United States Court of Appeals
for the Federal Circuit
__________________________
CONSOLIDATION COAL COMPANY, CONSOL OF
PENNSYLVANIA COAL COMPANY, CONSOL OF
KENTUCKY INC., EIGHTY FOUR MINING
COMPANY, HELVETIA COAL COMPANY, ISLAND
CREEK COAL COMPANY, KENT COAL MINING
COMPANY, KEYSTONE COAL MINING
CORPORATION, LAUREL RUN MINING
COMPANY, MCELROY COAL COMPANY, NINEVEH
COAL COMPANY, QUARTO MINING COMPANY,
EAGLE ENERGY, INC., ELK RUN COAL COMPANY,
INC., GOALS COAL COMPANY, GREEN VALLEY
COAL COMPANY, INDEPENDENCE COAL
COMPANY, INC., KNOX CREEK COAL
CORPORATION, MARFORK COAL COMPANY,
INC., MARTIN COUNTY COAL CORPORATION,
PEERLESS EAGLE COAL COMPANY,
PERFORMANCE COAL COMPANY, RAWL SALES &
PROCESSING COMPANY, SIDNEY COAL
COMPANY, INC., STONE MINING COMPANY, JIM
WALTER RESOURCES, INC., EASTERN
ASSOCIATED COAL CORPORATION, KINGSTON
RESOURCES, INC., PIONEER FUEL
CORPORATION, POWDER RIVER COAL
COMPANY, APOGEE COAL COMPANY, ARCH
WESTERN RESOURCES, LLC, CONYON FUEL
COMPANY, LLC, CATENARY COAL COMPANY,
COAL-MAC, INC., DAL-TEX COAL CORPORATION,
HOBET MINING, INC., MINGO LOGAN COAL
COMPANY, PAYTER BRANCH MINING, INC.,
PLATEAU MINING CORPORATION, RAG
CONSOLIDATION COAL v. US 2
CUMBERLAND RESOURCES, L.P., RAG EMERALD
RESOURCES, L.P., TWENTYMILE COAL
COMPANY, COASTAL COAL COMPANY, LLC,
COASTAL COAL-WEST VIRGINIA, LLC,
EVERGREEN MINING COMPANY, MID-VOL
LEASING, INC., MOUNTAINEER COAL
DEVELOPMENT COMPANY, OLD BEN COAL
COMPANY, SHIPYARD RIVER COAL TERMINAL
COMPANY, RIVERSIDE ENERGY, INC., VIRGINIA
CREWS COAL COMPANY, CLINTWOOD ELKHORN
MINING COMPANY, GATLIFF COAL COMPANY,
PREMIER ELKHORN COAL COMPANY, PERRY
COUNTY COAL CORPORATION, GLAMORGAN
COAL COMPANY, LLC, TERRY EAGLE, L.P.,
NICHOLAS-CLAY LAND & MINERAL, INC.,
NICHOLAS-CLAY COMPANY, LLC, ANDALEX
RESOURCES, INC., GENWAL RESOURCES, INC.,
PACIFIC COAST COAL COMPANY, USIBELLI
COAL MINE, INC., WEST RIDGE RESOURCES,
INC., UNITED STATES STEEL MINING COMPANY,
LLC AND COVENANT COAL CORPORATION
Plaintiffs-Appellants,
AND
WELLMORE ENERGY COMPANY, LLC
(FORMERLY KNOWN AS RAPOCA ENERGY
COMPANY, LLC)
Plaintiff-Appellant,
v.
UNITED STATES
Defendant-Appellee.
3 CONSOLIDATION COAL v. US
__________________________
2009-5083
__________________________
Appeal from the United States Court of Federal
Claims in 01-CV-254 and 01-CV-442, Senior Judge Boh-
dan A. Futey.
__________________________
Decided: August 2, 2010
__________________________
STEVEN H. BECKER, Baker & McKenzie, LLP, of New
York, New York, argued for all plaintiffs-appellants.
With him on the brief were SUZANNE I. OFFERMAN,
LINDSAY A. MINNIS and CHARLES H. CRITCHLOW. JOHN Y.
MERRELL, JR., Merrell & Merrell, P.C., of McLean, Vir-
ginia, for plaintiff-appellant Wellmore Energy Company,
LLC.
TODD M. HUGHES, Deputy Director, Commercial Liti-
gation Branch, Civil Division, United States Department
of Justice, of Washington, DC, argued for defendant-
appellee. With him on the brief were TONY WEST, Assis-
tant Attorney General, JEANNE E. DAVIDSON, Director,
and TARA K. HOGAN, Trial Attorney. Of counsel was
DANIEL W. KILDUFF, Office of the Solicitor, Department of
the Interior, of Washington, DC.
