Free Reply to Response to Motion - District Court of Federal Claims - federal

Case 1:03-cv-00178-CCM

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS
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RESOURCES CORPORA1'ION, GENTRY .CORPORATION, andSUNSE HOLDING, INC.,
BENCHMK

. ) )

) )
)

)

No. 03- I78L

Plaintiffs,
v.
THE UNITED STATES.

).
)

Honorable Christine Odell Cook Miller

)
)

of AMERICA,

)
) ) )

Defendant

SECOND DECLARATION OF DOUGLAS K. SIDDELL
I, Douglas K. Siddell, do declare and attest, upon per~onal knowledge, as follows:
i. f am currently the Supervisor of

the Teçhnic~IGroupjn the Knoxvile Field Offce

(KFO) of the Offce of Surface Mining ReclamatÎon and Enforcement (OSM). I have been
employed by OSM for over 27 years.
2. OSM is tle offce within the Department of

the Interior that administers the Surface
977

Mining Control and Reclamation Act of 1

(SMCRA). 30 U.S.c. § 1211. KFO is, among

other things, responsible for SMCRA permitting relating to surface coal mining operations in the
State of

Tennessee. OSM has perfoiied this function in Tennessee since a Federal takeover of

the State ofTeonessee's SMCRAprogram in 1984.
3. KFOprocessed the 1ands unsuitable for mining petition that resulted in the

Director of

OSM's March 24, 1987 decision to designate portions of

the Rock Creek watershed in Tennessee

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as

unsuitable for surface

coal mining operations under section 522 of SMCRA 30 U.S.c. §

1272. See Exhibit 4 to my prior declaration (U.S. Ex. 8-4, App. 1 358-69).
4. The

Rock Creek watershed petitioners askedOSM to designate the watershed - the
mining o~rations. (Although the Rock Creek

"Petition Area" - as UIsuitable for all surface coal

Watershed is actually larger than the Petition Area, in the context of

the March 24, 1981 partial

designation, the terms "Petition Area" and "Rock Creek watershed" are often used
interchangeably.) OSM did not grant the petition in its

entirety. Instead, the Director of OSM .

designated:
AU surface minable reserves of the Sewanee ,coal seam within the Rock
Creek watershed, Tennesseeasunsuitableforcoal mining operatioris using cOliveritional overburdeiliiÎxÎng teclliques for reclamation

and
The Hall, Middle, and Rock Creek gorges miiiing operations

mlßlog.

. . .

as unsuitable for all surface coal and surface disturbance incident to underground

See Id. at App. I, p. 358.
5. At the request of counsel for the United States, I directed my staff to prepare a

map

depicting: (i) the boundaries of the Petiti.on. Area~ (2) the designated gorge areas; and (3) the

boundaries of the propert that is the subject of this

litigation (the "Wharton

Property"). My staff

prepared this map by: (I) scanning a map of the Wharton Propert boundaries ("General
Location Map

Wharton Property," attched to an April 5, 2006 report prepared by Wiley

Consulting LLC for BenchmarkResources Corp. ("Wiley Report")) into a digital file; (2)
importing the digital file into computer software known as Autodesk Map 3D 2007; (3)
superi m posi ng the Wharton Property bowidaries on a USGS quadrangle map; and (4)

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superimposing the boundaries of the designated gorge areas and the Petition Area boundaries

(which we maintain in our Geographical Information System) on the same quadrangle map. A

copy of the map is attached to this declaration as Exhibit I (US. Ex. V -I, App. II at 596).
6. The Statement of

Reasons accompanying the Director's March 24,1987 partial

designation clearry specifies that, even after.the partial designation, OSM \\~lI receive and
process permit applications for a variety of

proposed mining operations wÜhin the Rock Creek

watershed. More specitícally, the Statement of Reasons explains:

(OSM) is responsible for approving or denying applications for proposed
surface coal Jnining operations in the Rock Creek

watershed. Under this

decision, fOSM) would receive and

process applications for proposed surface mining operations on any cOalse~m \\iithin the Rock Creek watershed except the designated portions of the gorges.

