broader due process argument also fails This Court holds that The due process of
law guaranteed by the State and Federal Constitutions when applied to procedure in the courts of
the land requires both notice and the right to be heard State ex reI Bd ofEduc of Cnty Of
Putnam v Beane Syl Pt 2 224 W Va 31 680 SE2d 46 (2009) (quoting Simpson v Stanton
SyJ Pt 2 119 WVa 235 193 SE 64 (1937)
As shown infra Eastern and its corporate successor ERP were aware of the Residents
proposed petition for writ of mandamus as early as 2011 and took part from the beginning of the
investigation process with the Residents and the WVDEP To the extent ERP complains that its
corporate predecessor failed to protect its interests by refusing to intervene in the proceedings
below it is bound by the terms of its agreement with Patriot and Eastern A corporate successor
may not avoid a prior liability simply because it subsequently decides it doesnt care for a part of
the deal ERPs due process argument fails because it had (1) notice and (2) had a right to be heard
before the Circuit Court of Wyoming County
10
Accordingly this Court should uphold the Circuit Courts Order because the Residents
Petition for a Writ of Mandamus and the subsequent hearing did not violate Eastern or ERPs due
process rights and did not result in an order that required impennissible restraints on the real
property of a third party
D The Circuit Court of Wyoming County was authorized to enter the Order at issue because it properly had venue
The Circuit Court of Wyoming County unquestionably had venue pursuant to West
Virginia Code sect 14-2-2 That statute states in its entirety
(a) The following proceedings shall be brought and prosecuted only in the circuit court of Kanawha County
(1) Any suit in which the governor any other state officer or a state agency is made a party defendant except as garnishee or suggestee
(2) Any suit attempting to enjoin or otherwise suspend or affect a judgment or decree on behalfof the State obtained in any circuit court
(b) Any proceeding for injunctive or mandamus relief involving the taking title or collection for or prevention of damage to real property may be brought and presented in the circuit court of the county in which the real property affected is situate
This section shall apply only to such proceedings as are not prohibited by the constitutional immunity of the State from suit under section thirty-five article VI of the Constitution of the State
W Va Code sect 14-2-2 (emphasis added) The underlying suit in which the plaintiffs alleged that
mining operations located near their homes contaminated their well water was a proceeding in
injunctive and mandamus relief against the WVDEP and Secretary Huffman that sought relief for
the prevention of damage to real property By its own tern1s the statute expressly provides the
Circuit Court of Wyoming County with venue and jurisdiction over the claim
This Court has ruled squarely on this issue in Shobe v Latimer 162 W Va 779 253 SE2d
54 (1979) In Shobe the plaintiffs sought a declaratory judgment holding that a water contract
11
between the West Virginia Department of Natural Resources and a public seIVice district was
illegalld The lower court granted a motion to dismiss holding that the Circuit Court ofKanawha
County did not have venue to adjudicate a claim based in Grant County West Virginiald This
Court disagreed holding that an action regarding stream rights was an allegation involving the
taking or damage to real property within in the meaning of WVa Code sect 14-2-2(b) and that
venue was proper in the circuit courts of either Kanawha or Grant County ld at 794 63 Such is
the case in the underlying matter the plaintiffs in the underlying Wyoming County action were
free pursuant to West Virginia Code sect 14-2-2 to choose between Kanawha and Wyoming County
Circuit Court Accordingly this Court should turn aside ERPs arguments regarding the authority
of the Circuit Court of Wyoming County
Accordingly this Court uphold the Circuit Courts Order because it had venue to detennine
the merits ofthe Residents Petition for a Writ of Mandamus
E The Circuit Court of Wyoming County properly granted the Residents Petition for a Writ of Mandamus because it found that the WVDEP had erred in carrying out its duties with regard to water replacement and because the primary jurisdiction doctrine much like the exhaustion of administrative remedies doctrine is inapplicable to this case
The Circuit Court of Wyoming County found as a matter oflaw that the WVDEP erred by
failing to order water replacement as alleged in the Residents Petition for a Writ of Mandamus
By granting the Petition the Court held that the WVDEP had a legal duty pursuant to West
Virginia Code sect 22-3-17(a) to order water replacement for the Residents Appendix at 8 The
Circuit Court also agreed with the Residents that West Virginia Code sect 22-3-17(a) mandates that
the WVDEP shall issue a Notice ofViolation in an operator is not in compliance with a provision
ofa state rule or pennit which constitutes a non-discretionary duty W Va Code 22-3-17(a)
12
The Circuit Court also correctly disregarded the primary jurisdiction doctrine This Court
has described the primary jurisdiction doctrine as follows
1 Where an administrative agency and the courts have concurrent jurisdiction of an issue which requires the agencys special expertise and which extends beyond the conventional experience ofjudges the doctrine ofprimary jurisdiction applies In such a case the court should refrain from exercising jurisdiction until after the agency has resolved the issue The courts decision whether to apply the primary jurisdiction doctrine is reviewed on appeal under an abuse of discretion standard
2 In detennining whether to apply the primary jurisdiction doctrine courts should consider factors such as whether the question at issue is within the conventional experience ofjudges whether the question at issue lies peculiarly within the agencys discretion or requires the exercise of agency expertise whether there exists a danger of inconsistent rulings and whether a prior application to the agency has been made
State ex reI Bell AII-1yen Virginia Inc v Ranson Syl Pts 1 and 2 201 W Va 402404497
SE2d 755 757 (1997)
The Circuit Courts action in this case meets the test established in Ranson because the
Residents primary argument for a writ ofmandamus before the Circuit Court was that the agency
had already resolved the issue to the agencys satisfaction In this case though the question at
issue undoubtedly lies peculiarly within the WVDEPs expertise and discretion the Circuit Court
detennined it had sufficient conventional experience to render its own decision on the merits of
the evidence presented to it during the hearing on the Residents petition for a wTit of mandamus
The Circuit Court in its Order based its decision on a consideration of the WVDEPs evidence
and findings but also on those of the testimony of the Residents expert witness and their own
testimony
Ultimately this Court in Ranson elected to not apply the primary jurisdiction doctrine
noting that this concept is essentially the same as exhaustion of administrative remedies
13
Not unlike the exhaustion of remedies doctrine the doctrine of primary jurisdiction is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties citations omitted)
Ranson 201 W Va 410497 SE2d 763lndeed the terms primary jurisdiction and exhaustion
of remedies though separate and distinct legal concepts are often confused and used
interchangeably ld at FN 6 (internal citation omitted)
The primary jurisdiction doctrine and the exhaustion of administrative remedies doctrine
do not apply in this matter because the circuit courts ofWest Virginia are granted explicit statutory
authority by West Virginia Code sect 22-3-24 to decide the claims raised in the Residents Petition
for a Writ of Mandamus as discussed infra To insist as does ERP that this Court should abstain
from deciding an issue that the Legislature has detennined is explicitly within the jurisdiction of
the circuit coqrts is incorrect
ERP argues that a danger of inconsistent rulings and other concerns (Petition at 35)
requires the application of the primary jurisdiction doctrine in this case That argument disregards
the fact that the only dispute arising out of the Residents Petition is currently pending before this
Court There are no other potential inconsistent rulings
Lastly ERP argues that the Circuit Courts Order violates the doctrine of primary
jurisdiction essentially because the Circuit Court did not expressly address the doctrine ofprimary
jurisdiction even though it was not raised in the Circuit Court proceedings There is no
requirement that a circuit court make an express finding on its own accordingly the absence of
such analysis is not reversible error
Accordingly this Court should uphold the Circuit Courts Order regarding the Residents
Petition for a Writ of Mandamus
14
F Patriot and Easterns bankruptcy claims do not bar the State of West Virginias regulatory authority
ERPs arguments regarding the Patriot bankruptcy proceedings are similarly unfounded
Patriots most recent bankruptcy case ended in October 2015 with the entry of the confinnation
order which occurred well before the December 2015 hearing in the Circuit Court of Wyoming
County at issue here That order dissolved the automatic stay in place and replaced it with a new
set of injunctions none of which were applicable at the time of the hearing on the writ of
mandamus in the underlying matter Further confinnation orders have no effect whatsoever on
state law enforcement Eastern was required to continue to comply with state environmental law
Pursuant to 28 USc sect 959(b) a debtor is required to perfonn any and all acts necessary in order
to effectuate compliance with State Law environmental obligations Furthennore 11 USc sect
362(b)(4) expressly exempts the enforcement of any police or regulatory law enforcement action
from the automatic stay See 11 USc sect 362(b)(4)
A ruling such as the one sought by ERP in this matter would throw State enforcement of
all State laws related to debtors operating under an automatic stay into disarray It is absurd to
suggest that the State of West Virginia through the WVDEP is unable to enforce environmental
laws against companies operating within the State pursuant to West Virginia law simply because
a mining company seeks bankruptcy protection Furthennore ERP asks this Court to maintain that
not only are West Virginia executive law enforcement agencies not able to order compliance with
State law against debtors but also that the circuit courts of West Virginia are unable to order
compliance That is not the law
On May 12 2015 Easterns parent company Patriot Coal Corporation and some of its
affiliates including Eastern filed a petition with the United States Bankruptcy Court for the
Eastern District ofVirginia under chapter 11 oftitle 11 ofthe United States Code (US Bankruptcy
15
Court ED Va Case No 15-32450 (KLPraquo During the course of the bankruptcy proceedings
Patriot negotiated the sale of substantially all of its assets to two separate entities Blackhawk
Mining LLC (Blackhawk) and VCLF VCLF proposed to acquire the Kopperston No1 Refuse
Impoundment including the SMCRA permit at issue in this case
In accordance with the Bankruptcy Courts Scheduling Order on September 18 2015
Patriot filed the Fourth Amended Disclosure Statement for the Debtors Fourth Amended Joint
Plan ofReorganization Pursuant to Chapter 11 of the Bankruptcy Code and the Debtors Fourth
Amended Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code
The Fourth Amended Plan attached a copy of the VCLF Asset Purchase Agreement
(APA) The VCLF APA definitively establishes Appellant ERPs liability for the water
replacement order at issue in this case The Fourth Amended Plan itself lists the SMCRA notice
that ultimately led to the Wyoming County Circuit Court Order at issue in this appeal as a piece
of unresolved litigation to be assumed by the purchasers of Patriots assets
Furthem10re Section 203 of the APA Assumed Liabilities states that VCLFIERP shall
assume all Liabilities associated with the Transferred Pem1its as well as liability for regulatory
violations and obligations on or in relation to the Purchased Assets or the Transferred Permits
arising post-Closing
Additionally Schedule 308(a)-(b) to the VCLF APA expressly lists all liabilities
associated with the Purchased Assets and again includes the May 2015 SMCRA notice from
owners ofproperties near the Kopperston mine alleging adverse impacts to groundwater resources
Schedule 313 lists all pending litigation associated with the Purchased Assets and yet again lists
the Kopperston SMCRA notice
16
ERP is a wholly owned subsidiary of VCLF incorporated to fulfill the reclamation
obligations associated with assets VCLF purchased out of the Patriot bankruptcy ERP became
the penn it holder of the pennit associated with this appeal ERPs assumption of the water
replacement liability at issue in this appeal is not just a matter of a contractual obligation between
two private parties rather its liability also arises by operation of the Bankruptcy Courts
Confinnation Order
Accordingly this Court should uphold the Circuit Courts Order in this matter because it
was not barred by bankruptcy law
VII CONCLUSION
In conclusion these Respondents respectfully request this Court enter an Order denying
ERPs Petition for a Writ of Prohibition
WEST VIRGINIA DEPARMENT OF ENVIRONMENTAL PROTECTION and SECRETARY AUSTIN CAPERTON by counsel
West Virginia Department of Environmental Protection Office of Legal Services 601 57th St SE Charleston WV 25304 Phone 304-926-0499 Fax 304-926-0461 Email jasonewandlingwvgov
17
CERTIFICATE OF SERVICE
I Jason Wandling certify that I served this Response in Opposition to Verified Petition for
Writ of Prohibition on 20 March 2017 by depositing a true copy thereof in the United States mail
postage prepaid addressed as follows
John J Meadows (WVSB 9442) Peter J Raupp (WVSB 10546) Devon J Stewart (WVSB 11712) Steptoe amp Johnson PLLC 707 Virginia Street East Chase Tower Seventeenth Floor PO Box 1588 Charleston WV 25326-1588 Phone 304-353-8154 Fax 304-353-8180 Email J ohnM eadowssteptoe-johnsoncom
PeterRauppsteptoe-johnsoncom DevonStewartsteptoe-johnsoncom
Honorable Warren D McGraw Judge PO Box 581 100 Main and Bank Streets Pineville WV 24874 Phone 304-732-7047 Fax 304-732-7047
Kevin W Thompson (WVSB 5062) David R Barney Jr (WVSB 7958) Thompson Barney 2030 Kanawha Blvd E Charleston WV 25311 Phone 304-343-4401 Fax 304-343-4405 Email kthompsonthompsonbarneycom
dbameythompsonbameycom
I ASSIGNMENTS OF ERROR QUESTIONS PRESENTED
The Assigrunents of Error or Questions Presented are framed by the Petitioners as
1 Whether the Respondent Judge exceeded his judicial powers by exercising subjectshy
matter jurisdiction over administrative claims that were not exhausted
2 Whether the Respondent Judge exceeded his judicial powers by issuing a
mandamus order without requiring the joinder of indispensable parties burdened by the order in
violation of West Virginia law the Due Process Clause of the Fourteenth Amendment to the us
Constitution and the West Virginia Constitution Article III sect 10
3 Whether the Respondent Judge exceeded his judicial powers by issuing a
mandamus order with respect to a discretionary state agency action or by failing to decline
jurisdiction under the primary jurisdiction doctrine
4 Whether the Respondent Judge exceeded his judicial powers in violation of the
exclusive venue statutes ofWest Virginia Code sectsect 53-1-2 and 14-2-2 by issuing a mandamus order
in an action against a state agency and its employees
5 Whether the Respondent Judge exceeded his judicial powers in violation of the
automatic stay under II USc sect 362(a) by issuing a mandamus order in an action commenced
and continued with respect to property interests of a debtor in bankruptcy
II STATEMENT OF THE CASE
The underlying facts at issue in this appeal are not in dispute However these Respondents
note facts regarding two issues
First ERP acquired the permit at issue as part of the bankruptcy and subsequent sale of
assets owned previously by Patriot Coal Corporation Patriot was the parent company of Eastern
Coal Company LLC the holder of the pennit at issue in this case Patriot filed for bankruptcy
1
protection on 12 May 2015 During the bankruptcy proceedings Patriot negotiated the sale of
substantially all its assets to two separate entities Blackhawk Mining LLC and VCLF VCLF is
the parent company of Petitioner ERP VCLF acquired the Kopperston No 1 Refuse
Impoundment including the SMCRA pennit at issue in this case
Patriots Fourth Amended Plan attached a copy ofthe assets VCLF planned to buy in a
document called the VCLF Asset Purchase Agreement (APA) That document specifically lists
the Residents notice of intent to sue the WVDEP that ultimately led to the Wyoming County
Circuit Court Order at issue in this appeal as a piece of unresolved litigation to be assumed by the
purchasers of Patriots assets
The Petitioner ERP is a wholly owned subsidiary of VCLF ERP was specifically
incorporated to fulfill the reclamation obligations associated with assets VCLF purchased out of
the Patriot bankruptcy including the pennit at issue here and all of its potential liabilities
Second the Petitioner omitted the date on which ERP assumed the permit at issue in this
appeal ERP became the pennittee on 28 July 2016
III SUMMARY OF ARGUMENT
The Respondent Residents did not fail to exhaust the administrative remedies available to
them in this matter The Respondent Residents properly exercised their rights to civil claims
pursuant to West Virginia Code sect 22-3-24 The administrative proceedings that ERP alleges to
have foreclosed the Residents civil suits were initiated in fact by the Residents notices of intent
to file suit against the WVDEP
ERP insists that West Virginia Rule of Civil Procedure 19 requires that Eastern or ERP
should have been named as parties to the Residents Petition for a Writ of Mandamus Rule 19
states that any persons who claim an interest in the real property at issue are indispensable parties
2
to the proceeding W Va R Civ P 19 and Petition at 23 However the Residents Petition for
a Writ of Mandamus and the Circuit of Court of Wyoming Countys Order did not in any way
claim an interest in Eastern or ERPs real property or affect Eastern or ERPs real property
Venue was properly established in the Circuit Court of Wyoming County in accordance
with West Virginia Code sect 14-2-2 which allows citizens to file suit against the State to prevent
damage to real property in the circuit court of the county in which the real property is found
Mandamus in this instance was proper because the Circuit Court found that West Virginia
Code sect 22-3-17(a) mandates that the WVDEP shall issue a Notice of Violation in an operator is
not in compliance with a provision of a state rule or pennit The primary jurisdiction doctrine
which is essentially the same as the exhaustion ofremedies doctrine did not apply to the Residents
Petition for a Writ of Mandamus because the Circuit Court had explicit statutory authorization to
adjudicate the claims in the Petition
Lastly the Residents Petition for a Writ of Mandamus was not barred by bankruptcy law
because the automatic stay at issue lapsed before the hearing and Order at issue in this case and
further because West Virginia regulatory action against parties that seek bankruptcy protection is
not affected by the automatic stay
IV STATEMENT REGARDING ORAL ARGUMENT AND DECISION
These Respondents believe oral argument is necessary pursuant to the criteria in Rule 18(a)
of the West Virginia Rules of Appellate Procedure Oral argument under Rules 19 or 20 of the
West Virginia Rules of Appellate Procedure is appropriate because pursuant to Rule 19(a)(2) the
case allegedly involves an unsustainable exercise of discretion where the law governing that
discretion is settled The appeal also involves constitutional questions regarding a court ruling
pursuant to Rule 20(a)(3)
3
V ARGUMENT
A These Respondents largely agree with the Petitioners regarding the standard of review to be applied in this matter
These Respondents note however that the standard of appellate review of a circuit courts
order granting relief through the extraordinary writ of mandamus is de novo Staten v Dean Syl
Pt 1 195 WVa 57464 SE2d 576 (1995) This Court reviews a circuit courts underlying
factual findings under a clearly erroneous standard Id Lastly this Court reviews conclusions of
law under a clearly erroneous standard Id
B The Residents properly exercised a statutory right to pursue their actions in the Circuit Court of Wyoming County
Under the exhaustion of administrative remedies doctrine where a claim is cognizable in
the first instance by an administrative agency alone judicial interference is withheld until the
administrative process has run its course This Court has long held that [t]he general rule is that
where an administrative remedy is provided by statute or by rules and regulations having the force
and effect of law relief must be sought from the administrative body and such remedy must be
exhausted before the courts will act Syl pt 1 Daurelle v Tiaders Fed Sav amp Loan Assn Syl
Pt I 143 WVa 674104 SE2d 320 (1958)
There are exceptions to this rule This Court has held The factors courts have cited to
excuse failure to exhaust are (1) that the claim is collateral to a demand for benefits (2) that
exhaustion would be futile and (3) that plaintiffs would suffer irreparable hann if required to
exhaust administrative remedies Wiggins v Eastern Assoc Coal COp Syl Pt 6 178 WVa 63
357 SE2d 745 (1987) (This Court will not require the exhaustion of administrative remedies
where such remedies are duplicative or the effort to obtain them futile) Finally [t]he rule which
4
requires the exhaustion ofadministrative remedies is inapplicable where no administrative remedy
is provided by law Daw-elle at Syl pt 2_
In this matter however the Respondent Residents had two (and possibly three) choices
First they could submit claims to the WVDEPs Office of Explosives and Blasting pursuant to
West Virginia Code sect 22-3A-5 Second (arguably) they could pursue administrative remedies via
the Surface Mine Board (or possibly the Environmental Quality Board) pursuant to West Virginia
Code sect 22B-1-7 Third the Residents could file civil claims pursuant to West Virginia Code sect 22shy
3-24
In this case the Residents chose to file civil claims pursuant to West Virginia Code sect 22shy
3-24 As part of that process and in compliance with West Virginia law that requires 30 day notice
before filing suit against a state agency the Residents initiated WVDEPs involvement in this
matter by mailing a letter of intent to sue with an attached proposed Complaint to file in Circuit
Court to the WVDEP on 14 November 2011
In its brief however ERP insists that the Residents foreclosed their statutory circuit court
claims by submitting complaints to the WVDEP without specifying that those complaints were
contained in a notice of intent to sue the agency in circuit court Petition at 15 It strains credulity
to assert that the Residents intended to pursue administrative claims when they told the agency by
letter that they intended to sue the agency in circuit court
Subsequently the Residents civil claims in the Circuit Court of Wyoming County were
filed in accordance with sect 22-3-24 which states
(a) Nothing in this article affects in any way the rights of any person to enforce or protect under applicable law the persons interest in water resources affected by a surface mining operation
(b) Any operator shall replace the water supply of an owner of interest in real property who obtains all or part of the owners supply of water for domestic
5
agricultural industrial or other legitimate use from an underground or surface source where the supply has been affected by contamination diminution or interruption proximately caused by the surface mining operation unless waived by the owner
(c) There is a rebuttable presumption that a mining operation caused damage to an owners underground water supply if the inspector determines the following (1) Contamination diminution or damage to an owners underground water supply exists and (2) a preblast survey was performed consistent with the provisions of section thirteen-a of this article on the owners property including the underground water supply that indicated that contamination diminution or damage to the underground water supply did not exist prior to the mining conducted at the mining operation
(d) The operator conducting the mining operation shall (1) Provide an emergency drinking water supply within twenty-four hours (2) provide temporary water supply within seventy-two hours (3) within thirty days begin activities to establish a permanent water supply or submit a proposal to the secretary outlining the measures and timetables to be utilized in establishing a permanent supply The total time for providing a permanent water supply may not exceed two years If the operator demonstrates that providing a permanent replacement water supply cannot be completed within two years the secretary may extend the time frame on case-by-case basis and (4) pay all reasonable costs incurred by the owner in securing a water supply
(e) An owner aggrieved under the provisions of subsections (b) (c) or (d) of this section may seek relief in court or pursuant to the provisions of section five article three-a of this chapter
W Va Code sect 22-3-24 (emphasis added)
In this case the Residents never initiated the administrative claims process pursuant to
West Virginia Code sect 22-3A-S That statute in its entirety states
(a) The office of explosives and blasting shall establish and manage a process for the filing administration and resolution of claims related to blasting
(b) Claims which may be filed and determined under the provisions of this section shall be those arising from both of the following
(1) Damage to property arising from blasting activities conducted pursuant to a permit granted under article three of this chapter and
(2) The damage is incurred by a claimant who is the owner or occupant of the property
6
(c) The claims process established by the office of explosives and blasting shall include the following
(1) An initial detennination by the office of the merit of the claim and
(2) An arbitration process whereby the claim can be detennined and resolved by an arbitrator in a manner which is inexpensive prompt and fair to all parties The office shall propose rules for legislative approval in accordance with article three chapter twenty-nine-a of this code for the development of standards for establishing rules relating to the initial claim detennination and the arbitration process provided in this subsection
(d) If the operator disagrees with the initial detennination made by the office and requests arbitration then the following shall apply
(1) Any party may be represented by a representati ve of their choice
(2) At the request of the claimant the office shall provide the claimant with representation in the arbitration process which representation shall not necessarily be an attomey-at-Iaw and
(3) If the claim is upheld in whole or in part then the operator shall pay the costs ofthe proceeding as well as reasonable representation fees and costs of the claimant in an amount not to exceed one thousand dollars
(e) Participation in the claims process created by this section shall be voluntary for the claimant However once the claimant has submitted a claim for detennination under the provisions of this section it is intended that the finding of the office if not taken to arbitration shall be final If arbitration is requested it is intended that the results of such arbitration shall be final The office shall provide written notification to the claimant of the provisions of this subsection and shall secure a written acknowledgment from the claimant prior to processing a claim pursuant to the provisions of this section
(f) The operator shall pay any claim for which the operator is adjudged liable within thirty days of a final detennination If the claim is not paid within thirty days the director shall issue a cessation order pursuant to section sixteen article three of this chapter for all sites operated by the operator
(g) No pennit to mine coal shall be granted unless the pennit applicant agrees to be subject to the tenns of this section
(h) To fulfill its responsibilities pursuant to this section the office may retain the services of inspectors experts and other persons or finns as may be necessary
7
W Va Code sect 22-3A-5 (1999) (repealed June 9 2016)
The Residents did not submit their claims to the WVDEPs Office of Explosives and
Blasting pursuant to West Virginia Code sect 22-3A-5 There is nothing in the record that reflects
that the Residents specifically sought WVDEP investigation pursuant to that code section or
otherwise sought resolution of their claims pursuant to West Virginia Code sect 22-3A-5 The record
does not contain a document created by the Residents that request an investigation and subsequent
arbitration by the WVDEP Office ofExplosives and Blasting Conversely the record does contain
the Residents initiating letter notifying the WVDEP that the Residents intended to sue the agency
Simply put no authority exists to support ERPs assertion that merely submitting citizen
complaints to the WVDEP irrevocably invoked the jurisdiction of the WVDEPs Office of
Explosives and Blasting and the arbitration requirement contained in West Virginia Code sect 22shy
3A-5 (1999) Furthermore no authority exists to support ERPs assertion that merely submitting
citizen complaints to the WVDEP irrevocably invoked administrative review before the
environmental boards tasked with reviewing agency action
This fundamental factual issue short circuits ERPs arguments that rely on Ewing v Ed of
Educ OCity oSummers 202 WVa 228 503 SE2d 541 (1998) State ex rei Chesapeake and
Potomac Telephone Co oJw Va v Ashworth 190 WVa 547438 SE2d 890 (1993) and Ashby
v City 0 Fairmont 216 WVa 527 607 SE2d 856 (2004) In each of those cases the
complainants invoked claims that specifically called for administrative resolution In this matter
the Residents from the start invoked claims they intended to pursue in circuit court
ERP cannot submit any evidence that the Residents ever submitted claims to the WVDEPs
Office of Explosives and Blasting or filed Notices of Appeal with the Surface Mine Board or the
8
Environmental Quality Board Accordingly this Court should hold that the Residents properly
exercised their statutory rights to pursue their water claims in circuit court
C The Circuit Courts Order was properly issued because Eastern and ERP were not indispensable parties and because no real property interest of Eastern or ERP was at issue
This Court should uphold the Circuit Courts Order because the Residents Petition for a
Writ ofMandamus and the subsequent hearing did not violate Eastern or ERPs due process rights
and did not result in an order that placed restraints on the real property of a third party
ERP insists that West Virginia Rule of Civil Procedure 19 requires that Eastern or ERP
should have been named as parties to the Residents Petition for a Writ of Mandamus Rule 19
requires that any persons who claim an interest in the real property at issue are indispensable
parties to the proceeding W Va R Civ P 19 and Petition at 23 This argument fails at the outset
because the Residents Petition for a Writ of Mandamus and the Circuit of Court of Wyoming
Countys Order did not in any way claim an interest in Eastern or ERPs real property or affect
Eastern or ERPs real property
Contrary to ERPs assertions this Court held in 0 Daniels v City of Charleston that
When a court proceeding directly affects or detennines the scope of rights or interests in real
property any persons who claim an interest in the real property at issue are indispensable parties
to the proceeding Any order or decree issued in the absence of those parties is null and void
ODaniels v City of CIz areston Syl Pt 2200 W Va 711 712490 SE2d 800 801 (1997)
(emphasis added)
o Daniels does not stand for the proposition that as here potential parties such as Patriot
Eastern or ERP must be joined as indispensable parties where as admitted by ERP personal
property is at issue There is no real property at issue in this case at least insofar as ERP is
9
concerned The only real property at issue in this case belongs to the Residents Accordingly
OBrien does not apply to this case
Every case cited by the o Daniels court -- Bonafede v Grafton Feed amp Storage Co 81
WVa 31394 SE 471 (1917) United Fuel Gas Co v Morley Oil amp Gas Co 101 WVa 73 131
SE 713 (1926) Oneal v Stimson 61 WVa 551 56 SE 889 (1907) -- involved real property
There is no West Virginia authority that makes the same statement about personal property and
there are certainly no West Virginia cases that bar a circuit court from granting a petition for a writ
ofmandamus that requires a state agency to order an action that might cause a corporation to spend
money in order to comply
ERPs broader due process argument also fails This Court holds that The due process of
law guaranteed by the State and Federal Constitutions when applied to procedure in the courts of
the land requires both notice and the right to be heard State ex reI Bd ofEduc of Cnty Of
Putnam v Beane Syl Pt 2 224 W Va 31 680 SE2d 46 (2009) (quoting Simpson v Stanton
SyJ Pt 2 119 WVa 235 193 SE 64 (1937)
As shown infra Eastern and its corporate successor ERP were aware of the Residents
proposed petition for writ of mandamus as early as 2011 and took part from the beginning of the
investigation process with the Residents and the WVDEP To the extent ERP complains that its
corporate predecessor failed to protect its interests by refusing to intervene in the proceedings
below it is bound by the terms of its agreement with Patriot and Eastern A corporate successor
may not avoid a prior liability simply because it subsequently decides it doesnt care for a part of
the deal ERPs due process argument fails because it had (1) notice and (2) had a right to be heard
before the Circuit Court of Wyoming County
10
Accordingly this Court should uphold the Circuit Courts Order because the Residents
Petition for a Writ of Mandamus and the subsequent hearing did not violate Eastern or ERPs due
process rights and did not result in an order that required impennissible restraints on the real
property of a third party
D The Circuit Court of Wyoming County was authorized to enter the Order at issue because it properly had venue
The Circuit Court of Wyoming County unquestionably had venue pursuant to West
Virginia Code sect 14-2-2 That statute states in its entirety
(a) The following proceedings shall be brought and prosecuted only in the circuit court of Kanawha County
(1) Any suit in which the governor any other state officer or a state agency is made a party defendant except as garnishee or suggestee
(2) Any suit attempting to enjoin or otherwise suspend or affect a judgment or decree on behalfof the State obtained in any circuit court
(b) Any proceeding for injunctive or mandamus relief involving the taking title or collection for or prevention of damage to real property may be brought and presented in the circuit court of the county in which the real property affected is situate
This section shall apply only to such proceedings as are not prohibited by the constitutional immunity of the State from suit under section thirty-five article VI of the Constitution of the State
W Va Code sect 14-2-2 (emphasis added) The underlying suit in which the plaintiffs alleged that
mining operations located near their homes contaminated their well water was a proceeding in
injunctive and mandamus relief against the WVDEP and Secretary Huffman that sought relief for
the prevention of damage to real property By its own tern1s the statute expressly provides the
Circuit Court of Wyoming County with venue and jurisdiction over the claim
This Court has ruled squarely on this issue in Shobe v Latimer 162 W Va 779 253 SE2d
54 (1979) In Shobe the plaintiffs sought a declaratory judgment holding that a water contract
11
between the West Virginia Department of Natural Resources and a public seIVice district was
illegalld The lower court granted a motion to dismiss holding that the Circuit Court ofKanawha
County did not have venue to adjudicate a claim based in Grant County West Virginiald This
Court disagreed holding that an action regarding stream rights was an allegation involving the
taking or damage to real property within in the meaning of WVa Code sect 14-2-2(b) and that
venue was proper in the circuit courts of either Kanawha or Grant County ld at 794 63 Such is
the case in the underlying matter the plaintiffs in the underlying Wyoming County action were
free pursuant to West Virginia Code sect 14-2-2 to choose between Kanawha and Wyoming County
Circuit Court Accordingly this Court should turn aside ERPs arguments regarding the authority
of the Circuit Court of Wyoming County
Accordingly this Court uphold the Circuit Courts Order because it had venue to detennine
the merits ofthe Residents Petition for a Writ of Mandamus
E The Circuit Court of Wyoming County properly granted the Residents Petition for a Writ of Mandamus because it found that the WVDEP had erred in carrying out its duties with regard to water replacement and because the primary jurisdiction doctrine much like the exhaustion of administrative remedies doctrine is inapplicable to this case
The Circuit Court of Wyoming County found as a matter oflaw that the WVDEP erred by
failing to order water replacement as alleged in the Residents Petition for a Writ of Mandamus
By granting the Petition the Court held that the WVDEP had a legal duty pursuant to West
Virginia Code sect 22-3-17(a) to order water replacement for the Residents Appendix at 8 The
Circuit Court also agreed with the Residents that West Virginia Code sect 22-3-17(a) mandates that
the WVDEP shall issue a Notice ofViolation in an operator is not in compliance with a provision
ofa state rule or pennit which constitutes a non-discretionary duty W Va Code 22-3-17(a)
12
The Circuit Court also correctly disregarded the primary jurisdiction doctrine This Court
has described the primary jurisdiction doctrine as follows
1 Where an administrative agency and the courts have concurrent jurisdiction of an issue which requires the agencys special expertise and which extends beyond the conventional experience ofjudges the doctrine ofprimary jurisdiction applies In such a case the court should refrain from exercising jurisdiction until after the agency has resolved the issue The courts decision whether to apply the primary jurisdiction doctrine is reviewed on appeal under an abuse of discretion standard
2 In detennining whether to apply the primary jurisdiction doctrine courts should consider factors such as whether the question at issue is within the conventional experience ofjudges whether the question at issue lies peculiarly within the agencys discretion or requires the exercise of agency expertise whether there exists a danger of inconsistent rulings and whether a prior application to the agency has been made
