[Federal Register Volume 65, Number 146 (Friday, July 28, 2000)]
[Proposed Rules]
[Pages 46389-46391]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-19063]



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DEPARTMENT OF THE INTERIOR

Office of Hearings and Appeals

43 CFR Part 4

RIN 1090-AA74


Special Rules Applicable to Surface Coal Mining Hearings and 
Appeals; Petitions for Award of Costs and Expenses Under Section 525(e) 
of the SMCRA

AGENCY: Office of Hearings and Appeals, Interior.

ACTION:  Proposed rulemaking.

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SUMMARY: The Office of Hearings and Appeals (OHA) proposes to amend its 
rule governing who may receive an award of costs and expenses, 
including attorney fees, under section 525(e) of the Surface Mining 
Control and Reclamation Act of 1977 (SMCRA) to provide that an 
applicant for a permit may only receive an award from the Office of 
Surface Mining Reclamation and Enforcement (OSM) if OSM denies an 
application in bad faith and for the purpose of harassing or 
embarrassing the applicant.

DATES: Comments must be receive on or before September 26, 2000.

ADDRESSES: Written comments about this proposed rule may be mailed or 
hand-delivered to Robert L. Baum, Director, Office of Hearings and 
Appeals, U.S. Department of the Interior, Room 1111, 4015 Wilson 
Boulevard, Arlington, Virginia 22203. See SUPPLEMENTARY INFORMATION for 
additional information on the handling of comments.

FOR FURTHER INFORMATION CONTACT: Will A. Irwin, Administrative Judge, 
Interior Board of Land Appeals, U.S. Department of the Interior, 4015 
Wilson Boulevard, Arlington, Virginia 22203. Phone: 703-235-3750.

SUPPLEMENTARY INFORMATION: Our practice is to make comments, including 
names and home addresses of respondents, available for public review 
during regular business hours. Individual respondents may request that 
we withhold their home addresses form the rulemaking record, and we 
will honor such requests to the extent allowable by law. There also may 
be circumstances in which we would withhold from the rulemaking record 
a respondent's identity, as allowable by law. If you wish us to 
withhold your name and/or address, you must state this prominently at 
the beginning of your comment. However, we will not consider anonymous 
comments. We will make all submissions from organizations or 
businesses, and from individuals identifying themselves as 
representatives or official of organizations or businesses, available 
for public inspection in their entirety.
    OSM has requested that OHA purpose amending 43 CFR 4.1294(b) and 
(c) to provide that an applicant for a permit from OSM is entitled to 
an award of costs and expenses from OSM only when circumstances 
demonstrate that OSM denied an application in bad faith and for the 
purpose of harassing or embarrassing the applicant. The term 
``applicant'' is defined at 30 CFR 701.5.
    In Skyline Coal Co. v. OSM, 150 IBLA 51 (1999), the Interior Board 
of Land Appeals (IBLA) affirmed Administrative Law Judge David 
Torbett's award of more than $200,000 in costs and expenses, including 
attorney fees, to Skyline Coal Company (Skyline). OSM had denied an 
application from Skyline for a permit and Skyline had filed a request 
for administrative review by OHA of the denial. During the course of 
the hearing before Judge Torbett, OSM agreed that Skyline's permit 
application could be approved. Judge Torbett therefore sustained 
Skyline's request for review.
    Subsequently, Skyline filed a petition for an award of costs and 
expenses with Judge Torbett under section 525(e) of SMCRA, 30 U.S.C. 
1275(e) (1994), and the implementing regulations in 43 CFR 4.1291. OSM 
opposed Skyline's petition, arguing that Skyline was a permittee under 
43 CFR Sec. 4.1294(c) and could only receive an award if it could 
demonstrate OSM had denied its application for a permit in bad faith. 
Skyline argued it was an applicant for a permit, not a permittee, and 
thus was entitled to an award under Sec. 4.1294(b) as a ``person'' who 
had initiated a review proceeding and had prevailed in whole or in 
part, achieving at least some degree on the merits. IBLA affirmed Judge 
Torbett's fee award, stating:

