# Appendix — Drummond Co. v. Hodel > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_2563%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1987 - **Citation:** 480 U.S. 941 ## Text 86 - 10 aia Supreme Court, U.S, FILED | DEC 9R 1986 JOSEPH F. SPANIOL, JR. No. 86- CLERK IN THE Siywenw Court of the Wuited States OCTOBER TERM, 1986 DRUMMOND COMPANY, INC., Petitioner, V. DONALD P. HODEL, SECRETARY OF THE INTERIOR, Respondent. APPENDIX TO PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT Of Counsel: MICHAEL B. BARR WILLIAM B. LONG (Counsel of Record) DRUMMOND Co., INC. CHARLES D. OSSOLA 101 Walston Bridge Road DEBORAH S. COLBY Jasper, Alabama 35501 HUNTON & WILLIAMS (205) 387-0501 P.O. Box 19230 2000 Pennsylvania Ave., N.W. Washington, D.C. 20006 (202) 955-1500 Counsel for Petitioner Drummond Company, Inc. December 26, 1986 WILSON - EPES PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001 APPENDIX TABLE OF CONTENTS CASES: Drummond Coal Company v. Hodel, 796 F.2d 503 Eee I saccadic krcndcks Sh cence pdeomdeticeansAanakentoping Drummond Coal Company v. Hodel, 610 F. Supp. Se BE Sette kn cicncntniidomealin Order Denying Petition for Rehearing and Sug- gestion for Rehearing Hn Bane in Drummond Coal Company v. Hodel, No. 85-5827 (D.C. Cir. Sept. 26, 1966) (per curiam) ................................. Drummond Coal Company v. Watt, Civil No. CV82- H-1838-S (N.D. Ala. May 18, 19838) ..................... Drummond Coal Company v. Watt, 735 F.2d 469 ee: I ah cer a re amtendeacns United States v. Brook Contracting Corp., 759 F.2d 320 (8rd Cir. 1985) ........ REARS IG SO. Rese PELL BER en A. J. Taft Coal Company v. United States, 605 F. Supn. 366 GN.D. Ala. 1986) ..............02............ Combs v. Sun-Up Coal, Civil No. CV-80-P-0236-J (N.D. Ala. Sept. 3, 1980) ............ en ieee iy A. J. Taft Coal Company v. Connors, Civil No. CV-86-H-245-S (N.D. Ala. June 18, 1986) ........ Section 401 and 402 of SMCRA, 30 U.S.C. §§ 1231 I an cs ga ssecc bis Aahanssen deoueusibesns ae yn CD aaa in css Be i te Oe PI GED nts cepa ensnsencacnncnanse nanan sanen ee Bis Memorandum from W. Hord Tipton, Acting Re- gional Director, Region II, Office of Surface Mining Reclamation and Enforcement, to J. Steven Griles, Deputy Director, dated August 6, 1981 Page la ii TABLE OF CONTENTS—Continued Page Memorandum from Phyllis Thompson, Chief, Branch of Fund Management, to Director, re- garding request for Policy Decision on Excess Moisture Deduction by Drummond Coal Com- la UNITED STATES COURT OF APPEALS DISTRICT OF COLUMBIA CIRCUIT No. 85-5827 DRUMMOND COAL COMPANY, Appellant v. DONALD P. HODEL, Secretary of the Interior Argued March 7, 1986 Decided July 22, 1986 Appeal from the United States District Court for the District of Columbia (Civil Action No. 82-02439) Michael B. Barr, with whom Charles D. Ossola, Wash- ington, D.C., was on brief for appellant. Albert M. Ferlo, Jr., Dept. of Justice, with whom Alfred Ghiorzi, Dirk D. Snel and Beverly Perry, Dept. of Justice, Washington, D.C., were on brief for appellee. James T. Hemphill, Washington, D.C., was on brief for amicus curiae, Mining and Reclamation Council of America, urging reversal. 2a Robert F. Stauffer, Washington, D.C., was on brief for amicus curiae, Nat. Coal Ass’n, urging reversal. Before MIKVA, STARR, and SILBERMAN, Circuit Judges. Opinion for the Court fiied by SILBERMAN, Circuit Judge. SILBERMAN, Circuit Judge: Appellant Drummond Coal Co. challenges a regulation of the Interior Department’s Office of Surface Mining (OSM). A full exposition of the facts and procedural history relating to Drummond’s challenge appears in the district court’s careful and thorough opinion granting the agency’s motion for summary judgment. Drummond Coal Co. v. Hodel, 610 F.Supp. 1489 (D.D.C.1985). For the reasons stated herein, we affirm the district court’s judgment. The Surface Mining Control and Reclamation Act (SMCRA), 30 U.S.C. §$ 1201 et seg. (1982), upon which the regulation at issue is premised, creates an Abandoned Mine Reclamation Fund to finance the restoration of land and water resources damaged by coal mining. Jd. § 1231 (ec) (1). The Fund’s principal source of revenue is a fee assessed on each ton of “coal produced” in the United States. Coal operators are required to pay the Secretary thirty-five cents per ton of “coal produced” by surface mining and fifteen cents per ton of coal produced by underground mining, or ten percent of the value of the coal at the mine, whichever is less. Jd. § 1232(a). Through a revised regulation, the Secretary has mandated that the fee be assessed on the gross weight of coal prior to sale—including impurities such as water which have not been removed. 30 C.F.R. § 870.12(b) (3) (i) (1985). Drummond claims that the revised regulation exceeds the Secretary’s statutory authority because it includes within the material taxed “excess” moisture attributable 8a to post-evacuation rainfall or washing, which Drummond asserts is not properly regarded as part of “coal.” Drum- mond also argues, in the alternative, that the regulation constitutes an arbitrary and capricious deviation from the Secretary’s past practice. We do not find merit in either contention. The Secretary’s initial fee regulations, promulgated in October 1978, were not entirely clear as to what was subject to the tax: (a) The operator shall pay a reciamation fee on each ton of coal produced for sale, transfer, or use... . (b) The fee shall be determined by the weight and value at the time of initial bona fide sale, transfer of ownershin, or use by the operator. 30 C.F.R § 870.12(b) (1978). In Alabama (though seem- ingly nowhere else in the country), certain OSM person- nel and at least six Alabama coal companies interpreted this regulation as analogous to Alabama’s severance tax. Alabama law permits coal operators to deduct the weight of “excess” moisture—moisture in excess of 2.88% of the total weight of taxable coal.2 See Ala.Code § 40.13-31 ‘ With an exception not here relevant, Section 1276(a) (2) of the SMCRA incorporates the arbitrary and capricious standard of re- view set forth in the Administrative Procedure Act, 5 U.S.C. § 706(2) (A) (1982). * That percentage represents what Alabama has established as the “inherent” moisture content of coal in Alabama. Coal in its unmined state naturally contains some moisture, along with ash and sulfur. See A.J. Taft Coal Co. v. United States, 605 F.Supp. 366, 871 n. 7 (N.D.Ala. 1984), aff'd mem. 760 F.2d 279 (11th Cir. 1985). This contrasts with “non-inherent” or “excess” moisture, which accumulates after coal is extracted from the ground as a result of immersion in water during the washing process or ex- ~ posure to rainfall. See Drummond Coal Co. v. Hodel, 610 F.Supp. 1489, 1493 (D.D.C.1985). The precise percentage of inherent mois- ture varies widely from one coal seam to another throughout the United States. See A.J. Taft Coal Co., 605 F.Supp. at 369. Ala- 4a (1975); State of Alabama Department of Revenue, Coal Severance Tax Regulation (July 13, 1979). This interpre- tation, by which “excess moisture deductions” were made on approximately seventy percent of the coal tonnage re- ported by Alabama coal companies to OSM, came to the attention of OSM’s Washington headquarters from a num- ber of sources in 1980 and 1981. In response, OSM proposed new regulations in December 1981 to clarify its position : (3) The weight of each ton shall be determined by the actual gross weight of the coal. (i) impurities, including water, that have not been removed prior to the time of initial bona fide sale, transfer of ownership, or use by the operator shall not be deducted from gross weight. 30 C.F.R § 870.12(b) (3) (i) (1982) (emphasis in origi- nal). Drummond, one of the Alabama coal companies that had been deducting “excess moisture” in its quarterly fee filings with OSM from 1977 through 1981,° contends that the revised regulation, by taxing impurities not removed prior to sale, exceeds the Secretary’s authority under the Act. According to Drummond, the SMCRA limit: the Secretary to taxing coal with its inherent impurities, see bama’s 2.88% figure for inherent moisture in coal is therefore an approximation that would not hold true even for all coal mined in that State. (OSM has noted, for example, that Alabama’s Bureau of Mines found an average inherent moisture of 3.0% for Alabama coal seams). ’ Drummond inadventently omitted the excess moisture deduc- tion from the tonnage report for the last quarter of 1981 and claimed a “refund” in its first quarter 1982 report. OSM denied the refund claim and disallowed any future deductions, but it has not, as far as the record shows, sought to recoup from Drummond the amounts deducted between 1977 and 1981. 5a supra note 2.‘ The statute does not, in Drummond’s view, permit the Secretary to tax that portion of the weight of coal represented by post-extraction added impurities such as rainwater or debris. Phrased in Gertrude Stein’s style, Drummond argues that coal is coal is coal.* Con- gress, however, did not define “coal” in the statute—still less the term “coal produced,” upon which the fee is levied. Like the district court, we do not find the ordinary mean- ing of that term unambiguous: “ ‘Production’ could rea- sonably be interpreted to include the entire process of * Drummond's position comes close to advocating a Btu tax, be- cause the inherent moisture and ash in coal also add nothing to its value as determined by the Secretary. Yet Con2ress rejected a Btu tax in the final version of the SMCRA. Its sole concession to a tax based on the heat value of coal was the provision whereby if 10% of the value of surface-mined coal at the mine, as determined by the Secretary, is less than 35 cents per ton, then the lesser figure is paid into the reclamation fund. See 30 U.S.C. § 1232(a); H.R. Rep. 218, 95th Cong., Ist Sess. 137, U.S.Code Cong. & Admin.News 1977, p. 669. The House Report stated that “only a small propor- tion of the low-heat sub-bituminous coal wil! be eligible for this reduced fee.” Jd. The contrast between this provision, based on heat value as determined by the Secretary, and the weight-based provision under which Drummond is taxed cuts strongly against Drummond's position in this case. * In support of its argument, appellant relies on the reasoning of A.J. Taft Coal Co., 605 F.Supp. at 366. In that case, the district court found that the Black Lung Tax on “coal sold by the producer” required the exclusion from gross weight of moisture in excess of the Alabama statutory 2.88% limit. Relying upon the “plain mean- ing” of the word “coal,” the district court adopted the State's 2.88% severance tax standard. The Taft court distinguished the holding in Drummond Coal Co. v. Watt, No. CV82-H-1838-S (N.D.Ala. May 18, 1983) [Available on WESTLAW, DCTU database], with whose reasoning we today agree, by reference to the fact that the agency administering the Black Lung Tax had issued no clarifying regu- lations, and that there was “no clear intent in [the Black Lung Tax statute], as there was in the [revised OSM] regulation, to tax water or any other ‘impurities.’ ” 605 F.Supp. at 371. To the extent that Taft’s rationale nevertheless may implicitly contradict our own, we respectfully disagree with it. 6a extracting and selling coal, complete from pit to buyer’s door, or it could refer solely to the process of extraction. [Nlowhere does the [SMCRA] specify what ele- ments comprise a ‘taxable’ piece of coal.” 610 F.Supp. at 1497. Drummond’s “plain meaning” argument is fur- ther undermined by the prevailing industry practice be- tween the passage of the SMCRA in 1977 and the final promulgation of the revised reguiations in 1982. Ac- cording to the record, the vast majority of U.S. coal operators, as well as OSM personnel outside of Alabama, interpreted the phrase “coal produced” as do the revised regulations. In view of the ambiguity of the statutory language, then, unless Congress in the legislative history specifically disleosed its intent on the question at issue we must defer to the Secretary’s construction of the Act. Chevron U.S.A. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984). Drummond contends that the legislative history indeed re- veals Congress’ intent on the matter at issue here—an in- tent inconsistent with the Secretary’s regulations. In sup- port of this contention, Drummond deploys the Third Cireuit’s decision in United States v. Brook Contracting Corp., 759 F.2d 320 (3d Cir.1985). Our review of the relevant legislative history * leads us respectfully to dis- agree, with the Third Circuit and agree with the district court below. See 610 F.Supp. at 1501 n.9. The legislative history simply does not disclose the requisite specific intent upon which a court could properly rely to overturn the Secretary’s regulations.’ ®* The House Report states that the legislative history of the SMCRA would include the legislative history of previously vetoed versions of the enactment from the two prior Congresses. H.R. Rep. No. 218, 95th Cong., 1st Sess. 140, reprinted in 1977 U.S.Code Cong. & Ad.News 593, 672. 7 There is, moreover, reason to doubt that the Third Circuit had jurisdiction over the suit in Brook. The Eleventh Circuit has held 7a Congress in fact never addressed the particular issue that we confront in this case. The House Report reflects general concern in connection with the level of the recla- mation fee to be assessed, with the burden placed on the industry and consumers and with the inflationary impact of the fee. See H.R.Rep. No. 218, 95th Cong., 1st Sess. 137, reprinted in 1977 U.S.Code Cong. & Ad.News 669; see also Brook, 759 F.2d at 324-25 (discussing House Report). Those considerations were explicitly balanced, however, against the need to raise sufficient funds to meet program objectives. Jd. In any event, we fail to see how the general policy concerns relating to the impact on industry and consumers—even standing alone—could be dispositive of the issue before us. In support of its holding the Brook court reviewed oc- casions, during the three years of legislative deliberations leading to the 1977 passage of the Act, when Congress considered estimates of the ultimate cost of the reclama- tion fee to industrial purchasers of coal and consumers. Id. at 325-26. These estimates used rough (‘“conserva- tive”) assumptions about the number of Btu’s per pound of coal—assumptions that the Third Circuit regarded as more consistent with “clean” coal than with coal that includes some amount of non-inherent impurities. Jd. at 325. Congress also considered certain calculations based on the spot price per ton of coal, in which there was apparently no indication that the price had been adjusted to reflect the existence of such impurities. Jd. at 325-26. that Section 1276(a) (1) of the SMCRA vests exclusive jurisdiction to review challenges to national regulations, like the regulations at issue here and in Brook, in the federal courts of the District of Columbia Circuit. Drummond Coal Co. v. Watt, 735 F.2d 469, 476 (11th Cir.1984). We are not compelled in this case to address this jurisdictional question. As the district court pointed out, it is indisputable that Section 1276(a) vests either concurrent or exclu- sive jurisdiction over suits like this in the United States District Court of the District of Columbia. Regardless of which interpreta- tion is correct, the district court properly exercised jurisdiction over this case, and, therefore, so does this Court. 