Nos. 96-1728 96-1797United States Court of Appeals, Fourth Circuit.Argued June 3, 1997.
Decided September 11, 1997.
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Appeals from the United States District Court for the Western District of Virginia, at Big Stone Gap. Samuel G. Wilson, Chief District Judge. (CA-91-7-B)
ARGUED: Stephen McQuiston Hodges, PENN, STUART ESKRIDGE, Abingdon, Virginia, for Appellant.
Ethan Gregory Shenkman, Environment and Natural Resources Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Amicus Curiae United States. Walton Davis Morris, Jr., Charlottesville, Virginia, for Appellee.
ON BRIEF: Timothy W. Gresham, PENN, STUART ESKRIDGE, Abingdon, Virginia, for Appellant. Daniel R. Bieger, COPELAND, MOLINARY BIEGER, Abingdon, Virginia, for Appellee. Lois J. Schiffer, Assistant Attorney General, John T. Stahr, Environment and Natural Resources Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Amicus Curiae United States. Harold P. Quinn, Jr., NATIONAL MINING ASSOCIATION, Washington, D.C., for Amicus Curiae National Mining.
Before WILKINS, NIEMEYER, and HAMILTON, Circuit Judges.
Judge Hamilton wrote the opinion, in which Judge Wilkins and Judge Niemeyer joined.
Affirmed in part, vacated in part, and remanded by published opinion.
HAMILTON, Circuit Judge:
[1] In this appeal, we consider whether Section(s) 520(f) of the Surface Mining Control and Reclamation Act of 1977 (SMCRA), 30 U.S.C. § 1270(f), provides a federal cause of action for the recovery of damages resulting from violation of state regulations that are a part of the state’s surface coal mining and reclamation regulatory program approved by the United States Secretary of the Interior pursuant to Section(s) 503 of SMCRA, 30 U.S.C. § 1253. We hold that it does.I.
[2] In this suit, Jo D. Molinary represents a class of persons, known as the “Pruitt heirs” (Pruitt Heirs), who own more than a 99% undivided interest in the surface estate of a fifty-acre tract of land located in Lee County, Virginia (the Pruitt Tract). The Powell Mountain Coal Company (Powell Mountain) owns an approximate .14% undivided interest in the surface estate of the Pruitt Tract and, under an 1887 deed, owns a 100% interest in the mineral rights of the Pruitt Tract. The Pruitt Tract is rural, mountainous, and has little economic value apart from its timber and mineral rights. The Pruitt Heirs use it primarily for recreational purposes such as hunting and hiking. Prior to Congress’ enactment of SMCRA in 1977, a three-acre portion of the Pruitt Tract was strip mined for coal by parties unrelated to Powell Mountain (the Three Acre Tract). The strip mining left a bench and a high wall on the Three Acre Tract that had not been reclaimed except by nature.
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to auger mine[1] the Three Acre Tract for coal that still remained. In its permit application, Powell Mountain listed itself and the “Pruitt Heirs” as cosurface owners, but did not list each heir by name. Powell Mountain listed itself as the sole owner of the mineral rights. Powell Mountain also informed the DMLR orally that it had obtained a legal opinion that no lease to extract the coal by the auger mining method was required from the other owners of the surface estate. Without further submissions from Powell Mountain, the DMLR issued the permit. Powell Mountain then extracted 4423.51 tons of coal from the Three Acre Tract by the auger mining method. Powell Mountain sold the coal for $190,122.46, clearing $35,909.05 in net income.
[4] After receiving complaints about the permit’s issuance, the DMLR determined that Powell Mountain’s permit application did not comply with certain state permitting regulations. Specifically, the DMLR determined that the permit application: (1) failed to list the name and address of all record owners as required by Virginia Regulation Section(s) 480-03-19.778.13(e) and (2) failed to contain either (a) written consent of the surface owners to extract the coal by surface mining, (b) a copy of a conveyance that expressly granted it the right to extract coal by surface mining, or (c) documentation that under applicable state law, it had the legal authority to extract the coal by surface mining as required by Virginia Regulation Section(s) 480-03-19.778.15(b). As a result, the DMLR revoked Powell Mountain’s permit, issued a cessation order, and ordered Powell Mountain to reclaim the Three Acre Tract. [5] Subsequently, this class action was filed in the United States District Court for the Western District of Virginia under SMCRA’s citizen suit provision, Section(s) 520(f) of SMCRA. See 30 U.S.C. § 1270(f). Section 520(f) of SMCRA provides that “[a]ny person who is injured in his person or property through the violation by any operator of any rule, regulation, order, or permit issued pursuant to [SMCRA] may bring an action for damages (including reasonable attorney and expert witness fees) . . . .” Id. Relevant to the issues before us, the Pruitt Heirs alleged that Powell Mountain’s failure to comply with Virginia Regulations Section(s) 480-03-19.778.13(e) and 480-03-19.778.15(b) proximately caused the improper issuance of the permit, which in turn resulted in the auger mining of the Three Acre Tract without their consent.