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PO Box 1070, Frankfort, KY 40602  Phone 502.875.2428, Fax 502.875.2845

KRC and Citizens Coal Council Challenge OSM Rule Weakening Permit Block Sanction Against Mining Law Violators  Posted: March 17, 2008

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

CITIZENS COAL COUNCIL,
Post Office Box 964
Washington, PA 15301,

and

KENTUCKY RESOURCES COUNCIL, INC.,
Post Office Box 1070
Frankfort, KY 40602
Plaintiffs-Petitioners,

v.

DIRK KEMPTHORNE,
Secretary of the Interior,
1849 C Street N.W.,
Washington DC 20240,
Defendant.

COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF,
AND PETITION FOR REVIEW

Introduction

1. This suit challenges the December 3, 2007, final action of Dirk Kempthorne, the Secretary of the Interior (the “Secretary”), promulgating regulations pursuant to the Surface Mining Control and Reclamation Act of 1977, 30 U.S.C. §§ 1201-1328 (“SMCRA”). See 72 Fed. Reg. 68,000-31 (Dec. 3, 2007) (hereinafter “the ownership or control rulemaking”). The Secretary’s rulemaking arbitrarily and capriciously rescinded important provisions of the Secretary’s prior rules on the nature and scope of SMCRA’s “permit block” sanction, the text of which states:

The applicant shall file with his permit application a schedule listing any and all notices of violations of this chapter and any law, rule, or regulation of the United States, or of any department or agency in the United States pertaining to air or water environmental protection incurred by the applicant in connection with any surface coal mining operation during the three-year period prior to the date of application.

The schedule shall also indicate the final resolution of any such notice of violation. Where the schedule or other information available to the regulatory authorityindicates that any surface coal mining operation owned or controlled by the applicant is currently in violation of this chapter or such other laws referred to [in] this subsection, the permit shall not be issued until the applicant submits proof that such violation has been corrected or is in the process of being corrected to the satisfaction of the regulatory authority, department, or agency which has jurisdiction over such violation . . . .

30 U.S.C. § 1260(c).

2. Congress enacted the permit block sanction as part of “a nationwide program to protect society and the environment from the adverse effects of surface coal mining operations,” 30 U.S.C. § 1202(a).

3. In establishing that program, Congress meant, among other things, to “assure that the rights of surface landowners and other persons with a legal interest in the land or appurtenances thereto are fully protected from such operations,” and to “assure that surface coal mining operations are so conducted as to protect the environment,” 30 U.S.C. § 1202(b) and (d).

4. The permit block sanction advances Congress’s purposes by protecting persons who live or recreate in America’s coalfields from (a) continued damage to their interests as the result of each ongoing violation of SMCRA which affects them and (b) new or additional damage to their interests as the result of each new violation that scofflaw coal operators might otherwise commit after obtaining new or significantly revised mining permits for areas that such operators have not previously affected.

5. Over the years since SMCRA’s enactment, the Secretary and citizens of America’s coalfields have used the “permit block” sanction to compel major coal operators in the United States to reclaim lands which so-called “contract operators” abandoned after mining coal at the behest of larger companies that actually controlled the manner in which the contract operator conducted surface coal mining operations, disposed of the coal produced, or both.

6. The regulatory changes promulgated on December 3, 2007, unlawfully narrow the reach of the permit block sanction, irrationally complicate its implementation by regulators and the public, and allow permit applicants to obscure information needed to detect ongoing violations of permit applicants and properly invoke the remedy.

Jurisdiction and Venue

7. This Court has jurisdiction of this action pursuant to 30 U.S.C. § 1276(a)(1) (judicial review of national rulemaking under SMCRA), as well as 28 U.S.C. § 1331(a) (federal question) and 28 U.S.C. § 1361 (mandamus). This Court may issue a declaratory judgment and grant further relief pursuant to 30 U.S.C. § 1276(b) and 28 U.S.C. §§2201 and 2202. Plaintiffs have a right to bring this action pursuant to 30 U.S.C. § 1276(a)(1) and the Administrative Procedure Act, 5 U.S.C. §§701 to 706. Review is properly conducted pursuant to 5 U.S.C. § 701 et seq. (Administrative Procedure Act) and 30 U.S.C. § 1276(a)(1) (SMCRA).

8. Venue is properly before this Court under 28 U.S.C. § 1391(e). With respect to allegations under SMCRA, venue lies only in this Court pursuant to 30 U.S.C. § 1276(a).

9. There is a present and actual controversy between the parties to this action. Plaintiffs have exhausted their administrative remedies and have no adequate remedy at law.

