Opinion ID: 415230
Heading Depth: 1
Heading Rank: 1

Heading: introduction

Text: This case comes before this court from a decision by the district court for the Western District of Texas, Bunton, J., in favor of the plaintiffs--the City of Austin, Texas, and the Lower Colorado River Authority. 1 1 We are presented with a question of allocation of costs under a coal procurement contract entered into between the plaintiffs and Decker Coal Company. 2 Specifically, the issue involved is whether, pursuant to the contractual provision allowing Decker to pass costs on to the plaintiffs for any new legislation, regulation, judicial action ... or labor agreement ... enacted, promulgated, or taken or made effective after March 31, 1974, Decker could pass through cost increases resulting from a 1976 determination by the Montana Department of State Lands [hereinafter, MDSL], pursuant to a pre-1974 Montana statute, which precluded disturbance of a certain portion of land within the proposed mine area. 3 2 Because we find, based on an interpretation of the entire contract as required by Montana law, 4 that the parties intended to allow pass-through of costs resulting from governmental action such as was involved here, we reverse the decision of the court below and remand for a determination of increased mining costs chargeable to the plaintiffs.