Appeal of Pebble exploration case reaches Supreme Court

ldemer@adn.comDecember 17, 2013 

In this file photo, an aerial view of a work camp in the area of the proposed Pebble Mine is seen on Aug. 27, 2013.The state Supreme Court heard arguments on cases concerning the mine on Tuesday, Dec. 17, 2013.

BILL ROTH — Anchorage Daily News Buy Photo

The question before the Alaska Supreme Court Tuesday morning seemed simple: Does extensive exploration work for the proposed Pebble mine amount to merely a temporary use of land that can be turned back to how it was, or is it significant enough to trigger protections for public good provided in the state Constitution?

That was the central issue argued in the first round of a multi-pronged Pebble-themed day at the Supreme Court. In the afternoon, justices heard arguments over whether the citizens and environmental groups on the losing side owes legal fees and whether the source of the money to bring the environmental challenge in court must be revealed.

The case had its origins in a lawsuit filed by a group that includes former First Lady Bella Hammond and Alaska constitutional delegate Vic Fischer. They sued the state Department of Natural Resources in July 2009, asserting the state was in effect disposing of state lands without public notice or any finding that it was managing the land for the common good, and therefore violating the Alaska Constitution.

Pebble later joined the suit on the state's side.

Anchorage Superior Court Judge Eric Aarseth ruled in September 2011 for the state and Pebble, finding that Pebble's work was designed for minimal disruption.

Trustees for Alaska, the environmental public interest law firm that handled the case, appealed Aarseth's decision on behalf of a group that now numbers 10 Bristol Bay-area tribal entities and their sister village corporations and four individuals: Hammond, Fischer, subsistence hunter and fisherman Rick Delkittie of Nondalton and Violet Willson of Naknek, who had the first commercial setnet site in the Naknek River. The tribal group is called Nunamta Aulukestai -- Yupik for "caretakers of the land."

Trustees lawyer Nancy Wainwright argued in the Tuesday morning session that Pebble's work was so extensive that it crossed the line into an area that requires a full public process, including a published notice and an analysis of whether the exploration work is in the state's best interests.

The arguments in the expansive Alaska courtroom in downtown Anchorage drew dozens of people: Department of Natural Resources employees, environmentalists, and for the afternoon sessions, Fischer himself.

State regulations consider removal of 5,000 gallons of water a year significant, Wainwright said. Pebble, under its temporary water-use permits, was allowed to remove more than 32 million gallons of water a year, she told the justices.

And while the state Legislature put a five-year expiration date on temporary water permits, Pebble has been exploring for more than 20 years, she said.

It's left behind 1,200 bore holes drilled into the earth as deep as 7,000 feet and hundreds of pits of buried waste that cannot be removed, Wainwright said.

"We're asking the court to say 'yes' -- in this case, Pebble has crossed that line," she argued.

The state argued that it's looking out for the interests of Alaskans.

Laura Fox, an assistant attorney general representing the Department of Natural Resources, told the justices that the Legislature already determined that temporary permits don't trigger requirements for public notice or a finding that the work is in the public interest.

The state holds power over the land because it controls the permits, Fox told the justices. The temporary permits are part of an administrative process with appeal rights, she said.

But how would the public know of the permit process if there's no notice? Justice Daniel Winfree asked.

The case has been "a moving target" with shifting issues from the start, Fox said.

Winfree said his question was specific.

The public isn't notified about every DNR decision, Fox said.

Is there a downside to letting the public know? asked retired Justice Warren Matthews. He and retired Justice Robert Eastaugh were filling in on the Supreme Court because Chief Justice Dana Fabe and Justice Craig Stowers removed themselves from the case.

The list of published notices would be very long if every temporary permit were included, Fox said.

Matthew Singer, one of Pebble's lawyers, told the judge that underground bore holes don't amount to a "taking" of the land. The state could allow hunters, fisherman, snowmachiners and sightseers to use the land the same as before Pebble was there, he said.

Underground exploration work "in no way impairs the state's ability to use that land for any other purpose," Singer said.

The tribal group knew about the work even without public notice, he said.

And the state doesn't just give away the permits, he said. Temporary permits include conditions. Mining companies must file a plan of operations. The state inspects the work and issues reports. It inspects reclamation work after exploration and writes reports about that, too, Singer said.

"That's a hard look," he said.

Not true, said Wainwright, who got the last word on the appeal of the main case.

The state didn't even know how many bore holes Pebble had drilled until the lawsuit was filed, she told the justices. DNR didn't know that Pebble was taking in water from places where it didn't even have a temporary permit, she said.

Pebble's permits should be revoked, she said.

Under Aarseth's ruling in favor of Pebble, the company and the state sought to recover $962,500 in attorney fees and costs from the plaintiffs.

A 2003 state "loser pays" law pushed through by then-Gov. Frank Murkowski ended the special status of public interest litigants to sue with no risk. Now for a litigant to avoid the other side's legal bills, the case must concern constitutional rights and can't be frivolous. Aarseth ruled the Pebble case met those tests.

But plaintiffs can't have an "economic incentive" to bring the case, and Aarseth agreed to allow the state and Pebble to examine that by extracting financial information from the plaintiffs, Trustees for Alaska, and the Alaska Conservation Foundation. The latter is a grant-maker that provided money to Trustees for Alaska for the lawsuit as well as to the tribal Nunamta group for work to protect Bristol Bay. The environmental law firm didn't charge the plaintiffs any fees.

Hammond, Fischer and the other plaintiffs also argue that being forced to pay the legal bills would be a hardship.

Pebble is trying to force Hammond, Fischer and the others to reveal what real estate they own, their bank statements, investment account records, tax returns and W-2s. It also wants to force for Trustees for Alaska and the Alaska Conservation Foundation to reveal where the money for the lawsuit came from, and how much it cost.

The plaintiffs are balking. They are asking the Supreme Court to find they have no economic incentive and are immune from having to pay attorney fees. Trustees for Alaska and the Alaska Conservation Foundation say they shouldn't have to disclose what Pebble wants either and contend that revelation of donor information would be destructive to charities.

The Pebble gold and copper deposit straddles the headquarters of two key rivers in the Bristol Bay watershed, home to the world's biggest run of sockeye salmon.

Howard Trickey, arguing for Pebble's bid for attorney fees, said the individual plaintiffs are just "proxies" for someone with substantial, commercial interest in killing the mine, perhaps commercial fishing corporations.

"Do you concede then the four individual plaintiffs in this case did not have a direct and substantial economic incentive?" Winfree asked.

Trickey said he did. Big money was behind the case, he said.

Would this puppeteer need to have an economic interest of his own? the justice asked.

Yes, and the behind-the-scenes power would have to have a hand in controlling the lawsuit, Trickey said.

There's no evidence that commercial fishing interests are behind the suit, William Wailand, an attorney for the Alaska Conservation Foundation, told the justices.

During a break in the arguments, Fischer, one of the authors of the Constitution, said he wasn't too worried about the legal bills.

"This whole business about being duped by special interests was an insult to my intelligence," he said.

The justices will issue their rulings later.

Reach Lisa Demer at ldemer@adn.com or 257-4390.

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