Wyoming’s lawsuit over a blocked coal export terminal is moot because the company behind the proposal is bankrupt and won’t be building the project, the federal government argued in a new filing to the U.S. Supreme Court.
In her brief, U.S. Solicitor General Elizabeth Prelogar argued that because the Millennium Bulk Terminal project is dead, there is no legal controversy for the nation’s highest court to consider. Millennium declared bankruptcy in December.
While the Supreme Court has yet to weigh in on the matter, the brief represents the latest obstacle to the effort by Wyoming and Montana to use the courts to pursue those states’ long-stated desire to ship Powder River Basin coal to overseas markets.
“Even if this court were to uphold Montana and Wyoming’s constitutional challenges to Washington (state’s) previous denial of … certification and require Washington to reconsider Millennium’s application, Millennium would still be bankrupt, would still lack any remaining interest in the property in question, and would still have abandoned its plans to build the proposed terminal,” the federal government argued. “None of the relief that Montana and Wyoming seek would change the fact that there will be no Millennium Bulk Terminal — and thus no chain of causation running from an increase in coal exports to increased revenues for Montana and Wyoming coming from ‘coal severance and other taxes.’”
In a statement Wednesday, Gov. Mark Gordon’s office said the two states would file a legal response to the government’s brief.
“I am most disappointed with the position of the US Solicitor General,” Gordon said in a statement. “The core issue of reaffirming a state’s constitutionally protected access to markets remains unresolved and I urge the Supreme Court to continue with the case. One state should not weaponize a water quality statute inappropriately to deny other states the ability to conduct interstate commerce. We will respond to the Solicitor General’s brief to stress the critical importance of the commerce clause, particularly to inland states.”
The decision was not entirely unexpected. The Supreme Court in October invited the acting solicitor general — who at that point had been appointed by the Trump administration — to provide an opinion on the suit. The official did not do so before leaving office at the end of Trump’s term.
The Biden administration’s aims of transitioning the country to clean energy, meanwhile, indicated to some that the new solicitor general would not side with Wyoming and Montana.
“What this means is that probably the most influential litigator in the country, from the Supreme Court’s perspective, is now going to come out on the other side of this issue,” Joshua Macey, a University of Chicago law professor, said back in January.
Macey said that the solicitor general’s comments can carry significant weight in cases that the U.S. Supreme Court is considering.
The lawsuit stems from a decision by Washington state’s Department of Ecology to deny Millennium Bulk Terminals a water quality permit in 2017. The department argued that the federal Clean Water Act gave the state the right to deny a permit to the project, which it believed would “cause irreparable and unavoidable harm to the Columbia River.”
The company initially proposed the terminal in 2012. Wyoming government and industry leaders have long said the west coast port would be critical to one of the state’s premier industries, as it would allow Powder River Basin firms to export their coal to Asia.
In January 2020, Wyoming joined Montana in asking the U.S. Supreme Court for a hearing.
In December, Lighthouse Resources, the proposed terminal’s parent company, filed for Chapter 11 bankruptcy. It then failed to find an interested buyer for the terminal.
Alexandra Klass, a professor specializing in energy, environment and natural resources law at the University of Minnesota, told the Star-Tribune earlier this year that Wyoming’s lawsuit could still have a chance in court.
“The fact that the solicitor general did not weigh in (before Biden took office) is not helpful to the Wyoming and Montana side on this,” Klass said. “But that does not necessarily mean that the (Supreme Court) won’t take the case.”
She also said that the fact that the court asked for the solicitor general to weigh in meant that “at least certain justices on the court had interest in the case.”