has failed to provide the necessary "reasoned analysis." Motor Vehicles, 463 U.S. at 42.
Based on the record before the Court, there is little evidence to support the claim that the 1982 regulations represented a change in OSM policy on the national level. In the preamble to the 1977 regulations, discussed at length, supra, OSM clearly stated that the reclamation fee would be based on the gross weight of the coal in its current condition -- with or without impurities -- at the time of initial sale, transference, or use. Subsequent policy explanations released between 1978 and 1980 were largely consistent with this basic position. See e.g. Solicitor's Opinion of Apr. 17, 1980, cited in Drummond's Supp. to Admin. Record, Attachment 3 at 3 (discussed supra, Part III A 2). No official statement dealing with OSM's national policy may be found to the contrary in the administrative record.
OSM's practice and policy at the local level, however, is more complicated. According to the Secretary, only 12 of approximately 6000 coal operators nationwide claimed a moisture deduction. Defendant's Mem. at 4. Of those who claimed deductions, all but one were located in Region II. Affidavit of Jane S. Robinson, Secretary's Record Supp., Exh. E.
The Secretary cannot be bound, the defendant argues, by the action of maverick officials in Region II.
Drummond correctly points out that the 1981 Inspector General's report, drafted for the Assistant Secretary of the Interior and the Associate Solicitor, however, specifically found that "the  regulations concerning reclamation for computations are subject to various interpretations" and that "as a result, the regulations have not been applied consistently by both the coal industry and OSM fee compliance personnel. . . ." Secretary's Record Supp., Exh. A at 10. See also Drummond's Supp. to Admin. Record, Attachment 1 at 4. Other reports drafted by OSM personnel concede that "OSM has never disallowed . . . a deduction [for excess moisture]; we simply never gave it to anyone who did not ask for it." Drummond's Supp. to Admin. Record, Attachment 3 at 4. It is Drummond's position that the defendant's admitted failure to deny a single request for a deduction amounted to a prior practice or policy to permit deductions when asked. Insofar as the 1982 regulations altered this "prior policy", without justification, Drummond concludes, the Secretary's decision to issue the revised regulations was arbitrary and capricious.
Drummond's argument is flawed in several respects. First, on the basis of the record here it is difficult to conclude that OSM knowingly and deliberately altered a prior practice. All but one of the excess moisture deductions were authorized by fee compliance officers in a single region -- Region II. There is no indication that either senior OSM officials or the Secretary's Office learned that the deductions had been authorized for Alabama operators by the Region II Compliance Chief until well into 1981 when Steven Griles, Deputy Director of OSM, requested W. Hord Tipton, Acting Regional Director of Region II, to investigate the treatment of moisture deductions in Region II. See Drummond Supp. to Admin. Record, Attachment 2, Tipton letter of Aug. 6, 1981, at 1. Upon learning of Region II's policy and discovering general uncertainty over the proper interpretation of the 1977 regulations, OSM moved quickly to correct Region II's deviation and clarify the regulations. In short, once OSM was made aware of the problem, remedial action was taken relatively promptly. The record does not support the conclusion that senior OSM officials in Washington knowingly endorsed a policy of permitting moisture deductions.
Indeed, as a matter of law, the activities of insubordinates or misinformed government officials generally will not bind the government. See Federal Crop Ins. v. Merrill, 332 U.S. 380, 384, 92 L. Ed. 10, 68 S. Ct. 1 (1947) ("anyone entering into an arrangement with the Government takes the risk of having accurately ascertained that he who purports to act for the Government stays within the bounds of his authority"); Schweiker v. Hansen, 450 U.S. 785, 67 L. Ed. 2d 685, 101 S. Ct. 1468 (1981) (government not estopped from enforcing regulation where social security claimant given erroneous information by government field representative); cf. Boggs v. Regan, Civil Action No. 79-1090 (D.D.C., decided Sept. 18, 1981) (Hansen distinguished on grounds that plaintiffs made "every effort to obtain information from all sources including the responsible decisionmakers." Slip op. at 5 (emphasis added)). In this instance, therefore, the activities of OSM officials in Region II can not properly be attributed to the Secretary. Because Drummond and the other Alabama operators who requested moisture deductions did not seek advice from the highest levels of OSM, they were in effect charged under the law with knowledge of the proper meaning and intent of the 1977 regulations. Viewed from this perspective, it is difficult to find that OSM ever altered its practice, for without knowledge or legal responsibility for Region II's activities the Secretary could not have authorized excess moisture deductions.
Yet, even if Region II's activities can be attributed to the higher levels of OSM, Drummond's argument remains flawed for a second reason. In cases where a reasoned justification for a policy change has been required, the agency involved made a distinct and decisive break from an affirmatively established rule or regulation. See, e.g., Motor Vehicles (rescinding an agency rule requires reasoned justification); Farmers Union Central Exchange, Inc. v. FERC, 236 U.S. App. D.C. 203, 734 F.2d 1486 (D.C. Cir. 1984) (agency decision to return to old ICC rate base requires reasoned justification).
In this case, however, there is no distinct, affirmative policy from which the 1982 regulations may be said to have deviated. OSM concedes that it never denied a deduction when requested, but it is also apparent that OSM never asserted in regulations, comments, or policy statements, that moisture deductions were permissible. Indeed, all of OSM's official pronouncements implied the opposite. In short, the lack of a consistent practice at the local level argues not for the conclusion that OSM had a prior practice different from that required by the 1982 revised regulations, but rather that OSM had no real policy at all at the local level.
Third and finally, even if the actions of OSM officials in Region II can be held to constitute a "prior practice" that may be imputed to the Secretary, the promulgation of the 1982 regulations represented a legitimate, justifiable response to the "demands of changing circumstances." Permian Basin, 390 U.S. 747, 20 L. Ed. 2d 312, 88 S. Ct. 1344 (1968). It is clear from the record that the confusion which developed in Alabama over the 1977 regulations represented an unexpected but serious threat to the Abandoned Mine Reclamation Fund Program. Given the broad, remedial purposes of the Act, the need to insure continued funding for the program, and Congress' clear intent to establish an administratively enforceable regulatory scheme that would not be based on a BTU or impurities-credit fee system, it was not unreasonable for OSM to promulgate new regulations designed to clarify the old. All of these reasons for the 1982 revisions -- discussed at length supra -- are contained in the administrative record. See Inspector General's Report, Secretary's Record Supp., Exh. A; Drummond's Supp. to Admin. Record, Attachments 1, 3.
After a "careful and searching inquiry into the record . . . to assure itself that the agency has examined the relevant data and articulated a reasoned explanation for its action," Farmers Unions, 734 F.2d at 1499, the Court concludes that a rational connection exists between "the facts found and the choice made." Burlington Truck Lines v. United States, 371 U.S. 156, 168, 9 L. Ed. 2d 207, 83 S. Ct. 239 (1962).
Because the revised regulations are consistent with the plain language and purpose of the SMCRA, and because the challenged regulations do not constitute a change from a prior administrative policy or practice, the Secretary's interpretation of the SMCRA and the 1977 regulations is entitled to broad deference. Based on this record, the plaintiff has not met its burden of establishing that the challenged agency action was arbitrary and capricious.
Accordingly, for the reasons set forth above, summary judgment must be granted in favor of the defendant. A separate Judgment accompanies this Memorandum Opinion and Order.
For the reasons set forth in the accompanying Memorandum Opinion, judgment is hereby entered in favor of defendant Donald P. Hodel, Secretary of the Interior, and against plaintiff Drummond Coal Company.