U.S. v. Devil's Hole, Inc.

• Decision Date: 09 November 1984
• Docket Number: No. 84-1046,84-1046
• Parties: , 14 Envtl. L. Rep. 20,861 UNITED STATES of America v. DEVIL'S HOLE, INC. UNITED STATES of America v. HECLA MACHINERY AND EQUIPMENT COMPANY, INC.
• Court: U.S. Court of Appeals — Third Circuit

Page 895

747 F.2d 895

21 ERC 1921, 14 Envtl. L. Rep. 20,861

UNITED STATES of America v. DEVIL'S HOLE, INC.

UNITED STATES of America v. HECLA MACHINERY AND EQUIPMENT COMPANY, INC.

No. 84-1046.

United States Court of Appeals Third Circuit.

Argued Sept. 10, 1984.

Decided Nov. 9, 1984.

K. Robert Conrad (argued), Charles J. Bloom, Ronald H. Levine, Conrad, Kerr, Bloom, Hitchner & O'Brien, Philadelphia, Pa., for appellants.

Edward S.G. Dennis, Jr., U.S. Atty., Walter S. Batty, Jr., Asst. U.S. Atty., Chief of Appeals, James G. Sheehan (argued), James J. West (argued), Asst. U.S. Attys., Philadelphia, Pa., for appellee.

Before GIBBONS, HUNTER and GARTH, Circuit Judges.

OPINION OF THE COURT

GIBBONS, Circuit Judge:

Devil's Hole, Inc. and Hecla Mining and Machinery Co. appeal from judgments against them in a suit by the United States for reclamation fees claimed to be due under section 402 of the Surface Mining Act. ¹ P.L. 95-87, Title IV Sec. 402, 91 Stat. 457, 30 U.S.C. Sec. 1232. They claim that the court erred, both factually and legally, in holding that they owe such fees. We affirm.

I.

Title IV of the Surface Mining Act, dealing with abandoned mine reclamation, creates a trust fund in the Treasury of the United States for the restoration of land and water resources and the environment previously degraded by adverse effects of coal mining practices. 30 U.S.C. Sec. 1233(3). The trust fund consists of sums collected pursuant to section 402(a) of the Act which provides:

All operators of coal mining operations subject to the provisions of this chapter shall pay to the Secretary of the Interior, for deposit in the fund, a reclamation fee of 35 cents per ton of coal produced by surface coal mining and 15 cents per ton of coal produced by underground mining or 10 per centum of the value of the coal at the mine, as determined by the Secretary, whichever is less, except that the reclamation fee for lignite coal shall be at a rate of 2 per centum of the value of the coal at the mine, or 10 cents per ton, whichever is less.

30 U.S.C. Sec. 1232(a). Reclamation fees not promptly paid are recoverable from coal mine operators "in any court of competent jurisdiction in any action at law to compel payment of debts." 30 U.S.C. Sec. 1232(e).

The Act authorizes the Secretary of the Interior to promulgate rules and regulations necessary to carry out the provisions of the Act. 30 U.S.C. Secs. 1211(c)(2), 1224(a). The Secretary has by regulation defined "[a]nthracite, bituminous and subbituminous coal [as] all coals other than lignite coal." 30 C.F.R. Sec. 870.5 (1983). He has also defined "[r]eclaimed coal [as] coal recovered from a deposit that is not in its original geological location, such as refuse piles or culm banks or retaining dams and ponds that are or have been used during the mining or preparation process, and stream coal deposits." Id. Moreover "[r]eclaimed coal operations are considered to be surface coal mining operations for fee liability and calculation purposes." Id. Thus, under the regulations the Secretary claims a reclamation fee of 35 cents a ton or 10 per centum of the value of the coal, whichever is less, on reclaimed coal.

II.

Devil's Hole and Hecla supply Pennsylvania Power and Light Company ² with anthracite silt, some of which is recovered from lands owned by that electric power generator. Anthracite silt is a finely divided waste material that formerly was produced when anthracite coal from underground mines was processed by washing with water. When anthracite mining was common in eastern Pennsylvania, the mixture of water and waste resulting from processing was directed into retaining areas called silt dams or slush dams. Over the years the water evaporated, leaving a mixture of rock and fine coal particles. Devil's Hole and Hecla use bulldozers and front end loaders to recover the silt from silt dams. The product is then transported to one of Pennsylvania Power and Light Company's electric generators, where, mixed with other coal, it is used as a boiler fuel. Neither Devil's Hole nor Hecla paid any reclamation fees.

