Judge nixes mining company challenge to ‘bad actor’ label

A Montana judge has dismissed a lawsuit from an Idaho mining company that’s fighting to overturn its designation by Montana regulators as an industry bad actor because of pollution tied to its CEO

District Judge Mike Menahan in Helena said in his ruling that the complaint from subsidiaries of Hecla Mining Co. was premature because the bad actor designation by the Montana Department of Environmental Quality was not final.

Montana’s bad actor law blocks individuals and companies who don’t clean up their old mines from starting new ones.

Hecla CEO Phillips Baker Jr. was former chief financial officer at Pegasus Mining, which went bankrupt in 1998 and saddled the state with more than $35 million in pollution cleanup costs.

A separate lawsuit brought by the agency against Hecla and Baker is pending.

“The other side jumped the gun on filing this,” said Jim Goetz, the attorney representing the state environmental agency. “We have to decide now how to get the merits (of the case) resolved.”

Hecla is proposing two copper and silver mines beneath the Cabinet Mountains Wilderness in northwestern Montana. The state’s designation threatens to tie up those projects if it stands up in court and Baker remains with the company.

Hecla Vice President Luke Russell said company attorneys were reviewing the ruling, but it did not come as a surprise.

Baker, who also serves as chairman of the National Mining Association, has said he was never in control of Pegasus, where he worked four years. He’s argued there’s no link between Pegasus and Hecla and that the bad actor designation appears to be an attempt to stop the two new mines that would employ about 300 people each.

State officials have said Hecla could have to reimburse more than $35 million in Pegasus-related cleanup costs if it wants to pursue the two new projects – Montanore Mine near Libby and Rock Creek Mine near Noxon. If the company doesn’t want to pay or otherwise resolve the alleged violations, Hecla could have its mining permits and licenses suspended, state officials wrote in a March 20 letter to the company.

Pegasus mines polluted surrounding waterways with cyanide, arsenic and other contaminants, prompting water treatment measures that may be needed permanently. That includes the Zortman-Landusky mine near the Fort Belknap Indian Reservation.