Graham et al v. Consolidation Coal Company et al
Filing
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OPINION AND ORDER granting in part and denying in part 12 Motion to Dismiss Plaintiffs' Complaint and in the Alternative, Motion for More Definite Statement; Denying 48 Motion to Strike Supplemental Authority. Signed by Judge James P. Jones on 3/18/2014. (lml)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF VIRGINIA
ABINGDON DIVISION
DIANNA L. GRAHAM, ET AL.,
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Plaintiffs,
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v.
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CONSOLIDATION COAL COMPANY, )
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ET AL.,
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Defendants.
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Case No. 1:13CV00011
OPINION AND ORDER
By: James P. Jones
United States District Judge
Terrence Shea Cook, T. Shea Cook, P.C., Richlands, Virginia, for Plaintiffs;
James R. Creekmore, Keith Finch, and Blair N.C. Wood, The Creekmore Law
Firm PC, Blacksburg, Virginia, Jonathan T. Blank and Kristin Davis,
McGuireWoods LLP, Charlottesville, Virginia, and David G. Altizer and Mandy
Varney French, Altizer, Walk and White PLLC, Tazewell, Virginia, for Defendants.
Pending before the court is Defendants’ Motion to Dismiss Plaintiffs’
Complaint and, in the Alternative, Motion for a More Definite Statement. 1 For the
reasons stated, the motion will be granted in part and denied in part.
1
The motion is in response to the plaintiffs’ Amended Complaint, referred to by
the plaintiffs as a “Corrected Complaint.” (ECF No. 4.) The initial Complaint contained
deficiencies in its allegations of subject-matter jurisdiction, among other procedural
problems, and the court directed that an amended complaint be filed in order to correct
those deficiencies. (Order, Feb. 5, 2013, ECF No. 2.)
I
The gist of the plaintiffs’ claim in this lawsuit is that a mining company,
faced with getting rid of excess wastewater from an underground coal mine, and
prohibited from discharging the water into local streams, diverted the water instead
into the underground voids in another mine it controlled located beneath the
plaintiffs’ land. For this conduct, the plaintiffs seek compensatory and punitive
damages, as well as injunctive relief. 2
More specifically, it is alleged by the plaintiffs that they are the owners of
real property called the Beatrice Tracts located in Buchanan County, Virginia, in
this judicial district, which ownership includes “natural gas reserves and coal bed
methane.” (Am. Compl. ¶ 6.) The coal itself, they allege, was conveyed away in
a severance deed in 1887 by their predecessors in title. Coal was mined from the
property by defendant Island Creek Coal Company (“Island Creek”) through its
Beatrice Mine.
The plaintiffs allege that the defendant Consolidation Coal Company, in the
course of mining on nearby property, caused “untreated water” containing
“pollutants, contaminants or hazardous substances,” to be “secretly place[d]” in the
underground mine voids left in the Beatrice Mine. (Id. ¶¶ 3, 5, 9, 10.) Island
2
Subject-matter jurisdiction is based upon specific allegations of diversity of
citizenship and amount in controversy. The plaintiffs also claim federal question
jurisdiction, but state no detail in that regard, other than a reference to “Federal QuestionCERCLA.” (Am. Compl. 2.)
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Creek is alleged to be owned by defendant CONSOL Energy Inc., also the parent
of defendant Consolidation Coal Company. It is alleged that these defendants, as
well as defendant CNX Gas Company LLC (“CNX Gas”), intentionally concealed
the placement of water in the mine voids.3
The plaintiffs allege that these actions have damaged them by making
production of their existing natural gas more difficult or impossible. They assert
causes of action against Consolidation Coal Company based upon trespass, unjust
enrichment, negligence, nuisance, and conversion. They assert a cause of action
against Island Creek for waste and against Island Creek, CNX Gas, and CONSOL
Energy Inc., for breaches of duties under agreements and orders relating to the
production of the gas owned by the plaintiffs.
In their Motion to Dismiss, the defendants contend that the plaintiffs have
failed to plead facts showing their standing to bring their claims. The defendants
assert that pursuant to a Virginia statute, Va. Code Ann. § 55-154.2(A) (2012), the
plaintiffs cannot be the owners of the mine voids themselves, and thus have no
standing to claim any damages resulting from the insertion of water into the voids.
