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NATIONAL WILDLIFE FEDN. v. HODEL

February 12, 1990

NATIONAL WILDLIFE FEDERATION, Plaintiff, KENTUCKY RESOURCES COUNCIL, INC., Plaintiff, CITIZENS COAL ENFORCEMENT GROUP, Plaintiff, RECLAMATION COAL-ITION, Plaintiff, CONCERN ABOUT WATER LOSS DUE TO MINING UNDERGROUND, Plaintiff, ENVIRONMENTAL POLICY INSTITUTE, Plaintiff
v.
DONALD P. HODEL, Secretary of the Interior, Defendant, JED D. CHRISTENSEN, Director, Office of Surface Mining Reclamation and Enforcement, Defendant, UNITED STATES DEPARTMENT OF THE INTERIOR, Defendant; NATIONAL WILDLIFE FEDERATION, Plaintiff, KENTUCKY RESOURCES COUNCIL, INC., Plaintiff, CITIZENS COAL ENFORCEMENT GROUP, Plaintiff, SAVE OUR CUMBERLAND MOUNTAINS, INC., Plaintiff, ENVIRONMENTAL POLICY INSTITUTE, Plaintiff v. DONALD P. HODEL, Secretary of the Interior, Defendant, JED D. CHRISTENSEN, Director, Office of Surface Mining, Reclamation and Enforcement, Defendant, UNITED STATES DEPARTMENT OF THE INTERIOR, Defendant; NATIONAL COAL ASSOCIATION, Intervenor-Defendant, AMERICAN MINING CONGRESS, Intervenor-Defendant; NATIONAL WILDLIFE FEDERATION, Plaintiff, KENTUCKY RESOURCES COUNCIL, INC., Plaintiff, CITIZENS COAL ENFORCEMENT GROUP, Plaintiff, RECLAMATION COAL-ITION, Plaintiff, CONCERN ABOUT WATER LOSS DUE TO MINING UNDERGROUND, Plaintiff, ENVIRONMENTAL POLICY INSTITUTE, Plaintiff v. DONALD P. HODEL, Secretary of the Interior, Defendant, ROBERT H. GENTILE, Acting Director, Office of Surface Mining, Defendant, UNITED STATES DEPARTMENT OF THE INTERIOR, Defendant, NATIONAL COAL ASSOCIATION, Intervenor-Defendant, AMERICAN MINING CONGRESS, Intervenor-Defendant



The opinion of the court was delivered by: FLANNERY

 THOMAS A. FLANNERY, UNITED STATES DISTRICT JUDGE

 In this matter, the court is again called upon to decide challenges to regulations implementing the Surface Mining Control and Reclamation Act of 1977 ("SMCRA" or "the Act"), 30 U.S.C.A. 1201 et seq. The Act seeks to protect society and the environment from the harmful effects of surface coal mining, sometimes known as "strip mining," as well as from surface damage caused by underground coal mining. In these three consolidated cases, five separable issues are before the court on cross motions for summary judgment: three deal with subsidence of land over underground mines; two others concern when the Act should begin to apply to certain kinds of coal mine operations.

 Plaintiffs bring this action on behalf of "environmentalist" interests and seek to overturn regulations they argue violate SMCRA. In opposition, the government defendants ask the Court to uphold the rules as a valid exercise of their authority under the Act to regulate coal mining operations. *fn1"

 I. Standard of Review

 Before taking up plaintiffs' five challenges, the court will discuss the proper standard of review. SMCRA § 526(a)(1), 30 U.S.C.A. § 1276(a)(1), provides:

 
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.

 The court has stated: "This is a narrow scope of review. This court will not substitute its judgment for that of the agency." PSMRL II, Round I, Mem. Op. at 2, 21 Env't Rep. Cas. at 1194. But, while "reasonable agency interpretive positions must be upheld," the Courts "remain the final arbiters of statutory meaning." Id. (Citations omitted.) This Court also recognized that:

 
The problem facing the reviewing court is exacerbated when an agency reverses its prior position. Although the court must not put the agency in a straight jacket to prevent any change in a course once set, the court must be satisfied that the agency states permissible reasons for this change. . . .
 
