Temporary relief is granted to Energy Supply of Indiana, Inc. from Cessation Order 10202-S-00083 according to the following conditions:
1. Appropriate bond will be maintained on Permit S-00083.
2. Energy Supply of Indiana, Inc. and Earl H. Powers will actively pursue a final resolution of a determination as to whether Earl Powers is a common controller of Sugarloaf Mining Company.
3. This temporary relief will terminate on May 28, 1991 unless extended or modified before that date. . . .
FINDINGS OF FACT
1. By letter dated February 15 and filed February 18, 1991, Energy Supply of Indiana, Inc. ("ES Indiana") through its attorney requested temporary relief from Cessation Order C10204-S-00083 (the "CO'') issued against ES Indiana by the division of reclamation (the "Division") of the department of natural resources (the "Department").
2. This proceeding is governed by IC 421.5 (the "administrative adjudication act" or "AAA") and 310 IAC 0.6-1, a rule adopted by the natural resources commission (the "Commission") to assist in its implementation of the AAA.
3. The CO was issued pursuant to IC 13-4.1 and 310 IAC 12, collectively referenced as "Indiana SMCRA".
4. More importantly, temporary relief from a cessation order is controlled by IC 13-4.1-11-8(e). This subsection provides, as modified by IC 14,-3-3-21(a), that the Commission may provide temporary relief from a cessation order where:
(A) A hearing is held in the locality of the permit area on the request for temporary relief in which all parties are given an opportunity to be heard. IC 13-4.1-11-8(e)(1).
(B) The applicant shows there is a substantial likelihood that the findings of the Commission on the merits of the cessation order will be favorable to the applicant. IC 13-4.1-11-8(e)(2).
(C) Temporary relief will not adversely affect the health or safety of the public or cause significant, imminent environmental harm to land, air, or water resources. IC 13-4.1-11-8(e)(3).
5. The parties stipulated that the hearing on temporary relief from the CO would be conducted in the division of oil and gas conference room on the sixth floor of the Old Trails Building, 309 West Washington, Indianapolis, Indiana beginning at 10:00 a.m., EST, on February 21, 1991. The hearing was completed at approximately 5:15 p.m., EST on the same date, and both parties were given an opportunity to be heard. This hearing satisfied the requirements of IC 13-4.111-8(e)(1).
6. The CO was issued on February 4, 1991 for an alleged failure to obtain approval of the transfer of a surface coal mining permit in violation of 310 IAC 12-3-126. The CO recites that in April 1990, Energy Supply, Inc. ("Energy supply") sold the operation at Venturi #1 Mine, Permit S-00083, to ES Indiana. In September 1990, ES Indiana requested a transfer of the permit, but the transfer has not been approved.
7. 310 IAC 12-3-126 provides, as modified by IC 14-3-3-24(b), that approval of the Department's director (the "Director") is required before a permit issued under Indiana SMCRA may be transferred. Although the Director has considerable discretion in determining whether to approve a transfer, the approval may not be unreasonably withheld.
8. Although processing of the transfer is not completed, the exclusive reason the Division determined a transfer cannot now be approved is that Earl H. Powers, the sole stockholder of ES Indiana, is listed by the United States Department of the Interior, Office of Surface of Mining and Enforcement ("OSMRE"), on the Applicant Violator System ("AVS") as a person responsible for violations of the Surface Mining Control and Reclamation Act of 1977.[FOOTNOTE i]
9. The AVS is a nationwide data system through which all state and federal SMCRA permit applications are reviewed. The design of the AVS is to identify surface coal mining violations for delinquent abandoned mine land fees, unpaid federal and
[VOLUME 6, PAGE 14]
state civil penalties, unabated cessation orders, and air and water quality violations related to coal mining operations. The AVS is a "vehicle" for OSMRE and the states to conduct a review to determine a permit applicant's compliance status. Respondent's Exhibit 10: "Memorandum of Understanding Between the office of Surface Mining Reclamation and Enforcement and the State of Indiana".
10. Earl H. Powers ("Powers") has been determined by OSMRE through the AVS to be a "common controller" of Sugarloaf mining Company, formerly operating in Arkansas. Sugarloaf Mining Company has been determined by OSMRE to be delinquent in its payment of abandoned mine land fees to the federal government and to be the subject of a bond forfeiture with respect to Arkansas surface coal mining permit P272MCO.
11. An applicant for a new permit or the transfer of a permit under Indiana SMCRA must establish that the applicant has paid all reclamation fees from previous and existing operations as required by 30 CFR 870. IC 13-4.1-4-3(a)(8).
