COALEX STATE INQUIRY REPORT - 74
July 28, 1986
Charles W. Kurtz. Esq.
Office Of General Counsel
Fifth Floor. Capital Plaza Tower
Frankfort, Kentucky 40601
TOPIC: CIVIL PENALTY/RECLAMATION REQUIREMENTS
SEARCH REQUEST: May a state regulatory agency impose both civil penalty and reclamation
requirements upon an operator mining without a valid permit.?
SEARCH RESULT: A search of COALEX was conducted focusing on decisions of the Interior Board
of Surface Mining Appeals (the Board) interpreting the Act's application to operators conducting
surface mining operations without a permit. Also included is a discussion of OSM's changes in the
regulatory definition of "Permittee" (30 CFR 700.5, 30 CFR 701.5) in attempting to clarify the
Secretary's interpretation of Congressional intent.
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INTERIOR BOARD DECISIONS
The first Board decision dealing with the issue of whether the Secretary could issue notices of
violation and cessation orders or impose civil penalties upon a surface coal mine operator
operating without a permit was DELIGHT COAL CORP., 1 IBSMA 186, 86 I.D. 321 (1979).
Delight operated an underground mining operation in Wise County, Virginia. OSM issued Delight
a notice of violation and three orders of cessation. One of the cessation orders alleged a violation
of 6502(d) of the Act in Delight's failure to obtain a surface mine permit. Delight filed a petition
for review, contesting certain elements of the notice of violation and the amounts of the proposed
civil penalties. The ALJ issued a ruling from the bench concerning Delight's petition for review
and assessed a penalty. However, before the ALJ issued a written order he vacated the order
from the bench "in order to prevent a possible miscarriage of justice by a misinterpretation of the
law and regulations." The ALJ requested briefings from the parties on whether a person who does
not have a permit to mine coal was subject to (a) 30 U.S.C. 61201 et seq. (1977) and (b) the
penalty provisions of 30 CPR 700 et seq. (Id. at 192) Both parties having failed to submit briefs
in accordance with the ALJ's request, the ALJ issued a written opinion in which he held that
"because Delight was not a permittee' within the meaning of the Act, the civil penalty provisions
of section 518 of the Act did not apply...." (Id. at 193)
The Interior Board reversed, stating that:
"Acting on Congress' stated intention that certain operational and reclamation standards apply
during the initial regulatory program, the Secretary defined permittee' in 30 CFR 700.5 in such a
way as to insure that all persons conducting surface coal mining and reclamation operations
would be covered during the initial program, despite possible differences in the operation of
existing state regulatory schemes...." (Id. at 198)
In conclusion, the Board stated that "the definition of permittee' adopted by the Secretary for
the initial regulatory program includes those persons who, through ignorance or dishonesty, fail to
get a permit from the proper regulatory authority before engaging in activities regulated by a
state." (Id. at 199)
The issue was again presented to the Board in CLAYPOOL CONSTRUCTION CO., 1 IBSMA 259,
86 I.D. 486 (1979). As in DELIGHT, the ALJ in CLAYPOOL held that the Act did not apply to
Claypool which was engaged in mining activities without a permit. In reversing, the Board cited
its decision in DELIGHT and reiterated its conclusion that 30 CFR 700.5 was written so as to
include a mining operator operating without a permit as a "permittee" and therefore subject to
the performance and enforcement provisions of the Act.
FEDERAL REGULATIONS
30 CFR 700.5 defines permittee as follows:
"[A]ny individual, partnership, association, society, joint stock company, firm, company,
corporation, or other business organization holding a permit to conduct surface coal mining and
reclamation operations issued by a State regulatory authority pursuant to a State program or by
the Secretary pursuant to a Federal program or a Federal lands programs. During the initial
regulatory program, the term includes persons conducting surface coal mining and reclamation
operations regulated by a State under State law or conducting such operations under a mining
plan approved pursuant to Part 211 of this title."
This definition was promulgated as part of the initial regulatory program December 13, 1977
(42 FR 62639) without comment as to its application to operators without permits.
OSM reworded the definition of "permittee" when it issued the permanent program regulation,
on March 13, 1979 (44 FR 15320), in an effort to clarify the applicability of the Act to operators of
surface coal mining operations operating without a permit.
The old definition was deleted from the initial program. The new definition was promulgated as
30 CFR 701.5. which reads as follows:
"Permittee means a person holding or required to hold a permit to conduct surface coal mining
and reclamation operation issued by a State program, by the Director pursuant to a Federal
program, by the Director pursuant to a Federal lands program, or, where a cooperative
agreement pursuant to Section 523 of the Act has been executed, by the Director and the State
regulatory authority."
In explaining the rationale of the Secretary in making the change in the definition, OSM stated:
"Several general comments were received which expressed concern over the problem of wildcat
operators, i.e., persons operating without a permit. The definition of permittee was revised to
include persons required to hold a permit to make it clear that a person cannot exempt himself
from the requirements of the Act by failing to obtain a permit. This continues the interpretation
made and implemented by the Office during the initial program." (44 FR 14935 (MARCH 13,
1979))
In addition, OSM stated that the change was made "... to further clarify that its interpretation
of the Act is that any person who mines without a permit is in violation of the Act and regulations
and is subject to enforcement action under the Act." (Id. at 14935)
Therefore, this change in OSM's definition of "permittee" in the permanent program, merely
represented a clarification of the Secretary's interpretation under the initial program and did not
constitute a change in policy or application of the Act towards operations being conducted without
permits.
Challenges to the Secretary's authority to regulate operators operating without permits
subsequent to the promulgation of the new definition of "permittee" have been just as
unsuccessful.
In WEST VIRGINIA ENERGY INC., 3 IBSMA 301 (1981), the Board, citing DELIGHT and
CLAYPOOL, concluded that "... one who should have a permit is chargeable with substantive
violations even in the absence of the required permit." (Id. at 307)
Likewise in MOUNTAIN ENTERPRISES COAL CO. v OSM, Docket Nos. CH 1-88-R, CH 1-1-09-P
(November 2, 1981), the ALJ cited DELIGHT in stating, "[m]ining without a licence [sic] does not
produce an impediment to enforcement nor to the assessment of a civil penalty." (Id. at 12)
ATTACHMENTS
A 42 FR 62640 (DECEMBER 13, 1977).
B 44 FR 15320 (MARCH 13, 1979).
C 44 FR 14935 (MARCH 13, 1979).
Search conducted by: Todd Leatherman
