Petition for Writ of Certiorari — Bolton v. United States

Supreme Court brief1986

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els q A B Y Supreme Court, U.S,

FILED

Nie. FEB 25 1986

IN THE SUPREME COURT OF THH UM¥tEBicr,

STATES

Meet

October Term, 1985

UNITED STATES OF AMERICA,

Plaintiff/Respondent

PRYOR BOLTON and GLEN McCULLAH

d/b/a PRYOR AND GLEN COAL CO.,

Defendants/Appellants

! PETITION FOR WRIT OF CERTIORARI

SIXTH CIRCUIT

TO THE

UNITED STATES COURT OF APPEAL FOR THE

901

r.0.

David A.

Perry H. Windle, III

Attorneys for Petitioners

Burknalter, II

Bearden Drive

Box

11841

Knoxville, TN 37939-1841

(615) 584-0241

February 24,

1986

as ts a _

Per se :

ie a

: om i =) : : a ~

QUESTIONS PRESENTED

1. Whether the Due Process rights

of the Appellants were violated by an

uncontestable, "final", and

nonbankruptable assessment of nearly

$200,000.00 being imposed on them by the

Office of Surface Mining when they had

never received timely and meaningful

notices of the alleged Notices of

Violations, Cessation Orders and the

Notices of Proposed Assessments during

the time periods when they were entitled

to administrative remedies and when the

‘Office of Surface Mining had actual

knowledge of the lack of service and had

the ability and means to insure notice.

2. Whether the regulations

governing service of Notices of

Violation, Cessation Orders, and Notices

of Proposed Assessments violate Due

Process as matter of law or as applied

under the circumstances of this case.

3. Whether equitable principles

applied to the circumstances of the

instant case preclude the Government

from collecting a civil penalty of

nearly $200,000.00 or whether the

district court may award only a nominal

penalty.

4. Whether the Equal Protection

rights of the Appellants were violated

by the application of the Surface Mining

Control and Reclamation Act of i977, 30

USC 1201. et seq., and implementing

regulations, under the circumstances of

this case.

PARTIES

Petitioners: Pryor Bolton and

Glen McCullah,

d/b/a Pryor and

Glen Coal Company

Respondent: United States of America

TABLE OF CONTENTS

Page

Questions Presented 1

Parties 2

Table of Statutes and Otner

Autnorities 5

Statement of Grounds on wnicn

Jurisdiction Invoked 9g

Statement of tne Case: 10

I. Nature of tne Case, and

Course of Proceedings 10

ki. Statement of tne Facts 14

Argument: Introduction 22

Le Failure of Appellants to

be notified in a timely

and meaningful manner of

the alleged violations

and assessments 23

Li. Unconstitutionality of

tne notice provisions of

30 CFR Sec. 722.14 and

30 CFR Sec. 723.17 28

III. Equitable Principles Bar

tne United States’ Action

In Tnis Case or Justify

Only a Nominal Penalty 53

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STATUTES:

TABLE OF AUTHORITIES

United States Code (USC)

USC

UWI UI VWI Ul UI VI

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11 USC

30 USC

RULES:

101.

951.

701.

702

703.

704.

705.

706.

523.

1201.

1268.

1271.

- 66

. 66

- 66

. 67

2,10

11,32,59, 66

- 58,61

Rule 4, Federal Rules of

Civii

Procedure. . . 24

REGULATIONS:

30 CFR 715.12. 30

30 CFR 722.14. Passim

30 CFR f23.1T. 500, 30, 33, 3"

30 CFR 723.18. 62

44 FR 48720. 46

45 FR 2626. 31

CASES:

Abbott Laboratories v. Gardner,

. 387 US 136, 87 S.Ct. 1507

L.Ed24 681 (1967). . 66

Henry L. Donerty & Co. v. Goodman,

294 US 628 55 S.Ct. 544 L.Ed

1100 (1935). 42,44

Flexner v. Farson,

248 US 289, 39 S.Ct. 97,

63 L.Ed 250 (1919). ~41, 43

Greene v. Lindsay,

456, US 444, 102 S.Ct. 1874,

72 L.Ed2d4 249 (1982). 36, 37, 39

Hess v. Pawloski,

215 Us Soe, 31 S.Ct« O32,

7t LEA TO9t (1927). 41,42

.Jornson v. Robinson,

STS US 301, 3567, 97, S.Ct. 1160,

1166, 39 L.Ed2d 389, 398 (1974). .67

Lindsay v. Normet,

405 US 56, 76-78, 92 S.Ct. 862,875-

877, 31 L.Ed2d 36, 52-53 (1972). .67

Mattnews v. Eldridge,

ee) a sh ee ee

Mennonite Board of Missions v. Adams,

NO2 Us 791% 103 S.Ct. 2706, 2712,

77 L.Ed2d 180, 188 (1983)... 41,51

Mullane v. Central Hanover Bank &

Trust Co., 339 US 306, 314,

0 S.Ct. 652, 657, 94 L.Ed24

Dee, OTS Viewers « ee tt lw hs 6399, ST

Oil Snale Corporation v. Morton, 370

F.Supp. 108, 125 (D.Colo. 1973). .63

Regan v. Taxation Witn Representation

of Wasnington, 461 US 540,

103 S.Ct. 1997, 76 L.Ed2d

Ce Ss 5p « = & p 6 « « « 65

United States v. American Greetings

Corporation 168 F.Supp. 45

(N.D. OH 1958), 272 F.2d 945

(6tn Cir. 1959). Phe -%

. 64

United States v. Ancorp National

Services, 367 F.Supp. 1221

SG Es 6S es

United States v. Gleamers & Farmers

Cooperative Elevator Co.,

314 F.Supp. 1148 (N.D. Ind. 1970) .53

United States v. Kras,

409 US 434, 93 S.Ct. 631, 34

ae 8 hk 2 ee

STATEMENT OF GROUNDS ON WHICH

JURISDICTION INVOKED

JURISDICTION

The District Court for the Eastern

District of Tennessee, Northern

Division, entered an Order and

Memorandum Opinion granting judgment in

favor of the United States on August 31,

1984. Notice of Appeal was timely filed

on September 20, 1984. The Court of

Appeals had jurisdiction to review the

final decision of the District Court

pursuant to 28 USC Sec. 1291.

Court of Appeals affirmed the

District Court's ruling by a final Order

filed on November 27, 1985. The right

of appeal is not available in this

action.

The Petitioner respectfully seeks

further review of this case by

requesting the

Petition for Writ of Certiorari

submitted pursuant to 28 U.S.C. Sec.

1254(1), timely filed under 28 U.S.C.

STATEMENT OF THE CASE

Nature of the Case, Course of

Proceedings and Disposition.

(All references to the record to

the Joint Apendix filed by the parties

with the Court of Appeals.)

The Petition of Pryor Bolton and

ylenn McCullah (hereinafter Appellants

or Bolton or McCullah) arises from a

final judgment on August 31, 1984 by the

United States District Court for the

Eastern District of Tennessee, Northern

Division. Judgment was entered in favor

of the United States for One Hundred

Ninety-Nine Thousand Eight Hundred

: 7 a f Nn mr \ A ; + a + +

Vollars ($199,80 eV. and interest al

the rate at 11.9% per annum from the

Appeals for the Sixth Circuit affirmed

on November 27, 1985.

The Complaint was brought by the

United States on January 3, 1984 for the

Sec. 1268(b)(c)(d) of the Surface Mining

Control and Reclamation Act of 1977,

penalties in the amount of $199,800.00

on two (2) Notices of Violations (J.A.,

p.139,158) and three (3) Cessation

d an answer on March

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had received notice of the Notice of

Violations and Cessation Orders. (J.A.,

p.13)

The trial was set for August 28,

1984, at which time the parties appeared

but no oral testimony was heard. The

Trial Court rendered judgment against

the Appellants on the record and allowed

the parties to supplement the record by

submission of further documentation.

The final order and memorandum was

entered on August 31, 1984. (J.A., p.8)

The Appellants timely fiied a

Notice of Appeal on September 20, 1984.

(J.A., p-23) The parties filed a Joint

Stipulation of Documents for Transmittal

on Appeal. The Sixth Circuit Court of

Appeals affirmed the Judgment on

November 27, 1985.

Statement of the Facts

The facts relevant to this appeal

are set forth in the pleadings,

responses to discovery requests,

exhibits and affidavits filed with the

Court as more specifically set forth

herein and the transcript of proceedings

on August 28, 1984. (References to

Exhibits numbered 1 through 20 refer to

documents attached to the United States'

Request for Admission and an identically

numbered set of documents submitted to

the trial court subsequent to the

hearing on August 28, 1984).

The United States alleged that

Appellants individually and doing

business as Pryor and Glenn Coal Company

conducted a surface coal mining and

reclamation operation in Campbell

County, Tennessee. The United States

issued two notices of violations and

three cessation orders against the

Defendants.

NOV 79-2-12-36 carried with it a

civil penalty in the amount of

$13,500.00 (J.A., p.4). CO 79-2-12-18

carried with it a civil penalty in the

amount of $3,500.00 (J.A., p.4,5) NOV

80-2-10-16 carried with it a_ecivil

penalty of $2,800.00 (J.A., p.3) CO

80-2-10-4 carried with it ae civil

penalty of $135,000.00 (J.A., p.6). CO

80-2-23-14 carried with it a civil

penalty in the amount of $45,000.00

NOV 719 -2-12-36 was issued for

alleged violations on October 10, 1979

(Exh. Y% Plaintiff's Request for

Admissions, hereinafter referred to as

‘ale ao a a ~ ar

rn OK ) ) 4 > wWa0c

we . WU ‘i> Ane Goa Se / WwAoO

Pl. Ad., J.

also issued on October 10, 1979 (Exh. 2,

PEsmGe, dehs, pe. 151). NOV 80-2-10-16

was issued for alleged violations on

Mareh 31, 1980 (Exh. 3, Pl.Ad., J.A.,

p.158). CO 80-2-10-4 was also issued on

March 31, 1980 (Exh. 4, Rl.Ad., J.A.,

p.168). CO 80-2-23-14 was issued on May

6, 1960 (Exh. 5, Pl.Ad., J.A., pi182).

Except for the initial NOV's and CO

(Exhs. 1 and 2, Pl.Ad.) which on their

face show attempted personal service,

the United States attempted to

personally serve the Appellants with the

documents on which it based its claims

for civil penalties in the amount of

$199,800.00.

The United States unsuccessfully

attempted to serve the Notice of

Violations, Cessation Orders, Proposed

Notice of Assessments and Final Orders

by mail. (See, generally Defendants'

Request for Admission and the United

States' Response thereto) (J.A.

132). NOV 79-2-12-36 and CO 79-12-18

were addressed to Pryor and Glenn Coal

Company, Route 1, Duff, Tennessee, 37729

and returned "refused". (See,

Defendants’ Request No. 1 and

corresponding response) en

op. 126, 132). NOV 80-2-10-16 was

addressed to Glenn McCullah at 515 WwW.

Elm Street, LaFollette, Tennessee, 37766

and returned “unclaimed" and was also

nt to the Route 1, Duff, Tennessee,

address and returned "refused." (Request

No. 2 and corresponding response) (J.A.,

p.125, 132). CO 80-2-10-4 was addressed

to Glenn McCullah at the 515 WwW. Elm

Street address and returned "unclaimed"

and was also sent to the Route 1, Duff,

o1Be

Tennessee, address and returned

"refused" (Request No. 3 and

corresponding response) (J.A., pel2T,

132). CO 80-2-23-14 was addressed to

the 515 W. Elm Street address and was

returned “unclaimed" and was also sent

to the Route 1, Duff, Tennessee, address

and was returned with the notation "out

of business" (Request No. y and

corresponding response). The five (5)

Notices of Proposed Assessments on the

NOV's and CO's were all sent to the

Route 1, Duff, Tennessee, address and no

attempt was made even by mail to send

them to the 515 W. Elm Street address of

Glenn McCullah (Requests 4 through 9 and

corresponding responses and Request No.

