PEABODY COAL CO. v OSM; Docket No. KC 8-1-P (April 19, 1979)

 TYPE: ALJ Hearing: Decision  

NAME: PEABODY COAL CO., Applicant v OFFICE OF SURFACE MINING RECLAMATION AND
ENFORCEMENT (OSM), Respondent

DATE: April 19, 1979  

CASE-NO: Docket No. KC 8-1-P  

PROCEEDING: Civil Penalty Proceeding, Notice of Violation # 78-IV-1-02  

COUNSEL: Gregory J. Leisse, Esq., 301 North Memorial Drive St. Louis, Missouri, for the Applicant.  Bruce E.
Cryder, Esq. and Gerald A. Thornton, Esq., Office of the Field Solicitor, U.S. Department of the Interior, Kansas City,
Missouri, for the Respondent.  

OPINIONBY: Administrative Law Judge Truswell  

OPINION: BACKGROUND  

   In accordance with Section 518 of the Surface Mining Control and Reclamation Act of 1977 (the Act), Peabody Coal
Company, Petitioner, petitioned on August 28, 1978, for review of a notice of proposed civil penalty assessment issued
by the Office of surface Mining and Reclamation, Respondent.  Comtemporaneous with the filing of its petition the
Petitioner in accordance with the requirements of 43 CFR Section 4.1152(b) (1) paid the full amount of the proposed
civil penalty ($2,800.00) to the Assessment Office, Office of Surface Mining to be placed in an escrow account pending
a final determination of the proposed assessment.  

   A hearing was held before the undersigned in St. Louis, Missouri, on January 15, 1979, a schedule for the submission
of posthearing briefs was established and all such briefs have now been received.  

   FACTS

    {2}  On June 29, 1978, the Office of Surface Mining issued Notice of Violation No. 78-IV-1-02 for Prairie Hill No.
2 Mine in Randolph County, Missouri.  This notice was for failure to pass all surface drainage from the disturbed area
through a sedimentation pond or a series of such ponds before leaving the permit area in violation of 30 CFR 715.17(a). 
The remedial action required was that petitioner design and construct necessary sedimentation ponds through which all
surface drainage from the disturbed area will pass before leaving the permit area.  This remedial action was required to
be accomplished no later than July 17, 1978.  The notice of violation was terminated by OSM on July 17, 1978 upon a
finding that petitioner had accomplished the remedial action.  On July 26, 1978 the assessment office of OSM issued a
notice of proposed assessment which proposed a penalty of $2,800.00.  Petitioner in its posthearing brief advised of the
point assignments by the assessment office and the worksheet of the assessment office was attached as an exhibit to the
posthearing brief.  The point assignments are as follows; Fifteen points for probability of occurrence, thirteen points for
extent of potential or actual damage, twenty points for negligence, no points were assigned for history of previous
violations or for good faith in accomplishing the remedial requirements.  At the hearing Respondent moved for
summary decision based on petitioner's answers to certain interrogatories that OSM had served on October  11, 1978. 
This tribuanl deferred decision on the motion and took evidence.  

   ISSUES

      The following issues are presented: (1) Was the enforcement of the general sedimentation pond requirement of
Section 715.17(a) enjoined by the order issued by Judge Flannery on May 3, 1978?  (2) Should Respondent's motion for
summary decision be granted?  (3) Do the facts warrant the assessment of a civil penalty and if they do what is the
proper amount of such penalty?  

   DISCUSSION, FINDINGS, AND CONCLUSIONS  

   Was enforcement of the general sedimentation pond requirement of 30 CFR 715.17(a) enjoined by the order issued by
Judge Flannery on May 3, 1978?  

