Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-akd-3_15-cv-00043/USCOURTS-akd-3_15-cv-00043-0/pdf.json

Nature of Suit Code: 899
Nature of Suit: Other Statutes - Administrative Procedure Act/Review or Appeal of Agency Decision
Cause of Action: 05:702 Administrative Procedure Act

---

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ALASKA

CASTLE MOUNTAIN COALITION, et al.,

Plaintiffs,

v.

OFFICE OF SURFACE MINING 

RECLAMATION AND ENFORCEMENT, 

et al.,

Defendants,

 and

USIBELLI COAL MINE, INC. and STATE 

OF ALASKA,

IntervenorDefendants.

Case No. 3:15-cv-00043-SLG

ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT

This is an administrative appeal from a decision of the Office of Surface Mining 

Reclamation and Enforcement (OSM). Plaintiffs are Castle Mountain Coalition, Cook Inlet 

Keeper, Alaska Center for the Environment, Alaska Community Action on Toxics, The 

Sierra Club, and Chickaloon Village Traditional Council (collectively, Castle Mountain). 

Defendants are comprised of OSM, the United States Department of the Interior, and 

Joseph Pizarchik, in his official capacity as Director of OSM (collectively, Federal 

Defendants). There are two Intervenor-Defendants: Usibelli Coal Mine, Inc. and the State 

of Alaska. Coal River Mountain Watch appears as amicus curiae. Before the Court are 

cross-motions for summary judgment filed by Castle Mountain and the Federal 

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Defendants.1 The Court heard oral argument on the two motions on January 29, 2016.2

I. BACKGROUND

Plaintiffs are several non-profit organizations and the governing body of a 

federally-recognized Native Village. They assert that their “members, supporters, and 

citizens have health, subsistence, cultural, economic, recreational, scientific, 

environmental, aesthetic, educational, conservation, commercial, and other interests in 

the Matanuska Valley.”3 They challenge OSM’s decision regarding the State of Alaska’s 

permitting of coal mining operations by Usibelli at the Wishbone Hill Mine near Sutton, 

Alaska, a community located roughly 60 miles northeast of Anchorage. 

At the heart of this dispute is the interpretation of the phrase “shall terminate” in 

the following statute of the Surface Mining Control and Reclamation Act (SMCRA):

[A surface coal mining] permit shall terminate if the permittee has not 

commenced the surface coal mining operations covered by such permit 

within three years of the issuance of the permit: Provided, That the 

regulatory authority may grant reasonable extensions of time upon a 

showing that such extensions are necessary by reason of litigation 

precluding such commencement or threatening substantial economic loss 

to the permittee, or by reason of conditions beyond the control and without 

the fault or negligence of the permittee . . . .

4

 1 See Docket 36 (Castle Mountain’s Motion for Summary Judgment); Docket 58 (Federal 

Defendant’s Cross-Motion for Summary Judgment). With regard to Castle Mountain’s motion, the 

Federal Defendants responded at Docket 60; Usibelli and the State of Alaska opposed the motion 

at Dockets 61 and 62, respectively; Castle Mountain replied at Docket 65; and amicus curiae Coal 

River Mountain Watch filed a brief in support of the motion at Docket 51-1. 

2 Docket 76 (Minute Entry).

3 See Docket 19 (First Amended Complaint) at 3–6.

4 30 U.S.C. § 1256(c). 

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Plaintiffs assert the phrase “shall terminate” in this statute unambiguously means 

that the permit automatically terminates if mining operations have not commenced within 

three years from the date of a coal mining permit’s issuance and no extension has been 

granted. OSM found, and all of the Defendants assert to this Court, that the statute is 

ambiguous and the regulatory authority may interpret, and has reasonably interpreted, it

to require administrative termination proceedings to be initiated before a permit may be

terminated.

The implementation of SMCRA is overseen by the Secretary of the Interior through 

OSM. SMCRA establishes minimum nationwide standards for surface coal mining 

operations, but it also allows states to assume primary jurisdiction (primacy) over the 

regulation of surface coal mining within the state if the Secretary approves a state 

program that “provides for the regulation of surface coal mining and reclamation 

operations in accordance with the requirements of [the Act].”5 However, in primacy states 

OSM retains certain enforcement powers under § 1271 of the Act. This statute provides 

that whenever the Secretary has reason to believe that any person is in violation of any 

requirement of the Act or any permit condition required by it, “the Secretary shall notify

the State regulatory authority” by issuing a ten-day notice (TDN), so termed because if a

state regulatory agency “fails within ten days after notification to take appropriate action 

to cause said violation to be corrected or to show good cause for such failure and transmit 

notification of its action to the Secretary, the Secretary shall immediately order Federal 

 5 30 U.S.C. § 1253.

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inspection of the surface coal mining operation at which the alleged violation is 

occurring . . . .”6 Moreover, if a primacy state is not enforcing any part of its program,

SMCRA states that “the Secretary may provide for the Federal enforcement, under the 

provisions of section 1271 of [the Act], of that part of the State program not being enforced 

by such State.”7 

The Secretary approved Alaska’s program (ASCMCRA or the Alaska Program) in 

May 1983, thereby making the Alaska Department of Natural Resources (DNR) the 

primary regulatory authority for all surface coal mining operations on non-federal and nonIndian lands within Alaska.

8 Both the State of Alaska and Usibelli maintain that because 

the Secretary approved the Alaska Program, this case should be determined under 

Alaska law and the federal statute is “largely irrelevant.”9 The Court disagrees. SMCRA 

sets the minimum standards applicable throughout the nation; state programs that 

regulate surface coal mining must do so “in accordance with the requirements” of the 

federal Act.10 Accordingly, a state’s provisions may be more stringent—but not less 

stringent—than SMCRA’s requirements.

11 In accordance with this requirement of federal 

 6 30 U.S.C. § 1271(a)(1).

7 30 U.S.C. § 1254(b).

8 30 C.F.R. § 902.10; see also AS 27.21.010 et seq.

9 See Docket 62 (State Opp.) at 3–4; Docket 61 (Usibelli Opp.) at 11.

10 See 30 U.S.C. §§ 1253(a), 1255.

11 See, e.g., Hodel v. Va. Surface Mining & Reclamation Ass’n, Inc., 452 U.S. 264, 289 (1981) 

(“Appellees’ claims accurately characterize the Act insofar as it prescribes federal minimum 

standards governing surface coal mining, which a State may either implement itself or else yield 

to a federally administered regulatory program.”).

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law, the Alaska termination statute substantially tracks the language of SMCRA, as it 

must. This case concerns the interpretation of the federal termination provision, with 

which Alaska’s parallel provision must, at a minimum, be in accord.

SMCRA prohibits surface coal mining without a permit.12 Permits are generally 

valid for five years. However, § 1256(c) of the Act, cited above, provides that a permit 

“shall terminate” if mining operations do not commence within three years of the permit 

issuance and sets out the two circumstances when an extension can be granted. A 

regulatory authority can also renew permits—which is distinct from extending the time to 

commence mining.13 In conformance with SMCRA, Alaska’s statutory framework tracks 

these federal provisions.14 

Pursuant to the Alaska Program, DNR first issued two permits for the Wishbone 

Hill Coal Project to Idemitsu Alaska, Inc. in September 1991.15 Idemitsu did not start

surface coal mining operations within three years after issuance of the permits. In August

1994, after receiving a request for an extension from Idemitsu, DNR extended the time to 

start mining operations to September 4, 1996.16 In September 1995, DNR approved the

transfer of the Wishbone Hill permits to North Pacific Mining Corporation (NPMC).