11 and corresponding response) (J.A.,

p.128,132). The United States admitted

that the envelopes containing Notices of

Proposed Assessments for the CO

80-2-10-4 and CO 80 -2-23-14 were

incorrectly addressed to "Pryor and

Gleen Coal Company" (Request No. 18 and

corresponding response) (J.-A, pe130,

The Appellants deny being served or

notified of the violations or notices of

assessments upon which the United States

sought and recovered judgment (See

Affidavits of Pryor Bolton P. 1 and

Glenn McCullah Pgs. 1 and 2 filed April

a 1984) (Jehes p.83, 90). The

Appellants also averred that they

dissolved the partnership of Pryor and

Glenn Coal Company after they were

unable to receive permitting for the

mine site in question. (McCullah

Affidavit P. 1 filed September 7, 1984

and Bolton Affidavit P. 1 filed

September 18, 198%) (JeAe,y D-135, 137).

Further, subsequent to the dissolution

of the partnership, neither Appellant

was authorized to accept service for the

other nor was anyone else authorized to

do so (McCullah Affidavit P. 2, filed

September 7, 1984 and Bolton Affidavit

P. 2, filed September 18, 1984) (J.A.,

5.136, 350)

Appellants averred that they were

not apprised of the United States’

efforts te collect civil penalties when

they appeared in a separate civil action

relating to the same minesite and that

reclamation work required of them was

prevented with the knowledge of the

United States. (Bolton Affidavit Pgs.

1, 4, 6 and McCullah Affidavit Pgs. 1,

3, 4 filed April 27, 1984) (J.A., p.84,

90). Bolton did not know the inspectors

5 on

who claimed to have attempted service on

him. (Bolton Affidavit Pgs. 2, 3 filed

April 27, 1984). McCullah has known one

of the inspectors involved with the

issuance of the notices of violations

and cessation orders but was-) never

contacted by him. (McCullah Affidavit

Pgs. 2, 3 filed April 27, 1984) (J.A.,

ARGUMENT

INTRODUCTION

7 1

The Appellants were never’. served

with the notices of violation, cessation

orders, and notices of assessments and

did not even learn of the notices of

violations and cessation orders until it

was too late to appeal or contest them.

The suit therefore should have been

dismissed.

The United States alleges that the

Appellants violated certain provisions

of the Act relating to a surface mining

operation in Campbell County, Tennessee,

in late 1979 and early 1980. The United

States contends that the Appellants were

issued two (2) separate notices of

violation and three (3) separate

cessation orders for the alleged

violations, but failed to pursue the

administrative remedies provided under

the Act to contest either the fact of

the violation(s) or the amount of

penalties subsequently assessed thereon.

I. Failure of Appellants to be notified

in a timely and meaningful manner of the

alleged violations and assessments.

The United States simply failed to

serve the Appellants with the notice(s)

of violations, cessation order(s), and

notices of proposed assessments for

which the United States received

judgment for civil penalties. Moreover,

the United States failed to make a

serious effort to notify Appellants

despite the fact that United States knew

the addresses of both of the Appellants

and had inspectors that lived in close

proximity to them. (See Affidavits of

Bolton and McCullah filed April 27,

1984) (J.A., p.83,90).

The preferred met’ -d of service in

any judicial or administrative action is

personal service upon the party charged.

For example, Rule 4 of the Federal Ruies

of Civil Procedure requires that a

Summons and complaint be served upon an

individual, personally or by leaving

copies thereof at his dwelling house or

usual place of abode with some person of

Suitable age and discretion then

residing therein or by delivering a copy

of the summons and of the complaint to

an agent authorized by appointment or by

law to receive service of process. FRCP

4(d)(1). A recent amendment to Rule 4

authorises service by mail, but unless

receipt is acknowledged on a form

required for such purpose service must

be made "in the manner. prescribed by

subdivision (d)(1) or (d)(3)." FRCP

u(e)(2)(e)(ii). In this ease, United

States can show no personal service upon

the Appellants nor has it shown that

personal service was even attempted

except for the initial NOV and COQ.

Further, despite the fact that the

notices and orders sent to Appellant

Bolton's address were all returned to

the United States, the United States

continued to use this obviously

ineffective means of "service".

To grant Judgment as a matter of

law under the facts and circumstances of

this case constituted a violation of

Appellants" Due Process rights. it is

elementary that one cannot be held to

answer to defend an action unless duly

notified of the need to answer and

-?6-

defend.

"The fundamental requisite

of due process of law is the

opportunity to be heard’...

This right to be heard has

little reality or worth unless

one is informed that the

matter is pending and can

choose himself whether to

appear or default, acquiesce

or contest. Mullane v. Central

Hanover Bank and Trust Company

339 Us 300, 318, (0 Se Ut.

657, 94 L.Ed 865, 873

An elementary and

fundamental requirement of due

process in any proceeding

which is to be accorded

finality is notice reasonably

calculated, under all of the

circumstances, to apprise

interested parties of the

pendency of the action and

afford them an opportunity to

present their objections.

The April 27, 1984 affidavits of Pryor

Bolton and Glenn McCullah in summary

reveal the following:

& Neither Bolton nor McCullah

were ever personally served by

————

~2¥ «

representatives of the Office of Surface

Mining with the notices of violation,

cessation orders, or proposed

assessments.

2 Neither Bolton nor McCullah

ever knowingly refused any of the

notices of violations, cessation orders,

or proposed assessments.

3. No one was authorized to accept

service on behalf of Bolton or McCullah.

4, Neither McCullah nor_ Bolton

were present at the mine site in

question beyond November 1979. Neither

man authorized or participated in any

activity or disturbance at the _ site

beyond November, 1979.

5. Bolton and McCullah were made

aware too late that notices of

violations and cessation orders had been

issued, and did not learn that penalties

a2be

of nearly $200,000.00 had been assessed

or were being sought from them until the

instant action.

II. Unconstitutionality of the notice

provisions of 30 CFR Sec. 722.14 and 30

Cen 200. 723-17

The regulations governing the

service of notices oof violations,

cessation orders and notices of proposed

assessments and the acts and/or

omissions of the United States in

attempting to serve notice in this case

fail to meet the minimum standards of

due process laid down by the United

States Supreme Court. The manner of

service of notices oi violations and

cessation orders is set forth in 30 CFR

Sec. 722.14, which provides in pertinent

part:

(a) A notice of violation

or cessation order shall be

served on the person to whom

it is directed or his

designated agent promptly

after issuance, as follows:

(1) By tendering a copy at

the Surface Coal Mining and

Reclamation Operation to the

designated agent or person to

whom it is directed. If no

such agent is reasonably

available, a copy may be

tendered to the individual

who, based upon reasonable

inquiry by the authorized

representative, appears to be

in charge of the Surface Coal

Mining and Reclamation

Operation referred to in the

notices or orders. If no such

individual can be located at

the site, a copy may be

tendered to any individual who

appears to be an employee or

agent to whom the order or

notice is issued. Service

shall be complete upon tender

of the notice or order and

shall not be deemed incomplete

because of refusal to accept.

(2) As an alternative to

Paragraph (a) (1) of this

section, service may be made

by sending a copy of the

notice or order by certified

mail or by hand to the person

to whom it is issued or his

designated agent. Service

Snall be complete upon tender

assessment is set forth in 30 CFR Sec.

723.1

part:

Paragraph (a)(1) of Section 722.14

purports to make service complete even

of the notice or order or of

the mail and shall not be

Geemed incomplete because of

refusal to accept.

The manner of serving the proposed

T+ which provides in pertinent

(b) The office shall serve

a copy of the proposed

assessment and a copy of the

worksheet showing the

computation of the proposed

assessment on the person to

whom the notice or order was

issued, by certified mail

within thirty (30) days of the

issuance of the notice or

order. If the mail is

tendered at the address of

that person set forth in the

Sign required under 30 CFR

715.12 (b) or at any address

at which that person is in

fact located, and he or she

refuses to accept delivery of

or to collect such mail, the

requirements of this paragraph

shall be deemed to have been

complied with upon such

tender.

nite

upon the refusal to accept service by an

individual on the mine site, whether

there is any connection shown between

the individual and the person to whom

the violation is directed, whether there

has been any showing that the person

alledgedly in violation is in fact

conducting operations at the particular

mine site, or whether the individual is

authorized to accept service. Under the

provisions set forth in Paragraph (a)(1)

of Section Teese ta an individual

unconnected with the person allegedly in

violation would have neither a duty nor

an incentive to accept service or notify

the alleged violator that he or she was

being charged with violating the Act at

that particular mine site. Such fears

were expressed by persons commenting on

the proposed rule. See, 45 FR 2626,

discussed, infra.

More important are the provisions

of Paragraph (a)(2) of Section 722.14,

which purport to make service ccpdlete

by sending a copy of the notice or order

by certified mail regardless of actual

notification and in the absence of even

an attempt at actual notification.

Further, Paragraph (a)(2) purports to

make service complete upon the tender

and refusal of mail without regard to

the possibility that the name or address

On the mail is incorrect or that the

mail may be refused by any number of

individuals.

A notice of a proposed assessment,

of course, cannot be served on an

alleged violator until a notice of

violation or cessation order has been

issued. See, 30 USC Section 1268(c).

Paragraph (b) of Section 723.17 provides

that certified mail is the only manner

in which a notice of proposed assessment

needs to be served upon an alleged

violator. Paragraph (b) is fatally

defective even though it attempts to be

more explicit that Paragraph (a)(2) of

Section 722.14 as to whom the mail is to

be sent. Paragraph (b) of Section

723.17 first presumes that the person

actually violating the act has posted a

Sign as required under 30 CFR Sec.

715.12(b) and further presumes that such

actual violator has listed his own name

and address.

The omissions of the United States

in this case, by failing to follow up on

known lack of information as to the

actual violators at the mine site in

question and known defects in attemps at

athe

service, serve only to compound the

unconstitutionality of 30 CFR Sec.

722.14 and 30 CFR Sec. 723.17. If the

United States suspected the Appellants

in this case of violating the Act,

personal service upon the Appellants

should and could have been easily

obtained through only a minimal effort.

One of the United States’

authorized representatives in this case

personally knew Defendant McCullah and

resides near the long-established

residences of both Appellants.

(McCullah Affidavit Pgs. 2, 3, filed

April 27, 1984) iJ ashes p.91, 92).

Having failed to make personal service

in this case, and having been notified

from the very beginning that attempted

service by mail was ineffectual, the

United States continued to repeat the

=35=

error witnout furtner inquiry.

Tne classic form of adequate notice

in any proceeding nas been personal

service of written notice. Mullane v.

Central Hanover Bank and Trust Company,

339 US 306, 313, 70 S.Ct. 652, 657 94

L.Ed. 865, 873 (1950). Resort to

substitute1 service sucn as publication

or, tne mails, as in tnis case, is

constitutiionally efficacious only in

cases wnere tne person sougnt to be

warned is missing or unknown. Id. 339

Sei ets. Gott, OF O50, 41.84. eat S75.

Suen is not tne case nere.

Court cases grounded on tne

constitutional due process standards of

Mullane, supra, point to tne

constitutional infirmaties of tne

regulations under review and tne acts

_ e

and omissions of the United States in

this case. Even in cases’ involving

actions on real property, posting of

notice upon the real property itself

does not necesarily satisfy minimum

standards of due process, prticularly if

the realities of the circumstances

involved in the case indicate that

notice has been inadequate. Greene v.