Parties

10. Plaintiff Citizens Coal Council (“CCC”) is a nonprofit corporation existing under the laws of Pennsylvania. CCC is a nationwide association of grassroots citizens’ organizations and individuals who reside in or visit America’s coalfields. CCC’s mission is to protect resources, including the homes, farms, businesses, and water supplies of its individual members, through advocacy of full compliance with all environmental laws pertaining to coal mining.

11. Plaintiff Kentucky Resources Council, Inc., (“KRC”) is a nonprofit membership organization incorporated under the laws of the Commonwealth of Kentucky and dedicated to prudent use and conservation of the natural resources of the state.

12. KRC and its members have as a particular focus of their advocacy efforts the minimization of the adverse impacts of coal extraction on land, water resources and public health and safety.

13. KRC members include individuals residing in the coalfields of Kentucky in areas where coal mining occurs, or is currently planned, or may occur in future. Unless properly regulated in accordance with SMCRA, surface coal mining operations threaten to adversely affect these members property and aesthetic interests.

14. Numerous individual CCC and KRC members depend upon the permit block sanction to protect their interests – as residents of, or visitors to, America’s coalfields – from damage as the result of additional violations of SMCRA or other federal environmental statutes committed by scofflaw coal operators who own or control mines that are already in violation of environmental laws.

15. CCC, KRC, and their members suffer and will continue to suffer injury in fact as the result of the Secretary’s December 3, 2007, ownership or control rulemaking because they will be deprived of the full scope of protection that Congress intended the permit block sanction to afford to citizens and visitors to America’s coalfields, because they will be less able to invoke the permit block sanction effectively where it is warranted, and because they will be less able to detect whether applicants for permits to conduct proposed surface coal mining operations that will affect their interests are owned or controlled by scofflaw coal operators.

16. Plaintiff organizations and their members participated in the rulemaking procedures which preceded the Secretary’s promulgation of the December 3, 2007, ownership or control rules, including submission of written comments on the proposed regulations prior to the close of the comment period provided by the Secretary.

17. Plaintiffs have participated in the permitting process for individual coal mines on behalf of themselves and their members, and have provided information about the need to preserve the permit block sanction in full force and to implement it properly.

18. CCC and KRC have each invoked the permit block sanction on behalf of their members to compel scofflaw coal operators to correct numerous ongoing violations of SMCRA and other federal environmental statutes, the validity of which was no longer subject to administrative or judicial review.

19. CCC and KRC bring this action on behalf of their members as well as themselves.

20. The interests of CCC, KRC, and their members are within the zone of interests protected by the Administrative Procedure Act and SMCRA.

21. Defendant Dirk Kempthorne is the Secretary of the Interior. He resides officially in Washington, D.C. Plaintiffs sue him in his official capacity. The Secretary is responsible for implementing all statutes, regulations, and programs administered by the United States Department of the Interior and its constituent agencies.

22. The Secretary, acting through the Office of Surface Mining Reclamation and Enforcement (“OSM”), has a statutory mandate to promulgate national regulations implementing SMCRA, including regulations that implement the permit block sanction.

23. The Secretary is also charged with the responsibility of complying with the Administrative Procedure Act.

Facts

24. After a number of preliminary rulemaking efforts, OSM published on October 10, 2006, the proposed rules which led directly to the agency’s December 3, 2007, ownership or control rulemaking.

25. On December 11, 2006, prior to deadline which the Secretary established for submission of comments on the October 10, 2006, proposed rules, CCC and KRC jointly submitted comments on OSM’s proposed rule changes.

26. Among other things, CCC and KRC commented that adoption of numerous proposed rule changes would be arbitrary, capricious, or inconsistent with SMCRA, the Administrative Procedure Act, or both.

27. Despite the comments that CCC and KRC submitted, the Secretary on December 3, 2007, promulgated a final rule that adopted most of the provisions that CCC and KRC opposed.

Claims for Relief

Count I

28. Plaintiffs reassert and reallege Paragraphs 1 through 27 of this complaint. The Secretary’s December 3, 2007, ownership or control rulemaking violates SMCRA and the Administrative Procedure Act in numerous respects, including but not limited to the following:

a. the Secretary failed to place in the public record of the ownership or control rulemaking various documents pertaining to his settlement of prior litigation with the National Mining Association (“NMA”), including the settlement agreements themselves, every draft of the agreements, every item of correspondence relating to the settlement, and every note or memorandum of communications relating to the settlement, even though the settlement triggered and governed the rulemaking proceedings which culminated in the December 3, 2007, final rule;

b. the Secretary did not, after first supplementing the public record as requested, reopen the comment period to solicit further comments regarding any “actual basis” for the rulemaking and any prejudgment of its outcome;

