[CITE: Musgrave v. DNR & Squaw Creek, 12 CADDNAR 163 (2009)]
[VOLUME 12, PAGE 163]
Cause #:09-077R
Caption: Musgrave v. DNR and Squaw Creek
Administrative Law Judge: Jensen
Attorneys: pro se (Musgrave); Boyko (DNR);
Phillips (Squaw Creek)
Date: August 24, 2009
ORDER
39. The instant proceeding is hereby ordered
dismissed.
ORDER GRANTING SQUAW CREEK COAL COMPANY’S AND
THE DEPARTMENT OF NATURAL RESOURCES’ MOTIONS TO DISMISS
Case History
1.
The
instant proceeding was initiated by Bil Musgrave and Kim Musgrave (collectively “the Musgraves”) through
correspondence (“Complaint”) filed
with the Natural Resources Commission “Commission”)
on April 22, 2009.
2.
On May
6, 2009, the appointed administrative law judge issued notice to the Musgraves
advising them that their “correspondence fails to establish an actionable
claim” and offering them an opportunity to supplement their original
correspondence.
3.
On May
22, 2009, the Musgraves filed supplemental correspondence (“Amended Complaint”) providing further explanation as to their
standing and their claims.
4.
A
prehearing conference was scheduled for June 29, 2009 and on June 25, 2009
Squaw Creek Coal Company (SCCC) filed
its Trial Rule 12(B) Motion to Dismiss Amended Petition of Claimants.
5.
At the
prehearing conference a briefing schedule was established with respect to
SCCC’s motion. That scheduled provided
the Department of Natural Resources (Department)
an opportunity to join in SCCC’s motion, an opportunity for the Musgraves to
respond to the motion of SCCC and any joinder motion of the Department. Also authorized was the opportunity for the
moving parties, SCCC and the Department to file reply briefs.
6.
The
Musgraves were advised during the prehearing conference that they are entitled
by Commission precedent to amend their complaint “once as a matter of course
before a response is filed”, Juday Creek,
et al. v. Ralph Williams and Associates and DNR, 8 CADDNAR 90, 93 (1998). In this instance, SCCC had filed its motion
to dismiss and the Department had filed its answer and affirmative
defenses. Consequently the
administrative law judge rejected any effort of the Musgraves to further amend
their complaint. See Report of Prehearing Conference dated July 1, 2009.
[VOLUME 12, PAGE 164]
7.
Each
party participated fully in the briefing process.
8.
The
Musgraves, in filing their response to SCCC’s and the Department’s motions to
dismiss, included additional factual elaborations relating to the claims as set
forth in their supplemental correspondence filed on May 22, 2009 and they
included Exhibits A, B & C in further support of their Complaint and
Amended Complaint.
9.
The
Department in filing its reply, viewing certain non-responsive portions of the
Musgraves’ response as well as the Exhibits as an attempt to further amend or
elaborate upon their Complaint and Amended Complaint, sought to have the
non-responsive portions of the Musgraves’ response and the Exhibits stricken
from the record.
10.
The administrative
law judge at this time determines that the Exhibits attached to the Musgraves
response should be and are hereby stricken from the record. While certain portions of the Musgraves
response are not truly responsive to SCCC’s and the Department’s motions to
dismiss, the content does, in fact, relate strictly to the issues raised in
their Amended Complaint. Therefore, no
portion of the Musgraves’ response will be stricken.
11.
Procedurally,
this cause is governed by IC 4-21.5-3 (commonly referred to as the
Administrative Orders and Procedures Act or AOPA) and the procedural requirements
of IC 14-34, commonly referred to as the Indiana Surface Coal Mine and
Reclamation Act (“I-SMCRA”).
12.
An
administrative law judge is authorized to issue a final order of dismissal if
the person seeking administrative review does not qualify or a dismissal could
be entered in a civil court. 312 IAC
3-1-9(b)(3) and (4).
Findings and Conclusions
13.