Lindsay, 456 US 444, 102 S.Ct. 1874, 72

L.Ed. 2d 249, (1982). In Greene, supra,

the Court was concerned with eviction

proceedings in which the standard use of

posted notices on apartment doors

frequently proved ineffective and in

which personal service was generally

attempted only once. The Court noted

that in previous decisions, where

"Dractical obstacles to providing

personal service" were invcelved, that it

STs

had “allowed judicial proceedings to be

prosecuted insome situations on_ the

basis of procedures that do not carry

with them the same certainty of actual

notice that inheres in ‘personal

service." Id. US at 449, S.Ct. at 1878,

Leeae &t 255. Quoting Mullane, supra,

the Court further stated that due

process requied that "notice [be]

reasonably calculated, under all of the

circumstances, to apprise interested

parties of the pendency of the action

and afford them an opportunity to

present their objections." Id.

Further, the Court in Greene noted

that the nature of an action has a

"bearing on a constitutional assessment

of the reasonableness of the procedures

employec." Id., US at 450, 451, S.Ct.

at 1978, 1979, L.Ed 2d at 255, 256.

-38-

The character of the action

reflects the extent to which

the Court purports to extend

its power, and thus may

roughly describe the scope of

potentional adverse

consequences to the person

claiming a right to more

effective notice. Bur "{ajll

proceedings like all rights,

are really against persons."

In this case, appellees have

been deprived of a specific

interest in property: indeed

of the right to continued

residence in their homes...

The sufficiency of notice must

be tested with reference to

its ability to inform people

of the pendency of proceedings

that affect their interests.

In arriving at the

constitutionality of a

procedure established by the

state to provide notice in a

particulr class of cases "its

effect must be judged in the

light of its practical

application to the affairs of

men as they are ordinarily

conducted."

Id.

In the instant case, the United

judgment from the Appellants in

States sought and received a money

amount which would deprive the

Appellants of every worldly possession,

including their homes, as well as

deprive the Appellants of their very

livelihood. This is more important

since these civil penalties are not

dischargeable in bankruptcy. See, 11

USC 523. The Court went on in Greene to

note that where personal service was

ineffectual "notice by mail may be

reasonably relied upon to provide

interested persons of actual notice of

judicial proceedings." Id. US at 455,

S.Ct. at 1881, L.Ed 2d at 258. However,

the Court made it clear that although

the mail service might be used _ to

"enhance the reliability of an otherwise

unreliable notice procedure", the

"continued exclusive reliance on an

effective means of service is not notice

~40-

‘reasonably calculated to reach those

who cold be easily informed by other

means at hand'." Id.

In the instant case, personal

service was not employed when it easily

could have been obtained. The United

States relied solely on service by mail

despite the fact that each of the

letters was returned marked "refused" or

"unclaimed". The United States never

even attempted to serve McCullah by mail

or otherwise after May of 1980.

Further, in the instant case, it is not

the real property of the Appellants

which is the subject of controversy, but

an action against them personally based

upon mailed notices upon which after the

initial NOV and CO in October 1979 the

United States exclusively relied.

When a proceeding will adversly

eas

oh 1-

affect the liberty or property interest

of a person, notice by mail fails to

meet the minimum constitutional

requirements o due process when it does

not insure actual notice. Mennonite

Board of Missions v. Adams, 462 US 791,

103 S.Ct. 2706, 2712, 77 L.Ed 2d 180,

188, (1983). Given such facts of this

case, the regulations and the United

States' ineffectual attempts at service

pursuant thereto failed to meet the

minimum constitutional requirements of

due process.

Leading cases addressing service of

process by mail generally were decided

in the context of nonresident

corporations or motorists. E.g-, Hess

v. Pawloski, 274 US 352, 47 S.Ct. 632,

71 L.Ed 1091; Flexner v. Farson. 248 US

289, 39 S.Ct. 97 63 L.Ed 250 (1919);

Henry L. Dohrety and Co. v. Goodman, 294

US 628, 55 S.Ct. 554 L.Ed 11CO (1935);

Wuchter v. Pizzutti, 276 US 13, 48 S.Ct.

259m 72 L.Ed 446, (1928). In Hess,

supra, the Supreme Court upheld the

constitutionality of a state statute

conferring jurisdiction over a

nonresident motorist by the device of

the nonmotorist's implied consent to the

appointment of a state official for the

acceptance of service of process.

However, critical to the decision in the

Hess case was the following language

included in the statute under review:

-»-Provided, that notice of such

Service and a copy of the process

are forthwith sent by registered

mail by the plaintiff to the

defendant, and the defendant's

return receipt and the plaintiff's

affidavit of compliane herewith are

appended to the writ and entered

with the declaration. The court in

anich the action is pending may

order such continuances as may be

necessary to afford the defendant

aoe

-43-

reasonable opportunity to defend

the action.

Id. US at 354, 356, S.Ct. at 633, L.Ed.

at 1094. Further, a law which purports

to make service complete upon an implied

designated agent, without a provision

providing that the designated agent

shall communicate such notice to the

real defendan, is unconstitutional.

Wuchterv. Pizzutti, supra, US at 19, 48

S.Ct. at 260, 72, L.Ed at 449 (1928).

The fiction of implied consent to

service of process upon an alleged agent

under a statute purportedly authorizing

such service does not apply to

individual nonresidents doing business

in the state. Flexner v. Farson, 248 US

289, 39 S.Ct. Reporter 97, 63 L.Ed. 250

(1919). In Flexner, the Supreme Court

upheld a ruling by the Illinois Supreme

Court declaring a Kentucky statute

DCAD RP GAS CREME REDE A

anus

unconstitutional which purported to

authorize such service and that

judgment founded upon such service was

void. Id., US at 293, S.Ct. at 98

ee. 86t | |6255- Thus, as applied t

individual operators, 30 CFR 722.14(a

is unconstitutional under the rational

of Flexner, supra. Quit a differen

situation arises where the defendant ha

established a business and an office i

a particular office, and has registere

T } 7+ wp 12 at = ~ =~ + ro

Under such circumstances, a statut

the Defendant may withstan

constitutional objections becaus

ahS =

*..-there is not only reasonable

probability, but practicable moral

certainty that the defendant will

receive actual notice of the pendency of

the action." Id. US at 627, S.Ct. 554,

L.Ed. at 1099. 30 CFR Sec. 722.14 does

not provide with such certainty that

actual notice of an alleged violation

will be given to an operator. The facts

in the instant case show that there was

no agent, real or implied, upon whom

service could be made on behalf of the

Appellants and that in fact Appellants

did not receive actual notice of the

alleged violations, cessation orders and

proposed assessments.

The unconstitutionality of 30 CFR

See. 722.14 is further compounded by the

Office of Surface Mining's total

disregard of the due process

46.

requirements set forth by the United

States Supreme Court in a long line of

decisions, supra, and the agency's

disregard of objections raised to its

provisions based upon the same rationale

expressed by the Supreme Court. The

text of 30 CFR Sec. 722.14 was set forth

as a proposed rule on August 20, 1979.

4y FR 48720. The supplementary

information preceding the full text of

Section 722.14 included the following:

The director, Office of

Surface Mining, has determined

that the proposed modification

is not significant and does

require the preparation of a

regulatory analysis.

The proposed revised

Section 722.14, which conforms

to similar language in the

permanent regulations, Section

843.14, explains in greater

detail the manner for service

of notices of violations,

cessation orders and show

cause orders. It also states

expressly OSM's interpretation

of its existing regulations

icine miele

-47-

regarding service, namely,

that service is complete upon

tender and shall not be deemed

incomplete because of refusal

to accept. Thus, for

instance, a person who refuses

to accept certified mail is

deemed to have been served

with that mail. The revised

Section 722.14 also provides a

mechanism by which agents may

be designated for service of

these notices and orders.

However, service on designated

agents is optional -- the

Office does not have to serve

a designated agent if for

instance, it has served the

person in charge of the

operation.

It seems equally clear that the Office

of Surface Mining's explicit view that

the modifications governing service of

process are "insignificant" have

unconstitutionally tainted the agency's

regulations and actions taken pursuant

to such regulations. The Office of

Surface Mining reiterated its lack of

concern for ‘ice of process when the

final rule was published. 45 FR 2626.

ee Ll

rte

> | Lo vin se

For example, the Supplementary

information preceding the final rule

contained the following language:

»~ee-a person who refuses to

accept certified mail is

deemed to have been served

with that mail. This includes

failure to pick up such mail

at the post office. Service

will be made at the mine site,

where possible, but failure to

do so will not’ invalidate

proper service by mail.

However, under the Supreme Court's due

process decisions, the OSM's

interpretation of "proper service by

mail" is in fact improper and

unconstitutional, and does not provide

for actual notice to the Defendant.

Valid concerns with the provisions of

Section 722.14 were expressed in

comments to the proposed modification to

Section 722.14:

Almost every commenter

objected to the second

sentence of Section 722.14

(a)(1) which permits’ service

on "any individual at the site

who appears to be an employee

or agent of the person to whom

the notice or order is

issued," where the designated

agent or individual who

appears to be in charge cannot

be located at the site. The

commenters felt that service

on such persons often results

in a notice or order being

lost or never being delivered

to a responsible individual

who will take proper action.

Therefore, the office has

changed this subsection.

The supposed change was "pro forma" only

and failed to meet the real concern

expressed by the commenters and failed

to conform the regulation to the

Substantive due process requirement that

the Appellant actually be notified of a

pending action. This is particularly

evident in light of the addition of the

mailing provision added as Subsection

(a)(2), the agency's stated view that

such modifications relating to service

-50-

of process were “insignificant" and that

service by mail is complete whether or

not service upon the Defendant or a

purported agent has first been attempted

and whether actual notice was in fact

received under section 722.14(a)(2).

it is clear that the OSM's attitude

and the regulations promulgated in the

shadow of the agency's attitude toward

service of process failed to measure up

to the standards espoused by the Supreme

Court in its decisions:

Beginning with Mullane,

this court has recognized,

contrary to the earlier line

of cases "that an adverse

judgment in rem directly

effects the property owner by

divesting him of his rights in

the property before the

court... In rejecting the

traditional justification for

distinquishing between

residents and nonresidents and

between in rem and in personam

actions, the Court has not

left all interested claimants

to the vagaries of indirect

-51-

notice. Our cases have

required the state to make

efforts to provide actual

notice to the interested

parties comparable to the

efforts that were previously

required only in in personam

actions.

Mennonite Board of Missions v. Adams,

supra, S.Ct. at 2710 n.3, 77 L.Ed2d at

186 n.3, (1983).

Since the instant case is one for

collection of a personal money judgment.

against the Appellants, it is clear that

due process was denied to the Appellants

under the older Supreme Court decisions

reviewing -in personam actions and

certainly under the recent decisions

erasing the due process.’ distinctions

between in rem and in personam actions.

Finally, assuming arguendo, as

alleged by United States, that’ the

Appellants were furnished with copies of

the notices of violation and cessation

sO evo

PhO

‘

orders as attachments to the complaint

filed in a separate action in the

district court styied United States of

America v. Pryor Bolton and Glenn

McCullah Civil Action No. 3-80-320 it

J >

would be immaterial. First, purported

service by any means other than that

authorized by appropriate rule of law is

ineffectual. Wuchter v. Pizzutti, 276

uSC 13, 2&8, 48 S.Ct. 259, 262, 72 L.Ed

446, 452 (1928). This is even more true

he rule itself is

unconstitutional, as in tne instant

case. Third, since Civil Action No.

