National Min. Ass'n v. U.S. Dept. of the Interior, s. 95-5434

Decision Date31 January 1997
Docket NumberNos. 95-5434,s. 95-5434
Citation105 F.3d 691
Parties, 323 U.S.App.D.C. 77, 65 USLW 2529, 27 Envtl. L. Rep. 20,499 NATIONAL MINING ASSOCIATION, Appellant v. UNITED STATES DEPARTMENT OF THE INTERIOR, et al., Appellees. to 95-5436.
CourtU.S. Court of Appeals — District of Columbia Circuit

Appeals from the United States District Court for the District of Columbia (Nos. 88cv03464, 89cv01167, and 89cv01751).

J. Michael Klise, Washington, DC, argued the cause for appellant, with whom John A. Macleod, Thomas C. Means, and Harold P. Quinn, Jr., were on the briefs.

Jonathan F. Klein, Attorney, U.S. Department of Justice, Washington, DC, argued the cause for appellees, with whom Lois J. Schiffer, Assistant Attorney General, and Jacques B. Gelin, Attorney, were on the brief. Richard M. Hall, Attorney, U.S. Department of Justice, entered an appearance.

Glenn P. Sugameli, Washington, DC, was on the brief for appellee National Wildlife Federation.

Before: EDWARDS, Chief Judge, HENDERSON and RANDOLPH, Circuit Judges.

Opinion for the Court filed by Chief Judge EDWARDS.

HARRY T. EDWARDS, Chief Judge:

Under the Surface Mining Control and Reclamation Act ("SMCRA"), a coal mining operation must obtain a permit before commencing surface mining. Appellant National Mining Association challenges three sets of regulations promulgated by the Department of Interior's Office of Surface Mining Reclamation and Enforcement ("OSM") under SMCRA: the "ownership and control" rule, the "permit-information" rule, and the "permit-rescission" rule.

We hold that the ownership and control rule violates step one of Chevron. Section 510(c) of SMCRA states that when any surface coal mining operation "owned or controlled by the applicant" is currently in violation of SMCRA, a permit shall not be issued. 30 U.S.C. § 1260(c) (1994). In this section, Congress spoke precisely to the question of whose violations are relevant before an applicant's permit can be blocked. The ownership and control rule, however, sweeps much more broadly--blocking permits if an operation owned or controlled "by either the applicant or by any person who owns and controls the applicant" is currently in violation of SMCRA, 30 C.F.R. § 773.15(b)(1) (1995) (emphasis added). The rule conflicts with the plain meaning of section 510(c) and, therefore, is unlawful. In addition, because the permit-information rule and the permit-rescission rule are centered on the ownership and control rule, they too must fall.

I. BACKGROUND

In 1977, Congress enacted SMCRA, 30 U.S.C. § 1201 et seq. (1994), "to establish a nationwide program to protect society and the environment from the adverse effects of surface coal mining operations," id. § 1202(a). OSM administers and enforces SMCRA. See id. § 1211(c). States may assume jurisdiction over operations within their borders by developing a regulatory program meeting the standards of SMCRA and approved by OSM. See id. § 1253.

Under SMCRA, no person may engage in surface coal mining operations without a permit from the appropriate regulatory authority. See id. § 1256(a). Section 510(c) requires that applicants file a schedule listing any notices of violation they have received in the prior three years and the final resolution of any such notices. See id. § 1260(c). Where that or other information indicates that any surface coal mining operation "owned or controlled by the applicant" is currently in violation of SMCRA, "the permit shall not be issued" until the applicant submits proof that the violation has been or is being corrected. Id.

In 1988, OSM issued the ownership and control rule. See 53 Fed.Reg. 38,868 (1988); see also 30 C.F.R. §§ 773.5, 773.15(b) (1995). Section 773.5 states that certain relationships constitute ownership or control of mining operations and that other relationships are presumed to constitute ownership or control. See 30 C.F.R. § 773.5. Under section 773.15(b)(1), if OSM or the state regulatory authority concludes that "any surface coal mining and reclamation operation owned or controlled by either the applicant or by any person who owns or controls the applicant" is currently in violation of SMCRA, it "shall not issue the permit." Id. § 773.15(b)(1). Together, these regulations "track ownership up and down a corporate chain," 53 Fed.Reg. at 38,875--as well as across that chain--so long as control is present.

In 1989, OSM promulgated the permit-information rule in order to conform the permit application requirements to the ownership and control rule. See 54 Fed.Reg. 8,982 (1989); see also §§ 773.17(i), 778.10, 778.13, 778.14, 843.11(g) (1995). The permit-information rule provides that permit applications must contain, inter alia, information about the applicant's corporate structure, those who own or control the applicant, and mining operations owned or controlled by the applicant or by any person who owns or controls the applicant. See 30 C.F.R. § 778.13(a)-(d). The rule also requires that permit applications contain information regarding permit suspensions and revocations, unabated cessation orders, and violation notices received in the preceding three years by any surface coal mining operation owned or controlled by the applicant or by any entity that owns or controls the applicant. See id. § 778.14(a)-(c).

