United States v. E & C Coal Co., Inc.

• Decision Date: 17 October 1986
• Docket Number: Civ. A. No. 82-0259-B.
• Citation: 647 F. Supp. 268
• Court: U.S. District Court — Western District of Virginia
• Parties: UNITED STATES of America, Plaintiff, v. E & C COAL COMPANY, INC., Defendant.

647 F. Supp. 268

UNITED STATES of America, Plaintiff, v. E & C COAL COMPANY, INC., Defendant.

Civ. A. No. 82-0259-B.

United States District Court, W.D. Virginia, Big Stone Gap Division.

October 17, 1986.

David W. McNabb, Asst. U.S. Atty., Knoxville, Tenn., for plaintiff.

Lewey K. Lee, Wise, Va., for defendant.

MEMORANDUM OPINION

GLEN M. WILLIAMS, District Judge.

BACKGROUND

On July 14, 1982 the United States Attorney filed this action at the request of the Secretary of the Interior seeking to collect reclamation fees on mined coal, as required by 30 U.S.C. § 1232 and the regulations promulgated pursuant thereto. The suit sought to collect reclamation fees for the quarter ending December 31, 1981 in the amount of $2,397.35, plus interest. Defendant filed an answer asserting as a ground of defense that it is not subject to the provisions of the Surface Mining Control and Reclamation Act of 1977 as set forth in the foregoing sections because the Act specifically exempted it by virtue of the fact that its surface operation is less than two (2) acres. On motion of the United States of America filed on March 28, 1984, this court stayed the case pending the decision of the United States Court of Appeals for the Fourth Circuit in the case of Commonwealth of Virginia v. Clark, Civil Action No. 83-0332-B.

The parties settled the aforementioned case by a consent order and this court entered a dismissal on January 9, 1985. Following the conclusion of that litigation, plaintiff filed a motion to amend its complaint to present a claim against the defendant for additional quarters. The amendment, filed on March 3, 1986, sought to collect additional reclamation fees for the fourth quarter of 1981, the first, second, third and fourth quarters of 1982; the first, second and third quarters of 1983 and the first, second and third quarters of 1984 for a total amount of $25,341.76. The United States also sought prejudgment interest commencing thirty days after the end of each calendar quarter for which the reclamation fees were due and late payment penalties permitted under the Debt Collection Act. (31 U.S.C. § 3717). In answering the amended complaint, the defendant reiterated its defense that it was not subject to the Surface Mining Control and Reclamation Act of 1977 because it was operating under a two-acre exemption. Defendant further pled the statute of limitations and filed a plea of recoupment alleging that it had mistakenly paid reclamation fees from December 1977 through September 1981 in the amount of $37,806.96. Defendant sought return of these fees plus interest. The defendant further argues that the Commonwealth of Virginia had specifically granted it the right to mine land and that the confusion concerning the two-acre dispute continued until the parties reached a settlement in Commonwealth v. Clark.

The parties submitted the case to the court under an agreed statement of facts in which the parties admitted the court's jurisdiction; that at all times relevant to this case the defendant operated an underground coal mine; that all the production relevant to this lawsuit came from said mine; that defendant had not paid reclamation fees for the calendar quarters set out in the complaint; that the amount of the deficiency was $25,341.76, plus interest of $8,218.05 and late penalty of $1,013.69, making a total of $34,573.50 as of April 30, 1986. The parties further agreed that the affected area of disturbance was less than two acres if the court did not include "shadow area" or the area above underground workings as part of the "affected area" as that term is defined in CFR § 701.5. On the other hand, if the court included the area above the underground workings as part of the "affected area" then at all times relevant to this lawsuit the subject mine was over two acres. The parties further stipulated that the defendant had paid $37,806.96 in reclamation fees and that if the court should find that defendant paid this amount in error, the plaintiff should refund this amount with interest under the theory of statutory recoupment. The parties stipulate that while there are other legal issues involved in the case, the principal issue is whether or not to include the area above the underground workings as part of the "affected area."