     On December 13, 1977, OSM promulgated its final rules for the initial regulatory program required by the Act (42
Fed. Reg. 62675).  Included in those regulations was Section 715.17(a) which stated in part:  

     "All surface drainage from the disturbed area...shall be passed through a sedimentation pond or a series of
sedimentation ponds before leaving the permit area...Sedimentation ponds required by this paragraph shall be
constructed in accordance with paragraph (e) of this section. "  

    {3}  Section 715.17(e) referred to in the above quotation stated the design, construction and maintenance criteria for
the sedimentation ponds.  On February 27, 1978, OSM promulgated amended criteria under Section 715.17(e) as
"interim final rules." (43 Fed. Reg. 8090).  These interim final rules were effective on publication.  However, OSM
requested public comments in these rules and held a public hearing after which final rules were to be published.  

      Before these final rules for sedimentation pond design and construction were published, Judge Thomas A. Flannery
of the Federal District Court for the District of Columbia enjoined the enforcement of the design and construction
standards under Section 715.17(e) promulgated on February 27, until such time as final rules were promulgated and
judicially reviewed.  He also enjoined the enforcement of Section 715.17(a) to the extent that it superseded, amended,
repealed or modified the provisions of the Federal Water Pollution Control Act (FWPCA).  In re Surface Mining
Regulation Litigation, 452 F. Supp. 327 (D.C.D.C. May 3, 1978).  

      Petitioner contends: 1) The general sedimentation pond requirement of Section 715.17(a) is so interconnected with
the design and construction standards of 715.17(e) that the enjoining of the enforcement of those standards effectively
enjoined enforcement of the general sedimentation pond requirement insofar as that requirement would necessitate the
design and construction of new ponds, and;  

      2) The general sedimentation pond requirement in effect supersedes, amends, repeals or modifies the provisions of
the FWPCA in such a way as to be enjoined under the terms of the injunction.  

      Petitioner argues that it is the enforcement of the sedimentation pond requirement, per se, that should be held to have
been enjoined by the decision  of Judge Flannery.  OSM should be held to be empowered to require sedimentation
ponds where a violation of the effluent limitations is proven.  But where no such effluent violation is established, OSM
should be held to be enjoined from requiring the designing and construction of sedimentation ponds pending the
promulgation of final, enforceable standards for the design, construction and maintenance of such ponds.  

      Section 515(b) (10) of the Act requires operators to "minimize disturbances to the prevailing hydrologic balance at
the mine site and in offsite areas...by  

    {4}  (B) (i) conducting surface coal mining operations so as to prevent, to the extent possible using the best
technology currently available, additional contributions of suspended solids to streamflow, or runoff outside the permit
area, but in no event shall contributions be in excess of requirements set by applicable State or Federal law;  

       (ii) constructing any siltation structures pursuant to sub-paragraph (B) (i) of this subsection prior to commencement
of surface coal mining operations, such structures to be certified by a qualified registered engineer to be constructed as
designed and as approved in the reclamation plan;  

       (c) cleaning out and removing temporary or large settling ponds or other siltation structures from drainways after
disturbed areas are revegetated and stabilized; and depositing the silt and debris at a site and in a manner approved by
the regulatory authority;  

       It is clear from this language that Congress contemplated a major use of "settling ponds or other siltation structures"
at surface coal mining operations.  Sedimentation of streams is to be prevented "using the best technology currently
available." It was left up to OSM to flesh out these requirements by regulations.  

   Pursuant to Section 501(a), OSM promulgated regulations on December 13, 1977, which, inter alia, did these two
things:  

       1.  By 30 CFR Sections 715.17(a) and 717.17(a) OSM determined that sediment ponds should always be used
(with severely restricted exceptions) because they are the best technology currently available for sediment control. See
42 Fed. Reg. 62653 (item 27) December 13, 1977; also items 4 and 8, pp. 62649-50.  

       2.  By 30 CFR Sections 715.17(e) and 717.17(e) OSM determined how these ponds should be built.  As noted in
item 27, 43 Fed. Reg. 62653, many commenters on these regulations felt that design criteria should not be specified.  

