924 F.3d 842
6th Cir.2019Background
- Tract 46 in Pike County, KY has severed surface and mineral estates; Pike Letcher and Johnson own the surface as cotenants, Pike Letcher owns the coal.
- Pike Letcher (through affiliate Premier/Elkhorn) obtained a Kentucky surface‑mining permit in 2014 based on a 2013 right‑of‑entry from Pike Letcher; Johnson objected.
- A federal district court (Johnson I) held that subsection (A) of SMCRA required consent of all surface owners; the Secretary issued a cessation order; Elkhorn revised its application invoking subsection (C) and Kentucky cotenancy law; Kentucky reissued a permit and the Secretary lifted the cessation order.
- Johnson administratively challenged the Secretary’s termination of the cessation order; an ALJ and the district court upheld the Secretary’s decision. Johnson appealed to this court.
- Central legal questions: (1) whether SMCRA §1260(b)(6)(C) permits reliance on state cotenancy law generally; (2) whether the Cabinet unlawfully adjudicated a property‑rights dispute; (3) whether Elkhorn’s failure to disclose pending litigation on its application voided the permit; and (4) whether Johnson exhausted administrative remedies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Finality / exhaustion | ALJ decision not final; Appeals Board must issue final decision before judicial review | 43 C.F.R. §4.21(a)(2)/(c) makes an ALJ decision final if Appeals Board fails to act on a stay petition within 45 days | ALJ decision became final under regulation when Board failed to act within 45 days; exhaustion satisfied |
| Scope of §1260(b)(6)(C) (state law to determine surface‑subsurface relationship) | Subsection (C) limited to state rules for construing severance conveyances only; cannot rely on cotenancy law to bypass subsection (A) | "State law" is unqualified; regulatory authority may apply any relevant state law (including cotenancy) to determine the surface‑subsurface relationship | Court holds §1260(b)(6)(C) permits reliance on any applicable state law; ALJ permissibly applied Kentucky cotenancy law |
| Prohibition on adjudicating "property rights disputes" | Cabinet and Secretary effectively adjudicated Johnson's property rights; SMCRA requires final state judgment before permit | The prohibition is narrow (disputes over deed validity, boundaries, fraud, ouster, waste); this is a statutory interpretation dispute, not a title dispute | Court: approval did not adjudicate a property‑rights dispute; prohibition construed narrowly; agency action not arbitrary or capricious |
| Disclosure of pending litigation (30 U.S.C. §1257(b)(9)) | Elkhorn failed to disclose Johnson I on its revised application; permit invalid | Even if disclosure required, omission was harmless—Cabinet and Secretary knew of the litigation and could have acted | Court: omission, if error, was harmless; does not justify reversing agency decision |
Key Cases Cited
- Bragg v. W. Va. Coal Ass'n, 248 F.3d 275 (4th Cir.) (describing SMCRA's cooperative federalism and dual environmental/energy purposes)
- Kentuckians for the Commonwealth v. U.S. Army Corps of Eng'rs, 746 F.3d 698 (6th Cir.) (discussing state's role under SMCRA)
- Robinson v. Shell Oil Co., 519 U.S. 337 (statutory interpretation starts with text)
- Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (agencies get deference for reasonable statutory interpretations)
- Barnhill v. Johnson, 503 U.S. 393 (property interests are creatures of state law)
- Rapanos v. United States, 547 U.S. 715 (clear‑statement requirement when federal law displaces state property rules)
- Weinberger v. Salfi, 422 U.S. 749 (Congress or agency may define what constitutes a final decision)
- Sierra Club v. Slater, 120 F.3d 623 (6th Cir.) (harmless‑error rule applies in APA review)