This court will examine the regulations and uphold them to the extent they are consistent with the language of SMCRA as interpreted in light of the legislative history. . . . If [the Secretary's] interpretation frustrates the policy that Congress sought to implement, no amount of deference can save it.

 Id., Mem. Op. at 3, 21 Env't Rep. Cas. at 1194-95 (internal quotation marks and citations omitted). As was the case in 1984, several issues before the Court today result from fundamental changes in the Secretary's original position when he first published the permanent regulations in 1979.

 II. Subsidence Issues

 "Subsidence occurs when a patch of land over an underground mine sinks, shifts, or otherwise changes its configuration. It is a costly and serious problem, particularly in urban areas, where land overlying and adjoining underground mines has been developed." Nat'l Wildlife Fed'n v. Hodel, 268 U.S. App. D.C. 15, 839 F.2d 694, 739 (D.C.Cir. 1988).

 A. 30 C.F.R. § 817.121(c), subsidence damage to structures.

 NWF first challenges whether the Secretary may limit the duty of an underground coal operator to correct material damage to structures caused by subsidence. The court must disapprove the Secretary's rule.

 Before 1983, the Secretary's rules required an operator to correct material subsidence damage both to structures and to land, regardless of state law. As the rule now reads, an operator must correct such damage to structures only to the extent state law requires. 30 C.F.R. § 817.121(c)(2) (1988). *fn3" NWF argues that the state-law limitation on the duty to correct subsidence damage to structures is contrary to the Act and arbitrary. The court agrees with plaintiffs and finds that this limitation lacks a proper basis in the statute. The Court will remand the rule to be revised.

 1.

 Placing a state law limitation on the duty to correct subsidence damage has practical effects not plain from the text of the rule. As the Supreme Court noted in regard to Pennsylvania:

 
[State property law] recognizes three separate estates in land: The mineral estate; the surface estate; and "the support estate." Beginning well over 100 years ago, land owners began severing title to underground coal and the right of surface support while retaining or conveying away ownership of the surface estate. It is stipulated that approximately 90% of the coal that is or will be mined by [a number of large underground coal mining companies] in western Pennsylvania was severed from the surface in the period between 1890 and 1920. When acquiring or retaining the mineral estate [the underground coal operators] or their predecessors typically acquired . . . a waiver of any claims for damages that might result from the removal of coal.

 Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470, 107 S. Ct. 1232, 1238-39, 94 L. Ed. 2d 472 (1987). *fn4" The upshot is that state property or contract law may let a coal operator dig a mine underneath a building someone else owns, cause the land to subside, damage the building, and bear no legal liability for the damage. This may arise because a building owner or his predecessor contracted away or waived the right to recover for damage from subsidence or other mining work. It may also arise because the building owner's deed to the land conveyed only a surface estate that does not give him the right to subjacent support. *fn5" As Keystone suggests, the act giving an operator the right in state law to cause subsidence damage without liability often took place more than half a century or more ago.

 This Court has decided related questions twice before. When the Secretary first issued regulations on subsidence control and surface owner protection in 1979, they required an underground coal operator to correct material damage from subsidence both to surface land or to structures. *fn6" 30 C.F.R. § 817.124 (1979). This Court upheld the rule against industry challenge. PSMRL I, Round I, 623 F.2d 712, 14 ERC 1083, 1106.

 In 1982, the Secretary proposed to amend and combine rules on subsidence so that 30 C.F.R. § 817.121 "would provide all the requirements for subsidence control." 47 Fed.Reg. 16604 (Apr. 16, 1982). *fn7" When the Secretary issued the Final Rule he:

 
established a distinction between damage to land and damage to structures or facilities. . . . All subsidence-caused material damage to the land is required to be repaired. [Underground coal mine] operator responsibility for material damage caused to structures or facilities is tied to liability under State law. If the operator has no liability under State law, the material damage need not be repaired and compensation need not be paid.

