Shell Pipe Line Corp. v. Old Ben Coal Co.

677 F.Supp. 572 (1988)

SHELL PIPE LINE CORPORATION, Plaintiff,
v.
OLD BEN COAL COMPANY, Defendant.

Civ. No. 86-4082.

United States District Court, S.D. Illinois, Benton Division.

January 14, 1988.

D. Simmons, Heyl, Royster, Voelker & Allen, P.C., Springfield, Ill., for plaintiff.

Richard Campbell, Campbell & DiVincenzo, Chicago, Ill., William W. Hart, Hart and Hart, P.C., Benton, Ill., Edmund J. Moriarty, Old Ben Coal Co., Legal Dept. 39-C, Cleveland, Ohio, for defendant.

MEMORANDUM AND ORDER

FOREMAN, Chief Judge:

This matter is before the Court on a Motion for Summary Judgment filed by defendant, Old Ben Coal Company (Old Ben). Plaintiff Shell Pipe Line Corporation (Shell) responded to the defendant's motion and renewed its earlier motion for summary judgment as well. This Court previously granted summary judgment in favor of defendant on a punitive damage count, leaving the statutory damage count as the sole remaining issue. Oral argument was presented by both sides on January 11, 1988.

Factual Summary

Plaintiff Shell Pipe Line Corporation operates and maintains an oil pipeline, known as the Capline Pipeline, under a contract with the several oil companies who own the pipeline in partnership. The pipeline runs from St. James, Louisiana to Patoka, Illinois. After giving notice of its intent, defendant Old Ben Coal Company began extracting coal from beneath lands in this district where the pipeline runs using a rather new technology known as "longwall mining". This type of mining, unlike standard room and pillar coal mining, virtually guarantees subsidence of the land above where the coal is extracted.

In order to avoid the possibility that subsidence of the land would cause a rupture of the pipeline and catastrophic business and ecological damage, Shell undertook extensive preventative measures. All told, Old Ben completed four "longwall panels" which passed under the pipeline at some point. Shell submits that the preventative measures taken to counteract possible subsidence damage from all four panels cost in excess of $750,000.00. Shell claims that under the applicable state regulations, Old Ben is liable for the costs of the preventative measures reasonably taken. Old Ben disclaims any such liability.

Previous Court Decisions

In its summary judgment motion, Old Ben raises a number of arguments in an attempt to persuade the Court that no liability attaches to Old Ben in the situation present before the Court. A number of these arguments have been dealt with previously by the Court in similar but not identical circumstances.

In Melvin v. Old Ben Coal Company (Melvin I), 610 F.Supp. 131 (S.D.Ill.1985) and Melvin v. Old Ben Coal Company (Melvin II, 612 F.Supp. 1204 (S.D.Ill.1985), this Court rejected several arguments advanced by Old Ben as reasons why no liability for subsidence damage from longwall mining could attach to the company. In short summary, the Melvin decisions held that: (1) longwall mining is a method of extracting coal which both the federal and state regulatory agencies view as acceptable and one which contemplates "planned subsidence" as referred to in various legislative and administrative laws and regulations; (2) a mining operation which utilizes longwall mining is not exempt from all the subsidence prevention and damage provisions of the Illinois Act and permanent mining reclamation program; (3) a mine operator which holds an interim mining permit is not exempt from the subsidence prevention and damage provisions of the permanent mining reclamation program even though no subsidence provisions existed in the interim program under which the operator's permit was granted; (4) the Illinois legislature, by enacting the Surface Coal Mining Land Conservation and Reclamation Act, "disturbed" prior Illinois case law on subsidence control, leaving waivers of surface support unenforceable when in conflict with the policy of the state regarding subsidence control.

In this case Old Ben has advanced the notion that several developments since the Melvin decisions warrant a reconsideration of the Court's previous rulings. Although the Court is not convinced that the Melvin holdings are in any way contrary to various later developments, a decision in that regard is unnecessary in view of this Court's agreement with Old Ben's position on another distinct issue.

Analysis

Old Ben argues that even if the Melvin holdings are still good law, the Illinois subsidence regulations promulgated under the permanent Act (Ill.Rev.Stat. ch 96-½, ¶ 7901.01 et seq.) do not subject Old Ben to liability where no actual physical damage to a structure occurred. This Court and the Illinois Department of Mines and Minerals (IDMM) agree with this position.

