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Texas Eastern Transmission, LP v. West Virginia Department of Environmental Protection

Supreme Court of West Virginia

November 16, 2017

TEXAS EASTERN TRANSMISSION, LP, Petitioner Below, Petitioner,
v.
WEST VIRGINIA DEPARTMENT OF ENVIRONMENTAL PROTECTION, DIVISION OF MINING AND RECLAMATION, AND THE MARSHALL COUNTY COAL COMPANY F/K/A McELROY COAL COMPANY, Respondents Below, Respondents. AND THE MARSHALL COUNTY COAL COMPANY, F/K/A McELROY COAL COMPANY, Petitioner Below, Petitioner,
v.
TEXAS EASTERN TRANSMISSION, LP, AND WEST VIRGINIA DEPARTMENT OF ENVIRONMENTAL PROTECTION, DIVISION OF MINING AND RECLAMATION, Respondents Below, Respondents.

          Submitted: September 13, 2017

         Appeals from the Circuit Court of Marshall County Honorable Jeffrey D. Cramer, Judge Civil Action No. 09-CAP-1K

          Kent George W. Bradley Sorrells Robinson & McElwee, PLLC Charleston, West Virginia Craig P. Wilson, pro hac vice Anthony R. Holtzman, pro hac vice K&L Gates LLP Harrisburg, Pennsylvania Attorneys for Texas Eastern Transmission, LP

          Scott Driver West Virginia Department of Environmental Protection Charleston, West Virginia Attorney for West Virginia Department of Environmental Protection

          Douglas J. Feichtner, pro hac vice Dinsmore & Shohl LLP Cincinnati, Ohio Jacob A. Manning Dinsmore & Shohl LLP Wheeling, West Virginia William E. Robinson Dinsmore & Shohl LLP Charleston, West Virginia Attorneys for The Marshall County Coal Company

          Jonathan T. Storage West Virginia Department of Transportation, Division of Highways Charleston, West Virginia Attorney for Amicus Curiae, West Virginia Department of Transportation, Division of Highways.

         SYLLABUS BY THE COURT

         1. "When the language of a regulation promulgated pursuant to the West Virginia Surface Mining and Reclamation Act, W.Va. Code, [22]-3-1 et seq., is clear and unambiguous, the plain meaning of the regulation is to be accepted and followed without resorting to the rules of interpretation or construction." Syllabus point 1, State ex rel Laurel Mountain/Fellowsville Area Clean Watershed Association, Inc. v. Callaghan, 187 W.Va. 266, 418 S.E.2d 580 (1992).

         2. W.Va. CSR § 38-2-14.17, read alone or in conjunction with W.Va. CSR § 38-2-3.32.a., contains no requirement that compliance therewith be demonstrated in a permit application tendered in accordance with W.Va. CSR § 38-2-3.

         3. W.Va. CSR § 38-2-16.2.c.2 does not abrogate West Virginia common law with respect to subjacent support waivers contained within coal severance deeds.

          OPINION

          DAVIS, JUSTICE.

         These consolidated appeals require the Court to interpret various provisions of the West Virginia Surface Coal Mining and Reclamation Rule ("WVSCMRR"), W.Va. CSR §§ 38-2-1 et seq., to determine whether a coal company must, in its application for a modification of its mining permit, describe how it will comply with the Utility Protection Standard found at W.Va. CSR § 38-2-14.17. We also are asked to determine whether the Subsidence Control Plan in the permit application under review adequately set out specific steps that would be taken to protect interstate gas pipelines that cross above a proposed mine site. Finally, we are asked to address whether the WVSCMRR abrogates the common law with respect to a coal operator's right to subside. We conclude that the circuit court correctly found the WVSCMRR does not require a permit application to demonstrate compliance with the Utility Protection Standard. Likewise, we find no error with the circuit court's ruling that the permit application sufficiently described how the coal operator would comply with the Utility Protection Standard. Accordingly, those rulings are affirmed. However, we conclude that the circuit court erred in finding that the WVSCMRR applied regardless of a coal operator's common law property rights. We, therefore, reverse that portion of the circuit court's rulings.

