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NORTHWEST MINING ASS'N v. BABBITT

May 13, 1998

NORTHWEST MINING ASSOCIATION, Plaintiff,
v.
BRUCE BABBITT, SECRETARY, U.S. DEPARTMENT OF INTERIOR; et al., Defendants.



The opinion of the court was delivered by: GREEN

MEMORANDUM

 This matter is before the Court on opposing motions for summary judgment. The Plaintiff, Northwest Mining Association ("NWMA"), disputes a final rule enacted by Defendant United States Bureau of Land Management ("BLM") concerning reclamation of mining lands. The Small Business Administration ("SBA") submitted an amicus curiae brief in favor of NWMA's position. The Arizona Mining Association and the Nevada Mining Association jointly submitted an amici curiae brief, also in favor of NWMA's position. The Court heard oral argument on March 10, 1998. For the reasons that follow, NWMA's motion is granted and the BLM's motion is denied.

 I. Background

 In 1976, Congress enacted the Federal Land Policy and

 Management Act ("FLPMA"), 43 U.S.C. §§ 1701, et seq. (1994). Congress declared in the FLPMA that it is the policy of the federal government, through the Secretary of the Interior, to manage public lands "in a manner which recognizes the Nation's need for domestic sources of minerals . . . from public lands[.]" 43 U.S.C. § 1701(a)(12). *fn1" Congress, however, also recognized the need to manage the public lands "in a manner that will protect the quality of scientific, scenic, historical, ecological, environmental, air and atmospheric, water resource, and archaeological values[.]" 43 U.S.C. § 1701(a)(8). Accordingly, while managing public lands under the Act, the Secretary and the BLM must "take any action necessary to prevent unnecessary or undue degradation of the lands" by "regulation or otherwise." 43 U.S.C. § 1732(b).

 The BLM's obligatory duty to prevent unnecessary or undue degradation of public lands has significant application in the mining industry. The extraction of hardrock minerals, such as gold and copper, often involves the excavation of large open pits, the use of toxic chemicals, disruption of underground water, and various other negative environmental effects. Historically, some miners abandoned their claims after the minerals ran out and left the land disturbed. In many cases, the use of millions of dollars of public funds has been required to reclaim such old, abandoned mining operations and return them to an environmentally sound state. (Def. Mem. at 2-3.)

 In 1981, the BLM responded to this problem by promulgating regulations, set forth in 43 C.F.R. § 3809, which allowed it to require bonds from miners in certain situations. Bonding ensures a miner's compliance with environmental standards by proactively funding the reclamation before the operation begins. In the event of a miner's default of its reclamation obligation, the bond, or other surety, will fund the environmental restoration, not the public. (Def. Mem. at 2-3.)

 The original regulations defined three levels of mining activities: "casual" level use, where only negligible disturbance of the land results (43 C.F.R. § 3809.0-5(b)); "notice" level use, where mining operations are greater than casual use but still disturb less than five acres per calendar year and where the operator need only submit a general notification of operations to the BLM before commencement (43 C.F.R. § 3809.1-3(a)-(c)); and "plan" level use, where more than five acres per calendar year are disturbed and where the operator must submit a detailed plan of all operations and reclamation to be undertaken to the BLM for approval (43 C.F.R. § 3809.1-9(b)). The original regulations allowed the BLM to require plan level operators to post a bond to ensure the reclamation of disturbed areas, but such bonds were not mandatory to all plan level operations (43 C.F.R. 3809.1-9(b)).

 On July 11, 1991, the BLM issued a notice of proposed rulemaking to amend its bonding requirement rules. The proposed rule would require bonds for all mining operations larger than casual level use. 56 Fed. Reg. 31,602 (1991). Notice level operators would be required to post a $ 5,000 bond for each claim, id. at 31,604, while plan level operators would be required to post a bond in an amount specified by the BLM, but in no case to exceed $ 1,000 per acre for explorational operations and $ 2,000 per acre for mining operations. Id. at 31,605. Additionally, the proposed rule would allow alternative financial instruments to be substituted for bonds, id. at 31,602, and would require operators with a history of noncompliance with BLM regulations to file plans on subsequent operations which would normally be conducted on a notice level. Id. at 31,602.

 The BLM stated that it would accept comments on the proposed rule amendments until September 9, 1991, id. at 31,602, but later extended the comment period to October 9, 1991 (56 Fed. Reg. 41,315 (1991)).

