United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued March 11, 1999 Decided April 27, 1999
No. 98-5320
National Mining Association,
Appellant
v.
Bruce Babbitt, Secretary,
United States Department of Interior, et al.,
Appellees
Appeal from the United States District Court
for the District of Columbia
95cv00938
Thomas C. Means argued the cause for appellant. With
him on the briefs were J. Michael Klise and Harold P.
Quinn, Jr. John A. MacLeod entered an appearance.
Robert H. Oakley, Attorney, United States Department of
Justice, argued the cause for the federal appellees. With him
on the briefs were Lois J. Schiffer, Assistant Attorney Gener-
al, and Robert L. Klarquist, Attorney.
Glenn P. Sugameli argued the cause for appellees National
Wildlife Federation, et al. With him on the brief was Thom-
as J. FitzGerald.
Before: Silberman, Ginsburg, and Garland, Circuit
Judges.
Opinion for the Court filed by Circuit Judge Silberman.
Silberman, Circuit Judge: National Mining Association
challenges four regulations promulgated by the Secretary of
the Interior (Office of Surface Mining Reclamation and En-
forcement) as part of a package of regulations governing
damage to land, structures, and certain water supplies caused
by mining subsidence. The district court rejected appellant's
claims. We, however, agree with appellant that two of the
agency's regulations are arbitrary and capricious.
I.
The Surface Mining Control and Reclamation Act, 30
U.S.C. ss 1201 et seq. (1994), sets forth permit requirements
and performance standards for coal mining operations. An
important aspect of this statutory scheme is its regulation of
subsidence caused by underground mining. Subsidence, as
used in the Act, apparently refers to the kind of earth
movement that occurs "when a patch of land over an under-
ground [coal] mine sinks, shifts, or otherwise changes its
configuration." National Wildlife Fed'n v. Hodel, 839 F.2d
694, 739 (D.C. Cir. 1988); see also Keystone Bituminous Coal
Ass'n v. DeBenedictis, 480 U.S. 470, 474-75 (1987) (discussing
coal mine subsidence and its effects). Although the word
subsidence literally means lowering, tending downward, or
"flatten[ing] out so as to form a depression," Webster's Third
New Int'l Dictionary 2279 (1971), and there is no definition of
the term in the statute or the regulations, the parties agree it
is used only to describe the kind of subsidence caused by
underground coal mining. For purposes of this case, we
accept that definition.
The central statutory provision governing "subsidence"
provides that an underground mining permit issued by an
approved State or Federal program must require the opera-
tor to "adopt measures consistent with known technology in
order to prevent subsidence causing material damage to the
extent technologically and economically feasible, maximize
mine stability, and maintain the value and reasonably foresee-
able use of such surface lands...." 30 U.S.C. s 1266(b)(1)
(1994).
Subsidence regulation under the Mining Act has had vari-
ous incarnations and has generated a fair amount of litigation
before us. See, e.g., National Wildlife Fed'n v. Lujan, 928
F.2d 453, 455-60 (D.C. Cir. 1991); National Wildlife Fed'n v.
Hodel, 839 F.2d at 739-41; In re Permanent Surface Mining
Regulation Litig., 653 F.2d 514 (D.C. Cir. 1981) (en banc). In
the aftermath, Congress added a new s 720 to the Mining
Act, see Energy Policy Act of 1992, Pub. L. No. 102-486, sec.
2504(a)(1), s 720, 106 Stat. 2776, 3104 (1992), which provides:
(a) Requirements. Underground coal mining operations
conducted after October 24, 1992, shall comply with each
of the following requirements:
(1) Promptly repair, or compensate for, material dam-
age resulting from subsidence caused to any occupied
residential dwelling and structures related thereto, or
non-commercial building due to underground coal mining
operations. Repair of damage shall include rehabilita-
tion, restoration, or replacement of the damaged occu-
pied residential dwelling and structures related thereto,
or non-commercial building. Compensation shall be pro-
vided to the owner of the damaged occupied residential
dwelling and structures related thereto or non-
commercial building and shall be in the full amount of the
diminution in value resulting from the subsidence. Com-
pensation may be accomplished by the purchase, prior to
mining, of a noncancellable premium-prepaid insurance
policy.
