Opinion ID: 501787
Heading Depth: 2
Heading Rank: 2

Heading: Bonding to Assure Reclamation of Land Affected by Mine Operations

Text: 177 In this part we address three challenges to district court rulings relating to the Secretary's bonding regulations. We reverse the district court's rulings, challenged by Industry, regarding incremental and phased bonding; the Secretary's regulations on these bonding arrangements, we hold, are compatible with the Act. We uphold the district court's ruling, challenged by NWF, that the initial bond for an underground operation need not be set at an amount sufficient to cover the cost of restoring land damaged by subsidence.
178 To facilitate bonding arrangements by mine operators, the Secretary has authorized the states (as regulatory authority) to implement plans allowing both incremental and phased bonding. Under the incremental bonding prescription, 30 C.F.R. Sec. 800.11(b), 37 an operator is not required to bond all at once the entire area to be mined in a given permit term. 38 Instead, the state plan may permit the operator to bond, and then commence operations on, smaller units, specifically, [i]ndependent increments ... of sufficient size and configuration to provide for efficient reclamation operations. 30 C.F.R. Sec. 800.11(b)(4). 179 Under the Secretary's authorization for phased bonding, 30 C.F.R. Sec. 800.13(a)(2), 39 an operator need not post one bond covering all phases of reclamation. Instead, the regulatory authority may allow the operator to obtain separate bonds for each of the three phases of reclamation (backfilling, regrading and drainage control; revegetation; all remaining reclamation), provided that all phase bonds are posted at the outset, that each bond is sufficient to cover reclamation work in the phase for which it is written, and that the sum of the bonds posted equals or exceeds the total amount needed to complete the reclamation plan for the entire area covered. 30 C.F.R. Sec. 800.13(a)(2); see 48 FED.REG. 32936, 32938, 32941 (1983). 40 As each reclamation phase is completed, the bond for that phase, subject to limitations, 41 will be released. If the mine operator defaults, [f]orfeiture of phase bonds ... will involve forfeiture of the total of the phase bonds remaining for the area or increment. 48 FED.REG. 32956 (1983). The Secretary has repeated his assurance that later phase bonds could be forfeited in the event that an earlier bond was released before the need for additional work was discovered. Supplemental Brief for the Secretary of the Interior at 2, 4-5; Correction to Supplemental Brief for the Secretary of the Interior at 2. 180 The district court found the incremental bonding allowance impermissible under Sec. 509(a) of the Act; 42 the court read that provision to require each bond to cover no less than the entire area to be mined in a given permit term. PSMRL II (Round II), 21 E.R.C. at 1743. Phased bonding, the district court held, was inconsistent with Sec. 509(b) of the Act; 43 the court read that provision to prohibit break[ing] the bond into specific phases of reclamation. Id. at 1744. Rejecting the Secretary's argument that Sec. 509(c) of the Act allows both bonding forms as alternative system[s], 44 the district court ruled that Sec. 509(c) countenances only alternatives to bonding, id. at 1743, not alternative bonding schemes. 181 We pretermit the question whether incremental and/or phased bonding can be accommodated within the terms of Secs. 509(a) and (b) of the Act. Section 509(c), we hold, reasonably could be read by the Secretary to permit his approval of alternative bonding methods that will fulfill the purposes of the Act. While Sec. 509(c) is not a model of the drafter's art, and the district court's reading of the provision is a plausible one, we defer to the reasonable interpretation ultimately proffered by the Secretary. Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 844-45, 104 S.Ct. 2778, 2782-83, 81 L.Ed.2d 694 (1984); Chemical Mfrs. Ass'n v. NRDC, 470 U.S. 116, 125, 105 S.Ct. 1102, 1107, 84 L.Ed.2d 90 (1985). Section 509(c) reads, in relevant part: 182 [I]n lieu of the establishment of a bonding program, as set forth in this section, the Secretary may approve as part of a State or Federal program an alternative system that will achieve the objectives and purposes of the bonding program pursuant to this section. 183 (Emphasis added.) Under the district court's construction, Congress established the sole permissible bonding program, but allowed the Secretary to approve a system alternative to bonding, e.g., insurance. The Secretary, in contrast, reads the Act to permit any system that fulfills the Act's objectives and purposes; both bonding and nonbonding programs, the Secretary maintains, could fit that description. 184 The Conference Report on the bill that became the Act, we think it significant, accords with the Secretary's ultimate interpretation. The Report observed that the House bill 185 included discretionary authority for alternative bonding approaches providing the objectives and purposes of this bonding program are met. The Senate receded. 