U.S. v. Troup

• Decision Date: 18 June 1987
• Docket Number: No. 86-1409,86-1409
• Citation: 821 F.2d 194
• Parties: , 17 Envtl. L. Rep. 20,907 UNITED STATES of America, Appellant, v. Warren TROUP, d.b.a. Warren Troup Coal Company, Appellee.
• Court: U.S. Court of Appeals — Third Circuit

Page 194

821 F.2d 194

26 ERC 1221, 17 Envtl. L. Rep. 20,907

UNITED STATES of America, Appellant, v. Warren TROUP, d.b.a. Warren Troup Coal Company, Appellee.

No. 86-1409.

United States Court of Appeals Third Circuit.

Argued Jan. 21, 1987.

Reassigned April 24, 1987.

Decided June 18, 1987.

F. Henry Habicht II, Asst. Atty. Gen., Edward S.G. Dennis, Jr., U.S. Atty., Edward T. Ellis, Asst. U.S. Atty., Philadelphia, Pa., Jacques B. Gelin, Maria A. Iizuka (argued), Dept. of Justice, Washington, D.C., for appellant.

Edward E. Kopko (argued), Law Office of James J. Curran, Pottsville, Pa., for appellee.

Before SEITZ, BECKER, MANSMANN, Circuit Judges.

OPINION OF THE COURT

SEITZ, Circuit Judge.

The United States appeals from the final judgment of the district court awarding it $19,526.80, which represents only 55% of the reclamation fees it sought against Warren Troup under Sec. 402(a) of the Surface Mining Control and Reclamation Act of 1977 (SMCRA), 30 U.S.C. Sec. 1232(a) (1982). We have jurisdiction under 28 U.S.C. Sec. 1291 (1982).

I.

Appellee Troup operates a surface coal mining business in the anthracite coal fields of Pennsylvania. Troup blasts large holes on the surface of abandoned mines and then excavates pillars of coal that remain from previous underground mining. The product that Troup removes, called "run-of-mine," contains coal, rock and other debris. Troup sells the run-of-mine material to an anthracite coal preparation plant called a breaker. The breaker crushes and cleans it and resells the processed product for a higher price.

The Surface Mining Control and Reclamation Act of 1977 (SMCRA) requires coal operators to pay the Secretary of the Interior "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...." 30 U.S.C. Sec. 1232(a). The moneys collected go into the Abandoned Mine Reclamation Fund and are used, among other things, to fund restoration of lands harmed by past coal mining activities. See 30 U.S.C. Sec. 1231(c)(1) (1982). Troup has never paid any reclamation fees.

In December 1984 the government filed a complaint in the Eastern District of Pennsylvania seeking to recover reclamation fees and interest due under the SMCRA. The government contended that the reclamation fee should be calculated on the total tonnage of the material Troup sold to the processor as mandated by the terms of a regulation adopted by the Secretary. The accuracy of the coal tonnage totals was stipulated by the parties. Troup agreed that a reclamation fee was due, but argued that a subtraction should be made for "the weight of rock, clay, dirt and other debris." ¹

In arriving at its award, the district court first found that the testimony of the government's expert witness established that the material mined by Troup was combustible and qualified as coal under standards set by the American Society for Testing and Materials (ASTM). The court, however, rejected the government's contention that Troup should pay reclamation fees on his product as mined. Instead, the court stated that its decision was mandated by United States v. Brook Contracting Corp., 759 F.2d 320 (3rd Cir.1985), ² which it read to require that reclamation fees may only be charged on material that is "(a) combustible; (b) qualifies as coal under ASTM standards; and (c) excludes the weight of rock, clay, dirt and other debris." United States v. Troup, No. 84-6079 (E.D.Pa. April 25, 1986) (unpublished bench opinion). The district court concluded that "the liability of Troup as the first seller should be limited to the amount of coal that is commercially useable by the ultimate user." Id. Accordingly, the court only found Troup liable for $19,526.80, which was 55% of what the government had sought. ³ This appeal followed.

II.

On appeal the government contends that in deciding that a reclamation fee may only be charged on the weight of the coal after it has been cleaned by the purchaser, the district court was invalidating a national regulation, which it did not have jurisdiction to do.

A preliminary issue must be addressed, i.e., whether the government's subject matter challenge to Troup's attack on the regulation may be entertained in view of our decision invalidating the regulation in Brook Contracting Corp. and our Internal Operating Procedures. Chapter 8C provides:

C. Policy of Avoiding Intra-Circuit Conflict of Precedent.

It is the tradition of this court that reported panel opinions are binding on subsequent panels. Thus, no subsequent panel overrules a published opinion of a previous panel. Court in banc consideration is required to overrule a published opinion of this court.

