Opinion ID: 695504
Heading Depth: 4
Heading Rank: 1

Heading: OSM's Authority to Review the PSC's Determination

Text: 15 Coteau argues that OSM acted beyond its authority when it effectively reversed the PSC's determination that Coteau was not owned or controlled by Basin. Finding that there exists a state of general confusion regarding SMCRA's allocation of power between OSM and primacy states, we examine the statutory and regulatory structure in some detail. 16 The district court's entertaining but erroneous memorandum and order characterized Coteau's objections to the OSM's FAD as a tempest in a teapot and as paranoid; the court found, without explanation, that PSC decisions, if determining compliance with national regulations, were reviewable by OSM, and that the OSM's decision was not arbitrary or capricious. These findings are seemingly based on the court's perception of Coteau as suffering no significant harm from the decision, and of the conflict between the PSC and OSM as trivial. We, however, do not perceive the underlying issue of the allocation of regulatory power between federal and state agencies as unimportant. The state primacy system, including the Secretary's corresponding rulemaking and oversight powers, was crafted to ensure that neither flexibility nor environmental safety would be sacrificed. See PSMRL, 653 F.2d at 519-21, 525-27. The instant action concerns this tension, and it is our role to protect Congress's determination of the best balance between these competing interests. 17 Coteau argues that OSM was ultra vires in reviewing the PSC's determination regarding ownership and control under Sec. 1271(a)(1) because, under SMCRA and ensuing case law, North Dakota, as a primacy state, has exclusive regulatory jurisdiction over the permitting process, and because Coteau is thus bound only by North Dakota, not federal, regulations. Coteau contends that we need not review the validity of OSM regulations to arrive at this conclusion. We disagree. 18 Under SMCRA, North Dakota has achieved primacy status by creating a state regulatory program for surface mining operations and obtaining approval of this program from the Secretary of the Interior under 30 U.S.C. Sec. 1253. Primacy status gives the state exclusive jurisdiction over the regulation of surface coal mining and reclamation operations, Sec. 1253(a), and state, not federal, regulations govern once a state program is approved by OSM. See 30 U.S.C. Sec. 1253(a) (state may assume exclusive jurisdiction over regulation of surface mining); PSMRL, 653 F.2d at 519 ([I]t is with an approved state law and with state regulations consistent with the Secretary's that surface mine operators must comply.); and Haydo v. Amerikohl Mining, Inc., 830 F.2d 494, 497 (3d Cir.1987) (word exclusive bears ordinary meaning as used in SMCRA). The Secretary's role in a primacy state becomes primarily one of oversight. PSMRL, 653 F.2d at 519-21, 525-27. There are three statutory exceptions to the state's exclusive jurisdiction, and this appeal concerns the breadth of the powers reserved to the Secretary, and through him the OSM, by Sec. 1271(a). 19 Section 1271 creates three methods by which the OSM can enforce mining regulations in primacy states. 7 Under the first of these methods, Sec. 1271(a), when the Secretary has reason to believe that a person is in violation of a requirement of SMCRA, he must notify the state regulatory authority. This is known as a ten-day notice, because the state then must within ten days take appropriate action to cause said violation to be corrected or ... show good cause why the violation has not been corrected. Sec. 1271(a)(1). If the state fails to take action or show cause within ten days, the Secretary must order a federal inspection of the mining operation suspected of violation. Id. If the violation creates an imminent danger to the public's health or safety, or to the environment, the Secretary then can issue a cessation order. Sec. 1271(a)(2). Section 1271(a)(1) is the authority cited by OSM for its ten-day notice, and is the only SMCRA enforcement provision for violations discovered on the basis of information received by the Secretary, rather than on a federal inspection. 20 Coteau's alleged violation of the ownership and control regulations, however, created no imminent danger to health or safety, or to the environment, which is the trigger for federal intervention under Sec. 1271(a)(1) and (2). In addition, Coteau argues that oversight and enforcement authority do not extend to the permitting process. See PSMRL, 653 F.2d at 519 (the state is the sole issuer of permits), 526 (individual state permit decisions are unreviewable [by the Secretary]). Permitting requirements such as revelation of ownership and control links are not likely to be verified through the statutorily-prescribed method of physical federal inspection of the mining operation (and the record in the instant case shows no federal inspection), are unlikely to cause an imminent danger to the public safety or to the environment, and are part of the state program based on state law. Section 1271(a)(1) and (2) then does not provide evident authority for the OSM's intervention in the PSC's permitting decisions regarding Coteau, an operation with no physical violations of any surface mining regulations. The question remains: Under what authority did OSM issue its ten-day notice and then review PSC's determination on the issue of ownership and control? This authority is not to be found in SMCRA itself; we must look to the regulations promulgated under SMCRA. 