610 F.Supp. at 1494-95. eT 8a Finally, the Brook court cited the arguments of members of Congress advocating a lower, ten-cents-per-ton fee, premised on gross revenue calculations for total 1975 coal tonnage which the court thought to be exclusive of noninherent moisture and debris. Even if the scientific and mathematical calculations upon which the Brook court’s analysis is founded are correct,*® they do not estab- lish, as Chevron requires, a specific congressional intent as to the interpretation of the words “coal produced.” The Third Circuit’s opinion appears to us to be based merely on speculative inferences from the legislative his- tory harnessed to a conviction that the Secretary’s regula- tion will cost too much.® Since Congress did not explicitly 8 The calculations reviewed by Congress assume 10,000 Btu’s per pound of coal, whereas the Brook court cites figures compiled by the American Society for Testing and Materials (ASTM), the principal source for industry data, for a range running from 6,300 to more than 15,500 Btu’s per pound of coal. ‘See 759 F.2d at 325. Congress may have chosen the 10,000 Btu’s per pound figure rather than a higher one to take account of the presence of non-inherent moisture or debris. Similarly, the Third Circuit states that “[t]here is abso- lutely no indication that Congress sought to include in the spot price of coal in adjustment for tonnages of non-coal material,” id. at 326. This seems to assume, without citation of support, that the 1975 spot price was per ton of clean coal rather than for “run-of- mine” coal, i.e., coal prior to the removal of non-inherent impuri- ties. Finally, the House Report’s figure for total 1975 coal produc- tion of 654 million tons which the Brook court cites, see id., multi- plied by the ten-cents-per-ton fee proposed by the House minority, would yield $65.4 million; yet the court quotes the minority report as claiming that the minority’s proposed ten cent fee “could gener- ate between $60 and $70 million dollars [sic] on an annualized vasis.” Id. (quoting H.R.Rep.No. 45, 94th Cong., 1st Sess. 168 (1975) ). We cannot say that this differential was not included in whole or in part to account for the fee falling on certain quantities of non-inherent moisture or debris. ® Nor could it be argued, as the Brook court seems to suggest, that under the revised regulation the fee would as a practical matter be imposed on an unlimited amount of impurities. If the amount of 9a address the proper meaning of the words “coal produced” in either the statutory language or the legislative history, we conclude that the Secretary was authorized to give the term a reasonable construction. By leaving the operative statutory terms undefined and delegating broad rulemak- ing authority to the Secretary, see 30 U.S.C. §§ 1211, 1242(a) (1982), Congress has left a gap in the regulatory regime for the agency to fill. See Chevron, 467 U.S. at 842-44, 104 S.Ct. at 2781-83; Montana v. Clark, 749 F.2d 740, 745 (D.C.Cir.1984), cert. denied, US. , 106 S.Ct. 246, 88 L.Ed.2d 255 (1985). And in formulating a definition of “coal produced,” the Secretary is entitled to balance the countervailing policies at stake. See Chev- ron, 467 U.S. at 844-45, 104 S.Ct. at 2782-83. We have no warrant to set aside the Secretary’s interpretation, if reasonable, merely because we might strike this policy balance in a different fashion. One cannot say that the Secretary’s definition is un- reasonable. The Secretary felt that important adminis- trative considerations supported his interpretation: “[I]f moisture deductions were allowed, audit of operator rec- ords would be further complicated and laboratory analy- ses required to document moisture content.” 47 Fed. Reg. 28,578 (1982). Further, he deemed it desirable to achieve “uniform application of Part 870 and equitable treatment of all operators.” Jd. Drummond contends that whatever administratve problems the Secretary would encounter elsewhere in the country, OSM’s Alabama regional office would be able to police deductions for non- inherent post-excavation moisture, presumably because of the apparatus already in place for administering Ala- bama’s severance tax, which requires measurement of the total moisture content of coal for comparison with the non-inherent moisture or other debris in coal reaches a point where the portion of the fee ascribable to such impurities exceeds the cost of “cleaning” the coal, then the operators will of course remove the impurities rather than pay the fee. cineca 10a 2.88% figure established in the statute.’? But the Secre- tary’s desire to employ a national standard that uni- formly prohibits deductions for post-excavation moisture is obvious commonsense. The inherent moisture of coal varies considerably among coal deposits in different parts of the country. Allowing excess moisture deductions for producers in all parts of the country would entail either the considerable burden of setting different inherent mois- ture levels for different localities or the inaccuracy (and inequity) of setting a single, approximate nationwide standard. And even if the percentage of inherent mois- ture in coal were uniform across the nation, or some ap- proximate figure were selected, Drummond still has not suggested how the Secretary could avoid conducting com- plex and extensive audits to determine the accuracy of operators’ measurements of non-inherent moisture and debris. Drummond further contends that the Secretary’s re- vised regulation is inconsistent with the definition of coal as “combustible carbonaceous rock” found elsewhere in the regulations. See 30 C.F.R. § 700.5 (1985). Appellant ignores the fact that this definition is prefaced by the words, “except where otherwise indicated.” Jd. The re- vised regulation clearly “otherwise indicate[s]” that im- purities included in the gross weight prior to sale are to be treated as “coal” for purposes of the tonnage fee. This argument, moreover, like Drummond’s statutory argu- ment, overlooks the point that the crucial statutory lan- guage is “coal produced,” not coal. a = e 1 Alabama is seemingly unique in the “excess moisture” provi- sions of its severance tax. Drummond Coal Co. v. Watt, No. CV &2- H-1838-S, slip op. at 3 (N.D.Ala. May 18, 1983) [Available on WESTLAW, DCTU database]. Throughout Drummond has ig- nored the non-inherent debris mixed with the coal, although the logic of their position would apply to all impurities. See Brook, 759 F.2d 320 (8d Cir.1985). Drummond apparently avoided making this argument because the Alabama severance tax provides a mechanism only for calculating excess moisture. lla Drummond also maintains that even if the Secretary’s interpretation would be reasonable if adopted initially, it is nevertheless arbitrary and capricious because when promulgated in 1982 it constituted a change of policy without adequate explanation. See Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983). Drummond thus seek to leverage the benefit of the “Alabama interpreta- tion” it enjoyed for four years into a national policy which it asserts OSM cannot so easily change. We find this argument, to put it kindly, insubstantial. There was certainly no national policy reflecting Drummond’s in- terpretation of the statute. The Secretary has represented to us that only twelve of 6000 operators took advantage of this “policy,” eleven of whom were based in Alabama. At most, the record reflects some degree of confusion prior to 1982 at the lower echelons of OSM." At the national level the agency’s position has been unchanged since 1977. See 42 Fed.Reg. 62,714 (1977); 610 F.Supp. at 1503. We do not say that the Secretary is or was forbidden to adopt Drummond’s suggested definition of “coal pro- duced.” Rather, we hold that because Congress had no specific intention on this point, the Secretary, under Chev- ron, had the authority to fashion a reasonable interpre- tation. This the Secretary has done. The judgment of the district court is therefore Affirmed. 11 Drummond doubts the Secretary’s representation and seeks to impose a burden on the Secretary to affirmatively “prove” that all but 12 coal operators followed his policy prior to 1982—which, of course, would require the Secretary, in order to support his position here, to conduct an enormously burdensome audit of thousands of quarterly reports. But the precise number of confused coal oper- ators is patently irrelevant. Drummond’s position seems to us to stem from a profound misunderstanding of State Farm’s rationale. That case does not hold that an agency is restricted in clarifying an ambiguous regulation that does not precisely convey an agency’s statutory interpretation. 12a UNITED STATES DISTRICT COURT DISTRICT OF COLUMBIA Civ. A. No. 82-2439 DRUMMOND COAL COMPANY, Plaintiff, V. DONALD P. HopDEL,* Secretary of the Interior, Defendant. June 11, 1985 Michael B. Barr, Hunton & Williams, Washington, D.C., for plaintiff. Alfred T. Ghiorzi, Land & Natural Resources Div., U.S. Dept. of Justice, Washington, D.C., for defendant. MEMORANDUM OPINION AND ORDER JOYCE HENS GREEN, District Judge. Before the Court are the parties’ cross motions for summary judgment. The plaintiff, Drummond Coal Com- pany, seeks declaratory and injunctive relief to prevent the Department of Interior (DOI) and the Office of Sur- face Mining (OSM) from enforcing regulations designed to govern the collection of reclamation fees under the Surface Mining Control and Reclamation Act of 1977 (SMCRA, the Act), 30 U.S.C. § 1201, et seg. At issue * Pursuant to Fed.R.Civ.P. 25(d), Donald P. Hodel has been sub- stituted for William P. Clark as Secretary of the Interior. 13a is a recently revised regulation that determines the method by which the plaintiff must calculate the fee it is required to pay under the Act for each ton of coal produced. Drummond contends that this revision, under- taken to clarify existing regulations, is both inconsistent with the language of section 402 of SMCRA (380 U.S.C. $ 1232) and contrary to prior administrative practice and policy. The defendant, in turn, argues that the re- vised regulation is “not repugnant to the language of the statute or its underlying purposes” and is consistent with prior practice. As such, the defendant concludes, the pro- mulgation of the challenged regulation falls within the scope of DOI’s broad rulemaking power and is entitled to “great deference” upon review by this Court. For the reasons set forth below, the Court concludes that the Secretary did not exceed his authority in pro- mulgating the chalienged regulations. Accordingly, the defendant’s cross-motion for summary judgment shall be granted. I. Background A. Regulatory Framework In 1977 Congress passed the Surface Mining Control and Reclamation Act. The purpose of the Act, as stated by Congress, was in part to “establish a nationwide pro- gram to protect society and the environment from the adverse effects of surface coal mining operations.” 30 U.S.C. § 1202(a). It was Congress’ hope that the Act would “promote the reclamation of mined areas” while striking a “balance between protection of the environ- ment ... and the Nation’s need for coal.” 30 U.S.C. § 1202 (f). To achieve this end, Congress included in the Act a provision establishing an “Abandoned Mine Reclamation Fund.” 30 U.S.C. § 1231. The terms of the fund pro- gram, as set out in section 1232(a) of the Act, required all coal operators subject to the SMCRA to pay into the l4a fund a reclamation fee of 35 cents for each ton of coal produced by surface mining. In December, 1977 the Secretary of the Interior, acting through OSM, promulgated national regulations setting forth the procedures to be used by coal mine operators in computing their reclamation fees. 42 Fed.Reg. 62715 (1977). The regulations stated in pertinent part that: (a) The operator shall pay a reclamation fee on each ton of coal produced for sale, transfer, or use, including 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. These regulations,| however, did not explain precisely how the “weight and value” of the coal at the time of initial sale or transfer was to be calculated. As a result, from 1977 to 1981 the regulations were subject to vary- ing interpretations, both by operators and by certain OSM officials. In Alabama, for example, coal operators regularly reduced their “‘taxable” coal tonnage by claim- ing a deduction for the alleged “excess moisture” content of the coal. Faced with evidence of confusion among operators and inconsistent interpretation by the OSM representatives, in December, 1981 the Secretary proposed revised regu- lations for reclamation fee computations. The revised regulations, ultimately approved in final form and codi- fied at 30 C.F.R. § 870.12(b) (3) (i) (1982), stated in relevant part that: (a) The operator shall pay a reclamation fee on each ton of coal produced for sale, transfer, or use, including the products of in situ mining. 1 The regulations promulgated in December, 1977 were incorpo- rated in the final regulations issued nearly one year later. See 30 C.F.R. 870.12 (b), 43 Fed.Reg. 49940 (1978). ans eet nanan aaa 15a (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. (3) The weight of each ton shall be determined by the actual gross weight of the coal. (i) Impurities, including water, that have not been removed prior to the time of initial bona fide sale, transfer of ownership, or use by the operator shall not be deducted from the gross weight. |Emphasis added. ] It is these 1981 revised regulations that serve as the focus for the plaintiff’s challenge in this case. Before turning to the merits of Drummond’s claim, however, a brief review of the coal company’s involvement in this litigation is required. B. Factual and Procedural History Drummond Coal Company, a Delaware corporation, mines substantial amounts of coal in Alabama. Begin- ning in 1977 when the reclamation fee regulations were first issued, and continuing until June, 1982 when the revised regulations were promulgated, Drummond rou- tinely subtracted a deduction for moisture from the ac- tual tonnage of coal mined, before calculating the recla- mation fee it believed was owing. The deductions were approved without exception by the OSM official respon- sible for the OSM region (“Region II’) in which Ala- bama was located. Five other Alabama based coal pro- ducers also followed this practice. The operators insisted that their calculations were based on an Alabama state coal severance tax law’ that permitted an excess mois- ture deduction. 