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Illinois South Project Inc. v. Hodel

decided: March 30, 1988.

ILLINOIS SOUTH PROJECT, INC., ET AL., PLAINTIFFS-APPELLANTS,
v.
DONALD P. HODEL, SECRETARY OF THE INTERIOR, ET AL.,DEFENDANTS-APPELLEES



Appeal from the United States District Court for the Central District of Illinois, No. 82-2229-Harold A. Baker, Chief Judge.

Posner, Easterbrook, and Manion, Circuit Judges.

Author: Easterbrook

EASTERBROOK, Circuit Judge.

The Surface Mining Control and Reclamation Act of 1977, 30 U.S.C. §§ 1201-1328, establishes rules for the strip mining of coal. See Hodel v. Virginia Surface Mining & Reclamation Ass'n, 452 U.S. 264, 69 L. Ed. 2d 1, 101 S. Ct. 2352 (1981). A state may regulate in the federal government's stead if it uses criteria "in accordance with" the Act and "consistent with" the federal implementing regulations. 30 U.S.C. § 1253(a)(1), (3), & (7). Illinois is one of the principal producers of surface-mined coal, much of it inexpensive and so in demand. Regulations concerning the mining of this coal were bound to draw protests. The state submitted a proposed regulatory system in March 1980 and has been locked in controversy ever since.

Part of the delay comes from the difficulty the Department of the Interior has encountered in promulgating regulations satisfactory to the courts of the District of Columbia, which have exclusive jurisdiction to review the federal regulations. 30 U.S.C. § 1276(a)(1). A series of decisions remanded one or another rule to the Secretary for more work. The most recent case, National Wildlife Federation v. Hodel, 839 F.2d 694 (D.C. Cir. 1988), resolves many of the issues but leaves some open, and two decisions that were not appealed set aside additional regulations important to Illinois. We shall have to create still more delay on account of open questions about the federal regulations.

Another part of the delay stems from the defects in the state's proposals. The Secretary rejected the state's first proposal in part, 45 Fed. Reg. 72468 (1980), and gave Illinois until the end of 1980 to submit a complying program. A state court forbade state officials from submitting a new plan until December 1981. Illinois Coal Ass'n v. Illinois Department of Mines and Minerals, No. 80-CH-303 (7th Cir. Sangamon County). The Secretary approved the new proposal conditionally in 1982, 47 Fed. Reg. 23858 (1982), but ongoing changes in the federal regulations (some on the Department's initiative, some on the courts') led to a remand for further consideration. On April 4, 1984, the Secretary approved the Illinois program. 49 Fed. Reg. 13494 (1984).

The plaintiffs, ten organizations (collectively Illinois South), contended that the program was defective in 52 separate ways. We can believe that there are 52 errors in the 250 pages of microscopic type that make up the state's regulatory program, but the blunderbuss attack did not conduce to speedy resolution of the case. The parties whittled the disagreements down to 26 (often by the capitulation of the state and the modification of its plan), which the district court resolved by granting summary judgment in favor of the defendants. In this court Illinois South reduced its challenges to seven (though with subparts), now six because it abandoned a further point in light of National Wildlife Federation.

1. Valid Existing Rights. The Act puts certain lands off limits to strip mining, including lands of historical interest and special ecological vulnerability. 30 U.S.C. § 1272. The exclusion does not apply, however, "to lands on which surface coal mining operations are being conducted on August 3, 1977, or under a permit issued pursuant to this chapter, or where substantial legal and financial commitments in such operation were in existence prior to January 4, 1977", § 1272(a)(6), or, to put it differently, lands "subject to valid existing rights" on August 3, 1977, § 1272(e). The Secretary's first regulation, 44 Fed. Reg. 15342 (1979), 30 C.F.R. § 761.5 (1980), defined this exception as covering property rights (including leases) held by the mine operator on August 3, 1977, but only if the operator either held by that date a permit to conduct mining or demonstrated that the land in question was immediately adjacent to and needed for an operating mine. The district court upheld this definition in In re Permanent Surface Mining Regulation Litigation, 14 E.R.C. 1083, 1090-92 (D.D.C. 1980), on the understanding that a good faith effort to obtain a permit before August 3, 1977, would be treated as a permit in force then.

