Free Status Report - District Court of Federal Claims - federal

Case 1:01-cv-00254-BAF

Document 121

Filed 06/02/2008

Page 1 of 5

IN THE UNITED STATES COURT OF FEDERAL CLAIMS ) ) Plaintiffs, ) ) v. ) ) UNITED STATES, ) ) Defendant. ) ----------------------------------------------------- ) WELLMORE ENERGY, LLC, ) ) Plaintiff, ) ) v. ) ) UNITED STATES, ) ) Defendant. ) CONSOLIDATION COAL CO., et al.,

No. 01-254 (Judge Futey)

No. 01-442 (Judge Futey)

DEFENDANT'S STATUS REPORT Pursuant to the Court's order dated April 29, 2008, the defendant respectfully submits this status report. Counsel for the four test plaintiffs have reviewed the contents of this status report and consent to the filing of this status report on behalf of the parties. Since the parties filed their last joint status report on April 24, 2008, the parties have the following developments to report to the Court. First, the case on appeal was submitted to the merits panel following the parties' presentation of oral argument before the Court of Appeals for the Federal Circuit on May 9, 2008. As reported in April, auditors from the Office of Surface Mining (OSM) reviewed documents on-site related to the sales of two of the test plaintiffs, Kingston Resources, Inc. (Kingston) and Pioneer Fuel Corp. (Pioneer). The auditors have completed a preliminary assessment of these new documents. The auditors plan to contact and

Case 1:01-cv-00254-BAF

Document 121

Filed 06/02/2008

Page 2 of 5

schedule a meeting with Pioneer and Kingston representatives to resolve some remaining issues. The lead auditor, who has been out of the office for a few weeks, is expected to return to the office the first week in June, at which time, arrangements will be made to meet with those companies. OSM estimates that it will be able to complete its review within a week after meeting with Kingston and Pioneer representatives. At that point, the parties may be in a position to stipulate to facts related to these transactions, which should limit the issues to be briefed regarding Kingston's and Pioneer's sales. In that event, it is likely that the only issue that would have to be briefed in connection with these two companies' sales through middlemen is whether those sales took place while the coal was in the export stream of commerce. That issue is also relevant to the other two test plaintiffs, Consol of Pennsylvania Coal Company (Consol) and Eastern Associated Coal Corporation (Eastern Associated). Also as previously reported, OSM has requested documentation relating to the test plaintiffs' sales of coal to Canadian customers. Consol has obtained, and submitted to OSM, a statement from its largest Canadian customer that, in Consol's opinion, confirms that all coal it purchased from Consol was actually exported to Canada. The remaining test plaintiffs are in the process of requesting, or are awaiting, letters from the Canadian customers confirming that all coal sold to them was actually exported to Canada and will submit those letters to OSM when received. When they are received, OSM will review those documents and obtain supporting documentation from the buyers, as necessary to complete the audit. Finally, Consol and Eastern Associated are in the final stages of collecting documentation which they believe will establish to OSM's satisfaction the actual export

2

Case 1:01-cv-00254-BAF

Document 121

Filed 06/02/2008

Page 3 of 5

of coal sold to unrelated U.S. middlemen/brokers which, in turn, contracted with foreign purchasers. Recently, Consol submitted two statements from U.S. middlemen/brokers to the OSM auditors that stated that the coal purchased from Consol was actually exported. The auditors are evaluating this new documentation. The parties respectfully request that the Court schedule July 21, 2008 for the submission of the next status report, following which the parties anticipate that they will be in a position to request a scheduling order regarding the briefing of the remaining damages issues.

3

Case 1:01-cv-00254-BAF

Document 121

Filed 06/02/2008

Page 4 of 5

Respectfully submitted, GREGORY G. KATSAS Acting Assistant Attorney General JEANNE E. DAVIDSON Director S/Todd M. Hughes TODD M. HUGHES Deputy Director S/Tara K. Hogan TARA K. HOGAN Trial Attorney Commercial Litigation Branch Civil Division U.S. Department of Justice Attn: Classification Unit, 8th Floor 1100 L Street, NW Washington, D.C. 20530 Telephone: (202) 616-2228 Telecopier: (202) 305-7643 Of Counsel: DANIEL W. KILDUFF Department of the Interior Counsel for Defendant

June 2, 2008

4

Case 1:01-cv-00254-BAF

Document 121

Filed 06/02/2008

Page 5 of 5

CERTIFICATE OF ELECTRONIC FILING

I hereby certify that on this 2nd day of June 2008, a copy of the foregoing "DEFENDANT'S STATUS REPORT" was filed electronically. I understand that notice of this filing will be sent to all parties by operation of the Court's electronic filing system. The parties may access this filing through the Court's System.

S/Tara K. Hogan

5