COALEX REPORT 303

	Coalex Report 303

This is the Office of Surface Mining's library of COALEX Research Reports. COALEX is a database of mining and reclamation information, including the Surface Mining Law and regulations, maintained in LEXIS-NEXIS -- a commercial, on-line research service. These reports have been compiled under a cooperative agreement between the Office of Surface Mining and the Interstate Mining Compact Commission, which represents most U.S. coal producing states. The following report includes an analysis of a specific issue requested by a state regulatory authority with responsibility for carrying out the Surface Mining Law. Copies of the research reports and attachments are available to the public, upon request. For additional information, or to obtain copies of the listed attachments, contact Ron Tarquinio by phone at (202) 208-2882 or by e-mail at rtarquin@osmre.gov.

                   
COALEX State Inquiry Report - 303
November, 1994

Myra Spicker, Esquire
Office of Attorney General
Indiana Government Center South, Fifth Floor
402 West Washington Street
Indianapolis, Indiana 46204

TOPIC: RETIREMENT OF PARTNER FROM CONTINUING PARTNERSHIP; COAL REMOVAL INCIDENT
TO PRIVATE DEVELOPMENT (Includes COALEX Reports Nos. 173 & 262)

INQUIRY: Coal was found in an area under construction for private commercial development. An
individual who was part of the partnership conducting the commercial development pulled out of
the partnership before the coal "entered interstate commerce". Is this individual one of the
"responsible parties" for mining without a permit?

SEARCH RESULTS: Using the COALEX Library and other LEXIS material, additional material was
added to existing COALEX Reports. The items identified discuss different aspects of the Inquiry,
e.g., the issues of partnership, responsible parties and commercial development. No cases were
identified that matched the specific fact situation of this Inquiry. Copies of the materials listed
below are attached.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

COALEX REPORTS
COALEX REPORT NO. 173, "Coal removal incident to private development" (1991). 
  This Report includes a survey accompanied by research. One of the included Interior
administrative opinions provides a two-part criteria for determining whether the regulatory
authority has authority over a project: (1) What is the underlying purpose of the excavation
through which the coal was encountered? (2) Does the coal enter commerce? [See TRIPLE B AND
GARY BRANHAM v OSM] 

COALEX REPORT NO. 262, "Non-commercial use of 'other minerals'" (1993).
  Several Interior administrative decisions and existing COALEX Reports provided some information
on whether a landfill operator who occasionally runs into coal while excavating shale and clay is
subject to the 16 2/3 exemption. The shale and clay are used by the landfill operator, not sold for
commercial use.


ADDITIONAL OHA DECISIONS
GARY COBB, IBLA 93-415 (1994).
  The Board analyzed Cobb's relationship to and resignation from Midwest Coal, operator for the
permittee, Poteau Coal, and his responsibility for delinquent reclamation fees and civil penalties. 


LLOYD D. LIVESAY D/B/A NU-WAY COAL CO., v OSM, Docket No. NX 7-93-R (1992).
  The ALJ found the Livesay was "a partner in, and therefore an owner of, Nu-Way Coal Company.
As such, he stood to benefit from the coal sold by Nu-Way Coal Company as the direct recipient of
the sale proceeds." Livesay was held liable for fees and for remedying violations.


CHRISTINE COAL v OSM, Docket Nos. NX 90-23-R, NX 90-41-R, NX 90-47-R (1991).
  In concluding that Hershell Pennington was a partner with Morgan Lewis in Christine Coal, not
merely the recipient of a debt payment for a loan on the purchase of mining equipment, the ALJ
discusses various tests, such as profit sharing, as evidence of a partnership.


BILLY P. EVANS v OSM, Docket No. NX 90-58-R (1991).
  The ALJ established that Evans was the operator (responsible for abating the violations) on the
permit in question and was "the owner of Lynco" as he was the person who stood "to benefit
directly from the sale, transfer, or use of the coal."


RED STAR COAL CO., INC. v OSM, Docket No. 90-28-R (1990).
  "There are several key elements necessary to finding that an agency relationship existed between
Leroy Lackey and Elwood Gibson.... Whether Leroy Lackey and Elwood Jackson had an agency
relationship is a question of fact to be proved by prior dealings, circumstances and the conduct of
the parties.... Here there was no right to control either the day-to-day mining or the sale of coal."

  Cites to U.S. v RAPOCA ENERGY CO., 613 F Supp 1161 (DC Va 1985). [Federal case and OHA
decision, G.A. SILER v OSM, Docket No. NX 6-62-P (1986), are attached.]


MCWANE COAL CO., INC. 95 IBLA 1, IBLA 85-621 (1986). MCWANE COAL CO. (On Judicial
Remand), 95 IBLA 1, IBLA 85-621 (1987).
  SYLLABUS: "'Operator.' Identification of the 'operator' responsible for payment of reclamation
fees... does not turn solely upon a literal interpretation of the phrase 'removes or intends to
remove' coal... but involves consideration of business realities. The person or entity who exercises
control over the person or entity who actually removes the coal is responsible for payment of the
reclamation fees."

   Also cites to RAPOCA.


AUBREY WATKINS v OSM, Docket No. NX 0-225-R (1983), amends AUBREY WATKINS v OSM,
Docket No. NX 0-225-R (1982).
  Watkins claimed that "although he financed the operation, that he had absolutely no control over
the acts of Peyton Smith or ownership in Black and White Land Developers. The Applicant asserts
that merely financing a venture does not make the Applicant a joint venturer with Peyton Smith so
as to render the Applicant liable for the alleged environmental damage." The ALJ found that the
evidence supported "a conclusion that the Applicant was the sole manager and owner of the
enterprise and Peyton Smith was nothing more than a business employee."

  
MISCELLANEOUS MATERIAL
Excerpts from the September, 1978 Proposed Rules and the March, 1979 Final Rules are attached
for background.



ATTACHMENTS
A.   COALEX REPORT NO. 173, "Coal removal incident to private development" (1991). 
B.   COALEX REPORT NO. 262, "Non-commercial use of 'other minerals'" (1993).
C.   GARY COBB, IBLA 93-415 (1994).
D.   LLOYD D. LIVESAY D/B/A NU-WAY COAL CO., v OSM, Docket No. NX 7-93-R (1992).
E.   CHRISTING COAL v OSM, Docket Nos. NX 90-23-R, NX 90-41-R, NX 90-47-R (1991).
F.   BILLY P. EVANS v OSM, Docket No. NX 90-58-R (1991).
G.   RED STAR COAL CO., INC. v OSM, Docket No. 90-28-R (1990).
H.   U.S. v RAPOCA ENERGY CO., 613 F Supp 1161 (DC Va 1985). 
I.   G.A. SILER v OSM, Docket No. NX 6-62-P (1986).
J.   MCWANE COAL CO., INC. 95 IBLA 1, IBLA 85-621 (1986). 
K.   MCWANE COAL CO. (On Judicial Remand), 95 IBLA 1, IBLA 85-621 (1987).
L.   AUBREY WATKINS v OSM, Docket No. NX 0-225-R (1983).
M.   AUBREY WATKINS v OSM, Docket No. NX 0-225-R (1982).
N.   43 FR 41662 (SEPTEMBER 18, 1978). Proposed rules. [Excerpt on bonding]
O.   44 FR 14902 (MARCH 13, 1979). Final rules. [Excerpt on bonding]


Research conducted by: Joyce Zweben Scall

(Home Page)

Office of Surface Mining
1951 Constitution Ave. N.W.
Washington, D.C. 20240
202-208-2719
getinfo@osmre.gov