CADDNAR

[CITE: Squaw Creek v. DNR, 4 CADDNAR 40 (1987)]

 

[VOLUME 4, PAGE 40]

 

Cause #: 86-128R

Caption: Squaw Creek v. DNR
Administrative Law Judge: Drew
Attorneys: Joest; Szostek, DAG
Date: April 27, 1987

ORDER

 

"Condition (11) of Permit #S-00009-2, issued to Squaw Creek Coal Company, South Field Mine in Warrick County, Indiana is affirmed."

FINDINGS OF FACT

 

1. On August 11, 1986, the Natural Resources Commission's delegates approved Permit #S-00009-2 for the Squaw Creek Mine, South Field amendment in Warrick County, Indiana.

 

2. Finding (b) and (1) in the recommendations of the Director, adopted by the Commission's delegates, in issuing permit #S-00009-2 were as follows:

 

(b) Squaw Creek Coal Company has demonstrated that surface coal mining and reclamation operations, as required by IC 13-4.1 and the regulations (310 IAC 12), can be accomplished under the mining and reclamation operations plan contained in the application.

 

EXCEPTION: Squaw Creek Coal Company has submitted a plan for restoration of prime farmland soils. However, the Director herein finds that the requirements of 310 IAC 12 have not been satisfied. Therefore, no prime farmland soils may be disturbed until Squaw Creek Coal Company submits a revised plan of restoration and the Director finds compliance with the regulations (310 IAC 12). (1) Squaw Creek Coal Company has not demonstrated and the Director cannot find, after consultation with the Secretary of Agriculture, that it has a technological capability to restore the prime farmland, within a reasonable time, to equivalent or higher levels of yield as nonmined prime farmland in the surrounding area under equivalent levels of management.

 

EXCEPTION: As cited earlier in finding (b), Squaw Creek Coal Company has not satisfied the requirements of the regulations (310 IAC 12) to the Director.

 

3. Condition (11) imposed by the Commission's delegates on Permit #s-00009-2 was as follows:

 

(11) No mining operations occur and bond not be submitted on lands classified as prime farmland on the map entitled "Soils Map-Prime Farmland", dated April 25, 1986, until Squaw Creek Coal Company submits to the Division, and the Director approves a plan for restoration of prime farmland soils in compliance with regulations (310 IAC 12).

 

4. This decision was served on Squaw Creek by certified mail, return receipt requested, and was received on August 14, 1986.

 

5. On September 15, 1986, Squaw Creek requested review of the Commission's decision.

 

6. IC 4-22-1 and IC 13-4.1 apply to this proceeding.

 

7. The Department of Natural Resources is an agency as defined in IC 4-22-1. The Natural Resources Commission is the ultimate authority of the Department with respect to the proceedings involving the issuance of surface coal mining permits.

 

8. The Commission has jurisdiction over the subject matter and the parties to this proceeding.

 

9. On January 29 and 30, 1986, a hearing was held in Indianapolis pursuant to notice and the parties presented evidence.

 

10. IC 13-4.1-4-3(d) provides:

 

(d) In addition to finding the application in compliance with subsection (a), if the proposed mining area contains prime farmland pursuant to IC 13-4.1-3-3(a)(16), the Director shall, after consultation with the United States Secretary of Agriculture and pursuant to rules adopted by the Commission, grant a permit to mine on prime farmland if the Director finds in writing that the operator has the technological capability to restore that mined area, within a reasonable time, to equivalent or higher levels of yield as nonmined prime farmland in the surrounding area under equivalent levels of management and can meet the soil reconstruction standards in IC 13-4.1-8-1(7). However, this subsection does not apply to any existing surface coal mining operations which held a valid permit on August 3, 1977, with continuous permits since that date.

 

11. The area permitted under Permit #S-00009-2 contained some prime farmland which was not exempted from the

 

[VOLUME 4, PAGE 41]

 

requirements of IC 13-4.1 by the exclusion set forth in IC 13-4.1-4-3(d).

 

12. This dispute involves the adequacy of Squaw Creek's proposed prime farmland restoration plan (hereinafter "the plan") submitted in connection with its #S-00009-2 permit application.

