[CITE: Jarrett v. DNR and Amax Coal Company, 5 CADDNAR 229 (1990)]
[VOLUME 5, PAGE 229]
Cause #: 89-099R
Caption: Jarrett v. DNR and
Amax Coal Company [Jarrett I]
Administrative Law Judge: Teeguarden
Attorneys: Goodwin, Pope;
Blanton; Spicker
Amicus Curiae: Noland, Indiana Coal Council; Cobb Hoosier Environmental Council
Date: October 29, 1990
ORDER (ALJ Nonfinal Order)
[NOTE: THIS ADMINISTRATIVE
PROCEEDING RESULTED IN TWO SEPARATE LINES OF APPEAL. THE ALJ DECISION WAS
MODIFIED FOLLOWING AN ARGUMENT ON OBJECTIONS AND IS SET FORTH FOLLOWING ALJ
FINDINGS. PARTIES TOOK JUDICIAL REVIEW. (1) WATER RIGHTS ISSUE: ON JUNE 17, 1991,
MARION SUPERIOR COURT, GRANTS AMAX'S PARTIAL SUMMARY JUDGMENT AND REVERSED NRC.
TRIAL COURT DECISION SET FORTH BELOW. ON NOVEMBER 24, 1992, COURT OF APPEALS
AFFIRMED TRIAL COURT (603 N.E.2d 1349). ON AUGUST 3,
1994, SUPREME COURT REVERSED COURT OF APPEALS AND REMANDED TO TRIAL COURT (638
N.E.2d 1418). ON NOVEMBER 1, 1994, REHEARING DENIED.
(2) JUDICIAL REVIEW WITH RESPECT TO COMPLIANCE WITH OPEN DOOR ACT. ON JANUARY
29, 1992, MARION SUPERIOR COURT GRANTED AMAX'S PARTIAL SUMMARY JUDGMENT.
DECISION SET FORTH BELOW.]
The following orders are issued:
a.
Amax's motion for Partial Summary judgment on the issue of water rights is
granted in part, but the relief requested as it applies to 89-99R (Objection to
condition 12 on the Cass-2 permit), 89-106R (Jarrett's objection to the
granting of the Cass-2 permit) and 90-012R (Jarrett's objection to the granting
of the Caledonia permit) is denied, because of the ruling on Issue K dealing
with subjacent support rights.
b.
Jarrett's motion for Summary Judgment filed in both 89-106R and 89-211R (Cass-2
permit) is granted, because of the ruling on Issues F and G; and permit
S-00041-2 is declared void.
c.
Jarrett's motion for Summary Judgment in 90-012R (Caledonia permit) is denied,
because of the rulings on Issues A, B, D, E, F, H, L, M, and N.
d.
Jarrett's requests for Temporary Relief on permit S-00041-2 (Cass-2permit) are
denied by the Administrative Law Judge for lack of ripeness, with leave to file
for reconsideration if this decision is otherwise overturned during the review
process and S-00041-2 is found to be validly granted.
e.
Jarrett's request for Temporary Relief and Stay on permit S-00242 (Caledonia
permit) is denied by the Administrative Law Judge because of the ruling on
Issues L and M.
ALJ FINDINGS OF FACT
1.
The Department of Natural Resources ("DNR") is an agency within the
meaning of IC 4-21.5-3-1.
2.
The DNR has primary responsibility for regulating coal mining in the State of
Indiana.
3.
Coal mining in the State of Indiana is regulated under IC 13-4.1 and 310 IAC 12
(I-SMCRA).
4.
Oversight of I-SMCRA is provided by the Department of the Interior and the
Office of Surface Mining ("OSM") under 30 USCA 1201 et seq., and 30 CFR
700 et seq., (F-SMCRA).
5. The
DNR regulation is provided by the Division of Reclamation. ("DOR").
6.
Indiana achieved primacy over coal mine regulation in 1982.
7.
Amax Coal Company and Amax Coal Industries, Inc. ("Amax") are in the
business of operating coal mines and actively mine in the State of Indiana.
8.
Prior to any time relevant to these proceedings, Amax operated the Minnehaha
Mine near Dugger, Indiana, in Sullivan County under Indiana permit number
S-00041, known as the "Cass Permit."
9.
During the fall of 1988, Amax filed an application to amend the Cass permit in
order to add considerable acreage to the area to be mined. This was denominated
S-00041-2 and has been called the "Cass 2" application and permit.
10.
The Cass 2 permit was approved, with conditions, on May 17, 1989, by the acting
Deputy Director, Bureau of Water and Mineral Resources of the DNR, and the
Chairman of the Advisory Council of the Bureau of Water and Mineral Resources
following the
[VOLUME 5, PAGE 230]
May
17 meeting of this Advisory Council.
11.
In the spring of 1989, Amax filed an application with DNR for permit S-00242 in
order to conduct a two seam surface mining operation on property also in the
general vicinity of Dugger, Indiana. This permit has been called the
"Caledonia" application and permit.
12.
The Caledonia permit was approved on December 15, 1989, by the Deputy Director,
Bureau of Water and Mineral Resources, and the Chairman of the Advisory Council
of the Bureau of Water and Mineral Resources following the December 15 meeting
of the Advisory Council.
13.
Jack Jarrett ("Jarrett") is a property owner in the area of both
mining operations. Jarrett owns a tract of land containing approximately 300
acres near Dugger, Indiana and resides on this property with his wife. Two grown
sons also live with their families in homes on this tract.
14.
The Jarrett family also operates a computerized typesetting business in a
separate structure on the property called the Engineering Building.
15.
Jarrett filed timely appeals to the Department's actions granting both the
Cass-2 and Caledonia permits.
16.
Jarrett's appeal of the grant of the Caledonia permit, filed January 16, 1990,
included a request for temporary relief under IC 13-4.1-6 and a stay under IC
4-21.5 ("AAA"). Shortly thereafter, Jarrett also requested temporary
relief with respect to the Cass-2 permit.
17.
The issues involved in both administrative appeals were very similar and the
parties identical, so a joint Temporary Relief hearing commenced on February
12, 1990.
18.
The hearing involved 24 days of evidence plus one entire day for final
argument. Several hundred exhibits were introduced and numerous briefs filed
including Amicus briefs by the Indiana Coal Council ("ICC") and the
Hoosier Environmental Council ("HEC").
19.
Both Jarrett and Amax filed summary judgment motions on several issues and all
parties have responded.
20.
Amax's motion to consider all evidence introduced in the Temporary Relief
Hearing as evidence for purposes of Summary Judgment was granted.
21.
Amax filed a timely request for review of the imposition of conditions 12 and
13 on the Cass-2 permit.
22.
Jarrett filed a timely request for review of DOR removal of condition 13 on the
same permit.
23.
All issues in these matters have been fully and extensively briefed.
24.
On matters involving the grant or denial of temporary relief, the
Administrative Law Judge is the ultimate authority for the DNR. (310 IAC 0.6-1-4).
25.
On other matters which involve permits and conditions thereon, the ultimate
authority is the Natural Resources Commission ("NRC.") After July 01,
1990, the NRC is the "ultimate authority" on all requests for
administrative review under IC 4-21.5 except temporary relief. (IC 14-3-3-21 as amended in 1990.) IC 4-21.5 is sometimes
referred to as the "AAA."
26.
In a temporary relief hearing, the burden of persuasion falls on the person
petitioning for temporary relief. This burden requires him to show a
substantial likelihood that he will prevail on the merits at the time of final
determination. IC 13-4.1-4-6.
27.
In all other matters before the Administrative Law Judge, the burden of
persuasion is on Amax to show its applications comply with all requirements of
I-SMCRA. IC 13-4.1-4-3.
28.
The entire area in question, including the Jarrett property, is honeycombed
with abandoned underground mine tunnels at different depths below the surface.
29.
None of these mines have been active since 1954 and underground mining
commenced in this area shortly after the turn of the century.
30.
All of these abandoned works are filled by groundwater which has seeped or
flowed into the cavities.
31.
The mines under the Jarrett property have filled with water to the extent that
some pressure is currently exerted on the roof of the mine by the water.
32.
The mines in question were all mined by roof and pillar mining techniques.
33.
The collapse of underground mines and the resultant surface damage is called
subsidence. Jarrett has two major concerns with subsidence.
34. Jarrett's
first concern deals with the effects of blasting on these underground mines.
35.
Jarrett's second concern deals with the effects of pumping water out of the
underground works and the resulting depressurization.
36.
Jarrett's
[VOLUME 5, PAGE 231]
remaining concerns deal with the
effects of blasting on the structures on his property.
37.
The Advisory Council recommended the placement of conditions 12 and 13 on
Cass-permit, because of concern about subsidence on the Jarrett property.
38. By
way of summary judgment motions and the Temporary Relief Hearing, the parties
have presented the following issues for review:
(A)
Both the Cass-2 and Caledonia permits were granted as a result of meetings
which violated the Indiana Open Door Laws, IC 5-14-1.5.
(B)
Only a Circuit or Superior Court may remedy an open door law violation, so even
if issue A is resolved in favor of Jarrett, the Administrative Law Judge cannot
order a remedy.
(C)
The Cass-2 permit was not properly approved by the correct persons as the
Delegation Rules for the Commission were not effective on the date of approval.
(D)
The Director of the DNR improperly delegated his responsibilities with respect
to issuing permits.
(E)
Both permits are invalid because the processing and approval procedure used by
the DNR is not authorized by rule or statute and actually conflicts with same.
(F)
Amax did not comply with necessary provisions of the permitting process and
thus both permits are invalid.
(G)
The imposition of conditions 12 and 13 on the Cass-2 permit were
an improper delegation of the permit approval process away from the Commission
and its delegates to the DOR and is actually a denial of the permit.
(H)
The Administrative Hearing is a de novo hearing and any procedural or substantive
errors committed by the DNR are correctable by the Administrative Law Judge.
(I) The surface owner of real property does not have the right
to object to subsidence if prior owners have conveyed away mineral rights and
subsidence rights.
(J)
Indiana Water Rights are not affected under I-SMCRA or F-SMCRA and those rights
allow the pumping of water from abandoned underground mines even if such
pumping increased the chance of subsidence of adjacent surface areas.
(K)
The surface owner of real property has an absolute right to subjacent support
no matter what Indiana Water Rights Law says.
(L)
Blasting and depressurization of underground mines will not cause subsidence,
because the area in question has already subsided.
(M) Even
if the old works have not subsided, blasting and depressurization will not
cause a significant increase in the risk of subsidence, so no further
restrictions on blasting limits or pumping are justified.
(N)
Other.
ISSUES A and B - INDIANA OPEN DOOR LAW
39.
The basic Indiana Open Door Law is found in IC 5-14-1.5.
40.
The remedy for an Open Door Violation is found in IC 5-14-1.5-7 which provides
that an action may be filed in a court of competent jurisdiction to declare a
decision void if not made at a meeting in which proper notice is given. A
Claimant need not show special damage.
41.
On its face, this section appears to limit remedies for violations to actions
filed in the proper court.
42.
Such a finding, however, would ignore the DNR's special statute on the open
door which incorporates IC 5-14-1.5-7; that being IC 14-3-3-21 (b).
43.
IC 14-3-3-21 (b) states that public notice under IC 5-14-1.5-5 (b) must be
given by NRC delegates at least 10 days before taking an action that is subject
to administrative review under the AAA. This provision has been repealed on
July 01, 1990, but was in effect at the time of both permit approvals. PL-28,1990.
44.
Cass-2 and Caledonia permit application decisions are subject to review under
the AAA.
45. By
the wording of IC14-3-3-2 (b) (passed in 1988), the Legislature intended to
grant concurrent jurisdiction over DNR administrative appeals to DNR
administrative law judges to decide Open Door Law matters. This in no way
changes the right of an affected party to file action for an Open Door
violation in an appropriate court without exhausting administrative remedies;
it merely allows the administrative pursuit of a remedy.
46.
Having concluded that the agency has jurisdiction under IC 4-21.5 over a claim
of an open door violation by DNR, the next step is to examine the notice
requirement and definitions.
47.
The NRC is responsible for issuing I-SMCRA permits.
[VOLUME 5, PAGE 232]
48.
The NRC has delegated its initial permit authority to the Chairman of the
Advisory Council of Water and Mineral Resources, and the Deputy Director of the
Bureau of Water and Mineral Resources. Again, this procedure has since been
changed effective July 01, 1990, by PL 28-1990.
49.
Assuming the delegation is valid (this matter will be discussed in Issue C),
one effect of IC 14-3-3-21 (b) is to make the NRC delegates subject to the same
notice requirements as the NRC would be, if the action to be taken is subject
to administrative review under the AAA.
50.
The NRC is an agency within the meaning of IC 5-14-1.5-2.
51.
The conclusion thus drawn is that the NRC Delegates must give notice of
meetings as provided by IC 5-14-1.5-5.
52.
In both the Cass-2 and Caledonia permit applications, proper notices were given
that the permits would be agenda items at the May 17, 1989, and December 15,
1989, monthly meetings of the Advisory Council of Water and Mineral Resources.
53.
No notice was given in either case that the Chairman of the Advisory Council
and Deputy Director as delegates of the NRC would be approving (or denying)
permits after the Council meeting.
54.
Jarrett attended both Council meetings and made presentations at both.
55.
Testimony about the procedure used to grant permits in both cases showed that, after
the adjournment of the Advisory Council meeting, staff members took the
documents necessary to show approval of the permits to the NRC delegates and
obtained their signatures. The evidence shows no further discussion of the
merits took place at this time and the delegates routinely signed what the
Council approved.
56.
The testimony of the three persons involved as delegates indicated that they
did not consider the act of jointly signing approvals of the permits as a
meeting.
57.
The documents themselves, however, state otherwise. Exhibit 55, signed by the
delegates May 17, 1989, states that with regard to Cass-2, "The Deputy
Director and Chairman of the Natural Resources Advisory Council of the Bureau
of Water and Mineral Resources, having met on the 17th day of May, 1989, did
accept and adopt the attached Findings and Recommendation of the Director with
respect to the above permit application." Exhibit 59 uses identical
wording for the Caledonia permit signed on December 15, 1989.
