Opinion ID: 184828
Heading Depth: 2
Heading Rank: 4

Heading: Waivers

Text: The Association's last challenge is to the regulation thatimplements the Energy Policy Act's repair or compensateobligation. See 30 C.F.R. s 817.121(c)(2) (The permitteemust promptly repair, or compensate the owner for, materialdamage resulting from subsidence caused to any noncommercial building or occupied residential dwelling or structure related thereto that existed at the time of mining.). The Association asserts that the regulation is unreasonableto the extent it purports to nullify prior agreements betweenowners of eligible structures and underground mine operators. In appellant's view, nothing in the Energy Policy Actsuggests an intent to override such waiver agreements thatwould otherwise be binding under state common law. Moreover, it is urged, if the statute were read to authorizeabrogation of waiver agreements, it would confer a windfall tothe landowner, and consequently might constitute an unconstitutional taking of the mining company's contract rights. The thrust of appellant's argument focuses on the unfairness (and asserted conflict with the statutory language)caused by a double recovery regulatory regime, underwhich a landowner is compensated pre-subsidence damage(and possibly pre-Energy Policy Act) by selling a waiver ofrights to the mining company, and then post-subsidence, postdamage through an enforcement action under the EnergyPolicy Act. The Association contends that Congress couldnot possibly have intended such a result. At oral argument,however, the government stated unequivocally (which it didnot do in its brief or in the preamble to the regulation) thatany compensation owed to a landowner under the Act willalways be reduced by at least the amount previously paid in acontractual waiver of subsidence rights--both pre-damage,pre-Act waivers, and pre-damage, post-Act waivers.2 In oth__________ 2 In the preamble, to be sure, the Secretary stated that [t]heuse of pre- and post-subsidence agreements would be an acceptablemeans of fulfilling the requirement so long as the terms meet therequirement under paragraph 817.121(c)(2) that the permittee repair or compensate any subsidence-related material damage to any er words, the value of the landowner's rights under thefederal regime may well exceed (indeed typically would) thepresent value of whatever compensation the landowner received under the previous legal climate. But the landownerwould not be entitled to a double recovery. The government's oral clarification seems to strip appellant's challenge ofits force and appellant waived rebuttal. Nonetheless, theAssociation's brief appeared to argue that such waivers mustbe honored fully, and that the set-off approach also is inconsistent with the Act. If appellant means to deny any obligation to compensatebeyond the amount a mining company originally paid thelandowner for the waiver, no matter how it would compare tothe landowner's legal rights post passage of the federalstatute, we reject its position. We previously upheld thegovernment's limitation of the obligation to repair or compensate for damage to structures only to the extent required bystate law, see National Wildlife Fed'n v. Lujan, 928 F.2d at457-59, in part because the Mining Act at the time did notexplicitly impose an obligation to compensate for such damage, see id. at 458 n.3. The Energy Policy Act imposes justsuch an obligation on its face. See 30 U.S.C. s 1309a(a)(1)(Compensation shall be provided to the owner of the damaged occupied residential dwelling and structures relatedthereto or non-commercial building and shall be in the fullamount of the diminution in value resulting from the subsidence.) (emphasis added). It is therefore wholly consistentwith the statute--indeed it might even be mandated--for theSecretary to require the mining companies further to compensate landowners for damages to which the new federal lawentitled them. That is not to say, of course, that a landownerand mining company would be barred from entering into apost-Act fair contract based on anticipated damages that __________ non-commercial building or occupied residential dwelling or relatedstructure. 60 Fed. Reg. at 16,735 (emphasis added). Although theSecretary did not make clear that this policy applies to both pre-Actand post-Act waivers, the government's position at oral argumentwas that it does. We accept the agency's interpretation of its ownregulation. would extinguish the landowner's claim if the damages turnedout to be more than anticipated. But we do not understandthe agency to deny that. As for appellant's takings challenge, the argument is insufficiently developed to warrant much attention. Appellantseems to assume that interference with contract rights is aper se taking, despite the well-settled rule that legislation[that] disregards or destroys existing contractual rights doesnot always transform the regulation into an illegal taking. Connally v. Pension Benefit Guar. Corp., 475 U.S. 211, 224(1986). To develop a real takings argument, appellant wouldbe compelled to demonstrate why (1) the economic impact ofthe regulation on the claimant; (2) the extent to which theregulation has interfered with investment-backed expectations; and (3) the character of the governmental action, id.at 225 (quoting Penn Cent. Transp. Co. v. City of New York,438 U.S. 104, 124 (1978)) (internal quotation marks omitted),warrant the conclusion that an unconstitutional taking necessarily would result. See also Eastern Enters. v. Apfel, 118 S. Ct. 2131, 2146-49 (1998) (reviewing takings precedents andconcluding that Congress has considerable leeway to fashioneconomic legislation, including the power to affect contractualcommitments between private parties). As we understandappellant's argument, based solely on the possibility that thegovernment's alteration of a mining company's previouslysettled contract rights could expose the government toliability for an unlawful taking, we should construe the Energy Policy Act to mandate an exemption in the Secretary'sregulations for private waiver agreements. But the avoidance canon is not applicable when the statute or regulationwould effect a taking, if at all, only in certain situations. SeeUnited States v. Riverside Bayview Homes, Inc., 474 U.S.121, 127-28 (1985); Bell Atlantic Tel. Cos. v. FCC, 24 F.3d1441, 1445 (D.C. Cir. 1994); Railway Labor Executives' Ass'nv. United States, 987 F.2d 806, 816 (D.C. Cir. 1993). We willnot frustrate[ ] permissible applications of a statute or regulation, Riverside Bayview Homes, 474 U.S. at 128, based onthe specter--rather implausible from what we can tell now-- of a future unconstitutional taking.