Coal River Energy, LLC v. U.S. Dep't of the Interior

Decision Date20 March 2013
Docket NumberCivil Action No. 11–1648(BJR).
Citation931 F.Supp.2d 64
PartiesCOAL RIVER ENERGY, LLC, Plaintiff, v. The UNITED STATES DEPARTMENT OF THE INTERIOR and its Secretary, Kenneth Salazar, Defendants.
CourtU.S. District Court — District of Columbia

OPINION TEXT STARTS HERE

John Y. Merrell, Jr., Merrell & Merrell PC, McLean, VA, Steven Harlan Becker, Becker Law Firm PLLC, New York, NY, for Plaintiff.

Tara Kathleen Hogan, U.S. Department of Justice, Washington, DC, for Defendants.

MEMORANDUM OPINION

BARBARA J. ROTHSTEIN, District Judge.

I. INTRODUCTION

This matter is before the Court upon consideration of Defendant's motion for judgment on the pleadings. In its motion, Defendant argues that the Court lacks jurisdiction under 30 U.S.C. § 1276(a)(1) to review Plaintiff Coal River's claims. The Court agrees that Plaintiff's claims must meet the requirements of § 1276(a)(1) and fail to do so. Accordingly, the Court GRANTS Defendant's motion for judgment on the pleadings.

II. BACKGROUND

Congress passed the Surface Mining Control and Reclamation Act of 1977 (“SMCRA”), codified at 20 U.S.C. §§ 1232 et seq., to, among other things, “establish a nationwide program to protect society and the environment from the adverse effects of surface coal mining operations,” and “assure that adequate procedures are undertaken to reclaim surface areas as contemporaneously as possible with the surface coal mining operations.” See20 U.S.C. § 1232(a), (e). To that end, Congress imposed a fee on coal “operators,” 30 U.S.C. § 1232(a), that would facilitate the “reclamation and restoration of land and water resources adversely affected by past coal mining,” id. § 1232(c)(1). This fee, which would go into an Abandoned Mine Land (“AML”) fund, was calculated based upon the weight of “coal produced.” 1Id. § 1232(a).

The SMCRA does not, however, define the term “coal produced.” This omission was of concern since the weight of coal fluctuates according to whether the coal is weighed at the time of extraction (at which time the coal's weight would include dirt, rocks, and other non-coal materials) or weighed at the time that the coal was ready for sale, transfer or use (after which the non-coal materials would presumably have been removed). Def.'s Mot. at 3; Pl.'s Opp'n at 11.

To resolve this issue, the Secretary of Interior, acting through the United States Department of Interior's Office of Surface Mining (OSM), promulgated 30 C.F.R. § 870.12 in December 1977. This regulation provided, in relevant part, that the coal operator would pay the AML fee on “each ton of coal produced for sale, transfer, or use,” as determined “by the weight and value [of the coal] at the time of initial bona fide sale, transfer of ownership, or use by the operator.” 30 C.F.R. § 870.12(a)-(b). OSM rejected a proposal that would have based the AML fee on the weight and value of the coal at the time it was extracted from the ground. 42 Fed. Reg. 44,956 (Sept. 7, 1977). In the early 1980s, OSM added language to 30 C.F.R. § 870.12 clarifying that the AML fee is to be determined by the weight and value of the coal at the time of the “first transaction or use of the coal by the operator immediately after it is severed, or removed from a reclaimed coal refuse deposit.” 30 C.F.R. § 870.12(b)(1).

Plaintiff Coal River Energy LLC is a West Virginia corporation formed in 2003 that produces and sells coal. Pl.'s Compl. ¶ 1. Since the second quarter of 2008, Plaintiff has sold coal for export and believes it will continue to do so in the future. Id. ¶ 4. Whenever Plaintiff has sold coal for export, it has had to pay the AML fee imposed by OSM. Id. ¶ 1.

In 2011, Plaintiff filed suit against the Department of the Interior and its Secretary (referred to collectively as Defendant). See generally Compl. Plaintiff claims that the imposition of the AML fee “on coal sold for export by Plaintiff,” as authorized by 30 C.F.R. § 870.12(b), “violates the Export Clause of the United States Constitution, which prohibits any tax or duty on exports.” 2 Compl. ¶¶ 1, 7. Plaintiff asks that the Court declare unconstitutional Defendant's regulations insofar as they impose an AML fee on coal sold for export, and seeks an order enjoining the Department of the Interior and the Secretary from “further imposition, or enforcement of the imposition, of a tax on plaintiff's coal when sold for export.” Compl., Prayer for Relief. Defendant moves for judgment on the pleadings, arguing that the Court lacks jurisdiction and must dismiss this matter. See generally Def.'s Mot. With that motion now ripe for consideration, the Court turns to consider the parties' legal arguments and the applicable legal standards.