58.
A careful reading of IC 14-3-3-2 indicates that the letter of the Open Door Law
was violated since no notice or agenda of a delegates' meeting was included in
the Advisory Council information.
59.
IC 5-14-1.5-7 (a)(3) provides that a decision made
when proper notice is not given may be declared void.
60.
To invoke this remedy, the action alleging an Open Door Violation must be
logged within 30 days after the improper act occurred and the Plaintiff knew or
should have known it occurred. At the latest, this is 30 days after the
completion of the Advisory Council minutes.
61.
Jarrett's appeal of the Caledonia permit was filed on January 16, 1990, and
while it mentioned a number of procedural violations, it did not refer to Open
Door violations.
62.
Jarrett's appeal of the Cass-2 permit was filed pro se on June 23, 1989, and
makes no reference to procedural matters of any type.
63.
The first mention the Administrative Law Judge can find of alleged Open Door
violations are in the motions for Summary Judgment filed on January 30, 1990.
64.
The Administrative Law Judge concludes that since Jack Jarrett participated in
both Advisory Council meetings and knew the Council recommendations, he knew or
should have known the decision that was made on those dates.
65.
To preserve an Open Door issue on Cass-2, Jarrett should have alleged a
violation prior to June 17, 1989. He did not.
66.
To preserve an Open Door issue on Caledonia, Jarrett should have alleged a
violation prior to January 15, 1990. He did not.
67. Therefore,
it is concluded that the DNR has jurisdiction over allegations of Open Door
violations, that there were technical Open Door violations in connection with
the approval of both the Cass-2 and Caledonia permit which did not affect
Jarrett's ability to appear and comment on the applications, and that Jarrett
waived his right to complain about the decision on these grounds because he did
not file a complaint within 30 days.
[VOLUME 5, PAGE 233]
ISSUE C: DELEGATION BY THE
NRC
68.
The Cass-2 permit was approved by Joseph Siener,
Chairman of the Bureau of Water and Mineral Resources, and John Simpson, acting
Deputy Director of the same Bureau, on May 17, 1989, as delegates of the NRC.[FOOTNOTE 1]
69. I-SMCRA
requires the NRC to approve or disapprove all applications for coal mining
permits. IC 13-4.1-2-1.
70.
Further, the same code section in I-SMCRA allows the NRC to delegate its duties
to a member of the NRC or an employee of the DNR.
71.
This delegation power has been in effect since Indiana achieved SMCRA primacy
in 1982.
72.
The NRC did not exercise this power until May 23, 1985, when it passed a formal
resolution on delegation. (Exhibit 306.) This
resolution specified that the Chairman of the Advisory Council (misspelled as
"Counsel" in the Exhibit) and the Deputy Director may grant or deny
coal mining permits.
73.
The NRC specifically retained the power to make the final decision on permits
when a AAA hearing is held.
74.
The legislature decided to allow the NRC to expand the delegation authority to
all Divisions in 1988, when it passed IC 14-3-3-21. This statute states that
the NRC may delegate duties by rule to a member of the NRC or an employee of
the DNR.
75.
The effective date of this act (PL 115-1988) was March 5, 1988.
76.
In response to this statute, the NRC adopted 310 IAC 0.7-3-5 which involved
virtually the same permit related delegations which were contained in the 1985
resolution.
77.
The effective date of 310 IAC 0.7-3-5 was May 28, 1989, since the filing date
with the Secretary of State was April 28, 1989.
78.
Jarrett contends that since the Cass-2 permit was approved by the purported
delegates on May 17, 1989, the permit is invalid.
79.
Official notice is taken under IC 4-21.5 that the rule making process found in
IC 4-22 is a time consuming process which frequently requires at least one year
for matters of significance to receive final approval.
80.
The DNR and NRC proceeded as rapidly as possible in adopting a delegation rule.
81.
Nothing in IC 14-3-3-21 indicates an intent to repeal
any prior delegations, and the adopted rule is substantively the equivalent of
the 1985 resolution.
82. On
May 17, 1989, the rule in question had been fully approved by the NRC, the
Attorney General, and the Governor, and was merely awaiting the expiration of
the 30 day period following the filing with the Secretary of State.
83.
While not directly in point, Van Allen v.
State, (1984) 467 N.E. 2d 1210 contains interesting language. This case
stated that a rule in place remains effective until amended or replaced even
though the Statutes involved are changed. The Court of Appeals recognized that
often there will be a window until new rules can be passed. This logic is
persuasive in this case.
84.
The Chairman of the Advisory Council and the Deputy Director were appropriate
delegates to approve the Cass-2 permit on May 17, 1989.
85.
Further, 310 IAC 0.6-1-3, which was in effect until amended effective May 28,
1989, allowed Jarrett to request an informal review of the delegates' decision
by the NRC. Jarrett utilized his option to pursue AAA review instead. Having
had the opportunity to proceed directly to the NRC for a decision, he cannot
now complain about improper delegation.
ISSUE D: DIRECTOR'S DELEGATION AUTHORITY
86.
Jarrett contends that the Director's Findings and Recommendations required by
I-SMCRA before a permit can be issued were not prepared by the Director of the
DNR for either permit and thus, both permits are void.
87.
IC 13-4.1-4-3 provides that the Director of the DNR shall make findings that:
(1)
The permit application is accurate and complete and in compliance with I-SMCRA.
(2)
Reclamation as required by I-SMCRA can be accomplished.
(3)
The assessment of hydrologic consequences has been made and the operation is
designed to prevent material damage to the hydrologic balance outside the
permit area.
(4),
(5), (6) Other provisions not applicable to this case.
88.
IC 13-4.1-2-2(c) gives the Director the authority to delegate "all or any
of hispowers and duties" in connection with
I-SMCRA.
89.
This statute has been in since Indiana achieved
[VOLUME 5, PAGE 234]
effect primacy status in July of
1982.
90.
On July 29, 1982, Director James Ridenour sent out a nine page memo (Exhibit
305) specifically delegating a number of responsibilities and duties.
91.
Page 2 of Exhibit 305 indicates that the Director delegated the duty to make written
findings on permit applications to "permitting".
92.
In light of the reading of the entire exhibit and the testimony of DOR
employees, this means the duty was delegated to the Permit Section of the DOR.
93.
The delegation rules require that the delegate be the head of the Permit
Section as the delegation statute requires the delegate be an employee.
94.
Jarrett contends this delegation may only be done by rule as in the case of the
Commission.
95.
I-SMCRA clearly encouraged delegation.
96.
I-SMCRA did not specify how delegation was to take place.
97.
In the absence of any statute to the contrary, there is nothing wrong with
delegating duties by way of a memo or a resolution.
98.
Further, in 1988, the legislature imposed a delegation by rule" limitation
on the NRC (see issue C), and presumably had the opportunity to do the same to
the Director. It did not do so.
99.
Accordingly, there is no I-SMCRA violation in delegating the duty to prepare
Director's Findings to the head of the Permitting Section.
100.
No authority has been presented or encountered to establish that
recommendations were a requirement of the permitting process. Accordingly, the
failure of the Director to personally make the recommendations cannot void a
permit.
ISSUE E: THE PERMITTING PROCESS ACTUALLY
EMPLOYED BY THE DNR CONFLICT WITH THE PROCESS PROVIDED BY LAW.
101. If there is one item that is crystal clear after the 24 days of hearing
and hundreds of pages of exhibits, it is the procedure used by the DNR in granting
a permit since achieving primacy in 1982.
102.
The procedure used is a two step procedure.
103.
When a permit application is received, it is forwarded to the Permitting
Section of the DOR for administrative review.
104.
This is called an Initial Submission.
105.
The Permitting Section can request more information if it feels the application
is not administratively complete.
106.
When the Permitting Section is satisfied, it sends a letter to the applicant
stating the permit is deemed administratively complete.
107.
Prior to this step, there is no public input.
108.
"Preliminarily complete" and "initially complete" are used
as synonyms for "administratively" complete.
109.
This finding of initial completeness begins the public input phase and the
technical review.
110.
The applicant is advised to begin newspaper advertisements and to place a copy
of the application in the appropriate county library.
111.
The application is forwarded by the Permitting Section to the Technical Section
for technical review.
112.
During the course of technical review, public input is received and the
Technical Section will require changes.
113.
When the DOR is satisfied that the application is technically complete, it
prepares the Director's Findings and places the application on the Advisory
Council Agenda.
114.
It is the long standing policy of DOR not to sign or date Director's Findings. FOOTNOTE 2]
115.
In the case of the Cass-2 application, it was deemed administratively complete
on February 13, 1989.
116.
In the case of the Caledonia application, it was deemed administratively
complete on August 16, 1989.
117.
This terminology is not defined anywhere in I-SMCRA.
118.
This terminology is used by the Office of Surface Mining (OSM) in F-SMCRA.
119.
This two step procedure is used by OSM under F-SMCRA.
120.
It is not the job of a permit inspector to decide whether or not the technical
information is correct; only that the information has been provided.
121.
Technical review generally leads to a number of changes.
122.
Upon completion of the technical review, findings are prepared and the matter
placed on the Advisory Council Agenda.
123.
In the case of the Caledonia application, this procedure was not followed in
that the matter was placed on
[VOLUME 5, PAGE 235]
the December 15, Advisory
Council Agenda considerably prior to the Findings being completed.
124.
In the case of the Caledonia application, the application was not deemed
technically complete until December 14, 1989, and the Findings of the Director
were then compiled and hand delivered to the Advisory Council on December 15.
125.
IC 4.1-3-1 requires that a permit be obtained to engage in surface coal mining.
126.
IC 4.1-3-3 sets forth the material which must be included in a permit
application and requires that an entire copy of the application be placed in
the county library in which the mining operation is located.
127.
IC 13-4.1-4-1 requires an applicant to advertise certain information in a local
newspaper at the time the application is submitted. Among other things, this
notice is required to tell readers where they can inspect a copy of the permit.
128.
IC 13-4.1-4-2 allows any affected person to request an informal conference
within 30 days after the last publication required by IC 13-4.1-4-1.
129.
310 IAC 12-3-6 sets forth general requirements for permit applications. This
section requires an application to be complete.
130.
This section of the rules also requires information in the application to be
current and include maps.
131.
A "complete application"is defined in 310
IAC 12-1-3 as an application for a permit which contains all information
required under IC 13-4.1 and 310 IAC 12.
132.
310 IAC 12-3-7 provides for a format and contents review and states that a
completeness review shall be completed no later than 15 days after the
application is submitted. This is done prior to formal review.
133.
310 IAC 12-3-26 requires each applicant to identify the county library where
the applicant will simultaneously file a copy of the application for public
inspection under 310 IAC. 12-3-106 (d).
134.
310 IAC 12-3-106 (d) requires an applicant to place an advertisement in a
newspaper of general circulation in the county in which the mine is located at
least once a week for 4 consecutive weeks at the same time the complete permit
application is filed with the Director. This advertisement must include a
statement that a copy of the application has been filed in the local county
library.
135.
310 IAC 12-3-106 also requires all revisions to be filed in the library. The
application must remain in the library from the time of the first publication in
a local newspaper until all rights to administrative and judicial review have
expired.
136.
310 IAC 2-3-30 requires an application to contain a description of the
hydrology and water quality for the permit area, the adjacent area, and the
general area.
137.
310 IAC 12-3-32 requires applications to include ground water information in
the permit and adjacent area. This requirement includes the location and extent
of each aquifer which may be affected by mining and known uses of the water in
each aquifer.
138.
310 IAC 12-1-3 defines "aquifer" as a zone, stratum, or group of
strata that can store and transmit water in sufficient quantities for a
specific use.
139.
310 IAC 12-3-34 requires the application to discuss the extent to which the
proposed surface mining activities may proximately result in diminution of an
underground source of water in adjacent areas for domestic and other legitimate
use. If interruption may result, the description must identify alternate
sources of water that could be developed.
140.
310 IAC 12-3-39 requires the application to include maps and plans of the
location of known workings of abandoned underground mines within the proposed
permit area and adjacent areas.
141.
310 IAC 12-1-3 defines "adjacent area" to include land outside the
affected or permit area where groundwater may be adversely impacted by surface
coal mining.
142.
310 IAC 12-3-43 requires each application to include a blasting plan which sets
the maximum ground vibration and airblast limits the Permittee will not exceed during blasting operations.
143.
310 IAC 12-3-47 requires each application to contain a reclamation plan which
protects the hydrologic balance of the permit and adjacent areas.
144.
310 IAC 12-1-3 defines "hydrological balance" as the relationship
between quality and quantity of water inflow to, water outflow from, and water
storage in a hydrologic unit such as a drainage
[VOLUME 5, PAGE 236]
basin, etc.
145.
310 IAC 12-3-50 requires an application which proposes mining within 500 feet
of an underground mine to describe the measures that will be used to comply
with 310 IAC 12-5-40.
146.
310 IAC. 12-5-40 states that no surface coal mining activities shall be
conducted within 500 feet of an active or abandoned underground mine unless the
activities result in improved resources recovery, abatement of water pollution,
or elimination of hazards to the health and safety of the public.
147.
310 IAC 12-3-105 requires the applicant to provide all information in a
complete application for review by the Director in accordance with 310 IAC. 12-3-105 through 310 IAC 12-3-117.
148.
310 IAC 12-3-106 provides that those agencies receiving notices under 310 IAC
12-3-106 have 30 days to submit comments to the Director and the Director must
transmit these comments to the applicant and the public library where a copy of
the application was filed.
149.
310 IAC 12-3-108 allows any person whose interests are or may be adversely
affected to file written objections to an initial or revised application with
the Director within 30 days after the last publication of the newspaper notice
required by 310 IAC 12-3-106. The Director is then required to transmit copies
of the objection to the applicant and the appropriate public library.