17 In 

 12 30 U.S.C. § 1256(a); see also 30 C.F.R. § 773.4(a).

13 See 30 U.S.C. § 1256(d).

14 See AS 27.21.010 et seq. 

15 A.R. 1382 (Docket 29-1 at 44–49) (Permits).

16 A.R. 1345 (Docket 29-1 at 8) (Letter Dated August 3, 1994).

17 A.R. 1202 (Docket 28-9 at 27) (Letter Dated September 19, 1995).

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January 1996, NPMC wrote to DNR, seeking information on the requirements for renewal 

of the permits.

18 After additional correspondence, DNR renewed the permits for a fiveyear period ending September 4, 2001.

19 DNR’s public notice of its permit renewal 

decision stated “[t]he applicant has again requested an extension for beginning mining 

due to ongoing marketing efforts.”20 In a letter accompanying the 1996 permit renewal, 

DNR informed NPMC that “should mining not commence within this renewal term, then 

due to the length of time since the original permit application work was completed no 

further renewals will be considered without an extensive review of the original applications 

and the baseline information they were based on.”21 In the decision under review in this 

case, OSM found that in the 1996 permit renewal DNR “did not expressly address the 

requirements of AS 27.21.070(b) [Alaska’s termination provision] and did not expressly 

grant a continuation of extension of time to commence mining.”22

In December 1997, DNR approved the transfer of the permits to Usibelli, subject 

to the conditions and stipulations of the original permits.23 In April 2001, Usibelli applied 

for a renewal of the permits for an additional five-year term.

24 In 2002, DNR renewed the 

 18 A.R. 1206 (Docket 28-9 at 24). 

19 A.R. 1154–54 (Docket 28-8 at 4–5).

20 A.R. 1150 (Docket 28-8 at 1).

21 A.R. 1141 (Docket 28-7 at 15).

22 A.R. 14 (Docket 26-2 at 13-14).

23 A.R. 1127 (Docket 28-7 at 1).

24 A.R. 1075 (Docket 28-6 at 5–6).

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permits until September 2006.

25 In November 2006, DNR renewed the permits for 

another five-year term expiring in November 2011.

26 Neither Usibelli’s 2001 permit 

renewal request nor its 2006 permit renewal request contained a request for an extension

of the time to commence mining operations; likewise, each permit renewal by DNR was 

silent in that regard.

27 Coal mining operations at Wishbone Hill did not begin until June 

2010, when Usibelli started building a road from the Glenn Highway to the project site.

28 

DNR renewed the permits most recently in October 2014.29

Castle Mountain asserts that it “became aware of the invalidity of the permits and 

unpermitted coal mining operations” in September 2011 when reviewing DNR’s 2011 

proposal to renew the permits.30 In November 2011, Trustees for Alaska submitted a 

citizen complaint to DNR on behalf of several groups including Plaintiffs, asserting that 

the permits had terminated by operation of law on September 4, 1996, because no mining 

operations had commenced by that date.

31 DNR responded in December 2011, asserting 

that it had properly renewed the permits in 1996. DNR added that “while activities prior 

to 2010 might not rise to the level of ‘coal mining operations’ as defined by [ASCMCRA], 

 25 A.R. 1027-37 (Docket 28-4 at 12-22).

26 A.R. 928–30 (Docket 28-1 at 4–6). 

27 See A.R. 1075 (Docket 28-6 at 5–6); A.R. 931 (Docket 28-1 at 7).

28 See Docket 19 at 13, ¶ 64; Docket 24 at 12, ¶ 64; Docket 35 at 10, ¶ 64; Docket 23 at 8, ¶ 64.

29 See A.R. 40–53 (Docket 26-3 at 22–30, Docket 26-4 at 1–5).

30 Docket 19 (FAC) at 13, ¶ 65.

31 A.R. 242 (Docket 26-6 at 15).

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coal mining operations did commence as of 2010.”32 DNR concluded that the Wishbone 

Hill permits were “valid and enforceable, and therefore there is no activity that warrants a 

Cessation Order to be issued under [the applicable state regulation].”33

On December 14, 2011, Trustees for Alaska sent a letter to OSM captioned

“Citizen Complaint” asserting that Usibelli was conducting surface coal mining operations 

at Wishbone Hill without valid permits in violation of ASCMCRA.

34 In response, OSM 

issued TDNs to DNR that informed DNR of the Trustees’ letter and directed DNR to 

respond with an explanation of what action it intended to take or why it did not believe a 

permit deficiency existed.

35

On January 6, 2012, DNR provided a comprehensive response to OSM in support 

of its position that “the Alaska Program has taken all appropriate action necessary in 

affirming that the Wishbone Hill permits are valid and therefore declining an inspection 

and cessation order.”36 DNR’s response acknowledged that the Alaska Program requires 

extensions to commence operations to be addressed in the notice of renewal decisions,

and that its 2002 and 2006 permit renewal decisions did not “contain a discussion of 

extensions.”37 But DNR maintained that “by granting a renewal of the permit with full 

 32 A.R. 247 (Docket 26-16 at 24).

33 A.R. 247 (Docket 26-6 at 24).

34 A.R. 249 (Docket 26-6 at 26).

35 A.R. 746–47 (Docket 27-5 at 12–13).

36 A.R. 679 (Docket 27-2 at 20).

37 A.R. 683–84 & n.27 (Docket 27-3 at 4–5 & n.27).

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knowledge of the status of Usibelli’s operations (i.e., that coal mining operations had not 

begun), DNR was implicitly granting an extension when it granted the permit renewals in 

2002 and 2006.”38 And while DNR acknowledged that extensions of the date to begin 

mining operations “should be documented in the permit renewal notices,” it asserted that 

“the failure to do so does not lead to an automatic termination of the permits under the 

extension statute.”39

In July 2012, OSM issued its initial evaluation of DNR’s January 2012 response 

and concluded that “DNR’s assertion that the permits are valid is not supported by the 

facts or applicable law.”40 OSM did not observe any ambiguity in the relevant statutes; 

rather, it repeatedly observed that under those statutes, “a permit terminates by operation 

of law if a permittee does not begin surface coal mining operations under the permit within 

three years after the permit is issued.”41 OSM found that DNR had not explicitly granted 

NPMC’s extension request in 1996, and concluded that as a result, the “permits expired 

on September 4, 1996, by operation of AS 27.21.070(b) when NPMC failed to commence 

mining by that date.” OSM added that “[e]ven if one assumed that DNR’s 1996 permit 

renewal and extension were valid, the subsequent renewals in 2002 and 2006 appear not 

to have been valid because, once again, neither [Usibelli] nor DNR seem to have made 

the showing or findings required by AS 27.21.070(b) to justify an extension of time to 

 38 A.R. 683–84 (Docket 27-3 at 4–5).

39 A.R. 684–85 (Docket 27-3 at 5–6).

40 A.R. 640 (Docket 27-1 at 4).

41 Id. See also A.R. 636 (Docket 27 at 163).

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commence mining.”42

OSM’s July 2012 initial evaluation discussed and rejected DNR’s “implicit 

extension” theory, finding it to be at odds with the requirements of AS 27.21.070(b). OSM 

concluded that based on DNR’s submission to date, it could not “make the determination 

that the standards for appropriate action or good cause for failure to take action have 

been met because information is missing from the record that may be available from 

[DNR].”43 OSM accorded DNR an additional ten days to provide any supplemental 

information in support of its position.

