The U.S. Court of Federal Claims on March 28 granted the federal government’s motion for summary judgment and dismissed a series of cases that had been combined into one proceeding and disputed the government’s right to impose Abandoned Mine Land (AML) fees on coal headed for export.
A long list of coal producers – including the Consolidation Coal unit of CONSOL Energy (NYSE:CNX) and Peabody Holding, the former name for Peabody Energy (NYSE:BTU) – had brought these cases. They said the imposition of AML fees on current coal production, with that money headed to clean up old, unreclaimed coal mines, violated the Export Clause of the U.S. Constitution when it came to coal headed solely into the export market. Coal for domestic consumption, which is the vast majority of U.S. coal output, wasn’t in dispute.
The claims court had stayed these cases pending resolution of one of these cases, Consolidation Coal Co. v. United States. In that case, the Court of Appeals for the Federal Circuit affirmed the claims court’s entry of judgment in favor of the government and the U.S. Supreme Court in June 2011 denied plaintiffs’ petition for a writ of certiorari. The claims court noted that these cases have bounced between various courts for years.
Congress passed the Surface Mining Control and Reclamation Act of 1977 (SMCRA), which established the Abandoned Mine Reclamation Fund in order to restore natural resources damaged by coal mining. This fund is paid for by an assessment of an AML reclamation fee. Coal producers must pay to the Secretary of the Interior 35 cents per ton of coal produced by surface coal mining and 15 cents per ton of coal produced by underground mining.
The March 28 decision read in part: “Plaintiffs assert that the Federal Circuit has ‘adopted the fiction that the tax was a deferred assessment on the extraction of coal’ rather than confronting the reality that the tax is actually imposed ‘upon the sale of exported coal.’ Whatever the merit of that argument, the decisions of the Federal Circuit have already ended this Court’s task, as plaintiffs well realize. The two legal questions before this Court—whether the SMCRA’s reclamation fee and the regulations applying that fee are constitutional—have already been answered by the Federal Circuit. Summary judgment in the government’s favor is therefore appropriate.”