150.
310 IAC 12-3-109 allows any person whose interests are or may be adversely
affected by the issuance of the permit to request an informal conference. This
request must contain a written summary of issues to be discussed and be filed
with the Director no later than 30 days after the publication required by 310
IAC 12-3-106(a).
151.
310 IAC 12-3-110 requires the DNR allow public inspection and copying of permit
applications.
152.
310 IAC 12-3-112 provides that no permit or revision application shall be
approved unless the application affirmatively demonstrates, and the NRC finds,
that the permit is complete and accurate and in compliance with 310 IAC 12.
153.
310 IAC 12-3-112 also requires that the applicant must show that the mining
operations as required by IC 13-4.1 and 310 IAC 12 can be accomplished under
the plan contained in the operation and the assessment of the probable
cumulative impact on the hydrologic balance has been made and the operations
have been designed to prevent damage to the hydrologic balance outside the
proposed permit area.
154.
310 IAC 12-3-114 requires the Commission to give written findings to all
parties to an informal conference stating the reason for approving, modifying,
or denying the application in whole or in part.
155.
The DOR has published guidelines which discuss the permit process. These were
introduced into evidence as Exhibits 270 and 456.
156.
Part of the problem in this proceeding involves DOR's use of terminology which
is neither used nor defined in I-SMCRA.
157.
The issue thus becomes whether or not the procedure used by the DOR varies
significantly from the applicable statutes and rules.
158.
The process is triggered by the delivery of a document similar to Exhibit 271,
entitled an Application for a Surface Coal Mining Permit.
159.
The same code section that sets forth the material to be included in the
application (IC 13-4.1-3-3) also requires the application for the permit (or
amendment of an existing permit) to be filed for inspection in the main public
library in the county where the mining operation is located.
160.
Filing in the library is mandatory, but the statute does not appear to specify
precisely when the library copy must be filed.
161.
There is a time limit set for compliance with IC 13-4.1-4-1, however.
162.
This statute mandates that at the time an operator submits its application for
a permit or revision of a permit, the applicant shall place the advertisement
required to be submitted in the permit application under IC 13-3-3(a) (6) in a
local newspaper once a week for four consecutive weeks.
163.
IC 13-4.1-3-3(a) (6) requires a copy of the above advertisement which must
include the exact boundaries and proposed mining sites to inform local
residents where the application is available for public inspection.
164.
IC 13-4.1-3-3(a) (6) does not absolutely require filing in the library, but
only that citizens be made aware of some location where they can examine the
application.
165.
The
[VOLUME 5, PAGE 237]
next step required by I-SMCRA is that
a format and contents review be done by DOR (310 IAC 12-3-7).
166.
Unfortunately, 310 IAC 12-3-7 also refers to review for completeness prior to
formal review.
167.
The DOR calls this step an "initial completeness review" or a
"review for administrative completeness."
168.
Were it not for the precise wording of 310 IAC.
12-3-7, it would be clear that the procedure used by DOR varies from the
procedure required by law.
169.
"Complete application" is defined in 310 IAC. 12-1-3 and does not
allow for different degrees of completeness.
170.
"Formal review" is not a defined term, but its specific use in this
rule must mean something.
171.
Further, the time limitations placed on a completeness review (15 working days)
clearly indicates that a thoroughly detailed analytical review is not
contemplated.
172.
Surface Coal Mining regulation qualifies as a complex, highly technical area of
law.
173.
Chevron USA v. Natural Resources Defense
Council, Inc. (1984) 467 U.S. 837, 81 L.Ed.
2d 694 may apply. This case holds that considerable weight should be accorded
to an agency's construction of a statutory scheme which the agency is entrusted
to administer as long as the construction is reasonable within the rules and
statutes. See, also, Department of Natural
Resources v. Porter County Drainage Board (Court of Appeals, July 10,
1990).
174.
On the other hand, an agency cannot ignore applicable rules. As stated in the Indiana State Board of Registration of
Architects v. Meier (1986), 489 N.E. 2d 966, agency discretion is not
without limits and an agency must comply with its own rules. See also Draft v. IDNR (1983), 453 N.E. 2d 288
and 293 (2 cases).
175.
Accordingly, it is concluded that the DOR permitting procedure is required to
be a two step procedure, and that despite the
differences in terminology between the rules and the current practice, the
agency practice on review of permits is authorized by I-SMCRA.
176.
The next step in the process occurs when the application is found to be
administratively complete which corresponds to the completion of the format and
contents review in 310 IAC 12-3-7.
177.
At this point, the applicant is issued a letter and required to begin
advertisements and file a copy of the application in the local library.
178.
While IC 13-4.1-3-3 may not specify precisely when the copy must be placed in
the library, 310 IAC 12-3-26 does.
179.
310 IAC 12-3-26 requires the applicant to simultaneously file a copy with the
local library under 310 IAC 12-3-106(d).
180.
The use of the word "simultaneously" in 310 IAC 12-3-26 is highly
confusing, but in light of the text of 310 IAC 12-3-106 (which requires
publication of a notice of application for a permit), it is concluded the
meaning of the two rules is to require the library submission to take place at
the time the advertisement is ready for its first publication.
181.
The step described in Finding 180 is required at the time a complete
application is filed with the Director and triggers the public response period.
182.
On their faces, both the procedure used and the
procedure provided by rule appear to be relatively consistent at this point.
The problem involves the use of the word "complete application" in
310 IAC 12.
183.
310 IAC 12-1-3 defines a "complete application" as one which contains
all information required under IC 13-4.1 and 310 IAC 12.
184.
Given the number of changes required during "technical review,"
Jarrett has a good argument that the procedure used by DOR does not conform to
the rules.
185.
The DOR interprets this rule to mean that all sections of the application have
been completed and on its face, prior to detailed technical review, it appears
that the application conforms to law.
186.
The definition of "complete application" does not necessarily mean a
"perfect application."
187.
All that is required to have a complete application is an application in which
all sections have been completed and on its face, the application does not
violate I-SMCRA. For example, there must be a blasting plan in which the
proposed limits do not exceed I-SMCRA standards. There is no
requirements during formal review and the public comment period that the
plan will not or cannot change.
188.
Accordingly, although the terminology used by the DOR is not consistent
[VOLUME 5, PAGE 238]
with I-SMCRA, the procedure
utilized is consistent with both the letter and spirit of 310 IAC 12.
189.
From this point forward, the Department Procedures
mirror 310 IAC 12 for matters involving public input and informal conferences.
190.
The last stage of the permitting process (prior to AAA hearings) is 310 IAC
12-3-112. This rule section does require accuracy before approval. The
Commission (or its Delegates) must find the application is both accurate and
complete and that mining and reclamation operations can be accomplished within
the boundaries and in conformance with I-SMCRA. 310 IAC 12-3-112 is further
indication that Jarrett's interpretation of "complete permit" and its
resultant affect on the process is not the appropriate interpretation of
I-SMCRA.
191.
The procedure used by DOR in granting permits is not in direct conflict with
governing statutes and rules, and therefore the permits in question are not
void or voidable for that reason.
ISSUES F AND G: AMAX AND THE DOR DID NOT
FOLLOW THE PROCEDURES EVEN AS INTERPRETED BY THE THE
DOR IN ISSUING THE PERMITS IN QUESTION AND THE COMMISION DELEGATES COULD NOT BY
LAW ATTACH CONDITIONS 12 AND 13 TO THE CASS-2 PERMIT.
192. Amax filed its application for the Cass-2 permit in November of 1988.
193.
Exhibit 1102 generally traces the history of this application.
194.
The first stage of the review was completed on February 13, 1989, and Amax was
advised to deposit a copy of the application in the Sullivan County Library and
begin publication. (See Exhibit 54.)
195.
Amax did take a copy to the Sullivan County Library.
196.
The permit application blast plan at that point did not have detailed answers
to the questions, but merely said "Refer to Permit S-00041" which was
the original Cass permit application. (See Exhibit 186)
197.
In February of 1989, the DOR did not check the library to see if proper
materials were filed.
198.
Jarrett examined the copy in the library and immediately complained about the
lack of a blasting plan and the accuracy of the underground mine information.
199.
An informal conference pursuant to 310 IAC 12-3-109 was held on the Cass-2
permit. Jarrett attended and participated.
200.
Jarrett attempted to find the original Cass blast plan at the Sullivan County
library and could not find it.
201.
Jarrett visited the DOR field office in Jasonville in an attempt to find a
blast plan for Cass or Cass-2.
202.
Because of DOR required revisions to the Cass blasting plans, a current copy
was not available for Jarrett at the time he visited the DOR field office.
203.
On April 19, 1989, the Department acknowledged that the revision had a
typographical error by the DOR. It had been misnumbered
and the DOR then corrected the error. (Exhibit 203.)
204.
Upon discovering this error, the DOR found the revised Cass blasting plan and
provided Jarrett with a copy in April prior to the informal hearing.
205.
A current blast plan is required to be in every permit file and available for
inspection by the public.
206.
310 IAC 12-3-108 provides for a 30 day comment period to run from the time of
the last publication.
207.
The Department concedes that a current Cass blasting plan was not available for
inspection at the Sullivan Public Library during this 30 day period.
208.
310 IAC 12-3-50 and Section L of the permit application require information
about underground mines if mining is to take place within 500 feet of the mine.
209.
Amax acknowledged in the Cass-2 application that mining would take place within
500 feet of abandoned underground mines and discussed the effects.
210.
Jarrett was not satisfied with the accuracy of the underground mine maps
provided by Amax and obtained copies himself from the Bureau of Mines.
Jarrett's maps differed from Amax's.
211.
Jarrett attended the Advisory Council meeting on May 17, 1989.
212.
Jarrett explained his concern about inaccurate underground mine maps, blasting
over underground mines, depressurization or de-watering of underground mines,
and subsidence.
213.
As a result of Jarrett's presentation, the Advisory Council recommended that
conditions 12 and 13 be added to the permit. The
[VOLUME 5, PAGE 239]
Commission
delegates accepted that recommendation and issued the permit for Cass-2 with
conditions 12 and 13 added to eleven other conditions.
214.
Condition 12 deals with the pumping of water from underground mines and reads
as follows: "No additional wells to de-water Coal VI and Coal VII shall be
activated until sufficient detail is added to the statement of probable
hydrological consequences to determine the effects that the dewatering may have
on potential subsidence both within the permit and adjacent off-site areas. In
addition, a ground water monitoring well must be installed in Coal VI at a
location approved by the Division of Reclamation and a monitoring plan approved
and initiated before any additional dewatering wells are activated." (See
Exhibit 55)
215.
Condition 13 deals with blasting near underground mines. The exact wording has
lead to a controversy, but the version appearing in the permit is as follows:
"Prior to any blasting in the amendment area, Amax shall establish a
monitoring plan to prevent adverse effects to the abandoned underground mines
from their surface mine blasting on Permit #S-00041-2. Amax shall submit for
review and approval the following:
(1)
The location(s) of seismograph placement.
(2)
The Peak Partial Velocity not to be exceeded at the monitoring location.
(3)
All the references which support #1 and #2 above.
(4)
A copy of the report which will be completed after each blast and that will
contain the data collected above and that will be made available to DNR upon
request." (See Exhibit 55) [FOOTNOTE
3]
216.
As of the close of the Hearing, condition 12 remained in effect.
217.
Condition 13 was deemed satisfied by the Deputy Division Director on September
12, 1989 and a letter sent to Amax telling them they could proceed with
blasting. (Exhibit 286)
218.
This letter was sent pursuant to a delegation from the NRC to the DOR Director
to remove conditions placed on a permit. See 310 IAC 0.7-3-5(c) (12).
219.
No evidence was introduced concerning a delegation from the DOR Division
Director to the Deputy Division Director.
220.
In granting approval to a permit application, Commission delegates must make a
finding that the permit is accurate and complete and that the applicant has
demonstrated that mining as required by law can be accomplished. 310 IAC 12-3-112.
221.
To approve a permit, the NRC delegates must conclude that the application and
mining plan minimizes disturbances to offsite ground water systems (IC
13-4.1-8-1(10)) and prevent blasting damage to private property outside the
permit area. (IC 13-4.1-10-2 (3)).
222.
Further, one purpose of I-SMCRA is to "assure
that the rights of surface land owners and other persons with a legal interest
in the land or appurtenances thereto are fully protected from surface coal
mining operations." (IC 13-4.1-1.2- (3)).
223.
Conditions 1 through 11 in the Cass-2 permit are fairly standard. They include
items such as no mining within 300 feet of an occupied dwelling without
receiving a written waver, no mining within 100 feet of public roads unless
approved by the Sullivan County Commissioners, effluent limitations must be
met, mining cannot commence in a floodway until the NRC approves a floodway
construction permit, and bond is $3,500 per acre.
224.
As pointed out by Amax, conditions 12 and 13 are highly unusual and the
evidence indicated this is the first time conditions such as these have been
attached to a permit.
225.
Removal of conditions 1 through 11 do not involve
discretion and for the most part, are merely restatements of the law. For
example, I-SMCRA prohibits mining within 300 feet of a dwelling unless a
written wavier is obtained, (310 IAC 12-3-22), and no one may construct in a
floodway unless they have an NRC permit to do so. (IC
13-2-22-13).
226.
Clearly the removal of conditions such as those described in Finding 225 only
requires submitting an appropriate document and does not involve a
"permitting" decision.
227.
Conditions 12 and 13 are fundamental permitting decisions.
228.
Imposing conditions 1 through 11 does not in any way imply a serious doubt in
the ability of the applicant to conduct mining operations within the provisions
of I-SMCRA.
229.
Imposing conditions 12 and 13 shows that the NRC delegates had serious
reservations about whether or
[VOLUME 5, PAGE 240]
not the mining plan would
conform to I-SMCRA.
230.
The NRC delegates have not approved a plan dealing with increased pumping or
blasting near underground mines.
231.
