Serving Northern St. Louis County, Minnesota

Justice Dept. seeks dismissal of Twin Metals lease lawsuit

Motion argues district court lacks jurisdiction

Marshall Helmberger
Posted 6/7/17

REGIONAL— The Trump Justice Department has filed a motion to dismiss a lawsuit by Twin Metals over last December’s decision by the Bureau of Land Management to deny renewal of two federal mineral …

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Justice Dept. seeks dismissal of Twin Metals lease lawsuit

Motion argues district court lacks jurisdiction

Posted

REGIONAL— The Trump Justice Department has filed a motion to dismiss a lawsuit by Twin Metals over last December’s decision by the Bureau of Land Management to deny renewal of two federal mineral leases critical to the company’s plans for a copper-nickel mine near Ely.

In the motion filed on Monday, Acting Assistant Attorney General Jeffrey Wood argues that the federal court overseeing the Twin Metals case has no jurisdiction over the matter, since the issue involves a contract dispute with the U.S. government.

The Twin Metals case seeks judicial review both as a real property dispute and as a request for judicial review under the Administrative Procedures Act. But Wood notes that a federal law, known as the Tucker Act, confers exclusive jurisdiction for “any claim against the United States founded… upon any express or implied contract with the United States” to the U.S. Court of Federal Claims, not federal district court where Twin Metals originally filed the case. According to Wood, the issue at the heart of the dispute is fundamentally over Twin Metals’ contractual rights under the leases. “The alleged source of all four counts – an automatic right of renewal into perpetuity – derives solely from the leases with the BLM. The type of relief sought – an order requiring the BLM and Forest Service to renew the lease – is specific performance of the leases, a purely contractual remedy,” wrote Wood.

The nature of Twin Metals claim, argues the Justice Department, effectively bars it from being argued in federal district court— which could well prove to be its undoing.

This week’s motion is yet another sign that the Trump administration is unwilling, at least for now, to reverse the 2016 decision by the Obama administration to renew the two mineral leases. Just last week, Agriculture Secretary Sonny Perdue indicated that the administration intended to move forward with a two-year study of a proposed withdrawal of 234,000 acres of federal land in the Superior National Forest from the federal mineral leasing program. Supporters of the Twin Metals proposal, including Eighth District Congressman Rick Nolan, had pushed the Trump administration to cancel that study and to renew the mineral leases without further environmental analysis.

The federal government originally issued the leases at issue to International Nickel Company, or INCO, in 1966. The government renewed them in the 1980s and again in 2004. Twin Metals eventually assumed control of the leases and had applied to renew them in 2013. The government’s denial of their application led to the ongoing lawsuit.

The government’s position, even if granted by the judge, would not foreclose further proceedings in the case, since the company could refile the action in the Court of Federal Claims. Yet attorneys for Twin Metals may have preferred their chances at federal district court, where the arguments could center on agency decision-making and discretion, which can sometimes be fertile ground for experienced attorneys.

In the Court of Federal Claims, the decision is likely to hinge solely on technical contractual language— and the language in the original lease plainly connects future rights of renewals to the start of mineral production during the initial ten-year phase of the lease. Yet no mineral production has been undertaken in the 51 years since the government issued the original lease.

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