[2] The parties later stipulated the total value of the surface mining rights used by Powell Mountain to be $3,317. [6] Powell Mountain moved to dismiss the complaint for lack of subject matter jurisdiction. See Fed.R.Civ.P. 12(b)(1). In its motion to dismiss, Powell Mountain argued that federal courts lack subject matter jurisdiction over citizen suits in states whose regulatory and enforcement programs have been approved by the Secretary of the Interior (the Secretary) pursuant to Section(s) 503 of SMCRA. Rejecting this argument as inconsistent with the plain language of Section(s) 520(f) of SMCRA, the district court denied the motion. See Molinary v. Powell Mountain Coal Co., Inc., 779 F. Supp. 839 (W.D. Va. 1991). [7] The Pruitt Heirs filed a motion for summary judgment as to liability. See Fed.R.Civ.P. 56. Powell Mountain filed a cross motion for summary judgment, arguing in part that proximate cause was lacking. The district court rejected this argument and granted summary judgment in favor of the Pruitt Heirs as to liability under Section(s) 520(f) of SMCRA. The district court then conducted a jury trial on the sole issue of whether Powell Mountain’s regulatory violations were wilful, reckless or grossly negligent. The jury, presented with a single interrogatory to this effect, answered in the affirmative. [8] The parties agreed to submit the issues of damages, attorney’s fees and costs to the district court for determination. Subsequently,Page 234
the district court awarded the Pruitt Heirs $190,622.46 in compensatory damages, an amount equal to the gross sales price of the coal. The district court recognized that technically the Pruitt Heirs only suffered a nominal sum of damages, but reasoned that awarding the much larger sum was necessary to “discourage the kind of intentional conduct that occurred in the present case. . . .” (J.A. 300). The district court also awarded the Pruitt Heirs $91,644.92 in costs and attorney’s fees. Thus, the district court entered final judgment in favor of the Pruitt Heirs for $282,267.38.
[9] Powell Mountain noted a timely appeal. On appeal, Powell Mountain challenges: (1) the district court’s denial of its motion to dismiss for lack of subject matter jurisdiction; (2) the district court’s entry of summary judgment as to liability in favor of the Pruitt Heirs; (3) the district court’s denial of its motion for summary judgment; and (4) the district court’s award of compensatory damages as excessive. The Pruitt Heirs noted a timely cross appeal, in which they challenge the district court’s award of attorney’s fees as inadequate.II.
[10] Before we address Powell Mountain’s challenge to the district court’s denial of its motion to dismiss for lack of subject matter jurisdiction, we briefly set forth some background information about SMCRA and Virginia’s federally approved version of SMCRA. Congress enacted SMCRA in 1977 to “establish a nationwide program to protect society and the environment from the adverse effects of surface coal mining operations.”30 U.S.C. § 1202(a). Section 201 of SMCRA, 30 U.S.C. § 1211, “creates the Office of Surface Mining Reclamation and Enforcement (OSM), within the Department of the Interior, and the Secretary of the Interior (Secretary) acting through OSM, is charged with primary responsibility for administering and implementing [SMCRA] by promulgating regulations and enforcing its provisions.” Hodel v. Virginia Surface Min. Reclam. Ass’n, 452 U.S. 264, 268-69 (1981). See also 30 U.S.C. § 1211, 1224.
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et seq. VSMCRA’s citizen suit provision provides that “[a]ny person who as a result of the violation by any operator of any rule, regulation, order, or permit issued pursuant to [VSMCRA], suffers injury to his person or property may bring an action for damages, including reasonable attorney and expert witness fees. Such action may be brought only in the circuit court of the county or city in which the surface coal mining operation complained of is located.” Va. Code Ann. Section(s) 45.1-246.1.G.
III.
[14] Powell Mountain’s theory that jurisdiction is exclusive in the courts of Virginia constitutes a facial attack on the complaint, pursuant to Federal Rule of Civil Procedure 12(b)(1), to dismiss the complaint for lack of subject matter jurisdiction. To the extent that Powell Mountain argues that the activity complained of is not cognizable under Section(s) 502(f) of SMCRA, the motion may be treated alternatively as one to dismiss for failure to state a claim upon which relief may be granted, pursuant to Federal Rule of Civil Procedure 12(b)(6). See Haydo v. Amerikohl Mining, Inc., 830 F.2d 494, 495-96 (3d Cir. 1987). Either way, we review de novo the district court’s legal conclusions surrounding the denial of the motion.
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an agency’s interpretation is a permissible construction of the statute, we need not “conclude that the agency construction was the only one it permissibly could have adopted to uphold the construction, or even the reading the court would have reached if the question initially had arisen in a judicial proceeding.” Chevron, 467 U.S. at 843 n. 11. Instead, we should “accord considerable deference to the agency’s interpretation of the statute, and `we should not disturb [that interpretation] unless it appears from the statute or its legislative history that the accommodation is not one that Congress would have sanctioned.'” Akindemowo v. INS, 61 F.3d 282, 284 (4th Cir. 1995) (quoting Chevron, 467 U.S. at 845). For the following reasons, we conclude that the interpretation espoused by the Secretary is a permissible construction of Section(s) 520(f) of SMCRA.