Accordingly, it is concluded that by purportedly approving the Cass-2 permit with
conditions 12 and 13, the NRC delegates were denying the permit application as
written and were rejecting the Director's Findings that the application is
accurate and complete and that mining can take place as required by I-SMCRA. By
attaching these conditions 12 and 13, the practical effect is to bypass the NRC
delegates and to turn over this crucial decision to the Division Director (or
in this case the Deputy Director). That being the case, the Cass-2 permit has
not been issued. [FOOTNOTE 4]
232.
As to the other matters raised on the Cass-2 procedure, despite all the flaws
in the library blast plan and the accuracy of underground mine maps, eventually
these problems were corrected and an informal conference held. While it should
be the responsibility of the DOR and Amax to provide these documents, and it
should not be Jarrett's responsibility to spend time and money for these items,
the fact remains that ultimately, they have been provided and considered.
233.
Jarrett raises another objection to both Cass-2 and Caledonia dealing with the
stability of the underground mines.
234.
Jarrett correctly points out in November of 1989, Amax submitted documents and
calculations to the DOR showing that the mines under the Jarrett property
(Vandalia #17 old works and Regent old works) were stable and depressurizing
the mines would not cause a subsidence problem. (Exhibit 7.)
[FOOTNOTE 5]
235.
On January 11, 1990, further correspondence was received by DOR from Amax
making reference to any change in its contention about the abandoned
underground mines. (See Exhibit 1102E)
236.
As late as February 05, 1990, Amax sent a letter to the DOR concerning
condition 12 and made no reference to any change in its contention about the
abandoned underground mines. (See Exhibit 1102E)
237.
On April 10, 1990, (Day 19 of the hearing), Amax produced as its 15th witness
an expert from Engineers International who testified that the underground mines
under Jarrett property have already failed or are in the process of failing. He
testified that pumping water from these works will not cause further
subsidence.
238.
April 10, 1990, was the first time this position was taken by Amax and the
first time the DOR (or Jarrett) was aware of this theory.
239.
Exhibit 1102E shows that Amax was well aware that the DOR wanted all relevant
information on condition 12 and Amax provided a number of replies. No further
response to DOR was made after Amax became aware of the expert's opinion.
240.
Amax contends the timing of the testimony referenced in Finding 237 is not a
problem because this hearing is de novo and because its presentation during the
hearing is adequate to satisfy I-SMCRA. (This contention is discussed in detail
in Issue H.)
241.
Making a major shift in a theory of an essential portion of the application
while administrative review of a permit is pending, and not submitting the
information as a revision to DOR, means that the application in Cass-2 was not
and is not complete and accurate within the meaning of IC 13-4.1-4-3.
242.
The same analysis might also hold true for the Caledonia permit.
243.
Caledonia raises some different questions, however.
244.
The Cass-2 permit, if approved, involves direct
pumping of Regent and Vandalia #17 old works which have numerous shafts and
tunnels under the Jarrett property.
245.
The Caledonia permit area does not extend over either of the above old works.
246.
The Caledonia permit is a two seam mining operation where both Seam VI and Seam
VIII coal will be mined, hence initial mining will
take place in areas where there are no Coal VI underground works.
247.
The Caledonia permit states that 2 observation wells have been placed in the
old works in the permit area in case depressurization becomes necessary.
(Exhibit 294, p. 77)
248.
The mining plan as approved for the Caledonia permit does not, apparently,
provide for direct pumping from underground works.
249.
Page 82 of the Exhibit 294 considers the effect of pit pumping, but does not
mention directed depressurization of the Rainbow Old Works (which are the works
under the
[VOLUME5, PAGE 241]
Caledonia
permit area.)
250.
Page 95 of the same exhibit discusses measures to be used within 500 feet of
the old works. The approved language states that the mining operation will
cease when the surface mine is no more then 150 feet
from the old works, and the company will then auger to within 50 feet.
251.
Testimony of Amax personnel uniformly stated that the operation is a two seam
operation and that at some later date, Amax may wish
to proceed with a coal VII extraction over the abandoned old works. If so, all
agreed that pumping would be desirable, but an amended plan including pumping
would have to be approved by the DOR. The mine manager testified that there was
no need to pump old works to mine both the VI and VII seam coal and that an
amendment to the plan would have to be made to mine Seam VII alone.
252.
While it might be better practice for mining plan and permit or the approval to
discuss these matters specifically, the Caledonia application and 310 IAC
12-3-121 do appear to require a specific application for revision and NRC
approval for a change in operations to allow pumping from old works.
253.
Since pumping old works was not necessarily contemplated or permitted,
information about Regent and Vandalia 17 old works and depressurization was not
required in order to have a complete and accurate permit application.
254.
The other issue involving irregularities in the Caledonia permit adoption which
requires attention is that the Director's Findings were not available until the
morning of the Advisory Council meeting.
255.
The DOR placed this matter on the December 15, 1989, Advisory Council Agenda.
256.
DOR did so without the findings being prepared in anticipation of finishing
them prior to the meeting.
257.
The DOR was still requesting information from Amax as late as December 13,
1989.
258.
Jarrett was aware that the staff was generally recommending approval and that the
matter was on the agenda.
259.
Further, Jarrett appeared with his expert in front of the Council and NRC
delegates and presented an argument against approval of the application.
260.
While this procedure may not be the best to use in controversial permit
applications, it does not violate any statute or rule. Jarrett knew the staff
had recommended approval in some form and was present with an expert.
261.
Accordingly, the Caledonia permit was properly approved.
ISSUE H: THE NATURE OF THE
ADMINISTRATIVE HEARING.
262. No single issue in this case produced more controversy than the nature and
purpose of these proceedings.
263.
Jarrett contends that the function of the Administrative Law Judge is to act as
an appellate reviewer of the Delegate's decision who can consider only evidence
available to the Delegates at the time of their decision.
264.
The logical extension of this position, coupled with Jarrett's interpretation
of "complete permit," would require that any permit application
revision made after the public comment period commenced to start the process
all over again. That is, since the application was changed, it obviously was
not "complete" and thus the Delegates could not approve it so the
application must return to the public comment stage.
265.
Nothing in the AAA supports the interpretation contained in Finding 264.
266.
Amax contends that a hearing under the AAA is totally de novo and anything
marginally relevant to the issues can be introduced whether or not the
Delegates or DOR were exposed to the information.
267.
The logical extension of Amax's position is that Amax can turn in a blank
permit application to the Delegates and file a request for review under AAA
when an application is denied.
268.
Nothing in the AAA supports the interpretation contained in Finding 267.
269.
Little or no Indiana case law exists to identify the proper role of the AAA in
reviewing an initial permitting decision.
270.
In the absence of persuasive authority, a balanced approach should be applied
which will adequately address the legitimate interests of the agency, the
parties, and the public.
271.
Certain types of cases are completely de novo. For example, administrative
review of a notice of violation issued by an inspector under I-SMCRA is a de
[VOLUME 5, PAGE 242]
novo hearing with the DNR bearing
the responsibility to introduce sworn testimony to prove a violation.
272.
Permitting and licensing action are somewhat different from sanctioning actions.
(A permit is a license within the meaning of the AAA. IC
4-21.5-1-8.)
273.
With respect to an appeal in a permit case, substantive issues are de novo.
That is, whether or not the blasting limits, for example, are set at an
appropriate level is a matter on which a
Administrative Law Judge may hear unlimited amounts of evidence and after
weighing same, can issue a decision changing those limits.
274.
Finding 273 leaves the issue of procedural and application defects to be
discussed.
275.
Amax cities numerous cases which stand for the proposition that the purpose of
a formal administrative hearing is to cure defects made by the agency in prior
actions, whether procedural or substantive.
276.
None of these cases involve the permitting process. Virtually all deal with
personnel matters and the only real issue is whether or not the agency had
adequate admissible evidence to justify the disciplinary action imposed. See Grisell v. Consolidated City of Indianapolis
(1981), 425 N.E. 2D 247, Riggens v. Board of Trustees of Ball State
University (1986), 489 N.E. 2d 616, and NRC
v. Sullivan (1981), 428 N.E. 2d 92.
277.
The parties did not dwell on the Indiana law of licenses and permits, possibly
because there is little case law.
278.
The law of licenses and permits is relevant to a resolution of this proceeding.
279.
I.L.E. Licenses Sec. 20 states that an applicant for a license must comply with
conditions prescribed by statute.
280.
This proceeding is not and cannot be the subject of a fully de novo hearing.
While the hearing can correct a number of errors, an administrative law judge
cannot order the issuance of a permit, regardless of the substantive evidence
introduced at hearing, if the correct permit procedures have not been followed
and the application not properly prepared.
281.
The primary appellate case involving permits is in accord with this theory. In
the case of Indiana Environmental
Management Board v. Town of Bremen (1984), 458 N.E. 2d 672, the court
voided a permit when the permitting process was not followed by the agency.
While this is not a SMCRA case and was decided under IC 4-22-1 (former law),
the Administrative Law Judge concludes that this case still stands for the
proposition that there are limits on the curing effect of a AAA hearing on
procedural errors, especially in permit cases.
282.
With regard to the Cass-2 permit, in the prior discussion of issues F and G.
The Administrative Law Judge found fundamental procedural errors involving the
permit application and process. Amax sought in part to rely on the de novo
aspect of these hearings to correct these defects. The problems with the
purported approval of the Cass-2 permit are non-correctable by a AAA hearing and the reasoning in Town of Bremen, supra,
applies.
283.
With regard to the Caledonia permit, any errors in the process were not so fundamental to the integrity of the permit as to not be
correctable by a AAA hearing. [FOOTNOTE
6]
ISSUE I: THE
SURFACE OWNER OF REAL PROPERTY CANNOT OBJECT TO SUBSIDENCE IF PRIOR OWNERS HAVE
CONVEYED AWAY SUBSIDENCE RIGHTS WITH THE MINERAL RIGHTS.
284. Without question, some of Jarrett's 300 acres were acquired by way of
conveyances in which prior fee owners had conveyed mineral rights including the
right to subside.
285.
The precise locations are disputed, but for purposes of this discussion, it
makes no difference.
286.
Amax is not a holder of the mineral and support rights under the Jarrett
property.
287.
A conveyance of subsidence rights to one particular party for the purpose of
conducting mining operations under the seller's property does not give a third
party mining off the seller's property the right to subside the property.
288.
Sellers can convey away their absolute right to subjacent support. See Paul v. Island Coal Co.
(1909), 88 N.E. 959, which holds that the effect of such a conveyance is to
relieve the company mining under the property from liability.
289.
There
[VOLUME 5, PAGE 243]
is no evidence that Amax was
involved in the mining done under these conveyances.
290.
Further, a recent West Virginia case has held that mining methods not
contemplated at the time of severance of mineral rights may not now be used to
the detriment of a surface owner and the conveyance can only waive damages
within the ordinary contemplation of the parties at the time of the waiver. Cogar v. Spring Ridge Coal Co. (W.V. 1989),
379 S.E. 2d 764.
291.
Amax's evidence shows the conveyances in question were made in the early 1900s.
292.
Mining techniques have changed since the early 1900s particularly with the
invention of heavy equipment, leading to an increase in surface mining.
293.
No party discussed the effect of IC 32-5-11 (lapse of mineral interest), and
the provision is assumed to be inapplicable.
294.
Accordingly, Jarrett's property right to subjacent support has not been waived
as to acts of a third party surface mine operating on other properties.
ISSUE J: INDIANA WATER RIGHTS LAW ALLOWS
UNLIMITED PUMPING FROM ABANDONED UNDERGROUND MINES EVEN IF SUCH PUMPING
INCREASES THE CHANCE OF SUBSIDENCE OF ADJACENT SURFACE AREAS AND THUS THE DNR
HAS NO RIGHT TO REGULATE OR PROHIBIT PUMPING.
295. The undisputed evidence show that the entire Dugger area in Sullivan
County is honeycombed by abandoned underground mines some of which were mined
around the turn of the century.
296.
The most recent mining in mines under the Jarrett
property took place approximately 35 years ago.
297.
With the passage of time, these mines filled with water.
298.
The two abandoned mines under the Jarrett property are the Regent old works and
the Vandalia 17 old works.
299.
Both the above mines were worked by room and pillar mining and extraction
methods.
300.
In some extraction panels, the extraction ratio appears to have exceeded 80%.
301.
Many areas have extraction ratios in excess of 70%.
302.
Once abandoned, the mine tunnels are no longer maintained.
303.
With the passage of time, both the mine roof and the pillars bearing the weight
of the overburden tend to lose support strength.
304.
Eventually, the roof and pillars will begin to fail and collapse becomes
likely. [FOOTNOTE 7]
305.
A collapse may or may not noticeably affect the surface above the mine
depending on depth below the surface of the mine shaft, height of the mine
shaft, extent of the failure, and nature of the overburden.
306.
The water which floods the mine makes no contribution into overburden support
during flooding. In fact, if anything, it decreases overburden support by
causing deterioration of the pillars.
307.
Once the mine has completely flooded, the water pressure makes a contribution
to stability by exerting pressure against the roof.
308.
As more water enters the mine, more water pressure is exerted on the roof, and
by the monitoring of observation wells drilled into the underground works, the
amount of water pressure being exerted on the roof (which reduces the weight
that otherwise would have to be supported by the roof and pillars) can be
measured.
309.
The removal of water from the underground mines reduces the water pressure
against the roof and thus increases the load on the roof and pillars.
310.
In tunnels where the load carrying capacity of the roof and pillars is very
close to the weight of the overburden, this reduction in water pressure can
lead to roof or pillar failure.
311.
Both Regent and Vandalia 17 old works extend under the Cass-2 permit area.
312.
Water pressure in abandoned Coal VI works causes problems in mining the Coal
VII seam by surface mining techniques.
313.
Specifically, as the surface mining operation passes over old flooded works,
the hydrostatic pressure literally forces water seepage into the pit, thereby
interfering with the orderly removal of overburden and coal.
314.