2 Alabama’s excess moisture provision sets a flat figure—2.88% of the gross weight of mined coal—as the “inherent moisture” con- tent of the coal. Any moisture content over and above 2.88% may 16a According to OSM, it was not until March, 1981 that the Secretary discovered that certain operators were sub- tracting a deduction for moisture. Drummond’s practice, in particular, did not come to the attention of the Secre- tary until March 13, 1982, when Drummond filed its report with OSM for the first quarter of 1982. In that report, Drummond explained that it had inadvertently failed to take a moisture deduction for December, 1981 tonnage, and that it expected to receive a credit for the “overpaymeit” of reclamation fees. In March 1981, before Drummond’s practice came to light, the Deputy Director of OSM ordered an investiga- tion of the fee collection method used in Region II. (See Secretary’s Record Supplement, Exhibit D). The results of that investigation—revealing a unique, albeit accepted, practice of excess moisture deductions in Alabama— sparked a policy decision at the highest levels of OSM to bring Region II and Alabama in line with what the Secre- tary argues had always been OSM’s nationally accepted method of fee calculation. Accordingly, in December, 1981 OSM promulgated the revised regulations. OSM notified Drummond on July 23, 1982, that OSM regula- tions did not permit an “excess moisture” deduction. Cit- ing the revised regulations, OSM informed Drummond that “the deduction claimed . . . for the fourth quarter of 1981 and all subsequent quarters is disallowed. ... Any future requests for refund of fee payments should... not [be] ‘offset’ by reduced payments in subsequent quar- ters.” Secretary’s Record Supp. Exh. C. Drummond responded immediately to OSM’s decision by filing two separate actions simultaneously—one in the Northern District of Alabama, Drummond Coal Co. v. James Watt, No. CV82-H-1838-S (slip op. May 18, 1983), and the other before this Court. The complaints, identical be deducted from the gross taxable tonnage. Ala.Code § 40.13-31. See Coal Severance Tax Regulations, State of Alabama, Dep’t of Revenue, Montgomery, Ala., July 9, 1979. 17a in all substantive respects, sought declaratory relief and injunctive relief. Specifically, Drummond requested that the revised 1982 regulations be declared and adjudged “arbitrary, [and] capricious[,] an ubuse of the Defend- ant’s discretion[,] and .. . inconsistent with . . . [the] SMCRA.” Plaintiff’s Complaint at 7. The complaint fur- ther requested that the defendant be permanently enjoined and restrained from enforcing or applying the challenged regulations. At the heart of Drummond’s objection to OSM’s action was its belief that a coal operator should not be taxed for excess moisture added to the coal after severance and extraction from the ground. According to Drummond, coal was often exposed to water in the mine, or to rain, after severance and before sale. Absorption of this water might add to the gross weight of the coal, but not its value. It made little sense, Drummond argued, to tax an operator based on a gross weight that did not reflect the true quantity of coal removed from the ground. Insofar as the SMCRA was designed to tax coal and not water, Drummond insisted, the revised regulations ex- ceeded the scope of the Act and thus were unlawful. More importantly, Drummond noted, between 1977 and March, 1982, OSM never objected to a request from a Region II operator for a moisture deduction. From Drummond’s perspective, therefore, the 1982 revised regulations repre- sented a departure from a prior administrative practice without a “reasoned justification”. Plaintiff’s Motion for Summary Judgment at 16-17. As such, the Secretary’s decision to promulgate the regulations was arbitrary and capricious, and constituted an abuse of discretion. For these reasons, Drummond argued, the regulations should be held void. Shortly after the filing of the complaints, the Secretary filed a motion in the Northern District of Alabama to dismiss or transfer the Alabama case on the ground that the SMCRA provided for exclusive jurisdiction in the 18a District of Columbia. On January 13, 1983, the Alabama court denied that motion. One week later, the Secretary requested a permanent injunction to prevent further pros- ecution in the Northern District of Alabama. Drum- mond opposed that motion by moving to stay all proceed- ings in the District of Columbia pending the outcome of the suit in the Northern District of Alabama. On Febru- ary 24, 1983, this Court granted Drummond’s motion to stay. In response to Drummond’s challenge on the merits, the Secretary asserted two central claims. First, the Sec- retary argued that the revised regulations did not repre- sent a change from prior administrative practice because Region II officers—allegedly the only officers to approve excess moisture deductions *—were never authorized to grant deductions. Actions, of these “insubordinate” offi- cials, the Secretary insisted, could neither bind DOI nor constitute the Department’s official administrative prac- tice or policy. Second, the Secretary argued that the regulations were entitled to “great deference” on review because they were consistent with the broad, remedial purposes of the SMCRA, and promoted the twin agency goals of uniform- ity in application and administrative efficiency. Specific- ally, the Secretary maintained that the ambiguity of the 1977 regulations permitted certain coal operators to pay less tax by contracting to sell coal based on its “energy value” per ton, as opposed to its gross weight. The 1982 revised regulations, the Secretary pointed out, merely en- sured that all operators would be taxed on the same basis and at the same point in the coal mining process; the new regulations, therefore, were national in both purpose % According to the Secretary, only 12 out of 6000 coal operators nationwide were permitted to take deductions, and 11 of the 12 were based in Alabama; the other was in Pennsylvania. | 19a and design. The decision to promulgate could not be con- sidered arbitrary or capricious.‘ Subsequently, the United States District Court for the Northern District of Alabama ruled that the 1982 revised regulations were valid. That court concluded that the new regulations did not constitute a “substantive change in the policy of the agency,” but rather represented a clarification of the SMCRA “so as to ensure uniform application of the law.” Drummond Coal Co. v. James G. Watt, CV 82-H-1838-S (Slip op., N.D.Ala. May 18, 1983 at 6). The Court also found that the regulations were not inconsistent with the plain language of the Act: The regulations are invalid, Drummond argues, be- cause they tax impurities such as water, while the Act authorizes a tax only on coal. This argument is not persuasive. The revised regulations are clearly within the scope of the agency’s authority under the Act. Congress chose to tax tonnage of “coal.” Obvi- ously there are impurities mixed with coal—dirt, sulfur, water, etc. Congress made no attempt to remove from taxation this small percentage of im- purities found in the mined coal. Had Congress been concerned that the inclusion of impurities would work an undue hardship on the coal operators, the tax could have been calculated in other ways. For example, Congress could have taxed the coal on its BTU content. Since Congress refused to distinguish coal from its impurities, the regulation requiring the inclusion of impurities in calculating gross weight at the time of initial sale, transfer, or use, is within the * Because the Secretary never attempted to recover the sums de- ducted by the Alabama operators from 1977 to 1981, Drummond lim- ited its challenge to the validity of the 1982 revised regulations. As best as can be determined, the plaintiff has challenged only the prospective enforcement of the 1982 regulations. Accordingly, this decision does not purport to address the validity of the 1977 regu- lations, or the propriety of the Secretary’s actions carried out under those regulations. 20a scope of the agency’s authority. The fact that the impurities involved here are “added” to the coal after it is mined does not change the result. Again, Con- gress was well aware that after mining and before sale or use, coal is exposed to water from a variety of sources. Drummond, slip op. at 7. On appeal, the United States Court of Appeals for the Eleventh Circuit reversed and vacated the Alabama dis- trict court decision. Although the Court expressed its “be- lie[f] that Drummond’s challenge to the revised regula- tions is wholly without merit,” the basis of the decision to reverse and the actual holding of the case were limited to the conclusion that section 1276(a) (1) of the SMCRA “vests in the United States District for the District Court of Columbia exclusive jurisdiction over th[ej case.”” Drum- mond Coal Co. v. Watt, 735 F.2d 469 (11th Cir.1984). With the Alabama litigation complete, this Court lifted the earlier stay. Thereafter, cross motions for summary judgment were filed on the very issues that the Eleventh Circuit found itself without jurisdiction to review. It is to these motions that the Court now turns. il. Jurisdiction Before reaching the merits of Drummond’s claim, a juris- dictional question need be addressed. 30 U.S.C. § 1276 (a) (1) states that: Any action of the Secretary to approve or dis- approve a State program or to prepare or promulgate a Federal program pursuant to this chapter shall be subject to judicial review by the United States Dis- trict Court for the District which includes the capital of the State whose program is at issue. Any action by the Secretary promulgating national rules or reg- ulations including standards pursuant to sections 1251, 1265, 1266, and 1273 of this title shall be sub- —————— 2la ject to judicial review in the United States District Court for the District of Columbia Circuit. Any other action constituing rulemaking by the Secretary shall be subject to judicial review only by the United States District Court for the District in which the surface coal mining operation is located. Any action subject to judicial review under this subsection shall be affirmed unless the court concludes that such ac- tion is arbitrary, capricious, or otherwise inconsistent with law. A petition for review of any action subject to judicial review under this subsection shall be filed in the appropriate Court within sixty days from the date of such action, or after such date if the petition is based solely on grounds arising after the sixtieth day. Any such petition may be made by any person who participated in the administrative proceedings and who is aggrieved by the action of the Secretary. [Emphasis added. ] Before the Eleventh Circuit, Drummond argued that this section conferred concurrent jurisdiction over the case on the United States District Court for the District of Co- lumbia and on “all other district courts that otherwise would have jurisdictien. . . .” The Eleventh Circuit dis- agreed with this interpretation, accepting instead the Secretary’s argument that Congress intended to vest ez- clusive jurisdiction over challenges to national regula- tions in the District Court for the District of Columbia. The Eleventh Circuit drew support for its conclusion from a decision by the Fourth Circuit, Tug Valley Re- covery Center v. Watt, 703 F.2d 796 (1983), but noted that other circuits had reached the opposite conclusion. See, e.g., Holmes Limestone Co. v. Andrus, 655 F.2d 732 (6th Cir. 1981), cert. denied sub nom. Watt v. Holmes Limestone Co., 456 U.S. 995, 102 S.Ct. 2280, 72 L.Ed.2d 1292 (1982). For the purposes of this suit at this point in the pro- ceedings, it matters little whether the jurisdictional deci- 22a sion of the Eleventh Circuit in the “duplicate” case filed in Alabama would or would not be held appropriate upon review by the Supreme Court. Regardless whether this Court has concurrent or exclusive jurisdiction, the statute plainly provides the District Court for the District of Columbia with jurisdiction in some form over a challenge to national regulations. The cross motions for summary judgment, therefore, are properly before the Court. III. Consistency, Legislative Purpose, | and Prior Practice Under the strict standard established by this Circuit, a motion for summary judgment may be granted only when it is shown that there “is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. ... In ruling on a summary judgment motion, the Court must draw all inferences from the record in the light most favorable to the party opposing the motion.” Williams v. Wash- ington Metropolitan Area Transit Authority, 721 F.2d 1412, 1414-15 (D.C. Cir. 1983). “To warrant summary judgment the record ‘should show the right of the [movant] to a judgment with such clarity as to leave no room for controversy. ...’” Weiss v. Kay Jewelry Stores, Inc., 470 F.2d 1259, 1262 (D.C. Cir. 1972). In this instance, neither party disputes the validity of the evidence contained in the administrative record. The sole issues that remain for resolution are lega! ones: (1) whether the decision to promuigate the 1982 revised reg- ulations constitutes an unlawful abuse of discretion on the part of the Secretary because the regulations are in- consistent with the language and purposes of the Act; and (2) whether the Secretary’s decision to piomulgate the revised regulations should be held arbitrary and ca- pricious insofar as it represents a change in prior ad- ministrative practice for which no reasoned justification has been offered. Disposition of the suit on summary judgment, therefore, is proper. 23a A. Statutory Language and Legislative History 1. The “Deference” Standard It is well established that when faced with a problem or statutory construction, “great deference [must be shown] to the interpretation given the statute by the officers or agency charged with its administration.” Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965). See also EPA v. National Crushed Stone Ass’n, 449 U.S. 64, 83, 101 S.Ct. 295, 306, 66 L.Ed.2d 268 (1980). Deference becomes all the more important when the interpretation of an administrative regulation is involved. Jd. In that instance “ ‘the ulti- mate criterion is the administrative interpretation, which becomes of controlling weight unless it is plainly errone- ous or inconsistent with the regulation.’” Bowles v. Seminole Rock Co., 325 U.S. 410, 413-14, 65 S.Ct. 1215, 1217, 89 L.Ed.2d 1700 (1945), quoted in Udall, 380 U.S. at 16-17, 85 S.Ct. at 801-802. To sustain the agency’s interpretation, the Court “need not find that [the agency’s] construction is the only rea- sonable one, or even that it is the result [that] would have [been] reached had the question arisen in the first instance in judicial proceedings.” Udall, 380 U.S. at 16, 85 S.Ct. at 801. To the contrary, the burden rests with the party challenging the administrative action to demon- strate invalidity. “Absent a contrary indication in the statute,” the Secretary’s judgment must be accepted. Jn Re: Permanent Surface Mining Regulation, 653 F.2d 514, 522 (D.C. Cir. 1981). As both the Supreme Court and this Circuit have noted, it is not a reasonable canon of interpretation [to as- sume] that the draftsmen of acts delegating agency powers, as a practical and realistic matter, can or do include specific consideration of every evil sought to be corrected.... [This] is precisely one of the rea- 24a sons why regulatory agencies . . . are created, for it is the fond hope of their authors that they bring to their work the expert’s familiarity with industry conditions which members of the delegating legisla- tures cannot be expected to possess. American Trucking Ass’n v. United States, 344 USS. 298, 309-10, 73 S.Ct. 307, 314, 97 L.Ed. 337 (1953), quoted in In Re: Permanent Surface Mining, 653 F.2d at 522. See also Miller v. Youakim, 440 U.S. 125, 145 n.25, 99 S.Ct. 957, 969 n.25, 59 L.Ed.2d 194 (1979); Maryland National Capital Park and Planning Comm’n v. Lynn, 514 F.2d 829, 834 (D.C. Cir., 1975) (burden rests on challenging party to overcome presumption of validity). Application of the Bowles Court’s “rebuttable defer- ence” standard of review is particularly appropriate in this instance because the drafters of the SMCRA clearly intended to delegate to the Secretary broad rulemaking power. Section 201(c)(2) (30 U.S.C. $1211) of the Act states that the Secretary shall “publish and promul- gate such rules and regulations as may be necessary to carry out the purposes and provisions of this Act.” Simi- larly, section 412 (30 U.S.C. § 1242) of the Act provides that the Secretary “shall have the power and authority, if not granted it otherwise, to engage in any work and to do all things necessary or expedient, including pro- mulgation of rules and regulations, to implement and administer the provisions of this Subchapter.” 30 U.S.C. § 1242(a).® Even were Congress not to have granted the Secretary broad d secretion in administering the Act, a “deference” standard of review would stil! be presumptively appro- 5 Indeed, as the defendant points out, the phrase “all things neces- sary or expedient” is rarely used by Congress. See Defendant’s Mera. at 14, n. 11. Congress’ decision to use that phrase in this instance, therefore, connotes a deliberate effort to delegate broad discretion to the Secretary for enforcement of the Act. 25a priate here because the regulatory framework underlying the SMCRA is the product of a long and complex legisla- tive process: Deference to the administering agency is particu- larly appropriate when a complex regulatory statute emerges from a process of difficult legislative gesta- tion. The Surface Mining Act was the result of a protracted effort, dating back to the Ninetieth Con- gress, and including presidential veto of bills passed by the Ninety-third and Ninety-fourth Congresses. From such a process of compromise and adjustment, a symmetrical statute containing explicit answers to every question of administrative implementation is unlikely to emerge. In Re: Permanent Surface Mining, 653 F.2d at 522. OSM’s interpretation of the 1977 regulations, there- fore, and of the statute as set forth in the revised regula- tions, must be accorded broad deference unless the record reflects that the agency’s interpretation is “plainly er- roneous”, Udall, 380 U.S. at 17, 85 S.Ct. at 801, or patently “inconsistent” with the earlier regulation. To determine whether deference should be accorded the Sec- retary in this instance, two questions must now be ad- dressed: (1) whether the 1982 regulations are consistent on their face with the language of the statute and of the 1977 regulations; and (2) whether the 1982 regulations are reasonably related to the legislative intent and pur- pose of the SMCRA. 2. Consistency with Statutory Language 30 U.S.C. § 1232 states that a reclamation fee of 35 cents per ton of “coal produced by surface coal mining” shall be levied on all coal operators. Emphasis added. The term “produced” is ambiguous. “Production” could reasonably be interpreted to include the entire process of extracting and selling coal, complete from pit to buyer’s 26a door, or it could refer solely to the process of extraction. The latter interpretation would support the conclusion that impurities added after extraction, such as moisture, should not be taxed. The former interpretation would imply that the gross product sold to the buyer-——even if it contains impurities and moisture—should serve as the basis for taxation. The statute also fails to define the term “coal”. Types of coal—such as “lignite” coal, surface mined coal, and underground coal—are distinguished, but nowhere does the Act specify what elements comprise a “taxable” piece of coal. As published in 1978, the 1977 regulations did little to remedy these ambiguities. The 1977 regulations, see 30 C.F.R. § 870.12(b), 43 Fed. Reg. 49940 (1978), state only that (a) The operator shall pay a reclamation fee on each ton of coal produced for sale, transfer, or use, including the product 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.® The preamble to the 1977 regulations, however, does provide some insight into OSM’s interpretative intent. In response to a question from a commentator about whether the fee was to be paid on “clean coal” or “run of mine” coal, OSM stressed that the erucial factor was not the composition of the coal, but the point in the mining and selling process that “first sale or transfer” took place: Section 837.12(a) and (b) of the regulations spec- ify that the fee be paid on each ton of coal produce for sale, transfer, or use and that the fee shall be 6 The 1977 regulations also include an “attempted” definition of coal. See 30 C.F.R. § 700.5, quoted in full infra Part III B, n. 9. Po ee 27a determined at the time of initial bona fide sale, transfer of ownership, or use by the operator. For example, if the initial transaction is based on the weight of run-of-mine coal then the reclamation fee must be paid for each ton of run-of-mine coal sold, transferred or used. If the initial transaction is based on the weight of clean coal, then the reclama- tion fee must be paid on each ton of clean coal sold, transferred, or used. 42 Fed. Reg. 62714, Dec. 18, 1977 (Dec. 13, 1977). Sig- nificantly, this interpretation of the 1977 regulations was reiterated one year later, in 1978, in an OSM Solicitor’s opinion: . . . The fee must be determined by the weight and value of the coal at the time of initial bona fide sale. More [sic] computations or estimations of the clean coal weight would not be in compliance. The coal would actually have to be cleaned prior to sale or use to meet the conditions in Section 837.12(b). Advisory Opinion of Apr. 17, 1980, quoted in Plaintiff’s Supp to Admin. Record, Attachment 3 at 3. The 1982 revised regulations adopt the first of the two possible interpretations of section 1232. The regulations state expressly that the time of sale, and not the value of the coal, is the determining factor. Impurities that have not been removed before the time of initial bona fide sale, transfer of ownership, or use by the owner, will be taxed. Both interpretations, however, are potentially consistent with the Act. The conclusion reached depends upon the particular objectives that Congress sought to further in enacting the legislation. If, for example, the Act’s drafters intended to create a tax mechanism that would promote administrative efficiency and ensure consistent, evenhanded enforcement, the first interpretation is reasonable, for it envisions a flat tax based on a uniform time of sale. If, 28a however, Congress hoped to tax operators based solely on the value and quantity of coal extracted, then the latter interpretation would be most logical. At one extreme, therefore, the 1982 regulations are not in consistent with the plain language of the statute or its supporting regulations. They simply make express what had been implied. Because the SMCRA does not contain an express provision to the contrary in the SMCRA, there is nothing “plainly erroneous” about interpreting ‘“coai produced” to refer to the condition of the coal at the time of sale or transfer. At the other extreme, the 1982 regu- lations may be viewed as consistent with an interpreta- tion of section 1232 that OSM represented as its own from 1977 until 1981. See Solicitor’s Advisory Opinion of Apr. 17, 1980; preamble to 1977 regulations, 42 Fed.Reg. 62714 (Dec. 13, 1977). That this interpretation was not the only one possible is of minor consequence. See Udall, 380 U.S. at 16, 85 S.Ct. at 801. For purposes of this review, what matters is that the 1982 regulations were potentially consistent with a plausible—indeed, reason- able—interpretation. In neither event, therefore, under either of the two possible interpretations, can the 1982 regulations be con- sidered clearly inconsistent with the plain meaning and language of the statute. 3. Consistency With Legislative Purpose In its 1977 House Report, Congress listed the objectives of the reclamation program as including the protection of health or safety of the public; pro- tection of the environment from continued degrada- tion and conservation of land and waier resources; the protection or enhancement of public facilities as part of reclamation of land and water conservation projects; the improvement of lands and waters to a suitable condition useful in economic social develop- 29a ment; and research and demonstration relating to the development of surtace mining reclamation and water quality control program methods. H.R. Rep. No. 95-218, 95th Cong., 1st Sess. 169; U.S. Code Cong. & Ad.News 593, 700 (1977). An earlier House Report that accompanied the SMCRA made clear that the reclamation fund provisions were designed to be remedial in purpose and function: [T]he widespread environmental degradation associ- ated with coal surface mining—including the indis- criminate dumping of coal mine waste on the lance surface and into streams—has resulted in the serious deterioration of the social and economic climate of affected regions. Where states have nct accepted the burden of rehabilitating these regions, the environ- mental and social costs have devolved upon local resi- dents. The injustice of requiring persons least able to shoulder such an enormous burden to do so is obvious. H.R.Rep. No. 93-1072, 93d Cong., 2d Sess. 116 (1974). It was considered critical, therefore, that the fee provi- sions generate sufficient revenue to fund the Abandoned Mine Program. See id. at 117. Early reports estimated that as much as $180 million per year would be needed to meet “high priority program needs.” Jd. The bill’s sponsors, however, hoped to find a way to impose a reclamation fee without “constrain[ing] the de- velopment or production” of coal: Several principal considerations form the basis for the... reclamation fee: First, to set the fee at such a level that it is not a burden on the industry; Third, to structure the fee so it would not exert an inflationary influence in the economy. 30a H.R.Rep. No. 95-218, 95th Cong., 1st Sess, 136, 137, U.S. Code Cong. & Ad.News 5938, 668-69 (1977). To achieve this end, Congress devised a differential fee based solely on the genus of coal mined. Types of coal were limited to three: surface mined coal was to be taxed at 35 cents per ton; underground mined coal at 15 cents per tor; and lignite coal at 10 cents per ton. See 30 U.S.C. § 1232 (a). Significantly, Congress expressly rejected an amend- ment to the reclamation fee provisions that would have provided for a uniform tax based on the BTU content (energy value) of the coal, see H.R.Rep. No. 93-1072, 93d Cong., 2d Sess. 116-17 (1974) (proposing fee of 1.23 cents per million BTUs), and rejected proposed amend- ments that would have permitted credits or deductions for state severance tax payments that, in turn, either provided for excess moisture deductions or were based on BTU value. See 120 Cong.Rec. H25230 (July 25, 1974) (amendment of Congressman Seiberling proposing a tax of $2.50 per ton of coal mined minus a credit of $0.01 for each 1000 BTUs “by which the weighted aver- age BTU value of coal mined... falls below 16,000 BTU per pound’); 121 Cong.Rec. H6809 (Mar. 17, 1975) (amendment of Congressman Regula proposing a credit for “the amount of any reclamation fee or severance tax ... paid to the State during that year.”). This decision to base the fee on the weight of the coal at a given time during the coal production process, and not on the value or “inherent content” of the coal, was not an arbitrary choice unsupported by logic or reason; to the contrary, by focusing on uniformity of application rather than value Congress furthered three legitimate and itiportant governmental interests. First, the time-based tax ensured that the Abandoned Mine Reclamation Fund provisions would be enforceable. Clearly, a BTU tax, or any tax requiring a determination of moisture content, possesses the inherent liability of entangling federal authorities in the complicated process 3la of overseeing testing for impurities. A tax based on gross weight at a definable point of time in the production process, however, avoids this problem because it elimi- nates the need to test. Second, by selecting an enforceable tax, Congress ensured that the funds necessary to con- duct the program would be available. Given Congress’ concern that the cost of rehabilitating environmentally degraded areas not fall upon the shoulders of those [citi- zens| least able to afford it, see supra, H.R.Rep. No. 93- 1072, 93d Cong., 2d Sess. 116 (1974), the mine program’s financial health was of critical importance. Third, by selecting a time-based tax Congress avoided the need to “choose [arbitrarily] between impurities”. If excess mois- ture were a deductible impurity, operators might argue, why not also deduct the weight of other impurities, such as sulphur, dust, or debris. Once caught in a technica! debate over the “true” elements of “pure” coal, there might, conceivably, be no end to the deductions claimed. To permit such a situation would jeopardize efforts to meet the costly, remedial purposes of the Act without im- posing new taxes—clearly an “inflationary influence,’— on other sectors of the economy. See H.R.Rep. No. 95- 218, U.S.Code Cong. & Ad.News at 668-69. The 1982 revised regulations are based on precisely these policy concerns. As discussed supra, although the preamble to the 1977 regulations and the Advisory Opin- ion of April 17, 1980, attempted to clarify the confusion surrounding the 1977 regulations and establish the recla- mation fee as time, not value, based, the 1977 regulations continued to create uncertainty among operators. In 1980 OSM completed a review of the Abandoned Mine Recla- mation Fund Fee Collection Program. The review cov- ered enforcement activities from October 1977 through June 1980, and concluded that inconsistencies in the 1977 regulations had resulted in disparate treatment of coal operators. Specifically, OSM found that the wording of the preamble to the 1977 regulations had created a tax loophole that was currently being exploited by operators | 32a in Region II. The preamble stated that the reclamation fee was to be computed “on the weight on which the initial transactions was based.” Secretary’s Record Supp., Exh. A at 12. The regulations themselves stated only that the fee was to be “based on the weight at the time of initial bona fide sale, transfer of ownership, or use by op- erator.” Jd. By devising contractual terms that permit- ted the operator to be paid at a higher rate for fewer tons of “clean” or “pure” coal, an operator would pay significantly less under the preamble interpretation be- cause the “weight on which the transaction was based” would be the weight of the anticipated clean coal. The- oretically, therefore, two operators could tender the same gross weight of coal for sale, and depending on the con- tractual terms used, one might pay considerably less than than the other. Secretary’s Record Supp., Exh. A at 11-13." 