__________________________
Before LOURIE, FRIEDMAN, and MOORE, Circuit Judges.
CONSOLIDATION COAL v. US 4
MOORE, Circuit Judge.
The appellants in this case, a group of operators in
the coal mining industry, appeal from the United States
Court of Federal Claims’ grant of summary judgment that
certain regulations that implement the Surface Mining
Control and Reclamations Act of 1977 (SMCRA) reclama-
tion fee do not violate the Export Clause of the Constitu-
tion. We affirm.
BACKGROUND
This is the third opinion we have issued in this long-
pending case. We explained the factual background in
our previous opinion. See Consolidation Coal Co. v.
United States, 351 F.3d 1374 (Fed. Cir. 2003) (Consol I).
Following our remand in Consol I, the Court of Federal
Claims granted summary judgment in favor of the plain-
tiff coal producers on the issue of liability. Consolidation
Coal Co. v. United States, 64 Fed. Cl. 718 (2005) (Consol
II). We reversed on June 11, 2008, holding that the
statutory fee was on “coal extracted” rather than “coal
sold” and thus not an unconstitutional tax on exports.
Consolidation Coal Co. v. United States, 528 F.3d 1344
(Fed. Cir. 2008) (Consol III). On remand, the appellants
(Consol, collectively) argued that Consol III only deter-
mined the constitutionality of the statute and separately
argued the constitutionality of the implementing regula-
tions. The Court of Federal Claims disagreed with the
appellants that Consol III did not decide the constitution-
ality of the regulations and entered summary judgment in
favor of the government on March 4, 2009. Consolidation
Coal Co. v. United States, 86 Fed. Cl. 384 (2009) (Consol
IV). This appeal followed.
5 CONSOLIDATION COAL v. US
DISCUSSION
We review the Court of Federal Claims’ grant of
summary judgment and determinations of our scope of
remand without deference. Old Stone Corp. v. United
States, 450 F.3d 1360, 1367 (Fed. Cir. 2006); Laitram
Corp. v. NEC Corp., 115 F.3d 947, 950 (Fed. Cir. 1997).
Summary judgment is appropriate when, drawing all
justifiable inferences in the nonmovant’s favor, there
exists no genuine issue of material fact and the movant is
entitled to judgment as a matter of law. Fed. R. Civ. P.
56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255
(1986). We have jurisdiction pursuant to 28 U.S.C.
§ 1295(a)(3).
In Consol IV, the Court of Federal Claims determined
that “the Federal Circuit [in Consol III] already addressed
and resolved the constitutionality of both the reclamation
fee statute and its implementing regulations.” Consol IV,
86 Fed. Cl. at 389. It held that because we determined
that “coal produced” in the statute means “coal extracted,”
then the phrase must have the same definition in the
regulations. Id. It pointed to the fact that our opinion in
Consol III discussed the “application” of the statute and
the “method” by which OSM collects fees. Id. The Court
of Federal Claims stated that this showed that we explic-
itly considered both the statutes and the implementing
regulations.
The Court of Federal Claims also found that even if
we did not reach the issue explicitly in Consol III, we
determined the issue by “necessary implication.” Int’l
Rectifier Corp. v. IXYS Corp., 515 F.3d 1353 (Fed. Cir.
2008) (holding that remand to determine a substantive
issue necessarily decided a related procedural issue). The
Court of Federal Claims held that because we found the
statute constitutional in Consol III in spite of Consol’s
CONSOLIDATION COAL v. US 6
arguments there regarding the regulations, Consol cannot
now be heard on the constitutionality of the regulations.
On appeal, Appellants argue that the Court of Federal
Claims erred in determining that our decision in Consol
III determined the constitutionality of the regulations at
issue. They point to the Consol III opinion that states
“the only question before this court is one of statutory
interpretation of 30 U.S.C. § 1232(a).” Consol III, 528
F.3d at 1347.
The government responds that the Court of Federal
Claims was correct; we considered the “application” of the
statute and the “method” of collecting the reclamation fee;
this is the equivalent of considering the implementing
regulations. It also points out that in Consol III we cited
the regulation in question as part of our analysis. See id.
at 1347.
We will address directly the parties’ arguments re-
garding the constitutionality of the implementing regula-
tions. In Consol III, we held that the doctrine of
constitutional avoidance required us to construe the
phrase “coal produced” in 30 U.S.C. § 1232(a) to mean
“coal extracted.” Id. at 1348. Appellants argue that
although this definition applies to the statute, the regula-
tions implemented by the Office of Surface Mining apply
the fee to coal sold. As an example, appellants point to 30
C.F.R. § 870.12(a)-(b)(3)(iii) which states in pertinent
part:
(a) The operator shall pay a reclamation fee on
each ton of coal produced for sale, transfer, or use,
including the products of in situ mining.
