Natl Mining Assn v. DOI

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 6, 2000 Decided June 8, 2001

No. 96-5274

National Mining Association,
Appellant

v.

United States Department of the Interior, et al.,
Appellees

Appeal from the United States District Court
for the District of Columbia
(94cv02740)

Thomas C. Means argued the cause for appellant. With
him on the briefs were Harold P. Quinn, Jr., J. Michael
Klise and Kirsten L. Nathanson. John A. MacLeod entered
an appearance.

Kathryn E. Kovacs, Attorney, U.S. Department of Justice,
argued the cause for appellees. With her on the brief were
James F. Simon, Acting Assistant Attorney General, and

Robert H. Oakley, Attorney. John T. Stahr and William B.
Lazarus, Attorneys, entered appearances.

Before: Ginsburg, Randolph, and Rogers, Circuit Judges.

Opinion for the Court filed by Circuit Judge Randolph.

Randolph, Circuit Judge: No one may engage in surface
coal mining without a permit issued pursuant to the Surface
Mining Reclamation and Control Act, 30 U.S.C. s 1201 et
seq., and the regulations thereunder. Under the Act, States
administer permit programs approved by the Secretary of the
Interior as consistent with federal laws and regulations. See
National Mining Ass'n v. United States Dep't of the Interior,
70 F.3d 1345, 1347 (D.C. Cir. 1995). The questions initially
presented in this appeal dealt with the validity of several
federal regulatory requirements imposed on permit appli-
cants, and the procedures for contesting the accuracy of
information used to determine permit eligibility. After oral
argument, the Interior Department revised many of these
regulations, and so we are faced with additional questions
concerning the extent to which the case is now moot.

Some of the original regulations stemmed from a consent
decree requiring the Interior Department to "establish and
maintain a computerized system" to track applicants and
violators, in order to enforce 30 U.S.C. s 1260(c). See Save
Our Cumberland Mountains v. Clark, No. 81-2134, 1985 U.S.
Dist. LEXIS 22934, at *1-*4 (D.D.C. Jan. 31, 1985); Save
Our Cumberland Mountains v. Watt, 550 F. Supp. 979, 980
(D.D.C. 1982), rev'd, 725 F.2d 1434 (D.C. Cir. 1984). Section
1260(c) provides that a permitting authority may not issue a
permit if "the schedule [attached to the permit application] or
other information available to the regulatory authority indi-
cates that any surface coal mining operation owned or con-
trolled by the applicant is currently in violation of this
chapter ... [unless] ... the applicant submits proof that such
violation has been corrected or is in the process of being
corrected." 30 U.S.C. s 1260(c).

In compliance with the consent decree, the Interior Depart-
ment's Office of Surface Mining created the Applicant/Viola-

tor System ("AVS"). The AVS is a computerized database
"programmed to identify 'links' between known violators and
applicants, individuals, and corporations." Sam P. Burchett,
The Applicant Violator System in Transition, 21 N. Ky. L.
Rev. 555 n.5 (1994). The Office of Surface Mining operates
the database and makes it available to the public on dedicated
terminals and the Internet. See Office of Surface Mining,
Access, at http://www.avs.osmre.gov/pubaccess.htm (last visit-
ed Dec. 5, 2000).

The National Mining Association (NMA) brought this ac-
tion to set aside aspects of the AVS and related regulations.
NMA objected to the AVS rules both because of the informa-
tion required of applicants and because of what is purportedly
done with the information. The district court granted sum-
mary judgment in favor of the Interior Department, sustain-
ing all of the regulations.

The case was argued before us in November 2000. In
December 2000, the Interior Department published a rule,
effective January 18, 2001, replacing the AVS rule at issue in
this appeal. See Application and Permit Information Re-
quirements; Permit Eligibility; Definitions of Ownership and
Control; the Applicant/Violator System; Alternative Enforce-
ment, 65 Fed. Reg. 79,582 (Dec. 19, 2000) (to be codified at 30
C.F.R.) [hereinafter AVS Rules]. We ordered supplemental
briefing on the question of mootness.

I.