The practice favored by the industry is to pump extremely large quantities of
water directly out of the underground works. This is known as "lowering
the head."
315.
Amax has a legitimate business purpose in pumping water out of Regent and
Vandalia 17 old
[VOLUME 5, PAGE 244]
works as the Cass-2 mining
operation proceeds close to these two mines.
316.
Indiana water rights law has been the subject of two recent court decisions.
317.
The first of these decisions was Wiggins
v. Brazil Coal and Clay (1983), 452 N.E. 2d 958. This case involved the
pumping of large amounts of water out of underground mines by a surface mining operation.
One result of the pumping was to drain a neighboring land owner's strip pit.
The Court held that water which percolates belongs to no particular owner and
is considered to be part of the land with which it mingles. Therefore, a coal
company which digs straight down and pumps groundwater for a valid business
purpose may do so without liability to an adjacent landowner for interfering
with his lake.
318.
This case represents a major expansion of the earlier cases holding similarly
in that this case involved pumping from an artificial structure (abandoned
underground mine) rather than a natural cavity.
319.
On its face, WIGGENS, supra, would appear to govern. This neglects the fact
that WIGGENS, supra, is a pre-I-SMCRA case.
320.
Amax contends that it is immaterial because neither I-SMCRA nor F-SMCRA affects
the state water rights law.
321.
Jarrett contends that I-SMCRA modifies Indiana water rights laws with respect
to surface coal mines.
322.
In accord with Wiggens, supra, is
Prohosky v. Prudential Insurance Company of America (N.D.
Ind, 1984), 584 F. Supp. 1337, rev'd on other grounds, 767 F. 2d 387 (1985). In this case, Prudential
had a gigantic irrigation system which used ground water to water 23,000 acres
of cropland. One result of pumping was that neighboring land owner's wells
failed. The court held that unless the pumping was malicious, there was no
liability.
323.
Possibly the only Indiana case finding liability is Gagnon v. French Lick Springs Hotel Co. (1904), 163 Ind. 687, 72 N.E.
849. In this case, a restraining order was issued to prohibit pumping ground
water since the landowner was simply pumping an underground water supply into a
creek to deplete the water available to the Hotel. The court restrained pumping
because it was malicious.
324.
The leading F-SMCRA case in this area is the appropriately titled In re Permanent Surface Mining Regulation
Litigation III (D.C.D.C. 1985), 620 F. Supp. 1519. (PSMRL III) In this case, the industry objected to water replacement
rules stating that since the mines owned water rights prior to the passage of
F-SMCRA and the proposed rules, it is an improper taking of property. The
Secretary of the Interior issued an interpretation saying F-SMCRA is not
intended to affect a senior water right under applicable state law.
Environmental groups then filed their own challenge to the interpretation. This
ended up being appealed under the name of National
Wildlife Federation v. Hodel (D.C. Cir), 839 F.
2d 694. The court here held F-SMCRA does not affect the right of a person to
enforce or protect under state law his interest in water resources. F-SMCRA
does not compel a change in state water rights law.
325.
I-SMCRA is not required to mirror F-SMCRA. The requirement is merely to provide
a standard which is no less stringent. Dudinsky v.
Commonwealth of Pennsylvania – Department of Environmental Resources,
(3rd Circuit 1987), 819 F. 2d 418, cert den'd: 484 U.S. 926.
326.
Jarrett contends that statutes such as IC 13-4.1-1-2(2) and (5) (Purpose of
I-SMCRA is to protect society and the environment from the adverse effects of
surface coal mining operations) and IC 13-4.1-4-3 (a) (3) (proposed mining
operation must be designed to prevent material damage to the hydrologic balance
outside the permit area) can and should be read to change Wiggins, supra, and Prohosky, supra, with regard to off-site damage to
water supplies caused by surface coal mining.
327.
The argument presented by Jarrett as described in Finding 326 has merit.
328.
However, if the Indiana General Assembly intended to make major changes in
water rights law with the passage of I-SMCRA to give adjacent owners a remedy
for damage to ground water supplies, the Legislature would not have felt
compelled to pass the amendment to IC 13-2-2.5 (Ground Water Emergencies) that
it did.
329.
The original general ground water emergency law specifically exempted surface
coal mining operations. See
[VOLUME 5, PAGE 245]
P.L. 144-1985 sec. 2 which excludes coal
mines from the definition of "person."
330.
Shortly after PSMRL III, supra, the legislature enacted P.L.
115-1986, SEC. 19, which removed the exemption and gave adjacent owners rights
under the Ground Water Emergency Act. This enactment also amended IC 13-4.1-8-1
(25) to more closely reflect F-SMCRA in order to take advantage (from
industry's perspective) of PSMRL III.
331.
The only possible reason for sec. 19 of P.L. 115-1986 is that the Legislature
believed that after PSMRL III, supra, I-SMCRA did not affect water rights.
332.
Further, the general language of the PSMRL
III decision would seem to apply in that it would be a taking of otherwise
valid existing water rights without compensation.
333.
Accordingly, I-SMCRA does not grant areas adjacent to surface coal mines and
greater right than otherwise exists and does not affect Indiana law on
traditional water rights.
ISSUE K: IN SPITE OF THE FINDING ABOVE
ON WATER RIGHTS, A SURFACE OWNER OF REAL PROPERTY HAS AN ABSOLUTE RIGHT TO
SUBJACENT SUPPORT.
334. All Indiana cases called to the Administrative Law Judge's attention and
all discovered by the Judge involving water rights dealt with the effect of
pumping on wells, lakes or ponds.
335.
The rights to support for real estate fall into two categories: lateral and
subjacent.
336.
Indiana has a well developed body of case law on lateral support. It has no
significant law with respect to subjacent support, other than cases such as Paull v. Island Coal, 88 N.E. 959 which
states that a surface owner has a right to support unless he contracts it away.
337.
There is no reason to believe that the common law of water rights is superior
to the common law of support.
338.
C.J.S Mines Sec. 277 and 278 state that the rights to
subjacent support generally are the same as the rights to lateral support and
that those rights are absolute for land in its natural state.
339.
A recent Indiana decision on lateral support is Spall v. Janota (1980), 406 N.E. 2d 378,
in which the Court of Appeals held there is an absolute right to lateral
support of land, but no such right to lateral support of buildings on the land.
The case goes on to elaborate on the right to support of buildings and states
that there is a right to recover for damage to buildings due to the withdrawl of lateral support if the act of withdrawing is
negligent. Liability for damage to land is strict liability.
340.
In accord is Restatement of Torts 2d, sec 818, which states that one who is priviledged to withdraw
subterranian fluids, including water, is not for that
reason priviledged to cause a subsidence of another's
land by the withdrawl. The priviledge
to withdraw is not a defense.
341.
Also of interest is Restatement of Torts 2d, sec. 820, which states that one
withdrawing naturally necessary subjacent support or support substituted for
naturally necessary support is liable for damage to the land, but is not
necessarily liable for damage to buildings unless there is negligence.
342.
Sec. 818 and sec. 820 were included in Restatement 2d in about 1977 and
represent a major change from the former sections, published in 1939, which
stated that there is no liability for subsidence caused by withdrawl
of subterranean water.
343.
Amax cites two cases from other jurisdictions which hold that the pumping of
percolating water on one piece of property which causes subsidence on another
is not actionable unless the withdrawal is willful or malicious. They are Finley v. Teeter Stone, Inc. (1968), 251
MD 428 A. 2D and Friendswood Deval v. Smith Southwest Industries (1978 Tex.), 576
S.W. 2d 21.
344.
Both of these cases are cases arising prior to the 1977 changes in the
Restatement.
345.
The modern language of Sec. 818 and 820 of Restatement 2d should be applied in
this proceeding. [FOOTNOTE 8]
346.
Accordingly, Jarrett has a right to subjacent support of the surface that
cannot be compromised by reliance on Indiana water rights law and thus the DNR
should regulate the activity under I-SMCRA.
[VOLUME 5, PAGE 246]
ISSUE L AND M: THERE IS NO
PROBLEM CAUSED BY BLASTING AND DEPRESSURIZATION OF UNDERGROUND MINES, BECAUSE
THEY HAVE ALREADY SUBSIDED AND EVEN IF THEY HAVE NOT, THERE IS NO SIGNIFICANT
INCREASE IN RISK OF SUBSIDENCE IF BLASTING AND PUMPING CONTINUE AT THE SAME
LEVEL.
347. The facts dealing with these issues are vigorously disputed and this
cannot form the basis for a summary judgment decision.
348.
For purposes of Temporary Relief, a decision must be made based on whether or
not Jarrett has produced sufficient evidence to indicate a substantial
likelihood he will prevail at a hearing on the merits. At the hearing on the
merits, the burden of persuasion is on Amax and the DNR to show the permits
meet I-SMCRA. See IC 13-4.1-4-6 and IC 13-4.1-4.3.
349.
This unworkable standard means that to prevail in a temporary relief hearing,
Jarrett must show by clear and convincing evidence that Amax and the DNR cannot
show by a preponderance of the evidence that the permit applications in
question demonstrate that mining can take place in conformance with I-SMCRA.
350.
With respect to the Cass-2 permit and application, the decision in Issue G that
the actions of the NRC delegates were a denial of the application rather than
an approval, means this issue is not ripe.
351.
In the event that the NRC (or a court on judicial review) finds to the
contrary, on Issue G, the Administrative Law Judge will issue a decision
dealing only with this substantive issue.
352.
With respect to the Caledonia permit and application, Exhibit 296, page 58
indicates this mining plan is for a two seam operation.
353.
As pointed out in the discussion of issues F and G, Amax personnel testified
under oath that the plan would have to be amended to mine seam 7 coal only over
the old works.
354.
Coal is not a permeable substance, so seepage through the unmined
seam 6 coal should not be a serious problem.
355.
Regent and Vandalia #17 old works do not extend under the Caledonia permit
area, so any pumping (pit or direct deep well) will not pump water directly
from those old works. The evidence shows a minimum of 200 feet between Rainbow
and Regent old works. The material in between is undisturbed coal and
overburden typical of west central Indiana.
356.
The evidence did not show a strong
hydrological connection between the Rainbow old works and Bush Creek old works
(mines under the surface of the Caledonia permit area) and the Regent old
works. This supports Amax's contention that there is not a close hydrological
connection between the two mines.
357.
The Rainbow old works are close to Bush Creek, but considerably farther away
from Regent than is Bush Creek.
358.
The water levels shown on Exhibit 10 indicate little connection between Rainbow
and Bush Creek.
359.
The overburden between Regent and Bush Creek should be the same as between Bush
Creek and Rainbow.
360.
Page 85 of Exhibit 296, limits the amount of drawdown
in Bush Creek and Rainbow regardless of the type of pumping.
361.
Whatever movement of water that takes place through unmined
overburden takes place very slowly.
362.
The nearest possible Caledonia blast which could take place to the Jarrett
property is approximately 1¼ miles.
363.
Blasting is designed to fracture and remove overburden.
364.
Blasting is designed to leave the coal seam intact.
365.
Because of this, the blasts are directed so that most of the energy stays away
from the coal and the maximum effects are observed on the surface.
366.
One measure of blast intensity is peak particle velocity (ppv)
measured in inches per second.
367.
The ppv in a seam 6 coal underground mine is
approximately 25% of the ppv on the surface over the
mine.
368.
The Caledonia permit requires that blasting not exceed 2.0 ppv
on the surface above the Regent mine.
369.
The closest point of the Regent mine to Caledonia is approximately one mile
from the Jarrett property.
370.
The Caledonia permit also must meet requirements of 310 IAC 12-5-36 which
states that no dwelling shall be subjected to a ppv
of more than 1.25 ips if less than 300 feet from the
blasting site, more than 1.0 ips if 301 to 5,000 feet
from the blasting site, and more than 0.75 ips if
more than 5,000 feet from the blasting site.
371.
Taken as a
[VOLUME 5, PAGE 247]
whole, the permit prohibits blasts
with ppv greater than 2.0 ips
measured at the closest portion of the Regent old works to the Caledonia permit
area and blasts greater than .75 ips measured at the
closest Jarrett structure.
372.
Below surface, these limits translated in to approximately .5 ips near the Caledonia permit area and .19 ips under the closest Jarrett building.
373.
Blasts in the Cass and Caledonia area are low frequency blasts.
374.
While these blasts are low frequency blasts and there is considerable
controversy surrounding the appropriate limits to be placed on low frequent
blasting to prevent damage, (see Exhibit 197), limits at this level on the
Jarrett property exceed any recognized standard to prevent damage. Even the Siskind Curve (Exhibit 197, page 73), would allow a ppv of .30 ips at a frequency of
2.0 Hz and blasts at Cass are in the 4.0 - 10.0 Hz range. 374. Accordingly,
Jarrett has failed to meet his burden of proof and is not entitled to Temporary
Relief from mining under Amax's Caledonia Permit for the reason that he has not
produced substantial evidence he will prevail at a hearing on the merits.
375.
As to the issue of whether or not subsidence has already occurred, this is
clearly fact sensitive and not a matter for summary judgment.
376.
As to Temporary Relief, a thorough discussion of this topic is unnecessary
unless the NRC or higher authority vacates the Administrative Law Judge's
finding that the Cass-2 permit was not properly granted or vacates the above
analysis of the Caledonia permit finding that Jarrett has not shown by
substantial evidence that he would prevail on the merits.
377.
In connection with this theory, however, it should be pointed out that the main
proponent of this point of view restricted his conclusion to panels and small
tunnels. This same witness pointed out that haulways
and main shafts were built for long time use and built with greatly enhanced
pillar strength. Jarrett contends that one such passage runs underneath his
house.
ISSUE N: OTHER ISSUES RAISED BY THE
PARTIES WHICH NEED DECIDING IN ORDER TO FORM A PRECEDENT FOR OTHER CASES OR
PERMIT APPLICATIONS.
