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National Coal Ass'n v. Lujan

ELR Citation: 23 ELR 20240
Nos. No. 91-5328, 979 F.2d 1548/36 ERC 1261/(D.C. Cir., 12/01/1992)

The court holds that two mining trade associations have standing to challenge the Department of the Interior's (DOI's) regulations implementing §518(f) of the Surface Mining Control and Reclamation Act (SMCRA) for the assessment of individual civil penalties against officers, directors, and agents of corporate mine operators, but upholds the regulations. The trade associations sought to set aside DOI's final rule containing individual penalty prescriptions under §518(f), claiming that the agency failed to include in the rule an assessment conference procedure or a point system feature included in DOI §518(a) corporate penalty regulations. The trade associations now appeal the district court's unelaborated one-sentence decision upholding the subsection (f) regulations.

The court first holds that the trade associations have standing to challenge DOI's SMCRA regulations. Although the challenged regulations apply only to individuals, DOI's attempt to divorce the corporation from those who act in its name is unpersuasive. The court holds that the associations' member companies' own economic interests are vitally affected by the §518(f) regulations. The very purpose of the individual penalties under subsection (f) is to compel permittee compliance with SMCRA by giving those who act for a corporation strong cause to adhere to the law and to abate violations promptly. Thus, it cannot be seriously doubted that coal companies fall within the zone of interests regulated by subsection (f). Moreover, the trade associations meet the requirements for associational standing, because the associations seek to protect interests germane to their organizational goals of ensuring a favorable regulatory environment and economic health for coal companies, and no apparent reason exists why the suit requires the participation of individual companies.

The court next holds that although a responsible accounting for its decision by the district court would better serve justice, no remand is necessary. The issues presented are few and clearly defined; the case has been well-briefed and argued; and the appellate court is obligated to review the administrative record de novo, and the record is not dense. Turning to the merits, the court holds that the subsection (f) regulations do not represent an abandonment or rescission of DOI policy, but represent the agency's refusal to permanently extend to individual penalty enforcement certain policy approaches developed in the context of corporate penalties. Because subsections (a) and (f) are interrelated, cross-referenced, and the statutory provision applicable to individuals incorporates, in part, those governing corporations, it was incumbent on DOI to say why it chose to depart from the corporate scheme when it adopted the individual regulations. However, because the agency did not purport to address individual penalties when it promulgated the regulations for corporate penalties, the agency's initial directives on individual penalties were notably provisional in character and the burden of explanation is relatively light.

As to the assessment conference provision, the agency explained that the basic reason for such conferences, preventing the underpayment or overpayment of the penalty into escrow, was inapplicable to subsection (f) penalties. Individuals, unlike corporate violators, are not required to prepay penalties into escrow pending administrative and judicial review. Next, the court holds that it must defer to the agency's interpretation of the "same penalties" clause of subsection (f), which declares that individual directors, officers, or agents are subject to the same civil penalties under subsection (a). DOI has stated that the provision does not require that the amount of the penalty assessed against the individual must be the same as that assessed against the corporation, but merely that the criteria of subsection (a) must be used in subsection (f) analysis and that the penalty ceilings must be the same. The court notes that no explicit or implicit instruction exists in subsection (f) as to whether the "same penalties" requirement means that the corporate and individual penalty assessments must be calculated using the identical methodologies. Thus, SMCRA does not bar the agency from departing from the corporate penalties' regulation when it frames the individual penalties' regulations.

As to the reclamation costs and omission of a point system, the court holds that the agency was justified in setting the reclamation costs' standard as an incentive for corporate officials to ensure compliance with SMCRA. Moreover, the agency's apparent decision that the point system was not well-suited to individual violations, in light of its experience administering the subsection (a) corporate penalty provisions, was reasonable. Thus, the omission of the two features from the subsection (f) individual civil penalty provisions was not arbitrary, capricious, or otherwise inconsistent with law.

Counsel for Appellants
John A. Macleod
Crowel & Moring
1001 Pennsylvania Ave. NW, Washington DC 20004
(202) 624-2500

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

Before: RUTH B. GINSBURG, WILLIAMS, and HENDERSON, Circuit Judges.