Save Our Cumberland Mountains, Inc. v. Lujan

No. 81-2134-AER (D.D.C. September 5, 1990)

The court approves a settlement agreement concerning the Office of Surface Mining's (OSM's) enforcement of the Surface Mining Control and Reclamation Act (SMCRA). The agreement requires OSM to revoke permits issued to entities with outstanding violations and to deny new permits to these entities. The agreement also requires OSM to implement a computer system capable of determining whether a permit applicant or holder is affiliated with a company or individual with an outstanding violation. The court first holds that the agreement does not violate SMCRA's principle of state primacy. The court next holds that the agreement does not constitute rulemaking subject to the Administrative Procedure Act's (APA's) notice and comment requirements. The agreement primarily contains two types of provisions: those implementing existing standards and those contemplating the creation of new standards. The former type requires no rulemaking. The latter type obligates the Secretary of the Interior to engage in future rulemaking, and the APA will therefore be satisfied in future proceedings. Finally, the court holds that the agreement does not unlawfully delegate power to a private party. OSM retains responsibility for the manner in which the computer system is developed. Furthermore, the Secretary of the Interior retains full discretion under the settlement agreement by reserving the right to render a final decision following dispute resolution procedures set forth in the agreement.

[The decisions on the merits are published at 13 ELR 20284, 20531, and 14 ELR 20205. A decision on attorneys fees is published at 17 ELR 20594.]

Counsel for Plaintiffs
Lloyd Thomas Galloway
Galloway & Greenberg
1835 K St. NW, Ste. 801, Washington DC 20006
(202) 833-9084

Counsel for Defendants
Alfred T. Ghiorzi, R. Anthony Rogers
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

[21 ELR 20121]

Memorandum

This case concerns the enforcement of the Surface Mining Control and Reclamation Act of 1977, 30 U.S.C. § 1201 et seq. ("SMCRA"), by the Secretary of the Department of the Interior (the "Secretary"), and more specifically the Office of Surface Mining ("OSM"). The long and tangled history of this litigation has lead [sic] to a carefully negotiated and comprehensive proposed settlement agreement ("the Agreement"), which the parties have placed before the Court for its approval.

As the parties neared a final text late last year, two coalitions of coal mining companies, the National Coal Association and the American Mining Congress ("NCA/AMC"), intervened to oppose approval. The Court also granted amicus curiae status to the Interstate Mining Compact Commission ("IMMC"), an association comprised of seventeen coal mining states. The various parties have exhaustively scrutinized every detail of the Agreement through quite lengthy briefing. Having closely examined each argument against approval, the Court concludes that the Agreement is fair, reasonable and consistent with law. It will therefore approve the agreement and dismiss the case.

In examining and approving the Agreement, it is clear that the Court needn't determine the rights of the parties or the merits of [the] case. Rather, it should satisfy itself "that the settlement is fair, adequate, reasonable and appropriate under the particular facts and that there has been valid consent by the concerned parties." Metropolitan Hous. Dev. Corp. v. Village of Arlington Hts., 616 F.2d 1006, 1014 (7th Cir. 1980), quoted in Citizens for a Better Environment v. Gorsuch, 718 F.2d 1117, 1127-28 [13 ELR 20975] (D.C. Cir. 1988). In addition, in a case such as this involving comprehensive statutory standards, the court ensures that approval is within its judicial power "simply by determining that the settlement is consistent with the statute the consent judgment is to enforce and fairly and reasonably resolves the controversy in a manner consistent with the public interest." Citizens for a Better Environment, 718 F.2d at 1128.

[21 ELR 20122]

It is important to say first what the Agreement, once approved, is not. It is not an injunction, its terms belie any intention that it be one, and it will not be enforced as such. As the Court reads the Agreement, approval simply serves the purpose of stating that the Agreement is lawful and reasonable — that it comports with the dictates of SMCRA and the Administrative Procedure Act ("the APA"), 5 U.S.C. § 553, and meets the standards of the Constitution of the United States.

The arguments of NCA/AMC in particular are myriad, often overstated, and at times marked by a rhetorical flourish which did not prove especially helpful. Nonetheless, in the Court's view, plaintiffs and defendants successfully addressed each challenge in their papers. While the Court will not engage in a point by point discussion of NCA/AMC's claims, it will treat their core complaints appropriately below.

