Ohio Valley Envtl. Coal. v. Caperton
| Decision Date | 13 November 2020 |
| Docket Number | CIVIL ACTION NO. 3:20-0470 |
| Citation | 500 F.Supp.3d 488 |
| Court | U.S. District Court — Southern District of West Virginia |
| Parties | OHIO VALLEY ENVIRONMENTAL COALITION, West Virginia Highlands, and Seirra Club, Plaintiffs, v. Austin CAPERTON, Secretary, West Virginia Department of Environmental Protection, Defendant. |
Derek O. Teaney, Appalachian Mountain Advocates, Inc., J. Michael Becher, Appalachian Center for the Economy and the Environment, Lewisburg, WV, for Plaintiffs.
Benjamin L. Bailey, Kevin Wallace Barrett, Maigreade Bridget Burrus, Bailey & Glasser, Charleston, WV, for Defendant.
Pending before the Court is Defendant Austin Caperton's Motion to Dismiss (ECF No. 9). Plaintiffs filed a response in opposition to the Motion (ECF No. 10), and Defendant replied (ECF No. 11). The dispute is now ripe for review. For the following reasons, the Motion is DENIED .
This suit arises from the Surface Coal Mining Control and Reclamation Act, 30 U.S.C. § 1201 et seq. ("SMCRA"). Congress enacted the SMCRA in 1977 to "strike a balance between the nation's interests in protecting the environment from the adverse effects of surface coal mining and in assuring the coal supply essential to the nation's energy requirements." Bragg v. W. Virginia Coal Ass'n , 248 F.3d 275, 288 (4th Cir. 2001) (citing 30 U.S.C. § 1202(a), (d), (f) ). To facilitate this balance, the Act established a permitting system that requires surface mining permit holders to reduce their environmental impact by reclaiming the site after extraction. 30 U.S.C. § 1202.
The federal government administers the SMCRA unless a state enacts its own program. Id. at § 1253. The Office of Surface Mining Reclamation and Enforcement ("OSM"), a branch of the Department of the Interior, is tasked with promulgating regulations, approving or disapproving state programs, overseeing state administration, and providing federal programs for states that do not take over administration. See id. at § 1211(c). Once OSM approves a state program, the state administers the SMCRA independently and maintains "exclusive jurisdiction" over the enforcement of the SMCRA minimum permitting standards. Id. at § 1253(a). Nevertheless, OSM retains some oversight authority to ensure that the state program complies with the SMCRA. See id. at §§ 1267, 1271; 30 C.F.R. § 732.17.
The federal government approved West Virginia's SMCRA program in 1981. 30 C.F.R. § 948.10. The West Virginia legislature enacted the "Surface Coal Mining and Reclamation Act" and vested the authority to administer the program with the Secretary of the West Virginia Department of Environmental Protection ("DEP"). W. Va. Code §§ 22-3-1 et seq.
The Complaint alleges that the Secretary of the DEP, Defendant Caperton, violated 30 C.F.R. § 732.17 ("Regulation 732.17"), which outlines procedures for OSM regulatory oversight. Under Regulation 732.17(b), the state "shall promptly notify [OSM], in writing, of any significant events or proposed changes which affect the implementation, administration or enforcement of the approved State program." The Regulation further defines "significant events" as including "[s]ignificant changes in funding or budgeting relative to the approved program." 30 C.F.R. § 732.17(b)(6). Specifically, Plaintiffs allege that Defendant violated this duty when DEP refused to notify OSM that several of its permit holders have or will become insolvent. Compl. ¶ 49, ECF No. 1. Plaintiffs reason that these insolvencies are "significant changes" to DEP's funding because they will overwhelm DEP's bonding system. Id. at ¶ 31.
