West Virginia Mining & Reclamation Ass'n v. Snyder

No. 91-0123-W(S) (N.D. W. Va. August 30, 1991)

The court holds that West Virginia mining associations have standing under the Declaratory Judgment Act, the Administrative Procedure Act (APA) and § 520 of the Surface Mining Control and Reclamation Act (SMCRA) to seek to enjoin federal enforcement in West Virginia's surface mining regulatory program before the defendant federal agencies have complied with SMCRA regulations. West Virginia's Division of Energy (WVDOE) received approval under SMCRA to become the regulatory authority for the state in 1981. In 1991, the federal Office of Surface Mining Reclamation and Enforcement (OSM) and the WVDOE entered into a Memorandum of Understanding under which the WVDOE waived the right to notification under SMCRA § 521(a)(1) of any violation found by the OSM, any right to respond to the OSM under SMCRA § 521(a) and 30 C.F.R. pts. 842 and 843, and any right to request informal review under 30 C.F.R. § 842.11(b)(1)(iii). Subsequently, plaintiffs sent defendants a Notice of Intent to sue under SMCRA § 520(a).

The court first holds that it has jurisdiction to hear plaintiffs' suit under the Declaratory Judgment Act, because there is a clear nexus between plaintiffs' status as interested parties and the claims sought to be adjudicated. The court holds that it has jurisdiction to hear plaintiffs' suit under APA § 702, because the Memorandum of Understanding is designed to implement, interpret, or prescribe law or policy, and is effectively a rulemaking by the OSM subject to review. The court also holds that it has jurisdiction to hear plaintiffs' suit under SMCRA § 520, SMCRA's citizen suit provision, because plaintiffs' members have incurred expenses that they might not otherwise have faced because of the operation of the Memorandum of Understanding, and thus have been directly affected. Relying on Congress' intent that affected groups would have the opportunity to sue under SMCRA, and the unambiguous language in the Secretary of the Interior's own regulations, the court finds that the permittees are the intended beneficiaries of the ten-day notice provision and that denial of that benefit is grounds for standing under the citizen suit provision. The court next holds that the determination of whether a preliminary injunction should issue is controlled by Blackwelder Furniture v. Seilig Manufacturing Co, 550 F.2d 189 (4th Cir. 1979), which requires a balancing of the likelihood of irreparable harm to the plaintiff without an injunction against the likelihood of harm to the defendant with an injunction, and a showing of likelihood of success.

The court holds that there is a substantial likelihood that the plaintiffs will succeed on the merits of their complaint. The plaintiffs have suffered irreparable injuries because they are deprived of the opportunity to conform their activities to the requirements of the West Virginia program. They will continue to suffer irreparable harm unless the defendants are enjoined from taking direct federal enforcement action against coal mining operations in West Virginia without first complying with the regulations. The court notes that no damages to the defendants will result from requiring them to comply with their own regulations.

Counsel for Plaintiffs
Dean K. Hunt
Stevens & Hunt
101 E. Vine St., 5th Fl., Lexington KY 40507
(606) 253-2072

Counsel for Defendants
Wayne A. Babcock
U.S. Department of the Interior
10 Parkway Ctr., Rm. 385, Pittsburgh PA 15220
(412) 937-4000

[22 ELR 20338]

Stamp, J.:

Memorandum Opinion and Order

I. Preliminary

This action arises under the Surface Mining Control and Reclamation Act (SMCRA), codified as amended at 30 U.S.C. §§ 1201-1328. Plaintiffs filed a Motion for a Temporary Restraining Order and Preliminary Injunction with this Court on July 31, 1991, alleging that defendants have assumed a direct enforcement role in the West Virginia surface mining regulatory program without complying with the procedures outlined in the SMCRA and Code of Federal Regulations. Plaintiffs seek to enjoin the defendants from taking direct federal enforcement action against coal mining operations located within the State of West Virginia without first complying with the provisions of 30 C.F.R. Parts 842 and 843.

The Court heard argument on plaintiffs motion on July 31, 1991, vitiating the need to impose a Temporary Restraining Order. At the request of the defendants, the Court established a briefing schedule. On August 9, 1991, defendants filed a memorandum in opposition to plaintiffs' motion. Plaintiffs filed their reply brief on August 12, 1991. Defendants submitted a supplemental letter of case authority on August 19, 1991.