In this
instance, a Trial Rule 12(B)(6) motion to dismiss for failure to state a claim
is determinable by a review of the Musgraves’ Complaint and Amended Complaint
to determine the sufficiency in stating a claim for which the Commission may
grant relief. Regina Bieda v. B & R Development and DNR, 9 CADDNAR 1, (2001).
14.
“A
complaint in an administrative proceeding need not "enumerate precisely
every event to which a hearing examiner may finally attach significance."
L.G. BALFOUR CO. v. FEDERAK TRADE COMM'N, 442 F.2d 1, 19 (7th Cir. 1971).
Rather, the purpose of the administrative complaint is to give the responding
party notice of the charges against him. Id. Reversal shall not occur absent
evidence that a party is misled by an administrative complaint, resulting in
prejudicial error. Id.” Regina Bieda v. B & R Development and
DNR, 9 CADDNAR 1, 4 (2001).
[VOLUME 12, PAGE 165]
15.
While a
complaint may place the responding party on notice as to the allegations
against him, the allegations may, nonetheless, be of such a nature that the
Commission is without the authority to grant the relief sought.
Standing
16.
Squaw
Creek and the Department allege that the Musgraves lack standing to initiate
the instant proceeding for the reason that they have not demonstrated that they
have or are likely to suffer immediate or future harm to a pecuniary, property
or personal interest as required by I.C. 4-21.5-4-3-7(a)(1)(B) or Huffman v. Indiana Office of Environmental
Adjudication, Indiana Department of Environmental Management and Eli Lilly and
Company, 811 N.E.2d 806 (Ind. 2004).
17.
In
addition to being controlled by the Administrative Orders and Procedures Act,
the present case is also brought under I-SMCRA, which states that “any person having
an interest that is or may be
adversely affected by the decision of the director will have the right to
administrative and judicial review…” 312 IAC 25-4-131.
18.
“I-SMCRA
is required to conform to its federal counterpart, the Federal Surface Coal
Mine and Reclamation Act (F-SMCRA)
and primacy requires the State of Indiana to adhere to the F-SMCRA concept of
standing.” Musgrave v. IDNR and Squaw Creek Coal Co., 10 CADDNAR 178, (2006), citing Hoosier Environmental Council v. DNR and Solar Sources, Inc., 7
CADDNAR 85 (March 23, 1995) Roberts d/b/a
Enterprise Oil & Associates v. DNR & Black Beauty Coal Co., 7
CADDNAR 206 (October 26, 1999).
19.
Under
F-SMCRA standing “is much broader than standing in more traditional cases, and
includes injury to aesthetic or recreation interest.” Further, an allegation that harm “could
happen” is adequate to show standing. Musgrave v. IDNR and Squaw Creek Coal Co., 10
CADDNAR 178 (2006), citing Hoosier Environmental Council, supra at
86, see also National Wildlife Federation
v. Hodel, 839 F.2d 694, (D.C.
Circuit 1988).
20.
The
Musgraves state in their Amended Complaint that “Our family also enjoys fishing
and boating in the downstream watershed of the Squaw Creek S-008 mine permit
area… We still drive through the permitted area enjoying the aesthetic value of
the area, bird watching and observing wildlife.” Further, the Musgraves state that “Bil is
President of the Chandler Volunteer Fire Department whose response area
includes Range Line Mine, Squaw Creek Mine, and Cypress Creek Mine.”
[VOLUME 12, PAGE 166]
21.
The
administrative law judge determines that under the broader concept of standing
as established under F-SMCRA and applicable to I-SMCRA, the Musgraves have
stated sufficient facts upon which to establish standing to initiate this
proceeding.
Collateral Estoppel
22.
The
doctrine of res judicata and
collateral estoppel are applicable in administrative proceedings. Galbreath
v. Griffith, 11 CADDNAR 224 (2007).
23.
