United States Court of Appeals for the Federal Circuit 

 

2007-5108 

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, APOGEE COAL 

COMPANY, ARCH WESTERN RESOURCES, LLC, CANYON FUEL COMPANY, LLC, 

CATENARY COAL COMPANY, COAL-MAC, CO., DAL-TEX COAL CORPORATION, 

HOBET MINING, INC., MINGO LOGAN COAL CO., KINGSTON RESOURCES, INC., 

PAYNTER BRANCH MINING, INC., PIONEER FUEL CORPORATION, PLATEAU 

MINING CORPORATION, RAG CUMBERLAND RESOURCES, L.P., RAG EMERALD 

RESOURCES, L.P., TWENTYMILE COAL COMPANY, COASTAL COAL COMPANY, 

LLC., COASTAL COAL-WEST VIRGINIA, LLC, EASTERN ASSOCIATED COAL 

CORPORATION, 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, AND 

ALEX RESOURCES, INC., GENWAL RESOURCES, INC., PACIFIC COAST COAL 

COMPANY, USIBELLI COAL MINE, INC., POWDER RIVER COAL COMPANY, WEST 

RIDGE RESOURCES, INC., UNITED STATES STEEL MINING COMPANY, LLC, 

COVENANT COAL CORPORATION, and RAPOCA ENERGY COMPANY, LLC 

(now known as Wellmore Energy Company, LLC), 

 Plaintiffs, 

and 

JIM WALTER RESOURCES, INC., 

 Plaintiff-Appellee, 

 v. 

UNITED STATES, 

 Defendant-Appellant. 
 

Paul A. Horowitz, Baker & McKenzie LLP, of New York, New York, argued for 

plaintiff-appellee. With him on the brief were Steven H. Becker, Charles H. Critchlow, 

and Suzanne I. Offerman. 

Jonathan F. Cohn, Deputy Assistant Attorney General, Commercial Litigation 

Branch, Civil Division, United States Department of Justice, of Washington, DC, argued 

for defendant-appellant. With him on the brief were Jeffrey S. Bucholtz, Acting 

Assistant Attorney General; Jeanne E. Davidson, Director; Todd M. Hughes, Deputy 

Director; and Tara K. Hogan, Trial Attorney. Of counsel on the brief was Daniel W. 

Kilduff, Office of the Solicitor, United States Department of the Interior, of Washington, 

DC. 

Appealed from: United States Court of Federal Claims 

Senior Judge Bohdan A. Futey 
United States Court of Appeals for the Federal Circuit 

2007-5108 

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, APOGEE COAL COMPANY, ARCH WESTERN RESOURCES, 

LLC, CANYON FUEL COMPANY, LLC, CATENARY COAL COMPANY, COAL-MAC, 

CO., DAL-TEX COAL CORPORATION, HOBET MINING, INC., MINGO LOGAN COAL 

CO., KINGSTON RESOURCES, INC., PAYNTER BRANCH MINING, INC., PIONEER 

FUEL CORPORATION, PLATEAU MINING CORPORATION, RAG CUMBERLAND 

RESOURCES, L.P., RAG EMERALD RESOURCES, L.P., TWENTYMILE COAL 

COMPANY, COASTAL COAL COMPANY, LLC, COASTAL COAL-WEST VIRGINIA, 

LLC., EASTERN ASSOCIATED COAL CORPORATION, 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, AND ALEX RESOURCES, 

INC., GENWAL RESOURCES, INC., PACIFIC COAST COAL COMPANY, USIBELLI 

COAL MINE, INC., POWDER RIVER COAL COMPANY, WEST RIDGE RESOURCES, 

INC., UNITED STATES STEEL MINING COMPANY, LLC, COVENANT COAL 

CORPORATION, and RAPOCA ENERGY COMPANY, LLC (now known as Wellmore 

Energy Company, LLC), 

 Plaintiffs, 

and 

JIM WALTER RESOURCES, INC., 

Plaintiff-Appellee, 

 

v. 
UNITED STATES 

 Defendant-Appellant. 

Appeal from the United States Court of Federal Claims in 01-CV-254, 01-CV-442, and 

01-CV-929, Senior Judge Bohdan A. Futey. 

__________________________ 

DECIDED: June 11, 2008 

 __________________________ 

Before NEWMAN, PROST, and MOORE, Circuit Judges. 

MOORE, Circuit Judge. 

Appellant United States appeals from the United States Court of Federal 

Claims’s grant of summary judgment that application of the Surface Mining Control and 

Reclamations Act of 1977 (SMCRA) reclamation fee to export sales of coal violates the 

Export Clause of the Constitution. We reverse and remand. 

BACKGROUND 

This case reaches us after a long history, including a previous appeal to this 

court. The factual background was explained in our prior opinion and will not be 

repeated here. See Consolidation Coal Co. v. United States, 351 F.3d 1374 (Fed. Cir. 

2003). Following our remand in Consolidation Coal, 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). The court 

ruled that, as applied to coal that is exported, the method by which the Office of Surface 

Mining Reclamation and Enforcement (OSM) collects its reclamation fee violates the 

2007-5108 2
Export Clause of the Constitution.1

 The coal producers moved for judgment in favor of 

Jim Walter Resources (JWR), who is one of five test plaintiffs. On February 22, 2007, 

the court entered judgment in favor of JWR. This appeal followed. 

