Pittston Co. v. Lujan

• Decision Date: 23 April 1992
• Docket Number: Civ. A. No. 91-0006-A.
• Citation: 798 F. Supp. 344
• Parties: The PITTSTON COMPANY and Clinchfield Coal Company, Plaintiffs, v. Manuel LUJAN, Jr., Secretary of the Interior and Commonwealth of Virginia, Defendants.
• Court: U.S. District Court — Western District of Virginia

798 F. Supp. 344

The PITTSTON COMPANY and Clinchfield Coal Company, Plaintiffs, v. Manuel LUJAN, Jr., Secretary of the Interior and Commonwealth of Virginia, Defendants.

Civ. A. No. 91-0006-A.

United States District Court, W.D. Virginia, Abingdon Division.

April 23, 1992.

Stephen M. Hodges, Abingdon, Va., John R. Woodrum, Washington, D.C., for plaintiffs.

Charles P. Gault, Dept. of Interior, Knoxville, Tenn., W. Michael Lepchitz, Asst. Atty. Gen., Big Stone Gap, Va., for defendants.

MEMORANDUM OPINION

GLEN M. WILLIAMS, Senior District Judge.

The Pittston Company and Clinchfield Coal Company ("Plaintiffs") initially brought this action seeking a temporary restraining order ("TRO"), preliminary injunction and permanent injunction. The court has previously entered orders granting the TRO and the preliminary injunction. Therefore, the permanent injunction is the only remaining issue. The matter is presently before the court on the motion of the Secretary of the Interior and the Commonwealth of Virginia ("Defendants") for summary judgment and Plaintiffs' motion for entry of a permanent injunction. The Plaintiffs assert jurisdiction pursuant to 28 U.S.C. § 1331 and 30 U.S.C. § 1276(a)(1).

FACTUAL AND PROCEDURAL BACKGROUND

The Pittston Company ("Pittston"), through its subsidiaries, is engaged in the business of mining coal in Virginia and other states. Clinchfield Coal Company ("Clinchfield") is an indirect wholly-owned subsidiary of Pittston operating in Virginia. Manuel Lujan, Jr. is Secretary of the United States Department of Interior ("Secretary"), which, through the Office of Surface Mining Reclamation and Enforcement ("OSM"), administers the Surface Mining Control and Reclamation Act of 1977 ("SMCRA"), 30 U.S.C. §§ 1201-1328, and promulgates regulations governing surface coal mining. The Commonwealth of Virginia, through its Department of Mines, Minerals and Energy ("DMME") and Division of Mine Land Reclamation ("DMLR"), obtained federal approval in 1981 as the primary regulatory authority and issuer of permits for surface coal mining in this state, with the Secretary, through OSM, retaining certain oversight authority.

Clinchfield is engaged in the business of mining, processing, and selling coal in Virginia. Clinchfield also hires independent contractors, known in the business as "contract miners," who mine for the company. The parties stipulated that, at certain times from the late 1970s to the mid-1980s, Golden Chip Coal, Inc., Fadco, Inc., Delight Coal Corporation, and Elkins Energy Company ("the Contractors") were contract miners for Clinchfield at locations in Southwest Virginia. During this time, Clinchfield owned or leased the coal being mined by the Contractors and, pursuant to contracts with them, had the right to receive the coal after mining. The Contractors were independently owned and operated and held their own permits from OSM and DMLR to conduct surface coal mining.

On October 3, 1988, the Secretary adopted regulations, effective November 2, 1988, defining the term "owned or controlled" as used in the SMCRA, 30 U.S.C. § 1260(c)¹, and revising the scope of review of a permit applicant's environmental compliance record prior to issuance of new permits. 30 C.F.R. § 773.5, 773.15(b).² At the same time, OSM established the Applicant/Violator System ("AVS"), a computer system that identifies whether an applicant for a permit is linked by ownership or control to any person having outstanding violations of federal or state surface mining laws.

Annetta L. Cheek, Chief of OSM's Applicant/Violator System Office ("AVSO"), submitted an affidavit describing the procedure followed for evaluating permit applications under § 510(c) of SMCRA, 30 U.S.C. § 1260(c). Cheek stated that the primary resource available to regulatory authorities for evaluating permit applications is the AVS. When queried, the AVS makes a recommendation to issue, deny, or condition a permit based on whether the AVS discovers an ownership or control link between the applicant and an outstanding violation. Cheek stated that the states are not required to follow the AVS or AVSO recommendation; but under their respective memoranda of understanding with OSM, the states are required to consider any information they receive from the AVS or AVSO before issuing a permit. However, Bill Bledsoe from the DMME stated that his agency had never overridden an OSM block based on federal violations. (2/6/91 Tr. at 71). Following the February 6, 1991 hearing, the OSM and DMLR entered into an agreement which requires Virginia to participate in the AVS and to refuse permits to any person the AVS links to a violator unless (1) the ownership or control link has been shown to be erroneous or (2) the applicant proves that the violation has been, or is being, abated or is the subject of a good faith appeal. (Plaintiffs' Exhibit 4 at 5, filed 11/12/91).