Finally, OSM promulgated the permit-rescission rule. See 54 Fed.Reg. 18,438 (1989); see also 30 C.F.R. §§ 773.20, 773.21, 843.21 (1995). This rule establishes procedures for revoking permits that violate the ownership and control rule.

Appellant National Mining Association filed suit, challenging the ownership and control rule, the permit-information rule, and the permit-rescission rule. The parties cross-moved for summary judgment. On August 31, 1995, the District Court granted summary judgment in favor of OSM on all claims. See National Wildlife Fed'n v. Babbitt, Civ. Nos.88-3117, 88-3464, 88-3470 (consolidated) (Aug. 31, 1995), slip op. at 25, 1995 WL 704973, reprinted in Joint Appendix ("J.A") 167; National Wildlife Fed'n v. Babbitt, Civ. Nos. 89-1130, 89-1167 (consolidated) (Aug. 31, 1995), slip op. at 12, 1995 WL 702504, reprinted in J.A. 180; National Wildlife Fed'n v. Babbitt, Civ. Nos. 89-1751,89-1811 (consolidated) (Aug. 31, 1995), slip op. at 19, 41 ERC 1529, reprinted in J.A. 200.

II. ANALYSIS

In Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), the Supreme Court set out the now-familiar two-step test for reviewing an agency's interpretation of a statute. First, the reviewing court must ask "whether Congress has directly spoken to the precise question at issue." Id. at 842, 104 S.Ct. at 2781. If so, "that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress." Id. at 842-43, 104 S.Ct. at 2781. If, however, "the statute is silent or ambiguous with respect to the specific issue," the reviewing court must defer to the agency's construction of the statute if it is reasonable. Id. at 843, 104 S.Ct. at 2782.

We hold that this case is controlled by the first step of Chevron. Section 510(c) of SMCRA is unmistakably clear. It states that when "any surface coal mining operation owned or controlled by the applicant" is currently in violation of SMCRA, the permit shall not be issued. 30 U.S.C. § 1260(c) (emphasis added). In this language, Congress spoke precisely to the question at issue--namely, whose violations are relevant before an applicant's permit can be blocked. On this question, therefore, there is no gap for the agency to fill--once OSM (or the state regulatory authority) has determined who the "applicant" is, it may only consider the violations of operations owned or controlled by the applicant. The ownership and control rule, however, sweeps much more broadly, blocking permits if an operation owned or controlled "by either the applicant or by any person who owns and controls the applicant" is currently in violation of SMCRA, 30 C.F.R. § 773.15(b)(1) (emphasis added). Because the ownership and control rule conflicts with the plain meaning of section 510(c), it is unlawful.

OSM points to the general rulemaking provisions of SMCRA, see 30 U.S.C. §§ 1211(c)(1)-(2), 1242(a), 1251(b) (1994), to justify its ownership and control rule. These provisions do not, however, permit OSM to trump Congress's specific statutory directive in section 510(c). As we stated in American Petroleum Institute v. EPA, 52 F.3d 1113 (D.C.Cir.1995), "EPA cannot rely on its general authority to make rules necessary to carry out its functions when a specific statutory directive defines the relevant functions of EPA in a particular area." Id. at 1119; see also Natural Resources Defense Council, Inc. v. Reilly, 976 F.2d 36, 41 (D.C.Cir.1992); Sierra Club v. EPA, 719 F.2d 436, 455 (D.C.Cir.1983). Indeed, in In re Permanent Surface Mining Regulation Litigation, 653 F.2d 514 (D.C.Cir.1981) (en banc), we explicitly noted that the general rulemaking provisions of SMCRA do not provide OSM with " 'carte blanche authority to promulgate any rules, on any matter.' " Id. at 523 (quoting Citizens to Save Spencer County v. EPA, 600 F.2d 844, 873 (D.C.Cir.1979)). Thus, even though these provisions grant OSM some substantive power, see id., "the power to issue regulations is not the power to issue any regulations," id. at 524.

Appellee National Wildlife Federation argues that because Congress did not specifically preclude OSM from reaching the applicant's owner (and those that the applicant's owner owns or controls), we should defer to OSM's interpretation of the statute under the second step of Chevron. See Brief for Appellee National Wildlife Federation at 11, 14-15. We reject this extreme position. As the en banc court has stated:

To suggest ... that Chevron step two is implicated any time a statute does not expressly...

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