Council of the Southern Mountains, Inc. v. Watt

No. 82-45 (E.D. Ky. October 18, 1982)

The court holds that plaintiff may be awarded attorneys fees and costs at the discretion of the Secretary of the Interior for citizen suits brought under the Surface Mining Control and Reclamation Act (SMCRA) to the extent that plaintiff's efforts resulted in administrative proceedings and final orders. The court denies plaintiff attorneys fees under § 525(e) of SMCRA and applicable regulations for private negotiations that the plaintiff conducted directly of plaintiff's contribution, these negotiations were not administrative proceedings and resulted in no final court order as required by the statute and regulations. Nor may plaintiff receive attorneys fees for an appeal that plaintiff filed with the Interior Board of Surface Mining and Reclamation Appeals and then voluntarily withdraw. The withdrawal prevented a final order and a full and fair determination of the issues, and leaves the substantiality of plaintiff's contribution in question. However, plaintiff may be awarded, at the discretion of the Secretary, fees and costs for its specific efforts in prosecuting complaints that on appeal resulted in agency enforcement actions and abatement by the operator.

Counsel for Plaintiff
Paul M. Smith
Onek, Klein & Farr
2550 M St. NW, Washington DC 20037
(202) 775-0184

L. Thomas Galloway
Center for Law & Social Policy
1751 N St. NW, Washington DC 20530
(202) 833-9084

Mark L. Morgan
326 W. Main St., Suite 205, Danville KY 40422
(606) 236-3303

Counsel for Defendants
Jane E. Graham, Ass't U.S. Attorney
P.O. Box 1490, Lexington KY 40591
(606) 233-2661

Alfred T. Ghiorzi
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-2306

[13 ELR 20394]

Unthank, J.:

Memorandum Opinion

Plaintiff ("Council") appeals from a final order of the defendants and third-party plaintiffs ("Federal defendants") which denied plaintiff attorney fees, expenses, and costs for action it had taken to prosecute, pursuant to 30 C.F.R. § 721.13(a), three citizen complaints charging third-party defendant Highand Coal Company ("Highland") with violations of coal mining regulations.

This matter was first lodged in the United States District Court for the District of Columbia, but was transferred to this court on Federal defendants' intention to implead Highland, a Kentucky coal operator, on the grounds of convenience to the parties and in the interest of justice. Highland was joined by the Federal defendants for indemnification and contribution for attorney fees, costs and expenses that might be awarded to the Council.

This court has jurisdiction of the matter under the provisions of 28 U.S.C. § 1331, and considers the case on motions for Summary Judgment by the Federal defendants and the Council.

The Federal defendants and the Council have stipulated these facts:

The Council is an Appalachian-based organization whose concerns include strip-mining in central Appalachia. Several of the Council's members live in the vicinity of a mine site in Ogden Creek Hollow, Knott County, Kentucky, operated by Highland Coal Company. Certain violations of the Surface Mining Control and Reclamation Act of 1977 (the "Act") in Highland's operation affected members of the Council. Beginning in May 1979, the Council submitted two informal citizens complaints to the Interior Office of Surface Mining Reclamation and Enforcement (OSM) regarding the Highland violations. OSM conducted two inspections in response to the Council's complaints but OSM did not issue a Notice of Violation or Cessation Order.

The Council took an informal appeal to the Regional Director of OSM's disposition of one of these complaints but this produced no enforcement orders. Ultimately, the Council filed a third complaint, producing a third OSM inspection. As a result of the Council's continuing efforts, OSM issued Notices of Violation concerning some of the issues raised. On a second appeal to the Regional Director, the Council won specific enforcement orders against Highland with respect to a substantial percentage of the practices it had identified. Highland abated all of the cited violations. The Council then filed an appeal to the Interior Board of Surface Mining and Reclamation Appeals (the "Board") seeking enforcement with respect to the remaining allegations, but after certain negotiations with Highland the Council voluntarily dismised the appeal. OSM did not participate in the settlement negotiations, nor did OSM ratify the settlement. Later the Council filed a petition for costs and expense with the Board. The Board ruled against the Council, holding that the voluntary dismissal is not a compensable final order as contemplated in 43 C.F.R. § 4.1290, and that the voluntary dismissal without Board approval provides an insufficient basis for finding the requisite "substantial contribution" to the full and fair determination of the issues.

The parties to these stipulations have agreed that there are no other facts relevant to the disposition of this case.

These stipulations were filed prior to the joining of Highland. Highland, in its Answer to the Third-Party Complaint denies any wrong-doing in its operations, denies that defendants can be awarded fees against it, that contribution and indemnification from it are inappropriate, and that defendants should be estopped from a claim against it on the ground that it was not a party to the administrative proceedings in relation to the disposition of the citizen complaints.

The court reviews these proceedings under the standards set out in 5 U.S.C. § 706, particularly as to whether or not the decision below was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.

