SER ERP Environmental Fund v. Hon. Warren D. McGraw, Judge

IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
September 2017 Term FILED
__________ October 5, 2017
released at 3:00 p.m.
No. 17-0148 RORY L. PERRY, II CLERK
SUPREME COURT OF APPEALS
__________ OF WEST VIRGINIA
STATE OF WEST VIRGINIA ex rel. ERP ENVIRONMENTAL FUND, INC.,
Petitioners
v.
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. & BETTY JO BAILEY; JASON A. & RONCHESKI
BAILEY; NEWMAN & KATHERINE BROWN; ALGIE D. & KATHERINE
COOK; ALGIE R. & PEGGY ANN COOK; DENNIS L. COOK, JR. &
MICHELLE COOK; DENNIS L. COOK, SR. & BRENDA K. COOK;
WILLIAM C. & REGINA COOK; DONNA FRALEY; MAYBETH
FRALEY; WESTLEY & JUDY FRALEY; DOYLE LEE & PHYLLIS
JOHNSON; GLEN & MARY JOHNSON; ELIZABETH L. KENNEDY;
WILLIAM D. & JENNY LAFFERTY; MICHAEL E. MARCUM;
HELEN M. MCGINNIS; ONNIE & VIRGINIA PAYNTER; EARL R.
PELPHREY; LARRY & BECKY REED; EVERETT & FREDA SMITH;
WILLIAM L. & JESSICA N. STEPP; JACQUELYN A. WHITLEY;
BILLY RAY WILLARD; TEDDY & DOROTHY WYKLE,
Respondents
______________________________________________________
Petition for Writ of Prohibition
WRIT GRANTED
_______________________________________________________
Submitted: September 12, 2017
Filed: October 5, 2017
Ancil G. Ramey, Esq. Jason Wandling, Esq.
Steptoe & Johnson PLLC West Virginia Department of
Huntington, West Virginia Environmental Protection,
John J. Meadows, Esq. Office of Legal Services
Peter J. Raupp, Esq. Charleston, West Virgnia
Devon J. Stewart, Esq. Counsel for DEP and Austin Caperton
Steptoe & Johnson PLLC
Charleston, West Virginia Kevin W. Thompson, Esq.
Counsel for Petitioners David R. Barney, Jr., Esq.
Thompson Barney
Charleston, West Virginia
Counsel for Individual Respondents
CHIEF JUSTICE LOUGHRY delivered the Opinion of the Court.
SYLLABUS
1. “A de novo standard of review applies to a circuit court’s decision to grant
or deny a writ of mandamus.” Syl. Pt. 1, Harrison Cty. Comm’n v. Harrison County
Assessor, 222 W.Va. 25, 658 S.E.2d 555 (2008).
2. “Mandamus lies to require the discharge by a public officer of a
nondiscretionary duty.” Syl. Pt. 3, State ex rel. Greenbrier Cty. Airport Auth. v. Hanna, 151
W.Va. 479, 153 S.E.2d 284 (1967).
3. A finding by the West Virginia Department of Environmental Protection
of contamination, diminution, or interruption to an owner’s water supply is a prerequisite
to the issuance of any water replacement relief under the West Virginia Surface Coal Mining
and Reclamation Act, West Virginia Code §§ 22-3-1 to -38 (2014 & Supp. 2017).
LOUGHRY, Chief Justice:
The ERP Environmental Fund, Inc. (“ERP”) seeks a writ of prohibition in
connection with the February 25, 2016, order of the Circuit Court of Wyoming County
compelling the West Virginia Department of Environmental Protection (“DEP”) to direct
Eastern Associated Coal, LLC (“Eastern”)1 to provide emergency drinking water, temporary
potable water, and ultimately permanent water replacement to the individually-named
respondents (hereinafter referred to as the “Residents”) pursuant to the provisions of the
West Virginia Surface Coal Mining and Reclamation Act (“SMCRA”).2 As grounds for
seeking relief, ERP argues that the circuit court’s order is unenforceable due to both
procedural and substantive infirmities.3 Upon our careful review of this matter, we find that
the circuit court lacked the authority to direct the DEP to obtain water replacement for the
Residents on the record developed in this case. Accordingly, the writ of prohibition
requested by ERP is hereby granted.