To determine whether anything remains of NMA's case, we
need to identify which regulations NMA challenged and
whether the new rules altered those regulations. This is no
small task. NMA, in its complaint, did not see fit to provide
citations to all of the regulations it thought invalid. Even in
its briefs in this court, NMA is content to refer generally to
"the rules" without, in many instances, providing any citations
to the C.F.R. Perhaps this results from NMA's habit of
describing what "the rules" prohibit when in fact NMA's real
complaint is that "the rules" do not affirmatively require what
NMA desires.

 At any rate, by our count NMA specifically argued against
the following old AVS rules issued by the Office of Surface
Mining: 30 C.F.R. ss 773.5, 773.20(c), 773.23(b), 773.24,
773.25 & 778.14(c) (1999). In its supplemental brief, NMA
agrees with the government that the new AVS rules moot its
challenges to ss 773.20(c), 773.23(b), 773.24 & 773.25. See
Supplemental Brief of Appellant at 4, 11. NMA also agrees
that its contention about the lack of any provision to allow
provisional permits is moot because the new rules fill the gap.
See AVS Rules, 65 Fed. Reg. at 79,664-65 (to be codified at
30 C.F.R. s 773.14).

As to NMA's remaining challenges to the regulations, some
are also moot and the rest are meritless.

A.

NMA mounted a scattershot due process attack on the old
AVS rules. Its main objections were that the rules did not
give notice, and did not give applicants the chance to contest
links to them on the AVS before these were posted and used
to deny applications. NMA brought the case as a facial
challenge to the rules. Yet NMA conceded at oral argument
that even by its lights, "the rules" could be constitutionally
applied in some cases. Whether that concession should have
ended this aspect of the case under the doctrine that a law
valid in some of its applications cannot be struck down as
invalid on its face is a question we leave to another day.
Compare United States v. Salerno, 481 U.S. 739, 745 (1987);
Reno v. Flores, 507 U.S. 292, 301 (1993); INS v. National
Ctr. for Immigrants' Rights, 502 U.S. 183, 188 (1991); Chemi-
cal Waste Mgmt. v. EPA, 56 F.3d 1434, 1437 (D.C. Cir. 1995);
with National Mining Ass'n v. Army Corps of Engineers,
145 F.3d 1399, 1407-08 (D.C. Cir. 1998). We also leave to
another day the question whether the sort of generalized due
process attack NMA advanced would be ripe under the
doctrine of Abbott Laboratories v. Gardner, 387 U.S. 136, 149
(1967). See Appalachian Power Co. v. EPA, 208 F.3d 1015,
1023 n.18 (D.C. Cir. 2000). We leave these questions undecid-

ed because NMA's due process claims are moot in light of the
new AVS rules.

In order to evaluate a procedural due process claim, a court
must evaluate the "risk of an erroneous deprivation of [a
property] interest through the procedures used, and the
probable value, if any, of additional or substitute procedural
safeguards." Mathews v. Eldridge, 424 U.S. 319, 335 (1976).
Although the new AVS rules, like the old rules, contain no
explicit provision allowing an owner to challenge a violation's
status before it has been entered into the AVS, see AVS
Rules, 65 Fed. Reg. at 79,666 (to be codified at 30 C.F.R.
s 773.25(a)), the new rules add other procedural protections.
Responding to due process concerns, the Office of Surface
Mining's new 30 C.F.R. s 773.14, provides that an entity
challenging AVS listings may be entitled to a provisional
permit. See AVS Rules, 65 Fed. Reg. at 79,664. This affects
the Mathews v. Eldridge calculus. The old set of rules, which
are the subject of this lawsuit, cannot be evaluated as if
nothing has changed. A new system is now in place. We
therefore must vacate this aspect of the district court's deci-
sion as moot. See Fusari v. Steinberg, 419 U.S. 379, 386,
388-89 (1975); see also Kremens v. Bartley, 431 U.S. 119, 128
(1977) (suggesting that mootness determination can be col-
ored by interest in avoiding premature constitutional adjudi-
cation).

B.

