§ 23.5(a)(2)(b). After the issuance of the permit or lease but before any prospecting or mining could commence, an exploration or mining plan was to be approved by defendants. 43 C.F.R. §§ 23.7 and 23.8. Significantly, the Secretary maintained and continues to maintain that the regulations allow him to reject the mining plan if it is found to be environmentally unsatisfactory or unacceptable. 43 C.F.R. § 23.8(a)(1).
The effect of these regulations was to guarantee that after 1969 no new prospecting permits would be issued without consideration being given to the environment.
More importantly, after 1969 all preference right lease applications, regardless of the date of issuance of the underlying permit, would be subject to an environmental scrutiny which would first determine the setting of lease terms to mitigate against environmental damage and later affect the decision whether to approve the proposed mining plan.
By order # 2952 dated February 13, 1973, the Secretary announced a moratorium on the issuance of any prospecting permits for coal pursuant to the 1920 Act until further notice. All pending applications for such permits would be rejected "in order to allow the preparation of a program for the more orderly development of coal resources upon the public lands . . . with proper regard for the protection of the environment." Accordingly, since February 13, 1973, no new prospecting permits have been issued.
This moratorium did not apply to, or restrict the rights of, holders of outstanding prospecting permits to obtain preference right coal leases. Defendants' policy of conditioning acceptance or rejection of a preference right lease application solely upon a discovery of coal in commercial quantities remained unchanged.
On May 6, 1976, in conjunction with the implementation of a comprehensive new coal leasing policy, defendants issued regulations which redefined the statutory terms "commercial quantities" and substantially altered the procedures for obtaining preference right leases.
The new regulations state that a person has found coal in commercial quantities when the deposit is ". . . of such a character and quantity that a prudent person would be justified in the further expenditure of his labor and means with a reasonable prospect of success in developing a valuable mine." 43 C.F.R. § 3520.1-1(c). The permittee must present evidence which shows that he reasonably expects his revenues to exceed his development and operating costs. Under the new regulations, however, these development and operating costs will include the cost of "complying with existing governmental regulations, reclamation and environmental standards, and proposed lease terms." 43 C.F.R. § 3521.1-1(c)(2)(vi).
The evidence which the permittee must submit as part of his commercial quantities test consists of both an "initial showing" and a "final showing." The permittee must make an "initial showing" describing in his preference right lease application both the proposed mining operations and the measures to be taken for reclamation and protection of the environment. 43 C.F.R. § 3521.1-1(b). Defendants next conduct a "technical examination and environmental analysis" which includes an analysis of the environmental impact of the proposed mining operations. 43 C.F.R. § 3521-4. Drawing on information contained in the technical examination and environmental analysis, the defendants then determine lease terms which may include rentals and royalty payments as well as conditions for mitigation of environmental damage. The mitigating lease terms are those required by related surface management regulations,
or more stringent terms may be set at the discretion of the Secretary. 43 C.F.R. § 3521.1-5(a). These proposed lease terms are reported to the permittee in the "technical examination and environmental analysis report." After receipt of the report, the permittee presents his final showing and submits a comparison of the estimates of his revenues and costs, including the costs of complying with applicable statutes, regulations and lease terms. 43 C.F.R. § 3521.1-1(c). If the estimates are based on a reasonable factual basis and support the permittee's assertion that he has found coal in commercial quantities, the Secretary will issue the lease. The requirement that the lessee later submit a mining plan continues in expanded form under 43 C.F.R. § 3041.
Defendants admit that under these regulations, if there is a major federal action, an EIS might be required on the proposed lease terms prior to the issuance of the lease and on the approval of a mining plan after the issuance of the lease. These regulations do not, however, alter the Department's unbroken interpretation of the Mineral Leasing Act, that upon a finding of commercial quantities, the Secretary has no discretion to reject the lease.
Therefore, defendants will not prepare an EIS on the issuance of the lease, whether or not such issuance is a major federal action significantly affecting the environment.
II. Federal Coal Management Facts Concerning Outstanding Prospecting Permits and Preference Right Lease Applications
For 40 years following the passage of the Mineral Leasing Act in 1920, the federal coal leasing program was relatively small. After 1960, however, there was an enormous surge in the issuance of federal coal prospecting permits and leases, as industrial and speculative interest in federal coal deposits boomed. Sixty-four percent of all outstanding federal coal leases were issued between 1960 and 1970. As a result, in 1970, there were nearly four times the number of acres under lease as there had been in 1960. The experience with prospecting permits was the same. Of 183 prospecting permits, which have matured into preference right lease applications, 90 were issued between February 1, 1965 and January 1, 1972.