1
ERP is the current permit holder subject to the DEP’s directives.
2
See W.Va. Code §§ 22-3-1 to -38 (2014 & Supp. 2017). We use the acronym
“SMCRA” to comport with its federal analogue, the Surface Mining Control and
Reclamation Act. See 30 U.S.C. §§ 1201 to -1328 (2012).
3
Specifically, ERP asserts that the Residents failed to exhaust their administrative
remedies and failed to join an indispensable party to the underlying mandamus proceeding.
Additional grounds raised by ERP include the absence of a non-discretionary act; the
primary jurisdiction doctrine; improper venue; and a bankruptcy stay.
1
I. Factual and Procedural Background
On November 4, 2011, the Residents filed an administrative claim with the
DEP in connection with their allegation that a reclaimed water impoundment (the
“Impoundment”) on property subject to a permit held by Eastern4 had contaminated their
well water in violation of SMCRA.5 After two years of investigating the complaint, DEP
Environment Resource Specialist, III, Dustin C. Johnson authored a report dated April 4,
2013, stating:
In conclusion, there is a lack of evidence that water emanating
from the 0001983 permit is causing detrimental environmental
damage to the hydrologic balance in which the alleged
groundwater contaminated wells are located. The sampling
results from outlet 013, as well as the DMRs, illustrate a history
of compliance from this site.
The Residents refiled their administrative claim with the DEP on April 13,
2013. On May 22, 2013, the DEP conducted a “fourth and final follow up to the original
complaint” filed by the Residents in November 2011. As a result of that final inquiry, the
DEP terminated the investigation of the Residents’ complaint after finding no evidence that
the permitted area–the Impoundment–was the contaminating source of the Residents’ water
supply. Opting not to appeal the final decision terminating their complaint,6 the Residents
4
See supra note 1.
5
The claims were asserted under West Virginia Code §§ 22-3-24 to -25 (2014).
6
See W.Va. Code § 22-3-17(e) (2014).
2
chose instead to file yet another complaint with the DEP on May 22, 2015, in which they
asserted the same facts as the earlier two administrative complaints.7
On September 16, 2015, the Residents filed a mandamus action in the Circuit
Court of Wyoming County through which they sought to require Eastern to provide
emergency, temporary, and permanent water replacement pursuant to West Virginia Code
§ 22-3-24 (2014). The Residents named the DEP and its cabinet secretary8 as respondents
but did not include Eastern or ERP as respondents to the mandamus proceeding.9
On December 2, 2015, the circuit court held an evidentiary hearing on the
Residents’ mandamus petition. Neither Eastern nor ERP participated in the hearing.10
Through its ruling issued on February 25, 2016, the circuit court directed the DEP to
“require Eastern to provide emergency water and temporary water replacement to Petitioners
7
The record before us does not indicate the status of that complaint.
8
Randy Huffman was named as the DEP Cabinet Secretary; that position is now held
by Austin Caperton.
9
The reason for the non-inclusion of Eastern was the pending bankruptcy proceeding
that involved Eastern and its parent company Patriot Coal Corporation that was filed on May
12, 2015. See In re: Patriot Coal Corp. et al., Case No. 15-32450 (E.D. Bankr. E.D. Va.).
10
Counsel for the Residents emailed a copy of the mandamus petition and the order
setting the evidentiary hearing to counsel for Eastern/ERP on October 15, 2015. Counsel
for Eastern/ERP attended the December 2, 2015, hearing but did not intervene or otherwise
participate in the proceeding.
3
[Residents] until such time as Eastern can establish a permanent water supply for them.” In
making its ruling, the circuit court discarded the testimony and findings of the DEP’s
witness, Dustin C. Johnson, preferring instead to rely on the testimony of the Residents’
expert witness, D. Scott Simonton.11 Citing Dr. Simonton’s opinion that “the presence of
the hydrogen sulfide gas is an indicator of Eastern’s mining impact on Petitioners’
[Residents’] water sources, even though the level of sulfate concentration may not have
exceeded any applicable standard,” the circuit court sua sponte determined that the
Residents’ “evidence of contamination demonstrates that Eastern’s mining operations
impacted their sources of water.”