378. Jarrett raised on several occasions the fact that the DOR geologists and
hydrologists (and from a review of the testimony, also an industry employed
scientist) do not consider an abandoned underground mine to be an aquifer and
thus the mining application is not complete (or complete and accurate.)
379.
The witness involved in this issue uniformly stated that to be an aquifer, an underground
pool of water had to be formed by nature and not because of the actions of man.
380.
While this may be the approved scientific description of an aquifer, people
involved in coal mining are stuck with the I-SMCRA definition which is "a
zone, stratum, or group of strata that can store and transmit water in
sufficient quantities for a specific use," 310 IAC 12-1-3.
381.
As defined by I-SMCRA definition requires the geological formations to be
natural.
382.
As defined by I-SMCRA, a flooded underground mine is an aquifer.
383.
While this means the aquifer portion of both applications was not correctly
filled out, the flooded mines were discussed elsewhere in the applications and
were prime topics at both the informal conferences and the Advisory Council
meetings.
384.
Accordingly, no harm was done to Jarrett by not listing the mines as aquifers.
385.
Jarrett raises an interesting and somewhat sophisticated point in discussing
the validity of 310 IAC 12-5-29 as amended.
386.
The amendment basically attempts to make sure not to provide more water rights
than are available under the Ground Water Emergency Act. (IC 13-2-2.5)
387.
A number of I-SMCRA rule changes have included a clause saying the proposed
rule is not effective until approved by OSM.
388.
This rule change did not contain such a condition.
389.
Jarrett contends that F-SMCRA rules require OSM approval before the rule can be
effective whether or not such a clause is included in the rule.
390.
OSM has oversight responsibility of surface coal mining and can require changes
if the State desires to keep
[VOLUME 5, PAGE 248]
primacy or continue receiving
funding.
391.
310 IAC 12-5-29 was, however, duly promulgated under IC 4-22-2 and published in
June of 1989.
392.
Having satisfied all requirements of Indiana rule making 310 IAC 12-5-29 is
effective and is part of the law of the State of Indiana until OSM takes an
affirmative action disapproving the rule.
393.
A similar analysis applies to Amax's contention that I-SMCRA does not require
the NRC to promulgate rules regarding delegations and IC 14-3-3-21(b) does not
apply to coal mining.
394.
Clearly F-SMCRA and the original I-SMCRA encouraged delegation.
395.
The Indiana General Assembly later enacted legislation that required all NRC
delegations subject to the AAA to be done by rule. IC
14-3-3-21 (b).
396.
Presumably, the Legislature could have specifically exempted coal mining or
delegations already in place. It did not.
397.
Accordingly, Indiana can enact a statute requiring the NRC to delegate its
responsibilities by rule and this statute supersedes I-SMCRA until such time as
OSM notifies the DNR of possible non-compliance.
398.
Jarrett cited the case of National
Wildlife Federation v. Lujan (1990 D.C.D.), 733 F. Supp. 419, as authority
for the proposition that F-SMCRA requires prevention of subsidence, even at the
expense of state water rights law.
399.
Amax correctly points out that the above case deals with underground mine
regulations.
400.
Both I-SMCRA and F-SMCRA clearly delineate between regulations applying to
surface mines and those applying to underground mines.
401.
In National Wildlife Federation v. Hodel (1988 D.C. Cir. ), 839 F.2d 694, the Circuit
Court of Appeals found that the 1977 Act contemplates different treatment
between surface and underground mines.
402.
Accordingly, Lujan, supra, does not apply to this case.
403.
Jarrett has contended that IC 13-4.1-4-3, 4 and 5 have not been satisfied with
regard to either permit in part, because the NRC or its Delegates did not
provide written reasons of findings for its determination.
404.
The decision made by the Delegates implicitly adopts the findings and
recommendations made by the Director, although with the Cass-2 permit, the
Delegates added material of their own.
405.
The documents taken as a whole provide written findings of the Commission as
required by IC 13-4.1-4-4.
406.
IC 13-4.1-4-5 is difficult or impossible to reconcile with the AAA.
407.
The use of the work "final" in IC 13-4.1-4-5(c) means something
different than "final decision" under IC 4-21.5.
408.
The use of the word "final" in IC 13-4.1-4-5(c) means the decision that
is made by the NRC or its Delegates after the informal conference and
Director's findings are presented. This same section gives an aggrieved party
the right to administrative review under the AAA of that decision which
ultimately lead to what the AAA refers to as a
"final decision" by NRC.
409.
This document provides written reasons for a decision and the final decision by
the ultimate agency authority (NRC) will adopt or clearly modify or vacate
these reasons.
410.
Accordingly, IC 4-21.5 and IC 13-4.1-4-5 have not been violated; and the
permits should not be voidable for that reason.
411.
Finally, there is no material dispute of fact on issues A, B, C, D, E, F, and G
involving procedures used to grant permits in general and these permits specifically.
There is no material dispute of fact on Issues H, J, and K on the nature of the
proceedings, water rights and right to support. There is no material dispute of
facts on the issues touched upon in Issue N.
412.
There is a material dispute of facts on Issue I on the topic of the effect of
specifically contracting away subsidence rights to the surface, but a
determination can be made in favor of Jarrett even while considering the
evidence most favorable to Amax.
413.
There is a material dispute of facts on Issues L and M which preclude a grant
of Summary Judgment.
FOOTNOTES
(1)
Jarrett's Motion for Summary Judgment discuss in part the Notices of Approval
which were sent out by the Permit Section Head saying, "the DNR
[VOLUME 5, PAGE 249]
approved the permit application"
and by the Deputy Director of DOR stating, "the Natural Resources Advisory
Council approved your permit application." Since the Commission Delegates
do purport to act as the DNR on initial permit decisions, the Permit Section letters
of approval are technically correct. The letters of approval from the Deputy
Director of the DOR are clearly incorrect as the Advisory Council has no
authority to grant or deny a permit. Since the Delegates both signed a document
granting the permit, these incorrect letters do not appear to have any
particular effect on this case and have not harmed the Claimant or mislead him
in any significant way.
(2)
Jarrett on occasion raises this as an issue. While the Administrative Law Judge
agrees that this is frustrating and poor practice, both uncontroverted
testimony of DOR employees and Advisory Council minutes show that a senior
member of the DOR staff involved in the Chain of Command above the Permitting
Section makes a formal presentation at the meeting and the conclusion is drawn
that this meets the minimum legal requirements for delegated findings.
(3)
It is quite possible that the version approved by the Advisory Council began by
saying "Prior to mining" rather than "Prior to blasting."
Since the Advisory Council only advises, this is immaterial, Exhibit 55 is a
certified copy of the documents approved by the NRC delegates and that language
governs.
(4)
The Administrative Law Judge reaches this decision somewhat reluctantly since
on July 01, 1990, the entire permitting process changes courtesy of PL-28-1990,
now IC 14-3-3-6 and IC 13-4.1-4-5 which place initial permit approval in the
Director, and removes the Advisory Council and NRC delegates from the process
entirely. On the other hand, the DOR personnel delegated the authority to act
on coal mine permits are now entirely different people from those in place at
the time crucial decisions were made (or not made) on this permit, and there
still has not been an unequivocal determination that mining can take place as
required by I-SMCRA.
(5)
These documents were directed at condition 12 on Cass-2, but was
available and presumably considered by the DOR in its Findings and
Recommendations on Caledonia in December of 1989.
(6)
One consequence of the Administrative Law Judge's determination of this issue
is the decision made in issue E involving the procedure used by the DNR in
processing permits. If the NRC or any higher authority reverses the Findings of
the Administrative Law Judge on Issue E that the Department procedure does
conform to I-SMCRA, then a consequence of such a ruling on this issue means
neither permit was granted.
(7)
A third point of possible failure is floor collapse causing or allowing pillars
to sink. From an examination of the evidence, it is clear that no party
considered floor failure to be a problem in this case.
(8) Sec. 820 of the restatement also deals with the problem that the reason for
instability of surface support is man made and not
natural, Further, WIGGENS, supra, indicates that the prime concern in
subsurface water cases is the source of the water, not the source of the
cavity. Clearly the water in Regent and Vandalia 17 is naturally occurring
percolating ground water.
FINAL ORDER (NATURAL RESOURCES
AMENDMENTS TO ALJ NONFINAL ORDER)
On
October 29, 1990 the Natural Resources Commission, following its consideration
of argument on objections, modified the findings and nonfinal
order of the administrative law judge as set forth below.
NOW, THEREFORE, in accordance with the actions taken by the Commission at its
August 21, 1990 meeting with respect to the ALJ Report and the Commission's
actions taken at the Special Commission Meeting on September 25, 1990, and in
order to clearly take final action with respect to procedural issues concerning
the approval by the Commission's delegates of the Cass-2 Permit application and
[VOLUME 5, PAGE 250]
the
Caledonia Permit application, as well as the legal issues concerning water
rights and subjacent support/subsidence issues, THE COMMISSION HEREBY ISSUES
ITS FINAL ORDER under IC 14-21.5-3-29 and modifies the ALJ Report, makes
additional findings, dissolves certain findings, and takes no action as to
certain findings as follows:
1. The Commission hereby acknowledges the appearances on behalf of the parties
and amicus curiae as set forth in Section I of the ALJ Report and the
procedural background of these matters as set forth in Section II of the ALJ
Report.
2.
The Commission hereby notes that Section III of the ALJ Report, which is
entitled "FINDINGS OF FACT," actually contains both findings of fact
and conclusions of law by ALJ Teeguarden. For
purposes of simplicity and clarity, except as otherwise noted, the numbered
paragraphs in Section III of the ALJ Report will be referenced herein simply as
"Findings," as will be the findings of fact and conclusions of law
made herein by the Commission. The Commission also hereby notes the use of
headings A - M throughout Section III of the ALJ Report, but considers these
headings to merely constitute a means of organization of the ALJ Report rather
than Findings.
3.
The Commission hereby affirms each and every one of the Findings made by ALJ Teeguarden in Section III of the ALJ Report, except as specifically
stated otherwise in paragraphs 6, 7, 8, 9, 10, 11 and the subparagraphs thereof
below.
4.
The Commission hereby affirms ALJ Teeguarden's order
that "Jarrett's motion for Summary Judgment in 90-012R (Caledonia Permit)
is denied, because of the rulings on Issues A, B, D, E, F, H, L, M and N [as
set forth in Section III of the ALJ Report]," as set forth in Subsection
c. of Section IV of the ALJ Report.
5.
The Commission hereby affirms ALJ Teeguarden's order
that "Jarrett's request for. . . Stay on Permit S-00242 (Caledonia Permit)
is denied by the Administrative Law Judge because of the ruling on Issues L and
M [ as set forth in Section III of the ALJ]" as set forth in Subsection e.
of Section IV of the ALJ Report.
6.
The Commission hereby takes no action
(a)
on ALJ Teeguarden's orders that "Jarrett's
requests for Temporary Relief on Permit S-00041-2 (Cass-2 Permit) are denied by
the Administrative Law Judge for lack of ripeness, with leave to file for
reconsideration if this decision is otherwise overturned during the review
process and S-00041-2 is found to be validly granted" and that
"Jarrett's request for Temporary Relief. . . on permit S-00242 (Caledonia
Permit) is denied by the Administrative Law Judge because of the ruling on
Issues L and M [as set forth in Section III of the ALJ Report]," as set
forth in Subsections d. and e., respectively, of Section IV of the ALJ Report,
or
(b) on Findings 348 - 377, to the extent they pertain only to
temporary relief, inclusive, because ALJ Teeguarden
is the ultimate authority with respect to Jarrett's requests for temporary
relief in Administrative Cause Nos. 90-013R (Permit S-00242) and 90-026R
(Permit S-00041-2), which are proceedings related to these matters.
6a.
The Commission hereby dissolves ALJ Teeguarden's
order that "Amax's motion for Partial Summary Judgment on the issue of
water rights is granted in part, but the relief requested as it applies to
89-99R (Objection to condition 12 on the Cass-2 permit), 89-106R (Jarrett's
objection to the granting of the Cass-2 permit) and 90-12R (Jarrett's Objection
to the granting of the Caledonia permit) is denied, because of the ruling on
Issue K dealing with subjacent support rights [as set forth in Section III of
the ALJ Report"], as set forth in Subsection a. Of Section IV of the ALJ
Report; and in place of that now-dissolved order, the Commission hereby makes
the following order:
Amax's motion for partial summary judgment on the issue of water rights is
hereby denied with respect to 89-99R (Amax's objection to the imposition of
condition 12 on the Cass-2 permit), 89-106R (Jarrett's objection to the
granting of the Cass-2 permit) and 90-012R (Jarrett's objection to the granting
of the Caledonia permit), both because of ALJ Teeguarden's
ruling on Issue K dealing
[VOLUME 5, PAGE 251]
with
subjacent support rights in Section III of the ALJ Report, which Findings have
been expressly affirmed by this Commission above, and because the Commission
hereby finds that Indiana groundwater law provides for reasonable regulation of
the use of groundwater and the Indiana Surface Mining Control and Reclamation
Act ( "I-SMCRA") prohibits damage by surface mining operations to
property outside the surface mining permit area, as more fully set forth in the
findings of fact made by the Commission immediately below in subparagraph b. of
this paragraph.
6b.(i). The Commission
hereby dissolves in its entirety Finding 333 set forth in Section III of the
ALJ Report; and in place of that now dissolved Finding, the Commission hereby
makes the following Finding 333:
Notwithstanding for foregoing, IC 13-2-2-2 and IC 13-14.1-8-1(21) authorizes
the Department of Natural Resources to regulate the use of groundwater by a
surface coal mining permittee so that such use does
not result in damage to property located outside the surface coal mining permit
area.