The Secretary promulgated a new "valid existing rights" regulation in 1983, 48 Fed. Reg. 41313-16, 41348-49, 30 C.F.R. § 761.5 (1986). The new language provided that if the operator had enough of a property interest that the application of the criteria of § 1272 would "take" the property and require the payment of "just compensation" under the Constitution, then the interest was to be treated as a "valid existing right"; otherwise not. This converted all regulatory questions into constitutional questions-and, one might suppose, shrunk the category of "valid existing rights", for the district court that sustained the 1979 regulation had held that the limits on that definition did not produce any takings. The Secretary expressed concern in 1983, however, that the 1979 regulation would lead to a call on the Treasury by displacing property rights, and reasoned that the revision would prevent this. On this reading, the 1983 rule may recognize as "valid existing rights" at least some interests denied that status by the 1979 regulation. Illinois proposed a "valid existing rights" clause consistent with the 1983 regulation, and the Secretary approved that clause under the 1983 regulation. 49 Fed. Reg. 13499-13501 (1984). The district court with exclusive jurisdiction over the federal regulations held in 1985, however, that the 1983 regulation had been promulgated without the necessary notice and opportunity for comment. In re Permanent Surface Mining Regulation Litigation, 22 E.R.C. 1557 (D.D.C. 1985). The Secretary did not appeal but did not issue a new rule either, apparently waiting for the resolution of related issues in National Wildlife Federation, at 748-751. As the district court saw this case, then, the "valid existing rights" provision of the Illinois plan conformed with a regulation that no longer existed, but might be repromulgated or modified.

The district court wrote that "a determination of whether Illinois' definition of [valid existing rights] is consistent with the federal definition . . . must await the Secretary's formulation of a new definition". Nonetheless, the district court granted summary judgment for the defendants, thereby approving the existing regulation. Illinois South attacks this disposition, contending that the vacation of the 1983 regulation restored to force the 1979 regulation, see Action on Smoking and Health v. CAB, 230 U.S. App. D.C. 1, 713 F.2d 795, 797 (D.C. Cir. 1983); cf. Appleton Memorial Hospital v. Bowen, 814 F.2d 408 (7th Cir. 1987); the Illinois rule is inconsistent with the 1979 regulation and so must perish.

The three sets of defendants offer different arguments. The federal appellees rely on the Secretary's statement acquiescing in the D.C. district court's decision:

In a few instances, State program amendments were approved based on the 1983 revisions. State programs will remain in effect until the Director of OSMRE has examined the provisions of each State program to determine whether changes are necessary and has notified the State regulatory authority pursuant to 30 CFR 732.17(c) and (d) that a State program amendment is required.

51 Fed. Reg. 41952 (1985). The state officials contend that the Illinois regulations are at least as effective as the 1979 federal regulations and so may be approved under them. The Illinois Coal Association, which intervened as a defendant to represent the interests of mine operators, insists that the D.C. decision of 1985 did not resurrect the 1979 regulations, and that final disposition therefore must await the new rules.

None of these arguments supports what the district court did, as opposed to what it said : what it did is enter judgment in favor of the state's regulations. Take the state's argument first. Perhaps the Secretary could have approved Illinois' proposal under the 1979 regulation, but he did not. He evaluated the proposal under the 1983 rule, intimating that it was the change that made the state's proposal satisfactory. We may not approve an administrative decision on the basis of a ground advanced by counsel but not the agency. SEC v. Chenery Corp., 318 U.S. 80, 87-88, 87 L. Ed. 626, 63 S. Ct. 454 (1943). The Association's argument may show that a court ought not disapprove the proposal on the basis of a superannuated regulation (a question we do not decide), but it hardly shows that the court may approve a proposal that rested on an invalid regulation. The Secretary's argument is simply beside the point. The published statement informed states that the Secretary would take the lead in informing them what any new regulation required. It did not and could not control the disposition of cases then pending, cases in which the state rules in question had never become effective.

