Cyanide Mining Ban Clears Last Hurdle

I-137—the ban on new, open-pit, cyanide-leach mines in Montana that was written and promoted by MEIC. Judge Lovell dismissed all the claims in Canyon Resource’s federal takings suit. This was just about the last legal gambit that Canyon had available.

Since its enactment by Montana voters in 1998, I-137 has survived many challenges from Canyon and the mining industry. Attempts were made to overturn the initiative in both the 1999 and 2003 legislative sessions. Then Canyon sponsored I-147 (at a cost of more than $3 million), which would have repealed I-137. Meanwhile, Canyon was also trying to get rid of I-137 in the courts.

Shortly after the enactment of I-137, Canyon filed nearly identical lawsuits in state and federal courts. The suits sought hundreds of millions of dollars in damages from the State of Montana. Canyon argued that I-137 took away its ability to mine the McDonald Gold deposit on the Blackfoot River, and that as a consequence Montana owed it the gross value of the as yet to be developed mine.

Canyon neglected to tell the courts that the processing of its mining permit application had ceased because the company had neglected to pay the bills for the required environmental impact statement. Because of Canyon’s financial negligence, Montana had actually revoked Canyon’s leases to mine on State land (another fact that Canyon forgot to bring up in court).

Canyon Resources put its federal “takings” suit on hold while it pursued action in State court. Both the Montana district and supreme courts ruled against Canyon in its state suit. Canyon appealed to the U.S. Supreme Court, which declined to take the case. So Canyon renewed its federal takings suit.

Judge Lovell’s ruling on this federal suit effectively dismissed Canyon’s suit not once, but twice. He ruled that because Canyon had already pursued its takings claim in state court, it could not now also do so in federal court. Proceeding with a federal suit would have, in essence, given the company “two bites of the same apple.” Further, Judge Lovell ruled that even if Canyon could pursue the suit, a recent U.S. Supreme Court ruling requires that federal courts pay deference to State law in this type of takings case. Because Canyon had already lost in State court, it was unlikely to win in federal court, Lovell wrote.

This is likely to be the last straw for Canyon. It has attempted to overturn or be compensated for I-137 in every forum imaginable, and lost every time. James Hesketh, president of Canyon Resources, said that the company is likely to appeal the ruling. Hesketh whined in the Helena Independent Record: “Is there a court out there that will view this from the point of view of justice?” MEIC’s attorneys believe that any appeal is likely to be viewed quite unfavorably by the courts.

So, finally, eight years after its approval by the Montana voters, I-137 appears to have survived all legislative, electoral, and judicial challenges. It’s about time.

Last updated June 27, 2006

In the News

Federal judge kills gold mine's lawsuit (By JENNIFER MCKEE, Gazette State Bureau, April 20, 2006) HELENA -- "A federal judge has tossed out claims by a Colorado mining company that Montana's voter-passed ban on cyanide leach mining illegally robbed the company of a would-be mine near Lincoln..."

Supreme Court: Cyanide ban not unconstitutional (June 8, 2005, by BOB ANEZ, AP)