Decker Coal Company v. United States of America et al

Filing 30

ORDER: Defendants' Motion for Summary Judgment 27 is STRICKEN; Decker's Motion to Strike 28 is MOOT. FINDINGS AND RECOMMENDATIONS: It is RECOMMENDED that Defendants' Stipulation to Vacatur 20 (deemed a Motion to Remand) should b e GRANTED. The IBLA Decision dated January 5, 2009, should be VACATED. This matter should be REMANDED to the MMS for further review and theis case closed. Objections to F&R due by 1/11/2010. Signed by Magistrate Carolyn S Ostby on 12/23/2009. (NOB)

IN THE UNITED STATES DISTRICT COURT F O R THE DISTRICT OF MONTANA BILLINGS DIVISION D E C K E R COAL COMPANY, Plaintiff, vs. U N I T E D STATES OF AMERICA; U N I T E D STATES D E P A R T M E N T OF THE I N T E R I O R ; KEN SALAZAR, in h is official capacity as Secretary o f the Department of the Interior; W A L T E R D. CRUICKSHANK, in h is official capacity as Acting D ir e c t o r , Mineral Management S e r v ic e , Department of the I n t e r io r , Defendants. I . BACKGROUND P la in t iff Decker Coal Company ("Decker") filed this action on M a r ch 6, 2009, seeking judicial review of a January 5, 2009, decision of t h e Interior Board of Land Appeals assessing coal royalty payments F I N D I N G S AND R E C O M M E N D A T IO N a n d ORDER C V -0 9 -2 6 -B L G -R F C -C S O

a g a in s t Decker. On June 1, 2009, Defendants answered the complaint, c o n t e n d in g that Decker should be denied all relief sought. Court Doc. 1 0 at 13. O n June 19, 2009, the Court put in place a schedule for the parties t o file motions or otherwise brief the merits of this administrative a p p e a l. Court Doc. 17. Before the first such deadline, Defendants filed a "Stipulation to Vacatur and Request for Status Conference to Modify B r ie fin g Schedule to Address Remand." Court Doc. 20. The document w a s not a stipulation between the parties but rather was in effect a m o t io n to remand, although not so captioned. It specifically requested t h e Court to modify the existing briefing schedule to address remand. Id. at 8. Defendants argued that vacatur and remand are appropriate b e c a u s e they "acknowledge that MMS and IBLA misapplied the r e g u la t io n s in assessing the value of the coal in the 2008 MMS Order a n d the 2009 IBLA decision." Id. at 6. A f t e r discussing this request with the parties, the Court agreed to D e fe n d a n t s ' request to modify the briefing schedule to address the r e m a n d request. Accordingly, upon the parties' agreement, the Court

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o r d e r e d the parties to brief the issue of remand and put a schedule in p la c e to accomplish that purpose. Court Doc. 24. Decker timely filed its B r ie f in Opposition to Motion to Remand on November 23, 2009. Court D o c . 26. On December 7, 2009, Defendants timely filed a reply to D e ck e r's opposition to the requested remand. Along with their reply, h o w e v e r , Defendants also filed a Motion for Summary Judgment. Decker has moved to strike the motion for summary judgment. Accordingly, the following motions are now before the Court: (1) D e f e n d a n t s ' Stipulation to Vacatur, which the parties now refer to as a M o t io n to Remand (Court Doc. 20); (2) Defendants' Motion for Summary J u d g m e n t (Court Doc. 27); and (3) Decker's Motion to Strike Motion for S u m m a r y Judgment and Statement of Undisputed Facts (Court Doc. 2 8 ). II. MOTION TO STRIKE MOTION FOR SUMMARY JUDGMENT D e c k e r argues that Defendants' Motion for Summary Judgment s h o u ld be stricken because it is not allowed under the current S c h e d u lin g Order and because Defendants did not comply with Local R u le 7.1(c)(1) which requires a movant to confer with other parties and

