Free Motion for Release of Bond Obligation - District Court of Colorado - Colorado

Case 1:00-cv-02325-MSK-MEH

Document 351-3

Filed 01/22/2007

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Case No. 00-cv-02325-MSK-MEH SIERRA CLUB and MINERAL POLICY CENTER, Plaintiffs, vs. CRIPPLE CREEK AND VICTOR GOLD MINING COMPANY, ANGLOGOLD ASHANTI (COLORADO) CORP. ANGLOGOLD ASHANTI NORTH AMERICA INC. and GOLDEN CYCLE GOLD CORPORATION Defendants. and Civil Action No. 01-cv-02307-MSK-MEH SIERRA CLUB and MINERAL POLICY CENTER, Plaintiffs, vs. CRIPPLE CREEK AND VICTOR GOLD MINING COMPANY, et al., ANGLOGOLD ASHANTI (COLORADO) CORP. ANGLOGOLD ASHANTI NORTH AMERICA INC. and GOLDEN CYCLE GOLD CORPORATION Defendants.

DECLARATION OF STEVE D'ESPOSITO

I, Steve D'Esposito, declare as follows:

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1.

I am the President of EARTHWORKS (formerly the Mineral Policy Center). I

work out of the Washington, DC, office of EARTHWORKS. 2. I am familiar with the organization, membership, policies, and practices of

EARTHWORKS. I am also familiar with EARTHWORKS' financial position and all aspects of our legal and policy programs. My responsibilities include management and supervision of the internal process whereby EARTHWORKS evaluates whether to initiate litigation to protect the environment. One important facet of that evaluation is an analysis of the financial obligations and risks involved in proposed environmental litigation. As President of EARTHWORKS I am familiar with and responsible for all aspects of our financial position and budget. I am submitting this declaration to provide the Court with facts concerning EARTHWORKS' ability to post a bond in the above-referenced litigation. 3. EARTHWORKS is the nation's foremost conservation organization focusing on

mining issues. EARTHWORKS is a non-profit organization and existing as a District of Columbia non-profit corporation. EARTHWORKS' mission is to protect communities and the environment from destructive impacts of mining, digging and drilling. EARTHWORKS seeks to carry out this mission nationwide and even internationally, and it employs grassroots organizing, public education and outreach, litigation, and other approaches in doing so. 4. EARTHWORKS uses litigation to advance its environmental objectives by

enforcing existing laws that protect the environment. EARTHWORKS is responsible for many of the nation's landmark lawsuits involving hard rock mining, such as Mineral Policy Center v. Norton, 292 F. Supp. 2d 30 (D. D.C. 2003) and Great Basin Mine Watch, et al. v. Hankins, 456 F.3d 955 (9th Cir. 2006).

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5.

EARTHWORKS has prosecuted some of its public interest lawsuits under

"citizen suit" and "private attorney general" provisions that Congress has codified in environmental laws. These provisions recognize that citizens acting as private attorneys general typically have no personal or financial stake in the litigation and therefore prosecute lawsuits that benefit the public as a whole. The stated purpose and beneficial result of these provisions is that private resources are devoted to law enforcement to complement the often inadequate public resources provided by public enforcement agencies. 6. The lawsuits EARTHWORKS prosecutes are without exception aimed at

vindicating public rights. In these cases, EARTHWORKS has no personal or financial stake in the litigation. In the present litigation, EARTHWORKS will reap no financial benefit should it prevail in the lawsuit. The nonprofit laws under which EARTHWORKS operates prevent EARTHWORKS from prosecuting litigation aimed primarily at advancing its own or other organizations or individuals private interests. 7. In filing lawsuits to enforce the environmental laws, EARTHWORKS does so

with the assumption that the courts will continue to apply the long-standing rule that plaintiffs who seek preliminary injunctive relief in actions to enforce such laws are excused from bond requirements. 8. EARTHWORKS is a relatively small organization. The size of EARTHWORKS'

budget reflects the fact that EARTHWORKS has staff and volunteer members working in many regions of the country. Nearly all of EARTHWORKS' budget is already committed to ongoing programs. A very large proportion of these commitments include the salaries of existing staff members. These committed funds are not available for general litigation without laying off staff PAGE 3 - DECL. OF STEVE D'ESPOSITO IN SUPPORT OF MOTION TO STAY JUDGMENT PENDING APPEAL AND TO WAIVE BOND

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members and/or shutting down or significantly reducing ongoing programs. Additionally, on average 80% of EARTHWORKS' budget is based upon donations from foundations given for specific programs designed to protect public interest and the environment. It is required that these funds are spent on those program activities and are therefore not available for other expenses. 9. The entire annual budget for EARTHWORKS is approximately $1.7 million. The

majority of these funds are already committed to pay the salaries and operating expenses of existing staff. A very tiny portion of this budget, $5,000, is allocated for legal costs, as most, if not all, of the lawsuits brought on behalf of EARTHWORKS are through the use of pro-bono counsel. 10. The imposition of a bond would have a chilling and concrete effect on the ability

of EARTHWORKS (or any public interest plaintiff) to prosecute lawsuits to advance public interests. If the financial burden of asserting public rights falls solely on the individual public interest litigant, then the incentives intentionally created by Congress to encourage citizen suits and private attorney general actions will be significantly reduced or eliminated. 11. EARTHWORKS cannot post a substantial injunction bond without ending or

significantly reducing ongoing environmental programs and/or laying off related program staff. If EARTHWORKS were forced to pay a substantial bond, it would be unable to pay the salaries and operating expenses of existing staff, thus crippling all of our programs. 12. Thus, a single substantial bond would greatly hinder EARTHWORKS from

carrying out its mission to protect the public interest through the courts. One such bond would consume an enormously disproportionate share of EARTHWORKS' available resources, greatly

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reducing EARTHWORKS' ability to prosecute private attorney general actions in order to vindicate public rights. If EARTHWORKS were required to post substantial bonds in its lawsuits, it could not bear the financial risk of litigating cases such as this. 13. Nonprofit organizations operate in a marketplace with established standards for

acceptable expenditures. Requiring a disproportionate share of the total resources of EARTHWORKS to be put to a single lawsuit would seem an unreasonable standard by any measure of nonprofit resource expenditure and our donors would not support it. 14. Initial inquiries indicate that obtaining a bond to cover the amount of the attorney

fee and cost award alone (without considering an amount to cover interest) is likely to require a premium of two percent of the amount bonded, or approximately $6,500. 15. Furthermore, I have learned that, to obtain a supersedeas bond, we would be

required to post full collateral in the form of an irrevocable letter of credit. 16. Initial inquiries into what is required for an irrevocable letter of credit indicate

that this would pose a financial hardship on EARTHWORKS. To obtain an irrevocable letter of credit in the amount of the monetary award alone (nearly $325,000) is approximately 20% of our annual budget and would restrain EARTHWORKS' abilities to carry out the basic functions of the organization. As a public interest organization EARTHWORKS spends the funds it receives from donors to carry-out programs on an annual basis. As a result EARTHWORKS does not have reserves. At the end of 2005, our last audited fiscal year, EARTHWORKS ran a deficit and had outstanding debt of over $100,000. While our audit for 2006 is not complete we expect to end 2006 in a similar financial position.

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Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on January 18, 2007. /s/ Steve D'Esposito Steve D'Esposito

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