## Facts

- The United States sought to recover reclamation fees under § 402 of the Surface Mining Control and Reclamation Act of 1977 (SMCRA), 30 U.S.C. § 1232(a), which imposes a per-ton fee on “operators of coal mining operations.”
- Rapoca Energy Company owned or leased large coal reserves in Buchanan, Dickinson, and Wise Counties, Virginia.
- Rapoca did not perform physical extraction itself; it contracted with 48 independent mining companies to mine coal from Rapoca’s reserves.
- Rapoca performed initial engineering and site development, including building access roads and sediment ponds.
- Rapoca selected the specific locations to be mined and provided that location information to the contractors.
- The contractors were required to deliver the mined coal exclusively to Rapoca, which purchased it at a fixed per-ton price.
- The parties filed cross-motions for summary judgment on whether Rapoca qualified as an “operator” and thus owed SMCRA reclamation fees.

## Issues

1. Whether a coal-reserve owner that arranges and controls mining through independent contractors is an “operator” under 30 U.S.C. § 1291(13) and liable for SMCRA § 402 reclamation fees.
2. Whether the independent-contractor status of the mining companies bars federal statutory liability for reclamation fees.

## Decision

- The court granted the United States’ motion for summary judgment and denied Rapoca’s cross-motion.
- The court held Rapoca was an “operator” within 30 U.S.C. § 1291(13) and was ultimately liable for SMCRA reclamation fees on coal mined from its reserves.
- The court rejected Rapoca’s contention that only the entities physically extracting the coal could be “operators.”
- The court further held Rapoca could not avoid liability by structuring production through independent contractors.

## Legal Principles

- Under SMCRA, “operator” is not limited to the entity that physically removes coal; an entity is an operator if it is engaged in the coal mining enterprise and removes or intends to remove more than 250 tons of coal within twelve consecutive calendar months at one location.
- Ownership or leasehold of coal, combined with planning and control of key aspects of the mining operation and exclusive purchasing arrangements, can establish that the owner is “engaged in coal mining” for purposes of SMCRA fee liability.
- State-law labels distinguishing employees from independent contractors do not control the allocation of federal statutory obligations under SMCRA.
- SMCRA’s remedial purpose supports interpreting “operator” to place reclamation-fee responsibility on the party that controls and benefits from the mining operation, preventing avoidance through contract-mining structures.

## Conclusion

The court held that Rapoca, as the coal-reserve owner that planned, developed, and controlled mining through exclusive contracts, was an SMCRA “operator” and owed § 402 reclamation fees despite delegating physical extraction to independent contractors.


United States v. Rapoca Energy Co., 613 F. Supp. 1161 (W.D. Va. 1985)