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Effects of Supreme Court decision debated
FRIDAY, MARCH 7, 2003

The world's largest coal company this week said it would use the outcome of the Navajo Nation's Supreme Court ruling in a separate lawsuit alleging the tribe lost $600 million for a unfavorable mining lease.

The 6-3 decision struck down the tribe's breach of trust claim against the federal government for approving the agreement. Peabody Energy, which has operated mines in northeastern Arizona for nearly four decades, said the ruling would impact a related case the tribe is pursuing.

Beth Sutton, a company spokesperson, wouldn't elaborate on the company's plans. "This decision is relevant to the pending litigation," she said yesterday. "We're not going to be able to get into any detail about strategy."

The lawsuit, filed in federal court in Washington, D.C., alleges Peabody representatives colluded with Department of Interior officials to deny the tribe a 20 percent royalty rate for what is considered a high quality coal deposit. Navajo leaders, unaware that a Peabody lobbyist met secretly with former Interior Secretary Don Hodel, accepted a 12.5 rate facing economic uncertainty. The lease was approved by the department in 1987.

In an interview in Washington, D.C., yesterday, Navajo Nation President Joe Shirley Jr. was unable to answer questions about this week's developments. He spoke of his push to improve the tribe's economy, one of his top priorities.

"We need to eliminate bureaucratic tangles at the Department of Interior," he said, citing federal rules that can tie up business developments for months at a time.

The Shirley administration wants to settle the dispute with Peabody, a top aide said. Even so, Louis Denetsosie, who is awaiting confirmation as the tribe's attorney general, is anticipating some difficulties now that the Supreme Court has ruled.

"We expect Peabody will rely on this decision and they will use this to fall back on," he said. "They will use it in negotiation and litigation."

"[The Supreme Court] made it more challenging to deal with Peabody and the other parties," he added, "but we don't think the decision prevents us from working out a favorable negotiated settlement."

Sutton said Peabody and the tribe continue to enjoy a good relationship. Currently, the company, the Navajo Nation and the Hopi Tribe, along with users of coal from the Black Mesa mines, are trying to work out complex water issues in the region.

Peabody uses a water source to transport coal from the mines to a generating station 270 miles away in Nevada. That supply agreement, which is not a lease to which the Navajo or Hopi tribes are a part, is expiring. Sutton said the company is looking for a 25-year extension.

Relevant Links:
The Navajo Nation - http://www.navajo.org
Peabody Energy - http://www.peabodyenergy.com