 

13. Squaw Creek's plan proposes to replace the subsoil in prime farmland areas with a substitute material referred to by Squaw Creek as "Conditioned graded cast overburden" which is defined by Squaw Creek as graded cast overburden meeting the following criteria: a) a pH of 6.0 or higher; b) no acid or toxic material present; c) high available water holding capacity; d) a slake-durability index of 0-40; e) not more than 15 percent unweatherable rock with no rocks greater than four inches in size.

 

14. The original plan submitted by Squaw Creek called for topsoil replacement of 8-12 inches of a mixture of A and B horizon material (i.e. a mixture of topsoil and upper subsoil) over the conditioned graded cast overburden. It was this plan that was initially disapproved on August 11, 1986 when condition (11) (which required Squaw Creek's plan to be in accordance with regulations found in 310 IAC 12) was imposed on its #S-00009-2 permit.

 

15. In discussions with the Division of Reclamation staff subsequent to the submission of the #S-00009-2 plan, Squaw Creek indicated that it intended to revise its proposed plan to provide for replacement of 15-20 inches of the A/B mixture over conditioned graded cast overburden. On January 12, 1987, both parties stipulated that such revision would be reflected in the permit application documents. As modified the #S-000092 plan was substantially identical to the #S-00009 plan as approved by the Director in July, 1984.[FOOTNOTE 1]

 

16. Permit #S-00009-2 is an amendment to Permit #S-00009 approved by the Natural Resources Commission and issued by the Director to Squaw Creek for its Squaw Creek Mine, South Field in October, 1983. Permit #s-00009 was originally issued subject to a condition similar to condition (11) on permit #S-00009-2 which is in dispute in this proceeding. However, on July 23, 1984, the Director approved a plan for Squaw Creek's agronomist, Randy Staley, testified that in his opinion as a certified professional agronomist, Squaw Creek's #S-00009-2 prime farmland modified, would result in the successful restoration of prime farmland productivity on the prime farmland soils within the #S-00009-2 permit area.

 

[17. Editor’s Note: A review of microfilm did not reveal omitted information.]

 

18. Division of Reclamation agronomist, Steven Wade, testified that in his opinion as a certified professional agronomist, Squaw Creek's #S-00009-2 plan would not result in the successful restoration of prime farmland productivity in accordance to the requirements set forth in 310 IAC 12-5-146 (a). He had therefore recommended that the plan not be approved and the Director's findings on Squaw Creek's plan had been based on his recommendation.[FOOTNOTE 3]

 

19. Squaw Creek maintains that because Respondent failed to approve essentially the same plan which had previously been approved in its #S-00009 plan, and because Respondents allegedly failed to give a reasoned justification for such disapproval, Respondents has acted arbitrarily and capriciously.

 

20. In determining whether Respondent's action in disapproving the plan was an arbitrary and capricious act, Squaw Creek must show that there was no reasonable basis for Respondent's decision. [Board of Trustees of Public Employees' Retirement Fund v. Baughman, 450 N.E. 2d 95 (Ind. App. 1983)] that Respondent disregarded the facts of the case, [Johnson v. Moritz, 426 N.E. 2d 448 (Ind. App.. 1981)] or that a reasonable and honest person could not have reached the same conclusion, [Metropolitan School District of Martinsville v. Mason, 451 N.E. 2d 349 (Ind. App. 1983)].

 

21. Wade testified at the hearing that he had essentially four concerns with Squaw Creek's proposed use of conditioned graded cast overburden as a substituted subsoil. These concerns include; the percentage of course fragments found in the proposed subsoil, the level of toxic materials, the soil's water holding capacity and the soul's moist bulk density.