In August 2012, DNR provided a lengthy supplemental response that challenged

OSM’s authority to use a ten-day notice process in this circumstance and reiterated 

DNR’s “implicit extension” theory.

44 DNR also asserted that even if OSM had the authority 

to use the TDN process, it should retract its TDNs for Wishbone Hill because DNR’s 

decision regarding the 2011 permit renewal was then pending.

45

In November 2014, OSM issued its final decision on Castle Mountain’s complaint

that is the subject of this appeal.

46 OSM first found that it had the authority to issue the 

 42 A.R. 642 (Docket 27-1 at 6).

43 A.R. 644 (Docket 27-1 at 8).

44 See A.R. 212–36 (Docket 26-5 at 12–23, Docket 26-6 at 1–13.).

45 DNR cited an OSM directive that provided, “OSM will not review pending RA [Regulatory 

Authority] permitting decisions and will not issue a TDN for an alleged violation involving a permit 

defect where the RA has not taken relevant permitting action (e.g., permit issuance, permit 

revision, permit renewal, or transfer, assignment, or sale of permit rights).” A.R. 234 (Docket 26-

6 at 9).

46 A.R. 7–25 (Docket 26-2 at 7–18, Docket 26-3 at 1–7). 

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ten-day notices in this context. OSM then reaffirmed its prior determination that DNR had 

not followed the appropriate procedures in connection with extensions of the time for the 

permit holders to commence mining operations. In this regard, OSM again rejected 

DNR’s implicit extension theory. But OSM reversed its earlier position regarding permit 

termination and concluded that federal law does not require surface mining permits to 

terminate by operation of law when mining operations have not commenced; rather, OSM 

concluded that a state may permissibly interpret SMCRA to require that an administrative

proceeding must be initiated to terminate a permit based on a failure to commence mining 

operations before the permit can be terminated. OSM then found that “DNR failed to 

[initiate a termination proceeding], and, consequently, Usibelli was not operating without 

a permit.”47

OSM presented two primary reasons in support of its conclusion that SMCRA does 

not mandate permit termination as a matter of law when an extension of the time to 

commence mining operations has not been sought or obtained. First, OSM observed that 

“[u]nder the Chevron line of precedent, if SMCRA is silent on the issue of whether 

termination of permits should automatically result when permits are not commenced 

within three years, then [OSM] may permissibly interpret the statute (and our regulations 

implementing the statute) as either effecting an automatic termination or not doing so, so 

long as the interpretation it adopts is reasonable.”48 Second, OSM cited to cases that 

 47 A.R. 8 (Docket 26-2 at 8).

48 A.R. 20 (Docket 26-3 at 2); see Chevron, U.S.A., Inc. v. Nat. Res. Defense Council, Inc., 467 

U.S. 837, 842–45 (1984).

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recognize the severity of an automatic forfeiture and concluded that “if forfeiture is not 

mandated by ‘clear and unequivocal’ language in SMCRA and the applicable Federal 

regulations, then we should not construe our statute and regulations as imposing this 

harsh penalty.”49 Accordingly, OSM found DNR’s position regarding permit termination

“consistent with both the approved Alaska regulatory program and with the Federal 

regulations and is no less stringent than section 506(c) of SMCRA [the federal termination 

provision].” OSM also found that “[t]he draconian and counterproductive remedy of 

shutting Usibelli down would run counter to the second purpose of section 506(c), 

ensuring the prompt development of the nation’s coal resources.” OSM concluded that 

DNR “had ‘good cause’ for not taking action against Usibelli for operating without a 

permit.” But OSM stated that DNR “has an affirmative duty to monitor whether timely 

mining operations are occurring and to issue prompt determinations in cases where 

mining operations have not commenced within three years.” It directed DNR to work with 

OSM to formulate “a written Action Plan to address [DNR’s] failure to implement [its] 

program provisions on the timely commencement of mining operations.”50 

Castle Mountain initiated this action in federal district court in March 2015 seeking 

to vacate and set aside OSM’s determination.

 49 A.R. 21 (Docket 26-3 at 3); see also United States v. Model Ford V-8 De Luxe Coach, Motor 

No. 18-3306511, 307 U.S. 219, 226 (1939); Am. Maritime Ass’n v. Blumenthal, 590 F.2d 1156, 

1165 (D.C. Cir. 1978).

50 A.R. 22–24 (Docket 26-3 at 4–6).

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II. JURISDICTION

Plaintiffs have asserted that the Court has subject matter jurisdiction over this 

action pursuant to 5 U.S.C §§ 702–06 (Administrative Procedures Act or APA), 28 U.S.C. 

§§ 2201–02 (declaratory judgments), and 28 U.S.C. § 1331 (federal question jurisdiction). 

Federal courts lack jurisdiction over APA challenges to agency actions when

Congress has provided another “adequate remedy.”51 The Federal Defendants assert 

that SMCRA’s citizen suit provision would have provided another adequate remedy to 

Castle Mountain such that Plaintiffs are precluded from bringing an action under the APA. 

However, to bring a citizen suit under SMCRA, a would-be plaintiff must, as a general 

rule, give the regulating entity written notice of the violation sixty days before filing the 

action. Here, it is undisputed that no such sixty-day notice was given. Therefore, the 

Federal Defendants maintain that Castle Mountain cannot bring this action at all because 

Castle Mountain did not provide sixty days’ notice to the Secretary as required by SMCRA

before commencing this lawsuit.

52 Nor, argue the Federal Defendants, can Castle 

Mountain bring an APA challenge because it had an alternative adequate remedy of 

which it failed to avail itself.53 

The Federal Defendants maintain that Castle Mountain could have brought a 

citizen suit under § 1270(a)(2), which provides:

 51 5 U.S.C. § 704; see also Brem-Air Disposal v. Cohen, 156 F.3d 1002, 1004 (9th Cir. 1998).

52 Docket 59 (Memorandum) at 22–23.

53 See Or. Nat. Res. Council v. U.S. Forest Serv., 834 F.2d 842, 851 (9th Cir. 1987) (“Where

plaintiffs may otherwise proceed under the citizen suit provision, they should not be allowed to 

bypass the explicit requirements of the Act . . . through resort to . . . the APA.”). 

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[A]ny person having an interest which is or may be adversely affected may 

commence a civil action on his own behalf to compel compliance with this 

chapter—

. . . .

(2) against the Secretary . . . where there is alleged a failure of the Secretary 

. . . to perform any act or duty under this chapter which is not discretionary 

with the Secretary . . . .

54

The Federal Defendants assert that this citizen suit provision applies because “the 

substance” of Castle Mountain’s allegations is that “the Secretary had a non-discretionary 

duty, which she failed to fulfill, to order a federal inspection and issue a cessation order 

because unpermitted mining was taking place at Wishbone Hill.”55 Castle Mountain 

counters that its challenge is limited to the review of a discretionary act by the agency

that falls under the APA, an issue which it frames as whether “OSM’s determination that 

the Alaska Department of Natural Resources . . . ha[d] shown good cause for not taking 

action in this case” was based on an “unlawful interpretation of SMCRA.”56 Plaintiffs

assert they principally seek declaratory relief and vacatur, and not an order compelling 

OSM to undertake a non-discretionary act.57 Thus, Castle Mountain asserts that the 

 54 30 U.S.C. § 1270(a)(2). Other types of citizen suits are authorized in 30 U.S.C. § 1270(a)(1). 

