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Fowler Land Co., Inc. v. Missouri Department of Natural Resources

Court of Appeals of Missouri, Southern District, Second Division

May 6, 2015


APPEAL fro THE CIRCUIT COURT OF BARTON COUNTY. Honorable James R. Bickel, Circuit Judge.


For Appellants: Jeffrey K. Elnicki, LAW OFFICE OF JEFFREY K. ELNICKI, of St. Louis, Missouri.

For Alternative Fuels, Inc., Respondent: P. Glen Smith, Husch Blackwell LLP, of Kansas City, Missouri.

For Missouri Department of Natural Resources and Missouri Land Reclamation Commission, Respondents: Chris Koster, Attorney General, and Timothy Duggan, Assistant Attorney General, Jefferson City, Missouri.

GARY W. LYNCH, J. -- Opinion author. NANCY STEFFEN RAHMEYER, J. -- concurs. DON E.BURRELL, J. -- concurs.



Page 503

Fowler Land Company, Inc., and the Margaret Leist Revocable Trust (individually " Fowler" and " Leist," respectively, and collectively " property owners" ) appeal the trial court's judgment affirming the decision of the Missouri Land Reclamation Commission (" Commission" ) upholding the approval by the Missouri Department of Natural Resources Land Reclamation Program (" Program" ) of Alternate Fuels, Inc.'s (" AFI" ) application filed in 2011 to revise Permit No. 1991-02 (" 2011 Permit Revision" ). Property owners claim the Commission had no legal authority to uphold the 2011 Permit Revision without their consent to the creation of the water impoundments envisioned by the permit revision and that they never gave such consent. Finding that the Commission ignored and failed to apply and follow 10 CSR § 40-6.060(4)(E)(5), which requires property owners' consent for the creation of such water impoundments, we reverse the Commission's decision and remand with directions to deny AFI's application for the 2011 Permit Revision.

Factual and Procedural Background

The Commission is a Missouri instrumentality or agency created and domiciled for administrative purposes with the Department of Natural Resources. Section 444.520.[1] It is authorized to administer and enforce the Missouri Surface Coal Mining Law, sections 444.800 to 444.970 and its implementing regulations (" Missouri SCML" ), as well as the orders and permits issued under that law.

The Program is a Missouri governmental instrumentality or agency, which under the supervision of its director and the Commission, implements the Missouri SCML on behalf of the Commission.

AFI is a coal mining company and is now a debtor pursuant to Title 11 U.S.C. Chapter 11, and Christopher Redmond (" Trustee" ) is its duly appointed trustee in bankruptcy.[2] AFI previously mined coal in Barton County under Permit No. 1991-02 (" Original Permit" or " 1991 Permit" ) issued by Program under the Missouri SCML, which authorized coal mining in a permitted area that included, among others, property owners' land. Property owners

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leased their land to AFI for the purpose of allowing mining to occur.

As part of its application for the Original Permit, 10 CSR § 40-6.050(10) required AFI to submit a reclamation plan that contained a detailed description of the proposed land use following reclamation of the land within the proposed permit area, including a description of any land use different from the pre-mining land uses and the information necessary to approve an alternative post-mining land use under 10 CSR § 40-3.130. The Original Permit included a reclamation plan prescribing each aspect of the reclamation required of AFI with respect to property owners' land, as required by the Missouri SCML. Continental Insurance Company and Continental Casualty Company (collectively " Continental" ) acted as one of AFI's sureties for reclamation under the Original Permit and its reclamation plan.

The pre-mining land use of Fowler's land consisted of 15 acres of prime farmland, 55 acres of cropland, 15 acres of pasture, and 25 acres of undeveloped land. The Original Permit provided for post-mining land use of Fowler's land as follows: 15 acres of prime cropland, 69 acres of pasture, 11 acres of water, and 15 acres of wildlife habitat. During the application process, Fowler consented to the permanent establishment of an 11-acre water impoundment in the center of the western portion of the Fowler land. This was the only final water impoundment on Fowler's land approved by the Original Permit.

The pre-mining land use of Leist's land subject to the Original Permit consisted of 95 acres of pasture land and 41 acres of undeveloped pre-mined land (with 2 acres of water included in the 41 acres of undeveloped pre-mined land). The Original Permit provides for post-mining usage of the Leist land as follows: 90 acres pasture, 41 acres of pasture pre-mined land (containing approximately 1/3 acre of water), and 5 acres of wildlife habitat.

AFI conducted mining operations under the Original Permit from approximately March 1993 to late 1996. In mining the permitted area and as a result of its unpermitted and unauthorized change in mining methods, AFI constructed, without Fowler's consent, four water impoundments either partially or wholly located on Fowler's land. These impoundments are identified as FWI 6-7 (8.8 acres),[3] FWI-8 (2.3 acres), Pond No. 4 (1.9 acres), and Pond No. 5 (2.4 acres). Ponds Nos. 4 and 5 are generally located in the area in which the single 11-acre water impoundment was to be located as authorized by the Original Permit, but FWI 6-7 and FWI-8 are not. The total post-mining result is that AFI created 15.4 acres of water on the Fowler land in four different water impoundments of which only 4.3 acres, in two separate ponds, is located within the single 11-acre water impoundment area authorized in the Original Permit.

AFI's unauthorized change in mining methods also created, without Leist's consent, two water impoundments either partially or wholly located on Leist's land, identified as Pond No. 001 (1.7 acres) and FWI-4 (4 acres), for a total of 5.7 acres of water. The Original Permit authorized and contemplated only a one-half-acre water impoundment on Leist's land in the location of Pond 001.[4]

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The Program initiated formal enforcement actions against AFI in response to AFI's construction of each of these six unauthorized water impoundments, as well as other permit violations.[5] In 1995, AFI submitted a proposed permit revision (" 1995 Permit Revision" ) requesting a change in its reclamation plan to reflect the change in the nature and direction of its mining operations, which would result in a change in post-mining land uses. In its 1995 Permit Revision application, AFI sought to revise the Original Permit to leave in place the six water impoundments presently located on property owners' land as permanent water impoundments. The Commission attempted to work with AFI to approve the 1995 Permit Revision and engaged in numerous rounds of comments, as well as enforcement actions, for several years. In December 2002, the Program denied AFI's 1995 Permit Revision because AFI had not obtained property owners' consent to the creation of the water impoundments. This denial was not appealed.

In June 2011, AFI filed a second application for a revision of the Original Permit (" 2011 Permit Revision" ). In its application, AFI claimed that the Commission exceeded its authority when it denied AFI's 1995 permit revision request because AFI could not obtain property owners' consent ...

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