7OSM identified three possible ways of interpreting the regula- tions: “1. The fee has been based on real weight of the coal (either run-of-mine or cleaned) at the time of sale. “2. The fee has been based on the ‘calculated’ reduced weight (supported by lab analysis), for which the operator was paid. “3. The fee has been based on the ‘calculated’ reduced weight (supported by lab analysis), even when the operator was not paid on the basis of fewer tons.” Secretary’s Record Supp. Exh. A at 16. Drummond, OSM concluded, followed the third approach, and in so doing exploited a lucrative loophole: “Drummond fits into the third category. Drummond sells coal by the ton and gets paid more or less per ton, according to the BTU’s per ton. If the coal has more moisture, it has fewer BTU’s per ton, and Drummond gets paid less per ton. (Note that Drummond does not get paid for fewer tons; they get paid less per ton.) Drummond is not the only company to be allowed this deduction; the IG report estimates that such a deduction reduced fees in Alabama by $304,811 over the 33-month period examined, and the FCO estimated that approximately 70 percent of the tonnage reported by operators in that State included an adjustment for excess moisture.” Jd. at 16- 17. | seein tiie leanne eat | 83a In addition to this loophole, the OSM report also found that some operators in Region II were reading the plain language of the regulations to permit excess moisture deductions. Secretary’s Record Supp., Exh. A at 10-11. Fearful that these interpretations would significantly and critically deplete the revenues needed to fund the Aban- doned Mine Program,*® thereby jeopardizing the broad, remedial purposes of the Act, OSM moved quickly to draft revised regulations unequivocally defining the fee as time, not value, based. Viewed against this background, it is apparent that the 1982 regulations were promulgated out of a need to ensure uniform enforcement, a workable administra- tive framework, and adequate, “inflation free” funding. As a direct response to those parts of the 1977 regula- tions that failed to enforce effectively the remedial pur- poses of the SMCRA, the 1982 revisions are patently con- sistent with the legislative intent of the Act. Finally, even were it not possible to identify the origi- nal purposes of the Act or analyze their relationship to the stated justifications for the 1982 regulations, the re- vised regulations would still survive judicial review be- cause the explanation tendered by OSM reflects a “ra- tional connection between the facts found and the choice made.” Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168, 83 S.Ct. 239, 246, 9 L.Ed.2d 207 (1962). Under the standard established by the Supreme Court, an agency’s action will be found arbitrary and capricious if, inter alia, the agency has entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise. 8 See supra, n. 7. 34a Motor Vehicle Manufacturers Ass’y v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 2867, 77 L.Ed.2d 443 (1983), quoted in Nat’l Ass’n of Patents on Hemodialysis and Transplantation, Inc. v. Heckler, 588 F. Supp. 1108 (D.D.C. 1984). In this instance, the rec- ord does not support the conclusion that OSM entirely failed to consider an aspect of the problem. The rationale tendered to support the 1982 regulations is both reason- able and logical given the evidence of administrative con- fusion before the agency. More important, one cannot reasonably conclude, in the absence of express statutory language or legislative history to the contrary, that it was “implausible” for the Secretary to assume that Con- gress was aware of the importance of creating an ad- ministratively enforceable tax mechanism—one that would meet the funding needs of the Abandoned Mine Program without requiring overly-intrusive regulation of local op- erators. To the contrary, it is fair to assume that had Congress wanted to ensure that impurities added during the coal mining process, but not part of the “inherent con- tent” of the coal, would not be taxed, it would fave chosen one of the value-based amendments. Congress was free to strike a different type of balance between the needs of compliance and the nature of the tax burden on the coal operator. In short, the 1982 regulations are neither patently “in- consistent” with nor plainly erroneous in their interpre- tation of the legislative purposes of the SMCRA.° Indeed, ®In support of its poeition Drummond cites a recent decision by the Third Circuit, United States v. Brook Contracting Corp., 759 F.2d 320 (3rd Cir.1985). In Brook the Third Circuit held that the 1982 regulations could not serve as a basis for including “rock, clay, dirt, and other debris in the computation of the reclamation fee.” Brook, at 327. The court ruled that “[t]o the extent that the government interprets § 870.12(b) [the 1982 regulations} to auth- orize imposition of the reclamation fee on noncoal material mined by appellants here, we hold this regulation exceeds the scope of 30 U.S.C. § 1232(a) and is therefore invalid.” Brook, at 327. [Continued } a 35a the revised regulations reflect governmental and agency interests which, in the absence of express language to the contrary, stand on their own as legitimate bases for agency action. As such, the agency’s decision to promul- ® [Continued ] In reaching its conclusion the Third Circuit relied heavily on leg- islative history indicating that: “Congress was very much concerned about economic burdens to the economy in general, and the coal industry in particular. Congres- sional research went to great pains to project costs to the consum- ers and the industry that would result from implementation of the reclamation fees. These projections strongly suggest that Congress intended to impose the fee on combustible coal only, and not... on additional tonnages of rock, clay and dirt.” Brook, at 325. The legislative excerpts cited in Brook refer to cost studies contemplated, or actually undertaken, by Congress. Signi- ficantly, however, none of the excerpts noted by the court actually discuss the cost studies in the context of the question at issue here, and at issue in Brook. More important, Brook curiously ignores the legislative history underscoring Congress’ equally pressing con- cern for the remedial purposes of the Act. As the Brook court points out, Congress’ purpose in establishing the reclamation fund was to avoid burdening the coal industry and exerting inflationary pressures on the economy, as well as “providing sufficient funds for meeting program objectives within a reasonable time frame.” H.R. Rep. No. 218, 95th Cong., 1st Sess., 170, reprinted in 1977, U.S.Code Cong. & Ad.News 593, 672; see supra at Part III A 3. Congress’s goal was to satisfy all of these concerns. An objective analysis, therefore, must consider all of the legislative history. Because Con- gress did not expressly discuss whether the fee actually agreed upon (35 cents per ton) would constitute an undue burden on the coal industry or the economy if based on a definition of coal that included impurities, we respectfully disagree with the conclusion that legislative history focusing solely on a “concern for costs” is either persuasive or dispositive of the issues involved in this case. To the contrary, it would appear that had a concern for “burdens to the industry” been of paramount concern to Congress, proposed amendments basing the fee on the BTU content of the coal would not have been rejected in favor of the current “flat tax” approach. Viewed in this light, then, the legislative history suggests that the remedial purposes of the Fund, and the need to rehabilitate those regions unable to absorb the costs associated with surface a 86a gate the 1982 regulations is entitled to substantial defer- ence, B. Prior Practice The Supreme Court has held that if an agency “chang[es] its course by rescinding a rule[,] [it] is obli- gated to supply a reasoned analysis for the change beyond that which may be required when an agency does not act in the first instance.” Motor Vehicles, 463 U.S. at 42, 103 S.Ct. at 2866. The Court has also pointed out, however, that “ ‘regulatory agencies do not establish rules of con- mining, were the focus of Congress’ concern. The 1982 regulations are reasonably consistent with this purpose. In reaching its conclusion, Brook also relied on the definition of coal as promulgated by the Secretary in 30 C.F.R. § 700.5: “As used throughout this chapter, the following terms have the specified meaning except where otherwise indicated—- “Coal means combustible carbonaceous rock, classified as anthracite, bituminous, subbituminous, or lignite by ASTM Standard D 388-77, referred to and incorporated by reference in the definition of “an- thracite” immediately above.” Because this definition does not ex- pressly include impurities, the court reasoned that impurities could not reasonably be included in the term “coal produced by surface mining.” 30 U.S.C. §§ 1201. The Secretary correctly points out, however, that the definition of “coal” is irrelevant to the question at issue here. The regulatory scheme challenged in this instance assesses the reclamation fees based on weight at a given time, not based on value. The focus of this Court’s analysis need only address the reasonableness of that scheme. If valid reasons exist to support the Secretary’s decision to base this tax on “time” rather than “value”, the manner in which coal is defined in section 700.5 clearly is not dispositive of the cen- tral issue. Of course, precisely the opposite would be true if Con- gress had in fact intended to base the tax on the inherent value of the coal mined. Cf. A.J. Taft Coal Co. v. United States, 605 F.Supp. 866 (N.D.Ala.1984), aff'd without opinion, 760 F.2d 280 (11th Cir. 1985) (distinguishing Drummond as a case that, unlike Taft, (1) does not involve the interpretation of a “statute and regulation which make reference only to coal”, and (2) does not involve a tax based on the coal’s BTU value). 37a duct to last forever.” Jd. quoting American Trucking Ass’ns v. Atchinson, T. & S.F.R. Co., 387 U.S. 397, 416, 87 S.Ct. 1608, 1618, 18 L.Ed.2d 847 (1967). “[A]n agency must be given ample latitude to ‘adapt their rules and policies to the demands of changing circumstances.’ ” Motor Vehicles, 463 U.S. at 42, 103 S.Ct. at 2866, quoting Permian Basin Area Rate Cases, 390 U.S. 747, 784, 88 S.Ct. 1344, 1368, 20 L.Ed.2d 312 (1968). When faced with “new developments”, an agency “may alter its past interpretation and overturn past administrative rulings and practice.” American Trucking, 387 U.S. at 416, 87 S.Ct. at 1618. Regulatory agencies “are supposed, within the limits of fair and prudent administration, to adapt their rules and practices to the Nation’s needs in a vola- tile, changing economy. They are neither required nor supposed to regulate the present and the future within the inflexible limits of yesterday.” Id. Drummond contends that the 1982 revised regulations represent a change in OSM’s “policy and practice” for which a reasoned justification is required. It is Drum- mond’s position that the Secretary has failed to provide the necessary “reasoned analysis.” Motor Vehicles, 463 U.S. at 42, 103 S.Ct. at 2866. Based on the record before the Court, there is little evi- dence to support the claim that the 1982 regulations repre- sented a change in OSM policy on the national level. In the preamble to the 1977 regulations, discussed at length, supra, OSM clearly stated that the reclamation fee would be based on the gross weight of the coal in its current condition—with or without impurities—at the time of initial sale, transference, or use. Subsequent policy ex- planations released between 1978 and 1980 were largely consistent with this basic position. See e.g. Solicitor’s Opinion of Apr. 17, 1980, cited in Drummond’s Supp. to Admin. Record, Attachment 3 at 3 (discussed supra, Part III A 2). No official statement dealing with OSM’s na- 38a tional policy may be found to the contrary in the adminis- trative record. OSM’s practice and policy at the local level, however, is more complicated. According to the Secretary, only 12 of approximately 6000 coal operators nationwide claimed a moisture deduction. Defendant’s Mem. at 4. Of those who claimed deductions, all but one were located in Re- gion II. Affidavit of Jane S. Robinson, Secretary’s Record Supp., Exh. E."