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NATIONAL COAL ASSN. v. HODEL

August 28, 1985

NATIONAL COAL ASSOCIATION, ET AL., Plaintiffs
v.
DONALD P. HODEL, ET AL., Defendants



The opinion of the court was delivered by: GREENE

 This case of first impression concerns the power of the Secretary of the Interior to engage in and approve land exchanges containing coal reserves where the exchange may, at least in part, benefit common carrier railroads. Ultimately, the decision turns, as do so many others in other contexts, on the meaning of the ubiquitous yet elusive phrase "the public interest." The issues are complicated by the fact that the exchanges are sought by three kinds of entities -- Princeton University and other eleemosynary institutions; the subsidiary of a railroad empire; and the National Park Service. Opposed to the exchanges are coal mining interests.

 I

 Plaintiffs, which are trade associations representing coal mine operators who collectively produce most of the coal mined annually in the United States, brought this action challenging a determination of the Secretary of the Interior issued in 1983 that the so-called "Corral Canyon" land exchange was in the "public interest" and therefore permissible under section 206 of the Federal Land Policy and Management Act of 1976 (FLPMA). *fn1" They seek an order (1) enjoining the Secretary and private defendant Rocky Mountain Energy Company to rescind the land exchange, and (2) declaring the Secretary's interpretation and application of section 206 to be contrary to law and invalid. Defendants have moved to dismiss or for summary judgment; plaintiffs have opposed defendants' motions and have cross-moved for summary judgment. After carefully considering the claims asserted by plaintiffs, and the papers and oral arguments submitted by the parties, the Court concludes that plaintiffs' claims lack merit, and it will accordingly grant defendants' motions and order the case dismissed.

 II

 The material facts are not in dispute. The land exchange challenged in this litigation was part of a three-way land swap arranged by Princeton University. During the years 1980 to 1982, Princeton received a series of charitable donations of privately owned lands located within the confines of Grand Teton National Park in the State of Wyoming. Seeking to convert this gift of real property into cash, Princeton offered to sell the land to the National Park Service, which had acquired similar tracts in the past to protect Grand Teton Park against commercial development. The Park Service responded that lack of funds for new parkland purchases precluded it from accepting Princeton's otherwise very attractive offer. When subsequent negotiations between Princeton and other conservation-oriented prospective purchasers proved equally unsuccessful, the University devised an imaginative solution to the problem: a three-way land exchange in which Princeton would sell the bequest lands to a private energy development company, which would then exchange them for federal lands located outside the park that were suitable for commercial mining and energy development. Such an exchange would simultaneously provide Princeton with the cash it needed, prevent the commercial exploitation of the donated land, create additional parkland at no financial cost to the federal government, and provide tangible economic benefits to the private energy company.

 In conjunction with three other eleemosynary institutions which were experiencing similar difficulties in disposing of land bequests, *fn2" Princeton reached an agreement with Rocky Mountain Energy Company ("Rocky Mountain") under which that company would purchase the Grand Teton properties owned by all four institutions and exchange them for federal coal lands in Wyoming's Corral Canyon that were contiguous to other tracts owned by Rocky Mountain. In December 1981, Rocky Mountain wrote to the Wyoming State Office of the Bureau of Land Management (BLM) of the Department of the Interior proposing the fee exchange of the private, Grand Teton lands for the Corral Canyon coal lands under section 206 of the FLPMA. The National Park Service and the BLM jointly prepared an Environmental Assessment which concluded that the proposed exchange was consistent with both the Park Service's land management objectives for Grand Teton National Park and the BLM's land use and resource management objectives for the Corral Canyon area. The BLM District Manager thereafter prepared a Land Report and Initial Recommendation in which he concluded that the public interest would be served by completing the exchange. In accordance with these decisions, the BLM continued to process the land exchange application.

 Notice of the proposed exchange was published in the Federal Register *fn3" and public comments were invited in accordance with departmental regulations. *fn4" Numerous organizations and individuals submitted comments, the overwhelming majority of which strongly endorsed the proposed exchange. The supporters of the exchange included such diverse groups as Rocky Mountain and the institutional landowners (with their financial interests), environmental organizations (such as the Wyoming Wildlife Federation and the Wyoming Chapter of the Sierra Club), the Governor of Wyoming, the entire Wyoming congressional delegation, and various Wyoming State agencies.

 The only comments opposing the proposed exchange were those filed by plaintiffs and by an affiliate of two other energy companies. The thrust of the opposing comments was that the proposed land exchange violated various federal statutes prohibiting affiliates of common carrier railroads, such as Rocky Mountain, *fn5" from leasing federal coal reserves for commercial development *fn6" and prohibiting railroads from transporting coal mined by their affiliates. *fn7" Plaintiffs contended that the proposed exchange, which would transfer to Rocky Mountain ownership federal coal lands that would otherwise remain available for leasing, was inconsistent with the spirit, if not the letter, of the statutory common-carrier coal leasing and transportation prohibitions, and that it therefore did not satisfy the "public interest" requirement of section 206 of the FLPMA. Finally, plaintiffs argued that the proposed exchange did not comply with the requirements of FLPMA section 206(b) that the land exchanged either be of equal value or that any discrepancy in valuation be made up with a cash payment. *fn8"

 On January 5, 1983, the BLM District Manager rejected plaintiffs' protests. Plaintiffs timely appealed that decision. On June 2, 1983, the BLM State Director, acting with the concurrence of the Assistant Secretary of the Interior, again rejected plaintiffs' protests in a memorandum decision that responded point-by-point to plaintiffs' objections. This action followed.

 III

 The parties appear to agree that, to the extent that judicial review of the Secretary's decision is available, the appropriate standard is that provided in the Administrative Procedure Act, 5 U.S.C. § 706(2)(A), which authorizes a reviewing court to "set aside agency action . . . found to be (a) arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law." Id.

 The defendants have mounted several threshold objections to judicial review in this case, however. The federal defendants contend that plaintiffs lack standing to challenge the Interior Secretary's decision. The private defendants (Rocky Mountain, et al.) contend that Interior Department decisions concerning federal land management are committed to agency discretion and are therefore unreviewable. The Court finds neither of these objections persuasive, and it concludes that judicial review under the § 706(2)(A) standard is appropriate.

 To establish their standing to sue, plaintiffs must establish (1) that they have suffered injury in fact, and (2) that they are within the zone of interests to be protected by the relevant legislation. Association of Data Processing Service Orgs., Inc. v. Camp, 397 U.S. 150, 151-52, 25 L. Ed. 2d 184, 90 S. Ct. 827 (1970). Here, plaintiffs have alleged that they have suffered significant, albeit limited, economic injury due to the Secretary's withdrawal of federal coal lands from the competitive leasing system, and that they will suffer even more severe economic injury if the Secretary is permitted to implement his alleged new policy of permitting ...


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