On August 2, 2007, the U.S. Court of Appeals for the Third Circuit issued a unanimous decision in favor of the coalition represented by PennFuture. The decision overturned the only portions of the February 2006 summary judgment of the U.S. District Court for the Middle District of Pennsylvania that the coalition challenged on appeal. The Third Circuit’s opinion, written by Judge D. Michael Fisher, was joined by Judge Kent A. Jordan and Senior Judge Jane R. Roth.
The underlying lawsuit, filed on December 8, 2003, sought review of two actions taken by federal coal mining regulators in 2003 to terminate two requirements they had imposed in 1991. The 1991 actions required Pennsylvania to amend its coal mining bonding program so that the program s reclamation guarantees met minimum federal standards, and to demonstrate the financial soundness of the bonding program through the submission of an actuarial study. The Court of Appeals directed the district court to set aside the 2003 terminations, thus requiring the federal regulators to reinstate the still-unsatisfied requirements they imposed in 1991.
In August 2001, Pennsylvania prospectively switched from an “alternative bonding system” (ABS) to a “conventional bonding system” (CBS) for certain kinds of coal mining operations. The central issue addressed by the Court of Appeals was “the question of what obligations, if any, Pennsylvania has to ensure reclamation of sites forfeited before the conversion to a CBS began, plus any additional sites whose reclamation costs are still not fully covered by CBS bonds.” Finding that the federal Surface Mining Control and Reclamation Act (SMCRA) “requires that reclamation and treatment of all post-SMCRA mining areas be guaranteed,” the Court of Appeals held that the words “any areas which may be in default at any time” in the federal regulation governing ABSs creates an ongoing obligation to guarantee the reclamation of all mines bonded under Pennsylvania’s ABS. As a result, unless complete reclamation of a mine initially bonded under the ABS – including perpetual treatment of any post-mining discharge – is fully guaranteed by conventional bonds posted under the new CBS, the ABS must provide sufficient money to ensure the mine’s reclamation.
On October 3, 2007, the Court of Appeals denied the Petition for Rehearing En Banc filed by the Pennsylvania Department of Environmental Protection.
After a few missteps and related legal proceedings, the federal regulators eventually reinstated their 1991 actions through a final rule published on October 15, 2008 and a letter to the Secretary of Pennsylvania DEP dated November 4, 2008.
For further developments related to the Kempthorne decision, see Pennsylvania Coal Mine Bonding Program -- ABS Program Amendment.
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