° The Secretary cannot be bound, the de- fendant argues, by the action of maverick officials in Region II. Drummond correctly points out that the 1981 Inspector General’s report, drafted for the Assistant Secretary of the Interior and the Associate Solicitor, however, specifi- cally found that “(t]he [1977] regulations concerning reclamation for computations are subject to various inter- pretations” and that “[a]s a result, the regulations have not been applied consistently by both the coal industry and OSM fee compliance personnel. . . .” Secretary’s Record Supp., Exh. A at 10. See also Drummond’s Supp. to Admin. Record Attachment 1 at 4. Other reports drafted by OSM personnel concede that “OSM has never disal- lowed . . . a deduction [for excess moisture] ; we simply never gave it to anyone who did not ask for it.” Drum- mond’s Supp. to Admin. Record, Attachment 8 at 4. It is Drummond’s position that the defendant’s admitted fail- ure to deny a single request for a deduction amounted to a prior practice or policy to permit deductions when asked. Insofar as the 1982 regulations altered this “prior policy”, without justification, Drummond concludes, the Secretary’s decision to issue the revised regulations was arbitrary and capricious. Drummond’s argument is flawed in several respects. First, on the basis of the record here it is difficult to con- According to the affidavit, a fee compliance officer in Pennsyl- vania permitted an operator to take a deduction on one occasion. Af- fidavit of Jane E. Robinson, Secretary’s Record Supp., Exh. E at 2. oe ene pe —« 39a clude that OSM knowingly and deliberately altered a prior practice. All but one of the excess moisture deductions were authorized by fee compliance officers in a single region—Region II. There is no indication that either senior OSM officials or the Secretary’s Office learned that the deductions had been authorized for Alabama operators by the Region II Compliance Chief until well into 1981 when Steven Griles, Deputy Director of OSM, requested W. Hord Tipton, Acting Regional Director of Region II, to investigate the treatment of moisture deductions in Region II. See Drummond Supp. to Admin. Record, At- tachment 2, Tipton letter of Aug. 6, 1981, at 1. Upon learning of Region II’s policy and discovering general uncertainty over the proper interpretation of the 1977 regulations, OSM moved quickly to correct Region II’s deviation and clarify the regulations. In short, once OSM was made aware of the problem, remedial action was taken relatively promptly. The record does not sup- port the conclusion that senior OSM officials in Washing- ton knowingly endorsed'a policy of permitting moisture deductions. Indeed, as a matter of law, the activities of insubordi- nates or misinformed government officials generally will not bind the government. See Federal Crop Ins. v. Merrill, 332 U.S. 380, 384, 68 S.Ct. 1, 3, 92 L.Ed. 10 (1947) (“anyone entering into an arrangement with the Govern- ment takes the risk of having accurately ascertained that he who purports to act for the Government stays within the bounds of his authority’) ; Schweiker v. Hansen, 450 U.S. 785, 101 S.Ct. 1468, 67 L.Ed.2d 685 (1981) (gov- ernment not estopped from enforcing regulation where social security claimant given erroneous information by government field representative); cf. Boggs v. Regan, Civil Action No. 79-1090 (D.D.C., decided Sept. 18, 1981) (Hansen distinguished on grounds that plaintiffs made “every effort to obtain information from all sources in- cluding the responsible decisionmakers.” Slip op. at 5 (emphasis added) ). In this instance, therefore, the activi- 40a ties of OSM officials in Region II cannot properly be at- tributed to the Secretary. Because Drummond and the other Alabama operators who requested moisture deduc- tions did not seek advice from the highest levels of OSM, they were in effect charged under the law with knowledge of the proper meaning and intent of the 1977 regulations. Viewed from this perspective, it is difficult to find that OSM ever altered its practice, for without knowledge or legal responsibility for Region II’s activities the Secretary could not have authorized excess moisture deductions."! Yet, even if Region II’s activities can be attributed to the higher levels of OSM, Drummond’s argument remains flawed for a second reason. In cases where a reasoned justification for a policy change has been required, the agency involved made a distinct and decisive break from an affirmatively established rule or regulation. See, e.g., Motor Vehicles (rescinding an agency rule requires rea- soned justification) ; Farmers Union Central Exchange, Inc. v. FERC, 734 F.2d 1486 (D.C.Cir.1984) (agency decision to return to old ICC rate base requires reasoned justification). 11 In support of its argument that the Secretary’s interpretation of the Act is not entitled to deference, Drummond argues that the Secretary’s interpretation is not “contemporaneous with enactment of [the] SMCRA.” Plaintiff’s Mem. at 15. Judicial deference to an agency interpretation, Drummond concludes, is “not warranted where [t]he interpretation is not contemporaneous with enactment of the statute [citing General Electric v. Gilbert, 429 U.S. 125, 142- 43, 97 S.Ct. 401, 411, 50 L.Ed.2d 343 (1975); Northern Colorado Water Conservancy District v. FERC, 730 F.2d 1509, 1519-20 (D.C. Cir. 1984) ]j”. Zd. To the extent that the Court now concludes OSM’s current inter- pretation of the Act does not conflict with the prior administrative practice “begun when that statute became law,” id., Drummond’s “contemporaneous” argument is essentially moot. Even were the Court less convinced that Region II’s activities cannot be attributed te the OSM’ national policy, the absence of any clear or consistent policy at the local level would militate against overturning the agency’s decision on the grounds that the interpretation was “con- temporaneous” with the enactment of the SMCRA. 4la In this case, however, there is no distinct, affirmative policy from which the 1982 regulations may be said to have deviated. OSM concedes that it never denied a deduc- tion when requested, but it is also apparent that OSM never asserted in regulations, comments, or policy state- ments, that moisture deductions were permissible. Indeed, all of OSM’s official pronouncements implied the opposite. In short, the lack of a consistent practice at the local level argues not for the conclusion that OSM had a prior prac- tice different from that required by the 1982 revised regu- lations, but rather that OSM had no real policy at all at the local level. Third and finally, even if the actions of OSM officials in Region II can be held to constitute a “prior practice” that may be imputed to the Secretary, the promulgation of the 1982 regulations represented a legitimate, justifi- able response to the “demands of changing circumstances.” Permian Basin, 390 U.S. 747, 88 S.Ct. 1844, 20 L.Ed.2d 312 (1968). It is clear from the record that the confusion which developed in Alabama over the 1977 regulations represented an unexpected but serious threat to the Aban- doned Mine Reclamation Fund Program. Given the broad, remedial purposes of the Act, the need to insure continued funding for the program, and Congress’ clear intent to establish an administratively enforceable regulatory scheme that would not be based on a BTU or impurities- credit fee system, it was not unreasonable for OSM to promulgate new regulations designed to clarify the old. All of these reasons for the 1982 revisions—discussed at length supra—are contained in the administrative record. See Inspector General’s Report, Secretary’s Record Supp., Exh. A; Drummond’s Supp. to Admin. Record, Attach- ments 1, 3. IV. Conclusion After a “careful and searching inquiry into the record ... to assure itself that the agency has examined the relevant data and articulated a reasoned explanation for 42a its action,” Farmers Unions, 734 F.2d at 1499, the Court concludes that a rational connection exists between “the facts found and the choice made.” Burlington Truck Lines v. United States, 371 U.S. 156, 168, 83 S.Ct. 239, 246, 9 L.Ed.2d 207 (1962). Because the revised regulations are consistent with the plain language and purpose of the SMCRA, and because the challenged regulations do not constitute a change from a prior administrative policy or practice, the Secretary’s interpretation of the SMCRA and the 1977 regulations is entitled to broad deference. Based on this record, the plaintiff has not met its burden of establishing that the challenged agency action was arbitrary and capricious.” Aceordingly, for the reasons set forth above, summary judgment must be granted in favor of the defendant. A separate Judgment accompanies this Memorandum Opinion and Order. 12 The Court notes that as a practical matter this decision need not work an undue hardship on the plaintiff. As the District Court in Alabama pointed out, there is nothing in the new regulations that would prevent an operator from removing impurities before the initial bona fide sale, transfer, or use. If Drummond chooses to clean or dry the coal before the coal is treated, there will be no tax on excess moisture or other impurities. 43a UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT SEPTEMBER TERM, 1986 CA No. 82-02439 No. 85-5827 DRUMMOND COAL COMPANY Vv. DONALD P. HODEL, Secretary of the Interior [Filed Sept. 26, 1986] BEFORE: Wald, Chief Judge; Robinson, Mikva, Ed- wards, Ginsburg, Bork, Starr, Silberman, Buckley and Williams, Circuit Judges ORDER Appellant’s suggestion for rehearing en banc has been circulated to the full Court. No member of the Court requested the taking of a vote thereon. Upon considera- tion of the foregoing, it is ORDERED, by the Court en bane, that appellant’s suggestion is denied. Per Curiam FOR THE COURT: GEORGE A. FISHER Clerk By: /s/ Robert A. Bonner ROBERT A. BONNER Chief Deputy Clerk 44a IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION CV82-H-1838-S DRUMMOND COAL COMPANY, Plainttff, VS. JAMES G. WATT, Defendant. [Filed May 18, 1983] MEMORANDUM OF DECISION On August 27, 1982, plaintiff Drummond Coal Com- pany (Drummond) filed in this court a petition for re- view and complaint for declaratory and injunctive relief. Drummond requests that the court review revised na- tional regulations promulgated by defendant James G. Watt, Secretary of the Department of the Interior (Sec- retary), acting through the office of Surface Mining Reclamation and Enforcement (OSM), pursuant to the Surface Mining Control and Reclamation Act of 1977, 30 U.S.C. §§ 1201, et seq. (the Act). Drummond is peti- tioning the court to declare invalid and enjoin the en- forcement of the Secretary’s revision of 30 C.F.R. § 870.12 on the ground that it is arbitrary, capricious, and inconsistent with the law. The Act imposed a recla- mation fee (the fee) on all coa! produced for sale, trans- fer or use in the United States. The fee is imposed by Section 402(a) of the Act in the following manner: 45a All operators of coal mining operations subject to the provisions of this Act shall pay to the Secretary of the Interior, for deposit in the fund, a reclama- tion fee of 35 cents per ton of coal produced by sur- face coal mining and i5 cents per ton of coal pro- duced by underground mining or 10 per centum of the value of the coal at the mine, as determined by the Secretary, whichever is less, except that the recla- mation fee for lignite coal shall be at a rate of 2 per centum of the value of the coal at the mine, or 10 cents per ton, whichever is less. Section 201(c) (2) of the Act empowers the Secretary to “publish and promulgate such rules and regulations as may be necessary to carry out the purposes and provi- sions of this Act.” More particularly, Section 412(a) of the Act empowers the Secretary “to engage in any work and do all things necessary or expedient, including pro- mulgation of rules and regulations, to implement and administer” the abandoned mine land program. On December 13, 1977, under the authority delegated by the Secretary, OSM promulgated regulations which established procedures for the computation of reclama- tion fees. 30 C.F.R. Part 837 (42 Fed. Reg. 62713). These regulations, which were incorporated in the final regulations issued by OSM on October 25, 1978, provide in Section 870.12(b) that: The reclamation fee shall be determined by the weight and value [of the coal] at the time of initial bona fide sale, transfer of ownership or use by the operator. 30 C.F.R. § 870.12(b) (43 Fed. Reg. 49940). These regulations attempted to establish a _ simple method. of determining when the coal should be weighed and the value that should be used when establishing the amount owed by the operator. The regulations were uni- formly applied in all states but Alabama. In Alabama, 46a Drummond and perhaps several other Alabama producers, with the knowledge of the Secretary, deducted “excess” moisture when calculating the weight of coal for purposes of computing the fee. Drummond defines “excess” mois- ture as water which is added to coal after it has been severed from the ground. This moisture, Drummond ex- plains, is absorbed by coal when it is immersed in water during the washing process or when it is exposed to rain- fall or other water that collects in the mine or pit. Since water adds weight but not value to the coal, Drummond argues that this added weight should not be subject to taxation. These Alabama operators apparently had become ac- custom to taking this deduction when computing their tax under the Alabama Coal Severance Tax. See Ala. Code § 40-13-1, et seq. (1975). From the evidence before the court, it appears that Alabama has the only state severance tax which allows for such an “excess” moisture deduction in computing state severance taxes on coal. The Secretary states that OSM has never interpreted its regulations to permit coal operators to deduct mois- ture content from the weight of their coal when calculat- ing the reclamation fees which become due under the Act. But contrary to agency policy, the OSM fee com- pliance officer for Alabama permitted the “excess” mois- ture deduction to those Alabama operators who requested it. Elsewhere in the United States the fee was uniformly calculated without a deduction for moisture, excess or otherwise. Due to the inconsistent application of the first set of regulations, the Secretary opted to promulgate a new set of regulations. On December 11, 1981, the Secretary published in the Federal Register proposed revisions to the Abandoned Mine Reclamation Program, including regulations for fee computations. 