McCracken et al v. The Black Diamond Company
OPINION AND ORDER denying 9 Motion to Dismiss; denying 14 Amended Motion to Dismiss. Signed by Judge James P. Jones on 5/6/12. (sc)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF VIRGINIA
JENNIE McCRACKEN, ET AL.,
THE BLACK DIAMOND
Case No. 1:11CV00073
OPINION AND ORDER
By: James P. Jones
United States District Judge
Mary Varson Cromer, Appalachian Citizens’ Law Center, Whitesburg,
Kentucky, for Plaintiffs; Thomas R. Scott, Jr., Street Law Firm, LLP, Grundy,
Virginia, for Defendant.
The plaintiffs filed this case pursuant to the “citizens suit” provisions of the
Surface Mining Control and Reclamation Act of 1977 (“SMCRA”). They allege
that the defendant coal mining company has diminished and contaminated their
water supplies and failed to provide them with an adequate and permanent
replacement, in violation of SMCRA as well as state law. The plaintiffs seek a
money judgment for damages sufficient to enable them to fund replacement of the
water supplies destroyed by the defendant’s mining operation. I find that the
allegations set forth in the plaintiffs’ Amended Complaint are sufficient to survive
the defendant’s Motion to Dismiss.
The facts, as alleged in the Amended Complaint, and which are accepted for
the purposes of the present motion, are as follows.
The plaintiffs, Jennie McCracken and Russell Daugherty, are adjacent
property owners in Hurley, Virginia, in Buchanan County.
McCracken and Daugherty relied exclusively on groundwater wells on their
properties to provide their necessary domestic water supplies.
supplied both households with an adequate quantity of clear, clean water.
The defendant, The Black Diamond Company (“Black Diamond”), operates
an underground coal mine in Buchanan County, pursuant to a surface mining
permit. As part of its permit, Black Diamond is required to provide temporary and
permanent water supplies to replace any supplies that are contaminated,
diminished, or interrupted as a result of its mining operation.
In August 2006, Black Diamond became authorized to extend its surface
mining operation into the Mill Creek area, which lies in the valley below
McCracken’s and Daugherty’s wells. Black Diamond mined the area directly
underneath Daugherty’s property, approximately 500 to 1000 feet from the two
Shortly afterwards, McCracken and Daughtery began experiencing
significant problems with the quantity and quality of water provided by the wells.
McCracken and Daugherty complained to the Virginia Division of Mined
Land Reclamation (“DMLR”) concerning the problems with their water supplies.
In the spring of 2007, Black Diamond drilled a new well for the Daughtery
household; however, the water provided by the new well was red in color and of
very poor quality.
DMLR conducted an investigation and concluded that
McCracken’s and Daughtery’s water diminution problems were related to Black
Diamond’s mining operation.
DMLR also determined that Daughtery’s new
replacement well was unsuitable for domestic use without extensive treatment.
Consequently, in May of 2008, DMLR issued two Water Replacement Orders
directing Black Diamond to permanently replace McCracken’s and Daugherty’s
water supplies within twenty-one days. The new water supplies were to be of
equivalent quantity and quality to that existing before mining.
Subsequently, Black Diamond drilled a new well for the McCracken
household and installed sand filtration systems for both McCracken’s and
Daugherty’s new wells. However, even after filtration, the water provided was
unfit for consumption primarily because of high levels of iron and other metals, as
well as coliform contamination.
On August 17, 2010, DMLR advised Black
Diamond that the new wells and post-filtered water supplies did not meet the
Virginia Department of Health water quality standards. DMLR ordered Black
Diamond to provide temporary water replacements of potable/drinking water until
such time that the permanent post-treatment supplies met the Virginia Health
Department water quality standards.
Since then, Black Diamond has been supplying Daugherty and McCracken
with potable bottled water and trucked-in water as a temporary replacement
Permanent water supplies have not been established for the
McCracken or Daugherty households.
The plaintiffs allege that, because Black Diamond has not provided them
with adequate, permanent replacements of their water supplies as ordered by
DMLR, Black Diamond is in violation of SMCRA as well as Virginia law. They y
seek a money judgment for damages to compensate them for the costs arising from
the loss and contamination of their water wells, and to enable them to fund
permanent replacements of the water supplies destroyed by Black Diamond’s
Black Diamond has moved to dismiss the plaintiffs’ causes of action on
various different theories. The defendant claims that the court lacks subject matter
jurisdiction or, in the alternative, that the plaintiffs have failed to state claims for
which relief can be granted. See Fed. R. Civ. P. 12(b)(1), 12(b)(6). Additionally,
the defendant has moved to dismiss for failure to join an indispensable party under
Federal Rule of Civil Procedure 12(b)(7). The Motion to Dismiss has been fully
briefed and is ripe for decision.