DISCUSSION 

We review the Court of Federal Claims’s grant of summary judgment without 

deference. Old Stone Corp. v. United States, 450 F.3d 1360, 1367 (Fed. Cir. 2006). 

“Statutory interpretation is a question of law that we review de novo.” Wesleyan Co. v.

Harvey, 454 F.3d 1375, 1378 (Fed. Cir. 2006). The only question before this court is 

one of statutory interpretation of 30 U.S.C. § 1232(a). Pursuant to the statute, the 

reclamation fee is imposed upon “coal produced” in the United States: 

All operators of coal mining operations . . . shall pay . . . a reclamation fee 

of 35 cents per ton of coal produced by surface mining and 15 cents per 

ton of coal produced by underground mining or 10 per centum of the value 

of the coal at the mine, as determined by the Secretary . . . . 

30 U.S.C. § 1232(a) (emphases added). Neither the statute nor OSM’s regulations 

specifically define the term “coal produced.” OSM’s regulations provide: 

(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. 

30 C.F.R. § 870.12 (emphasis added). If “coal produced” in § 1232(a) refers solely to 

coal extracted then the disputed portion of the statute does not render the statute 

unconstitutional under the Export Clause. If, however, “coal produced” is interpreted to 

include the entire process of extracting and selling coal—if it is a tax on extraction and

 1

 The Export Clause provides that “No Tax or Duty shall be laid on Articles 

exported from any State.” U.S. Const. art. I, § 9, cl. 5. 

2007-5108 3
sale—then, as it applies to sales that occur in the export process, it is an 

unconstitutional violation of the Export Clause. 

Where a possible construction of a statute would render the statute 

unconstitutional, courts must construe the statute “to avoid such problems unless such 

construction is plainly contrary to the intent of Congress.” Edward J. DeBartolo Corp. v. 

Fla. Gulf Bldg & Constr. Trades Council, 485 U.S. 568, 575 (1988). This canon of 

constitutional avoidance is subject only to the qualification that the interpretation that 

“save[s] a statute from unconstitutionality” must be reasonable—that is, the saving 

construction must not be “plainly contrary to the intent of Congress.” Id. at 575. “The 

elementary rule is that every reasonable construction must be resorted to, in order to 

save the statute from unconstitutionality.” Id. (quoting Hooper v. California, 155 U.S. 

648, 657 (1895)). 

Both sides agree the reclamation fee would be constitutional if imposed solely on 

coal extracted. We agree with the government that “coal produced” in § 1232(a) can 

reasonably be interpreted to mean “coal extracted,” and that this interpretation avoids a 

potential violation of the Export Clause. JWR argues that in Drummond Coal Co. v. 

United States, 796 F.2d 503 (D.C. Cir. 1986) this same statutory language “coal 

produced” was interpreted as including both the extraction and sale of coal. In 

Drummond, however, the D.C. Circuit was not interpreting the statute in light of the 

potential conflict with the Export Clause. The issue of the constitutionality of the 

reclamation fee as applied to exports simply was not raised. Id. at 503-08. Moreover, 

the Drummond court did not conclude that the language of the statute mandated the 

construction, but rather it held that the statute was ambiguous: “Like the district court, 

2007-5108 4
we do not find the ordinary meaning of that term unambiguous: ‘Production could 

reasonably be interpreted to include the entire process of extracting and selling coal, 

complete from pit to buyer’s door, or it could refer solely to the process of extraction.’” 

Id. at 505. Drummond involved the validity of a government regulation that directed that 

in calculating the tax on the gross weight of coal after it had been mined but before sale, 

the gross weight included impurities such as water that had not been removed. The 

court did not itself independently determine the meaning of the statutory term “coal 

produced,” but instead gave Chevron deference to the regulatory definition of that term, 

which included water as part of the “coal produced.” 796 F.2d at 507. In the present 

case, in contrast, the sole question is whether, in determining if the statute violates the 

constitutional prohibition of export taxes, ”coal produced” properly is defined as “coal 

extracted.” The government asserted that the plain meaning of the statute is that “coal 

produced” is to be interpreted as “coal extracted.” Even if we were to assume that the 

statute is ambiguous as to the meaning of “coal produced,” the government’s 

construction must still prevail as it is the only reasonable construction which preserves 

the constitutionality of the statute. 

JWR also argues that the position taken by the government in this case, that 

“coal produced” is limited to “coal extracted,” is inconsistent with the position the 

government took in Drummond. Although the government disputes the argument that it 

has taken inconsistent positions, either way, the government’s interpretation of “coal 

produced” in this case must prevail. Neither the government, nor this court, are bound 

by any contrary assertions by the government regarding the statutory interpretation of 

“coal produced” where the canon of constitutional avoidance mandates that we adopt 

2007-5108 5
2007-5108 6

the reasonable construction that as applied to the SMCRA reclamation fee “coal 

produced” is limited to “coal extracted.” 

For the foregoing reasons, we reverse the grant of summary judgment and 

remand for proceedings consistent with this opinion. 

REVERSED and REMANDED