How not to do a water rights and mining agreement between a property owner and a mining company
One could not find a more significant conflict than that between a private property owner defending his property and water rights against a mining company in need of developing its mining plan, with that plan including the need for water.
In this opinion piece, I will discuss a recent written stipulation between a property owner and a mining company intended to settle litigation. Background for this matter can be found in my prior piece on cease and desist orders.
I have been accused, among other colorful charges, of being a tree -hugger. And, I have been accused of being “hell bent for leather” for developers. These labels are comfortably dispelled by the reader who takes the time to consider what I write. I am not here obliged to either the property owner or the mining company in my observations. While the world has changed, I am not aware that my readers have yet taken an oath renouncing the use of reason.
I have represented developers and parties affected by development in my practice and do not tilt the scales of fair analysis in either direction. The conflict in question and the settling of such a conflict by agreement is commonly called a stipulation in disputed litigation.
A stipulation between parties is a contract. In this case, the stipulation was intended to state the material resolved points under the parties’ settlement.
The parties to the pending litigation stated they, “mutually agreed to resolve their dispute, without an admission with respect to liability [between themselves].”
The stipulation contains a number of reasonable concessions between the parties which will not be reviewed in this piece. I here review problems with the stipulation:
The stipulation does not provide the amount of consideration the landowner was to receive.
The stipulation does not provide the quantities of water given by water rights which are to be transferred under the agreement. Without reference to designated quantities of a commodity, future conflicts can easily occur.
Future permit applications for water rights are to be subordinated to one of the parties without a full discussion of the method of measuring or calculating what a subordinated right means.
A release of past, present or future claims, known or unknown, from the landowner was given to the mining company for claims arising from the company’s use of water concerning the landowner’s property rights or water rights. This type of release would stop a landowner’s possible claim from risks associated with yet unknown mining events. Mining hazards cannot be easily predicted.
Parties may define and allocate financial responsibility for environmental issues and claims between themselves. The stipulation under discussion does not appear to address the question of possible liability to third parties, one way or another. An agreement or stipulation could not immunize a party from so-called public cost recovery claims. By way of illustration, under federal CERCLA law a responsible party (a party causing contamination) may remain liable to the federal government regardless of that party’s contractual arrangements with other parties.
The stipulation does not provide a good step-by-step agreed-on process for addressing future problems which may arise based on the terms of the stipulation. Disputes concerning an existing stipulation can arise on the “construction,” meaning interpretation, as well as the enforcement of an existing stipulation.
David Ganje is an attorney who practices natural resources, environmental and commercial law. His website is lexenergy.net.
Photo: Haakon County, South Dakota, courthouse. Public domain, wikimedia commons
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