A. LACK OF SUBJECT MATTER JURISDICTION.
A motion to dismiss pursuant to Rule 12(b)(1) of the Federal Rules of Civil
Procedure raises the fundamental question of whether the court is competent to
hear and adjudicate the claims brought before it. Challenges to jurisdiction under
Rule 12(b)(1) may be raised in two distinct ways — facial attacks and factual
attacks. See Thigpen v. United States, 800 F.2d 393, 401 n. 15 (4th Cir. 1986).
In the present case, the defendant mounts a facial challenge, arguing that the
Amended Complaint “simply fails to allege facts upon which subject matter
jurisdiction can be based.” Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982).
In analyzing a facial challenge, the court must proceed as it would on a motion to
dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6)
and accept the allegations in the Amended Complaint as true. See id.
The plaintiffs filed this action pursuant to § 520(f) of SMCRA. Section
Any person who is injured in his person or property through the
violation by any operator of any rule, regulation, order, or permit
issued pursuant to [SMCRA] may bring an action for damages . . .
only in the judicial district in which the surface coal mining operation
complained of is located.
30 U.S.C.A. § 1270(f) (West 2007). This provision creates a federal cause of
action for the recovery of damages resulting from the violation of “any rule,
regulation, order, or permit issued pursuant to [SMCRA].” Id. Black Diamond’s
first argument for dismissal centers on whether the statutory phrase “issued
pursuant to [SMCRA],” includes state-issued orders and regulations that comprise
a federally approved state surface mining program. More precisely, the issue is
whether the Virginia orders and regulations allegedly violated by Black Diamond
were issued “pursuant to” SMCRA, such that the court has subject matter
jurisdiction over the Amended Complaint under § 520(f).
contends that the Virginia orders were not issued pursuant to SMCRA, and that
Virginia courts have exclusive jurisdiction over the plaintiffs’ claims.
This argument has no merit. The Fourth Circuit has plainly stated that
individual plaintiffs may maintain actions in federal court under § 520(f) of
SMCRA to recover money damages from coal operators as a result of a violation
of any state rule, regulation, permit, or order included in an approved state
regulatory program. See Molinary v. Powell Mountain Coal Co., Inc., 125 F.3d
231, 237 (4th Cir. 1997) (“Because Congress has not specifically assigned
jurisdiction over § 520(f) suits elsewhere, we conclude the district court possessed
subject matter jurisdiction pursuant to 28 U.S.C. § 1331.”).
Diamond cites the Fourth Circuit’s subsequent decision in Bragg v. W. Va. Coal
Ass’n, 248 F.3d 275 (4th Cir. 2001), for its emphasis on the exclusivity of state
regulation, the Bragg court reiterated the conclusion in Molinary that SMCRA
gives federal courts subject matter jurisdiction “over at least some sorts of claims.”
See Bragg, 248 F.3d at 299. The question is not one of jurisdiction, but of the
merits of the claim. Id. at 299-300.
Black Diamond next argues that this court lacks jurisdiction because DMLR
has already taken some enforcement action in response to the plaintiffs’ requests
for relief, triggering SMCRA’s diligent prosecution bar. In other words, Black
Diamond asserts that the plaintiffs chose to seek enforcement through DMLR and,
having done so, must now be barred from litigating before this court.
Title 30 U.S.C.A. § 1270(b)(1)(B) (West 2007) provides that “no [citizen]
action may be commenced . . . if the [federal government] or the State has
commenced and is diligently prosecuting a civil action in a court of the United
States or a State to require compliance with the provisions of [SMCRA], or any
rule, regulation, order, or permit issued pursuant to [SMCRA] . . . .” While it is
true that DMLR has issued two Water Replacement Orders in connection with
plaintiffs’ requests for relief, the statutory language is clear — enforcement actions
of regulatory authorities can only preclude citizen suits against coal operators if the
state regulatory agency itself has brought a civil action against the operator in a
Because DMLR has not commenced any civil action against Black
Diamond, the diligent prosecution bar is not implicated.