(2) Promptly replace any drinking, domestic, or resi-
dential water supply from a well or spring in existence
prior to the application for a surface coal mining and
reclamation permit, which has been affected by contami-
nation, diminution, or interruption resulting from under-
ground coal mining operations.
Nothing in this section shall be construed to prohibit or
interrupt underground coal mining operations.
(b) Regulations. Within one year after October 24, 1992,
the Secretary shall, after providing notice and opportuni-
ty for public comment, promulgate final regulations to
implement subsection (a) of this section.
30 U.S.C. s 1309a (1994). In order to implement this new
statutory provision, the Secretary in 1993 proposed subsi-
dence regulations revising the subsidence regulations previ-
ously promulgated under the Mining Act. See 58 Fed. Reg.
50,174 (1993). After a notice and comment period, the Secre-
tary modified the proposed regulations and issued them in
final form in 1995. See 60 Fed. Reg. 16,722 (1995).
II.
Appellant National Mining Association brought this action
in the district court challenging 10 parts of the new regula-
tions as arbitrary and capricious, see 30 U.S.C. s 1276(a)(1);
5 U.S.C. s 706(2)(A), and moved for summary judgment.
The Secretary, along with intervenor National Wildlife Feder-
ation, filed cross-motions for summary judgment, which the
district court granted. The Association limits its appeal to
four of the district court's rulings. We consider them in turn.
A.The Angle of Draw Presumption
The Association's most vigorous challenge is to the regula-
tion establishing a rebuttable presumption of causation:
If damage to any non-commercial building or occupied
residential dwelling or structure related thereto occurs
as a result of earth movement within an area determined
by projecting a specified angle of draw from the outer-
most boundary of any underground mine workings to the
surface of the land, a rebuttable presumption exists that
the permittee caused the damage. The presumption will
normally apply to a 30-degree angle of draw.
30 C.F.R. s 817.121(c)(4)(i) (1998). As the agency explained,
the angle of draw "is the angle of inclination between the
vertical at the edge of the underground mine workings and
the point of zero vertical displacement at the edge of a
subsidence trough." 60 Fed. Reg. at 16,738. It "is one way
to define the outer boundary of subsidence displacement that
may occur at the surface." Id.
Once the presumption is triggered, the burden shifts to the
mining company to offer evidence that the damage is attribut-
able to another cause. The regulation suggests some exam-
ples: that the "damage predated the mining in question; the
damage was proximately caused by some other factor or
factors and was not proximately caused by subsidence; or the
damage occurred outside the surface area within which subsi-
dence was actually caused by the mining in question." 30
C.F.R. s 817.121(c)(4)(iv).
Appellant claims that this presumption actually shifts the
burden of proof to mining companies to show a negative--
that their operations did not cause subsidence--and that such
a shift runs afoul of the Administrative Procedure Act given
the agency's posture in such situations as proponents of an
order. See 5 U.S.C. s 556(d) (1994); Director, Office of
Workers' Compensation Programs, Dep't of Labor v. Green-
wich Collieries, 512 U.S. 267, 281 (1994). The government
responds that the agency's regulation merely shifts the bur-
den of production not the burden of persuasion, and it is only
the latter that the APA forbids. See id. at 279-80. Although
we recognize that at a certain point along an evidentiary
continuum a shift in the burden of production can become de
facto a shift in the burden of persuasion, we do not think it is
necessary in this case to draw the line. For a factual
presumption that causes a shift in the burden of production
must be reasonable (as we explain below, this means essen-
tially that the circumstances giving rise to the presumption
must make it more likely than not that the presumed fact
exists, see Secretary of Labor v. Keystone Coal Mining Corp.,
151 F.3d 1096, 1100-01 (D.C. Cir. 1998)). For two reasons,
the agency's presumption fails that test. The first is that the
nature of subsidence evidence that triggers the presumption
has become hopelessly confused in this litigation, and the
second is that the geographical boundary in which the pre-
sumption obtains--the angle of the draw--is irrationally
broad.
