Opinions of the United
1995 Decisions States Court of Appeals
for the Third Circuit
8-16-1995
PA Coal Assoc v Babbitt
Precedential or Non-Precedential:
Docket 94-7538
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UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
No. 94-7538
PENNSYLVANIA COAL ASSOCIATION,
an unincorporated association
v.
BRUCE BABBITT, Secretary of the Interior
of the United States Department of Interior;
ROBERT URAM, Director, Office of Surface
Mining Reclamation and Enforcement,
United States Department of Interior,
Appellants
PENNSYLVANIA DEPARTMENT OF ENVIRONMENTAL RESOURCES (DER),
Intervenor in D.C.
No. 94-7558
PENNSYLVANIA COAL ASSOCIATION,
an unincorporated association
v.
BRUCE BABBITT, Secretary of the Interior
of the United States Department of Interior;
ROBERT URAM, Director, Office of Surface
Mining Reclamation and Enforcement,
United States Department of Interior
PENNSYLVANIA DEPARTMENT OF ENVIRONMENTAL RESOURCES (DER),
Intervenor in D.C.
Commonwealth of Pennsylvania,
Department of Environmental Resources,
1
Appellant
2
On Appeal from the United States District Court
for the Middle District of Pennsylvania
(D.C. Civ. No. 93-cv-00780)
Argued May 5, 1995
Before: SLOVITER, Chief Judge, ALITO, Circuit Judge,
and SCHWARZER, District Judge*
(Opinion Filed August 16, 1995)
Robert R. Long, Jr.
Office of United States Attorney
Federal Building
Harrisburg, PA 17108
Steven C. Barcley
United States Department of Interior
Office of the Solicitor
Pittsburgh, PA 15220
Ellen J. Durkee
Tamara N. Rountree (Argued)
United States Department of Justice
Environmental & Natural Resources
Washington, D.C. 20026
Attorney for Appellants Secretary of the Interior of
the United States and Director of the Office of
Surface Mining Reclamation and Enforcement
Joseph G. Pizarchik
Dennis Whitaker (Argued)
Office of Attorney General of
Pa. Department of Environmental Resources
Harrisburg, PA 17105
Attorneys for Appellant Department
Environmental Resources
_________________________
3
* Hon. William W Schwarzer, Senior United States District Judge,
United States District Court for the Northern District of
California, sitting by designation.
4
Stephen C. Braverman (Argued)
Buchanan Ingersoll
Philadelphia, PA 19103
Attorney for Appellee Pa. Coal Association
OPINION OF THE COURT
SLOVITER, Chief Judge.
The Secretary of the Interior of the United States
("Secretary"), the Director of the Office of Surface Mining
Reclamation and Enforcement ("Director"), and the Pennsylvania
Department of Environmental Resources ("DER") appeal from the
district court's grant of summary judgment in favor of the
Pennsylvania Coal Association ("PCA") on its challenge to the
Secretary's approval of certain amendments to Pennsylvania's
surface mining regulatory program. At issue is whether the
Secretary acted arbitrarily and capriciously in approving
amendments that eliminate the "willfully and knowingly" scienter
requirement for imposition of civil penalties on corporate
officers and that change the appeal procedures by requiring
alleged violators to perfect an appeal from a compliance order at
the risk of having their challenge to the fact of violation
deemed waived.
5
I.
Facts and Procedural History
In 1977, in response to the growing environmental and
social costs of coal extraction in the United States, Congress
enacted the Surface Mining Control and Reclamation Act ("SMCRA"),
30 U.S.C. §§ 1201-1328 (1988 & Supp. IV 1993). Among other
things, the SMCRA proposed "to establish a nationwide program to
protect society and the environment from the adverse effects of
surface coal mining operations." 30 U.S.C. § 1202(a). By
establishing nationwide standards governing surface coal mining
operations, Congress hoped that "the unnecessary degradation of
land and water resources [would] be avoided as the country makes
good use of its abundant coal supply." H. R. Rep. No. 95-218,
95th Cong., 1st Sess. 57 (1977), reprinted in 1977 U.S.C.C.A.N.
593, 595.
The SMCRA established the Office of Surface Mining
Reclamation and Enforcement ("OSM") as a subdivision of the
Department of the Interior. 30 U.S.C. § 1211(a). The SMCRA
empowers the Secretary, acting through the OSM, to administer the
programs for controlling surface coal mining operations set forth
in the Act. Id. § 1211(c).