         I.

         FACTUAL AND PROCEDURAL HISTORY

         The Marshall County Coal Company f/k/a McElroy Coal Company ("Marshall Coal") claims that it has ownership of certain underground coal reserves in Marshall County, West Virginia, as well as extensive contractual common law rights to access and mine the coal without liability for effects on the surface of lands overlying the reserve.[1] Marshall Coal further contends that, on February 10, 1983, the West Virginia Department of Environmental Protection ("WVDEP") issued to Marshall Coal a mine permit authorizing it to explore, develop, and extract coal by longwall mining underneath the surface at the McElroy mine in Marshall County.[2] In December 2007, Marshall Coal submitted to WVDEP an application for a revision to its permit for the McElroy mine ("Permit Revision Application 33"). The purpose of the revision was to "add area to the subsidence control plan for developmental and longwall mining for the McElroy Deep Mine."[3]

         Subsequent to Marshall Coal obtaining ownership of the coal reserves and the right to subside the surface, Texas Eastern Transmission, LP ("Texas Eastern") obtained rights-of-way for a portion of the surface area above Marshall Coal's reserves. These rights-of-way allow Texas Eastern to operate four interstate gas transmission pipelines that cross the revised permit area over a distance of approximately four miles. The pipelines are operated pursuant to certificates of public convenience and necessity issued by the Federal Energy Regulatory Commission.[4] According to Texas Eastern, the pipelines transport over two billion cubic feet of natural gas per day to consumers in the mid-Atlantic and Northeastern United States. The pipelines, which are buried at a depth of approximately three feet, range from thirty to thirty-six inches in diameter. The gas pressure in the pipelines is said to vary between approximately 700 and 1, 000 pounds per square inch. Texas Eastern avers that the pipelines have limited tolerance for stress created by ground movement associated with subsidence.

         As part of its Permit Revision Application 33, Marshall Coal submitted a subsidence control plan stating, in part, under the heading "Renewable Resource Lands and Features":

Surface lands other than what is used for dwellings or businesses overlying the projected mining area are primarily pasturelands and non-commercial woodlands. These areas were identified using aerial photographs.
Surface topography in this mining area is primarily comprised of steeply sloping hillsides with limited land uses. Primarily, the land uses are limited to the hilltops and ridgelines where the topography consists of more moderately sloping hillsides and fairly broad ridgetops suitable for pastures and hay/crops, respectively. There are no intensively managed commercial forests or public use lands within the projected mining area. . . .
Due to the mining method (longwall) utilized in the mining of the areas proposed in this application, it is expected that there will be planned subsidence of the above-mentioned surface features and renewable resource lands. If subsidence does occur as a result of the longwall mining, that causes material damage or reduces the value or reasonable foreseeable use of the surface lands, [Marshall Coal] will restore the land or structure(s) or compensate the surface owner. [5]

(Footnote added). In addition, Permit Revision Application 33, under the heading "Gas Lines, " states that "[m]ining beneath gas pipelines will be handled per common law practices in accordance with West Virginia codes and regulations and severance deeds between the pipeline owner and [Marshall Coal]."

         Texas Eastern and Columbia Gas Transmission Corp. ("Columbia Gas"), [6] who also has pipelines crossing Marshall Coal's reserves, both objected to the WVDEP's approval of Marshall Coal's Permit Revision Application 33. Accordingly, a public hearing was held on October 23, 2008. Thereafter, WVDEP approved Marshall Coal's Permit Revision Application 33 on November 25, 2008, expressly finding that the revision was "accurate and complete and all of the requirements of Article 3, Chapter 22, and the Regulations have been complied with." Texas Eastern then appealed the WVDEP's approval of Permit Revision Application 33 to the West Virginia Surface Mine Board ("SMB"), asserting, in relevant part, that Marshall Coal's Permit Revision Application 33 was deficient because it failed to: (1) demonstrate that Marshall Coal would conduct its mining operation is a way that would protect Texas Eastern's pipelines and (2) specify in its subsidence control plan the measures that would be taken to protect Texas Eastern's pipelines from material damage. Columbia Gas also appealed the WVDEP's approval of Marshall Coal's Permit Revision Application 33.[7]