NMA argued that the definition of "owned and controlled"
in s 773.5 of the old regulations was unconstitutionally vague
and that the Office of Surface Mining should have adopted
substantive rebuttal standards to overcome the presumptions
set forth in the definition. See Brief of Appellant at 39-40.
The new rules eliminate the presumptions and, in place of the
former definition of "owned or controlled," substitute two new
definitions of "own, owner, or ownership" and "control or
controller." See AVS Rules, 65 Fed. Reg. at 79,662 (to be
codified at 30 C.F.R. s 701.5). The new rules also list the
types of information one may use to rebut an ownership or

control linkage in the AVS. See AVS Rules, 65 Fed. Reg. at
79,666 (to be codified at 30 C.F.R. s 773.25(c)). In light of
these substantial changes, NMA's vagueness challenge is
moot. Any opinion regarding the former rules would be
merely advisory.

C.

Section 778.14(c) of the old rules required applicants to
submit "[a] list of all violation notices received by the appli-
cant during the three-year period preceding the application
date, and a list of all outstanding violation notices received
prior to the date of the application by any surface coal mining
operation that is deemed to be owned or controlled by the
applicant." 30 C.F.R. s 778.14(c) (1999). Because the new
version of s 778.14(c) is to the same effect, see AVS Rules, 65
Fed. Reg. at 79,669 (to be codified at 30 C.F.R. s 773.14(c)),
NMA's claim that the rule exceeds the Interior Department's
statutory authority is not moot.

Under the Act, applicants must list all "notices of violations
... incurred by the applicant in connection with any surface
coal mining operation during the three-year period prior to
the date of application." 30 U.S.C. s 1260(c). The rule,
NMA points out, seeks information beyond the three-year
cutoff--namely, "a list of all outstanding violation notices
received prior to the date of the application by any surface
coal mining operation that is deemed to be owned or con-
trolled by the applicant" regardless of the date. This is true,
but not determinative. NMA fails to appreciate the distinc-
tion between violations incurred by the applicant and viola-
tions incurred by entities owned or controlled by the appli-
cant. The three-year cutoff in s 1260(c) of the Act applies
only to violations by the applicant itself; it does not place any
time limit on the other information s 778.14(c) of the regula-
tions requires. We have held that "the Act's explicit listings
of information required of permit applicants are not exhaus-
tive, and do not preclude the Secretary from requiring the
states to secure additional information needed to ensure
compliance with the Act." In re Permanent Surface Mining

Regulation Litig., 653 F.2d 514, 527 (D.C. Cir. 1981); see
National Mining Ass'n v. Department of the Interior, 177
F.3d 1, 9 (D.C. Cir. 1999). There is not the slightest doubt
that the information sought through the regulation will help
ensure compliance with the Act. Under s 1260(c), a permit
may not be granted to an applicant if such related entities are
in violation of the Act at the time of the application and have
not taken steps to rectify the situation. We therefore reject
NMA's attack on s 778.14(c).

D.

This brings us to NMA's claim that the old rules violate
"state primacy." By "state primacy," NMA refers to the
Act's giving power to state agencies to issue permits pursuant
to federally-approved state programs. See 30 U.S.C.
s 1260(a). The Department of the Interior is empowered to
approve or disapprove state programs, see 30 U.S.C.
s 1253(b), and to establish regulatory requirements for these
programs, see 30 U.S.C. s 1251(b). But once the Secretary
approves a program, permits are to be issued and revoked by
the designated "regulatory authority," rather than the Interi-
or Department. See also Bragg v. West Virginia Coal Ass'n,
No. 99-2443, 2001 WL 410382, at *3-*4 (4th Cir. Apr. 24,
2001) (describing the "cooperative federalism" envisioned by
the statute).

According to NMA, the old rules "effectively strip[ped] the
state of its exclusive permitting authority under s 510 [of the
Act], prohibiting the state from issuing a permit if the
applicant [was] shown in the AVS as linked to: unabated
violations issued by other states; or violations issued by
OSM." See Brief of Appellant at 51. The offending rules
were s 773.23(b) and ss 773.24-.25, which NMA described as
prohibiting a "state from allowing the applicant to demon-
strate that : (1) it is not linked by ownership/control to the
alleged violator(s); (2) that the violations have been abated;
or (3) that the violations are invalid." Id. In its supplemen-
tal brief NMA admits that the rule (30 C.F.R.
s 773.25(b)(3)(i)) giving the Office of Surface Mining "plenary

authority" over information on the AVS has been removed.
We think the rest of NMA's state primacy challenge is also
moot.