Plaintiff argues that it is entitled to an award of fees and costs under the provisions of 30 U.S.C. 1275(e) or, alternately, under the provisions of 43 C.F.R. 4.1294. These read in pertinent part as follows:

30 U.S.C. § 1275(e):

Whenever an order is issued under this section or as a result of any administrative proceeding under this Act, at the request of any person, a sum equal to the appropriate amount of all costs and expenses (including attorney fees) as determined by the Secretary to have been reasonably incurred by such person for or in connection with his participation in such proceedings, including any judicial reviews or agency action, may be assessed against either party as the court, resulting from judicial review or the Secretary resulting from administrative proceedings, deems proper.

43 C.F.R. § 4.1294 is prefaced by § 4.1290, which reads:

§ 4.1290 Who may file:

(a) Any person may file a petition for award of costs and expenses including attorney's fees reasonably incurred as a result of that person's participation in any administrative proceeding under the Act which results in —

(1) A final order being issued by an administrative law judge; or

(2) A final order being issued by the Board.

43 C.F.R. § 4.1294 Who may receive an award:

Appropriate costs and expenses including attorney fees may be awarded:

(a) To any person from the permittee, if —

(1) The person initates any administrative proceedings reviewing enforcement actions, upon a finding that a violation of the Act, regulations or permit has occurred, or that an imminent hazard existed, or to any person who participates in an enforcement proceeding where such a finding is made if the administrative law judge or Board determines that the person made a substantial contribution to the full ad fair determination of the issues; or . . .

(b) To any person other than a permittee or his representative from OSM, if the person initiates or participates in any proceeding under the Act upon a finding that the person made a substantialcontribution to a full and fair determination of the issues.

These provide discretionary award of costs and expenses for administrative proceedings under the Act, 30 U.S.C. § 1201 et seq. § 4.1290(a) requires that a final order be issued before such awards may be made. § 4.1294(a) provides for such awards from the permittee/violator if an ALJ or the Board finds that the petitioner made a substantial contribution to a full and fair determination of the issues. § 4.1294(b) provides for the awards from OSM upon a finding of petitioner's substantial contribution to a full and fair determination of the issues.

The Council's efforts have been expended, generally, in four areas: (1) The filing of three citizens complaints of violations, (2) the filing and withdrawing of an appeal on one of these violations, (3) assisting the Secretary in defining fee award standards, and (4) negotiating directly with Highland for the abatement of certain violations.

The Secretary has already acknowledged an obligation to the Council for its assistance in setting fee award standards, and the court has not been asked to address any issue relating to this particular transaction. The other three require comment and resolution.

The negotiations the Council conducted with Highland resulted in no official action or participation by the Secretary. No final order was entered, no positive action was required of the Secretary, and none was asked to resolve the matter in dispute between the Council and Highland. Being essentially private negotiations where the parties involved had no power under the statutes to conduct administrative proceedings, it does not seem that they were in the nature of an administrative proceeding as contemplated [13 ELR 20395] by 5 U.S.C. § 554 and the Act, and the court finds that they were not. There having been no administrative proceeding in this transaction and no final order having been entered to dispose of the matter on the merits, there can be no award under either the statute or the regulations, regardless of the substantiality of Council's contributions.

The filing of an unperfected appeal by Council, and its subsequent voluntary withdrawal did not constitute an administrative proceeding as contemplated by the Act or 5 U.S.C. § 554, and neither its filing nor its withdrawal resulted in a final order or a fair and full determination of the issues, although the mere filing may have had some coercive effect on Highland. Any proceedings which might have been instituted as a result of the filing were unilaterally and prematurely aborted by the withdrawal which precluded review and final orders. The substantiality of Council's contribution based on the mere filing of an unperfected appeal is questionable. An award of fees and costs for Council's efforts in this transaction cannot be justified under either the statute or the regulations.

However, it is undisputed by the Secretary that, as a result of Council's efforts in prosecuting a complaint (or complaints), specific orders were issued on an appeal by Council against Highland which resulted in abatement of the violations cited in this particular complaint, or complaints, the record not being quite clear as to what violations were cited on what complaint and what abatement was effected on which specific order. It seems to the court that Council's contributions in effecting specific abat*ment were substantial, and that the specific orders resolving these particular violations reached a full and fair determination of the issues in an administrative proceeding, and the court so finds. Council may, therefore, be granted an award of fees and costs for its specific efforts in this transaction under the provisions of 43 C.F.R. 4.1290 and 4.1294(a) or (b).

The Council's contributions as to the complaints on which no violations were cited could not be compensable under either the statute or the regulations, no final orders having been issued and no administrative proceedings having been instituted to reach a full and fair determination of any issue.

These awards are discretionary. The court finds that the claim for fees and costs should be reconsidered in light of the foregoing and in light of Highland's answer filed herein on 2 September 1982, and specific findings and authorities should be set forth in support of any decision rendered thereon.

The decision below must be vacated and remanded to the Secretary for reconsideration of Council's claim, and for other proceedings not inconsistent with this opinion.

This the 18th day of Cotober, 1982.