OPINION

This court is of the opinion that the reclamation fees, that the United States seeks to recover for the period prior to August 1, 1982, are not collectible under the rationale of this court's opinion in United States of America v. Shelton Coal Corp., 647 F.Supp. 264 (W.D.Va.1986). In Shelton this court held that the Department of Interior could not collect reclamation fees for a period prior to the time the regulations defining "affected areas" became effective and that such regulation did not come into being until after July 30, 1982. Even more than Shelton's factual situation required its result, the facts in the present case require this court to adopt Shelton's rationale because the "affected area" involved in this case deals with the shadow area above underground workings. A thorough search of the Surface Mining Act reveals that prior to August 1982 it did not in any way define "affected area" as consisting of the shadow area. Shelton dealt with the inclusion of roads within "affected area" and the Act did have some language concerning the inclusion of roads to determine the "affected area." Therefore, the facts of the present case support Shelton's rationale even more than Shelton's facts did. This conclusion follows because prior to the time that the Department promulgated the regulation there was no reference in the Act to indicate to the defendant E & C Coal Co., Inc. that it was liable for any kind of regulation under the Act because it was a two-acre exemption. A copy of this court's opinion in United States of America v. Shelton Coal Corp., supra, is attached hereto^* and made a part of this opinion and, for the reasons stated therein, the court grants judgment to the defendant on any claim for reclamation fees prior to August 1, 1982.

PRIMACY

The court now proceeds to consider the defendant's arguments regarding the fees collectible for the quarters subsequent to August 1982. It appears at the outset that because the United States of America promulgated regulations in July 1982 defining "affected area" as including the shadow area above the underground workings, the defendant's argument will prevail only if the court finds that the Commonwealth of Virginia had primacy and that because Virginia had primacy, the defendant did not have to pay reclamation fees because it was operating a two-acre exemption under the laws of the Commonwealth of Virginia. No doubt exists that once the federal government grants a state the right to regulate surface coal mining and reclamation operations within its boundaries, that state has the exclusive right to regulate. The federal government may limit the states exclusive regulation, however, by specifically providing that the Secretary of the Interior retains power to regulate specific areas. The federal government has no right to intervene with the state's conduct of its surface mining operations on non-federal lands unless the federal government brings proper actions to take the right of regulation away from the state. As this court set forth in Shelton, supra, the federal government granted approval of Virginia's regulatory program on December 15, 1981 and, therefore, Virginia became the exclusive party controlling surface coal mining and reclamation operations in the Commonwealth of Virginia. 30 U.S.C. § 1253 states as follows:

Each state in which there are or may be conducted surface coal mining operations on non-federal lands, and which wishes to assume exclusive jurisdiction over the regulation of surface coal mining and reclamation operations except as provided in §§ 1271 and 1273 of this title and subchapter 4 of this title, shall submit to the Secretary by the end of the eighteenth month period beginning August 3, 1977 a state program which demonstrates that such state has the capability of carrying out the provisions of this chapter.

(Emphasis added).

That the federal government granted the State of Virginia such exclusive jurisdiction under the Act is undisputed. However, one of the provisions that Congress specifically exempted from the state's exclusive jurisdiction is that provision pertaining to reclamation fees. 30 U.S.C. § 1232 covers reclamation fees and is one of the sections which specifically exempts state primacy and exclusive jurisdiction. 30 U.S.C. § 1232 provides:

All operators of coal mining operations subject to the provisions of this chapter shall pay to the Secretary of the Interior, for deposit in the fund, a reclamation fee of thirty-five cents per ton of coal produced by surface coal mining and fifteen cents per ton of coal produced by underground mining or ten percent of the value of the coal at the mine as determined by the Secretary....

Operators are to pay such fees not later than thirty days after the end of each calendar quarter. This section also provides for a penalty and allows the government to maintain civil actions to recover fees. By promulgating a regulation in August of 1982 which it has not altered nor challenged, defining "affected area" as consisting of the shadow area above the underground workings of the mine, the federal government thereby placed the reclamation fees under the exclusive control of the federal government. As a result, all coal companies, which were operating a mine, were subject to this regulation in defining whether or not a two-acre exemption existed. Thus, at the time of the promulgation of the regulations in July 1982, the defendant became subject to the Act and the state regulation did not constitute a basis for exclusion. Because Congress specifically exempted reclamation fees as an area not given to the exclusive jurisdiction to the state, the...