Winona County faces second sand ban suit


(4/24/2017)

by CHRIS ROGERS

Winona County now faces two lawsuits challenging its frac sand ban. Last Wednesday, the Houston County-based, would-be mining company Minnesota Sands sued, claiming that the ban prevents the company from digging up frac sand deposits valued at $3.6 billion in Winona County and asking the Winona County District Court Judge Nancy Buytendorp to award monetary damages. This lawsuit and another filed last month include requests for monetary damages that the county’s insurance would not cover, if awarded by a judge.

The County Board passed the ban last November after scores of citizens urged them to ban the industry in order to protect groundwater, farmland, and scenic beauty from large-scale mining. Other citizens opposed it. The ban only applies to rural parts of the county — not cities — and it outlaws mining, hauling, and processing sand for use in hydraulic fracturing oil wells (“fracking”), but allows sand mining for construction and agricultural purposes.

 

What is Minnesota Sands?

Minnesota Sands holds leases on potential mine sites in Winona, Houston, and Fillmore counties that have been stalled since 2013.

Back in 2012, Minnesota Sands owner Rick Frick, of rural Dakota, proposed a cluster of 11 mines in Winona, Houston, and Fillmore counties south of St. Charles. Under the name Minnesota Proppant, he also proposed a rail-loading spur in St. Charles that would receive the sand. St. Charles city leaders rejected the rail spur proposal after nearly half of the city’s residents petitioned against it. 

In 2013, Minnesota Sands completed one environmental study for two of its proposed mines in Saratoga Township — the Yoder and Dabelstein mines. State agencies urged Winona County to require Minnesota Sands to complete a more in-depth environmental study — called an Environmental Impact Statement (EIS) — for the mines, and just before the county was slated to vote on the issue, Minnesota Sands voluntarily agreed to prepare an EIS. Minnesota Sands’ proposal has not gone very far since then. Frick announced he would move forward on the EIS in 2015 and put some money down on the study, but then domestic oil prices plunged and he never submitted basic information — like an up-to-date list of where his proposed mining sites are — to the Minnesota Environmental Quality Board (EQB). Last year, an agreement between Frick and the EQB to pay for the EIS expired. “We notified [Minnesota Sands] that we were closing out the project and couldn’t proceed without a data submittal and a [new] income agreement in hand,” EQB Planning Director Erik Dahl explained in an interview last week.

 

New suit makes

familiar charges

Like the lawsuit filed last month by Saratoga Township resident Roger Dabelstein and the recently formed nonprofit Southeast Minnesota Property Owners, this new case claims that Winona County violated property owners’ rights to equal protection under the Minnesota and U.S. constitutions because, they argue, the frac sand ban treats sand mines differently solely based on the whether sand is sold for construction or for fracking. Both suits claim that the ban violates the U.S. Constitution’s prohibitions on local regulation of interstate commerce and that it violates landowners’ right to due process because it outlaws frac sand without any rational basis. The lawsuits also argue that the ban constitutes “a regulatory taking” — regulations so restrictive that they effectively take away a landowners’ ability to use their property. 

If a judge ultimately sides with the miners, the county could wind up on the hook for monetary damages related to those regulatory taking claims. The county’s insurance firm, the Minnesota Counties Intergovernmental Trust (MCIT), is covering the county’s attorney fees and may cover the cost of certain damages, if awarded. However, MCIT does not cover awards for regulatory takings, Winona County Administrator Ken Fritz explained.

Minnesota Sands’ attorney Christopher Dolan declined to comment, but public relations consultant Mike Zipko said, “We believe that banning the use of materials for the energy industry will not hold up.”

Asked whether Minnesota Sands plans to move forward with its mining proposals, Zipko said that the U.S. energy industry has bounced back from economic challenges, that local sand is unique and extremely valuable, but for Frick’s business to move forward, Minnesota Sands needs a court ruling to address Winona County’s ban. “I don’t think you would go to this sort of action if there wasn’t a viable business,” he added.

Land owned by Roger Dabelstein and Southeast Minnesota Property Owners President Tom Campbell were once among Minnesota Sands’ proposed mining sites, but it is unclear whether they are any longer. Frick’ has said the sites have changed since 2013, and he has never submitted a new list of mining sites. Campbell said he is no longer under contract with Minnesota Sands. Zipko declined to comment. According to the lawsuit, Minnesota Sands holds seven leases to mine a total of 1,946 acres in Winona County.

 

The county’s defense

MCIT-appointed attorney Jay Squires successfully defended Winona County’s decision to permit the county’s only permitted frac sand mine, the Nisbit mine, against court challenges by neighbors. Now, he will represent Winona County in both of the lawsuits challenging its decision to outlaw the frac sand industry.

Squires was not available for an interview and he has not responded to Minnesota Sands’ claims yet. In his initial response, Squires denied Southeast Minnesota Property Owners' claims and asked Judge Mary Leahy to dismiss the case. The county's initial response denies the plaintiffs’ claims that there is no geological difference between frac sand and construction sand and that the mining process for them is the same.

It is unclear who, exactly, the members of Southeast Minnesota Property Owners are. They claim to be Winona County residents with interests in mining or shipping frac sand that are now blocked. Squires questioned whether they have a real grievance to sue over, arguing that “some or all of the plaintiffs may lack standing.”

Asked in an interview whether citizens should be worried about the lawsuits, Fritz said, “Just because someone makes a claim doesn’t necessarily mean it’s a valid claim.”

Keep reading the Winona Post for more on this story.

 

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