3-80-320 was initiated after the time

had run in which the Appellants would

have had the opportunity to request

public hearings and pursue other

administrative remedies under the Act,

such notice would be worthless and

constitutionally ineffective. Such

"notice" would not provide the

Appellants an opportunity to be heard at

a meaningful time and in a meaningful

& 5

‘Tp

manner. Mathews v. Elcridge, 424 U

»- Equitable Principles Bar the United

States' Action In This Case or Justify

Only a Nominal Penalty.

The Government is not immune from

the application of equitable principles.

Where allegations of equitable

Principles are shown to present a valid

defense to an action brought by the

government, summary judgment in favor of

the government is improper. or United

States v. Gleaners and Farmers

Cooperative Elevator Co., 314 F.Supp.

1148 (N.D. Ind. 1970).

————————

-54-

[W]hen the sovereign comes

into court to assert a

pecuniary demand against the

citizen the court has

authority, and is under duty,

to withhold relief to the

sovereign, except upon terms

which do justice to the

citizen or subject as

determined by the

jurisprudence of the forum in

like subject matter between

man and man. The acts or

omissions of its officers, if

they be authorized to bind the

Ynited States or to shape its

czvurse of conduct as to a

particular transaction, and

they have acted within the

purview of their authority,

may in a proper case work an

estoppel against the

government.

Id. at 1150 (citing Walker v. United

States, 139 F. 109, 413(M.D. Ala. 1905).

Justice requires under the facts of the

instant case that the government be

barred from obtaining a money judgment

against the defendants based upon the

equitable principles of estoppel and

laches.

-55-

The Appellants turn now to the

Government's failure to abide by the Act

and its own regulations, its untimely

delay in notifying the Appellants of the

huge amount of the penaities assessed

upon the alleged violations and

cessation orders, and its failure to

apprise the Appellants of its intent to

collect such penalties in previous

litigation between the parties.

A simple review of the Government's

own documents in this case serves to

show the Government's lack of adherence

to the regulations. On October 10,

1979, NOV No. 79-2-12-36 and COQ No.

79-2-12-18 were issued by the Government

naming the Appellants as alleged

violators of the Act. On March 31,

1980, NOV No. 80-2-10-16 and CO No.

80-2-10-4 were issued in the name of the

Appellants. On May 8, 1980, CO No.

80-2-23-14 was issued.

On November 7, 1979, a notice of

proposed assessment of civil penalty in

the amount of $13,500 00 was allegedly

sent to the Appellants for NOV No.

79-2-12-36. Also, on November 7, 1979,

a notice of proposed assessment of civil

penalty in the amount of $3,500.00 was

allegedly sent to the Appellants on CO

No. 79=-2-12-18. On April 21, 1980, a

notice of proposed assessment of civil

penalty in the amount of $2,800.00 was

allegedly sent to the Appellants on NOV

No. 80-2-10-16.

On May 7, 1982, a notice of

proposed assessment of civil penalty in

the amount of $135,000.00 was allegedly

sent to the Appellants- on CO No.

80-2-10-4, over two years after’ the

-57-

issuance of said cessation order. Also,

on May 7, 1982, a notice of proposed

assessment of civil penalty in the

amount of $45,000.00 was allegedly sent

to the Appellants on CO No. 80-2-23-14,

also two years after the issuance of

said cessation order.

The Act requires that:

Each notice or order issued

under this section shall be

given promptly to the permittee

or his agent by the Secretary

or his authorized

representative who issues such

notice or order... Provided,

That any notice or order issued

purusant to this section which

requires cessation of mining by

the operator shall expire

within thirty (30) days of

actual notice to the operator

unless a public hearing is held

at the site or within such

reasonable proximity to’ the

site that any viewings of the

site can be conducted during

the course of public hearing.

30 USC Sec. 1271(a)(5). Actual notice

of each notice or order issued is

-58-

required by 30 USC Sec. 1271(a)(5), and

the Appellants were not given actual

notice of the notices and orders under

review in the instant case. It already

has been shown that the implementing

regulations fail to insure that such

actual notice will be given, and in fact

they failed to adhere to the

requirements of the Act under which they

were promulgated.

Likewise, the civil penalties

assessed against the Appellants’ were

assessed in blatant disregard of the

requirements of the Act. Civil

penalties are governed by 30 USC Sec.

1268, which provides in pertinent part:

(b) A civil penalty shall

be assessed by the Secretary

only after the person charged

with a violation described

under subsection (a) of this

section has been given an

opportunity for a public

hearing....

-59-

notice or order charging that

a violation or Act has

occurred, the Secretary shall

inform the operator within

thirty (30) days of the

proposed amount of said

penalty...

(Emphasis added).

The United States failed to insure that

the Appellants were given actual notice

of the notices of violation and

cessation orders. Therefore, the

Appellants could not avail themselves of

their right to an opportunity for a

public hearing, and the civil penalties

assessed in this case were issued in

violation of subsection (b) of 30 USC

Sec. 1268. Equally important is the

fact that the OSM did not even attempt

to serve two civil penalties totalling

$180,000.00 on the Appellants” until

fully two (2) years had passed from the

-60-

issuance of the cessation orders upon

which the civil penalties were based.

The United States' contention that

the civil penalties are nonetheless

valid because of the Appellants'

involvement in United States v. Pryor

Bolton and Glen McCullah, Civ. Action

No. 3-80-320 (E.D. Tenn., filed July 22,

1980), is without consequence,

particularly regarding the $180,000.00

in civil penalties assessed for

cessation order no. 80 -2-10-4 and

cessation order no. 80-2-23-14. The

notices of proposed assessment upon the

latter cessation orders were not even

issued until nearly two (2) years after

the institution of Civil Action No.

3-80-320.

By the time the Government brought

Civil Action No. 3-80-320, it already

nad failed to insure tnat tne Appellants

were given actual notice of tne notices

of violation and cessation orders an’

nad Jeprived tne Appellants of § ai}l

administrative remedies. During tne

course of proceedings in Civil Action

No. 3=+80-320, tne Appellants were lea’

to believe tnat tne United States would

”

eek no furtner action against tne

Appellants base. Jpon tne alleges

violations and cessation orders otner

tnan requiring reclamation work to the

mine site in question. Tne autnority in

effect to waive tne collection of civil

penalties is fully witnin tne purview of

tne Act pursuant to 30 USC sec.

1271(a)(5), wnicn provides in pertinent

part;

...Any notice or order

issue4 pursuant to tnis

section may be modified,

vacated, or terminated by the

een

Secretary or his authorized

repesentative.

See also, 30 CFR Section

723.18(b) (3)( ii)

The Government should not

allowed to collect the oppressive civil

penaities sought in this case.

The Goverment can .be

estopped by the conduct of its

agents within the scope of

their authority. The notion

that the Government is immune

from estoppel is only true

when we are presented with an

attempted estoppel of the

government resulting from the

erroneous, illegal, or

unauthorized acts of its

agents. In tnese situations,

the United States cannot be

estopped.

The policy considerations

behind these estoppel rules

are liked with those providing

the rationale for soverign

immunity. They reflect a

desire to conserve the public

treasury and resources held by

the government for the use and

welfare of us all, from

depletion through the

oversight and error of a few

individuals. But this

laudable husbanding of

ibs.

resources cannot be carried so

far as to permit the

government to deal

ecapriciously with its

citizens.

Concern with this latter

aspect of governmental

estoppel has produced

commentary highly critical of

the harsh rules in this area.

Moreover, an increasin number

of judicial decisions have

demonstrated a changing

attitude in the application of

estoppel against the

government, resulting in its

more frequent availability,

even where the estoppel is

created by unauthorized,

improper, or illegal agents'

acts.

Oil Shale Corporation v.

Morton, 370 F.Supp. 108, 125

(D, COLO. 1973).

Equitable principles applied to the

facts of this case require that the

Government be barred from collecting the

oppressive civil penalties awarded by

the district court.

Further, a refusal to assert

estoppel against the government by no

means prevents the court from affording

the Appellants relief based upon the

circumstances which otherwise would

raise the grounds for estoppel. When

estoppel is rejected as to the

government in a civil penalty

proceeding, the circumstances7~ should

entitle the government to nothing more

than a nominal award. United States v.

American Greeting Corp., 168 F.Supp. 45

(N.D. Ohio 1958) aff'd per curiam, 272

F2d 945 (6th Cir. 1959). Finally, the

Defendant's financial ability to pay any

penalty is a factor for the court's

consideration in determining the amount

of any penalty. United States v. Ancorp

National Services, 367 F.Supp. 1221

(S.D.N.Y. 1973).

Therefore, the trial judge was

misinformed by counsel for the United

-65-

States when he inquired about his

discretion involving the amount of the

penalty at the hearing August 28, 1984.

Cera 49).

IV. Equal Protection Argument

Under the circumstances of this

case, the Government cannot defeat an

equal protection attack Simply by

meeting the rational basis test.

Because of the fundamental rights which

have been interferred with ae strict

scrutnity analysis necessary. Regan v.

Taxation With Representation Of

Washington, 461 US 540, 103 S.Ct. 1997,

76 L.Ed2d 129 (1983). The implementing

regulations on their face and as

applied, relating to the fundamental

rights of notice and the opportunity to

be heard, cannot withstand a

constitutional challenge, whether based

~66-

upon a rational or ae strict scrutiny

analysis.

Further, the prepayment provision

of 30 USC Sec. 1268(c) is invalid on its

face and as applied to the circumstances

of the instant action. The presumption

and policy in favor of reviewability of

agency action is very strong. Abott

Laboratories v. Gardner, 387 US 136, 87

S.Ct. 1507, L.Ed2d 681 (1967). The

Department of Interior is an executive

department specifically subject to

review under the Administrative

Procedure Act. See, 5 USC Sec. 101,

Sec. 551, and Section 702. Section

1268(c) of title 30 restricts access to

the courts unreasonably and is in

conflict with the statutory presumption

of review given to all litigants coming

within the purview of 5 USC Sections 701

~67-

through 706.

Although the words of a particular

statute may presumptively preclude

review of certain facts or conclusions,

a constitutional challenge to the

statute upon which agency action is

predicated is not barred because of such

presumptive unreviewability. Johnson v.

Robison, 415 US 361, 367, 97 S.Ct. 1160,

1166, 39 L.Ed2d 389, 398, (1974).

Prepayment in full of a civil penalty as

a condition to receive review of alleged

arbitrary, capricious, illegal or

unconstitutional agency action, is an

undue burden on the defendants’

Statutory right to review and cannot be

Sustained. Lindsay v. Normet, 405 US

56, 76-78, 92 S.Ct. 862, 875-877, 31

L.Ed2d 36, 52-53 (1972).

In effect, the prepayment

-68-

provisions of the Act create an invalid

distinction between alleged violators

who can afford to pay the full amount of

an assessed civil penalty and are -

allowed judicial review and those who

cannot afford to pay and, therefore, are

barred from seeking redress. The

legitimate interest the Government may

have in conditioning access to the

courts on prepayment of filing fees in

order to defray the cost of

administration is not served by

requiring prepayment of a civil penalty.

A filing fee may be raised relatively

easily regardless of financial condition

and is a mere pittance in comparison

with a civil penalty of $200,000.00.

Therefore, cases upholding payment of

filing fees even from indigent persons

are inapposite. see, Cokes United

-69-

States v. Kras, 409 US 434, 933 S.Ct.

631, 34 L.Ed2d 626 (1973).