Cheek stated that the ownership or control link is determined by using the standards set forth in 30 C.F.R. §§ 773.5, 773.15(b)(1). The ownership and control information in the AVS comes from two sources: (1) information submitted in applications for surface mining permits pursuant to § 507 of SMCRA, 30 U.S.C. § 1257, and equivalent state requirements, and (2) information developed through research conducted by the AVSO's Lexington, Kentucky office. At present, violations in the AVS consist of state's reports of bond forfeitures, OSM's reports of unabated federal performance standard violations, unpaid federal civil penalties, and unpaid abandoned mine land fees.

Cheek's affidavit also addressed an applicant's access to information in the AVS and the applicant's opportunities to amend adverse information prior to the information being used to block permits. Cheek stated that, when the AVSO identifies a link to an unabated violation, the AVSO sends a letter, hereinafter referred to as the thirty-day letter, to the newly identified entity notifying the entity that the link has been discovered. The entity then has thirty days to submit material that may correct the violation information or rebut an ownership or control link to the outstanding violation. The entity may wish to contest the status of the violation or the ownership or control link. The "status" of the violation includes whether such violation has been corrected, is being corrected, or is the subject of a good faith appeal. The "ownership or control" link is reviewed under 30 C.F.R. §§ 773.5, 773.15(b)(1). However, the AVSO does not review the "validity" of federal or state violations. The validity of the violation refers to whether a violation existed at all or was the responsibility of the party cited.

If there is no response to the thirty-day letter, the AVSO will recommend denial of any pending or future permit. If the material submitted in response to the thirty-day letter is unpersuasive, the AVSO will respond by letter, hereinafter referred to as the ten-day letter, explaining why the AVSO continues to believe the link exists. OSM will provide the company with its documentation and suggest the type of documentation the company could submit to show that there is no link. The entity then has ten days to respond. If there is no response to the ten-day letter, the information is entered into the AVS. If a person responds to the ten-day letter, but does not rebut the link, the Director of the OSM ("Director") issues OSM's final decision notifying the entity that a link has been created. If the letters are persuasive, the information will not be used.

Corporations may appeal an adverse decision by the Director to the OSM's Office of Hearings and Appeals, Interior Board of Land Appeals as provided by 43 C.F.R. §§ 4.1280 to 4.1286. An adverse ruling by this body may be appealed to the appropriate federal district court pursuant to 5 U.S.C. §§ 702, 704.

Separately from the thirty-day letter process, the AVSO sends applicants, for whom it recommends granting a permit, a list of known ownership and control relationships involving the applicant. The applicant may then advise the AVSO of any erroneous information in the "organizational family tree," thus preventing any possible erroneous thirty-day letters.

Independent of the thirty-day letter process, individuals may obtain information relating to them in the AVS by submitting a request under the Privacy Act, 43 C.F.R. § 2.63. The applicant can also submit a request under the Freedom of Information Act, 43 C.F.R. § 2.14.

An individual or entity may at any time seek to amend information contained in the AVS prior to filing an application. If the individual or entity submits information that rebuts a presumed ownership or control link, the link is removed from the AVS. However, if the OSM remains convinced that the link exists, the Director issues a written decision and the link will remain. Administrative and judicial review can be had as previously described.

Even if an individual or entity has not taken advantage of the opportunities to contest the accuracy of the information prior to filing an application, an applicant has opportunities for administrative review during the application review process. If the regulatory authority³ accepts an AVSO recommendation to deny an application, the regulatory authority notifies the applicant and refers the applicant to the state or federal agency with jurisdiction over the violation linked to the applicant. The applicant may submit to the regulatory authority a response to an adverse recommendation of the AVSO. Such a response may attempt to refute the facts or rebut the presumptions underlying the ownership or control link. The regulatory authority must issue a decision on the permit application within a reasonable time pursuant to 30 U.S.C. § 1264(b) or equivalent state law.

After a permit is denied, an applicant may challenge any basis for a denial, including the status or validity of an outstanding violation or the ownership or control...