Western Fuels-Utah, Inc. v. Lujan, FUELS-UTA
| Decision Date | 09 February 1990 |
| Docket Number | Nos. 88-5417,INC,FUELS-UTA,s. 88-5417 |
| Citation | 895 F.2d 780 |
| Parties | WESTERN, Appellant, v. Manuel LUJAN, Jr., Secretary of the United States Department of the Interior, Appellee. PEABODY COAL COMPANY, et al., Appellants, v. Manuel LUJAN, Jr., Secretary of the United States Department of the Interior, Appellee. COLOWYO COAL COMPANY, Appellant, v. Manuel LUJAN, Jr., Secretary of the United States Department of the Interior, Appellee. through 88-5419. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
John F. Shepherd, Denver, Colo., with whom Kenneth D. Hubbard, Washington, D.C., for Peabody Coal Co., et al., Charles L. Kaiser, Denver, Colo., and Thomas P. Humphrey, Washington, D.C., for Colowyo Coal Co. were on the joint brief for appellants, in Nos. 88-5418 and 88-5419.
Charles F. Holum, Denver, Colo., with whom Edward Weinberg, Washington, D.C., was on the brief for appellant, Western Fuels-Utah, Inc. in No. 88-5417.
Jean A. Kingrey, Atty., Dept. of Justice, with whom Richard B. Stewart, Asst. Atty. Gen. and Robert L. Klarquist, Atty., Dept. of Justice, Washington, D.C., were on the brief for appellee in all cases.
William L. Slover and John H. LeSeur for City of Colorado Springs, Colo., and Central Power & Light Co., Kenneth G. Lee, Washington, D.C., for Colorado-Ute Electric Ass'n, Inc., were on the joint brief for amici curiae urging reversal in all cases.
John R. McNeill and J. David Reed, Montrose, Colo., also entered appearances for amici curiae, Colorado-Ute Elec. Ass'n, Inc., in No. 88-5419.
Before WALD, Chief Judge, and EDWARDS and D.H. GINSBURG, Circuit Judges.
Opinion for the Court filed by Chief Judge WALD.
The appellants in these consolidated cases hold leases granting them the right to mine coal on federal lands. They seek review of the district court's decision upholding the Bureau of Land Management's ("BLM") readjustments of their leases. The appellants challenge first the BLM's decision that it was compelled to apply the Federal Coal Leasing Amendments Act of 1976 ("FCLAA") to their leases, even though the leases were issued before 1976, and claim further that if the BLM has correctly interpreted FCLAA to apply to their leases, then the statute is unconstitutional. The appellants also challenge the timeliness of the lease readjustments. We affirm the district court's judgment sustaining the lease readjustments against all of these claims.
The Mineral Lands Leasing Act of 1920 ("MLLA"), 41 Stat. 437 (1920) (), authorized the Secretary of the Interior to lease federal lands for coal production. The Act dictated certain mandatory provisions to be included in the leases it authorized; in particular, it required that each lease provide for payment by the lessee of a royalty of not less than five cents per ton of coal extracted. Sec. 7, 41 Stat. at 439. The Act provided that the term of a coal mining lease would be indeterminate, upon condition of diligent development and continued operation of the mine, and upon the further condition that "at the end of each twenty-year period succeeding the date of the lease such readjustment of terms and conditions may be made as the Secretary of the Interior may determine, unless otherwise provided by law at the time of the expiration of such periods." Id.
In 1976, Congress enacted the Federal Coal Leasing Amendments Act of 1976, 90 Stat. 1083 (1976) (). Among the several concerns that led Congress to amend the MLLA was the low royalty lessees were paying for publicly owned coal. See H.R.Rep. No. 681, 94th Cong., 2d Sess. 17, reprinted in 1976 U.S.Code Cong. & Admin.News 1943, 1953 [hereinafter 1976 House Report] ("the public is being paid a pittance for its coal resources"). Accordingly, Congress amended Sec. 7 of the MLLA, 30 U.S.C. Sec. 207, to provide:
A coal lease shall be for a term of twenty years and for so long thereafter as coal is produced annually in commercial quantities from that lease.... A lease shall require payment of a royalty in such amount as the Secretary shall determine of not less than 12 1/2 per centum of the value of coal as defined by regulation, except the Secretary may determine a lesser amount in the case of coal recovered by underground mining operations. The lease shall include such other terms and conditions as the Secretary shall determine. Such rentals and royalties and other terms and conditions of the lease will be subject to readjustment at the end of its primary term of twenty years and at the end of each ten-year period thereafter if the lease is extended.
