United States Court of Appeals 

for the Federal Circuit 

__________________________ 

CONSOLIDATION COAL COMPANY, CONSOL OF 

PENNSYLVANIA COAL COMPANY, CONSOL OF 

KENTUCKY INC., EIGHTY FOUR MINING 

COMPANY, HELVETIA COAL COMPANY, ISLAND 

CREEK COAL COMPANY, KENT COAL MINING 

COMPANY, KEYSTONE COAL MINING 

CORPORATION, LAUREL RUN MINING 

COMPANY, MCELROY COAL COMPANY, NINEVEH 

COAL COMPANY, QUARTO MINING COMPANY, 

EAGLE ENERGY, INC., ELK RUN COAL COMPANY, 

INC., GOALS COAL COMPANY, GREEN VALLEY 

COAL COMPANY, INDEPENDENCE COAL 

COMPANY, INC., KNOX CREEK COAL 

CORPORATION, MARFORK COAL COMPANY, 

INC., MARTIN COUNTY COAL CORPORATION, 

PEERLESS EAGLE COAL COMPANY, 

PERFORMANCE COAL COMPANY, RAWL SALES & 

PROCESSING COMPANY, SIDNEY COAL 

COMPANY, INC., STONE MINING COMPANY, JIM 

WALTER RESOURCES, INC., EASTERN 

ASSOCIATED COAL CORPORATION, KINGSTON 

RESOURCES, INC., PIONEER FUEL 

CORPORATION, POWDER RIVER COAL 

COMPANY, APOGEE COAL COMPANY, ARCH 

WESTERN RESOURCES, LLC, CONYON FUEL 

COMPANY, LLC, CATENARY COAL COMPANY, 

COAL-MAC, INC., DAL-TEX COAL CORPORATION, 

HOBET MINING, INC., MINGO LOGAN COAL 

COMPANY, PAYTER BRANCH MINING, INC., 

PLATEAU MINING CORPORATION, RAG 
CONSOLIDATION COAL v. US 2

CUMBERLAND RESOURCES, L.P., RAG EMERALD 

RESOURCES, L.P., TWENTYMILE COAL 

COMPANY, COASTAL COAL COMPANY, LLC, 

COASTAL COAL-WEST VIRGINIA, LLC, 

EVERGREEN MINING COMPANY, MID-VOL 

LEASING, INC., MOUNTAINEER COAL 

DEVELOPMENT COMPANY, OLD BEN COAL 

COMPANY, SHIPYARD RIVER COAL TERMINAL 

COMPANY, RIVERSIDE ENERGY, INC., VIRGINIA 

CREWS COAL COMPANY, CLINTWOOD ELKHORN 

MINING COMPANY, GATLIFF COAL COMPANY, 

PREMIER ELKHORN COAL COMPANY, PERRY 

COUNTY COAL CORPORATION, GLAMORGAN 

COAL COMPANY, LLC, TERRY EAGLE, L.P., 

NICHOLAS-CLAY LAND & MINERAL, INC., 

NICHOLAS-CLAY COMPANY, LLC, ANDALEX 

RESOURCES, INC., GENWAL RESOURCES, INC., 

PACIFIC COAST COAL COMPANY, USIBELLI 

COAL MINE, INC., WEST RIDGE RESOURCES, 

INC., UNITED STATES STEEL MINING COMPANY, 

LLC AND COVENANT COAL CORPORATION 

Plaintiffs-Appellants, 

AND

WELLMORE ENERGY COMPANY, LLC 

(FORMERLY KNOWN AS RAPOCA ENERGY 

COMPANY, LLC) 

Plaintiff-Appellant, 

v. 

UNITED STATES 

Defendant-Appellee. 
3 CONSOLIDATION COAL v. US

__________________________ 

2009-5083 

__________________________ 

Appeal from the United States Court of Federal 

Claims in 01-CV-254 and 01-CV-442, Senior Judge Bohdan A. Futey. 

__________________________ 

Decided: August 2, 2010 

__________________________ 

STEVEN H. BECKER, Baker & McKenzie, LLP, of New 

York, New York, argued for all plaintiffs-appellants. 

With him on the brief were SUZANNE I. OFFERMAN, 

LINDSAY A. MINNIS and CHARLES H. CRITCHLOW. JOHN Y.

MERRELL, JR., Merrell & Merrell, P.C., of McLean, Virginia, for plaintiff-appellant Wellmore Energy Company, 

LLC. 

TODD M. HUGHES, Deputy Director, Commercial Litigation Branch, Civil Division, United States Department 

of Justice, of Washington, DC, argued for defendantappellee. With him on the brief were TONY WEST, Assistant Attorney General, JEANNE E. DAVIDSON, Director, 

and TARA K. HOGAN, Trial Attorney. Of counsel was 

DANIEL W. KILDUFF, Office of the Solicitor, Department of 

the Interior, of Washington, DC. 