State ex reI Bell AII-1yen Virginia Inc v Ranson Syl Pts 1 and 2 201 W Va 402404497
SE2d 755 757 (1997)
The Circuit Courts action in this case meets the test established in Ranson because the
Residents primary argument for a writ ofmandamus before the Circuit Court was that the agency
had already resolved the issue to the agencys satisfaction In this case though the question at
issue undoubtedly lies peculiarly within the WVDEPs expertise and discretion the Circuit Court
detennined it had sufficient conventional experience to render its own decision on the merits of
the evidence presented to it during the hearing on the Residents petition for a wTit of mandamus
The Circuit Court in its Order based its decision on a consideration of the WVDEPs evidence
and findings but also on those of the testimony of the Residents expert witness and their own
testimony
Ultimately this Court in Ranson elected to not apply the primary jurisdiction doctrine
noting that this concept is essentially the same as exhaustion of administrative remedies
13
Not unlike the exhaustion of remedies doctrine the doctrine of primary jurisdiction is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties citations omitted)
Ranson 201 W Va 410497 SE2d 763lndeed the terms primary jurisdiction and exhaustion
of remedies though separate and distinct legal concepts are often confused and used
interchangeably ld at FN 6 (internal citation omitted)
The primary jurisdiction doctrine and the exhaustion of administrative remedies doctrine
do not apply in this matter because the circuit courts ofWest Virginia are granted explicit statutory
authority by West Virginia Code sect 22-3-24 to decide the claims raised in the Residents Petition
for a Writ of Mandamus as discussed infra To insist as does ERP that this Court should abstain
from deciding an issue that the Legislature has detennined is explicitly within the jurisdiction of
the circuit coqrts is incorrect
ERP argues that a danger of inconsistent rulings and other concerns (Petition at 35)
requires the application of the primary jurisdiction doctrine in this case That argument disregards
the fact that the only dispute arising out of the Residents Petition is currently pending before this
Court There are no other potential inconsistent rulings
Lastly ERP argues that the Circuit Courts Order violates the doctrine of primary
jurisdiction essentially because the Circuit Court did not expressly address the doctrine ofprimary
jurisdiction even though it was not raised in the Circuit Court proceedings There is no
requirement that a circuit court make an express finding on its own accordingly the absence of
such analysis is not reversible error
Accordingly this Court should uphold the Circuit Courts Order regarding the Residents
Petition for a Writ of Mandamus
14
F Patriot and Easterns bankruptcy claims do not bar the State of West Virginias regulatory authority
ERPs arguments regarding the Patriot bankruptcy proceedings are similarly unfounded
Patriots most recent bankruptcy case ended in October 2015 with the entry of the confinnation
order which occurred well before the December 2015 hearing in the Circuit Court of Wyoming
County at issue here That order dissolved the automatic stay in place and replaced it with a new
set of injunctions none of which were applicable at the time of the hearing on the writ of
mandamus in the underlying matter Further confinnation orders have no effect whatsoever on
state law enforcement Eastern was required to continue to comply with state environmental law
Pursuant to 28 USc sect 959(b) a debtor is required to perfonn any and all acts necessary in order
to effectuate compliance with State Law environmental obligations Furthennore 11 USc sect
362(b)(4) expressly exempts the enforcement of any police or regulatory law enforcement action
from the automatic stay See 11 USc sect 362(b)(4)
A ruling such as the one sought by ERP in this matter would throw State enforcement of
all State laws related to debtors operating under an automatic stay into disarray It is absurd to
suggest that the State of West Virginia through the WVDEP is unable to enforce environmental
laws against companies operating within the State pursuant to West Virginia law simply because
a mining company seeks bankruptcy protection Furthennore ERP asks this Court to maintain that
not only are West Virginia executive law enforcement agencies not able to order compliance with
State law against debtors but also that the circuit courts of West Virginia are unable to order
compliance That is not the law
On May 12 2015 Easterns parent company Patriot Coal Corporation and some of its
affiliates including Eastern filed a petition with the United States Bankruptcy Court for the
Eastern District ofVirginia under chapter 11 oftitle 11 ofthe United States Code (US Bankruptcy
15
Court ED Va Case No 15-32450 (KLPraquo During the course of the bankruptcy proceedings
Patriot negotiated the sale of substantially all of its assets to two separate entities Blackhawk
Mining LLC (Blackhawk) and VCLF VCLF proposed to acquire the Kopperston No1 Refuse
Impoundment including the SMCRA permit at issue in this case
In accordance with the Bankruptcy Courts Scheduling Order on September 18 2015
Patriot filed the Fourth Amended Disclosure Statement for the Debtors Fourth Amended Joint
Plan ofReorganization Pursuant to Chapter 11 of the Bankruptcy Code and the Debtors Fourth
Amended Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code
The Fourth Amended Plan attached a copy of the VCLF Asset Purchase Agreement
(APA) The VCLF APA definitively establishes Appellant ERPs liability for the water
replacement order at issue in this case The Fourth Amended Plan itself lists the SMCRA notice
that ultimately led to the Wyoming County Circuit Court Order at issue in this appeal as a piece
of unresolved litigation to be assumed by the purchasers of Patriots assets
Furthem10re Section 203 of the APA Assumed Liabilities states that VCLFIERP shall
assume all Liabilities associated with the Transferred Pem1its as well as liability for regulatory
violations and obligations on or in relation to the Purchased Assets or the Transferred Permits
arising post-Closing
Additionally Schedule 308(a)-(b) to the VCLF APA expressly lists all liabilities
associated with the Purchased Assets and again includes the May 2015 SMCRA notice from
owners ofproperties near the Kopperston mine alleging adverse impacts to groundwater resources
Schedule 313 lists all pending litigation associated with the Purchased Assets and yet again lists
the Kopperston SMCRA notice
16
ERP is a wholly owned subsidiary of VCLF incorporated to fulfill the reclamation
obligations associated with assets VCLF purchased out of the Patriot bankruptcy ERP became
the penn it holder of the pennit associated with this appeal ERPs assumption of the water
replacement liability at issue in this appeal is not just a matter of a contractual obligation between
two private parties rather its liability also arises by operation of the Bankruptcy Courts
Confinnation Order
Accordingly this Court should uphold the Circuit Courts Order in this matter because it
was not barred by bankruptcy law
VII CONCLUSION
In conclusion these Respondents respectfully request this Court enter an Order denying
ERPs Petition for a Writ of Prohibition
WEST VIRGINIA DEPARMENT OF ENVIRONMENTAL PROTECTION and SECRETARY AUSTIN CAPERTON by counsel
West Virginia Department of Environmental Protection Office of Legal Services 601 57th St SE Charleston WV 25304 Phone 304-926-0499 Fax 304-926-0461 Email jasonewandlingwvgov
17
CERTIFICATE OF SERVICE
I Jason Wandling certify that I served this Response in Opposition to Verified Petition for
Writ of Prohibition on 20 March 2017 by depositing a true copy thereof in the United States mail
postage prepaid addressed as follows
John J Meadows (WVSB 9442) Peter J Raupp (WVSB 10546) Devon J Stewart (WVSB 11712) Steptoe amp Johnson PLLC 707 Virginia Street East Chase Tower Seventeenth Floor PO Box 1588 Charleston WV 25326-1588 Phone 304-353-8154 Fax 304-353-8180 Email J ohnM eadowssteptoe-johnsoncom
PeterRauppsteptoe-johnsoncom DevonStewartsteptoe-johnsoncom
Honorable Warren D McGraw Judge PO Box 581 100 Main and Bank Streets Pineville WV 24874 Phone 304-732-7047 Fax 304-732-7047
Kevin W Thompson (WVSB 5062) David R Barney Jr (WVSB 7958) Thompson Barney 2030 Kanawha Blvd E Charleston WV 25311 Phone 304-343-4401 Fax 304-343-4405 Email kthompsonthompsonbarneycom
dbameythompsonbameycom
protection on 12 May 2015 During the bankruptcy proceedings Patriot negotiated the sale of
substantially all its assets to two separate entities Blackhawk Mining LLC and VCLF VCLF is
the parent company of Petitioner ERP VCLF acquired the Kopperston No 1 Refuse
Impoundment including the SMCRA pennit at issue in this case
Patriots Fourth Amended Plan attached a copy ofthe assets VCLF planned to buy in a
document called the VCLF Asset Purchase Agreement (APA) That document specifically lists
the Residents notice of intent to sue the WVDEP that ultimately led to the Wyoming County
Circuit Court Order at issue in this appeal as a piece of unresolved litigation to be assumed by the
purchasers of Patriots assets
The Petitioner ERP is a wholly owned subsidiary of VCLF ERP was specifically
incorporated to fulfill the reclamation obligations associated with assets VCLF purchased out of
the Patriot bankruptcy including the pennit at issue here and all of its potential liabilities
Second the Petitioner omitted the date on which ERP assumed the permit at issue in this
appeal ERP became the pennittee on 28 July 2016
III SUMMARY OF ARGUMENT
The Respondent Residents did not fail to exhaust the administrative remedies available to
them in this matter The Respondent Residents properly exercised their rights to civil claims
pursuant to West Virginia Code sect 22-3-24 The administrative proceedings that ERP alleges to
have foreclosed the Residents civil suits were initiated in fact by the Residents notices of intent
to file suit against the WVDEP
ERP insists that West Virginia Rule of Civil Procedure 19 requires that Eastern or ERP
should have been named as parties to the Residents Petition for a Writ of Mandamus Rule 19
states that any persons who claim an interest in the real property at issue are indispensable parties
2
to the proceeding W Va R Civ P 19 and Petition at 23 However the Residents Petition for
a Writ of Mandamus and the Circuit of Court of Wyoming Countys Order did not in any way
claim an interest in Eastern or ERPs real property or affect Eastern or ERPs real property
Venue was properly established in the Circuit Court of Wyoming County in accordance
with West Virginia Code sect 14-2-2 which allows citizens to file suit against the State to prevent
damage to real property in the circuit court of the county in which the real property is found
Mandamus in this instance was proper because the Circuit Court found that West Virginia
Code sect 22-3-17(a) mandates that the WVDEP shall issue a Notice of Violation in an operator is
not in compliance with a provision of a state rule or pennit The primary jurisdiction doctrine
which is essentially the same as the exhaustion ofremedies doctrine did not apply to the Residents
Petition for a Writ of Mandamus because the Circuit Court had explicit statutory authorization to
adjudicate the claims in the Petition
Lastly the Residents Petition for a Writ of Mandamus was not barred by bankruptcy law
because the automatic stay at issue lapsed before the hearing and Order at issue in this case and
further because West Virginia regulatory action against parties that seek bankruptcy protection is
not affected by the automatic stay
IV STATEMENT REGARDING ORAL ARGUMENT AND DECISION
These Respondents believe oral argument is necessary pursuant to the criteria in Rule 18(a)
of the West Virginia Rules of Appellate Procedure Oral argument under Rules 19 or 20 of the
West Virginia Rules of Appellate Procedure is appropriate because pursuant to Rule 19(a)(2) the
case allegedly involves an unsustainable exercise of discretion where the law governing that
discretion is settled The appeal also involves constitutional questions regarding a court ruling
pursuant to Rule 20(a)(3)
3
V ARGUMENT
A These Respondents largely agree with the Petitioners regarding the standard of review to be applied in this matter
These Respondents note however that the standard of appellate review of a circuit courts
order granting relief through the extraordinary writ of mandamus is de novo Staten v Dean Syl
Pt 1 195 WVa 57464 SE2d 576 (1995) This Court reviews a circuit courts underlying
factual findings under a clearly erroneous standard Id Lastly this Court reviews conclusions of
law under a clearly erroneous standard Id
B The Residents properly exercised a statutory right to pursue their actions in the Circuit Court of Wyoming County
Under the exhaustion of administrative remedies doctrine where a claim is cognizable in
the first instance by an administrative agency alone judicial interference is withheld until the
administrative process has run its course This Court has long held that [t]he general rule is that
where an administrative remedy is provided by statute or by rules and regulations having the force
and effect of law relief must be sought from the administrative body and such remedy must be
exhausted before the courts will act Syl pt 1 Daurelle v Tiaders Fed Sav amp Loan Assn Syl
Pt I 143 WVa 674104 SE2d 320 (1958)
There are exceptions to this rule This Court has held The factors courts have cited to
excuse failure to exhaust are (1) that the claim is collateral to a demand for benefits (2) that
exhaustion would be futile and (3) that plaintiffs would suffer irreparable hann if required to
exhaust administrative remedies Wiggins v Eastern Assoc Coal COp Syl Pt 6 178 WVa 63
357 SE2d 745 (1987) (This Court will not require the exhaustion of administrative remedies
where such remedies are duplicative or the effort to obtain them futile) Finally [t]he rule which
4
requires the exhaustion ofadministrative remedies is inapplicable where no administrative remedy
is provided by law Daw-elle at Syl pt 2_
In this matter however the Respondent Residents had two (and possibly three) choices
First they could submit claims to the WVDEPs Office of Explosives and Blasting pursuant to
West Virginia Code sect 22-3A-5 Second (arguably) they could pursue administrative remedies via
the Surface Mine Board (or possibly the Environmental Quality Board) pursuant to West Virginia
Code sect 22B-1-7 Third the Residents could file civil claims pursuant to West Virginia Code sect 22shy
3-24
In this case the Residents chose to file civil claims pursuant to West Virginia Code sect 22shy
3-24 As part of that process and in compliance with West Virginia law that requires 30 day notice
before filing suit against a state agency the Residents initiated WVDEPs involvement in this
matter by mailing a letter of intent to sue with an attached proposed Complaint to file in Circuit
Court to the WVDEP on 14 November 2011
In its brief however ERP insists that the Residents foreclosed their statutory circuit court
claims by submitting complaints to the WVDEP without specifying that those complaints were
contained in a notice of intent to sue the agency in circuit court Petition at 15 It strains credulity
to assert that the Residents intended to pursue administrative claims when they told the agency by
letter that they intended to sue the agency in circuit court
Subsequently the Residents civil claims in the Circuit Court of Wyoming County were
filed in accordance with sect 22-3-24 which states
(a) Nothing in this article affects in any way the rights of any person to enforce or protect under applicable law the persons interest in water resources affected by a surface mining operation
(b) Any operator shall replace the water supply of an owner of interest in real property who obtains all or part of the owners supply of water for domestic
5
agricultural industrial or other legitimate use from an underground or surface source where the supply has been affected by contamination diminution or interruption proximately caused by the surface mining operation unless waived by the owner
(c) There is a rebuttable presumption that a mining operation caused damage to an owners underground water supply if the inspector determines the following (1) Contamination diminution or damage to an owners underground water supply exists and (2) a preblast survey was performed consistent with the provisions of section thirteen-a of this article on the owners property including the underground water supply that indicated that contamination diminution or damage to the underground water supply did not exist prior to the mining conducted at the mining operation
(d) The operator conducting the mining operation shall (1) Provide an emergency drinking water supply within twenty-four hours (2) provide temporary water supply within seventy-two hours (3) within thirty days begin activities to establish a permanent water supply or submit a proposal to the secretary outlining the measures and timetables to be utilized in establishing a permanent supply The total time for providing a permanent water supply may not exceed two years If the operator demonstrates that providing a permanent replacement water supply cannot be completed within two years the secretary may extend the time frame on case-by-case basis and (4) pay all reasonable costs incurred by the owner in securing a water supply
(e) An owner aggrieved under the provisions of subsections (b) (c) or (d) of this section may seek relief in court or pursuant to the provisions of section five article three-a of this chapter
W Va Code sect 22-3-24 (emphasis added)
In this case the Residents never initiated the administrative claims process pursuant to
West Virginia Code sect 22-3A-S That statute in its entirety states
(a) The office of explosives and blasting shall establish and manage a process for the filing administration and resolution of claims related to blasting
(b) Claims which may be filed and determined under the provisions of this section shall be those arising from both of the following
(1) Damage to property arising from blasting activities conducted pursuant to a permit granted under article three of this chapter and
(2) The damage is incurred by a claimant who is the owner or occupant of the property
6
(c) The claims process established by the office of explosives and blasting shall include the following
(1) An initial detennination by the office of the merit of the claim and
(2) An arbitration process whereby the claim can be detennined and resolved by an arbitrator in a manner which is inexpensive prompt and fair to all parties The office shall propose rules for legislative approval in accordance with article three chapter twenty-nine-a of this code for the development of standards for establishing rules relating to the initial claim detennination and the arbitration process provided in this subsection
(d) If the operator disagrees with the initial detennination made by the office and requests arbitration then the following shall apply
(1) Any party may be represented by a representati ve of their choice
(2) At the request of the claimant the office shall provide the claimant with representation in the arbitration process which representation shall not necessarily be an attomey-at-Iaw and
(3) If the claim is upheld in whole or in part then the operator shall pay the costs ofthe proceeding as well as reasonable representation fees and costs of the claimant in an amount not to exceed one thousand dollars
(e) Participation in the claims process created by this section shall be voluntary for the claimant However once the claimant has submitted a claim for detennination under the provisions of this section it is intended that the finding of the office if not taken to arbitration shall be final If arbitration is requested it is intended that the results of such arbitration shall be final The office shall provide written notification to the claimant of the provisions of this subsection and shall secure a written acknowledgment from the claimant prior to processing a claim pursuant to the provisions of this section
(f) The operator shall pay any claim for which the operator is adjudged liable within thirty days of a final detennination If the claim is not paid within thirty days the director shall issue a cessation order pursuant to section sixteen article three of this chapter for all sites operated by the operator
(g) No pennit to mine coal shall be granted unless the pennit applicant agrees to be subject to the tenns of this section
(h) To fulfill its responsibilities pursuant to this section the office may retain the services of inspectors experts and other persons or finns as may be necessary
7
W Va Code sect 22-3A-5 (1999) (repealed June 9 2016)
The Residents did not submit their claims to the WVDEPs Office of Explosives and
Blasting pursuant to West Virginia Code sect 22-3A-5 There is nothing in the record that reflects
that the Residents specifically sought WVDEP investigation pursuant to that code section or
otherwise sought resolution of their claims pursuant to West Virginia Code sect 22-3A-5 The record
does not contain a document created by the Residents that request an investigation and subsequent
arbitration by the WVDEP Office ofExplosives and Blasting Conversely the record does contain
the Residents initiating letter notifying the WVDEP that the Residents intended to sue the agency
Simply put no authority exists to support ERPs assertion that merely submitting citizen
complaints to the WVDEP irrevocably invoked the jurisdiction of the WVDEPs Office of
Explosives and Blasting and the arbitration requirement contained in West Virginia Code sect 22shy
3A-5 (1999) Furthermore no authority exists to support ERPs assertion that merely submitting
citizen complaints to the WVDEP irrevocably invoked administrative review before the
environmental boards tasked with reviewing agency action
This fundamental factual issue short circuits ERPs arguments that rely on Ewing v Ed of
Educ OCity oSummers 202 WVa 228 503 SE2d 541 (1998) State ex rei Chesapeake and
Potomac Telephone Co oJw Va v Ashworth 190 WVa 547438 SE2d 890 (1993) and Ashby
v City 0 Fairmont 216 WVa 527 607 SE2d 856 (2004) In each of those cases the
complainants invoked claims that specifically called for administrative resolution In this matter
the Residents from the start invoked claims they intended to pursue in circuit court
ERP cannot submit any evidence that the Residents ever submitted claims to the WVDEPs
Office of Explosives and Blasting or filed Notices of Appeal with the Surface Mine Board or the
8
Environmental Quality Board Accordingly this Court should hold that the Residents properly
exercised their statutory rights to pursue their water claims in circuit court
C The Circuit Courts Order was properly issued because Eastern and ERP were not indispensable parties and because no real property interest of Eastern or ERP was at issue
This Court should uphold the Circuit Courts Order because the Residents Petition for a
Writ ofMandamus and the subsequent hearing did not violate Eastern or ERPs due process rights
and did not result in an order that placed restraints on the real property of a third party
ERP insists that West Virginia Rule of Civil Procedure 19 requires that Eastern or ERP
should have been named as parties to the Residents Petition for a Writ of Mandamus Rule 19
requires that any persons who claim an interest in the real property at issue are indispensable
parties to the proceeding W Va R Civ P 19 and Petition at 23 This argument fails at the outset
because the Residents Petition for a Writ of Mandamus and the Circuit of Court of Wyoming
Countys Order did not in any way claim an interest in Eastern or ERPs real property or affect
Eastern or ERPs real property
Contrary to ERPs assertions this Court held in 0 Daniels v City of Charleston that
When a court proceeding directly affects or detennines the scope of rights or interests in real
property any persons who claim an interest in the real property at issue are indispensable parties
to the proceeding Any order or decree issued in the absence of those parties is null and void
ODaniels v City of CIz areston Syl Pt 2200 W Va 711 712490 SE2d 800 801 (1997)
(emphasis added)
o Daniels does not stand for the proposition that as here potential parties such as Patriot
Eastern or ERP must be joined as indispensable parties where as admitted by ERP personal
property is at issue There is no real property at issue in this case at least insofar as ERP is
9
concerned The only real property at issue in this case belongs to the Residents Accordingly
OBrien does not apply to this case
Every case cited by the o Daniels court -- Bonafede v Grafton Feed amp Storage Co 81
WVa 31394 SE 471 (1917) United Fuel Gas Co v Morley Oil amp Gas Co 101 WVa 73 131
SE 713 (1926) Oneal v Stimson 61 WVa 551 56 SE 889 (1907) -- involved real property
There is no West Virginia authority that makes the same statement about personal property and
there are certainly no West Virginia cases that bar a circuit court from granting a petition for a writ
ofmandamus that requires a state agency to order an action that might cause a corporation to spend
money in order to comply
ERPs broader due process argument also fails This Court holds that The due process of
law guaranteed by the State and Federal Constitutions when applied to procedure in the courts of
the land requires both notice and the right to be heard State ex reI Bd ofEduc of Cnty Of
Putnam v Beane Syl Pt 2 224 W Va 31 680 SE2d 46 (2009) (quoting Simpson v Stanton
SyJ Pt 2 119 WVa 235 193 SE 64 (1937)
As shown infra Eastern and its corporate successor ERP were aware of the Residents
proposed petition for writ of mandamus as early as 2011 and took part from the beginning of the
investigation process with the Residents and the WVDEP To the extent ERP complains that its
corporate predecessor failed to protect its interests by refusing to intervene in the proceedings
below it is bound by the terms of its agreement with Patriot and Eastern A corporate successor
may not avoid a prior liability simply because it subsequently decides it doesnt care for a part of
the deal ERPs due process argument fails because it had (1) notice and (2) had a right to be heard
before the Circuit Court of Wyoming County
10
Accordingly this Court should uphold the Circuit Courts Order because the Residents
Petition for a Writ of Mandamus and the subsequent hearing did not violate Eastern or ERPs due
process rights and did not result in an order that required impennissible restraints on the real
property of a third party
D The Circuit Court of Wyoming County was authorized to enter the Order at issue because it properly had venue
The Circuit Court of Wyoming County unquestionably had venue pursuant to West
Virginia Code sect 14-2-2 That statute states in its entirety
(a) The following proceedings shall be brought and prosecuted only in the circuit court of Kanawha County
(1) Any suit in which the governor any other state officer or a state agency is made a party defendant except as garnishee or suggestee
(2) Any suit attempting to enjoin or otherwise suspend or affect a judgment or decree on behalfof the State obtained in any circuit court
(b) Any proceeding for injunctive or mandamus relief involving the taking title or collection for or prevention of damage to real property may be brought and presented in the circuit court of the county in which the real property affected is situate
This section shall apply only to such proceedings as are not prohibited by the constitutional immunity of the State from suit under section thirty-five article VI of the Constitution of the State
W Va Code sect 14-2-2 (emphasis added) The underlying suit in which the plaintiffs alleged that
mining operations located near their homes contaminated their well water was a proceeding in
injunctive and mandamus relief against the WVDEP and Secretary Huffman that sought relief for
the prevention of damage to real property By its own tern1s the statute expressly provides the
Circuit Court of Wyoming County with venue and jurisdiction over the claim
This Court has ruled squarely on this issue in Shobe v Latimer 162 W Va 779 253 SE2d
54 (1979) In Shobe the plaintiffs sought a declaratory judgment holding that a water contract
11
between the West Virginia Department of Natural Resources and a public seIVice district was
illegalld The lower court granted a motion to dismiss holding that the Circuit Court ofKanawha
County did not have venue to adjudicate a claim based in Grant County West Virginiald This
Court disagreed holding that an action regarding stream rights was an allegation involving the
taking or damage to real property within in the meaning of WVa Code sect 14-2-2(b) and that
venue was proper in the circuit courts of either Kanawha or Grant County ld at 794 63 Such is
the case in the underlying matter the plaintiffs in the underlying Wyoming County action were
free pursuant to West Virginia Code sect 14-2-2 to choose between Kanawha and Wyoming County
Circuit Court Accordingly this Court should turn aside ERPs arguments regarding the authority
of the Circuit Court of Wyoming County
Accordingly this Court uphold the Circuit Courts Order because it had venue to detennine
the merits ofthe Residents Petition for a Writ of Mandamus
E The Circuit Court of Wyoming County properly granted the Residents Petition for a Writ of Mandamus because it found that the WVDEP had erred in carrying out its duties with regard to water replacement and because the primary jurisdiction doctrine much like the exhaustion of administrative remedies doctrine is inapplicable to this case
The Circuit Court of Wyoming County found as a matter oflaw that the WVDEP erred by
failing to order water replacement as alleged in the Residents Petition for a Writ of Mandamus
By granting the Petition the Court held that the WVDEP had a legal duty pursuant to West
Virginia Code sect 22-3-17(a) to order water replacement for the Residents Appendix at 8 The
Circuit Court also agreed with the Residents that West Virginia Code sect 22-3-17(a) mandates that
the WVDEP shall issue a Notice ofViolation in an operator is not in compliance with a provision
ofa state rule or pennit which constitutes a non-discretionary duty W Va Code 22-3-17(a)
12
The Circuit Court also correctly disregarded the primary jurisdiction doctrine This Court
has described the primary jurisdiction doctrine as follows
1 Where an administrative agency and the courts have concurrent jurisdiction of an issue which requires the agencys special expertise and which extends beyond the conventional experience ofjudges the doctrine ofprimary jurisdiction applies In such a case the court should refrain from exercising jurisdiction until after the agency has resolved the issue The courts decision whether to apply the primary jurisdiction doctrine is reviewed on appeal under an abuse of discretion standard
2 In detennining whether to apply the primary jurisdiction doctrine courts should consider factors such as whether the question at issue is within the conventional experience ofjudges whether the question at issue lies peculiarly within the agencys discretion or requires the exercise of agency expertise whether there exists a danger of inconsistent rulings and whether a prior application to the agency has been made
State ex reI Bell AII-1yen Virginia Inc v Ranson Syl Pts 1 and 2 201 W Va 402404497
SE2d 755 757 (1997)
The Circuit Courts action in this case meets the test established in Ranson because the
Residents primary argument for a writ ofmandamus before the Circuit Court was that the agency
had already resolved the issue to the agencys satisfaction In this case though the question at
issue undoubtedly lies peculiarly within the WVDEPs expertise and discretion the Circuit Court
detennined it had sufficient conventional experience to render its own decision on the merits of
the evidence presented to it during the hearing on the Residents petition for a wTit of mandamus
The Circuit Court in its Order based its decision on a consideration of the WVDEPs evidence
and findings but also on those of the testimony of the Residents expert witness and their own
testimony
Ultimately this Court in Ranson elected to not apply the primary jurisdiction doctrine
noting that this concept is essentially the same as exhaustion of administrative remedies
13
Not unlike the exhaustion of remedies doctrine the doctrine of primary jurisdiction is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties citations omitted)
Ranson 201 W Va 410497 SE2d 763lndeed the terms primary jurisdiction and exhaustion
of remedies though separate and distinct legal concepts are often confused and used
interchangeably ld at FN 6 (internal citation omitted)
The primary jurisdiction doctrine and the exhaustion of administrative remedies doctrine
do not apply in this matter because the circuit courts ofWest Virginia are granted explicit statutory
authority by West Virginia Code sect 22-3-24 to decide the claims raised in the Residents Petition
for a Writ of Mandamus as discussed infra To insist as does ERP that this Court should abstain
from deciding an issue that the Legislature has detennined is explicitly within the jurisdiction of
the circuit coqrts is incorrect
ERP argues that a danger of inconsistent rulings and other concerns (Petition at 35)
requires the application of the primary jurisdiction doctrine in this case That argument disregards
the fact that the only dispute arising out of the Residents Petition is currently pending before this
Court There are no other potential inconsistent rulings
Lastly ERP argues that the Circuit Courts Order violates the doctrine of primary
jurisdiction essentially because the Circuit Court did not expressly address the doctrine ofprimary
jurisdiction even though it was not raised in the Circuit Court proceedings There is no
requirement that a circuit court make an express finding on its own accordingly the absence of
such analysis is not reversible error
Accordingly this Court should uphold the Circuit Courts Order regarding the Residents
Petition for a Writ of Mandamus
14
F Patriot and Easterns bankruptcy claims do not bar the State of West Virginias regulatory authority
ERPs arguments regarding the Patriot bankruptcy proceedings are similarly unfounded
Patriots most recent bankruptcy case ended in October 2015 with the entry of the confinnation
order which occurred well before the December 2015 hearing in the Circuit Court of Wyoming
County at issue here That order dissolved the automatic stay in place and replaced it with a new
set of injunctions none of which were applicable at the time of the hearing on the writ of
mandamus in the underlying matter Further confinnation orders have no effect whatsoever on
state law enforcement Eastern was required to continue to comply with state environmental law
Pursuant to 28 USc sect 959(b) a debtor is required to perfonn any and all acts necessary in order
to effectuate compliance with State Law environmental obligations Furthennore 11 USc sect
362(b)(4) expressly exempts the enforcement of any police or regulatory law enforcement action
from the automatic stay See 11 USc sect 362(b)(4)
A ruling such as the one sought by ERP in this matter would throw State enforcement of
all State laws related to debtors operating under an automatic stay into disarray It is absurd to
suggest that the State of West Virginia through the WVDEP is unable to enforce environmental
laws against companies operating within the State pursuant to West Virginia law simply because
a mining company seeks bankruptcy protection Furthennore ERP asks this Court to maintain that
not only are West Virginia executive law enforcement agencies not able to order compliance with
State law against debtors but also that the circuit courts of West Virginia are unable to order
compliance That is not the law
On May 12 2015 Easterns parent company Patriot Coal Corporation and some of its
affiliates including Eastern filed a petition with the United States Bankruptcy Court for the
Eastern District ofVirginia under chapter 11 oftitle 11 ofthe United States Code (US Bankruptcy
15
Court ED Va Case No 15-32450 (KLPraquo During the course of the bankruptcy proceedings
Patriot negotiated the sale of substantially all of its assets to two separate entities Blackhawk
Mining LLC (Blackhawk) and VCLF VCLF proposed to acquire the Kopperston No1 Refuse
Impoundment including the SMCRA permit at issue in this case
In accordance with the Bankruptcy Courts Scheduling Order on September 18 2015
Patriot filed the Fourth Amended Disclosure Statement for the Debtors Fourth Amended Joint
Plan ofReorganization Pursuant to Chapter 11 of the Bankruptcy Code and the Debtors Fourth
Amended Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code
The Fourth Amended Plan attached a copy of the VCLF Asset Purchase Agreement
(APA) The VCLF APA definitively establishes Appellant ERPs liability for the water
replacement order at issue in this case The Fourth Amended Plan itself lists the SMCRA notice
that ultimately led to the Wyoming County Circuit Court Order at issue in this appeal as a piece
of unresolved litigation to be assumed by the purchasers of Patriots assets
Furthem10re Section 203 of the APA Assumed Liabilities states that VCLFIERP shall
assume all Liabilities associated with the Transferred Pem1its as well as liability for regulatory
violations and obligations on or in relation to the Purchased Assets or the Transferred Permits
arising post-Closing
Additionally Schedule 308(a)-(b) to the VCLF APA expressly lists all liabilities
associated with the Purchased Assets and again includes the May 2015 SMCRA notice from
owners ofproperties near the Kopperston mine alleging adverse impacts to groundwater resources
Schedule 313 lists all pending litigation associated with the Purchased Assets and yet again lists
the Kopperston SMCRA notice
16
ERP is a wholly owned subsidiary of VCLF incorporated to fulfill the reclamation
obligations associated with assets VCLF purchased out of the Patriot bankruptcy ERP became
the penn it holder of the pennit associated with this appeal ERPs assumption of the water
replacement liability at issue in this appeal is not just a matter of a contractual obligation between
two private parties rather its liability also arises by operation of the Bankruptcy Courts
Confinnation Order
Accordingly this Court should uphold the Circuit Courts Order in this matter because it
was not barred by bankruptcy law
VII CONCLUSION
In conclusion these Respondents respectfully request this Court enter an Order denying
ERPs Petition for a Writ of Prohibition
WEST VIRGINIA DEPARMENT OF ENVIRONMENTAL PROTECTION and SECRETARY AUSTIN CAPERTON by counsel
West Virginia Department of Environmental Protection Office of Legal Services 601 57th St SE Charleston WV 25304 Phone 304-926-0499 Fax 304-926-0461 Email jasonewandlingwvgov
17
CERTIFICATE OF SERVICE
I Jason Wandling certify that I served this Response in Opposition to Verified Petition for