In response, the plaintiffs dispute the defendants’ interpretation of the statute and
in the alternative argue that if it is interpreted as plaintiffs contend, the statute is
unconstitutional.
3
“Mine voids” are defined by the plaintiffs as “open spaces . . . created by mining
activity.” (Am. Compl. ¶ 10.)
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The Motion to Dismiss has been briefed and argued and is ripe for decision. 4
II
The plaintiffs’ claim is not unique. In Levisa Coal Co. v. Consolidation
Coal Co., 662 S.E.2d 44 (Va. 2008), Levisa Coal Company (“Levisa”) sued for an
injunction against Consolidation Coal Company (“Consolidation”), one of the
parties here, seeking to prevent the discharge of wastewater from one mine into an
idled coal mine called the VP3 Mine. Levisa, which had leased the coal and coal
mining rights for the VP3 Mine to Consolidation’s predecessor, contended that the
continued presence of the wastewater would harm its ability to extract the coalbed
methane and other coal seams from the property. While the trial court denied
relief, the Supreme Court of Virginia reversed, holding that because the original
severance deed of the coal had not granted the right to the owner of the coal to use
the property for the support of mining operations on other tracts of land, Levisa
4
Oral argument was held on the Motion to Dismiss on July 31, 2013. Thereafter,
because the constitutionality of the state statute had been drawn into question, I notified
the then-Attorney General of Virginia, Kenneth T. Cuccinelli, II, of that issue in the case
and granted him 60 days to intervene on the question of the statute’s consitutionality.
(Certificate Pursuant to 28 U.S.C. § 2403, Aug. 1, 2013, ECF No. 30.) However, the
Attorney General did not intervene. Following that delay, I then allowed the defendants
to file an additional brief on the constitutional issue, which issue had been raised initially
by the plaintiffs in a surreply brief on the Motion to Dismiss. On December 9, 2013, I
advised the parties that the Motion to Dismiss was finally deemed submitted for decision
without further briefing. The defendants have now appropriately advised the court of a
recent ruling (February 25, 2014) by a state trial court upholding the constitutionality of
the statute in question, which supplemental authority the plaintiffs have responded to.
While the plaintiffs have also requested that I strike the submission of the supplemental
authority, I will deny that request.
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could not have leased that right to Consolidation and thus Consolidation was
without a legal right to discharge the wastewater into the VP3 Mine. 662 S.E.2d at
52.5
In the Levisa case, as in this case, Consolidation contended that the plaintiff
lacked standing because it had no current possessory interest in the VP3 Mine
voids where the wastewater from other mines was stored. Id. at 48. However, the
Virginia court rejected that argument, holding that because there was a claim that
the inundation of the VP3 Mine would potentially damage Levisa’s right to the gas
deposits associated with the mine, there was sufficient standing. Id.
Similar lawsuits have also been filed in this court.
In Powers v.
Consolidation Coal Co., No. 1:12CV00039, 2013 WL 56325, at *1 (W.D. Va. Jan.
3, 2013), I denied a motion to dismiss on the ground that the complaint adequately
set forth a plausible claim that the inundation of the mine with water from another
mine would adversely affect the plaintiffs’ ability to extract the coalbed methane
gas that they owned. In C.L. Ritter Lumber Co. v. Consolidation Coal Co., No.
1:11CV00019, 2011 WL 4963195, at *1 (W.D. Va. Oct. 19, 2011), I denied the
defendants’ motion to dismiss for the same reason. In Oryn Treadway Sheffield,
Jr., Trust v. Consolidation Coal Co., 819 F. Supp. 2d 625, 630-31 (W.D. Va.
5
The court also directed the trial court to consider whether Levisa had an
adequate remedy at law, that is, for money damages, thus precluding injunctive relief. Id.
at 53-54.
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2011), aff’d, 497 F. App’x 318 (4th Cir. 2012) (unpublished), I granted a motion to
dismiss because there was no plausible claim made in the complaint that the
inundation of the mine voids affected the plaintiffs’ ability to extract any other
minerals.
In the present case, consistent with my prior rulings, I find that the plaintiffs
have standing to sue in light of their plausible allegation that their extraction of
natural gas has been made more difficult or impossible by the inundation of the
mine voids in the Beatrice Mine.
