Cat Run Coal Co. v. Babbitt, Civil Action No. 2:95-1063.

• Decision Date: 08 August 1996
• Docket Number: Civil Action No. 2:95-1063.
• Citation: 932 F. Supp. 772
• Parties: CAT RUN COAL CO., Plaintiff, v. Bruce BABBITT, Secretary of the Interior, and Robert Uram, Director of the Office of Surface Mining, Reclamation and Enforcement, Defendants.
• Court: U.S. District Court — Southern District of West Virginia

932 F. Supp. 772

CAT RUN COAL CO., Plaintiff, v. Bruce BABBITT, Secretary of the Interior, and Robert Uram, Director of the Office of Surface Mining, Reclamation and Enforcement, Defendants.

Civil Action No. 2:95-1063.

United States District Court, S.D. West Virginia, Charleston Division.

August 8, 1996.

Robert G. McLusky, James R. Snyder, Jackson & Kelly, Charleston, WV, for plaintiff.

Steven C. Barcley, Special Asst. U.S. Attorney, U.S. Dept. of the Interior, Office of the Solicitor, Pittsburgh, PA, Rebecca A. Betts, United States Attorney, Charleston, WV, for defendants.

MEMORANDUM OPINION AND ORDER

HADEN, Chief Judge.

Pending are the parties' cross motions for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure.¹ The parties agree there are no genuine issues of material fact extant. They have submitted the Administrative Record and memoranda in support of their respective positions. The matter is mature for the Court's consideration.

THE STANDARD

Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is proper only:

"If the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to summary judgment as a matter of law."

Fed.R.Civ.P. 56(c).

THE UNDISPUTED FACTS

Plaintiff Cat Run Coal Company ("Cat Run") is a member of the National Council of Coal Lessors, Incorporated ("NCCL"), and the owner of approximately thirty-five thousand acres of mineral and surface properties in West Virginia. Coal is mined on some portions of these properties pursuant to leases from Cat Run, while other portions of Cat Run's properties, which may contain minable coal reserves, are adjacent to properties owned by others. Mining on these properties could cause mining-related pollutants to discharge across, onto or from Cat Run's properties into area streams.²

Defendant Bruce Babbitt is the Secretary of the Interior ("Secretary") who, acting through the Federal Office of Surface Mining, Reclamation and Enforcement ("OSM"), is charged under the Federal Surface Mining Control and Reclamation Act ("SMCRA"),³ 30 U.S.C. §§ 1201 et seq., with reviewing and approving changes to West Virginia's surface mining program. Defendant Robert Uram is the Director of OSM. The regulatory authority responsible for implementing the state surface mining program in West Virginia is the West Virginia Division of Environmental Protection ("WVDEP").⁴

OSM requires states to adopt reclamation bonding programs to ensure complete reclamation of mine sites. OSM's regulations provide that if a reclamation bond is forfeited, but is inadequate to complete reclamation, "the operator⁵ shall be liable for remaining costs." 30 C.F.R. § 800.50(d)(1) (emphasis added). OSM's regulations also allow the WVDEP to complete reclamation at bond forfeiture sites and to "recover from the operator all costs of reclamation in excess of the amount forfeited." 30 C.F.R. § 800.50(d)(1) (emphasis added).

On June 28, 1993, WVDEP submitted for OSM's approval numerous proposed changes to the WVSMCRA.⁶ Included among those changes was a revision to the Code of State Regulations (C.S.R.) at § 38-2-12.4. Prior to the amendment, the regulation provided "the permittee shall be liable for all reclamation costs, and the Director of the WVDEP shall collect from the permittee all costs in excess of the amount forfeited." C.S.R. § 38-2-12.4 (effective June 1, 1991) (emphasis added). These collections were deposited with the Special Reclamation Fund⁷ to replace funds used by WVDEP. As modified regulation 12.4(e) states, "the operator, permittee, or other responsible party shall be liable for all costs in excess of the amount forfeited. The Director may commence civil, criminal or other appropriate action to collect such costs." C.S.R. § 38-2-12.4(e) (emphasis added).

OSM announced receipt of the proposed amendments and invited public comment in a Federal Register notice published August 12, 1993. 58 Fed.Reg. 42903. Included in the notice was a nearly verbatim summary of the terms of C.S.R. § 38-2-12.4(e):

"The State also proposes to revise paragraph (e) of this subsection to provide that the operator, permittee, or other responsible party be liable for all costs in excess of the amount forfeited. The Director may commence civil, criminal or other appropriate action to collect such costs."

58 Fed.Reg. at 42909. Cat Run complains, however, the notice did not define who was intended to be covered by the term "other responsible party."