         Columbia Gas also had earlier appealed to the SMB a permit revision application by Consolidation Coal Co. ("Consol Appeals")[8] that shared "common, dispositive questions of law"[9] with the appeals of Marshall Coal's Permit Revision Application 33 at issue in the case sub judice ("Marshall Coal Appeals"). Accordingly, in order to avoid duplication of efforts by the SMB and the parties with respect to the Marshall Coal Appeals, the parties to the Marshall Coal Appeals stipulated that the legal proceedings in the Consol Appeals would govern the Marshall Coal Appeals.

         The SMB's order dated February 18, 2009, in the Consol Appeals, addressed cross summary judgment motions on two issues: (1) whether WVDEP erred in issuing permits to Consolidation Coal Co. ("Consol") without requiring Consol to specify the measures it would take to protect Columbia Gas' pipelines in advance of mining and (2) whether Consol had an obligation to correct or repair material damage to Columbia Gas' pipelines regardless of the parties' common law property rights. As to the first issue, pre-mining protection of gas pipelines, the SMB denied Columbia Gas' motion for summary judgment and granted Consol's summary judgment motion. The SMB based its decision upon its finding that the WVDEP properly interpreted state regulations to require that subsidence control plans contained in permit applications describe the measures to be taken to either mitigate subsidence damages to pipelines prior to mining or to remedy subsidence damage caused by mining, but do not require mine operators to describe both. As to post-mining subsidence-induced damage to pipelines, the SMB granted Columbia Gas' motion for summary judgment and denied Consol's summary judgment motion, ruling that state regulations required Consol to either repair or compensate for such damages regardless of its common law property rights. Consol had raised an additional argument asserting that, if state regulations were interpreted as requiring it to either repair or compensate for damages to commercial structures such as gas lines, then the state regulation was more stringent than the parallel federal regulation. According to Consol, WVDEP was required to make specific written findings of the need for a provision that is more stringent than the comparable federal mining provision, and it had failed to do so. The SMB found that ruling upon this issue was outside of its authority and concluded that such a determination should be left to a court of competent jurisdiction.

         The SMB then issued a final order, dated March 26, 2009, in the Marshall Coal Appeals. The order summarily stated that the appeals were granted in part and dismissed in part for the reasons that had been set out in its amended[10] final order rendered in the Consol Appeals. Texas Eastern, Columbia Gas, Consol, and Marshall Coal each filed a separate appeal to the SMB's order.[11] On October 7, 2013, Columbia Gas and Consol voluntarily dismissed their appeals, leaving only Texas Eastern and Marshall Coal as parties to the appeal.

         On August 5, 2016, the Circuit Court of Marshall County issued its order affirming the SMB. On September 6, 2016, Texas Eastern filed an appeal of the Circuit Court's order in this Court, where it was designated as Appeal Number 16-0827. Thereafter, on September 16, 2016, Marshall Coal filed in this Court a separate appeal of the same order, which was designated as Appeal Number 16-0877.[12] By order entered December 5, 2016, this Court granted a joint motion to consolidate the two appeals for purposes of filing a joint appendix and for consideration of the merits.

         II.

         STANDARD OF REVIEW

         This Court has recognized that, pursuant to W.Va. Code § 22B-1-9 (1994) (Repl. Vol. 2010), a "decision of the Surface Mine Board is reviewed by the circuit court pursuant to the provisions of W.Va. Code § 29A-5-4 [(1998) (Repl. Vol. 2010)] of the State Administrative Procedures Act." Tennant v. Callaghan, 200 W.Va. 756, 760, 490 S.E.2d 845, 849 (1997). We further have recognized that,

[i]f the circuit court's order is appealed to this Court, we review the circuit court's order de novo, and thus, [we likewise] review the Surface Mine Board's decision "pursuant to the standard of review articulated in W.Va. Code, 29A-5-4(g) [(1998) (Repl. Vol. 2010)] . . . and syllabus point 1 of [HCCRA v. Boone Memorial Hospital, 196 W.Va. 326, 472 S.E.2d 411 (1996).]"