Although the Department of Interior has not compiled figures to show the amount of land in the United States covered by currently outstanding prospecting permits and preference right lease applications, partial figures demonstrate that as of October 1974, in six western states, at least 496,000 acres containing some 12 billion tons of coal were subject to 183 preference right lease applications.
Much of this coal is minable by strip and surface mining methods. Defendants state in their papers that many of the permits upon which these applications are based were issued without the type of environmental scrutiny that would be standard today,
and some of these lease applications may cover leases where mining will not be acceptable.
While not all leases issued in the past have resulted in active coal mining operations, in 1976 Congress amended the Mineral Leasing Act to require lessees to diligently develop mining operations upon penalty of forfeiture. 30 U.S.C. § 207(a) as amended by Pub.L. 94-377. Approval of preference right lease applications, therefore, could potentially result in coal mining activities being undertaken on hundreds of thousands of acres of federal and private lands. Such mining operations could have an adverse environmental impact on the land containing federal coal deposits and on surrounding acreage.
Plaintiffs are two associations suing on behalf of their members, a "considerable number" of whom "use and enjoy the land, air, water, historic, archeological and aesthetic resources of the public lands administered by the defendants herein, some of which are subject to preference right coal lease applications."
Other members of the two associations "live in geographical areas which may be adversely affected by the development and urbanization attendant to the mining of federal coal lands pursuant to preference right coal leases."
These uncontroverted factual statements by the respective heads of NRDC and EDF are sufficient to support standing to sue. Sierra Club et al. v. Andrus, 189 U.S.App.D.C. 117, 581 F.2d 895, 899 (1978); Sierra Club v. Morton, 169 U.S.App.D.C. 20, 24, 514 F.2d 856, 870 n.20 (1975).
II. Ripeness and Case or Controversy
Defendants, in their initial motion for summary judgment, on August 25, 1975, urge the Court to dismiss the case because it is not ripe for decision. According to defendants, the record "plainly establishes" that the phrase "shall be entitled" in § 201(b) has not been defined by rule or regulation. The Secretary, however, affirmatively stated in a letter to plaintiffs that it is the consistent policy of the Department to interpret § 201(b) as mandating issuance of a preference right coal lease upon a showing that the coal exists in commercial quantities. The interpretation of § 201(b) embodied in defendant Berklund's letter of January 13, 1975, is reviewable final agency action. Abbott Laboratories v. Gardner, 387 U.S. 136, 87 S. Ct. 1507, 18 L. Ed. 2d 681 (1967); National Automatic Laundry & Cleaning Council v. Shultz, 143 U.S.App.D.C. 274, 443 F.2d 689 (1971).
Defendants' related argument that there is no present case or controversy and plaintiffs are seeking, in reality, an advisory opinion must also fail. Defendants in their memorandum dated January 17, 1977 adequately state the reasons why this case is ripe for adjudication: "The proposition that the Secretary has discretion to deny a lease notwithstanding a permittee's showing of coal in "commercial quantities' constitutes the central theme of plaintiffs' argument . . . It is no less clear that defendants deny the existence of such discretionary authority in the Secretary. If the Court does not rule clearly and unequivocally that the Secretary has, or does not have, the discretion envisioned by plaintiffs, it will have failed to resolve the one point of dispute which clearly exists between plaintiffs and defendants."
III. Amount in Controversy
In determining the amount in controversy, the United States Court of Appeals for the District of Columbia looks to "the pecuniary result to either party which the judgment would produce." Gomez v. Wilson, 155 U.S.App.D.C. 242, 251, 477 F.2d 411, 420, n.53 (1973). In light of the cost to the United States in preparing impact statements, and in losing income from coal lease contracts which otherwise would have been entered into, it is difficult to understand why defendants have even attempted to raise this issue. Since the results of a judgment favorable to plaintiffs could result in a cost to defendants exceeding $ 10,000, the Court finds that the jurisdictional amount requirement has been satisfied.
IV. Indispensable Parties
The parties agree that at least 183 applicants for preference right coal leases will be affected in some way by a judgment. The defendants press the Court to dismiss for failure to join these applicants as indispensable parties under Rule 19, Fed.R.Civ.P. While plaintiffs make no showing or representation, it can be assumed that these applicants reside in a multitude of states and cannot feasibly be joined in any one district. To require dismissal of this action which seeks to enforce what are essentially public rights, based upon a failure to join indispensable parties, would effectively preclude such litigation against the government. Rule 19 was not intended to cause such a result, and courts have not permitted it to do so.