The principal regulatory and enforcement provisions of
the SMCRA are set forth in Subchapter V of the Act. See 30
U.S.C. §§ 1251-1279; see also Hodel v. Virginia Surface Mining &
Reclamation Ass'n, Inc., 452 U.S. 264, 269 (1981). A permit is
required before any person or company may engage in surface coal
mining operations. See 30 U.S.C. § 1256. That permit must
6
require the surface coal mining operation to satisfy certain
environmental protection performance standards. See id. §§ 1265-
66. Permittees who violate any permit condition or who violate
any other provision of Subchapter V may be assessed with civil
penalties. Id. § 1268(a). Permittees who "willfully and
knowingly" commit such violations may be punished by a fine
and/or imprisonment. Id. § 1268(e).
Two SMCRA civil penalty provisions are particularly
relevant to this case. One provides that when a violation is
committed by a corporate permittee "any director, officer, or
agent of such corporation who willfully and knowingly authorized,
ordered or carried out such violation, failure or refusal shall
be subject to the same civil penalties" that may be imposed upon
permittees. Id. § 1268(f) (emphasis added). The other deals
with the opportunity of parties charged with violations by the
Secretary to challenge the fact of the violation. Under the
SMCRA, a party may challenge the Secretary's charge of violation
either within thirty days of receiving a notice or order charging
a violation, see id. § 1275(a)(1), or after a penalty has been
assessed. See id. § 1268(c); see also 30 C.F.R. § 845.19.
In addition to the provisions for federal enforcement
of the SMCRA, see 30 U.S.C. § 1254, the statute contains a
mechanism by which states may "assume exclusive jurisdiction over
the regulation of surface coal mining and reclamation operations"
on non-Federal lands within the state. Id. § 1253(a). To
achieve this control, a state must submit to the Secretary a
proposed program "which demonstrates that such State has the
7
capability of carrying out the provisions of [the SMCRA] and
meeting its purposes . . . ." Id. The proposed state program
must contain state laws which provide for the regulation of
surface coal mining and reclamation operations "in accordance
with the requirements of [the SMCRA]," id. § 1253(a)(1), and
rules and regulations "consistent with" regulations issued by the
Secretary under the SMCRA. Id. § 1253(a)(7). Section 505(b) of
the SMCRA provides, however, that "[a]ny provision of any State
law or regulation . . . which provides for more stringent land
use and environmental controls and regulations of surface coal
mining and reclamation operation than do the provisions of this
chapter or any regulation issued pursuant thereto shall not be
construed to be inconsistent with this chapter." Id. § 1255(b)
(emphasis added). Moreover, with respect to civil and criminal
penalty provisions, the SMCRA requires that the state program
"incorporate penalties no less stringent than those set forth in
this section, and . . . contain the same or similar procedural
requirements relating thereto." Id. § 1268(i) (emphasis added).
The Secretary has the authority to promulgate
regulations establishing procedures and requirements for the
preparation, submission and approval of state programs. Id.
§1251(b). The criteria established by the Secretary for the
approval or disapproval of state programs provide, in relevant
part, that the Secretary shall not approve a proposed state
program unless the Secretary finds that:
(a)The program provides for the State to
carry out the provisions and meet the
purposes of the Act and this Chapter within
8
the State and that the State's laws and
regulations are in accordance with the
provisions of the Act and consistent with the
requirements of the Chapter.
(b) The State regulatory authority has the authority
under State laws and regulations pertaining to
coal exploration and surface coal mining and
reclamation operations and the State program
includes provisions to--
. . . .
(7) Provide for civil and criminal sanctions for
violations of the State law, regulations and
conditions of permits and exploration
approvals including civil and criminal
penalties in accordance with section 518 [30
U.S.C. § 1268] of the Act and consistent with
30 C.F.R. 845, including the same or similar
procedural requirements;
30 C.F.R. § 732.15.
The Secretary has also promulgated regulations
governing any changes, referred to as "amendments," to an
approved state program. See 30 C.F.R. § 732.17. A state that
proposes any amendments to the laws or regulations that make up
the approved state program must submit them for approval to the
OSM Director. 30 C.F.R. § 732.17(g). The OSM Director must
review the proposed amendments with reference to the criteria set
forth in 30 C.F.R. § 732.15 for the approval or disapproval of
the state program. See 30 C.F.R. § 732.17(h)(10).
