IN THE MATTER OF LAC MINERALS (USA), LLC'S PETITION FOR RELEASE OF RECLAMATION LIABILITY, UPDATED RECLAMATION FINANCIAL ASSURANCE, POSTCLOSURE PLAN AND FINANCIAL ASSURANCE, AND REQUEST TO RETAIN WATER MANAGEMENT FACILITIES AND ACCESS ROADS Mine Permit Nos. 445, 460.
CONSIDERED ON BRIEFS DATE: APRIL 24, 2017
FROM THE CIRCUIT COURT OF THE FOURTH JUDICIAL CIRCUIT
LAWRENCE COUNTY, SOUTH DAKOTA THE HONORABLE MICHELLE K.
PALMER PERCY, Judge
A. SCHMIDT Attorney for appellants Harlan A. Schmidt and
Robert G. Fowler.
MAIN KELLEN B. WILLERT of Bennett Main, Gubbrud &
Willert, PC Belle Fourche, South Dakota Attorneys for
appellee LAC Minerals (USA), LLC.
J. JACKLEY Attorney General
R. BLAIR Assistant Attorney General Pierre, South Dakota
Attorneys for appellee South Dakota Department of Environment
and Natural Resources.
Robert Fowler and Harlan Schmidt, intervenors in LAC Mineral
USA, LLC's (LAC) petition regarding mine permit Nos. 445
and 460, appeal from the circuit court's affirmance of
the Board of Minerals and Environment's determination
that it had subject matter jurisdiction over the petition.
They also appeal both the circuit court's determination
that they waived due process issues and the court's
denial of a motion to supplement the administrative record.
We affirm in part and reverse in part.
This case concerns the Richmond Hill Mine near Lead, South
Dakota. The mine was approved as a large-scale gold mine in
1988 under Mine Permit No. 445. All mining and exploration
stopped by order of the South Dakota Department of
Environment and Natural Resources (DENR) in 1993, after
detection of acid rock drainage. LAC obtained a permit
amendment with a revised reclamation plan in 1994 that
addressed the drainage. In 2014, LAC submitted a petition to
DENR for a release of reclamation obligations; a postclosure
plan and financial assurance; an updated reclamation plan and
financial assurance; a request for extension of reclamation
period; and a request for road and building retention. It
sought a hearing before the South Dakota Board of Minerals
and Environment (Board).
Harlan Schmidt, personally and as attorney on behalf of
Robert Fowler, petitioned to intervene. Fowler's interest
in some of the mining property has been previously litigated
in federal court. See Fowler v. LAC Minerals (USA),
LLC, 694 F.3d 930, 935 (8th Cir. 2012) ("Fowler
retains an ongoing reversionary interest in the
property."). There has been no showing of what interest,
if any, that Schmidt has in the matter. However, his interest
has not been challenged. The petition to intervene raised
three issues, but one of those issues was voluntarily
dismissed prior to the hearing before the Board. The two
remaining issues were "whether the Department [had]
jurisdiction to conduct [the] hearing" and "whether
LAC's 'Request' without payment of an
'application fee' is actually a proposed amendment
under SDCL 45-6B-18 because it makes 'minor modifications
of the terms and conditions of the reclamation
plans'?". (Emphasis added.) According to Schmidt and
Fowler, the Board did not have jurisdiction over the matter
because LAC failed to consult with Fowler, which he contends
is required by various statutes in SDCL chapter 45-6B and is
a prerequisite to the Board obtaining jurisdiction. Schmidt
and Fowler also asserted that the changes to the reclamation
plan amounted to an amendment of the mining petition, which
required a fee pursuant to SDCL 45-6B-18. According to
Schmidt and Fowler, the failure of LAC to submit the fee
likewise divested the Board of jurisdiction.
Pursuant to administrative rule, a member of the board was
appointed to act as chair of the hearing. See ARSD
74:09:01:08. On October 5, 2015, after the parties submitted
briefs on the issues raised in the petition to intervene, the
hearing chair issued a memorandum decision determining that
the Board had jurisdiction over LAC's petition. The
hearing chair noted that there was no evidence that LAC
consulted with Fowler, but it concluded that Fowler was not a
"landowner" who needed to be consulted under SDCL
45-6B-44. The hearing chair determined that it did not have
sufficient information to decide whether LAC's petition,
with regard to reclamation, amounted to an
amendment. However, the hearing chair opined that one method
for resolution would be for LAC to dismiss its current
request and resubmit it along with a filing fee, thereby
treating it as an amendment. Thereafter, prior to the full
Board hearing, LAC withdrew its updated reclamation plan and
its request to extend reclamation period. Schmidt and Fowler
submitted proposed findings of fact and conclusions of law to
the hearing chair. They also submitted a letter to the Board
raising some concerns about leach pads and stating that they
were "obliged to appeal" the ruling that Fowler was
not a "landowner."
The Board held a hearing on LAC's requests on October 15,
2015. Those requests included being released from reclamation
liability for portions of the land; approval of new
reclamation financial assurance; approval to keep certain
roads, buildings, and structures for water management
activities; approval of postclosure financial assurance; and
release of current reclamation financial assurance. Neither
Schmidt nor Fowler attended the Board hearing. The Board
subsequently incorporated the hearing chair's memorandum
decision into its findings of fact and conclusions of law and
adopted it as the final decision of the Board. The Board
determined that because "LAC withdrew the updated
reclamation plan and the . . . request to extend reclamation
period, the Hearing Chair and the Board need not reach the
issue of whether or not said documents were a permit
amendment application." Furthermore, it found that
because the reclamation plan and request for extension had
been withdrawn, those "materials were therefore not
considered by the Hearing Chair or by the Board."
Nevertheless, it went on to determine that "Fowler and
Schmidt are not 'landowners' as that term is used in
SDCL 45-6B-44." The Board
rejected all of Schmidt and Fowler's proposed findings of
fact and conclusions of law.
Schmidt and Fowler appealed the Board's decision to the
circuit court. They presented four issues in their statement
of issues. Those issues were as follows:
1. Whether the Board had jurisdiction to act where LAC did
not provide notice to Fowler [who is] entitled to notice by
SDCL 45-6B-17 . . . ?
2. Whether the Board erred in determining that Fowler was not
a 'landowner' entitled to notice, consultations, and
approvals under South Dakota mining statutes and regulations
thereby denying Fowler the rights and privileges of South
Dakota law . . . ?
3. If [the c]ourt affirms that Fowler is not a landowner
entitled to such notice, consultations, and approvals under
the provisions of SDCL 45-6B-44, SDCL 45-6B-45[, ] ARSD
74:29:06:01 and ARSD 74:29:06:05, then do those statutes and
regulations, or the failure to provide statutory notice, deny
Fowler due process of law?
4. Whether the Board had jurisdiction to act where LAC did
not submit the amendment fee ...