As
stated in Galbreath, at
page 227,
“The doctrine of res judicata bars litigation of a claim after a final judgment has
been rendered in a prior action involving the same claim between the same
parties or their privies.” Small v. Centocor, Inc., 731 N.E.2d 22
at 26 (Ind. Ct. App. 2000), citing Indiana
Insurance Company v. American Community Services, Inc., 718 N.E.2d 1147,
1155 (Ind. Ct. App. 1999). “The
principle behind this doctrine, as well as the doctrine of collateral estoppel,
is the prevention of repetitive litigation of the same dispute.” Id. As explained by the Small Court, “the following four requirements must be satisfied for
a claim to be precluded under the doctrine of res judicata:
1.) The former judgment must have been
rendered by a court of competent jurisdiction;
2.) The former judgment must have been
rendered on the merits;
3.) The matter now at issue was or, could
have been, determined in the prior action; and
4.) The controversy adjudicated in the former
action must have been between the parties to the present suit or their
privies.” Id.
24.
Collateral
estoppel is not applicable to the present proceeding for two reasons. First, the adjudication of Musgrave v. IDNR and Squaw Creek Coal Co., 10 CADDNAR 178 (2006) involved the
matter of bond release and as such did not involve the same claim as the
present litigation, which involves a permit renewal. Second, because the present litigation
involves a permit renewal action taken by the Department and the first involved
a bond release action taken by the Department the matter at issue presently
could not have been determined in the prior action.
[VOLUME 12, PAGE 167]
Failure to State a Claim Upon Which Relief
Can Be Granted.
25.
At issue
is the renewal of a permit issued to SCCC by the Department pursuant to the I-SMCRA.
26.
A permit
renewal such as the one at issue here is controlled by 312 IAC 25-4-128 through
312 IAC 25-4-131, which state,
312 IAC 25-4-128 Permit
reviews; revisions, renewals, transfer, sale, and assignment of rights granted
under permits; permit renewals, general requirements
Sec. 128. (a) Any valid, existing permit
issued under this program shall carry with it the right of successive renewal
upon expiration of the term of the permit in accordance with sections 129
through 131 of this rule. Successive renewal shall be available only for those
areas that were specifically approved by the director on the application for
the existing permit as within the boundaries of the permit.
(b) Permit renewal shall not be available for
conducting surface coal mining and reclamation operations on lands beyond the
boundaries of the permit area approved under the existing permit except as
provided in section 129(b)(2) of this rule. (Natural Resources Commission;
312 IAC 25-4-128; filed Jun 21, 2001, 2:53 p.m.: 24 IR 3496, eff Dec 1, 2001;
readopted filed May 29, 2007, 9:51 a.m.: 20070613-IR-312070146RFA)
312 IAC 25-4-129 Permit
reviews; revisions, renewals, transfer, sale, and assignment of rights granted
under permits; completed applications
Sec. 129. (a) Complete applications for
renewals of a permit shall be made within the time prescribed by section 5(b)
of this rule. Renewal applications shall be in a form and with contents
required by the director under this program and in accordance with subsection
(b)(2), including, at a minimum, the following:
(1) A statement of the name and address of
the permittee, the term of the renewal requested, the permit number, and a
description of any changes to the matters set forth in the original application
for a permit or prior permit renewal.
(2) A copy of the newspaper notice and proof
of publication of same under section 109(a) of this rule.
(3) Evidence that a liability insurance
policy will be provided by the applicant for the proposed period of renewal.
(b) Processing and review of renewals shall
satisfy the following:
(1) Complete applications for renewal shall
be subject to the requirements of public notification and participation
contained in sections 109 through 112 of this rule.
[VOLUME
12, PAGE 168]
(2) If a complete application for renewal of
a permit includes a proposal to extend the mining and reclamation operation
beyond the boundaries authorized in the existing permit, the portion of the
complete application for renewal of a valid permit that addresses any new land
areas shall be subject to the full standards applicable to new permit
applications under:
(A) IC 14-34;
(B) sections 2 through 8 of this rule;
(C) sections 16 through 128 of this rule;
(D) this section;
(E) sections 130 through 143 of this rule;
(F) 312 IAC 25-5; and
(G) the regulatory program.