Similarly, Black Diamond contends that, as a result of the Water
Replacement Orders issued by DMLR, the plaintiffs’ claims are barred by the
doctrine of res judicata. To invoke the doctrine of res judicata, a party must
establish a final judgment on the merits in a prior suit resolving claims by the same
parties or their privies, and a subsequent suit based on the same cause of action.
See Ohio Valley Envtl. Coal. v. Aracoma Coal Co., 556 F.3d 177, 210 (4th Cir.
2009). While the doctrine of res judicata was developed in the context of judicial
proceedings, it may be applied to administrative actions as well. See United States
v. Utah Constr. & Mining Co., 384 U.S. 394, 421-22 (1966). For res judicata to
attach to determinations of administrative agencies, the prior “decision must be
rendered pursuant to the agency’s adjudicatory authority and the procedures
employed by the agency must be substantially similar to those used in a court of
law.” Liller v. W. Va. Human Rights Comm’n, 376 S.E.2d 639, 646 (W. Va. 1988).
Issues and procedures are not substantially similar if the second action involves the
application of different legal standards or substantially different procedural rules,
even though the factual setting of both actions may be the same. See Parklane
Hosiery Co. v. Shore, 439 U.S. 322, 331 n.15 (1979).
Res judicata is clearly inapplicable here. First, there has been no formal
adjudication between the parties in a court of law. Second, the procedures utilized
by DMLR were not substantially similar to those employed in judicial proceedings.
For instance, there is no indication that the parties were represented by lawyers, or
that DMLR’s grievance process provided for any of the discovery mechanisms
available under the Federal Rules of Civil Procedure. DMLR simply issued Water
Replacement Orders with no subsequent proceedings in administrative courts or
elsewhere. 1 Where there is no evidence of any testimony, subpoenaed evidence, or
opportunity to test any contention by confrontation, the doctrine of administrative
res judicata has no application. See Delamater v. Schweiker, 721 F.2d 50, 53-54
(2d Cir. 1983).
Finally, Black Diamond argues that the plaintiffs’ claims in Count One and
Count Three must be dismissed because they are not founded upon current
violations of its permit or any ongoing order issued by DMLR. Specifically, Black
Black Diamond also argues that the plaintiffs are barred from litigating in this
court because they failed to exhaust all administrative remedies. However, SMCRA does
not require plaintiffs to pursue administrative remedies before seeking relief in court. See
30 U.S.C.A. § 1276(e) (West 2007); see also Ginn v. Consolidation Coal Co., 437
N.E.2d 793, 796 (Ill. App. Ct. 1982).
Diamond contends that DMLR’s May 2008 Water Replacement Orders have been
dismissed due to compliance, and that DMLR’s August 2010 Water Replacement
Order currently controls Black Diamond’s responsibility for the plaintiffs’ water
supplies. Since the plaintiffs do not allege any violations of the August 2010
Order, Black Diamond argues that their claims must be dismissed.
I find this argument to be unpersuasive. As discussed, the May 2008 Water
Replacement Orders directed Black Diamond to permanently replace the plaintiffs’
water supplies within twenty-one days. The new water supplies were to be of
equivalent quantity and quality as the plaintiffs’ pre-mining supplies.
Additionally, Black Diamond’s surface mining permit requires Black Diamond to
permanently replace any water supply that is contaminated, diminished, or
interrupted by its mining operation. Contrary to Black Diamond’s assertion, the
plaintiffs do not admit that Black Diamond complied with the May 2008 Water
Replacement Orders nor its permit.
While the plaintiffs concede that Black
Diamond drilled new wells and installed sand filtration systems, they allege that
the water replacements provided are of insufficient quality.
Thus, taking the
plaintiffs’ allegations regarding Black Diamond’s requirements and its failure to
provide adequate, permanent replacements as true, the plaintiffs have stated valid
claims upon which relief could be granted.
B. FAILURE TO JOIN AN INDISPENSABLE PARTY.
Black Diamond also argues that the plaintiffs’ claims should be dismissed
for failure to join an indispensable party under Rule 19. See Fed. R. Civ. P.
12(b)(7). In ruling on a 12(b)(7) motion, a court must accept as true the allegations
of the complaint. See Davis Cos. v. Emerald Casino, Inc., 268 F.3d 477, 479 n.2
(7th Cir. 2001). In addition, the burden rests on the moving party to show that the
party who was not joined is needed for a just adjudication. Am. Gen. Life &
Accident Ins. Co. v. Wood, 429 F.3d 83, 92 (4th Cir. 2005).
Whether a party is indispensable requires a two-step inquiry. See Fed. R.