Any ap d~- the Sewanee coal sea ~. . dling plan and reclamationplanj.otherwisied on the
basis

of this decision. If (OS .. to surface

mine the Sewanee coal in the J~tion
and reclamation plan, (OSMj would continue to process that ~pplication identically with all others processed under the Federal Program for Tennessee. contained an approvable materials handling plan

See Exhibit 4 to my prior declaration (U.S~ Ex. 8-4, App. I at 368).
7. In layman's terms, even after the partial designation, an applicant

could apply to KFO

for a permit to conduct the following mining operations:

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(a) The Wharton Property outside of the Petiion Area: KFO would entertain applications for all surface coal mining operations (including surface and underground mining). All areas outside the Petition Area are unaffected b partial designation.
(b) The Pet it ion Area Outside of the designated

gorge areas: KFO would ente

permit applications.

for aU surface coal

mining operations (inccudingsurfa.
not be

undeq,o:oundminilig) on any coal seam, as long as there would activities, or impacts of surface activities, in the designated gorge surface mine theSewanee coal seam would

any .

areas. An

applìcantproposing to

have to submit

a special materials handling plan and reclamation plan.

(c) Tht dtSignatedgorgeareas: KFO would entertain pennit applications for
underground roining, as long as . impacts ofsurface activities, in the

there would not be any surface activities, or designated gorge areas.

USM would

process any allowable applications in the same maiieras it processes all other
Fedetal SMCRA program for

applications undcr the

Tennessee.
may engage

8. SMORA provides that no

person

in surface coM mining operations
issued by the

. without a pertitto conduct

surface

coal mining and reclamation operations

appropriate regulatory autM\i,i~*'l~~~~Î"lt.it~~ (i 5). OSM is the regulatory

authority in Tennessee.
9. A permit application must contain detailed information about the possible

environmental consequences

of

the.

proposed mine, as well

as

assurances that damage to

the

site

willbe prevented or minimized during mining and

substantially repaired after mining has come

to

an

end. See,e.g.,30U.S.C.§§ 1257, 1260, 1265.

10. OSM reviews permit applications in three phases. We first determine whether the
application is administratively complete. 30 c.F.R. § 942.773(b)(2). The purpoe of

the

. administrative completeness

review is to assess whether the applicant has submitted at least the

minimum amount of information for us to

begin our substantive technical review. Id. Once the

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application is administratively complete, we begin our technical review to determine whether the
proPQsed mining operation wiI me.et all the substantive requirements of SMCRA and its
implementing rebiulations. During the final phase, we

address any final legal matters and render

a decision on

the permit

application.

i i. The permitting process is highly interactive; with many back-and..forth discussions
between OSM staff

and the applicant. DJ;ring our technical review, we always issue "technical

deficiency letters" to the applicant. 30 C.F.R.§ 942.773(bX6). These deficiencylettersare
designed to

let the applicant know of potential problems with the application and typically

request additional information to allow' our permit review staff to determine whether the
pröposedmining operation is consistent withtne requirements ofSMCRA and the

applicable

regulations. Through technicaldeficiency letters and other communications

with applicants, we
as necessary; in order

activèly \vorkwìth applicants to modify fhe proposed mine plan,

to obtain a

permit.
12. At the end of the

interactive permitting process, both OSM and theapphcant know.

with substantial certinty the extent of mining operations that wil be allowed on the proposed
. pennit area under SMCRA and its implementing

regulations.

13. Since OSM instituted a Federal SMCRA program in Tennessee in 1984, OSMhas
granted more than 80 percent of

all new permit applications that it accepted for processing and 011

which it rendered a final decision. (Occasionally, applicants vvithdraw their permit applications

on their own initiative; OSM does not render final decisions on those withdrawn applications~)
14. By letter dated March 7, 2090, Mr. Darold Proctor wrote to KFO "concerning
possibiIìties of acquiring permits for surface mines, and drift (deep) mines" on the

. .