NMA also contended that state primacy was undercut by
30 C.F.R. s 773.23(b)(2) (1999), which, it claimed, barred
states from issuing permits when the AVS showed links to
unabated violations issued by other states or by OSM. It is
by no means clear that the new regulations continue this
practice. Under the new s 773.11(a), a regulatory authority
is required to review information from the AVS as well as
"any other available information" to establish an applicant's
compliance history. AVS Rules, 65 Fed. Reg. at 79,664 (to be
codified at 30 C.F.R. s 773.11). Section 773.12 directs the
regulatory authority to make its decision based on the infor-
mation gathered under s 773.11. See id. (to be codified at 30
C.F.R. s 773.12). There is no readily apparent provision
indicating that information from the AVS is to be given
controlling weight. Likewise, there is nothing in the new
s 773.23 that indicates that AVS information should control a
regulatory authority's decision to rescind a permit as improvi-
dently issued. See AVS Rules, 65 Fed. Reg. at 79,665 (to be
codified at 30 C.F.R. s 773.23). Since nothing indicates that
the new regulations require AVS information to control state
decisions, the remainder of NMA's state primacy challenge is
moot.

E.

Because rules of the Interior Department's Office of Hear-
ing and Appeals (OHA) were not changed by the new rule-
making, NMA's original challenge to those rules--43 C.F.R.
ss 4.1374 and 4.1384--presents a live controversy. Both
rules place the "burden of persuasion" on those challenging
the validity of a decision to rescind a permit as improvidently
granted (s 4.1374(b)), and to those challenging decisions of
the Office of Surface Mining regarding an ownership or
control link in the AVS or the status of a violation reported
there (s 4.1384(b)).

When it originally promulgated these regulations, the Of-
fice of Surface Mining thought that such an allocation of the

burden of proof was permitted by s 7(c) of the Administrative
Procedure Act. See Use of the Applicant/Violator System in
Surface Coal Mining and Reclamation Permit Approval;
Standards and Procedures for Ownership and Control Deter-
minations, 59 Fed. Reg. 54,306, 54,360 (Oct. 28, 1994) [herein-
after Use of the AVS] (citing APA s 7(c), 5 U.S.C. s 556(d)).
Relying on our decision in Environmental Defense Fund, Inc.
v. EPA, 548 F.2d 998 (D.C. Cir. 1976), it concluded that "OSM
properly bears only the burden of going forward with proof,
not the ultimate burden of persuasion." Use of the AVS, 59
Fed. Reg. at 54,360.

Section 7(c) says that "[e]xcept as otherwise provided by
statute, the proponent of a rule or order has the burden of
proof." 5 U.S.C. s 556(d). In Environmental Defense Fund,
we interpreted "burden of proof" to mean only the burden of
production or "going forward." See Environmental Def.
Fund, 548 F.2d at 1004 & n.14. The Supreme Court, in dicta,
later agreed with us. See NLRB v. Transportation Mgmt.
Corp., 462 U.S. 393, 404 n.7 (1983). However, shortly before
the Department of the Interior approved the rules in this
case, the Supreme Court changed its position. In Greenwich
Collieries, it concluded that the "burden of proof" in s 7(c)
meant "the burden of persuasion." Director, Office of Work-
ers' Comp. Programs v. Greenwich Collieries, 512 U.S. 267,
276 (1994).

