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National Mining Ass'n v. Department of the Interior

Citation: 29 ELR 21286
No. No. 97-5202, 177 F.3d 1/48 ERC 1609/(D.C. Cir., 05/28/1999) Provisions upheld & struck down

The court upholds some provisions and strikes down other provisions of an Office of Surface Mining Reclamation and Enforcement (OSM) interim final rule that required a surface mining permit applicant to disclose all environmental violations it incurred at its mining operations. The court first holds that the rule's provision authorizing the OSM to block a permit based on an applicant's ownership or control of both a violating operation and entities that own or control a violating operation is consistent with the Surface Mining Control and Reclamation Act (SMCRA). SMCRA's language applies to any violating operations controlled by the applicant, not only those directly owned by the applicant. The court then holds, however, that the rule oversteps the OSM's statutory authority by allowing permit blocking based on a violation by an entity no longer owned or controlled by the applicant. SMCRA expressly authorizes permit blocking only when an operation owned or controlled is currently in violation of environmental laws. For violations of an operation that an entity has controlled but no longer does, Congress authorized permit blocking only if there is a demonstrated pattern of willful violations resulting in irreparable damage to the environment. Thus, to the extent the rule authorizes permit blocking based on past ownership without such a pattern, it contravenes SMCRA.

The court then strikes down two of the rule's rebuttable presumptions of ownership or control. Being an officer or director does not by itself enable an entity to control the company or its operations. Further, while ownership of as little as 10 percent of a company's stock may confer control of an operation, the OSM has cited no authority for the proposition that it is likely to do so. The court next holds that the rule is not subject to and, thus, does not violate the five-year statute of limitations governing penalty enforcement. Because SMCRA expressly requires permit blocking based on current, ongoing violations, whenever first committed, it is clear that Congress intended to exempt permit denials from the limitations. The court further holds, however, that the rule is impermissibly retroactive insofar as it imposes permit ineligibility based on pre-rule violations. In addition, the court holds that although the rule's provisions for suspending or rescinding improvidently issued permits (IIPs) are consistent with SMCRA, the IIP provisions impinge on state primacy by authorizing the OSM to take remedial action against operators without complying with SMCRA § 521(a)'s procedural requirements.

[A prior decision in this litigation is published at 27 ELR 20499.]

Counsel for Appellant
Thomas C. Means
Crowell & Moring
1001 Pennsylvania Ave. NW, Washington DC 20004
(202) 624-2500

Counsel for Appellees
Ellen D. Katz
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Before Wald and Silberman, JJ.