Wharton

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Property. See

Affdavit of

Darold Proctor, ~ 3, Exhibit 4 to Plaintiffs' Response to Defend.

Motion to Dismiss for Lack of Subject Matter Jurisdiction or, in the Alternative, fOr Summa~f:!~~"!~;
.:t.:t::¡..:~ .--~::t~;~;

Judgment (Plaintiffs' Response).
15. KFOrespondedto Mr. Proctor

on March 30,2000. See U.S. Ex. L, App. Uat435.,
March 24, 1987 partial designation, including Hie

37. rnour response, we

Summarized the

information as to the types of permit applications OSM would receive and process even after the
partial designation. We also enclosed a "copy of

the draft application formwhiçh briefly.
of infonnation that is required

explains thepennittingprocess and the type

to be submitted by the

applicant." The draft application was approximately 100 pages long and set forth in detail most
of the infonnationalrequirements for a typical pèrmit applicant.
16. OSM has

never received a permit application from Mr.Proctor Qr any of,thePlainiiffs .

in this

litigation.
17. Counsel for the United States provided me with a copy of: and

asked me to review,

the Wiley Report, a portion of which

is appended to Plaintiffs' Response as Exhibiil.

i 8. On page three of his report, Mr. Wiley states: "Although the OSM designation

decision states that the Sewanee coal seam, could be mined using some unconventional
overburden mixing technique forreclamatíon, it is my opinion that a method acceptable to

the

regulatory authority within the watershed boundary

is not economically available.'1 (tis

premature to speculate what type of special materials handling plan and reclamation plan OSM
might find acceptable. This ty of issue would be addressed in the permitting procss, and

any

decision would have to be based on the techiical merits of a specificmine plan.

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19. Me.

Wiley also states: "It is my opinion, due to the potential surface impact from

underground mining, such as possible subsidence and probable hydrologic consequences, that
underground mining of coal from areas contained within the Rock Creek watershed bOW1dary are

also

preclUded frOll1 mining due to the OSM designation of unsuìtability within

the drainage

. areas."

20. OSM's partial designation does not bar subsidence in the designated gorge areas.
Pursuant to section

522 of SMCRA, 30 U.S.c. § 1272, the partial designation bars "surface coal
gorge areas, By

miningoperatioris" jri the designated

interpretative rule, OSM has explained that

subsidence due to underground coal mining is

not included in the definilìonof"surface coal
areas where surfåcecoal mining operations

mining operations" and therefore is not prohibited in

are

barred under section

5220fSMCRA. 30CER§ 761.200. Subsidence,

hO\vever,

is

regulated

pursuant to section 516 ofSMCRA. 30 U.S.c.§ 1266. The partial designation did

not

impose any additionalrestrictions on subsidence beyond the generally-applicable restrictions of
section 516. Any issues re(ated to pötentialsubsidence În the designated gorge areas would

be

addressed in the permitting process.
21. As

to "probable hydrologic consequences,"SMCRArequîreså permit upplicant to
consequences of the

. submit a detailed "detennination of the probable hydrologic

mining and

reclamation

operations" sufficient to allow the regulatory authority to assess the "probable

cumulative impacts of all anticipated mining in the area upon the hydrology of the area."
30 U.S.c. § i

257(bX 1 I). The issueof'.probable hydrologic consequences" isnecessarily partòf

the permitting process and would be addressed in that context. It is premature to speùlate that

OSM would bar any underground mining

in the Rock Creek watershed due

to hydrologic

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consequences, and any decision on that issue would have to be based on the technical meritSorà

specific mine plan.

22. I have been provided acopy of, and have reviewed, Plaintilfs' Response, together
. with the exhibits attched

to that document.