On July 31, 1982, the Secretary approved the
Pennsylvania regulatory program for surface coal mining and
reclamation operations. See 30 C.F.R. Part 938; 47 Fed. Reg.
33,079 (1982). The Pennsylvania program is set forth in the
Pennsylvania Surface Mining Conservation and Reclamation Act
9
("PaSMCRA"), 52 Pa. Stat. Ann. §§ 1396.1-1396.31 (Supp. 1994),
and its accompanying regulations, 25 Pa. Code §§ 86.1- 86.242.
The Pennsylvania program vests the primary authority for
enforcement of the program with the Pennsylvania DER. See 52 Pa.
Stat. Ann. § 1396.4c.
On December 18, 1991, Pennsylvania submitted proposed
program amendments for approval by the Director of the OSM,
including the three proposed amendments that have been challenged
by PCA in this lawsuit. Two of those amendments ("the civil
liability amendments") would alter the standard for the
imposition of civil penalties on corporate officers for
violations of the PaSMCRA by a permittee corporation. See 25 Pa.
Code § 86.195(a) (as amended 1993); 25 Pa. Code 86.1 (as amended
1993). The third amendment ("the civil appeals amendment") would
alter the appeal procedure for persons charged with a violation.
See 25 Pa. Code § 86.202 (as amended 1993).
Upon receipt of Pennsylvania's proposed amendments, the
OSM initiated a public comment period and announced the
opportunity for a public hearing. PCA, the principal trade
association of Pennsylvania's coal producers, forwarded comments
and, at its request, a public hearing was held on June 30, 1992.
After receiving assurance from the state that the civil appeals
amendment was in conformity with state law, the OSM approved each
of the challenged amendments on April 8, 1993. See 58 Fed. Reg.
18,149, 18,152-53, 18,157-58 (1993). Thereafter, the Secretary
issued a final order approving the three proposed amendments. See
30 C.F.R. § 938.15(y).
10
PCA filed this action on May 25, 1993 seeking
declaratory and injunctive relief to set aside the three
amendments. It named as defendants Bruce Babbitt, the Secretary
of the Department of the Interior, and W. Hord Tipton, who was
then Acting Director of the OSM.1 The Pennsylvania DER
intervened as a party defendant in the action.
After the parties had filed cross-motions for summary
judgment, the district court issued an order granting PCA's
motion for summary judgment on the issue of the Secretary's
approval of the civil liability amendments, concluding that the
Secretary's approval was "arbitrary, capricious and inconsistent
with SMCRA," and enjoined the Secretary and the Director from
enforcing those amendments. See Order & Judgment of March 30,
1994. The court denied PCA's motion for summary judgment on its
challenge to the civil appeals amendment. Id.
The parties filed motions to reconsider and to alter or
amend the district court's judgment. On July 12, 1994 the
district court vacated its prior order denying PCA's motion for
summary judgment regarding the civil appeals amendment, and
granted PCA's motion, concluding that the Director's approval of
that amendment was "arbitrary and capricious" because
inconsistent with the Secretary's own regulations. The court
then enjoined the Secretary and the OSM from enforcing the civil
appeals amendments. See Order & Judgment of July 12, 1994. The
court denied the motions of the Secretary, the OSM Director and
1
Tipton was replaced as the OSM Acting Director by Ann Shields,
and later by current OSM Director Robert Uram.
11
the Pennsylvania DER to alter and amend its grant of summary
judgment on the civil liability amendments.
The Secretary and the OSM Director (the "federal
defendants") appeal from the district court's order invalidating
the Secretary's approval of the civil liability amendments. The
Pennsylvania DER ("the State") filed a separate appeal from that
order and the district court's order invalidating the approval of
the civil appeals amendment. The two appeals have been
consolidated. We have jurisdiction over the district court's
grant of summary judgment to PCA pursuant to 28 U.S.C. § 1291.
II.
Standard of Review
An appellate court reviews the district court's grant
of summary judgment de novo, applying the same standard as the
district court. Beazer East, Inc. v. United States Envtl.
Protection Agency, Region III, 963 F.2d 603, 606 (3d Cir. 1992).
This requires that we view the underlying facts and all
reasonable inferences therefrom in the light most favorable to
the party opposing the motion.
Judicial review over the Secretary's actions under the
SMCRA uses the deferential standard applied to administrative
actions. The Act provides:
Any action of the Secretary to approve or
disapprove a State program . . . pursuant to
this chapter shall be subject to judicial
review by the United States District Court
for the District which includes the capital
of the State whose program is at issue. . . .
