Burlington Northern R. Co. v. U.S., 84-989

• Decision Date: 09 January 1985
• Docket Number: No. 84-989,84-989
• Parties: BURLINGTON NORTHERN RAILROAD COMPANY and Meridian Land and Mineral Company, Appellants, v. The UNITED STATES, Appellee. Appeal
• Court: U.S. Court of Appeals — Federal Circuit

Page 627

752 F.2d 627

BURLINGTON NORTHERN RAILROAD COMPANY and Meridian Land and Mineral Company, Appellants, v. The UNITED STATES, Appellee.

Appeal No. 84-989.

United States Court of Appeals Federal Circuit.

Jan. 9, 1985.

William A. Gould, Perkins, Coie, Stone, Olsen & Williams, Washington, D.C., argued for appellants.

Arthur E. Gowran, Dept. of Justice, Washington, D.C., argued for appellee. With him on the brief were F. Henry Habicht, II, Asst. Atty. Gen. and Jacques B. Gelin, Washington, D.C.

Stuart A. Sanderson, Office of the Sol., U.S. Dept. of Interior, Washington, D.C., of counsel.

Before MARKEY, Chief Judge, and FRIEDMAN and RICH, Circuit Judges.

FRIEDMAN, Circuit Judge.

This is an appeal from the judgment of the United States Claims Court dismissing without prejudice Burlington Northern Railroad Company's (Burlington) suit seeking just compensation from the United States under the fifth amendment for the alleged taking of Burlington's coal reserves in Custer National Forest. We affirm.

I

Burlington filed a petition in the Claims Court alleging that it owns substantial mineral reserves, including coal, which are under federal and privately-owned lands within the Custer National Forest. Burlington contended that section 522(e)(2)(B) of the Surface Mining Control and Reclamation Act (Act), 30 U.S.C. Sec. 1272(e)(2)(B) (1982), prohibits all surface coal mining within the Custer National Forest, that its reserves can be "recovered only by surface mining techniques," and that the Act rendered Burlington's reserves "valueless" and effected a taking of Burlington's property.

Section 522(e) of the Act restricts surface coal mining on certain federal lands. The statute provides in pertinent part:

After August 3, 1977, and subject to valid existing rights no surface coal mining operations except those which exist on August 3, 1977, shall be permitted--

(1) on any lands within the boundaries of units of the National Park System, ...;

(2) on any Federal lands within the boundaries of any national forest: Provided, however, That surface coal mining operations may be permitted on such lands if the Secretary finds that there are no significant recreational, timber, economic, or other values which may be incompatible with such surface coal mining operations and--

(A) surface operations and impacts are incident to an underground coal mine; or

(B) where the Secretary of Agriculture determines, with respect to lands which do not have significant forest cover within those national forests west of the 100th meridian, that surface mining is in compliance with the Multiple-Use Sustained-Yield Act of 1960 ... and the provisions of this chapter: And provided further, That no surface coal mining operations may be permitted within the boundaries of the Custer National Forest; ....

30 U.S.C. Sec. 1272(e).

The United States moved to dismiss the petition for failure to state a claim upon which relief could be granted. The United States contended that the prohibition on surface coal mining in Custer National Forest is subject to the valid existing rights exception and does not apply to private holdings there, and that with respect to the reserves under federal land, the suit was premature because Burlington had not exhausted its administrative remedies by seeking a mining permit from the Secretary.

Ruling from the bench, the Claims Court (Chief Judge Kozinski) refused to hold that the Act on its face effected a taking. The court pointed out that the government argued that the Act does not absolutely prohibit coal mining in Custer National Forest and that for six years Burlington had not attempted to obtain a mining permit or to mine the resources without a permit.

II

"[N]o one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted." McKart v. United States, 395 U.S. 185, 193, 89 S.Ct. 1657, 1662, 23 L.Ed.2d 194 (1969), quoting from Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 50-51, 58 S.Ct. 459, 463-464, 82 L.Ed. 638 (1938). See also Hodel v. Virginia Surface Mining & Reclamation Assn., 452 U.S. 264, 297, 101 S.Ct. 2352, 2371, 69 L.Ed.2d 1 (1981).

Subchapter V of the Act, 30 U.S.C. Secs. 1251-1279, created a detailed system for control of the environmental effects of surface coal mining. It gave the Secretary of the Interior broad authority to regulate surface coal mining operations. Anyone seeking to conduct those operations must obtain from the Secretary a permit to do so. Secs. 1256-60. The Act provides for administrative hearings and judicial review of the agency's final determinations on permit applications. Secs. 1264, 1276.

In its appeal to this court, the sole reason Burlington gives for not seeking a permit from the Secretary is that such action would have been futile because, as Burlington interprets the Act, the Secretary has no authority to permit mining in Custer National Forest. The government counters that the Secretary has that authority. At oral...