Equally in opposite are cases

upholding requirements that alleged tax

liability be prepaid in order to

challenge the assessment of the

challenged amount. In such cases, there

is a strong presumption that the

disgruntled taxpayer has financial

resources necessary to make prepayment

because the liability itself is based

upon the income or assets of the

taxpayer. A civil penalty in no way

reflects the alleged violator's ability

to pay. Likewise, conditioning access

to the court upon prepayment of a full

civil penalty without providing an

alternative for one who cannot afford to

prepay is a violation of equal

protection. Such a failure is a

deprivation of

Significant right

process context,

impermissable.

and,

fundamental and

as in the due

constitutionally

afi

CONCLUSION

For the foregoing reasons, it

respectfully requested that the Petition

be granted.

RESPECTFULLY SUBMITTED, this

D4 - aay of Kovuem , 1986.

VID A. KHALTER, II

Attorney for Appellants

P. O. Box 11841

901 Bearden Drive

Knoxville, TN 37939-1841

(615) 584-0241

the

aT2x

APPENDIX

o73-

INDEX TO A”°PENDIX

Opinion of Court of Appeals

Memorandum & Order of District

Court Filed 05/24/84

Memorandum & Order of District

Court Filed 08/31/84

United States Constitution:

Amendment Five

28 USC Sec. 1254(1)

28 USC Sec. 1291

28 USC Sec. 2101(c)

30 USC Sec. 1268(b)

30 USC Sec. 1268(c)

30 USC Sec. 1268( 4d)

30 USC Sec. 1271(a)

Rule 56, Federal Rules

of Civil Procedure

Page

UNITED STATES COURT OF APPEALS FOR THE

SIXTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff/Appellee,

PRYOR BOLTON and GLEN McCULLAH

d/b/a PRYOR AND GLEN COAL CO.,

Defendants/Appellants.

)

ORDER

BEFORE: MARTIN, JONES and WELLFORD,

Circuit Judges.

<The

PER CURIAM. Defendants, Pryor

Bolton and Glenn McCullah, d/b/a Pryor

and Glenn Coal Company (P&G Coal),

appeal from a final judgment entered in

favor of the United States for $199,800

plus interest in this action for the

collection of civil penalties assessed

against defendants pursuant to 30 U.S.C.

Sec. 1268(d), a part of the Surface

Mining Control and Reclamation Act of

1977 (Act).

The district court, after granting

partial summary judgment to the United

States on the various issues of law

before the court, set for trial the

factual issue of whether defendants had

received notice of asserted violations

and cessation orders.

This case involves civil penalties

assessed against Bolton and McCullah for

violations of the Act, based on two

notices of violations (or "NOVs") and

three cessation orders (or "COs") issued

by the Office of Surface Mining (OSM) of

the Department of the Interior in 1979

and 1980. On July 22, 1980, a eivil

action was filed against defendants

under Section 521(c) of the Act, 30

U.S.C. Sec. 1271(c), to compel their

compliance with the five prior notices

and orders involved in this case. On

November 1, 1983, the district court

ordered the defendants to perform

certain remedial work at the mine site

in question and entered an injunction

against future surface coal mining

operations not in compliance with the

Act.

The complaint in this prior

action,as well as defendants' answer and

the district court's order, set out the

facts surrounding the attempts at

service of the five notices of violation

and cessation orders on defendants.

-T6-

Defendants’ answer does not raise any

objection with respect to the

government's means of service. Because

this prior action was for an injunction,

the government did not articulate in its

complaint the facts surrounding’ the

attempted service of the notices of

proposed assessment, some of which were

served prior to the action's

commencement.

Proposed assessments of civil

penalties for these citations were sent

to defendants in 1979 and 1980.

Defendants did not take an

administrative appeal from the proposed

assessments and to. OSM issued final

orders requiring payment of the amount

of controversy. Defendants did not pay

the penalties and, on January 3, 1984,

OSM filed this collection action, which

is the subject of this appeal.

Defendants raise several legal

challenges to the collection action,

specifically challenging the

constitutionally of the service of the

Bie

citations in question by certified mail.

In its order of May 24, 1984, the

district court found that notice by

certified mail, as provided by 30 C.F.R.

Sec. 722.14(a) and 723.17(b) (1984), was

constitutionally adequate. Determining

that "[i]t is reasonable to assume that

if persons refuse to accept delivery or

collect their mail, the mail has in fact

reached them," the court upheld the

provisions of the regulations which find

adequate service where there is refusal

to accept delivery. The court rejected

defendants’ argument that OSM's delay in

assessing penalties estopped the United

States from filing a collection action

against them, relying on United States

v. Log Mountain Mining Co., 550 F.Supp.

811 (E.D. Tenn. 1982), aff'd without

opinion sub nom. United States v. Moore,

-78-

734 F.2d 17 (6th Cir. -1984), cert.

denied, 105 S.Ct. 247. The trial court

also found defendants' equal protection

argument meritless. Reserved for trial

was the question whether defendants

received sufficient notice of the five

citations upon which the assessments are

based.

Defendants submitted a surface

mining permit application to the

Tennessee Division of Surface Mining

under the P&G Coal name as a

partnership. Because the initial

application was incomplete, the

application was merely stamped

"received" by the state office on

September 21, 1979. Each defendant's

home address was given in the

application, Bolton's address being

given as P&G Coal's address.

Even before the complete

application was submitted, defendants

had commenced mining operations contrary

to law. A state inspecton report dated

October 4, 1979, indicates that mining

activity was in progress as early as

September 5, 1979. A cease order was

issued by state inspectors on September

25, 1979.

On October 10, - 1979,

representatives of the Secretary of

State of the Interior inspected P&G

Coal's operation in response to the

State inspection report and cease order.

At the conclusion of their inspection,

the Secretary's representatives issued

the first Cessation Order for mining

without a permit and the first Notice of

Violation for several performance

standard violatioas. Copies of both

documents were tendered to Bolton at the

mine site, but he refused to accept

them. Copies of the documents were also

sent by certified mail to P&G Coal at

its address given in its permit

application. They were returned marked

"refused". Copies of the documents were

then sent by regular mail to the same

address, and they were not returned.

On November 7, 1979, the OSM

Assessment Office sent P&G Coal notices

of the proposed assessment of civil

penalties for the prior violations cited

in the COs and NOVs. The notices of

proposed assessment were likewise sent

by certified mail to the address for the

company stated in the permit application

and, again, refused.

Later, a helicopter overflight of

the mine site showed that the operation

-81-

was still in progress, in violation of

the CO. The next year a follow-up

inspection of the mine site revealed

that the operation had been atandoned

without reclamation, in violation of the

applicable law. Another CO was issued

for defendants' failure to abate the

violations previously cited in a NOV.

Another NOV was issued for dfendants'

failure to reclaim and restore their

mine site.

Copies of the new citations were

also sent by certified mail to each

defendant. Bolton's were returned

marked "refused", while those sent to

McCullah were returned marked

"unclaimed". Both sets of documents

were then mailed again to each defendant

by regular mail.

Notice of proposed assessment for

the last NOV was sent by certified mail

to P&G Coal's address, and it was

returned marked "out of business".

On May 6, 1980, a second follow-up

inspection revealed that the site

remained abandoned and unreclaimed. A

representative of the Secretary

therefore issued still another CO for

defendants' failure to abate the

violations cited in the previous nov,

and the described procedure was again

followed. The copy sent to Boiton was

returned marked "out of business", while

the copy sent to McCullah was returned

marked “unclaimed". Notices of proposed

assessment for the latest COs were sent

by certified mail to P&G Coal's address

and returned as "refused".

Both a final order of penalty

assessment and a final demand letter

«83.

were issued in 1981 and 1982 for each of

the five proposed penalty assessments.

Each of the ten documents, then, was

sent by certified mail to the P&G Coal

address given in the permit application,

and each of them was returned marked

"refused".

Defendants called no witnesses at

the hearing, but rather informed the

court through their attorney tnat "Mr.

Bolton... did not specifically refuse

the [Notice of Violation]. It was his

practice to specifically refuse any and

all certified mail regardless of the

identity of the sender..." Affidavits

submitted by the defendants at the

request of the district court stated

that Bolton and McCullah "dissolved

their partnership ... in November of

1979" and that after such dissolution

-84-

neither had “authority to accept notice

on behalf [of the other]."

The Act provides for issuance of

cessation orders and assessment of civil

penalties against any permittee who

violates the Act. 30 U.S.C. Sec.

1268(a). The person charged with a

violation may contest the charge in

administrative and judicial proceedings

by forwarding the proposed amount of the

penalty to the Secretary of the

Interior. 530.0 «SC. Sec. 1268(c).

Failure to forward the money to the

Secretary to be placed in escrow within

30 days from notice of the proposed

penalty results in forfeiture of all

legal rights to contest the violation or

the amount of the penalty. Id.

This provision, not directly at

issue here but mentioned in defendarts'

Brief, has withstood constitutional

challenges. See, Blackhawk Mining Co.

«$5.

v. Andrus, 711 F.2d 753 (6th Cir. 1983);

Graham v. Office of Surface Mining

Reclamation and Enforcement, T22 F.2d

1106 (3d Cir. 1983) (citing cases).

Regulations promulgated by the

Secretary set forth the procedure for

service of notices of violation and

cessation orders and are set forth in

pertinent part:

(a) A notice of violation

or cessation order shall be

served on the person to whom

it is directed or his

designated agent promptly

after issuance, as follows:

(1) By tendering a copy at

the surface coal mining and

reclamation operation to the

designated agent or to the

person to whom it is directed.

If no such agent is reasonably

available, a copy may be

tendered to the individual

who, based upon reasonable

inquiry by the authorized

representative, appears to be

in charge of the surface coal

mining and reclamation

operation referred in the

notice or order. If no such

individual can be located at

the site, a copy may 0be

tendered to any individual at

-86-

the site who appears to be an

employee or agent of the

person to whom the notice or

order is issued. Service

shall be complete upon tender

of the notice or order and

shall not be deemed incomplete

because of refusal to accept.

(2) As an aiternative to

paragraph (a) (1) of this

section, service may be made

by sending a copy of the

notice or order by certified

mail or by hand to the person

to whom it is issued or his

designed agent. Service shall

be complete upon tender of the

notice or order or of the mail

and shall not be deemed

incomplete because of refusal

to accept.

30 C.F.R. Sec. 722.14(a)(1)-(2) (1985)

(emphasis added). The regulations also

provide for the service of notices of

assessment of civil penalties in a

Similar manner:

(b) The Office shall serve

a copy of the proposed

assessment and of the

worksheet showing the

computation of the proposed

assessment to the person to

whom the notice or order was

-87-

issued, by certified mail,

Within 30 days of the issuance

of the notice or order. as

the mail is tendered at the

address of that person set

forth in the sign required

under 30 CFR Te -TSTB) or at

any address at which that

person is in fact located, and

he or she refuses to accept

delivery of or to collect such

mail, the requirements of this

paragraph shall be deemed to

have been complied with upon

such tender.

30 CoP eR, Sec. 723.17(b) (1985)

(emphasis added).

The district court also noted:

Postal service regulations

provide that "[clertified

mail...ewill be delivered to

the addressee or his

authorized representative."

Domestic Mail Manual, Chapter

9, Subchapter 910, Par 912,

Sec. 912.51 (Issue 13,December

29; 1983), incorporated by

reference in 39 CFR Sec.

111.12111.5 (1983)

(hereinafter DMM). If for any

reason, the carrier cannot

deliver the certified article,

he leaves a notice or arrival

at the address and the article

is held at the post office for

the addressee. DMM Sec.

912.55. If the article is not

called for within 5 days, a

second notice is issued. Id.

If the article is not called

for within 5 days, a _ second

notice is issued. Id. If the

article is not called for or

redelivery requested, the

article is returned to the

sender.

The district court found that

defendants' willful evasion was the

basis of their failure to receive the

notices and assessments here involved.