 On February 28, 1997, almost six years after the original proposal, the BLM issued the final rule. 62 Fed. Reg. 9093 (1997). The final rule contained several substantive differences from the proposed rule which are pertinent to this case. Most notably, notice level and plan level operators are each required by the final rule to post bonds for 100 percent of the estimated reclamation costs. Id. at 9100, 9101.

 Additionally, the final rule requires notice and plan level operators to employ an outside engineer to calculate and certify the cost of reclamation of the disturbed areas, id. at 9100-01, provide bonds for all its existing mining disturbances within ninety days (if not in compliance with the rules), id. at 9103, and meet water quality standards for one year at the reclaimed site before the bond would be released. Id. at 9102. The final rule imposed criminal sanctions on persons who knowingly violate the regulations. Id. at 9103.

 The BLM stated that the rule, as enacted, would not have a significant impact on a substantial number of small entities. Id. at 9099. The BLM defined "small entity" as "an individual, small firm, or partnership at arm's length from control of any parent companies." Id. at 9099.

 The NWMA seeks summary judgment under the Administrative Procedure Act, 5 U.S.C. §§ 551, et seq. (1994) ("APA") on the basis that there was no notice in the proposed rule of the 100 percent bond requirement, the professional third party engineer requirement, the water quality requirement, or of the potential criminal sanctions.

 Alternatively, the NWMA seeks summary judgment under the Regulatory Flexibility Act ("RFA"), 5 U.S.C. §§ 601, et seq. (1994) (as amended by Pub. L. 104-121, Title II, 110 Stat. 864-67 (1996)) on the grounds that, when certifying that the final rule would not have a significant economic impact on a substantial number of small entities, the BLM did not use the Small Business Administration's definition of "small miner" and did not follow the appropriate procedure for adopting an alternate definition as required by the RFA.

 The BLM generally denies the NWMA's allegations and itself moves the Court for summary judgment, arguing that the NWMA lacks standing to object. The BLM alleges that, since the NWMA failed to participate in the rulemaking process by filing any comments during the appropriate period, the NWMA lacks standing to challenge the new rule under the APA. *fn2" The BLM also alleges that, because the NWMA is not itself a small entity, it lacks standing to challenge the new rule under the RFA.

 II. Discussion

 The Court shall grant summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986).

 A. Standing of the NWMA

 The BLM claims that the NWMA does not have standing to object to its final rule under either the APA or the RFA because it did not submit comments during the notice and comment period. The NWMA asserts that it need not have submitted comments because the BLM's original rule proposal did not properly inform it that its interests were at stake. The NWMA further asserts that, in any event, it has associational standing as a representative of its members.

 The Plaintiff is correct. The nature of the NWMA's claims under the APA is that there was insufficient notice of the altered and additional aspects of the final rule given by the BLM in its initial proposal. There is no way the NWMA could have submitted comments regarding interests it was not informed were at stake.

 The BLM also challenges the NWMA's assertion of associational standing, contending that it does not apply to rulemaking procedures. The BLM does hot provide an explanation of why this is so. In Warth v. Seldin, 422 U.S. 490, 45 L. Ed. 2d 343, 95 S. Ct. 2197 (1974), and Hunt v. Washington State Apple Advertising Comm'n, 432 U.S. 333, 53 L. Ed. 2d 383, 97 S. Ct. 2434 (1977), the Supreme Court refined its associational standing doctrine into a three-prong test.

 
"An association has standing to bring suit on behalf of its members when: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit."

 Hunt, 432 U.S. at 343.

 The Plaintiff here meets these elements and the Court finds no basis to conclude that rulemaking should be regarded as exempt from this test. Accordingly, the Court finds that the NWMA has standing under the APA to object to the final rule at issue here.

 The BLM also claims that the NWMA lacks standing under the Regulatory Flexibility Act because the language of the RFA extends standing to seek judicial review only to a "small entity." The RFA provides that "a small entity that is adversely affected or aggrieved by final agency action is entitled to judicial review . . . ." 5 U.S.C. § 611(a)(1). Section 601(6) of the RFA states, in relevant part, that the term "small entity" shall have the same meaning as the term "small organization." Section 601(4) states, in relevant part, that the term "small organization" means "any not-for-profit enterprise which is independently owned and operated and is not dominant in its field . . . ." Here, the BLM does not contest the NWMA's assertion that it is an independently owned and operated, not-for-profit enterprise which ...


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