    In his August 1, 1994, order, Judge Torbett rejected OSM's 
argument, noting that an applicant for a permit is not, and does not 
become, a ``permittee'' until the applicant is issued a permit. He 
further found that, as a mining company, Skyline was a ``person'' 
under 30 U.S.C. Sec. 1291(19) (1994) and was therefore eligible to 
petition for and receive an award of costs and fees under 43 CFR 
Sec. 4.1294(b). Judge Torbett noted that 43 CFR Sec. 4.1294(c) 
specifically covers enforcement actions taken against permittees, 
that is, cases involving cessation orders (CO's), NOV's, or orders 
to show cause why a permit should not be suspended or revoked. That 
regulation, the Judge observed, makes no mention of denials of 
permit applications. He ruled that the governing regulation was 43 
CFR Sec. 4.1294(b) and that Skyline met the criteria therein. 
(August 1, 1994, Order at 3-5, 7.)
Id. at 53.

    In his concurring opinion, Administrative Judge Burski suggested 
that if OSM were dissatisfied with the result of the case it could seek 
an amendment of the regulations that would accord with its 
interpretation of SMCRA. Id. at 63.
    OSM has requested OHA, which is responsible for these regulations, 
to propose an amendment that would limit an award to an applicant for a 
permit to the circumstances in Sec. 4.1294(c). OSM suggests that the 
legislative history of SMCRA supports its request, quoting from the 
Senate's report on S.7, which was the Senate's version of SMCRA:

    In many, if not most, cases in both the administrative and 
judicial forum, the citizen who sues to enforce the law, or 
participates in administrative proceedings to enforce the law, will 
have little or no money with which to hire a lawyer. If private 
citizens are to be able to assert the rights granted them by this 
bill, and if those who violate this bill's requirements are not to 
proceed with impunity, then citizens must have the opportunity to 
recover the attorneys' fees necessary to vindicate their rights. 
Attorneys' fees may be awarded to the permittee or government when 
the suit or participation is brought in bad faith.

S. Rep. No. 95-128, 95th Cong. 1st Sess. 59 (1977). When Sec. 4.1294 
was first proposed, some commenters suggested substituting the 
statutory language of section 525(e). OHA rejected the suggestion 
``because it did not answer any of the questions raised by the 
statutory language.'' 43 FR 34395 (Aug. 3, 1978).
    The proposed amendment of Secs. 4. 1294(b) and (c) is designed to 
answer the question of when an applicant for a permit may be eligible 
for an award of costs and expenses, including attorney fees, and to 
limit an award to an applicant to the circumstances in Sec. 4.1294(c).

Procedural Matters

Executive Order 12866--Regulatory Planning and Review

    This document is not a significant rule under Executive Order 
12866.
    a. This rule will not have an effect of $100 million or more on the 
economy. It will not adversely affect in a material way the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or state, local, or tribal governments or communities. The 
proposed revision would have the effect of limiting the circumstances 
authorizing the award of costs and expenses, including attorney fees, 
to applicants whose applications have

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been denied. The rule would not impose any new costs on the coal 
industry. While the number of requests for attorney fees that would be 
processed under the proposed revisions is not known, it is expected 
that only a very few applicants would potentially qualify for an award 
as a result of prevailing over OSM in a proceeding to review OSM's 
denial of a permit application.
    b. This rule will not create a serious inconsistency or otherwise 
interfere with an action taken or planned by another agency.
    No other agency has a rule implementing section 525(e) of SMCRA.
    c. This rule does not alter the budgetary effects of entitlements, 
grants, user fees, or loan programs or the rights or obligations of 
their recipients.
    No entitlements, grants, user fees, or loan programs are authorized 
by section 525(e) of SMCRA or its implementing regulations.
    d. This rule does not raise novel legal or policy issues.
    The legal issued involved--the standard for making an award of 
costs and expenses to an applicant for a surface coal mining permit who 
prevails on administrative review of the denial of an application by 
OSM--has been discussed by IBLA in the Skyline Coal Co. case, 150 IBLA 
51 (1999). The proposed amendment is in response to that discussion.