The regulation states that the presumption is employed
wherever damage to a structure covered by the Energy
Policy Act "occurs as a result of earth movement" within the
angle of the draw, 30 C.F.R. s 817.121(c)(4), which gives rise
to the question: What is the conceptual relationship between
"subsidence" (which, it will be recalled, the parties agree
refers to mining subsidence) and "earth movement"? On
appeal, contrary to its position in the district court, the
government explains that "earth movement" does not mean
any earth movement but only "earth movement consistent
with subsidence" and that any resulting damage to covered
structures (also necessary to trigger the presumption) is alas
consistent with the kind of damage caused by subsidence.
Appellant cries foul. It claims the government cannot shift
the meaning of the regulation during litigation. Before the
district court the government appeared to argue that proof of
subsidence in fact (that is, coal mining subsidence) was neces-
sary to trigger the presumption. It is not uncommon, howev-
er, when an agency regulation is challenged in a facial attack,
as Congress permits parties to do, that the meaning of
disputed provisions does not appear clearly until the case is
before the courts of appeals. We typically accept the agen-
cy's construction--which often eliminates or narrows the dis-
pute--because we recognize the agency is entitled to defer-
ence as to the meaning of its own regulation. Auer v.
Robbins, 519 U.S. 452, 462-63 (1997); Serono Lab. v. Shalala,
158 F.3d 1313, 1325 (D.C. Cir. 1998); Association of Bitumi-
nous Contractors, Inc. v. Apfel, 156 F.3d 1246, 1251-52 (D.C.
Cir. 1998); Paralyzed Veterans of Am. v. D.C. Arena L.P.,
117 F.3d 579, 584 (D.C. Cir. 1997), cert. denied sub nom.
Pollin v. Paralyzed Veterans of Am., 118 S. Ct. 1184 (1998).
Yet, we are entitled to expect that at least by the time of oral
argument the agency will have settled on an interpretation
that reflects its "fair and considered judgment," Auer, 519
U.S. at 462--and that such an interpretation is understanda-
ble.
The government assures us that, despite some vacillation, it
has come to rest, but, unfortunately, if it has, we do not
understand its conceptual resting point. Pressed at oral
argument to define just what "earth movement consistent
with subsidence" means, the government, with manifest circu-
larity, explained that the term refers to earth movement not
caused by non-subsidence (i.e., earth movement not caused by
earthquakes, floods, etc.). Establishing the cause of the
damage, however--whether subsidence or something else--is
the whole purpose of the evidentiary presumption. Indeed,
as appellant correctly observes, one of the ways in which a
mining company rebuts the presumption is to produce evi-
dence that the damage was proximately caused by some
factor other than mining. See 30 C.F.R. s 817.121(c)(4)(iv).
It thus does not help to define the trigger for the presump-
tion in terms of the presumption's intended result. In short,
we have no clue what "earth movement consistent with subsi-
dence" means and the government's efforts to enlighten us
created instead hopeless confusion.
We, of course, cannot approve a regulatory presumption
that the agency's lawyers cannot interpret in an intelligible
fashion. But even if we did understand the relationship
between subsidence and earth movement, as those terms are
used in the regulation, it could not stand because the geo-
graphical boundary of the area in which the presumption
operates--the angle of the draw--is both arbitrary and capri-
cious. That is to say, the presumption simply does not serve
as a reasonable proxy to explain subsidence damage to struc-
tures.
Appellant contends that the record reveals that the kind of
subsidence that occurs within the angle of draw (pure vertical
subsidence) is not the kind of subsidence (differential vertical
and horizontal displacement) that ordinarily results in dam-
age to surface structures. The very authors of the scientific
studies on which the agency relied in its proposed rulemak-
ing, the Association points out, have specifically rejected the
predictive value of the angle of draw. And, even this evi-
dence does not support the agency's decision to base a
nationwide presumption of causation on the angle of draw.
