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WEDNESDAY, SEPTEMBER 4, 2002

The world's largest coal conglomerate is fighting accusations that it participated in "suppressing and concealing" of information in a $600 million breach of trust dispute before the U.S. Supreme Court.

Peabody Coal filed a friend of the court brief in the Navajo Nation's case last month. The company has mined the tribe's lands in northeastern Arizona since the 1960s.

But the company denies it broke the law by engaging in secret talks with a former Reagan administration Cabinet member over stalled lease negotiations with the tribe. "The uncontradicted record demonstrates, as a matter of law, that Peabody did not seek improperly to influence the Interior Department," the August 19 brief stated.

The United States also does not owe the Navajo Nation any money for an agreement a federal appeals court said was approved under "economic pressure" in 1987. "The government is not to be treated as a common-law trustee," the company said.

Peabody isn't a party to the case and won't be responsible for damages should the Supreme Court uphold an August 2001 ruling that found the government in breach of trust. A divided panel of the Federal Circuit Court of Appeals said a 20 percent royalty rate was lowered to 12.5 percent due to lobbying by a personal friend of Interior Secretary Don Hodel.

The company, however, has an financial interest in a controversy that has garnered international attention. It faces another lawsuit, initiated by the Navajo Nation and supported by the Hopi Tribe, for the same lease agreement.

A federal judge overseeing the case threatened contempt sanctions against the company for filing "frivolous" court motions. An appeal has been lodged.

Outside of the court system, Peabody faces challenges to its mining practices. Hopi and Navajo officials, backed by environmental groups in the U.S. and worldwide, question the company's use of a precious water source to transport coal from tribal lands to a power generating station 273 miles away.

"Peabody brought the benefits of a first class coal mining operation and many jobs to the Navajo Nation," the company noted in its Supreme Court brief.

The Court has not yet scheduled a date for oral arguments in the case, which has been joined with a $14 million trust dispute affecting the White Mountain Apache Tribe of Arizona. A hearing is expected in November.

Related Documents:
Supreme Court Docket Sheet No. 01-1375 | DOJ Petition Brief | DOJ Reply Brief | DOJ Merits Brief

Related Decisions:
NAVAJO NATION v. US, No 00-5086 (Fed Cir. August 10, 2001)

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

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Legal tactics land Peabody in hot seat (7/22)
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Griles can't explain trust standards (6/27)
Navajo royalty case accepted (6/4)
Don Hodel's Navajo Folly (6/4)
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