Matter of Lac Minerals
2017 SD 44
| S.D. | 2017Background
- LAC Minerals operated the Richmond Hill Mine (Permit Nos. 445 & 460); mining paused in 1993 after acid rock drainage and a 1994 permit amendment addressed reclamation.
- In 2014 LAC petitioned DENR/Board for release of reclamation liability, updated reclamation/postclosure plans and financial assurance, extension of reclamation period, and retention of roads/buildings.
- Harlan Schmidt (and on behalf of Robert Fowler) intervened, alleging DENR/Board lacked jurisdiction because LAC failed to consult or give notice to Fowler under SDCL ch. 45-6B and because LAC did not pay an amendment fee.
- The Hearing Chair found the Board had jurisdiction, concluded Fowler was not a “landowner” under certain reclamation statutes, and suggested LAC could refile with a fee if needed; LAC withdrew reclamation/extension requests before the Board hearing.
- The Board adopted the Hearing Chair’s decision; Schmidt and Fowler appealed to circuit court, which affirmed jurisdiction, found waiver of due-process arguments, and held the postclosure submission was not an amendment.
- The Supreme Court affirmed in part and reversed in part: it held the Board had subject-matter jurisdiction and that appellants waived due-process claims, approved denial of supplemental record evidence, but reversed the Board/circuit court finding that Fowler is not a landowner under the reclaimed-statute context because that issue was not properly before the agencies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Board had subject-matter jurisdiction over LAC’s petition | Schmidt/Fowler: Board lacked jurisdiction because LAC failed to consult/notify Fowler as required by SDCL ch. 45-6B and failed to pay an amendment fee | LAC/DENR: Statutory application/amendment requirements (consultation, notice, fee) are application merits, not jurisdictional bars; the Board has jurisdiction under SDCL 45-6B-73 | Held: Board had subject-matter jurisdiction; statutory filing requirements are not jurisdictional. |
| Whether Fowler is a “landowner” entitled to consultation/approval under SDCL ch. 45-6B and related rules | Schmidt/Fowler: Fowler qualifies and was entitled to consultation/rights under reclamation statutes | LAC/DENR: Those reclamation provisions did not apply to the matters before the Board after LAC withdrew reclamation requests | Held: Reversed Board/circuit court ruling that Fowler is not a landowner under those statutes because the reclamation provisions were inapplicable and the issue was not properly before the agencies. |
| Whether failure to raise due-process claims before the Board waived those claims | Schmidt/Fowler: Failure to receive statutorily required consultations/notices denied Fowler due process | LAC/DENR: Appellants failed to preserve due-process claims by not raising them at the administrative hearing | Held: Appellants waived the due-process argument by not presenting it to the Board; the court affirmed waiver. |
| Whether the circuit court erred in denying supplementation of the administrative record (and whether postclosure requests constituted a permit amendment requiring a fee) | Schmidt/Fowler: Several documents (district-court judgment, notice to DENR, Cepak deposition) should be added; postclosure requests were an amendment requiring fee | LAC/DENR: Most proffered documents were not proper additional evidence; the amendment-fee challenge was not preserved before the Board | Held: Trial court did not abuse discretion in refusing to add documents (SDCL 1-26-34 requires showing materiality and good reason to have not presented evidence to agency). The amendment-fee issue was not preserved for review and was not addressed. |
Key Cases Cited
- Koch Exploration Co. v. South Dakota Dept. of Rev., 387 N.W.2d 530 (S.D. 1986) (subject-matter jurisdiction cannot be conferred or denied by parties’ actions)
- Fowler v. LAC Minerals (USA), LLC, 694 F.3d 930 (8th Cir. 2012) (background on Fowler’s reversionary property interest)
- Wendell v. S.D. Dep’t of Transp., 587 N.W.2d 595 (S.D. 1998) (questions of law reviewed de novo)
- In re State of S.D. Water Mgmt. Bd., 351 N.W.2d 119 (S.D. 1984) (administrative exhaustion/preservation principles)