Opinion ID: 1281848
Heading Depth: 1
Heading Rank: 1

Heading: Jurisdiction Exercised by the Federal Court

Text: Upon the depletion of high grade iron ore in the Mesabi Range, Reserve Mining Company in the year 1947 sought and obtained from the Water Pollution Control Commission and Department of Conservation (predecessors of the Pollution Control Agency and the Department of Natural Resources) permits to construct a taconite processing plant at Silver Bay on the shore of Lake Superior. Large quantities of lake water were necessary for the operation of the plant and resulted in some 67,000 tons of sludge being returned to the lake every day. The permits were issued on the theory that the tailings would settle in a trough some 900 feet deep in Lake Superior. At a public hearing on June 17, 1947, the concerns expressed by Minnesota Conservation Commissioner Chester S. Wilson proved to be prophetic when he stated to H. S. Taylor, a representative of Reserve: And you understand that if the permit should be granted and the discharge from the water from this plant should result in damaging consequences not contemplated, that the responsibility would be on your company or on the applicant company to take whatever action might be necessary to remedy those conditions. In response, Mr. Taylor stated: Why yes, we can stand that risk in any event we have to take certain risks.    This company will be a responsible company and we will recognize our legal liabilities. United States v. Reserve Mining Co., 408 F.Supp. 1212, 1218 (D.Minn.1976). After an expenditure of $350 million by Reserve, the plant began commercial operations in the year 1956. A conference of representatives of the United States and the States of Minnesota, Michigan, and Wisconsin convened by the Secretary of the Interior in September 1969 determined that Reserve's operation was polluting Lake Superior and asked the company to propose an abatement plan. In November 1969 the Secretary of the Interior approved standards of water quality for Lake Superior adopted earlier by the PCA. Reserve challenged the validity of those standards in the District Court of Lake County. The trial court held that Water Pollution Control Regulation 15(c)(6) was arbitrary and unreasonable as to Reserve because it prescribed a density too light for discharges to settle in the lake, but otherwise held it valid as amended. We affirmed that ruling but reversed so much of the decision as required the parties to negotiate for a variance. Reserve Mining Co. v. Minnesota PCA, 294 Minn. 300, 308, 200 N.W.2d 142, 146 (1972). A plan submitted by Reserve to the Lake Superior Enforcement Conference in January 1971 designed to flocculate tailings (cause them to coalesce into small lumps) was rejected by the conference. The Attorney General of the United States was thereupon asked to commence an action against Reserve to enjoin further pollution of Lake Superior. The present on-going litigation in Federal court then began in 1972 and resulted in an order entered by the court on April 20, 1974, enjoining the discharge by Reserve of tailings into Lake Superior and amphibole fibers into the air as of the following day, April 21, 1974. United States v. Reserve Mining Co., 380 F.Supp. 11, 21 (D.Minn.1974). On April 22, the court of appeals granted a brief stay and, after a further hearing on May 11, granted a 70-day stay on condition that Reserve take prompt steps to prepare and implement an appropriate plan for abatement. That stay was extended until a hearing on the merits was had. Reserve Mining Co. v. United States, 498 F.2d 1073 (8 Cir. 1974). Three applications to vacate the stay were presented to the United States Supreme Court and denied: July 9, 1974, 418 U.S. 911, 94 S.Ct. 3203, 41 L.Ed.2d 1156 (1974); October 11, 1974, 419 U.S. 802, 95 S.Ct. 287, 42 L.Ed.2d 33 (1974); and March 31, 1975, 420 U.S. 1000, 95 S.Ct. 1441, 43 L.Ed.2d 758 (1975). [3] The court of appeals in its decision noted that [u]ntil June 8, 1973, the case was essentially a water pollution abatement case, but on that date the focus of the controversy shifted to the public health impact of Reserve's discharge of asbestiform particles into the air and water. 498 F.2d 1073, 1074 (8 Cir. 1974). It held that whether such discharges resulted in detrimental health effects was unknown, the level of asbestiform fiber exposure was undetermined, and no substantial danger had been proved. In response to the appeal court's remand to consider Reserve's abatement plan and to encourage a voluntary settlement, the trial court on October 18, 1974, entered a supplemental memorandum and order finding Reserve to be in violation of various Wisconsin and Minnesota pollution statutes and reserved consideration of the fines and penalties which it would impose. United States v. Reserve Mining Co., 394 F.Supp. 233 (D.Minn.1974). The court of appeals, in reviewing on the merits the trial court's decision, resolved the issue of its jurisdiction over air pollution as distinguished from water pollution, Reserve Mining Co. v. Environmental Protection Agency, 514 F.2d 492, 522, note 55 (8 Cir. 1975), by stating: As to Minnesota's claims relating to air emissions, we believe this is an appropriate case in which to invoke pendent jurisdiction, citing Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218, 227 (1966). The Federal court affirmed and retained jurisdiction to determine the question of air pollution under state law. The court of appeals concluded by holding that Reserve should be given a reasonable time to cease discharging its wastes into Lake Superior including the time necessary for the state to act on Reserve's application to dispose of tailings at Mile Post 7 or some other acceptable site. The court suggested that a final administrative decision should be reached within a year after a final appellate decision. If the state and Reserve were unable to agree on a site, Reserve was given a year to phase out its Silver Bay facilities. Thereafter, the chief judge of the district court imposed the following penalties against Reserve: [4] 1) $837,500 for violating the terms of its water discharge permits; 2) $200,000 for violating court rules and orders as to discovery; and 3) $22,290 to reimburse the city of Duluth for furnishing interim clean water facilities. United States v. Reserve Mining Co., 408 F.Supp. 1212 (D.Minn.1976); United States v. Reserve Mining Co., 412 F.Supp. 705 (D.Minn.1976). The court noted: The court has now determined all pending issues properly within its province. Remaining for resolution is agreement between the State of Minnesota and Reserve Mining Company as to an appropriate on-land taconite waste disposal site. Prompt accord on this issue hopefully will signal the end of this long pending, and often acrimonious, controversy so that Minnesota and its people can return to a normal and productive society with the environment preserved and public health protected. 412 F.Supp. 714. Finally, on July 7, 1976, the district court found: Now, after almost 16 months of study, discussion, negotiation, debate, extensive hearings and official actions by state agencies, no agreement has been reached: Reserve still demands Milepost 7 which Minnesota will not permit, and Minnesota offers Milepost 20 which Reserve does not want. United States v. Reserve Mining Co., 417 F.Supp. 789, 791 (D.Minn.1976). Accordingly the court held:    Reserve and its parent corporations cease discharge of taconite tailings into Lake Superior one year from today, at midnight on July 7, 1977. The court of appeals affirmed the district court's decision with a suggestion that if the on-land disposal controversy is settled by agreement or litigation in the state court, Reserve is not barred from seeking modification of the closure order from the district court. United States v. Reserve Mining Co., 543 F.2d 1210, 1212 (8 Cir. 1976). That modification was granted on May 26, 1977. However, the court of appeals expressly recognized that the question of arriving at an on-land disposal site was strictly a matter of state law over which the Federal courts would not assume jurisdiction.