Penn. Fed. of Sportsmen's Clubs v. Kempthorne

• Decision Date: 02 August 2007
• Docket Number: No. 06-1780.,06-1780.
• Citation: 497 F.3d 337
• Parties: PENNSYLVANIA FEDERATION OF SPORTSMEN'S CLUBS, INC.; Pennsylvania Chapter Sierra Club; Pennsylvania Trout, Inc.; Tri-State Citizens Mining Network, Inc.; Mountain Watershed Association, Inc., Appellants v. Dirk KEMPTHORNE,<SMALL><SUP>*</SUP></SMALL> Secretary, United States Department of the Interior; Brent Wahlquist, Acting Director, Office of Surface Mining Reclamation and Enforcement; Brent Wahlquist, Regional Director, Office of Surface Mining Reclamation and Enforcement; Commonwealth of Pennsylvania, Department of Environmental Protection, Intervenor in D.C.
• Court: U.S. Court of Appeals — Third Circuit

497 F.3d 337

PENNSYLVANIA FEDERATION OF SPORTSMEN'S CLUBS, INC.; Pennsylvania Chapter Sierra Club; Pennsylvania Trout, Inc.; Tri-State Citizens Mining Network, Inc.; Mountain Watershed Association, Inc., Appellants v. Dirk KEMPTHORNE,^* Secretary, United States Department of the Interior; Brent Wahlquist, Acting Director, Office of Surface Mining Reclamation and Enforcement; Brent Wahlquist, Regional Director, Office of Surface Mining Reclamation and Enforcement Commonwealth of Pennsylvania, Department of Environmental Protection, Intervenor in D.C.

No. 06-1780.

United States Court of Appeals, Third Circuit.

Argued March 26, 2007.

Filed: August 2, 2007.

Kurt J. Weist (Argued), PennFuture, Harrisburg, PA, for Appellants.

Tamara N. Rountree (Argued), U.S. Department of Justice, Environment & Natural Resources Division, Washington, DC, for Appellees, Dirk Kempthorne, et al., and Brent Wahlquist, et al.

Dennis Whitaker (Argued), Department of Environmental Protection, Harrisburg, PA, for Appellee, Pennsylvania Dept. of Environmental Protection.

Before: FISHER, JORDAN and ROTH, Circuit Judges.

OPINION OF THE COURT

FISHER, Circuit Judge.

This is an appeal from a grant of summary judgment by the District Court sustaining two decisions of the United States Department of the Interior, Office of Surface Mining Reclamation and Enforcement. Plaintiffs challenge the agency's decisions to terminate a program deficiency notice issued pursuant to 30 C.F.R. § 732.17, and delete a required amendment that was codified at 30 C.F.R. § 938.16(h), both of which directed Pennsylvania to comply with the requirements of 30 C.F.R. § 800.11(e). For the reasons that follow, we conclude that the agency's decisions were inconsistent with its own regulations and regulatory obligations. We will therefore reverse the judgment of the District Court, in part, and set aside both agency actions.

I. BACKGROUND

A.

Plaintiffs in this case are several nonprofit public interest organizations, corporations, and coalitions dedicated to the preservation of Pennsylvania's environment and conservation of its natural resources. For the sake of convenience, they will be referred to collectively as the "Federation." The individual defendants have all been sued in their official capacities as administration officials. In addition, the Commonwealth of Pennsylvania, Department of Environmental Protection ("PADEP"), has been permitted to join as an intervenor-defendant. The Federation alleges that the Office of Surface Mining Reclamation and Enforcement ("OSM") has taken a position and performed actions inconsistent with its regulatory obligations under the Surface Mining Control and Reclamation Act of 1977 ("SMCRA"), 30 U.S.C. § 1201, et seq. A short review of the origin and purpose of SMCRA is therefore in order.

Congress enacted SMCRA to provide protection against environmental degradation from coal mining and to clean up areas damaged by past coal mining. See 30 U.S.C. § 1202(a) ("It is the purpose of this Act to . . . establish a nationwide program to protect society and the environment from the adverse effects of surface coal mining operations . . . ."). Many of the adverse effects of surface coal mining relate to the large number of abandoned and unreclaimed coal mining sites strewn across the nation. These sites "continue, in their unreclaimed condition, to substantially degrade the quality of the environment, prevent or damage the beneficial use of land or water resources, or endanger the health or safety of the public. . . ." 30 U.S.C. § 1202(h). SMCRA aims to promote the complete reclamation of these abandoned mining sites and seeks to assure that the untreated mine discharges of abandoned sites are abated. See Pennsylvania Coal Ass'n v. Babbitt, 63 F.3d 231, 233 (3d Cir.1995). The statute empowers the Secretary of the Interior, through OSM, to promulgate regulations to realize these goals and oversee the regulatory program. 30 U.S.C. § 1211(c).

Significantly, however, SMCRA allows a State to steward its own regulatory program if it can administer that program according to federal standards. Under this "cooperative federalism" approach, individual States are expected to take the lead in regulation while the federal government oversees their efforts. Once a State program is approved, the State achieves "primacy" over the regulation of its surface mining program under SMCRA. Pennsylvania attained primacy in 1982. See 47 Fed.Reg. 33,050, 33,076 (July 30, 1982).