[20] First, the language at issue is certainly broad enough to support the Secretary’s interpretation. It may reasonably be said that once the Secretary approves a state surface coal mining and reclamation program, the rules, regulations, orders, and permits issued under that program are “issued,” in the language of Section(s) 520(f), “pursuant to” SMCRA. [21] Second, creating a federal cause of action so that citizens may redress violations of state surface coal mining and reclamation regulations in federal court is consistent with Congress’ goal of establishing “a nationwide program to protect society and the environment from the adverse effects of surface coal mining operations.” 30 U.S.C. § 1202(a). [22] Third, as the Secretary points out in its amicus brief, when Congress referred to permits issued by either state or federal regulatory authorities elsewhere in SMCRA, it used the phrase, “permit issued pursuant to this chapter.” See, e.g., 30 U.S.C. § 1256(d)(1), 1261(b), 1272(a)(6). By contrast, when Congress intended to limit the application of a provision to permits or orders issued pursuant to a federal program, it did so expressly. See, e.g., 30 U.S.C. § 1268(e)-(f) (“permit issued pursuant to a Federal program”); 1273(b) (“permit . . . issued by the Secretary”); 1275(a)(1) (c) (“notice or order” issued “pursuant to Federal Program”). [23] Fourth and finally, as the Secretary also points out, its interpretation is consistent with the operation of Section(s) 520(a)(1) of SMCRA, which provides for citizen suits to ensure compliance with the “provisions of [SMCRA] or of any rule, regulation, order or permit issued pursuant thereto,”30 U.S.C. § 1270(a)(1), in conjunction with the operation of Section(s) 520(b) of SMCRA, which places limits on the initiation of such suits. Section Section(s) 520(b)(1)(B) of SMCRA states that a suit may not be commenced under Section(s) 520(a)(1) if “the Secretary or the State” is already “diligently prosecuting a civil action . . . to require compliance.”30 U.S.C. § 1270(b)(1)(B). Because a state would only prosecute a compliance action if it were a primacy state, the language of these subsections shows that Congress contemplated that federal citizen suits for compliance would be brought in primacy states. Considering that the key language in Section(s) 520(a)(1) of SMCRA is virtually identical to the key language in Section(s) 520(f) of SMCRA, it follows that Congress intended Section(s) 520(f) of SMCRA to provide for federal citizen suits for damages in primacy states. [24] The Secretary’s interpretation does not conflict, as Powell Mountain suggests, with the federal grant of “exclusive regulatory jurisdiction over the regulation of surface coal mining and reclamation operations” in Section(s) 520(f) of SMCRA to states with federally approved surface coal mining and reclamation programs. See 30 U.S.C. § 1253(a). Exclusive regulatory jurisdiction simply does not encompass exclusive adjudicatory jurisdiction. Common sense dictates that a government’s acts in regulating a subject are distinctly different than its acts in adjudicating a party’s rights related to the subject.[5]Page 237
[25] Because Congress has not specifically assigned jurisdiction over Section(s) 520(f) suits elsewhere, we conclude the district court possessed subject matter jurisdiction pursuant to 28 U.S.C. § 1331. Int’l Science Tech. Inst., Inc., 106 F.3d at 1154. Thus, we affirm the district court’s denial of Powell Mountain’s motion to dismiss.IV.
[26] We next address Powell Mountain’s challenge to the district court’s grant of summary judgment in favor of the Pruitt Heirs. According to Powell Mountain, summary judgment in favor of the Pruitt Heirs was inappropriate because the evidence does not establish proximate cause.
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[30] At bottom, the practices just outlined served as an efficient intervening cause, breaking the causal chain between Powell Mountain’s violation of the regulations at issue and the damage alleged by the Pruitt Heirs. Put another way, the undisputed evidence in the record establishes that the Pruitt Heirs suffered damage because the permitting officer routinely approved permits based on incomplete permit applications, not because the incompleteness of Powell Mountain’s permit application induced the permitting officer to approve it. [31] Despite the Pruitt Heirs’ contention to the contrary, the fact that the DMLR revoked the permit after it received complaints about the incomplete nature of Powell Mountain’s permit application is not evidence of proximate cause. The subsequent revocation simply does not speak to whether the incompleteness of the permit application induced the permitting officer to issue Powell Mountain the permit in the first place. Because there is no evidence of proximate cause in the record, we hold the district court erred in denying Powell Mountain’s motion for summary judgment.V.
[32] In conclusion, we hold that the district court: (1) properly denied Powell Mountain’s motion to dismiss; (2) erroneously granted the Pruitt Heirs’ motion for summary judgment as to liability; and (3) erroneously denied Powell Mountain’s motion for summary judgment. Accordingly, we: (1) affirm the district court’s denial of Powell Mountain’s motion to dismiss; (2) vacate the district court’s entry of summary judgment as to liability in favor of the Pruitt Heirs; (3) vacate the district court’s final judgment; and (4) remand with instructions that the district court enter summary judgment in favor of Powell Mountain.[6]