Free Motion to Amend Pleadings - Rule 15 - District Court of Federal Claims - federal

Case 1:01-cv-00441-GWM

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UNITED STATES COURT OF FEDERAL CLAIMS ____________________________________ | | | Plaintiff, | | v. | | UNITED STATES, | | Defendant. | ____________________________________| RED RIVER COAL COMPANY, INC.,

Court No.: 01-441C BEFORE: Judge Miller FIRST AMENDED COMPLAINT

Plaintiff, Red River Coal Company, Inc., by its attorneys, Merrell & Merrell, P.C., brings this action against Defendant, the United States, and for its complaint herein alleges, on knowledge as to matters pertaining respectively to themselves, and on information and belief as to all other matters, as follows: NATURE OF THE ACTION 1. In this action, the Plaintiff seeks recovery of damages in the form of a refund of fees imposed

by the Defendant and paid by the Plaintiff pursuant to 30 U.S.C. § 1232 (hereinafter the "Coal Reclamation Fee") on the sale of coal for export from the United States. 2. The Plaintiff further seeks a declaratory judgment that the Coal Reclamation Fee is

unconstitutional as applied to exports. PARTIES 3. Plaintiff, Red River Coal Company, Inc., is a producer of coal. Plaintiff brings this action for

damages in the amount of Coal Reclamation Fee assessments it paid with respect to coal sold for export from the United States. 1

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4.

Plaintiff has standing in this action because it has paid the Coal Reclamation Fee with respect

to coal sold for export from the United States (or holds valid assignments with respect to such claims), which was illegally assessed and collected in violation of the United States Constitution. No such taxes have been passed on or included in export sales prices paid by any other entity. JURISDICTION 5. This Court possesses jurisdiction of this action under 28 U.S.C. § 1491(a)(1), as Plaintiff seeks

damages under Article I, Section 9, Clause 5 of the United States Constitution (the "Export Clause"), and under the Takings Clause of the Fifth Amendment of the United States Constitution, for the imposition of Coal Reclamation Fees on coal sold for export from the United States in violation of the Constitution. FACTUAL ALLEGATIONS 6. The Export Clause provides that "No Tax or Duty shall be laid on Articles exported from any

State." U.S. Const. art. I, § 9, cl. 5. 7. In 1977, Congress enacted Pub. L. No. 95-87, 91 Stat. 445 (1977) to promote the reclamation

of mined lands by establishing a special fund to be financed by reclamation fee payments on coal produced by surface or underground mining. The tax, codified within the Surface Mining Control and Reclamation Act ("SMCRA") at 30 U.S.C. § 1232, as amended, reads in pertinent part as follows: § 1232. (a) Reclamation Fee Payment; rate All operators of coal mining operations subject to the provisions of this chapter shall pay to the Secretary of the Interior, for deposit in the fund, a reclamation fee of 35 cents per ton of coal produced by surface coal mining and 15 cents per ton of coal 2

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produced by underground mining or 10 per centum of the value of the coal at the mine, as determined by the Secretary, whichever is less, except that the reclamation fee for lignite coal shall be at a rate of 2 per centum of the value of the coal at the mine or 10 cents per ton, whichever is less. *** 30 U.S.C. § 1232. 8. The Coal Reclamation Fee statute does not provide for an exemption for coal that is sold for

export from the United States. 9. The Coal Reclamation Fee is imposed on coal produced for sale, transfer or use. 30 C.F.R.

§ 870.12(a). 10. The Coal Reclamation Fee is determined by the weight and value of the coal at the time of the

initial bona fide sale, transfer of ownership, or use by the operator of the coal produced. 30 C.F.R. § 870.12(b). Unless and until there is a sale, transfer of ownership, or use by the coal operator following severance of the coal, no liability to pay the Coal Reclamation Fee attaches. 11. In the case of coal sold for export, the Coal Reclamation Fee is determined by the weight and

value of the coal at the time of such export sale. 12. Liability for the Coal Reclamation Fee on coal sold for export attaches at a time when the coal

has entered the export stream and is bound for export. As such, the Coal Reclamation Fee imposed on coal sold for export is directly related to the export of such coal, imposes a direct tax burden on such exports, and is a tax on exported articles. 13. For the periods at issue in the complaint, Plaintiff has paid Coal Reclamation Fees on exported

coal in the amounts indicated on the attached Schedule A. FIRST CAUSE OF ACTION 14. Paragraphs 1 through 13 are repeated with the same force and effect as if stated fully herein. 3

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15.