The Supreme Court has long recognized the inapplicability of the term " "indispensable party' to adjudications of public, not private rights." National Licorice Co. v. NLRB, 309 U.S. 350, 60 S. Ct. 569, 84 L. Ed. 799 (1940). In that case, the Court held that when litigation seeks the vindication of a public right, third persons who may be adversely affected by a decision favorable to the plaintiff do not thereby become indispensable parties. The instant case presents a situation somewhere between purely private and public litigation, since the plaintiffs, private litigants, are seeking to vindicate the public rights embodied in NEPA. Such litigation would fall within the National Licorice rule, and other courts have so held. See Kirkland v. New York State Dept. of Correctional Serv., 520 F.2d 420, 424 (2d Cir. 1975); State of Delaware v. Bender, 370 F. Supp. 1193, 1197-98 (D.Del.1974). The 183 preference lease applicants are, therefore, not indispensable parties within the scope of Rule 19, and their absence does not defeat the Court's jurisdiction to decide the issues before it.
I. Does Either the Mineral Leasing Act of 1920 or NEPA Give the Secretary Discretion to Reject a Preference Right Coal Lease Application on Purely Environmental Grounds?
Plaintiffs contend that the Secretary has discretion under 30 U.S.C. § 201(b) and NEPA to reject a preference right lease application on purely environmental grounds. They rest their contention primarily on two premises. First, the language of the Mineral Leasing Act authorizes rejection and, second, NEPA requires that the Mineral Leasing Act be interpreted to further NEPA's broad policies of environmental protection.
An analysis of the language in §§ 201(a) and 201(b) does not support plaintiffs' statutory interpretation. Under § 201(a), where lands are known to contain coal deposits, the Secretary "shall, in his discretion," offer the lands for lease by competitive bidding "or by such other methods as he may by general regulations adopt." If, however, the existence or workability of deposits is unknown, under § 201(b) the Secretary "May issue" prospecting permits. If the permittee then makes a showing that the land contains commercial quantities, the permittee " Shall be entitled" to a lease. The language "shall be entitled" could not be clearer, and on its face it obligates the Secretary to issue a coal lease to the permittee.
Plaintiffs argue that the § 201(b) procedure must be interpreted as one of the "other methods" open to the Secretary under § 201(a) for issuance of leases. This would inject the discretion granted the Secretary by § 201(a) into the procedure of § 201(b), thereby requiring him to comply with NEPA when proceeding under § 201(b). Plaintiffs' interpretation is incorrect. The other methods referred to in § 201(a) are those to be adopted by the Secretary by regulation, not those methods already provided for by the statute.
Plaintiffs next point to the legislative history, which they claim implies a different meaning. The House Report states that § 201(b) was intended:
"to encourage the prospecting of undiscovered coal deposits and to reward the prospector by giving him a preferential right to a lease of the area covered by his permit." H.R.No.398, 66th Cong., 1st Sess. 12 (1919).
Use of the word "preferential," according to plaintiffs, demonstrates that Congress intended only that the prospecting permittee be given a right of first refusal if the Secretary decided to lease the land at all.
The word "preferential" was not used in § 201(b), and in the absence of anything more, this would raise an ambiguity. However, Congress was aware of the difference between the phrases "preference right" and "shall be entitled," for it expressly granted "preference rights" to at least three other groups under different sections of the Mineral Leasing Act. See § 193a (granting "preference right" to United States to purchase products mined under the Act); § 229 (granting "preference right" to a permit or lease of mineral rights to entrymen or patentees of land entered and patented for agricultural purposes prior to the Act); § 262 (granting "preference right" to lessee of sodium rights to land to renew lease for successive periods of ten years). On the other hand, with the exception of oil and gas leases, Congress stated that prospecting permittees of other minerals "shall be entitled" to a lease of part or all of the lands prospected upon a showing of "commercial quantities" or "valuable deposits." See §§ 201(b) (coal), 211(b) (phosphates), 262 (sodium), 272 (sulphur), 282 (potash). The House Report did not intend to use "preferential right" as a term of art, and the weight accorded its use by plaintiffs must be rejected.