I. The Agreement and State Primacy

NCA/AMC and IMMC both allege that the Agreement violates the SMCRA principle of state primacy. The Agreement implements currently valid rules governing the issuance and recission of mining permits. It also requires the Secretary to enter into Memoranda of Understanding with mining states regarding the use of the Applicant/Violator System ("AVS"). Much of NCA/AMC's and IMMC's argument belongs, and is strenuously advocated, in the so-called "Rules" cases. To the extent the Agreement goes beyond applicable rules, the Court is satisfied that the action it contemplates for the Secretary with respect to the states is consistent with SMCRA section 521(a), 30 U.S.C. § 1271(a). Given this provision, the "primacy" contemplated by the statute does not necessarily translate to the "exclusivity" sought by intervenors and to a lesser extent by amicus. Our Circuit has pointed out that the "ultimate responsibility for guaranteeing effective state enforcement of uniform nationwide minimum standards lies with the Secretary . . . ." In re Permanent Surface Mining Regulation Litigation, 653 F.2d 514, 523 (D.C. Cir. 1981). In this light, the Agreement plainly does not violate state primacy.

II. The Agreement and the Administrative Procedure Act

NCA/AMC next complain that the Agreement constitutes rulemaking subject to the notice and comment requirements of the APA. The Court agrees with the Secretary that the Agreement primarily contains two types of provisions: those implementing existing standards and those which contemplate the creation of new standards. The former type requires no rulemaking. With respect to the latter category, the Agreement obligates the Secretary to engage in future rulemaking and the APA will therefore be satisfied at a later time.

Section One relates to the development of the AVS. It clearly incorporates existing standards. Although NCA/AMC believe the computer will contain and trigger action upon ownership and control relationships different than those set out in existing regulations, the Agreement provides otherwise. The computer shall identify relationships "which meet the requirements of 30 C.F.R. § 773.5 . . . ." Agreement P1.3. Additionally, the terms "operator" and "permitting action" are defined by reference to the statute and regulations. Finally, the Secretary is correct to point out that the manner in which he structures the system is purely a matter of "agency organization, procedure, or practice" to which the notice and comment requirements of the APA do not apply. See 5 U.S.C. § 553(b)(3)(A).

Section Two deals with information collection. It relies upon sources which add no new burden on industry. The provision that OSM "consider" collecting other information must be carried out using governmental sources, its own investigation or by reviewing company records "to the extent allowed by applicable law." Agreement P2.5.

Section Three relates to state use of the AVS and the Memoranda of Understanding discussed above. It expressly provides for future rulemaking prior to the implementation of most of its provisions. Other provisions in this Section simply are not "rules." For example, Attachment A exempts three provisions from future rulemaking. Under paragraphs 3.1, 3.1.1 and 3.1.3, the Secretary must require the states to use the AVS, review certain files therein to verify applicant ownership and control statements and address all potential links to violations. These requirements can be found in existing regulations. See 30 U.S.C. §§ 1260(b)(1), (c) and 30 C.F.R. §§ 773.15(b)(1), (c)(1) (regulatory authority must use "available information" before issuing permit and find that linked violations are corrected, are being corrected or subject to appeal).

The Court is also persuaded that Section Six of the Agreement merely incorporates the standards of the "improvidently issued permit" rules, 30 C.F.R. §§ 773.20, 773.21, 843.21. Much is made of the requirement in paragraph 6.7 that OSM take "effective remedial action consistent with 30 C.F.R. § 843.21(d)," while that regulation simply calls for "appropriate" action. NCA/AMC is correct that some types of enforcement may well be effective and at the same time entirely inappropriate. It seems rather clear that any inappropriate, though effective, remedial action taken under the Agreement would be subject to challenge under the rule, which provides the standard under which "effective" action must be judged. Lastly, NCA/AMC challenge the lack of concrete standards governing the manner in which violator link determinations may be rebutted. In the ownership and control rules, the Secretary has chosen a case-by-case analysis in this regard, and claims that this method is not lawful must be addressed in the "Rules" cases.

Section Seven deals with individual civil penalties, consistent with the provisions of 30 U.S.C. § 1268(f) and 30 C.F.R. §§ 846.5, 846.12(b). No new standards are imposed. Indeed, paragraph 7.2 provides that OSM must proceed "in accordance with" the Individual Civil Penalty regulations, and that "prior to any final ICP assessment [an individual] shall be afforded due process of the law, in accordance with 30 C.F.R. § 846.17." Finally, though OSM wishes to shift the burden of going forward with evidence to the individual, the Agreement provides for future rulemaking before it will do so.