__________________________ 

Before LOURIE, FRIEDMAN, and MOORE, Circuit Judges. 
CONSOLIDATION COAL v. US 4

MOORE, Circuit Judge. 

The appellants in this case, a group of operators in 

the coal mining industry, appeal from the United States 

Court of Federal Claims’ grant of summary judgment that 

certain regulations that implement the Surface Mining 

Control and Reclamations Act of 1977 (SMCRA) reclamation fee do not violate the Export Clause of the Constitution. We affirm. 

BACKGROUND

This is the third opinion we have issued in this longpending case. We explained the factual background in 

our previous opinion. See Consolidation Coal Co. v. 

United States, 351 F.3d 1374 (Fed. Cir. 2003) (Consol I). 

Following our remand in Consol I, the Court of Federal 

Claims granted summary judgment in favor of the plaintiff coal producers on the issue of liability. Consolidation 

Coal Co. v. United States, 64 Fed. Cl. 718 (2005) (Consol 

II). We reversed on June 11, 2008, holding that the 

statutory fee was on “coal extracted” rather than “coal 

sold” and thus not an unconstitutional tax on exports. 

Consolidation Coal Co. v. United States, 528 F.3d 1344 

(Fed. Cir. 2008) (Consol III). On remand, the appellants 

(Consol, collectively) argued that Consol III only determined the constitutionality of the statute and separately 

argued the constitutionality of the implementing regulations. The Court of Federal Claims disagreed with the 

appellants that Consol III did not decide the constitutionality of the regulations and entered summary judgment in 

favor of the government on March 4, 2009. Consolidation 

Coal Co. v. United States, 86 Fed. Cl. 384 (2009) (Consol 

IV). This appeal followed. 
5 CONSOLIDATION COAL v. US

DISCUSSION

We review the Court of Federal Claims’ grant of 

summary judgment and determinations of our scope of 

remand without deference. Old Stone Corp. v. United 

States, 450 F.3d 1360, 1367 (Fed. Cir. 2006); Laitram 

Corp. v. NEC Corp., 115 F.3d 947, 950 (Fed. Cir. 1997). 

Summary judgment is appropriate when, drawing all 

justifiable inferences in the nonmovant’s favor, there 

exists no genuine issue of material fact and the movant is 

entitled to judgment as a matter of law. Fed. R. Civ. P. 

56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 

(1986). We have jurisdiction pursuant to 28 U.S.C. 

§ 1295(a)(3). 

In Consol IV, the Court of Federal Claims determined 

that “the Federal Circuit [in Consol III] already addressed 

and resolved the constitutionality of both the reclamation 

fee statute and its implementing regulations.” Consol IV, 

86 Fed. Cl. at 389. It held that because we determined 

that “coal produced” in the statute means “coal extracted,” 

then the phrase must have the same definition in the 

regulations. Id. It pointed to the fact that our opinion in 

Consol III discussed the “application” of the statute and 

the “method” by which OSM collects fees. Id. The Court 

of Federal Claims stated that this showed that we explicitly considered both the statutes and the implementing 

regulations. 

The Court of Federal Claims also found that even if 

we did not reach the issue explicitly in Consol III, we 

determined the issue by “necessary implication.” Int’l 

Rectifier Corp. v. IXYS Corp., 515 F.3d 1353 (Fed. Cir. 

2008) (holding that remand to determine a substantive 

issue necessarily decided a related procedural issue). The 

Court of Federal Claims held that because we found the 

statute constitutional in Consol III in spite of Consol’s 
CONSOLIDATION COAL v. US 6

arguments there regarding the regulations, Consol cannot 

now be heard on the constitutionality of the regulations. 

On appeal, Appellants argue that the Court of Federal 

Claims erred in determining that our decision in Consol 

III determined the constitutionality of the regulations at 

issue. They point to the Consol III opinion that states 

“the only question before this court is one of statutory 

interpretation of 30 U.S.C. § 1232(a).” Consol III, 528 

F.3d at 1347. 

The government responds that the Court of Federal 

Claims was correct; we considered the “application” of the 

statute and the “method” of collecting the reclamation fee; 

this is the equivalent of considering the implementing 

regulations. It also points out that in Consol III we cited 

the regulation in question as part of our analysis. See id.

at 1347. 