23. In his affidavit dated August 28,2006 (attached to Plaiotiffs' Response as Exhibit 4),
Mr. Darold Proctor identifies threeleUers he purportedly sent

to OSM and attches copies of

those letters to his affdavit. Mr. Proctor states

that the purpose of these letters was to inquire
responses to any of

about "administrative remedies" and asserts that he never received

these

letters. Plaintiffs rhakesimilarassertions in their response brief at pages 7-8.
24. At present,OSM has not been able to verii) that it received the

letters Me. Proctor

claims to have sent

on Noveinber24,~001, and J11liuary 20, 2002.

25. OSM dig receive a versi
aftdavit. The copy altached toMr.

. " in eversion

OSM~sfiles is dated January

4, 2002, and contains a handwritten

to OSM on January 7,2002. A copy of the leter received by OSMis attached to this declaration
as Exhibit 2 (US, Ex. V-2, App. In at 597).. Otherthan the different dates, the

. .

notation

that it was sent by fax

two letters appear

to be identicaL

26. OSM responded toMr: Proctor's "lettefltàx of JanuaryA, 2002" by certified mail on
February 1,2002. A copy ofOSM's responsive letter is attached to this declaration as Exhibit 3
(U.S. Ex. V-3, App. II at 598-599). In its response, OSM explained that it was

"unable to

deteopine what

you meant by

the phrase 'exhaust all variances, waivers and/or administrative

remedies under the reclamation act of 1977 (SMCRA).'" As such, OSM did not provide a

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specific response to that aspect ofMr. Proctor's letter. However,OSM's responsivelette
make clear that OSM did not interpret

Mr. Proctor's letter as a request for any specific
therefore, that OSM did not deny any particular

administrative relief, and;

administrative ..

27. OSM also clarified

that ìt did

"not

agree that

any action \vithrespect to j'oude

this response,could legally constitute an exhaustion of a
as a prerequisite to judicial

review. "

28. Theffnal paragrph of üSM's response discusses judicial. review ofOSM~s "decision

to designate lands unsuitable for

coal mining." In this context, it is clear that OSM viewed Mr.

ProctOr's letter as requesting informatiòn about administratìve procedures related to .theMarch
24, l 987 partial desîgnation. In no way

identityanyadmìnistrative remedies that. woùld have. to be exhausted

takings claim againstthé go\iètÌentintheUS. Court of

\ .

did we construe Mr. Proctor's letter asarequesHor ustö
before

he couId pl.sùe a

Federal Claims. Asa regulatory

agency administering SMCRA, this

type of legal information is beyond our purview

and

expertise. .

Pursuant to 28 U.se. § 1746, J declare

under penalty of

perjur that the foregoing is true

and cOrrect

Dated: September 28, 2006

. SIDUELL'

~I

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APP. in 595

Rock Creek Watershed Tennessee
Bledsoe and Hamilton Counties

Case 1:03-cv-00178-CCM

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Fox Cover Sheet
BeNCHMARK RESOURCes CORPRATION
P.O. SOX 5611

48-.s9.s-1636/fAX 48-595-7636
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Mr. George C. Mi.. .Ditor

Uni Sta De. ofth Interr

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O:ofSmf Mig
Via Fax 865-545-4 i i 1 January 4. 2002

SlO Gay Str S. W. #500

Knxv, Tc.on 37902
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De Mr. Mir:

We re reucs40n beha of the co-te of reord Behmrk Reur Corpraon an Satia Limted. th spif procur reuied to ext al va. waivers anor admive ~ un th relaion ac or 1977 (SMR). an th Federprogr for Tee. 30 CP 942:164, Al, any oth Fed'1or Stae of Tenn Stutes th ar apli to th Roccrk Water Pettion Evatin Doumnvimnnt Impt statem (fi), 522

