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M.L. Johnson Family Properties, LLC v. Bernhardt

United States District Court, E.D. Kentucky, Southern Division, Pikeville

August 14, 2019

M.L. JOHNSON FAMILY PROPERTIES, LLC, Plaintiff,
v.
DAVID BERNHARDT, Secretary of the Interior, Defendant.

          ORDER & OPINION

          KAREN K. CALDWELL, CHIEF JUDGE

         There are currently two motions before the Court. First, Plaintiff M.L. Johnson Family Properties, LLC (“Johnson LLC”) asks for the Court's leave to file a Second Amended Complaint. [DE 101.] Second, the Defendant Secretary has moved to dismiss the claims set forth in Johnson LLC's First Amended Complaint. [DE 83.] For reasons set forth below, the Court (1) denies Johnson LLC's motion for leave to file a Second Amended Complaint [DE 101] and (2) grants the Secretary's motion to dismiss Johnson LLC's First Amended Complaint. [DE 83.] The matter shall remain on the Court's active docket to allow the parties to file for fees and costs pursuant to 30 U.S.C. § 1270(d).

         BACKGROUND

         The underlying facts and procedural history of this dispute are outlined in orders and opinions previously issued in this case, 7:14-cv-78 (see e.g., Doc. 35), and related action, 7:16-cv-06 (see e.g., Docs. 45, 85, 102, 110). The Court will therefore only recount the details relevant to the resolution of the two motions before it.

         A.

         On May 14, 2014, Johnson LLC filed a citizens suit for declaratory and injunctive relief pursuant to the Surface Mining Control and Reclamation Act of 1977 (“SMCRA”), specifically 30 U.S.C. § 1270. [DE 1.] On May 16, 2014, Johnson LLC requested a restraining order and a preliminary injunction compelling the Secretary to issue a cessation order requiring Premier Elkhorn to halt the surface mining of Tract 46 in Pike County, Kentucky. [DE 5.] After moving for a restraining order and preliminary injunction, Johnson LLC amended its Complaint as a matter of right pursuant to Fed.R.Civ.P. 15(a)(1). [DE 20.]

         Johnson LLC's First Amended Complaint, which is currently still operative, sets forth four claims for relief. Count I alleges that the Kentucky Cabinet is engaged in a pattern and practice of issuing surface mining permits based on applications that fail to list the names and addresses of all surface owners of the land to be mined. [DE 20, at 16.] Similarly, Count II asserts that the Kentucky Cabinet is engaged in a pattern and practice of issuing surface mining permits based on applications that fail to show that adequate public notice has been given that includes all land ownership information. [DE 20, at 17.] Count III posits that the Kentucky Cabinet improperly issues mining permits without the written consent of all surface owners. [DE 20, at 19.] Finally, Count IV alleges that the Secretary failed to inspect Premier Elkhorn's permit to mine on Tract 46 after learning of a purported imminent danger situation. [DE 20, at 20.]

         On June 13, 2014, then-District Judge Amul Thapar partially granted Johnson LLC's application for an injunction, ordering the Secretary to inspect Premier Elkhorn's mining operations. Judge Thapar further ordered Premier Elkhorn to cease all surface mining operations on Tract 46 during the pendency of the Secretary's inspection. The Secretary reported to the Court on July 21, 2014 that the Office of Surface Mining Reclamation and Enforcement (“OSMRE”) had conducted the required inspection. The Secretary also advised that because OSMRE had determined that the surface mining of Tract 46 had occurred without a valid mining permit, the agency was compelled under 30 U.S.C. § 1272(a)(2) to issue a cessation order. [DE 46-1, at 9.]

         On July 30, 2014, Judge Thapar dissolved the previously issued injunction at Johnson LLC's request. [DE 52.] The matter was then transferred to the undersigned following Judge Thapar's appointment to the Sixth Circuit Court of Appeals.

         On April 11, 2018, this Court entered an order dismissing the action from its active docket. Considering its final judgment in related case 7:16-cv-06, the Court believed that all issues between the parties had been adjudicated. [DE 60.] Nevertheless, the Court reopened the matter per Johnson LLC's request. [DE 64.] Not long after reinstatement, Johnson LLC moved to further amend its Complaint. [DE 79.] The motion asked the Court to suspend Counts I and II of Johnson LLC's First Amended Complaint thereby allowing the entity to dismiss a related regulatory proceeding. Johnson LLC also conceded that the Court's judgment in related case 7:16-cv-06 precluded the litigation of Count III. As to Count IV, Johnson LLC sought to amend the claim to request only declaratory relief. Johnson LLC then requested leave to add an additional claim, Count V, a declaration that OSMRE lawfully issued the cessation order. Lastly, Johnson LLC asked for the Court's permission to add Premier Elkhorn as a regular party defendant.

         The Secretary then filed its opposition to Johnson LLC's motion to amend. At the same time, the Secretary moved to dismiss the remaining claims set forth in Johnson LLC's First Amended Complaint. [DE 83.] In response, Johnson LLC “respectfully abandon[ed] each of its existing and proposed claims” (Counts I thru IV) and took the position that it was now only seeking to amend its Complaint to add Count V, a declaration of the validity of OSMRE's cessation order. [DE 95, at 1.] Before the Court could rule on the pending matters, Johnson LLC again moved to amend its Complaint. [DE 96.] This time around, Johnson LLC sought to add Count VI, a claim for damages against Premier Elkhorn. [DE 96.] The Court ordered Johnson LLC to combine its two pending motions into a single consolidated one.

         On March 15, 2019, Johnson LLC tendered its consolidated motion to amend. [DE 101.] Johnson LLC requested leave to “withdraw all claims stated in the First Amended Complaint” other than Count IV, which it sought to “update.” [DE 101, at 3.] The proposed Second Amended Complaint asserts only two claims for relief. Count I asks for a declaration upholding the validity of the cessation order, and Count II presents a damages claim against Premier Elkhorn. Because the disposition of the Secretary's motion to dismiss hinged on whether the Court allowed Johnson LLC the opportunity to amend its Complaint, the Court stayed any further briefing on the dismissal motion. [DE 104.]

         B.

         While the parties' respective motions were pending before the Court, Premier Elkhorn filed a petition in the United States Bankruptcy Court for the Eastern District of Kentucky seeking relief under Chapter 11 of the United States Bankruptcy Code. [DE 110.] Premier Elkhorn is protected by 11 U.S.C. § ...


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