OSM Sued Over Ten Day Notice Policy

Farrell-Cooper Mining Company, a small mining company in Oklahoma, has sued the U.S. Office of Surface Mining (“OSM”) challenging the issuance of two 10-day notices (“TDN”) to the state involving two of Farrell-Cooper’s state-issued coal mining permits.  TDNs are the mechanism by which OSM can initiate oversight over conditions existing on sites permitted by states with OSM-approved programs under the Surface Mining Control and Reclamation Act (“SMCRA”).  

SMCRA allows OSM to take direct enforcement action against mine operators in primacy states for violations of performance standards or permit conditions, but only after a state fails to respond “appropriately” to a TDN advising it that OSM believes a violation exists.  See 30 U.S.C. §1271(c).  In the event a state does not respond appropriately (by taking enforcement action or explaining why no violation exists), the OSM “shall” inspect “the . . . mining operation at which the alleged violation is occurring. . . .”  30 U.S.C. §1271(a)(1).  If, as a result of the inspection, OSM finds a violation, it shall issue either a cessation order (if there is imminent harm) or a notice of violation (“NOV”) “to the permittee” fixing a time for abatement of the violation.  30 U.S.C. §1271(a)(2) & (3).  Historically, because the statute speaks to “inspections” of “mining operations” and issuance of NOVs “to the permittees,” OSM has generally limited the application of this section of the statute to “on the ground” violations of performance standards.  It generally has not used this authority to oversee individual state permit decisions.  In fact, when an OSM field office attempted to use its TDN authority to review a state permit decision in West Virginia, former Assistant Interior Secretary Rebecca Watson intervened and informed complaining citizens that OSM did not possess the authority to veto state permit decisions. 

In June 2009, however, the Interior Department signed a memorandum of understanding with USEPA and the Corps of Engineers which committed OSM to determine how it could “more effectively conduct oversight of state permitting . . . activities” under SMCRA—polite language for requiring OSM to rescind the Watson letter.  By memo of November 15, 2010, OSM Director Pizarchik rejected the rationale of the Watson letter and advised his staff that OSM would henceforth use its TDN oversight authority with respect to “alleged violations of permitting requirements” in addition to violations of performance standards.  That memo was subsequently embodied in a draft policy document. 

The Farrell-Cooper situation involves a dispute over approximate original contour (“AOC”), where the state-issued permits allowed the company to create last cut lakes at two of its mines.  According to the complaint, OSM and the state of Oklahoma formed a team to investigate the legislative history of AOC, and the team issued a report in 1997 approving such techniques.  However, in 2010, OSM issued a draft oversight report on AOC and found that the state had not properly implemented its approved program by failing to require mines to be reclaimed to AOC.  

In January 2011, OSM issued two TDNs to Oklahoma attacking the Farrell-Cooper permits and reclamation plans for its mines.  Farrell-Cooper has since received a notice of violation (“NOV”) from OSM.  The complaint will almost certainly be met with the standard governmental defenses that : 1) a TDN is not a final agency action; 2) the operator must exhaust its administrative remedies in appealing the NOVs; and 3) that this is not an attack on the permit, but rather of a failure to meet on-the-ground performance standards. 

This article was authored by Robert G. McLusky, Jackson Kelly PLLC. For more information on the author see here.