12. If the information derived by OSMRE and listed on the AVS is accurate, ES Indiana and any other corporation controlled by Powers would be ineligible to receive a surface coal mining permit under IC 134.1-4-3(a)(8).
13. However, although the AVS is an important "vehicle" for determining compliance with IC 13-4.1-4-3(a)(8), Indiana SMCRA does not manifest an intention to delegate management of the permit review function to OSMRE through the application of AVS.
14. An AVS listing might provide evidence on administrative review with respect to a permitting or permit transfer question, if the standards for administrative collateral estoppel are satisfied, but the listing is not in itself dispositive.[FOOTNOTE ii] See, regarding administrative collateral estoppel generally, Spearman v. Delco Remy Div. of GMC (S.D. Ind. 1989), 717 F. Supp. 1351 and Watson Rural Water v. Ind. Cities Water (1989), Ind. App., 540 N.E.2d 131.
15. The only witness present for the temporary relief hearing who could testify directly on the issue of the relationship of Powers to the Sugarloaf Mining Company was Earl H. Powers, himself. Powers testified that he was never a director, officer, or shareholder of Sugarloaf Mining Company.
16. Similarly, an affidavit by Jerrod R. Daniels dated February 21, 1991, states that Daniels is the sole officer of Sugarloaf Mining Company and that Powers has never served as an officer, director or owner of that company and that Powers has never been a shareholder of Sugarloaf Mining Company. Claimant's Exhibit A.
17. The preponderance of the evidence presented at the temporary relief hearing is that Powers was not and is not a common controller of Sugarloaf Mining Company.[FOOTNOTE iii]
18. ES Indiana has shown there is a substantial likelihood that the findings of the Commission on the merits of the CO will be favorable to ES Indiana. The requirements of IC 13-4.1-118(e)(2) have been satisfied.
19. Other than the CO, the only sanctions issued by the Department against ES Indiana with respect to the operation of Permit S00083 have been notices of violation for:
(1) mining off the bonded area (for which a penalty was assessed);
(2) pumping off site; and
(3) failure to construct a sediment basin. The first two of these violations were successfully abated; and the time for the abatement of the third violation does not run until March 6, 1991.
20. other than potential problems associated with the CO, Keith Swihart testified that the mining activities of ES Indiana do not adversely affect the health or safety of the public or cause significant, imminent environmental harm to the land, air, or water resources.
21. With assurances that adequate bonding continues to secure the operations of ES Indiana on Permit S-00083, any immediate concerns with potential problems associated with the CO are addressed.
22. ES Indiana has demonstrated that temporary relief will not adversely affect the health or safety of the public or cause significant, imminent environmental harm to land, air, or water resources. IC 13-4.1-118(e)(3) has been satisfied.
23. The preponderance of the evidence received during the hearing on February 21, 1991 supports the granting to ES Indiana of temporary relief from the CO.
FOOTNOTES
i. The Department urges that the CO was issued, not because Sugarloaf Mining Company is listed on the AVS, but rather because Permit S-00083 was not transferred from Energy Supply to ES Indiana. The Division's inspector, Keith Swihart, testified, however, that the Division policy was to allow mining until a transfer application is completed. He also testified that the only reason processing of the transfer application has been terminated is that Sugarloaf
[VOLUME 6, PAGE 15]
Mining is listed on the AVS. Clearly, although the immediate cause for the CO is that the permit has not been transferred, the factual basis for the CO is the AVS listing. In determining whether to grant temporary relief, both the immediate legal causation and the factual basis for the causation must be considered.
ii. A major point of legal contention between the parties is the proper forum to contest an AVS listing. The Department presents what appears a cogent argument that a federal administrative remedy is available and must be exhausted by Powers. ES Indiana urges that it is appropriately in pursuit of relief from the United States District Court for the Southern District of Indiana and has, in fact, obtained a temporary restraining order. Whatever the outcome of these contests, who is or is not properly listed on the AVS is a federal question which must be decided by a federal tribunal. Reference to the AVS is not, however, critical to a determination under IC 13-4.1-4-3(a)(8). That determination can be founded on a variety of sources, including testimony or a final judicial or agency determination made following an opportunity for a due process review.
iii. The Department presented documentation at the hearing on temporary relief which tended to impeach some of the testimony by Powers. A temporary relief hearing is often, by its nature, conducted under temporal distress; and that result was aggravated in this proceeding where potential key witnesses reside at a distance from the hearing site. Even so, a determination must be rendered based on the testimony received. The documents offered by the Department did not go so far as to totally discredit Powers; and direct testimony to refute his view of the facts was essentially nonexistent.