Moye White LLP | Attorneys at Law | 16 Market Square 6 th Floor th Street | Denver, Colorado tel | fax | Copyright © 2007 Moye White LLP. All rights reserved. CMA v. SUMMIT COUNTY A LANDMARK SUPREME COURT DECISION BENEFITING COLORADO INDUSTRY April 28, 2009 COLORADO AND DENVER BAR ASSOCIATION CLE PROGRAM PAUL M. SEBY

“UNCERTAINTY” THREATENS COMMERCE AND INDUSTRY IN COLORADO  Political uncertainty  Legal/Regulatory uncertainty  Economic uncertainty 2

WHAT STARTED THIS ALL?  Anti-mining actions taken by multiple Colorado counties.  On January 26, 2004, Summit County amended its Land Use Code, establishing:  A complete ban on mining or milling operations utilizing cyanide or other toxic/acidic chemical ore-processing reagents in heap or vat leach applications, anywhere in Summit County.  Detailed County “Performance Standards” for mining operations. 3

CMA’S CHALLENGE  Closely coordinated/well prepared – thought through.  Not an attack on the traditional authority of Colorado counties  A necessary action critical to preserving the future of mining in Colorado and the uniformity of state mining law and policy. 4

THE LONG AND WINDING ROAD I. District Court - CMA won II. Colorado Court of Appeals  CMA won – County “Performance Standards” set aside  CMA lost 2-1 – Ban upheld III. Colorado Supreme Court – Takes the case! IV. CMA Wins – All told 5 years? 5

COLORADO SUPREME COURT  Main Holding: Summit County’s regulations are invalid because they are pre-empted by state law.  “The effect of this ordinance is to prohibit a certain type of mining technique customarily used in the mineral industry to extract precious metals, such as gold.” 6

WHAT IS LEGAL “PREEMPTION?”  “The purpose of the preemption doctrine is to establish a priority between potentially conflicting laws enacted by various levels of government.”  3 ways laws or regulations can be “pre-empted.”  Express  Implied  Operational Conflict 7

COLORADO SUPREME COURT DECISION  “The General Assembly has expressly delegated to local governments board powers to establish and enforce zoning and land use regulations.”  “The Colorado General Assembly enacted the MLRA in The intent of the act is to foster the extraction of minerals, the reclamation of mined land, and the protection of human health, welfare, and the environment.”  “The MLRA vests the Board with sole authority for reclamation permitting and standard setting.”  Key: “Reclamation Standards” 8

COLORADO SUPREME COURT - PRACTICALLY SPEAKING “A patchword of county-level bans on certain mining extraction methods would inhibit what the General Assembly has recognized as a necessary activity and would impede the orderly development of Colorado’s mineral resources. It would prohibit the recovery of minerals in areas where operations using cyanide or other chemicals for mineral extraction can be conducted in an environmentally protective manner.” 9

“ONE STATE, ONE STANDARD” “Supreme Court makes right call:  Who sets the rules on mining in Colorado, the state or local governments? Summit County thought it knew the answer, but last week a 6-1 majority of the Colorado Supreme Court said the county was wrong. And it’s a good thing the court did, too.  The court struck down a county ordinance attempting to ban an entire class of mining within its borders. The ruling means counties can’t prohibit mining operations and, presumably, other activities that are authorized and regulated by the state.  Had the court sided with the county, mining companies could have faced a dizzying array of laws and rules across the state, and even bans on production in some counties where mining opponents had the ear of a majority of elected officials.” Rocky Mountain News Opinion January 18,