Court Rules Montana has Jurisdiction to Enforce “Bad Actor” Law

Lawsuit Advances Against Idaho-Based Hecla Mining Company & CEO Baker 

HELENA, MT — On Wednesday, May 26th, parties received notice that State District Court Judge Mike Menahan ruled that the Montana Department of Environmental Quality (DEQ) has the authority to enforce the state’s “bad actor” law against Hecla Mining Company and its CEO, Phillips S. Baker Jr, for Baker’s affiliation with Pegasus Gold Corporation. In his order, the judge concluded that Montana courts have jurisdiction over Idaho-based Hecla and Baker due to Hecla’s ownership and operation of mining operations in Montana, stating that “Baker has purposefully availed himself of the privilege of mining in Montana, and in doing so has accepted the jurisdiction of Montana courts with respect to that mining activity.” 

“This is great news and our hope is that the court will hold companies like Hecla and CEO Phillips Baker accountable for their past actions causing significant contamination to drinking water sources, ceremonial sites, and powwow grounds on the Fort Belknap reservation,” said President Andrew Werk, Jr. of the Fort Belknap Indian Community. “We are faced with continual water quality monitoring with this perpetual nightmare caused by these bad actors. To date DEQ has spent more than $32 million in public funds for clean-up at the Zortman-Landusky mine site.” 

The “bad actor” law was enacted in 2001 in the wake of the Pegasus Gold bankruptcy to prevent senior executives and mining companies from receiving a new permit to mine in Montana if they’ve failed to clean-up past operations or reimburse the state for those clean-up costs. 

Baker served as a top official for Pegasus Gold when it filed for bankruptcy in 1998 and abandoned its operations at the Zortman-Landusky, Beal Mountain and Basin Creek cyanide leach gold mines. That left behind a toxic mess, forcing taxpayers to foot the bill for tens of millions of dollars in reclamation and long-term water treatment costs. The state of Montana has spent more than $50 million for reclamation and water treatment at Zortman-Landusky alone, where acid mine drainage despoiled the land, water, and sacred sites of the A’aninin and Nakoda tribes, whose reservation borders the mine site. Publicly-funded water treatment costs continue at Zortman-Landusky and Beal Mountain today, and will be needed in perpetuity.

Under Montana state law, the DEQ has the power to prevent a person or entity from mining in the state if they’ve caused harm to the environment and neglected to remedy their mistakes. Baker’s prior involvement with Pegasus Gold makes his role with Hecla a clear violation of that law. The district court’s recent ruling ensures that Hecla and Baker are subject to Montana courts’ oversight of their new mining endeavors in Montana. 

Hecla, with Baker as its CEO, is currently proposing two massive new copper/silver mines adjacent to and excavating under the Cabinet Mountains Wilderness, which would damage the traditional lands of the Ktunaxa people.  Recent federal court decisions invalidated permits for those mines for failure to comply with the Clean Water Act and Endangered Species Act. 

DEQ filed the “bad actor” lawsuit against Hecla and Baker in March 2018, and was subsequently joined by the Fort Belknap Indian Community, Ksanka Kupaqa Xaʾⱡȼin (a traditional society within the Ksanka Band of the Ktunaxa Nation) and a coalition of five conservation groups (Earthworks, Clark Fork Coalition, Montana Environmental Information Center, Rock Creek Alliance, and Montana Conservation Voters), who intervened in support of the case in July 2018. Earthjustice, an environmental legal organization, represents the conservation groups in defending the DEQ’s determination that Baker’s involvement with Hecla is a direct violation of the bad actor law. Now that the procedural issue over jurisdiction has been resolved, the court can move forward to issue a final decision on the merits of the case. 

“Montana passed laws designed to prevent mining executives with a history of irresponsible behavior from further despoiling the state,” said Earthjustice Attorney Tim Preso. “This decision by the court is a first step toward ensuring that the law that protects Montana from further environmental degradation is able to hold Hecla and Baker to account.”

“We’re heartened by the court’s decision,” said Bonnie Gestring, northwest program director at Earthworks. “Montana must be able to hold mining executives accountable when they leave our state with a mountain of clean-up costs.” 

“Montanans have spent decades and millions of dollars cleaning up the mess left behind by Pegasus Gold,” said Karen Knudsen, executive director of the Clark Fork Coalition.   “The ‘bad actor’ law was passed in the wake of Pegasus’ bankruptcy and was clearly intended to hold mining executives accountable for their previous messes. The Court’s recent order reflects that intent, and we now look forward to a decision on the merits of the case.” 

“Historically, mining companies have gotten away with leaving unreclaimed mine sites for taxpayers to clean up, some of which will require treatment for decades to come,” said Mary Costello, executive director of the Rock Creek Alliance.  “That’s why it’s so important that Montana’s bad actor law, which was passed with bipartisan support, is enforced. This law ensures that mining  executives are held accountable to Montana’s taxpayers so that abandoned toxic mine sites remain a thing of the past.”

“The laws we have on the books to protect clean water and assure that mining sites are fully reclaimed are only going to be effective if bad actors are held accountable and the law is adequately enforced,” stated Derf Johnson, Clean Water Program Director with the Montana Environmental Information Center. “We are incredibly heartened to see the court’s order, and now the DEQ can proceed with fully prosecuting this case on the merits.