[NOTE: THIS CASE WAS REVERSED ON JUDICIAL REVIEW BY THE WARRICK SUPERIOR COURT ON SEPTEMBER 29, 1994 IN CAUSE NO. 87DO1-9309-CP-184. JUDICIAL DECISION IS SET FORTH BELOW. IN AN UNPUBLISHED DECISION, THE COURT OF APPEALS REMANDED THE CASE TO THE ALJ WITH INSTRUCTIONS. THE DECISION BY THE COURT OF APPEALS (87A05-9503-CV-90) IS INCLUDED FOLLOWING THE TRIAL COURT DECISION.]
Notice of violation N20502-S-216 is hereby vacated.
FINDINGS OF FACT
1. The Indiana Department of Natural Resources ("DNR") is an agency within the meaning of IC 4-21.5.
2. The DNR is the state agency responsible for the regulation of surface coal mining operations in Indiana.
3. IC 4-21.5, IC 13-4.1, and 310 IAC 12 apply to these proceedings.
4. At all times relevant to these proceedings, Peabody Coal Company ("Peabody") held permit S-216 issued by the DNR which permitted the surface mining of coal at the Peabody Lynnville mine.
5. On may 7, 1992, a duly authorized representative of the DNR issued notice of violation N20507-S-00216 ("NOV'') to Peabody.
6. On May 26, 1992, Peabody filed a timely request for administrative review and on June 22, 1992, Peabody amended its request to include a timely request for review of the civil penalty assessment ("CPA") of the NOV.
7. Since the matters involved in the request for review deal with enforcement of mining regulations and not with the issuance or revocation of a permit, the administrative law judge is the ultimate authority for the agency within the meaning of IC 4-21.5.
8. The NOV was written for failure to remove topsoil as a separate layer from the area to be disturbed prior to commencing other mining activities in violation of 310 IAC 12-5-12.1 and 310 IAC 12-3-4, condition of permit part IV B5.
9. 310 IAC 12-5-12.1 provides that "topsoil shall be removed as a separate layer from the area to be disturbed,. . . " and that the removal must take place ". . . before any drilling, blasting, mining, or other disturbance, . . . ." This same rule lists exceptions but Peabody does not contend that any of the exceptions apply.
10. 310 IAC 12-3-4 requires a surface mining operation to conduct its activities in accordance with its approved permit. Part IV B5 of this permit (joint exhibit II) discusses the timing and coordination of removal, storage, and distribution of topsoil. It also requires removal of a minimum strip of ten feet of top soil in advance of the mining operation.
11. The DNR has the burden of persuasion in enforcement matters. See Peabody Coal Company v. Ralston, 578 N.E.2d 751 (Ind. App. 1991).
12. The evidence presented at the hearing by Peabody indicated that the area in question was "dozed" in order to salvage the top soil. Notice of violation N20502-S-216 is hereby vacated.
13. Peabody's witnesses readily admit "dozing" is the least effective method of removing top soil but that because of the wet conditions, it was the only method that would work.
14. Likewise, testimony of Peabody's witnesses indicated a loss of 5-15% of top soil during handling was to be expected. The DNR did not dispute this figure or contend that such a handling loss is a violation.
15. Department testimony clearly showed that any loss of top soil was slight and would not affect the ability to reclaim the area.
16. A combination of the weather conditions and mining operations prevented the inspector from obtaining soil samples or otherwise make a detailed examination of some area in question.
17. Much, if not all, of the evidence supporting the violation is circumstantial.
l8. Since the burden of proof is on the DNR, NOVs based on circumstantial evidence can be affirmed only if plausible explanations are not made by the mine. Further, the administrative law judge performs a duty similar to a trial judge sitting
[VOLUME 6, PAGE 142]
without a jury. See Indiana Department of Natural Resources v. United Refuse Company, (Indiana Supreme Court 1993) 615 N.E.2d 100.