Comments opposing this amendment were submitted by the NCCL on September 13, 1993 and May 16, 1994. The NCCL commented: (1) there are no "responsible parties" other than "permittees" and "operators" under the SMCRA and the WVSMCRA, and therefore the addition of "other responsible parties" was at best confusing surplusage; (2) WVDEP employees represented the proposed revision allowed the agency to shift reclamation costs at bond forfeiture sites from the Special Reclamation Fund to landowners or royalty owners who were not otherwise "permittees" or "operators"; (3) any attempt to shift reclamation costs away from "permittees" or "operators" and the Special Reclamation Fund to landowners or royalty owners was not properly noticed, was unauthorized by the State Program, and was inconsistent with the SMCRA and the WVSMCRA, both of which were intended to protect landowners and to require that "operators" and "permittees" fully reclaim their mine sites.⁸

On May 19, 1995, OSM published a second Federal Register notice announcing the availability of a draft decision document on the WVDEP's proposed bonding program. The notice contained the addresses of the OSM and WVDEP offices where copies of the draft decision document could be obtained. In addition, this notice informed the public that one free copy of the document was available at OSM's Charleston Field Office upon request. 60 Fed.Reg. 26855. The notice did not include comment/response language nor advise the public that landowners could be liable for reclamation costs.

The draft decision document itself, however, contained a fulsome summary of the NCCL's comments and OSM's proposed responses. In apparent response to the NCCL's comments that the term "other responsible parties" was not defined, OSM's draft decision stated:

"Although West Virginia does not define `other responsible party,' it is commonly understood that it would include any person who may be responsible for the mining operation.

West Virginia's proposed requirement is neither specifically authorized nor prohibited by SMCRA. However, it is consistent with the principles and purposes of SMCRA to ensure the reclamation of surface areas disturbed by coal mining. See SMCRA Section 102(e). Therefore, since the proposed provision does not conflict with any Federal requirements under SMCRA, the Director finds that the proposed provision does not conflict with SMCRA or the Federal regulations, and he is approving it."

Draft Decision at 70-71 (B.9.d.(3)) (May 1995); see also 60 Fed.Reg. 51900, 51909 at B.9.d.(3) (Oct. 4, 1995).

OSM did not attempt to explain who was meant to be "any person who may be responsible for the mining operation," i.e., whether the phrase included only those who might be liable otherwise under the SMCRA or others who could be liable for the effects of mining operations under statutes other than the SMCRA. OSM analogized to the Clean Water Act:

"as discussed in finding B.9.d.(3), the proposed requirement in C.S.R. § 38-2-12.4(e) is not prohibited by SMCRA. Also, under the Federal Clean Water Act, a permittee, operator and/or landowner can be held responsible for the treatment of point source discharges that do not meet effluent limits after forfeiture."

Id. at 101; 60 Fed.Reg. at 51915.⁹

To the extent OSM intended the statements in the draft decision document to define the term "other responsible parties," this was the first public notice that WVDEP's regulation was intended to allow the WVDEP to shift the costs of mine reclamation, including treatment of acid mine drainage, from the liable parties under the SMCRA, i.e., operators, permittees, and the Special Reclamation Fund they fund to guarantee their obligations, to persons who are not subject to the SMCRA but who yet may be liable under other statutes for the effects of unreclaimed mine sites.

No comments were received on proposed subsection 12.4(e) as a result of the May 19, 1995 Federal Register notice.

By final rule making of October 4, 1995, OSM approved the WVDEP's changes to C.S.R. § 38-2-12.4(e). 60 Fed.Reg. 51900, 51909 and 51915.

Cat Run initiated this action pursuant to 30 U.S.C. § 1276 to appeal OSM's approval of this amendment to West Virginia's surface mining program.¹⁰ Cat Run contends: (1) OSM violated the Notice and Comment Provisions of the Administrative Procedures Act ("APA"); (2) OSM breached its duties under the SMCRA and the APA by failing to require WVDEP to define the term "other responsible parties"; (3) the regulation is unconstitutionally vague¹¹; and (4) OSM's actions in approving the amendment without defining the scope or meaning of "other responsible parties" were arbitrary, capricious, and inconsistent with law.

THE LAW

I. NOTICE AND COMMENT

To be effective, amendments to West Virginia's surface mining program require two particular notices be given. 30 C.F.R. § 732.17(h). First, the Director of OSM must publish a notice in the Federal Register announcing the receipt of the amendment. Id. at § 732.17(h)(1). The notice must signify the amendment is being reviewed by the Director and include, inter alia, the text or a summary of the proposed amendment. Id. at § 732.17(h)(2)(i). If the text is not included in the Federal Register notice, the notice must include the addresses where copies of the proposed amendment may be obtained...