National Coal Ass'n v. Hodel, 85-6090

• Decision Date: 11 August 1987
• Docket Number: No. 85-6090,85-6090
• Citation: 825 F.2d 523
• Parties: , 41 Ed. Law Rep. 53, 18 Envtl. L. Rep. 20,039 NATIONAL COAL ASSOCIATION, et al., Appellants, v. Donald P. HODEL, U.S. Secretary of the Interior, et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 523

825 F.2d 523

263 U.S.App.D.C. 386, 41 Ed. Law Rep. 53,

18 Envtl. L. Rep. 20,039

NATIONAL COAL ASSOCIATION, et al., Appellants, v. Donald P. HODEL, U.S. Secretary of the Interior, et al.

No. 85-6090.

United States Court of Appeals District of Columbia Circuit.

Argued Oct. 31, 1986.

Decided Aug. 11, 1987.

Jerome H. Simonds, Washington, D.C., with whom Arnold Levy, Harvey A. Levin, John S. Lopatto, III and Thomas Altmeyer, were on the brief for appellants.

Dirk D. Snel, Atty., Dept. of Justice, Washington, D.C., with whom Jacques B. Gelin, Atty., Dept. of Justice was on the brief for appellee, U.S. Secretary of the Interior.

Russell H. Carpenter, Jr., Washington, D.C., with whom Laird Hart was on the brief for appellees, Rocky Mountain Energy Co., et al.

Before WALD, Chief Judge, WILLIAMS, Circuit Judge and WILL, ^* Senior District Judge.

Opinion for the Court Per Curiam. ^**

Concurring Opinion filed by Circuit Judge WILLIAMS.

PER CURIAM:

Section 206 of the Federal Land Policy and Management Act of 1976 ("FLPMA"), 43 U.S.C. Sec. 1716 (1982), authorizes the Secretary of the Interior to dispose of a "tract of public land or interests therein ... by exchange ... where ... the public interest will be well served by making that exchange...." The National Coal Association and the Mining and Reclamation Council of America challenge the propriety of one such exchange on two grounds. First, they argue that restrictions on coal leasing contained in Secs. 2(c) and 37 of the Mineral Leasing Act of 1920 ("MLA"), 30 U.S.C. Secs. 202, 193 (1982), proscribe the exchange. Second, they contend that the Secretary, in his survey of the public interest, failed to consider certain "competitive issues" as closely as he should have. We hold that plaintiffs have standing to raise both issues but lose on the merits.

I. BACKGROUND

Between 1980 and 1982, Princeton University received several bequests of privately owned land located within the boundaries of Grand Teton National Park in Wyoming. In order to convert its Grand Teton holdings into cash, Princeton offered them for sale to the National Park Service. The Service rejected Princeton's offer for lack of funds.

Equally unsuccessful in attracting a suitable purchaser among conservationist groups, Princeton conceived of a three-way swap: Princeton, along with three similarly situated charitable institutions (Dartmouth College, Vermont Law School, and the Sloan-Kettering Cancer Center), would sell their Grand Teton holdings to Rocky Mountain Energy Co., a private energy development company; the company would in turn exchange them for federal coal lands in the Corral Canyon, Wyoming area. Rocky Mountain already owned several tracts there. These were alternate sections of a checkerboard, products of the federal government's nineteenth-century program for stimulating rail development in the West. Rocky Mountain's consolidation of its Corral Canyon tracts with the government's would yield a large contiguous tract more suitable for economical mining. Moreover, the proximity of the Corral Canyon tracts to rail facilities owned by Union Pacific Railroad Company (Rocky Mountain's affiliate through a common parent, Union Pacific Corporation) would give Rocky Mountain special cost advantages. The proposed swap met the needs of every party involved, providing Princeton with the cash it needed without surrendering the bequests to commercial use; creating additional parkland at no cash cost to the federal government; and facilitating Rocky Mountain's development of its checkerboard coal.

The proposal depended upon the Secretary's exercise of his exchange authority under Sec. 206 of FLPMA. Receiving a favorable recommendation from the Bureau of Land Management ("BLM"), the Secretary invited public comment on the proposal, 47 FED.REG. 40,912 (1982). The responses--including those from environmental organizations, the Governor and several agencies of Wyoming, and the entire Wyoming congressional delegation--were overwhelmingly favorable.

Plaintiffs--trade associations whose collective membership produces most of the nation's coal--and one other firm were the sole dissidents. They raised the two objections posed here, and the Secretary and District Court (on motion for summary judgment) successively rejected them. National Coal Association v. Hodel, 617 F.Supp. 584 (D.D.C.1985). We address the MLA and FLPMA claims in turn.

II. THE MLA

Section 2(c) of the MLA broadly prohibits the grant of federal coal leases to common-carrier railroads:

No company or corporation operating a common-carrier railroad shall be given or hold a permit or lease under the provisions of [the MLA] ... for any coal deposits except for its own use for railroad purposes....