Tennant, 200 W.Va. at 761, 490 S.E.2d at 850. Accord West Virginia Div. of Envtl. Prot. v. Kingwood Coal Co., 200 W.Va. 734, 747, 490 S.E.2d 823, 835 (1997). Thus, insofar as our review is governed by the same standards that apply to the circuit court, we recognize that,

"'[u]pon judicial review of a contested case under the West Virginia Administrative Procedure[s] Act, Chapter 29A, Article 5, Section 4(g), the circuit court may affirm the order or decision of the agency or remand the case for further proceedings. The circuit court shall reverse, vacate or modify the order or decision of the agency if the substantial rights of the petitioner or petitioners have been prejudiced because the administrative findings, inferences, conclusions, decisions or order are "(1) In violation of constitutional or statutory provisions; or (2) In excess of the statutory authority or jurisdiction of the agency; or (3) Made upon unlawful procedures; or (4) Affected by other error of law; or (5) Clearly wrong in view of the reliable, probative and substantial evidence on the whole record; or (6) Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion."' Syl. Pt. 2, Shepherdstown Volunteer Fire Department v. Human Rights Commission, 172 W.Va. 627, 309 S.E.2d 342 (1983)." Syllabus Point 1, St. Mary's Hospital v. State Health Planning and Development Agency, 178 W.Va. 792, 364 S.E.2d 805 (1987).

Syl. pt. 1, West Virginia Health Care Cost Review Auth. v. Boone Mem'l Hosp., 196 W.Va. 326, 472 S.E.2d 411 (1996).

         To the extent that our resolution of the instant appeal also requires this Court to interpret statutory provisions and state rules, we further recognize that "[i]nterpreting a statute or an administrative rule or regulation presents a purely legal question subject to de novo review." Syl. pt. 1, Appalachian Power Co. v. State Tax Dep't of W.Va., 195 W.Va. 573, 466 S.E.2d 424 (1995).

         With regard for the foregoing standards, we address the assignments of error raised by the parties in these consolidated appeals.

         III.

         DISCUSSION - APPEAL NUMBER 16-0827

         Texas Eastern, petitioner in Appeal Number 16-0827, argues that the circuit court erred in affirming the SMB's determination that, under the West Virginia Code of State Rules, an applicant for a longwall mine permit need not demonstrate in its application how harm to natural gas pipelines will be minimized or reduced. Texas Eastern relies on three grounds to support its assertion of error. We will address two of these grounds in turn.[13]

         A. West Virginia Utility Protection Standard

         Texas Eastern first argues that Marshall Coal was required, but failed, to demonstrate in its Permit Revision Application 33 that it would comply with the West Virginia Utility Protection Standard ("Utility Protection Standard"), found at W.Va. CSR § 38-2-14.17.[14]Marshall Coal, a respondent in Appeal No. 16-0827, responds that the Utility Protection Standard is a performance standard, and, as such, it should not be confused with the application requirements for pre-mining permits and permit revisions. We agree with Marshall Coal. The WVDEP, a respondent in Appeal No. 16-0827, did not address this specific issue.

         Notably, W.Va. CSR § 38-2-14, [15] the section of the W.Va. CSR in which the Utility Protection Standard is found, bears the title "Performance Standards" and is separate and apart from W.Va. CSR § 38-2-3, which is the portion of the rules expressly addressing permit application requirements and contents. The introductory sentence of W.Va. CSR § 38-2-14 is clear in stating that the performance standards apply to mining operations: "[i]n addition to the requirements of the Act, the following performance standards shall be applicable to both surface and underground mining operations." (Emphasis added). No reference to application requirements is made in this introductory sentence. Contained within the performance standards is the specific provision referred to by Texas Eastern as the "Utility Protection Standard, " which reads as follows:

14.17. Utility Installations. All surface mining operations[16]shall be conducted in a manner which minimizes damage, destruction, or disruption of services provided by oil, gas, and water wells; oil, gas and coal-slurry pipelines; railroads; electric and telephone lines; and water and sewage lines which pass over, under, or through the permit ...

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