19. As pointed out on page 2 of Peabody's post hearing brief, the inspector based her conclusion that there was unremoved top soil being disturbed on color, vegetation, and the absence of a discernible "shelf".[FOOTNOTE 1]
20. The testimony of Peabody's agronomist adequately explained these observations in a way consistent with their being no violation.
21. While the inspector's credentials are very good, the inspector is not a professional soil scientist or agronomist. In matters involving interpretations of this type of circumstantial evidence her opinion cannot be given greater weight than Peabody's expert, who is a professional agronomist with 16 years experience in coal mining.
22. Peabody's certified soil classifier and soil scientist testified that the color, especially when wet, of the A and C horizon soils in this soil series is very similar, thus a visual examination is not conclusive.
23. The mine is not required to segregate and save C horizon soil.
24. The same witness also testified that the A horizon (which is required to be removed and segregated) varies from six to eight inches in this area.
25. No contradictory testimony was produced to refute the six to eight inch testimony.
26. Under the above circumstances, there would not be a particularly large "shelf". The operator is only obligated to remove the top soil. Given the wet conditions, the removal of six inches of soil would not leave a discernible bench.[FOOTNOTE 2]
27. The DNR's post hearing brief has an extensive discussion of the possible failure to maintain a ten foot bench.
28. The NOV does not make specific reference to the NOV being based on the failure to maintain the topsoil bench.
29. Further, the inspector specifically testified that she did not write the NOV for failing to maintain an appropriate topsoil bench.
30. Peabody correctly maintains in its reply brief that the NOV cannot be affirmed on grounds other than those on which it was written.
31. In short, after examining and weighing all the testimony, the conclusion is drawn that the DNR has not met its burden of persuasion.
32. Having reached the conclusion that the DNR failed to meet its burden of proof, there is no need to examine the civil penalty assessment as no penalty should be assessed.
FOOTNOTES
1. The inspector did take soil samples from the high wall area which were not analyzed or introduced into evidence.
2. The inspector testified that she thought Peabody was required to remove twelve inches of soil. In the absence of more than six inches of A horizon soil, six inches appears to be the required depth of removal. See 310 IAC 12-512.1(a)(2).
WARRICK SUPERIOR COURT -- FINDINGS OF FACT AND CONCLUSIONS OF LAW
(1). Petitioner Indiana Department of Natural Resources ("DNR") is an administrative agency of the State of Indiana with responsibility for the administration and enforcement of a program for the regulation of the environmental aspects of surface coal mining and reclamation pursuant to the Indiana Surface Mining Control and Reclamation Act ("ISMCRA"), Ind. Cod 13-4.1 and its implementing rules set forth at 310 IAC 12.
(2) The DNR is an agency within the meaning of Ind. Code 4-21.5.
(3) Respondent Peabody Coal Company ("Peabody") is a corporation which operates surface coal mining operations in the State of Indiana under ISMCRA permits issued by the DNR. Peabody operates the Lynnville Mine, Indiana Surface Mining Permit No. 8-216, in Warrick county, Indiana.
(4) On May 7, 1992, following mine site inspections of Peabody's Lynnville Mine, Permit No. B-126, on April 24, 1992, April 29, 1992, and May 7, 1992, DNR mine inspector Christine Gerace issued Notice of Violation ("NOV,') N20507-S-126 for "[F]ailure to remove all topsoil as a separate layer from the area to be disturbed prior to any drilling, blasting, mining, or other disturbance takes place, but after the vegetative cover is cleared from the area which would interfere with its removal." Ad. Hearing Joint Exhibit I, Inspection Report (attached to NOV), p. 2. Ad. Tr. 4-6, 11, 19. The NOV cited as regulatory provisions violated 310 IAC 12-5-12.1(a) [requiring topsoil material removal prior to mining] and (b) [requiring such removal after removal of vegetation and before the commencement of mining activities], and Permit Condition IV.B.(5), pp. 249-50 of the permit [requiring topsoil material removal at least ten feet in advance of the active operation prior to mine-related disturbance].