7a. The Commission hereby dissolves ALJ Teeguarden's
order that "Jarrett's motion for Summary Judgment filed in both 89-106R
and 89-211 R (Cass-2 permit) is granted, because of the ruling on Issues F and
G [as set forth in Section III of the ALJ Report]; and Permit S-00041-2 is
declared void," as set forth in Subsection b. of Section IC of the ALJ
Report; and in place of that now-dissolved order, the Commission hereby makes the
following order:
Jarrett's motion for summary judgment filed in both 89-106R and 89-211R (Cass-2
Permit) is hereby denied, because the Commission hereby finds matters of proper
procedure:
(a)
that the Commission and the Commission's delegates for the purpose of acting
upon surface coal mining permit applications have the authority to approve a
surface coal mining permit application in part but defer decisions as to
portions of such an application in part;
(b)
that the Commission and the Commission's delegates for the purpose of acting
upon surface coal mining permit applications have the authority to utilize
conditions such as Conditions 12 and 13 to the Cass-2 permit as a method of
deferring a decision on a surface coal mine permit application in part as a
matter of procedure; and
(c)
that the Commission's delegate for the purpose of removing conditions attached
to the approval of surface coal mining permit application the Director of the
Division of Reclamation within the Department of Natural Resources, has the
authority to determine whether conditions attached to the approval of a surface
coal mining permit application such as Conditions 12 and 13 attached to the
approval of the Cass-2 Permit have been satisfied.
Although the Commission takes no position at this time with respect to the
issues raised in these matters either:
(a)
as to whether or not the imposition of Condition 13 to the approval of the
Cass-2 permit application was necessary, proper, and/or lawful with respect to
the substance of those conditions; or
(b)
as to whether the release of Condition 13 to the approval of the Cass-2 permit
application or the failure to release Condition 12 to the approval of the
Cass-2 permit application as of August 21, 1990 were proper and lawful with
respect to the substance of those actions and inactions; and Permit S-00041-2
is hereby declared by the Commission to have been properly approved by the
Commission's delegates on May 17, 1989 to the extent that the application was
approved by them in part and decisions on certain aspects of the application
were deferred by them in part by the attachment of Conditions 12 and 13 to the
approval of the application, with the authority to release Conditions 12 and 13
being delegated to the Director of the Division of Reclamation of the
Department of Natural
[VOLUME 5, PAGE 252]
Resources,
as more fully set forth in the findings of fact made by the Commission
immediately below in subparagraph b. of this paragraph.
7b. (i) The Commission hereby dissolves in their
entirety Findings 226, 227, and 231 including footnote 4 to Finding 231, as set
forth in Section III of the ALJ Report; and in place of those now-dissolved
Findings, the Commission hereby makes the following Finding 231:
IC 13-14.1-4-4 and 310 IAC. 12-3-114 provide for the approval of a surface coal
mining permit application wholly or in part; IC 13-4.1-4-7 expressly provides
for the for the attachment of conditions to the approval of a surface coal
mining permit application; and the authority to release conditions attached to
the approval of a surface coal mining permit application has been duly
delegated to the Director of the Division of Reclamation within the Department
of Natural Resources. No provisions of IC 13-4.1 prohibits
deferral of a decision on part of a permit application and there is inherent
authority for such a procedure. Furthermore, ever since Indiana attained SMCRA
primacy, the Commission and the Commission's delegates for the purpose of
acting upon surface coal mining permit applications have used the procedure of
attaching substantive conditions to the approval of portions of an application
as a means of deferring action on other portions of the application. That being
the case, it was lawful and proper for the Commission's delegates to defer
certain decisions with respect to portions of the Cass-2 permit application by
attaching Conditions 12 and 13 to their approval of other aspects of the
application, with the authority to release those conditions resting in the
Director of the Division of Reclamation within the Department of Natural
Resources. Consequently. The approval of the Cass-2
permit application was lawful from a procedural standpoint in all respects.
(ii)
The Commission hereby dissolves in its entirety Findings 240, 241, and 242 as
set forth in Section III of the ALJ Report; and in place of those now-dissolved
Findings, the Commission hereby makes the following Findings 241:
However, in light of revised Findings 231 above, the application in Cass-2 was
and is complete and accurate within the meaning of IC 13-4.1-4-3 with respect
to those portions of the application that were actually approved by the
Commission's delegates on May 17, 1989, although the application in Cass-2 was
not complete within the meaning of IC 13-4.1-4-3 with respect to those portions
of the application as to which a decision was deferred by the attachment of
Condition 12 to the approval of the application in part.
(iii) The Commission hereby dissolves in its entirety Finding 282 as set forth
in Section III of ALJ Report; and in place of that now-dissolved Finding, the
Commission hereby makes the following Finding 282: With regard to the Cass-2
Permit, any errors in the process were not so fundamental to the integrity of
the permit as to not be correctable by a AAA hearing.
8. The Commission hereby dissolves in their entirety Findings 347, 375, and 413
as set forth in Section III of the ALJ Report, because they address the
propriety of summary judgment with respect to issues as to which no party has
moved for summary judgment.
9.
The Commission hereby takes no action at this time with respect to Finding 219
as set forth in Section III of the ALJ Report, for the reason that the Finding
is not related either to the orders made by ALJ Teeguarden
in Section IV of the ALJ Report or the orders made by the Commission herein.
10.
The Commission hereby takes no action at this time with respect to Findings 27,
262 - 281, and 283 inclusive (including footnote 6 thereto) as set forth in
Section III of the ALJ Report, for the reason that those Findings are not
related either to the orders made by ALJ Teeguarden
in Section IV of the ALJ Report or the orders made by the Commission herein.
11. To the extent
[VOLUME 5, PAGE 253]
that any objection to the ALJ
Report made by Jarrett, Amax, or DNR has been satisfied above, the Commission
hereby sustains such objection.
12.
To the extent that any objection to the ALJ Report made by Jarrett, Amax, or
DNR is directed either to a finding or an order in the ALJ Report as to which
the Commission takes no action, per paragraphs 6, 9, and 10. Herein, the
Commission hereby takes no action at this time as to any such objection.
13.
To the extent that any objection to the ALJ Report made by Jarrett, Amax, or
DNR has not been addressed in paragraphs 12 and/or 13. Herein, the Commission
hereby overrules each and every such objection.
14.
As to those portions of this Order which specify certain Findings of the ALJ
Report as not being necessary to the final actions taken in this Order, such
portions are hereby declared to constitute "final action" so that any
party deems necessary to the final actions taken in other paragraphs of this
order.
_______________________________________________________________________
[NOTE: CADDNAR citation does not apply to the below entry.]
(1) MARION SUPERIOR COURT
FINDINGS OF FACT, CONCLUSIONS OF LAW, AND JUDGMENT ON WATER RIGHTS ISSUE (FILED
JUNE 17, 1991)
This matter comes before the Court on AMAX's First Motion for Partial Summary Judgment
on Water Rights Issue with respect to its complaint for judicial review of
certain permitting actions by the Natural Resources Commission
["Commission"] concerning AMAX's application for a surface coal
mining permit pursuant to the Indiana Surface Mining Control and Reclamation
Act (IC sections 13-4.1 et seq. "I-SMCRA"). Respondent Jarrett
["Jarrett"] filed a cross-motion for partial summary judgment on the
same issues. The Court now finds that AMAX's Motion for Partial Summary
Judgment On Water Rights Issue should be granted as
there is no issue of material fact and that Jarrett's Motion should be denied.
The Court now enters its findings of fact and conclusions of law.
BACKGROUND AND ISSUES
1. The Commission's authority with respect to surface coal mining operations
arises under I-SMCRA which, pursuant to the Federal Surface Mining and
Reclamation Act of 1977 ("F-SMCRA"), 30 U.S.C. sections 1201 et seq.)
were submitted to and approved by the Secretary of the
Interior (30 C.F.R. section 914) as a state program, pursuant to 30 USC section
1253.
2.
Pursuant to I-SMCRA, AMAX sought a permit amendment for its Minnehaha Mine,
Cass Pit, in Sullivan County to extend its surface coal mining in the No. 7
coal seam into a new area.
3.
In its permit application, AMAX described the nature of the proposed
operations, including pumping water on its lands from abandoned underground
mine works in the No. 6 coal seam, which lies below the No. 7 coal seam, in the
amendment are in order to prevent such ground water from invading and flooding
the mining pit. The abandoned underground mines in the No. 6 seam, commonly
known as the Regent and Vandalia No. 17 mines, extend
beyond the new permit area beneath adjacent property, including that surface
owned by Jarrett.
4.
On May 17, 1989, the Cass permit application was approved except for, among
other things, AMAX's well pumping from the abandoned underground mines and
Condition 12 was imposed which prohibited additional depressurization wells in
the permit amendment area "until sufficient detail is added to the
statement of probable hydrologic consequences to determine the effects that
dewatering may have on potential subsidences both
within the permit and adjacent off-site areas."
5. Through
the administrative review process, AMAX challenged the Commission's
jurisdiction and authority to impose Condition 12. These objections to
Condition 12 were overruled by the ALJ, which the Commission affirmed by its
order of October 29, 1990, upholding the imposition of Condition 12. The matter
is now pending back before the ALJ for further proceedings.
6.
The issues on these cross-motions are:
(a)
Whether I-SMCRA preserves Indiana water rights law and denies to the Commission
any authority to affect "in any way" such water right?
(b) Whether AMAX may use the ground water on its premises to prevent such from
invading and flooding its surface mining pits; or whether Jarrett and others
may use such ground water as substituted support to replace the natural support
removed in the abandoned underground mines and require AMAX to prevent its
escape by providing lateral support?
F-SMCRA AND I-SMCRA PRESERVE WATER
RIGHTS
7.
In Section 717(a), F-SMCRA expressly preserved and prevented any effect or change in the State's water rights by providing:
"Nothing in this Act shall be construed as affecting in any way the right
of any person to enforce or protect under applicable law, his interest in water
resources affected by a surface coal mining operation." [30
U.S.C. section 1307(a)]. The litigation history of Section 717(a)
ultimately established that "Section 717(a) requires deference to state
water law on questions of water use. . . " In re Permanent Surface Mining Regulation Litigation II, Round III,
620 F. Supp. 1519, 1225 (D.C. D.C. 1985) (hereinafter "PSMRL II, Round III"). The Court of
Appeals in sustaining the decision on appeal held that Section 717(a) means
"that whatever water rights state laws afford mine operators are preserved
along with those of other users. . .and [SMCRA] does
not deprive anyone, including mine operators, of whatever rights to the use of
water they had previously." National Wildlife Federation v. Hodel,
839 F.2d 694, 756-57 (D.C. Cir. 1988).
8.
After PSMRL II, Round III, the General
Assembly in 1986 amended I-SMCRA so that F-SMCRA section 717(a) was repeated
verbatim in IC section 13-4.1-8-1(25) (PL 115-1986, Sec. 13), which expressly
limits and prohibits all provisions of the "Article" from
"affecting in any way" water rights.
9.
The timing of the 1986 Amendment to I-SMCRA in relationship to the litigation
under Section 717(a), the verbatim repetition of Section 717(a), and the other
amendments in the 1986 Amendment making surface coal mining subject to IC
sections 13-2-2.5 et seq., make it clear that no provision within I-SMCRA was
to affect in any way water rights. Hence, all provisions of I-SMCRA are subject
to this prohibition which protects water rights.
RIGHTS TO USE WATER FLOW WITH
L OST GROUND WATER
10.
The pre-SMCRA water rights law set forth in Wiggins
v. Brazil Coal & Clay (Ind. 1983), 452 N.E.2d 958, 963 is that the
ground water escaping from one landowner to the land of another is "lost
water" as to the former. The escaping water appearing on AMAX's lands
"is a part of [AMAX's] land. . . and belongs
to" AMAX, Id. at 964. The rights to use water flow with the ground water.
Under Indiana water rights law, there is no obligation of lateral support upon
land owners to prevent the escape of ground water from other lands. See Wiggins, supra, at 964 and the discussion of Spall v. Janota (1980), Ind. App., 406 N.E.2d 378.
11.
The Indiana water rights law as reaffirmed in Wiggins, supra, does not
depend on, or change due to, the nature of the ground water use by a landowner
before the water escapes (i.e., a use of substituted support or a use to fill a
pit and form a lake), or upon the secondary effects occasioned by the escape of
the ground water, (i.e., the lost use for support or the lost use to fill a pit
and form a lake).
12.
The "use" which Jarrett and others seeks to protect is using the
ground water assertedly as "substituted
support" to replace the natural support removed during mining in Regent
and Vandalia Mines pursuant to mining rights conveyances. Such "use"
has no priority under Indiana water law; and there is no basis in law to
require lateral support for water, that is, to prevent the escape of ground
water. Nothing under Indiana law would allow a landowner whose predecessors
have sold rights, including the removal of natural support, to replace such
rights by limiting the rights of others or by placing on others new or
additional lateral support duties.
13.
The Commission's adoption of the Restatement 2d Torts sections 817-820
concerning lateral/subjacent support with respect to the facts at bar is
contrary to law in that there is no duty of lateral support with respect to
ground water under Indiana law. Moreover, even under the law of lateral support
pursuant to the Restatement 2d Torts sections 817-820, a landowner cannot
artificially enlarge his rights to support by altering the natural condition of
his l and so as to create or place an additional duty of lateral support upon
adjoining landowners. (See Comments c, e, Illustration 4, g, k, sections 817
and 820). Further, the facts are undisputed that the naturally necessary
subjacent support was removed by the underground mining in the No. 6 coal seam
and the water flooding the abandoned underground mines decreased even further
the remaining pillar support. (See Finding 306, as affirmed by the Commission.)
Such water cannot, and did not, replace the naturally necessary support.
14.
AMAX's pumping of ground water in order to prevent the ground water from
invading and flooding its surface coal mine pit is a valid business purpose
(ALJ Finding 315, affirmed by the Commission) and is lawful exercise of its
pre-SMCRA ground water rights.
CONDITION 12 UNLAWFULLY RESTRICTS WATER
RIGHTS
15.