The nationwide presumption is further deficient, it is argued,
because it overlooks the key distinction between high extrac-
tion and partial extraction mining (damage to structures from
the latter method is said to be unlikely); it ignores the critical
variable of mining depth (the deeper the mine, the greater
surface area is covered by the 30-degree angle of draw, yet
the less likely is actual structural damage at the surface); and
it ignores other non-subsidence causes of earth movement
that are just as likely to cause damage to structures within
the angle of draw.1
The government's response is anemic. It emphasizes that
the regulation permits a state regulatory authority to petition
the Department for a different angle if it can demonstrate
that its proposed angle is more reasonable, see 30 C.F.R.
s 817.121(c)(4)(i), and also permits a mining company to
request a different site-specific angle if it too could demon-
strate a more reasonable calculation, see id.
s 817.121(c)(4)(ii). But the government does not claim--nor
could it--that these safety valve provisions could save the
regulatory presumption if we thought it unreasonable. As we
have said repeatedly, an evidentiary presumption is "only
permissible if there is a sound and rational connection be-
tween the proved and inferred facts, and when proof of one
__________
1 Appellant also claimed that the Department unlawfully relied
on studies not mentioned in the proposed rule. But informal
rulemaking does not contemplate a closed record; the government
is entitled to rely on information not exposed to comment so long as
it is supplementary. See generally Air Transport Ass'n of America
v. FAA, 1999 WL 110689, at *5-6 (D.C. Cir. Mar. 5, 1999). The real
problem with the studies is that they are inadequate support for the
presumption.
fact renders the existence of another fact so probable that it is
sensible and timesaving to assume the truth of [the inferred]
fact ... until the adversary disproves it." Keystone Coal
Mining, 151 F.3d at 1100-01 (quoting Chemical Mfrs. Ass'n
v. Department of Transp., 105 F.3d 702, 705 (D.C. Cir. 1997)
(quoting NLRB v. Curtin Matheson Scientific, Inc., 494 U.S.
775, 788-89 (1990))) (emphasis added) (internal citation and
internal quotation marks omitted) (alterations in original).
"If there is an alternate explanation for the evidence that is
also reasonably likely, then the presumption is irrational."
Id.
We think the government has failed to justify its presump-
tion. It has not offered any support, scientific or otherwise,
that even begins to establish that the angle of draw delimits
the surface area within which it is logical or reasonable to
employ an evidentiary presumption of causation. Indeed, the
government apparently concedes that it is not supported by
available science. This is not surprising since, as appellant
argues, science seems more supportive of the view that the
angle of draw has nothing whatever to do with identifying
subsidence-caused damage to structures. A leading textbook
in the field, which the government paradoxically listed as
support for the presumption, see 60 Fed. Reg. at 16,738,
defines the angle of draw in such a way as to seriously
undermine (pun intended) the government's position. See
Syd S. Peng, Coal Mine Ground Control 422-23 (2d ed. 1986)
(defining angle of draw, noting that it varies from 15 to 45
degrees, and then stating: "The angle of draw is more or less
of academic interest. Because the subsidence profile levels
off and subsidence becomes very small far before it reaches
the edges of the subsidence basin[,] from [a] structural dam-
ages point of view, it is practically meaningless.") (emphasis
added).
Nonetheless, the government thinks it sufficient to explain
that the angle of draw is used merely "to define the bound-
aries of the area within which earth movement resulting from
subsidence, if any, will most probably occur." But the real
question in using the angle of draw to set the applicable
boundaries is whether subsidence-caused damage to struc-
tures within the angle is more likely than not to occur. After
all, the mining company's potential liability is for causing
damage to protected structures, not for causing "earth move-
ment resulting from subsidence." Unless the government
can establish a likely connection between the former and the
angle of draw, the presumption cannot stand.
