Serving Northern St. Louis County, Minnesota

Litigation could risk Minntac expansion

U.S. Steel’s suit against MPCA may come back to haunt company

Marshall Helmberger
Posted 6/28/17

REGIONAL— The legal battle between U.S. Steel and the Minnesota Pollution Control Agency has attracted reinforcements after the judge in the case recently granted three environmental groups their …

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Litigation could risk Minntac expansion

U.S. Steel’s suit against MPCA may come back to haunt company

Posted

REGIONAL— The legal battle between U.S. Steel and the Minnesota Pollution Control Agency has attracted reinforcements after the judge in the case recently granted three environmental groups their request to intervene— and that decision could complicate the case for U.S. Steel.

State District Court Judge Robyn Millinacker, earlier this month, granted the intervention request by the Minnesota Center for Environmental Advocacy, the Save Lake Superior Association, and Save Our Sky Blue Waters, all of which were parties to a lawsuit filed last November that alleged that the MPCA had failed in its obligation to regulate U.S. Steel’s Minntac tailings basin.

As part of their intervention, the three groups have now filed a counterclaim against U.S. Steel that seeks to invalidate the permit to mine for Minntac’s recent expansion until the company completes an environmental impact statement and brings its illegal pollution discharges under control.

The basin contains high levels of a number of pollutants, particularly sulfate, and it seeps millions of gallons a year into adjacent surface and groundwater, according to the MPCA. It’s been a sore spot for environmental groups for more than a decade.

Meanwhile the judge has referred all the parties to mediation in the unlikely hope that a settlement can be reached. Their first scheduled mediation session is set for August.

Long history

The dispute over longstanding pollution violations from the Minntac tailings basin dates back decades, but the issue came to a head last November, when the three environmental groups sued the MPCA for its failure to issue a new water discharge permit for the 8,000-acre basin or to make headway on clean-up of the contaminated discharges from the facility.

The environmental groups dropped the suit a week later when the MPCA suddenly released a new draft permit for the tailings basin and signed a stipulation agreement with the groups guaranteeing that the agency would have a final permit approved and in place by early September 2017.

But U.S. Steel filed suit against the MPCA weeks later, alleging that the agency had failed to take necessary regulatory steps in a timely manner. The MPCA filed a counterclaim against U.S. Steel outlining a long history of delay tactics by the company that had continuously thwarted the agency’s efforts to clean up Minntac’s pollution.

Environmental groups called the U.S. Steel lawsuit just one more delay tactic by the company, which has been operating under an expired discharge permit for more than a quarter century.

“It’s frustrating,” said Aaron Klemz, spokesperson for the MCEA back in February. “We’ve already waited 25 years for a new permit and now this lawsuit is just about more delay,” said Klemz. “They’re basically seeking an injunction against our stipulation agreement.”

Indeed, MCEA staff attorney Hudson Kingston said this week that U.S. Steel has filed for an injunction against the issuance of a final permit, although the court has yet to act on the request. For now, said Kingston, the environmental groups are still assuming that the MPCA will live up to its commitment in the stipulation agreement and approve a final permit for Minntac by early September.

For now, MPCA officials are on the same page. “At this point in time we have no reason to conclude we will not comply with the settlement agreement with MCEA,” said MPCA spokesperson Dave Verhasselt. According to Verhasselt, the agency officials are currently drafting responses to comments on the draft permit as well as responding to specific requests raised by various parties in the process.

Kingston said he expects that U.S. Steel will seek a hearing on its injunction before a final permit is issued.

Case poses risks for U.S. Steel

Yet U.S. Steel’s legal maneuvering appears to pose some risk for the company. By drawing the dispute into court, the company has given new life to the claim by environmentalists that the Department of Natural Resources should not have issued a mine expansion permit to U.S. Steel last year given Minntac’s ongoing pollution violations and without conducting an environmental impact statement.

MCEA first brought that claim to the Court of Appeals in 2013, but the DNR argued at the time that Minntac’s pollution was being addressed by a 2011 stipulation agreement that the company had signed with the MPCA. Under that agreement, U.S. Steel promised to install a dry scrubber system for its air emissions to replace a wet scrubber system that was contributing to worsening water contamination in the tailings basin. It also agreed to reduce discharges from the tailings basin into the Dark River by pumping back seepage from the tailings basin. The DNR argued that those commitments, which the company had documented in its initial environmental review, justified allowing the mine expansion without further environmental review or further demonstration that the company was cleaning up its pollution violations.

The Court of Appeals agreed with the DNR, and cited the legal agreement between U.S. Steel and the MPCA in clearing the way for the DNR to issue a permit for the mine expansion. But shortly after the DNR issued the permit, U.S. Steel informed the MPCA that it did not intend to comply with the agreement. Five years later, neither of the improvements that U.S. Steel promised to implement have been done.

In a new counterclaim filed as part of their intervention, the environmental groups note that the DNR issued the mine expansion permit based on false promises from U.S. Steel and that the permit should now be rescinded.

“Because U.S. Steel’s installation of dry controls and the Dark River [discharge reduction] were conditions precedent to its ability to obtain a Permit to Mine, this Court should enjoin the company’s use of that permit unless and until U.S. Steel fully complies with its pollution control commitments or a full EIS is completed for its mine expansion project,” contends Kingston in a brief filed earlier this month with the court. “They used the schedule of compliance as a shield against us,” said Kingston— and now U.S. Steel’s shield no longer exists. Whether the company comes to regret its decision to litigate against the MPCA remains to be seen.

Meanwhile, the parties could still reach an agreement through mediation, although the terms of any such deal could potentially be confidential.

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