Southern District of West Virginia Rules That Permit Validity Cannot Form the Basis of a SMCRA Citizen Suit
August 28, 2019
By: Chris M. Hunter
On August 12, 2019, a federal court in West Virginia ruled that plaintiffs cannot use SMCRA’s citizen suit provision to challenge the validity of a surface mining permit in a suit against the permittee. Order. The Plaintiffs, a group of anti-mining organizations, relied on what has come to be known as SMCRA’s “not started” provision, which provides for termination of permits where mining has not commenced within three years of issuance, unless the permit is extended by the regulatory agency:
a permit shall terminate if the permittee has not commenced the surface coal mining operations covered by such permit within three years of the issuance of the permit: Provided, that the regulatory authority may grant reasonable extensions of time upon a showing that such extensions are necessary by reason of litigation precluding such commencement or threatening substantial economic loss to the permittee, or by reason of conditions beyond the control and without the fault or negligence of the permittee.
See 30 U.S.C. § 1256(c). West Virginia’s approved surface mining program contains a similar provision at W.Va. Code § 22-3-8(a)(3).
In this case, Republic Energy, LLC (“Republic”) began operating in 2018 on a permit that was issued in 2008. Republic’s predecessor had secured an extension of the three-year deadline in February 2012—a few months after the three-year anniversary of permit issuance had lapsed. Shortly after Republic’s permit was extended, Plaintiffs complained to the Office of Surface Mining (“OSM”), which exercises oversight of states with approved surface mining programs, arguing that the permit had terminated automatically in 2011 when mining had not commenced within three years of issuance.
OSM exercises its oversight authority over violations of state programs by giving states ten days' notice either to take appropriate enforcement action or explain why none is warranted. These notices are known as Ten Day Notices or “TDNs.” If the State does not appropriately respond, then OSM typically takes direct action itself against the mine operator. OSM issued a TDN to WVDEP in 2012, asking it to explain why Republic’s permit had not automatically terminated in 2011.
WVDEP explained that, pursuant to its longstanding policy, the agency is required to notify the permittee of the deadline at least 90 days prior to the three-year anniversary. WVDEP asserted that the Permit did not terminate automatically on the three-year anniversary because it had failed to comply with its notification policy. After notifying the permittee of the three-year deadline, it granted an extension pursuant to W.Va. Code § 22-3-8(a)(3)—but after the three-year anniversary of the Permit.
Initially, OSM’s Charleston Field Office (“CHFO”) found WVDEP’s response to be inappropriate, but the CHFO was later overruled by OSM’s Deputy Director, who found that WVDEP’s notification policy was a permissible construction of the “not-started” provision. Plaintiffs then sued OSM in federal court. While Plaintiffs’ suit against OSM was pending, a similar case was decided by the District Court of Alaska. See Castle Mountain Coalition v. Office of Surface Mining Reclamation and Enforcement, 2016 WL 3688424 (July 7, 2016). OSM requested dismissal and voluntary remand of Plaintiffs’ suit over Republic’s permit for further consideration in light of Castle Mountain. On remand, OSM considered not only WVDEP’s 2012 extension of Republic’s permit, but also its 2013 renewal of the permit and a second extension of the three-year deadline in 2016 (mining commenced on the permit in 2018).
Although OSM ultimately re-affirmed WVDEP’s actions, Plaintiffs did not resume their suit against OSM. Instead, before OSM concluded its review, Plaintiffs sued Republic in federal court in West Virginia under SMCRA’s citizen suit provision. Plaintiffs alleged that Republic was mining without a surface mining permit. But, as explained above, Republic unquestionably had a surface mining permit, which had been issued by WVDEP in 2008, and was currently recognized by the agency, as evidenced by its subsequent renewals of the permit in 2013 and 2019. Thus, there was no question that Republic had a surface mining permit recognized by the regulatory authority (WVDEP). Rather, Plaintiffs argued that Republic lacked a valid surface mining permit because mining had not commenced on the permit within three years of issuance of the permit—in 2011.
SMCRA provides that “any person having an interest which is or may be adversely affected may commence a civil action on his own behalf to compel compliance.” 30 U.S.C. § 1270(a). The suit can be brought against the state government or agency director who has failed to enjoin coal operators who are operating “in violation of any rule, regulation, order or permit.” 30 U.S.C. § 1270(a)(1).
Interestingly, the citizen suit provision for actions against permittees does not refer to an operator’s violation of any statute. The omission was deliberate. As originally drafted, the citizen suit provision authorized citizens to sue coal operators directly for operating in violation of SMCRA. But in legislative debate, concern was expressed that mine operators would be subject to lawsuits by citizens plaintiffs who claimed that the operator’s permit had not been issued in conformity with the statute. To address this concern, the provision was amended to limit citizen suits against coal mine operators by deleting the authorization to sue a coal mine operator for operating in violation of SMCRA. The Senate’s Conference Report explained that the provision was carefully worded to avoid allowing citizens to sue operators for perceived permit defects:
Subsection (a) assures, that no “operator” can be sued under this section if he is operating in compliance with all regulations, orders, and an approved permit, even though the regulating authority or the Secretary has failed to properly implement the Act. In such case, the suit must be brought against the regulatory authority.
S.Rpt. No. 101, 94 Cong., 1st Session 84 (1975).
Accordingly, a citizen suit against a coal operator cannot be based on a claim that the coal operator’s permit violates SMCRA or the approved state statute. See, e.g., Okla. Wildlife Fed’n v. Hodel, 642 F.Supp. 569, 571-72 (N.D. Okla. 1986); Friends of Mat-Su v. Usibelli Coal Mine, Inc., 2012 WL 12871623 (D. Ala. 2012).
Republic moved to dismiss the suit under the legal authority discussed above, arguing that SMCRA’s citizen suit provision does not authorize actions against the permittee over the permit’s validity. In the alternative, Republic argued that the suit should be dismissed on various abstention grounds and/or based on Plaintiffs’ failure to join WVDEP as an indispensable party.
In considering Republic’s motion to dismiss, the Court characterized the thrust of Plaintiffs’ action as a request to invalidate a permit that OSM and WVDEP view as valid: “the essence of the Citizen Groups’ complaint is that the permit was issued (or extended) in violation of the statute.” The Court then cited the Senate Conference Report’s statement indicating that the legislative intent was to preclude actions directly against a private operator who is operating in compliance with an approved permit for violation of the statute. The Court found that Republic has been operating since 2018 in compliance with its approved permit. Additionally, the Court cited Molinary v. Powell Mountain Coal Company, 125 F.3d 231 (4th Cir. 1997) for the proposition that an action against an operator must be dismissed where the alleged misconduct rests with the permitting agency, not the operator.
Ultimately, the Court found that Plaintiffs’ real qualms were with WVDEP’s extension and subsequent renewal of the permit—and also with OSM’s approval of WVDEP’s actions. Accordingly, the Court held that it lacked subject matter jurisdiction under 30 U.S.C. § 1270(a)(1) and dismissed the case without considering Republic’s abstention arguments or the argument that WVDEP is an un-joinable, indispensable party.