 

22. Wade's concerns (as stated above) led him to conclude that the subsoil substitute proposed by Squaw Creek could not achieve the desired productivity levels required in 310 IAC 12-5-146(a). In particular, Wade believed the 15 percent unweatherable rock proposed by Squaw Creek as comprising part of the conditioned graded cast overburden was excessive and that the subsoil should contain no more than 5 percent unweatherable rock (or "course fragments".)[FOOTNOTE 4]

 

23. Comments provided by the Soil Conservation Service (hereinafter the "SCS") also stated concerns similar to those expressed by Respondent. In particular, Respondent and the SCS questioned a laboratory analysis conducted on Squaw

 

[VOLUME 4, PAGE 42]

 

Creek's behalf to determine the water holding capacity of the conditioned graded cast overburden. The results indicated that the water holding capacity of the conditioned graded cast overburden was acceptable but both Respondents and the SCS questioned the procedure by which those results were obtained. Consequently, Respondent relied on other methods and studios to determine the water holding capacity of the conditioned graded cast overburden.[FOOTNOTE 5]

 

24. Wade also testified that corn growth in the soil types found in Squaw Creek's #S-00009-2 permitted area had pre-mining productivity levels of 105-115 bushels of corn per acre. He further testified that corn grown in a subsoil consisting of graded cast overburden materials would have a projected a yield of 65 bushels per acre. Wade believed that even with the "conditioning" of the graded cast overburden (as proposed by Squaw Creek) the difference in yields was too large to overcome in order to achieve acceptable productivity levels.[FOOTNOTE 6]

 

25. During the course of reviewing Squaw Creek's #S-00009-2 permit and prime farmland restoration plan (both prior to and following Respondent's rejection of the plan), the parties met on several occasions in an effort to create a mutually satisfactory plan. During the course of these discussions, both parties exchanged letters and other memoranda detailing their questions and responses.[FOOTNOTE 7]

 

26. Based on the above finding, Respondent's refusal to approve Squaw Creek's plan in its #S-00009-2 permit cannot be found to be arbitrary and capricious. Respondent had a reasonable basis for its decision, its decision was supported by the facts of the case and a reasonable and honest person could also be said to have come to a similar conclusion.[FOOTNOTE 8]

 

27. An agency's decision can also be considered to be arbitrary and capricious when that decision is inconsistent with a previous decision made under similar circumstances. [Donovan v. Adams Steel Erection, Inc., 766 F. 2d 804, 807 (3rd Cir. 29850]. Squaw Creek maintains that such was the case when Respondent disapproved Squaw Creek's restoration plan in its #S-00009-2 permit after approving a similar plan in Squaw Creeks' #S-00009 permit.

 

28. Decisions by administrative agencies must be made on a rational basis and consistently applied. However, once an appropriate decision is made, that does not preclude an agency from ever altering that decision. An agency may change its position when circumstances so dictate and it provides a reasoned justification for its change in positions.

 

29. As was the case with the #S-00009-2 permit, the #S-00009 permit also met initial disapproval before its revised version was finally approved. While some of the evidence submitted at the hearing appeared to indicate that the #S-00009 plan faced many of the same problems as did the #S-00009-2 plan, no evidence was put forth to show why Respondent finally approved the #S-00009 restoration plan.[FOOTNOTE 9]

 

30. Throughout the course of its review Squaw Creek's #S-00009-2 plan, Respondent voiced its continuing concern that the plan would not meet appropriate productivity levels as required by 310 IAC 12-5-146 (a). Squaw Creek was undoubtedly aware of such concerns and cannot now claim that Respondent' s failure to approve its plan was without a reasoned justification.[FOOTNOTE 10]

 

31. Based upon the above findings, Respondent did not act arbitrarily and capriciously by making inconsistent decisions relating to the approval of Squaw Creek's #S-00009 and #S-00009-2 restoration plan.

 

32. Any decision made by an administrative body which is substantially influenced by a misapplication of the law, cannot by upheld. [Public Service CO. Of Indiana, Inc. v. Review Board of the Indiana Employment Security Division, 451 N.E. 2d 371, 375 (Ind. App. 1983)]. Squaw Creek contends that Respondent was under no obligation to justify any differing decisions with the SCS.

 

33. According to IC 13-4.1-4-3 (d), Respondent is required to consult with the United States Secretary of Agriculture (of which the SCS is a recognized branch of that agency) when reviewing prime farmland restoration plans. Respondent is not requires to adopt the SCS's findings but merely to use such consultations as part of its internal review process.

