Meridian Land and Mineral Co. v. Hodel

• Citation: 843 F.2d 340
• Decision Date: 25 March 1988
• Docket Number: 85-4405,Nos. 85-4385,s. 85-4385
• Parties: MERIDIAN LAND AND MINERAL COMPANY, and Burlington Northern Railroad Company, Plaintiffs-Appellees, v. Donald Paul HODEL, James R. Harris, and U.S. Department of the Interior, Defendants-Appellants. Theodore FLETCHER, et al., Plaintiffs-Appellees, v. UNITED STATES of America, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 340

843 F.2d 340

MERIDIAN LAND AND MINERAL COMPANY, and Burlington Northern

Railroad Company, Plaintiffs-Appellees, v. Donald Paul HODEL, James R. Harris, and U.S. Department of

the Interior, Defendants-Appellants.

Theodore FLETCHER, et al., Plaintiffs-Appellees, v. UNITED STATES of America, Defendant-Appellant.

Nos. 85-4385, 85-4405.

United States Court of Appeals,

Ninth Circuit.

Argued and Submitted Dec. 3, 1986.

Decided March 25, 1988.

Jacques B. Gelin, Land and Natural Resources Div., Washington, D.C., for defendants-appellants.

William A. Gould, Perkins Coie, Seattle, Wash., for plaintiff-appellee Meridian.

Michael G. Moses, Billings, Mont., for plaintiff-appellee Fletcher.

Appeal from the United States District Court for the District of Montana.

Before BROWNING, Chief Judge, and WRIGHT and BOOCHEVER, Circuit Judges.

JAMES R. BROWNING, Chief Judge:

Meridian Land and Mineral Company and Burlington Northern Railroad Company ("Meridian") and Theodore Fletcher own coal underlying surface lands in Custer National Forest (Custer) which they allege can only be recovered by use of surface mining methods. They sought a declaratory judgment that the "Custer Proviso" in section 522(e)(2)(B) of the Surface Mining Control and Reclamation Act of 1977, 30 U.S.C. Secs. 1201 et seq. (1982), imposed an absolute ban on all surface coal mining operations within the boundaries of Custer National Forest. The Secretary of Interior contended the Custer Proviso negated only the exception to the ban on surface mining stated in the paragraph in which the Proviso appeared, and left unaffected the exceptions implicit in the provision that the ban on surface mining was "subject to valid existing rights" and was applicable only to "Federal lands" (and hence not to private property) within Custer National Forest. ¹ The district court construed the Custer Proviso as an absolute bar to surface mining in Custer National Forest. We reverse.

I

Meridian first filed a claim for just compensation in the United States Claims Court alleging the "Custer Proviso" barred exploration and use of Meridian's coal deposits in Custer and thereby effected a taking of its property. The Claims Court dismissed without prejudice and the Court of Appeals for the Federal Circuit affirmed. See Burlington Northern Railroad Co. v. United States, 752 F.2d 627, 630 (Fed.Cir.1985). Relying primarily upon Hodel v. Virginia Surface Mining & Reclamation Assoc., 452 U.S. 264, 101 S.Ct. 2352, 69 L.Ed.2d 1 (1981), the Court of Appeals held Meridian's claim for just compensation was premature because Meridian had not sought a permit for surface mining from the Secretary of the Interior. While Meridian's appeal to the Federal Circuit was pending, Meridian filed this declaratory judgment action in the court below.

Fletcher filed suit in the court below seeking both a declaration that section 1272(e)(2)(B) barred surface mining for coal in Custer and just compensation for the taking. The district court transferred the action to the Claims Court which dismissed the claim for compensation as premature and returned the claim for declaratory judgment to the district court. The two declaratory judgment actions were then consolidated in the district court.

The government argues the claims for declaratory judgment should have been dismissed by the district court for the same reasons the claims for just compensation were dismissed in the Claims Court: lack of ripeness and failure to exhaust administrative remedies. ²

As the Supreme Court explained in Virginia Surface Mining, unless the " 'mere enactment' of the Surface Mining Act has deprived appellees of economically viable use of their property"--a possibility the Court rejected--whether there has been a "taking" requiring compensation depends upon the nature of the governmental action and its effect upon the specific property. Id. at 295-97, 101 S.Ct. at 2370-71. These factors cannot be evaluated until the administrative process has been completed. Id. at 297, 101 S.Ct. at 2371; Williamson Co. Regional Planning Comm. v. Hamilton Bank, 473 U.S. 172, 191, 105 S.Ct. 3108, 3119, 87 L.Ed.2d 126 (1985). Moreover, the administrative process might lead to an accommodation that would avoid the constitutional issue entirely. Virginia Surface Mining, 452 U.S. at 297, 101 S.Ct. at 2371. For these reasons, until the administrative process is completed, the taking issue "simply is not ripe for judicial resolution." Id.; Williamson Co., 473 U.S. at 190-91, 105 S.Ct. at 3119-20; Ramex Mining Corp. v. Watt, 753 F.2d 521, 523 (6th Cir.), cert. denied, 474 U.S. 900, 106 S.Ct. 271, 88 L.Ed.2d 225 (1985).

