By a per curiam (“for the Court”) decision issued on October 19, 2012, the West Virginia Supreme Court of Appeals ruled that the West Virginia Department of Environmental Protection (“WVDEP”) is obligated to pay the Hominy Creek Preservation Association (“HCPA”) more than $300,000 in attorneys’ fees and costs incurred in connection with two consolidated appeals brought before the West Virginia Surface Mine Board. Hominy Creek Preservation Association, Inc., v. WVDEP, No. 11-0749 (W.Va. Supreme Court, 10/19/12). In issuing its decision, the Supreme Court reversed an April 8, 2011 ruling by the Kanawha County Circuit Court. The lower court had concluded that the HCPA had no legal basis for seeking a fee award and that it had not prevailed on the merits of the underlying administrative appeals (involving various challenges to a permit issued to Green Valley Coal Company).

By statute and WVDEP regulation, fees and costs are available to prevailing parties in permitting and other administrative appeals, both to and against: (1) the WVDEP; (2) permittees alleged to be in violation of their permits, applicable statutes, or mining regulations; and (3) any other participating parties. As in most such cases, the central consideration by the Surface Mine Board in the underlying appeals was whether the HCPA had made a “significant contribution” to the final determination of the issues raised by the appeals. In this case, that determination was more difficult because the issues were resolved by a comprehensive settlement agreement between HCPA and the permittee also involving a related federal court lawsuit, rather than through a final order on the merits. As set forth in a 20-page order granting the HCPA’s fee petition, the Surface Mine Board found that the HCPA had made such a contribution, as evidenced by the fact that Green Valley Coal Company made material revisions to its mining permit after the appeals were filed. As noted, the Kanawha County Circuit Court found to the contrary.

However, the basis for the Supreme Court’s reversal was a jurisdictional defect rather than a challenge to the lower court’s analysis of the record as it pertained to the fee award regulations. Specifically, the Court held that a party may not extend the mandatory 30-day appeal period that applies to Surface Mine Board orders by filing a motion for reconsideration or a similar post-order motion before the Board. Here, the WVDEP had filed a “Motion for Clarification” with the Surface Mine Board, asking it to reconsider and alter its April 16, 2010 Order awarding fees to the HCPA (without also filing an appeal of that order). Neither the statute creating the Board nor the applicable regulations allow for such a motion. The Board denied the motion in a two-paragraph order entered on June 7, 2010, without disturbing or revising any of the findings or determinations made in its original order. Accordingly, the Supreme Court found that the WVDEP’s appeal from the Board’s April 16, 2010 Order (which was not filed with the Circuit Court until July 7, 2010) was untimely.

Although it will be treated as having no precedential effect because of its per curiam nature, this decision serves as a reminder that any party to an appeal before the West Virginia Surface Mine Board may be exposed to a fee claim if a case is resolved against that party. In addition, efforts to convince the Board to reconsider a Final Order do not obviate the need to timely file a notice of appeal from such an order while the Board is considering such a motion. Both of these factors may influence the form and substance of any settlement that may be reached in the course of such administrative proceedings and in related cases.