For Western Aggregates, Inc: JMBM Client Prevails in First-Ever Vested Rights Hearing

Jeffer Mangels Butler & Marmaro LLP announced that its client, Western Aggregates LLC – a subsidiary of Eagle Materials Inc. – prevailed in a hearing before the State Mining and Geology Board (Board) to determine the validity of “vested rights” to mine and produce construction materials from lands in the Yuba Goldfields, one of the most significant construction aggregate deposits in California. This much-anticipated decision was the first under a new process adopted by the Board last year for determining vested rights.

Vested rights allow mines operating prior to enactment of the Surface Mining and Reclamation Act of 1975 (SMARA) to be “grandfathered” out of the need to obtain a surface mining permit under SMARA. In August and September of this year, the Board held public hearings to address Western Aggregates’ claim of vested rights in the Yuba Goldfields, before making its decision on September 11, 2009.

The hearing process addressed a number of important issues, including the types of mining activities and evidence relevant to determining the scope of a vested right, the relationship of lessee mining operators and contractors to the determination of vested rights, and the circumstances under which vested rights and permits may co-exist. One issue yet to be resolved by the Board is whether or how a determination of annual production should factor into the overall vested right determination process; for Western Aggregates, that issue will be determined by the Board in January. This first-ever hearing process by the Board followed over a year of rulemaking by the Board to develop a set of regulations to guide the vested rights hearing process.

Kerry Shapiro, co-chairman of JMBM’s Construction & Building Materials Group, actively participated in the shaping of the Board’s vested rights procedures and regulations over the past year. Shapiro successfully navigated Western Aggregates through the vested rights process, resolving a variety of legal and evidentiary issues raised by the Board, resulting in a 4-2 vote for Western Aggregates’ vested right. Shapiro, who has an extensive practice in areas of land use, government and environmental regulation, said, “This is a precedent-setting decision that will allow Western Aggregates to continue its successful contribution to Yuba County and preserve the jobs of its employees.”