THE ASSOCIATED PRESS

WASHINGTON -- A St. Louis coal company asked a federal judge Wednesday to
hold the country's largest American Indian tribe in contempt of court for using
a company memo in a $600 million lawsuit.
A contempt ruling would help Peabody Coal Co. fight the Navajo Nation's
lawsuit over a lucrative coal royalty plan, company lawyer Peter Buscemi said.
The lawsuit in U.S. District Court accuses Peabody of using secret contacts
with Interior Department officials to block the tribe's royalty plan. The tribe
is asking for more than $600 million in damages.
A July 1985 memo between Peabody lawyers discusses the company's efforts to
influence then-Interior Secretary Donald Hodel. The memo says Peabody lawyers
"in large part" wrote the order Hodel gave that blocked the royalty plan the
Navajos wanted.
The tribe obtained a copy of the memo during a separate lawsuit over the
royalty issue against the federal government. Jacob Stein, a lawyer for the
Navajos, acknowledged Wednesday that the tribe used that memo in developing its
lawsuit against Peabody.
Buscemi said the memo was covered by a 1996 confidentiality order in the
claims court case and should not have been used.
Although Buscemi said copies of the memo were under seal in the claims
court, its full text is included in a December 1997 filing in the case that is
public record.
Buscemi told Baskir that the Navajo Nation and a lawyer for the tribe, Paul
Frye, should be held in contempt of court and barred from using the memo for any
purpose, including in the U.S. District Court lawsuit.
"It is not up to litigants to decide whether to obey orders of the court,"
Buscemi said.
Stein said the confidentiality order did not cover the memo. The order was
meant to keep Peabody's financial information and trade secrets confidential,
not documents such as the July 1985 memo, Stein said.
Baskir did not indicate when he would rule on the contempt issue.
The memo discusses Peabody's decision to hire Stan Hulett, a friend of
Hodel, to press Peabody's case with the Interior Department. Peabody was trying
to get the department to block a Bureau of Indian Affairs ruling that would have
given the Navajo Nation a 20 percent royalty on coal from its reservation.
At the time, Peabody was paying the Navajos 37.5 cents per ton for coal from
its two mines on the reservation in Arizona -- about a 2 percent royalty. The
tribe, not knowing how or why the 20 percent royalty was blocked, later agreed
to a 12.5 percent royalty.
Hodel ordered a subordinate to block the 20 percent royalty ruling days
after meeting with Hulett and using language provided by Peabody, the memo says.
The Navajo Nation's lawsuit says Hulett's intervention was illegal and cost
the tribe millions of dollars. Peabody spokesman Vic Svec has said the company
was merely lobbying the government and did nothing wrong.
Hodel has said he does not recall meeting with Hulett on the Navajo royalty
case. The Salt Lake TribuneNATIONThursday, December 2, 1999 A15

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