III. ANALYSIS
A. Legal Standard—Motion for Judgment on the Pleadings

A defendant may move for judgment on the pleadings [a]fter the pleadings are closed—but early enough not to delay trial.” Fed.R.Civ.P. 12(c). To succeed, a movant must demonstrate that “no material fact is in dispute and that it is entitled to judgment as a matter of law.” Peters v. Nat'l R.R. Passenger Corp., 966 F.2d 1483, 1485 (D.C.Cir.1992). Furthermore, in resolving a motion for judgment on the pleadings, the Court must assume the factual allegations in favor of the plaintiff. Equal Rights Ctr. v. Post Props., 633 F.3d 1136, 1141 (D.C.Cir.2011).

B. The SMCRA Deprives the Court of Jurisdiction Over Plaintiff's Claims
1. The Jurisdictional Requirements of § 1276(a)(1) Apply to Plaintiff's Claims
a. The Requirements of § 1276(a)(1) Apply Once the Court is Asked to Invalidate OSM's Regulations

The SMCRA provides that:

Any action by the Secretary promulgating national rules or regulations ... shall be subject to judicial review in the United States District Court for the District of Columbia Circuit.... A petition for review of any action subject to judicial review under this subsection shall be filed in the appropriate Court within sixty days from the date of such action, or after such date if the petition is based solely on grounds arising after the sixtieth day. Any such petition may be made by any person who participated in the administrative proceedings and who is aggrieved by the action of the Secretary.

30 U.S.C. § 1276(a)(1).

Defendant argues the Court lacks jurisdiction to review Plaintiff's claims under the jurisdictional limitations imposed by § 1276(a)(1). Def.'s Mot. at 11–12. Plaintiff responds that § 1276(a)(1) only constrains judicial review of facial challenges, and therefore does not affect this Court's ability to entertain Plaintiff's claim, which attacks the constitutionality of OSM's regulations as applied to coal that is sold for export. Pl.'s Opp'n at 18–19.

Although the thrust of Plaintiff's arguments focus on whether its claims are an “as applied” rather than a “facial” challenge, the label here is unimportant. As demonstrated by the case law, the Court's inquiry more properly focuses on whether its resolution of Plaintiff's claim might require the Court to invalidate the regulations, either implicitly or explicitly. See discussion infra; cf. Envt'l Defense v. Duke Energy Corp., 549 U.S. 561, 127 S.Ct. 1423, 167 L.Ed.2d 295 (2007) (holding that a court's “implicit validation” of the relevant regulations triggered the requirements of § 307(b) of the Clean Water Act which, like § 1276(a)(1), limits judicial review of challenges to the validity of a regulation).

In United States v. Troup, 821 F.2d 194 (1987), the United States sought to recover AML fees owed by a coal operator that sold the raw coal product, i.e. coal mixed with rock and other debris, to a third party. In his defense, the coal operator argued that he should only be required to pay AML fees “on the weight of the coal after it ha[d] been cleaned” by the third party. Declining to exercise jurisdiction, the Third Circuit observed that the coal operator's defense struck at the heart of OSM's regulation, which provided that the AML fee would be calculated based on the coal's weight at the time of sale, notwithstanding any impurities that remained. According to the Third Circuit, the constraints to the court's jurisdiction found in SMCRA applied because this was “the type of challenge to national regulations contemplated by [§ 1276(a)(1) ].” Id. at 198.

Other Courts have similarly held that the jurisdictional requirements of § 1276(a)(1) apply to any action that challenges the validity of the regulations promulgated under the SMCRA, regardless of whether the challenge is direct or indirect. In Tug Valley v. Watt, the Fourth Circuit acknowledged that the “characterization of [the] suit as an attack on [a] federal regulation” hinged on one's interpretation of the regulation at issue. 703 F.2d 796, 799 (4th Cir.1983). Nevertheless, the Fourth Circuit concluded that the plaintiff had to satisfy the requirements of § 1276(a)(1) for judicial review because the claim was tantamount to an attack on a federal regulation. Id. at 800 (holding that the district court “had no jurisdiction to hear what amounted to an attack on [a] federal regulation”); see also Com. of Virginia ex rel. Virginia Dep't of Conservation & Economic Dev. v. Watt, 741 F.2d 37, 40–41 (4th Cir.1984) (“attacks on administrative action, taken in accordance with the Secretary's regulations, amount to attacks on the regulations themselves” and even indirect attacks on a regulation must abide by the requirements for judicial review laid out in § 1276(a)(1)). Lastly, in Amerikohl Mining, Inc. v. United States, the Federal Circuit, affirmed a dismissal for lack of subject matter jurisdiction, holding that “regardless of how [the coal producer] characterizes the present action, [it] is precluded from challenging the validity of regulations promulgated under section 1276(a)(1) because it did not meet the requirements therein. 899 F.2d 1210, 1215 (Fed.Cir.1990). Under these cases, if the Court finds that it is being asked to invalidate 30 C.F.R. § 870.12, then Plaintiff must meet the requirements in § 1276(a)(1) for ...

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