to inspect the records of "second parties" was sufficient to ensure that operators' reports of coal tonnage and AML Fund fees were accurate, and, therefore, that inspection of the records of royalty recipients and end-users of coal was unnecessary. The Secretary, obviously, did not see it that way. The issue is not whether NMA or the Secretary has the better of that argument, but whether OSM had the statutory authority to issue the regulation. The inspection of records of parties to a coal transaction, be they the records of "second parties," royalty recipients or end-users, is for the purpose of identifying mine operators who have shirked responsibility for paying fees and to identify coal sales or transfers. 59 F.R. 28147 (1994). Not even NMA's argument has identified any legal distinction between "second parties" and others with information on a mine operator's coal production or sales. None are "operators." The present § 870.17, like its predecessor, is reasonably related to Title IV's goal of securing reclamation fees from mine operators, and it was within OSM's power to promulgate the regulation.
Finally, § 870.17 is not arbitrary or capricious. The basis and purpose statement accompanying § 870.17 contains support for OSM's decision to authorize the inspection of records of non-operators. See In re Surface Mining Regulation Litigation, 456 F. Supp. at 1308 (substantial evidence not required, but agency must show support for regulations in basis and purpose statement or administrative record). Access to "second party" information, pursuant to the prior version of § 870.17, has allowed OSM auditors to identify substantial sums of unpaid fees.
59 F.R. 28147 (1994). Based on this experience, OSM could reasonably conclude that data from coal buyers and royalty information would be an "aid in validating the tonnage subject to fees." Id.
2. Fourth Amendment
When authorized by law, an administrative agency may conduct reasonable investigations, including the examination of corporate records, without violating the Fourth Amendment's prohibition against warrantless searches and seizures. See See v. Seattle, 387 U.S. 541, 544-45, 18 L. Ed. 2d 943, 87 S. Ct. 1737 (1967); Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186, 208, 90 L. Ed. 614, 66 S. Ct. 494 (1946). SMCRA expressly authorizes OSM to "make those investigations and inspections necessary to insure compliance with this chapter; conduct hearings, administer oaths, issue subpenas, and compel the attendance of witnesses and production of written or printed material as provided for in this chapter." 30 U.S.C. § 1211(c)(1).
Section 870.17 authorizes OSM to access records only for the purpose of conducting audits "to ensure compliance with the provisions of the Act." In addition, access is limited to "reasonable times upon request" of the agency. The regulation does not, on its face, authorize warrantless searches or seizures of property. A party to whom OSM has made a request for inspection of documents pursuant to § 870.17 might have a basis grounded in the facts of a specific case to challenge that specific order or subpoena on Fourth Amendment grounds, but NMA's facial challenge to § 870.17 fails as a matter of law.
An appropriate order accompanies this memorandum.
July 23, 1996
United States District Judge
For the reasons set forth in the accompanying memorandum, it is this 23d day of July, 1996, ordered that defendants' motion for summary judgment [# 9] is granted and the case is dismissed.
United States District Judge