. . . .
12
Any action subject to judicial review under
this subsection shall be affirmed unless the
court concludes that such action is
arbitrary, capricious, or otherwise
inconsistent with law.
30 U.S.C. § 1276(a)(1) (emphasis added).
In determining whether the Secretary's actions are
"arbitrary, capricious, or otherwise inconsistent with law," we
look to the statute to determine "whether Congress has directly
spoken to the precise question at issue." Chevron U.S.A., Inc.
v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842
(1984). If the statute is silent or ambiguous, however, courts
typically defer to the Secretary's reasonable interpretation. See
National Wildlife Fed'n v. Lujan, 928 F.2d 453, 456 (D.C. Cir.
1991); see also Chevron, 467 U.S. at 843 ("the question for the
court is whether the agency's answer is based on a permissible
construction of the statute"). Such deference is particularly
appropriate when a court reviews the Secretary's interpretation
of the Secretary's own regulations. See Udall v. Tallman, 380
U.S. 1, 16 (1965).
III.
Discussion
A.
The Civil Liability Amendments
The issue between the parties over the civil liability
amendments to the PaSMCRA is based upon the difference between
the language in the federal statute governing the imposition of
civil penalties on corporate officers and the language now in the
13
Pennsylvania regulations. As noted above, under the federal
statute the Secretary may assess civil penalties against any
corporate director, officer or agent who "willfully and knowingly
authorized, ordered, or carried out such violation, failure or
refusal . . . ." 30 U.S.C. § 1268(f). The same standard is
incorporated in a parallel federal regulation. See 30 C.F.R.
§846.12(a).
In contrast, with the omission of the "willfully and
knowingly" language from Pennsylvania's civil liability
regulation, the DER may assess civil penalties against a
corporate officer who "participates in a violation or whose
misconduct or intentional neglect causes or allows a violation."
See 25 Pa. Code § 86.195(a) (as amended 1993). The related
amendment defines "participates" as "[t]o take part in an action
or to instruct another person or entity to conduct or not to
conduct an activity." See 25 Pa. Code § 86.1 (as amended 1993).
Neither party elucidates precisely what effect the
language change eliminating the "willfully and knowingly"
scienter requirement will have on the standard of proof in a
particular case. Arguably it makes the scienter requirement as
to corporate officers one of general intent rather than specific
intent. Inasmuch as PCA's challenge in this suit was only to the
Secretary's approval of the omission of the "willfully and
knowingly" language and the district court did not discuss how
that might apply to a corporate officer's conduct, we leave that
issue for resolution by a state court or agency in an appropriate
case.
14
The district court agreed with PCA that the Secretary's
approval of Pennsylvania's civil liability amendments was invalid
under the SMCRA. The court held that because the Pennsylvania
Code would now permit the assessment of civil penalties against
corporate officers who do not act "willfully and knowingly," it
authorized imposition of individual liability on "a lesser
standard of proof concerning the individual's intent than in the
federal law," although "no particular provision of SMCRA or
federal regulations authorizes a state to vary the standard of
individual liability." Memorandum of Decision, March 30, 1994,
at 16-18. The district court also found that the omission of the
"willfully and knowingly" language that is in 30 U.S.C. § 1268(f)
meant that the Pennsylvania law and regulations do not include
"all applicable provisions" of the SMCRA and therefore the
amended civil liability regulations were "defective" under 30
C.F.R. § 730.5(a). Id. at 18.
The district court cited various provisions of the
federal statute and regulations which require that state law be
"consistent with" and "in accordance with" the requirements of
the SMCRA and regulations issued thereunder. See, e.g., 30
U.S.C. § 1253(a)(1) (state law must be "in accordance with the
requirements of" SMCRA); 30 U.S.C. § 1253(a)(7) (state rules and
regulations must be "consistent with regulations issued by the
Secretary"); 30 C.F.R. § 732.15(a) (permitting approval of a
state program only if, inter alia, the State's laws and
regulations are "in accordance with the provisions of the Act"
and "consistent with the requirements of the Chapter"); 30 C.F.R.
15
§ 732.15(b)(7) (requiring that the state program "[p]rovide for
civil and criminal sanctions for violations of the State law,
regulations and conditions of permits and exploration approvals
including civil and criminal penalties in accordance with section
518 [30 U.S.C. § 1268] of the Act . . . .").