We note at the outset that no subject matter jurisdictional attack was either raised or addressed in Brook Contracting Corp. or, indeed, in Devil's Hole. Under these circumstances, is this panel free under our IOP to decide that jurisdictional issue? We have no doubt that we are, particularly in view of the fundamental importance of that factor in the federal court system. While our IOP serves the worthy purposes of providing legal stability and predictability, it cannot override a Congressional mandate as to subject matter jurisdiction, at least where the issue has not been directly confronted by our court.

Beyond any IOP constraint, the judicial reality is that if we speak without subject matter jurisdiction, our utterances are tainted precedent. As the Court said in Alabama Hospital Association v. United States, 656 F.2d 606 (U.S.Ct.Claims 1981), cert. denied, 456 U.S. 943, 102 S.Ct. 2006, 72 L.Ed.2d 465 (1982), in considering a related situation, "[A] lack of subject matter jurisdiction goes to the very power of a court to hear a controversy; ... [the] earlier case can be accorded no weight either as precedent or as law of the case."

If we lack subject matter jurisdiction to address the merits of the regulation and, nevertheless, consider the merits of Devil's Hole and Brook Contracting Corp., we could justifiably be accused of compounding dicta.

III.

We proceed, then, to address the government's contention that the district court lacked subject matter jurisdiction to decide that, despite Brook Contracting Corp., the national regulation here involved was unenforceable.

National regulations establishing procedures for computing reclamation fees under section 1232(a) were promulgated by the Secretary of the Interior in 1977:

(a) The operator shall pay a reclamation fee on each ton of coal produced for sale, transfer, or use, including the product of in situ mining.

(b) The fee shall be determined by the weight and value at the time of initial bona fide sale, transfer of ownership, or use by the operator.

30 C.F.R. Sec. 870.12 (1978). Because these regulations were interpreted inconsistently by local representatives of the Office of Surface Mining, and caused some confusion among coal mining operators, the Secretary proposed revised regulations in 1981. In order "to clarify the point in time of fee determination as well as the value and weight parameters for calculating reclamation fees," 47 Fed.Reg. 28574, 28577 (June 30, 1982), the following was added:

(3) The weight of each ton shall be determined by the actual gross weight of the coal.

(i) Impurities, including water, that have not been removed prior to the time of initial bona fide sale, transfer of ownership, or use by the operator shall not be deducted from the gross weight [emphasis in original].

30 C.F.R. Sec. 870.12(b)(3) (1986).

Judicial review of regulations promulgated under the SMCRA is provided for in 30 U.S.C. Sec. 1276(a)(1):

Any action by the Secretary promulgating national rules or regulations ... shall be subject to judicial review in the United States District Court for the District of Columbia Circuit. Any other action constituting rulemaking by the Secretary shall be subject to judicial review only by the United States District Court for the District in which the surface coal mining operation is located. Any action subject to judicial review under this subsection shall be affirmed unless the court concludes that such action is arbitrary, capricious, or otherwise inconsistent with law. A petition for review of any action subject to judicial review under this subsection shall be filed in the appropriate Court within sixty days from the date of such action, or after such date if the petition is based solely on grounds arising after the sixtieth day.

Although this case was originally brought by the government as a collection action, Troup's defense that he need only pay reclamation fees on the weight of the coal after it has been cleaned by the breaker runs directly counter to promulgated regulations. In effect, Troup is challenging those regulations that specifically provide that "impurities ... that have not been removed prior to the time of initial bona fide sale ... shall not be deducted from the gross weight" subject to the reclamation fee. See 30 C.F.R. Sec. 870.12(b)(3). Although Troup argued in his brief that his case did not involve a judicial review of the regulations, but rather an interpretation of the word "coal" as used in the Act and regulations, his counsel conceded at oral argument that he was in fact attacking these regulations.

We find Troup's attack on the regulation to be the type of challenge to national regulations contemplated by the jurisdictional statute, 30 U.S.C. Sec. 1276(a)(1). Cf. UGI Corp. v. Watt, 644 F.Supp. 16 (M.D.Pa.1985) (plaintiffs' argument that they should pay any interest due on reclamation fees at the legal rate recognized in Pennsylvania was actually a regulatory challenge since there were federal regulations delineating exactly what the interest rate should be, see 30 C.F.R. Sec. 870.15(c)). Our conclusion is not affected by the fact that Troup's challenge arose as a defense to a collection action.

Under section 1276(a)(1), jurisdiction to rule on...