(3) Before the permit renewal becomes valid,
the permittee shall submit to the director any additional performance bond
required to comply with 312 IAC 25-5. (Natural
Resources Commission; 312 IAC 25-4-129; filed Jun 21, 2001, 2:53 p.m.: 24 IR
3496, eff Dec 1, 2001; readopted filed May
29, 2007, 9:51 a.m.:
20070613-IR-312070146RFA)
312 IAC 25-4-130 Permit
reviews; revisions, renewals, transfer, sale, and assignment of rights granted
under permits; terms
Sec. 130. Any permit renewal shall be for a
term not to exceed the period of the original permit established under section
119 of this rule. (Natural Resources Commission; 312 IAC 25-4-130; filed Jun
21, 2001, 2:53 p.m.: 24 IR 3496, eff Dec 1, 2001; readopted filed May 29, 2007,
9:51 a.m.: 20070613-IR-312070146RFA)
312 IAC 25-4-131 Permit
reviews; revisions, renewals, transfer, sale, and assignment of rights granted
under permits; approval criteria
Sec. 131. (a) The director shall, upon the
basis of a complete application for renewal and completion of all procedures
required under sections 129 and 130 of this rule, issue a renewal of a permit
unless it is established and written findings by the director are made that:
(1) the terms and conditions of the existing
permit are not being satisfactorily met;
(2) the present surface coal mining and
reclamation operations are not in compliance with the environmental protection
standards under IC 14-34 and 312 IAC 25-6;
(3) the requested renewal substantially
jeopardizes the operator's continuing responsibility to comply with IC 14-34
and the regulations on existing areas;
(4) the operator has not provided evidence
that any performance bond required to be in effect for the operations will continue
in full force and effect for the proposed period of renewal, as well as any
additional bond the director might require under 312 IAC 25-5; or
[VOLUME
12, PAGE 169]
(5) any additional revised or updated
information required by the director has not been provided by the applicant.
(b) In determining whether to approve or deny
a renewal, the burden shall be on the opponents of renewal.
(c) The director shall send copies of the
director's decision to the following:
(1) The applicant.
(2) Any persons who filed objections or
comments to the renewal.
(3) Any persons who were parties to any
informal conference held on the permit renewal.
(d) Any person having an interest that is or
may be adversely affected by the decision of the director will have the right
to administrative and judicial review set forth in sections 122 and 123 of this
rule. (Natural Resources Commission; 312 IAC 25-4-131; filed Jun 21, 2001,
2:53 p.m.: 24 IR 3496, eff Dec 1, 2001; readopted filed May 29, 2007, 9:51
a.m.: 20070613-IR-312070146RFA)
27.
The
Musgraves’ Amended Complaint makes numerous allegations relating to the dumping
of hazardous waste at the site by Alcoa and raise actual claims relating to
allegations of Departmental wrongdoing in (1) granting SCCC extensions for
backfilling and grading at the site that was the subject of the renewal
application, (2) granting SCCC grade deferrals for the site that was the
subject of the renewal application, (3) not addressing an existing open
highwall that the Musgraves’ characterize as an “imminent danger to the health
and safety of the public”, (4) finding that mining was ongoing at the time of
issuing the renewal permit, (5) finding that exploratory drill holes had been
backfilled when IDEM stated previously that they had not been backfilled and
were capable of facilitating leaching.
Further, the Musgraves offer a variety of concerns stemming from an ongoing
investigation being conducted by IDEM into the matter of the alleged toxic
waste dumping by Alcoa and findings of remedial measures that should be taken
at the site associated with the permit renewal.
28.
The
Musgraves’ Response to SCCC’s and the Department’s motions to dismiss provides
little except to expound upon the allegations contained within their Amended
Complaint and to provide administrative rule citations in support of those
allegations. The Musgraves explains “if
current Indiana Law was enforced, Squaw Creek Coal Company would be found in
violation of 312 IAC 25-6-48” for failing to conduct contemporaneous
reclamation, and for failing to backfill and grade disturbed areas as required
by 312 IAC 25-6-49 and 312 IAC 25-6-50.
