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AVOIDING A PATCHWORK OF LOCAL MINING REGULATIONS: COLORADO SUPREME COURT INVALIDATES COUNTY CYANIDE HEAP LEACHING BAN AND AFFIRMS STATE INTEREST MINERAL DEVELOPMENT

BY: JEFF BECKER

On January 12th, the Colorado Supreme Court reversed the Colorado Court of Appeals and issued a decision that will have profound and lasting impact on mining and natural resource development in Colorado and the Rocky Mountain West. In Colorado Mining Association v. Board of County Commissioners of Summit County, 2009 WL 60506 (Colo. 2009), the Court invalidated a Summit County ordinance that banned the use of toxic or acidic chemicals, such as cyanide, for mineral processing in vat or heap leach operations in the county – effectively prohibiting certain types of mining techniques common in the industry. The Court concluded that the Summit County ordinance impermissibly conflicts with and is impliedly preempted by the Mined Land Reclamation Act (“MLRA”) (a state statute amended in 1993). The Court held that by specifically empowering the Colorado Mined Land Reclamation Board (“MLRB”) to authorize and regulate the use of mining techniques that would be banned under the county ordinance, the Colorado Legislature – through the MLRA – identified a sufficiently dominant state interest in the use of such chemicals for mineral development.

In 2004, the Board of County Commissioners of Summit County, Colorado enacted land use ordinance Section 3812.04 which states that “[a]ny mining or milling operation that utilizes cyanide or other toxic/acidic ore-processing reagents in heap or vat leach operations shall not be allowed in any zoning district.” The county based this ban on the determination that the use of certain chemicals (such as cyanide) for mineral processing poses an unacceptable risk to public health and the environment. Use of cyanide for mineral extraction is fairly common in Colorado, and at the time of the ordinance’s enactment, fifteen operating mines in the state were permitted to utilize cyanide.

Concern about the use of cyanide in Colorado mining operations dates back to the late 1980s and environmental damage linked to cyanide heap leaching at the Summitville Gold Mine in Rio Grande County. The Summitville Mine ultimately became a U.S. EPA Superfund site. In 1993, and in response to the Summitville Mine incident, the Colorado Legislature reexamined the desirability of allowing cyanide in mining operations. Importantly for this case, the Colorado Legislature specifically determined that such mining techniques were permissible provided they are regulated by the MLRB under the terms of an Environmental Protection Plan. Given that the Colorado Legislature specifically amended the MLRA in 1993 to allow the regulated and controlled use of cyanide in mining operations, the Court in Colorado Mining Ass’n. v. Bd. of Cty. Comm’r. Summit County concluded that the Summit County ban would impermissibly entirely displace the MLRB’s authority to authorize the use of such mining techniques.

Shortly after the Summit County ordinance was enacted, the Colorado Mining Association challenged the ordinance in Summit County District Court seeking a declaratory judgment. The district court ruled that the ordinance is a reclamation standard expressly preempted by the MLRA. Summit County and two intervenors, the Alliance for Responsible Mining and the Blue River Group of the Sierra Club, appealed the district court decision. The Court of Appeals agreed with Summit County and upheld the ordinance as not expressly or impliedly preempted by the MLRA. The Colorado Supreme Court disagreed, and found that the ordinance impermissibly excludes what the Colorado Legislature has expressly authorized.

Critical to the analysis of the Summit County ordinance is that counties in Colorado are subdivisions of the state and creatures of state statute. Counties only enjoy those powers that are expressly granted to them by the Colorado Constitution or by the Colorado Legislature. While counties also have certain incidental implied powers to effectuate those expressly granted, when there is a conflict between a specific state statute and a county ordinance, the state statute controls over the county’s general land use authority. In Colorado Mining Ass’n. v. Bd. of Cty. Comm’r. Summit County, the Summit County ordinance and the 1993 Amendments to the MLRA could not be harmonized. Drawing on the rational used in a number of Colorado oil and gas cases, the Court then found evidence in the MLRA of a legislative determination that there is a dominant state interest in mineral processing utilizing chemicals such as cyanide. Thus, the Summit County ban was impliedly preempted by the dominant state interest in using cyanide (and other toxic and acidic chemicals) in mining under the 1993 Amendments to the MLRA.

The Court decision was based, in part, on three fundamental findings: “(1) the ordinance impedes the MLRA’s goal of encouraging mineral development while protecting human health and the environment; (2) the ordinance is inconsistent with both the General Assembly’s decision to authorize mining operations that use chemicals for extraction and the resulting [MLRB]-regulated permitting regime for Designated Mining Operations; and (3) state statutes and canons of statutory construction require that [the Court] resolve the conflict between the MLRA and Summit County’s ban ordinance in favor of the MLRA.” The Court also recognized the practical and policy implications of the Summit County ban and found that “[a] patchwork of county-level bans on certain mining extraction methods would inhibit what the General Assembly has recognized as a necessary activity and would impede the orderly development of Colorado’s mineral resources.”

The Court also found that while the Summit County ban on cyanide heap leaching (and other mining techniques) was invalid, Colorado counties retain considerable land use authority over the location and impacts of mining operations. A county’s land use authority is not boundless, however, and courts will examine closely ordinances that prohibit activities rather than designating appropriate areas for such activities.

Justices Eid and Coats concurred in the majority’s judgment, but rejected the implied preemption conclusion of the majority opinion. The concurring Justices would have relied solely on statutory analysis to answer the question of whether the state of Colorado empowered Summit County to ban a particular mining technique. They concluded that Summit County was granted no such power by the Colorado Legislature because the ordinance is in effect a reclamation standard different from the standards established by the MLRB which allow cyanide heap leaching, and other mining techniques. Under this analysis, the state’s specific regulation of mining reclamation standards “trumps” the county’s general land use authority.

Justice Martinez offered the sole dissenting opinion and found that while some “practical tension exists,” the Summit County ordinance is neither impliedly nor expressly preempted and is within the county’s land use authority. Justice Martinez allows that the practical tension could amount to an operational conflict under Colorado’s preemption doctrine, but because the appeal arose out of a declaratory judgment action, there was an insufficient evidentiary record to make such a determination.

The Colorado Supreme Court’s majority opinion in Colorado Mining Ass’n. v. Bd. of Cty. Comm’r. Summit County strengthens fundamental principles of state preemption over conflicting county regulations applicable to the development of natural resources. The Court gave due regard to the Colorado Legislature’s expressed dominant state interest in developing Colorado’s mineral resources – potentially through the careful and regulated use of controversial mining techniques like cyanide heap leaching. The Court’s decision also has implications for other mineral and natural resource development in the state and Rocky Mountain region.

s with the MLRA, for example, the Colorado Oil and Gas Conservation Act (“OGCA”) expresses a dominant state interest in and provides standards for fostering the responsible, balanced development, production, and utilization of the natural resources of oil and gas in the state of Colorado. Despite the standards and direction provided by the Colorado Legislature in the MLRA and the OGCA, natural resource developers throughout the state are increasingly facing a patchwork of conflicting and contradictory county and local regulation. The Colorado Supreme Court’s decision in Colorado Mining Ass’n. v. Bd. of Cty. Comm’r. Summit County is a positive step toward clarifying the relationship between state and local regulation of natural resource development in Colorado and the region.