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United States v. Buckingham Coal Co.

United States District Court, Sixth Circuit

April 29, 2013

United States of America, Plaintiff,
v.
Buckingham Coal Co., et al., Defendants.

OPINION AND ORDER

JAMES L. GRAHAM, District Judge.

The United States of America brought this action against the State of Ohio and Buckingham Coal Company ("Buckingham") based on a dispute surrounding certain mineral rights beneath a dam and reservoir in Athens County, Ohio. The United States seeks declaratory relief under 28 U.S.C. § 2201, damages from the State, and damages from Buckingham, alleging that it intentionally interfered with contracts between the United States and Ohio. Doc. 42 ¶ 55. In its answer, Buckingham asserted a counterclaim against the United States seeking damages for tortious interference with contract. Doc. 51 at 11.

The United States' motion to dismiss the counterclaim is before the court. Doc. 58. For the reasons stated herein, the motion is denied.

I. Factual and Procedural History

The subject of this lawsuit is the coal mineral interests in the land associated with the Tom Jenkins Dam and Burr Oak Reservoir ("the Project"). The Project was constructed by the United States Army Corps of Engineers ("the Corps") pursuant to Act of Congress (Flood Control Act of 1936 - "1936 Act" and Act of December 22, 1944 - "1944 Act") and in partnership with the State of Ohio. Doc. 42 ¶¶ 1, 2. The United States and Ohio executed an agreement ("Articles of Agreement" or the "Cooperative Agreement") in 1948, which delineates the parties' obligations with respect to the project lands. Doc. 42 ¶ 2. Under the Cooperative Agreement, Ohio obtained the fee simple title to the land that would be covered by the reservoir, including coal mineral interests. Doc. 42 ¶ 2. The Agreement also required Ohio to grant the United States a perpetual flowage easement for "flood control, erosion and water supply purposes." Doc. 42 ¶¶ 2, 18(b) (quoting Cooperative Agreement, Art. I, ¶ 5). The parties acted according to these agreements without incident until February 2010 when the United States learned of a proposal to mine coal under the project lands. Doc. 42 ¶ 25.

Between January and March 2010, Ohio executed two Coal Mining Leases and an Agreement for Exchange of Coal Rights with Buckingham Coal Company ("the Coal Mining and Exchange Agreements"), under which Buckingham obtained the rights to mine coal beneath the surface of the project lands. Doc. 42 ¶ 3; Doc. 51 ¶¶ 7-10. The mineral rights that Ohio leased to Buckingham include rights that Ohio obtained as part of the Project and the Cooperative Agreement with the United States. Doc. 42 ¶¶ 3, 4. The Corps learned of and objected to Buckingham's plans to mine under Project lands. Doc. 42 ¶¶ 26, 27. Pursuant to a Mine Safety and Health Administration-issued permit, Buckingham began mining operations. Doc. 42 ¶ 28; Doc. 51 ¶ 14.

The United States subsequently initiated this action against the State of Ohio and Buckingham Coal Company on May 4, 2011 seeking declaratory relief, preliminary and permanent injunctive relief, and damages. See Doc. 1. The United States asserts that Ohio's decision to lease the mineral interests in project lands to Buckingham violates Ohio's obligations under the 1936 Act, the 1944 Act, and the Cooperative Agreement. Doc. 42 ¶ 5. The United States alleges that Buckingham Coal Company intentionally interfered with the contract between Ohio and the United States, causing the United States to incur expenses to inspect, monitor, and remediate damage caused by Buckingham's mining activities (Count III).

On May 6, 2011, the United States filed a motion for a temporary restraining order, seeking to prevent Buckingham from excavating, mining, or otherwise disturbing the ground beneath the Project lands. See Doc. 8. This Court denied the motion on May 12, 2011. The Court's order denying the temporary restraining order detailed extensive factual findings following an evidentiary hearing. See Doc. 23.

On May 29, 2012, Buckingham asserted a counterclaim against the United States, alleging tortious interference with contract. Doc. 51. Buckingham alleges, among other things, that the United States sought to impede Buckingham's contractual rights under the Coal Mining and Exchange Agreements with Ohio, engaged in repeated efforts to nullify these Agreements, and refused to include Buckingham in discussions regarding these Agreements. Doc. 51 ¶¶ 10-12. Buckingham alleges that it has incurred substantial expense and inconvenience defending its contractual rights, and seeks to recover damages from the United States. Doc. 51 ¶¶ 21, 26, 27.

Before the Court is the United States' motion to dismiss Buckingham's counterclaim for lack of jurisdiction, or in the alternative, for failure to state a claim. Doc. 58.

II. Standards of Review

a. Rule 12(b)(1)

The plaintiff has the burden of demonstrating the court's jurisdiction where subject-matter jurisdiction is challenged pursuant to a Rule 12(b)(1) motion. Moir v. Greater Cleveland Regional Transit Auth., 895 F.2d 266, 269 (6th Cir. 1990); Official Pillowtex LLC v. Hollander Home Fashions Corp., 479 F.Supp.2d 744, 752 (S.D. Ohio 2007).

The framework under which the court reviews a Rule 12(b)(1) motion depends on the nature of the challenge to the court's subject-matter jurisdiction. Ohio National Life Ins. Co. v. United States, 922 F.2d 320, 325 (6th Cir. 1990); Wojton v. United States, 199 F.Supp.2d 722, 725 (S.D. Ohio 2004). Rule 12(b)(1) motions generally come in two varieties: facial attacks and factual attacks. Ohio National Life Ins. Co., 922 F.2d at 325. As the Sixth Circuit has explained, "a facial attack on the subject matter jurisdiction alleged by the complaint merely questions the sufficiency of the pleading." Id. A district court must take the allegations in the complaint as true when reviewing a facial attack. Id. On the other hand, a factual attack on the court's jurisdiction presents a factual controversy, and the district court must weigh the conflicting evidence to resolve the disputed jurisdictional facts. Id. When the district court reviews a factual attack, "no ...


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