Hecla sues state for ‘bad actor’ claim

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Students join Hecla Mining Company officials on a tour of Troy Mine in this file photo. (John Blodgett/The Western News file)

The legal dispute over mining in the Cabinet Mountains escalated Friday.

Earlier this week, the Montana Department of Environmental Quality informed Hecla Mining Company’s president and CEO that he was in possible violation of the state’s “bad actor” environmental law.

On Friday, three Hecla subsidiaries with operations in Northwest Montana struck back, suing the Department and its director, Tom Livers, in Lincoln County District Court.

The plaintiffs and defendant differ on the status of Hecla President and CEO, Phillips S. Baker, Jr. On Tuesday, Livers notified Baker that his leadership of Pegasus Gold, Inc. – whose 1998 bankruptcy left Montana with three severely contaminated mining sites – barred him from undertaking new projects under the Mining Metals Reclamation Act.

Montanore Minerals Corporation, Troy Mine Inc., and RC Resources Inc. disagree. These Hecla-owned companies respectively own the proposed Montanore mine site, the in-reclamation Troy Mine and the exploratory Rock Creek mine. In his letter Tuesday, Livers warned that the Department could revoke permits for these projects.

In their complaint, shared in a press release Friday, the companies’ attorneys argued that because they, not Hecla, were the legal entities responsible for these mines, the “bad actor” provision did not apply.

They also addressed Baker’s involvement with Pegasus. That company had forfeited a $30 million reclamation bond when it went bankrupt. Even then, Livers wrote, “ongoing obligations at these sites will cost the state approximately $2 million per year in perpetuity.”

But the firms’ attorneys, with Billings-based Holland & Hart LLP, argued that “Mr. Baker had no personal obligation to ensure that a bond covered reclamation costs of a Pegasus entity. If Pegasus failed to perform such work persuant to its permit with the Department [of Environmental Quality], Pegasus is exclusively liable for that failure.”

In a statement issued Friday afternoon, Livers said that “we reached our decision based on careful deliberation of the legal issues. We stand by it and are prepared to defend it.”

Aurora Janke, one of the Earthjustice attorneys who sought this action, told the Daily Inter Lake that the Department of Environmental Quality “got the law right in holding Hecla and Phillips Baker accountable under Montana’s ‘bad actor’ provisions. We are still reviewing the complaint, but we intend to defend DEQ’s action.”

Tricia Brooks, Clerk of the Lincoln County District Court, said a timeframe for the case’s next steps was not available.

Reporter Patrick Reilly can be reached at preilly@dailyinterlake.com, or at 758-4407.

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