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Powder River Basin Resource Council v. Jewell

United States District Court, District of Wyoming

December 6, 2018

SALLY JEWELL, in her official capacity as as United States Secretary of the Interior, NED FARQUHAR, in his official capacity as Deputy Assistant Secretary for Land and Minerals Management, UNITED STATES OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT, a Federal Agency within the United States Department of Interior, Federal Respondents. and STATE OF WYOMING, PEABODY POWDER RIVER MINING. LLC, Intervenor Respondents.



         Petitioners Powder River Basin Resource Council ("PRBRC") and Western Organization of Resource Councils ("WORC") (collectively "Petitioners") challenge the decision of the United States Secretary of Interior ("Secretary"), the Deputy Assistant Secretary for Lands and Minerals Management ("Deputy Secretary"), the United States Office of Surface Mining Reclamation and Enforcement ("OSMRE") (sometimes collectively "respondents" or "federal respondents") approving a mining plan modification on March 14, 2014 for Peabody Powder River Mining, LLC's ("Peabody") North Antelope Rochelle Mine ("NARM") in the Powder River Basin ("PRB") in Wyoming. The State of Wyoming and Peabody were permitted to intervene in the administrative action (collectively referred to as "intervenor-respondents"), also opposing the relief requested by Petitioners.

         Petitioners seek judicial review of the decision approving a mining plan modification under the Administrative Procedure Act ("APA"), 5 U.S.C. § 706(2)(A). Petitioners contend the agency's decision approving the NARM mining plan modification violates the Surface Mining Control and Reclamation Act ("SMCRA"), 30 U.S.C. §§ 1202 et seq. and does not satisfy the requirements for reclamation set forth in Title 30 of the Code of Federal Regulations. Petitioners contend the agency decision was arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law, in violation of the APA. The respondents and intervenor-respondents assert Petitioners' allegations are overstated and improperly apprehend both SMCRA and the Administrative Record ("AR") in this case.

         Having reviewed the parties' submissions, all materials in the record, and being fully advised, the Court finds and concludes that the decision recommending approval of the mining plan modification by the Secretary is consistent with and in accordance with applicable law, is supported by substantial evidence in the administrative record, and there is no clear error warranting reversal of the Secretary's decision. For the reasons stated more fully below, the Secretary's approval of the mine modification plan is affirmed and the Petition for Review will be dismissed.

         Background and Contentions

         The Secretary approved a mining plan modification authorizing a coal mine expansion for Peabody's NARM, one of the largest strip mine operations in the world. The mining plan modification that was approved would expand the size of NARM to approximately 60, 000 acres, with over 53, 000 surface acres disturbed by mining; approximately half of the disturbed lands are federal public lands. The mining plan increases the public lands available for mining an additional 6, 717 acres within NARM, for a total of nearly 30, 000 acres of affected federal public land ownership. Petitioners assert that during the 30 years of operation of NARM, no lands or waters of the mine have been permanently reclaimed. None of the federal public lands impacted by NARM operations have been permanently reclaimed, which has resulted in a single use of those federal lands by Peabody.

         In their petition for review, Petitioners assert that the mining plan modification was authorized "behind closed doors and without the benefit of public input and participation." They further assert that the mining plan modification fails to ensure contemporaneous and timely reclamation of federal public lands and restoration of associated waters by establishing a timetable, measured by bond release, for accomplishment of every major reclamation step and minimizing disturbance to the hydrologic balance. The mining plan amendment exacerbates Peabody's reclamation failures by allowing Peabody to self-bond or provide a "corporate guarantee." Petitioners explain this to mean that Peabody never puts up real money intended to protect the federal resources that are damaged through operations pursuant to the mining plan modification. Thus, there is no real economic incentive for Peabody or the operator to timely or contemporaneously reclaim these public resources. Petitioners also argue that Peabody's ability to self-bond and guarantee successful reclamation is questionable. This is because Peabody has suffered significant losses over a long period of time and its credit rating was downgraded to non-investment grade or junk bond status. Petitioners assert there was a complete failure to consider Peabody's bond status and its ability to self-bond and cover its financial obligations to complete reclamation, while still allowing Peabody to cause additional disturbance of public lands within the mining plan modification.