In compliance with the circuit court’s directive to secure water replacement
for the Residents, the DEP issued two water replacement orders12 to Eastern under authority
of West Virginia Code § 22-3-24 and tendered the orders to ERP for compliance purposes.13
As a non-party to the mandamus action, ERP struggled to identify the forum in which to
challenge these orders–orders that were not even issued against ERP14–which involved the
11
Dr. Simonton is an environmental engineering professor at Marshall University. As
a non-party to the mandamus proceeding, ERP lacked the opportunity to challenge Dr.
Simonton’s expertise to testify and to cross-examine him with regard to his findings.
12
Those orders were issued on March 4 and 25, 2016.
13
See supra note 1.
14
When a third water replacement order was issued on October 16, 2016, ERP was
finally identified as the permit holder.
4
expenditure of significant financial resources.15 Seeking to resolve this matter in the
administrative setting in which it was initiated, ERP filed an appeal with the West Virginia
Surface Mine Board (the “Board”) requesting that the Board vacate the DEP orders. As
grounds for its request for relief from the Board, ERP asserted that the circuit court’s order
“was both unlawful and directly contrary to the WVDEP’s prior investigations.”
During a June 16, 2016, hearing before the Board, the DEP provided testimony
concerning its decision to terminate the Residents’ complaint. Dustin Johnson explained:
“I didn’t find any evidence that any mining–any permitted mining impact was contaminating
the groundwater regime in this area.” He opined further that “[s]ulfates are generally used
by us in [sic] an indication that there has been some mining contamination if you have highly
elevated sulfates.” Here, the “sulfates were particularly low in most well samples, indicating
very little influence from mine drainage.” While acknowledging that “ERP has a compelling
argument that cannot be overlooked” with regard to a denial of due process or lack of
jurisdiction, the Board concluded that it lacked “the power to review a decision [issued] by
a circuit court.” Following the Board’s dismissal of the appeal, ERP petitioned this Court
for a writ of prohibition.
15
In its Notice of Appeal filed with the West Virginia Surface Mine Board, ERP
represented those costs to include $26,000 per month for delivery services to twenty-six
residential locations and a one-time equipment cost for the purchase and installation of
twenty-six 1,100 gallon water tanks at $4,000 per tank. The final phase that would require
permanent water replacement was estimated to cost approximately $7,000,000.
5
II. Standard of Review
As this Court pronounced in syllabus point one of Harrison County
Commission v. Harrison County Assessor, 222 W.Va. 25, 658 S.E.2d 555 (2008), “[a] de
novo standard of review applies to a circuit court’s decision to grant or deny a writ of
mandamus.” In conducting this plenary review, our task is to consider “whether the legal
prerequisites for mandamus relief are present.” State ex rel. Cooper v. Caperton, 196 W.Va.
208, 214, 470 S.E.2d 162, 168 (1996). In this case, our review is subject to the principle
that “[m]andamus lies to require the discharge by a public officer of a nondiscretionary
duty.” Syl. Pt. 3, State ex rel. Greenbrier Cty. Airport Auth. v. Hanna, 151 W.Va. 479, 153
S.E.2d 284 (1967). Bearing these precepts in mind, we now consider whether the circuit
court’s issuance of a writ of mandamus was proper.
III. Discussion
As a starting point to our review of the circuit court’s award of replacement
water to the Residents, we observe that this type of extraordinary relief is governed by the
following requirements: “To invoke mandamus the relator must show (1) a clear right to the
relief sought; (2) a legal duty on the part of the respondent to do the thing relator seeks; and
(3) the absence of another adequate remedy.” Syl. Pt. 2, Myers v. Barte, 167 W.Va. 194,
279 S.E.2d 406 (1981). As evidence of their entitlement to the relief granted by the circuit
6
court, the Residents point to their right as citizens to enforce the provisions of SMCRA. See
W.Va. Code § 22-3-25 (2014).