Writ of Prohibition on 20 March 2017 by depositing a true copy thereof in the United States mail
postage prepaid addressed as follows
John J Meadows (WVSB 9442) Peter J Raupp (WVSB 10546) Devon J Stewart (WVSB 11712) Steptoe amp Johnson PLLC 707 Virginia Street East Chase Tower Seventeenth Floor PO Box 1588 Charleston WV 25326-1588 Phone 304-353-8154 Fax 304-353-8180 Email J ohnM eadowssteptoe-johnsoncom
PeterRauppsteptoe-johnsoncom DevonStewartsteptoe-johnsoncom
Honorable Warren D McGraw Judge PO Box 581 100 Main and Bank Streets Pineville WV 24874 Phone 304-732-7047 Fax 304-732-7047
Kevin W Thompson (WVSB 5062) David R Barney Jr (WVSB 7958) Thompson Barney 2030 Kanawha Blvd E Charleston WV 25311 Phone 304-343-4401 Fax 304-343-4405 Email kthompsonthompsonbarneycom
dbameythompsonbameycom
to the proceeding W Va R Civ P 19 and Petition at 23 However the Residents Petition for
a Writ of Mandamus and the Circuit of Court of Wyoming Countys Order did not in any way
claim an interest in Eastern or ERPs real property or affect Eastern or ERPs real property
Venue was properly established in the Circuit Court of Wyoming County in accordance
with West Virginia Code sect 14-2-2 which allows citizens to file suit against the State to prevent
damage to real property in the circuit court of the county in which the real property is found
Mandamus in this instance was proper because the Circuit Court found that West Virginia
Code sect 22-3-17(a) mandates that the WVDEP shall issue a Notice of Violation in an operator is
not in compliance with a provision of a state rule or pennit The primary jurisdiction doctrine
which is essentially the same as the exhaustion ofremedies doctrine did not apply to the Residents
Petition for a Writ of Mandamus because the Circuit Court had explicit statutory authorization to
adjudicate the claims in the Petition
Lastly the Residents Petition for a Writ of Mandamus was not barred by bankruptcy law
because the automatic stay at issue lapsed before the hearing and Order at issue in this case and
further because West Virginia regulatory action against parties that seek bankruptcy protection is
not affected by the automatic stay
IV STATEMENT REGARDING ORAL ARGUMENT AND DECISION
These Respondents believe oral argument is necessary pursuant to the criteria in Rule 18(a)
of the West Virginia Rules of Appellate Procedure Oral argument under Rules 19 or 20 of the
West Virginia Rules of Appellate Procedure is appropriate because pursuant to Rule 19(a)(2) the
case allegedly involves an unsustainable exercise of discretion where the law governing that
discretion is settled The appeal also involves constitutional questions regarding a court ruling
pursuant to Rule 20(a)(3)
3
V ARGUMENT
A These Respondents largely agree with the Petitioners regarding the standard of review to be applied in this matter
These Respondents note however that the standard of appellate review of a circuit courts
order granting relief through the extraordinary writ of mandamus is de novo Staten v Dean Syl
Pt 1 195 WVa 57464 SE2d 576 (1995) This Court reviews a circuit courts underlying
factual findings under a clearly erroneous standard Id Lastly this Court reviews conclusions of
law under a clearly erroneous standard Id
B The Residents properly exercised a statutory right to pursue their actions in the Circuit Court of Wyoming County
Under the exhaustion of administrative remedies doctrine where a claim is cognizable in
the first instance by an administrative agency alone judicial interference is withheld until the
administrative process has run its course This Court has long held that [t]he general rule is that
where an administrative remedy is provided by statute or by rules and regulations having the force
and effect of law relief must be sought from the administrative body and such remedy must be
exhausted before the courts will act Syl pt 1 Daurelle v Tiaders Fed Sav amp Loan Assn Syl
Pt I 143 WVa 674104 SE2d 320 (1958)
There are exceptions to this rule This Court has held The factors courts have cited to
excuse failure to exhaust are (1) that the claim is collateral to a demand for benefits (2) that
exhaustion would be futile and (3) that plaintiffs would suffer irreparable hann if required to
exhaust administrative remedies Wiggins v Eastern Assoc Coal COp Syl Pt 6 178 WVa 63
357 SE2d 745 (1987) (This Court will not require the exhaustion of administrative remedies
where such remedies are duplicative or the effort to obtain them futile) Finally [t]he rule which
4
requires the exhaustion ofadministrative remedies is inapplicable where no administrative remedy
is provided by law Daw-elle at Syl pt 2_
In this matter however the Respondent Residents had two (and possibly three) choices
First they could submit claims to the WVDEPs Office of Explosives and Blasting pursuant to
West Virginia Code sect 22-3A-5 Second (arguably) they could pursue administrative remedies via
the Surface Mine Board (or possibly the Environmental Quality Board) pursuant to West Virginia
Code sect 22B-1-7 Third the Residents could file civil claims pursuant to West Virginia Code sect 22shy
3-24
In this case the Residents chose to file civil claims pursuant to West Virginia Code sect 22shy
3-24 As part of that process and in compliance with West Virginia law that requires 30 day notice
before filing suit against a state agency the Residents initiated WVDEPs involvement in this
matter by mailing a letter of intent to sue with an attached proposed Complaint to file in Circuit
Court to the WVDEP on 14 November 2011
In its brief however ERP insists that the Residents foreclosed their statutory circuit court
claims by submitting complaints to the WVDEP without specifying that those complaints were
contained in a notice of intent to sue the agency in circuit court Petition at 15 It strains credulity
to assert that the Residents intended to pursue administrative claims when they told the agency by
letter that they intended to sue the agency in circuit court
Subsequently the Residents civil claims in the Circuit Court of Wyoming County were
filed in accordance with sect 22-3-24 which states
(a) Nothing in this article affects in any way the rights of any person to enforce or protect under applicable law the persons interest in water resources affected by a surface mining operation
(b) Any operator shall replace the water supply of an owner of interest in real property who obtains all or part of the owners supply of water for domestic
5
agricultural industrial or other legitimate use from an underground or surface source where the supply has been affected by contamination diminution or interruption proximately caused by the surface mining operation unless waived by the owner
(c) There is a rebuttable presumption that a mining operation caused damage to an owners underground water supply if the inspector determines the following (1) Contamination diminution or damage to an owners underground water supply exists and (2) a preblast survey was performed consistent with the provisions of section thirteen-a of this article on the owners property including the underground water supply that indicated that contamination diminution or damage to the underground water supply did not exist prior to the mining conducted at the mining operation
(d) The operator conducting the mining operation shall (1) Provide an emergency drinking water supply within twenty-four hours (2) provide temporary water supply within seventy-two hours (3) within thirty days begin activities to establish a permanent water supply or submit a proposal to the secretary outlining the measures and timetables to be utilized in establishing a permanent supply The total time for providing a permanent water supply may not exceed two years If the operator demonstrates that providing a permanent replacement water supply cannot be completed within two years the secretary may extend the time frame on case-by-case basis and (4) pay all reasonable costs incurred by the owner in securing a water supply
(e) An owner aggrieved under the provisions of subsections (b) (c) or (d) of this section may seek relief in court or pursuant to the provisions of section five article three-a of this chapter
W Va Code sect 22-3-24 (emphasis added)
In this case the Residents never initiated the administrative claims process pursuant to
West Virginia Code sect 22-3A-S That statute in its entirety states
(a) The office of explosives and blasting shall establish and manage a process for the filing administration and resolution of claims related to blasting
(b) Claims which may be filed and determined under the provisions of this section shall be those arising from both of the following
(1) Damage to property arising from blasting activities conducted pursuant to a permit granted under article three of this chapter and
(2) The damage is incurred by a claimant who is the owner or occupant of the property
6
(c) The claims process established by the office of explosives and blasting shall include the following
(1) An initial detennination by the office of the merit of the claim and
(2) An arbitration process whereby the claim can be detennined and resolved by an arbitrator in a manner which is inexpensive prompt and fair to all parties The office shall propose rules for legislative approval in accordance with article three chapter twenty-nine-a of this code for the development of standards for establishing rules relating to the initial claim detennination and the arbitration process provided in this subsection
(d) If the operator disagrees with the initial detennination made by the office and requests arbitration then the following shall apply
(1) Any party may be represented by a representati ve of their choice
(2) At the request of the claimant the office shall provide the claimant with representation in the arbitration process which representation shall not necessarily be an attomey-at-Iaw and
(3) If the claim is upheld in whole or in part then the operator shall pay the costs ofthe proceeding as well as reasonable representation fees and costs of the claimant in an amount not to exceed one thousand dollars
(e) Participation in the claims process created by this section shall be voluntary for the claimant However once the claimant has submitted a claim for detennination under the provisions of this section it is intended that the finding of the office if not taken to arbitration shall be final If arbitration is requested it is intended that the results of such arbitration shall be final The office shall provide written notification to the claimant of the provisions of this subsection and shall secure a written acknowledgment from the claimant prior to processing a claim pursuant to the provisions of this section
(f) The operator shall pay any claim for which the operator is adjudged liable within thirty days of a final detennination If the claim is not paid within thirty days the director shall issue a cessation order pursuant to section sixteen article three of this chapter for all sites operated by the operator
(g) No pennit to mine coal shall be granted unless the pennit applicant agrees to be subject to the tenns of this section
(h) To fulfill its responsibilities pursuant to this section the office may retain the services of inspectors experts and other persons or finns as may be necessary
7
W Va Code sect 22-3A-5 (1999) (repealed June 9 2016)
The Residents did not submit their claims to the WVDEPs Office of Explosives and
Blasting pursuant to West Virginia Code sect 22-3A-5 There is nothing in the record that reflects
that the Residents specifically sought WVDEP investigation pursuant to that code section or
otherwise sought resolution of their claims pursuant to West Virginia Code sect 22-3A-5 The record
does not contain a document created by the Residents that request an investigation and subsequent
arbitration by the WVDEP Office ofExplosives and Blasting Conversely the record does contain
the Residents initiating letter notifying the WVDEP that the Residents intended to sue the agency
Simply put no authority exists to support ERPs assertion that merely submitting citizen
complaints to the WVDEP irrevocably invoked the jurisdiction of the WVDEPs Office of
Explosives and Blasting and the arbitration requirement contained in West Virginia Code sect 22shy
3A-5 (1999) Furthermore no authority exists to support ERPs assertion that merely submitting
citizen complaints to the WVDEP irrevocably invoked administrative review before the
environmental boards tasked with reviewing agency action
This fundamental factual issue short circuits ERPs arguments that rely on Ewing v Ed of
Educ OCity oSummers 202 WVa 228 503 SE2d 541 (1998) State ex rei Chesapeake and
Potomac Telephone Co oJw Va v Ashworth 190 WVa 547438 SE2d 890 (1993) and Ashby
v City 0 Fairmont 216 WVa 527 607 SE2d 856 (2004) In each of those cases the
complainants invoked claims that specifically called for administrative resolution In this matter
the Residents from the start invoked claims they intended to pursue in circuit court
ERP cannot submit any evidence that the Residents ever submitted claims to the WVDEPs
Office of Explosives and Blasting or filed Notices of Appeal with the Surface Mine Board or the
8
Environmental Quality Board Accordingly this Court should hold that the Residents properly
exercised their statutory rights to pursue their water claims in circuit court
C The Circuit Courts Order was properly issued because Eastern and ERP were not indispensable parties and because no real property interest of Eastern or ERP was at issue
This Court should uphold the Circuit Courts Order because the Residents Petition for a
Writ ofMandamus and the subsequent hearing did not violate Eastern or ERPs due process rights
and did not result in an order that placed restraints on the real property of a third party
ERP insists that West Virginia Rule of Civil Procedure 19 requires that Eastern or ERP
should have been named as parties to the Residents Petition for a Writ of Mandamus Rule 19
requires that any persons who claim an interest in the real property at issue are indispensable
parties to the proceeding W Va R Civ P 19 and Petition at 23 This argument fails at the outset
because the Residents Petition for a Writ of Mandamus and the Circuit of Court of Wyoming
Countys Order did not in any way claim an interest in Eastern or ERPs real property or affect
Eastern or ERPs real property
Contrary to ERPs assertions this Court held in 0 Daniels v City of Charleston that
When a court proceeding directly affects or detennines the scope of rights or interests in real
property any persons who claim an interest in the real property at issue are indispensable parties
to the proceeding Any order or decree issued in the absence of those parties is null and void
ODaniels v City of CIz areston Syl Pt 2200 W Va 711 712490 SE2d 800 801 (1997)
(emphasis added)
o Daniels does not stand for the proposition that as here potential parties such as Patriot
Eastern or ERP must be joined as indispensable parties where as admitted by ERP personal
property is at issue There is no real property at issue in this case at least insofar as ERP is
9
concerned The only real property at issue in this case belongs to the Residents Accordingly
OBrien does not apply to this case
Every case cited by the o Daniels court -- Bonafede v Grafton Feed amp Storage Co 81
WVa 31394 SE 471 (1917) United Fuel Gas Co v Morley Oil amp Gas Co 101 WVa 73 131
SE 713 (1926) Oneal v Stimson 61 WVa 551 56 SE 889 (1907) -- involved real property
There is no West Virginia authority that makes the same statement about personal property and
there are certainly no West Virginia cases that bar a circuit court from granting a petition for a writ
ofmandamus that requires a state agency to order an action that might cause a corporation to spend
money in order to comply
ERPs broader due process argument also fails This Court holds that The due process of
law guaranteed by the State and Federal Constitutions when applied to procedure in the courts of
the land requires both notice and the right to be heard State ex reI Bd ofEduc of Cnty Of
Putnam v Beane Syl Pt 2 224 W Va 31 680 SE2d 46 (2009) (quoting Simpson v Stanton
SyJ Pt 2 119 WVa 235 193 SE 64 (1937)
As shown infra Eastern and its corporate successor ERP were aware of the Residents
proposed petition for writ of mandamus as early as 2011 and took part from the beginning of the
investigation process with the Residents and the WVDEP To the extent ERP complains that its
corporate predecessor failed to protect its interests by refusing to intervene in the proceedings
below it is bound by the terms of its agreement with Patriot and Eastern A corporate successor
may not avoid a prior liability simply because it subsequently decides it doesnt care for a part of
the deal ERPs due process argument fails because it had (1) notice and (2) had a right to be heard
before the Circuit Court of Wyoming County
10
Accordingly this Court should uphold the Circuit Courts Order because the Residents
Petition for a Writ of Mandamus and the subsequent hearing did not violate Eastern or ERPs due
process rights and did not result in an order that required impennissible restraints on the real
property of a third party
D The Circuit Court of Wyoming County was authorized to enter the Order at issue because it properly had venue
The Circuit Court of Wyoming County unquestionably had venue pursuant to West
Virginia Code sect 14-2-2 That statute states in its entirety
(a) The following proceedings shall be brought and prosecuted only in the circuit court of Kanawha County
(1) Any suit in which the governor any other state officer or a state agency is made a party defendant except as garnishee or suggestee
(2) Any suit attempting to enjoin or otherwise suspend or affect a judgment or decree on behalfof the State obtained in any circuit court
(b) Any proceeding for injunctive or mandamus relief involving the taking title or collection for or prevention of damage to real property may be brought and presented in the circuit court of the county in which the real property affected is situate
This section shall apply only to such proceedings as are not prohibited by the constitutional immunity of the State from suit under section thirty-five article VI of the Constitution of the State
W Va Code sect 14-2-2 (emphasis added) The underlying suit in which the plaintiffs alleged that
mining operations located near their homes contaminated their well water was a proceeding in
injunctive and mandamus relief against the WVDEP and Secretary Huffman that sought relief for
the prevention of damage to real property By its own tern1s the statute expressly provides the
Circuit Court of Wyoming County with venue and jurisdiction over the claim
This Court has ruled squarely on this issue in Shobe v Latimer 162 W Va 779 253 SE2d
54 (1979) In Shobe the plaintiffs sought a declaratory judgment holding that a water contract
11
between the West Virginia Department of Natural Resources and a public seIVice district was
illegalld The lower court granted a motion to dismiss holding that the Circuit Court ofKanawha
County did not have venue to adjudicate a claim based in Grant County West Virginiald This
Court disagreed holding that an action regarding stream rights was an allegation involving the
taking or damage to real property within in the meaning of WVa Code sect 14-2-2(b) and that
venue was proper in the circuit courts of either Kanawha or Grant County ld at 794 63 Such is
the case in the underlying matter the plaintiffs in the underlying Wyoming County action were
free pursuant to West Virginia Code sect 14-2-2 to choose between Kanawha and Wyoming County
Circuit Court Accordingly this Court should turn aside ERPs arguments regarding the authority
of the Circuit Court of Wyoming County
Accordingly this Court uphold the Circuit Courts Order because it had venue to detennine
the merits ofthe Residents Petition for a Writ of Mandamus
E The Circuit Court of Wyoming County properly granted the Residents Petition for a Writ of Mandamus because it found that the WVDEP had erred in carrying out its duties with regard to water replacement and because the primary jurisdiction doctrine much like the exhaustion of administrative remedies doctrine is inapplicable to this case
The Circuit Court of Wyoming County found as a matter oflaw that the WVDEP erred by
failing to order water replacement as alleged in the Residents Petition for a Writ of Mandamus
By granting the Petition the Court held that the WVDEP had a legal duty pursuant to West
Virginia Code sect 22-3-17(a) to order water replacement for the Residents Appendix at 8 The
Circuit Court also agreed with the Residents that West Virginia Code sect 22-3-17(a) mandates that
the WVDEP shall issue a Notice ofViolation in an operator is not in compliance with a provision
ofa state rule or pennit which constitutes a non-discretionary duty W Va Code 22-3-17(a)
12
The Circuit Court also correctly disregarded the primary jurisdiction doctrine This Court
has described the primary jurisdiction doctrine as follows
1 Where an administrative agency and the courts have concurrent jurisdiction of an issue which requires the agencys special expertise and which extends beyond the conventional experience ofjudges the doctrine ofprimary jurisdiction applies In such a case the court should refrain from exercising jurisdiction until after the agency has resolved the issue The courts decision whether to apply the primary jurisdiction doctrine is reviewed on appeal under an abuse of discretion standard
2 In detennining whether to apply the primary jurisdiction doctrine courts should consider factors such as whether the question at issue is within the conventional experience ofjudges whether the question at issue lies peculiarly within the agencys discretion or requires the exercise of agency expertise whether there exists a danger of inconsistent rulings and whether a prior application to the agency has been made
State ex reI Bell AII-1yen Virginia Inc v Ranson Syl Pts 1 and 2 201 W Va 402404497
SE2d 755 757 (1997)
The Circuit Courts action in this case meets the test established in Ranson because the
Residents primary argument for a writ ofmandamus before the Circuit Court was that the agency
had already resolved the issue to the agencys satisfaction In this case though the question at
issue undoubtedly lies peculiarly within the WVDEPs expertise and discretion the Circuit Court
detennined it had sufficient conventional experience to render its own decision on the merits of
the evidence presented to it during the hearing on the Residents petition for a wTit of mandamus
The Circuit Court in its Order based its decision on a consideration of the WVDEPs evidence
and findings but also on those of the testimony of the Residents expert witness and their own
testimony
Ultimately this Court in Ranson elected to not apply the primary jurisdiction doctrine
noting that this concept is essentially the same as exhaustion of administrative remedies
13
Not unlike the exhaustion of remedies doctrine the doctrine of primary jurisdiction is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties citations omitted)
Ranson 201 W Va 410497 SE2d 763lndeed the terms primary jurisdiction and exhaustion
of remedies though separate and distinct legal concepts are often confused and used
interchangeably ld at FN 6 (internal citation omitted)
The primary jurisdiction doctrine and the exhaustion of administrative remedies doctrine
do not apply in this matter because the circuit courts ofWest Virginia are granted explicit statutory
authority by West Virginia Code sect 22-3-24 to decide the claims raised in the Residents Petition
for a Writ of Mandamus as discussed infra To insist as does ERP that this Court should abstain
from deciding an issue that the Legislature has detennined is explicitly within the jurisdiction of
the circuit coqrts is incorrect
ERP argues that a danger of inconsistent rulings and other concerns (Petition at 35)
requires the application of the primary jurisdiction doctrine in this case That argument disregards
the fact that the only dispute arising out of the Residents Petition is currently pending before this
Court There are no other potential inconsistent rulings
Lastly ERP argues that the Circuit Courts Order violates the doctrine of primary
jurisdiction essentially because the Circuit Court did not expressly address the doctrine ofprimary
jurisdiction even though it was not raised in the Circuit Court proceedings There is no
requirement that a circuit court make an express finding on its own accordingly the absence of
such analysis is not reversible error
Accordingly this Court should uphold the Circuit Courts Order regarding the Residents
Petition for a Writ of Mandamus
14
F Patriot and Easterns bankruptcy claims do not bar the State of West Virginias regulatory authority
ERPs arguments regarding the Patriot bankruptcy proceedings are similarly unfounded
Patriots most recent bankruptcy case ended in October 2015 with the entry of the confinnation
order which occurred well before the December 2015 hearing in the Circuit Court of Wyoming
County at issue here That order dissolved the automatic stay in place and replaced it with a new
set of injunctions none of which were applicable at the time of the hearing on the writ of
mandamus in the underlying matter Further confinnation orders have no effect whatsoever on
state law enforcement Eastern was required to continue to comply with state environmental law
Pursuant to 28 USc sect 959(b) a debtor is required to perfonn any and all acts necessary in order
to effectuate compliance with State Law environmental obligations Furthennore 11 USc sect
362(b)(4) expressly exempts the enforcement of any police or regulatory law enforcement action
from the automatic stay See 11 USc sect 362(b)(4)
A ruling such as the one sought by ERP in this matter would throw State enforcement of
all State laws related to debtors operating under an automatic stay into disarray It is absurd to
suggest that the State of West Virginia through the WVDEP is unable to enforce environmental
laws against companies operating within the State pursuant to West Virginia law simply because
a mining company seeks bankruptcy protection Furthennore ERP asks this Court to maintain that
not only are West Virginia executive law enforcement agencies not able to order compliance with
State law against debtors but also that the circuit courts of West Virginia are unable to order
compliance That is not the law
On May 12 2015 Easterns parent company Patriot Coal Corporation and some of its
affiliates including Eastern filed a petition with the United States Bankruptcy Court for the
Eastern District ofVirginia under chapter 11 oftitle 11 ofthe United States Code (US Bankruptcy
15
Court ED Va Case No 15-32450 (KLPraquo During the course of the bankruptcy proceedings
Patriot negotiated the sale of substantially all of its assets to two separate entities Blackhawk
Mining LLC (Blackhawk) and VCLF VCLF proposed to acquire the Kopperston No1 Refuse
Impoundment including the SMCRA permit at issue in this case
In accordance with the Bankruptcy Courts Scheduling Order on September 18 2015
Patriot filed the Fourth Amended Disclosure Statement for the Debtors Fourth Amended Joint
Plan ofReorganization Pursuant to Chapter 11 of the Bankruptcy Code and the Debtors Fourth
Amended Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code
The Fourth Amended Plan attached a copy of the VCLF Asset Purchase Agreement
(APA) The VCLF APA definitively establishes Appellant ERPs liability for the water
replacement order at issue in this case The Fourth Amended Plan itself lists the SMCRA notice
that ultimately led to the Wyoming County Circuit Court Order at issue in this appeal as a piece
of unresolved litigation to be assumed by the purchasers of Patriots assets
Furthem10re Section 203 of the APA Assumed Liabilities states that VCLFIERP shall
assume all Liabilities associated with the Transferred Pem1its as well as liability for regulatory
violations and obligations on or in relation to the Purchased Assets or the Transferred Permits
arising post-Closing
Additionally Schedule 308(a)-(b) to the VCLF APA expressly lists all liabilities
associated with the Purchased Assets and again includes the May 2015 SMCRA notice from
owners ofproperties near the Kopperston mine alleging adverse impacts to groundwater resources
Schedule 313 lists all pending litigation associated with the Purchased Assets and yet again lists
the Kopperston SMCRA notice
16
ERP is a wholly owned subsidiary of VCLF incorporated to fulfill the reclamation
obligations associated with assets VCLF purchased out of the Patriot bankruptcy ERP became
the penn it holder of the pennit associated with this appeal ERPs assumption of the water
replacement liability at issue in this appeal is not just a matter of a contractual obligation between
two private parties rather its liability also arises by operation of the Bankruptcy Courts
Confinnation Order
Accordingly this Court should uphold the Circuit Courts Order in this matter because it
was not barred by bankruptcy law
VII CONCLUSION
In conclusion these Respondents respectfully request this Court enter an Order denying
ERPs Petition for a Writ of Prohibition
WEST VIRGINIA DEPARMENT OF ENVIRONMENTAL PROTECTION and SECRETARY AUSTIN CAPERTON by counsel
West Virginia Department of Environmental Protection Office of Legal Services 601 57th St SE Charleston WV 25304 Phone 304-926-0499 Fax 304-926-0461 Email jasonewandlingwvgov
17
CERTIFICATE OF SERVICE
I Jason Wandling certify that I served this Response in Opposition to Verified Petition for
Writ of Prohibition on 20 March 2017 by depositing a true copy thereof in the United States mail
postage prepaid addressed as follows
John J Meadows (WVSB 9442) Peter J Raupp (WVSB 10546) Devon J Stewart (WVSB 11712) Steptoe amp Johnson PLLC 707 Virginia Street East Chase Tower Seventeenth Floor PO Box 1588 Charleston WV 25326-1588 Phone 304-353-8154 Fax 304-353-8180 Email J ohnM eadowssteptoe-johnsoncom
PeterRauppsteptoe-johnsoncom DevonStewartsteptoe-johnsoncom
Honorable Warren D McGraw Judge PO Box 581 100 Main and Bank Streets Pineville WV 24874 Phone 304-732-7047 Fax 304-732-7047
Kevin W Thompson (WVSB 5062) David R Barney Jr (WVSB 7958) Thompson Barney 2030 Kanawha Blvd E Charleston WV 25311 Phone 304-343-4401 Fax 304-343-4405 Email kthompsonthompsonbarneycom
dbameythompsonbameycom
V ARGUMENT
A These Respondents largely agree with the Petitioners regarding the standard of review to be applied in this matter
These Respondents note however that the standard of appellate review of a circuit courts
order granting relief through the extraordinary writ of mandamus is de novo Staten v Dean Syl
Pt 1 195 WVa 57464 SE2d 576 (1995) This Court reviews a circuit courts underlying
factual findings under a clearly erroneous standard Id Lastly this Court reviews conclusions of
law under a clearly erroneous standard Id
B The Residents properly exercised a statutory right to pursue their actions in the Circuit Court of Wyoming County
Under the exhaustion of administrative remedies doctrine where a claim is cognizable in
the first instance by an administrative agency alone judicial interference is withheld until the
administrative process has run its course This Court has long held that [t]he general rule is that
where an administrative remedy is provided by statute or by rules and regulations having the force
and effect of law relief must be sought from the administrative body and such remedy must be
exhausted before the courts will act Syl pt 1 Daurelle v Tiaders Fed Sav amp Loan Assn Syl
Pt I 143 WVa 674104 SE2d 320 (1958)
There are exceptions to this rule This Court has held The factors courts have cited to
excuse failure to exhaust are (1) that the claim is collateral to a demand for benefits (2) that
exhaustion would be futile and (3) that plaintiffs would suffer irreparable hann if required to
exhaust administrative remedies Wiggins v Eastern Assoc Coal COp Syl Pt 6 178 WVa 63
357 SE2d 745 (1987) (This Court will not require the exhaustion of administrative remedies
where such remedies are duplicative or the effort to obtain them futile) Finally [t]he rule which
4
requires the exhaustion ofadministrative remedies is inapplicable where no administrative remedy
is provided by law Daw-elle at Syl pt 2_
In this matter however the Respondent Residents had two (and possibly three) choices
First they could submit claims to the WVDEPs Office of Explosives and Blasting pursuant to
West Virginia Code sect 22-3A-5 Second (arguably) they could pursue administrative remedies via
the Surface Mine Board (or possibly the Environmental Quality Board) pursuant to West Virginia
Code sect 22B-1-7 Third the Residents could file civil claims pursuant to West Virginia Code sect 22shy
3-24
In this case the Residents chose to file civil claims pursuant to West Virginia Code sect 22shy
3-24 As part of that process and in compliance with West Virginia law that requires 30 day notice
before filing suit against a state agency the Residents initiated WVDEPs involvement in this
matter by mailing a letter of intent to sue with an attached proposed Complaint to file in Circuit
Court to the WVDEP on 14 November 2011
In its brief however ERP insists that the Residents foreclosed their statutory circuit court
claims by submitting complaints to the WVDEP without specifying that those complaints were
contained in a notice of intent to sue the agency in circuit court Petition at 15 It strains credulity
to assert that the Residents intended to pursue administrative claims when they told the agency by
letter that they intended to sue the agency in circuit court
Subsequently the Residents civil claims in the Circuit Court of Wyoming County were
filed in accordance with sect 22-3-24 which states
(a) Nothing in this article affects in any way the rights of any person to enforce or protect under applicable law the persons interest in water resources affected by a surface mining operation
(b) Any operator shall replace the water supply of an owner of interest in real property who obtains all or part of the owners supply of water for domestic
5
agricultural industrial or other legitimate use from an underground or surface source where the supply has been affected by contamination diminution or interruption proximately caused by the surface mining operation unless waived by the owner
(c) There is a rebuttable presumption that a mining operation caused damage to an owners underground water supply if the inspector determines the following (1) Contamination diminution or damage to an owners underground water supply exists and (2) a preblast survey was performed consistent with the provisions of section thirteen-a of this article on the owners property including the underground water supply that indicated that contamination diminution or damage to the underground water supply did not exist prior to the mining conducted at the mining operation
(d) The operator conducting the mining operation shall (1) Provide an emergency drinking water supply within twenty-four hours (2) provide temporary water supply within seventy-two hours (3) within thirty days begin activities to establish a permanent water supply or submit a proposal to the secretary outlining the measures and timetables to be utilized in establishing a permanent supply The total time for providing a permanent water supply may not exceed two years If the operator demonstrates that providing a permanent replacement water supply cannot be completed within two years the secretary may extend the time frame on case-by-case basis and (4) pay all reasonable costs incurred by the owner in securing a water supply
(e) An owner aggrieved under the provisions of subsections (b) (c) or (d) of this section may seek relief in court or pursuant to the provisions of section five article three-a of this chapter
W Va Code sect 22-3-24 (emphasis added)
In this case the Residents never initiated the administrative claims process pursuant to
West Virginia Code sect 22-3A-S That statute in its entirety states
(a) The office of explosives and blasting shall establish and manage a process for the filing administration and resolution of claims related to blasting
(b) Claims which may be filed and determined under the provisions of this section shall be those arising from both of the following
(1) Damage to property arising from blasting activities conducted pursuant to a permit granted under article three of this chapter and
(2) The damage is incurred by a claimant who is the owner or occupant of the property
6
(c) The claims process established by the office of explosives and blasting shall include the following
(1) An initial detennination by the office of the merit of the claim and
(2) An arbitration process whereby the claim can be detennined and resolved by an arbitrator in a manner which is inexpensive prompt and fair to all parties The office shall propose rules for legislative approval in accordance with article three chapter twenty-nine-a of this code for the development of standards for establishing rules relating to the initial claim detennination and the arbitration process provided in this subsection
(d) If the operator disagrees with the initial detennination made by the office and requests arbitration then the following shall apply
(1) Any party may be represented by a representati ve of their choice
(2) At the request of the claimant the office shall provide the claimant with representation in the arbitration process which representation shall not necessarily be an attomey-at-Iaw and
(3) If the claim is upheld in whole or in part then the operator shall pay the costs ofthe proceeding as well as reasonable representation fees and costs of the claimant in an amount not to exceed one thousand dollars
(e) Participation in the claims process created by this section shall be voluntary for the claimant However once the claimant has submitted a claim for detennination under the provisions of this section it is intended that the finding of the office if not taken to arbitration shall be final If arbitration is requested it is intended that the results of such arbitration shall be final The office shall provide written notification to the claimant of the provisions of this subsection and shall secure a written acknowledgment from the claimant prior to processing a claim pursuant to the provisions of this section
(f) The operator shall pay any claim for which the operator is adjudged liable within thirty days of a final detennination If the claim is not paid within thirty days the director shall issue a cessation order pursuant to section sixteen article three of this chapter for all sites operated by the operator
(g) No pennit to mine coal shall be granted unless the pennit applicant agrees to be subject to the tenns of this section
(h) To fulfill its responsibilities pursuant to this section the office may retain the services of inspectors experts and other persons or finns as may be necessary
7
W Va Code sect 22-3A-5 (1999) (repealed June 9 2016)
The Residents did not submit their claims to the WVDEPs Office of Explosives and
Blasting pursuant to West Virginia Code sect 22-3A-5 There is nothing in the record that reflects