The court acknowledged that section 505(b) of the
SMCRA, 30 U.S.C. § 1255(b), explicitly permits states to enact
"more stringent land use and environmental controls and
regulations," but it read that provision as "only intended to
allow states to impose more stringent substantive standards on
coal mining operations," and "not intended to lower the threshold
of liability." Memorandum of Decision, March 30, 1994, at 15. It
therefore believed that section 505(b) of the SMCRA was
inapplicable.
On appeal, the federal defendants contend that the
district court's construction of section 505(b) was plainly
incorrect. They argue that because Pennsylvania's civil
liability amendments impose a stricter standard of liability for
individual corporate officers, they are necessarily "more
stringent land use and environmental controls" authorized by
section 505(b). The federal defendants also argue that the
district court's distinction between "substantive state standards
on coal mining operations" and the standards for "individual
liability" is untenable, and note that section 505(b) applies to
"[a]ny provision of any State law or regulation." 30 U.S.C.
§1255(b) (emphasis added). Congress's use of the term "any,"
they reason, permits states to enact any law or regulation which
16
is more stringent than the federal laws or regulations, not
merely "substantive" land use or environmental control
provisions. Pennsylvania's more expansive standard for individual
corporate officer liability is one such form of more stringent
regulation.
The plain language of the statute and our prior
precedent convince us that the district court's interpretation of
section 505(b) is too narrow. That section reflects Congress's
intent to give the states primary jurisdiction over regulation of
surface mining, see 30 U.S.C. §§ 1201(f), 1253, as long as the
states impose laws and regulations that at least meet the minimum
Federal standards. H.R. Conf. Rep. No. 493, 95th Cong., 1st
Sess. 102 (1977), reprinted in 1977 U.S.C.C.A.N. 728, 733. Of
course, the states may not impose a law or regulation that is
"inconsistent" with the SMCRA, as section 505(a) makes clear, see
30 U.S.C. § 1255(a), but section 505(b) clarifies that "more
stringent" laws or regulations shall not be construed as
"inconsistent." Instead, the entire purpose of section 505(b) is
to ensure that the federal standards act as a floor. There would
be no reason to allow the states to impose their own regulations
if the regulations had to be the same as the federal Act and
regulations. That the federal sanction is to serve only as the
base rather than the ceiling for the state programs is spelled
out in the SMCRA itself.
We see no support in the SMCRA for reading sanctions
out of section 505(b). Sanctions for violations are an integral
element of "land use and environmental controls and regulations."
17
While not determinative, it is relevant that the SMCRA civil
liability provisions, including the provision imposing individual
liability on corporate officers, fall within Subchapter V dealing
with Control of the Environmental Impacts of Surface Coal Mining,
the Subchapter directed to substantive controls. The provision
for the Secretary's approval of state programs requires, inter
alia, that the state have in place sanctions that "meet the
minimum requirements of [the SMCRA]." 30 U.S.C. § 1253(a)(2).
Had Congress contemplated that states could not reach farther
than the SMCRA in conduct subject to sanction, it hardly would
have included such a provision.
This court previously considered the scope of section
505(b) of the SMCRA in Budinsky v. Pennsylvania Dep't of Envtl.
Resources, 819 F.2d 418 (3d Cir.), cert. denied, 484 U.S. 926
(1987). At issue in that case was a Pennsylvania amendment
requiring a permit for all mining activity, notwithstanding that
the SMCRA at the time contained an exemption (since repealed) for
surface mining operations that affect two acres or less.
Pennsylvania justified its broader permit requirement under
section 505(b) as a "more stringent" requirement than that
imposed under the federal law. On appeal, Budinsky, a coal mine
operator, argued that section 505(b) applied solely to the
"procedural, technical and substantive permit application
requirements" of 30 U.S.C. §§ 1256-1257, and therefore could not
be construed as allowing the Pennsylvania DER to regulate mining
operations of less than two acres. Budinsky, 819 F.2d at 421.
18
We rejected the operator's restrictive interpretation of that
provision and concluded instead that section 505(b) "manifestly
pertains to the entire Act, including the two-acre exemption of
[30 U.S.C.] § 1278(2)." Id. at 422 (emphasis added). We stated
that nothing in the SMCRA "precludes a state from exceeding the
Act's land use and environmental directives with more stringent
standards." Id. at 422-23.