 48 Fed.Reg. 24638 (June 1, 1983).

 Both industry and environmentalists challenged the 1983 Final Rule. This Court upheld it against an industry challenge to the requirement to restore land materially damaged by subsidence. PSMRL II, Round II, Mem. Op. at 3-8, 21 Env't Rep. Cas. at 1727-29. The Court rejected the view that the rule "infringes on state laws that provide remedies in tort and contract for subsidence damage." Id., Mem. Op. at 6-7, 21 Env't Rep. Cas. at 1729. *fn8"

 For their part, the environmentalists challenged the rule limiting the duty to correct subsidence damage to structures. This Court did not reach the merits, however. Instead, it remanded the matter back to the Secretary for proper notice and comment. *fn9"

 In response to this ruling, the Secretary published a new Final Rule in 1987, 52 Fed.Reg. 4860 (1987). The 1987 version made almost no changes to the remanded text, and the Secretary readopted the view that underground operators need only pay owners for or correct subsidence damage to structures or facilities "to the extent required under applicable provisions of State law." 30 C.F.R. 817.121(c)(2) (1988). *fn10"

 The Secretary next justified the rule on the ground that "in policy, as well as law, there is clear reason to distinguish protection provided for land and structures." Id.

 
Where an underground mine operator purchases from the surface owner the right to subside the surface, the individual's property rights are protected, but the long term public interest in the land is not protected. Thus, [the rule's requirement to restore land without regard to state law] functions to prevent this injury to the land by assuring that in all cases, irrespective of private contract, this valuable natural resource will be restored . . . . No environmental or public interest exists in protecting a building or structure where its present or past owner has either conveyed or waived a right to subjacent support. . . .
 
While private parties may not be motivated to protect the environment, they have a great incentive to protect structures that they own. State law has traditionally provided remedies in contract and tort for those parties who own subsidence-damaged structures. Accordingly, it is inappropriate for [the Secretary] to step in and protect owners of these structures thereby creating an additional private property right which clearly was not intended by Congress.

 Id. at 4863-64.

 Last, the Secretary argued that other regulations protect the structures in which the public has an interest. He cited 30 C.F.R. 817.121(d) which "prohibits underground mining activities beneath or adjacent to public buildings and facilities, churches, schools and hospitals, and large bodies of water unless an operator can demonstrate before a permit is issued that subsidence will not cause material damage." Id. at 4864. The Secretary added that if subsidence damages these facilities or features, "the regulatory authorities are empowered to suspend mining until the operator ensures that no further material damage will occur (see 30 C.F.R. 817.121(e))." Id. Further, "if imminent danger from underground mining exists to inhabitants of urbanized areas, cities, towns or communities, such mining must be suspended." Id.

 2.

 After carefully reviewing the Act's language, previous court rulings on the issue of subsidence, the Act's legislative history, and the Secretary's justification for the limitation on the duty to correct subsidence damage to structures, this Court finds that the 1987 version of § 817.121(c)(2) cannot stand.

 Both this Court and the Court of Appeals have read SMCRA's language and its legislative history as sustaining the Secretary's authority to require underground miners to restore land damaged by subsidence. *fn13" Now the court must decide whether the same language can sustain a rule that cuts down the duty to restore damage to structures by reference to state law. The Court finds that the statute's language shows that Congress did not differentiate based upon state law between the duties of underground operators with respect to subsidence damage to land and to structures. Instead, § 817.121(c)(2) is inconsistent with the provisions of the Act in § 102(b) and the first and third clauses of § 516(b)(1).

 First, the Court must reject the Secretary's argument that the Act's sole purpose was to safeguard the "public" interest in the environment, and, thus, state tort and contract law is enough to protect any private interests. Congress stated in the Act that two of its purposes are to "establish a nationwide program to protect society and the environment from the adverse effects of surface coal mining operations," SMCRA § 102(a), 30 U.S.C.A. § 1202(a), and to "assure that the rights of surface landowners and other persons with a legal interest in the land or appurtenances thereto are fully protected from such operations." SMCRA § 102(b), 30 U.S.C.A. § 1202(b). *fn14" In this regard, Congress was not concerned solely with the environment, but intended to ease hardship that coal mining sometimes causes society, its people, and their property.

 Congress specifically required underground operators to "adopt measures consistent with known technology in order to prevent subsidence causing material damage to the extent technologically and economically feasible . . . and maintain the value and reasonably foreseeable use of such surface lands . . . ." SMCRA § 516(b)(1), 30 U.S.C.A. § 1266(b)(1). *fn15" Not a word in any of these is said about state law.