(5) Peabody requested formal administrative review of the NOV, as well as the civil penalty assessed, pursuant to Ind. Code Section 4-21.5-3, the Administrative Orders and Procedures Act ("AOPA"), and Ind. Code 13-4.1. An administrative hearing was held on November 17, 1993.
(6) Following the filing of post-hearing briefs, the Administrative Law Judge ("ALJ") issued his Report, Findings of Fact, and Final Order vacating the NOV on August 31, 1993. He determined, inter alia, the NOV could not be supported on the ground that Peabody failed to maintain "an appropriate bench" (i.e. remove topsoil material) at least ten feet in advance of the mining operations since "[T]he NOV does not make specific reference to the NOV being based on the failure to maintain the topsoil bench.'' ALJ Findings 27, 28, 30. Peabody does not dispute the DNR contention that the ten-foot bench was not maintained, i.e. it does not claim it, in fact, removed topsoil material at least ten feet in advance of the mining operation.
(7) Permit Condition IV.B.(5) recites, in pertinent part, that: Topsoiling material will be removed prior to any mine related surface disturbance. . . . Efforts will be made to remove all existing topsoil. Topsoil removal will stay ahead of the active operation . . . . climatic conditions [will] cause the area of removal to vary from ten to 3,000 feet in advance of the mine operation. . . . Joint Exhibit 11 at the administrative hearing; Brief of Petitioner, Attachment 1.
(8) Peabody was, therefore, in violation of Permit Condition IV.B(5) because it failed to removed all the soil material delineated in its permit.
(9) Inspector Gerace's DNR responsibilities , at the time of hearing, included reviewing and approving Peabody permit applications, inspecting Peabody's active mines for compliance with ISMCRA and permit requirements, and issuing NOVs and civil penalty assessments for violations. Ad. Tr. 4-5. She holds an Associate of Science degree in Geological Engineering from Delta Community College, a Bachelor of science in Geology from the University of Kentucky, and has attended a variety of technical seminars offered by the U.S. Department of Interior's Office of Surface Mining. Ad. Tr. 5.
(10) Under ISMCRA, mine inspectors must make, at a minimum, one inspection per month per mine. Ind. Code Section 13-4.1-11 [sic.]. Testimony indicated that, at certain times, Inspector Gerace visited the Lynnville more than once a month. Ad. Tr. Ad. Haring Joint Exhibit I,-Inspection Report (attached to NOV), p. 2. Ad. Tr. 4-6, 11, 19.
(11) At the time of the violation Ms. Gerace had been a mine inspector for approximately four years. Ad. Tr. 4.
(12) Inspector Gerace testified that topsoil material may be identified by virtue of, inter alia, color, texture, and the presence (or absence) of organic material; and that whether soil has been removed, as required, may be determined by "a clear demarcation or change in level." Ad. Tr. 32, 34, 55, 56.
(13) Testimony by Inspector Gerace, as well as pictorial evidence, indicated that not all topsoil material was salvaged. Color and texture she observed were indicative of unremoved topsoil. With respect to texture, the inspector testified as C-grade material or C horizon; whereas topsoil material is loamy or crumbly between the fingers, like potting soil, the C material has a lot of fragmented material and rock in it. Ad. Tr. 56. With respect to color, the inspector testified, with regard to the material she identified as the soil material required to be salvaged: I surely believe that topsoil had not been removed. You'll notice the brown coloration of the material. It's not your typical gray clay material that's in the area." Ad. Tr. 32. Further, grassy vegetation, roots, and other organic matter were present immediately adjacent to removed overburden or "Spoil." Ad. Tr. 12, 15, 17, Respondent DNR Ad. Hearing Exhibits A-1 through A5 and B-1 through B-4.
(14) 310 IAC 12-0.5-133 defines "topsoil" as "the A soil horizon layer of the three (3) major soil horizons. "A horizon" means "the uppermost mineral layer and is the part of the soil in which the organic matter is most abundant . . . ." 310 IAC 12-0.5-8.