Section Ten provides for a dispute resolution mechanism for conflicts which arise between the parties under the Agreement. It is largely a continuation of the mechanism found in Judge Parker's 1985 Amended Order, and does not alter the substantive or procedural rights of third parties. Affected parties retain any remedies against OSM action they might otherwise have by regulation or statute.

Lastly, NCA/AMC's arguments that Sections Eleven and Twelve require notice and comment are also without merit. Section Eleven's requirement that OSM make certain net worth determinations available to plaintiffs remains limited by the Privacy Act, 5 U.S.C. § 552a. Section Twelve permits the OSM to suggest and negotiate better methods of achieving the goals of the Agreement and addresses possible changes in the applicable law. These provisions are procedural, as well as merely contemplative of possible future action. The application in the future might well result in substantive alteration of applicable standards, but they do not presently constitute rulemaking.

III. The Agreement and Due Process

NCA/AMC believe that portions of Sections Three, Six and Nine deprive them of property without due process of law. They first point to the use of the term "link" in Sections Three and Six as unconstitutionally vague. The term is defined as an "ownership and control relationship[] which meet[s] the requirements of 30 C.F.R. § 773.5." Agreement P1.3. The Court believes that NCA/AMC's "confusion" actually stems from its disagreement with the ownership and control rules, which are allegedly overexpansive and which rely to some extent on case-by-case analyses. These claims will be determined in good time in the "Rules" cases. The clear equation of the term with the ownership and control rules and the set of examples found at paragraph 1.3, however, is more than adequate to pass constitutional muster.

The Court has addressed the effect of Section Ten above. The procedures therein do not and cannot prejudice the due process rights of third parties, as the Agreement expressly provides. The 1985 Amended Order's terms are actually improved with respect to third party rights. In the Court's judgment, Section Ten is entirely consistent with due process in the abstract, as well as with existing administrative procedures.

IV. Delegation of Authority

The Agreement does not unlawfully delegate power to a private party, plaintiffs. It is clear from paragraph 1.4 of the Agreement that OSM retains responsibility for the manner in which the AVS computer system is developed. More generally, the Secretary retains full overall discretion under the Agreement by reserving the right to render a final decision following Section Ten dispute resolution procedures.

[21 ELR 20123]

The other provisions to which NCA/AMC point as unlawful delegations simply do not read as such. One example is paragraph 2.2 n.5, which NCA/AMC characterize as requiring the Secretary to accept information provided by plaintiff outside the computer system. Instead, the Agreement provides for OSM verification of the information before its acceptance and use by the agency. No unlawful delegation appears from such a scheme.

NCA/AMC also contend that the Agreement, if approved, would violate the principle of separation of powers because the Court would have interfered with the Secretary's discretion and interjected itself into matters beyond its equitable powers. This argument assumes in part that the Agreement is by its terms illegal, something the Court has already rejected. Moreover, the Court's role, previously extensive under the 1985 Amended Order, is substantially curtailed. The dispute resolution procedures of Section Ten require plaintiffs to initiate new litigation if unsatisfied with the Secretary's final decision. OSM retains all jurisdiction and venue defenses it might otherwise have in such an action. It is difficult to see, therefore, in what manner the Court might overstep its equitable power.

V. Conclusion

After examining each provision of the Agreement, hundreds of briefing pages and the dozens of specific arguments by intervenors and amicus in opposition to approval, the Court concludes that the Agreement is entirely in accord with SMCRA, the APA and constitutional mandates. It is a fair and reasonable compromise and rationally carries out the purposes behind SMCRA and the rules promulgated by the Secretary thereunder. The Agreement will receive the Court's approval, and this case will be dismissed.

An appropriate Order accompanies this Memorandum.

Order

Upon consideration of the joint motion of the parties under Fed. R. Civ. Pro. 41 to approve the Settlement Agreement Between Save Our Cumberland Mountains, Inc. et al. and Manuel Lujan, Jr., Secretary, United States Department of the Interior, et al. (the "Agreement") and to dismiss the above-captioned case, and upon consideration of the Brief in Opposition to the Agreement of the National Coal Association and American Mining Congress, as well as the amicus curiae brief of the Interstate Mining Compact Commission, it is by the Court this 5th day of September, 1990,

ORDERED, that the Agreement be and hereby is APPROVED by the Court; and it is

FURTHER ORDERED, that this matter be and hereby is DISMISSED.