The Court has now reviewed the law applicable to this matter and has reviewed the memoranda filed by the parties. The Court concludes that plaintiffs have the requisite standing to raise this issue; that the correct standard for obtaining injunctive relief under the SMCRA is the standard set forth in Blackwelder Furniture v. Seilig Manufacturing Co., 550 F.2d 189 (4th Cir. 1977); that plaintiffs have met that standard; and that a preliminary injunction should issue.

Accordingly, IT IS HEREBY ORDERED that Defendants Harry M. Snyder, Office of Surface Mining Reclamation and Enforcement, Manuel Lujan, Jr., and the United States Department of the Interior are enjoined from taking direct federal enforcement action against coal mining operations located within the State of West Virginia without first complying with the provisions of 30 C.F.R. Parts 842 and 843.

II. Facts

Pursuant to 30 U.S.C. § 1253(a), the West Virginia Division of Energy became the regulatory authority under SMCRA for the State of West Virginia on January 21, 1981, by submitting to the Secretary of the Interior a program comprised of state laws and regulations that contain provisions consistent with the regulations promulgated by the Department of Interior. Once a state's regulations are approved, the state regulatory agency acquires exclusive authority over the regulation of coal mining operations within the state; the Office of Surface Mining has authority only to oversee the state's administration and enforcement of its laws and regulation.

Under 30 C.F.R. § 843.12(a)(2), federal inspectors who discover apparent violations of the SMCRA in states that have assumed regulatory authority under the SMCRA, "shall give a written report of the violation to the State and to the permittee so that appropriate action can be taken by the State. Where the state fails after notification to take appropriate action to cause the violation to be corrected, or to show good cause for such failure . . . the [federal inspector] shall reinspect and, if the violation continues to exist, shall issue a notice of violation or cessation order, as appropriate."

On June 3, 1991, Defendant Snyder, acting on the behalf of the Office of Surface Mining Reclamation and Enforcement, and Commissioner E.W. Wayland, acting on behalf of the West Virginia Division of Energy, entered into a "Memorandum of Understanding," under which the Division of Energy waived "the right to notification under SMCRA Section 521(a)(1) of any violation found by OSM, any right to respond to OSM under SMCRA Section 521(a) and 30 C.F.R. Parts 842 and 843, and any right to request informal review under 30 C.F.R. § 842.11(b)(1)(iii)."

By letter dated May 30, 1991, West Virginia Mining and Reclamation Association sent a Notice of Intent to Sue Under Section 520(a) of the Surface Mining Control and Reclamation Act of 1977 to Defendants Snyder and Lujan.

III. Plaintiffs Have Standing to Bring this Action

Plaintiffs brought this suit asserting that this Court has jurisdiction under 30 U.S.C. §§ 1270(a) and 1276, under 29 U.S.C. §§ 1331, 1337, 1361, 2201, and 2202, and under 5 U.S.C. §§ 701-706.

Defendants deny that plaintiffs possess the requisite standing to bring this case, arguing that the injuries alleged to have been suffered by plaintiffs' members are not within the zone of interests to be protected by SMCRA's ten day notice provision, and that the Memorandum of Understanding did not constitute a rulemaking, which would require public notice and comment.

The Court has reviewed counsels' arguments and concludes [22 ELR 20339] that plaintiffs do have standing to raise this issue pursuant to the Declaratory Judgment Act, the Administrative Procedure Act, and the SMCRA.

Plaintiffs assert that they have standing to raise this action pursuant to the Declaratory Judgment Act. Defendants have not explicitly objected to that assertion. Under the Declaratory Judgment Act, "any court of the United States . . . may declare the rights and other legal regulations of any interested party seeking such declaration." A person is an "interested party" if there appears to be a logical nexus between the status asserted by the plaintiffs and the claim sought to be adjudicated. Acevedo Montalvo v. Hernandez Colon, 440 F. Supp 238 (D.P.R. 1977).