(15) On the Lynnville, Permit S216, additionally, the Bl soil horizon was to be removed, and thus treated, as alternative topsoiling material, within selected areas along with the A soil horizon. Permit Condition IV.B.(5), Ad. Hearing Joint Exhibit II, Petitioner's Brief, Attachment 1, p. 249.
(16) On this permit, even C soil horizon "of the bottomland soil series" was authorized to be utilized as alternative topsoil material. Petitioner's Brief, Attachment 3, p. 247.
(17) Peabody agronomist Randy Staley testified that "a common person" could not distinguish between A and C horizons.
(18) Inspector Gerace was, however, a seasoned professional who had educational and field experience with respect to geology and minesites, who was a frequent visitor to the subject site and was familiar with that site, and who had, at the time of the NOV issuance, "four years of experience watching operators pick up topsoil." Ad. Tr. 35.
(19) Mr. Staley, who did not observe the areas of violation until a week or so after the NOV was written (Ad. Tr. 80), testified that the material under the spoil could have been topsoil and that, indeed, there were small areas where topsoil had been left. Ad. Tr. 60, 103, 110.
(20) All topsoil material must be salvaged. 310 IAC 12-5-12.1)(a). See, also, Burgess Mining and construction Corp. v. Office of Surface Mining, 1 IBSMA 293 (1979), interpreting an equivalent federal requirement under the federal Surface Mining Control and Reclamation Act of 1977 ("SMCRA"), 30 U.S.C. sections 1201 et seq.
(21) The amount of topsoil loss does not determine whether a violation has occurred; the amount of loss is taken into account when a civil penalty assessment is made following the issuance of an NOV. 310 IAC 12-6-12(b)(2) makes provision for the assessment of penalty points with respect to the extent of actual or potential damage.
(22) The ALJ's Findings Nos. 14 and 15 that any loss of topsoil was slight and would not affect the ability of the operator to reclaim the area erroneously impliedly concludes that slight topsoil loss is acceptable under ISMCRA. Such a conclusion is contrary to law.
(23) Finding No. 15 also erroneously implies that mine operators under ISMCRA jurisdiction do not have to comply with environmental performance standards contained in Ind. code Sections 13-4.1-8-1 and 310 IAC 12-5 so long as areas disturbed by mining can be approved for bond release under Ind. Code 13-4.1-6 and 310 IAC 12-4. Such a conclusion is also contrary to law.
(24) The ALJ's Findings Nos. 24 and 25 imply that Peabody is only obligated to restore six to eight inches of topsoil material, and, thus, according to Finding 26 the inspector could not have easily discerned a difference in surface levels where soil would have been removed and restored. [see Finding No. 10, supra.] However, Peabody witness Staley testified that the mine is obligated to restore "eight to 12 inches" of such material. Ad. Tr. 112. See, also, Permit condition IV.B(l), Petitioner's Brief, Attachment 3, p. 247. Findings Nos. 25, 26 are unsupported by substantial evidence.
(25) The ALJ's interpretations and Findings run counter to ISMCRA law, are arbitrary and capricious, and are unsupported by substantial evidence in that:
(a) There is no de minimus standard under ISMCRA; operators must conform their behavior to the mandates and prohibitions of ISMCRA; extent of actual or potential harm is addressed by the civil penalty assessment.
(b) The ten-foot bench requirement in the mining permit is a part of the regulatory mandate that an operator remove all topsoil from the area to be disturbed by mining and not a separate requirement independent of the removal mandate; it indicates that extent of topsoil removal that is required before the permitted is allowed to engage in mining activities defines as "surface coal mining operational by Ind. Code Section 13-4.1-1-3(12).
(c)The NOV is properly grounded on the fact that Peabody failed to remove topsoil material at least ten feet in front of the active operation and thus was in violation of its permit condition.