Nothing within I-SMCRA can affect in any way such water rights [IC
13-4.1-8-1(25)]. All provisions of I-SMCRA are subject to this prohibition,
including IC 13-4.1-8-1(21) relied on by the Commission. While the Commission
points to IC 13-2-2-2 as a basis for its authority to affect AMAX's ground
water rights, nothing within IC 13-2-2-2 authorizes or grants any authority to
the Commission, and the remainder of IC 13-2-2 et seq. has not been implemented in the case at bar, even assuming
it could have been.
16.
The Commission and Jarrett would construe I-SMCRA so as to take AMAX's water
rights to replace the naturally necessary support removed by the underground
mining allowed by Jarrett's and other's predecessors, and require lateral
support of the water by AMAX, all for the benefit of Jarrett and others. The
law is clear that a statute must be interpreted to avoid a constitutional
infirmity, if it is reasonably possible to do so. General Telephone Co. v. Public Service Comm’n
(1958), 283 Ind. 646, 150 N.E.2d 891, 894. If
I-SMCRA is construed as suggested by Jarrett and the Commission, then serious
constitutional issues arise as to whether there is a taking
of AMAX's valid existing property rights without compensation; or
whether there is a valid public use pursuant to the 14th and 5th Amendments of
the Constitution of the United States.
17.
The imposition of Condition 12 on the Cass permit (S-00041-2), which purported
to restrict AMAX from pumping ground water to prevent such from invading its
mining pits, was unlawful, without authority, and in excess of the Commission's
jurisdiction.
18.
There is no just reason for delay in the entry of judgment hereon, particularly
in view of the various matters relating to Condition 12 which are pending
before the Commission and the ALJ at the present time.
JUDGMENT
The
Court, having granted AMAX's Motion for Partial Summary Judgment On Water Rights Issues, denied Jarrett's Motion, and made
its Findings of Fact and Conclusions of Law, now enters final judgment thereon.
IT IS THEREFORE ORDERED, ADJUDGED AND DECREED that imposition of Condition 12
to the Cass Permit Amendment (S-00041-2) was unlawful and in excess of the
Commission's authority and jurisidiction. This matter
as to all issues related thereto is remanded to the Commission for further
actions not inconsistent with this judgment. ALL OF WHICH IS
ORDERED, ADJUDGED AND DECREED this day of June 17, 1991.
(Honorable
Anthony J. Metz, III, Judge, Marion Superior Court No. 1)
MARION SUPERIOR COURT ORDER ON REMAND
MARION SUPERIOR COURT FINDINGS OF FACT, CONCLUSIONS
OF LAW, AND JUDGMENT ON COMPLIANCE OF OPEN DOOR ACT (FILED JANUARY 29, 1992)
This matter comes before the Court on Amax's Motion for Summary Judgment in
Cause No. 49D03-9002-CP-0266 [which has been consolidated with Cause No.
49D01-9008-MI-1286], Amax's Motion for Partial Summary Judgment with respect to
Open Door Act issues in Cause No. 49D01-9008-MI-1286, and plaintiff-respondent
Jarrett's Cross Motion for Summary Judgment in Cause No. 49D03-9002-CP-0266.
These Motions concern compliance by the Natural Resources Commission and its
delegates with the Open Door Act, I.C. 5-14-1.5 et seq., in connection with the
Commission's approval of two surface coal mining and reclamation permits for
Amax's Minnehaha mine in Sullivan County. The Court now finds that Amax's
Motion for Summary Judgment and Motion for Partial Summary Judgment should be
granted, as there is no genuine issue of material fact and Amax is entitled to
judgment as a matter of law, and that Jarrett's Motion should be denied. The
Court now enters its findings of fact and conclusions of law.
BACKGROUND AND ISSUES
1.
Petitioner Jarrett contends that Amax's Cass-II and Caledonia surface coal
mining permits were approved by delegates of the Natural Resources Commission in
violation of Indiana's Open Door Act, I.C. 5-14-1.5, and should be declared
"void".[FOOTNOTE 1] The Open Door Act issues arise in two
separate procedural contexts now consolidated before this Court. Jarrett
initially raised the Open Door Act issues in administrative review proceedings
before the DNR/Commission, and then subsequently filed a separate civil lawsuit
in Room 3 of Court rasing the same issues. In the
administrative proceedings, the Commission/ALJ rejected Jarrett's Open Door Act
issues finding that Jarrett's claim that the Open Door Act was violated in
consideration of the Cass-II and Caledonia permits was barred by the 30 day
statute of repose contained in I.C. 5-14-1.5-7(b). Jarrett seeks judicial
review of the Commission's decision affirming the ALJ's determination that
Jarrett's Open Door claims were not timely raised.
2.
During pendency of the administrative proceedings, on February 20, 1990,
Jarrett also filed a separate lawsuit in Superior Court Room 3, Cause No.
49D03-9002-CP-0266, (the "Superior 3" case), requesting that the
Cass-II and Caledonia permits be declared void based upon the same underlying
Open Door Act allegations which he as simultaneously presenting to the agency
and which were finally adjudicated adversely to him by the Commission in its
October 26, 1990 Order. This Superior 3 case, in which Jarrett has moved for
Summary Judgment, has been consolidated in this Court with the judicial review
action, Cause No. 49D01-9008-MI-1286. Amax has filed a Motion for Summary Judgment
with respect to Cause No. 49D03-9002-CP-0266 and Motion for Partial Summary
Judgment on the Open Door Act issues in Cause No. 49D01-9008-MI-1286.
NO GENUINE ISSUES OF MATERIAL FACT EXIST
RESPECTING COMMISSION'S DELEGATES' APPROVAL OF CASS-II AND CALEDONIA PERMITS
3.
All material facts necessary to disposition of these Motions are undisputed.
The official minutes of the meetings of the Commission's delegates and Advisory
Council at which Amax's Cass-II [May 17, 1989] and Caledonia [December 15,
1989] permits were approved demonstrate that either Jarrett or his counsel
appeared at both meetings and fully availed themselves of the opportunity to
present evidence and argument in opposition to permit approval. [Exhibit 64 and 65]. It is undisputed that the May 17 and
December 15 meetings of the delegates and Advisory Council took place in a
public forum as required by the Open Door Act, and that all other requirements
of the Act were met with respect to the Advisory Council. It is also undisputed
that the Commission's delegates, Messrs. Siener and
Simpson on May 17, and Messrs. Siener and Doxtater on
December 15 were present at these public meetings on both occasions and that
Jarrett, along with other members of the public, were given full and fair
opportunity to present evidence in opposition to the permits.[FOOTNOTE 2]
4.
The uncontested facts reflect that no subsequent, secret "meeting"
occurred to consider the permits after the public meetings attended by Jarrett
and his counsel. [February 13, 1990 administrative hearing
transcript, pp. 132-33, 159-60, 175, and 255-56.] To the extent that
Jarrett is contending that he was somehow entitled to be physically present at
the moment the delegates performed the ministerial act of signing the permits
approvals, such is without basis in the Open Door Act. T is undisputed that
Jarrett and his counsel were present at the meetings where presentations were
made before the delegates as they considered both permit applications. 4. [misnumbered in decision] These undisputed facts support
entry of Summary Judgment in favor of Amax in the Superior 3 case and Partial
Summary Judgment in favor of Amax with respect to Open Door Act issues in the
judicial review proceedings. Jarretts' Motion for
Summary Judgment in the Superior 3 case must be denied.
JARRETT COLLATERALLY ESTOPPED BY
COMMISSION ORDER TO RE-LITIGATE TIMELINESS ISSUE IN COLLATERAL CIVIL
PROCEEDINGS
5.
The Open Door Act's Statute of Repose, I.C. 5-14-1.5-7(b), provides that any
action to declare void a decision allegedly made in violation of the Act must
be commenced within thirty (30) days of the date that the plaintiff knew or
should have know [sic] that the act or failure to act complained of had
occurred. The ALJ and Commission found that Jarrett's Open Door Act complaints
were not timely raised before the Agency. [ALJ Finding 64-67; Commission Order
of October 26, 1990.] In McClanahan v.
Remington Freight Lines, Inc., 517 N.E.2d 390 (Ind. 1988) the Supreme Court
held that agency determinations such as the Commission Order will estop subsequent litigation where:
(1) the issues sought to be estopped
were within the statutory jurisdiction of the agency;
(2) the agency was acting in a judicial capacity;
(3) the parties had a fair opportunity to litigate the issues;
and
(4) the decision of the administrative tribunal could be
appealed to a judicial tribunal. McClanahan,
517 N.E.2d at 394. The record in this case clearly
demonstrates that these criteria are met by the Commission Order - and Jarrett
has presented no argument to the contrary in opposition to Amax's Motions for
Summary Judgment. Accordingly, Jarrett is collaterally estopped
to re-litigate the timeliness of his Open Door Act complaints before the Agency
in collateral civil proceedings such as the Superior 3 case.
6.
Hence, Amax is entitled to Summary Judgment in Cause No. 49D03-9002-CP-0266.
JUDICIAL REVIEW - AGENCY FINDINGS
SUPPORTED BY SUBSTANTIAL EVIDENCE
7.
With respect to the judicial review proceedings, the administrative record
demonstrates substantial evidence supporting the Commission's determination
that Jarrett's Open Door Act complaints were not timely raised.
Indeed, the undisputed fact of Jarrett and/or his counsel's attendance at the
May 17 and December 15 meetings would be sufficient to trigger the start of the
thirty (30) day period under I.C. 5-14-1.5-7(b)(2).[FOOTNOTE 3] Additionally, Jarrett's own testimony in
the administrative proceedings is at least "substantial evidence" to
support the Commission's factual determination that he knew or should have
known of both permit approval determinations [May 17 and December 15, 1989]
over thirty (30) days prior to his initial Open Door Act complaints in each
case.[FOOTNOTE 4] Specifically, Jarrett testified that it
was his contemporaneous understanding on both May 17 and December 15 that
permit approval had occurred at the meetings he attended. [March 6, 1990
Administrative Hearing Transcript, at pp. 94-96 and p. 115]. Additionally, the
Commission's determination that Jarrett could, in any case, be charged with
constructive knowledge of the delegates' actions in light of his frequent
correspondence with DNR regarding the permits and repeated perusal of DNR's
public permit files is supported by substantial evidence. [March
6, 1990 transcript, at pp. 96-97, 116-117]. Indeed, the mere fact that
Jarrett petitioned for administrative review of the Cass-II permitting decision
on June 23, 1989 indicates that he was well aware of the delegates
decision at that time. [ALJ Report, finding 62].
8.
The Commission's determination that Jarrett's Open Door Act complaints were not
timely raised is supported by substantial evidence, and Amax is accordingly
entitled to Partial Summary Judgment with respect to the Open Door Act issues
in these judicial review proceedings.
HIERARCHICAL ADMINISTRATIVE REVIEW --
CURE
9.
Even apart from any of the foregoing considerations, any errors or violations
of the Open Door Act committed by the Commission's delegates at the May 17 and
December 15 meetings in connection with Amax's permits have been cured and
rendered moot, as a matter of law, by subsequent administrative review
proceedings culminating in the Commission Order of October 26, 1990. Riggin v. Board of Trusttes
of Ball State University, 489 N.E.2d 616 (Ind. App. 1986). In RIGGIN, the
Court of Appeals held that any violations of the Open door Act occurring in
lower-level administrative proceedings may be fully cured and rendered moot, as
a matter of law, by subsequent, hierarchical administrative review by the
ultimate authority of an agency. Id. at 624. This rationale applies directly to the case at
bar to prevent Jarrett from asserting on judicial review alleged errors
committed by the delegates where, as here, any such errors have been cured by
the Commission's determination, after full administrative review, to affirm the
delegates' disputed action. It is undisputed that the Commission's proceedings
affirming the delegates' acts were conducted in full compliance with the Open
Door Act. Hence, Jarrett has no basis for complaint regarding alleged errors in
the lowest level of administrative proceedings.
10.
Because any errors occurring in proceedings by the Commission's delegates in
connection with approval of Amax's permits have been subsequently cured and
rendered moot by administrative review and final Commission action, Amax is
entitled to Partial Summary Judgment with respect to the Open Door Act issues
in judicial review.
11.
There is no just reason for delay in the entry of judgment hereon, particularly
in view of various matters pending between the parties before the Commission
and the ALJ at the present time.
12.
The Court having granted Amax's Motion for Summary Judgment in Cause No.
49D03-9002-CP-0266, denied Jarrett's Motion for Summary Judgment in the same
case, and granted Amax's Motion for Partial Summary Judgment with respect to
the Open Door Act issues in Cause No. 49D01-9008-MI-1286, and made its findings
of fact and conclusions of law, now enters final judgment that:
(1)
In Cause No. 49D03-9002-CP-0266, Amax's Motion for Summary Judgment is hereby
granted and Jarrett's Motion for Summary Judgment is hereby denied; and
(2)
In Cause No. 49D01-9008-MI-1286, Amax's Motion for Partial Summary Judgment
with respect to the Open Door Act issues is hereby granted. All
of which is ORDERED, ADJUDGED AND DECREED this January 29, 1992.
FOOTNOTES
1.
Indiana's version of the Surface Mining Control and Reclamation Act
("I-SMCRA"), I.C. 13-4.1-3-1, requires that permits be issued by the
proper regulatory authorities (the Commission at the time the Cass-II and
Caledonia permits were approved) prior to initiation of proposed surface mining
activities.
2. The May 17 meeting, Jarrett's presentation was apparently effective enough
to persuade the Commission's delegates to impose two additional conditions upon
their approval of the Cass-II permit.
3. The "substantial evidence" which must appear in the Agency record
to support the Commission Order has been described by the Court of Appeals as
"something more than scintilla and something less than a preponderance of
the evidence." State
ex rel Department of Natural Resources v. Lehman,
378 N.E.2d 31, 36 (Ind. App. 1978).
4. The Supreme Court has held that the question of when a party "should
have known" a particular fact is a question of fact, and not of law. Allied Resin Corporation v.
Waltz, 574 N.E.2d 913, 915 (Ind. 1991).