186 H.R. CONF.REP. NO. 493, 95th Cong., 1st Sess. 103 (1977), reprinted in 1977 U.S.CODE CONG. & ADMIN.NEWS 593, 735 (emphasis added). The dispositive question, it thus appears to us, is whether the Secretary rationally concluded that the incremental and phased bonding plans he permitted will achieve the [same] objectives and purposes as those achievable under a plan indisputably consistent with Secs. 509(a) and (b) of the Act. SMCRA Sec. 509(c). 187 The district court rejected incremental bonding because the area covered by such a bond could be (and likely would be) smaller than the area to be mined in the course of one permit term. But under the Secretary's prescription, no surface area could be disturbed until the regulatory authority determined that the amount of bond posted for that area was sufficient to assure completion of the reclamation plan in the event of forfeiture. 30 C.F.R. Sec. 800.11(c); Sec. 800.14(b); see 48 FED.REG. 32937 (1983). True, the regulation allows an operator to confine bonding ahead to that portion of the permitted area that the operator plans to affect in the near future. But so long as the bond is calculated (as 30 C.F.R. Sec. 800.14(b) requires) at the full cost of reclaiming that particular increment of land, and the size and configuration of the increment (as 30 C.F.R. Sec. 800.11(b)(4) requires) are appropriate for efficient reclamation, we do not see how the arrangement appreciably heightens the risk that any land will be left unreclaimed. 188 Phased bonding, too, measures up to the standard we deem critical. We reiterate that [t]he total of the phase bonds must be sufficient to cover costs to the regulatory authority to complete the reclamation plan, and bond[s] covering all three phases must be posted before disturbance of the area or increment bonded. 48 FED.REG. 32936 (1983). 189 Phase bonds are all posted before any land is disturbed, and are individually released as each reclamation phase is accomplished, with limits on release comparable to those applicable to a single bond. See supra note 42. If the operator defaults and additional work on a completed phase becomes necessary, remaining bonds can be used to complete that reclamation work, but coverage may be inadequate to carry out in full the later reclamation stage(s). A single bond covering all three reclamation phases, we note, may be released in stages as each phase is accomplished. SMCRA Sec. 519(c) (60% may be released upon backfilling, regrading and drainage control; an unspecified percent may be released upon completion of revegetation and other requirements; the remainder may be released upon expiration of the period of operator liability following revegetation). If, subsequent to partial release of the single bond, additional work on an earlier phase is required, the operator's default will have similar consequences: the unreleased portion of the bond can be used to complete that work, but an inadequate amount may remain to fulfill the subsequent phase(s). Thus phased bonding appears to create no appreciably greater risk of incomplete reclamation than does a single bond. 190 In sum, the Secretary reasonably construed Sec. 509(c) of the Act, and responsibly determined that the incremental and phased bonding programs he authorized fulfilled the statutory objective: to ensure, to the extent feasible, completion of the reclamation plan in the event that an operator defaults. We therefore reverse the district court's judgment with respect to incremental and phased bonding and uphold the Secretary's prescriptions. 191
192 The Secretary requires underground mine operators to repair any material damage to land caused by subsidence. 30 C.F.R. Sec. 817.121(c)(1). Over Industry's objection, the district court upheld the Secretary's requirement, and we have affirmed that disposition. See infra pp. 739-41. NWF charges that the Secretary's bonding regulations are at odds with his requirement that operators repair subsidence-caused surface damage. The regulations at issue do not require bonding for subsidence damage at the outset of mining operations. See 30 C.F.R. Sec. 800.14. 45 They do call for bonding if and when damage occurs. 46 The Secretary's scheme in this regard, the district court held, is reasonable and implements the requirements of the Act. PSMRL II (Round II), 21 E.R.C. at 1743. We agree. 193 The Secretary explained that whether, when, and where subsidence will cause damage to the surface cannot be calculated with any degree of reliability when operations commence: [T]echniques for estimating the extent of necessary land restoration that may result from subsidence have not yet been developed[, so that] the amount of a performance bond based on estimated costs would be pure conjecture. 48 FED.REG. 32948 (1983). With this impediment to initial bonding in view, the Secretary settled on the following arrangement. 