(d) The permit condition requiring that topsoil be removed at least ten feet in front of the active pit is, in fact, a ground upon which the NOV should have been sustained. The NOV should have been sustained on those grounds alone.
(e) Additionally, the ALJ ignored DNR evidence of spoil piles placed on unremoved topsoil (Inspection Report, p.2), grubbed trees (Inspection Report), soil covered with overflow spoil from the pit excavation (Ad. Tr. 15-17), no soil removal ten feet in advance of mining activities (Ad. Tr. 14-17, Joint Exhibit II) as well as pictures indicating vegetation growing in unremoved topsoil and spoil pushed over onto topsoil. The NOV for failing to remove all topsoil material as required by 310 IAC 12-5-12 is supported by substantial evidence presented by the DNR which was ignored by the ALJ.
(26) The evidence in this case supported the issuance of the NOV.
(27) The NOV was properly, appropriately, and lawfully issued. It should not have been vacated by the ALJ.
(27) Petitioner DNR is a party entitled under Ind Code 4-21.5-5 to seek judicial review of the ALJ decision. Peabody Coal Co. v. Indiana Department of Natural Resources (1994), 629 N.B.2d 925, rehearing denied, petition to transfer pending.
(28) Peabody has failed to demonstrate that it is entitled to relief under Ind. Code Section 4-21.5-5.
JUDGMENT
IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED by the Court that Peabody's Petition for Judicial Review be, and the same hereby is, denied, and the Final order of the ALJ vacating Notice of Violation #NI0507-8-126 is reversed. The case is remanded to the ALJ for findings consistent with this opinion. Cost are awarded to the Indiana Department of Natural Resources.
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COURT OF APPEALS DECISION
The Department of Natural Resources ("DNR") issued a citation to Peabody coal Company ("Peabody") for an alleged violation of the Indiana Surface Mining Control and Reclamation Act ("ISMCRA") and Peabody's mining permit. An administrative law judge ("ALJ") found in favor of Peabody, but on review, the trial court set aside the decision. On appeal, Peabody raises four issues for our review which we consolidate and restate as follows:
1) whether the trial court erred in determining that Peabody's failure to remove topsoil violated the ISMCRA;
2) whether the trial court erred in determining that Peabody's failure to maintain a ten-foot topsoil removal bench violated Peabody's permit; and
3) whether the trial court erred in determining that de minimis topsoil loss violates the ISMCRA.
We reverse and remand.[FOOTNOTE 1]
FACTS
On April 24, 1992, Christine Gerace, a reclamation specialist for DNR, inspected Peabody's Lynnville-North Millersburg complex in Warrick County, Indiana. During her inspection, she discovered that a portion of a diversion ditch, in her opinion, had been constructed on unremoved topsoil. Gerace informed Peabody's operator that she would return to collect soil samples.
On April 29, 1992, Gerace returned to the site and found that the operator had pushed topsoil material back from the ditch. Gerace also inspected an area in front of a pit highwall. She believed the operator failed to remove the topsoil from this area and merely covered it with overflow spoil from an excavation. She also believed the operator had failed, in both areas, to comply with a condition of Peabody's mining permit requiring Peabody to remove topsoil at least ten feet in advance of its mining activities.
On May 7, 1995, Gerace returned to discover that the operator had constructed an access road along the edge of the highwall and that, in her opinion, pushed spoil onto unremoved topsoil. She then issued a notice of violation ("NOV") for "failure to remove all topsoil as a separate layer from the area to be disturbed prior to any drilling, blasting, mining, or other disturbance takes place, but after the vegetative cover is clear from the area which would interfere with its removal." Record, p. 127. Gerace cited Peabody for violating 310 IAC Indiana Administrative Code 12-5-12.1(a) - (b), 310 IAC 12-3-4, and Permit Condition IV.B(5).