Plaintiffs, associations of the West Virginia mining companies incurring fines imposed by federal authorities for alleged failure to comply with the SMCRA, allege that the federal authorities have not complied with the SMCRA or with their own regulations. Plaintiffs seek to have the Memorandum of Understanding between the Office of Surface Mining and the Division of Energy declared invalid for failure to comply with the Administrative Procedure Act (APA) and for improper waiver of the ten day notice provision. There is clearly a nexus between plaintiffs' status and the claims sought to be adjudicated. Therefore, plaintiffs have standing to bring this action before the Court pursuant to the Declaratory Judgment Act.

Plaintiffs also assert that they possess standing to bring this action pursuant to the Administrative Procedure Act, 5 U.S.C. § 702. Plaintiffs argue that the Memorandum of Understanding between the OSM and West Virginia Division of Mining constitutes a "rule" for the purposes of the Administrative Procedure Act and as such requires notice and a public hearing, neither of which occurred. Defendants deny that the Memorandum constitutes a rule and insist that plaintiffs therefore lack standing to sue under 5 U.S.C. § 702.

The Administrative Procedure Act defines a "rule" as the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law of policy or describing the organization, procedure, or practice requirements of an agency . . .

5 U.S.C. § 551(4). Defendants argue that, although the definition is broad, the statement by the West Virginia Division of Energy in the Memorandum of Understanding that it specifically waives its right to ten days notice under 30 U.S.C. § 1271(a)(1) does not constitute rule-making by OSM. This Court cannot agree.

The Memorandum made between OSM and the Division of Energy gives OSM the right to impose fines in West Virginia for violations of the SMCRA without first providing ten days notice "to the State and the perimittee" as prescribed by regulation. The Memorandum establishes the policy whereby OSM provides financial and technical assistance to West Virginia in exchange for direct involvement in regulation of the SMCRA. It is clear to this Court that the Memorandum is "designed to implement, interpret, or prescribe law or policy," and in fact does so. Accordingly, the Memorandum of Understanding is, in effect, rule-making by the OSM. Pursuant to the Administrative Procedure Act, notice and a period of public comment must be afforded before rules can take effect. See 5 U.S.C. § 553(b). OSM did not comply with the APA when it entered the Memorandum of Understanding with the Division of Energy. Pursuant to 5 U.S.C. § 702, plaintiffs, whose members have been adversely affected by OSM's action, have standing to raise this action. See also Sierra Club v. Morton, 405 U.S. 727 [2 ELR 20192] (1972) (affording standing to organizations whose members are injured).

The Court concludes that plaintiffs have standing to bring this action under the Administrative Procedure Act.

Plaintiffs finally assert standing to bring this action pursuant to the citizen suit provisions of SMCRA, 30 U.S.C. § 1270(a). Plaintiffs argue that as representatives of the regulated industry, they are directly affected and injured by defendants' failure to comply with the provisions of 30 C.F.R. Parts 733, 842, and 843. Defendants deny that plaintiffs are intended beneficiaries of the ten day notice provision and insist that because the plaintiffs are not intended beneficiaries, plaintiffs lack standing to contest the provisions of the Memorandum of Understanding by which the West Virginia Division of Energy waives the notice provision.

Defendants argue that "'Congress did not enact the ten-day notice provision for the operator's benefit but rather to allow the state, as primary regulators, the first opportunity to correct the violation.'" Defendants' Brief at 6, quoting Patrick Coal Corp. v. Office of Surface Mining Reclamation and Enforcement, 661 F. Supp. 380, 384 (W.D. Va. 1987). Defendants state that the ten day notice process is a communications device between OSM and the States, which is not intended for the benefit of mine operators.

Plaintiffs counter that Congress intended to provide for broad interpretation of standing for citizen suits under the SMCRA, that the Interior Board of Land Appeals has consistently recognized an operator's standing under the ten day notice provision, and that plaintiffs' claimed injuries are within the zone of interests protected by the ten day notice provision of the SMCRA.

