From Deseret News archives:
Court upholds $24 million ruling on Kingston mine
The 10th Circuit Court of Appeals rejected an appeal by C.W. Mining that would have overturned a lower court decision on a lawsuit involving utility coal deliveries. The company operates several coal mines in Bear Canyon in Emery County.
C.W. Mining had a contract to supply public utility Aquila Inc., based in Kansas City, Mo., with 1.6 million tons of coal over two years from 2004 to 2006, with an option to extend the contract through 2008.
A labor strike hit the company within a week of the contract signing and lasted for two years.
In addition, the mine suffered several roof collapses during the fall of 2003, resulting in the mine's permanent closure following an order by the U.S. Mine Safety and Health Administration in January 2004. The company also suffered more roof collapses in its other mines.
Despite its efforts to maintain stability in its mine operations, the company's problems with Aquila continued, and C.W. Mining eventually canceled its contract.
Aquila filed a lawsuit against C.W. Mining, claiming that it had failed to fulfill its contractual obligations. Aquila said that it was forced to purchase coal at higher market prices from other sources.
C.W. Mining claimed that the labor strike contributed to its inability to meet its contract obligations. A Utah district court ruled that it was geological problems, rather than labor issues, that were the main reasons for C.W. Mining's failures.
In October 2007, U.S. District Judge Tena Campbell ruled that Aquila was entitled to $24 million in damages. The U.S. 10th Circuit agreed with he lower court's ruling and reaffirmed the decision.
E-mail: jlee@desnews.com
