Fontanari v. Colorado Mined Land Reclamation Board.

2023 COA 15. No. 21CA1021. Colorado Mined Land Reclamation Board Rule 3.03.2(6)(a)—Colorado Division of Reclamation, Mining and Safety—Release of Performance Bonds or Deposits—Colorado Administrative Procedure Act—Adjudicatory Hearing.

February 9, 2023

Snowcap Coal Company, Inc. (Snowcap) has a permit to mine coal under land owned by Fontanari, which requires Snowcap to reclaim the mine pursuant to a reclamation plan approved by the Colorado Office of Mine Reclamation. Snowcap filed a performance bond with the Colorado Division of Reclamation, Mining and Safety (DRMS) to insure compliance with its reclamation plan and applied for a partial release of the performance bond after completing certain reclamation work. On September 16, 2019, the DRMS delivered its proposed decision approving Snowcap’s request to Fontanari. Four days later, the notice of the proposed decision was published in The Daily Sentinel, where it was again published seven days later. On October 21, 2019, Fontanari’s counsel submitted a request to the DRMS for an adjudicatory hearing before the Colorado Mined Reclamation Board (Board). Snowcap moved to dismiss the request, arguing that the board lacked jurisdiction because Fontanari didn’t file his request within 30 days of the issuance of the proposed decision, as required by CRS § 34-33-125(6). DRMS opposed the motion based on Board Rule 3.03.2(6)(a), 2 Code Colo. Regs. 407-2 (the Rule), which provides that the request must be received within 30 days of “the first publication of the proposed decision.” The Board concluded that the Rule conflicts with CRS § 34-33-125(6), which controls, and because Fontanari’s request for an adjudicatory hearing wasn’t received within 30 days of issuance of the DRMS’s proposed decision, that decision became final under CRS § 34-33-125(5) and the Board could not review it. Fontanari sought review with the district court along with an award of costs and expenses, including attorney fees. The district court upheld the Board’s decision and determined that Snowcap was entitled to attorney fees.

On appeal, Fontanari contended that the Rule doesn’t conflict with CRS § 34-33-125(6). However, the Rule plainly conflicts with CRS § 34-33-125(6) and is therefore void. Accordingly, the Board lacked jurisdiction over Fontanari’s request for review.

Fontanari also argued that because the Rule was “duly promulgated,” the Board couldn’t invalidate it without going through the Administrative Procedure Act’s (APA) formal rulemaking procedure. However, under the APA itself, any rule that “conflicts with a statute shall be void.” Therefore, the Board was not required to act in excess of its jurisdiction until it repealed the Rule through formal APA rulemaking or Snowcap successfully challenged the Rule in a separate court proceeding.

Fontanari further contended that he was denied due process because he relied on the Rule, which the DRMS itself cited in telling him he had 30 days from the first publication to request an administrative hearing. As discussed above, if, as in this case, the rule at issue is void, the agency must not follow it. And to the extent Fontanari asserted that he relied on the DRMS’s statements in the notice and accompanying letter to him, he didn’t preserve that issue.

Fontanari further argued that the district court erred by denying his request for attorney fees under CRS § 34-33-128(4). Given the resolution of the substantive challenges, it cannot be concluded that the district court abused its discretion by denying Fontanari’s request for fees.

Fontanari also challenged the district court’s award of attorney fees to Snowcap. Because the court hasn’t yet determined the appropriate amount of those fees, the court of appeals lacks jurisdiction to review this challenge.

Snowcap requested an award of its reasonable attorney fees incurred on appeal under C.A.R. 39.1. However, it failed to invoke any particular rule or statute allowing for an award of fees.

The part of Fontanari’s appeal challenging the district court’s award of attorney fees to Snowcap was dismissed. The judgment was otherwise affirmed.