Court Opinion

ID: 2674022
Source: CourtListenerOpinion
Date Created: 2014-05-14 00:01:30.116753+00
Date Added: 2024-06-11T09:20:07.848842
License: Public Domain

United States Court ofAppeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 4, 2014                   Decided May 13, 2014

                        No. 13-5119

                 COAL RIVER ENERGY, LLC,
                       APPELLANT

                              v.

   SALLY JEWELL, SECRETARY, U.S. DEPARTMENT OF THE
    INTERIOR AND UNITED STATES DEPARTMENT OF THE
                      INTERIOR,
                      APPELLEES

        Appeal from the United States District Court
                for the District of Columbia
                    (No. 1:11-cv-01648)

    Steven H. Becker argued the cause and filed the briefs for
appellant.

     Tara K. Hogan, Senior Trial Counsel, U.S. Department of
Justice, argued the cause for appellees. With her on the brief
were Stuart F. Delery, Assistant Attorney General, and Jeanne
E. Davidson, Director.

    Before: KAVANAUGH and WILKINS, Circuit Judges, and
SILBERMAN, Senior Circuit Judge.
                                2

    Opinion for the Court filed by Senior Circuit Judge
SILBERMAN.

     SILBERMAN, Senior Circuit Judge: Under the Surface
Mining Control and Reclamation Act, operators of coal mines
must pay a fee for each ton of coal they produce by mining. The
purpose of the fee is to fund the restoration of land damaged by
coal mining. A Department of the Interior regulation requires
mine operators to pay the reclamation fee when the coal is
ultimately sold or used, rather than immediately after the coal is
removed from the ground. Appellant, a coal mine operator, sued
the Secretary in district court, arguing that the regulation could
not be constitutionally applied to coal sold for export because
the Export Clause of the Constitution states that “No Tax or
Duty shall be laid on Articles exported from any state.” U.S.
Const. Art. I, § 9, cl. 5. The district court dismissed the case as
untimely. We affirm.

                                I.

     In 1977, Congress enacted the Reclamation Act,
establishing a fee on all coal mined in the United States. The Act
set a fee of “28 cents per ton of coal produced by surface coal
mining and 12 cents per ton of coal produced by underground
mining.” 30 U.S.C. § 1232(a). Immediately after the coal is
removed from the ground it is impure, mixed with other rocks
and dirt. So if the coal were weighed at that moment, it would be
impossible to determine exactly how much mass is attributable
to coal and how much to other impurities. The Secretary of the
Interior, recognizing that problem, promulgated the following
rule:

         (a) The operator shall pay a reclamation fee on each
         ton of coal produced for sale, transfer, or use, including
                                3

         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). Measuring the weight of
the coal at the time of sale increases accuracy, as most
impurities will likely have been removed. The total weight – and
total fee charged – should therefore be less.

     A number of coal companies, nevertheless, challenged the
regulation – at least with respect to the sales of coal for export.
A direct tax on coal exported would violate the little-known
Export Clause of the Constitution, which provides that “No Tax
or Duty shall be laid on Articles exported from any state.” U.S.
Const. Art. I, § 9, cl. 5. They sued in the Court of Federal
Claims, were initially successful, but lost on appeal in the
Federal Circuit. See Consolidation Coal Co. v. United States,
528 F.3d 1344, 1348 (Fed. Cir. 2008), cert. denied 131 S. Ct.
2990 (2011). The Federal Circuit, relying on the constitutional
avoidance canon, interpreted the statutory phrase “coal
produced” as referring to coal extracted, and therefore the
regulation should be interpreted as a fee imposed on extraction
but collected at a later date.

     A few months later a newly established coal company, Coal
River – which did not participate in the Consolidation Coal
litigation – filed essentially the same suit, a challenge to the
regulation based on the Export Clause, in our district court,
seeking ultimately a D. C. Circuit conflict with the Federal
Circuit. Appellant relied on our opinion in Drummond Coal Co.
v. Hodel, 796 F.2d 503 (D.C. Cir. 1986), in which a coal
company challenged a different portion of the Secretary’s
                                 4

regulation, which clarified that impurities not removed at the
time of sale were included in the weight of the coal on which the
fee was imposed. Although we noted that the term “‘coal
produced’...could reasonably be interpreted to include the entire
process of extracting and selling coal...or it could refer solely to
the process of extraction,” and the government was resting on the
former interpretation, our key observation was that “nowhere
does the [Act] specify what elements comprise a taxable piece of
coal.” Id. at 505. In that case, although we sanctioned pursuant
to Chevron the Department’s interpretation that “coal produced”
was legitimately interpreted as the final step at sale or use, we
were not faced with the constitutional argument presented in
Consolidation Coal, which led the Federal Circuit to conclude
the constitutional avoidance canon trumped the Department’s
prior interpretation. Therefore, appellant’s argument that there is
a conflict between the two circuits is somewhat strained.