Shell argues that 62 Ill.Admin Reg. 1817.124 (1985) applies in this situation and mandates that Old Ben pay for preventative measures taken as damages due to subsidence. That particular regulation provides as follows:

Section 1817.124 SUBSIDENCE CONTROL: SURFACE OWNER PROTECTIONS

a) Each person who conducts underground mining activities shall adopt all measures approved by the Department under 62 Ill.Adm.Code 1784.20 to reduce the likelihood of subsidence, to prevent subsidence causing material damage, or reducing the value, or reasonably foreseeable use of surface lands, and to mitigate the effects of any such damage or reduction which may occur.

b) Each person who conducts underground mining which results in subsidence that causes material damage or reduces the value or reasonably foreseeable use of the surface lands shall, with respect to each surface area affected by subsidence:

1) Restore, rehabilitate, or remove and replace each damaged structure, feature or value, promptly after the damage is suffered, to the condition it would be in if no subsidence has occurred and restore the land to a condition capable of supporting reasonably foreseeable uses it was capable of supporting before subsidence; or

2) Purchase the damaged structure or feature for its fair market, presubsidence value and shall promptly after subsidence occurs, to the extent technologically and economically feasible, restore the land surface to a condition capable and appropriate of supporting the purchased structure, and other foreseeable uses it was capable of supporting before mining. Nothing in this paragraph shall be deemed to grant or authorize an exercise of the power of condemnation or the right of eminent domain by any person engaged in underground mining activities.

c) Each person who conducts underground mining activities will compensate the owner of any surface structure in the full amount of the diminution in value resulting from subsidence, by purchase prior to mining of noncancellable, premium prepaid insurance policy or other means approved by the Department as assuring before mining begins that payment will occur; indemnify every person with an interest in the surface for all damages suffered as a result of the subsidence; and, to the extent technologically and economically feasible, fully restore the land to a condition capable of maintaining reasonably foreseeable uses which it could support before subsidence.

Shell relies on that part of subsection (c) which states that an operator must "indemnify every person with an interest in the surface for all damages suffered as a result of the subsidence." Old Ben argues that when read as a whole the regulation clearly addresses only physical damage which actually occurs. None of the regulations promulgated address the specific problem at hand according to Old Ben.

In January of 1985, after Old Ben had completed two of the four longwall panels, Shell wrote to the Illinois Department of Mines and Minerals asking that the Department help Shell in collecting the cost of preventative measures already taken and direct Old Ben to pay for similar costs in conjunction with the final two panels. The Department's response stated that although Old Ben was responsible for curing all physical damage which occurred as a result of its mining, it was excepted from the prevention requirements of the Act and regulations because it was utilizing a planned subsidence method of extraction. Furthermore, the response indicated that so long as preventative measures were being taken by someone there was no imminent danger present and hence the regulatory provisions which would empower the department to halt mining where an imminent danger was present could not be invoked. According to IDMM this was a "situation for which no precedence has yet to be established nor can any clear cut intent of the regulations be drawn." Both Shell's letter and the response of IDDM were attached to defendant's summary judgment motion as Exhibit A and are appendant to this Memorandum and Order.

Like the IDMM this Court finds no clear cut responsibility on the part of an operator utilizing longwall mining to pay for damage prevention measures. Section 1817.124 of the state regulations, when read as whole, deals with specific physical or material damage. Section 1817.181, which Shell also relies on to support its claim, simply calls for an operator to minimize possible damage, destruction or disruption of any pipelines. In this case the pipeline remained unharmed.

The Court is not unsympathetic to the position Shell found itself in when confronted with possible subsidence damage from Old Ben's mining activity. There is no question that Shell should be commended for taking the action it did to insure against possible catastrophic results of subsidence damage, whether or not that action was prompted by contractual duties or a concern for the environment. However, as this Court stated in Melvin II, federal courts commonly give great deference to the statutory interpretation of an agency charged with the administration thereof. Melvin v. Old Ben Coal Company, 612 F.Supp. 1204, 1206 (S.D.Ill.1985). In this case, the agency does not find authority in the regulations for ordering Old Ben to pay for the preventative measures.

Whether the legislature and those who drafted the regulations meant for the imminent danger provisions to be the answer to the situation which confronted Shell or simply failed to take such a possibility into consideration is not apparent. One thing is certain, this Court is not about to embark upon a mission to rewrite or fill in the gaps of state legislation and regulations. Like the IDMM, this Court finds nothing within the framework of the mining regulations or applicable legislation which would allow it to find that Old Ben is required to pay for preventative measures taken by Shell. Consequently, Shell's action must fail. Perhaps the Illinois legislature will review the current legislation in light of the circumstances of this case. It would be a wise decision, for next time the company or individuals involved may not act as responsible as Shell and the results could be devastating.

Accordingly, defendant Old Ben Coal Company's Motion for Summary Judgment (Document No. 42) is hereby GRANTED. The Clerk is directed to enter judgment in favor of defendant and against plaintiff on plaintiff's Amended Complaint.

IT IS SO ORDERED.