Plaintiffs also rely on Udall v. Tallman, 380 U.S. 1, 4, 85 S. Ct. 792, 13 L. Ed. 2d 616 (1965) and Duesing v. Udall, 121 U.S.App.D.C. 370, 350 F.2d 748 (1965), Cert. denied, 383 U.S. 912, 86 S. Ct. 888, 15 L. Ed. 2d 667 (1966), which interpret § 226 of the Act pertaining to issuance of oil and gas leases to grant discretion to the Secretary to lease or not to lease. Section 226 is not identical to §§ 201(a) and (b), however. Section 226(a) states that the Secretary "may" lease all lands "known Or believed to contain oil or gas deposits." Section 226(b), then, requires that land within a known producing oil or gas field shall be leased to the highest bidder, and § 226(c) requires that land not within a known producing oil or gas field shall be leased to the first qualified lease applicant. Both §§ 226(b) and (c) are subject to § 226(a), which grants general discretion to the Secretary to lease known oil and gas fields or land believed to be an oil and gas field, and the Court of Appeals so held. Id. at 750.
Not only is there a difference in the statutory language between these two sections of the Mineral Leasing Act, but the interpretation of the gas and oil provisions in Udall v. Tallman, supra, is inapplicable to coal preference right leases for two additional reasons. First, an oil and gas applicant does no more than file an application. Congress, therefore, did not need to reward him, as it did the coal permittee, for his effort in discovering a previously undiscovered mineral. Second, there is no opportunity for the Secretary to exercise his discretion whether to release certain lands prior to an application for an oil or gas lease. In contrast, under the provisions pertaining to coal preference right leases, the Secretary exercises discretion and considers the public interest prior to issuing prospecting permits.
Furthermore, Udall v. Tallman, supra, requires this Court to respect an agency's interpretation of its statutory discretion. See Brannan v. Stark, 87 U.S.App.D.C. 388, 185 F.2d 871 (1950), Aff'd, 342 U.S. 451, 72 S. Ct. 433, 96 L. Ed. 497 (1951). Since the enactment of the Mineral Leasing Act in 1920, the Department has never wavered in its interpretation of the mandatory language of § 201(b).
Given the unequivocal statutory language and the supporting legislative history, as well as 58 years of consistent agency statutory interpretation and application, the court finds that "shall" does in fact mean "shall" and does not permit the Secretary to reject preference right coal leases on purely environmental grounds.
Alternatively, plaintiffs contend that the intent of § 201(b) is unclear and NEPA requires the Secretary to interpret his statutory mandate in accord with NEPA's broad environmental goals. The Court, however, finds nothing ambiguous in the words "shall be entitled"; the language is a clear mandate to the Secretary to award a preference right lease to a permittee who has made the requisite statutory showing. The question becomes, then, does NEPA require that the Secretary exercise discretion to reject a preference right lease on purely environmental grounds in violation of his express statutory obligation?
NEPA represents the most comprehensive legislative attempt yet to render the federal government responsive to broad environmental needs and considerations. Recognizing "the profound impact of man's activity on the interrelations of all components of the natural environment," including "resource exploitation", and further recognizing "the critical importance of restoring and maintaining environmental quality to the overall welfare and development of man," Congress has required all federal agencies to administer their programs in accordance with the policies of NEPA. 42 U.S.C. §§ 4331, 4332. To this end, Congress directed that:
"To the fullest extent possible : (1) the policies, regulations and public laws of the United States should be Interpreted And Administered in accordance with the policies (of NEPA) . . ." (emphasis supplied). 42 U.S.C. § 4332.
A federal official, however, need not comply with NEPA where to do so would violate a statutory obligation. Legislative history indicates that compliance is mandated "unless the existing law applicable to such agency's operations expressly prohibits or makes full compliance with one of the directives impossible." Conf.Rept. 91-765, 91st Cong., 1st Sess., Reprinted in (1969) U.S.Code Cong. & Admin.News, pp. 2767, 2770. In the Statement accompanying and made part of the Conference Report, the conferees observed that compliance was required "unless to do so would clearly violate . . . existing statutory authorizations." 115 Cong.Rec. 39703 (1969). Finally, the guidelines of the Council on Environmental Quality set forth that NEPA supplements existing obligations "unless existing law applicable to the agency's operations expressly prohibits or makes compliance impossible." 40 C.F.R. § 1500.4.
Moreover, in Flint Ridge Dev. Co. v. Scenic Rivers Ass'n of Oklahoma, 426 U.S. 776, 788, 96 S. Ct. 2430, 2438, 49 L. Ed. 2d 205 (1976), the Supreme Court held:
"Section 102 of (of NEPA) recognizes, however, that where a clear and unavoidable conflict in statutory authority exists, NEPA must give way. As we noted in United States v. SCRAP, 412 U.S. 669 (93 S. Ct. 2405, 2419, 37 L. Ed. 2d 254), "NEPA was not intended to repeal by implication any other statute.' "