Peabody requested administrative review of the NOV and the civil penalty which was subsequently. On November 17, 1992, the ALJ held a hearing in Evansville, Indiana. On August 31, 1993, the ALJ issued his final order vacating the NOV.
On September 30, 1993, DNR petitioned for judicial review in the Warrick Superior Court. Peabody moved for change of venue from the judge which was granted.
On September 29, 1994, the court issued its findings of fact and conclusions thereon. The trial court ruled in favor of DNR and set aside the ALJ's final order. Peabody appeals the trial court's judgment.
DISCUSSION
This case is governed by Ind. Code 4-21.5-5-1 et seq. The function of the court on judicial review is limited to determining whether the agency possessed jurisdiction of the subject matter, and whether the agency's decision was made pursuant to proper procedures, was based upon substantial evidence, was not arbitrary or capricious, and was not in violation of any constitutional, statutory or legal principal. I.C. ¤4-21.5-5-14(d); See Natural Resources Commission V. AMAX Coal Co. (1994), Ind., 638 N.E.2d 418, 423, reh'g denied.
When the trial court determines whether an agency has violated a statute, it does not conduct a new trial. AMAX, 638 N.E.2d at 423. The trial court proceeding is not intended to be a trial de novo. When reviewing the administrative action, the trial court must view the evidence most favorable to the administrative proceedings and must not reweigh the evidence. State Board of Registration v. Nord (1992), Ind.App., 600 N.E.2d 124, 128, reh'g denied. Absent an error of law, the trial court may not substitute its judgment for that of the agency. AMAX, 638 N.E.2d at 423. Administrative findings of fact will not be reversed unless it conclusively appears the evidence upon which the decision was made was devoid of probative value or so proportionately inadequate that the finding could not rest on a rational basis. Indiana Alcoholic Beverage Commission v. River Road Lounge, Inc. (1992), Ind.App., 590 N.E.2d 656, 658, trans. denied.
While deference is given to an agency's factual determinations, deference is not given to the agency's legal conclusions. Nord, 600 N.E.2d at 128. Although the trial court is bound by the agency's findings of fact, the court is free to determine any legal questions that arise out of the agency's decision. Id. However, when the agency interprets a statute, the reviewing court should give the agency's interpretation great weight, but is not bound thereby. Id. On appeal, we review the trial court's decision to determine whether the trial court followed the law. AMAX, 638 N.E.2d at 423.
The first issue raised for our review is whether the trial court erred in determining that Peabody's failure to remove topsoil violated the ISMCRA. Peabody contends we should reverse the trial court's judgment because it exceeds the proper scope of judicial
review of an agency decision. Peabody argues that the trial court erred when it reweighed the evidence and judged the credibility of the witnesses.[FOOTNOTE 2] When reviewing an agency decision, the trial court may neither reweigh conflicting evidence nor judge the credibility of the witnesses. Board of Registration for Lane Surveyors v. Bender (1993), Ind.App., 626 N.E.2d 491, 496. It is the role of the agency to act as the fact finder in an administrative proceeding and the reviewing court may not substitute it s judgment on factual matters. See Peabody Coal Co. v. Indiana Department of Natural Resources (1994), Ind.App., 640 N.E.2d 435, 436, reh'g denied.
After weighing all the evidence, the ALJ concluded that DNR had failed to meet its burden of persuasion that Peabody had violated the ISMCRA. On review, the trial court overturned the ALJ's decision. In its findings of fact and conclusions of law, the trial court stated:
"(12) Inspector Gerace testified that topsoil material may be identified by virtue of, inter alia, color, texture, and the presence (or absence) of organic material; and that whether soil has been removed, as required, may be determined by a 'clear demarcation or change in level.'
(17) Peabody agronomist Randy Staley testified that 'a common person' could not distinguish between A and C horizons.
