U.S. Supreme Court Affirms Royalty Award To School Trust
20-Feb-1997
The U.S. Supreme Court has rejected an appeal by a St. Louis-based coal company that sought to avoid paying approximately $10.3 million in coal royalties owed to the Utah School and Institutional Trust Lands Administration. In its February 18 decision, the Supreme Court rejected without comment the appeal by Trail Mountain Coal Company, which mined coal from state school trust lands in Emery County, Utah, from 1979 through 1985. Trail Mountain is now owned by Arch Minerals Corporation of St. Louis. The Supreme Court's decision leaves in place a 1996 decision of the Utah Supreme Court finding that Trail Mountain had wrongly underpaid the royalties. Trail Mountain had deposited some $5.7 million into escrow in 1992, but now owes an additional $4.6 million to the state. The ruling should end more than 12 years of litigation involving the underpayment of royalties, which began with state audits in 1984 of a number of companies mining coal from state trust lands in Carbon and Emery Counties. "We're very pleased with the Supreme Court's decision," says Trust Lands Administration legal counsel John Andrews. "Trail Mountain has fought paying these royalties ever since the 1984 audits. This has gone to the Utah Supreme Court twice in addition to the U.S. Supreme Court. It is time that we get this money deposited in the Permanent School Fund where it belongs." In fighting off the coal companies' legal challenges, the state used a legal team headed by the Vernal law firm of McKeachnie & Allred, which worked with the Trust Lands Administration's legal staff and the Utah Attorney General's office. Including the Trail Mountain case, the state's audits have recovered over $25 million for the Permanent School Fund, which provides financial support for Utah's public schools. The School and Institutional Trust Lands Administration is an independent state agency which manages 3.7 million acres of Utah trust lands exclusively for the benefit of Utah's schools and other public institutions.