that the Residents specifically sought WVDEP investigation pursuant to that code section or
otherwise sought resolution of their claims pursuant to West Virginia Code sect 22-3A-5 The record
does not contain a document created by the Residents that request an investigation and subsequent
arbitration by the WVDEP Office ofExplosives and Blasting Conversely the record does contain
the Residents initiating letter notifying the WVDEP that the Residents intended to sue the agency
Simply put no authority exists to support ERPs assertion that merely submitting citizen
complaints to the WVDEP irrevocably invoked the jurisdiction of the WVDEPs Office of
Explosives and Blasting and the arbitration requirement contained in West Virginia Code sect 22shy
3A-5 (1999) Furthermore no authority exists to support ERPs assertion that merely submitting
citizen complaints to the WVDEP irrevocably invoked administrative review before the
environmental boards tasked with reviewing agency action
This fundamental factual issue short circuits ERPs arguments that rely on Ewing v Ed of
Educ OCity oSummers 202 WVa 228 503 SE2d 541 (1998) State ex rei Chesapeake and
Potomac Telephone Co oJw Va v Ashworth 190 WVa 547438 SE2d 890 (1993) and Ashby
v City 0 Fairmont 216 WVa 527 607 SE2d 856 (2004) In each of those cases the
complainants invoked claims that specifically called for administrative resolution In this matter
the Residents from the start invoked claims they intended to pursue in circuit court
ERP cannot submit any evidence that the Residents ever submitted claims to the WVDEPs
Office of Explosives and Blasting or filed Notices of Appeal with the Surface Mine Board or the
8
Environmental Quality Board Accordingly this Court should hold that the Residents properly
exercised their statutory rights to pursue their water claims in circuit court
C The Circuit Courts Order was properly issued because Eastern and ERP were not indispensable parties and because no real property interest of Eastern or ERP was at issue
This Court should uphold the Circuit Courts Order because the Residents Petition for a
Writ ofMandamus and the subsequent hearing did not violate Eastern or ERPs due process rights
and did not result in an order that placed restraints on the real property of a third party
ERP insists that West Virginia Rule of Civil Procedure 19 requires that Eastern or ERP
should have been named as parties to the Residents Petition for a Writ of Mandamus Rule 19
requires that any persons who claim an interest in the real property at issue are indispensable
parties to the proceeding W Va R Civ P 19 and Petition at 23 This argument fails at the outset
because the Residents Petition for a Writ of Mandamus and the Circuit of Court of Wyoming
Countys Order did not in any way claim an interest in Eastern or ERPs real property or affect
Eastern or ERPs real property
Contrary to ERPs assertions this Court held in 0 Daniels v City of Charleston that
When a court proceeding directly affects or detennines the scope of rights or interests in real
property any persons who claim an interest in the real property at issue are indispensable parties
to the proceeding Any order or decree issued in the absence of those parties is null and void
ODaniels v City of CIz areston Syl Pt 2200 W Va 711 712490 SE2d 800 801 (1997)
(emphasis added)
o Daniels does not stand for the proposition that as here potential parties such as Patriot
Eastern or ERP must be joined as indispensable parties where as admitted by ERP personal
property is at issue There is no real property at issue in this case at least insofar as ERP is
9
concerned The only real property at issue in this case belongs to the Residents Accordingly
OBrien does not apply to this case
Every case cited by the o Daniels court -- Bonafede v Grafton Feed amp Storage Co 81
WVa 31394 SE 471 (1917) United Fuel Gas Co v Morley Oil amp Gas Co 101 WVa 73 131
SE 713 (1926) Oneal v Stimson 61 WVa 551 56 SE 889 (1907) -- involved real property
There is no West Virginia authority that makes the same statement about personal property and
there are certainly no West Virginia cases that bar a circuit court from granting a petition for a writ
ofmandamus that requires a state agency to order an action that might cause a corporation to spend
money in order to comply
ERPs broader due process argument also fails This Court holds that The due process of
law guaranteed by the State and Federal Constitutions when applied to procedure in the courts of
the land requires both notice and the right to be heard State ex reI Bd ofEduc of Cnty Of
Putnam v Beane Syl Pt 2 224 W Va 31 680 SE2d 46 (2009) (quoting Simpson v Stanton
SyJ Pt 2 119 WVa 235 193 SE 64 (1937)
As shown infra Eastern and its corporate successor ERP were aware of the Residents
proposed petition for writ of mandamus as early as 2011 and took part from the beginning of the
investigation process with the Residents and the WVDEP To the extent ERP complains that its
corporate predecessor failed to protect its interests by refusing to intervene in the proceedings
below it is bound by the terms of its agreement with Patriot and Eastern A corporate successor
may not avoid a prior liability simply because it subsequently decides it doesnt care for a part of
the deal ERPs due process argument fails because it had (1) notice and (2) had a right to be heard
before the Circuit Court of Wyoming County
10
Accordingly this Court should uphold the Circuit Courts Order because the Residents
Petition for a Writ of Mandamus and the subsequent hearing did not violate Eastern or ERPs due
process rights and did not result in an order that required impennissible restraints on the real
property of a third party
D The Circuit Court of Wyoming County was authorized to enter the Order at issue because it properly had venue
The Circuit Court of Wyoming County unquestionably had venue pursuant to West
Virginia Code sect 14-2-2 That statute states in its entirety
(a) The following proceedings shall be brought and prosecuted only in the circuit court of Kanawha County
(1) Any suit in which the governor any other state officer or a state agency is made a party defendant except as garnishee or suggestee
(2) Any suit attempting to enjoin or otherwise suspend or affect a judgment or decree on behalfof the State obtained in any circuit court
(b) Any proceeding for injunctive or mandamus relief involving the taking title or collection for or prevention of damage to real property may be brought and presented in the circuit court of the county in which the real property affected is situate
This section shall apply only to such proceedings as are not prohibited by the constitutional immunity of the State from suit under section thirty-five article VI of the Constitution of the State
W Va Code sect 14-2-2 (emphasis added) The underlying suit in which the plaintiffs alleged that
mining operations located near their homes contaminated their well water was a proceeding in
injunctive and mandamus relief against the WVDEP and Secretary Huffman that sought relief for
the prevention of damage to real property By its own tern1s the statute expressly provides the
Circuit Court of Wyoming County with venue and jurisdiction over the claim
This Court has ruled squarely on this issue in Shobe v Latimer 162 W Va 779 253 SE2d
54 (1979) In Shobe the plaintiffs sought a declaratory judgment holding that a water contract
11
between the West Virginia Department of Natural Resources and a public seIVice district was
illegalld The lower court granted a motion to dismiss holding that the Circuit Court ofKanawha
County did not have venue to adjudicate a claim based in Grant County West Virginiald This
Court disagreed holding that an action regarding stream rights was an allegation involving the
taking or damage to real property within in the meaning of WVa Code sect 14-2-2(b) and that
venue was proper in the circuit courts of either Kanawha or Grant County ld at 794 63 Such is
the case in the underlying matter the plaintiffs in the underlying Wyoming County action were
free pursuant to West Virginia Code sect 14-2-2 to choose between Kanawha and Wyoming County
Circuit Court Accordingly this Court should turn aside ERPs arguments regarding the authority
of the Circuit Court of Wyoming County
Accordingly this Court uphold the Circuit Courts Order because it had venue to detennine
the merits ofthe Residents Petition for a Writ of Mandamus
E The Circuit Court of Wyoming County properly granted the Residents Petition for a Writ of Mandamus because it found that the WVDEP had erred in carrying out its duties with regard to water replacement and because the primary jurisdiction doctrine much like the exhaustion of administrative remedies doctrine is inapplicable to this case
The Circuit Court of Wyoming County found as a matter oflaw that the WVDEP erred by
failing to order water replacement as alleged in the Residents Petition for a Writ of Mandamus
By granting the Petition the Court held that the WVDEP had a legal duty pursuant to West
Virginia Code sect 22-3-17(a) to order water replacement for the Residents Appendix at 8 The
Circuit Court also agreed with the Residents that West Virginia Code sect 22-3-17(a) mandates that
the WVDEP shall issue a Notice ofViolation in an operator is not in compliance with a provision
ofa state rule or pennit which constitutes a non-discretionary duty W Va Code 22-3-17(a)
12
The Circuit Court also correctly disregarded the primary jurisdiction doctrine This Court
has described the primary jurisdiction doctrine as follows
1 Where an administrative agency and the courts have concurrent jurisdiction of an issue which requires the agencys special expertise and which extends beyond the conventional experience ofjudges the doctrine ofprimary jurisdiction applies In such a case the court should refrain from exercising jurisdiction until after the agency has resolved the issue The courts decision whether to apply the primary jurisdiction doctrine is reviewed on appeal under an abuse of discretion standard
2 In detennining whether to apply the primary jurisdiction doctrine courts should consider factors such as whether the question at issue is within the conventional experience ofjudges whether the question at issue lies peculiarly within the agencys discretion or requires the exercise of agency expertise whether there exists a danger of inconsistent rulings and whether a prior application to the agency has been made
State ex reI Bell AII-1yen Virginia Inc v Ranson Syl Pts 1 and 2 201 W Va 402404497
SE2d 755 757 (1997)
The Circuit Courts action in this case meets the test established in Ranson because the
Residents primary argument for a writ ofmandamus before the Circuit Court was that the agency
had already resolved the issue to the agencys satisfaction In this case though the question at
issue undoubtedly lies peculiarly within the WVDEPs expertise and discretion the Circuit Court
detennined it had sufficient conventional experience to render its own decision on the merits of
the evidence presented to it during the hearing on the Residents petition for a wTit of mandamus
The Circuit Court in its Order based its decision on a consideration of the WVDEPs evidence
and findings but also on those of the testimony of the Residents expert witness and their own
testimony
Ultimately this Court in Ranson elected to not apply the primary jurisdiction doctrine
noting that this concept is essentially the same as exhaustion of administrative remedies
13
Not unlike the exhaustion of remedies doctrine the doctrine of primary jurisdiction is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties citations omitted)
Ranson 201 W Va 410497 SE2d 763lndeed the terms primary jurisdiction and exhaustion
of remedies though separate and distinct legal concepts are often confused and used
interchangeably ld at FN 6 (internal citation omitted)
The primary jurisdiction doctrine and the exhaustion of administrative remedies doctrine
do not apply in this matter because the circuit courts ofWest Virginia are granted explicit statutory
authority by West Virginia Code sect 22-3-24 to decide the claims raised in the Residents Petition
for a Writ of Mandamus as discussed infra To insist as does ERP that this Court should abstain
from deciding an issue that the Legislature has detennined is explicitly within the jurisdiction of
the circuit coqrts is incorrect
ERP argues that a danger of inconsistent rulings and other concerns (Petition at 35)
requires the application of the primary jurisdiction doctrine in this case That argument disregards
the fact that the only dispute arising out of the Residents Petition is currently pending before this
Court There are no other potential inconsistent rulings
Lastly ERP argues that the Circuit Courts Order violates the doctrine of primary
jurisdiction essentially because the Circuit Court did not expressly address the doctrine ofprimary
jurisdiction even though it was not raised in the Circuit Court proceedings There is no
requirement that a circuit court make an express finding on its own accordingly the absence of
such analysis is not reversible error
Accordingly this Court should uphold the Circuit Courts Order regarding the Residents
Petition for a Writ of Mandamus
14
F Patriot and Easterns bankruptcy claims do not bar the State of West Virginias regulatory authority
ERPs arguments regarding the Patriot bankruptcy proceedings are similarly unfounded
Patriots most recent bankruptcy case ended in October 2015 with the entry of the confinnation
order which occurred well before the December 2015 hearing in the Circuit Court of Wyoming
County at issue here That order dissolved the automatic stay in place and replaced it with a new
set of injunctions none of which were applicable at the time of the hearing on the writ of
mandamus in the underlying matter Further confinnation orders have no effect whatsoever on
state law enforcement Eastern was required to continue to comply with state environmental law
Pursuant to 28 USc sect 959(b) a debtor is required to perfonn any and all acts necessary in order
to effectuate compliance with State Law environmental obligations Furthennore 11 USc sect
362(b)(4) expressly exempts the enforcement of any police or regulatory law enforcement action
from the automatic stay See 11 USc sect 362(b)(4)
A ruling such as the one sought by ERP in this matter would throw State enforcement of
all State laws related to debtors operating under an automatic stay into disarray It is absurd to
suggest that the State of West Virginia through the WVDEP is unable to enforce environmental
laws against companies operating within the State pursuant to West Virginia law simply because
a mining company seeks bankruptcy protection Furthennore ERP asks this Court to maintain that
not only are West Virginia executive law enforcement agencies not able to order compliance with
State law against debtors but also that the circuit courts of West Virginia are unable to order
compliance That is not the law
On May 12 2015 Easterns parent company Patriot Coal Corporation and some of its
affiliates including Eastern filed a petition with the United States Bankruptcy Court for the
Eastern District ofVirginia under chapter 11 oftitle 11 ofthe United States Code (US Bankruptcy
15
Court ED Va Case No 15-32450 (KLPraquo During the course of the bankruptcy proceedings
Patriot negotiated the sale of substantially all of its assets to two separate entities Blackhawk
Mining LLC (Blackhawk) and VCLF VCLF proposed to acquire the Kopperston No1 Refuse
Impoundment including the SMCRA permit at issue in this case
In accordance with the Bankruptcy Courts Scheduling Order on September 18 2015
Patriot filed the Fourth Amended Disclosure Statement for the Debtors Fourth Amended Joint
Plan ofReorganization Pursuant to Chapter 11 of the Bankruptcy Code and the Debtors Fourth
Amended Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code
The Fourth Amended Plan attached a copy of the VCLF Asset Purchase Agreement
(APA) The VCLF APA definitively establishes Appellant ERPs liability for the water
replacement order at issue in this case The Fourth Amended Plan itself lists the SMCRA notice
that ultimately led to the Wyoming County Circuit Court Order at issue in this appeal as a piece
of unresolved litigation to be assumed by the purchasers of Patriots assets
Furthem10re Section 203 of the APA Assumed Liabilities states that VCLFIERP shall
assume all Liabilities associated with the Transferred Pem1its as well as liability for regulatory
violations and obligations on or in relation to the Purchased Assets or the Transferred Permits
arising post-Closing
Additionally Schedule 308(a)-(b) to the VCLF APA expressly lists all liabilities
associated with the Purchased Assets and again includes the May 2015 SMCRA notice from
owners ofproperties near the Kopperston mine alleging adverse impacts to groundwater resources
Schedule 313 lists all pending litigation associated with the Purchased Assets and yet again lists
the Kopperston SMCRA notice
16
ERP is a wholly owned subsidiary of VCLF incorporated to fulfill the reclamation
obligations associated with assets VCLF purchased out of the Patriot bankruptcy ERP became
the penn it holder of the pennit associated with this appeal ERPs assumption of the water
replacement liability at issue in this appeal is not just a matter of a contractual obligation between
two private parties rather its liability also arises by operation of the Bankruptcy Courts
Confinnation Order
Accordingly this Court should uphold the Circuit Courts Order in this matter because it
was not barred by bankruptcy law
VII CONCLUSION
In conclusion these Respondents respectfully request this Court enter an Order denying
ERPs Petition for a Writ of Prohibition
WEST VIRGINIA DEPARMENT OF ENVIRONMENTAL PROTECTION and SECRETARY AUSTIN CAPERTON by counsel
West Virginia Department of Environmental Protection Office of Legal Services 601 57th St SE Charleston WV 25304 Phone 304-926-0499 Fax 304-926-0461 Email jasonewandlingwvgov
17
CERTIFICATE OF SERVICE
I Jason Wandling certify that I served this Response in Opposition to Verified Petition for
Writ of Prohibition on 20 March 2017 by depositing a true copy thereof in the United States mail
postage prepaid addressed as follows
John J Meadows (WVSB 9442) Peter J Raupp (WVSB 10546) Devon J Stewart (WVSB 11712) Steptoe amp Johnson PLLC 707 Virginia Street East Chase Tower Seventeenth Floor PO Box 1588 Charleston WV 25326-1588 Phone 304-353-8154 Fax 304-353-8180 Email J ohnM eadowssteptoe-johnsoncom
PeterRauppsteptoe-johnsoncom DevonStewartsteptoe-johnsoncom
Honorable Warren D McGraw Judge PO Box 581 100 Main and Bank Streets Pineville WV 24874 Phone 304-732-7047 Fax 304-732-7047
Kevin W Thompson (WVSB 5062) David R Barney Jr (WVSB 7958) Thompson Barney 2030 Kanawha Blvd E Charleston WV 25311 Phone 304-343-4401 Fax 304-343-4405 Email kthompsonthompsonbarneycom
dbameythompsonbameycom
requires the exhaustion ofadministrative remedies is inapplicable where no administrative remedy
is provided by law Daw-elle at Syl pt 2_
In this matter however the Respondent Residents had two (and possibly three) choices
First they could submit claims to the WVDEPs Office of Explosives and Blasting pursuant to
West Virginia Code sect 22-3A-5 Second (arguably) they could pursue administrative remedies via
the Surface Mine Board (or possibly the Environmental Quality Board) pursuant to West Virginia
Code sect 22B-1-7 Third the Residents could file civil claims pursuant to West Virginia Code sect 22shy
3-24
In this case the Residents chose to file civil claims pursuant to West Virginia Code sect 22shy
3-24 As part of that process and in compliance with West Virginia law that requires 30 day notice
before filing suit against a state agency the Residents initiated WVDEPs involvement in this
matter by mailing a letter of intent to sue with an attached proposed Complaint to file in Circuit
Court to the WVDEP on 14 November 2011
In its brief however ERP insists that the Residents foreclosed their statutory circuit court
claims by submitting complaints to the WVDEP without specifying that those complaints were
contained in a notice of intent to sue the agency in circuit court Petition at 15 It strains credulity
to assert that the Residents intended to pursue administrative claims when they told the agency by
letter that they intended to sue the agency in circuit court
Subsequently the Residents civil claims in the Circuit Court of Wyoming County were
filed in accordance with sect 22-3-24 which states
(a) Nothing in this article affects in any way the rights of any person to enforce or protect under applicable law the persons interest in water resources affected by a surface mining operation
(b) Any operator shall replace the water supply of an owner of interest in real property who obtains all or part of the owners supply of water for domestic
5
agricultural industrial or other legitimate use from an underground or surface source where the supply has been affected by contamination diminution or interruption proximately caused by the surface mining operation unless waived by the owner
(c) There is a rebuttable presumption that a mining operation caused damage to an owners underground water supply if the inspector determines the following (1) Contamination diminution or damage to an owners underground water supply exists and (2) a preblast survey was performed consistent with the provisions of section thirteen-a of this article on the owners property including the underground water supply that indicated that contamination diminution or damage to the underground water supply did not exist prior to the mining conducted at the mining operation
(d) The operator conducting the mining operation shall (1) Provide an emergency drinking water supply within twenty-four hours (2) provide temporary water supply within seventy-two hours (3) within thirty days begin activities to establish a permanent water supply or submit a proposal to the secretary outlining the measures and timetables to be utilized in establishing a permanent supply The total time for providing a permanent water supply may not exceed two years If the operator demonstrates that providing a permanent replacement water supply cannot be completed within two years the secretary may extend the time frame on case-by-case basis and (4) pay all reasonable costs incurred by the owner in securing a water supply
(e) An owner aggrieved under the provisions of subsections (b) (c) or (d) of this section may seek relief in court or pursuant to the provisions of section five article three-a of this chapter
W Va Code sect 22-3-24 (emphasis added)
In this case the Residents never initiated the administrative claims process pursuant to
West Virginia Code sect 22-3A-S That statute in its entirety states
(a) The office of explosives and blasting shall establish and manage a process for the filing administration and resolution of claims related to blasting
(b) Claims which may be filed and determined under the provisions of this section shall be those arising from both of the following
(1) Damage to property arising from blasting activities conducted pursuant to a permit granted under article three of this chapter and
(2) The damage is incurred by a claimant who is the owner or occupant of the property
6
(c) The claims process established by the office of explosives and blasting shall include the following
(1) An initial detennination by the office of the merit of the claim and
(2) An arbitration process whereby the claim can be detennined and resolved by an arbitrator in a manner which is inexpensive prompt and fair to all parties The office shall propose rules for legislative approval in accordance with article three chapter twenty-nine-a of this code for the development of standards for establishing rules relating to the initial claim detennination and the arbitration process provided in this subsection
(d) If the operator disagrees with the initial detennination made by the office and requests arbitration then the following shall apply
(1) Any party may be represented by a representati ve of their choice
(2) At the request of the claimant the office shall provide the claimant with representation in the arbitration process which representation shall not necessarily be an attomey-at-Iaw and
(3) If the claim is upheld in whole or in part then the operator shall pay the costs ofthe proceeding as well as reasonable representation fees and costs of the claimant in an amount not to exceed one thousand dollars
(e) Participation in the claims process created by this section shall be voluntary for the claimant However once the claimant has submitted a claim for detennination under the provisions of this section it is intended that the finding of the office if not taken to arbitration shall be final If arbitration is requested it is intended that the results of such arbitration shall be final The office shall provide written notification to the claimant of the provisions of this subsection and shall secure a written acknowledgment from the claimant prior to processing a claim pursuant to the provisions of this section
(f) The operator shall pay any claim for which the operator is adjudged liable within thirty days of a final detennination If the claim is not paid within thirty days the director shall issue a cessation order pursuant to section sixteen article three of this chapter for all sites operated by the operator
(g) No pennit to mine coal shall be granted unless the pennit applicant agrees to be subject to the tenns of this section
(h) To fulfill its responsibilities pursuant to this section the office may retain the services of inspectors experts and other persons or finns as may be necessary
7
W Va Code sect 22-3A-5 (1999) (repealed June 9 2016)
The Residents did not submit their claims to the WVDEPs Office of Explosives and
Blasting pursuant to West Virginia Code sect 22-3A-5 There is nothing in the record that reflects
that the Residents specifically sought WVDEP investigation pursuant to that code section or
otherwise sought resolution of their claims pursuant to West Virginia Code sect 22-3A-5 The record
does not contain a document created by the Residents that request an investigation and subsequent
arbitration by the WVDEP Office ofExplosives and Blasting Conversely the record does contain
the Residents initiating letter notifying the WVDEP that the Residents intended to sue the agency
Simply put no authority exists to support ERPs assertion that merely submitting citizen
complaints to the WVDEP irrevocably invoked the jurisdiction of the WVDEPs Office of
Explosives and Blasting and the arbitration requirement contained in West Virginia Code sect 22shy
3A-5 (1999) Furthermore no authority exists to support ERPs assertion that merely submitting
citizen complaints to the WVDEP irrevocably invoked administrative review before the
environmental boards tasked with reviewing agency action
This fundamental factual issue short circuits ERPs arguments that rely on Ewing v Ed of
Educ OCity oSummers 202 WVa 228 503 SE2d 541 (1998) State ex rei Chesapeake and
Potomac Telephone Co oJw Va v Ashworth 190 WVa 547438 SE2d 890 (1993) and Ashby
v City 0 Fairmont 216 WVa 527 607 SE2d 856 (2004) In each of those cases the
complainants invoked claims that specifically called for administrative resolution In this matter
the Residents from the start invoked claims they intended to pursue in circuit court
ERP cannot submit any evidence that the Residents ever submitted claims to the WVDEPs
Office of Explosives and Blasting or filed Notices of Appeal with the Surface Mine Board or the
8
Environmental Quality Board Accordingly this Court should hold that the Residents properly
exercised their statutory rights to pursue their water claims in circuit court
C The Circuit Courts Order was properly issued because Eastern and ERP were not indispensable parties and because no real property interest of Eastern or ERP was at issue
This Court should uphold the Circuit Courts Order because the Residents Petition for a
Writ ofMandamus and the subsequent hearing did not violate Eastern or ERPs due process rights
and did not result in an order that placed restraints on the real property of a third party
ERP insists that West Virginia Rule of Civil Procedure 19 requires that Eastern or ERP
should have been named as parties to the Residents Petition for a Writ of Mandamus Rule 19
requires that any persons who claim an interest in the real property at issue are indispensable
parties to the proceeding W Va R Civ P 19 and Petition at 23 This argument fails at the outset
because the Residents Petition for a Writ of Mandamus and the Circuit of Court of Wyoming
Countys Order did not in any way claim an interest in Eastern or ERPs real property or affect
Eastern or ERPs real property
Contrary to ERPs assertions this Court held in 0 Daniels v City of Charleston that
When a court proceeding directly affects or detennines the scope of rights or interests in real
property any persons who claim an interest in the real property at issue are indispensable parties
to the proceeding Any order or decree issued in the absence of those parties is null and void
ODaniels v City of CIz areston Syl Pt 2200 W Va 711 712490 SE2d 800 801 (1997)
(emphasis added)
o Daniels does not stand for the proposition that as here potential parties such as Patriot
Eastern or ERP must be joined as indispensable parties where as admitted by ERP personal
property is at issue There is no real property at issue in this case at least insofar as ERP is
9
concerned The only real property at issue in this case belongs to the Residents Accordingly
OBrien does not apply to this case
Every case cited by the o Daniels court -- Bonafede v Grafton Feed amp Storage Co 81
WVa 31394 SE 471 (1917) United Fuel Gas Co v Morley Oil amp Gas Co 101 WVa 73 131
SE 713 (1926) Oneal v Stimson 61 WVa 551 56 SE 889 (1907) -- involved real property
There is no West Virginia authority that makes the same statement about personal property and
there are certainly no West Virginia cases that bar a circuit court from granting a petition for a writ
ofmandamus that requires a state agency to order an action that might cause a corporation to spend
money in order to comply
ERPs broader due process argument also fails This Court holds that The due process of
law guaranteed by the State and Federal Constitutions when applied to procedure in the courts of
the land requires both notice and the right to be heard State ex reI Bd ofEduc of Cnty Of
Putnam v Beane Syl Pt 2 224 W Va 31 680 SE2d 46 (2009) (quoting Simpson v Stanton
SyJ Pt 2 119 WVa 235 193 SE 64 (1937)
As shown infra Eastern and its corporate successor ERP were aware of the Residents
proposed petition for writ of mandamus as early as 2011 and took part from the beginning of the
investigation process with the Residents and the WVDEP To the extent ERP complains that its
corporate predecessor failed to protect its interests by refusing to intervene in the proceedings
below it is bound by the terms of its agreement with Patriot and Eastern A corporate successor
may not avoid a prior liability simply because it subsequently decides it doesnt care for a part of
the deal ERPs due process argument fails because it had (1) notice and (2) had a right to be heard
before the Circuit Court of Wyoming County
10
Accordingly this Court should uphold the Circuit Courts Order because the Residents
Petition for a Writ of Mandamus and the subsequent hearing did not violate Eastern or ERPs due
process rights and did not result in an order that required impennissible restraints on the real
property of a third party
D The Circuit Court of Wyoming County was authorized to enter the Order at issue because it properly had venue
The Circuit Court of Wyoming County unquestionably had venue pursuant to West
Virginia Code sect 14-2-2 That statute states in its entirety
(a) The following proceedings shall be brought and prosecuted only in the circuit court of Kanawha County
(1) Any suit in which the governor any other state officer or a state agency is made a party defendant except as garnishee or suggestee
(2) Any suit attempting to enjoin or otherwise suspend or affect a judgment or decree on behalfof the State obtained in any circuit court
(b) Any proceeding for injunctive or mandamus relief involving the taking title or collection for or prevention of damage to real property may be brought and presented in the circuit court of the county in which the real property affected is situate
This section shall apply only to such proceedings as are not prohibited by the constitutional immunity of the State from suit under section thirty-five article VI of the Constitution of the State
W Va Code sect 14-2-2 (emphasis added) The underlying suit in which the plaintiffs alleged that
mining operations located near their homes contaminated their well water was a proceeding in
injunctive and mandamus relief against the WVDEP and Secretary Huffman that sought relief for
the prevention of damage to real property By its own tern1s the statute expressly provides the
Circuit Court of Wyoming County with venue and jurisdiction over the claim
This Court has ruled squarely on this issue in Shobe v Latimer 162 W Va 779 253 SE2d
54 (1979) In Shobe the plaintiffs sought a declaratory judgment holding that a water contract
11
between the West Virginia Department of Natural Resources and a public seIVice district was
illegalld The lower court granted a motion to dismiss holding that the Circuit Court ofKanawha
County did not have venue to adjudicate a claim based in Grant County West Virginiald This
Court disagreed holding that an action regarding stream rights was an allegation involving the
taking or damage to real property within in the meaning of WVa Code sect 14-2-2(b) and that
venue was proper in the circuit courts of either Kanawha or Grant County ld at 794 63 Such is
the case in the underlying matter the plaintiffs in the underlying Wyoming County action were
free pursuant to West Virginia Code sect 14-2-2 to choose between Kanawha and Wyoming County
Circuit Court Accordingly this Court should turn aside ERPs arguments regarding the authority
of the Circuit Court of Wyoming County
Accordingly this Court uphold the Circuit Courts Order because it had venue to detennine
the merits ofthe Residents Petition for a Writ of Mandamus
E The Circuit Court of Wyoming County properly granted the Residents Petition for a Writ of Mandamus because it found that the WVDEP had erred in carrying out its duties with regard to water replacement and because the primary jurisdiction doctrine much like the exhaustion of administrative remedies doctrine is inapplicable to this case
The Circuit Court of Wyoming County found as a matter oflaw that the WVDEP erred by
failing to order water replacement as alleged in the Residents Petition for a Writ of Mandamus
By granting the Petition the Court held that the WVDEP had a legal duty pursuant to West
Virginia Code sect 22-3-17(a) to order water replacement for the Residents Appendix at 8 The
Circuit Court also agreed with the Residents that West Virginia Code sect 22-3-17(a) mandates that
the WVDEP shall issue a Notice ofViolation in an operator is not in compliance with a provision
ofa state rule or pennit which constitutes a non-discretionary duty W Va Code 22-3-17(a)
12
The Circuit Court also correctly disregarded the primary jurisdiction doctrine This Court
has described the primary jurisdiction doctrine as follows
1 Where an administrative agency and the courts have concurrent jurisdiction of an issue which requires the agencys special expertise and which extends beyond the conventional experience ofjudges the doctrine ofprimary jurisdiction applies In such a case the court should refrain from exercising jurisdiction until after the agency has resolved the issue The courts decision whether to apply the primary jurisdiction doctrine is reviewed on appeal under an abuse of discretion standard
2 In detennining whether to apply the primary jurisdiction doctrine courts should consider factors such as whether the question at issue is within the conventional experience ofjudges whether the question at issue lies peculiarly within the agencys discretion or requires the exercise of agency expertise whether there exists a danger of inconsistent rulings and whether a prior application to the agency has been made
State ex reI Bell AII-1yen Virginia Inc v Ranson Syl Pts 1 and 2 201 W Va 402404497
SE2d 755 757 (1997)
The Circuit Courts action in this case meets the test established in Ranson because the
Residents primary argument for a writ ofmandamus before the Circuit Court was that the agency
had already resolved the issue to the agencys satisfaction In this case though the question at
issue undoubtedly lies peculiarly within the WVDEPs expertise and discretion the Circuit Court
detennined it had sufficient conventional experience to render its own decision on the merits of
the evidence presented to it during the hearing on the Residents petition for a wTit of mandamus
The Circuit Court in its Order based its decision on a consideration of the WVDEPs evidence
and findings but also on those of the testimony of the Residents expert witness and their own
testimony
Ultimately this Court in Ranson elected to not apply the primary jurisdiction doctrine
noting that this concept is essentially the same as exhaustion of administrative remedies
13
Not unlike the exhaustion of remedies doctrine the doctrine of primary jurisdiction is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties citations omitted)
Ranson 201 W Va 410497 SE2d 763lndeed the terms primary jurisdiction and exhaustion
of remedies though separate and distinct legal concepts are often confused and used
interchangeably ld at FN 6 (internal citation omitted)
The primary jurisdiction doctrine and the exhaustion of administrative remedies doctrine
do not apply in this matter because the circuit courts ofWest Virginia are granted explicit statutory
authority by West Virginia Code sect 22-3-24 to decide the claims raised in the Residents Petition
for a Writ of Mandamus as discussed infra To insist as does ERP that this Court should abstain
from deciding an issue that the Legislature has detennined is explicitly within the jurisdiction of
the circuit coqrts is incorrect
ERP argues that a danger of inconsistent rulings and other concerns (Petition at 35)
requires the application of the primary jurisdiction doctrine in this case That argument disregards
the fact that the only dispute arising out of the Residents Petition is currently pending before this
Court There are no other potential inconsistent rulings
Lastly ERP argues that the Circuit Courts Order violates the doctrine of primary
jurisdiction essentially because the Circuit Court did not expressly address the doctrine ofprimary
jurisdiction even though it was not raised in the Circuit Court proceedings There is no
requirement that a circuit court make an express finding on its own accordingly the absence of
such analysis is not reversible error
Accordingly this Court should uphold the Circuit Courts Order regarding the Residents
Petition for a Writ of Mandamus
14
F Patriot and Easterns bankruptcy claims do not bar the State of West Virginias regulatory authority