But that provision has been interpreted to apply only to suits against operators, including the 

government when it functions as an operator. See Ok. Wildlife Fed’n v. Hodel, 642 F. Supp. 569, 

571–72 (N.D. Okla. 1986).

55 Docket 59 at 21.

56 Docket 65 (Reply) at 9.

57 Id. See also Docket 19 (First Amended Complaint) at 17; but see Docket 37 (Castle Mountain’s 

Memorandum in Support of Plaintiffs’ Motion for Summary Judgment) at 43 and Docket 65 (Reply) 

at 33, in which Castle Mountain also asks the Court to “order the agency to conduct a federal 

inspection and to take additional appropriate actions,” a position it later retracted at oral argument.

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citizen suit provision in SMCRA does not apply and the Court has subject matter 

jurisdiction under the APA.

OSM’s enforcement duties upon receipt of a citizen complaint are set forth in 30 

U.S.C. § 1271(a)(1).

58 That provision does not assign any non-discretionary duties to the 

agency unless and until the Secretary has found “reason to believe” that a violation exists. 

Here, Castle Mountain takes issue with OSM’s finding that the agency did not have reason 

to believe that a violation had occurred and asserts that the finding is not in accordance 

with the law, specifically § 1256(c). Castle Mountain’s First Amended Complaint, as 

framed, does not directly concern the Secretary’s non-discretionary actions or duties, and 

does not seek to compel the Secretary to take some action.

59 Accordingly, the citizen 

suit provision in § 1270(a)(2) does not provide a jurisdictional basis for the Complaint; 

thus, the Court has jurisdiction under the APA and 28 U.S.C. § 1331.

60

 58 30 U.S.C. § 1271(a)(1) provides in part that:

Whenever, on the basis of any information available to him, including receipt of 

information from any person, the Secretary has reason to believe that any person 

is in violation of any requirement of this chapter or any permit condition required 

by this chapter, the Secretary shall notify the State regulatory authority, if one 

exists, in the State in which such violation exists. If no such State authority exists 

or the State regulatory authority fails within ten days after notification to take 

appropriate action to cause said violation to be corrected or to show good cause 

for such failure and transmit notification of its action to the Secretary, the Secretary 

shall immediately order Federal inspection of the surface coal mining operation at 

which the alleged violation is occurring . . . .

59 See Docket 19 (FAC) at 17; see also Ok. Wildlife Fed’n, 642 F. Supp. at 570 (“The Court’s 

jurisdiction under § 1270(a)(2) is limited to compelling the Secretary to take some action.”).

60 See Chrysler Corp. v. Brown, 441 U.S. 281, 317 n.47 (1979) (citing Califano v. Sanders, 430 

U.S. 99 (1977)) (“Jurisdiction to review agency action under the APA is found in 28 U.S.C. 

§ 1331.”).

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III. STANDING AND RIGHT TO SUE

The State of Alaska challenges Castle Mountain’s standing to bring this case. 

Under Article III of the Constitution, “[t]he jurisdiction of the federal courts is limited to 

‘cases’ and ‘controversies.’”61 The Supreme Court has deduced a set of requirements 

that make up the constitutional minimum of standing:

[A] plaintiff must show (1) it has suffered an “injury in fact” that is (a) concrete 

and particularized and (b) actual or imminent, not conjectural or 

hypothetical; (2) the injury is fairly traceable to the challenged action of the 

defendant; and (3) it is likely, as opposed to merely speculative, that the 

injury will be redressed by a favorable decision.

62

Castle Mountain maintains that each Plaintiff “has a mission to protect the 

Matanuska Valley and traditional Tribal lands from improperly permitted coal mining” 

where their members and Tribal citizens “reside near, visit, or otherwise enjoy the 

Matanuska Valley and the mine site for numerous purposes, including recreation, wildlife 

viewing, and cultural and subsistence practices.”63 No party asserts that these interests 

do not satisfy the requirements for Article III standing. 

However, in addition to Article III standing, “a statutory cause of action extends 

only to plaintiffs whose interests ‘fall within the zone of interests protected by the law 

 61 Wash. Envtl. Council v. Bellon, 732 F.3d 1131, 1138 (9th Cir. 2013) (quoting U.S. Const. art. III, 

§ 2).

62 Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180–81 (2000) 

(citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61 (1992); Hunt v. Wash. State Apple 

Adver. Comm’n, 432 U.S. 333, 343 (1977)); see also Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 

1547 (2016).

63 Docket 37 at 24.

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invoked.’”64 The State argues Plaintiffs lack standing because Plaintiffs’ “interests are not 

within the zone-of-interest that [the termination] provision seeks to protect.”65 The APA 

provides a cause of action to persons who are “adversely affected or aggrieved by agency 

action within the meaning of a relevant statute.”66 In the APA context, the Supreme Court 

has held that the test is “not especially demanding” and “forecloses suit only when a 

plaintiff’s interests are so marginally related to or inconsistent with the purposes implicit 

in the statute that it cannot reasonably be assumed that Congress authorized that plaintiff 

to sue.”67 

The State correctly observes that Castle Mountain’s right to sue must be measured 

against the statutory purposes specific to the termination provision in SMCRA—30 U.S.C. 

§ 1256(c).

68 The State maintains that the purpose of that termination provision is to 

“prevent squatting on mining permits,” and that it “vindicates purely economic interests.”69 

 64 Lexmark Intern., Inc. v. Static Control Components, Inc., 134 S. Ct. 1377, 1387–88 (2014) 

(quoting Allen v. Wright, 468 U.S. 737, 751 (1984)) (the zone-of-interests test does not belong in 

the “prudential” standing rubric but rather “asks whether this particular class of persons has a right 

to sue under this substantive statute”) (quotation marks, formatting, and citation omitted). 

65 Docket 62 at 12. See also Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 883 (1990) (plaintiffs’ 

aggrievements or adverse effects must fall “within the ‘zone of interests’ sought to be protected 

by the statutory provision whose violation forms the legal basis for his complaint”).

66 5 U.S.C. § 702.

67 Lexmark, 468 U.S. at 1389 (quotation marks and citations omitted).

68 Docket 62 at 8; see, e.g., Bennett v. Spear, 520 U.S. 154, 175–76 (1997) (“Whether a plaintiff’s 

interest is arguably protected by the statute within the meaning of the zone-of-interests test is to 

be determined not by reference to the overall purpose of the Act in question . . . but by reference 

to the particular provisions of law upon which the plaintiff relies.”) (quotation marks and formatting 

omitted); see also Desert Citizens Against Pollution v. Bisson, 231 F.3d 1172, 1179 (9th Cir. 2000). 

69 Docket 62 at 11–12.

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In the State’s view, the interests expressed in Plaintiffs’ declarations “describe the harms 

associated with commencement of mining at Wishbone Hill, not the harms associated 

with a failure to commence mining operations at Wishbone Hill.”70 The State asserts that 

“[e]nvironmental protection is simply not the purpose of the termination provision.” Thus, 

the State maintains that Castle Mountain’s purported interests fall outside the zone of 

interests protected by the termination provision, such that Plaintiffs have no right to 

challenge the agency’s interpretation of the termination statute under the APA.