The agency rejected the suggestion that the presumption
be limited to the so-called "angle of critical deformation"--a
smaller angle, within the angle of draw, that measures the
inclination from the edge of the underground mining area to
the surface point exhibiting the "maximum tensile strain" or
stretching. See 60 Fed. Reg. at 16,738. (Dr. Peng, a leading
expert in the field, estimates that the angle of critical defor-
mation is on average 10 degrees smaller than the angle of
draw. See Peng at 423.) Although the government concedes
that subsidence-caused damage to structures within the angle
of critical deformation portion of the angle of draw is more
likely to occur than in the portion of the angle of draw beyond
the angle of critical deformation, it contends that its decision
to use the entire angle of draw is justified on "possibility"
grounds--the larger angle defines the "outer boundary of
subsidence displacement that may occur at the surface."
(Neither in its brief nor in the preamble to the final rule, see
60 Fed. Reg. at 16,738-39, we should note, has the govern-
ment offered any scientific support for even the possibility of
subsidence-caused damage within the angle of draw.)
To impose a presumption of causation of damage on a party
based merely on the possibility that the party caused the
damage is to convert a factual presumption into a counterfac-
tual presumption. Although the government has never wa-
vered from its insistence that the presumption is a factual
one, we do not see how a counterfactual procedural device
could be justified even as a matter of policy, see Allentown
Mack Sales & Serv., Inc. v. NLRB, 118 S. Ct. 818, 828 (1998),
since the statute imposes liability only for causation. More-
over, the government simply has no response at all to the
devastating objection that the angle of draw is an inherently
illogical measure since, as a matter of geometry, the deeper
the mine the wider the angle. Yet, it seems undisputed that
the likelihood of any structural damage on the surface de-
creases with the depth of the mine. Since the agency recog-
nized, in its preamble to the final rule, see 60 Fed. Reg. at
16,740, that the depth and location of the mine (and the
amount of coal extracted) are all factors that bear on the
likelihood of subsidence-caused damage, the Department nev-
er even adequately explains why it wishes to employ any sort
of nationwide presumption.
Essentially the government argues that its presumption is
justified by efficiency; it is easier to establish a mine's
liability. There are limits to that justification, otherwise the
government could dispense with enforcement proceedings
altogether. To be sure, we would be obliged to defer to a
reasonable agency determination of probabilities--including
predictions based on its own expertise and policies. But we
see nothing of the sort here. We have no difficulty conclud-
ing that this regulation is both arbitrary and capricious
because it is irrationally overbroad, and we therefore vacate
it.
B.Pre-Subsidence Survey
Appellant challenges the regulation requiring all applicants
for a mining permit to conduct, inter alia, a pre-subsidence
"survey of the condition of all non-commercial buildings or
occupied residential dwellings and structures related thereto,
that may be materially damaged or for which the reasonably
foreseeable use may be diminished by subsidence, within the
area encompassed by the applicable angle of draw." 30
C.F.R. s 784.20(a)(3) (1998). Appellant's principal objection
is that, when promulgating this regulation in 1995, the agency
failed adequately to explain its deviation from its prior policy
not to require pre-subsidence surveys. The government re-
sponds with two internally inconsistent arguments: that the
change in policy was justified (if not mandated) by the
Energy Policy Act of 1992, and that the requirement of a pre-
subsidence survey of the condition of structures is not a
change of position at all because the regulation has always
implicitly required such a survey. We take this latter argu-
ment as an alternative one (though it would have been helpful
if counsel had designated it as such). Even so, it is plainly
wrong, and we are surprised that the government would
choose to advance it. It cannot seriously be maintained that
prior to 1995 the regulation required a pre-subsidence survey.
The government admits as much in describing the pre-
Energy Policy Act regulatory regime: beginning in 1983,
"[i]nstead of conducting a pre-subsidence survey, the appli-
cant was now only required to identify any lands or struc-
tures that could be materially damaged by subsidence." And
in the preamble to the proposed version of the current
regulation, the Secretary explained that "the survey itself
[required by the prior regulation] is proposed to be changed
from a mere inventory of structures, and renewable resource
lands, to a survey of the condition of structures, facilities, and
surface features." 58 Fed. Reg. at 50,179 (emphasis added).
