Reclamation Law Constitutional, But Exempts Uranium

May 02, 2000

Summary
Among other things, New Mexico's non-coal reclamation law - the New Mexico Mining Act of 1993, §§ 69-36-1, et seq., NMSA 1978 (1997 Repl.) ("the Act") - applies retroactively to extraction operations that produced marketable minerals for a total of at least two years between January 1, 1970 and June 18, 1993. Since the Act's passage, many believed the Act swept within its scope numerous mines comprising the once-booming uranium industry that operated in western New Mexico between the late 1940s and early 1980s, at least those mines where commercial production continued into the 1970s. The constitutionality of the Act's retroactive application and whether the Act applies to uranium mines are two issues that recently came to a head in one company's appeal from state regulatory enforcement proceedings. See United Nuclear Corporation v. New Mexico Mining Commission, et al., First Jud. Dist. Ct. of N.M. Cons. App. Nos. SF 96-1961, -1962 and -1963 (April 10, 2000) ("United Nuclear").

RETROACTIVELY APPLIED RECLAMATION LAW IS CONSTITUTIONAL, BUT DOES NOT APPLY TO COMPANY'S URANIUM MINES, ACCORDING TO NEW MEXICO COURT
 
Among other things, New Mexico's non-coal reclamation law - the New Mexico Mining Act of 1993, §§ 69-36-1, et seq., NMSA 1978 (1997 Repl.) ("the Act") - applies retroactively to extraction operations that produced marketable minerals for a total of at least two years between January 1, 1970 and June 18, 1993. Since the Act's passage, many believed the Act swept within its scope numerous mines comprising the once-booming uranium industry that operated in western New Mexico between the late 1940s and early 1980s, at least those mines where commercial production continued into the 1970s. The constitutionality of the Act's retroactive application and whether the Act applies to uranium mines are two issues that recently came to a head in one company's appeal from state regulatory enforcement proceedings. See United Nuclear Corporation v. New Mexico Mining Commission, et al., First Jud. Dist. Ct. of N.M. Cons. App. Nos. SF 96-1961, -1962 and -1963 (April 10, 2000) ("United Nuclear").

In United Nuclear, the court held that although the Act's retroactive application is constitutional, the three United Nuclear operations in question were expressly exempted by certain of the Act's definitions. Specifically, the Act's definition of "minerals" excludes, among other things, "commodities, byproduct materials and wastes that are regulated by the nuclear regulatory commission . . . ." § 69-36-3(G). Similarly, the Act's definition of "mining" excludes "the extraction, processing or disposal of commodities, byproducts or wastes or other activities regulated by the federal nuclear regulatory commission." § 69-36-3(H). According to the court, "the only commodity that was mined at these mines was uranium ore, all mined as a source material and specifically excluded from regulation of the Mining Act." The court reasoned that regulation of uranium ore and the extraction of uranium ore "is subject to regulation by the Nuclear Regulatory Commission and not the New Mexico Mining Commission."

The Mining and Minerals Division ("MMD") and Mining Commission ("the Commission"), the relevant New Mexico regulatory bodies, have consistently taken the position that surface operations at New Mexico's uranium mines fall within the scope of the Act. Indeed, after passage of the Act in 1993 and adoption of its implementing regulations, several uranium companies either sought approval of prior reclamation efforts or initiated permitting proceedings, at least provisionally, and conducted reclamation pursuant to the regulatory performance standards adopted pursuant to the Act. United Nuclear itself took certain steps toward permitting its sites, but ultimately refused to complete the process, leading to MMD's issuance of Notices of Violation ("NOVs") in connection with United Nuclear's failure of reclamation at its Saint Anthony, Northeast Churchrock and Section 27 mines. United Nuclear perfected an administrative appeal to the Commission, which upheld MMD's issuance of the NOVs, and this judicial appeal followed.

The First Judicial District Court dismissed the NOVs on the grounds described above. According to counsel for MMD, the agency will seek a further appeal to the New Mexico Court of Appeals. United Nuclear likely will not only defend the court's core holding relative to the exclusionary language in the Act's key definitions, but may also cross-appeal or otherwise argue for affirmance on the basis of the constitutionally-grounded theories it lost in United Nuclear. Those theories consisted of both a challenge based on the Act's retroactive effect, as well as several theories relating to the specific application to United Nuclear, including alleged defects in the NOVs and the hearings conducted thereon and alleged interferences with United Nuclear's contractual relationships to the property owners at the three mines. Accordingly, the appeal to the Court of Appeals likely will present again the full panoply of issues decided by the District Court.