National Coal Ass'n v. Hodel

• Decision Date: 27 October 1987
• Docket Number: CV 85-150-BLG-JFB.,No. CV 85-115-BLG-JFB,CV 85-115-BLG-JFB
• Citation: 675 F. Supp. 1231
• Parties: NATIONAL COAL ASSOCIATION, Plaintiff, v. Donald P. HODEL, Secretary of the Interior, U.S. Department of the Interior, Burlington Northern, Incorporated, and Two wholly-owned subsidiaries of Burlington Northern, Incorporated: Meridian Minerals Company, and Burlington Northern Railroad Company, Defendants. NORTHERN PLAINS RESOURCE COUNCIL; McCone Agricultural Protection Organization; and Montana Wildlife Federation, Plaintiffs, v. Donald P. HODEL, Secretary of the Interior; United States Department of the Interior; Burlington Northern, Incorporated; Meridian Mineral Company; and Burlington Northern Railroad Company, Defendants.
• Court: U.S. District Court — District of Montana

675 F. Supp. 1231

NATIONAL COAL ASSOCIATION, Plaintiff, v. Donald P. HODEL, Secretary of the Interior, U.S. Department of the Interior, Burlington Northern, Incorporated, and Two wholly-owned subsidiaries of Burlington Northern, Incorporated: Meridian Minerals Company, and Burlington Northern Railroad Company, Defendants.

NORTHERN PLAINS RESOURCE COUNCIL; McCone Agricultural Protection Organization; and Montana Wildlife Federation, Plaintiffs, v. Donald P. HODEL, Secretary of the Interior; United States Department of the Interior; Burlington Northern, Incorporated; Meridian Mineral Company; and Burlington Northern Railroad Company, Defendants.

Nos. CV 85-115-BLG-JFB, CV 85-150-BLG-JFB.

United States District Court, D. Montana, Billings Division.

October 27, 1987.

COPYRIGHT MATERIAL OMITTED

John W. Ross, Anderson, Brown, Gerbase, Cebull and Jones, P.C., Billings, Mont., Arnold Levy, Jerome H. Simonds and John S. Lopatto, III, Freedman, Levy, Kroll & Simonds, Washington, D.C., Thomas Slater, Jr., Hunton & Williams, Richmond, Va., Michael Barr and William Young, Hunton & Williams, Washington, D.C., Thomas Altmeyer, Mining & Reclamation Council, Washington, D.C., for plaintiff.

F. Henry Habicht, II, Asst. Atty. Gen., Land & Natural Resources Div. and Fred R. Disheroon, Sp. Litigation Counsel, Land & Natural Resources Div., U.S. Dept. of Justice, Washington, D.C., Byron Dunbar, U.S. Atty., Dist. of Mont., Richard Aldrich, Regional Sol., Dept. of the Interior, Stephen H. Foster, Holland & Hart, Billings, Mont., for defendants.

Guy R. Martin, Perkins Law Firm, Washington, D.C., for Burlington Northern.

MEMORANDUM OPINION

BATTIN, Chief Judge.

These actions challenge the authority, and proper exercise thereof, of the Secretary of the Interior to approve the exchange of coal-laden public lands for private lands held by an affiliate of a common carrier railroad. The above-captioned partially consolidated cases are presently pending before the Court on cross-motions for summary judgment. For the reasons stated below, the defendants' motions are granted and the plaintiffs' motions are denied.

Plaintiff National Coal Association (NCA) is a trade association whose members include coal-producing companies.¹ NCA's membership includes companies mining coal in western states in competition with defendant Meridian Minerals Company (Meridian). NCA purports to represent its members' interests by dealing with public authorities in areas affecting the production, transportation, utilization, and sale of coal. Meridian is a member of NCA.²

Plaintiff Northern Plains Resource Council (NPRC) is an organization whose members include those residing, owning property, or having business interests in Circle, Montana, and the outlying McCone County area near the land subject to the exchange, hereinafter referred to as the "Circle West" exchange. NPRC is concerned with protecting the agricultural and environmental life style of the area from injury caused by strip mining and coal development. Plaintiff McCone Agricultural Protection Organization is an affiliate of NPRC. Plaintiff Montana Wildlife Federation is an organization of sportsmen and conservation groups using Bureau of Land Management (BLM) lands for recreational purposes. These foregoing plaintiffs shall be collectively referred to as the "NPRC" plaintiffs.

Defendant Donald P. Hodel is the Secretary of the Interior and is sued in his official capacity as fiduciary of the lands involved in the Circle West exchange. Defendant United States Department of the Interior (DOI), which includes the BLM, is the agency charged with administering federal coal leases and federal coal interest exchanges. These defendants shall be collectively referred to as the "Federal Defendants".

Defendant Burlington Northern Incorporated (BN Inc.) is a financial holding company that operates, through wholly owned subsidiaries, a common carrier railroad, defendant Burlington Northern Railroad Company (BN Railroad), and a mining company, defendant Meridian. BN Railroad maintains track within twenty (20) miles of the Circle West exchange. Meridian is the private participant in the land exchange issue. These defendants shall be collectively referred to as the "Private Defendants".

