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Alton Coal pursuit of legal fees may have far-reaching effect

Published February 26, 2013 3:35 pm

Mining • Company wants groups that challenged its strip mine to pay.
This is an archived article that was published on sltrib.com in 2013, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

An attorney-fee dispute arising from the controversial Coal Hollow strip-mine in Alton could have far-reaching consequences on citizens and conservation groups' ability to legally challenge coal projects.

Alton Coal Development prevailed in its bid to strip-mine coal on private land near Bryce Canyon National Park after a string of legal skirmishes that ended last October in the Utah Supreme Court. Now the company wants to extract its legal costs — it hasn't detailed a dollar amount — from the Southern Utah Wilderness Alliance and three other groups.

But not content with state regulators' formal opinion that developers must show their adversaries acted "in bad faith" to collect legal costs, Alton Coal lawyer Denise Dragoo has asked the Utah governor to intervene and impose a much lower standard.

The matter, to be argued before the Board of Oil, Gas and Mining Wednesday, could result in environmentalists being liable for hefty legal costs every time they take a Utah coal project to court and lose.

A finding for Alton would deter groups from taking coal developers to court, according to Tim Wagner, head of the Sierra Club's Utah chapter, which joined SUWA in the Alton suit.

"The availability of the courts for any groups, no matter their agenda, is a part of democracy," Wagner said. "These challenges are not frivolous. These projects are being challenged for good reasons."

The other plaintiffs are the Natural Resources Defense Council and the National Parks Conservation Association. This consortium alleged that the Division of Oil, Gas and Mining, or DOGM, failed to perform an adequate environmental review when it authorized the state's only strip mine on 600 acres of private coal in 2009.

A separate proposal by Alton, to expand operations onto 3,500 acres, is still under analysis.

The environmentalists lost at every level and now Alton says it's entitled to be reimbursed for its legal costs. The company contends that an old legal standard — requiring the winner in coal disputes to show that its opponent sued simply to harass and embarrass — no longer holds.

DOGM opposes that position, saying the bad-faith standard was "inadvertently omitted" from the state's administrative code. In its filings with the mining board, regulators argue the state is obligated to abide by this standard as part of a deal it forged 32 years ago with the federal government to win primacy over coal mining regulation. The federal Office of Surface Mining is now threatening action against the state if it fails to apply the bad-faith standard in the Alton matter.

Dragoo is seeking help from Gov. Gary Herbert, who received a $10,000 from Alton for his 2010 election campaign, and his energy adviser Cody Stewart.

In a Feb. 21 letter, she accused state regulators of "prematurely capitulating" their authority to the feds and asked the governor to allow the mining board "to proceed unfettered" by federal standards.

bmaffly@sltrib.com