c. the Secretary’s deletion from the regulatory definition of “control or controller” of specific examples of that status, such as general partners in a partnership and persons who have the ability to commit financial or real property assets contravenes the requirements of 30 U.S.C. § 1260(c) and contradicts his previous interpretation of the term without establishing a rational basis for the change;

d. the Secretary’s rescission of the requirement that regulatory authorities recognize as “owners” all persons (other than “owners of record”) “possessing or controlling” in excess of 50 percent of an entity’s ownership instruments contravenes the requirements of 30 U.S.C. § 1260(c) and contradicts his previous interpretation of the term without establishing a rational basis for the change;

e. the Secretary’s limitation of a regulatory authority's “downstream” reach under the definition of “own, owner, or ownership”(i) rests upon an error of statutory and regulatory interpretation, (ii) lacks any factual basis or reasoned analysis, (iii) contradicts the Secretary’s earlier interpretation of 30 U.S.C. § 1260(c) without presenting any new information or occurrence that might justify or support the proposed change, and (iv) betrays rather than implements the remedial purpose that underlies the statutory mandate to withhold new or significantly revised mining permits from applicants who own entities that are responsible for uncorrected regulatory violations;

f. the Secretary’s redefinition of the term “transfer, assignment, or sale of permit rights” to exclude changes in “effective control” of an existing permittee, and to include only a change in the entity which actually holds a particular mining permit, unlawfully renders regulatory authorities powerless to invoke the permit block sanction to prevent a scofflaw coal operator from obtaining permit rights from others and then continuing to conduct surface coal mining operations while the scofflaw operator’s ongoing violations of SMCRA or other environmental laws go unremedied;

g. the Secretary’s rescission of the requirement that permit applicants identify each of their owners and controllers unlawfully abrogates each permit applicant’s duty to provide information necessary to effective implementation of the permit block sanction, and thus unlawfully sacrifices the agency’s effective implementation of 30 U.S.C. § 1260(c) for the improper purpose of making the regulated community’s workload a bit lighter;

h. the Secretary’s removal from several regulations of provisions that require posting on the Internet of information regarding implementation of SMCRA’s ownership or control provisions unlawfully contradicts his previous determination of the need for such provisions without establishing a rational basis for the change;

i. the Secretary’s amendment of 30 U.S.C. § 774.11 to “clarify” when OSM may actually use ownership or control findings to impose the permit block sanction unlawfully creates an automatic stay of agency action pending administrative review, in direct conflict with the provisions of 30 U.S.C. §§ 1264(d), 1275(c), and their state law counterparts, all of which authorize temporary relief from the action of SMCRA regulatory authorities pending administrative review only upon the challenging party’s satisfaction of three specific criteria for such relief;

j. the Secretary’s rescission of the requirement that each permit applicant identify the person or persons responsible for filing Form OSM-1 for a proposed surface coal mining operation contradicts his previous regulation on the issue without establishing a rational basis for the change; and

k. the Secretary’s rescission of the requirement that regulatory authorities refer certain matters for so-called “alternative enforcement action”conflicts with the statutory mandate that the Secretary acknowledged when he first established that requirement, without any showing of a rational basis for the proposed rescission.

Count Two

29. CCC and KRC reassert and reallege Paragraphs 1 through 28 of this complaint.

30. The Secretary failed to address adequately or to respond to significant problems or matters that were raised in comments made on the proposed rules.

Prayer for Relief

CCC and KRC respectfully request that this Court:

A. Declare that the portions of the December 3, 2007, ownership or control rulemaking identified in Paragraph 28 of this complaint violate SMCRA;

B. Declare that the portions of the December 3, 2007, ownership or control rulemaking identified in Paragraph 28 of this complaint are arbitrary, capricious, an abuse of discretion, or otherwise inconsistent with law, in violation of the Administrative Procedure Act;

C. Enter an order expressly vacating the portions of the December 3, 2007, ownership or control rulemaking identified in Paragraph 28 of this complaint;

D. Enjoin the Secretary and those acting under his authority from implementing the portions of the December 3, 2007, ownership or control rulemaking identified in Paragraph 28 of this complaint in any manner, including but not limited to approval of any state program amendment that which would implement any of the unlawful regulatory changes identified in Paragraph 28 of this complaint;

E. Enter an order compelling the Secretary to review all approved state regulatory programs under SMCRA and to require any change necessary in each program to ensure that the state regulatory authority will implement the permit block sanction consistently with the Secretary’s regulations as they stand following the requested vacatur of the unlawful portions of the December 3, 2007, ownership or control rulemaking;

F. Award Plaintiffs their costs, disbursements, and reasonable attorneys' fees; and

G. Grant such other relief as the Court deems just and appropriate.

Respectfully submitted,
James Dougherty
D.C. Bar No. 939538
709 3rd Street SW
Washington, D.C. 20004
(202) 488-1140


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