According to the Musgraves, the Department should take action to
terminate SCCC’s permit for nonuse under I.C. 14-34-5-3 and for SCCC’s failure
to reclaim a steep highwall running adjacent to a county road that in the
Musgraves’ opinion represents and imminent danger to health and safety of the
public.
[VOLUME 12, PAGE 170]
29.
The
Musgraves have failed to set forth a legal basis for their belief that the
issues as set forth in the Musgraves’ Amended Complaint and their response to
SCCC’s and the Department’s motions to dismiss, as restated by the
administrative law judge in Findings 26 and 27, are sufficient to allow the
Department to deny SCCC’s permit renewal application.
30.
The
administrative law judge’s independent comparison of 312 IAC 25-4-131, which
controls the Department’s review of permit renewals under I-SMCRA, to the
Musgraves’ allegations, as set forth in Findings 26 and 27, at best results in
speculation that the Musgraves’ claims are based upon the belief that if the Department had taken action on
the matters they identified, the SCCC would have been in noncompliance with
“the terms and conditions of the existing permit”, which would have justified the
Department’s denial of SCCC’s permit renewal application. 312 IAC 25-4-131(a)(1).
31.
If the
administrative law judge’s interpretation of the Musgraves Amended Complaint is
correct, the Amended Complaint is self-defeating. In reviewing SCCC’s permit renewal
application, the Department is required to issue the renewal unless it
determines that the terms and conditions of the permit are “not being
satisfactorily met.” 312 IAC 25-4-131(a)(1).
While the Musgraves may believe that the Department should take the
noted enforcement measures and may further believe that terms and conditions of
SCCC’s existing permit are not being met, the Musgraves, in their own Amended
Complaint and response to SCCC’s and the Department’s motions to dismiss,
acknowledge that these enforcement actions have not been taken.
32.
It is
the Musgraves’ responsibility to file a Complaint that places the responding
parties clearly on notice of the charges against them. While the administrative law judge has offered
some thought as to potential legal bases of the Musgraves claims as restated in
Findings 26 and 27, it is not certain that those thoughts are a correct
interpretation of the Musgraves’ Amended Complaint.
33.
The
Musgraves have failed to state the legal basis of their claim and the bases of
their claim cannot rest upon speculative interpretation of the trier of fact. Therefore, the claims made by the Musgraves
that are restated in Findings 27 and 28 are deemed insufficient to state a
claim upon which relief may be granted.
34.
The Musgraves
make additional claims related to the alleged hazardous waste that has been
dumped at the site associated with SCCC’s renewal application ,alleging more
particularly in their response to SCCC’s and the Department’s motions to
dismiss that there is the “possibility of contaimed (contaminated) water
leaching from old prospect drill holes into subsurface water pathways…”
[VOLUME 12, PAGE 171]
35.
With
respect to the issue of leaching of hazardous waste, the Musgraves, again, fail
to state the legal bases of their belief that this provided grounds upon which
the Department could have or should have denied SCCC’s permit renewal
application.
36.
The only
possible theory that can be identified by the administrative law judge involves
Musgraves possible belief that the potential for the leaching of contaminated
water from the drill holes would have justified the Department’s denial of the
permit renewal because SCCC was not “in compliance with the environmental
protection standards under IC 14-34 and 312 IAC 25-6,” 312 IAC 25-4-131(1)(b),
however this, again is mere speculation by the administrative law judge.
37.
It is
observed once again that 312 IAC 25-4-131(b)(2) would require SCCC to be in
actual non-compliance with the requisite standards in order to for the Department
to be authorized to deny the permit renewal application. Under this interpretation by the
administrative law judge the Musgraves’ Amended Complaint would, again, be
self-defeating because they site merely the possibility of some leaching but
not any actual non-compliance by SCCC.
38.
With
respect to the hazardous waste leaching issues, the Musgraves also have failed
to state a claim upon which relief may be granted.
[EDITOR’S NOTE:
The original format of the Administrative
Law Judge’s Final Order has been changed to match CADDNAR format.]