ERPs arguments regarding the Patriot bankruptcy proceedings are similarly unfounded
Patriots most recent bankruptcy case ended in October 2015 with the entry of the confinnation
order which occurred well before the December 2015 hearing in the Circuit Court of Wyoming
County at issue here That order dissolved the automatic stay in place and replaced it with a new
set of injunctions none of which were applicable at the time of the hearing on the writ of
mandamus in the underlying matter Further confinnation orders have no effect whatsoever on
state law enforcement Eastern was required to continue to comply with state environmental law
Pursuant to 28 USc sect 959(b) a debtor is required to perfonn any and all acts necessary in order
to effectuate compliance with State Law environmental obligations Furthennore 11 USc sect
362(b)(4) expressly exempts the enforcement of any police or regulatory law enforcement action
from the automatic stay See 11 USc sect 362(b)(4)
A ruling such as the one sought by ERP in this matter would throw State enforcement of
all State laws related to debtors operating under an automatic stay into disarray It is absurd to
suggest that the State of West Virginia through the WVDEP is unable to enforce environmental
laws against companies operating within the State pursuant to West Virginia law simply because
a mining company seeks bankruptcy protection Furthennore ERP asks this Court to maintain that
not only are West Virginia executive law enforcement agencies not able to order compliance with
State law against debtors but also that the circuit courts of West Virginia are unable to order
compliance That is not the law
On May 12 2015 Easterns parent company Patriot Coal Corporation and some of its
affiliates including Eastern filed a petition with the United States Bankruptcy Court for the
Eastern District ofVirginia under chapter 11 oftitle 11 ofthe United States Code (US Bankruptcy
15
Court ED Va Case No 15-32450 (KLPraquo During the course of the bankruptcy proceedings
Patriot negotiated the sale of substantially all of its assets to two separate entities Blackhawk
Mining LLC (Blackhawk) and VCLF VCLF proposed to acquire the Kopperston No1 Refuse
Impoundment including the SMCRA permit at issue in this case
In accordance with the Bankruptcy Courts Scheduling Order on September 18 2015
Patriot filed the Fourth Amended Disclosure Statement for the Debtors Fourth Amended Joint
Plan ofReorganization Pursuant to Chapter 11 of the Bankruptcy Code and the Debtors Fourth
Amended Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code
The Fourth Amended Plan attached a copy of the VCLF Asset Purchase Agreement
(APA) The VCLF APA definitively establishes Appellant ERPs liability for the water
replacement order at issue in this case The Fourth Amended Plan itself lists the SMCRA notice
that ultimately led to the Wyoming County Circuit Court Order at issue in this appeal as a piece
of unresolved litigation to be assumed by the purchasers of Patriots assets
Furthem10re Section 203 of the APA Assumed Liabilities states that VCLFIERP shall
assume all Liabilities associated with the Transferred Pem1its as well as liability for regulatory
violations and obligations on or in relation to the Purchased Assets or the Transferred Permits
arising post-Closing
Additionally Schedule 308(a)-(b) to the VCLF APA expressly lists all liabilities
associated with the Purchased Assets and again includes the May 2015 SMCRA notice from
owners ofproperties near the Kopperston mine alleging adverse impacts to groundwater resources
Schedule 313 lists all pending litigation associated with the Purchased Assets and yet again lists
the Kopperston SMCRA notice
16
ERP is a wholly owned subsidiary of VCLF incorporated to fulfill the reclamation
obligations associated with assets VCLF purchased out of the Patriot bankruptcy ERP became
the penn it holder of the pennit associated with this appeal ERPs assumption of the water
replacement liability at issue in this appeal is not just a matter of a contractual obligation between
two private parties rather its liability also arises by operation of the Bankruptcy Courts
Confinnation Order
Accordingly this Court should uphold the Circuit Courts Order in this matter because it
was not barred by bankruptcy law
VII CONCLUSION
In conclusion these Respondents respectfully request this Court enter an Order denying
ERPs Petition for a Writ of Prohibition
WEST VIRGINIA DEPARMENT OF ENVIRONMENTAL PROTECTION and SECRETARY AUSTIN CAPERTON by counsel
West Virginia Department of Environmental Protection Office of Legal Services 601 57th St SE Charleston WV 25304 Phone 304-926-0499 Fax 304-926-0461 Email jasonewandlingwvgov
17
CERTIFICATE OF SERVICE
I Jason Wandling certify that I served this Response in Opposition to Verified Petition for
Writ of Prohibition on 20 March 2017 by depositing a true copy thereof in the United States mail
postage prepaid addressed as follows
John J Meadows (WVSB 9442) Peter J Raupp (WVSB 10546) Devon J Stewart (WVSB 11712) Steptoe amp Johnson PLLC 707 Virginia Street East Chase Tower Seventeenth Floor PO Box 1588 Charleston WV 25326-1588 Phone 304-353-8154 Fax 304-353-8180 Email J ohnM eadowssteptoe-johnsoncom
PeterRauppsteptoe-johnsoncom DevonStewartsteptoe-johnsoncom
Honorable Warren D McGraw Judge PO Box 581 100 Main and Bank Streets Pineville WV 24874 Phone 304-732-7047 Fax 304-732-7047
Kevin W Thompson (WVSB 5062) David R Barney Jr (WVSB 7958) Thompson Barney 2030 Kanawha Blvd E Charleston WV 25311 Phone 304-343-4401 Fax 304-343-4405 Email kthompsonthompsonbarneycom
dbameythompsonbameycom
agricultural industrial or other legitimate use from an underground or surface source where the supply has been affected by contamination diminution or interruption proximately caused by the surface mining operation unless waived by the owner
(c) There is a rebuttable presumption that a mining operation caused damage to an owners underground water supply if the inspector determines the following (1) Contamination diminution or damage to an owners underground water supply exists and (2) a preblast survey was performed consistent with the provisions of section thirteen-a of this article on the owners property including the underground water supply that indicated that contamination diminution or damage to the underground water supply did not exist prior to the mining conducted at the mining operation
(d) The operator conducting the mining operation shall (1) Provide an emergency drinking water supply within twenty-four hours (2) provide temporary water supply within seventy-two hours (3) within thirty days begin activities to establish a permanent water supply or submit a proposal to the secretary outlining the measures and timetables to be utilized in establishing a permanent supply The total time for providing a permanent water supply may not exceed two years If the operator demonstrates that providing a permanent replacement water supply cannot be completed within two years the secretary may extend the time frame on case-by-case basis and (4) pay all reasonable costs incurred by the owner in securing a water supply
(e) An owner aggrieved under the provisions of subsections (b) (c) or (d) of this section may seek relief in court or pursuant to the provisions of section five article three-a of this chapter
W Va Code sect 22-3-24 (emphasis added)
In this case the Residents never initiated the administrative claims process pursuant to
West Virginia Code sect 22-3A-S That statute in its entirety states
(a) The office of explosives and blasting shall establish and manage a process for the filing administration and resolution of claims related to blasting
(b) Claims which may be filed and determined under the provisions of this section shall be those arising from both of the following
(1) Damage to property arising from blasting activities conducted pursuant to a permit granted under article three of this chapter and
(2) The damage is incurred by a claimant who is the owner or occupant of the property
6
(c) The claims process established by the office of explosives and blasting shall include the following
(1) An initial detennination by the office of the merit of the claim and
(2) An arbitration process whereby the claim can be detennined and resolved by an arbitrator in a manner which is inexpensive prompt and fair to all parties The office shall propose rules for legislative approval in accordance with article three chapter twenty-nine-a of this code for the development of standards for establishing rules relating to the initial claim detennination and the arbitration process provided in this subsection
(d) If the operator disagrees with the initial detennination made by the office and requests arbitration then the following shall apply
(1) Any party may be represented by a representati ve of their choice
(2) At the request of the claimant the office shall provide the claimant with representation in the arbitration process which representation shall not necessarily be an attomey-at-Iaw and
(3) If the claim is upheld in whole or in part then the operator shall pay the costs ofthe proceeding as well as reasonable representation fees and costs of the claimant in an amount not to exceed one thousand dollars
(e) Participation in the claims process created by this section shall be voluntary for the claimant However once the claimant has submitted a claim for detennination under the provisions of this section it is intended that the finding of the office if not taken to arbitration shall be final If arbitration is requested it is intended that the results of such arbitration shall be final The office shall provide written notification to the claimant of the provisions of this subsection and shall secure a written acknowledgment from the claimant prior to processing a claim pursuant to the provisions of this section
(f) The operator shall pay any claim for which the operator is adjudged liable within thirty days of a final detennination If the claim is not paid within thirty days the director shall issue a cessation order pursuant to section sixteen article three of this chapter for all sites operated by the operator
(g) No pennit to mine coal shall be granted unless the pennit applicant agrees to be subject to the tenns of this section
(h) To fulfill its responsibilities pursuant to this section the office may retain the services of inspectors experts and other persons or finns as may be necessary
7
W Va Code sect 22-3A-5 (1999) (repealed June 9 2016)
The Residents did not submit their claims to the WVDEPs Office of Explosives and
Blasting pursuant to West Virginia Code sect 22-3A-5 There is nothing in the record that reflects
that the Residents specifically sought WVDEP investigation pursuant to that code section or
otherwise sought resolution of their claims pursuant to West Virginia Code sect 22-3A-5 The record
does not contain a document created by the Residents that request an investigation and subsequent
arbitration by the WVDEP Office ofExplosives and Blasting Conversely the record does contain
the Residents initiating letter notifying the WVDEP that the Residents intended to sue the agency
Simply put no authority exists to support ERPs assertion that merely submitting citizen
complaints to the WVDEP irrevocably invoked the jurisdiction of the WVDEPs Office of
Explosives and Blasting and the arbitration requirement contained in West Virginia Code sect 22shy
3A-5 (1999) Furthermore no authority exists to support ERPs assertion that merely submitting
citizen complaints to the WVDEP irrevocably invoked administrative review before the
environmental boards tasked with reviewing agency action
This fundamental factual issue short circuits ERPs arguments that rely on Ewing v Ed of
Educ OCity oSummers 202 WVa 228 503 SE2d 541 (1998) State ex rei Chesapeake and
Potomac Telephone Co oJw Va v Ashworth 190 WVa 547438 SE2d 890 (1993) and Ashby
v City 0 Fairmont 216 WVa 527 607 SE2d 856 (2004) In each of those cases the
complainants invoked claims that specifically called for administrative resolution In this matter
the Residents from the start invoked claims they intended to pursue in circuit court
ERP cannot submit any evidence that the Residents ever submitted claims to the WVDEPs
Office of Explosives and Blasting or filed Notices of Appeal with the Surface Mine Board or the
8
Environmental Quality Board Accordingly this Court should hold that the Residents properly
exercised their statutory rights to pursue their water claims in circuit court
C The Circuit Courts Order was properly issued because Eastern and ERP were not indispensable parties and because no real property interest of Eastern or ERP was at issue
This Court should uphold the Circuit Courts Order because the Residents Petition for a
Writ ofMandamus and the subsequent hearing did not violate Eastern or ERPs due process rights
and did not result in an order that placed restraints on the real property of a third party
ERP insists that West Virginia Rule of Civil Procedure 19 requires that Eastern or ERP
should have been named as parties to the Residents Petition for a Writ of Mandamus Rule 19
requires that any persons who claim an interest in the real property at issue are indispensable
parties to the proceeding W Va R Civ P 19 and Petition at 23 This argument fails at the outset
because the Residents Petition for a Writ of Mandamus and the Circuit of Court of Wyoming
Countys Order did not in any way claim an interest in Eastern or ERPs real property or affect
Eastern or ERPs real property
Contrary to ERPs assertions this Court held in 0 Daniels v City of Charleston that
When a court proceeding directly affects or detennines the scope of rights or interests in real
property any persons who claim an interest in the real property at issue are indispensable parties
to the proceeding Any order or decree issued in the absence of those parties is null and void
ODaniels v City of CIz areston Syl Pt 2200 W Va 711 712490 SE2d 800 801 (1997)
(emphasis added)
o Daniels does not stand for the proposition that as here potential parties such as Patriot
Eastern or ERP must be joined as indispensable parties where as admitted by ERP personal
property is at issue There is no real property at issue in this case at least insofar as ERP is
9
concerned The only real property at issue in this case belongs to the Residents Accordingly
OBrien does not apply to this case
Every case cited by the o Daniels court -- Bonafede v Grafton Feed amp Storage Co 81
WVa 31394 SE 471 (1917) United Fuel Gas Co v Morley Oil amp Gas Co 101 WVa 73 131
SE 713 (1926) Oneal v Stimson 61 WVa 551 56 SE 889 (1907) -- involved real property
There is no West Virginia authority that makes the same statement about personal property and
there are certainly no West Virginia cases that bar a circuit court from granting a petition for a writ
ofmandamus that requires a state agency to order an action that might cause a corporation to spend
money in order to comply
ERPs broader due process argument also fails This Court holds that The due process of
law guaranteed by the State and Federal Constitutions when applied to procedure in the courts of
the land requires both notice and the right to be heard State ex reI Bd ofEduc of Cnty Of
Putnam v Beane Syl Pt 2 224 W Va 31 680 SE2d 46 (2009) (quoting Simpson v Stanton
SyJ Pt 2 119 WVa 235 193 SE 64 (1937)
As shown infra Eastern and its corporate successor ERP were aware of the Residents
proposed petition for writ of mandamus as early as 2011 and took part from the beginning of the
investigation process with the Residents and the WVDEP To the extent ERP complains that its
corporate predecessor failed to protect its interests by refusing to intervene in the proceedings
below it is bound by the terms of its agreement with Patriot and Eastern A corporate successor
may not avoid a prior liability simply because it subsequently decides it doesnt care for a part of
the deal ERPs due process argument fails because it had (1) notice and (2) had a right to be heard
before the Circuit Court of Wyoming County
10
Accordingly this Court should uphold the Circuit Courts Order because the Residents
Petition for a Writ of Mandamus and the subsequent hearing did not violate Eastern or ERPs due
process rights and did not result in an order that required impennissible restraints on the real
property of a third party
D The Circuit Court of Wyoming County was authorized to enter the Order at issue because it properly had venue
The Circuit Court of Wyoming County unquestionably had venue pursuant to West
Virginia Code sect 14-2-2 That statute states in its entirety
(a) The following proceedings shall be brought and prosecuted only in the circuit court of Kanawha County
(1) Any suit in which the governor any other state officer or a state agency is made a party defendant except as garnishee or suggestee
(2) Any suit attempting to enjoin or otherwise suspend or affect a judgment or decree on behalfof the State obtained in any circuit court
(b) Any proceeding for injunctive or mandamus relief involving the taking title or collection for or prevention of damage to real property may be brought and presented in the circuit court of the county in which the real property affected is situate
This section shall apply only to such proceedings as are not prohibited by the constitutional immunity of the State from suit under section thirty-five article VI of the Constitution of the State
W Va Code sect 14-2-2 (emphasis added) The underlying suit in which the plaintiffs alleged that
mining operations located near their homes contaminated their well water was a proceeding in
injunctive and mandamus relief against the WVDEP and Secretary Huffman that sought relief for
the prevention of damage to real property By its own tern1s the statute expressly provides the
Circuit Court of Wyoming County with venue and jurisdiction over the claim
This Court has ruled squarely on this issue in Shobe v Latimer 162 W Va 779 253 SE2d
54 (1979) In Shobe the plaintiffs sought a declaratory judgment holding that a water contract
11
between the West Virginia Department of Natural Resources and a public seIVice district was
illegalld The lower court granted a motion to dismiss holding that the Circuit Court ofKanawha
County did not have venue to adjudicate a claim based in Grant County West Virginiald This
Court disagreed holding that an action regarding stream rights was an allegation involving the
taking or damage to real property within in the meaning of WVa Code sect 14-2-2(b) and that
venue was proper in the circuit courts of either Kanawha or Grant County ld at 794 63 Such is
the case in the underlying matter the plaintiffs in the underlying Wyoming County action were
free pursuant to West Virginia Code sect 14-2-2 to choose between Kanawha and Wyoming County
Circuit Court Accordingly this Court should turn aside ERPs arguments regarding the authority
of the Circuit Court of Wyoming County
Accordingly this Court uphold the Circuit Courts Order because it had venue to detennine
the merits ofthe Residents Petition for a Writ of Mandamus
E The Circuit Court of Wyoming County properly granted the Residents Petition for a Writ of Mandamus because it found that the WVDEP had erred in carrying out its duties with regard to water replacement and because the primary jurisdiction doctrine much like the exhaustion of administrative remedies doctrine is inapplicable to this case
The Circuit Court of Wyoming County found as a matter oflaw that the WVDEP erred by
failing to order water replacement as alleged in the Residents Petition for a Writ of Mandamus
By granting the Petition the Court held that the WVDEP had a legal duty pursuant to West
Virginia Code sect 22-3-17(a) to order water replacement for the Residents Appendix at 8 The
Circuit Court also agreed with the Residents that West Virginia Code sect 22-3-17(a) mandates that
the WVDEP shall issue a Notice ofViolation in an operator is not in compliance with a provision
ofa state rule or pennit which constitutes a non-discretionary duty W Va Code 22-3-17(a)
12
The Circuit Court also correctly disregarded the primary jurisdiction doctrine This Court
has described the primary jurisdiction doctrine as follows
1 Where an administrative agency and the courts have concurrent jurisdiction of an issue which requires the agencys special expertise and which extends beyond the conventional experience ofjudges the doctrine ofprimary jurisdiction applies In such a case the court should refrain from exercising jurisdiction until after the agency has resolved the issue The courts decision whether to apply the primary jurisdiction doctrine is reviewed on appeal under an abuse of discretion standard
2 In detennining whether to apply the primary jurisdiction doctrine courts should consider factors such as whether the question at issue is within the conventional experience ofjudges whether the question at issue lies peculiarly within the agencys discretion or requires the exercise of agency expertise whether there exists a danger of inconsistent rulings and whether a prior application to the agency has been made
State ex reI Bell AII-1yen Virginia Inc v Ranson Syl Pts 1 and 2 201 W Va 402404497
SE2d 755 757 (1997)
The Circuit Courts action in this case meets the test established in Ranson because the
Residents primary argument for a writ ofmandamus before the Circuit Court was that the agency
had already resolved the issue to the agencys satisfaction In this case though the question at
issue undoubtedly lies peculiarly within the WVDEPs expertise and discretion the Circuit Court
detennined it had sufficient conventional experience to render its own decision on the merits of
the evidence presented to it during the hearing on the Residents petition for a wTit of mandamus
The Circuit Court in its Order based its decision on a consideration of the WVDEPs evidence
and findings but also on those of the testimony of the Residents expert witness and their own
testimony
Ultimately this Court in Ranson elected to not apply the primary jurisdiction doctrine
noting that this concept is essentially the same as exhaustion of administrative remedies
13
Not unlike the exhaustion of remedies doctrine the doctrine of primary jurisdiction is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties citations omitted)
Ranson 201 W Va 410497 SE2d 763lndeed the terms primary jurisdiction and exhaustion
of remedies though separate and distinct legal concepts are often confused and used
interchangeably ld at FN 6 (internal citation omitted)
The primary jurisdiction doctrine and the exhaustion of administrative remedies doctrine
do not apply in this matter because the circuit courts ofWest Virginia are granted explicit statutory
authority by West Virginia Code sect 22-3-24 to decide the claims raised in the Residents Petition
for a Writ of Mandamus as discussed infra To insist as does ERP that this Court should abstain
from deciding an issue that the Legislature has detennined is explicitly within the jurisdiction of
the circuit coqrts is incorrect
ERP argues that a danger of inconsistent rulings and other concerns (Petition at 35)
requires the application of the primary jurisdiction doctrine in this case That argument disregards
the fact that the only dispute arising out of the Residents Petition is currently pending before this
Court There are no other potential inconsistent rulings
Lastly ERP argues that the Circuit Courts Order violates the doctrine of primary
jurisdiction essentially because the Circuit Court did not expressly address the doctrine ofprimary
jurisdiction even though it was not raised in the Circuit Court proceedings There is no
requirement that a circuit court make an express finding on its own accordingly the absence of
such analysis is not reversible error
Accordingly this Court should uphold the Circuit Courts Order regarding the Residents
Petition for a Writ of Mandamus
14
F Patriot and Easterns bankruptcy claims do not bar the State of West Virginias regulatory authority
ERPs arguments regarding the Patriot bankruptcy proceedings are similarly unfounded
Patriots most recent bankruptcy case ended in October 2015 with the entry of the confinnation
order which occurred well before the December 2015 hearing in the Circuit Court of Wyoming
County at issue here That order dissolved the automatic stay in place and replaced it with a new
set of injunctions none of which were applicable at the time of the hearing on the writ of
mandamus in the underlying matter Further confinnation orders have no effect whatsoever on
state law enforcement Eastern was required to continue to comply with state environmental law
Pursuant to 28 USc sect 959(b) a debtor is required to perfonn any and all acts necessary in order
to effectuate compliance with State Law environmental obligations Furthennore 11 USc sect
362(b)(4) expressly exempts the enforcement of any police or regulatory law enforcement action
from the automatic stay See 11 USc sect 362(b)(4)
A ruling such as the one sought by ERP in this matter would throw State enforcement of
all State laws related to debtors operating under an automatic stay into disarray It is absurd to
suggest that the State of West Virginia through the WVDEP is unable to enforce environmental
laws against companies operating within the State pursuant to West Virginia law simply because
a mining company seeks bankruptcy protection Furthennore ERP asks this Court to maintain that
not only are West Virginia executive law enforcement agencies not able to order compliance with
State law against debtors but also that the circuit courts of West Virginia are unable to order
compliance That is not the law
On May 12 2015 Easterns parent company Patriot Coal Corporation and some of its
affiliates including Eastern filed a petition with the United States Bankruptcy Court for the
Eastern District ofVirginia under chapter 11 oftitle 11 ofthe United States Code (US Bankruptcy
15
Court ED Va Case No 15-32450 (KLPraquo During the course of the bankruptcy proceedings
Patriot negotiated the sale of substantially all of its assets to two separate entities Blackhawk
Mining LLC (Blackhawk) and VCLF VCLF proposed to acquire the Kopperston No1 Refuse
Impoundment including the SMCRA permit at issue in this case
In accordance with the Bankruptcy Courts Scheduling Order on September 18 2015
Patriot filed the Fourth Amended Disclosure Statement for the Debtors Fourth Amended Joint
Plan ofReorganization Pursuant to Chapter 11 of the Bankruptcy Code and the Debtors Fourth
Amended Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code
The Fourth Amended Plan attached a copy of the VCLF Asset Purchase Agreement
(APA) The VCLF APA definitively establishes Appellant ERPs liability for the water
replacement order at issue in this case The Fourth Amended Plan itself lists the SMCRA notice
that ultimately led to the Wyoming County Circuit Court Order at issue in this appeal as a piece
of unresolved litigation to be assumed by the purchasers of Patriots assets
Furthem10re Section 203 of the APA Assumed Liabilities states that VCLFIERP shall
assume all Liabilities associated with the Transferred Pem1its as well as liability for regulatory
violations and obligations on or in relation to the Purchased Assets or the Transferred Permits
arising post-Closing
Additionally Schedule 308(a)-(b) to the VCLF APA expressly lists all liabilities
associated with the Purchased Assets and again includes the May 2015 SMCRA notice from
owners ofproperties near the Kopperston mine alleging adverse impacts to groundwater resources
Schedule 313 lists all pending litigation associated with the Purchased Assets and yet again lists
the Kopperston SMCRA notice
16
ERP is a wholly owned subsidiary of VCLF incorporated to fulfill the reclamation
obligations associated with assets VCLF purchased out of the Patriot bankruptcy ERP became
the penn it holder of the pennit associated with this appeal ERPs assumption of the water
replacement liability at issue in this appeal is not just a matter of a contractual obligation between
two private parties rather its liability also arises by operation of the Bankruptcy Courts
Confinnation Order
Accordingly this Court should uphold the Circuit Courts Order in this matter because it
was not barred by bankruptcy law
VII CONCLUSION
In conclusion these Respondents respectfully request this Court enter an Order denying
ERPs Petition for a Writ of Prohibition
WEST VIRGINIA DEPARMENT OF ENVIRONMENTAL PROTECTION and SECRETARY AUSTIN CAPERTON by counsel
West Virginia Department of Environmental Protection Office of Legal Services 601 57th St SE Charleston WV 25304 Phone 304-926-0499 Fax 304-926-0461 Email jasonewandlingwvgov
17
CERTIFICATE OF SERVICE
I Jason Wandling certify that I served this Response in Opposition to Verified Petition for
Writ of Prohibition on 20 March 2017 by depositing a true copy thereof in the United States mail
postage prepaid addressed as follows
John J Meadows (WVSB 9442) Peter J Raupp (WVSB 10546) Devon J Stewart (WVSB 11712) Steptoe amp Johnson PLLC 707 Virginia Street East Chase Tower Seventeenth Floor PO Box 1588 Charleston WV 25326-1588 Phone 304-353-8154 Fax 304-353-8180 Email J ohnM eadowssteptoe-johnsoncom
PeterRauppsteptoe-johnsoncom DevonStewartsteptoe-johnsoncom
Honorable Warren D McGraw Judge PO Box 581 100 Main and Bank Streets Pineville WV 24874 Phone 304-732-7047 Fax 304-732-7047
Kevin W Thompson (WVSB 5062) David R Barney Jr (WVSB 7958) Thompson Barney 2030 Kanawha Blvd E Charleston WV 25311 Phone 304-343-4401 Fax 304-343-4405 Email kthompsonthompsonbarneycom
dbameythompsonbameycom
(c) The claims process established by the office of explosives and blasting shall include the following
(1) An initial detennination by the office of the merit of the claim and
(2) An arbitration process whereby the claim can be detennined and resolved by an arbitrator in a manner which is inexpensive prompt and fair to all parties The office shall propose rules for legislative approval in accordance with article three chapter twenty-nine-a of this code for the development of standards for establishing rules relating to the initial claim detennination and the arbitration process provided in this subsection
(d) If the operator disagrees with the initial detennination made by the office and requests arbitration then the following shall apply
(1) Any party may be represented by a representati ve of their choice
(2) At the request of the claimant the office shall provide the claimant with representation in the arbitration process which representation shall not necessarily be an attomey-at-Iaw and
(3) If the claim is upheld in whole or in part then the operator shall pay the costs ofthe proceeding as well as reasonable representation fees and costs of the claimant in an amount not to exceed one thousand dollars
(e) Participation in the claims process created by this section shall be voluntary for the claimant However once the claimant has submitted a claim for detennination under the provisions of this section it is intended that the finding of the office if not taken to arbitration shall be final If arbitration is requested it is intended that the results of such arbitration shall be final The office shall provide written notification to the claimant of the provisions of this subsection and shall secure a written acknowledgment from the claimant prior to processing a claim pursuant to the provisions of this section
(f) The operator shall pay any claim for which the operator is adjudged liable within thirty days of a final detennination If the claim is not paid within thirty days the director shall issue a cessation order pursuant to section sixteen article three of this chapter for all sites operated by the operator
(g) No pennit to mine coal shall be granted unless the pennit applicant agrees to be subject to the tenns of this section
(h) To fulfill its responsibilities pursuant to this section the office may retain the services of inspectors experts and other persons or finns as may be necessary
7
W Va Code sect 22-3A-5 (1999) (repealed June 9 2016)
The Residents did not submit their claims to the WVDEPs Office of Explosives and
Blasting pursuant to West Virginia Code sect 22-3A-5 There is nothing in the record that reflects
that the Residents specifically sought WVDEP investigation pursuant to that code section or
otherwise sought resolution of their claims pursuant to West Virginia Code sect 22-3A-5 The record
does not contain a document created by the Residents that request an investigation and subsequent
arbitration by the WVDEP Office ofExplosives and Blasting Conversely the record does contain
the Residents initiating letter notifying the WVDEP that the Residents intended to sue the agency
Simply put no authority exists to support ERPs assertion that merely submitting citizen
complaints to the WVDEP irrevocably invoked the jurisdiction of the WVDEPs Office of
Explosives and Blasting and the arbitration requirement contained in West Virginia Code sect 22shy
3A-5 (1999) Furthermore no authority exists to support ERPs assertion that merely submitting
citizen complaints to the WVDEP irrevocably invoked administrative review before the
environmental boards tasked with reviewing agency action
This fundamental factual issue short circuits ERPs arguments that rely on Ewing v Ed of
Educ OCity oSummers 202 WVa 228 503 SE2d 541 (1998) State ex rei Chesapeake and
Potomac Telephone Co oJw Va v Ashworth 190 WVa 547438 SE2d 890 (1993) and Ashby
v City 0 Fairmont 216 WVa 527 607 SE2d 856 (2004) In each of those cases the
complainants invoked claims that specifically called for administrative resolution In this matter
the Residents from the start invoked claims they intended to pursue in circuit court
ERP cannot submit any evidence that the Residents ever submitted claims to the WVDEPs
Office of Explosives and Blasting or filed Notices of Appeal with the Surface Mine Board or the
8
Environmental Quality Board Accordingly this Court should hold that the Residents properly
exercised their statutory rights to pursue their water claims in circuit court
C The Circuit Courts Order was properly issued because Eastern and ERP were not indispensable parties and because no real property interest of Eastern or ERP was at issue
This Court should uphold the Circuit Courts Order because the Residents Petition for a
Writ ofMandamus and the subsequent hearing did not violate Eastern or ERPs due process rights
and did not result in an order that placed restraints on the real property of a third party
ERP insists that West Virginia Rule of Civil Procedure 19 requires that Eastern or ERP
should have been named as parties to the Residents Petition for a Writ of Mandamus Rule 19
requires that any persons who claim an interest in the real property at issue are indispensable
parties to the proceeding W Va R Civ P 19 and Petition at 23 This argument fails at the outset
because the Residents Petition for a Writ of Mandamus and the Circuit of Court of Wyoming
Countys Order did not in any way claim an interest in Eastern or ERPs real property or affect
Eastern or ERPs real property
Contrary to ERPs assertions this Court held in 0 Daniels v City of Charleston that
When a court proceeding directly affects or detennines the scope of rights or interests in real
property any persons who claim an interest in the real property at issue are indispensable parties
to the proceeding Any order or decree issued in the absence of those parties is null and void
ODaniels v City of CIz areston Syl Pt 2200 W Va 711 712490 SE2d 800 801 (1997)
(emphasis added)
o Daniels does not stand for the proposition that as here potential parties such as Patriot
Eastern or ERP must be joined as indispensable parties where as admitted by ERP personal
property is at issue There is no real property at issue in this case at least insofar as ERP is
9
concerned The only real property at issue in this case belongs to the Residents Accordingly
OBrien does not apply to this case
Every case cited by the o Daniels court -- Bonafede v Grafton Feed amp Storage Co 81
WVa 31394 SE 471 (1917) United Fuel Gas Co v Morley Oil amp Gas Co 101 WVa 73 131
SE 713 (1926) Oneal v Stimson 61 WVa 551 56 SE 889 (1907) -- involved real property
There is no West Virginia authority that makes the same statement about personal property and
there are certainly no West Virginia cases that bar a circuit court from granting a petition for a writ
ofmandamus that requires a state agency to order an action that might cause a corporation to spend
money in order to comply
ERPs broader due process argument also fails This Court holds that The due process of
law guaranteed by the State and Federal Constitutions when applied to procedure in the courts of
the land requires both notice and the right to be heard State ex reI Bd ofEduc of Cnty Of
Putnam v Beane Syl Pt 2 224 W Va 31 680 SE2d 46 (2009) (quoting Simpson v Stanton
SyJ Pt 2 119 WVa 235 193 SE 64 (1937)
As shown infra Eastern and its corporate successor ERP were aware of the Residents
proposed petition for writ of mandamus as early as 2011 and took part from the beginning of the
investigation process with the Residents and the WVDEP To the extent ERP complains that its
corporate predecessor failed to protect its interests by refusing to intervene in the proceedings
below it is bound by the terms of its agreement with Patriot and Eastern A corporate successor
may not avoid a prior liability simply because it subsequently decides it doesnt care for a part of
the deal ERPs due process argument fails because it had (1) notice and (2) had a right to be heard
before the Circuit Court of Wyoming County
10
Accordingly this Court should uphold the Circuit Courts Order because the Residents
Petition for a Writ of Mandamus and the subsequent hearing did not violate Eastern or ERPs due
process rights and did not result in an order that required impennissible restraints on the real
property of a third party
D The Circuit Court of Wyoming County was authorized to enter the Order at issue because it properly had venue
The Circuit Court of Wyoming County unquestionably had venue pursuant to West
Virginia Code sect 14-2-2 That statute states in its entirety
(a) The following proceedings shall be brought and prosecuted only in the circuit court of Kanawha County
(1) Any suit in which the governor any other state officer or a state agency is made a party defendant except as garnishee or suggestee
(2) Any suit attempting to enjoin or otherwise suspend or affect a judgment or decree on behalfof the State obtained in any circuit court
(b) Any proceeding for injunctive or mandamus relief involving the taking title or collection for or prevention of damage to real property may be brought and presented in the circuit court of the county in which the real property affected is situate
This section shall apply only to such proceedings as are not prohibited by the constitutional immunity of the State from suit under section thirty-five article VI of the Constitution of the State
W Va Code sect 14-2-2 (emphasis added) The underlying suit in which the plaintiffs alleged that
mining operations located near their homes contaminated their well water was a proceeding in
injunctive and mandamus relief against the WVDEP and Secretary Huffman that sought relief for