Regulatory Flexibility Act

    The Department of the Interior certifies that this rule will not 
have a significant economic impact on a substantial number of small 
entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). 
This determination is based on the findings that the proposed revisions 
will not significantly change costs to industry and will not affect 
state or local governments. Furthermore, the rule produces no adverse 
effects on competition, employment, investment, productivity, 
innovation, or the ability of United States enterprises to compete with 
foreign-based enterprises in domestic or export markets for the reasons 
stated above.
    Only a few applicants for surface coal mining permits would be 
expected to apply for a permit, have their applications denied by OSM, 
prevail on administrative review of the denial, and be able to 
demonstrate that OSM's denial was based on bad faith and for the 
purpose of harassing or embarrassing the applicant, and an even smaller 
number of these applicants would be small entities.

Small Business Regulatory Enforcement Fairness Act

    This rule is not a major rule under 5 U.S.C. 804(2), the Small 
Business Regulatory Enforcement Fairness Act. This rule:
    a. Does not have an annual effect on the economy of $100 million or 
more for the reasons stated above.
    The potential reduction in the award of costs and expenses as a 
result of amending this rule would be, at most, in the hundreds of 
thousands of dollars per year, given the number of applicants for 
permits and the even smaller number whose applications would be denied 
by OSM for reasons they could demonstrate amounted to bad faith and for 
the purpose of harassing or embarrassing the applicant.
    b. Will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, state, or local government 
agencies, or geographic regions because the rule does not impose major 
new requirements on the coal mining industry or consumers.
    No cost increases of any kind appear foreseeable as a result of 
limiting the award of costs and expenses to applicants for surface 
mining permits to instances in which their applications are denied by 
OSM for reasons of bad faith and for the purpose of harassing or 
embarrassing the applicant.
    c. Does not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S. based enterprises to compete with foreign-based enterprises for 
the reasons stated above.
    Any eventual effects of the nature listed above from limiting the 
circumstances when an applicant for the award of costs and expenses 
could receive an award as a result of prevailing on administrative 
review of the denial of a permit application because OSM's denial was 
based on bad faith and for the purpose of harassing or embarrassing the 
applicant would be minimal.

Unfunded Mandates

    This rule does not impose an unfunded mandate on state, local, or 
tribal governments or the private sector of more than $100 million per 
year. The rule does not have a significant or unique effect on state, 
local, or tribal governments or the private sector. A statement 
containing the information required by the Unfunded Mandates Reform Act 
(2 U.S.C. 1531, et seq.) is not required.
    A small government is not likely to apply for a surface coal mining 
permit. Therefore, it is improbable that there would be an effect of 
any kind on small governments.

Executive Order 12630--Takings

    In accordance with Executive Order 12630, the rules does not have 
takings implications. This determination is based on the fact that the 
rule will not have an impact on the use or value of private property 
and so, does not result in significant costs to the government.
    No realistic claims of a constitutional taking appear possible from 
defining the standard for an award of costs and expenses to an 
applicant for a surface mining permit whose application is denied to be 
OSM's bad faith and for the purpose of harassing or embarrassing the 
applicant in denying the application.

Executive Order 13132--Federalism

    This proposed rule does not have Federalism implications. It would 
not have ``substantial direct effects on the states, on the 
relationship between the national government and the states, or on the 
distribution of power and responsibilities among the various levels of 
government.''
    The only potential impact on the states from this proposed 
amendment is that they would wish to change their state program rules 
to correspond to the changed federal rule. This does not appear to 
qualify as a significant effect.