The Legislature clearly has authorized the bringing of citizen suits to compel
compliance with SMCRA. Under West Virginia Code § 22-3-25, “any person having an
interest which is or may be adversely affected may commence a civil action in the circuit
court of the county to which the surface-mining operation is located . . . .” Such a suit may
be instituted “[a]gainst the director, division, surface mine board or appropriate division
employees, . . . where there is an alleged failure of the above to perform any act or duty
under this article which is not discretionary.” Id. at § 22-3-25(a)(2) (emphasis supplied).
In their attempt to identify a non-discretionary duty that was not performed in
this matter, the Residents reference the mandatory duty for the DEP director under West
Virginia Code § 22-3-17 (2014) to “cause a notice of violation to be served upon the
operator or operator’s authorized agent” for non-compliance with any of the requirements
of SMCRA, its legislative rules, or specified permit conditions. The Residents alleged that
Eastern violated the provision of SMCRA that required it to “[m]inimize the disturbances
to the prevailing hydrologic balance at the mine site and in associated off-site areas.” W.Va.
Code § 22-3-13(b)(10); W.Va. C.S.R. § 38-2-14.5. Given that the DEP director is statutorily
required to act in the instance of non-compliance with SMCRA, the Residents submit that
7
DEP’s non-issuance of a violation notice constitutes the requisite non-discretionary act to
warrant mandamus relief.
What the Residents overlook in their zeal to locate the necessary unfulfilled
duty by the DEP is the discretion necessarily imposed upon the DEP to determine in the first
instance whether there has been a violation of SMCRA, the supporting regulations, or a
permit. When the Residents filed their administrative complaint pursuant to SMCRA in
2011, the DEP undertook an investigation to determine whether the Impoundment was the
source of the alleged groundwater issues. At the end of that investigation, which included
ground water sampling and site visitation, DEP specialist Dustin Johnson determined that
the Impoundment was not “contaminating the groundwater regime in this area.” Based on
the specific results obtained from the water testing, the DEP terminated the complaint after
determining that the permitted area was not the source of the Residents’ water issues.16
In its order granting relief, the trial court included the following finding:
According to Mr. Johnson, there was nothing to connect the
exceedances to a violation. Mr. Johnson explained that, after
consulting with inspectors and others, he believed that the
abandoned slate dump adjacent to Eastern’s impoundment was
the cause of the water standard exceedances, not anything
16
In his April 4, 2013, report, Mr. Johnson acknowledged a possible source of the
water contamination was the “un-reclaimed pre-SMCRA refuse dump located to the east of
the impoundment.”
8
related to Eastern’s permit, including the impoundment. Mr.
Johnson also did not believe there was any evidence of seepage
from the impoundment which would contaminate the
Petitioners’ [Residents’] well water.
Discarding the legislative authority expressly reposed in the DEP to reach this conclusion,
the trial court decided that the DEP’s decision to terminate the Residents’ complaint was
made “in complete abrogation of all of the scientific evidence uncovered by the sampling
and testing events conducted in the area.”
The right to institute a citizens suit under SMCRA for water replacement is
premised upon a finding that the citizens’ water supply “has been affected by contamination,
diminution or interruption proximately caused by the surface mining operation.” W.Va.
Code § 22-3-24(b); see W.Va. Code § 22-3-24(e). In this case, the predicate finding by the
DEP of contamination specifically linked to the permitted area is missing. Absent a finding
of contamination by DEP, there is no statutory basis for the issuance of a notice of violation.
See W.Va. Code § 22-3-17. Only if the DEP had failed to issue a notice of violation in the
face of unmistakable evidence of water contamination associated with the Impoundment,
could the Residents succeed on their theory that the DEP failed to perform a non­
discretionary duty under SMCRA. See id. But, as the record makes clear, that was not the
case here.
