## Facts

- The Surface Mining Control and Reclamation Act of 1977 (SMCRA) allows a state to assume primary regulatory authority over surface coal mining if its program is “in accordance with” SMCRA and “consistent with” federal regulations, subject to approval by the Secretary of the Interior.
- Illinois submitted a proposed SMCRA program in 1980; after partial rejection, a state-court injunction delayed resubmission, and a revised plan was conditionally approved by the Secretary in 1982.
- Illinois South Project, Inc. and other organizations sued in federal district court challenging the Secretary’s approval, initially alleging numerous defects but narrowing the appeal to a smaller set of issues, prominently including Illinois’s “complete application” rule for permits.
- Federal regulations treat an application as “complete” when the regulatory authority determines it contains adequate information to begin processing; Illinois’s rule referred to an “apparent good-faith effort to address the required information.”
- The Office of Surface Mining and Illinois represented that the Illinois provision required (1) submission of all required information under the federal standard and (2) that the submission be in good faith (i.e., based on reasonably supported data).
- While the case was pending, related litigation in the D.C. Circuit remanded or invalidated certain federal SMCRA regulations, creating uncertainty for issues in Illinois’s program that tracked those federal rules.

## Issues

1. Whether Illinois’s “complete application” standard, as written and as interpreted by federal and state regulators, was consistent with SMCRA and federal implementing regulations.
2. How a court reviewing approval of a state SMCRA program should handle challenges that depend on federal regulations subject to ongoing remand or revision in separate, exclusive-review proceedings.
3. What level of deference is owed to the Secretary’s approval decision and to the shared federal-state interpretation of contested state regulatory language.

## Decision

- The Seventh Circuit affirmed the district court’s judgment upholding the Secretary’s approval of Illinois’s program on issues that did not depend on unsettled federal regulations.
- The court held that Illinois’s “good-faith” language, as construed by the Office of Surface Mining and Illinois, did not relax the federal completeness requirement but added a good-faith component to the same informational baseline.
- For challenges intertwined with federal regulations that had been remanded or invalidated in D.C. Circuit litigation, the court declined to issue definitive rulings and remanded or left matters for further proceedings once the federal regulatory framework became clearer.

## Legal Principles

- Under SMCRA, challenges to the validity of federal regulations are channeled to the D.C. Circuit; other courts reviewing state-program approvals generally apply existing federal regulations rather than reassessing their validity.
- A state program may use text differing from federal regulations if, in substance, it remains consistent with SMCRA and federal requirements as approved by the Secretary.
- Courts give substantial deference to the Secretary’s approval of a state SMCRA program and to reasonable agency interpretations of program provisions within the agency’s administration.
- When both the federal overseer and the state regulator adopt a restrictive interpretation of a state rule during approval litigation, a court may accept that interpretation and treat it as binding for purposes of consistency review.
- Where a state program provision’s legality depends on federal regulations in flux due to remand or revision, a reviewing court may defer final resolution to avoid decisions that could be displaced by imminent regulatory change.

## Conclusion

The Seventh Circuit largely sustained federal approval of Illinois’s SMCRA regulatory program, rejecting the claim that the state’s “good-faith” completeness standard diluted federal permit requirements as interpreted by regulators, while postponing or remanding issues that turned on unsettled federal SMCRA regulations subject to separate D.C. Circuit proceedings.


Illinois S. Project, Inc. v. Hodel, 844 F.2d 1286 (7th Cir. 1988)