194 If and when material damage to land results from subsidence, the operator's reclamation and bonding obligations ripen simultaneously. The regulatory authority may, at that point, adjust the bond to take full account of the necessary reclamation work. 30 C.F.R. Sec. 800.15(a), implementing SMCRA Sec. 509(e). Liability insurance proceeds may also be used to accomplish reclamation, 47 and the initially-posted bond stands available for any reclamation obligations whenever they arise. 30 C.F.R. Sec. 800.16(c); see Brief for the Secretary of the Interior as Appellee at 13. Under this scheme, it is only when the operator defaults before upward adjustment of the bond that land damaged by subsidence may be left incompletely reclaimed. 195 In thus dealing with the problem of bonding for damage to land from subsidence, the Secretary invoked Sec. 516(d) of the Act, which permits such modifications to ... bond requirements as are necessary to accommodate the distinct difference between surface and underground coal mining. 48 We hold, as did the district court, that the Secretary relied on that provision legitimately. 196 The record and regulatory history bear out the essential points made by the Secretary: (1) the subsidence problem qualifies as a distinct difference between surface and underground coal mining; and (2) unless and until subsidence damage occurs, bonding for it would be a highly speculative endeavor. We summarize the salient points. 197 Rules proposed in 1978 would have required mine operators to post a bond adequate to defray the potential costs of repairing subsidence damage. The final 1979 rules, however, dropped this requirement in the face of comments emphasizing the absence of information and techniques adequate to project what restoration subsidence might require, and therefore the costs entailed. See 44 FED.REG. 15112 (1979); cf. 44 FED.REG. 15274 (1979) (citing technical literature, the Secretary observed that [a]n itemization of the probable effects of subsidence on structures would most likely be so speculative or general as not to be useful to the property owner). 198 In 1980, the Secretary added to the bonding regulations a provision applicable only to underground operators engaged in planned subsidence mining. See FED.REG. 6031, 6037, 52309, 52318 (1980). This provision, 30 C.F.R. Sec. 801.16(a), 49 required operators to post an initial bond large enough to cover measures to prevent potential damage to surface facilities. These preventive measures, set out in Sec. 784.20(b) of the regulations, include reinforcing sensitive structures, and relocating pipelines, utility lines, and movable improvements to land. See 30 C.F.R. Sec. 784.20(b) (1981) (referenced by 30 C.F.R. Sec. 801.16(a) (1981)). Upon performance of the prescribed preventive measures, presumably before mining commenced, the portion of the bond posted to guarantee their fulfillment became releasable. 30 C.F.R. Sec. 801.16(a) (1981); see also FED.REG. 52309 (1980). 199 Not only was the provision put forward in 1980 limited to operators engaged in planned subsidence; more significantly, it did not require coverage for repairing subsidence-caused surface damage. Instead, bonding was to cover only pre-operation preventive measures. See 45 FED.REG. 6031 (1980) (protection of surface owners from damaging effects of subsidence [is] the subject of further study). In 1981, the Secretary deleted Sec. 801.16(a) from the regulatory scheme. He reasoned that a bond affording funds to take preventive measures was unnecessary because, upon a mine operator's failure to undertake those measures, the operator would lose permission to mine, thus eliminating the need for the preventive measures. 46 FED.REG. 59934 (1981). 200 NWF cites nothing in the current administrative record relevant to the difficulty of estimating subsidence damage that was not also before the Secretary in 1979. Compare Brief for Appellants NWF at 30 (evidence in current record allegedly demonstrating predictability of subsidence consists of (1) environmental impact statement, (2) statement by Industry and (3) statement in 1979 record), with Brief for Appellants NWF at 25 n. (environmental impact statement in current record also accompanied the 1979 regulations), and 44 FED.REG. 15273 (1979) (similar Industry statement made in 1979). Because the Secretary has not adopted a new view or approach on bonding for the effects of subsidence, but has merely restated a position he previously advanced and justified, we would require a further demonstration on his part only if significant new evidence were present. Here, no such evidence has been called to our attention. In sum, we conclude that, confronted with the extraordinary complexity and uncertainty of estimating coverage for subsidence damage, the Secretary was entitled to find the requisite necess[ity] to modify, as he did, bond requirements that otherwise might have governed. See SMCRA Sec. 516(d).