Defendants argue, nevertheless, that

because they were unaware of the

assessment of civil penalties against

them, they were unable to contest them

administratively within the statutory

time limit. Since Sec. 722.14(a) and

723.17(b) permitted this circumstances,

the defendants argue that these

regulations are unconstitutional as

violative of due process.

Addressing the constitutionality of

-89-

the regulations authorizing service of

notice by certified mail and deeming

such service complete where the

recipient refuses to accept, to district

court wrote:

-.--AsSuming the address is

correct and the addressee is

not attempting to evade

service, it is reasonable to

assume that under most

circumstances [certified] mail

will reach the addressee.

Thus, service of notice of the

violations and penalties by

certified mail is reasonably

calculated under the

circumstances to provide

interested parties with

notice, as required by due

process. The provisions of

the regulations which state

that service of notice is not

made incomplete by refusal to

accept delivery or to collect

mail does not render the

regulations unconstitutional.

It is reasonable to assume

that if person refuse to

accept delivery or collect

their mail, the mail has in

fact reached them. See,

Hoffman v. National Equipment

Rental, Ltd., 643 F.2d 987,

(uth Cir. 1981). For the

foregoing reasons the Court

: as y - j a) - “Ke veer

ee S Dio? _ tate hh

7 ms a) oe oe : ce ia ane a oi

= ) :

Ee 7

-90-

finds the regualtions

constitutional and grants

Summary judgment on the issue

of law for plaintiff.

However, because defendants

Say they never received notice

of the violations and

penalties, the Court believes

this factual issue must be

tried. If in fact defendants

would be entitled to ecntest

the fact of violation and the

amount of penalty at an

administrative hearing, as

provided by 30 U.S.C. Sec.

1268(c).

Defendants seek to challenge this

holding by reference to Mullane v.

Central Hanover Bank and Trust Company,

339 U.S. 306 (1950); Greene v. Lindsay,

456 U.S. 444 (1982); and Mennonite Board

of Missions v. Adams, 462 0s3. 791

(1983). We find defendants' contentions

unpersuasive and affirm the district

court's conclusions.

In Mullane, the Supreme Court

upheld notice by publication in some

circumstances and enunciated the

standard for constitutionally adequate

service of process:

An elementary and fundamental

requirement of due process in

any proceeding which is to be

accorded finality is notice

reasonably calculated, under

all the circumstances, to

apprise interested parties of

the pendency of the action and

afford them an opportunity to

present their objections.

[Citations omitted.] The

notice must be of such nature

as reasonably to convey the

required information,

[eitation omitted] and it must

afford a reasonable time for

those interested to make their

appearance [citations

omitted]. But if with due

regard for the

practicalitiesand

peculiarities of the case °

these conditions are

reasonably met, the

constitutional requirements

are satisfied. "The criterion

is not the possibility of

conceivably injury but the

just and reasonable character

of the requirements, having

reference to the subject with

which the statute deals."

American Land C. v. Zeiss. 219

U.S. 47, 673; and see Blinn v.

Nelson, 222 U.S. 1, T7-

«aQ2~-

But when notice is a

person's due, process which is

a mere gesture is not due

process. The means employed

must be such as one desirous

of actually informing the

absentee might reasonably

adopt to accomplish it. The

rerasonableness and hence the

constitutional validity of any

chosen method may be defended

on the ground that it is in

itself reasonably certain to

inform those affected

{[eitations omitted], or, where

conditions do not reasonably

permit such notice, that the

form chosen is not

substantially less likely to

bring home notice than other

of the feasible and customary

substitutes.

339 U.S. at 314-15 (emphasis added).

Greene followed the strictures of

Mullane by striking down a forcible

entry or detainer statute which merely

provided for service of process by

posting a summons on the tenant's door.

In arriving at the

constitutional assessment, we

look to the realities of the

ease before us: In determining

the constitutionality of a

wi Re

procedure established by the

State to provide notice in a

particular class of cases,

"its effect must be judged in

the light of its practical

application to the affairs of

men as they are ordinarily

conducted." North Laramie

Land Co. v. Hoffman, 268 U.S.

276, 283 (1925).

456 U.S. at 451. The Court in Greene

also expressly approved the use of mail

service in context of tenants. See,

456

Gewe at 455. In Mennonite Board of

Missions, the Court struck down a

requiring publication notice of a

law

tax

sale of real property to a known

mortgagee where service by mail

possible, but in this case, as

Mullane and Greene, service by mail

approved.

None of the cases cited

defendants, moreover, contemplate a

of circumstances present here where

party raising the due process claim

was

set

the

has

-94-

earlier attempted to thwart the very

notice he complains about not receiving.

One case cited by the district court

deals with the similar issue. In

Hoffman v. National Equipment Rental,

Ltd., 643 F.2d 987, 990 (4th Cir. 1981)

When there was service of process by

certified mail returned marked

"refused," the court found no due

process violation. We agree with the

rationale.

we detect no clearly eroneous

finding made by the district court, and

as noted, we agree with the conclusions

reached as to each defendant. It is of

particular significance that defendants

were parties to an action by the

government for an injunction involving

the five notices and orders which form

the basis for the assessments on which

Fare ee eee ars cee VO

-95-

this collection action is based. They

may be presumed to be aware of the

governement's actions and the basis

therefor apart from their willful

evasion.

Defendants argue that the penalties

here asserted are void because the

government failed to abide by the

statutory scheme, because of failure to

inform them of the proposed penalty

within 30 days. 30 U.S.C. Sec

1268(c). United States v. Log

Mountain Mining Co., 550 F.Supp. 811

(E.D. Tenn. 1982), aff'd without opinion

sub nom. United States v. Moore, 734 734

F.2d 17 (6th Cir. 1984), cert. denied,

105 S.Ct. 247 is dispositive on this

issue, and we accordingly find no basis

defendants' contention.

ec. 1268(¢c) provides in

30 U.S.C. S

pertinent part:

t4)

~96-

Upon the issuance of a

notice or order charging that

a violation of this chapter

has occurred, the Secretary

shall inform the operator

within thirty days of the

proposed amount of said

penalty. The person charged

with the penalty shall then

have thirty days to pay the

proposed penalty in full or,

if the person wishes to

contest either the amount of

the penalty or the fact of the

violation, forward the

proposed amount to the

Secretary for placement in an

escrow account.

(Emphasis added).

Finally, the defendants argue that

300 s«&WW SC Sec. 1271(a)(5) operates

against imposition of the penalties,

citing a portion of that section:

eeeLajny notice or order

issued pursuant to this

section which requires

cessation of mining by the

operator shall expire within

thirty days of actual notice

to operator unless a

publi. hearing is held at the

site or within such reasonable

proximity to the site that any

viewings of the site can be

conducted during the course of

public hearing.

We read this part of the statute to

provide that a cessation order expires

Within 30 days of "actual notice". It

does not require personal service as

argued by defendants.

Defendants! estoppel and laches

argument is without merit as well. The

defendants do not allege what acts they

undertook to their prejudice in reliance

upon the government's alleged delay in

prosecution. See Sigmon Fuel Co. v.

Tennessee Valley Authority, 531 F.Supp.

80, 82 (E.D. Tenn. 1982), rev'd on other

grounds, 709 F.2d 440 (6th Cir. 1983).

We affirm the district court's judgment

in all respects.

MANDATE ISSUED: December 20, 1985.

ENTERED BY ORDER OF THE COURT

/s/By: John H. Hehman, Clerk

UNITED STATES COURT OF APPEALS FOR THE

SIXTH CIRCUIT

UNITED STATES OF AMERICA,

"NY NY NY

3-84-14

PRYOR BOLTON and GLEN McCULLAH )

d/b/a PRYOR AND GLEN COAL CO., )

MEMORANDUM

Plaintiff, United States of America

brings this civil action to recover

civil penaities assessed against

defendants pursuant to the Surface

Mining Control and Reclamation Act of

1977 [the Act], 30 U.S.C. Sec. 1201 et.

seq. This case is before the Court on

cross-motions for summary judgment.

The Act provides for issuance of

cessation orders and assessment of civil

penalties against any permittee who

violates the Act. 30 oe Ge Sec.

1268(a). The person charged with a

-99-

violation may contest the charge in

administrative and judicial proceedings

by forwarding the proposed amount of the

penalty to the Secretary of the

Interior. 30. «68.560. Sec. 1268(c).

Failure to forward the money to _ the

Seretary within 30 days from notice of

the proposed penalty shali result in

forfeiture of all legal rights to

contest the violation or the amount of

the penalty. Id. The Secretary's

regulations provide that a notice of

violation or cessation order shall be

served promptly after issuance, as

follows:

(1) By tendering a copy at

the surface coal mining and

reclamation operation to the

designated agent or to the

person to whom it is directed.

If no such agent is reasonably

available, a copy may be

tendered to the individual

who, based upon reasonably

inquiry by the authorized

The

proposed assessment

representative, appears to be

in charge of the surface coal

mining and reclamation

operation referred to in the

notice or order. If no such

individual can be located at

the site, a copy may be

tendered to any individual at

the site who appears to be an

employee or agent of the

person to whom the notice or

order is issued. Service

shall be complete upon tender

of the notice or order and

shall not be deemed incomplete

upon tender of the notice or

order amd shall not be deeded

incomplete because of refusal

to accept.

(2) As an alternative to

paragraph (a) (1) of this

section, service may be made

by sending a copy of the

notice or order by certified

mail or by hand to the person

to whom it is issued or is

designated agent. Service

shall be complete upon tender

of the notice or order or of

the mail and shall no be

deemed incomplete because of

refusal to accept.

regulations also provide that

C.F.R. Sec. 722.14(a)(1)-(2) (1983).

the

of civil penalties

-101-

shall be served as follows:

(b) The Office shall serve

a copy of the proposed

assessment and . of the

worksheet showing the

computation of the proposed

assessment on the person to

whom the notice or order was

issued, by certified mail,

within 30 days of the issuance

of the notice or order. If

the mail is tendered at the

address of that person set

forth in the sign required

under 30 CFR 715.12(b) or at

any address at Which tnat

person is in fet located, and

he or she refuses to accept

delivery of or to collect such

mail, the requirements of this

paragraph shall be deemed to

have been complied with upon

such tender.

30 CFR Sec. 723.17(b) (1983).

Defendants say they were not served

or notified of the violations or notices

of assessments upon which this action is

based. (Affidavits of Pryor Bolton and

Glenn McCullah). Defendant McCullah

Says he was not aware of the assessment

of civil penalties until this lawsuit

-102-

was brought in January 1984. (Affidavit

of Glenn McCullah at 3). Defendant

Pryor Bolton said he was aware of the

assessment of civil penalties until late

1983. (Affidavit of Pryor Bolton at 2).

Defendants say, because they were

unaware of the assessment of violations

and penalties, they were unable to

contest administratively, within the

Statutory time limit, the assessments

and now are precluded by statute from

contesting judicially the assessments.

Thus, defendants say they have been

denied their due process right to notice

and an opportunity to be heard prior to

this action to collect civil penalties.

Defendants say they are entitled to

Summary judgment.

Plaintiff says defendant Bolton was

personally served at the mine site with

notice of violation 79<£2-12-36 and

cessation order 79-2-12-18, which

defendant Bolton refused to accept; that

cessation orders 79-<2-12-18, 80-2-10-4

and notices of violation 79-2-12-36 and

89-2-10-16 were mailed to defendants by

certified mail and were returned

"refused", "unclaimed" or "out of

business"; and that the notices of

violations and cessation orders were

then mailed by regular mail to

defendants and were not returned.

(Affidavit of Charles G. Wofford).