We will address directly the parties’ arguments regarding the constitutionality of the implementing regulations. In Consol III, we held that the doctrine of 

constitutional avoidance required us to construe the 

phrase “coal produced” in 30 U.S.C. § 1232(a) to mean 

“coal extracted.” Id. at 1348. Appellants argue that 

although this definition applies to the statute, the regulations implemented by the Office of Surface Mining apply 

the fee to coal sold. As an example, appellants point to 30 

C.F.R. § 870.12(a)-(b)(3)(iii) which states in pertinent 

part: 

(a) The operator shall pay a reclamation fee on 

each ton of coal produced for sale, transfer, or use, 

including the products of in situ mining. 

(b) The fee shall be determined by the weight and 

value at the time of initial bona fide sale, transfer 

of ownership, or use by the operator. 
7 CONSOLIDATION COAL v. US

Appellants argue that because OSM collects the reclamation fee at the time of sale, it is necessarily a tax on “coal 

sold” rather than “coal extracted” regardless of the meaning of the term in the statute. 

On the other hand, the government argues that liability under SMRCA incurs at the time of extraction; the 

collection of the fee is merely delayed until the time of 

sale, when operators typically weigh coal. The government argues that the time of collection cannot convert a 

constitutional tax or fee to an unconstitutional one, citing 

Liggett & Myers Tobacco Co. v. United States, 299 U.S. 

383 (1937). In Liggett, the taxpayer was a manufacturer 

of tobacco and disputed a tax based on weight that applied to its product at the time of sale or removal from the 

factory. Id. at 385. Liggett sold the tobacco in question to 

the Commonwealth of Massachusetts for use at a state 

hospital. Id. Liggett and the Commonwealth argued that 

any tax on the sale amounted to an improper imposition 

of a tax on the Commonwealth. Id. The Court held that 

this was not a tax on sale, but a proper tax on manufacture. Id. at 386. Although the statute delayed the collection of the tax from the time of manufacture to the time of 

sale or removal from the factory, this did not make it 

unconstitutional. Id. The Court found that the timing of 

the tax “mitigate[s] the burden” on manufacturers and 

“indicates no purpose to impose the tax upon . . . sale.” Id.

Appellants respond that Liggett is not applicable because the coal extracted is not the same product that the 

operators later sell. They argue that between extraction 

and sale, certain impurities like oil and antifreeze may 

accumulate,1 while the operators remove other materials 

like dirt and rock that come along with coal as extracted. 

 1 30 C.F.R. § 870.18 allows for deduction for excess 

moisture accumulated between extraction and sale. 
CONSOLIDATION COAL v. US 8

Although the extracted coal along with dirt and rock may 

be heavier – and thus subject to a higher fee – the appellants argue that this is the proper basis for the reclamation fee. The appellants also argue that this is a tax on 

sale rather than extraction because coal that an operator 

never sells will never be subject to the fee.2

Appellants’ arguments in this appeal regarding the 

language of the regulation are much the same as those 

made in Consol III. Using the same canon of construction, the doctrine of constitutional avoidance, we hold that 

the regulations implementing SMCRA do not violate the 

Export Clause. See Edward J. DeBartolo Corp. v. Fla. 

Gulf Bldg. & Constr. Trades Council, 485 U.S. 568, 575 

(1988). The regulations, like the statute, use the term 

“coal produced,” and we conclude that this term in the 

regulation must be construed consistent with the identical 

term in the statute. “Coal produced” applies to “coal 

extracted” rather than “coal sold.” 

The decision by OSM to delay collection of the reclamation fee to the time of sale simply “mitigate[s] the 

burden” on operators by not requiring the installation and 

use of weighing equipment at the time of extraction. 

Appellants’ arguments regarding the change in weight 

between extraction and sale are not persuasive. In Liggett, the Court did not differentiate between an organic 

product like tobacco that could change weight and other 

products that could not. We see no reason to do so here.3 

 2 Our decision in Consol III addresses appellants’ 

alternative arguments regarding Drummond Coal Co. v. 

Hodel, 796 F.2d 503 (D.C. Cir. 1986). Consol III, 528 F.3d 

at 1347. 

3 The government persuasively argues that the 

weight at the time of sale, without dirt and rocks, is a 

more accurate representation of the amount of “coal 

extracted” than if the operators took the weight at the 
9 CONSOLIDATION COAL v. US

The liability incurs at the time of extraction, and OSM 

merely collects the fee at the time of sale. The practice of 

stockpiling – holding product that never sells – should not 

change the result. If an operator extracts coal, but 

chooses not to sell it, it still incurs liability; the stockpiling simply creates a collection issue for OSM. 

We hold that all of OSM’s challenged regulations for 

collecting the reclamation fee under SMCRA, like the 

statute itself, apply to “coal extracted” and do not violate 

the Export Clause. 

AFFIRMED 

 

time of extraction. We agree that it would appear contrary to our decision in Consol III to levy a fee on dirt and 

rocks as part of “coal extracted.”