(b) The fee shall be determined by the weight and
value at the time of initial bona fide sale, transfer
of ownership, or use by the operator.
7 CONSOLIDATION COAL v. US
Appellants argue that because OSM collects the reclama-
tion fee at the time of sale, it is necessarily a tax on “coal
sold” rather than “coal extracted” regardless of the mean-
ing of the term in the statute.
On the other hand, the government argues that liabil-
ity under SMRCA incurs at the time of extraction; the
collection of the fee is merely delayed until the time of
sale, when operators typically weigh coal. The govern-
ment argues that the time of collection cannot convert a
constitutional tax or fee to an unconstitutional one, citing
Liggett & Myers Tobacco Co. v. United States, 299 U.S.
383 (1937). In Liggett, the taxpayer was a manufacturer
of tobacco and disputed a tax based on weight that ap-
plied to its product at the time of sale or removal from the
factory. Id. at 385. Liggett sold the tobacco in question to
the Commonwealth of Massachusetts for use at a state
hospital. Id. Liggett and the Commonwealth argued that
any tax on the sale amounted to an improper imposition
of a tax on the Commonwealth. Id. The Court held that
this was not a tax on sale, but a proper tax on manufac-
ture. Id. at 386. Although the statute delayed the collec-
tion of the tax from the time of manufacture to the time of
sale or removal from the factory, this did not make it
unconstitutional. Id. The Court found that the timing of
the tax “mitigate[s] the burden” on manufacturers and
“indicates no purpose to impose the tax upon . . . sale.” Id.
Appellants respond that Liggett is not applicable be-
cause the coal extracted is not the same product that the
operators later sell. They argue that between extraction
and sale, certain impurities like oil and antifreeze may
accumulate, 1 while the operators remove other materials
like dirt and rock that come along with coal as extracted.
1 30 C.F.R. § 870.18 allows for deduction for excess
moisture accumulated between extraction and sale.
CONSOLIDATION COAL v. US 8
Although the extracted coal along with dirt and rock may
be heavier – and thus subject to a higher fee – the appel-
lants argue that this is the proper basis for the reclama-
tion fee. The appellants also argue that this is a tax on
sale rather than extraction because coal that an operator
never sells will never be subject to the fee. 2
Appellants’ arguments in this appeal regarding the
language of the regulation are much the same as those
made in Consol III. Using the same canon of construc-
tion, the doctrine of constitutional avoidance, we hold that
the regulations implementing SMCRA do not violate the
Export Clause. See Edward J. DeBartolo Corp. v. Fla.
Gulf Bldg. & Constr. Trades Council, 485 U.S. 568, 575
(1988). The regulations, like the statute, use the term
“coal produced,” and we conclude that this term in the
regulation must be construed consistent with the identical
term in the statute. “Coal produced” applies to “coal
extracted” rather than “coal sold.”
The decision by OSM to delay collection of the recla-
mation fee to the time of sale simply “mitigate[s] the
burden” on operators by not requiring the installation and
use of weighing equipment at the time of extraction.
Appellants’ arguments regarding the change in weight
between extraction and sale are not persuasive. In Lig-
gett, the Court did not differentiate between an organic
product like tobacco that could change weight and other
products that could not. We see no reason to do so here. 3
2 Our decision in Consol III addresses appellants’
alternative arguments regarding Drummond Coal Co. v.
Hodel, 796 F.2d 503 (D.C. Cir. 1986). Consol III, 528 F.3d
at 1347.
3 The government persuasively argues that the
weight at the time of sale, without dirt and rocks, is a
more accurate representation of the amount of “coal
extracted” than if the operators took the weight at the
9 CONSOLIDATION COAL v. US
The liability incurs at the time of extraction, and OSM
merely collects the fee at the time of sale. The practice of
stockpiling – holding product that never sells – should not
change the result. If an operator extracts coal, but
chooses not to sell it, it still incurs liability; the stockpil-
ing simply creates a collection issue for OSM.
We hold that all of OSM’s challenged regulations for
collecting the reclamation fee under SMCRA, like the
statute itself, apply to “coal extracted” and do not violate
the Export Clause.
AFFIRMED
time of extraction. We agree that it would appear con-
trary to our decision in Consol III to levy a fee on dirt and
rocks as part of “coal extracted.”