     But as will become apparent, any supposed conflict with the
Federal Circuit is not really relevant because we agree with the
district court that appellant’s challenge to the rule comes too late
to be entertained. Section 1276 of the Reclamation Act explicitly
provides – similar to a number of statutes – that all challenges to
regulations promulgated under the Act must be brought within
sixty days of a rule’s promulgation. 30 U.S.C. § 1276(a)(1).

                                II.

    Before considering the scope of limitations language of
§ 1276, we need to deal with Coal River’s argument that § 1276
does not even apply to its suit, which relies on the Constitution
and the Administrative Procedure Act, because it is not one
challenging the regulation on its face. As we understand Coal
River’s contention, it is that § 1276 only covers “facial”
challenges to the regulation, whereas appellant’s claim – based
                                    5

as it is only on the regulation’s impact on sales for export, not all
sales or uses of coal – should be thought of as an as-applied
challenge. Although Coal River’s case is admittedly directed to
only certain transactions covered by the regulation, it is still a
challenge to the rule as it is written, and not simply as it might
later be interpreted or applied. As such, it is certainly a challenge
to an “action by the Secretary promulgating national rules or
regulations,” and therefore § 1276 applies.1

     We turn now to the timeliness of the claim under the
Reclamation Act. To be sure, § 1276 provides a safety valve; a
challenge may be brought “after such date if the petition is based
solely on grounds arising after the sixtieth day.” Coal River
argues that, as a new coal company that was not in existence at
the time the regulation was promulgated, it can take advantage
of the safety valve provision. The government, without explicitly
conceding that such a circumstance falls within the regulation’s
exception, does not contest this interpretation. But it contends
that the district court was correct in determining that, at most,
Coal River had sixty days after the fee was first imposed on it.

     Coal River argues that imposing a sixty-day limitation on an
after-arising claim is unauthorized by the statute. After all, it
claims – and this is quite true – the statute is conspicuously silent
on such a limitation. Conspicuous because the preceding clause
imposes just that limitation on the normal claim. Moreover, Coal

     1
        Because Coal River’s challenge clearly falls within the terms of
the statute, we need not decide whether, for constitutional purposes,
it is properly regarded as a facial challenge or an as-applied challenge,
though we note that “the distinction between facial and as-applied
challenges is not . . .well defined.” Citizens United v. Fed. Election
Comm'n, 558 U.S. 310, 331 (2010).
                                   6

River points out that a comparable administrative review
provision of the Clean Air Act explicitly states that challenges to
regulations based on subsequent “after-arising” claims must be
brought within sixty days. See 42 U.S.C. § 7607(b)(1).2 So
obviously Congress had in mind how to deal with a limitation on
after-arising claims, if it had wanted one.

     Coal River’s argument is by no means insubstantial; it is
superficially troubling, but ultimately we reject it and agree with
the district court because Coal River’s interpretation would
essentially nullify the sixty-day limitation for challenges to rules
under § 1276 (or any similar statute). That is so because there
might be a number of new coal companies that could come into
existence over a period of time after the initial sixty-day period
passed. Under Coal River’s interpretation, if each such company
could challenge the regulations at any time, it would certainly
frustrate Congress’s objective that facial challenges to the
regulation be confined to a limited period (the coal industry
might take advantage of such a situation to fund new litigation,
perhaps for a smaller company). Moreover, as the government
notes, an absence of an explicit statute of limitations is “a void
which is commonplace in federal statutory law.” Bd. of Regents
of Univ. of State of N. Y. v. Tomanio, 446 U.S. 478, 483 (1980).
It is standard practice for courts to “borrow” a statute of
limitations when one is not explicitly provided, and in this case,
the most obvious limitations period is the one in the previous

     2
      We have previously noted the different language used by the two
statutes, though we did not have occasion to definitively interpret the
Reclamation Act, as we do now. See Am. Rd. & Transp. Builders Ass'n
v. E.P.A., 588 F.3d 1109, 1113 (D.C. Cir. 2009).
                                    7

clause.3 Indeed, we discovered that two of our sister circuits have
sanctioned that approach construing analogous statutes.4

     Coal River claims that, even if the sixty-day statute of
limitations applies, the statute is subject to equitable tolling
because it is not jurisdictional. We need not decide whether the
statute is jurisdictional, however, because Coal River has made
no effort whatsoever to explain why equitable tolling would be
appropriate in this case. The sixty-day limitation period,
therefore, applies regardless of whether it is a jurisdictional bar.