The Supreme Court stated in Sierra Club that the citizen suit provision of the SMCRA should be broadly construed. 405 U.S. at 734. Further, the legislative history from a precursor to the final version of the SMCRA indicates that standing should be afforded to all individuals within "the broadest standing requirements enunciated by the United States Supreme Court." S. Rep. No. 128, 95th Cong., 1st Sess. at 87 (1977). Plaintiffs' members have incurred expenditures that they might not have otherwise faced because of the operation of the Memorandum of Understanding, and therefore have been directly affected by the Memorandum of Understanding. Plaintiffs have standing under the broad provisions of the SMCRA to prosecute this action.

Defendants argue that in the preamble to the 1988 revision of the ten day notice provision, the Secretary made it clear that the ten day notice provision is only a communication device between OSM and the states. If the Secretary of Interior did not intend the permittee tobenefit from the ten day notice provision, however, the Secretary would not have included the permittee as a recipient of notice pursuant to 30 C.F.R. § 843.12(a)(2). This Court, while recognizing that great deference is to be afforded to the Secretary's interpretation, is also bound by Congress' intent and the explicit language of the Secretary's regulations. Congress intended that affected groups would have the opportunity to sue under the SMCRA and the unambiguous language in the Secretary's own regulations make it clear to this Court that permittees are intended beneficiaries of the notice provision. As the Interior Board of Land Appeals has recognized, an operator has standing under the ten day provision of the SMCRA.

Finally, the Court is not convinced that the reasoning in Patrick applies to this case. Patrick involved the exemption from regulation of sites encompassing less than two acres. The case now before the Court concerns a ten day notice provision under a specific regulation. The situations are entirely dissimilar. The concerns for public welfare and the probability for danger when operations are entirely free of regulation as in Patrick are much more serious than when a ten day notice period is interposed before the OSM can take direct regulatory authority. Patrick does not apply to the facts and the specific regulation involved in this case.

Plaintiffs have standing to raise their claim in this Court pursuant to the Declaratory Judgment Act, the Administrative Procedure Act, and the citizen suit provision of the SMCRA.

IV. The Blackwelder Test Is the Correct Standard

Defendants argue that the test for determining whether a preliminary injunction should issue in this case is dictated by Virginia Surface Mining and Reclamation Association v. Andrus, 604 F.2d 312 [9 ELR 20618] (4th Cir. 1979). Under Andrus, a plaintiff must show a substantial likelihood of success on the merits before an injunction will issue. Plaintiffs disagree, arguing that Blackwelder Furniture v. Seilig [22 ELR 20340] Manufacturing Co., 550 F.2d 189 (4th Cir. 1977), supplies the correct standard.

The Court has reviewed counsels' arguments and finds that the standards set forth in Blackwelder are correct. Even if Andrus did apply, the Court finds that there is a substantial likelihood that plaintiffs will succeed on the merits of their complaint. Accordingly, plaintiffs' motion for injunctive relief is GRANTED.

V. Plaintiffs Have Met the Standards for Issuance of an Injunction

In Blackwelder Furniture Co. v. Seilig Manufacturing Co., 550 F.2d 189 (4th Cir. 1977), the Fourth Circuit delineated the equitable factors that a district court must consider when determining whether a preliminary injunction should issue. The Fourth Circuit stated that a district court must first balance the likelihood of irreparable harm to the plaintiff without an injunction against the likelihood of harm to the defendant with an injunction. Id. at 195. Then, if a decided imbalance of hardship appears in the plaintiff's favor, the plaintiff need not show a likelihood of success; plaintiff need only show that grave or serious questions arepresented by plaintiff's claim. Id. at 195-96. However, "[t]he importance of probability of success increases as the probability of irreparable injury diminishes." Id. at 195. If there is a strong probability of success on the merits, a "possible" irreparable injury may suffice. Id. at 196. The district court should also consider the public interest. Id. The Blackwelder court continued that "[t]he two more important factors are those of probable irreparable injury to plaintiff without a decree and of likely harm to the defendant with a decree." Id.

As this Court has discussed previously, the language of the ten day notice provision requires that the permittee receive notice of a violation at the same time the State is notified. From this notice requirement, this Court has concluded that the Secretary intended coal mining operations to benefit from the notice provision. Further, this Court has concluded that the Memorandum of Understanding constitutes a rule subject to the rule-making requirements of the APA. The gravamen of plaintiffs' complaint is that the Memorandum of Understanding violates permittees' right to receive notice and violates the APA. This Court feels that there is a substantial likelihood that plaintiffs will succeed on the merits of their complaint. Accordingly, even under the Andrus standard suggested by defendants, an injunction must issue in favor of plaintiffs.

