FRANKFORT — A long-running dispute over a proposal by a now-defunct coal company to mine underneath one of the last tracts of old-growth forest in Kentucky is back nearly to square one.

        The Supreme Court on Thursday ruled that DLX Inc. did not go through all the administrative procedures necessary before going to court. The company claimed that the Natural Resources Cabinet's failure to grant it a mining permit amounted to the state taking its property without compensation.

        DLX owns the rights to 2,845 underground acres, about 27 acres above ground, near Lilley Cornett Woods in Letcher County. The company asked in 1994 to extend its mining permit to take in 168 acres under or adjacent to the woods, which have been designated a national natural landmark.

        The 550-acre forest is owned by the state and used as a laboratory area by Eastern Kentucky University. Mr. Cornett was a miner who saved his money to buy land between the world wars. His family sold it to the state in 1969.

        The cabinet indicated it would approve a mining permit, provided there was a 250-foot barrier between the mining and the woods. The company made a counter offer to halt mining 110 feet away. When the cabinet declined the company's proposal, DLX sued and claimed that the cabinet had “taken” the property because it had effectively lost any use of it.

        The cabinet said DLX still had administrative procedures to go through before it could go to court. The company countered that the administrative procedures were irrelevant to its claim that the cabinet acted unconstitutionally.

        In a 5-2 decision, the high court said because DLX did not appeal an initial decision of the secretary of the cabinet, it did not have grounds to go to court.

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