The common law rule in Virginia has been that mine voids are available to
the owner of the coal as long as coal is being mined from the particular tract, but
once the coal is exhausted, the ownership of the empty space once occupied by the
coal reverts to the grantor of the coal by operation of law. See Clayborn v. Camilla
Red Ash Coal Co., 105 S.E. 117, 119 (Va. 1920) (holding that the coal owner has
only an interest in the coal itself, with the “necessary incidental easement to use the
containing walls for support and for the purpose of getting [the coal] out”). The
defendants argue that the plaintiffs have not adequately pleaded exhaustion of the
coal in this case in order to show reversion of the mine voids. However, I find that
even if reversion were a necessity in order to support some of the plaintiffs’ claims
— and I make no determination in that regard — it is implicit in the allegations of
the Amended Complaint.
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An important holding in the Clayborn case was that the coal operator could
not use the mine voids for the transport of coal from other tracts, except as might
be permitted by the severance deed. This holding, which the Supreme Court of
Virginia recognized was a departure from the rule in other states, followed from
the court’s determination that “when nothing more is said than that the coal is
granted, or that the coal is granted with the right to mine and remove it, nothing but
the coal and the right to remove it ought to be understood to pass by the deed.”
105 S.E. at 122.
A Virginia statute, adopted in 1981, provides that except as
otherwise provided in the severance deed, the owner of minerals “shall be
presumed to be the owner of the shell, container chamber, passage, and space
opened underground for the removal of the minerals, with full right to haul and
transport minerals from other lands and to pass men, materials, equipment, water
and air through such space.” Va. Code Ann. 55-154.2(A). It is further provided in
the statute that these provisions “shall not affect contractual obligations and
agreements entered into prior to July 1, 1981.” Id. 6
It is contended that this statute expressly allows the storage of water from
other mines in the Beatrice Mine voids, thus relieving the defendants of any
6
The statute was recently amended by the Virginia General Assembly, 2012 Va.
Acts ch. 695, by adding subsections, which are not relied upon here. The portion of the
statute relied upon by the defendants became subsection A. The statute has never been
construed by any reported decision of the Virginia Supreme Court.
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liability claimed, at least in the absence of any rebuttal of the presumption. The
plaintiffs argue that because the severance deed was entered into before 1981, the
statute does not apply. The defendants assert that a severance deed is not a
“contractual obligation[] [or] agreement[]” and thus that provision of the statute is
inapplicable.
Alternatively,
the
plaintiffs
contend
that
the
statute
is
unconstitutional.
The facts of the case are insufficient at this time to decide these issues,
particularly in light of apparent ambiguities in the statute. Does “passage” of the
water in the mine voids describe what has happened in this case? Does the clause
permitting the “right to haul and transport minerals from other lands” also apply to
the water stored in the Beatrice Mine voids? While the right to the use of the mine
voids by the defendants and the effect, if any, of the Virginia statute on that right
may be relevant to the ultimate resolution of this case, I cannot resolve the
applicability of the statute — and certainly its constitutionality — at this point in
the litigation.
III
The plaintiffs concede that they have not adequately pleaded the violation of
any duty established under agreements and orders relating to the production of
coalbed methane. I will grant the Motion to Dismiss to that extent but allow the
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plaintiffs leave to amend in that regard. The defendants also seek a more definite
statement of the plaintiffs’ claim, in order that it might be determined whether the
applicable statute of limitations applies.
However, because the statute of
limitations is an affirmative defense, I do not find that relief appropriate. See
Powers, 2013 WL 56325, at *2.
Accordingly, it is ORDERED as follows:
1.
Defendants’ Motion to Dismiss Plaintiffs’ Complaint and, in the
Alternative, Motion for a More Definite Statement (ECF No. 12) is GRANTED IN
PART AND DENIED IN PART;
2.
Plaintiffs’ claims set forth in Counts VII and VIII of the Amended
Complaint are DISMISSED because they do not set forth sufficient facts as to the
duties claimed to have been violated and the sources of such duties, provided that
the plaintiffs are granted leave to file an Amended Complaint as to such counts in
order to remedy such insufficiencies, and further provided that the Amended
Complaint must be filed within 14 days of the date of entry of this Order;
3.
Defendants’ Motion to Dismiss is otherwise DENIED; and
4.
Plaintiffs’ Motion to Strike Supplemental Authority (ECF No. 48) is
DENIED.
ENTER: March 18, 2014
/s/ James P. Jones
United States District Judge
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