When a State has primacy, operators of surface coal mining sites are required to file an application for a surface coal mining and reclamation permit with the state regulatory authority. 30 U.S.C. § 1252(a). To receive a mining permit, operators are required to submit a detailed reclamation plan for the site in question. This plan must provide sufficient information to demonstrate that complete reclamation can be accomplished. 30 U.S.C. §§ 1257(d), 1258(a). In addition, after the permit application has been approved, but before the permit is issued, applicants are required to file a performance bond with the regulatory authority. 30 U.S.C. § 1259(a). SMCRA's bonding program is designed to provide further assurance of "complete reclamation of mine sites." Cat Run Coal Co. v. Babbitt, 932 F.Supp. 772, 774-75 (S.D.W.Va.1996). Under SMCRA, the bonds collected by States from mining operators must be "sufficient to assure the completion of the reclamation plan if the work had to be performed by the regulatory authority," i.e., the State. 30 U.S.C. § 1259(a).

A conventional bond system ("CBS"), authorized by 30 U.S.C. § 1259(a), is sometimes referred to as a "full cost" system because the cost of the bond is not discounted or supplemented by any other source. Rather, the operator must pay the entire cost of the bond needed to complete reclamation in the event of forfeiture. Id. A CBS bond is site specific, covering the permit area upon which the operator conducts surface coal mining. Id. ("The bond shall cover that area of land within the permit area upon which the operator will initiate and conduct surface coal mining and reclamation operations within the initial term of the permit."). As mining and reclamation operations within the permit area are expanded, the permit holder must file additional bonds to cover the additional operations. Id. ("As succeeding increments of surface coal mining and reclamation operations are to be initiated and conducted within the permit area, the permittee shall file with the regulatory authority an additional bond or bonds to cover such increments . . . .").

An alternative bond system ("ABS"), authorized by 30 U.S.C. § 1259(c), is a collective risk-spreading system that draws in part on a bond pool to cover the reclamation liabilities of each individual mining site. An ABS allows a State to discount the amount of the required site-specific bond to an amount that is less than the full cost needed to complete reclamation of the site in the event of forfeiture. Individual mine operators contribute to the bond pool, thereby sharing the liability of reclamation and compensating for the discounted site-specific bonds.

B.

Pennsylvania's past and present efforts to comply with its obligation to maintain a solvent bond system form the backdrop for this appeal. Pennsylvania first instituted an ABS to cover surface coal mines in 1981, even before it obtained primacy over mining activities in the Commonwealth. See 11 Pa. Bull. 2680 (August 1, 1981) (final rule implementing ABS). As previously noted, OSM approved Pennsylvania's surface coal mining regulatory program in 1982. 47 Fed.Reg. 33,050 (July 30, 1982); see generally Hodel v. Virginia Surface Mining & Reclamation Ass'n, 452 U.S. 264, 268-72, 101 S.Ct. 2352, 69 L.Ed.2d 1 (1981) (describing state program approval process). Under the approved program, Pennsylvania had the authority to implement either an ABS or CBS.

From 1982 until 2001, Pennsylvania opted for a bifurcated bond system, with surface coal mines, as well as coal refuse reprocessing operations and coal preparation plants, covered by an ABS, and underground coal mines and coal refuse disposal operations covered by a CBS. The ABS that Pennsylvania used for its surface coal mines consisted, in part, of site-specific bonds set below the cost of reclamation. These discounted site-specific bonds were supplemented by a statewide bond pool called the "Surface Mining Conservation and Reclamation Fund" ("PA SMCRA Fund"), 52 Pa. Stat. Ann. § 1396.18. The PA SMCRA Fund receives revenue from several sources, including the collection of a one-time, nonrefundable, per-acre reclamation fee paid by individual operators of surface coal mines. That fee was originally $50 per acre, but was raised to $100 per acre in 1993. See 25 Pa.Code § 86.17(e).

On January 10, 1991, OSM's director notified PADEP that Pennsylvania's "alternative bonding system must be modified to provide the resources needed to reclaim existing permanent forfeiture sites within a reasonable timeframe and to ensure that future forfeiture sites will be reclaimed in a timely manner. These resources must be sufficient to complete the reclamation plan approved in the permit." On May 31, 1991, in a final rule conditionally approving a proposed state program amendment, OSM codified a "required regulatory program amendment," 30 C.F.R. § 938.16(h), directing Pennsylvania to submit information by November 1, 1991, indicating that the PA SMCRA Fund was solvent. Specifically, the rule required Pennsylvania to either "submit information, sufficient to demonstrate that the [ABS] can be operated in a manner that will meet the requirements of 30 C.F.R. § 800.11(e)," or to amend its rules or otherwise amend its program by November 1, 1991, to be compliant with Federal standards. 56 Fed. Reg. 24,687, 24,719-21 (May 31, 1991). This "required amendment" was published in the Federal Register on May 31, 1991, as a...