Plaintiff further says that notices of

proposed assessment and letters of final

order and final demand for each notice

of violation and cessation order were

mailed by certified mail to defendants

and were returned "refused". (Affidavit

of Lescer A. Smalls). Plaintiff

contends that certified mail service, as

authorized by the regulations and as

used to notify defendants of the

violations and proposed assessments,

satisfies due process. PiaintiftT

requests summary judgment on the legal

issues and a trial of the factual issue

Whether defendants were served with

notice.

Although defendants challenge the

constitutionality of both the regulation

authorizing service of notice at the

mine site, 30 CFR Sec. 722.14(a)(1), and

the regulations authorizing service of

notice by certified mail, 30 CFR Sec.

722.14(a)(2) and Sec. 723.17(b), the

Court believes it necessary to decide

the constitutionality of only the

regulations authorizing service of

notice by certified mail because all

-105-

notices of violation, cessation orders,

and notices of proposed assessments were

sent by certified mail and plaintiff

states that it primarily relied on

certified mail service.

The United States Supreme Court has

held that, prior to an action which will

affect an interest in life, liberty or

property protected by the Due Process

Clause, due process requires "notice

reasonably calculated, under all the

circumstances, to apprise interested

parties of the pendency of the action

and afford them an opportunity to

present their objections." Mullane v.

Central Hanover Trust Co., 339 U.S. 306,

314 (1950). Personal service, while

always constitutionally adequate, is not

required and if reasonably calculated to

reach interested parties, notice is not

-106-

insufficient simply because it fails to

reach. them. Id. at 313-314, 319. The

United States Supreme Court, on three

occasions, has stated that notice by

mail is sufficient to satisfy due

process. Mennonite Board of Missions

Adams, U.S. » 03 S.Ct. 2706

(1983); Greene v. Lindsey, 456 8 4y4y

(1982); Mullane, 339 U.S. 306, supra.

It is clear that an action to

collect civil penalties assessed for

violations of the Act affects an

interest in property protected by the

Due Process Clause. Thus, prior to an

action for collection, notice of the

violations and penalties is required in

order to allow the persons assessed an

opportunity to contest administratively

and judicially the fact of violation and

the amount of the penalty. The question

-107-

is whether notification by certified

mail, as provided in 30 CRF Sec.

722.14(a) (2) and cerearior is

constitutionally adequate. It is the

Opinion of the Court that such notice is

constitutionally adequate.

Postal service regulations provide

that "(ejertified mail... will be

delivered to the addressee or his

authorized representative." Domestic

Mail Manual, Chapter 9. Subchapter 910,

Part 912, Sec. 912.51 (Issue 13%

December 29, 1983), incorporated by

reference in 39 CFR Sec. 111.1-111.5

(1983) (hereinafter DMM). If for any

reason, the carrier cannot deliver the

certified article, he leaves a notice of

arrival at the address and the article

is held at the post office for the

addressee DMM Sec. 912.55. L= the

-108-

article is not called for within 5 ddys,

a second notice is issued. Id. If the

article is not called for or redelivery

requested, the article is returned to

the sender. Assuming the address is

correct and the addressee is not

attempting to evade service, it is

reasonable to assume that under most

circumstances the mail will reach the

addressee. Thus, service of notice of

the violations and penalties by

certified mail is reasonably calculated

under the circumstances to provide

interested parties with notice, as

required by due process. The provisions

of the regulations which state that

service of notice is not made incomplete

by refusal to accept delivery or to

collect mail does not render the

regulations unconstitutional. It is

reasonable ¢ : ime that if persons

refuse to accept delivery or collect

theirmail, the mail has in fact reached

them. See Hoffman v. National Equipment

Rental, Ltd.. 643 F.2d 987, 990 (4th

Cir. 1981). For the foregoing reasons

the Court finds the regulations

constitutional and grants summary

judgment on the issue of law (for

plaintiff. However, because defendants

Say they never received notice of the

violations and penalties, the Court

believes this factual issue must be

tried. If in fact defendants would be

entitled to contest the fact of

violation and the amount of penalty at

an administrative hearing, as provided

by 30 U.S.C. Sec. 1268(c).

Defendants also argue that

plaintiff is barred by the doctrine of

laches and is estopped from bringing the

action because plaintiff failed to

timely notify defendants of the civil

penalties, delayed in bringing the

action, and failed to follow the

requirements of the Act. Plaintiff says

the United States cannot be estopped by

misconduct of its agents and that

defendants have shown no reliance on

their part to justify estoppel.

The Act provides that, upon

issuance of a notice or order chargig a

violation of the Act, the Secretary

Shall within 30 days inform the violator

of the amount of the proposed penalty.

30 U.S.C. Sec. 1268(c). This

requirement was met for notice of

violations 79-2-12-36 and 80-2-10-16 and

cessation order 79:2:12:18. However,

notice of the proposed amount of penalty

-111-

for cessation orders 80-2-10-4 and

80-2-23-14 was not mailed until

approximately two years after notice of

the violations. The apparent reason for

this delay was that the regulations were

being modified to place a limit on the

amounts which could be assessed. (See

Letter from Carolyn Carter, Assessment

Specialist, Office of Surface Mining, to

Pryor and Glenn Coal Co., dated May 7,

1982, attachment to plaintiff's motion

for summary judgment).

This court has held that the 30-day

notice provision of 30 U.S.C. Sec.

1258(c) is not jurisdictional; thus

failure of the Secretary to act within

30 days does not render the penalties

viod. United States v. Log Mountain

Mining Co., 550 F.Supp. 811 (E.D. Tenn.

1984). Neither does the delay estop the

government from bringing the present

action. To assert estoppel against the

federal government, defendants must

prove the ordinary elements of estoppel

plus some act of affirmative misconduct.

Sigmon Fuei Company v. Tennessee Vailey

Authority, 531 F.Supp. 80, 82 (E.D.

Tenn. 1982), rev'd on other grounds, 709

F.2d 440 (6th Cir. 1983). Defendants

have failed to establish the ordinary

element of estoppel that they relied to

their detriment on the delay in notice.

Further they have faialed to allege and

prove any affirmative misconduct by the

government. Thus, the estoppel argument

is without merit.

Equally without merit is

defendants' equal protection argument.

See Graham v. Office of Surface Mining

Reclamation and Enforcement, 722 F.2d

«113

1106, 1113-1114 (3rd Cir. 1983).

For tne foregoing reasons it is

ordered tnat tne government's motion for

Summary judgment is granted on tne

issues of law and defendants' motion for

Summary judgment is denied. It if

furtner ordered tnat tre issue of fact

wnetner defendants received notice is to

be set for trial.

/s/By: Tnomas G. Hull

United Stetes District Judge

UNITED STATES COURT OF APPEALS FOR THE

SIXTH CIRCUIT

UNITED STATES OF AMERICA, )

¥. ) CIV.

3-84-14

PRYOR BOLTON and GLEN McCULLAH )

d/b/a PRYOR AND GLEN COAL CO., )

ORDER

For tne reasons Stated in a

memornium opinion tnis day passed to tne

Clerk for filing, it is ORDERED tnat

defendants' motion for summary judgment

is DENIED and tne government's motion

for summary judgment is GRANTED on tne

issues of law. It is furtner ORDERED

tnat tne issue of fact wnetner

defendants received notice snall be set

for trial.

/s/By: Tnomas G. Hull

United States District Judge

-115-

UNITED STATES COURT OF APPEALS FOR THE

SIXTH CIRCUIT

UNITED STATFS OF AMERICA,

Vv. CE¥s

)

3-84-14

PRYOR BOLTON and GLEN McCULLAH )

d/b/a PRYOR AND GLEN COAL CO., )

MEMORANDUM

This is an action to collect civil

penalties assessed against defendants

Glenn McCullah and Pryor, doing business

as Pryor and Glenn Coal Company,

pursuant to the Surface Mining Control

and Reclamation Act of i977 [the Act],

30 U.S.C. Sec. 1201, et seq. The Act

provides for issuance of cessation

orders annd assessment of civil

penalties against any person who

violates the Act. 30 U.S.C. Sec.

1268(a). The person charged with a

violation may contest the charge in

Ree mn tee

-116-

administrative and judicial proceedings

by forwarding the proposed amount of the

penalty to the Secretary of the

Interior. 30 #634U.S.C. Sec. 1268(c).

Failure to forward the money to the

Secretary within 30 days from notice of

the proposed penalty results in a

forefeiture of all legal rights’ to

contest the violation or amount of the

penalty. Id.

In this case, civil penalties were

assessed against defendants in the

amount of $199,000.00. Defendants

failed to exhaust administrative

remedies. Thus, the government made a

motion for summary judgment on the

ground that the penalties were finally

due and owing. Defendants contested the

motion for summary judgment contending

that they never received notice of the

ett?

violations and proposed penalties.

Defendants attacked the

constitutionality of the regulation

permitting service of notice of the

violations and assessments by certified

mail. The Court held that the

regulation permitting service by

certified mail was constitutional but

denied plaintiff's motion for summary

judgment because of the contested issue

whether defendants, in fact, received

notice of the violations and penalties

(order entered May 24, 1984).

The factual issue came on for trial

on August 28, 1984. Pursuant to Rule 52

of the Federal Rules of Civil Procedure

the Court makes the following findings

of fact:

Defendants Pryor Bolton and Glenn

McCullah operated the partnership of

-118-

Pryor and Glenn Coal Company. The

mailing address of the partnership was

Route 1, Duff, Tennessee 37729.

The following documents were mailed

by certified mail to the Pryor and Glenn

Coal Company, c/o Pryor Bolton, Route 1,

Duff, Tennessee, 37729.

ts Notice of violation (NOV)

79-2 -12-36, notice of proposed

assessment, final order and final

demand. All were marked "refused".

2 Cessation order (CO)

79 -2-12-18 notice of proposed

penalty assessment, final order and

final demand. All were returned

marked "refused".

3 CO 80-2-10-16, notice of

proposed penalty assessment, final

order, and final demand. The CO

and proposed penalty assessment

were returned mrked

"out-of-business"; the other

documents were returned marked

"refused".

4. CO 80-2-10-4, notice of

proposed penalty assessment, final

order and final demand. All were

returned marked "refused".

5. CO 80-2-23-14, notice of

proposed penalty assessment, final

order and final demand. The CO was

returned marked "“out-of-business";

the notices were returned marked

"refused".

The following documents were mailed

by certified mail to the Pryor and Glenn

Coal Company, c/o Glenn McCullah, 515 W.

Elm St., LaFollette, Tennessee 37766,

and were returned unclaimed: CO

80-2-10-4, CO 80 -2-23-14, NOV

80 -2-10-16. Additionally, NOV

79-2-12-36 and CO 79-2-12-18 were

tendered at the mine site and were

refused.

Defendant Bolton followed a

practive never to accept certified mail

The Court makes7~ the following

conclusions of law:

Defendants cannot complain that

they received no notice of the documents

when they wilfully evaded service. See

Hoffman v. National Equipment Rental,

Ltd., 643 F.2d 987, 990 (4tn Cir. 1980).

For tne foregoing reasons, it is

ORDERED tne plaintiff nave judgment

against tne defendants in tne amount of

$199,800.

/s/By: Tnomas G. Hull

United States District Judge

UNITED STATES COURT OF APPEALS FOR THE

SIXTH CIRCUIT

UNITED STATES OF AMERICA,

Vv. @ 2

3-84-14

PRYOR BOLTON and GLEN McCULLAH )

d/b/a PRYOR AND GLEN COAL CO., )

ORDER

For tne reasons stated in a

memorandum opinion tnis day passed to

tne Clerk for filing, it is ORDERED tnat

plaintiff nave judgment against

defendants for $199,800.00., togetner

witn interest at the rate of 11.98

percent per annum from tne date of tnis

judgment, and tne costs of tnis action.