the prevention of damage to real property By its own tern1s the statute expressly provides the
Circuit Court of Wyoming County with venue and jurisdiction over the claim
This Court has ruled squarely on this issue in Shobe v Latimer 162 W Va 779 253 SE2d
54 (1979) In Shobe the plaintiffs sought a declaratory judgment holding that a water contract
11
between the West Virginia Department of Natural Resources and a public seIVice district was
illegalld The lower court granted a motion to dismiss holding that the Circuit Court ofKanawha
County did not have venue to adjudicate a claim based in Grant County West Virginiald This
Court disagreed holding that an action regarding stream rights was an allegation involving the
taking or damage to real property within in the meaning of WVa Code sect 14-2-2(b) and that
venue was proper in the circuit courts of either Kanawha or Grant County ld at 794 63 Such is
the case in the underlying matter the plaintiffs in the underlying Wyoming County action were
free pursuant to West Virginia Code sect 14-2-2 to choose between Kanawha and Wyoming County
Circuit Court Accordingly this Court should turn aside ERPs arguments regarding the authority
of the Circuit Court of Wyoming County
Accordingly this Court uphold the Circuit Courts Order because it had venue to detennine
the merits ofthe Residents Petition for a Writ of Mandamus
E The Circuit Court of Wyoming County properly granted the Residents Petition for a Writ of Mandamus because it found that the WVDEP had erred in carrying out its duties with regard to water replacement and because the primary jurisdiction doctrine much like the exhaustion of administrative remedies doctrine is inapplicable to this case
The Circuit Court of Wyoming County found as a matter oflaw that the WVDEP erred by
failing to order water replacement as alleged in the Residents Petition for a Writ of Mandamus
By granting the Petition the Court held that the WVDEP had a legal duty pursuant to West
Virginia Code sect 22-3-17(a) to order water replacement for the Residents Appendix at 8 The
Circuit Court also agreed with the Residents that West Virginia Code sect 22-3-17(a) mandates that
the WVDEP shall issue a Notice ofViolation in an operator is not in compliance with a provision
ofa state rule or pennit which constitutes a non-discretionary duty W Va Code 22-3-17(a)
12
The Circuit Court also correctly disregarded the primary jurisdiction doctrine This Court
has described the primary jurisdiction doctrine as follows
1 Where an administrative agency and the courts have concurrent jurisdiction of an issue which requires the agencys special expertise and which extends beyond the conventional experience ofjudges the doctrine ofprimary jurisdiction applies In such a case the court should refrain from exercising jurisdiction until after the agency has resolved the issue The courts decision whether to apply the primary jurisdiction doctrine is reviewed on appeal under an abuse of discretion standard
2 In detennining whether to apply the primary jurisdiction doctrine courts should consider factors such as whether the question at issue is within the conventional experience ofjudges whether the question at issue lies peculiarly within the agencys discretion or requires the exercise of agency expertise whether there exists a danger of inconsistent rulings and whether a prior application to the agency has been made
State ex reI Bell AII-1yen Virginia Inc v Ranson Syl Pts 1 and 2 201 W Va 402404497
SE2d 755 757 (1997)
The Circuit Courts action in this case meets the test established in Ranson because the
Residents primary argument for a writ ofmandamus before the Circuit Court was that the agency
had already resolved the issue to the agencys satisfaction In this case though the question at
issue undoubtedly lies peculiarly within the WVDEPs expertise and discretion the Circuit Court
detennined it had sufficient conventional experience to render its own decision on the merits of
the evidence presented to it during the hearing on the Residents petition for a wTit of mandamus
The Circuit Court in its Order based its decision on a consideration of the WVDEPs evidence
and findings but also on those of the testimony of the Residents expert witness and their own
testimony
Ultimately this Court in Ranson elected to not apply the primary jurisdiction doctrine
noting that this concept is essentially the same as exhaustion of administrative remedies
13
Not unlike the exhaustion of remedies doctrine the doctrine of primary jurisdiction is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties citations omitted)
Ranson 201 W Va 410497 SE2d 763lndeed the terms primary jurisdiction and exhaustion
of remedies though separate and distinct legal concepts are often confused and used
interchangeably ld at FN 6 (internal citation omitted)
The primary jurisdiction doctrine and the exhaustion of administrative remedies doctrine
do not apply in this matter because the circuit courts ofWest Virginia are granted explicit statutory
authority by West Virginia Code sect 22-3-24 to decide the claims raised in the Residents Petition
for a Writ of Mandamus as discussed infra To insist as does ERP that this Court should abstain
from deciding an issue that the Legislature has detennined is explicitly within the jurisdiction of
the circuit coqrts is incorrect
ERP argues that a danger of inconsistent rulings and other concerns (Petition at 35)
requires the application of the primary jurisdiction doctrine in this case That argument disregards
the fact that the only dispute arising out of the Residents Petition is currently pending before this
Court There are no other potential inconsistent rulings
Lastly ERP argues that the Circuit Courts Order violates the doctrine of primary
jurisdiction essentially because the Circuit Court did not expressly address the doctrine ofprimary
jurisdiction even though it was not raised in the Circuit Court proceedings There is no
requirement that a circuit court make an express finding on its own accordingly the absence of
such analysis is not reversible error
Accordingly this Court should uphold the Circuit Courts Order regarding the Residents
Petition for a Writ of Mandamus
14
F Patriot and Easterns bankruptcy claims do not bar the State of West Virginias regulatory authority
ERPs arguments regarding the Patriot bankruptcy proceedings are similarly unfounded
Patriots most recent bankruptcy case ended in October 2015 with the entry of the confinnation
order which occurred well before the December 2015 hearing in the Circuit Court of Wyoming
County at issue here That order dissolved the automatic stay in place and replaced it with a new
set of injunctions none of which were applicable at the time of the hearing on the writ of
mandamus in the underlying matter Further confinnation orders have no effect whatsoever on
state law enforcement Eastern was required to continue to comply with state environmental law
Pursuant to 28 USc sect 959(b) a debtor is required to perfonn any and all acts necessary in order
to effectuate compliance with State Law environmental obligations Furthennore 11 USc sect
362(b)(4) expressly exempts the enforcement of any police or regulatory law enforcement action
from the automatic stay See 11 USc sect 362(b)(4)
A ruling such as the one sought by ERP in this matter would throw State enforcement of
all State laws related to debtors operating under an automatic stay into disarray It is absurd to
suggest that the State of West Virginia through the WVDEP is unable to enforce environmental
laws against companies operating within the State pursuant to West Virginia law simply because
a mining company seeks bankruptcy protection Furthennore ERP asks this Court to maintain that
not only are West Virginia executive law enforcement agencies not able to order compliance with
State law against debtors but also that the circuit courts of West Virginia are unable to order
compliance That is not the law
On May 12 2015 Easterns parent company Patriot Coal Corporation and some of its
affiliates including Eastern filed a petition with the United States Bankruptcy Court for the
Eastern District ofVirginia under chapter 11 oftitle 11 ofthe United States Code (US Bankruptcy
15
Court ED Va Case No 15-32450 (KLPraquo During the course of the bankruptcy proceedings
Patriot negotiated the sale of substantially all of its assets to two separate entities Blackhawk
Mining LLC (Blackhawk) and VCLF VCLF proposed to acquire the Kopperston No1 Refuse
Impoundment including the SMCRA permit at issue in this case
In accordance with the Bankruptcy Courts Scheduling Order on September 18 2015
Patriot filed the Fourth Amended Disclosure Statement for the Debtors Fourth Amended Joint
Plan ofReorganization Pursuant to Chapter 11 of the Bankruptcy Code and the Debtors Fourth
Amended Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code
The Fourth Amended Plan attached a copy of the VCLF Asset Purchase Agreement
(APA) The VCLF APA definitively establishes Appellant ERPs liability for the water
replacement order at issue in this case The Fourth Amended Plan itself lists the SMCRA notice
that ultimately led to the Wyoming County Circuit Court Order at issue in this appeal as a piece
of unresolved litigation to be assumed by the purchasers of Patriots assets
Furthem10re Section 203 of the APA Assumed Liabilities states that VCLFIERP shall
assume all Liabilities associated with the Transferred Pem1its as well as liability for regulatory
violations and obligations on or in relation to the Purchased Assets or the Transferred Permits
arising post-Closing
Additionally Schedule 308(a)-(b) to the VCLF APA expressly lists all liabilities
associated with the Purchased Assets and again includes the May 2015 SMCRA notice from
owners ofproperties near the Kopperston mine alleging adverse impacts to groundwater resources
Schedule 313 lists all pending litigation associated with the Purchased Assets and yet again lists
the Kopperston SMCRA notice
16
ERP is a wholly owned subsidiary of VCLF incorporated to fulfill the reclamation
obligations associated with assets VCLF purchased out of the Patriot bankruptcy ERP became
the penn it holder of the pennit associated with this appeal ERPs assumption of the water
replacement liability at issue in this appeal is not just a matter of a contractual obligation between
two private parties rather its liability also arises by operation of the Bankruptcy Courts
Confinnation Order
Accordingly this Court should uphold the Circuit Courts Order in this matter because it
was not barred by bankruptcy law
VII CONCLUSION
In conclusion these Respondents respectfully request this Court enter an Order denying
ERPs Petition for a Writ of Prohibition
WEST VIRGINIA DEPARMENT OF ENVIRONMENTAL PROTECTION and SECRETARY AUSTIN CAPERTON by counsel
West Virginia Department of Environmental Protection Office of Legal Services 601 57th St SE Charleston WV 25304 Phone 304-926-0499 Fax 304-926-0461 Email jasonewandlingwvgov
17
CERTIFICATE OF SERVICE
I Jason Wandling certify that I served this Response in Opposition to Verified Petition for
Writ of Prohibition on 20 March 2017 by depositing a true copy thereof in the United States mail
postage prepaid addressed as follows
John J Meadows (WVSB 9442) Peter J Raupp (WVSB 10546) Devon J Stewart (WVSB 11712) Steptoe amp Johnson PLLC 707 Virginia Street East Chase Tower Seventeenth Floor PO Box 1588 Charleston WV 25326-1588 Phone 304-353-8154 Fax 304-353-8180 Email J ohnM eadowssteptoe-johnsoncom
PeterRauppsteptoe-johnsoncom DevonStewartsteptoe-johnsoncom
Honorable Warren D McGraw Judge PO Box 581 100 Main and Bank Streets Pineville WV 24874 Phone 304-732-7047 Fax 304-732-7047
Kevin W Thompson (WVSB 5062) David R Barney Jr (WVSB 7958) Thompson Barney 2030 Kanawha Blvd E Charleston WV 25311 Phone 304-343-4401 Fax 304-343-4405 Email kthompsonthompsonbarneycom
dbameythompsonbameycom
W Va Code sect 22-3A-5 (1999) (repealed June 9 2016)
The Residents did not submit their claims to the WVDEPs Office of Explosives and
Blasting pursuant to West Virginia Code sect 22-3A-5 There is nothing in the record that reflects
that the Residents specifically sought WVDEP investigation pursuant to that code section or
otherwise sought resolution of their claims pursuant to West Virginia Code sect 22-3A-5 The record
does not contain a document created by the Residents that request an investigation and subsequent
arbitration by the WVDEP Office ofExplosives and Blasting Conversely the record does contain
the Residents initiating letter notifying the WVDEP that the Residents intended to sue the agency
Simply put no authority exists to support ERPs assertion that merely submitting citizen
complaints to the WVDEP irrevocably invoked the jurisdiction of the WVDEPs Office of
Explosives and Blasting and the arbitration requirement contained in West Virginia Code sect 22shy
3A-5 (1999) Furthermore no authority exists to support ERPs assertion that merely submitting
citizen complaints to the WVDEP irrevocably invoked administrative review before the
environmental boards tasked with reviewing agency action
This fundamental factual issue short circuits ERPs arguments that rely on Ewing v Ed of
Educ OCity oSummers 202 WVa 228 503 SE2d 541 (1998) State ex rei Chesapeake and
Potomac Telephone Co oJw Va v Ashworth 190 WVa 547438 SE2d 890 (1993) and Ashby
v City 0 Fairmont 216 WVa 527 607 SE2d 856 (2004) In each of those cases the
complainants invoked claims that specifically called for administrative resolution In this matter
the Residents from the start invoked claims they intended to pursue in circuit court
ERP cannot submit any evidence that the Residents ever submitted claims to the WVDEPs
Office of Explosives and Blasting or filed Notices of Appeal with the Surface Mine Board or the
8
Environmental Quality Board Accordingly this Court should hold that the Residents properly
exercised their statutory rights to pursue their water claims in circuit court
C The Circuit Courts Order was properly issued because Eastern and ERP were not indispensable parties and because no real property interest of Eastern or ERP was at issue
This Court should uphold the Circuit Courts Order because the Residents Petition for a
Writ ofMandamus and the subsequent hearing did not violate Eastern or ERPs due process rights
and did not result in an order that placed restraints on the real property of a third party
ERP insists that West Virginia Rule of Civil Procedure 19 requires that Eastern or ERP
should have been named as parties to the Residents Petition for a Writ of Mandamus Rule 19
requires that any persons who claim an interest in the real property at issue are indispensable
parties to the proceeding W Va R Civ P 19 and Petition at 23 This argument fails at the outset
because the Residents Petition for a Writ of Mandamus and the Circuit of Court of Wyoming
Countys Order did not in any way claim an interest in Eastern or ERPs real property or affect
Eastern or ERPs real property
Contrary to ERPs assertions this Court held in 0 Daniels v City of Charleston that
When a court proceeding directly affects or detennines the scope of rights or interests in real
property any persons who claim an interest in the real property at issue are indispensable parties
to the proceeding Any order or decree issued in the absence of those parties is null and void
ODaniels v City of CIz areston Syl Pt 2200 W Va 711 712490 SE2d 800 801 (1997)
(emphasis added)
o Daniels does not stand for the proposition that as here potential parties such as Patriot
Eastern or ERP must be joined as indispensable parties where as admitted by ERP personal
property is at issue There is no real property at issue in this case at least insofar as ERP is
9
concerned The only real property at issue in this case belongs to the Residents Accordingly
OBrien does not apply to this case
Every case cited by the o Daniels court -- Bonafede v Grafton Feed amp Storage Co 81
WVa 31394 SE 471 (1917) United Fuel Gas Co v Morley Oil amp Gas Co 101 WVa 73 131
SE 713 (1926) Oneal v Stimson 61 WVa 551 56 SE 889 (1907) -- involved real property
There is no West Virginia authority that makes the same statement about personal property and
there are certainly no West Virginia cases that bar a circuit court from granting a petition for a writ
ofmandamus that requires a state agency to order an action that might cause a corporation to spend
money in order to comply
ERPs broader due process argument also fails This Court holds that The due process of
law guaranteed by the State and Federal Constitutions when applied to procedure in the courts of
the land requires both notice and the right to be heard State ex reI Bd ofEduc of Cnty Of
Putnam v Beane Syl Pt 2 224 W Va 31 680 SE2d 46 (2009) (quoting Simpson v Stanton
SyJ Pt 2 119 WVa 235 193 SE 64 (1937)
As shown infra Eastern and its corporate successor ERP were aware of the Residents
proposed petition for writ of mandamus as early as 2011 and took part from the beginning of the
investigation process with the Residents and the WVDEP To the extent ERP complains that its
corporate predecessor failed to protect its interests by refusing to intervene in the proceedings
below it is bound by the terms of its agreement with Patriot and Eastern A corporate successor
may not avoid a prior liability simply because it subsequently decides it doesnt care for a part of
the deal ERPs due process argument fails because it had (1) notice and (2) had a right to be heard
before the Circuit Court of Wyoming County
10
Accordingly this Court should uphold the Circuit Courts Order because the Residents
Petition for a Writ of Mandamus and the subsequent hearing did not violate Eastern or ERPs due
process rights and did not result in an order that required impennissible restraints on the real
property of a third party
D The Circuit Court of Wyoming County was authorized to enter the Order at issue because it properly had venue
The Circuit Court of Wyoming County unquestionably had venue pursuant to West
Virginia Code sect 14-2-2 That statute states in its entirety
(a) The following proceedings shall be brought and prosecuted only in the circuit court of Kanawha County
(1) Any suit in which the governor any other state officer or a state agency is made a party defendant except as garnishee or suggestee
(2) Any suit attempting to enjoin or otherwise suspend or affect a judgment or decree on behalfof the State obtained in any circuit court
(b) Any proceeding for injunctive or mandamus relief involving the taking title or collection for or prevention of damage to real property may be brought and presented in the circuit court of the county in which the real property affected is situate
This section shall apply only to such proceedings as are not prohibited by the constitutional immunity of the State from suit under section thirty-five article VI of the Constitution of the State
W Va Code sect 14-2-2 (emphasis added) The underlying suit in which the plaintiffs alleged that
mining operations located near their homes contaminated their well water was a proceeding in
injunctive and mandamus relief against the WVDEP and Secretary Huffman that sought relief for
the prevention of damage to real property By its own tern1s the statute expressly provides the
Circuit Court of Wyoming County with venue and jurisdiction over the claim
This Court has ruled squarely on this issue in Shobe v Latimer 162 W Va 779 253 SE2d
54 (1979) In Shobe the plaintiffs sought a declaratory judgment holding that a water contract
11
between the West Virginia Department of Natural Resources and a public seIVice district was
illegalld The lower court granted a motion to dismiss holding that the Circuit Court ofKanawha
County did not have venue to adjudicate a claim based in Grant County West Virginiald This
Court disagreed holding that an action regarding stream rights was an allegation involving the
taking or damage to real property within in the meaning of WVa Code sect 14-2-2(b) and that
venue was proper in the circuit courts of either Kanawha or Grant County ld at 794 63 Such is
the case in the underlying matter the plaintiffs in the underlying Wyoming County action were
free pursuant to West Virginia Code sect 14-2-2 to choose between Kanawha and Wyoming County
Circuit Court Accordingly this Court should turn aside ERPs arguments regarding the authority
of the Circuit Court of Wyoming County
Accordingly this Court uphold the Circuit Courts Order because it had venue to detennine
the merits ofthe Residents Petition for a Writ of Mandamus
E The Circuit Court of Wyoming County properly granted the Residents Petition for a Writ of Mandamus because it found that the WVDEP had erred in carrying out its duties with regard to water replacement and because the primary jurisdiction doctrine much like the exhaustion of administrative remedies doctrine is inapplicable to this case
The Circuit Court of Wyoming County found as a matter oflaw that the WVDEP erred by
failing to order water replacement as alleged in the Residents Petition for a Writ of Mandamus
By granting the Petition the Court held that the WVDEP had a legal duty pursuant to West
Virginia Code sect 22-3-17(a) to order water replacement for the Residents Appendix at 8 The
Circuit Court also agreed with the Residents that West Virginia Code sect 22-3-17(a) mandates that
the WVDEP shall issue a Notice ofViolation in an operator is not in compliance with a provision
ofa state rule or pennit which constitutes a non-discretionary duty W Va Code 22-3-17(a)
12
The Circuit Court also correctly disregarded the primary jurisdiction doctrine This Court
has described the primary jurisdiction doctrine as follows
1 Where an administrative agency and the courts have concurrent jurisdiction of an issue which requires the agencys special expertise and which extends beyond the conventional experience ofjudges the doctrine ofprimary jurisdiction applies In such a case the court should refrain from exercising jurisdiction until after the agency has resolved the issue The courts decision whether to apply the primary jurisdiction doctrine is reviewed on appeal under an abuse of discretion standard
2 In detennining whether to apply the primary jurisdiction doctrine courts should consider factors such as whether the question at issue is within the conventional experience ofjudges whether the question at issue lies peculiarly within the agencys discretion or requires the exercise of agency expertise whether there exists a danger of inconsistent rulings and whether a prior application to the agency has been made
State ex reI Bell AII-1yen Virginia Inc v Ranson Syl Pts 1 and 2 201 W Va 402404497
SE2d 755 757 (1997)
The Circuit Courts action in this case meets the test established in Ranson because the
Residents primary argument for a writ ofmandamus before the Circuit Court was that the agency
had already resolved the issue to the agencys satisfaction In this case though the question at
issue undoubtedly lies peculiarly within the WVDEPs expertise and discretion the Circuit Court
detennined it had sufficient conventional experience to render its own decision on the merits of
the evidence presented to it during the hearing on the Residents petition for a wTit of mandamus
The Circuit Court in its Order based its decision on a consideration of the WVDEPs evidence
and findings but also on those of the testimony of the Residents expert witness and their own
testimony
Ultimately this Court in Ranson elected to not apply the primary jurisdiction doctrine
noting that this concept is essentially the same as exhaustion of administrative remedies
13
Not unlike the exhaustion of remedies doctrine the doctrine of primary jurisdiction is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties citations omitted)
Ranson 201 W Va 410497 SE2d 763lndeed the terms primary jurisdiction and exhaustion
of remedies though separate and distinct legal concepts are often confused and used
interchangeably ld at FN 6 (internal citation omitted)
The primary jurisdiction doctrine and the exhaustion of administrative remedies doctrine
do not apply in this matter because the circuit courts ofWest Virginia are granted explicit statutory
authority by West Virginia Code sect 22-3-24 to decide the claims raised in the Residents Petition
for a Writ of Mandamus as discussed infra To insist as does ERP that this Court should abstain
from deciding an issue that the Legislature has detennined is explicitly within the jurisdiction of
the circuit coqrts is incorrect
ERP argues that a danger of inconsistent rulings and other concerns (Petition at 35)
requires the application of the primary jurisdiction doctrine in this case That argument disregards
the fact that the only dispute arising out of the Residents Petition is currently pending before this
Court There are no other potential inconsistent rulings
Lastly ERP argues that the Circuit Courts Order violates the doctrine of primary
jurisdiction essentially because the Circuit Court did not expressly address the doctrine ofprimary
jurisdiction even though it was not raised in the Circuit Court proceedings There is no
requirement that a circuit court make an express finding on its own accordingly the absence of
such analysis is not reversible error
Accordingly this Court should uphold the Circuit Courts Order regarding the Residents
Petition for a Writ of Mandamus
14
F Patriot and Easterns bankruptcy claims do not bar the State of West Virginias regulatory authority
ERPs arguments regarding the Patriot bankruptcy proceedings are similarly unfounded
Patriots most recent bankruptcy case ended in October 2015 with the entry of the confinnation
order which occurred well before the December 2015 hearing in the Circuit Court of Wyoming
County at issue here That order dissolved the automatic stay in place and replaced it with a new
set of injunctions none of which were applicable at the time of the hearing on the writ of
mandamus in the underlying matter Further confinnation orders have no effect whatsoever on
state law enforcement Eastern was required to continue to comply with state environmental law
Pursuant to 28 USc sect 959(b) a debtor is required to perfonn any and all acts necessary in order
to effectuate compliance with State Law environmental obligations Furthennore 11 USc sect
362(b)(4) expressly exempts the enforcement of any police or regulatory law enforcement action
from the automatic stay See 11 USc sect 362(b)(4)
A ruling such as the one sought by ERP in this matter would throw State enforcement of
all State laws related to debtors operating under an automatic stay into disarray It is absurd to
suggest that the State of West Virginia through the WVDEP is unable to enforce environmental
laws against companies operating within the State pursuant to West Virginia law simply because
a mining company seeks bankruptcy protection Furthennore ERP asks this Court to maintain that
not only are West Virginia executive law enforcement agencies not able to order compliance with
State law against debtors but also that the circuit courts of West Virginia are unable to order
compliance That is not the law
On May 12 2015 Easterns parent company Patriot Coal Corporation and some of its
affiliates including Eastern filed a petition with the United States Bankruptcy Court for the
Eastern District ofVirginia under chapter 11 oftitle 11 ofthe United States Code (US Bankruptcy
15
Court ED Va Case No 15-32450 (KLPraquo During the course of the bankruptcy proceedings
Patriot negotiated the sale of substantially all of its assets to two separate entities Blackhawk
Mining LLC (Blackhawk) and VCLF VCLF proposed to acquire the Kopperston No1 Refuse
Impoundment including the SMCRA permit at issue in this case
In accordance with the Bankruptcy Courts Scheduling Order on September 18 2015
Patriot filed the Fourth Amended Disclosure Statement for the Debtors Fourth Amended Joint
Plan ofReorganization Pursuant to Chapter 11 of the Bankruptcy Code and the Debtors Fourth
Amended Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code
The Fourth Amended Plan attached a copy of the VCLF Asset Purchase Agreement
(APA) The VCLF APA definitively establishes Appellant ERPs liability for the water
replacement order at issue in this case The Fourth Amended Plan itself lists the SMCRA notice
that ultimately led to the Wyoming County Circuit Court Order at issue in this appeal as a piece
of unresolved litigation to be assumed by the purchasers of Patriots assets
Furthem10re Section 203 of the APA Assumed Liabilities states that VCLFIERP shall
assume all Liabilities associated with the Transferred Pem1its as well as liability for regulatory
violations and obligations on or in relation to the Purchased Assets or the Transferred Permits
arising post-Closing
Additionally Schedule 308(a)-(b) to the VCLF APA expressly lists all liabilities
associated with the Purchased Assets and again includes the May 2015 SMCRA notice from
owners ofproperties near the Kopperston mine alleging adverse impacts to groundwater resources
Schedule 313 lists all pending litigation associated with the Purchased Assets and yet again lists
the Kopperston SMCRA notice
16
ERP is a wholly owned subsidiary of VCLF incorporated to fulfill the reclamation
obligations associated with assets VCLF purchased out of the Patriot bankruptcy ERP became
the penn it holder of the pennit associated with this appeal ERPs assumption of the water
replacement liability at issue in this appeal is not just a matter of a contractual obligation between
two private parties rather its liability also arises by operation of the Bankruptcy Courts
Confinnation Order
Accordingly this Court should uphold the Circuit Courts Order in this matter because it
was not barred by bankruptcy law
VII CONCLUSION
In conclusion these Respondents respectfully request this Court enter an Order denying
ERPs Petition for a Writ of Prohibition
WEST VIRGINIA DEPARMENT OF ENVIRONMENTAL PROTECTION and SECRETARY AUSTIN CAPERTON by counsel
West Virginia Department of Environmental Protection Office of Legal Services 601 57th St SE Charleston WV 25304 Phone 304-926-0499 Fax 304-926-0461 Email jasonewandlingwvgov
17
CERTIFICATE OF SERVICE
I Jason Wandling certify that I served this Response in Opposition to Verified Petition for
Writ of Prohibition on 20 March 2017 by depositing a true copy thereof in the United States mail
postage prepaid addressed as follows
John J Meadows (WVSB 9442) Peter J Raupp (WVSB 10546) Devon J Stewart (WVSB 11712) Steptoe amp Johnson PLLC 707 Virginia Street East Chase Tower Seventeenth Floor PO Box 1588 Charleston WV 25326-1588 Phone 304-353-8154 Fax 304-353-8180 Email J ohnM eadowssteptoe-johnsoncom
PeterRauppsteptoe-johnsoncom DevonStewartsteptoe-johnsoncom
Honorable Warren D McGraw Judge PO Box 581 100 Main and Bank Streets Pineville WV 24874 Phone 304-732-7047 Fax 304-732-7047
Kevin W Thompson (WVSB 5062) David R Barney Jr (WVSB 7958) Thompson Barney 2030 Kanawha Blvd E Charleston WV 25311 Phone 304-343-4401 Fax 304-343-4405 Email kthompsonthompsonbarneycom
dbameythompsonbameycom
Environmental Quality Board Accordingly this Court should hold that the Residents properly
exercised their statutory rights to pursue their water claims in circuit court
C The Circuit Courts Order was properly issued because Eastern and ERP were not indispensable parties and because no real property interest of Eastern or ERP was at issue
This Court should uphold the Circuit Courts Order because the Residents Petition for a
Writ ofMandamus and the subsequent hearing did not violate Eastern or ERPs due process rights
and did not result in an order that placed restraints on the real property of a third party
ERP insists that West Virginia Rule of Civil Procedure 19 requires that Eastern or ERP
should have been named as parties to the Residents Petition for a Writ of Mandamus Rule 19
requires that any persons who claim an interest in the real property at issue are indispensable
parties to the proceeding W Va R Civ P 19 and Petition at 23 This argument fails at the outset
because the Residents Petition for a Writ of Mandamus and the Circuit of Court of Wyoming
Countys Order did not in any way claim an interest in Eastern or ERPs real property or affect
Eastern or ERPs real property
Contrary to ERPs assertions this Court held in 0 Daniels v City of Charleston that
When a court proceeding directly affects or detennines the scope of rights or interests in real
property any persons who claim an interest in the real property at issue are indispensable parties
to the proceeding Any order or decree issued in the absence of those parties is null and void
ODaniels v City of CIz areston Syl Pt 2200 W Va 711 712490 SE2d 800 801 (1997)
(emphasis added)
o Daniels does not stand for the proposition that as here potential parties such as Patriot
Eastern or ERP must be joined as indispensable parties where as admitted by ERP personal
property is at issue There is no real property at issue in this case at least insofar as ERP is
9
concerned The only real property at issue in this case belongs to the Residents Accordingly
OBrien does not apply to this case
Every case cited by the o Daniels court -- Bonafede v Grafton Feed amp Storage Co 81
WVa 31394 SE 471 (1917) United Fuel Gas Co v Morley Oil amp Gas Co 101 WVa 73 131
SE 713 (1926) Oneal v Stimson 61 WVa 551 56 SE 889 (1907) -- involved real property
There is no West Virginia authority that makes the same statement about personal property and
there are certainly no West Virginia cases that bar a circuit court from granting a petition for a writ
ofmandamus that requires a state agency to order an action that might cause a corporation to spend
money in order to comply
ERPs broader due process argument also fails This Court holds that The due process of
law guaranteed by the State and Federal Constitutions when applied to procedure in the courts of
the land requires both notice and the right to be heard State ex reI Bd ofEduc of Cnty Of
Putnam v Beane Syl Pt 2 224 W Va 31 680 SE2d 46 (2009) (quoting Simpson v Stanton
SyJ Pt 2 119 WVa 235 193 SE 64 (1937)
As shown infra Eastern and its corporate successor ERP were aware of the Residents
proposed petition for writ of mandamus as early as 2011 and took part from the beginning of the
investigation process with the Residents and the WVDEP To the extent ERP complains that its
corporate predecessor failed to protect its interests by refusing to intervene in the proceedings
below it is bound by the terms of its agreement with Patriot and Eastern A corporate successor
may not avoid a prior liability simply because it subsequently decides it doesnt care for a part of
the deal ERPs due process argument fails because it had (1) notice and (2) had a right to be heard
before the Circuit Court of Wyoming County
10
Accordingly this Court should uphold the Circuit Courts Order because the Residents
Petition for a Writ of Mandamus and the subsequent hearing did not violate Eastern or ERPs due
process rights and did not result in an order that required impennissible restraints on the real
property of a third party
D The Circuit Court of Wyoming County was authorized to enter the Order at issue because it properly had venue
The Circuit Court of Wyoming County unquestionably had venue pursuant to West
Virginia Code sect 14-2-2 That statute states in its entirety
(a) The following proceedings shall be brought and prosecuted only in the circuit court of Kanawha County
(1) Any suit in which the governor any other state officer or a state agency is made a party defendant except as garnishee or suggestee
(2) Any suit attempting to enjoin or otherwise suspend or affect a judgment or decree on behalfof the State obtained in any circuit court
(b) Any proceeding for injunctive or mandamus relief involving the taking title or collection for or prevention of damage to real property may be brought and presented in the circuit court of the county in which the real property affected is situate
This section shall apply only to such proceedings as are not prohibited by the constitutional immunity of the State from suit under section thirty-five article VI of the Constitution of the State
W Va Code sect 14-2-2 (emphasis added) The underlying suit in which the plaintiffs alleged that
mining operations located near their homes contaminated their well water was a proceeding in
injunctive and mandamus relief against the WVDEP and Secretary Huffman that sought relief for
the prevention of damage to real property By its own tern1s the statute expressly provides the
Circuit Court of Wyoming County with venue and jurisdiction over the claim
This Court has ruled squarely on this issue in Shobe v Latimer 162 W Va 779 253 SE2d
54 (1979) In Shobe the plaintiffs sought a declaratory judgment holding that a water contract
11
between the West Virginia Department of Natural Resources and a public seIVice district was
illegalld The lower court granted a motion to dismiss holding that the Circuit Court ofKanawha
County did not have venue to adjudicate a claim based in Grant County West Virginiald This
Court disagreed holding that an action regarding stream rights was an allegation involving the
taking or damage to real property within in the meaning of WVa Code sect 14-2-2(b) and that
venue was proper in the circuit courts of either Kanawha or Grant County ld at 794 63 Such is
the case in the underlying matter the plaintiffs in the underlying Wyoming County action were
free pursuant to West Virginia Code sect 14-2-2 to choose between Kanawha and Wyoming County
Circuit Court Accordingly this Court should turn aside ERPs arguments regarding the authority
of the Circuit Court of Wyoming County
Accordingly this Court uphold the Circuit Courts Order because it had venue to detennine
the merits ofthe Residents Petition for a Writ of Mandamus
E The Circuit Court of Wyoming County properly granted the Residents Petition for a Writ of Mandamus because it found that the WVDEP had erred in carrying out its duties with regard to water replacement and because the primary jurisdiction doctrine much like the exhaustion of administrative remedies doctrine is inapplicable to this case
The Circuit Court of Wyoming County found as a matter oflaw that the WVDEP erred by
failing to order water replacement as alleged in the Residents Petition for a Writ of Mandamus
By granting the Petition the Court held that the WVDEP had a legal duty pursuant to West
Virginia Code sect 22-3-17(a) to order water replacement for the Residents Appendix at 8 The
Circuit Court also agreed with the Residents that West Virginia Code sect 22-3-17(a) mandates that
the WVDEP shall issue a Notice ofViolation in an operator is not in compliance with a provision
ofa state rule or pennit which constitutes a non-discretionary duty W Va Code 22-3-17(a)
12
The Circuit Court also correctly disregarded the primary jurisdiction doctrine This Court
has described the primary jurisdiction doctrine as follows
1 Where an administrative agency and the courts have concurrent jurisdiction of an issue which requires the agencys special expertise and which extends beyond the conventional experience ofjudges the doctrine ofprimary jurisdiction applies In such a case the court should refrain from exercising jurisdiction until after the agency has resolved the issue The courts decision whether to apply the primary jurisdiction doctrine is reviewed on appeal under an abuse of discretion standard