DNR argues that the trial court did not resolve a factual matter. Instead, DNR contends the trial court decided a question of law: whether Peabody's actions constituted compliance with the ISMCRA requiring removal of topsoil. DNR relies on our decision in Nord for support. Nord, 600 N.E.2d at 124. In that case, an engineer was suspended by the registration board for placing his seal on plans which he allegedly did not prepare. Id. at 126. The parties did not dispute that Nord reproduced building plans which were prepared by another engineer. Rather, the issue was whether Nord's efforts constituted "preparation" within the meaning of the registration board's regulations. Id. at 129. We decided that the trial court was not bound by the agency's interpretation of a regulation and could decide this issue as a matter of law. Id. Therefore, the trial court did not reweigh the evidence to resolve disputed facts and properly reached its own conclusion on a question of law. Id. at 129-30.
The present case is distinguishable because the trial court here reweighed the evidence to resolve disputed facts. Contrary to DNR's contention, the issue was not whether Peabody substantially complied with the ISMCRA regarding the removal of topsoil. Instead, the issue was whether Peabody, in fact, removed the topsoil from the site.
The ALJ determined that the evidence supporting the violation was circumstantial and that DNR failed to prove Peabody did not remove the topsoil. Pursuant to I.C. 4-21.5-3-14(c), the agency has the burden of persuasion at each stage of the proceeding. In its findings of fact and conclusions of law, the trial court found that, "[t]he NOV for failing to remove all topsoil material as required by 310 IAC 12-5-12 is supported by substantial evidence presented to the DNR which was ignored by the ALJ." Record, p. 132. The trial court decided that Peabody had violated 310 IAC 12-5-12; however, there was no issue concerning the interpretation of this statute.[FOOTNOTE 3] Rather, the trial court substituted its own judgment on a factual matter of whether the topsoil had been removed. See Peabody, 640 N.E.2d at 436. Therefore, the trial court did not decide an issue of law.
The ALJ heard conflicting evidence concerning whether the topsoil had, in fact, been removed. Based on this evidence, the ALJ found that DNR failed to meet its burden of persuasion. DNR does not contend nor does the record reveal that the evidence upon which the ALJ's decision is based was devoid of probative value or so proportionately inadequate that the finding could not rest on a rationale basis. See River Road Lounge, 590 N.E.2d at 658. We find no error in the ALJ's decision. Accordingly, we hold that the trial court erred when it reweighed the evidence and judged the credibility of the witnesses. See Bender, 626 N.E.2d at 496.
The second issue raised for our review is whether the trial court erred in determining that Peabody's failure to maintain a ten-foot topsoil removal bench violated Peabody's permit. Peabody contends that we should reverse the trial court's judgment because it exceeds the proper scope of judicial review of an agency decision. Peabody claims the trial court determined the facts de novo and substituted its own factual findings for those of the agency.
The ALJ determined that the NOV could not be affirmed for failure to maintain the topsoil bench because the NOV was not issued on that specific ground. The trial court overturned the ALJ's decision and found that the NOV could be upheld based upon the evidence that Peabody failed to maintain the ten-foot bench. In its findings of fact and conclusion of law, the trial court stated:
* * * * * *
(25)(b) The ten-foot bench requirement in the mining permit is a part of the regulatory mandate that an operator remove all topsoil from the area to be disturbed by mining and not a separate requirement independent of the removal mandate; it indicates the extent of topsoil removal that is required before the permittee is allowed to engage in mining activities defined as 'surface coal mining operations' by Ind. Code Section 13-4.1-1-3(12). The NOV is properly grounded on the fact that Peabody failed to remove topsoil material at least ten feet in front of the active operation and thus was in violation of its permit condition. The permit condition requiring that topsoil be removed at least ten feet in front of the active pit, is, in fact, a ground upon which the NOV should have been sustained. The NOV should have been sustained on those grounds alone."
The trial court did not overturn the ALJ's decision because it was unsupported by substantial evidence, arbitrary and capricious, or outside the agency's jurisdiction. See Indiana Department of Environmental Management v. Conrad (1993), Ind., 614 N.E.2d 916, 919. Instead, the trial court overturned the ALJ's conclusion that the NOV cold not be affirmed on grounds other than those upon which it was issued. The trial court then weighed the facts and evidence de novo to conclude that Peabody violated its permit by failing to maintain a ten-foot bench.
