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NATL. MINING ASS'N v. U.S. DOI

July 23, 1996

NATIONAL MINING ASSOCIATION, Plaintiff,
v.
U.S. DEPARTMENT OF THE INTERIOR, et al., Defendants.


James Robertson, United States District Judge


The opinion of the court was delivered by: ROBERTSON

Plaintiff National Mining Association (NMA) *fn1" , whose members include coal mining companies, coal owners, and utilities, challenge certain reporting and auditing regulations, 30 C.F.R. §§ 870.5, 870.15, and 870.17, promulgated by the Office of Surface Mining Reclamation and Enforcement pursuant to Title IV of the Surface Mining Control and Reclamation Act (SMCRA), 30 U.S.C. § 1201 et seq. Before the court are the parties' cross-motions for summary judgment. For the reasons set forth below, the defendants are entitled to judgment as a matter of law.

 Background

 Congress enacted SMCRA in 1977 to promote, among other things, the reclamation of abandoned mine lands. See 30 U.S.C. § 1202(h). Under Title IV of the Act, coal mine operators must pay into an "Abandoned Mine Reclamation Fund" (the AML Fund) fees based on the tonnage of coal they mine each quarter. 30 U.S.C. § 1232(a). Monies deposited into the AML Fund are then used to reclaim and restore land and water adversely affected by past coal mining. 30 U.S.C. § 1231(c). To provide a basis for assessing fees, SMCRA requires "all operators of coal mine operations [to] submit a statement of the amount of coal produced during the calendar quarter, the method of coal removal and the type of coal." 30 U.S.C. § 1232(c).

 Congress created the Office of Surface Mining Reclamation and Enforcement (OSM) to implement the provisions of the Act. In 1982, OSM promulgated regulations setting forth the information required in the quarterly reports of mine operators and authorizing audits to ensure that mine operators were paying appropriate fees into the AML Fund. 30 C.F.R. §§ 870.15(b), 870.17 (1982). Section 870.15(b) of those regulations required operators to report the "tonnage of coal sold, used, or ownership transferred during the applicable calendar quarter." Section 870.17 authorized OSM officers to examine the records of operators and "second parties," those who buy coal from, or sell coal to, an operator. The rationale behind the auditing regulation was straightforward: records from "second parties" would permit OSM to confirm the accuracy of the operators' quarterly reports.

 Congress amended Title IV of SMCRA in 1990, modifying several aspects of the abandoned mine reclamation program. Pub. L. No. 101-508, at §§ 6001-6014. The amended statute expanded operators' reporting requirements and, for the first time, expressly required the Secretary of the Interior to conduct audits to verify the accuracy of reported information. *fn2"

 Reporting Requirements

 Revised § 870.15(b) requires mine operators to disclose in their quarterly reports any person owning more than 10 percent of the mineral estate that is the subject of the SMCRA permit as well as anyone purchasing more than 10 percent of that quarter's coal production. The regulation also incorporates § 870.5's definition of "mineral owner," which provides that "if there are several persons who have successively transferred the mineral rights, information shall be provided on the last owner(s) in the chain prior to the permittee, i.e. the person or persons who have granted the permittee the right to extract the coal." *fn4" Information provided pursuant to § 870.15(b) will be kept confidential upon request, except where disclosure of the information is otherwise required by statute or regulation.

 NMA argues, inter alia, that (1) OSM does not have the authority to require operators to report the "last owner" of the mineral rights; (2) that OSM failed to state in the proposed rulemaking notice that the "last owner" provision was being considered; and (3) that OSM has failed to adequately address NMA's concerns, raised in its comments on the proposed regulations, about the confidentiality of owner and purchaser information contained in the quarterly reports.

 1. Statutory Authority

 Title 30 U.S.C. § 1232(c) unambiguously requires mine operators to report, among other things, "the owner of the coal." The same section also requires, however, that operators report "any changes in information...since the date of the preceding quarterly report," leaving open to interpretation the question whether all interim transfers of ownership must be reported as well. Sections 870.5 and 870.15 of the regulations provide necessary clarification, requiring, in cases of successive transfers of mineral rights, only that the mine operator report the owner who "granted the permittee the right to extract the coal." That requirement represents a permissible construction of the statute's reporting requirements. See Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 81 L. Ed. 2d 694, 104 S. Ct. 2778 (1984).


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