III.

Claiming that the operations of Devil's Hole and Hecla fall squarely within the definition of surface coal mining in 30 C.F.R. Sec. 870.5 (1983), the United States commenced this action to recover unpaid reclamation fees. Devil's Hole and Hecla defended on two grounds: that as a matter of fact anthracite silt is not coal; and that as a matter of law its operations are not surface coal mining.

(A) Anthracite Silt is Coal

The parties presented expert testimony on the question whether anthracite silt is coal. Stratton C. Schaeffer, a licensed professional engineer specializing in the evaluation and use of energy sources, testified that the Devil's Hole and Hecla operations were "second mining" or "bank mining". He also opined that based on its BTU and carbon content the anthracite silt is coal. Dr. Alan Davis, a Professor at Pennsylvania State University and Director of the Anthracite Division of the Coal Research Section, testified that anthracite silt which is less than 50% ash on a dry basis is coal of anthracite rank. The defendants' own witnesses established that the electric utility customer only accepted anthracite silt with a maximum ash content of 40%. Dr. Davis testified that under American Society for Testing and Materials Standard 888-77 material having the BTU and fixed carbon content of the defendants' anthracite silt is classified as anthracite coal. The trial court, crediting these witnesses, found as a fact that anthracite silt is coal. That finding of fact is not clearly erroneous. Indeed the only evidence to which Devil's Hole and Hecla point, suggesting a different factual conclusion is the evidence that the electric utility customer mixed the silt with other coal to sustain combustion. The court, crediting the testimony of the government's experts, found, however, that with sufficient heat for ignition, anthracite silt is combustible alone, but that Pennsylvania Power and Light Company does not have the technology to burn the silt safely alone. Unquestionably, therefore, Fed.R.Civ.P. 52(a) requires that we accept the trial court's finding that anthracite silt is coal.

(B) Defendants' Operations are Surface Mining

There is no factual dispute over what Devil's Hole and Hecla do. They recover what has been found to be coal from deposits that are not in their original position. Thus their operations fall squarely within the Secretary's definition of surface coal mining operations. They claim, however, that the trial court erred as a matter of law in accepting that definition because 1) the regulation was promulgated in 1982, after this suit was begun; and 2) it is inconsistent with Title IV of the Surface Mining Act.

We hold that the regulations promulgated by the Secretary are clearly consistent with the Act. Accord, United States v. H.G.D. & J. Co., 561 F.Supp. 315 (S.D.W.Va.1983) (dredging of coal sediment from river bottom deemed to be "surface mining" within the reclamation fee provisions). Cf., Marshall v. Stoudt's Ferry Preparation Co., 602 F.2d 589 (3d Cir.1979). Because congressional intent to assess a fee against operators such as Devil's Hole and Hecla is manifest, we need not determine whether the district court erred in relying on the regulations in interpreting the statute.

The district court's holding that the extraction of anthracite silt by Devil's Hole and Hecla is "surface coal mining" subject to an assessment under 30 U.S.C. Sec. 1232 was not based on the contested regulation alone: it was based on the language of the statute. Title VII of the Act defines "surface coal mining operations" to include "excavations, workings, impoundments, dams, ventilation shafts, entryways, refuse banks, dumps, stockpiles, overburden piles, spoil banks, culm banks,...." 30 U.S.C. Sec. 1291(28)(B). There is no doubt that appellant's activities fall within this definition. Devil's Hole and Hecla contend that this broad definition of "surface coal mining" should apply only to Title V of the Act, which is aimed at preventing environmentally undesirable side effects of present "surface coal mining operations." Title IV, which contains the fee assessment provision, refers to "surface coal mining," not "surface coal mining operations." We reject Devil's Hole and Hecla's argument that Congress intended the two phrases to carry distinct meanings. Congress did not provide a definition of "surface coal mining." It is difficult to believe that the drafters of the Act did not intend their definition of "surface coal mining operations" to apply to the fee assessment provision which states: "All operators of coal mining...