The government's argument that a pre-subsidence survey of
the condition of structures has always been implicitly re-
quired is palpably in conflict with its own account of the
regulatory history.
Much the better argument is that the change in policy was
justified by Congress' explicit instruction to the Secretary in
the Energy Policy Act to promulgate regulations to imple-
ment the new Act, which conferred greater protection to
structures and land from subsidence-caused damage. Once
again, however, the government overplays its hand and sug-
gests that Congress' instruction to promulgate new regula-
tions completely absolves the agency of the requirement to
supply a reasoned explanation for its change in policy. The
government relies for this proposition on our decision in City
of Las Vegas v. Lujan, 891 F.2d 927 (D.C. Cir. 1989), in which
we stated that "[a] change in congressional instructions, of
course, absolves the Secretary from explaining why his policy
has changed, if indeed it has," id. at 934. But Lujan involved
a specific congressional instruction to take a precise agency
action--issuing emergency regulations--more readily than
the Secretary previously had seen fit to take. See id. The
Energy Policy Act does not refer to pre-subsidence surveys
at all, and so we do not see how Congress' general instruction
to implement statutory protection of structures through a
repair or compensate obligation absolves the government of
explaining its decision to require a pre-subsidence survey that
it previously had opted against.
Be that as it may, the agency did actually say in the
preamble to the final rule that the new policy was necessary
"to effectively implement the requirements of the Energy
Policy Act," 60 Fed. Reg. at 16,730, and more specifically that
the information gathered was "essential to establish a base-
line against which the effects of subsidence may be measured
and to ensure full implementation [of the Energy Policy
Act]," id. at 16,729. Consistent with the notion that the
Energy Policy Act's mandate justified the Secretary's deci-
sion to increase mining companies' information-gathering re-
sponsibilities, the agency limited the survey requirement to
structures and water supplies protected by the Energy Policy
Act. See id. at 16,730. Greater protection for structures
(albeit only through a repair or compensate obligation) was
the main impetus of the Energy Policy Act, and we think the
agency's reliance on that impetus is a satisfactory explanation
for its change of policy.
Appellant also contends that the agency failed to respond
adequately to comments that the regulation is overly burden-
some, and that it irrationally requires information about the
condition of structures at the time of the permit application,
rather than at the time (often years later) when mining
operations actually commence. In our view, the agency has
said enough and its regulations are not unreasonable. The
Secretary specifically responded to the comments complain-
ing about the cost of the survey by limiting the structures to
which the requirement applied, and by modifying some of the
mapping requirements of the survey. See id. We do not
agree with appellant, moreover, that the timing of the survey
(pre-application as opposed to pre-mining) is without purpose.
As the government points out, the results of the pre-
subsidence survey are used to determine whether the appli-
cant is also required to submit a subsidence control plan with
the application. See 30 C.F.R. s 784.20(b). The agency
concluded that, based on its experience in this area, "the
proposed format for the survey information is the minimum
needed to adequately assess the need for a subsidence control
plan." 60 Fed. Reg. at 16,730. The government also explains
that the possible effects of subsidence is a relevant factor in
its determination of whether to grant a permit in the first
place. We see no reason why the agency should be precluded
from requiring all of this information at the time of the
application just because conditions might change before min-
ing begins. As the Secretary explained, the mining company
can always supplement outdated information later in the
process. See 60 Fed. Reg. at 16,730.
Nevertheless, the regulation as currently written must be
vacated along with the first one discussed because it defines
the area within which the pre-subsidence survey is required
by reference to the angle of draw. The government did not
argue that the survey requirement could be sustained inde-
pendent of the angle of draw--and we do not see how it could.
C.Planned Subsidence Minimization
The Association next challenges two provisions of the new
regulations that impose an obligation on mining permittees
who use a "planned subsidence" mining technique to minimize
subsidence damage.
If a permittee employs mining technology that provides
for planned subsidence in a predictable and controlled
manner, the permittee must take necessary and prudent
measures, consistent with the mining method employed,
to minimize material damage to the extent technological-
ly and economically feasible to non-commercial buildings
and occupied residential dwellings and structures related
thereto....