The district court in this case attempted to reconcile
Budinsky with its conclusion that section 505(b) is inapplicable
here by stating that Budinsky involved "land use and
environmental controls and regulations." Memorandum of Decision,
July 14, 1994, at 13-14. This conclusory attempt to distinguish
Budinsky is unpersuasive. In Budinsky, we plainly stated that
section 505(b) applies "to the entire Act." Id. at 422. Having
held in Budinsky that 30 U.S.C. § 1255(b) (section 505(b))
applies to 30 U.S.C. § 1278, we see no reason not to apply it to
30 U.S.C. § 1268(f), which contains the individual corporate
officer liability standard.
The district court and PCA both relied on Pennsylvania
Coal Mining Ass'n v. Watt, 562 F. Supp. 741 (M.D. Pa. 1983), an
earlier decision by this district judge. Of course, that opinion
is not precedential for us. In any event, it is distinguishable.
The SMCRA requires that bond hearings be held within thirty days
after a request for such hearing and that the decision be
announced within thirty days of the hearing. See 30 U.S.C.
§1269. In contrast, the Pennsylvania program had no time
requirement for hearings and allowed sixty days from the hearing
19
for announcement of decisions. The court held in Watt that the
Pennsylvania program was not "in accordance with" or "consistent
with" the provision in the SMCRA, and that it was not saved as a
"more stringent" control or regulation than the federal law
because, in fact, it was not "more stringent."
While we need not decide whether the Watt court
correctly analyzed the parameters of "stringency," we fail to
see that Watt is applicable here. The state rule at issue in
Watt did not impose a "more stringent" land use or environmental
control than the applicable federal rule, but merely created the
possibility for delays by the regulatory authorities that federal
law specifically prohibited. In this case, by contrast, the
state liability standard is directed to those who are regulated
and is inclusive of the federal standard, as no person who is
liable under the federal law will be able to avoid liability
under the state standard.
Similarly, In re: Permanent Surface Mining Regulation
Litigation, 14 Env't Rep. Cas. (BNA) 1083 (D.D.C. Feb. 26, 1980),
aff'd in relevant part & rev'd in part, 14 Env't Rep. Cas. (BNA)
1813 (D.C. Cir. 1980), on which PCA relies, does not support its
position. In suggesting that state programs must incorporate the
same statutory criteria as those set forth in the federal
statute, the Permanent Surface Mining court was referring
specifically to the four criteria set forth in 30 U.S.C. §1268(a)
to be used in determination of the amount of a penalty to be
assessed. See id. at 1089 n.10. The Permanent Surface Mining
decision does not suggest that states cannot expand the relevant
20
"statutory criteria" to create a more stringent standard. Rather,
it holds that the federal law sets forth the minimum criteria
which must be incorporated into the state programs.
We conclude that section 505(b) of the SMCRA applies to
Pennsylvania's civil liability amendments, and that under that
section the Pennsylvania civil liability amendments, which impose
a more stringent standard of individual liability, may not be
construed as inconsistent. It follows that the district court
erred in holding that the Secretary's approval of those
amendments was invalid.
B.
The Civil Appeals Amendment
We turn to the State's challenge to the district court's order
holding arbitrary and capricious the OSM's approval of the civil
appeals amendment. In 1988 the Pennsylvania Commonwealth Court
interpreted the PaSMCRA and regulations to permit a party against
whom the DER assessed a civil penalty to contest the fact of the
violation when the party challenges the later assessed civil
penalty. See Kent Coal Mining Co. v. Commonwealth, 550 A.2d 279,
283 (Pa. Commw. 1988). In so holding, the Commonwealth Court
looked to what it viewed as the unambiguous language in section
18.4 of the PaSMCRA, 52 Pa. Stat. Ann. § 1396.18d (previously
codified at 52 Pa. Stat. Ann. §1396.22), and the similar language
in the comparable regulation in the Pennsylvania Code. Section
18.4 of the PaSMCRA provides: "[t]he person or municipality
charged with the penalty shall then have thirty (30) days to pay
the proposed penalty in full or, if the person or municipality
21
wishes to contest either the amount of the penalty or the fact of
the violation, forward the proposed amount to the secretary for
placement in an escrow account . . . " 52 Pa. Stat. Ann. §
1396.18d (emphasis added). Under the regulation: "[t]he person
charged with the violation may contest the penalty assessment or
the fact of the violation by filing an appeal with the
Environmental Hearing Board, including with the appeal an amount
equal to the assessed penalty--to be held in escrow as provided
in subsection (b)--within 30 days from receipt of the assessment
or reassessment." 25 Pa. Code, § 86.202(a) (1988) (emphasis
added) (amended 1993).
