CADDNAR


[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

 

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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

 

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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.

 

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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.

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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

 

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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

 

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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

 

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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

 

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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

 

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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


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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

 

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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


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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

 

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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

 

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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

 

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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

 

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 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.


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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

 

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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

 

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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

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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

 

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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

 

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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

 

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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).