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UNITED STATES v. THOMPSON BROS. COAL CO.

February 26, 1982

UNITED STATES of America, Plaintiff,
v.
THOMPSON BROTHERS COAL CO., INC., Defendant



The opinion of the court was delivered by: DUMBAULD

In the case at bar the United States sues to collect a civil penalty *fn1" of $ 1,000 allegedly incurred by defendant coal company for violation of a regulation prohibiting pollution of a stream by discharging mine drainage without first purifying it by use of a sedimentation pond. *fn2"

Defendant does not contest the existence of the violation, but alleges that section 518(c) (30 U.S.C. § 1268(c) ) of the Surface Mining Control and Reclamation Act of August 3, 1977, 91 Stat. 447, 30 U.S.C. § 1201 et seq. *fn3" is unconstitutional, as a denial of due process and equal protection. *fn4"

 The challenged provision requires that when the Secretary of the Interior has informed the operator of the proposed amount of a penalty, the person charged may have 30 days within which to pay in full, "or, if the person wishes to contest either the amount of the penalty or the fact of the violation, (shall) forward the proposed amount to the Secretary for placement in an escrow account." *fn5" "Failure to forward the money to the Secretary within thirty days shall result in a waiver of all legal rights to contest the violation or the amount of the penalty." 30 U.S.C. § 1268(c).

 It is the requirement of prepayment which constitutes the basis of defendant's contention of unconstitutionality. *fn6"

  It can be plausibly argued, as defendant does, that if due process requires a hearing before the government quits paying its own money to a relief recipient, *fn7" a hearing should a fortiori be required before the government takes his own money from a citizen in satisfaction of a purported governmental exaction.

 A clear exposition of the circumstances indicating whether pre-deprivation hearing is required or not is found in Mathews v. Eldridge, 424 U.S. 319, 332-35, 340, 96 S. Ct. 893, 901-3, 905, 47 L. Ed. 2d 18 (1976). Whether the procedures provided "are constitutionally sufficient requires analysis of the governmental and private interests, that are affected." Matthews is controlling for the case at bar.

 It seems clear that the validity of the prepayment requirement is to be determined, not by a mechanical temporal test, but by the reasonableness of the statutory scheme as a whole. In that connection it should be emphasized that under 30 U.S.C. § 1275 and 43 C.F.R. 4.1160 et seq. the operator is entitled, without any prepayment, to obtain a full adversary evidentiary hearing before an impartial ALJ with respect to the existence of the violation charged in the notice. If no violation is established, of course there will be no penalty assessed, and no occasion to seek the "second bite of the apple" under the prepayment provision of 30 U.S.C. § 1268(c). Moreover, immediately upon receipt of the notice charging a violation the operator may informally submit any pertinent material which he wishes to be considered in connection with the decision to assess a penalty and to determine the amount thereof. 30 C.F.R. 723.16(a). Furthermore, upon receipt of the proposed penalty assessment the operator may seek an informal conference to haggle over the amount of the penalty to be assessed. 30 C.F.R. 723.17(a). This was the only remedy which defendant in the case at bar utilized (unsuccessfully).

 It is thus clear that there was afforded to defendant ample, abundant, and adequate additional remedies which satisfy the criteria of reasonableness and due process.

 The prepayment requirement is thus seen to be an appropriate means of discouraging frivolous resort to an additional avenue of delay for the purpose of prolonging the collection process and postponing the painful moment of payment. Past experience, as the legislative history shows, indicated the wisdom of enacting such a provision. 95th Cong., 1st Sess., S.Rep.No.95-128, 58-59 (1977).

 The temporary loss of use of a small sum for a short time is surely de minimis in comparison to the other expenditures and outlays which a coal operator is obliged to make in order to carry on business. If successful in upsetting or reducing the penalty he is reimbursed the amount prepaid, together with interest at 6% or that on Treasury bills, whichever is higher. This hardship is insufficient to constitute deprivation without due process.

 On the equal protection point, defendant's contentions are even less persuasive. Defendant contends that the statute creates two classes of coal operators, i.e. those who can and those who can not afford the $ 1,000 penalty assessed here; and that such classification is discriminatory and violates equal protection.

 But in truth the statute does not establish any classification at all. The penalty applies to all violations equally. The separation of sheep and goats depending on their ability to pay the penalty is not effected by statute but by "the magic of the marketplace" (to use President Ronald Reagan's phrase). One might as well assert that Ford Motor Company violates the equal protection clause by unconstitutionally setting the price of a Continental at a figure which one "class" of motorists is unable to pay, but which the other "class" can afford.

 Moreover, language in Justice Marshall's opinion in Hodel v. Indiana, -- - U.S., 452 U.S. 314, 101 S. Ct. 2376, 2386, 69 L. Ed. 2d 40, 55 (1981), *fn8" although dealing with other portions of the Act relating to "prime farmland," is indicative of the appropriate disposition of defendant's equal protection argument:

 
Social and economic legislation like the Surface Mining Act that does not employ suspect classifications or impinge on fundamental rights must be upheld against equal protection attack when the legislative means are rationally related to a legitimate governmental ...

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