DER did not include a proposed penalty when it sent a compliance
order to Kent Coal notifying it of a PaSMCRA violation, and
apparently DER has a practice of issuing a compliance order in
advance of assessment of a penalty. When Kent Coal sought to
challenge both the violation and the penalty, DER argued that
under the doctrine of administrative finality Kent Coal's failure
to appeal the compliance order within thirty days precluded it
from contesting the fact of violation. The Kent Coal court
rejected this argument by reference to the statute and regulation
quoted above which expressly refer to an appeal on both issues.
In the proposed amendments submitted to the OSM for approval,
Pennsylvania modified 25 Pa. Code § 86.202 in two ways: one was a
modification of subsection (a) so that it now refers only to an
appeal of a "penalty assessment." 25 Pa. Code §86.202(a) (as
amended 1993). The other was to add the following language to
subsection (d):
22
A person may challenge either the fact of the
violation or the amount of the penalty once
an appeal of that issue has been perfected.
In either challenge, the appellant will be
bound as to actions of the Department which
have become final under section 4 of the
Environmental Hearing Board Act (35 P.S.
§7514). A final action includes a compliance
order which has become final, even though the
order addresses the same violation for which
a civil penalty is assessed.
25 Pa. Code § 86.202(d) (as amended 1993).
As summarized by the Director of the OSM in granting approval to
the amendment, this change "would eliminate the chance to appeal
the fact of the violation at the time of penalty assessment if
the appeal of the compliance order had not been perfected . . .
." 58 Fed. Reg. at 18,153. The details of the procedure are not
before us but it appears that, under the amended regulation, a
party seeking to challenge the fact of a PaSMCRA violation must
perfect an appeal to the Environmental Hearing Board within 30
days of the compliance order. See 25 Pa. Code § 21.52; 35 Pa.
Stat. Ann. § 7514(c).
After the Secretary ratified the Director's approval of the civil
appeals amendment, PCA asserted a many-pronged challenge to that
approval in district court. The district court rejected PCA's
contention that the change in the Pennsylvania regulation was
"inconsistent" with federal law notwithstanding that the SMCRA
gives parties the opportunity to challenge both the fact of
violation and the penalty at the same time. See 30 U.S.C. §
1268(c). The court recognized that state programs were required
23
to contain "the same or similar procedural requirements" as those
available under the federal law, 30 U.S.C. § 1268(i), but held
that Pennsylvania's amended civil appeals regulation did provide
"similar," albeit not the "same," procedural rights as those
available under federal law. See Memorandum of Decision, March
30, 1994, at 6. Notably, the court reasoned that "the amendment
affects only the timing of an appeal and not the substantive
matters that can be raised." Id. at 6-7.
In the same opinion, the district court rejected PCA's contention
that the amended regulation conflicts with state law. On
reconsideration, however, the district court reached a different
result, noting that its earlier decision had been based on its
view that the provisions as to procedure in section 18.4 had been
implicitly repealed because they were inconsistent with a
subsequently enacted Pennsylvania statute. Memorandum of
Decision, July 12, 1994, at 4-5. The court was now persuaded
that section 18.4 had not been repealed by implication. It
concluded that the amended civil appeals regulation was in
conflict with the still viable section 18.4 as it had been
interpreted by Kent Coal. The district court then held that
because a statute controls over a regulation, the amended civil
appeals amendment was invalid under Pennsylvania law. Id. at 11.
Continuing its analysis, the district court interpreted the
federal SMCRA regulations as prohibiting the OSM from approving
an amendment that was invalid under Pennsylvania state law. The
court read 30 C.F.R. § 732.15(b)(7) to require that the OSM
determine "that Pennsylvania had authority under state law to
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adopt a provision like new section 86.202." Memorandum of
Decision, July 12, 1994 at 9. Relying on its own conclusion as
to the invalidity of the amended civil appeals regulation under
state law, the court held that the OSM's approval of an invalid
regulation violated the Secretary's own regulation at 30 C.F.R.
§732.15(b)(7) and was "arbitrary and capricious." See Memorandum
of Decision, July 12, 1994 at 11. It therefore enjoined the
enforcement of the civil appeals amendment.
On appeal, the State argues primarily that the district court's
conclusion rests upon a misinterpretation of 30 C.F.R.
