Rise Gold’s Constitutional takings prospects - Dead on Arrival

Read the opinion and legal analysis. CEA Foundation's attorneys weighed in on the Rise Gold's threat of legal action against Nevada County just before they unanimously denied approval of the Idaho-Maryland Mine project.

"The County's decision to deny the [Vested Rights] Petition was sound and a court is unlikely to overturn it," said Ellison Folk, Attorney for Shute, Mihaly & Weinberger LLP. "No matter what sort of takings claim Rise tries to assert, it will be dead on arrival in court."

Below is the full text of an opinion piece by CEA Foundation President, Ralph Silberstein followed by the legal analysis. The opinion piece was originally published in The Union on February 13, 2024... three days before the Nevada County Supervisors voted 5-0 to reject the project and not certify the Environmental Impact Report.

Ralph Silberstein: Rise Gold’s Constitutional takings prospects - Dead on Arrival

February 13, 2024

Ralph Silberstein, President CEA Foundation

After receiving a unanimous rejection of the Idaho-Maryland Mine project from the Planning Commission, Rise Gold resorted to claims of bias and unfair handling, which gained little traction, followed by an unsuccessful effort to circumvent permitting with a Petition for Vested Rights to the Board of Supervisors.

Subsequently, at the vested rights hearing and afterwards, Rise has made repeated accusations of “takings” and unfair treatment under the Constitution, threatening legal actions in federal court if the Board denies their project. Since both the Planning Commission and the Planning Staff Report have now recommended denying the project and not certifying the Environmental Impact Report (EIR), it seems likely that the Board will follow suit at the final hearing on February 15,16.

In that eventuality, the question arises: how realistic is it that Rise could prevail in a legal challenge?

We look to an assessment of Rise’s potential legal actions, written by the law firm of Shute, Mihaly & Weinberger, LLP, and summarized here, to consider the likelihood of such a prospect.

Regarding Rise’s vested rights petition, it is doubtful that State court — where the challenge must begin — would second-guess the Board’s fact-bound, thorough, and impartial decision to deny Rise’s petition. The petition contained major flaws and the mine has been abandoned since the 1950s. The burden would fall on Rise to overcome the “presumption of correctness” of the County’s findings and convince the court that the County’s “decision is contrary to the weight of the evidence.”

Rise has also accused the County of bias, thus depriving Rise of due process. The bias argument has no merit. The County’s staff reports and related materials explained in scrupulous detail the legal principles and factual context necessary to make a determination on Rise’s petition. This included a point-by-point analysis, supported with numerous factual exhibits, addressing the many misleading or simply incorrect statements in the petition. That the County’s analysis reached different legal and factual conclusions than Rise does not mean County staff were biased: it means they did their jobs.

And in terms of “takings,” state and federal law are unambiguous that the County’s denial of the project would not amount to a taking. Rise has only two options for demonstrating that the County’s actions would constitute an unconstitutional taking. First, they would have to prove that the County’s denial of the project deprived Rise of all economically viable use of its property. But the properties owned by Rise have multiple other permissible uses that are consistent with existing zoning, including light industrial use, rendering that argument moot.

Secondly, Rise could attempt to argue a takings under the multi-factor test set forth in Penn Central Transportation Co. v. City of New York, but would be hard pressed to satisfy that test, which sets an extremely high threshold for a takings claim.

In short, no matter what sort of “takings” claim Rise tries to assert, it would likely be dead on arrival. (Scroll down to see the full text of the analysis by Shute, Mihaly, & Weinberger, Legal Considerations Surrounding Idaho-Maryland Mine Permitting Decisions.)

So why would Rise file a legal challenge to the Board decisions, anyway? One possibility is that, having perpetrated a false narrative about the high quality of their EIR and the project’s benefits, Rise’s leaders may now believe their own falsehoods. Another possibility is that they have succumbed to incompetent legal counsel regarding vested rights and takings case law. A third and more cynical explanation for Rise filing suit is that they know they are on the losing side but imagine that launching a legal challenge in federal court would be so prolonged and costly that the County would seek a settlement agreement to end the fiscal drain on County resources. Or it could be all three reasons.

Regardless of motivations, a legal challenge would likely be another big mistake for Rise because the Board, a huge coalition of environmental groups, and most of this community have already proven that they do not easily cave in to shoddy projects, marketing spin or threats. Furthermore, it’s one thing for one to lose one’s own money in a gamble or bluff, but another thing entirely to squander the capital of investors and bleed out shareholders’ equity on meritless lawsuits.

Rise still owns 119 acres in Grass Valley. If faced with a no vote on their project, they should do the responsible thing and stay away from baseless legal challenges, consider the will of the community, sell the land, and move on.

Ralph Silberstein, President CEA Foundation