71 

Castle Mountain responds that its interests are well within the zone of interests 

protected by the termination provision, which it asserts has dual goals: “ensuring

development of coal resources and ensuring that permits and reclamation plans do not 

become outdated.”72 Plaintiffs observe that OSM’s own regulations “deem[] operating 

without a ‘valid’ permit to ‘constitute a condition or practice which causes or can 

reasonably be expected to cause significant imminent environmental harm.’”73 Thus, 

Castle Mountain maintains that “[t]he delay caused the permits to terminate, and the 

resultant unpermitted mining strongly implicates [Plaintiffs’] environmental, recreational, 

health, cultural, property, and public participation interests.”74

The Court finds that Castle Mountain’s asserted interests readily fall within the 

 70 Docket 62 at 10. See also Dockets 38–49 (Declarations).

71 Docket 62 at 13. The State also asserts that Castle Mountain has other avenues under the 

federal and state programs to seek redress. See Docket 62 at 14. 

72 Docket 65 at 13.

73 Id. (citing 30 C.F.R. § 843.11(a)(2)).

74 Docket 65 at 14.

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zone of interests protected by the termination provision, as that provision does not relate 

only to the economic attributes of mining. And Castle Mountain has shown it is adversely 

affected by the agency’s interpretation of the termination provision. In light of the 

foregoing, Castle Mountain has both Article III standing and the right to sue OSM over its 

interpretation of SMCRA’s termination provision under the APA.

IV. THE SMCRA TERMINATION PROVISION

The APA directs courts to “hold unlawful and set aside” an agency decision that is 

“arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”75 

Here, the question is whether the agency’s interpretation of the termination statute is “not 

in accordance with law.”76

In reviewing an agency’s interpretation of a statute, a court’s first task is to 

“determine whether ‘Congress has directly spoken to the precise question at issue. If the 

intent of Congress is clear, that is the end of the matter; for the court, as well as the 

agency, must give effect to the unambiguously expressed intent of Congress.’”77 

The statute at issue is 30 U.S.C. § 1256(c), which again provides that:

[A coal mining] permit shall terminate if the permittee has not commenced 

the surface coal mining operations covered by such permit within three 

years of the issuance of the permit: Provided, That the regulatory authority 

 75 5 U.S.C. § 706(2)(A).

76 Although framed as cross-motions for summary judgment pursuant to Alaska Local Rule 16.3, 

in an APA case, “summary judgment merely serves as the mechanism for deciding, as a matter 

of law, whether the agency action is supported by the administrative record and otherwise 

consistent with the APA standard of review.” Oceana, Inc. v. Pritzker, 24 F. Supp. 3d 49, 60 

(D.D.C. 2014) (citation omitted). 

77 Ariz. v. Tohono O’odham Nation, 818 F.3d 549, 556 (9th Cir. 2016) (quoting Chevron, U.S.A., 

Inc. v. Nat. Res. Defense Council, Inc., 467 U.S. 837, 842–43 (1984)).

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may grant reasonable extensions of time upon a showing that such 

extensions are necessary by reason of litigation precluding such 

commencement or threatening substantial economic loss to the permittee, 

or by reason of conditions beyond the control and without the fault or 

negligence of the permittee . . . .

OSM upheld Alaska’s interpretation of the provision “to mean that if mining 

operations do not commence within three years, and no extension is granted, the permit 

will not terminate automatically; rather, the permit remains valid until the regulatory 

authority takes an affirmative action to terminate it.”78 All Defendants support OSM’s 

interpretation. Plaintiffs argue that OSM’s interpretation is not in accordance with law 

because the phrase “shall terminate” is not ambiguous. Rather, Plaintiffs maintain that it

unambiguously mandates permit termination when mining operations do not begin within 

three years of a permit’s issuance and no explicit extension has been granted. 

Accordingly, the Court must first determine if the disputed phrase “shall terminate” 

is ambiguous. “A statute is ambiguous if it is susceptible to more than one reasonable 

interpretation. The starting point is the statutory text. . . . When a statute does not define 

a term, we generally interpret that term by employing the ordinary, contemporary, and 

common meaning of the words that Congress used.”79 Here, the statute does not define 

the terms “shall” and “terminate.” SMCRA was passed in 1977. In 1976, Webster’s Third 

New International Dictionary explained that “shall” is “used in laws, regulations, or 

 78 A.R. 22 (Docket 26-3 at 18).

79 Tohono O’odham Nation, 818 F.3d at 556 (quotation marks omitted) (first quoting Alaska 

Wilderness League v. EPA, 727 F.3d 934, 938 (9th Cir. 2013), then quoting Chevron, 467 U.S. at 

842–43, and then quoting United States v. Gallegos, 613 F.3d 1211, 1214 (9th Cir.2010)).

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directives to express what is mandatory,” and defined “terminate” to mean “to bring to an 

ending or cessation in time, sequence, or continuity: CLOSE.”80 Thus, according to this 

dictionary frequently cited by the Supreme Court, around the time Congress debated 

SMCRA’s termination provision an ordinary meaning of the phrase “shall terminate” would 

denote a mandatory ending.

Consistent with the ordinary meaning of the term “shall,” the Supreme Court has 

repeatedly recognized that when Congress uses the word “shall,” it is mandatory, and 

does not give an agency authority to disregard that directive. For example, in

Kingdomware Technologies, Inc. v. United States, the Supreme Court held that “[u]nlike 

the word ‘may,’ which implies discretion, the word ‘shall’ usually connotes a 

requirement.”81 The Supreme Court has also observed that “the mandatory ‘shall’ . . . 

normally creates an obligation impervious to judicial discretion.”82

 80 WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 2085, 2359 (1976). The Supreme Court 

frequently cites various editions of this dictionary. See, e.g., Voisine v. United States, --- S. Ct. --

--, No. 14-10154, 2016 WL 3461559, at *5 (U.S. June 27, 2016) (citing the 1954 edition); 

McDonnell v. United States, --- S. Ct. ----, No. 15-474, 2016 WL 3461561, at *13 (U.S. June 27, 

2016) (citing the 1961 edition); Kellogg Brown & Root Servs., Inc. v. United States, ex rel. Carter, 

135 S. Ct. 1970, 1976 (2015) (citing the 1976 edition). 

81 136 S. Ct. 1969, 1977 (2016); see also Ross v. Blake, 136 S. Ct. 1850, 1856–57 (2016) (where 

the PLRA provides that “[a]n inmate ‘shall’ bring ‘no action’ . . . absent exhaustion of available 

administrative remedies . . . [t]here is no question that exhaustion is mandatory”); Nat’l Ass’n of 

Home Builders v. Defenders of Wildlife, 551 U.S. 644, 661–62 (2007) (the statutory phrase “shall 

approve” means “EPA does not have the discretion to deny a transfer of an application); Lopez v. 

Davis, 531 U.S. 230, 241 (2001) (noting Congress’ “use of a mandatory ‘shall’ . . . to impose 

discretionless obligations”).

82 Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26, 35 (1998).

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Highly persuasive to this Court on the issue of any ambiguity in SMCRA’s 

termination provision is the Ninth Circuit decision of Grand Canyon Trust v. Tucson 

Electric Power Co.83 Grand Canyon Trust involved a termination provision in a Clean Air 

Act regulation that is structurally quite similar to the termination provision in SMCRA, as 

it contained both a mandatory termination provision and a permissive extension option. 