§732.15(b)(7). In particular, the State contends that the
Secretary's (here inclusive of the Director's) obligation under
that provision is limited to ensuring that the state regulatory
authority has the "authority" to promulgate appropriate
regulations under state law, and that the Secretary is not
required to ensure that every proposed amendment is consistent
with all other provisions in state law. If there is a conflict
with state law, the State argues, that issue is best resolved by
the Pennsylvania courts.
The question before us is not whether the district court
correctly analyzed the intricacy of Pennsylvania administrative
law but whether the SMCRA regulations mandate that the Secretary
undertake such an intricate analysis before approving a state
program or amendment. The plain language of the regulation
imposes no duty on the Secretary to ensure that all elements of
the state program are consistent with state law. Under 30 C.F.R.
§ 732.15(a) the Secretary must ensure consistency with the
25
relevant provisions of federal law, and the findings relevant
here were limited to the conclusion that the provisions in the
amended civil appeals regulation are similar to the SMCRA
regulations dealing with the procedures for civil penalties. See
58 Fed. Reg. at 18,158. Sections 732.15(b)(7) and (8) require
only that the Secretary find that the DER "has the authority
under State law and regulations" to provide for civil and
criminal sanctions for PaSMCRA violations and to enforce them. 30
C.F.R. § 732.15(b)(7)-(8).
PCA correctly notes that during the OSM's review of the civil
appeals amendment in this case, the Director questioned
Pennsylvania regarding the consistency of the amendment with
state law. During the course of its review of the amendment,
"OSM expressed concern that this change to section 86.202 would
render it inconsistent with section 18.4 of PA-SMCRA [52 Pa.
Cons. Stat. Ann. § 1396.18d]." 58 Fed. Reg. at 18,153.
Pennsylvania satisfied these concerns by providing a letter from
the Pennsylvania Attorney General approving the proposed
regulations "in both form and legality." Id. (emphasis added).
We are troubled by the Secretary's failure to articulate a
binding administrative interpretation to clarify the extent of
the Secretary's duty to inquire into state law, but we decline to
glean from the OSM's inquiry during the administrative
proceedings an affirmative obligation on the Secretary to do more
than was done here. We have no need here to consider the
separate question whether the Secretary has the authority to
26
reject proposed amendments to state programs due to their
inconsistency with state law.
Finally, apparently as an alternative ground to uphold the
district court's order, PCA argues that the civil appeals
amendment is not consistent with federal provisions which permit
an alleged violator to wait to challenge the fact of violation
until making a challenge to the penalty that is assessed. See 30
U.S.C. § 1268(c); see also 30 C.F.R. § 845.19. We find no basis
for PCA's argument.
Under 30 U.S.C. § 1268(i), state programs are only required to
"contain the same or similar procedural requirements" as those
set forth in the federal statute. 30 U.S.C. § 1268(i) (emphasis
added); see also 30 C.F.R. § 732.15(b)(7) (requiring, among other
things, that the state program include "the same or similar
procedural requirements" for civil and criminal sanctions as
those contained in 30 U.S.C. § 1268 and 30 C.F.R. § 845). The
Director acknowledged that the new PaSMCRA civil appeals
regulation eliminates an alleged violator's ability to delay its
appeal of the fact of a violation, but approved the amendment
because it contains procedures which are "similar to the
counterpart Federal regulations," see 58 Fed. Reg. at 18,153; see
also id. at 18,158, a conclusion also reached by the district
court.
Because the state civil appeals amendment follows the federal
procedures in assuring notice and an opportunity to be heard and
merely restricts the timing of appeals, we agree with the
Director's conclusion that the procedural requirements of the
27
civil appeals amendment are "similar" to the procedural
requirements available under the SMCRA, as that term is used in
30 U.S.C. § 1268(i). The Director's interpretation of "similar"
as used in 30 U.S.C. 1268(i) is not unreasonable, nor does it
violate any clear statutory or regulatory mandate. It is
therefore entitled to deference. See Chevron, 467 U.S. at 844.
Thus, we conclude that the district court erred in holding that
the Secretary's approval of the civil appeals amendment was
"arbitrary, capricious, or otherwise inconsistent with law" due
to what the court viewed as an inconsistency with state law, and
we cannot affirm the district court's order on the alternative
grounds advanced by PCA.
IV.
Conclusion
For the foregoing reasons, the orders of the district court will
be reversed with instructions to vacate the injunctions and enter
summary judgment for the defendants and the intervenor.
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