FACTS AND CONTENTIONS

In November of 1981, Meridian submitted to the DOI a proposal to exchange its alternating checkerboard coal rights near Circle, Montana, with those of the Federal Government's located in the same area. The BLM commenced a study of the Circle West exchange proposal and, in December of 1982, released its environmental assessment requesting written comment from members of the public. In May of 1983, having considered the comments submitted and prepared its findings, BLM announced that the interests were suitable for exchange. Plaintiffs have at all times objected to the proposal.

On September 8, 1983, the DOI rejected all protests and approved the BLM decision finding the interests appropriate for exchange in accordance with § 206(a) of the Federal Land Policy and Management Act of 1976 (FLMPA), 43 U.S.C. § 1716(a). Section 206(a) permits fee-for-fee exchanges of federal lands for private when in the "public interest".³ Thus, the United States transferred approximately 174.7 million tons of in place reserves (159.9 million tons recoverable coal) in or under about 7887 acres to Meridian in exchange for approximately 223.3 million tons of in place reserves (198.2 million tons recoverable coal) in or under about 11,553 acres. As a result of the exchange, Meridian consolidated its interests in the North Tract of the Circle West area while the Federal Government consolidated in the South Tract. Each unified tract contains slightly more than 400 million tons of coal underlying approximately 20,000 acres in the North Tract and 24,400 acres in the South Tract. The approval decision constituted final agency action of the DOI.

Plaintiff NCA, on behalf of its members, commenced this action on April 11, 1985, contesting the exchange.⁴ In substance, NCA's motion for summary judgment first contends the exchange is not authorized by § 206(a) of FLPMA in light of §§ 2(c) and 37 of the Mineral Leasing Act of 1920 (MLA), 30 U.S.C. § 181 et seq., and the Commodities Clause of the Interstate Commerce Act, 49 U.S.C. § 10746. Section 2(c) of the MLA, 30 U.S.C. § 202, generally prohibits issuance of a federal coal lease to a company operating a common carrier railroad.⁵ The Commodities Clause generally prohibits a rail carrier from transporting goods manufactured or mined by it or under its authority.⁶ Section 37 of the MLA, 30 U.S.C. § 193, generally provides for the conveyance of federal coal to private parties through competitive leasing.⁷ Second, NCA contends that, if authorized by § 206 of FLPMA, the approval was arbitrary, capricious, and an abuse of discretion because the Secretary in making the public interest determination did not adequately consider the competitive effects of conveying coal to an affiliate of a common carrier railroad.

Plaintiff NPRC, on behalf of its members, filed a complaint contesting the exchange on May 10, 1985. Based on a finding that the two cases involved common issues of law, the Court, on December 27, 1985, ordered that Claims 1 through 4 and the 11th claim (to the extent incorporating claims 1 through 4) in NPRC's complaint, CV 85-150-BLG-JFB, be consolidated with all claims for relief stated in CV 85-115-BLG-JFB. NPRC, in its motion for summary judgment, also contests FLPMA authorization of the exchange and the proper exercise of the Secretary's authority therein, if any. With respect to the latter contention, NPRC contends the Secretary in making the public interest determination failed to give consideration to the land use criteria of recreation, food, and fiber. Accordingly, NPRC, as well as NCA, request the Court to invalidate the Secretary's interpretation and implementation of the pertinent FLPMA and MLA sections and to void the Circle West coal interest exchange. NPRC has also moved for summary judgment on the remaining counts contained in CV 85-150-BLG-JFB.⁸ These counts allege generally defendants' failure to implement statutory and regulatory prescriptions on land exchanges. Specifically, NPRC alleges the United States did not receive land of equal value, in violation of FLPMA § 206(b), that the exchange is not in conformity with the applicable land use plan, in violation of FLPMA § 202, that all unsuitability criteria were not applied, in violation of 43 C.F.R. 2200.1(d), and that no site specific environmental impact analysis was prepared, in violation of the National Environmental Policy Act, 42 U.S.C. § 4321.

In response, both the private and federal defendants filed cross-motions for summary judgment generally supporting FLPMA authorization of the exchange and a proper exercise of the Secretary's authority therein. In addition, both defendants maintain this action is barred, in whole or in part, by the doctrine of collateral estoppel on the basis of the decision in National Coal Association v. Hodel, 617 F.Supp. 584 (D.C. D.C.1985), affirmed, 825 F.2d 523 (D.C.Cir. 1987). After exhaustive briefing, the consolidated matters were brought before the Court on oral argument. The unconsolidated portions of NPRC's complaint have been submitted without oral argument. Today the Court decides the issues presented.

DISCUSSION

Though rife with interests and arguments, the parties agree the case lends itself to two central issues. First, under the governing legislation, is the Secretary of the Interior charged with proper authority to approve the land exchange at issue? Second, if authority exists, did the Secretary properly act in this exchange? These issues provide the general framework for considering the merits of the case. However, before addressing the merits, the Court is presented with certain challenges that warrant initial examination.

I. Authority of the...