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Court ruling in Ohio mining case could prove costly
John C. Kuehner
Plain Dealer Reporter

All Pleasant City wanted was to protect its water wells from a strip miner.

The tiny village succeeded. But its fight, which started in 1988, could require taxpayers to compensate landowners for lost use of their property because of state regulations.

A ruling this month by the Ohio Supreme Court could disarm the state's mining program and encourage developers to challenge the state's wetlands, shoreline and other environmental safeguards - and cost taxpayers a lot of money, environmental lawyers said.

"It's a very disturbing ruling," said Timothy Dowling, chief counsel for the Community Rights Counsel, which supported Pleasant City's case. "This decision requires Ohio taxpayers to pay polluters not to pollute and to pay corporations for simply following the laws enacted by the citizens of Ohio and enforced by state officials."

The state must decide by today whether it will ask the court for a reconsideration. State officials have declined to discuss the case since the justices ruled 4-3 on Dec. 18.

The court ordered the state to pay the mining company RTG Inc. for the loss of its coal assets. The Ohio Department of Natural Resources had imposed a regulation that prevented the company from mining coal on a portion of property it owned or leased in Guernsey County.

The justices said that by regulating these mining practices, the state purchased the coal and must pay for it. It's the same provision of the Ohio Constitution that requires the state to compensate a landowner for a public use.

The decision could cost taxpayers more than $5 million, depending on the final assessed value of RTG's estimated 1.3 million tons of unmined coal. The state also must pay RTG's lawyers' fees, which will be more than $250,000.

"As a citizen, if your property is taken from you, and if you are to be paid for it, is that such a bad result?" asked RTG's lawyer, Mark Stemm. "What's the big concern? The constitution has been followed here."

But others say that what makes this ruling so monumental is that it ignored past U.S. Supreme Court decisions, including a decision this year, said John Echeverria, executive director of the Georgetown Environmental Law and Policy Institute. The Ohio Supreme Court carved out a ruling based on Ohio's Constitution that recognizes coal as a separate, distinct property interest.

Previous rulings by the federal court considered the entire value of a property with its other uses and assets, such as timber and available building surface. The state had argued that RTG either already has mined, or could mine, 40 percent of the property.

"It is the single most radical decision on the takings issue anywhere in the United States," Echeverria said. "The decision creates a precedent that raises the specter that it will be impossible for Ohio to implement its mining program. It seems unlikely the court recognized what an extreme step they were taking."

Not everyone sees it that way.

"We think it's a victory for the coal industry," said Mike Carey, who heads the Ohio Coal Association, which represents the state's coal producers and related industries.

"Access is important: You have to be able to mine the coal to sell it."

The Pacific Legal Foundation, which fights for property rights, supported RTG's fight.

"Whenever a court recognizes that a property-right interest is being taken by government and requires compensation, that is a victory for property rights," said Meriem Hubbard, a legal counsel with the group.

Everyone agrees that "takings" are a controversial, complex and unsettled area of the law.

The issues in the RTG suit date back nearly two decades. The small, family-owned mining company wanted to strip-mine a section of Guernsey County. The company acquired the mining rights and proper state permits and prepared the site for mining, said Stemm, the RTG lawyer.

But opposition, which started when the company announced plans in the early 1980s, continued.

In 1987, the U.S. Environmental Protection Agency designated the aquifer that served the village's water supply as the sole source for drinking water.

A year later, the village asked the state to designate 833 acres as unsuitable for mining because the operations would affect the water wells that serve the village's 1,000 residents.

But the state fought the designation, seeking instead to designate a smaller area.

The village fought the state all the way to the Ohio Supreme Court, which ordered the state in 1994 to broaden the ban.

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