Winston Ford Co. v. Watt

No. 80-10 (E.D. Ky. March 31, 1982)

The court upholds the constitutionality of § 518(c) of the Surface Mining Control and Reclamation Act (SMCRA), which requires prepayment of penalties into escrow prior to an evidentiary hearing. Plaintiff's petition for review of the assessed penalties was dismissed for failure to comply with § 518(c). Relying on two of its earlier decisions, the court rules that § 518(c), in conjunction with other available administrative remedies, satisfies the procedural due process requirements of the Constitution. The court orders plaintiff to pay the penalty together with costs.

[The issues raised in this case are analyzed at 12 ELR 10071; cases raising similar issues are reported at 12 ELR 20662, 20755, and 20781 — Ed.]

Counsel for Plaintiff
Herman W. Lester
Combs & Lester
207 Caroline Ave., P.O. Drawer 551, Pikeville KY 41501
(606) 432-6218

Counsel for Defendants
Louis G. DeFalaise, U.S. Attorney
P.O. 1490, Lexington KY 40501
(606) 233-2661

Lois J. Schiffer
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-2793

[12 ELR 20762]

Unthank, J.:

Memorandum Opinion

This is a civil action arising under the Constitution and the laws of the United States. The Court has jurisdiction by virtue of 28 U.S.C. §§ 1331 and 1337, and by virtue of 5 U.S.C. §§ 701, 702, and 30 U.S.C. § 1276. Plaintiff seeks a declaration of rights pursuant [12 ELR 20763] to 28 U.S.C. §§ 2201 & 2202. In particular, plaintiff seeks a declaratory judgment concerning the constitutionality of 30 U.S.C. § 1268(c) of the Surface Mining Control Act of 1977 and the regulations adopted pursuant thereto.

Section 518(c) of the Surface Mining Control and Reclamation Act of 1977 (hereinafter "the Act"), 30 U.S.C. § 1268(c), provides that, in order to obtain formal administrative review of a proposed civil penalty assessment, a mine operator must first pay the amount of the proposed penalty into an escrow account. On December 20, 1979, the Secretary of Interior issued a final order denying plaintiff's request for an administrative hearing under § 1268 because of plaintiff's failure to comply with the pre-payment requirement. On January 21, 1980, plaintiff commenced this action to obtain judicial review of the Secretary's decision and to obtain a declaratory judgment regarding the constitutionality of § 518(c).

Defendants filed an answer and counterclaim on March 19, 1980, denying plaintiff's assertion that the Act is unconstitutional, and asking the Court to grant judgment against plaintiff for the amount of the unpaid civil penalty. Plaintiff did not respond to the counterclaim.

On October 22, 1980, the Court stayed this action pending the decision of the Supreme Court in Andrus v. Virginia Surface Mining and Reclamation Ass'n, Docket No. 79-1538.That case involved an appeal by the Secretary from a district court ruling that § 518(c) was unconstitutional. The Supreme Court, on June 15, 1981, reversed the district court decision, ruling that the challenge to § 518(c) was "premature." Hodel v. Virginia Surface Mining and Reclamation Ass'n, U.S. , 101 S. Ct. 2352, 2374 [11 ELR 20569] (1981).

Defendant have now moved the Court for summary judgment in their favor with respect to both plaintiff's cause of action and defendants' counterclaim against plaintiff for $4,100. The Court notes that there are no genuine issues of material fact in this case. Therefore, the question is whether defendants are entitled to judgment as a matter of law.

Undisputed Facts

On December 22, 1978, an authorized representative of the Secretary conducted an inspection of plaintiff's surface mining operation in Pike County, Kentucky, pursuant to 30 U.S.C. § 1252(e). As a result of this inspection, plaintiff was issued Notice of Violation 78-2-18-10, pursuant to 30 U.S.C. § 1271(a)(3), for a total of five violations of the Surface Mining Act and implementing regulations. One of these violations was later vacated.

On January 26, 1979, plaintiff was issued a notice of proposed assessment of civil penalty, pursuant to 30 U.S.C. § 1268(c), informing plaintiff that a proposed penalty in the amount of $6,700 had been assessed for the four violations. Plaintiff requested and received an informal assessment conference for the proposed penalty, pursuant to 30 C.F.R. § 723.18. As a result of the assessment conference, the amount of the proposed penalty was reduced to $4,100.

On October 9, 1979, plaintiff filed a petition for administrative review of the proposed penalty assessment, pursuant to 43 C.F.R. § 4.1150 et seq. Plaintiff failed to forward with its petition a check for the amount of the proposed penalty, as required by 30 U.S.C. § 1268(c) and 43 C.F.R. § 4.1152(b). As a result, on November 21, 1979, an ALJ ordered the petition for review dismissed for plaintiff's failure to comply with the pre-payment requirement.

On December 10, 1979, plaintiff filed a petition for discretionary review of the order of dismissal, pursuant to 43 C.F.R. § 4.1270. By order dated December 20, 1979, the Interior Board of Surface Mining and Reclamation Appeals, acting on behalf of the Secretary, denied plaintiff's petition for discretionary review. Having thereby exhausted its administrative remedies, plaintiff commenced this action on January 21, 1980.

The sole issue presented in this action is whether 30 U.S.C. § 1268(c) is constitutional.

Constitutionality of § 1268(c)

In Blackhawk Mining Co. v. Watt, No. 79-136 [12 ELR 20781] (E.D. Ky. 1982), this Court rejected an identical challenge to § 1268(c), holding that "§ 1268(c), when considered in conjunction with the other available remedies satisfies the demands of procedural due process, and is, therefore, constitutional" (slip op. at 8). In finding § 1268(c) constitutional, this Court relied upon the case of United States v. Hill, No. CIV-1-81-50 [12 ELR 20662] (E.D. Tenn. 1982). Once again, the Court finds the rationale of Hill compelling. Accordingly, the Court must grant the motion for summary judgment in favor of defendants in the amount of $4,100. The Court adopts the relevant portions of its opinion in Blackhawk Mining, supra, in its holding today.

An order will enter granting defendants' motion for summary judgment, and awarding judgment in favor of defendants and against plaintiff in the principal sum of $4,100, together with costs.