The Export Clause of the Constitution (Article 1, Section 9, Clause 5) states: "No Tax or Duty

shall be laid on Articles exported from any State." 16. The Coal Reclamation Fee imposed under 30 U.S.C. § 1232, with respect to coal sold for

export, is a tax or duty prohibited by the Export Clause and is, therefore, unconstitutional. 17. Plaintiff paid Coal Reclamation Fees on exports, which fees were unconstitutionally imposed

and assessed on coal sold for export. SECOND CAUSE OF ACTION 18. 19. Paragraphs 1 through 17 are repeated with the same force and effect as if stated fully herein. The Coal Reclamation Fee imposed under 30 U.S.C. § 1232, with respect to coal sold for

export, is a tax or duty prohibited by the Export Clause and is, therefore, unconstitutional. 20. The Defendant's unconstitutional exaction of the Coal Reclamation Fee on coal sold for export

violates the Takings Clause of the Fifth Amendment of the United States Constitution, which provides, "nor shall private property be taken for public use without just compensation." 21. Plaintiff paid Coal Reclamation Fees on exports, which fees were unconstitutionally imposed

and assessed on coal sold for export. REQUEST FOR JUDGMENT AND RELIEF WHEREFORE, Plaintiff respectfully requests that this Court enter a judgment and order against the United States, granting Plaintiff the following: a. On the First Cause of Action: a declaration that the Coal Reclamation Fees laid against

Plaintiff's coal produced and sold for export from the United States is an unconstitutional exaction of a tax on exports in violation of the Export Clause of the United States Constitution, and an award of damages in the amount of all Coal Reclamation Fee payments 4

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which were made by Plaintiff in connection with coal sold for export, together with appropriate interest, costs and attorneys' fees; b. On the Second Cause of Action: a declaration that the Defendant's exaction of the

unconstitutional Coal Reclamation Fee on coal sold for export violates the Fifth Amendment to the United States Constitution, and an award of damages in the amount of all Coal Reclamation Fee payments which were made by Plaintiff in connection with coal sold for export, together with appropriate interest, costs and attorneys' fees; together with such other and further relief as this Court may deem just and proper.

Respectfully submitted, MERRELL & MERRELL, P.C.

By: s/John Y. Merrell, Jr. John Y. Merrell, Jr. Merrell & Merrell, P.C. Attorneys for Plaintiff 1477 Chain Bridge Road Suite 101 McLean, VA 22101 Tel: (703) 790-8440 Fax: (703) 790-8944 Of Counsel: John Y. Merrell Date: February 2, 2007

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SCHEDULE A Coal Reclam at ion Fee Paid on Export ed Coal By RED RIV ER COAL COM PANY, INC.
Tax Period Surface @ $.35 $9,919.86 8,659.79 5,216.02 6,972.34 2,182.11 9,181.30 6,424.16 7,581.05 3,088.32 3,842.67 4,129.01 12,274.21 4,743.41 5,698.05 2,965.41 3,708.50 0.00 0.00 6,941.68 0.00 1,220.00 961.39 4,202.03 917.82 1,581.30 1,167.08 0.00 0.00 311.18 310.47 302.28 0.00 0.00 0.00 6 Underground @ $.15 10,323.09 8,071.53 4,654.48 7,361.15 2,711.15 6,314.83 6,630.57 3,625.12 3,006.24 3,595.40 2,139.68 10,572.35 13,406.65 4,226.09 2,118.48 3,384.75 0.00 1,725.29 1,274.73 0.00 1,587.51 1,608.73 5,184.73 1,565.70 727.38 91.24 0.00 0.00 1,260.03 246.59 8,275.11 0.00 0.00 0.00 Total

1995 1995 1995 1996 1996 1996 1996 1997 1997 1997 1997 1998 1998 1998 1998 1999 1999 1999 1999 2000 2000 2000 2000 2001 2001 2001 2001 2002 2002 2002 2002 2003 2003 2003

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

$20,242.95 16,731.32 9,870.50 14,333.49 4,893.26 15,496.13 13,054.73 11,206.17 6,094.56 7,438.07 6,268.69 22,846.56 18,150.06 9,924.14 5,083.89 7,093.25 0.00 1,725.29 8,216.41 0.00 2,807.51 2,570.12 9,386.76 2,483.52 2,308.68 1,258.32 0.00 0.00 1,571.21 557.06 8,577.39 0.00 0.00 0.00

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2003 2004 2004 2004 2004 2005 2005

Q4 Q1 Q2 Q3 Q4 Q1 Q2

642.98 2,031.83 4,503.75 0.00 0.00 0.00 388.46 $122,068.46

2,609.69 3,680.15 1,432.11 0.00 0.00 0.00 893.16 $124,303.71

3,252.67 5,711.98 5,935.86 0.00 0.00 0.00 1,281.62 $246,372.17

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