Minnesota's legal bill to defend challenges to PolyMet mine swells to $6.4 million

Minnesota so far has spent roughly $6.4 million on the national law firm Holland & Hart to defend the state's permitting decisions for PolyMet's proposed copper-nickel mine.

The figure, provided by officials at the Minnesota Pollution Control Agency (MPCA) and Department of Natural Resources (DNR), covers work the Denver-based law firm and a predecessor firm completed since being hired in 2015. The state has had to defend several permitting decisions against environmental groups for what would be Minnesota's first hard rock mining operation, near Hoyt Lakes. The PolyMet project is on hold, pending those challenges.

Typically, the state Attorney General's Office represents state agencies in court. But MPCA spokeswoman Andrea Cournoyer said an email that the agency used outside counsel to avoid draining the resources of the Attorney General's Office and "advise the MPCA on substantive administrative law issues, associated legal risks and to defend the agency's decisions over a period of years."

Cournoyer added that the agency has used outside counsel in other cases before, "but not with any regularity."

However, Paula Maccabee, an attorney for the nonprofit group WaterLegacy, argued that doing so here wasn't an efficient use of public money.

"If the state uses the independent Attorney General's Office, rather than lawyers internal to the agencies or these national corporate firms … there will be a better analysis of what is needed to comply with the law and protect the public interest," Maccabee said.

In an email, a spokesman for Attorney General Keith Ellison, John Stiles, said that when Ellison took office in 2019, he inherited an office that had shrunk by half from 25 years before, as well as inheriting the contract with Holland & Hart.

Stiles said Ellison strongly prefers to handle the state's legal matters out of his office and has fought for more funding. According to Stiles, "If the agencies predict more mining litigation moving forward on other projects and if the Legislature provides needed funding, Attorney General Ellison's office is prepared to represent the agencies in that litigation."

Of the state's total bill for Holland & Hart, nearly $4.1 million has been paid since 2017 for services to the MPCA. The state already had paid $41,207 to the international law firm Crowell & Moring before moving to Holland & Hart.

The balance of the bill, nearly $2.3 million, was for services to the DNR, according to DNR spokeswoman Gail Nosek. She added that Holland & Hart had "provided excellent legal counsel."

The legal fees have been paid for by repeated legislative appropriations, the most recent of which was $3 million to cover costs in 2022 and 2023.

JT Haines, the northeastern Minnesota director for the Minnesota Center for Environmental Advocacy, questioned what kind of advice the state has received from the firm. According to its website, Holland & Hart represents mining industry members including "precious metals, hard rock, energy, industrial, coal and critical mineral producers" operating in the United States and around the world.

"Our state agencies have a ton of discretion in how to approach these permits and how to approach these lawsuits [after permitting decisions]," Haines said, including the ability to add more transparency to the permitting process. "In most cases they have not done that. They have done what the court has required in the strictest sense."

Nosek disagreed, saying the review process for PolyMet's NorthMet project "far exceeded the public engagement and transparency obligations outlined in state statute and rule."

Holland & Hart attorney Bryson Smith, who helped represent the MPCA in recent arguments before the state Supreme Court, wrote in an email that the firm could not talk about its work with the state or other clients.

The firm's contract with the state specifies that it doesn't represent any clients that would present a conflict of interest in the PolyMet case. It did disclose, as required, clients that could pose a conflict otherwise with Minnesota government, according to Cournoyer: the pharmaceutical company Allergan PLC and the National Rural Electric Cooperative Association.

The Minnesota Center for Environmental Advocacy has challenged several permits issued for the NorthMet project, including the DNR's mine permit and dam safety permits, as well as a water permit and air permit issued by the MPCA. WaterLegacy has challenged the permit to mine and the wastewater permit, which Maccabee argued against in court last month.

The water permit arguments centered on whether it was improper for the MPCA to discuss the permit by phone with the federal Environmental Protection Agency (EPA), rather than having the EPA submit a formal letter into the MPCA's public record. Smith, arguing for the MPCA, told the Minnesota Supreme Court it was the EPA's choice whether or not to write the letter.

Minnesota has used outside attorneys in environmental cases before. Those cases included a lawsuit against Maplewood-based 3M for polluting water with toxic "forever chemicals," which was settled in 2018; litigation in the 1980s against Reserve Mining, which had dumped taconite mine tailings into Lake Superior; and in reviewing bankruptcy proceedings and the terms of a trust for Mesabi Metallics, which had failed to complete a taconite mining plant in Nashwauk, according to Nosek and Cournoyer.

"External counsel is needed for matters that require specialized expertise, or are particularly complex and extensive in scope in ways that go beyond the capacity" of lawyers working for state agencies or the Attorney General's Office, Cournoyer said in her email.

Haines countered that with all the state money that has been spent so far, the Attorney General's Office could hire some of its own attorneys to do the work.

"You would also be developing [state] lawyers with expertise in mining," he said.