       Conceptually, these requirements are entirely distinguishable.  The first determines that a type of well-known
technology is the best available for achieving a result mandated by Congress, and that it must be employed.  The other
attempts to detail how that general technology shall be employed.  It is possible to disagree with the latter without
disagreeing with the former.  

     {5}  That is precisely what many in the coal industry did, arguing that company engineers were in the position to
design functional, result-oriented  ponds based on particular site conditions that would give better results than design
standards intended for nationwide applicability.  

       In the challenges to the December 13, 1977, rules in the U.S. District Court for the District of Columbia, the coal
industry successfully argued that the Secretary had not adequately demonstrated upon the record why he had chosen the
particular design criteria specified in 30 CFR 715.17(e) and 717.17(e). This is what Judge Flannery discussed at 452 F.
Supp. 343 item (a) in his May 3, 1978, opinion.  He did not enjoin nor even discuss the Secretary's determination that
sediment pond technology is in concept, the best technology currently available for sediment control.  Under item (b),
Judge Flannery implicitly left in effect those effluent regulations that did not "...supersede, amend, modify, or repeal the
provisions of the FWPCA..." Operators continued to be responsible for having ponds that would prevent violations of
the sediment effluent requirements (suspended solids).  

       Therefore Judge Flannery did not "interconnect" the design criteria and the requirement for sediment control by use
of ponds in any way.  Petitioner, like all other companies, was free to design sediment ponds that would
"prevent...additional contributions of suspended solids to streamflow, or runoff outside the permit area..." Section
515(b) (1) (B) (i) of the Act.  

       Did the general sedimentation pond requirement supersede, amend, repeal, or modify the provisions of the
FWPCA?  Judge Flannery, on May 3, 1978, enjoined the enforcement of Section 715.17(a) to the extent that it
superseded, amended, repealed or modified the provisions of the FWPCA.  Judge Flannery in his Memorandum
Opinion and Order issued August 9, 1978 on Consolidation Coal Company's motion for temporary restraining order on
the enforcement of the effluent limitations of Section 717.17(a) ruled that enforcement of the effluent limitations of
Section 715.17(a) did not supersede, amend, repeal or modify the provisions of the FWPCA program and enforcement
of the effluent limitations was not enjoined.  Petitioner contends that considerations which influenced the Judge's
determination of the effluent limitations do not apply in the case of the general sedimentation pond requirement.  Judge
Flannery found that neither the EPA nor the states had acted to apply such standards to non-point source discharges. 
Petitioner points out that states have acted on the question of the requirement for sedimentation ponds.  OSM lists West
Virginia, Pennsylvania, Kentucky and Montana as being among the states requiring sediment ponds as part of mining
operations.  43 Fed. Reg. 52739 (November 14, 1978).  Thus, OSM's sedimentation pond requirement, argues
Petitioner, is not one that "fills a gap" where states have failed to act.  It is one that attempts to supersede a state's
determinations as to whether sedimentation ponds are to be required for mining operations within its boundaries.  As
such, the general sedimentation requirement would supersede the Federal Water Pollution Control Act which grants
states the discretion to make such determinations.  33 U.S.C. Section 1288.  For that reason, concludes Petitioner, the
general sedimentation pond requirement of Section 715.17(a) should be held to be enjoined under the terms of Judge
Flannery's injunction.  Respondent contends that what Judge Flannery said on August 9, 1978, should be considered
irrelevant to Peabody's degree of negligence in June and July, 1978, based on its interpretation of the May 3, 1978,
decision.  

     {6}  The August 9, opinion, however, is a verification of OSM's power to require sediment ponds.  The court said, in
effect, that the states, not the  EPA, had the responsibility for regulating non-point discharges under Section 208 of the
FWPCA and that since no state had acted under Section 208, OSM was free to fill the gaps in the FWPCA program,
"with respect to non-point discharges." The sediment pond requirement of Section 715.17(a) turns nonpoint discharges
into point source discharges which must meet the effluent standards of both OSM and EPA, thus filling the regulatory
gap.  Said Judge Flannery:  

      "This is precisely the type of situation envisioned by the Act where the Secretary of the Department of Interior
would step in and regulate in order to prevent water pollution by the mining operations." (Memorandum Opinion p. 2.)  

