2010-08-16_REVISION - C1981008 (9)

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In sum, these provisions, together or singly, do not even remotely support the assertions and purported "requirements" in your May 18, 2010 letter. In fact, to the contrary, there are several indications in the statute and regulations that DRMS lacks jurisdiction and authority to intervene in this manner in private property disputes. To take just one example, Rule 2.03, which requires operators to document their right of entry and other property issues, contains the express qualification that "[n]othing in 2.03 shall be construed as vesting in the Division or Board the jurisdiction to adjudicate property right disputes." See, Rule 2.03.6(3). These and other provisions led our legal counsel to conclude that as a matter of Colorado law DRMS has no such jurisdiction or authority. The dispute between the Morgans and WFC, to the extent it concerns past damage to the property, is such a private property dispute over which DRMS lacks jurisdiction. It is governed by the parties' 1998 Coal Mining Lease, which gives WFC the right to mine the coal and reclaim the property in accordance with applicable regulations, subject to WFC's obligation to return the property "so that it is approximately in the same condition as when Lessee entered the property (i.e. farmable condition)." The dispute over whether or not WFC is in compliance with this requirement cannot be resolved until reclamation is completed and the Lease is concluded (and the extent of the alleged "damage," if any, to the Morgan property is finally ascertainable). WFC's legal position is that the Morgan's threatened lawsuit, in addition to numerous other defects, is inappropriate until the regulatory and permit process has been completed. However, none of these considerations, nor any applicable legal requirement, justifies what appears to us to be improper intervention by DRMS in what is essentially a private property dispute concerning the extent to which past mining activities may or may not have damaged the Morgan property. Based on the foregoing, I request that you provide a detailed explanation of the source and extent of DRMS's authority and jurisdiction to intervene in the dispute between WFC and the Morgan family. It appears that DRMS is acting under a misapprehension as to the scope of that authority. WFC has gone to considerable lengths to resolve the dispute with the Morgans, and has documented those efforts to DRMS in extensive filings. These attempts have been successful to a large extent, in that all the major issues relating to ongoing reclamation and protection of the prime farmland have been accepted by the Morgan family. To the extent we can, in spite of the Morgans' threatened legal action, WFC will continue to try and reach agreement concerning the outstanding issues relating to protection of their prime farmlands. However, WFC does not intend to resolve the issue of alleged damage to the Morgan farm arising from the actions taken in the past by simply acceding to their overinflated demands. Nor do we think it is remotely proper for DRM:S to require us to do so as a condition of permit revision, or to imply or suggest that we are subject to such requirements. We do not want this analysis to delay the Division's action on PR06, so we do not expect that this would be completed before the issuance of an informal decision on 4