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Rith Energy, Inc. v. United States

Grant of summary judgment in favor of the United States affirmed where government suspended plaintiff's mining permit until it could devise a plan to address the problem of acid mine drainage; government's action did not result in a categorical taking of plaintiff's property, and plaintiff did not have reasonable investment-backed expectations of fixing the problem.

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Appealed from: United States Court of Federal Claims Judge John P. Wiese

In 1985, Rith Energy, Inc., purchased two coal mining leases in Tennessee. It subsequently applied for, and obtained, a federal permit to conduct mining operations on the leased property. After Rith had mined for a period of time, the Office of Surface Mining Reclamation and Enforcement of the United States Department of the Interior (OSM) concluded that a portion of the property on which Rith was mining contained high levels of potentially toxic materials that could pollute the groundwater in the area through a process known as “acid mine drainage.” OSM therefore suspended Rith’s permit and prohibited it from mining most of the coal covered by the mining leases until Rith devised a plan to address the problem of acid mine drainage at its mining site. When Rith was unable to devise a plan that satisfied OSM, Rith’s request to revise its mining permit was denied and Rith was unable to conduct any more mining at the site.

After several unsuccessful administrative and judicial challenges to OSM’s actions, Rith sued the United States in the Court of Federal Claims, contending that its property had been taken without compensation, in violation of the Takings Clause of the Fifth Amendment. The Court of Federal Claims granted summary judgment for the government, and Rith appealed. Because the government’s conduct at issue in this case did not result in a categorical taking of Rith’s property, and because Rith did not have reasonable investment-backed expectations that it would be permitted to mine in a way that would create a high risk of acid mine drainage, we affirm.

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