         The federal respondents have opposed Petitioners' contentions. The process for approving applications for coal leases first comes to the federal agency under the authority of the Mineral Leasing Act of 1920 ("MLA"). The first stage in that process requires the Secretary to consider various economic and environmental factors in making decisions regarding applications for federal coal leases. Frequently, this is referred to as the NEPA process. The next step in that process requires the Wyoming Department of Environmental Quality ("WDEQ"), which is the federally approved SMCRA permitting authority, 30 C.F.R. § 950.20, to consider applications for surface mining permits, provide opportunities for public comment, and issue permits and approve proposed mining plans, which includes the requirement to address mining and reclamation requirements of the SMCRA program. WDEQ then forwards to OSMRE for mining plan approval. The third stage of the process requires OSMRE to conduct its own review and make recommendations to the Secretary that the proposed plans for mining federal coal be approved, disapproved, or approved with conditions. 30 U.S.C. § 207(c); 30 C.F.R. Part 746. It is the Secretary who makes the final decision on proposed mining plans.

         The first and second stages require public participation; the third stage does not. Petitioner PRBRC participated in the first stage involving the decision to lease the two Wright Area coal lease tracts at issue here, the review process under the National Environmental Policy Act ("NEPA"), 42 U.S.C. §§ 4321-4307h. Petitioner WORC did not participate in the first stage where the decision approving leasing of federal coal lands was made. At the second stage, there were four publications in the local press in October 2013 giving notice of the mining permit approval proceedings. Notwithstanding their knowledge of agency procedures providing notice to the public and opportunities to participate and comment, neither of the petitioners in this case did so in that second stage. During the permit approval stage, detailed plans for mining operations and reclamation required by SMCRA are reviewed and assessed. Petitioners offered no comment or input when WDEQ was assessing the permit application and mining plan modification, yet they contend here that the decisions were made behind closed doors and without the opportunity for Petitioners and others to participate and offer input.

         As to the third stage of the case, responding to Petitioners' claim that the OSMRE did not provide opportunities for public participation, respondents argue Petitioners have misread the pertinent regulations and applicable law. OSMRE is required to consider comments received during the NEPA and SMCRA permitting processes, but additional formal public comment is not mandated in the third stage. Consequently, the respondents urge that Petitioners do not state a cognizable claim. Respondents also assert that, even if the regulations required public participation, no prejudice was suffered by Petitioners because they were fully aware of the process and the WDEQ/OSMRE proceedings. The remaining claims lack merit because Petitioners have not identified any violation of the SMCRA performance standards.

         The State of Wyoming and Peabody were permitted to intervene as respondents in this action and submitted a joint response brief in opposition to Petitioners' opening brief. Many of the issues raised in the intervenor-respondents' opposition are substantially similar to those advanced by the federal respondents. During the permit approval phase, Petitioners never objected or offered comment that WDEQ, OSMRE or the Secretary violated SMCRA by failing to ensure the mining plan modification meets performance standards for reclaiming federal lands and water resources. Because these comments and arguments were never raised during the pertinent administrative processes, the Intervenor-respondents contend they have been waived and that Petitioners cannot complain about these matters now. Even if Petitioners can raise these arguments now, the record demonstrates the arguments do not have merit. The decision documents, reviewed by OSMRE and approved by the Secretary, approved the mining plan. The mining plan approval relied on the Environmental Impact Statement ("EIS") prepared pursuant to NEPA. The EIS was based on extensive environmental analysis, hydrologic and soil monitoring, sampling and testing pertinent to detailed operation and reclamation planning. There were meaningful opportunities for public comment and cooperating agency review and recommendations. Petitioner PRBRC actively participated in this public NEPA process. Intervenor-respondents ask that the Petition be dismissed because Petitioners have failed to identify any flaw in the state and federal analysis conducted under SMCRA.

         Decision History

         1. Stage 1

         In 2010, a Final Impact Statement for Wright Area Coal Lease Applications was prepared. This FEIS concerned approval of the issuance of two large coal leases within the PRB, which included portions of land located within the Thunder Basin National Grassland. The environmental impacts of four Lease(s) by Application (LBAs) were the focus of the EIS prepared for the Wright Area Coal Lease Applications, pursuant to NEPA. The evaluation of the environmental impacts of coal leasing first requires preparation of an Environmental Analysis (EA) or EIS evaluating site-specific and cumulative environmental and socioeconomic impacts of leasing and development of federal coal in the application areas.