The regulation provided:

Approval to construct [a power plant] shall become invalid if construction is 

not commenced within 18 months after the receipt of such approval, if 

construction is discontinued for a period of 18 months or more, or if 

construction is not completed within a reasonable time. The Administrator 

may extend the 18–month time period upon a satisfactory showing that an 

extension is justified.84

In December 1977, Tucson Electric received a permit to construct two power plant 

units. The construction of the units was completed in 1985 and 1990. Many years later, 

in 2001, Grand Canyon Trust brought a citizen enforcement action against Tucson 

Electric asserting that Tucson Electric had failed to comply with the regulation because it 

had not commenced construction by the cut-off date, had discontinued construction for 

longer than eighteen months, and had not completed construction within a reasonable 

time.85 

 83 391 F.3d 979 (9th Cir. 2004).

84 Grand Canyon Trust, 391 F.3d at 983.

85 Subsequent amendments to the Clean Air Act imposed stricter technology requirements on 

newly-constructed power plants that had not commenced construction by March 19, 1979. These 

requirements were important in Grand Canyon Trust because Grand Canyon Trust sought to 

impose those requirements on the already-constructed power plants, which could have cost 

Tucson Electric up to $300 million, and civil penalties for operating without the updated technology 

of up to $27,500 per day. The issue is not particularly relevant to the statutory interpretation at 

issue in this case. However, with regard to Defendants’ focus on forfeiture, it bears noting that in 

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The Ninth Circuit agreed with Grand Canyon Trust, and held that a “natural 

reading” of the phrase “shall become invalid” provided for automatic permit invalidation, 

even though the term “automatic” was not in the statute itself:

[W]e read this language to provide that a permit automatically becomes 

invalid in the enumerated circumstances unless the administrator exercises 

discretionary authority to extend the permit. On a natural reading of the 

language, administrative action is only required to forestall invalidation of a 

permit. No agency action is required to invalidate a permit if construction is 

not timely commenced.86

Like the regulation at issue in Grand Canyon Trust, the Court finds that “on a natural 

reading” of the SMCRA termination provision, the phrase “shall terminate” is selfexecuting, and “administrative action is only required to forestall invalidation of a permit.” 

Defendants argue that the statute is ambiguous because it does not include the word 

“automatically” in reference to termination.87 But like the regulation at issue in Grand 

Canyon Trust, a natural reading of 30 U.S.C. § 1256(c) compels a conclusion that use of 

the term “automatic” is not required to effectuate the termination by operation of law of a 

permit in these circumstances.

Textually, the statute as written is self-executing—it does not require the regulatory 

authority to take any action. If Congress had intended that the regulatory authority must 

or could take action to terminate the permit in the event that mining activities had not 

 

Grand Canyon Trust, the Ninth Circuit held that “neither the requirement that Tucson Electric 

replace its emission-control equipment, nor the potential for civil fines, establishes the type of 

expectations-based prejudice that laches requires.” Id. at 988.

86 Grand Canyon Trust, 391 F.3d at 983–84.

87 See Docket 59 at 25.

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commenced, then the termination provision should have read: The regulatory authority 

shall (or may) terminate a permit. Other portions of SMCRA do expressly direct the 

agency to affirmatively take certain actions. For example, § 1260(a) provides “the 

regulatory authority shall grant, require modification of, or deny the application for a permit 

in a reasonable time set by the regulatory authority . . . . [T]he regulatory authority shall 

notify the local governmental officials . . . that a permit has been issued . . . .”; 

§ 1271(a)(2) provides “the Secretary or his authorized representative shall immediately 

order a cessation of surface coal mining and reclamation operations” when, on the basis 

of federal inspection, OSM determines the permittee is in violation of SMCRA; and 

§ 1271(a)(4) provides “the Secretary or his authorized representative shall forthwith issue 

an order to the permittee to show cause . . . .” In contrast, that the termination statute 

does not mandate any action by the agency makes clear that Congress intended permit 

termination to be self-executing. 

The Federal Defendants acknowledge that the term “shall” is generally mandatory, 

but observe that it is not always the case. They cite to the Supreme Court’s decision in 

Gutierrez de Martinez v. Lamagno, a Westfall Act case in which the Court held that the 

use of the phrase “shall be deemed an action against the United States” when the United 

States was substituted as a party did not preclude subsequent judicial review of the 

agency’s scope-of-employment certification that effectuated the substitution.

88 In

Gutierrez, the Supreme Court observed in a footnote that “[t]hough ‘shall’ generally 

 88 515 U.S. 417 (1995).

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means ‘must,’ legal writers sometimes use, or misuse, ‘shall’ to mean ‘should,’ ‘will,’ or 

even ‘may”.89 The Supreme Court held that judicial review of the certification decision 

was permitted, despite the finality of the language “shall be deemed,” because to construe 

the Westfall Act otherwise “would oblige [the Court] to attribute to Congress two highly 

anomalous commands[:] . . . that Congress, by its silence, authorized the Attorney 

General’s delegate to make [certification determinations without any judicial check[,] [and 

that Congress] cast Article III judges in the role of petty functionaries . . . stripped of 

capacity to evaluate independently whether the executive’s decision is correct.”90 Here, 

there are none of the separation-of-powers issues that informed the Supreme Court’s 

construction of the Westfall Act in Gutierrez.

The Federal Defendants place considerable emphasis on Sierra Club v. Jackson,

91

which concerned whether the administrator of the Environmental Protection Agency had 

 89 The footnote in Gutierrez continued:

See D. MELLINKOFF, MELLINKOFF’S DICTIONARY OF AMERICAN LEGAL USAGE 402–03 

(1992) (“shall” and “may” are “frequently treated as synonyms” and their meaning 

depends on context); B. GARNER, DICTIONARY OF MODERN LEGAL USAGE 939 (2d 

ed. 1995) (“[C]ourts in virtually every English-speaking jurisdiction have held—by 

necessity—that shall means may in some contexts, and vice versa.”) For example, 

certain of the Federal Rules use the word “shall” to authorize, but not to require, 

judicial action. See, e.g., Fed.Rule Civ.Proc. 16(e) (“The order following a final 

pretrial conference shall be modified only to prevent manifest injustice.”) (emphasis 

added); Fed.Rule Crim.Proc. 11(b) (A nolo contendere plea “shall be accepted by 

the court only after due consideration of the views of the parties and the interest of 

the public in the effective administration of justice.”) (emphasis added). 

Gutierrez, 515 U.S. at 433 n.9.

90 Id. at 426.

91 648 F.3d 848 (D.C. Cir. 2011).

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a mandatory duty to take enforcement action under a provision of the Clean Air Act that 

provides in relevant part:

The Administrator shall, and a State may, take such measures, including 

issuance of an order, or seeking injunctive relief, as necessary to prevent 

the construction or modification of a major emitting facility . . . .92

The Sierra Club argued that the plain text of the statute made enforcement by the 

Administrator mandatory. The D.C. Circuit Court noted that “[t]he Sierra Club’s textual 

argument carries considerable weight. As we have repeatedly noted, ‘shall’ is usually 

interpreted as the language of command.”93 However, the Circuit Court ultimately 

disagreed with the Sierra Club because although the statute directed the Administrator to 

act, it only required that the Administrator take such measures “as necessary” and 

provided “no guidance . . . as to what action is ‘necessary.’”94 The Court does not find 

Sierra Club to be helpful in resolving whether the SMCRA statute is not ambiguous, 

because the disputed statutory language in this case does not contain the lack of 

specificity that was present in Sierra Club. And textually, the language of SMCRA’s 

termination provision is quite different because it does not command the agency to do 

anything at all.