      This point was reaffirmed in Judge Flannery's final opinion of August 24, 1979.  In Re Surface Mining Litigation,
436 F. Supp. 1301 (D.C.D.C., 1978). There the court added, at p. 1314:  

      ...Thus, the court cannot conclude that the requirements of Sections 715.17(a) and 717.17(a) repeal, amend,
supersede, or modify the provisions of Section 208 of the FWPCA because the Secretary has filled a regulatory gap
where the EPA has no authority to act and the states have not yet promulgated a regulatory program...  

   The court spoke of all of "...the requirements of Sections 715.17(a) and 717.17(a)..." without qualification.  

      The fact that at least four states required surface coal mines to have sediment ponds prior to the proposed rules of
November 14, 1978, is not proof that Missouri had decided, as part of its Section 208 regulatory program, not to require
sediment ponds.  The Petitioner has not shown that the four states mentioned enacted their laws in an attempt to comply
with Section 208.  More to the point, the state of Missouri has not yet submitted a Section 208 plan to the EPA for
review and approval, and thus has not assumed any regulation under Section 208.  

      Even when Missouri and the other coal states finally get around to regulating non-point discharges under Section
208, it may well be decided that any rules enacted pursuant to Section 515(b) (10) of P.L. 95-87 will remain in effect
unless they weaken or nullify particular EPA rules.  

     {7}  The above argument that OSM regulations fail because they attempt to supersede the state program constitutes a
de novo challenge to the regulations and should be attacked by an original civil action in the U.S. District Court for the
District of Columbia.  Section 526(a) of the Act (30 U.S.C. 1276).  

       I conclude that the enforcement of the general sedimentation pond requirement of Section 715.17(a) was not
enjoined by the May 3, 1978 Order of Judge Flannery.  

      Should Respondent's motion for summary decision be granted?  Yes! Petitioner in answer to interrogatories from
Respondent admitted that it did not pass all surface drainage from the disturbed area through a sediment pond before
such drainage left the permit area.  Enforcement of the general sedimentation pond requirement was not enjoined by the
Judge Flannery Order of May 3, 1978. And since Petitioner did not comply with 43 CFR 4.1152(a) (2) n1 it is
precluded from asserting a penalty different from the one proposed.  It does not follow  from the above, however, that
this tribunal will or should adopt the proposed penalty as the civil penalty of this decision.  Findings of fact on each of
the four criteria set forth in 30 CFR 723.12 is required by 43 CFR 4.1157(a). n2 The assignment of points by the
assessment office would have remained unknown to this tribuanl had not Petitioner made the Assessment Office
worksheet an exhibit to its posthearing brief.  Respondent asserted that this is a de novo assessment and anything
pertaining thereto which transpired prior was irrelevant (Tr. 58-59).  

   n1 43 CFR, Section 4.1152(a) (2).  That section provides:  

   "(a) (2) The petition shall include- If the amount of the penalty is being contested based upon a misapplication of the
civil penaly formula, a statement indicating how the civil penalty formula contained in 30 CFR Part 723 was
misapplied, along with a proposed civil penalty utilizing the civil penalty fromula;"  

   n2 43 CFR, Section 4.1157(a).  That section provides:  

   "(a) The administrative law judge shall incorporate in his decision concerning the civil penalty, findings of fact on
each of the four criteria set forth in 30 CFR 723.12, and conclusions of law."  

      I find that the Notice of Violation uas validly issued and that Respondent is entitled to a summary decision affirming
said Notice of Violation and assessing a civil penalty in an amount to be determined by the Administrative Law Judge.  