2 In detennining whether to apply the primary jurisdiction doctrine courts should consider factors such as whether the question at issue is within the conventional experience ofjudges whether the question at issue lies peculiarly within the agencys discretion or requires the exercise of agency expertise whether there exists a danger of inconsistent rulings and whether a prior application to the agency has been made
State ex reI Bell AII-1yen Virginia Inc v Ranson Syl Pts 1 and 2 201 W Va 402404497
SE2d 755 757 (1997)
The Circuit Courts action in this case meets the test established in Ranson because the
Residents primary argument for a writ ofmandamus before the Circuit Court was that the agency
had already resolved the issue to the agencys satisfaction In this case though the question at
issue undoubtedly lies peculiarly within the WVDEPs expertise and discretion the Circuit Court
detennined it had sufficient conventional experience to render its own decision on the merits of
the evidence presented to it during the hearing on the Residents petition for a wTit of mandamus
The Circuit Court in its Order based its decision on a consideration of the WVDEPs evidence
and findings but also on those of the testimony of the Residents expert witness and their own
testimony
Ultimately this Court in Ranson elected to not apply the primary jurisdiction doctrine
noting that this concept is essentially the same as exhaustion of administrative remedies
13
Not unlike the exhaustion of remedies doctrine the doctrine of primary jurisdiction is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties citations omitted)
Ranson 201 W Va 410497 SE2d 763lndeed the terms primary jurisdiction and exhaustion
of remedies though separate and distinct legal concepts are often confused and used
interchangeably ld at FN 6 (internal citation omitted)
The primary jurisdiction doctrine and the exhaustion of administrative remedies doctrine
do not apply in this matter because the circuit courts ofWest Virginia are granted explicit statutory
authority by West Virginia Code sect 22-3-24 to decide the claims raised in the Residents Petition
for a Writ of Mandamus as discussed infra To insist as does ERP that this Court should abstain
from deciding an issue that the Legislature has detennined is explicitly within the jurisdiction of
the circuit coqrts is incorrect
ERP argues that a danger of inconsistent rulings and other concerns (Petition at 35)
requires the application of the primary jurisdiction doctrine in this case That argument disregards
the fact that the only dispute arising out of the Residents Petition is currently pending before this
Court There are no other potential inconsistent rulings
Lastly ERP argues that the Circuit Courts Order violates the doctrine of primary
jurisdiction essentially because the Circuit Court did not expressly address the doctrine ofprimary
jurisdiction even though it was not raised in the Circuit Court proceedings There is no
requirement that a circuit court make an express finding on its own accordingly the absence of
such analysis is not reversible error
Accordingly this Court should uphold the Circuit Courts Order regarding the Residents
Petition for a Writ of Mandamus
14
F Patriot and Easterns bankruptcy claims do not bar the State of West Virginias regulatory authority
ERPs arguments regarding the Patriot bankruptcy proceedings are similarly unfounded
Patriots most recent bankruptcy case ended in October 2015 with the entry of the confinnation
order which occurred well before the December 2015 hearing in the Circuit Court of Wyoming
County at issue here That order dissolved the automatic stay in place and replaced it with a new
set of injunctions none of which were applicable at the time of the hearing on the writ of
mandamus in the underlying matter Further confinnation orders have no effect whatsoever on
state law enforcement Eastern was required to continue to comply with state environmental law
Pursuant to 28 USc sect 959(b) a debtor is required to perfonn any and all acts necessary in order
to effectuate compliance with State Law environmental obligations Furthennore 11 USc sect
362(b)(4) expressly exempts the enforcement of any police or regulatory law enforcement action
from the automatic stay See 11 USc sect 362(b)(4)
A ruling such as the one sought by ERP in this matter would throw State enforcement of
all State laws related to debtors operating under an automatic stay into disarray It is absurd to
suggest that the State of West Virginia through the WVDEP is unable to enforce environmental
laws against companies operating within the State pursuant to West Virginia law simply because
a mining company seeks bankruptcy protection Furthennore ERP asks this Court to maintain that
not only are West Virginia executive law enforcement agencies not able to order compliance with
State law against debtors but also that the circuit courts of West Virginia are unable to order
compliance That is not the law
On May 12 2015 Easterns parent company Patriot Coal Corporation and some of its
affiliates including Eastern filed a petition with the United States Bankruptcy Court for the
Eastern District ofVirginia under chapter 11 oftitle 11 ofthe United States Code (US Bankruptcy
15
Court ED Va Case No 15-32450 (KLPraquo During the course of the bankruptcy proceedings
Patriot negotiated the sale of substantially all of its assets to two separate entities Blackhawk
Mining LLC (Blackhawk) and VCLF VCLF proposed to acquire the Kopperston No1 Refuse
Impoundment including the SMCRA permit at issue in this case
In accordance with the Bankruptcy Courts Scheduling Order on September 18 2015
Patriot filed the Fourth Amended Disclosure Statement for the Debtors Fourth Amended Joint
Plan ofReorganization Pursuant to Chapter 11 of the Bankruptcy Code and the Debtors Fourth
Amended Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code
The Fourth Amended Plan attached a copy of the VCLF Asset Purchase Agreement
(APA) The VCLF APA definitively establishes Appellant ERPs liability for the water
replacement order at issue in this case The Fourth Amended Plan itself lists the SMCRA notice
that ultimately led to the Wyoming County Circuit Court Order at issue in this appeal as a piece
of unresolved litigation to be assumed by the purchasers of Patriots assets
Furthem10re Section 203 of the APA Assumed Liabilities states that VCLFIERP shall
assume all Liabilities associated with the Transferred Pem1its as well as liability for regulatory
violations and obligations on or in relation to the Purchased Assets or the Transferred Permits
arising post-Closing
Additionally Schedule 308(a)-(b) to the VCLF APA expressly lists all liabilities
associated with the Purchased Assets and again includes the May 2015 SMCRA notice from
owners ofproperties near the Kopperston mine alleging adverse impacts to groundwater resources
Schedule 313 lists all pending litigation associated with the Purchased Assets and yet again lists
the Kopperston SMCRA notice
16
ERP is a wholly owned subsidiary of VCLF incorporated to fulfill the reclamation
obligations associated with assets VCLF purchased out of the Patriot bankruptcy ERP became
the penn it holder of the pennit associated with this appeal ERPs assumption of the water
replacement liability at issue in this appeal is not just a matter of a contractual obligation between
two private parties rather its liability also arises by operation of the Bankruptcy Courts
Confinnation Order
Accordingly this Court should uphold the Circuit Courts Order in this matter because it
was not barred by bankruptcy law
VII CONCLUSION
In conclusion these Respondents respectfully request this Court enter an Order denying
ERPs Petition for a Writ of Prohibition
WEST VIRGINIA DEPARMENT OF ENVIRONMENTAL PROTECTION and SECRETARY AUSTIN CAPERTON by counsel
West Virginia Department of Environmental Protection Office of Legal Services 601 57th St SE Charleston WV 25304 Phone 304-926-0499 Fax 304-926-0461 Email jasonewandlingwvgov
17
CERTIFICATE OF SERVICE
I Jason Wandling certify that I served this Response in Opposition to Verified Petition for
Writ of Prohibition on 20 March 2017 by depositing a true copy thereof in the United States mail
postage prepaid addressed as follows
John J Meadows (WVSB 9442) Peter J Raupp (WVSB 10546) Devon J Stewart (WVSB 11712) Steptoe amp Johnson PLLC 707 Virginia Street East Chase Tower Seventeenth Floor PO Box 1588 Charleston WV 25326-1588 Phone 304-353-8154 Fax 304-353-8180 Email J ohnM eadowssteptoe-johnsoncom
PeterRauppsteptoe-johnsoncom DevonStewartsteptoe-johnsoncom
Honorable Warren D McGraw Judge PO Box 581 100 Main and Bank Streets Pineville WV 24874 Phone 304-732-7047 Fax 304-732-7047
Kevin W Thompson (WVSB 5062) David R Barney Jr (WVSB 7958) Thompson Barney 2030 Kanawha Blvd E Charleston WV 25311 Phone 304-343-4401 Fax 304-343-4405 Email kthompsonthompsonbarneycom
dbameythompsonbameycom
concerned The only real property at issue in this case belongs to the Residents Accordingly
OBrien does not apply to this case
Every case cited by the o Daniels court -- Bonafede v Grafton Feed amp Storage Co 81
WVa 31394 SE 471 (1917) United Fuel Gas Co v Morley Oil amp Gas Co 101 WVa 73 131
SE 713 (1926) Oneal v Stimson 61 WVa 551 56 SE 889 (1907) -- involved real property
There is no West Virginia authority that makes the same statement about personal property and
there are certainly no West Virginia cases that bar a circuit court from granting a petition for a writ
ofmandamus that requires a state agency to order an action that might cause a corporation to spend
money in order to comply
ERPs broader due process argument also fails This Court holds that The due process of
law guaranteed by the State and Federal Constitutions when applied to procedure in the courts of
the land requires both notice and the right to be heard State ex reI Bd ofEduc of Cnty Of
Putnam v Beane Syl Pt 2 224 W Va 31 680 SE2d 46 (2009) (quoting Simpson v Stanton
SyJ Pt 2 119 WVa 235 193 SE 64 (1937)
As shown infra Eastern and its corporate successor ERP were aware of the Residents
proposed petition for writ of mandamus as early as 2011 and took part from the beginning of the
investigation process with the Residents and the WVDEP To the extent ERP complains that its
corporate predecessor failed to protect its interests by refusing to intervene in the proceedings
below it is bound by the terms of its agreement with Patriot and Eastern A corporate successor
may not avoid a prior liability simply because it subsequently decides it doesnt care for a part of
the deal ERPs due process argument fails because it had (1) notice and (2) had a right to be heard
before the Circuit Court of Wyoming County
10
Accordingly this Court should uphold the Circuit Courts Order because the Residents
Petition for a Writ of Mandamus and the subsequent hearing did not violate Eastern or ERPs due
process rights and did not result in an order that required impennissible restraints on the real
property of a third party
D The Circuit Court of Wyoming County was authorized to enter the Order at issue because it properly had venue
The Circuit Court of Wyoming County unquestionably had venue pursuant to West
Virginia Code sect 14-2-2 That statute states in its entirety
(a) The following proceedings shall be brought and prosecuted only in the circuit court of Kanawha County
(1) Any suit in which the governor any other state officer or a state agency is made a party defendant except as garnishee or suggestee
(2) Any suit attempting to enjoin or otherwise suspend or affect a judgment or decree on behalfof the State obtained in any circuit court
(b) Any proceeding for injunctive or mandamus relief involving the taking title or collection for or prevention of damage to real property may be brought and presented in the circuit court of the county in which the real property affected is situate
This section shall apply only to such proceedings as are not prohibited by the constitutional immunity of the State from suit under section thirty-five article VI of the Constitution of the State
W Va Code sect 14-2-2 (emphasis added) The underlying suit in which the plaintiffs alleged that
mining operations located near their homes contaminated their well water was a proceeding in
injunctive and mandamus relief against the WVDEP and Secretary Huffman that sought relief for
the prevention of damage to real property By its own tern1s the statute expressly provides the
Circuit Court of Wyoming County with venue and jurisdiction over the claim
This Court has ruled squarely on this issue in Shobe v Latimer 162 W Va 779 253 SE2d
54 (1979) In Shobe the plaintiffs sought a declaratory judgment holding that a water contract
11
between the West Virginia Department of Natural Resources and a public seIVice district was
illegalld The lower court granted a motion to dismiss holding that the Circuit Court ofKanawha
County did not have venue to adjudicate a claim based in Grant County West Virginiald This
Court disagreed holding that an action regarding stream rights was an allegation involving the
taking or damage to real property within in the meaning of WVa Code sect 14-2-2(b) and that
venue was proper in the circuit courts of either Kanawha or Grant County ld at 794 63 Such is
the case in the underlying matter the plaintiffs in the underlying Wyoming County action were
free pursuant to West Virginia Code sect 14-2-2 to choose between Kanawha and Wyoming County
Circuit Court Accordingly this Court should turn aside ERPs arguments regarding the authority
of the Circuit Court of Wyoming County
Accordingly this Court uphold the Circuit Courts Order because it had venue to detennine
the merits ofthe Residents Petition for a Writ of Mandamus
E The Circuit Court of Wyoming County properly granted the Residents Petition for a Writ of Mandamus because it found that the WVDEP had erred in carrying out its duties with regard to water replacement and because the primary jurisdiction doctrine much like the exhaustion of administrative remedies doctrine is inapplicable to this case
The Circuit Court of Wyoming County found as a matter oflaw that the WVDEP erred by
failing to order water replacement as alleged in the Residents Petition for a Writ of Mandamus
By granting the Petition the Court held that the WVDEP had a legal duty pursuant to West
Virginia Code sect 22-3-17(a) to order water replacement for the Residents Appendix at 8 The
Circuit Court also agreed with the Residents that West Virginia Code sect 22-3-17(a) mandates that
the WVDEP shall issue a Notice ofViolation in an operator is not in compliance with a provision
ofa state rule or pennit which constitutes a non-discretionary duty W Va Code 22-3-17(a)
12
The Circuit Court also correctly disregarded the primary jurisdiction doctrine This Court
has described the primary jurisdiction doctrine as follows
1 Where an administrative agency and the courts have concurrent jurisdiction of an issue which requires the agencys special expertise and which extends beyond the conventional experience ofjudges the doctrine ofprimary jurisdiction applies In such a case the court should refrain from exercising jurisdiction until after the agency has resolved the issue The courts decision whether to apply the primary jurisdiction doctrine is reviewed on appeal under an abuse of discretion standard
2 In detennining whether to apply the primary jurisdiction doctrine courts should consider factors such as whether the question at issue is within the conventional experience ofjudges whether the question at issue lies peculiarly within the agencys discretion or requires the exercise of agency expertise whether there exists a danger of inconsistent rulings and whether a prior application to the agency has been made
State ex reI Bell AII-1yen Virginia Inc v Ranson Syl Pts 1 and 2 201 W Va 402404497
SE2d 755 757 (1997)
The Circuit Courts action in this case meets the test established in Ranson because the
Residents primary argument for a writ ofmandamus before the Circuit Court was that the agency
had already resolved the issue to the agencys satisfaction In this case though the question at
issue undoubtedly lies peculiarly within the WVDEPs expertise and discretion the Circuit Court
detennined it had sufficient conventional experience to render its own decision on the merits of
the evidence presented to it during the hearing on the Residents petition for a wTit of mandamus
The Circuit Court in its Order based its decision on a consideration of the WVDEPs evidence
and findings but also on those of the testimony of the Residents expert witness and their own
testimony
Ultimately this Court in Ranson elected to not apply the primary jurisdiction doctrine
noting that this concept is essentially the same as exhaustion of administrative remedies
13
Not unlike the exhaustion of remedies doctrine the doctrine of primary jurisdiction is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties citations omitted)
Ranson 201 W Va 410497 SE2d 763lndeed the terms primary jurisdiction and exhaustion
of remedies though separate and distinct legal concepts are often confused and used
interchangeably ld at FN 6 (internal citation omitted)
The primary jurisdiction doctrine and the exhaustion of administrative remedies doctrine
do not apply in this matter because the circuit courts ofWest Virginia are granted explicit statutory
authority by West Virginia Code sect 22-3-24 to decide the claims raised in the Residents Petition
for a Writ of Mandamus as discussed infra To insist as does ERP that this Court should abstain
from deciding an issue that the Legislature has detennined is explicitly within the jurisdiction of
the circuit coqrts is incorrect
ERP argues that a danger of inconsistent rulings and other concerns (Petition at 35)
requires the application of the primary jurisdiction doctrine in this case That argument disregards
the fact that the only dispute arising out of the Residents Petition is currently pending before this
Court There are no other potential inconsistent rulings
Lastly ERP argues that the Circuit Courts Order violates the doctrine of primary
jurisdiction essentially because the Circuit Court did not expressly address the doctrine ofprimary
jurisdiction even though it was not raised in the Circuit Court proceedings There is no
requirement that a circuit court make an express finding on its own accordingly the absence of
such analysis is not reversible error
Accordingly this Court should uphold the Circuit Courts Order regarding the Residents
Petition for a Writ of Mandamus
14
F Patriot and Easterns bankruptcy claims do not bar the State of West Virginias regulatory authority
ERPs arguments regarding the Patriot bankruptcy proceedings are similarly unfounded
Patriots most recent bankruptcy case ended in October 2015 with the entry of the confinnation
order which occurred well before the December 2015 hearing in the Circuit Court of Wyoming
County at issue here That order dissolved the automatic stay in place and replaced it with a new
set of injunctions none of which were applicable at the time of the hearing on the writ of
mandamus in the underlying matter Further confinnation orders have no effect whatsoever on
state law enforcement Eastern was required to continue to comply with state environmental law
Pursuant to 28 USc sect 959(b) a debtor is required to perfonn any and all acts necessary in order
to effectuate compliance with State Law environmental obligations Furthennore 11 USc sect
362(b)(4) expressly exempts the enforcement of any police or regulatory law enforcement action
from the automatic stay See 11 USc sect 362(b)(4)
A ruling such as the one sought by ERP in this matter would throw State enforcement of
all State laws related to debtors operating under an automatic stay into disarray It is absurd to
suggest that the State of West Virginia through the WVDEP is unable to enforce environmental
laws against companies operating within the State pursuant to West Virginia law simply because
a mining company seeks bankruptcy protection Furthennore ERP asks this Court to maintain that
not only are West Virginia executive law enforcement agencies not able to order compliance with
State law against debtors but also that the circuit courts of West Virginia are unable to order
compliance That is not the law
On May 12 2015 Easterns parent company Patriot Coal Corporation and some of its
affiliates including Eastern filed a petition with the United States Bankruptcy Court for the
Eastern District ofVirginia under chapter 11 oftitle 11 ofthe United States Code (US Bankruptcy
15
Court ED Va Case No 15-32450 (KLPraquo During the course of the bankruptcy proceedings
Patriot negotiated the sale of substantially all of its assets to two separate entities Blackhawk
Mining LLC (Blackhawk) and VCLF VCLF proposed to acquire the Kopperston No1 Refuse
Impoundment including the SMCRA permit at issue in this case
In accordance with the Bankruptcy Courts Scheduling Order on September 18 2015
Patriot filed the Fourth Amended Disclosure Statement for the Debtors Fourth Amended Joint
Plan ofReorganization Pursuant to Chapter 11 of the Bankruptcy Code and the Debtors Fourth
Amended Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code
The Fourth Amended Plan attached a copy of the VCLF Asset Purchase Agreement
(APA) The VCLF APA definitively establishes Appellant ERPs liability for the water
replacement order at issue in this case The Fourth Amended Plan itself lists the SMCRA notice
that ultimately led to the Wyoming County Circuit Court Order at issue in this appeal as a piece
of unresolved litigation to be assumed by the purchasers of Patriots assets
Furthem10re Section 203 of the APA Assumed Liabilities states that VCLFIERP shall
assume all Liabilities associated with the Transferred Pem1its as well as liability for regulatory
violations and obligations on or in relation to the Purchased Assets or the Transferred Permits
arising post-Closing
Additionally Schedule 308(a)-(b) to the VCLF APA expressly lists all liabilities
associated with the Purchased Assets and again includes the May 2015 SMCRA notice from
owners ofproperties near the Kopperston mine alleging adverse impacts to groundwater resources
Schedule 313 lists all pending litigation associated with the Purchased Assets and yet again lists
the Kopperston SMCRA notice
16
ERP is a wholly owned subsidiary of VCLF incorporated to fulfill the reclamation
obligations associated with assets VCLF purchased out of the Patriot bankruptcy ERP became
the penn it holder of the pennit associated with this appeal ERPs assumption of the water
replacement liability at issue in this appeal is not just a matter of a contractual obligation between
two private parties rather its liability also arises by operation of the Bankruptcy Courts
Confinnation Order
Accordingly this Court should uphold the Circuit Courts Order in this matter because it
was not barred by bankruptcy law
VII CONCLUSION
In conclusion these Respondents respectfully request this Court enter an Order denying
ERPs Petition for a Writ of Prohibition
WEST VIRGINIA DEPARMENT OF ENVIRONMENTAL PROTECTION and SECRETARY AUSTIN CAPERTON by counsel
West Virginia Department of Environmental Protection Office of Legal Services 601 57th St SE Charleston WV 25304 Phone 304-926-0499 Fax 304-926-0461 Email jasonewandlingwvgov
17
CERTIFICATE OF SERVICE
I Jason Wandling certify that I served this Response in Opposition to Verified Petition for
Writ of Prohibition on 20 March 2017 by depositing a true copy thereof in the United States mail
postage prepaid addressed as follows
John J Meadows (WVSB 9442) Peter J Raupp (WVSB 10546) Devon J Stewart (WVSB 11712) Steptoe amp Johnson PLLC 707 Virginia Street East Chase Tower Seventeenth Floor PO Box 1588 Charleston WV 25326-1588 Phone 304-353-8154 Fax 304-353-8180 Email J ohnM eadowssteptoe-johnsoncom
PeterRauppsteptoe-johnsoncom DevonStewartsteptoe-johnsoncom
Honorable Warren D McGraw Judge PO Box 581 100 Main and Bank Streets Pineville WV 24874 Phone 304-732-7047 Fax 304-732-7047
Kevin W Thompson (WVSB 5062) David R Barney Jr (WVSB 7958) Thompson Barney 2030 Kanawha Blvd E Charleston WV 25311 Phone 304-343-4401 Fax 304-343-4405 Email kthompsonthompsonbarneycom
dbameythompsonbameycom
Accordingly this Court should uphold the Circuit Courts Order because the Residents
Petition for a Writ of Mandamus and the subsequent hearing did not violate Eastern or ERPs due
process rights and did not result in an order that required impennissible restraints on the real
property of a third party
D The Circuit Court of Wyoming County was authorized to enter the Order at issue because it properly had venue
The Circuit Court of Wyoming County unquestionably had venue pursuant to West
Virginia Code sect 14-2-2 That statute states in its entirety
(a) The following proceedings shall be brought and prosecuted only in the circuit court of Kanawha County
(1) Any suit in which the governor any other state officer or a state agency is made a party defendant except as garnishee or suggestee
(2) Any suit attempting to enjoin or otherwise suspend or affect a judgment or decree on behalfof the State obtained in any circuit court
(b) Any proceeding for injunctive or mandamus relief involving the taking title or collection for or prevention of damage to real property may be brought and presented in the circuit court of the county in which the real property affected is situate
This section shall apply only to such proceedings as are not prohibited by the constitutional immunity of the State from suit under section thirty-five article VI of the Constitution of the State
W Va Code sect 14-2-2 (emphasis added) The underlying suit in which the plaintiffs alleged that
mining operations located near their homes contaminated their well water was a proceeding in
injunctive and mandamus relief against the WVDEP and Secretary Huffman that sought relief for
the prevention of damage to real property By its own tern1s the statute expressly provides the
Circuit Court of Wyoming County with venue and jurisdiction over the claim
This Court has ruled squarely on this issue in Shobe v Latimer 162 W Va 779 253 SE2d
54 (1979) In Shobe the plaintiffs sought a declaratory judgment holding that a water contract
11
between the West Virginia Department of Natural Resources and a public seIVice district was
illegalld The lower court granted a motion to dismiss holding that the Circuit Court ofKanawha
County did not have venue to adjudicate a claim based in Grant County West Virginiald This
Court disagreed holding that an action regarding stream rights was an allegation involving the
taking or damage to real property within in the meaning of WVa Code sect 14-2-2(b) and that
venue was proper in the circuit courts of either Kanawha or Grant County ld at 794 63 Such is
the case in the underlying matter the plaintiffs in the underlying Wyoming County action were
free pursuant to West Virginia Code sect 14-2-2 to choose between Kanawha and Wyoming County
Circuit Court Accordingly this Court should turn aside ERPs arguments regarding the authority
of the Circuit Court of Wyoming County
Accordingly this Court uphold the Circuit Courts Order because it had venue to detennine
the merits ofthe Residents Petition for a Writ of Mandamus
E The Circuit Court of Wyoming County properly granted the Residents Petition for a Writ of Mandamus because it found that the WVDEP had erred in carrying out its duties with regard to water replacement and because the primary jurisdiction doctrine much like the exhaustion of administrative remedies doctrine is inapplicable to this case
The Circuit Court of Wyoming County found as a matter oflaw that the WVDEP erred by
failing to order water replacement as alleged in the Residents Petition for a Writ of Mandamus
By granting the Petition the Court held that the WVDEP had a legal duty pursuant to West
Virginia Code sect 22-3-17(a) to order water replacement for the Residents Appendix at 8 The
Circuit Court also agreed with the Residents that West Virginia Code sect 22-3-17(a) mandates that
the WVDEP shall issue a Notice ofViolation in an operator is not in compliance with a provision
ofa state rule or pennit which constitutes a non-discretionary duty W Va Code 22-3-17(a)
12
The Circuit Court also correctly disregarded the primary jurisdiction doctrine This Court
has described the primary jurisdiction doctrine as follows
1 Where an administrative agency and the courts have concurrent jurisdiction of an issue which requires the agencys special expertise and which extends beyond the conventional experience ofjudges the doctrine ofprimary jurisdiction applies In such a case the court should refrain from exercising jurisdiction until after the agency has resolved the issue The courts decision whether to apply the primary jurisdiction doctrine is reviewed on appeal under an abuse of discretion standard
2 In detennining whether to apply the primary jurisdiction doctrine courts should consider factors such as whether the question at issue is within the conventional experience ofjudges whether the question at issue lies peculiarly within the agencys discretion or requires the exercise of agency expertise whether there exists a danger of inconsistent rulings and whether a prior application to the agency has been made
State ex reI Bell AII-1yen Virginia Inc v Ranson Syl Pts 1 and 2 201 W Va 402404497
SE2d 755 757 (1997)
The Circuit Courts action in this case meets the test established in Ranson because the
Residents primary argument for a writ ofmandamus before the Circuit Court was that the agency
had already resolved the issue to the agencys satisfaction In this case though the question at
issue undoubtedly lies peculiarly within the WVDEPs expertise and discretion the Circuit Court
detennined it had sufficient conventional experience to render its own decision on the merits of
the evidence presented to it during the hearing on the Residents petition for a wTit of mandamus
The Circuit Court in its Order based its decision on a consideration of the WVDEPs evidence
and findings but also on those of the testimony of the Residents expert witness and their own
testimony
Ultimately this Court in Ranson elected to not apply the primary jurisdiction doctrine
noting that this concept is essentially the same as exhaustion of administrative remedies
13
Not unlike the exhaustion of remedies doctrine the doctrine of primary jurisdiction is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties citations omitted)
Ranson 201 W Va 410497 SE2d 763lndeed the terms primary jurisdiction and exhaustion
of remedies though separate and distinct legal concepts are often confused and used
interchangeably ld at FN 6 (internal citation omitted)
The primary jurisdiction doctrine and the exhaustion of administrative remedies doctrine
do not apply in this matter because the circuit courts ofWest Virginia are granted explicit statutory
authority by West Virginia Code sect 22-3-24 to decide the claims raised in the Residents Petition
for a Writ of Mandamus as discussed infra To insist as does ERP that this Court should abstain
from deciding an issue that the Legislature has detennined is explicitly within the jurisdiction of
the circuit coqrts is incorrect
ERP argues that a danger of inconsistent rulings and other concerns (Petition at 35)
requires the application of the primary jurisdiction doctrine in this case That argument disregards
the fact that the only dispute arising out of the Residents Petition is currently pending before this
Court There are no other potential inconsistent rulings
Lastly ERP argues that the Circuit Courts Order violates the doctrine of primary
jurisdiction essentially because the Circuit Court did not expressly address the doctrine ofprimary
jurisdiction even though it was not raised in the Circuit Court proceedings There is no
requirement that a circuit court make an express finding on its own accordingly the absence of
such analysis is not reversible error
Accordingly this Court should uphold the Circuit Courts Order regarding the Residents
Petition for a Writ of Mandamus
14
F Patriot and Easterns bankruptcy claims do not bar the State of West Virginias regulatory authority
ERPs arguments regarding the Patriot bankruptcy proceedings are similarly unfounded
Patriots most recent bankruptcy case ended in October 2015 with the entry of the confinnation
order which occurred well before the December 2015 hearing in the Circuit Court of Wyoming
County at issue here That order dissolved the automatic stay in place and replaced it with a new
set of injunctions none of which were applicable at the time of the hearing on the writ of
mandamus in the underlying matter Further confinnation orders have no effect whatsoever on
state law enforcement Eastern was required to continue to comply with state environmental law
Pursuant to 28 USc sect 959(b) a debtor is required to perfonn any and all acts necessary in order
to effectuate compliance with State Law environmental obligations Furthennore 11 USc sect
362(b)(4) expressly exempts the enforcement of any police or regulatory law enforcement action
from the automatic stay See 11 USc sect 362(b)(4)
A ruling such as the one sought by ERP in this matter would throw State enforcement of
all State laws related to debtors operating under an automatic stay into disarray It is absurd to
suggest that the State of West Virginia through the WVDEP is unable to enforce environmental
laws against companies operating within the State pursuant to West Virginia law simply because
a mining company seeks bankruptcy protection Furthennore ERP asks this Court to maintain that
not only are West Virginia executive law enforcement agencies not able to order compliance with
State law against debtors but also that the circuit courts of West Virginia are unable to order
compliance That is not the law
On May 12 2015 Easterns parent company Patriot Coal Corporation and some of its
affiliates including Eastern filed a petition with the United States Bankruptcy Court for the
Eastern District ofVirginia under chapter 11 oftitle 11 ofthe United States Code (US Bankruptcy
15
Court ED Va Case No 15-32450 (KLPraquo During the course of the bankruptcy proceedings
Patriot negotiated the sale of substantially all of its assets to two separate entities Blackhawk
Mining LLC (Blackhawk) and VCLF VCLF proposed to acquire the Kopperston No1 Refuse
Impoundment including the SMCRA permit at issue in this case
In accordance with the Bankruptcy Courts Scheduling Order on September 18 2015
Patriot filed the Fourth Amended Disclosure Statement for the Debtors Fourth Amended Joint
Plan ofReorganization Pursuant to Chapter 11 of the Bankruptcy Code and the Debtors Fourth
Amended Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code
The Fourth Amended Plan attached a copy of the VCLF Asset Purchase Agreement
(APA) The VCLF APA definitively establishes Appellant ERPs liability for the water
replacement order at issue in this case The Fourth Amended Plan itself lists the SMCRA notice
that ultimately led to the Wyoming County Circuit Court Order at issue in this appeal as a piece
of unresolved litigation to be assumed by the purchasers of Patriots assets
Furthem10re Section 203 of the APA Assumed Liabilities states that VCLFIERP shall
assume all Liabilities associated with the Transferred Pem1its as well as liability for regulatory
violations and obligations on or in relation to the Purchased Assets or the Transferred Permits
arising post-Closing
Additionally Schedule 308(a)-(b) to the VCLF APA expressly lists all liabilities
associated with the Purchased Assets and again includes the May 2015 SMCRA notice from
owners ofproperties near the Kopperston mine alleging adverse impacts to groundwater resources
Schedule 313 lists all pending litigation associated with the Purchased Assets and yet again lists
the Kopperston SMCRA notice
16
ERP is a wholly owned subsidiary of VCLF incorporated to fulfill the reclamation
obligations associated with assets VCLF purchased out of the Patriot bankruptcy ERP became
the penn it holder of the pennit associated with this appeal ERPs assumption of the water
replacement liability at issue in this appeal is not just a matter of a contractual obligation between
two private parties rather its liability also arises by operation of the Bankruptcy Courts
Confinnation Order
Accordingly this Court should uphold the Circuit Courts Order in this matter because it
was not barred by bankruptcy law
VII CONCLUSION
In conclusion these Respondents respectfully request this Court enter an Order denying
ERPs Petition for a Writ of Prohibition
WEST VIRGINIA DEPARMENT OF ENVIRONMENTAL PROTECTION and SECRETARY AUSTIN CAPERTON by counsel
West Virginia Department of Environmental Protection Office of Legal Services 601 57th St SE Charleston WV 25304 Phone 304-926-0499 Fax 304-926-0461 Email jasonewandlingwvgov
17
CERTIFICATE OF SERVICE
I Jason Wandling certify that I served this Response in Opposition to Verified Petition for
Writ of Prohibition on 20 March 2017 by depositing a true copy thereof in the United States mail
postage prepaid addressed as follows
John J Meadows (WVSB 9442) Peter J Raupp (WVSB 10546) Devon J Stewart (WVSB 11712) Steptoe amp Johnson PLLC 707 Virginia Street East Chase Tower Seventeenth Floor PO Box 1588 Charleston WV 25326-1588 Phone 304-353-8154 Fax 304-353-8180 Email J ohnM eadowssteptoe-johnsoncom
PeterRauppsteptoe-johnsoncom DevonStewartsteptoe-johnsoncom
Honorable Warren D McGraw Judge PO Box 581 100 Main and Bank Streets Pineville WV 24874 Phone 304-732-7047 Fax 304-732-7047
Kevin W Thompson (WVSB 5062) David R Barney Jr (WVSB 7958) Thompson Barney 2030 Kanawha Blvd E Charleston WV 25311 Phone 304-343-4401 Fax 304-343-4405 Email kthompsonthompsonbarneycom
dbameythompsonbameycom
between the West Virginia Department of Natural Resources and a public seIVice district was
illegalld The lower court granted a motion to dismiss holding that the Circuit Court ofKanawha
County did not have venue to adjudicate a claim based in Grant County West Virginiald This
Court disagreed holding that an action regarding stream rights was an allegation involving the
taking or damage to real property within in the meaning of WVa Code sect 14-2-2(b) and that
venue was proper in the circuit courts of either Kanawha or Grant County ld at 794 63 Such is
the case in the underlying matter the plaintiffs in the underlying Wyoming County action were
free pursuant to West Virginia Code sect 14-2-2 to choose between Kanawha and Wyoming County
Circuit Court Accordingly this Court should turn aside ERPs arguments regarding the authority
of the Circuit Court of Wyoming County
Accordingly this Court uphold the Circuit Courts Order because it had venue to detennine
the merits ofthe Residents Petition for a Writ of Mandamus
E The Circuit Court of Wyoming County properly granted the Residents Petition for a Writ of Mandamus because it found that the WVDEP had erred in carrying out its duties with regard to water replacement and because the primary jurisdiction doctrine much like the exhaustion of administrative remedies doctrine is inapplicable to this case
The Circuit Court of Wyoming County found as a matter oflaw that the WVDEP erred by
