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United States v. Troup

argued: January 21, 1987.

UNITED STATES OF AMERICA, APPELLANT,
v.
WARREN TROUP, D.B.A. WARREN TROUP COAL COMPANY, APPELLEE



APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA - PHILADELPHIA, D.C. Civil No. 84-6079.

Author: Seitz

Before: SEITZ, BECKER, MANSMANN, Circuit Judges.

Opinion OF THE COURT

SEITZ, Circuit Judge.

The United States appeals from the final judgment of the district court awarding it $19,526.80, which represents only 55% of the reclamation fees it sought against Warren Troup under § 402(a) of the Surface Mining Control and Reclamation Act of 1977 (SMCRA), 30 U.S.C. § 1232(a) (1982). We have jurisdiction under 28 U.S.C. § 1291 (1982).

I.

Appellee Troup operates a surface coal mining business in the anthractie coal fields of Pennsylvania. Troup blasts large holes on the surface of abandoned mines and then excavates pillars of coal that remain from previous underground mining. The product that Troup removes, called "run-of-mine," contains coal, rock and other debris. Troup sells the run-of-mine material to an anthracite coal preparation plant called a breaker. The breaker crushes and cleans it and resells the processed product for a higher price.

The Surface Mining Control and Reclamation Act of 1977 (SMCRA) requires coal operators to pay the Secretary of the Interior "a reclamation fee of 35 cents per ton of coal produced by surface coal mining and 15 cents per ton of coal produced by underground mining . . . ." 30 U.S.C. § 1232(a). The moneys collected go into the Abandoned Mine Reclamation Fund and are used, among other things, to fund restoration of lands harmed by past coal mining activities. See 30 U.S.C. § 1231(c)(1) (1982). Troup has never paid any reclamation fees.

In December 1984 the government filed a complaint in the Eastern District of Pennsylvania seeking to recover reclamation fees and interest due under the SMCRA. The government contended that the reclamation fee should be calculated on the total tonnage of the material Troup sold to the processor as mandated by the terms of a regulation adopted by the Secretary. The accuracy of the coal tonnage totals was stipulated by the parties. Troup agreed that a reclamation fee was due, but argued that a subtraction should be made for "the weight of rock, clay, dirt and other debris."*fn1

In arriving at its award, the district court first found that the testimony of the government's expert witness established that the material mined by Troup was combustible and qualified as coal under standards set by the American Society for Testing and Materials (ASTM). The court, however, rejected the government's contention that Troup should pay reclamation fees on his product as mined. Instead, the court stated that its decision was mandated by United States v. Brook Contracting Corp., 759 F.2d 320 (3rd Cir. 1985),*fn2 which it read to require that reclamation fees may only be charged on material that is "(a) combustible; (b) qualifies as coal under ASTM standards; and (c) excludes the weight of rock, clay, dirt and other debris." United States v. Troup, No. 84-6079 (E.D. Pa. April 25, 1986) (unpublished bench opinion). The district court concluded that "the liability of Troup as the first seller should be limited to the amount of coal that is commercially usable by the ultimate user." Id. Accordingly, the court only found Troup liable for $19,526.80, which was 55% of what the government had sought.*fn3 This appeal followed.

II.

On appeal the government contends that in deciding that a reclamation fee may only be charged on the weight of the coal after it has been cleaned by the purchaser, the district court was invalidating a national regulation, which it did not have jurisdiction to do.

A preliminary issue must be addressed, i.e., whether the government's subject matter challenge to Troup's attack on the regulation may be entertained in view of our decision invalidating the regulation in Brook Contracting Corp. ...


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