Daw'elle v. T;-aders Fed. Sav. - West Virginia · PDF fileO'Daniels v. City ofCharleston, 200...

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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

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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


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


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

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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

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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)

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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

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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

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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

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(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

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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

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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



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

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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

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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

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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)

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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

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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

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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

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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




West Virginia cases














III



WVa Code sect 14-2-2 13 11 12


WVa Code sect 22-3-24 156 14





W Va R Civ P 19 2 3 9



Federal statutes

11 USC sect 362 1 15

28 USC sect 959 15

IV
























1
























2
























3

V ARGUMENT














Pt I 143 WVa 674104 SE2d 320 (1958)







4








3-24















5












6












7























8



















(emphasis added)




9














SyJ Pt 2 119 WVa 235 193 SE 64 (1937)









10




















11





















12






SE2d 755 757 (1997)









testimony



13






















14
























15























16






Confinnation Order



VII CONCLUSION





17













West Virginia cases














III



WVa Code sect 14-2-2 13 11 12


WVa Code sect 22-3-24 156 14





W Va R Civ P 19 2 3 9



Federal statutes

11 USC sect 362 1 15

28 USC sect 959 15

IV
























1
























2
























3

V ARGUMENT














Pt I 143 WVa 674104 SE2d 320 (1958)







4








3-24















5












6












7























8



















(emphasis added)




9














SyJ Pt 2 119 WVa 235 193 SE 64 (1937)









10




















11





















12






SE2d 755 757 (1997)









testimony



13






















14
























15























16






Confinnation Order



VII CONCLUSION





17












WVa Code sect 14-2-2 13 11 12


WVa Code sect 22-3-24 156 14





W Va R Civ P 19 2 3 9



Federal statutes

11 USC sect 362 1 15

28 USC sect 959 15

IV
























1
























2
























3

V ARGUMENT














Pt I 143 WVa 674104 SE2d 320 (1958)







4








3-24















5












6












7























8



















(emphasis added)




9














SyJ Pt 2 119 WVa 235 193 SE 64 (1937)









10




















11





















12






SE2d 755 757 (1997)









testimony



13






















14
























15























16






Confinnation Order



VII CONCLUSION





17

































1
























2
























3

V ARGUMENT














Pt I 143 WVa 674104 SE2d 320 (1958)







4








3-24















5












6












7























8



















(emphasis added)




9














SyJ Pt 2 119 WVa 235 193 SE 64 (1937)









10




















11





















12






SE2d 755 757 (1997)









testimony



13






















14
























15























16






Confinnation Order



VII CONCLUSION





17

































2
























3

V ARGUMENT














Pt I 143 WVa 674104 SE2d 320 (1958)







4








3-24















5












6












7























8



















(emphasis added)




9














SyJ Pt 2 119 WVa 235 193 SE 64 (1937)









10




















11





















12






SE2d 755 757 (1997)









testimony



13






















14
























15























16






Confinnation Order



VII CONCLUSION





17

































3

V ARGUMENT














Pt I 143 WVa 674104 SE2d 320 (1958)







4








3-24















5












6












7























8



















(emphasis added)




9














SyJ Pt 2 119 WVa 235 193 SE 64 (1937)









10




















11





















12






SE2d 755 757 (1997)









testimony



13






















14
























15























16






Confinnation Order



VII CONCLUSION





17










V ARGUMENT














Pt I 143 WVa 674104 SE2d 320 (1958)







4








3-24















5












6












7























8



















(emphasis added)




9














SyJ Pt 2 119 WVa 235 193 SE 64 (1937)









10




















11





















12






SE2d 755 757 (1997)









testimony



13






















14
























15























16






Confinnation Order



VII CONCLUSION





17

















3-24















5












6












7























8



















(emphasis added)




9














SyJ Pt 2 119 WVa 235 193 SE 64 (1937)









10




















11





















12






SE2d 755 757 (1997)









testimony



13






















14
























15























16






Confinnation Order



VII CONCLUSION





17





















6












7























8



















(emphasis added)




9














SyJ Pt 2 119 WVa 235 193 SE 64 (1937)









10




















11





















12






SE2d 755 757 (1997)









testimony



13






















14
























15























16






Confinnation Order



VII CONCLUSION





17





















7























8



















(emphasis added)




9














SyJ Pt 2 119 WVa 235 193 SE 64 (1937)









10




















11





















12






SE2d 755 757 (1997)









testimony



13






















14
























15























16






Confinnation Order



VII CONCLUSION





17
































8



















(emphasis added)




9














SyJ Pt 2 119 WVa 235 193 SE 64 (1937)









10




















11





















12






SE2d 755 757 (1997)









testimony



13






















14
























15























16






Confinnation Order



VII CONCLUSION





17




























(emphasis added)




9














SyJ Pt 2 119 WVa 235 193 SE 64 (1937)









10




















11





















12






SE2d 755 757 (1997)









testimony



13






















14
























15























16






Confinnation Order



VII CONCLUSION





17























SyJ Pt 2 119 WVa 235 193 SE 64 (1937)









10




















11





















12






SE2d 755 757 (1997)









testimony



13






















14
























15























16






Confinnation Order



VII CONCLUSION





17





























11





















12






SE2d 755 757 (1997)









testimony



13






















14
























15























16






Confinnation Order



VII CONCLUSION





17






























12






SE2d 755 757 (1997)









testimony



13






















14
























15























16






Confinnation Order



VII CONCLUSION





17















SE2d 755 757 (1997)









testimony



13






















14
























15























16






Confinnation Order



VII CONCLUSION





17































14
























15























16






Confinnation Order



VII CONCLUSION





17

































15























16






Confinnation Order



VII CONCLUSION





17
































16






Confinnation Order



VII CONCLUSION





17















Confinnation Order



VII CONCLUSION





17



















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