9
Citing the testimony of the Residents and their expert witness, the circuit court
supplanted the DEP’s finding of no contamination with its diametric conclusion: “In this
case, Petitioners’ [Residents’] evidence of contamination demonstrates that Eastern’s
permitted mining operations impacted their sources of water. The contamination emanating
from Eastern’s permitted impoundment negatively impacted Petitioners’ ability to use their
well water safely for domestic purpose.” Sidestepping the issue raised by the DEP at the
mandamus proceeding with regard to the Residents being unable to demonstrate “a clear and
indisputable right to the issuance of the writ,”17 the circuit court simply declared that the
Residents’ right to water replacement is clear under SMCRA “if there is evidence that the
permitted mine contaminated their groundwater.” And then the circuit court proceeded to
create the predicate finding of contamination by cherry picking from the evidence adduced
in this case.
Our reading of the legislative scheme at issue makes clear that a finding by the
DEP of contamination, diminution, or interruption to an owner’s water supply is a
17
Despite its clear objections to the Residents’ entitlement to mandamus relief during
the proceedings below, the DEP fully complied with the circuit court’s mandamus directives.
When questioned during oral argument, the DEP stated that the agency’s position regarding
the lack of contamination from the permitted area has never changed. Accordingly, we find
the DEP’s decision to support the Residents’ position on appeal rather puzzling. It is one
thing to respect a circuit court’s ruling, but quite another to adopt a wholly inconsistent
position. And, given the DEP’s unwavering position with regard to the lack of a SMCRA
violation, this course change is not only baffling but suggests an abrogation of the agency’s
duties to enforce the laws of this state.
10
prerequisite to the issuance of any water replacement relief under SMCRA.18 See W.Va.
Code § 22-3-24.19 Not only did the circuit court lack the authority to supply the requisite
finding of water contamination necessary to grant any water replacement relief under
SMCRA but it further lacked the authority to grant relief in mandamus predicated on the
DEP’s failure to perform a non-discretionary duty. As discussed above, the DEP had a duty
to issue a notice of violation only upon its finding of a specific violation of SMCRA. See
W.Va. Code § 22-3-17. But as the record reveals, the DEP never found any evidence that
SMCRA had been violated by Eastern, as alleged in the Residents’ complaint. See supra
note 17.
The petitioners have amply demonstrated that the prerequisites for mandamus
relief are not present in this case. As the submitted record makes evident, the DEP did not
fail to perform a non-discretionary duty. See Hanna, 151 W.Va. 479, 153 S.E.2d 284, syl.
pt. 3. Absent that critical element, the circuit court lacked the authority to direct the DEP
18
While the enforcement of SMCRA’s water replacement rights is permitted in circuit
court, we find no basis for concluding that the Legislature authorized the circuit court to
usurp the DEP’s authority with regard to making the pivotal finding of “contamination,
diminution or interruption to an owner’s water supply.” W.Va. Code §22-3-24 (b), (c). The
integral involvement of the DEP both with regard to making that necessary initial finding
and then with regard to overseeing the water replacement supply during the two-year period
prescribed by statute is clear. See, e.g., W.Va. Code § 22-3-24(h) (discussing DEP director’s
authority regarding discontinuation of water replacement service).
19
The statute goes so far as to create a rebuttable presumption of causation upon a
DEP inspector’s finding of contamination in certain instances. See W.Va. Code § 22-3­
24(c).
11
to compel Eastern to supply the Residents with emergency, temporary, and permanent water
replacement supplies. Given this fatal impediment to the issuance of a writ of mandamus,
we find no need to address the additional grounds for relief set forth by ERP.20 Furthermore,
this Court wishes to make clear that we are not deciding the issue of whether the Residents’
water is contaminated. That issue is not before us. Our limited inquiry in this case was to
determine whether the circuit court had the necessary grounds to compel water replacement
to the Residents under the provisions of SMCRA. See W.Va. Code § 22-3-24. It did not.
IV. Conclusion
Based on the foregoing, the writ of prohibition sought by the petitioners is
granted to prevent enforcement of the writ of mandamus issued by the Circuit Court of
Wyoming County against the West Virginia Department of Environmental Protection on
February 25, 2016.
Writ granted.
20
See supra note 3.
12