Justices deny Mines Management appeal to oust judge

The Montana Supreme Court upheld a denial for a substitution of judge Tuesday in a case between Mines Management and a group of claimholders now associated with former Montana governor Brian Schweitzer.

The state case concerns the legitimacy of 58 claims held by Arnold Bakie and others on the location of the potential Montanore Mine, which is owned by Mines Management. Fourteen of the claims were sold earlier this year to Optima Inc., a group that includes Schweitzer, who now serves as chairman of the board of directors for Stillwater Mining Company.

“This is the court rejecting Montanore’s attempt at court shopping,” Schweitzer said.

In March 2013, District Judge James Wheelis granted summary judgment in favor of Bakie and others, ruling their claims were legitimate. The ruling prevented Mines Management from accessing a 14,000-foot adit, or underground tunnel, into the copper silver mine worth an estimated $8 billion. Mines Management appealed the ruling to the state Supreme Court.

In January the state Supreme Court issued an order concluding that Wheelis did not make sufficient findings to support the granting of injunction and appellate review. The ruling was remanded with the instructions to “vacate the subject injunction and for further proceedings.”

Mines Management filed for a motion of substitution of judge. Wheelis denied the motion. Mines Management’s appeal to the state Supreme Court was denied Tuesday.

“The Montana Supreme Court ruling merely means that Judge Wheelis will continue to preside over the Lincoln County case, as directed by the Supreme Court ruling earlier this year,” Glenn Dobbs, Mines Management CEO said.

While the state case continues on, the two sides are also involved in a federal case.

“In April this year the Federal Court in Missoula granted Mines Management a condemned easement across the subject claims,” Dobbs said. “The federal condemnation case will continue to go forward on the issue of compensation, unaffected, as it has always been, by the state court proceedings.”

The federal ruling allowed the sides to enter arbitration to determine the value of just compensation to be paid to the claimholders for crossing their claims. A three-person panel will determine that value. Each side may choose one member of the panel. The third member must be agreed upon by both sides. If arbitration is unsuccessful, the case may go to a jury.

“Arnold Bakie filed these claims 30 years ago,” Schweitzer said. “He made an agreement with Noranda stating: One, Bakie would be paid $50,000 a year for access to the site of his claims; two, Noranda would spend $100,000 a year developing the claim and three, that Bakie would have rights to four percent of all the refined metal. Then Montanore says he does not have legitimate claims.”

Proceedings have been contentious between Schweitzer and Dobbs. In June, Optima demanded $10 million as compensation for Mines Management’s “successful condemnation of a right of way through Optima’s asserted claims.”

Schweitzer contends that Montanore is unable to state under oath the value of the ore bodies.

“Mines Management has not mined a teaspoon of ore anywhere in the world,” Schweitzer said. “Our mine is being sterilized and we want to be compensated. All that is left is to determine just compensation.”