21 30 C.F.R. Sec. 842.11(b)(1) (1989) states that: 22 An authorized representative of the Secretary shall immediately conduct a Federal inspection: 23 (i) When the authorized representative has reason to believe on the basis of information available to him or her (other than information resulting from a previous Federal inspection) that there exists a violation of the Act, this chapter, the applicable program, or any condition of a permit or an exploration approval, or that there exists any condition, practice, or violation which creates an imminent danger to the health or safety of the public or is causing or could reasonable be expected to cause a significant, imminent environmental harm to land, air or water resources, and-- 24 .... 25 (ii)(B)(1) The authorized representative has notified the state regulatory authority of the possible violation and more than ten days have passed since notification and the State regulatory authority has failed to take appropriate action to cause the violation to be corrected or to show good cause for such failure and to inform the authorized representative of its response. After receiving a response from the State regulatory authority, before inspection, the authorized representative shall determine in writing whether the standards for appropriate action or good cause for such failure have been met. 26 30 C.F.R. Sec. 842.11(b) (emphasis added). 30 C.F.R. Sec. 843.12(a)(2) (1989) states: 27 When, on the basis of [a] Federal inspection [as described in Sec. 842.11(b)(1)(ii)(B)(1) ], an authorized representative of the Secretary determines that there exists a violation of the Act, the State program, or any condition of a permit or exploration approval required by the Act which does not create an imminent danger or harm ... the authorized representative shall give a written report of the violation to the State and to the permittee so that appropriate action can be taken by the State. Where the State fails within ten days after notification to take appropriate action to cause the violation to be corrected, or to show good cause for such failure ... the authorized representative shall reinspect and, if the violation continues to exist, shall issue a notice of violation or cessation order, as appropriate. No additional notification to the State by the Office is required before the issuance of a notice of violation if previous notification was given under Sec. 842.11(b)(1)(ii)(B) of this chapter. 28 30 C.F.R. Sec. 843.12(a)(2) (emphasis added). 29 These regulations parallel SMCRA Sec. 1271(a)(1) and (2) closely, with an exception: Secs. 842.11 and 843.12 mandate intervention for any condition that is a violation of either state or federal regulations, or an imminent danger. Assuming that federal inspection includes an investigation of a mining operations' financial affairs, these regulations provide authority for OSM's review of the PSC's permitting decision, whether based on state or on federal regulations, and whether an imminent danger was presented or not. 30 C.F.R. Sec. 778.13 designates information that must be provided by any surface mining permit applicant to any regulatory authority that will be making the permitting decision. Amongst the information that must be provided are details concerning each person who owns or controls the applicant under the definition of 'owned or controlled' and 'owns or controls' in Sec. 773.5 of this chapter. 30 C.F.R. Sec. 778.13(c). Sections 842.11 and 843.12 authorize federal intervention, in the form of an inspection followed by a notice of violation, if a mining operation is found to be in violation of a provision of this chapter. This chapter refers to 30 C.F.R. ch. VII, which includes Sec. 778.13(c). It follows that Secs. 842.11 and 843.12 authorize ten-day notice to the state regulatory authority, federal inspection, and review of the state authority's decision based on a violation of the ownership and control information requirements set out in Sec. 778.13(c). Thus, under its own regulations, OSM had the authority to review the PSC's determination that Coteau was not owned or controlled by Basin, and Coteau's ultra vires argument demands review of the regulations themselves. 8 30 We decline to review the constitutionality of these regulations at this stage of proceedings, and for the purpose of examining the likelihood that Coteau will succeed on the merits of its claims that do not challenge the validity of the regulations themselves, we assume, without deciding, that the regulations are valid. Under Secs. 842.11 and 843.12 as written, OSM did have authority to issue a ten-day notice to the PSC regarding alleged ownership and control linkage between Coteau and Basin, and, if the PSC failed to take appropriate action or to show good cause for failure to do so, OSM had authority to order inspection and, if a violation was found, a notice of violation. OSM therefore had authority to review the PSC's determination to find if it provided for appropriate action or showed good cause for failure to do so. 31