Further support for finding that SMCRA’s termination statute unambiguously 

results in permit termination by operation of law when mining operations have not 

commenced derives from the context in which the language appears. For while the 

 92 42 U.S.C. § 7477.

93 Sierra Club, 648 F.3d at 856 (quotation marks and citations omitted).

94 Id.

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statute clearly directs that a permit shall terminate, it also provides that the agency “may 

grant reasonable extensions.” If the statute were read permissively to allow but not 

require permit termination if operations had not commenced, regardless of the reason for 

the delay in commencing operations, then effectively the two limited exceptions to the 

permit termination would have no purpose in the statute. And yet, “[i]f possible, every 

word and every provision is to be given effect . . . . None should be ignored. None should 

needlessly be given an interpretation that causes it to . . . have no consequence.”95 To 

comply with this interpretive canon, the words “shall” and “may” should be accorded

different meanings in SMCRA’s termination provision.

The Supreme Court has observed that “[w]hen a statute distinguishes between 

‘may’ and ‘shall,’ it is generally clear that ‘shall’ imposes a mandatory duty.”96 The import 

of the use of both words in a statute was discussed in Center for Biological Diversity v. 

United States Fish & Wildlife Service.

97 In that case, the Ninth Circuit upheld the United 

States Fish and Wildlife Service’s decision to not complete a formal designation of critical

habitat for an endangered fish species. The disputed language in the Endangered 

 95 ANTONIN SCALIA & BRYAN A. GARNER, READING LAW: THE INTERPRETATION OF LEGAL TEXTS 174 

(2012).

96 Kingdomware Techs., Inc. v. United States, 136 S. Ct. 1969, 1977 (2016). In Kingdomware, 

the Supreme Court held that a statute was unambiguously mandatory because it “requires that ‘a 

contracting officer of the Department shall award contracts’ to veteran-owned small businesses 

using restricted competition whenever the Rule of Two is satisfied, ‘[e]xcept as provided in 

subsections (b) and (c).’ (Emphasis added.) Subsections (b) and (c) provide, in turn, that the 

Department ‘may’ use noncompetitive procedures and sole-source contracts for lower value 

acquisitions. . . . Congress’ use of the word ‘shall’ demonstrates that § 8127(d) mandates the use 

of the Rule of Two in all contracting before using competitive procedures.”

97 450 F.3d 930, 935 (9th Cir. 2006).

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Species Act (ESA) used both the terms “shall” and “may.” The Circuit Court held that 

“[w]hen ‘may’ and ‘shall’ are both used in a statute, ‘the normal inference is that each is 

being used in its ordinary sense—the one being permissive, the other mandatory.’”98 Put 

another way, the Circuit Court found that Congress knew the difference between “may” 

and “shall” when it used them together in that provision of the ESA.

The Federal Defendants maintain that even when “shall” and “may” appear 

together, their meaning depends on context.99 In the disputed statute here, they assert

that “[t]here is no direction, in the exception proviso, that the extension come at a 

particular time, either before or after three years has run.”100 To the Federal Defendants, 

because the statute accords the agency the discretion to grant reasonable extensions at 

any time, “[t]he only statutory command is that once the regulatory authority determines 

that a permit extension is ‘necessary’ to prevent inequity, the extension must be 

‘reasonable’—a word that clearly envisions a range of permissible outcomes.”101 But this 

argument overlooks that fact that extensions can be granted under the statute for only 

two specific reasons. Thus, unlike the statute in Sierra Club that directed the 

administrator to take unspecified measures “as necessary,” SMCRA provides only two 

specific bases on which the regulatory authority can grant permit extensions.102

 98 Id. (quoting Haynes v. United States, 891 F.2d 235, 239–40 (9th Cir. 1989).

99 Docket 59 at 27.

100 Docket 59 at 29.

101 Docket 59 at 29.

102 See supra notes 91–94 and accompanying text.

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The Federal Defendants also cite to Citizens Association for Sound Energy v. 

United States Nuclear Regulatory Commission.

103 In that case, the United States Court 

of Appeals for the District of Columbia Circuit found permissible the Nuclear Regulatory 

Commission’s (NRC’s) statutory interpretation that automatic forfeiture did not result 

when an operator failed to meet the deadline to file for a permit extension under the 

Atomic Energy Act. The statute at issue in that case, 42 U.S.C. § 2235, provided:

The construction permit shall state the earliest and latest dates for the 

completion of the construction or modification. Unless the construction or 

modification of the facility is completed by the completion date, the 

construction permit shall expire, and all rights thereunder be forfeited, 

unless upon good cause shown, the Commission extends the completion 

date.104

The operator applied for an extension approximately six months after the permit expiration 

date, which the NRC issued. Citizens Association for Sound Energy challenged the 

agency action, arguing in part that the operator’s failure to apply for an extension prior to 

the permit’s expiration caused “a complete forfeiture of the permit, such as to preclude 

the issuance of an extension.”105 The D.C. Circuit Court disagreed, holding that “[t]he 

plain language of [§ 2235] permits the Commission to extend a completion date for ‘good 

cause.’ There is no language specifying that the expiration of the construction permit 

automatically effects forfeiture of the permit, or that the Commission is then barred from 

 103 821 F.2d 725 (D.C. Cir. 1987).

104 Citizens Ass’n for Sound Energy, 821 F.2d at 730.

105 Id.

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an application to extend the latest construction date.”106 The Federal Defendants assert 

the case supports a finding that the statute at issue here is not unambiguous and that 

OSM’s interpretation of the termination provision in SMCRA is reasonable.

107 

Citizens Association did not require the D.C. Circuit to analyze the plain meaning 

of the phrase “shall expire” as used in the statute at issue. Rather, the Circuit Court 

focused on the broad “good cause” exception to permit expiration. And that statute

contained only the term ‘shall’ and not the SMCRA provision’s combination of “shall” and 

“may.” Most importantly, the case did not address the automatic termination of a permit 

when no extension had been sought or granted at all—either before or after the permit 

expiration date—as is the case here. In short, the Court does not find that the D.C. 

Circuit’s analysis in Citizens Association demonstrates that the termination provision at 

issue here is ambiguous. 

To interpret the provision as OSM has done—so as to permit an interpretation that 

makes termination dependent on agency action—reads additional words and conditions 

into the statute that simply are not there. Moreover, because SMCRA sets the floor to 

which state programs must comply, Alaska’s statute must be in accordance with the 

 106 Id.

107 Docket 59 at 32. The State of Alaska and Usibelli do not directly address the ambiguity 

question, although the State joins the Federal Defendants’ brief on the meaning of “shall.” See

Docket 62 at 27. Usibelli adds that if “shall” in SMCRA “demonstrates Congressional intent to 

require automatic termination . . . the fact that the Alaska statute . . . does not use the word ‘shall’ 

should support the construction that under Alaska law, there is no automatic termination.” See 

Docket 61 at 18. However, since the federal law sets the floor to which primacy states must 

comply, Alaska cannot adopt a statute that is less stringent than SMCRA. See supra notes 8–11 

and accompanying text.