Courts should apply the law in force at the time of decision. Bradley v. Richmond School Board, 416 U.S. 696, 40 L. Ed. 2d 476, 94 S. Ct. 2006 (1974). The law in force today is surely not the 1983 regulation. The 1979 regulation regained currency when the 1983 regulation died, but its prospective significance is cloudy. The Secretary's statement in 1985 did not suggest that he would apply that rule to any pending matter, because although procedurally valid the 1979 rule no longer expressed the Secretary's substantive views. The Secretary would have to use the 1979 rule as the basis of any current substantive decision, but the Secretary's principal response has been to defer decisions pending a new, valid rule. The only thing clear to us is that the Secretary wanted to take a new look at the "valid existing rights" question as soon as he had a new regulation in place. An agency may do this if it acts "with all deliberate speed" to generate and implement a new regulation. Addison v. Holly Hill Fruit Products, Inc., 322 U.S. 607, 619, 88 L. Ed. 1488, 64 S. Ct. 1215 (1944); cf. Burlington Northern, Inc. v. United States, 459 U.S. 131, 74 L. Ed. 2d 311, 103 S. Ct. 514 (1982). The Secretary's approval of the Illinois proposal under the defective 1983 regulation cannot stand; we therefore vacate the district court's decision to the extent it granted summary judgment to the defendants on this issue. We remand with instructions to return this subject to the Secretary for further proceedings under whatever regulation is in force at the time the Secretary issues a fresh decision. If the Secretary wishes to use something like the 1983 regulation, he had best promulgate it.

2. Deferred Designation Decisions. Section 522(c) of the Act, 30 U.S.C. § 1272(c), permits any potentially affected person to petition the applicable regulatory agency "to have [an] area designated as unsuitable for surface coal mining operations". It requires the agency to hold a hearing on the petition within ten months, and to issue a decision within 60 days of the hearing. In 1983 the Secretary issued a regulation permitting regulatory officials to defer decision concerning such a petition until there was a prospect that someone would want to use the lands for mining. 48 Fed. Reg. 41352-53 (1983), 30 C.F.R. § 764.15(a)(3) (1984). The Secretary saw this as a sensible way to alleviate the burden of deciding unnecessary petitions and obtaining an adversarial presentation from persons interested in alternative uses of the land. The only district court with jurisdiction on this question saw this as a clear violation of the statutory rule, and set aside the regulation. In re Permanent Surface Mining Regulation Litigation, 620 F. Supp. 1519, 1541-44 (D.D.C. 1985). The Secretary acquiesced in this decision, 51 Fed. Reg. 41956, 41961 (1986).

While the 1983 regulation was in force, however, the Secretary approved the portion of Illinois' plan taking advantage of the right to defer decision. 49 Fed. Reg. 13501 (1984), approving 62 Ill. Adm. Code § 1764.15(e). Illinois South challenged this on the basis of the 1985 decision. The district court's opinion did not mention the subject.

The Secretary submits that this question is moot. The Secretary has issued a formal notice to Illinois that its program is deficient and assures us that Illinois has submitted an amendment to its plan deleting the offending provision. Curiously, however, Illinois defends the existing regulation on the merits, without reference to the decision abrogating the federal regulation in question. The state maintains that even with the deferral provision, its rule is no less effective in protecting genuine interests than is federal law. Its apparent contention, in other words, is that state regulatory systems may depart from the requirements of the Act, so long as they are as effective in the long run. The district court did not address this contention and may never have to. As things stand, we are uncertain about the status of the state rule. If Illinois plans to enforce its deferral rule, the case is not moot. We therefore vacate this portion of the district court's decision and remand with instructions to ...


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