30 C.F.R. s 817.121(a)(2); see also 30 C.F.R. s 784.20(b)(7)
(providing that mining companies required to submit a subsi-
dence control plan and projecting to use planned subsidence
must, with certain exceptions, include "a description of meth-
ods to be employed to minimize damage from planned subsi-
dence to non-commercial buildings and occupied residential
dwellings and structures related thereto"). Planned subsi-
dence refers to mining methods that make it possible to
predict the time and manner of the resulting subsidence (one
such method is "longwall mining").
Appellant disputes the regulation's damage minimization
requirement for planned subsidence on the ground that such
a requirement is contrary to s 516(b)(1) of the Mining Act,
which provides that any permit issued must
require the operator to adopt measures consistent with
known technology in order to prevent subsidence causing
material damage to the extent technologically and eco-
nomically feasible, maximize mine stability, and maintain
the value and reasonably foreseeable use of such surface
lands, except in those instances where the mining tech-
nology used requires planned subsidence in a predicta-
ble and controlled manner....
30 U.S.C. s 1266(b)(1) (1994) (emphasis added).
Since Congress explicitly approved longwall mining, not-
withstanding that, by definition, it causes subsidence, appel-
lant argues that the regulation would frustrate Congress'
intent. The government's minimization of damage require-
ment, we are told, is merely a paraphrase of the prevention of
damage requirement from which longwall mining is exempt-
ed. The government argues that it is entitled to Chevron
deference in interpreting the statutory language for the
phrase "predictable and controlled manner" can be interpret-
ed as a manner that restricts collateral damage. Appellant,
by contrast, would read predictable and controlled manner as
not imposing any separate obligation but as words that simply
describe longwall mining. If we were interpreting the statute
de novo, we might well agree that appellant has the better
argument. But we are not. And although the government's
reading is a bit of a stretch, we think it passes the Chevron
test. See Chevron U.S.A. Inc. v. Natural Resources Defense
Council, Inc., 467 U.S. 837, 842-43 (1984).
D.Waivers
The Association's last challenge is to the regulation that
implements the Energy Policy Act's "repair or compensate"
obligation. See 30 C.F.R. s 817.121(c)(2) ("The permittee
must promptly repair, or compensate the owner for, material
damage resulting from subsidence caused to any non-
commercial building or occupied residential dwelling or struc-
ture related thereto that existed at the time of mining.").
The Association asserts that the regulation is unreasonable
"to the extent it purports to nullify prior agreements between
owners of eligible structures and underground mine opera-
tors." In appellant's view, nothing in the Energy Policy Act
suggests an intent to override such waiver agreements that
would otherwise be binding under state common law. More-
over, it is urged, if the statute were read to authorize
abrogation of waiver agreements, it would confer a windfall to
the landowner, and consequently might constitute an uncon-
stitutional taking of the mining company's contract rights.
The thrust of appellant's argument focuses on the unfair-
ness (and asserted conflict with the statutory language)
caused by a "double recovery" regulatory regime, under
which a landowner is compensated pre-subsidence damage
(and possibly pre-Energy Policy Act) by selling a waiver of
rights to the mining company, and then post-subsidence, post-
damage through an enforcement action under the Energy
Policy Act. The Association contends that Congress could
not possibly have intended such a result. At oral argument,
however, the government stated unequivocally (which it did
not do in its brief or in the preamble to the regulation) that
any compensation owed to a landowner under the Act will
always be reduced by at least the amount previously paid in a
contractual waiver of subsidence rights--both pre-damage,
pre-Act waivers, and pre-damage, post-Act waivers.2 In oth-
__________
2 In the preamble, to be sure, the Secretary stated that "[t]he
use of pre- and post-subsidence agreements would be an acceptable
means of fulfilling the requirement so long as the terms meet the
requirement under paragraph 817.121(c)(2) that the permittee re-
pair or compensate any subsidence-related material damage to any
er words, the value of the landowner's rights under the
federal regime may well exceed (indeed typically would) the
present value of whatever compensation the landowner re-
ceived under the previous legal climate. But the landowner
would not be entitled to a double recovery. The govern-
ment's oral clarification seems to strip appellant's challenge of
its force and appellant waived rebuttal. Nonetheless, the
Association's brief appeared to argue that such waivers must
be honored fully, and that the set-off approach also is incon-
sistent with the Act.
