National Mining Association v. Kempthorne

Jan 15: In the U.S. Court of Appeals, D.C. Circuit, Case No. 06-5199. The Appeals Court says, "The Secretary of the Interior has interpreted the phrase 'valid existing rights' in the Surface Mining Control and Reclamation Act to foreclose surface mining operations in sensitive areas. The National Mining Association [NMA] challenges this reading of the statute, but we conclude that we must defer to the Secretary’s reasonable interpretation of this ambiguous phrase."

In 1977, Congress enacted the Surface Mining Control and Reclamation Act (SMCRA), “to protect society and the environment from the adverse effects of surface coal mining operations.” Section 522(b) of the SMCRA authorizes the Secretary of the Interior (Secretary) to prohibit surface coal mining operations on Federal lands if he determines them to be unsuitable for that purpose. Section 522(e) bans outright surface mining in statutorily designated areas. In the appeal, D.C. Circuit is asked to determine how Congress intended that ban to work.

The relevant text of § 522(e) provides: "After August 3, 1977, and subject to valid existing rights no surface coal mining operations except those which exist on August 3, 1977, shall be permitted [in the statutorily designated areas]." The Appeals Court says, "Because one must show 'valid existing rights' (VER) to start a surface mining operation in a § 522(e) area, the meaning of the phrase is critical. For decades, the Secretary and the courts have wrestled with how best to understand VER and determine what it protects. We need not recount this history. Suffice it to say that VER has occasioned a spectrum of agency interpretations, ranging from a relaxed 'ownership and authority' standard, which required only that the miner show a property right in the coal, to a more exacting 'all permits' standard, which called for a showing that surface mining licenses had been issued prior to the date § 522(e) took effect."

In its final analysis the Appeals Court says, "At oral argument, the NMA did not claim that the government would be on the hook for a 'massive and unforeseen' sum, paid out to frustrated miners as just compensation... The record is devoid of evidence suggesting it is so. Given this implicit concession that the 1999 Rule will have relatively insignificant takings implications that can be readily addressed in the Court of Claims, there is no serious constitutional problem to be avoided. '[T]he avoidance canon is not applicable when the statute or regulation would effect a taking, if at all, only in certain situations.' Nat’l Mining Ass’n v. Babbitt, 172 F.3d 906, 917 (D.C. Cir. 1999). The usual Chevron analysis is therefore applied to the 1999 Rule, which results in our deferring to the Secretary’s reasonable interpretation of an ambiguous statutory term. The district court properly accorded Chevron deference to the Secretary’s interpretative rule. The judgment is affirmed."

Access the complete opinion (click here).