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termination provision of § 1256(c). Based on the foregoing analysis, the Court finds that 

SMCRA’s termination provision is not ambiguous. Rather, Congress has directly spoken 

to the precise question and has provided that a surface coal mining permit terminates by 

operation of law when mining operations have not commenced within three years unless 

the agency has affirmatively granted an extension for one of the two specified reasons 

allowed in the statute. OSM’s contrary interpretation regarding the Wishbone Hill permits 

is not in accordance with law, and must be set aside, for the Court, as well as OSM and 

the State of Alaska, must give effect to the unambiguously expressed intent of 

Congress.108 

A review of SMCRA’s legislative history on this provision does not warrant a 

contrary result. The parties cite to portions of SMCRA’s or ASCMCRA’s legislative history 

as supporting their positions.

109 On balance, the Court finds that the legislative history 

cited by the parties does not squarely address the issue before the Court, and is, in any 

event, unnecessary to parse when the statute itself is unambiguous.

110 

 108 Chevron, U.S.A., Inc. v. Nat. Res. Defense Council, Inc., 467 U.S. 837, 842–43 (1984).

109 Docket 37 (Castle Mountain Mot.) at 29–32; Docket 65 (Castle Mountain Reply) at 23; Docket

60 (Fed. Defendants’ Opp.) at 34–38; Docket 62 (State of Alaska Opp.) at 25; Docket 61 (Usibelli 

Opp.) at 17; see also Docket 33-1 (Alaska DNR Commissioner Decision) at 2–4 and 8–11. 

110 The State of Alaska asserts that Alaska’s legislative history is the relevant authority and that 

the DNR Commissioner determined that “where possible, the state legislation sought to reduce 

some of the burdens imposed by the federal legislation and implement a program more tailored 

to the needs of Alaskans.” The State asserts that “[a]utomatic termination is inconsistent with this 

legislative purpose.” Docket 62 at 25. The Court finds this assertion contrary to the law. Alaska 

coal mining regulations may not “reduce” the burden of SMCRA. Rather, as already stated, 

Alaska regulations must be “in accordance” with SMCRA or they may be “more stringent.” 

Therefore, Alaska’s termination provision must also mean that permits terminate automatically 

unless a valid extension is granted. See supra notes 8–11 and accompanying text.

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 The parties have also discussed how the law of forfeiture should affect the 

outcome in this case. OSM’s decision referenced several older forfeiture cases, and 

reasoned that because SMCRA “does not give ‘clear and unequivocal’ warning that 

automatic termination of the permit could result from missing the three-year deadline,” it 

is preferable to interpret the Act to not require permit termination.111 The Federal 

Defendants add to this line of reasoning by citing to various statutes and regulations that 

they assert provide a clear lesson: “when Congress (or an agency) chooses to make 

termination of a license, lease, or permit automatic, it does so explicitly, giving full notice 

to licensees to be on their guard against forfeiture of their vested rights. The failure to do 

so in [the termination provision] indicates, quite simply, that that is not the outcome that 

Congress intended.”112 In effect, the Federal Defendants argue that the phrase “shall 

terminate” is not sufficiently clear to apprise a permit holder that the permit shall terminate 

if mining operations are not commenced within the requisite three years or extended 

period. But, as explained above, this Court disagrees, and finds the phrase “shall 

terminate” to be free from ambiguity as to the consequence of a failure to commence 

mining operations when no exception applies. 

 111 Docket 26-3 at 2–4; see also United States v. Model Ford V-8 De Luxe Coach, Motor No. 18-

3306511, 307 U.S. 219, 226 (1939) (citing Farmers’ & Mechanics’ Nat’l Bank v. Dearing, 91 U.S. 

29, 33–35 (1875)); Am. Maritime Ass’n v. Blumenthal, 590 F.2d 1156, 1165 (D.C. Cir. 1978).

112 Docket 60 at 34. Usibelli and Alaska both maintain forfeiture arguments under Alaska law. 

See Docket 61 at 16–17; Docket 62 at 28. But, as the Court has made clear, Alaska law does not 

provide the rules of decision in this case.

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 Moreover, unlike the cases cited by the Federal Defendants, the loss of a surface 

coal mining permit for failing to commence operations is not a penalty for violating a 

federal law. Rather, it is a statutory condition of the permit itself: Usibelli received the 

permits and subsequent renewals subject to “[a]ll conditions and stipulations of the 

original permits” that by their own terms did not “relieve the permittee of the responsibility 

for compliance with any federal, state or local law or regulation.”113 This would 

encompass the termination and extension provisions. The Federal Defendants refer to 

the permits as giving licensees “vested rights.”114 But no party has cited to any case that 

found vested rights that continue beyond a permit’s termination. Rather, Castle Mountain 

has cited cases that hold precisely the opposite.115 The fact that other statutes and 

regulations, cited by Defendants, use different language than SMCRA to effect a

termination does not render SMCRA’s language non self-executing. Moreover, when the 

termination provision is properly enforced, it is not clear that a significant forfeiture would 

even occur. For if properly enforced, a permit would terminate before any mining 

operations had commenced, thereby minimizing any economic losses. And Plaintiffs 

concede that “the statute places no express time limits on when an extension may be 

 113 See Docket 28-7 (Permit Transfer) at 1–2; Docket 28-4 at 12–22 (2002 Permit Renewal); 

Docket 28-1 at 4–6 (2006 Permit Renewal).

114 Docket 60 at 34.

115 Bd. of Regents v. Roth, 408 U.S. 564, 578 (1972) (assistant professor’s property interest in 

continued employment extended only to the end date of his contract); Kraft v. Jacka, 872 F.2d 

862, 867–68 (9th Cir. 1989), abrogated on other grounds by Dennis v. Higgins, 498 U.S. 439 

(1991) (no protected property interest continued after the automatic expiration of limited gaming 

licenses).

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granted.”116 Accordingly, it may be that under SMCRA the regulatory authority can extend 

the time to commence mining even after a permit has terminated, provided the statutory 

grounds for extension have been met. This Court need not determine that issue in this 

proceeding. In sum, because the termination provision in SMCRA is unambiguous, 

OSM’s and Defendants’ assertions regarding forfeiture law are inapposite.

CONCLUSION

In light of the foregoing, the Court finds that the phrase “shall terminate” as set 

forth in section 1256(c) of the Surface Mining Control and Reclamation Act is 

unambiguous, in that a surface mining permit terminates by operation of law if mining 

operations have not timely commenced under that statute unless an extension has been

granted pursuant to the statute’s terms. Accordingly, Castle Mountain Coalition’s Motion 

for Summary Judgment at Docket 36 is GRANTED; and the Office of Surface Mining 

Reclamation and Enforcement’s Motion for Summary Judgment at Docket 58 is DENIED. 

The Office of Surface Mining Reclamation and Enforcement Office’s determination that

SMCRA does not require permit termination when surface coal mining operations have 

not commenced within three years of permit issuance and no valid extension has been 

granted, and that DNR therefore had good cause for not taking corrective action in 

response to the ten-day notices regarding the Wishbone Hill permits, is VACATED. This 

 116 Docket 65 at 20.

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matter is REMANDED to the agency for further proceedings consistent with this decision. 

The Clerk of Court is directed to enter judgment for Plaintiffs accordingly. 

DATED this 7th day of July, 2016 at Anchorage, Alaska.

 /s/ Sharon L. Gleason

 UNITED STATES DISTRICT JUDGE

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