Executive Order 12988--Civil Justice Reform

    In accordance with Executive Order 12988, the Office of the 
Solicitor has determined that this rule does not unduly burden the 
judicial system and meets the requirements of sections 3(a) and 3(b)(2) 
of the Order.
    The proposed amendment of the rule clearly limits the basis for an 
award of costs and expenses to an applicant for a surface coal mining 
permit whose application is denied to a demonstration of bad faith and 
for the purpose of harassing or embarrassing the applicant on the part 
of OSM in denying the application. The proposed rule has no pre-emptive 
or retroactive effect.

Paperwork Reduction Act

    The proposed rule does not contain collections of information which 
require approval by the Office of Management and Budget under 44 U.S.C. 
Sec. 3501 et seq.
    The proposed amendment of the rule would not change the information 
a petitioner for an award of costs and expenses would provide with the 
petition; it would only change the standard for when an applicant for a

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permit could receive an award. Therefore, no information collection is 
involved.

National Environmental Policy Act

    OHA has reviewed this proposed rule and determined that it is 
categorically excluded from the National Environmental Policy Act 
process in accordance with the Departmental Manual 516 DM 2, Appendix 
1.10.

Clarity of this Regulation

    Executive Order 12866 requires each agency to write regulations 
that are easy to understand. We invite your comments on how to make 
this proposed rule easier to understand, including answers to questions 
such as the following: (1) Are the requirements in the proposed rule 
clearly stated? (2) Does the proposed rule contain technical language 
or jargon that interferes with its clarity? (3) Does the format of the 
proposed rule (grouping and order of sections, use of headings, 
paragraphing, etc.) aid or reduce its clarity? (4) Would the rule be 
easier to understand if it were divided into more (but shorter) 
sections? (A ``section'' appears in bold type and is preceded by the 
symbol ``Sec. '' and a numbered heading; for example, Sec. 4.1294). (5) 
Is the description of the proposed rule in the ``SUPPLEMENTARY 
INFORMATION'' section of this preamble helpful in understanding the 
proposed rule? What else could we do to make the proposed rule easier 
to understand?
    Send a copy of any comments that concern how we could make this 
proposed rule easier to understand to: Office of Regulatory Affairs, 
Department of the Interior, Room 7229, 1849 C Street NW, Washington, DC 
20240. You may also e-mail the comments to this address: 
[email protected].

List of Subjects in 43 CFR Part 4

    Administrative practice and procedure, Lawyers, Surface mining.

    Dated: July 3, 2000.
John Berry,
Assistant Secretary, Policy, Management and Budget.
    For the reasons set forth in the preamble, OHA proposes to amend 43 
CFR Part 4 as follows:

PART 4--DEPARTMENT HEARINGS AND APPEALS PROCEDURES

    1. The authority citation for part 4, Subpart L, continues to read 
as follows:

    Authority: 30 U.S.C. 1256, 1260, 1261, 1264, 1268, 1271, 1271, 
1275, 1293: 5 U.S.C. 301.

    2. 43 CFR 4.1294(b) and (c) are revised to read as follows:


Sec. 4.1294  Who may receive an award.

* * * * *
    (b) From OSM to any person, other than an applicant or permittee or 
his or her representative, who initiates or participates in any 
proceeding under the Act, who prevails in whole or in part, achieving 
at least some degree of success on the merits, upon a finding that such 
person made a substantial contribution to a full and fair determination 
of the issues.
    (c) To an applicant or permittee from OSM when the applicant or 
permittee demonstrates that OSM denied an application or issued an 
order of cessation, a notice of violation, or an order to show cause 
why a permit should not be suspended or revoked, in bad faith and for 
the purpose of harassing or embarrassing the applicant or permittee; or
* * * * *
[FR Doc. 00-19063 Filed 7-27-00; 8:45 am]
BILLING CODE 4310-79-M