 

34. As previously noted, both Respondent and the SCS voiced mutual concerns as to the productive capacity of Squaw Creek's proposed plan.,. This fact alone does not demonstrate that the Respondent gave the SCS's comments undue differences. Consequently, the decision made by Respondent to disapprove Squaw Creek's prime. Farmland restoration plan cannot be said to have been influenced by a misapplication of the law, namely IC 13-4.1-4-3 (d).

 

[VOLUME 4, PAGE 43]

FOOTNOTES

 
1. It was further stipulated that the recommendations of Respondent's staff concerning the disapproval of Squaw Creek's restoration plan would not be altered, even with the modifications in the plan.

2. Respondent understood, as indicated by testimony given by way of deposition and at the hearing, that Squaw Creek intended the #S-00009-2 plan be identical to the one eventually approved in the #S-00009 permit.

3. 310 IAC 12-5-146 (a) requires in part: Sec 146. Prime Farmland: Soil Removal. (A) Surface Coal Mining and Reclamation operations on prime farmland shall be conducted to:

 

(2) Separately remove the B horizon, or other suitable soul material that will create a reconstructed soil of greater productive capability than that which existed before mining.

(3) Separately remove the underlying C horizons, other strata, or a combination of horizons or other strata, to be used instead of the B horizon. When replaced, these combinations shall be equal to, or more favorable for plant growth than, the B horizon.

4. Both Wade and Staley cited various studies regarding the relative effect the percentage of course fragments would have on the productive capacity of a soil. Wade discussed various studies which indicated course fragments decrease a soil's productivity and Staley referred to other studies which indicated course fragments could even be beneficial to a soil. However, neither party put forth any evidence which would prove that any particular study or approach was clearly in error or based on totally invalid assumptions.

5. The method used by Squaw Creek to determine the conditioned graded cast overburden's water holding capacity involved removing the course fragments from the sample and then crushing it. Respondent did not believe this procedure provided an accurate representation of the subsoil material and therefore viewed those results as less than reliable.

6. During the course of the hearing, there was testimony regarding a study being conducted at Peabody Coal Company's Lynnville Mine, located near to and containing similar soil types as those found at Squaw Creek's South Field Mine. In this study, corn was being grown directly in unconditioned graded cast overburden. Wade visited Peabody's test pilot and testified that he saw some corn growing in the graded cast overburden but that it was at best sparsely vegetated. Although Squaw Creek is not maintaining that crops grown in graded cast overburden will have equal or better yields than those grown in undisturbed prime farmland soils, the fact that some corn can grow under such conditions is hardly proof that a subsoil consisting of conditioned graded cast overburden can create productivity levels required by 310 IAC 12-5-146.

7. While Respondent's main concerns were never addressed in any one particular document or meeting, its concern regarding the potential productivity levels of the subsoil substitute was clearly expressed throughout the course of review as evidenced by various documents submitted and testimony given at the hearing.

8. When proving an administrative agency has acted in an arbitrary and capricious manner, the burden of proof that there is no reasonable basis for the agency's actions is on the party so claiming. [Baughman, 450 N.E. 2d at 97] It is also a tenet of administrative law that the reviewing body give deference to the administrative agency's expertise in the area [Metropolitan School District, 451 N.E. 2d at 353] and in this sense the arbitrary and capricious standard is narrow and restricted [Farmer's Union Central Exchange, Inc. v. F.E.R.C., 734 F. 2d 1486, 1500 (D.C. Cir. 1984)].

 

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9. Respondent employed a different agronomist at that time and all memoranda and notes used by him and his staff concerning the review of Squaw Creek's #S-00009 restoration plan are no longer present in Respondent's files.

10. There is no principle that requires perfect consistency in decisions made by administrative agencies during the course of its review of a particular problem. So long as it takes account of all relevant factors and its goal is reasonable (such as making sure that Squaw Creek's #S-00009-2 plan met all statutory requirements) that agency's decision should be sustained based on the deferential standard required by the technical nature of the subject matter [Illinois Bell Telephone Co. v. F.C.C., 740 F. 2d 465 (7th Cir, 1984).]