 In the Court's view, "fully protected" means just that, not fully protected to the extent that state law provides. No reasonable person would think full protection plainly means that (1) an operator may cause land underneath someone else's house to shift or drop, weakening foundations, cracking walls, bending floors, breaking windows, perhaps collapsing the home; and (2) the operator may walk away from this shambles with a duty to restore the homeowner's land but not the home except as state law provides. Still less would a reasonable person believe this comports with the plain meaning of maintaining "value and reasonably foreseeable use" of the surface land. Nor would a reasonable person think that preventing material damage plainly means that the operator need do nothing about damage that actually occurred unless State law directs. Yet these are the consequences of just the sort of "plain meanings" that the Secretary and industry ask the Court to adopt.

 In this regard, it is hard to see how the Congressional mandates of preventing subsidence causing material damage and maintaining the value and use of surface lands can be given effect under § 817.121(c)(2). In the Court's view, preventing subsidence causing material damage inevitably requires that damage that does occur must be corrected. If Congress had merely wanted operators to prevent subsidence, it would not have added the additional words "causing material damage." This shows that prevention of material damage is the object of the clause. This is made clearer by § 516(b)(1)'s later stricture that operators may engage in mining methods that use planned subsidence, and specifically, standard room-and-pillar mining. The court earlier rejected an interpretation of this clause that the duty to prevent subsidence causing material damage did not require that damage be restored. In PSMRL II, Round II, industry argued that "although Congress was concerned with [the problem of subsidence], and explicitly required underground miners to do everything feasible to prevent subsidence that materially damaged land, it allowed this land to be left in its damaged condition once subsidence occurred." PSMRL II, Round II, 21 Env't Rep. Cas. at 1728. In response, the court stated:

 
The effect of industry's interpretation of this area of the statute would be to allow the dictates of section 516(b)(1) to be rendered virtually meaningless. A coal operator would have to indicate that he is taking measures to prevent subsidence in order to obtain a permit. Once mining was underway, there would be nothing in the Act to stop the operator from abandoning these measures. The land could be materially damaged, and without a requirement of restoration, the environment would be no better off, with regard to subsidence, than it was before the Act was passed. This court cannot subscribe to such a result involving an area of obvious concern to Congress.

 Id. at n. 4.

 This reasoning applies here, too. This clause in § 516(b)(1) contains no limitation under state law, and it is not limited to land. The clause applies to both land and structures. If the court were to sustain the Secretary's rule, structures "could be materially damaged, and without a requirement of restoration" going beyond state law, those with interests in appurtenances to the land, "would be no better off, with regard to subsidence, than [they were] before the Act." Yet Congress in § 102(b) intended to give these persons "full protection" from mining operations. Obviously, to the extent that state law already provides redress in tort or contract for subsidence damage to structures, SMCRA simply adds an additional protection. But for those persons without recourse at state law, SMCRA was intended to provide protection they did not have. Under § 817.121(c)(2), the protection has all but vanished. Congress intended otherwise.

 The Court further finds that § 817.121(c)(2) runs afoul of the third clause in § 516(b)(1). This requires the operator to maintain the value and reasonably foreseeable use of surface lands. The Secretary and industry argue that § 516(b)(1) speaks only of surface lands when it discusses maintenance of value and use. In their view, "surface lands" means land in its natural state as distinguished from land in an improved state with structures on it, or the structures themselves. Mem. of Federal Defts in Supp. of Cross-Motion for Summary Judgment at 5. This is a peculiarly strained reading. It ignores the obvious: the value of land is tied to the value of structures on it, and the use of land mostly depends upon the structures it can support. It is unclear how either surface land's value or its reasonably foreseeable use can be maintained when structures on the surface land -- which give the land much of its value and define its use -- may be damaged by subsidence without such harm having to be corrected.

 For example, SMCRA § 510(b)(6), 30 U.S.C.A. § 1260(b)(6), contemplates a situation where the private mineral estate has been severed from the private surface estate. The section requires the operator seeking a permit to prove that it has the private surface estate owner's consent, or the operator has a valid conveyance granting the right to mine the mineral estate. When a conveyance is unclear, "the surface-subsurface legal relationship shall be determined in accordance with State law." Thus in a situation directly related to the issue before the Court, Congress specifically indicated a role for State law. The Court is not inclined to construe ...


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