30 U.S.C. Sec. 202 (1982). The restriction nips in the bud certain potential violations of the so-called "commodities clause" of the Interstate Commerce Act, 49 U.S.C. Sec. 10746 (1982), which prohibits interstate rail carriers from transporting "an article or commodity that ... is manufactured, mined, or produced by the carrier or under its authority...." ¹ Section 2(c) is reinforced by Sec. 37 of the MLA, which makes the MLA the exclusive means of disposing of federal coal lands, subject to a qualification that specifically includes the very authority under which the Secretary acted here:

[T]he deposits of coal ... herein referred to ... shall be subject to disposition only in the form and manner provided in this Act, except as provided in sections 206 and 209 of the Federal Land Policy and Management Act of 1976....

Pub.L. No. 66-146, Sec. 37, 41 Stat. 437, 451 (1920), as amended by Pub.L. No. 95-554, Sec. 4, 92 Stat. 2073, 2074 (1978) (codified at 30 U.S.C. Sec. 193 (1982)) (emphasis added). Nevertheless, plaintiffs contend that the MLA implicitly limits Sec. 206 of FLPMA.

A. Standing

The government challenged plaintiffs' standing only in a footnote, Brief for Secretary at 18 n. 15, to which plaintiffs never responded. Since this court must satisfy itself that it has jurisdiction, however, we address the issue without the benefit of argument by the parties.

Plaintiffs' alleged injury stems from their members' status "as competitors of ... [Rocky Mountain]." Complaint at 40, Joint Appendix ("J.A.") at 40. ² The exchange, they allege, allows Rocky Mountain economically to mine a large tract of previously unminable land, thereby threatening plaintiffs' members with more rigorous competition.

Since plaintiffs' allegations of competitive threat undoubtedly satisfy constitutional standing requirements, see Clarke v. Securities Industry Association, --- U.S. ----, 107 S.Ct. 750, 754 n. 5, 93 L.Ed.2d 757 (1987); Investment Company Institute v. Camp, 401 U.S. 617, 620-21, 91 S.Ct. 1091, 1093-94, 28 L.Ed.2d 367 (1971), we address only their prudential standing under Sec. 10 of the Administrative Procedure Act ("APA"), 5 U.S.C. Sec. 702 (1982). ³ That inquiry proceeds in two parts. First we must determine whether plaintiffs are "arguably within the zone of interests to be protected or regulated by" the MLA. Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 153, 90 S.Ct. 827, 830, 25 L.Ed.2d 184 (1970). The Supreme Court recently articulated the test as follows:

In cases [such as this one] where the plaintiff is not itself the subject of the contested regulatory action, the test denies a right of review if the plaintiff's interests are so marginally related to or inconsistent with the purposes implicit in the statute that it cannot reasonably be assumed that Congress intended to permit the suit.

Clarke, 107 S.Ct. at 757. If we find that plaintiffs fall within the MLA's zone of interests, we must then examine whether the MLA exhibits a " 'fairly discernible' ... congressional intent to preclude review at [their] behest." Id. at 759. Thus, even plaintiffs who are among a statute's prime beneficiaries will lack standing if, for instance, allowance of such suits would severely disrupt the administrative scheme. Id. at 757 (citing Block v. Community Nutrition Institute, 467 U.S. 340, 348, 104 S.Ct. 2450, 2455, 81 L.Ed.2d 270 (1984)).

The legislative history of Sec. 2(c) provides a sufficient basis for locating plaintiffs within its protected zone. It was enacted out of fear "that if railroads were allowed to own coal mines they would discriminate in transportation against competing coal mines which depended on rail transportation...." Northern Indiana Public Service Co. v. Carbon County Coal Co., 799 F.2d 265, 271 (7th Cir.1986) [hereinafter cited as NIPSCO ]; see 58 CONG.REC. 4739 (1919) (remarks of Sen. LaFollette). ⁴

It is an open question whether Sec. 2(c)'s prohibition encompasses leases to a railroad's affiliate. See NIPSCO, 799 F.2d at 270-72. But parties complaining of administrative error obviously need not prevail on all issues of statutory interpretation in order to establish standing; were that so, the zone of interests test would not merely implicate but would duplicate the merits. Cf. Von Aulock v. Smith, 720 F.2d 176, 185 (D.C.Cir.1983). Since " 'Congress has arguably legislated against the competition that [plaintiffs seek] to challenge,' " plaintiffs have asserted an interest that bears "a plausible relationship to the policies underlying" the MLA. Clarke, 107 S.Ct. at 759 (quoting Investment Company Institute, 401 U.S. at 620, 91 S.Ct. at 1094). That is enough.

Nor do there appear any factors, such as existed in Block, 467 U.S. at 345-51, 104 S.Ct. at 2453-56, that make "fairly discernible" in the MLA "a congressional intent to preclude review at [plaintiffs'] behest." Clarke, 107 S.Ct. at 759. Plaintiffs, therefore, have standing to assert their challenge based on the MLA.

B. The Merits

On the merits, plaintiffs' argument would be implausible even in the absence of Sec. 37's explicit exception (added in 1978) for transfers under Sec. 206 of FLPMA. Section 206 itself makes not the...