46 Fed. Reg. 6077 (1981). The preamble to the new regulations set forth the purpose for the revision to § 870.12: “T{o] clarify ee 47a the point in time of fee determination, as well as the weight parameters for calculating reclamation fees.” 47 Fed. Reg. 28577, col. 3 (June 30, 1982). The new pertinent part of the 1982 revised regulations including the clarifying provisions provides as follows: (a) The operator shall pay a reclamation fee on each ton of coal produced for sale, transfer, or use, including 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. . * * * (3) The weight of each ton shall be determined by the actual gross weight of the coal. (i) Impurities, including water, that have not been removed prior to the time of initial bona fide sale, transfer of ownership, or use by the operator shall not be deducted from the gross weight. 47 Fed. Reg. 28594 (June 30, 1982). Both the 1977 and 1982 regulations implement Section 402 of the Act and have national applicability to all operators of coal mining operations subject to the Act. Both regulations require computation of the reclamation fee on the basis of the weight and value of the coal at the time of initial bona fide sale, transfer or use by the operator. But most importantly for this present litiga- tion, the revised regulations expressly prohibit coal opera- tors from taking an “excess” moisture deduction. The issue before this court is whether the promulgation of these new regulations is within the scope of the Secre- tary’s authority. The standard of judicial review of the Secretary’s gen- eral rulemaking authority to promulgate national rules or regulations is clearly established in Section 526(a) (1) of the Act which provides, in relevant part, the following: ee eee 48a Any action subject to judicial review under this sub- section shall be affirmed unless the court conc!:des that such action is arbitrary, capricious, or otherwise inconsistent with law. The “arbitrary or capricious” standard of review is a limited one. The Supreme Court has stated the following concerning this standard: [T]he court must consider whether the [agency’s] decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment. . . . Although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one. The court is not em- powered to substitute its judgment for that of the agency. Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416 (1971). The arbitrary and capricious standard reflects two basic principles of judicial review of administrative ac- tion: that agency actions are presumed valid, United States v. Southern Ry. Co., 364 F.2d 86 (5th Cir. 1966). cert. denied, 386 U.S. 1031 (1967), and that the burden is on the challenger to show that the agency’s action vio- lates the standard. Maryland-National Capital Park and Planning Comm’n v. Lynn, 514 F.2d 829, 834 (D.C. Cir. 1975). Drummond contends that the June 30, 1982 clarifica- tions to 30 C.F.R. 870.12 are arbitrary and capvicious. However, the case law is clear that an agency’s inter- pretation of a statute will be upheld so long as the inter- pretation is part of a range of reasonable interpretations. After a thorough review of the record presented in this action, this court finds that Drummond has failed to carry its burden of showing that the regulations are arvitrary or capricious. 49a Drummond argues that the new regulations amount to a substantive change in the policy of the agency without a rational explanation. This court views the new regula- tions as a clarification of the statute by the agency so as to ensure uniform application of the law. Drummond, in its own brief, cites an intra-agency memo which observes that the initial regulations were subject to varying inter- pretations and applications. See Memorandum in Opposi- tion to Defendant’s Motion for Summary Judgment, p. 5. Because the initial regulations were not being interpreted uniformly, the agency was acting responsibly by seeking to clarify its position. The preamble to the revised regu- lations states that one of the purposes of the regulations was to “clarify the weight parameters for calculating reclamation fees.” This court views the action of the agency as reasonable and within the scope of its authority. A pam RA gee eal te reel Drummond also contends that the new regulations are inconsistent with the plain language of the Act. The regulations are invaiid, Drummond argues, because they tax impurities such as water, while the Act authorizes a tax only on coal. This argument is not persuasive. The revised regulations are clearly within the scope of the agency’s authority under the Act. Congress chose to tax tonnage of “coal.” Obviously there are impurities mixed with coal—dirt, sulfur, water, etc. Congress made no attempt to remove from taxation this small percentage of impurities found in the mined coal. Had Congress been concerned that the inclusion of impurities would work an undue hardship on the coal operators, the tax could have been calculated in other ways. For example, Congress could have taxed the coal on its BTU content. Since Congress refused to distinguish coal from its im- purities, the reguiation requiring the inclusion of im- purities in calculating gross weight at the time of initial sale, transfer, or use, is within the scope of the agency’s authority. The fact that the impurities involved here are “added” to the coal after it is mined does not change the SES TAROS IER TURNS Ye 50a result. Again, Congress was well aware that after min- ing and before sale or use, coal is exposed to water from a variety of sources. Finally, there is nothing in the new regulations which will prevent the coal operators from removing the im- purities prior to the initial bona fide sale, transfer or use. If the operator chooses to clean or dry the coal be- fore the initial sale, transfer or use, there will be no tax on water or other impurities, as Drummond contends. For these reasons, this court is of the opinion that the challenged regulations are valid and not arbitrary or capricious. A separate order will be entered in accord- ance with this memorandum. DONE this 18th day of May, 1983. /s/ James H. Hancock United States District Judge 5la UNITED STATES COURT OF APPEALS ELEVENTH CIRCUIT No. 83-7366 DRUMMOND COAL COMPANY, Plaintiff-Appellant, . Cross-A ppellee, JAMES G. WATT, Defendant-Appellee, Cross-Appellant. July 2, 1984 Fournier, J. Gale, III, Birmingham, Ala., for plaintiff- appellant, cross-appellee. Kathleen P. Dewey, Robert L. Klarquist, U.S. Dept. of Justice, Washington, D.C., Frank W. Donaldson, U.S. Atty., Herbert J. Lewis, III, Asst. U.S. Atty., Birming- ham, Ala., Glenda Hudson, Div. of Surface Mining, Dept. of Interior, George R. Hyde, Dept. of Justice, Land and Natural Resources Div., Washington, : D.C., for defendant- appellee, cross- -appellant. Appeals from the United States District Court for the Northern District of Alabama Before RONEY and JOHNSON, Circuit Judges, and MORGAN, Senior Circuit Judge. 52a JOHNSON, Circuit Judge: Drummond Coal Company (“Drummond”) appeals the judgment of the United States District Court for the Northern District of Alabama, denying Drummond’s peti- tion for review and its complaint for injunctive and declaratory relief from regulations promulgated by the Secretary of the Interior (“the Secretary”), acting through the Office of Surface Mining Reclamation and Enforcement (“OSM”), pursuant to the Surface Mining Control and Reclamation Act of 1977, 30 U.S.C.A. $$ 1201 et seq. (“the Act”). The regulations at issue © govern the reclamation fund created under the Aban- doned Mine Land Reclamation Program established by the Act. Specifically, the challenged regulation deter- mines the method by which Drummond must calculate the fee it is required to pay into the fund on each ton of coal it produces. The Secretary filed a cross-appeal, challenging the denial of his motion to dismiss the case for lack of juris- diction, pursuant to Federal Rule of Civil Procedure 12(b) (3)... The Secretary maintains that Section 526 (a) (1) of the Act, 30 U.S.C.A. § 1276(a) (1), vests the United States District Court for the District of Colum- bia with exclusive jurisdiction to hear challenges to na- tional regulations promulgated under the Act, and thus the district court here should have dismissed this case. Although we believe that Drummond’s challenge to the revised regulations is wholly without merit, we do not here reach that issue because we agree with the Secre- tary that Section 1276(a) (1) vests in the United States 1 The district court refused to certify the jurisdictional question for interlocutory appeal. The district court also denied the Secre- tary’s motion to transfer the case to the United States District Court for the District of Columbia, pursuant to 28 U.S.C.A. § 1404, where Drummond concurrently had filed another action challenging the same regulation on the same grounds. On appcal, the Secretary does not challenge the denial of his motion to transfer the case. — 53a District Court for the District of Columbia exclusive juris- diction over this case. Consequently, we reverse the dis- trict court’s decision on the jurisdictional question, vacate its decision on the merits, and remand the case with in- structions to the district court to dismiss the action. I. Congress in 1977 enacted the Surface Mining Control and Reclamation Act for the purpose of, among other things, establishing “a nationwide program to protect so- ciety and the environment from the adverse effects of surface coal mining operations,” 30 U.S.C.A. § 1202(a), and promoting “the reclamation of mined areas left with- out adequate reclamation . . . which continue, in their unreclaimed condition, to substantially degrade the qual- ity of the environment, prevent or damage the beneficial use of land or water resources, or endanger the health or safety of the public.” 30 U.S.C.A. § 1202(h). Title IV of the Act created the Abandoned Mine Reclamation Fund, 30 U.S.C.A. § 1231, and enacted a requirement that all coal operators subject to the statute pay into the fund a reclamation fee on every ton of coal they produce, 30 U.S.C.A. § 1232. On December 13, 1977, the Secretary first promulgated regulations governing the payment of the reclamation fee. 42 Fed.Reg. 62713 (codified at 30 C.F.R. Part 870 (1981) ). These regulations, which were incorporated in the final regulations issued on October 25, 1978, 43 Fed. Reg. 49940, provided that the fee was “determined by the weight and value [of the coal] at the time of the initial bona fide sale, transfer of ownership, or use by the operator.” 30 C.F.R. § 870.12(b) (1981). The regu- lations did not prescribe the elements that define the weight and value of the coal. The Secretary later discovered that some coal opera- tors in Alabama, before calculating their fees, were sub- a 54a tracting from the actual tonnage mined a deduction for the moisture content of the coal. The Secretary in June 1982 published revised regulations prohibiting such de- ductions. 47 Fed.Reg. 28593 (1982). The revised regula- tions stated that “(t]he weight of each ton shall be deter- mined by the actual gross weight of the coal,” 30 C.F.R. § 870.12 (b) (3) (1983),? and specified that “[i]mpurities, 2 The revised regulation provides in full: § 870.12 Reclamation fee. (a) The operator shall pay a reclamation fee on each ton of coal produced for sale, transfer, or use, including 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. (1) The initial bona fide sale, transfer of ownership, or use shall be determined by the first transaction or use of the coal by the operator immediately after it is severed, or removed from a reclaimed coal refuse deposit. (2) The value of the coal shall be determined F.O.B. mine. (3) The weight of each ton shall be determined by the actual gross weight of the coal. (i) Impurities, including water, that have not been removed prior to the time of initial bona fide sale, transfer of ownership, or use by the operator shall not be deducted from the gross weight. (ii) Operators selling coal on a clean coal basis shall retain records that show run-of-mine tonnage, and the basis for the clean coal transaction. (iii) Insufficient records shall subject the operator to fees based on raw tonnage data. (c) If the operator combines surface mined coal, including reclaimed coai, wit] underground mined coal before the ccal is weighed for fee purposes, the higher reclamation fee shall apply, unless the operator can substantiate the amount of coal produced by surface mining by acceptable engineering calcula- tions or other reports which the Director may require. 30 C.F.R. § 870.12 (1983). 55a including water, that have not been removed prior to the time of initial bona fide sale, transfer of ownership, or use by the operator shall not be deducted from the gross weight.” 30 C.F.R. § 870.12(b) (3) (i) (1983). In August 1982, Drummond filed this suit challenging 30 C.F.R. § 870.12 on the ground that it was arbitrary, capricious and inconsistent with the Act. The Secretary in October 1982 moved the court to dismiss the case for lack of jurisdiction, arguing that Section 1276(a) (1) conferred exclusive jurisdiction to hear challenges to na- tional regulations on the federal district court for the District of Columbia. The district court denied the mo- tion in January 1983, concluding that the Act provided the District of Columbia district court with concurrent jurisdiction in cases involving national regulations. In May 1983, the district court entered judgment for the Secretary on the merits of Drummond’s challenge, con- cluding that the regulations promulgated by the Secre- tary were valid and not arbitrary or capricious. Drum- mond filed its notice of appeal, and the Secretary cross- appealed from the May judgment and the January order insofar as they determined that the United States Dis- trict Court for the Northern District of Alabama had jurisdiction to hear challenges to national regulations promulgated under the Act. Il. We address first the jurisdictional question raised by the Secretary. The statutory provision governing juris- diction, 30 U.S.C.A. § 1276(a) (1), states that: Any action of the Secretary to approve or dis- approve a State program or to prepare or promul- 3 Drummond at the same time filed an action in the United States District Court for the District of Columbia. See n. 1 supra. On February 24, 1983, the district court in the District of Columbia entered an order suspending proceedings in that action until all proceedings, including appeals, in this case are completed. Maine 56a gate a Federal Program pursuant to this chapter shall be subject to judicial review by the United States District Court for the District which includes the capital of the State whose program is at issue. Any action by the Secretary promulgating national rules or regulations including standards pursuant to sections 1251, 1265, 1266, and 1273 of this title shall be subject to judicial review in the United States District Court for the District of Columbia Circuit. Any other action constituting rule-making by the Secretary shall be subject to judicial review only by the United States Court for the District in which the surface coal mining operation is located. Any action subject to judicial review under this subsec- tion shall be affirmed unless the court concludes that such action is arbitrary, capricious, or otherwise in- consistent with the law. A petition for review of any action subject to judicial review under this sub- section shall be filed in the appropriate Court within sixty days from the date of such action, or after such date if the petition is based solely on grounds aris- ing after the sixtieth day. Any such petition may be made by any person who participated in the admin- istrative proceedings and who is aggrieved by the action of the Secretary. Id. (emphasis added). The Secretary maintains that the plain language of the statute reveals Congress’ intent to vest exclusive jurisdic- tion over challenges to national regulations in the Dis- trict Court for the District of Columbia. In addition, the Secretary contends that the legislative history and pur- pose of the Act, as well as case law interpreting this statute and others and a survey of jurisdictional statutes, support the Secretary’s conclusion. Drummond argues that the language of the statute and its legislative history support the conclusion reached by the court below that the statute confers concurrent jurisdiction on the District 57a of Columbia district court and all other district courts that otherwise would have jurisdiction of the case. Only two other circuits have addressed this question, and they have not agreed on the answer. In Holmes Limestone Co. v. Andrus, 655 F.2d 732 (6th Cir.1981), cert. denied sub nom. Watt v. Holmes Limestone Co., 456 U.S. 995, 102 S.Ct. 2280, 72 L.Ed.2d 1292 (1982), the Court reversed the district court’s determination that the statute vested exclusivse jurisdiction in the District of Columbia district court. Jd. at 733. The Fourth Circuit, in Tug Valley Recovery Center v. Watt, 703 F.2d 796 (1983), without citing Holmes Limestone and with little discussion, disagreed.