ENTER:

/s/By: Tnomas G. Hull

United States District Judge

-122-

CONSTITUTION OF THE UNITED STATES OF

AMERICA

Amendment 5

Criminal ac .ons--Provisions

concerning--Due process of law and just

compensation clauses.

No person shall be held to answer for a

capital, or otherwise infamous crime,

unless on a presentment or indictment of

a Grand Jury, except in cases arising in

the land or naval forces, or in the

Militia, when in actual service in time

of War or public danger; nor shall any

person be subject for the same offence

to be twice put in jeopardy of life or

limb; nor shall be compelled in any

criminal case to be a witness against

himself, nor be deprived of life,

liberty, Or property, without due

process of law; nor_- shall _ private

property be taken for public. use,

without just compensation.

-123-

28 U.S.C. Sec. 1254. Court of appeais;

certiorari; appeal; certified questions

Cases in the courts of appeals may be

reviewed by the Supreme Court by the

following methods:

(1) By writ of certiorari

granted upon the petition of any party

to any civil or criminal case, before or

after rendition of judgment or decree;

(2) By appeal by a party

relying on a State statute held by a

court of appeals to be invalid = as

repugnant to the Constitution, treaties

Or laws of the United States, but such

appeal shall preclude review by writ of

certiorari at te instance of § such

appellant, and the review on appeal

shall be restricted to the Federal

questions presented;

(3) By certification at any

time by a court of appeals of any

question of law in any civil or criminal

case as to which instructions. are

desired, and upon such certification the

Supreme Court may give binding

instructions or require the entire

record to be sent up for decision of the

entire matter in controversy.

-124-

28 U.S.C. Sec. 1291. Final decisions of

district courts

The courts of appeals’ shall

have jurisdiction of appeals from all

final decisions of the district courts

ef the United States, the United States

District Court for the District of the

Canal Zone, the District Court of Guam,

and the District Court of the Virgin

Islands, except where a direct review

may be had in the Supreme Court.

-125-

28 U.S.C. Sec. 2101. Supreme Court;

time for appeal Or certiorari;

docketing; stay

(a) eee

(b) eee

(&) Any other appeal or any

writ of certiorari intended to bring any

judgment or decree in a civil action,

Suit or proceeding before the Supreme

Court for review shall be taken or

applied for within ninety days after the

entry of such judgment or decree, A

justice of the Supreme Court, for good

cause shown, may extend the time for

applying for a writ of certiorari for a

period of not exceeding sixty days.

(d) eee

(e) eee

(f£) eee

30 U.S.C. Sec. 1268. Penalties

(a) eee

(b) Hearing. A civil penalty

shall be assessed by the Secretary only

after the person charged with a

violation described under subsection (a)

of this section has been given. an

Opportunity for a public hearing. Where

such a public hearing has been held, the

Secretary shall make findings of fact,

and he shall issue a written decision as

to the occurrence of the violation and

the amount of the penalty which is

warranted, incorporating, when

appropriate, and order therein requiring

that the penalty be paid. When

appropriate, the Secretary shall

consolidate such hearings with other

proceedings under section 521 of this

Act. Any hearing under this section

shall be of record and shall be subject

to section 554 of title 5 of the United

States Code. Where the person charged

with such a violation fails to avail

himself of the opportunity for a public

hearing, a civil penalty shall _ be

assessed by the Secretary after the

Secretary has jetermined that A

violation did occur, and the amount of

the penalty which is warranted, and has

issued an order requiring that_ the

penalty be paid.

issuance of a notice or order charging

that a violation of the Act has

occurred, the Secretary shall inform th.

Operator within thirty days of the

proposed amount of said penalty. The

person charged with the penalty shall

then have thirty days to pay the

proposed penalty in full or, if the

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-127-

person wishes to contest either’ the

amount of the penalty or the fact of the

violation, forward the proposed amount

to the Secretary for placement in an

escrow account. If through

administrative or judicial review of the

proposed penalty, it is determined that

no violation occurred, or that’ the

amount of the penalty should be reduced,

the Secretary shall within thirty days

remit the appropriate amount to the

person, with interest at the rate of 6

percent, or at the prevailing Department

of the Treasury rate, whichever is

greater. Failure to forward the money

to the Secretary within thirty days

shall result in a waiver of all legal

rights to contest the violation or the

amount of the penalty.

(d) Recovery in civil action.

Civil penalties owed under this Act, may

be recovered in a civil action brought

by the Attorney General at the request

of the Secretary in any appropriate

district court of the United States.

(€) wor

(i) eeee

-128-

30 U.S.C. Sec. 1271. Enforcement.

(a) Notice; Federal

inspection; waiver; cessation order;

affirmative obligations; hearing;

suspension or revocation of permits;

contents of notices and orders;

expiration date. (1) Whenever, on the

basis of any information available to

him, including receipt of information

from any person, the Secretary has

reason to believe that any person is in

violation of any requirement of this Act

Or any permit condition required by this

Act, the Secretary shall notify the

State regulatory authority, if one

exists, in the State in which’ such

violation exists. If no such State

authority exists or the State regulatory

authority fails within ten days after

notification to take appropriate action

to cause said violation to be corrected

Or to show good cause for such failure

and transmit notification of its action

to the Secretary, the Secretary shall

immediately order Federal inspection of

the surface coal mining operation at

which the alleged viclation is occurring

unless the information available to the

Secretary is a result of a previous

Federal inspection of such surface coal

mining operation. The ten-day

notification period shall be waived when

the person informing the Secretary

provides adequate proof that an imminent

danger of significant environmental harm

exists and that the State has failed to

take appropriate action. When the

Federal inspection results from

information provided to the Secretary by

any person, the Secretary shall notify

such person when the Federal inspection

is proposed to be carried out and such

person shall be allowed to accompany the

-129-

inspector during the inspection.

(2) When, on the basis of any

Federal inspection, the Secretary or his

authorized representative determines

that any condition or practices exist,

or that any permittee is in violation of

any requirement of this Act or any

permit condition required by this Act,

which condition, practice, or violation

also creates an imminent danger to the

health or safety of the public, or is

causing, Or can reasonably be expected

to cause Significant, imminent

environmental harm to land, air, or

water resources, the Secretary or his

authorized representative shall

immediately order a cesstion of surface

coal mining and reclamation operations

or the portion thereof relevant to the

condition, practice, or violation. Such

cessation order shall remain in effect

until the Secretary or his authorized

representative determines that the

condition, practice, or violation has

been abated, or until modified, vacated,

Or terminated by the Secretary or his

authorized representative pursuant to

subparagraph (a)(5) of this section.

Where the Secretary finds that the

ordered cessation of surface coal mining

and reclamation operations, or any

portion thereof, will not completely

abate the imminent danger to health or

safety of the public or the significant

imminent environmental harm to. land,

air, or water resources, the Secretary

shall, in addition to the cessation

order, impose affirmative obligations on

the operator requiring him to take

whatever steps the Secretary deems

necessary to abate the imminent danger

or the significant environmental harm.

-130-

(3) When, on the basis of a

Federal inspection which is carried out

during the enforcement of a Federal

program or a Federal lands’ program,

Federal inspection pursuant to section

502, or section 504(b) or during Federal

enforcement of a State program in

accordance with subsection (b) of this

section, the Secretary or his authorized

representative determines that any

permittee is in violation of = any

requirement of this Act or any permit

condition required by this Act; but such

violation does not create an imminent

danger to the health or safety of the

public, or cannot be reasonably expected

to cause significant, imminent

environmental harm to land, air, or

water resources, the Secretary or

authorized representative shall issue a

notice to the permittee or his agent

fixing a reasonable time but not more

than ninety days from the abatement of

the violation and providing opportunity

for public hearing.

If, upon expiration of the

period of time as originally fixed or

subsequently extended, for good cause

shown and upon the written finding of

the Secretary or his authorized

representative, the Secretary or his

authorized representative finds that the

violation has not been abated, he shall

immediately order a cessation of surface

coal mining and reclamation operations

or the portion thereof relevant to the

violation. Such cessation order. shall

remain in effect until the Secretary or

his authorized representative determines

that the violation has been abated, or

until modified, vacated, or terminated

by the Sectetary or his authorized

representative pursuant to subparagraph

-131-

(a) (5) of this subsection, the Secretary

shall determine the steps necessary to

abate the violation in the most

expeditious manner possible, and shall

include the necessary measures in the

order.

(4) When, on the basis of a

Federal inspection which is carried out

during the enforcement of a Federal

program or a Federal lands’ program,

Federal inspection pursuant to section

502 or section 504 or during Federal

enforcement of a State program in

accordance with subsection (b) of this

section, the Secretary or his authorized

representative determines that a pattern

of violations of any requirements of

this Act or any permit conditions

required by this Act exists or has

existed, and if the Secretary or his

authoried representative also find that

such violations are caused by the

unwarranted failure of the permittee to

comply with any requirements of this Act

Or any permit conditions, or that such

violations are willfully caused by the

permittee, the Secretary or his

authorized representative shall

forthwith issue an order to the

permittee to show cause as to why the

permit should not be suspended or

revoked and shall provide opportunity

for a public hearing. If a hearing is

requested the Secretary shall inform all

interested parties of the time and place

of the hearing. Upon the permitte's

failure to show cause as to why the

permit should not be suspended or

revoked, the Secretary or his authorized

representative shall forthwith suspend

or revoke the permit.

(5) Netices and orders issued

a ae e-em

-132-

to this section shall set forth with

reasonable specificity the nature of the

violation and the remedial action

required, the period of time established

for abatement, and a reasonable

description of the portion of the

surface coal mining and reclamation

Operation to which the notice or order

applies. Each notice or order issued

under this section shall be given

promptly to the permittee or his agent

by the Secretary or his authorized

representative who issues such notice or

Order, and all such notices and orders

shall be in writing and snall be signed

by such authorized representatives. Any

notice or order issued pursuant to this

section may be modified, vacated, or

terminated by the Secretary or his

authorized representative. A copy of

any such order or notice shall be sent

to the State regulatory authority in the

State in which the violation occurs:

Provided, That any notice or _ order

issued pursuant to this section which

requires cessation of mining by the

Operator shall expire within thirty days

of actual notice the operator unless a

public hearing is held at the site or

within such reasonable proximity to the

site that any viewings of the site can

be conducted during the course of the

public hearing.

(b) cee

ie _ owe

a es io ‘ ;

stot al ee a. ta oe a.

eer 3

- 7

me “Wry

re 7 ” ——

-133-

CERTIFICATE

I, David A. Burkhalter, ik, a

member of the Bar of the Court, pursuant

to Supreme Court Rule 19 and Rule 28,

hereby certify that I have served Robert

S- More, Special As’sistant U.S.

Attorney, Department of the Interior,

P.O. Box 15006, Knoxville, TN 37901, and

the Solicitor General, Department of

Justice, Washington, D.C. 20530, with

three (3) true and exact copies of the

foregoing Petition and filed with the

Court forty (40) true and exact copies,

properly addressed to the Clerk of the

Court, by depositing same in the United

States Post Office, first class postage

prepaid, or with the Knoxville terminal

of Federal Express, a corporation

offering overnight delivery of docugents

and Ko articles, this the ” ag | day

of Ad 13 » 198

HALTER, II

STATE OF TENNESSEE

COUNTY OF KNOX

SUBSCRIBED and sworn to before

me this the Q4YW day of A-ha ;

1986. ) WA

NOTARY PUBLIC

My Commission Expires: j-2/- NF

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.