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t o state in the text of the motion whether any party objects to the m o t io n . Defendants' motion is actually a motion for partial summary ju d g m e n t although it is captioned as a full summary judgment motion. They ask the Court to address the "narrow issue" of whether the MMS a n d IBLA acted arbitrarily and capriciously when they determined that t h e 1993 Decker-ComEd contract was non-arm's length. Court Doc. 27 a t 2. Defendants explain that they seek a ruling on this "threshold is s u e " because Decker's opposition to remand challenges the MMS and I B L A determination that the Decker-ComEd contract was non-arm's le n g t h ." Court Doc. 27-2 at 3. They continue to assert, however, that r e g a rd le s s of whether the contract is found to be non-arm's-length, r e m a n d is appropriate. Fed. R. Civ. P. 16(a) permits the Court to establish control of p r o ce e d in g s so that a case will not be protracted or the proceedings w a s t e fu l. The Ninth Circuit has held that district courts have broad d is c r e tio n in supervising the pretrial phase of litigation. Arakaki v. L in g le , 477 F.3d 1048, 1069 (9th Cir. 2007) (citing Johnson v. Mammoth

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R e cr e a tio n s , Inc., 975 F.2d 604,607 (9th Cir. 1992)). In Arakaki, the c o u r t affirmed an order striking a motion for summary judgment where t h e motion was untimely and "was not filed in the proper round of s u m m a ry judgment rounds, as scheduled by the district court in a p r e v io u s order." Arakaki, 477 F.3d at 1069. The Court will strike Defendants' motion for summary judgment fo r the following reasons. First, Defendants requested that the briefing s c h e d u le on the merits issues be vacated until the remand issue was a d d re s s e d . The Court agreed. Now, without asking for an amendment o f the Court's current scheduling order, Defendants inject procedural c o n fu s io n by filing a piecemeal motion for summary judgment while also c o n t in u in g to request remand regardless of the ruling on the motion for s u m m a r y judgment. This is wasteful and violates the scheduling order w h ic h was adopted at Defendants' request. It requests the Court to p e r m it Defendants to choose which merits issues it will reach prior to r e m a n d and which it will not. Either it is appropriate to remand, or the c a s e must proceed to an orderly decision on the issues framed by the p le a d in g s .

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S e c o n d , as Decker notes, Defendants failed to comply with Local R u le 7.1(c)(1) which requires a movant to contact opposing parties and t o state in the motion whether any party objects to the motion. The s u m m a ry judgment motion will be stricken. I I I . MOTION TO REMAND A. Parties' Arguments A s set forth above, Defendants have stipulated to "vacatur of the I B L A decision and MMS Order at issue in this action." Court Doc. 20 at 2 . They acknowledge "that MMS and IBLA misapplied the regulations" in assessing the value of the coal at issue. Id. at 6. In support of their a r g u m e n t that the case should now be remanded to MMS for further a d m in is t r a t iv e proceedings, they argue that the Court unquestionably h a s authority to remand, and that remand is proper because it would a llo w MMS to reconsider its decision in light of this Court's intervening d e c is io n in Decker Coal Company v. United States, CV-07-126-BLGR F C -C S O , Court Doc. 35 (Order Adopting Findings and R e c o m m e n d a t io n ) (hereafter "Decker I"). D e c k e r opposes remand, arguing that it will serve no useful

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p u r p o s e because the record is fully developed and there is no u n c e r t a in t y as to the outcome. Court Doc. 26 (Decker's Brief in O p p o s it io n to Motion to Remand) at 6-7. In addition to the reasons a d d r e s s e d in Decker I, Decker argues that the IBLA Decision should be s e t aside because the MMS was required to utilize the contract price for r o y a lt y purposes because the contract was negotiated at arm's-length. Decker expresses concern that Defendants do not adequately explain w h a t they intend to do on remand and surmises that remand will only a llo w Defendants to craft additional reasons "for its arbitrary and c a p r ic io u s decision." Id. at 13. B . Discussion A s an initial matter, the Court addressees Decker's argument that t h is Court refused to remand Decker I to the MMS and should similarly r e fu s e to remand here. Court Doc. 26 at 2, 4, 7. But it should be noted t h a t Defendants did not argue for remand in Decker I until it filed its o b je c t io n s to the Findings and Recommendations of the Magistrate J u d g e . See Decker I, Court Doc. 26. In adopting the Findings and R e c o m m e n d a t io n s , the Court did not comment on the tardy request for