         An announcement of the Draft EIS for the Wright Area LBAs was published in the Federal Register on June 26, 2009; Notice of Availability and Notice of Public Hearing for the Draft EIS was published in the Federal Register on July 8, 2009. A 60 day comment period on the Draft EIS ended August 25, 2009; public hearing was held July 29, 2009, in Gillette, Wyoming, soliciting public comment on the Draft EIS and other matters. Individuals representing organizations presented statements on the Draft EIS during the hearing; written comments were received from 15 individuals, agencies, businesses, and organizations, in addition to numerous telephone comments and emails from interested individuals and entities during the comment period. A summary of statements from the public hearing and public comments, with agency responses, is included in the Final EIS, AR 021485; Appendix I (Draft EIS Comment Letters, BLM Responses, and Hearing Summary), AR 22605-22813. After the FEIS was prepared, the Records of Decision for the Wright Area Coal Lease Applications, including the South Porcupine and North Porcupine Tracts, were issued. AR 22824 (ROD South Porcupine Coal Lease Application, August 2011); AR 22849 (ROD North Porcupine Coal Lease Application, October 2011). Both the EIS and RODs advised that before mining could commence, the operator would need a permit from WDEQ and the mining plan would have to be approved by the Assistant Secretary of Interior. AR 22834-22835.[1] The BLM authorized coal leases in the North Porcupine and South Porcupine coal lease tracts in the Wright area, which would expand NARM in the PRB.

         The FEIS is in the AR 21472-22813; the Record of Decision ("ROD") for the South Porcupine Tract is in the AR at 228134-228138; the ROD for the North Porcupine Tract is at AR 22839-22884.

         2. Stage 2

         Peabody acquired the coal leases in December 2011, approved in February 2012. After acquiring the coal leases, Peabody submitted its permit application package ("PAP") on April 29, 2012 to WDEQ seeking a mining permit amendment for the additional coal leases obtained on August 1, 2012 for the South Porcupine Tract and on October 1, 2012 for the North Porcupine Tract in NARM. AR 1-18104. WDEQ approved the permit amendment to include mining of additional coal leases for the South Porcupine and North Porcupine Tracts, adding 10, 339.3 acres to the permit area. AR 23473; AR 23568. WDEQ's assessment process included an administrative completeness review and ultimately, a determination approving the permit to mine the additional coal leases in the NARM, conditioned upon approval by the Secretary upon OSMRE's recommendation.

         The operator, Peabody, published notice of the completed PAP application in the Gillette News Record for four consecutive weeks in October 2013, pursuant to 30 U.S.C. § 1263. Notices were also mailed to adjacent landowners, pursuant to the same statute. The notices advised of opportunities for submitting comments and objections to the permit modifications; none were received. AR 23473, 23641. The statute, 30 U.S.C. § 1263, provides:

§ 1263. Public notice and public hearings
(a) Submittal of advertisement to regulatory authority; notification of local governmental bodies
At the time of submission of an application for a surface coal mining and reclamation permit, or revision of an existing permit, pursuant to the provisions of this chapter or an approved State program, the applicant shall submit to the regulatory authority a copy of his advertisement of the ownership, precise location, and boundaries of the land to be affected. At the time of submission such advertisement shall be placed by the applicant in a local newspaper of general circulation in the locality of the proposed surface mine at least once a week for four consecutive weeks. The regulatory authority shall notify various local governmental bodies, planning agencies, and sewage and water treatment authorities, of water companies in the locality in which the proposed surface mining will take place, notifying them of the operator's intention to surface mine a particularly described tract of land and indicating the application's permit number and where a copy of the proposed mining and reclamation plan may be inspected. These local bodies, agencies, authorities, or companies may submit written comments within a reasonable period established by the regulatory authority on the mining applications with respect to the effect of the proposed operation on the environment which are within their area of responsibility. Such comments shall immediately be transmitted to the applicant by the regulatory authority and shall be made available to the public at the same locations as are the mining applications.
(b) Objections to permit applications; informal conference; record
Any person having an interest which is or may be adversely affected or the officer or head of any Federal, State, or local governmental agency or authority shall have the right to file written objections to the proposed initial or revised application for a permit for surface coal mining and reclamation operation with the regulatory authority within thirty days after the last publication of the above notice. Such objections shall immediately be transmitted to the applicant by the regulatory authority and shall be made available to the public. If written objections are filed and an informal conference requested, the regulatory authority shall then hold an informal conference in the locality of the proposed mining, if requested within a reasonable time of the receipt of such objections or request. The date, time and location of such informal conference shall be advertised by the regulatory authority in a newspaper of general circulation in the locality at least two weeks prior to the scheduled conference date. The regulatory authority may arrange with the applicant upon request by any party to the administrative proceeding access to the proposed mining area for the purpose of gathering information relevant to the proceeding. An electronic or stenographic record shall be made of the conference proceeding, unless waived by all parties. Such record shall be maintained and shall be accessible to the parties until final release of the applicant's performance bond. In the event all parties requesting the informal conference stipulate agreement prior to the requested informal conference and withdraw their request, such informal conference need not be held.
(c) Prior Federal coal lease hearing as evidence
Where the lands included in an application for a permit are the subject of a Federal coal lease in connection with which hearings were held and determinations were made under section 201(a)(3)(A), (B) and (C) of this title, such hearings shall be deemed as to the matters covered to satisfy the requirements of this section and section 1264 of this title and such determinations shall be deemed to be a part of the record and conclusive for purposes of sections 1260, 1264 of this title and this section.

         On December 3, 2013, WDEQ approved the permit modification application and then forwarded the decision document to OSMRE. AR 23473, 23606. The decision document (SDD) expressly stated the permit was issued on the condition that the Assistant Secretary of Interior approve the mining plan. AR 23607. The SDD indicated that the reclamation plan in the PAP could accomplish reclamation required by Wyo. Stat. § 35-11- 406(n)(ii) and LQD RR, Chapter 4, Section 2. AR 23608. The SDD is in the AR at 23568- 23605.

         The SDD found that Peabody had affirmatively satisfied the requirements for permit approval as required by law, including:

(1) that the application was accurate and complete, pursuant to Wyo. Stat. §35-11-406(n)(i);
(2) that the reclamation plan can accomplish reclamation as required by the Act, Wyo. Stat. § 35-11-406(n)(ii) and LQD Coal RR, Chapter 4, Section 2;
(3) that the proposed operation was designed to prevent material damage to the hydrologic balance outside the permit area pursuant to Wyo. Stat. §35-11-604(n)(iii);
(4) the area proposed to be mined is not included within an area designated unsuitable for surface coal mining pursuant to Wyo. Stat. § 35-11-425, within an area where mining is prohibited pursuant to Section 522(e) of P.L. 95-87, nor within an area under review for this designation in an administrative proceeding (Wyo. Stat. § 35-11-406(n)(iv));
(5) the proposed operation contains alluvial valley floors within or adjacent to the permit area, but will not interrupt, discontinue, or preclude farming on alluvial valley floor(s) that are irrigated or naturally subirrigated, except those undeveloped range lands within the alluvial valley floors which are not significant to farming, or where the farming that might be precluded is of such a small acreage that its loss will have a negligible impact on the farm's agricultural production, and the proposed operation will not materially damage the quantity or quality of water in surface or underground water systems that supply these alluvial valley floors (Wyo. Stat. § 35-11-406(n)(v));
(6) the area to be surface mined does not contain prime farmland (Wyo. Stat. § 35-11-406(n)(vi));
(7) the schedule required by Wyo. Stat. § 35-11-406(a)(xiv) and the compliance review conducted by WDEQ/LQD suggests that all surface coal mining operations owned or controlled by the applicant are currently in compliance with the act and all applicable State and Federal laws, or that any violation has been or is in the process of being corrected to the satisfaction of the authority, department or agency that has jurisdiction over the violation (Wyo. Stat. § 35-11-406(n)(vii));
(8) neither the applicant nor operator controls or has controlled mining operations with a demonstrated pattern of willful violations of such nature and duration with such resulting irreparable harm to the environment as to indicate reckless, knowing or intentional conduct (Wyo. Stat. § 35-11 -406(o));
(9) the applicant does not qualify for an experimental practice variance (LQD Coal RR Chapter 9);
(10) all appropriate Federal, State, and Local government agencies with an interest in historic preservation have approved the proposed operation, even though it may adversely affect any site(s) included in, or eligible for inclusion in, the National Register of Historic Places. A plan to mitigate adverse effects has been approved by the State Historic Preservation Office, and other appropriate agencies, and has been incorporated in the applicant's mining plan/or has been attached to the permit by condition (LQD Coal RR Chapter 12, Section 1(a(v)(C));
(11) although the proposed operation is within one hundred feet of the outside right-of-way line of a public road, the road may be relocated or the area affected because the applicant has obtained the necessary approvals of the authority with jurisdiction over the public road. Public notice and an opportunity for public hearings for this purpose have been provided and the required written finding has been made determining that the interests of the public and the affected landowners will be protected from the proposed operation (LQD Coal RR Chapter 12, Section 1(a)(v)(D));
(12) for the term covered by the permit, the proposed operation will be consistent with other surface coal mining and reclamation operations proposed or contemplated in pending or approved mining permits (LQD Coal RR Chapter 12, Section 1 (a)(iv)(A));
(13) the mining and reclamation activities proposed will not affect the continued existence of endangered or threatened species or result in the destruction or adverse modification of their critical habitats (LQD Coal RR Chapter 4, Section 2(r)(iii);
(14) no mining or reclamation activities will take place within the boundaries of the National Park System, the National Wildlife Refuge System, the National System of Trails, the National Wilderness Preservation System, the Wild and Scenic Rivers System, or any National Forest (LQD Coal RR Chapter 12 Section 1(a)(v)(A) and (B));
(15) no mining or reclamation activities will be conducted within three hundred feet of any occupied dwelling, public building, school, church, community, institutional building, or public park, nor within one hundred feet of a cemetery (LQD Coal RR Chapter 12, Section 1(a)(v)(E), (F), and (G)); and
(16) public notice was given in the Gillette News Record from October 4 to October 21, 2013, with no objections to the permit received, Wyo. Stat. § 35-11-406(j) and (k)).