failing to order water replacement as alleged in the Residents Petition for a Writ of Mandamus
By granting the Petition the Court held that the WVDEP had a legal duty pursuant to West
Virginia Code sect 22-3-17(a) to order water replacement for the Residents Appendix at 8 The
Circuit Court also agreed with the Residents that West Virginia Code sect 22-3-17(a) mandates that
the WVDEP shall issue a Notice ofViolation in an operator is not in compliance with a provision
ofa state rule or pennit which constitutes a non-discretionary duty W Va Code 22-3-17(a)
12
The Circuit Court also correctly disregarded the primary jurisdiction doctrine This Court
has described the primary jurisdiction doctrine as follows
1 Where an administrative agency and the courts have concurrent jurisdiction of an issue which requires the agencys special expertise and which extends beyond the conventional experience ofjudges the doctrine ofprimary jurisdiction applies In such a case the court should refrain from exercising jurisdiction until after the agency has resolved the issue The courts decision whether to apply the primary jurisdiction doctrine is reviewed on appeal under an abuse of discretion standard
2 In detennining whether to apply the primary jurisdiction doctrine courts should consider factors such as whether the question at issue is within the conventional experience ofjudges whether the question at issue lies peculiarly within the agencys discretion or requires the exercise of agency expertise whether there exists a danger of inconsistent rulings and whether a prior application to the agency has been made
State ex reI Bell AII-1yen Virginia Inc v Ranson Syl Pts 1 and 2 201 W Va 402404497
SE2d 755 757 (1997)
The Circuit Courts action in this case meets the test established in Ranson because the
Residents primary argument for a writ ofmandamus before the Circuit Court was that the agency
had already resolved the issue to the agencys satisfaction In this case though the question at
issue undoubtedly lies peculiarly within the WVDEPs expertise and discretion the Circuit Court
detennined it had sufficient conventional experience to render its own decision on the merits of
the evidence presented to it during the hearing on the Residents petition for a wTit of mandamus
The Circuit Court in its Order based its decision on a consideration of the WVDEPs evidence
and findings but also on those of the testimony of the Residents expert witness and their own
testimony
Ultimately this Court in Ranson elected to not apply the primary jurisdiction doctrine
noting that this concept is essentially the same as exhaustion of administrative remedies
13
Not unlike the exhaustion of remedies doctrine the doctrine of primary jurisdiction is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties citations omitted)
Ranson 201 W Va 410497 SE2d 763lndeed the terms primary jurisdiction and exhaustion
of remedies though separate and distinct legal concepts are often confused and used
interchangeably ld at FN 6 (internal citation omitted)
The primary jurisdiction doctrine and the exhaustion of administrative remedies doctrine
do not apply in this matter because the circuit courts ofWest Virginia are granted explicit statutory
authority by West Virginia Code sect 22-3-24 to decide the claims raised in the Residents Petition
for a Writ of Mandamus as discussed infra To insist as does ERP that this Court should abstain
from deciding an issue that the Legislature has detennined is explicitly within the jurisdiction of
the circuit coqrts is incorrect
ERP argues that a danger of inconsistent rulings and other concerns (Petition at 35)
requires the application of the primary jurisdiction doctrine in this case That argument disregards
the fact that the only dispute arising out of the Residents Petition is currently pending before this
Court There are no other potential inconsistent rulings
Lastly ERP argues that the Circuit Courts Order violates the doctrine of primary
jurisdiction essentially because the Circuit Court did not expressly address the doctrine ofprimary
jurisdiction even though it was not raised in the Circuit Court proceedings There is no
requirement that a circuit court make an express finding on its own accordingly the absence of
such analysis is not reversible error
Accordingly this Court should uphold the Circuit Courts Order regarding the Residents
Petition for a Writ of Mandamus
14
F Patriot and Easterns bankruptcy claims do not bar the State of West Virginias regulatory authority
ERPs arguments regarding the Patriot bankruptcy proceedings are similarly unfounded
Patriots most recent bankruptcy case ended in October 2015 with the entry of the confinnation
order which occurred well before the December 2015 hearing in the Circuit Court of Wyoming
County at issue here That order dissolved the automatic stay in place and replaced it with a new
set of injunctions none of which were applicable at the time of the hearing on the writ of
mandamus in the underlying matter Further confinnation orders have no effect whatsoever on
state law enforcement Eastern was required to continue to comply with state environmental law
Pursuant to 28 USc sect 959(b) a debtor is required to perfonn any and all acts necessary in order
to effectuate compliance with State Law environmental obligations Furthennore 11 USc sect
362(b)(4) expressly exempts the enforcement of any police or regulatory law enforcement action
from the automatic stay See 11 USc sect 362(b)(4)
A ruling such as the one sought by ERP in this matter would throw State enforcement of
all State laws related to debtors operating under an automatic stay into disarray It is absurd to
suggest that the State of West Virginia through the WVDEP is unable to enforce environmental
laws against companies operating within the State pursuant to West Virginia law simply because
a mining company seeks bankruptcy protection Furthennore ERP asks this Court to maintain that
not only are West Virginia executive law enforcement agencies not able to order compliance with
State law against debtors but also that the circuit courts of West Virginia are unable to order
compliance That is not the law
On May 12 2015 Easterns parent company Patriot Coal Corporation and some of its
affiliates including Eastern filed a petition with the United States Bankruptcy Court for the
Eastern District ofVirginia under chapter 11 oftitle 11 ofthe United States Code (US Bankruptcy
15
Court ED Va Case No 15-32450 (KLPraquo During the course of the bankruptcy proceedings
Patriot negotiated the sale of substantially all of its assets to two separate entities Blackhawk
Mining LLC (Blackhawk) and VCLF VCLF proposed to acquire the Kopperston No1 Refuse
Impoundment including the SMCRA permit at issue in this case
In accordance with the Bankruptcy Courts Scheduling Order on September 18 2015
Patriot filed the Fourth Amended Disclosure Statement for the Debtors Fourth Amended Joint
Plan ofReorganization Pursuant to Chapter 11 of the Bankruptcy Code and the Debtors Fourth
Amended Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code
The Fourth Amended Plan attached a copy of the VCLF Asset Purchase Agreement
(APA) The VCLF APA definitively establishes Appellant ERPs liability for the water
replacement order at issue in this case The Fourth Amended Plan itself lists the SMCRA notice
that ultimately led to the Wyoming County Circuit Court Order at issue in this appeal as a piece
of unresolved litigation to be assumed by the purchasers of Patriots assets
Furthem10re Section 203 of the APA Assumed Liabilities states that VCLFIERP shall
assume all Liabilities associated with the Transferred Pem1its as well as liability for regulatory
violations and obligations on or in relation to the Purchased Assets or the Transferred Permits
arising post-Closing
Additionally Schedule 308(a)-(b) to the VCLF APA expressly lists all liabilities
associated with the Purchased Assets and again includes the May 2015 SMCRA notice from
owners ofproperties near the Kopperston mine alleging adverse impacts to groundwater resources
Schedule 313 lists all pending litigation associated with the Purchased Assets and yet again lists
the Kopperston SMCRA notice
16
ERP is a wholly owned subsidiary of VCLF incorporated to fulfill the reclamation
obligations associated with assets VCLF purchased out of the Patriot bankruptcy ERP became
the penn it holder of the pennit associated with this appeal ERPs assumption of the water
replacement liability at issue in this appeal is not just a matter of a contractual obligation between
two private parties rather its liability also arises by operation of the Bankruptcy Courts
Confinnation Order
Accordingly this Court should uphold the Circuit Courts Order in this matter because it
was not barred by bankruptcy law
VII CONCLUSION
In conclusion these Respondents respectfully request this Court enter an Order denying
ERPs Petition for a Writ of Prohibition
WEST VIRGINIA DEPARMENT OF ENVIRONMENTAL PROTECTION and SECRETARY AUSTIN CAPERTON by counsel
West Virginia Department of Environmental Protection Office of Legal Services 601 57th St SE Charleston WV 25304 Phone 304-926-0499 Fax 304-926-0461 Email jasonewandlingwvgov
17
CERTIFICATE OF SERVICE
I Jason Wandling certify that I served this Response in Opposition to Verified Petition for
Writ of Prohibition on 20 March 2017 by depositing a true copy thereof in the United States mail
postage prepaid addressed as follows
John J Meadows (WVSB 9442) Peter J Raupp (WVSB 10546) Devon J Stewart (WVSB 11712) Steptoe amp Johnson PLLC 707 Virginia Street East Chase Tower Seventeenth Floor PO Box 1588 Charleston WV 25326-1588 Phone 304-353-8154 Fax 304-353-8180 Email J ohnM eadowssteptoe-johnsoncom
PeterRauppsteptoe-johnsoncom DevonStewartsteptoe-johnsoncom
Honorable Warren D McGraw Judge PO Box 581 100 Main and Bank Streets Pineville WV 24874 Phone 304-732-7047 Fax 304-732-7047
Kevin W Thompson (WVSB 5062) David R Barney Jr (WVSB 7958) Thompson Barney 2030 Kanawha Blvd E Charleston WV 25311 Phone 304-343-4401 Fax 304-343-4405 Email kthompsonthompsonbarneycom
dbameythompsonbameycom
The Circuit Court also correctly disregarded the primary jurisdiction doctrine This Court
has described the primary jurisdiction doctrine as follows
1 Where an administrative agency and the courts have concurrent jurisdiction of an issue which requires the agencys special expertise and which extends beyond the conventional experience ofjudges the doctrine ofprimary jurisdiction applies In such a case the court should refrain from exercising jurisdiction until after the agency has resolved the issue The courts decision whether to apply the primary jurisdiction doctrine is reviewed on appeal under an abuse of discretion standard
2 In detennining whether to apply the primary jurisdiction doctrine courts should consider factors such as whether the question at issue is within the conventional experience ofjudges whether the question at issue lies peculiarly within the agencys discretion or requires the exercise of agency expertise whether there exists a danger of inconsistent rulings and whether a prior application to the agency has been made
State ex reI Bell AII-1yen Virginia Inc v Ranson Syl Pts 1 and 2 201 W Va 402404497
SE2d 755 757 (1997)
The Circuit Courts action in this case meets the test established in Ranson because the
Residents primary argument for a writ ofmandamus before the Circuit Court was that the agency
had already resolved the issue to the agencys satisfaction In this case though the question at
issue undoubtedly lies peculiarly within the WVDEPs expertise and discretion the Circuit Court
detennined it had sufficient conventional experience to render its own decision on the merits of
the evidence presented to it during the hearing on the Residents petition for a wTit of mandamus
The Circuit Court in its Order based its decision on a consideration of the WVDEPs evidence
and findings but also on those of the testimony of the Residents expert witness and their own
testimony
Ultimately this Court in Ranson elected to not apply the primary jurisdiction doctrine
noting that this concept is essentially the same as exhaustion of administrative remedies
13
Not unlike the exhaustion of remedies doctrine the doctrine of primary jurisdiction is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties citations omitted)
Ranson 201 W Va 410497 SE2d 763lndeed the terms primary jurisdiction and exhaustion
of remedies though separate and distinct legal concepts are often confused and used
interchangeably ld at FN 6 (internal citation omitted)
The primary jurisdiction doctrine and the exhaustion of administrative remedies doctrine
do not apply in this matter because the circuit courts ofWest Virginia are granted explicit statutory
authority by West Virginia Code sect 22-3-24 to decide the claims raised in the Residents Petition
for a Writ of Mandamus as discussed infra To insist as does ERP that this Court should abstain
from deciding an issue that the Legislature has detennined is explicitly within the jurisdiction of
the circuit coqrts is incorrect
ERP argues that a danger of inconsistent rulings and other concerns (Petition at 35)
requires the application of the primary jurisdiction doctrine in this case That argument disregards
the fact that the only dispute arising out of the Residents Petition is currently pending before this
Court There are no other potential inconsistent rulings
Lastly ERP argues that the Circuit Courts Order violates the doctrine of primary
jurisdiction essentially because the Circuit Court did not expressly address the doctrine ofprimary
jurisdiction even though it was not raised in the Circuit Court proceedings There is no
requirement that a circuit court make an express finding on its own accordingly the absence of
such analysis is not reversible error
Accordingly this Court should uphold the Circuit Courts Order regarding the Residents
Petition for a Writ of Mandamus
14
F Patriot and Easterns bankruptcy claims do not bar the State of West Virginias regulatory authority
ERPs arguments regarding the Patriot bankruptcy proceedings are similarly unfounded
Patriots most recent bankruptcy case ended in October 2015 with the entry of the confinnation
order which occurred well before the December 2015 hearing in the Circuit Court of Wyoming
County at issue here That order dissolved the automatic stay in place and replaced it with a new
set of injunctions none of which were applicable at the time of the hearing on the writ of
mandamus in the underlying matter Further confinnation orders have no effect whatsoever on
state law enforcement Eastern was required to continue to comply with state environmental law
Pursuant to 28 USc sect 959(b) a debtor is required to perfonn any and all acts necessary in order
to effectuate compliance with State Law environmental obligations Furthennore 11 USc sect
362(b)(4) expressly exempts the enforcement of any police or regulatory law enforcement action
from the automatic stay See 11 USc sect 362(b)(4)
A ruling such as the one sought by ERP in this matter would throw State enforcement of
all State laws related to debtors operating under an automatic stay into disarray It is absurd to
suggest that the State of West Virginia through the WVDEP is unable to enforce environmental
laws against companies operating within the State pursuant to West Virginia law simply because
a mining company seeks bankruptcy protection Furthennore ERP asks this Court to maintain that
not only are West Virginia executive law enforcement agencies not able to order compliance with
State law against debtors but also that the circuit courts of West Virginia are unable to order
compliance That is not the law
On May 12 2015 Easterns parent company Patriot Coal Corporation and some of its
affiliates including Eastern filed a petition with the United States Bankruptcy Court for the
Eastern District ofVirginia under chapter 11 oftitle 11 ofthe United States Code (US Bankruptcy
15
Court ED Va Case No 15-32450 (KLPraquo During the course of the bankruptcy proceedings
Patriot negotiated the sale of substantially all of its assets to two separate entities Blackhawk
Mining LLC (Blackhawk) and VCLF VCLF proposed to acquire the Kopperston No1 Refuse
Impoundment including the SMCRA permit at issue in this case
In accordance with the Bankruptcy Courts Scheduling Order on September 18 2015
Patriot filed the Fourth Amended Disclosure Statement for the Debtors Fourth Amended Joint
Plan ofReorganization Pursuant to Chapter 11 of the Bankruptcy Code and the Debtors Fourth
Amended Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code
The Fourth Amended Plan attached a copy of the VCLF Asset Purchase Agreement
(APA) The VCLF APA definitively establishes Appellant ERPs liability for the water
replacement order at issue in this case The Fourth Amended Plan itself lists the SMCRA notice
that ultimately led to the Wyoming County Circuit Court Order at issue in this appeal as a piece
of unresolved litigation to be assumed by the purchasers of Patriots assets
Furthem10re Section 203 of the APA Assumed Liabilities states that VCLFIERP shall
assume all Liabilities associated with the Transferred Pem1its as well as liability for regulatory
violations and obligations on or in relation to the Purchased Assets or the Transferred Permits
arising post-Closing
Additionally Schedule 308(a)-(b) to the VCLF APA expressly lists all liabilities
associated with the Purchased Assets and again includes the May 2015 SMCRA notice from
owners ofproperties near the Kopperston mine alleging adverse impacts to groundwater resources
Schedule 313 lists all pending litigation associated with the Purchased Assets and yet again lists
the Kopperston SMCRA notice
16
ERP is a wholly owned subsidiary of VCLF incorporated to fulfill the reclamation
obligations associated with assets VCLF purchased out of the Patriot bankruptcy ERP became
the penn it holder of the pennit associated with this appeal ERPs assumption of the water
replacement liability at issue in this appeal is not just a matter of a contractual obligation between
two private parties rather its liability also arises by operation of the Bankruptcy Courts
Confinnation Order
Accordingly this Court should uphold the Circuit Courts Order in this matter because it
was not barred by bankruptcy law
VII CONCLUSION
In conclusion these Respondents respectfully request this Court enter an Order denying
ERPs Petition for a Writ of Prohibition
WEST VIRGINIA DEPARMENT OF ENVIRONMENTAL PROTECTION and SECRETARY AUSTIN CAPERTON by counsel
West Virginia Department of Environmental Protection Office of Legal Services 601 57th St SE Charleston WV 25304 Phone 304-926-0499 Fax 304-926-0461 Email jasonewandlingwvgov
17
CERTIFICATE OF SERVICE
I Jason Wandling certify that I served this Response in Opposition to Verified Petition for
Writ of Prohibition on 20 March 2017 by depositing a true copy thereof in the United States mail
postage prepaid addressed as follows
John J Meadows (WVSB 9442) Peter J Raupp (WVSB 10546) Devon J Stewart (WVSB 11712) Steptoe amp Johnson PLLC 707 Virginia Street East Chase Tower Seventeenth Floor PO Box 1588 Charleston WV 25326-1588 Phone 304-353-8154 Fax 304-353-8180 Email J ohnM eadowssteptoe-johnsoncom
PeterRauppsteptoe-johnsoncom DevonStewartsteptoe-johnsoncom
Honorable Warren D McGraw Judge PO Box 581 100 Main and Bank Streets Pineville WV 24874 Phone 304-732-7047 Fax 304-732-7047
Kevin W Thompson (WVSB 5062) David R Barney Jr (WVSB 7958) Thompson Barney 2030 Kanawha Blvd E Charleston WV 25311 Phone 304-343-4401 Fax 304-343-4405 Email kthompsonthompsonbarneycom
dbameythompsonbameycom
Not unlike the exhaustion of remedies doctrine the doctrine of primary jurisdiction is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties citations omitted)
Ranson 201 W Va 410497 SE2d 763lndeed the terms primary jurisdiction and exhaustion
of remedies though separate and distinct legal concepts are often confused and used
interchangeably ld at FN 6 (internal citation omitted)
The primary jurisdiction doctrine and the exhaustion of administrative remedies doctrine
do not apply in this matter because the circuit courts ofWest Virginia are granted explicit statutory
authority by West Virginia Code sect 22-3-24 to decide the claims raised in the Residents Petition
for a Writ of Mandamus as discussed infra To insist as does ERP that this Court should abstain
from deciding an issue that the Legislature has detennined is explicitly within the jurisdiction of
the circuit coqrts is incorrect
ERP argues that a danger of inconsistent rulings and other concerns (Petition at 35)
requires the application of the primary jurisdiction doctrine in this case That argument disregards
the fact that the only dispute arising out of the Residents Petition is currently pending before this
Court There are no other potential inconsistent rulings
Lastly ERP argues that the Circuit Courts Order violates the doctrine of primary
jurisdiction essentially because the Circuit Court did not expressly address the doctrine ofprimary
jurisdiction even though it was not raised in the Circuit Court proceedings There is no
requirement that a circuit court make an express finding on its own accordingly the absence of
such analysis is not reversible error
Accordingly this Court should uphold the Circuit Courts Order regarding the Residents
Petition for a Writ of Mandamus
14
F Patriot and Easterns bankruptcy claims do not bar the State of West Virginias regulatory authority
ERPs arguments regarding the Patriot bankruptcy proceedings are similarly unfounded
Patriots most recent bankruptcy case ended in October 2015 with the entry of the confinnation
order which occurred well before the December 2015 hearing in the Circuit Court of Wyoming
County at issue here That order dissolved the automatic stay in place and replaced it with a new
set of injunctions none of which were applicable at the time of the hearing on the writ of
mandamus in the underlying matter Further confinnation orders have no effect whatsoever on
state law enforcement Eastern was required to continue to comply with state environmental law
Pursuant to 28 USc sect 959(b) a debtor is required to perfonn any and all acts necessary in order
to effectuate compliance with State Law environmental obligations Furthennore 11 USc sect
362(b)(4) expressly exempts the enforcement of any police or regulatory law enforcement action
from the automatic stay See 11 USc sect 362(b)(4)
A ruling such as the one sought by ERP in this matter would throw State enforcement of
all State laws related to debtors operating under an automatic stay into disarray It is absurd to
suggest that the State of West Virginia through the WVDEP is unable to enforce environmental
laws against companies operating within the State pursuant to West Virginia law simply because
a mining company seeks bankruptcy protection Furthennore ERP asks this Court to maintain that
not only are West Virginia executive law enforcement agencies not able to order compliance with
State law against debtors but also that the circuit courts of West Virginia are unable to order
compliance That is not the law
On May 12 2015 Easterns parent company Patriot Coal Corporation and some of its
affiliates including Eastern filed a petition with the United States Bankruptcy Court for the
Eastern District ofVirginia under chapter 11 oftitle 11 ofthe United States Code (US Bankruptcy
15
Court ED Va Case No 15-32450 (KLPraquo During the course of the bankruptcy proceedings
Patriot negotiated the sale of substantially all of its assets to two separate entities Blackhawk
Mining LLC (Blackhawk) and VCLF VCLF proposed to acquire the Kopperston No1 Refuse
Impoundment including the SMCRA permit at issue in this case
In accordance with the Bankruptcy Courts Scheduling Order on September 18 2015
Patriot filed the Fourth Amended Disclosure Statement for the Debtors Fourth Amended Joint
Plan ofReorganization Pursuant to Chapter 11 of the Bankruptcy Code and the Debtors Fourth
Amended Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code
The Fourth Amended Plan attached a copy of the VCLF Asset Purchase Agreement
(APA) The VCLF APA definitively establishes Appellant ERPs liability for the water
replacement order at issue in this case The Fourth Amended Plan itself lists the SMCRA notice
that ultimately led to the Wyoming County Circuit Court Order at issue in this appeal as a piece
of unresolved litigation to be assumed by the purchasers of Patriots assets
Furthem10re Section 203 of the APA Assumed Liabilities states that VCLFIERP shall
assume all Liabilities associated with the Transferred Pem1its as well as liability for regulatory
violations and obligations on or in relation to the Purchased Assets or the Transferred Permits
arising post-Closing
Additionally Schedule 308(a)-(b) to the VCLF APA expressly lists all liabilities
associated with the Purchased Assets and again includes the May 2015 SMCRA notice from
owners ofproperties near the Kopperston mine alleging adverse impacts to groundwater resources
Schedule 313 lists all pending litigation associated with the Purchased Assets and yet again lists
the Kopperston SMCRA notice
16
ERP is a wholly owned subsidiary of VCLF incorporated to fulfill the reclamation
obligations associated with assets VCLF purchased out of the Patriot bankruptcy ERP became
the penn it holder of the pennit associated with this appeal ERPs assumption of the water
replacement liability at issue in this appeal is not just a matter of a contractual obligation between
two private parties rather its liability also arises by operation of the Bankruptcy Courts
Confinnation Order
Accordingly this Court should uphold the Circuit Courts Order in this matter because it
was not barred by bankruptcy law
VII CONCLUSION
In conclusion these Respondents respectfully request this Court enter an Order denying
ERPs Petition for a Writ of Prohibition
WEST VIRGINIA DEPARMENT OF ENVIRONMENTAL PROTECTION and SECRETARY AUSTIN CAPERTON by counsel
West Virginia Department of Environmental Protection Office of Legal Services 601 57th St SE Charleston WV 25304 Phone 304-926-0499 Fax 304-926-0461 Email jasonewandlingwvgov
17
CERTIFICATE OF SERVICE
I Jason Wandling certify that I served this Response in Opposition to Verified Petition for
Writ of Prohibition on 20 March 2017 by depositing a true copy thereof in the United States mail
postage prepaid addressed as follows
John J Meadows (WVSB 9442) Peter J Raupp (WVSB 10546) Devon J Stewart (WVSB 11712) Steptoe amp Johnson PLLC 707 Virginia Street East Chase Tower Seventeenth Floor PO Box 1588 Charleston WV 25326-1588 Phone 304-353-8154 Fax 304-353-8180 Email J ohnM eadowssteptoe-johnsoncom
PeterRauppsteptoe-johnsoncom DevonStewartsteptoe-johnsoncom
Honorable Warren D McGraw Judge PO Box 581 100 Main and Bank Streets Pineville WV 24874 Phone 304-732-7047 Fax 304-732-7047
Kevin W Thompson (WVSB 5062) David R Barney Jr (WVSB 7958) Thompson Barney 2030 Kanawha Blvd E Charleston WV 25311 Phone 304-343-4401 Fax 304-343-4405 Email kthompsonthompsonbarneycom
dbameythompsonbameycom
F Patriot and Easterns bankruptcy claims do not bar the State of West Virginias regulatory authority
ERPs arguments regarding the Patriot bankruptcy proceedings are similarly unfounded
Patriots most recent bankruptcy case ended in October 2015 with the entry of the confinnation
order which occurred well before the December 2015 hearing in the Circuit Court of Wyoming
County at issue here That order dissolved the automatic stay in place and replaced it with a new
set of injunctions none of which were applicable at the time of the hearing on the writ of
mandamus in the underlying matter Further confinnation orders have no effect whatsoever on
state law enforcement Eastern was required to continue to comply with state environmental law
Pursuant to 28 USc sect 959(b) a debtor is required to perfonn any and all acts necessary in order
to effectuate compliance with State Law environmental obligations Furthennore 11 USc sect
362(b)(4) expressly exempts the enforcement of any police or regulatory law enforcement action
from the automatic stay See 11 USc sect 362(b)(4)
A ruling such as the one sought by ERP in this matter would throw State enforcement of
all State laws related to debtors operating under an automatic stay into disarray It is absurd to
suggest that the State of West Virginia through the WVDEP is unable to enforce environmental
laws against companies operating within the State pursuant to West Virginia law simply because
a mining company seeks bankruptcy protection Furthennore ERP asks this Court to maintain that
not only are West Virginia executive law enforcement agencies not able to order compliance with
State law against debtors but also that the circuit courts of West Virginia are unable to order
compliance That is not the law
On May 12 2015 Easterns parent company Patriot Coal Corporation and some of its
affiliates including Eastern filed a petition with the United States Bankruptcy Court for the
Eastern District ofVirginia under chapter 11 oftitle 11 ofthe United States Code (US Bankruptcy
15
Court ED Va Case No 15-32450 (KLPraquo During the course of the bankruptcy proceedings
Patriot negotiated the sale of substantially all of its assets to two separate entities Blackhawk
Mining LLC (Blackhawk) and VCLF VCLF proposed to acquire the Kopperston No1 Refuse
Impoundment including the SMCRA permit at issue in this case
In accordance with the Bankruptcy Courts Scheduling Order on September 18 2015
Patriot filed the Fourth Amended Disclosure Statement for the Debtors Fourth Amended Joint
Plan ofReorganization Pursuant to Chapter 11 of the Bankruptcy Code and the Debtors Fourth
Amended Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code
The Fourth Amended Plan attached a copy of the VCLF Asset Purchase Agreement
(APA) The VCLF APA definitively establishes Appellant ERPs liability for the water
replacement order at issue in this case The Fourth Amended Plan itself lists the SMCRA notice
that ultimately led to the Wyoming County Circuit Court Order at issue in this appeal as a piece
of unresolved litigation to be assumed by the purchasers of Patriots assets
Furthem10re Section 203 of the APA Assumed Liabilities states that VCLFIERP shall
assume all Liabilities associated with the Transferred Pem1its as well as liability for regulatory
violations and obligations on or in relation to the Purchased Assets or the Transferred Permits
arising post-Closing
Additionally Schedule 308(a)-(b) to the VCLF APA expressly lists all liabilities
associated with the Purchased Assets and again includes the May 2015 SMCRA notice from
owners ofproperties near the Kopperston mine alleging adverse impacts to groundwater resources
Schedule 313 lists all pending litigation associated with the Purchased Assets and yet again lists
the Kopperston SMCRA notice
16
ERP is a wholly owned subsidiary of VCLF incorporated to fulfill the reclamation
obligations associated with assets VCLF purchased out of the Patriot bankruptcy ERP became
the penn it holder of the pennit associated with this appeal ERPs assumption of the water
replacement liability at issue in this appeal is not just a matter of a contractual obligation between
two private parties rather its liability also arises by operation of the Bankruptcy Courts
Confinnation Order
Accordingly this Court should uphold the Circuit Courts Order in this matter because it
was not barred by bankruptcy law
VII CONCLUSION
In conclusion these Respondents respectfully request this Court enter an Order denying
ERPs Petition for a Writ of Prohibition
WEST VIRGINIA DEPARMENT OF ENVIRONMENTAL PROTECTION and SECRETARY AUSTIN CAPERTON by counsel
West Virginia Department of Environmental Protection Office of Legal Services 601 57th St SE Charleston WV 25304 Phone 304-926-0499 Fax 304-926-0461 Email jasonewandlingwvgov
17
CERTIFICATE OF SERVICE
I Jason Wandling certify that I served this Response in Opposition to Verified Petition for
Writ of Prohibition on 20 March 2017 by depositing a true copy thereof in the United States mail
postage prepaid addressed as follows
John J Meadows (WVSB 9442) Peter J Raupp (WVSB 10546) Devon J Stewart (WVSB 11712) Steptoe amp Johnson PLLC 707 Virginia Street East Chase Tower Seventeenth Floor PO Box 1588 Charleston WV 25326-1588 Phone 304-353-8154 Fax 304-353-8180 Email J ohnM eadowssteptoe-johnsoncom
PeterRauppsteptoe-johnsoncom DevonStewartsteptoe-johnsoncom
Honorable Warren D McGraw Judge PO Box 581 100 Main and Bank Streets Pineville WV 24874 Phone 304-732-7047 Fax 304-732-7047
Kevin W Thompson (WVSB 5062) David R Barney Jr (WVSB 7958) Thompson Barney 2030 Kanawha Blvd E Charleston WV 25311 Phone 304-343-4401 Fax 304-343-4405 Email kthompsonthompsonbarneycom
dbameythompsonbameycom
Court ED Va Case No 15-32450 (KLPraquo During the course of the bankruptcy proceedings
Patriot negotiated the sale of substantially all of its assets to two separate entities Blackhawk
Mining LLC (Blackhawk) and VCLF VCLF proposed to acquire the Kopperston No1 Refuse
Impoundment including the SMCRA permit at issue in this case
In accordance with the Bankruptcy Courts Scheduling Order on September 18 2015
Patriot filed the Fourth Amended Disclosure Statement for the Debtors Fourth Amended Joint
Plan ofReorganization Pursuant to Chapter 11 of the Bankruptcy Code and the Debtors Fourth
Amended Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code
The Fourth Amended Plan attached a copy of the VCLF Asset Purchase Agreement
(APA) The VCLF APA definitively establishes Appellant ERPs liability for the water
replacement order at issue in this case The Fourth Amended Plan itself lists the SMCRA notice
that ultimately led to the Wyoming County Circuit Court Order at issue in this appeal as a piece
of unresolved litigation to be assumed by the purchasers of Patriots assets
Furthem10re Section 203 of the APA Assumed Liabilities states that VCLFIERP shall
assume all Liabilities associated with the Transferred Pem1its as well as liability for regulatory
violations and obligations on or in relation to the Purchased Assets or the Transferred Permits
arising post-Closing
Additionally Schedule 308(a)-(b) to the VCLF APA expressly lists all liabilities
associated with the Purchased Assets and again includes the May 2015 SMCRA notice from
owners ofproperties near the Kopperston mine alleging adverse impacts to groundwater resources
Schedule 313 lists all pending litigation associated with the Purchased Assets and yet again lists
the Kopperston SMCRA notice
16
ERP is a wholly owned subsidiary of VCLF incorporated to fulfill the reclamation
obligations associated with assets VCLF purchased out of the Patriot bankruptcy ERP became
the penn it holder of the pennit associated with this appeal ERPs assumption of the water
replacement liability at issue in this appeal is not just a matter of a contractual obligation between
two private parties rather its liability also arises by operation of the Bankruptcy Courts
Confinnation Order
Accordingly this Court should uphold the Circuit Courts Order in this matter because it
was not barred by bankruptcy law
VII CONCLUSION
In conclusion these Respondents respectfully request this Court enter an Order denying
ERPs Petition for a Writ of Prohibition
WEST VIRGINIA DEPARMENT OF ENVIRONMENTAL PROTECTION and SECRETARY AUSTIN CAPERTON by counsel
West Virginia Department of Environmental Protection Office of Legal Services 601 57th St SE Charleston WV 25304 Phone 304-926-0499 Fax 304-926-0461 Email jasonewandlingwvgov
17
CERTIFICATE OF SERVICE
I Jason Wandling certify that I served this Response in Opposition to Verified Petition for
Writ of Prohibition on 20 March 2017 by depositing a true copy thereof in the United States mail
postage prepaid addressed as follows
John J Meadows (WVSB 9442) Peter J Raupp (WVSB 10546) Devon J Stewart (WVSB 11712) Steptoe amp Johnson PLLC 707 Virginia Street East Chase Tower Seventeenth Floor PO Box 1588 Charleston WV 25326-1588 Phone 304-353-8154 Fax 304-353-8180 Email J ohnM eadowssteptoe-johnsoncom
PeterRauppsteptoe-johnsoncom DevonStewartsteptoe-johnsoncom
Honorable Warren D McGraw Judge PO Box 581 100 Main and Bank Streets Pineville WV 24874 Phone 304-732-7047 Fax 304-732-7047
Kevin W Thompson (WVSB 5062) David R Barney Jr (WVSB 7958) Thompson Barney 2030 Kanawha Blvd E Charleston WV 25311 Phone 304-343-4401 Fax 304-343-4405 Email kthompsonthompsonbarneycom
dbameythompsonbameycom
ERP is a wholly owned subsidiary of VCLF incorporated to fulfill the reclamation
obligations associated with assets VCLF purchased out of the Patriot bankruptcy ERP became
the penn it holder of the pennit associated with this appeal ERPs assumption of the water
replacement liability at issue in this appeal is not just a matter of a contractual obligation between
two private parties rather its liability also arises by operation of the Bankruptcy Courts
Confinnation Order
Accordingly this Court should uphold the Circuit Courts Order in this matter because it
was not barred by bankruptcy law
VII CONCLUSION
In conclusion these Respondents respectfully request this Court enter an Order denying
ERPs Petition for a Writ of Prohibition
WEST VIRGINIA DEPARMENT OF ENVIRONMENTAL PROTECTION and SECRETARY AUSTIN CAPERTON by counsel
West Virginia Department of Environmental Protection Office of Legal Services 601 57th St SE Charleston WV 25304 Phone 304-926-0499 Fax 304-926-0461 Email jasonewandlingwvgov
17
CERTIFICATE OF SERVICE
I Jason Wandling certify that I served this Response in Opposition to Verified Petition for
Writ of Prohibition on 20 March 2017 by depositing a true copy thereof in the United States mail
postage prepaid addressed as follows
John J Meadows (WVSB 9442) Peter J Raupp (WVSB 10546) Devon J Stewart (WVSB 11712) Steptoe amp Johnson PLLC 707 Virginia Street East Chase Tower Seventeenth Floor PO Box 1588 Charleston WV 25326-1588 Phone 304-353-8154 Fax 304-353-8180 Email J ohnM eadowssteptoe-johnsoncom
PeterRauppsteptoe-johnsoncom DevonStewartsteptoe-johnsoncom
Honorable Warren D McGraw Judge PO Box 581 100 Main and Bank Streets Pineville WV 24874 Phone 304-732-7047 Fax 304-732-7047
Kevin W Thompson (WVSB 5062) David R Barney Jr (WVSB 7958) Thompson Barney 2030 Kanawha Blvd E Charleston WV 25311 Phone 304-343-4401 Fax 304-343-4405 Email kthompsonthompsonbarneycom
dbameythompsonbameycom
CERTIFICATE OF SERVICE
I Jason Wandling certify that I served this Response in Opposition to Verified Petition for
Writ of Prohibition on 20 March 2017 by depositing a true copy thereof in the United States mail
postage prepaid addressed as follows
John J Meadows (WVSB 9442) Peter J Raupp (WVSB 10546) Devon J Stewart (WVSB 11712) Steptoe amp Johnson PLLC 707 Virginia Street East Chase Tower Seventeenth Floor PO Box 1588 Charleston WV 25326-1588 Phone 304-353-8154 Fax 304-353-8180 Email J ohnM eadowssteptoe-johnsoncom
PeterRauppsteptoe-johnsoncom DevonStewartsteptoe-johnsoncom
Honorable Warren D McGraw Judge PO Box 581 100 Main and Bank Streets Pineville WV 24874 Phone 304-732-7047 Fax 304-732-7047
Kevin W Thompson (WVSB 5062) David R Barney Jr (WVSB 7958) Thompson Barney 2030 Kanawha Blvd E Charleston WV 25311 Phone 304-343-4401 Fax 304-343-4405 Email kthompsonthompsonbarneycom
dbameythompsonbameycom