     {8}  It is now incumbent upon this tribuanl to determine the proper amount of the civil penalty.  The Notice of
Violation was for failure "to pass all surface drainage from the disturbed area through a sediment pond or ponds before
leaving the permit area" as required by 30 CFR 715.17(a).  The Notice of Violation was issued by Michael C. Wolfrom,
supervisory reclamation specialist with OSM.  Mr. Wolfrom testified: that there were no sedimentation ponds when he
inspected 5mine on June 29, 1978 (Tr. 28); that there was, however, a small depression but it was inadequate to catch
all drainage from the disturbed area (Tr. 28); that approximately 40 acres had been disturbed (Tr. 29); that spoil was
deposited within approximately ten to twenty feet of the main drainageway (Tr. 27); that Petitioner's reclamation
superintendent, Jim Howard, and Mike Giovanini, the water quality man, advised there was no provision downstream to
collect and treat water coming from the disturbed area (Tr. 31); that Mike Giovanini mentioned that they on occasion
had not met the National Pollutant Discharge Elimination System standards administered by the Environmental
Protection Agency (Tr. 31, 42); that in his opinion sedimentation would go off the permit area (Tr. 34) and; that to cause
this rain would have to occur (Tr. 35).  

   Petitioner had no evidence to present (Tr. 44).  

   The four criteria set forth in 30 CFR 723.12 will now be considered:  

   History of Previous violations.  There is no evidence of past violations at this coal mining operation and therefore no
points should be assigned.  

     Seriousness - Probability of occurrence.  The probability of sedimentation was likely from the evidence of Mr.
Wolfrom.  Approximately forty acres had been disturbed, spoil had been deposited to within approximately ten to
twenty feet of the main drainageway and an existing small depression would catch only some of the drainage from the
disturbed area.  I find from the evidence that the proper assignment of points would be thirteen.  

     Extent of potential or actual damage.  It is clear from the evidence: that there would be sedimentation damage off the
permit area; that a small depression would catch some of the drainage from the disturbed area; that no cessation order
was issued and eighteen days was allowed for remedial work which the OSM witness believed could have been
performed in eight to sixteen hours and; that the OSM witness was not helpful as to "...the duration and extent of the
damage or impact." I find eight points to be the proper assignemnt for this schedule.  A total of 21 points is therefore
assigned for seriousness.  

     Negligence.  It is not unreasonable to assume that Petitioner was confused by the facts as they then existed: questions
regarding Judge Flannery's Order and the possibility that the Judge Flannery opinion might cause the Secretary to
rethink the pond requirement.  It is understandable that it wished to delay the construction of sedimentation ponds until
there were final rules for sedimentation pond design and construction.  While I am willing to give weight to these
concerns of the Petitioner, I cannot understand why it neglected to do anything to prevent sediment deposits beyond the
permit area.  It must have realized the inevitability of such deposits.  At very little cost in time or money, Petitioner
could have erected barriers which would have held back surface run-off.  With such minimum protection it could have
then taken more time to decide what would be in its best interest.  The environment would not have been totally ignored. 
To have done nothing under the circumstances constitutes negligence and I so find.  I further find that the assignment of
twelve points is in conformity with this schedule.  

    {9}  Good faith in attempting to achieve compliance.  Petitioner accomplished the required remedial action within the
eighteen days allowed therefor.  Such accomplishment was normal and thus no points should be assigned under this
schedule.  

   I find that the total number of points assigned under 30 CFR 723.12 to be 33 and that said number of points converts
to a civil penalty of $1,300.00  

   All proposed findings and conclusions presented and not otherwise incorporated in this decision are herewith denied.  

   ORDER  

      It is therefore ordered: that Notice of Violation No. 78-IV-1-02, June 29, 1978, is affirmed; that the proposed civil
penalty assessed against the Petitioner be reduced from $2,800.00 to $1,300.00 and; that the balance of $1,500.00 with
interest at the rate of six percent or with interest at the prevailing Department of the Treasury rate, whichever is greater,
be remitted to Petitioner.