The Classic Case

The basic issues could not be simpler--even though they have taken 8 1/2 months, more than 800 official exhibits and 18,500 pages of court testimony to spell out. Indeed, the federal court suit against Reserve Mining Co. has become the classic pollution case because it poses so sharply the questions of whether or not damage to a region's environment is worse than damage to the same region's economy, and of who should pay for cleaning up pollution. Ten plaintiffs, including the Federal Government and the states of Michigan, Wisconsin and Minnesota, want a Reserve plant to stop discharging what they regard as harmful emissions into the air and Lake Superior. In reply, Reserve says that the emissions pose no danger to public health, that to stop them it would have to close down, and that if the governments are so anxious for a cleanup, they should pay for it.

Back to Court. Two weeks ago, the case seemed resolved, but the solution was short-lived. Federal District Court Judge Miles Lord, who has a reputation for being tough but fair, abruptly ordered the company to stop its discharges--period. But last week Reserve's lawyers, arguing that the action would cause "irreparable damage" to the company and the local economy, won a stay of that order. Result: what is already the longest environmental trial in U.S. history will go back to the courts.

Reserve Mining, which is owned jointly by Armco Steel and Republic Steel, produces 15% of the U.S.'s iron ore. It mines taconite around Babbitt, Minn., then ships the flintlike rock 50 miles to Silver Bay, on the shores of Lake Superior. There the iron content of the taconite is extracted, and the wastes, or "tailings," are dumped into the water. Any time that Reserve is attacked for polluting the lake--and the attacks have been continuous since 1967--it says that it might have to close the plant if ordered to stop. That would wreak economic havoc, since the company employs 3,100 workers in the area, or at least 90% of the local work force. But in February 1972, the U.S. Justice Department decided to sue for a cleanup anyway. The trial began last summer.

The key issue became public health. Asbestos fibers had been discovered in the drinking water that five communities, including Duluth, 60 miles down the shoreline, draw from Lake Superior. Federal scientists pinpoint Reserve's taconite tailings as the source of the asbestos. Company experts say that the material leaches naturally out of surrounding rock formations. Either way, the minute fibers are dangerous. If ingested or inhaled--and particles have been detected in the air over Reserve's Silver Bay plant--asbestos can cause cancer.

The ideal solution would be for Reserve Mining to dispose of its wastes on land. But company officials testified that Reserve had no plan for land disposal, and would need time to prepare one. The executives also rejected a Government proposal that Reserve move its entire Silver Bay operation to Babbitt. Such a move would cost $ 187 million, said federal officials. Reserve promptly upped the estimate to $575 million, a figure that Judge Lord scrutinized and then branded as "blatantly inflated." On March 1, an Armco executive admitted that Reserve Mining had in fact prepared four or five on-land disposal plans. The judge was aghast. He charged the company with deliberately stalling the trial in the hope of getting the Government to step in and pay for the cleanup.

Political Influence. Two weeks ago, the trial hit its emotional peak when Minnesota Deputy Attorney General Byron Starns read notes that supposedly were made during a Reserve board meeting in 1971. The notes, purportedly written by Armco Steel Vice President Harry Holiday Jr., indicated that Reserve and its parent companies had tried to use their political influence in Minnesota and Washington to keep the case out of court. Judge Lord was shocked. "If what is represented in this document is taking place every day in the lives of the corporations of our country," he said, "then I fear for our country."

Lord left no doubt that his decision would be based on Reserve Mining's willingness to clean up its operations. On the trial's final day, Reserve Chairman C. William Verity said that the company would build a $172 million on-land disposal system--provided it got federal financial assistance. Lord called his proposal "absurd." He ordered "an immediate curtailment of the discharges." In order to comply, the company really did briefly shut down its Silver Bay plant.

The court's decision dismayed Reserve's employees and their families but was widely praised elsewhere. Reserve Mining lost no time in obtaining a stay from an emergency panel of three circuit court judges who convened at night around a dining table in a restaurant in Springfield, Mo. Later this month the full appellate court will hear the company's appeal for a permanent stay. Meantime, the employees are back at work, and every day the big plant at Silver Bay is spilling 67,000 tons of taconite tailings into Lake Superior.

This file is automatically generated by a robot program, so viewer discretion is required.