If appellant means to deny any obligation to compensate
beyond the amount a mining company originally paid the
landowner for the waiver, no matter how it would compare to
the landowner's legal rights post passage of the federal
statute, we reject its position. We previously upheld the
government's limitation of the obligation to repair or compen-
sate for damage to structures only to the extent required by
state law, see National Wildlife Fed'n v. Lujan, 928 F.2d at
457-59, in part because the Mining Act at the time did not
explicitly impose an obligation to compensate for such dam-
age, see id. at 458 n.3. The Energy Policy Act imposes just
such an obligation on its face. See 30 U.S.C. s 1309a(a)(1)
("Compensation shall be provided to the owner of the dam-
aged occupied residential dwelling and structures related
thereto or non-commercial building and shall be in the full
amount of the diminution in value resulting from the subsi-
dence.") (emphasis added). It is therefore wholly consistent
with the statute--indeed it might even be mandated--for the
Secretary to require the mining companies further to com-
pensate landowners for damages to which the new federal law
entitled them. That is not to say, of course, that a landowner
and mining company would be barred from entering into a
post-Act fair contract based on anticipated damages that
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non-commercial building or occupied residential dwelling or related
structure." 60 Fed. Reg. at 16,735 (emphasis added). Although the
Secretary did not make clear that this policy applies to both pre-Act
and post-Act waivers, the government's position at oral argument
was that it does. We accept the agency's interpretation of its own
regulation.
would extinguish the landowner's claim if the damages turned
out to be more than anticipated. But we do not understand
the agency to deny that.
As for appellant's takings challenge, the argument is insuf-
ficiently developed to warrant much attention. Appellant
seems to assume that interference with contract rights is a
per se taking, despite the well-settled rule that "legislation
[that] disregards or destroys existing contractual rights does
not always transform the regulation into an illegal taking."
Connally v. Pension Benefit Guar. Corp., 475 U.S. 211, 224
(1986). To develop a real takings argument, appellant would
be compelled to demonstrate why "(1) the economic impact of
the regulation on the claimant; (2) the extent to which the
regulation has interfered with investment-backed expecta-
tions; and (3) the character of the governmental action," id.
at 225 (quoting Penn Cent. Transp. Co. v. City of New York,
438 U.S. 104, 124 (1978)) (internal quotation marks omitted),
warrant the conclusion that an unconstitutional taking neces-
sarily would result. See also Eastern Enters. v. Apfel, 118
S. Ct. 2131, 2146-49 (1998) (reviewing takings precedents and
concluding that "Congress has considerable leeway to fashion
economic legislation, including the power to affect contractual
commitments between private parties"). As we understand
appellant's argument, based solely on the possibility that the
government's alteration of a mining company's previously
settled contract rights "could expose" the government to
liability for an unlawful taking, we should construe the Ener-
gy Policy Act to mandate an exemption in the Secretary's
regulations for private waiver agreements. But the avoid-
ance canon is not applicable when the statute or regulation
would effect a taking, if at all, only in certain situations. See
United States v. Riverside Bayview Homes, Inc., 474 U.S.
121, 127-28 (1985); Bell Atlantic Tel. Cos. v. FCC, 24 F.3d
1441, 1445 (D.C. Cir. 1994); Railway Labor Executives' Ass'n
v. United States, 987 F.2d 806, 816 (D.C. Cir. 1993). We will
not "frustrate[ ] permissible applications of a statute or regu-
lation," Riverside Bayview Homes, 474 U.S. at 128, based on
the specter--rather implausible from what we can tell now--
of a future unconstitutional taking.
* * * *
For the foregoing reasons, we reverse the district court in
part and affirm in part.