The SMCRA requires all state programs to administer a bonding system to disincentivize permittees from abandoning mines before reclaiming the site. See 30 U.S.C. § 1259 ; 30 C.F.R. 800.11. A permit applicant must post a performance bond "sufficient to assure the completion of the reclamation plan if the work had to be performed by the regulatory authority in the event of forfeiture ...." 30 U.S.C. § 1259(a). Alternatively, a state may propose an alternative bonding system that "achieve[s] the objectives and purposes of the bonding program pursuant to this section." Id. at § 1259(c) ; 30 C.F.R. § 800.11(e). West Virginia administers an alternative bonding system that is two-tiered. First, permit applicants are required to post a site-specific bond not to exceed $5,000 per acre, even if the projected reclamation costs exceed this rate. See W.Va. Code § 22-3-11(a). Second, to subsidize the remaining reclamation costs, West Virginia established the Special Reclamation Fund and the Special Reclamation Water Trust Fund (collectively, "Special Reclamation Fund"), which are funded by a tax of 27.9 cents per ton of coal mined in the state. W.Va. Code § 22-3-11(g). Together, the site-specific bonds and Special Reclamation Fund are intended to ensure that DEP will have sufficient money to "complete the reclamation plan for any areas which may be in default at any time." See 30 C.F.R. § 800.11(e).
According to the Complaint, DEP has recognized in other court filings that one permittee's recent insolvency alone will overwhelm its alternative bonding system. In March 2020, DEP filed an emergency motion in Kanawha County Circuit Court to appoint a special receiver to assume ERP Environmental Fund Inc.’s ("ERP") responsibilities. Compl. ¶ 29; Aff. of Harold D. Ward, Ex. A to Def.’s Reply ¶ 3, ECF No. 11-1. In support of its motion, DEP submitted a memorandum and supporting affidavit1 that detailed ERP's insolvency and noncompliance as follows:
The state court granted DEP's motion and appointed Doss Special Receiver, LLC. The Special Receiver is operating with "a budget of approximately $1,000,000." Compl. ¶ 36. Consequently, the deficit between reclamation costs and available funds is between $114 and $229 million, depending on DEP's ability to collect ERP's bonds. Id. at ¶¶ 32, 36. Plaintiffs allege that, as of December 31, 2019, the Special Reclamation Fund has accumulated $174 million, only ten percent of which DEP may spend in a year. Id. at ¶ 28; W. Va. Code § 22-3-1.
Based on the law and facts above, Plaintiffs sent DEP and OSM a notice of intent to sue on May 8, 2020. Id. at ¶ 5. Neither DEP nor OSM initiated suit within 60 days. Compl. ¶ 6. However, on July 8, 2020, DEP sent a letter to OSM that "cited Plaintiffs’ notice letter and denied that any significant events had occurred which affect the implementation, administration or enforcement of the approved State program." Id. at ¶ 45. Plaintiffs filed this suit the next day. See id.
Defendant seeks to dismiss this suit on several grounds, including lack of standing and ripeness, failure to state a claim, res judicata, and Eleventh Amendment immunity. As explained below, the Court rejects these arguments and denies the Motion.
Federal courts do not have jurisdiction over a suit unless the plaintiff can establish standing. Lujan v. Defs. of Wildlife , 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). In general, standing requires three elements: (1) an injury in fact that is both concrete and actual or imminent; (2) a causal connection between the injury and the defendant's alleged wrongdoing; and (3) a substantial likelihood that a favorable judgment will redress the injury. Id. Defendant argues that Plaintiffs’ alleged injuries are not concrete or actual because the alternative bonding system has not yet been overburdened. Defendant also argues that a favorable judgment may not redress the alleged deficiencies in the alternative bonding system because even if the Court orders Defendant to issue notice, OSM may choose not to require a program amendment. Although these arguments may have merit under the traditional standing analysis, that analysis does not apply. Where, as here, the plaintiff alleges a procedural injury, a modified standard applies. Summers v. Earth Island Inst. , 555 U.S. 488, 496, 129 S.Ct. 1142, 173 L.Ed.2d 1 (2009).
In Summers v. Earth Island Inst. , the Supreme Court held that when a plaintiff asserts a procedural injury, that plaintiff does not need to meet the "normal standards for redressability and immediacy." Id. at 496, 129 S.Ct. 1142. Rather, a plaintiff can enforce a procedural right "so long as the...
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