     Coal River alternatively contends that even if § 1276 would
be a bar, if standing alone, it is not alone. It is argued that Coal
River’s claim under the Constitution itself for equitable relief
and/or a cause of action under the APA provides alternative
routes to judicial review. Coal River relies on the presumption of
judicial review under APA (and the Constitution). To be sure,
such a presumption is powerful, but it applies in situations where
judicial review would be totally precluded, see Bowen v.
Michigan Acad. of Family Physicians, 476 U.S. 667, 671 (1986),
or would be realistically inadequate. See Sackett v. E.P.A., 132
S. Ct. 1367, 1372 (2012). But where a federal claim is merely

     3
       In its reply brief, Coal River argues that each payment of the tax
constitutes an after-arising ground. Although we note that such an
interpretation would eviscerate the sixty-day limitation for all
plaintiffs, arguments raised for the first time in reply briefs are
forfeited. Am. Wildlands v. Kempthorne, 530 F.3d 991, 1001 (D.C.
Cir. 2008).
     4
      HRI, Inc. v. E.P.A., 198 F.3d 1224, 1239 n.9 (10th Cir. 2000)
(construing 42 U.S.C. § 300j–7(a)); Chevron U.S.A., Inc. v.
U.S.E.P.A., 908 F.2d 468, 470 (9th Cir. 1990) (construing 33 U.S.C.
§ 1369(b)(1))
                                  8

channeled to a single forum, the question is whether it is “fairly
discernible” that Congress intended that particular review
provision to be exclusive. Elgin v. Dep't of Treasury, 132 S. Ct.
2126, 2133 (2012). It seems quite apparent to us that Congress’s
fashioning of an explicit provision for judicial review of the
promulgation of regulations – and limiting the time to raise such
a challenge – meets the Elgin standard.

     As we have held, however, a statute like § 1276 does not
preclude a challenge when the government actually applies its
regulation against a party; assuming, of course, that a party has
an available procedure, it can mount a substantive rather than a
“procedural” defense against the regulation. See Indep. Cmty.
Bankers of Am. v. Bd. of Governors of Fed. Reserve Sys., 195
F.3d 28, 34 (D.C. Cir. 1999) (citing Functional Music, Inc. v.
FCC, 274 F.2d 543, 546 (D.C. Cir. 1958)). A substantive defense
is one based on an argument that a regulation is not authorized
by a statute or the Constitution, as opposed to a claim under the
APA regarding the method used in promulgating the regulation,
such as that it was issued without adequate notice, or that the
government inadequately responded to comments. See JEM
Broad. Co., Inc. v. F.C.C., 22 F.3d 320, 325 (D.C. Cir. 1994).5
So Coal River could certainly raise its constitutional challenge
in the Court of Federal Claims after the fee is assessed. Indeed,
both parties agree that route is available to appellant, but Coal
River argues it is inadequate. And, as we noted, the presumption
of judicial review would defeat an exclusive mode if the
exclusive mode were quite inadequate.

     5
      Appellant makes a rather silly argument based on a misreading
of Functional Music, Inc. that the statute of limitations in § 1276
should be interpreted as precluding only direct procedural challenges,
not substantive challenges.
                                 9

     Coal River’s (rather half-hearted) reason for claiming that
the Court of Federal Claims is inadequate is that the court cannot
grant declaratory relief. But a determination of the Court of
Federal Claims, upheld by the Federal Circuit, that the regulation
was illegal as applied to sales for export would have all the force
needed to complete relief without the formality of a declaratory
order. Indeed, a suit for declaratory relief seems decidedly
inferior, since it would provide only prospective relief, whereas
a suit for damages can provide both prospective and retroactive
relief. Coal River’s real problem is that the route is closed, not by
structural impediments, but because the Federal Circuit has
already ruled against its position. Adequate review, however,
entitles one to a procedurally fair forum, not to favorable
substantive law.

                               ***

     We determine that § 1276 applies to Coal River’s claim and
that its suit was untimely. The judgment of the district court is
affirmed.

                                                        So ordered.