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r e m a n d . See Decker I, Court Doc. 35. Accordingly, that case offers s c a n t instruction here. The Ninth Circuit has held that, under the Administrative P r o c e d u r e Act, 5 U.S.C. § 706(2), the normal remedy for an unlawful a g e n c y action is to "set aside" the action. Southeast Alaska C o n s e rv a tio n Council v. U.S. Army Corps of Engineers, 486 F.3d 638, 6 5 4 -5 5 (9th Cir. 2007), rev'd on other grounds, Coeur Alaska, Inc. v. S o u t h e a s t Alaska Conservation Council, 129 S.Ct. 2458 (2009). A court s h o u ld "`vacate the agency's action and remand to the agency to act in c o m p lia n c e with its statutory obligations.'" Id. (citing Defenders of W ild life v. EPA, 420 F.3d 946, 978 (9th Cir. 2005), rev'd on other g ro u n d s , National Ass'n of Home Builders v. Defenders of Wildlife, 551 U .S . 644 (2007)). As Defendants argue, the governing statute vests in the Secretary o f Interior the discretion to determine royalty amounts. See 30 U.S.C. § 2 0 7 (a ) ("A lease shall require payment of a royalty in such amount as t h e Secretary shall determine....). Where a statute places decisionm a k in g discretion primarily in agency hands, courts should, generally

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s p e a k in g , remand a case to the agency. "`[T]he proper course, except in r a r e circumstances, is to remand to the agency for additional in v e s tig a tio n or explanation.'" I.N.S. v. Orlando Ventura, 537 U.S. 12, 1 6 (2002) (quoting Florida Power & Light Co. v. Lorion, 470 U.S. 729, 7 4 4 (1985)). "A reviewing court is not generally empowered to conduct a d e novo inquiry into the matter being reviewed and to reach its own c o n clu s io n s based on such an inquiry." Florida Power & Light, 470 U.S. a t 744. D e c k e r argues that this is one of the rare cases where remand is n o t required. It argues that remand is unwarranted and unnecessary because (1) Defendants have not explained what they intend to do on r e m a n d and (2) there is no uncertainty as to the outcome so remand w o u ld serve no useful purpose. As to the first point, the Court finds t h a t Defendants have adequately stated the purpose of remand. They m a in t a in that remand is the proper remedy because it would allow M M S to reconsider its decision requiring recalculation and payment of a d d it io n a l royalties in light of this Court's intervening decision in D e c k e r I. Court Doc. 20 at 2. Because the statute vests this discretion

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in the Secretary, remand for this purpose is appropriate. S e c o n d , the Court cannot conclude that remand would serve no u s e f u l purpose. As set forth in the cases cited above, where the agency s e e k s remand for reapplication of its regulations in light of this Court's p r io r rulings, this Court may not conduct a de novo inquiry into a p p lic a t io n of the regulations and reach its own conclusions. By s t ip u la t in g to vacatur of the challenged decisions, Defendants have a lr e a d y agreed to the primary relief Decker seeks in its Complaint (" P la in tiff prays that the Court enter judgment [to] set aside the IBLA D e c is io n ...." ). Court Doc. 1 at 12. Decker will not be unduly prejudiced b y an Order setting aside the IBLA Decision and remanding for further a d m in is t ra t iv e review in light of this Court's holding in Decker I. I V . CONCLUSION ORDER F o r the reasons set forth above, IT IS HEREBY ORDERED: (1 ) Defendants' Motion for Summary Judgment (Court Doc. 27) is S T R IC K E N . (2 ) Decker's Motion to Strike (Court Doc. 28) is MOOT.

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F I N D I N G S AND RECOMMENDATIONS D e fe n d a n t s ' Stipulation to Vacatur (deemed a Motion to Remand) (C o u r t Doc. 20) should be GRANTED. The IBLA Decision dated J a n u a r y 5, 2009, should be VACATED. This matter should be R E M A N D E D to the MMS for further review and this case closed. N O W , THEREFORE, IT IS ORDERED that the Clerk shall serve a copy of the Findings and Recommendation of United States M a g is t r a t e Judge upon the parties. The parties are advised that p u r s u a n t to 28 U.S.C. § 636, any objections to the findings and r e c o m m e n d a t io n must be filed with the Clerk of Court and copies served o n opposing counsel within fourteen (14) days after receipt hereof, or o b je c t io n is waived. DATED this 23rd day of December, 2009. /s / Carolyn S. Ostby U n it e d States Magistrate Judge

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