Plaintiffs argue that OSM's elimination of the ten day notice provision required under that statute causes them irreparable harm by depriving them of the opportunity to conform their activities to the requirements of the West Virginia program. Because OSM is now engaging in direct regulatory action in West Virginia without providing ten days notice to the permittees, plaintiffs are losing the opportunity to comply with regulations without having immediate fines imposed. Plaintiffs are also forced to attempt to comply with OSM's interpretation of the West Virginia application of the SMCRA, which interpretations may not conform with the West Virginia Division of Energy. Based upon the representations made by the plaintiffs, which defendants have not disputed, and upon this Court's independent determination of the potential problems facing plaintiffs, this Court concludes that the plaintiffs have suffered and will continue to suffer irreparable injuries unless defendants are enjoined from taking direct federal enforcement action against coal mining operations located within the State of West Virginia without first complying with the provisions of 30 C.F.R. Parts 842 and 843.

Plaintiffs also argue that the defendants will not be significantly damages [sic] if an injunction issues. Plaintiffs argue that they only seek to have defendants comply with their own regulations. Further, in case of imminent danger, the SMCRA provides that OSM may act without following the notice requirement. The Court finds that providing ten days notice to permittees prior to direct action by the OSM does not constitute significant damage. In fact, it is merely requiring defendants to comply with their own regulations. Additionally, as defendants note, in the case of imminent danger to the public safety OSM has the statutory right to act without providing notice. The Court cannot discern any damages to plaintiffs by requiring them to comply with their own regulations.

The plaintiffs have demonstrated a substantial likelihood of success on the merits. Plaintiffs have suffered irreparable damages because of the waiver of the ten day notice provision by the West Virginia Division of Energy and will continue to suffer irreparable harm unless OSM is enjoined from acting directly without providing notice to the permittees. Defendants will suffer minimal harm, if any, from being required to comply with their own regulations. The balance of the hardships weighs significantly in favor of plaintiffs. Under both Blackwelder and Andrus, plaintiffs are entitled to the preliminary injunction they seek.

Pursuant to Fed.R.Civ.P. Rule 65(c), the Court has reviewed the potential harm to defendants from improper imposition of this injunction and concludes that an unsecured bond in the amount of $ 5,000.00 is appropriate.

VI. Conclusion

Plaintiffs have standing to raise their claims in this Court. Plaintiffs have demonstrated substantial likelihood of success on the merits and have demonstrated that the balance of the hardships weighs in favor of the granting of a preliminary injunction. Accordingly, for all of the foregoing reasons, plaintiffs' motion for a preliminary injunction is GRANTED. Upon plaintiffs' tender to Court of an unsecured bond in the amount of $ 5,000.00,

Defendants, their officers, agents, servants, employees, and attorneys, and those persons in active concert or participation with them, who receive actual notice of the order by personal service or otherwise, are hereby PRELIMINARILY ENJOINED from taking any action in the State of West Virginia pursuant to the following provision of the June 3, 1991 Memorandum of Understanding:

IV. A(3)(c) To enable OSM to assist WVDOE in inspection and enforcement efforts, WVDOE specifically waives, during the term of and the purposes set forth in this MOU, the right to notification under SMCRA Section 521(a)(1) of any violation found by OSM, any right to respond to OSM under SMCRA Section 521(a) and 30 CFR Parts 842 and 843, and any right to request informal review under 30 CFR 842.11(b)(1)(iii).

Defendants, their officers, agents, servants, employees, and attorneys, and those persons in active concert or participation with them, who receive actual notice of the order by personal service or otherwise, are further PRELIMINARILY ENJOINED from taking direct federal enforcement action against surface or underground coal mining operations located within the State of West Virginia without first complying with the provisions of 30 C.F.R. Parts 842 and 843.

The Clerk is directed to transmit certified copies of this order to counsel of record herein.

ENTERED: August 30, 1991