22. ,i"
Tenn refe ootena ofretd). ny. a leg bi conveya

SMCR Evauaion OSMRPF-8, an Envinm Im, Statem OSMREIS-

Th abovemene rees goe spiñ to th Petiton to decla th Rokcr
Watersh as untale for al su mi operaios. Th OSMR fa to provide

Prper Notice aøor servce Co the identible owen mten, (i., th abve

pertni to th mi

es~ un a lae portion of th 22,858 ac R.cr Waterhe Peton ar
~

Unles we he ftom you to th cont by Feb 9. 200. we wi as th you

are de th reue ad relif an tha we have threby exhaed our

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adrativ rem as th ne pre to'se Judìa re. .

Be Reu: Corpratin
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Siddell Dec. II -- Exhibit 2 APP. III 597

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United States Departn1ent of the Interior
OFFICE OF SU RFACE !\.HNING
Rn'¡iimJlllOn arut Enfnn;cim::nl

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530 Gay St. SW. .sllt!~ .'ion KnoxvHIt., TN 37902
FEB

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CERTIFIED MAIL
7000 1670 0008 9882 5456

rvlr Darold E. Proctor, Authorized Agent
Benchmark Re!Uurces Corporation
P.O. B(JX 5611

Carèfree, Arizona 85377

Dear Mr. Proctor:
Thank yt'u for your letter/fax of January 4, 20n2. Your letter references a lack of

"proper notice and/or service to id.entifiable o\vnersip interest" tor a lands :usuitable for mining petition decision for the Rock Creek Watershed. Tennessee. The Rock Creek Waicrshcd land:; unsuitable for mining (LUM) petition was originally received by the Tennessee Deparment of Hcaltb and Environment on September 28~ 1984 and lransren-cd to the Offce

of Surface Mining (OSM) on October 10. J 984, On or about August 11. 1985~ we received í1

JeUer from you regarding this unsuitabilty proêceding and your company's: mineral interests.
you might lîke to become an intervenor in the proceeding; However, our review of ihe record finds no furter c.ommunication from you. Your letter to us in 1985 would demonstrte that you had persorrt actunl knowledgeufthe proceeding, Înaddition to The letter indicated that

the general public notices di~cus8ed below,

A draf petition evaluation document/environmental impact statement (PEDlEIS) was
avaHablc for pubHc: comment on MMch 21, ¡ 986. Publîc noticcs were issued bylocal and

regional newspapers and Federal Register and Tennessee Register announcements on March 20, 1986. along with a wide area maHing La inierested parties. governmental agencces. and landowners.
Additional public notices were made after the issuance of

the finaJ PEDIEIS on

September 26.1986. And. after the decision to designate the petition area was issued, public notices were .made in accordance with 30 CFR 942.764 and were pwvidcd on Apd.l2. J 987.
We were unable lo determine what you meant by Lhe phrdse .'exh,mst all varíances. waivers

and/or administrative remedies under the reclamaiion:.ct of 1977 (SMCRA)", so we arc nQt
responding to this part of your letter.

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Siddell Dec. II -- Exhibit 3 APP. III 598

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Mr. Darold E. Proctor. Authorized Agent

!

We did nOt interpret ymir letter as requesting any specifc administratIve relief. Therefore, \ve
arc nol denying any p.::Icu!ar adminIstrative relief. Also. we do not agree that any aClll1n

with respect to yom' letter, or this tC::pOtlSè. could legally constitute an exhaustion of
administrative remedies that would 5erve as a prerequisite to judicial revie\"l.
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The applicable law allows judicial review of OSM'sdccìsion to designate lands unsuitable for coal ruining, but only \vithin restricted time Emits. We certa.inJyrespect your rìght as a citizen

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to me a lawsuit to chal1enge OSM's actions if)'ou choose.

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George C. Miler, Director
Knoxvi1e Field Office

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Nick Holt. SOL

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Siddell Dec. II -- Exhibit 3 APP. III 599

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