NMA argues that the regulations cannot be valid because
they shift the burden of proof, in violation of the Administra-
tive Procedure Act. But this argument only succeeds if one
ignores the other language in s 7(c). The statute says that
the proponent of an order bears the burden of proof "[e]xcept
as otherwise provided by statute." 5 U.S.C. s 776(d) (empha-
sis added). We have already concluded that the power to
suspend permits that were improvidently granted derives
from OSM's power to "order the suspension, revocation, or
withholding of any permit for failure to comply with any of
the provisions of this chapter or any rules and regulations
adopted pursuant thereto." 30 U.S.C. s 1211(c)(1); National
Mining Ass'n v. United States Dep't of the Interior, 177 F.3d
1, 9 (D.C. Cir. 1999). We have also concluded that the

obligation to comply with the provisions of this chapter means
the obligation to comply with the requirements of 30 U.S.C.
s 1260(c). That section provides that when the regulatory
authority is aware of an "operation owned or controlled by
the applicant [that] is currently in violation" of state or
federal rules, "the permit shall not be issued until the appli-
cant submits proof that such violation has been corrected or
is in the process of being corrected." 30 U.S.C. s 1260(c)
(emphasis added). In short, Congress has allocated the
burden of proving compliance with the Act. Cf. Steadman v.
SEC, 450 U.S. 91, 96-97 (1981) (applying standards of proof
from s 7(c) because Congress had not otherwise provided).
If, at any point, a permit-holder is unable to submit proof that
its permit is not linked to a violator, it is no longer in
compliance with s 1260(c) and the Secretary may rescind the
permit. It follows that when challenging OSM's decision to
rescind a permit as improvidently granted, the permit holder
properly bears the burden of persuasion.

43 C.F.R. s 4.1374 covers only decisions to rescind improvi-
dently granted permits. But the same allocation of burdens
of proof is made in 43 C.F.R. s 4.1384 (1999), which governs
review of OSM's decisions regarding the existence and status
of ownership and control links in the AVS. NMA contends
that OSM should bear the burden of proving that a linkage
should be entered into the AVS at all. To NMA, the OSM is
the "proponent" of an administrative order to enter informa-
tion into the AVS, and s 4.1384 is invalid even if s 4.1374 is
valid. But this view distorts the statute: 30 U.S.C. s 1260(c)
places the burden of proof on the applicant, and no one else.
The regulatory authority deciding whether to issue a permit
uses the AVS as a source of information about potential
violations. If NMA's view were correct, then the question
whether the permit should be issued would shift from a
proceeding before a state regulatory agency where the appli-
cant bears the burden of proof to a federal proceeding over
the accuracy of the AVS information where OSM bears the
burden of proof. That result is inconsistent with the statute.

 It is true that the Interior Department did not explicitly
rely on the foregoing rationale in its preamble to the OHA
rules. Ordinarily, when an agency reaches the proper conclu-
sion for the wrong reasons, the courts remand the rule to the
agency for further consideration. See SEC v. Chenery Corp.,
318 U.S. 80, 95 (1943). However, we do not do so here.
When the language of the statute commands a particular
outcome--as 30 U.S.C. ss 1211 and 1260 do here--the fact
that the agency states an incorrect legal rationale is insuffi-
cient to require a remand. See Motion Picture Ass'n of Am.
v. Oman, 969 F.2d 1154, 1158 (D.C. Cir. 1992). In this case, a
remand would be pointless. As Judge Friendly stated,
"Chenery does not mean that any assignment of a wrong
reason calls for reversal and remand; this is necessary only
when the reviewing court concludes there is a significant
chance that but for the error the agency might have reached
a different result." Henry J. Friendly, Chenery Revisited:
Reflections on Reversal and Remand of Administrative Or-
ders, 1969 Duke L.J. 199, 211.

II.

We therefore vacate the district court's judgment with
regard to the following challenges: (1) the due process chal-
lenge to "the rules" as a whole; (2) the challenge to the rules'
lack of provisional permits; (3) the challenge to 30 C.F.R.
s 773.5 (1999) as vague as well as the lack of rebuttal
standards; (4) the claim that the rules--specifically, 30
C.F.R. ss 773.23, 773.24 & 773.25 (1999)--violated the Act's
"state primacy" requirement. With regard to each of these
challenges, we order that the district court dismiss them as
moot. We affirm the district court's ruling that 30 C.F.R.
s 778.14 (1999) does not impermissibly require extra informa-
tion, and that the Office of Hearing and Appeals rules, 43
C.F.R. ss 4.1374, 4.1384 (1999), do not improperly shift the
burden of proof.

So ordered.