* Id. at 799 n. 3. “It is elementary that the meaning of a statute must, in the first instance, be sought in the language in which the Act is framed.” Caminetti v. United States, 242 U.S. 470, 485, 37 S.Ct. 192, 194, 61 L.Ed. 442 (1917). If the language is plain and does not lead “to absurd or wholly impracticable consequences, it is the sole evidence of the ultimate legislative intent.” Jd. at 490, 37 S.Ct. at 196. When the “legislative purpose is expressed in ‘plain and unambiguous language, . . . the . . . duty of the courts is to give it effect according to its terms’.” United States v. Rutherford, 442 U.S. 544, 551, 99 S.Ct. 2470, 2475, 61 L.Ed.2d 68 (1979) (quoting United States v. Lexington Mill & Elevator Company, 232 U.S. 399, 409, 34 S.Ct. 337, 340, 58 L.Ed. 658 (1914) ). Section 1276(a)(1) states that national regulations “shall be subject to judicial review in the United States * District courts also have decided the question both ways. Con- cluding that the statute confers exclusive jurisdiction are: Virginia Mining & Reclamation Ass’n v. Watt, No. 82-2799 (D.D.C. June 8, 1983) (unpublished opinion) ; Reading Anthracite v. Office of Sur- face Mining Reclamation and Enforcement, No. 80-0667 (E.D.Pa. October 8, 1980) (unpublished opinion); Union Carbide Corp. v. Andrus, 13 E.R.C. 1481 (S.D.W.Va. 1979). Concluding that the statute confers concurrent jurisdiction is: Utah International, Inc. v. Department of the Interior, 553 F.Supp. 872 (D.Utah 1982). 58a District Court for the District of Columbia Circuit.” ° The language that Congress chose for this provision indi- cates its intent. The word “shall” is a mandatory, not permissive, form * and indicates a congressional i::tent to require that judicial review of regulations having nation- wide application occur in the federal district court in the District of Columbia. This result is neither absurd nor wholly impracticable. A rational basis can be conceived for centralizing review of national regulations. Congress may have had a particular desire to foster uniformity in the interpretation of these regulations.’ Congress’ provi- sion in other statutes of a single avenue for judicial re- ® No party challenges here the assertion that the regulation under review is a national regulation. ® The word “shail” has been defined as follows: Shail. As used in statutes, contracts, or the like, this word is generally imperative or mandatory. In common or ordinary parlance, and in its ordinary signification, the term “shall” is a word of command, and one which has always or which must be given a compulsory meaning; as denoting obligation. It has a peremptory meaning, and it is generally imperative or man- datory. It has the invariable significance of excluding the idea of discretion, and has the significance of operating to impose a duty which may be enforced, particularly if public policy is in favor of this meaning, or when addressed to public officials, or where a public interest is involved, or where the public or persons have rights which ought to be exercised or enforced, unless a contrary intent appears. People v. O’Rourke, 124 Cal.App. 752, 13 P.2d 989, 992. But it may be construed as merely permissive or directory (as equivalent to “may”), to carry out the legislative intention and in cases where no right or benefit to any one depends on its being taken in the imperative sense, and where no public or private right is impaired by its interpretation in the other sense. Wisdom v. Board of Sup’rs of Polk County, 236 Iowa 669, 19 N.W.2d 602, 607, 608. Black’s Law Dictionary 1233 (rev. 5th ed. 1979). 7 See text accompanying nn. 11 & 12 infra. 59a view * and its subsequent enactment of this statute sug- gest that limiting review to one court is not impracticable. Even if we were not to rely on the plain meaning of the statute, we would reach the conclusion that we do on the basis of the Act’s legislative history and purpose, ap- plicable case law, and Congress’ treatment of other juris- dictional statutes. In so doing, we explicitly reject the reasoning and conclusions reached by the district court in this case and by the Sixth Circuit in Holmes Limestone. The court below compared the Senate and House ver- sions of the bill considered by the Conference Committee with the bill that emerged from Conference. The court noted that the House and Senate bills both provided that review of national regulations would occur only in the Court of Appeals for the District of Columbia, that review of actions by the Secretary to approve or disapprove a state program would occur only in the federal court of appeals for the circuit that contains the state whose pro- gram is at issue, and finally that review of any other action by the Secretary would occur only in the district court (House bill) or court of appeals (Senate bill) for the district in which the mining operation at issue is located. The district court noted that the bill that emerged from Conference omitted the word “only” in the sentences regarding the review of national regulations and state programs but retained the word in the sentence providing for the review of other actions by the Secretary. (It also changed the court in which review would occur from the circuit to the district.) The court concluded that the omis- 8 See, e.g., 42 U.S.C.A. §1973c (Voting Rights Act) (certain states seeking to impose new voter qualifications may institute an action in the United States District Court for the District of Columbia); 42 U.S.C.A. § 7607 (Clean Air Act) (certain regula- tions subject to review only in the United States Court of Appeals for the District of Columbia) ; 47 U.S.C.A. § 402(b) (Federal Com- munications Act) (certain orders of the FCC may be reviewed by the United States Court of Appeals for the District of Columbia). 60a sion of the word “only” from the sentence providing for review of nationa: regulations was purposeful and indi- cated Congress’ intent to create concurrent jurisdiction. The court found this conclusion bolstered by the retention of “only” in the sentence involving other actions by the Secretary. The majority in Holmes Limestone, supra, adopted essentially the same reasoning. 655 F.2d at 737.” We cannot agree. The Conference Committee Report did not explain the reason, if any existed, for omitting the word “only” from the Conference bill. H.R.Rep. No. 95-493, p. 111 (1977), reprinted in 1977 U.S.Code Cong. & Ad.News 728, 743. Unexplained changes made in com- mittee are not reliable indicators of congressional intent. See Trailmobile Company v. Whirls, 331 U.S. 40, 61, 67 S.Ct. 982, 992, 91 L.Ed. 1328 (1947). Although the omis- sion may represent an intention to vest concurrent juris- diction, as the government notes, it may represent instead a congressional! recognition of the force of the word “shall” and an intention to avoid redundancy. Alternatively, as Justice White suggested in his dissent from the denial of certiorari in Holmes Limestone, the omission may have been completely inadvertent. 156 U.S. 995, 996, 102 S.Ct. 2280, 2281, 72 L.Ed.2d 1292 (1982) (White, J., with Blackmun, J., dissenting) ."° *In a separate opinion, Judge Merritt rejected the reasoning of the majority, but concurred in the result. See Holmes Limestone Co. v. Andrus, 655 F.2d 732, 739-41 (6th Cir. 1981) (Merritt, J., concurring), cert. denied sub nom. Watt v. Holmes Limestone Co., 456 U.S. 995, 102 S.Ct. 2280, 72 L.Ed.2d 1292 (1982). Judge Merritt concluded that the language of Section 1276(a)(1) is unclear and the legislative history inconclusive on the matter of congressional intent. 1 In support of its argument that the omission was intentional, Drummond suggests that without the explicit provision for judicial review in the District of Columbia district court, that court might not have venue over an action challenging national regulations promulgated under the Act, and thus inclusion of the provision merely indicates Congress’ intention to ensure that the D.C. court 6la Legislative history reveals the purposes behind the Act and supports our conclusion. In enacting the Surface Mining Control and Reclamation Act, Congress sought to establish uniform national standards for the surface min- ing of coal and reclamation of lands damaged by past mining practices. Congress expressly found that uniform federal standards were essential “to insure that competi- tion in interstate commerce among sellers of coal produced in different States will not be used to undermine the abil- ity of the several States to improve and maintain adequate standards... .” 30 U.S.C.A. §$1201(g). “The [House and Senate] Committees also explained that inadequacies in existing state laws and the need for uniform minimum nationwide standards made federal regulations impera- tive.” Hodel v. Virginia Surface Mining & Reclamation Association, 452 U.S. 264, 280, 101 S.Ct. 2352, 2362, 69 L.Ed.2d 1 (1981) (citing S.Rep. No. 95-128, at 49; H.R. Rep. No. 95-218, at 58, reprinted in 1977 U.S.Code Cong. & Ad.News 593, 596). Although Congress also intended to provide the flexibility required by the widely differing local conditions under which mining occurs throughout the country," its concern for minimum national standards ap- would have venue. The government correctly points out that under 28 U.S.C.A. § 1391(e) (1), except as otherwise provided by law, actions to review federal administrative decisions properly lie in the United States District Court for the District of Columbia. 11 See 30 U.S.C.A. § 1201(f) (“because of the diversity in terrain, climate, biologic, chemical, and other physical conditions in areas subject to mining operations, the primary governmental responsi- bility for developing, authorizing, issuing, and enforcing regulations for surfac’ mining and reclamation operations subject to this Act should rest with the States”), 30 U.S.C.A. § 1202(g) (a purpose of the Act is to “assist the States in developing and implementing a program to achieve the purposes of this Act”); 30 U.S.C.A. § 1253 (“Each State in which there are or may be conducted surface coal mining operations on non-Federal lands, and which wishes to assume exclusive jurisdiction over the regulation of surface coal mining and reclamation operations . . . shall submit to the Secretary . . . a State program which demonstrates that such State has the capa- 62a plicable to all is abundantly clear in the legislative his- tory. A provision establishing one forum in which judicial review of nationally applicable regulations must occur is entirely consistent with this expressed concern.” It was on this basis that the Fourth Circuit in Tug Valley, supra, determined that jurisdiction to review national regulations promulgated under the Act was vested exclusively in the United States District Court for the District of Columbia. 703 F.2d at 799 n.3. Our reading of the statute is further supported by the case law interpreting other jurisdictional statutes. “It is well settled that if Congress, as here, specifically desig- nates a forum for judicial review of administrative ac- tion, that forum is exclusive. And this result does not depend on Congress using the word “exclusive” in the statute providing for a forum for judicial review.” Gard- ner v. Alabama, 385 F.2d 804, 810 (5th Cir.1967), cert. denied, 389 U.S. 1046, 88 S.Ct. 773, 19 L.Ed.2d 839 (1968) (construing Civil Rights Act of 1964 and Social Security Act) (citations omitted) (citing Whitney Na- tional Bank in Jefferson Parish v. Bank of New Orleans bility of carrying out the provisions of this Act”); 30 U.S.C.A. § 1255 (State laws are not preempted by the Act unless incon- sistent with it). #2 Justice White adverted to another congressional purpose that supports the conclusion we reach here. . . « §526(a)(1) provides that regulations with a national impact be reviewed in the District of Columbia, those with a statewide impact in the district court for the district of the capital of the State involved, and all other regulations only in the district where the surface mining operation at issue is located. By allowing a national regulation to be challenged in federal courts other than those in the District of Columbia, the Court of Appeals here arguably frustrated Congress’ carefully devised plan for judicial review. Watt v. Holmes Limestone Co., 456 U.S. 995, 996, 102 S.Ct. 2280, 2281, 72 L.Ed.2d 1292 (1982) (White, J., with Blackmun, J., dis- senting from denial of certiorari). 63a & Trust Co., 379 U.S. 411, 85 S.Ct. 551, 13 L.Ed.2d 356 ( [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_2563%3A2. Public record. Not legal advice.