         Peabody was advised by letter dated December 2, 2013 of approval of the permit amendment for NARM. AR 23561-23567. The SDD was provided to the BLM Field Office in Casper, Wyoming; OSMRE in Denver, Colorado was provided a copy of the SDD and application for its own independent review. AR 23473.

         3. Stage 3

         The next step taken with respect to the mining plan modification process is reflected in the AR at 23464-23470, the Memorandum to the Director of the OSMRE from the OSMRE Regional Director in Denver, Colorado, date-stamped February 27, 2014, recommending that the Secretary approve the mining permit modification. The recommendation for approval of the mining plan permit modification was based on the PAP including the Resource Recovery and Protection Plan ("R2P2") submitted by Peabody; compliance with NEPA; documentation assuring compliance with the requirements of other federal laws, regulations and executive orders; comments and recommendations or concurrence of other federal agencies, and the public; findings and recommendations of the BLM regarding the R2P2, federal lease requirements, and the MLA; and, findings and recommendations of the WDEQ regarding the permit application and the Wyoming state program. AR 23464-23465.

         This recommendation memorandum includes discussion of the relevant background concerning NARM, outlines the proposed actions and identifies federal coal lands that would be affected by the proposal, and discusses the scope and impact of the project and the review process leading up to the recommendation for approval of the proposed mining plan modification. The review process is addressed in the recommendation memorandum at AR 23468-23469. It notes WDEQ reviewed the permit application under the approved Wyoming State program, the Federal lands program, and the Wyoming cooperative agreement. WDEQ approved the permit application on December 3, 2013. OSMRE consulted with other federal agencies, and adopted the EIS including the biological assessment, surveys for cultural resources and Inventory reports regarding same provided to State Historical Preservation Office ("SHPO") for review, among other things. Additionally, the OSMRE recommendation memorandum to the Director stated:

OSMRE has determined that the impacts on the quality of the human environment associated with approval of this mining plan modification have been adequately disclosed in previous NEPA analyses. The environmental analysis prepared by BLM with OSMRE as a cooperating agency, the EIS and other environmental documents noted in the Statement of NEPA Adoption and Compliance, describe the impacts that may result from approval of this mining plan modification and its alternatives. The adequacy of the EIS is currently the subject of a judicial challenge, WildEarth Guardians v. U.S. Forest Service, 12-CV-00085-ABJ (D. Wyo.). The Statement of NEPA Adoption and Compliance and supporting environmental analysis are included in the attached decision document.
OSMRE did not identify any issues during its review that required resolution by the addition of special conditions to the mining plan modification approval.
Publication of four consecutive weekly notices in the Gillette News Record newspaper notified the public of the availability of the administratively complete PAP for review. The last publication date was October 21, 2013. No public comments on the PAP were received after the public notice was published.
WDEQ determined that a bond for $332, 669, 500 is adequate for NARM Permit No. 569 associated with this mining plan modification. The bond is payable to both the State of Wyoming and the United States.

AR 23469-23470.

         The Statement of NEPA Adoption and Compliance for the NARM mining plan modification is at AR 23474-23475. The OSMRE prepared a Statement of National Environmental Policy Act (NEPA) Adoption and Compliance for Peabody Powder River Mining, LLC North Antelope Rochelle Mine Federal Coal Leases WYW173408 and WYW176095 Mining Plan Decision Document. The introduction to this document notes that the PAP for a permit revision for NARM was submitted to WDEQ. WDEQ approved the permit revision December 3, 2013. The PAP proposed extending surface mine mining operations into 9, 607 acres of Federal Leases WYW173408 and WYW176095. "In accordance with the Mineral Leasing Act of 1920, under delegation of authority, the Assistant Secretary, Land and Minerals Management, must approve, approve with conditions, or disapprove the proposed mining plan modification for Federal Leases WYW173408 and WYW176095. Pursuant to 30 CFR Part 746, the Office of Surface Mining Reclamation and Enforcement (OSMRE) is recommending approval of the mining plan action without special conditions." AR 23474. The recommendation includes a statement of environmental significance of the proposed action, and includes a determination that the Final Environmental Impact Statement for the Wright Area Coal Lease Applications, July 2010 (EIS) adequately described the potential direct, indirect, and cumulative impacts that may result from approval of this mining plan modification and its alternatives. Id. It continues:

This Statement of NEPA Adoption and Compliance is based on the above EIS in which OSMRE, as a cooperating agency, participated in its development. In accordance with 40 CFR 1506.3(a) and (c), OSMRE has independently reviewed the EIS and finds that OSMRE's comments and suggestions have been satisfied, the EIS meets Council on Environmental Quality (CEQ) standards, and complies with 43 CFR Subpart E and other program requirements. The adequacy of the EIS is currently the subject of a judicial challenge, WildEarth Guardians v. U.S. Forest Service, 12-cv-00085-ABJ (D. Wyo.). In addition, BLM's review and approval of the Resource Recovery and Protection Plan, the PAP, and WDEQ's written findings for the PAP have been independently reviewed by OSMRE. These documents reviewed in conjunction with the attached EIS adequately and accurately access the environmental impacts of the proposed mining plan action. The opportunity for public input was provided during and with completion of the EIS, with submission of the PAP, and during issuance of the state mining permit.
The undersigned has determined that OSMRE's public involvement requirements for an EIS have been met. The EIS was subject to public review and comment prior to publication of the final EIS. Comments on the EIS were reviewed and analyzed by the BLM and the EIS was revised as appropriate. Comments outside the scope of the EIS were addressed in the BLM Record of Decision. No comments on the PAP were received after the date of last publication. In addition, the referenced EIS and this Statement of NEPA Adoption and Compliance will be made publicly available on the OSMRE Western Region's website.
After an independent review of the Final Environmental Impact Statement for the Wright Area Coal Lease Applications, July 2010, 1 have determined that it adequately addresses the impacts of the proposed mining plan modification, and hereby adopt the entire EIS.

         This Statement of NEPA Compliance is dated February 26, 2014 and was signed by the Field Operations Branch Manager of the U.S. Department of the Interior, Office of Surface Mining Reclamation and Enforcement. AR 23474-23475.

         Following the recommendation for approval from OSMRE, the Secretary of Interior issued its mining plan modification approval document on March 14, 2014, signed by the Principal Deputy Assistant Secretary, Lands and Minerals Management. AR 23644.

         The various Mining Plan Decision documents are in the AR at 23460-23648. PAP ...

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