Civ. P. 19. First, it must be determined whether the party is “necessary” pursuant
to Rule 19(a). See Owens-Ill., Inc. v. Meade, 186 F.3d 435, 440 (4th Cir. 1999).
Under this rule, a party is “necessary” if:
(A) in that person’s absence, the court cannot accord complete relief
among existing parties; or
(B) that person claims an interest relating to the subject of the action
and is so situated that disposing of the action in the person’s absence
(i) as a practical matter impair or impede the person’s ability to
protect the interest; or
(ii) leave an existing party subject to a substantial risk of
incurring double, multiple, or otherwise inconsistent obligations
because of the interest.
Fed. R. Civ. P. 19(a)(1). Second, if a necessary party cannot be joined, the court
must then decide whether that party is “indispensable” under Rule 19(b). If the
party is “indispensable,” the court must dismiss the action. In determining whether
a party is “indispensable,” the court weighs the following factors:
(1) the extent to which a judgment rendered in the person’s absence
might prejudice that person or the existing parties;
(2) the extent to which any prejudice could be lessened or avoided by:
(A) protective provisions in the judgment;
(B) shaping the relief; or
(C) other measures;
(3) whether a judgment rendered in the person’s absence would be
(4) whether the plaintiff would have an adequate remedy if the action
were dismissed for nonjoinder.
Fed. R. Civ. P. 19(b).
Determinations as to necessity and indispensability are left to the sound
discretion of the trial court. See Coastal Modular Corp. v. Laminators, Inc., 635
F.2d 1102, 1108 (4th Cir. 1980). Dismissal of a case for nonjoinder is a drastic
remedy and should be employed sparingly. See Teamsters Local Union No. 171 v.
Keal Driveaway Co., 173 F.3d 915, 918 (4th Cir. 1999).
In this case, Black Diamond argues that DMLR is a necessary party because
it has already issued orders with respect to Black Diamond’s violations and
permitting the suit to continue in both the state administrative arena and federal
court would likely subject the parties to conflicting legal obligations.
As a general rule, regulatory agencies are not considered
necessary parties in citizens suit enforcement actions. See, e.g., Ass’n to Protect
Hammersley, Eld, & Totten Inlets v. Taylor Res., Inc., 299 F.3d 1007, 1014 (9th
Cir. 2002) (“We fully agree with other federal circuits . . . that federal and state
agencies administering federal environmental laws are not necessary parties in
citizen suits to enforce the federal environmental laws.”); Friends of the Earth v.
Carey, 535 F.2d 165, 173 (2d Cir. 1976). To hold otherwise would negate one of
the primary purposes of environmental citizens suit provisions — to provide a
means by which citizens can seek enforcement or relief where the regulatory
authority has failed to properly enforce the law. Moreover, Congress expressly
gave regulatory authorities the power to intervene as a matter of right in any
SMCRA citizens suit. See 30 U.S.C.A. § 1270(c)(2) (West 2007). The fact that
Congress chose to allow state regulatory authorities to elect whether to become
involved in SMCRA citizens suits, rather than to create a requirement that they
participate as parties, shows that Congress did not regard state regulatory
authorities as necessary parties to such actions.
Furthermore, DMLR is not so situated that resolution by this court would
impair or impede its interest or cause Black Diamond to incur inconsistent legal
obligations. As Black Diamond acknowledges, DMLR’s only outstanding interest
is its August 2010 Order requiring Black Diamond to provide the plaintiffs with
temporary potable/drinking water until a permanent solution can be obtained. If
the plaintiffs’ remedy is granted, the plaintiffs will obtain adequate, permanent
replacement water supplies and Black Diamond will no longer be required to
provide potable water under the terms of DMLR’s Order. Thus, a successful
disposition will end Black Diamond’s current obligation to provide the plaintiffs
with water without impairing or impeding the effectiveness of DMLR’s Order.
Because DMLR does not qualify as a “necessary” party under Rule 19(a)(1),
further indispensability analysis is unwarranted.
For these reasons, the defendant’s Motion to Dismiss (ECF No. 9) is
The defendant also filed an Amended Motion to Dismiss (ECF No. 14). This
It is so ORDERED.
ENTER: May 6, 2012
/s/ James P. Jones
United States District Judge
motion additionally asserts that there is no diversity subject-matter jurisdiction. Because
I find SMCRA to be the basis of the court’s jurisdiction, there is no reason to consider
this argument, and the amended motion is also denied.
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