The difference between such taking claims and the claims remaining in these cases is clear. Appellees seek only a declaration that the Custer Proviso bars all surface coal mining in Custer National Forest. That question is purely one of statutory construction. No "ad hoc, factual inquiries," Virginia Surface Mining, 452 U.S. at 295, 101 S.Ct. at 2370, regarding the particular property owned by appellees are required--or would be relevant. In such circumstances, even a constitutional challenge could be decided without further administrative proceedings--indeed, just such a challenge (whether section 1272(e), on its face, effected a "taking") was resolved in Virginia Surface Mining, 452 U.S. at 296 n. 37, 101 S.Ct. at 2370 n. 37. See also Ramex, 753 F.2d at 524.

The issue presented here is ripe for decision under established standards. Appellees own coal deposits within Custer National Forest which can be exploited only by surface mining. Doubt as to whether the Custer Proviso bars such mining impairs appellees ability to either alienate the property or develop it. The issue raised is purely legal. It is definite and concrete. Delay will impose an economic burden upon appellees. See Assiniboine and Sioux Tribes v. Board of Oil and Gas Conservation, 792 F.2d 782, 787-90 (9th Cir.1986).

The policies underlying the exhaustion requirement would not be served by requiring exhaustion in these cases: there was no premature interference with an agency process; there was no administrative decision the agency could have corrected; no factual development was required; and the court had the benefit of the agency's view of the meaning of the statute. See Assiniboine and Sioux Tribes, 792 F.2d at 791. Moreover, the ultimate task of statutory interpretation involves judicial rather than administrative expertise. See Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843 n. 9, 104 S.Ct. 2778, 2781 n. 9, 81 L.Ed.2d 694 (1984); Southern California Edison Co. v. F.E.R.C., 770 F.2d 779, 782 (9th Cir.1985).

We conclude that the district court did not abuse its discretion, see Assiniboine, 792 F.2d at 790, by interpreting the statute without first requiring appellees to apply for a surface mining permit under 30 U.S.C. Secs. 1256 and 1257, or for an agency determination that they possessed "valid existing rights."

II

Subject to valid existing rights, section 1272(e)(2) prohibits surface coal mining operations on federal lands in any national forest unless the Secretary of Interior finds there are no values incompatible with surface mining and either (A) surface impacts are incident to an underground coal mine, or (B) the Secretary of Agriculture determines, with respect to unforested lands west of the 100th meridian, that surface mining complies with this Act and three listed federal statutes regulating the management of federal lands, "[a]nd provided further, [t]hat no surface coal mining operations may be permitted within the boundaries of the Custer National Forest."

The district court held the quoted words plainly ban all strip coal mining in Custer National Forest; that the plain meaning is conclusive absent a clearly expressed legislative intention to the contrary, Lynch v. Rank, 747 F.2d 528, 532 (9th Cir.1984), amended, 763 F.2d 1098 (1985); and that the legislative history of the Proviso is at best "contradictory and inconclusive." We think, to the contrary, that the statutory setting of the words strongly suggests they apply only to the exception to the ban on strip mining on federal lands in national forests stated in the same paragraph (B) of the section. We think that this interpretation is supported by the legislative history.

The two exceptions to the ban on surface mining which would be applicable to Custer National Forest if the government were correct, but would be inapplicable if the district court were correct, are (1) the exception for "valid existing rights" stated in the opening lines of subsection 1272(e), and (2) the exception for private lands implied from the express limitations of subsection 1272(e)(2) to "any Federal lands." The government reads the first sentence of subsection 1272(e) to subject the entire subsection, including the Custer Proviso, to the "valid existing rights" exception; appellees respond that the Proviso bans all mining in Custer regardless of the existence of valid existing rights. The government contends the Custer Proviso only prohibits mining on federal lands within Custer and does not affect private in holdings. Appellees respond that the language of the statute as a whole indicates the Custer Proviso applies to private as well as federal lands, emphasizing the Act's use of the labels "Federal" or "private" where a limited effect was to be accorded certain provisions and use of the terms "all" and "any," or the lack of any specific designation, when a provision was intended to apply to both Federal and private lands.

The placement of the Proviso as the last clause of subsection (B) suggests that its only purpose is to negate the exception to the ban on surface mining stated in subsection (B). The legislative history confirms this reading.

The exception and the Proviso now found in paragraph (B) of subsection (e)(2) came into the statute together. The predecessor...