## Facts

- The Susan Pruitt Cloud Land Trust (the “Pruitt Heirs”) owned more than a 99% undivided interest in the surface estate of a 50-acre tract in Lee County, Virginia.
- Powell Mountain Coal Company owned a small undivided surface interest and held 100% of the mineral rights under an 1887 deed.
- Before SMCRA’s enactment, a three-acre portion of the tract had been strip-mined by others, leaving an unreclaimed bench and highwall.
- After SMCRA, Powell Mountain obtained a surface-mining permit under Virginia’s SMCRA program approved by the Secretary of the Interior.
- The surface owners alleged Powell Mountain violated Virginia program regulations by re-disturbing the previously unreclaimed area without proper authorization and failing to meet reclamation standards, causing damage to the surface estate.

## Issues

1. Whether SMCRA § 520(f), 30 U.S.C. § 1270(f), creates a federal cause of action for damages based on violations of state regulations incorporated into an approved state SMCRA program.
2. Whether the operator’s alleged violations of the approved Virginia program proximately caused compensable injury to the surface owners’ property for purposes of § 520(f) liability.
3. Whether compensatory damages under § 520(f) may be measured by the gross sales price of coal removed, rather than by the surface owner’s actual property injury.

## Decision

- The Fourth Circuit affirmed in part, vacated in part, and remanded.
- The court held § 520(f) authorizes a federal damages action for violations of state regulations that are part of an approved state SMCRA program.
- The court affirmed the district court’s determination of operator liability under § 520(f) for violating Virginia program requirements and causing property damage.
- The court vacated the damages award insofar as it treated the gross sales price of the coal as compensatory damages, and remanded for reconsideration of the proper measure and amount of damages (and related relief).

## Legal Principles

- SMCRA’s approved-state-program framework makes state rules and permits issued under an approved program enforceable within SMCRA’s federal remedial scheme for purposes of § 520(f).
- Section 520(f) permits recovery of damages for injury to person or property caused by an operator’s violation of a rule, regulation, order, or permit issued pursuant to SMCRA, including those arising from an approved state program.
- Liability under § 520(f) requires a causal connection between the regulatory violation and the plaintiff’s injury, including proximate cause.
- Compensatory damages under § 520(f) must be tied to compensating for the plaintiff’s actual injury, not automatically pegged to the operator’s gross coal revenues.

## Conclusion

The Fourth Circuit recognized a federal damages remedy under SMCRA § 520(f) for violations of an approved state surface-mining program, upheld liability for state-program violations causing property harm, but required recalculation of damages because the district court’s gross-coal-sales measure did not necessarily reflect the surface owners’ compensable injury.


Molinary v. Powell Mountain Coal Co., 125 F.3d 231 (4th Cir. 1997)