OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT

U.S. Department of the Interior

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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 
OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT

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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). 
OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT

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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 venture 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] 
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