## Facts

- West Virginia regulated surface coal mining through the West Virginia Surface Coal Mining and Reclamation Act and regulations that formed a federally approved state program under the Surface Mining Control and Reclamation Act of 1977 (SMCRA).
- SMCRA requires mine operators to post performance bonds to guarantee completion of reclamation; bond release is tied to successful completion of reclamation obligations.
- Acid mine drainage (AMD) can persist after mining and may require treatment to meet post-mining water quality obligations.
- West Virginia proposed a program amendment addressing final bond release at sites where AMD was being controlled through “passive treatment” systems.
- Passive treatment relies on natural or constructed features (such as wetlands or similar structures) to treat acidic drainage and may continue operating long after mining ends; it can also require occasional human intervention if conditions change.
- Under the proposed amendment, an operator could obtain final bond release while passive treatment remained in place and continued to function as the means of meeting drainage-related reclamation requirements, even though active treatment and active management would have to end before bond release.
- The Office of Surface Mining Reclamation and Enforcement (OSM), acting for the Secretary of the Interior, reviewed the proposed amendment and disapproved it as inconsistent with SMCRA’s bond-release framework.
- OSM’s stated concern was that allowing bond release while ongoing treatment remained necessary would shift future costs and risks of AMD control away from the operator and onto the public if the passive system failed or required further work after bond release.
- Trade associations representing coal producers and related businesses sued federal officials, seeking to set aside OSM’s disapproval as contrary to SMCRA and inconsistent with federal law.
- The parties filed cross-motions for summary judgment on the administrative record; defendants also filed a motion to dismiss one count and a motion for leave to exceed page limits.

## Issues

1. Whether SMCRA clearly requires approval of a state program amendment that would allow final bond release while ongoing passive treatment of AMD remains necessary to meet reclamation obligations.
2. If SMCRA does not clearly answer that question, whether OSM’s interpretation (no final bond release while continuing treatment is required) is a permissible construction entitled to deference under Chevron.
3. Whether OSM’s disapproval is unlawful because the Clean Water Act allows compliance through treatment, allegedly making OSM’s position inconsistent with federal water pollution law.

## Decision

- The court granted defendants’ motion for summary judgment and denied plaintiffs’ motion for summary judgment.
- The court held that SMCRA does not directly resolve the precise question of whether final bond release is allowed when long-term AMD treatment must continue, so the statute is ambiguous on that point.
- Applying Chevron, the court upheld OSM’s construction that final bond release is not appropriate where continued treatment is required, because that reading is reasonable in light of SMCRA’s structure and objectives.
- The court accepted OSM’s concern that releasing bonds while treatment continues could shift the financial burden of future repairs, operation, or failure of treatment systems from operators to the public.
- The court rejected plaintiffs’ Clean Water Act argument, concluding that Clean Water Act treatment-based compliance does not control SMCRA’s separate bond-release standard and does not prevent OSM from requiring completion of reclamation before final bond release.
- The court denied as moot defendants’ motion to dismiss Count VII (because summary judgment resolved the case) and granted defendants’ motion to exceed page limitations.

## Legal Principles

- When a statute does not speak clearly to the specific question at issue, courts apply Chevron and defer to an agency’s reasonable interpretation adopted within its delegated authority.
- Under SMCRA, performance bonds function to ensure reclamation is completed and to prevent operators from leaving unfunded, long-term environmental liabilities after mining ends.
- OSM may disapprove a state program amendment if it is inconsistent with SMCRA, even where the state program otherwise operates in lieu of direct federal regulation.
- A state cannot obtain federal approval for a bond-release approach that allows operators to recover bonds while ongoing pollution control remains necessary, if the agency reasonably reads SMCRA to require completion of reclamation obligations before final release.
- The Clean Water Act’s allowance of treatment to meet discharge limits does not determine SMCRA’s bond-release requirements; the two statutes can impose different duties aimed at different regulatory goals.

## Conclusion

The court upheld OSM’s disapproval of West Virginia’s proposed amendment that would have allowed final reclamation bond release while passive AMD treatment continued, holding that SMCRA is ambiguous on the precise bond-release question and that OSM’s interpretation barring final release during ongoing treatment was reasonable and consistent with SMCRA’s goal of keeping reclamation costs and risks with the operator rather than the public.


West Virginia Mining and Reclamation Association v. Babbitt, 970 F. Supp. 506 (1997)