The appellants, Peabody Coal Company ("Peabody"), Colowyo Coal Company ("Colowyo"), and Western Fuels-Utah, Inc. ("Western Fuels"), are holders of federal coal leases issued before 1976. Each lease, in accordance with the MLLA, contained a clause reserving to the lessor a right of readjustment at twenty-year intervals. These clauses did not precisely track the words of the statute; they provided that the lessor reserved:
[t]he right reasonably to readjust and fix royalties payable hereunder and other terms and conditions at the end of 20 years from the date hereof and thereafter at the end of each succeeding 20-year period during the continuance of this lease unless otherwise provided by law at the time of the expiration of any such period.
See Joint Appendix ("J.A.") 12, 36, 41, 75, 203. 1
As the leases came due for their twenty-year readjustments after 1976, the Secretary, acting through the BLM, readjusted them to provide for payment of the 12.5% royalty fixed in Sec. 207 (), and also to provide that their subsequent readjustments would take place at ten-year intervals. The BLM expressly stated at the time of these readjustments (and continues to maintain on this appeal) that it used the 12.5% royalty figure because Sec. 207 required it to do so. See, e.g., J.A. 26; Brief for Appellee at 21-22. The lessees, except Western Fuels, objected to the 12.5% royalty, but the BLM overruled these objections.
The lessees also objected to the timeliness of the procedure by which the BLM readjusted their leases. At the time of the lease readjustments in question, the BLM used a four-step process to readjust coal leases. The first step was that the BLM sent the lessee a Notice of Intent to Readjust the Lease ("NIRL"). 2 This notice, a one-page letter, stated the date on which the lease became subject to readjustment; it also stated that the lease would be readjusted, and that the readjusted terms and conditions would be sent to the lessee within two years of the date of the NIRL. See, e.g., J.A. 49. The second step was that the BLM sent the lessee the proposed readjusted terms and conditions of the lease. The third step was that the lessee could file objections to the proposed terms with the BLM. The last step was the BLM's ruling on the lessee's objections and imposition of the readjusted lease.
In all of the lease readjustments at issue, the BLM sent the lessee a NIRL prior to the lease's twenty-year anniversary date. The lease readjustment process, however, was not completed before the anniversary date in all of the cases. In the case of Western Fuels' lease, the BLM did not send the proposed readjusted terms until after the anniversary date. In all of the other cases, the BLM sent the NIRL and the proposed readjusted terms before the anniversary date, but with regard to some of the leases, the BLM did not rule on the lessee's objections to the proposed readjusted terms until after the anniversary date. In all the cases, the BLM sent the proposed readjusted terms within the period specified in the NIRL.
The lessees all appealed their readjustments within the Department of the Interior to the Interior Board of Land Appeals ("IBLA"), which upheld the mandatory application of Sec. 207 to pre-1976 leases, 3 and found the lease readjustments to be timely. The lessees sought review of the IBLA decisions in district court, which consolidated the cases and granted the Secretary's motion for summary judgment in all of them. The lessees then brought the instant appeals.
In deciding whether to uphold the BLM's decision to apply Sec. 207 to pre-1976 leases, we begin by identifying the precise question at issue, and determining whether Congress has directly spoken to that question. If the intent of Congress with respect to the precise question at issue is clear, we must give it effect. Chevron, U.S.A., Inc. v. NRDC, 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984). In determining the intent of Congress, we must look to "the particular statutory language at issue, as well as the language and design of the statute as a whole," K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 108 S.Ct. 1811, 1817, 100 L.Ed.2d 313 (1988), and we must employ traditional tools of statutory construction, including, where appropriate, legislative history. Ohio v. United States Department of the Interior, 880 F.2d 432, 441 (D.C.Cir.1989).
In the present cases, the question at issue is whether the mandatory lease terms provided in Sec. 207 apply to pre-1976 leases when they come up for readjustment after 1976. The text of Sec. 207 itself does not clearly answer that question. As amended by FCLAA, 30 U.S.C. Sec. 207 now provides in mandatory terms for a 12.5% royalty on coal leases. It does not, however, expressly provide that this royalty shall be imposed on pre-1976 leases; nor, on the other hand, does it expressly grandfather such leases from the imposition of this royalty.
The appellants claim that the absence of an express reference to pre-1976 leases in Sec. 207 implies that such leases are...
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