Further, even if the trial court had been correct to conclude that the ALJ's decision was legally defective, it should have remanded this issue to the ALJ. If a court finds error in an administrative proceeding, it may only vacate the decision and remand the cause back to the agency for further consideration. Adkins v. Tell City (1993), Ind.App., 625 N.E.2d 1298, 1303. Here, the trial court reviewed the ALJ's decision de novo. We find the trial court erred by exceeding the proper scope of judicial review of an agency decision.
The third issue raised for our review is whether the trial court erred in determining that de minimis topsoil loss violates the ISMCRA. In the findings of fact, the ALJ stated:
On review, the trial court concluded that the ALJ's findings were erroneous and overturned the ALJ's decision. The trial court held that there was no de minimis standard under the ISMCRA. In support of its conclusion, the trial court cited to Burgess Mining and Construction Corp. v. Office of Surface MIning. (1979), 1 IBSMA 293. In that case, Burgess received a NOV and determined that Burgess failed to remove all the topsoil pursuant to 30 CFR 715.16. Id. at 296. On appeal, Burgess argued the language of section 715.16 was ambiguous. Id. at 297 - 98. Under its interpretation, Burgess contended it was not required to salvage all the topsoil, but rather circumstances would dictate the exact amount to be salvaged. Id. at 298. The court ruled against Burgess primarily because Burgess failed to cite to any authority in support of its contention. Id.
Burgess does not support the trial court's conclusion that there is no de minimis standard in the ISMCRA. Further, Burgess does not address whether a "5 - 15%" loss of topsoil is de minimis. Therefore, the trial court could not rely on Burgess in concluding that the ALJ's findings were erroneous.
The trial court also relies on 310 IAC 12-5-12.1(a) and 12-6-12(b) for support. However, these statutes do not address whether a "5 - 15%" loss of topsoil is a de minimis.
The ALJ made a factual determination that a "5 - 15%" loss of top soil was de minimis. The trial court's reliance on the aforementioned authority does not support its conclusion that the ALJ's findings were erroneous. The ALJ's findings of fact will not be reversed unless it conclusively appears the evidence upon which the decision was made was devoid of probative value or so proportionately inadequate that the finding cold not rest on a rational basis. River Road Lounge, 590 N.E.2d at 658. Here, we find no error in the ALJ's findings. We hold the trial court erred in overturning the decision of the ALJ.
For the forgoing reasons we reverse the judgment of the trial court in all respects and remand this cause for further proceedings not inconsistent with this opinion.
FOOTNOTES
1. DNR argues that the tial court's errors were harmless. In Homehealth, Inc. v. NIPSCO, we stated: "Error in conclusions of law which are not used or required as a basis of judgment is harmless and will be disregarded on appeal. Such is no ground for reversal where no prejudice results to the party complaining." Homehealth, Inc. v. NIPSCO (1992), Ind.App., 600 N.E.2d 970, 975, reh'g denied. The courts erroneous conclusions, disussed in our opinion, formed the basis of its judgment to oveturn the ALJ's decision. Therefore, these errors were not harmless.
2. Peabody also argues the trial court applied the wrong standard of review to the ALJ's final order and considered evidentiary matters outside the agency record. We need not address these issues because we reverse the trial court's jugdment on other grounds.
3. We note that IAC 12-5-12 has been repealed since 1985, which was seven years before Peabody committed the alledged violation. In addition, DNR contends that I.C. 14-4.1-8-1 is the controlling statute in this case. However, we need not proceed into a detailed discussion of this statute because the tiral court did not resolve a question of law regarding the issue of top soil removal.
(13) Testimony by Inspector Gerace, as well as pictorial evidence, indicated that not all topsoil material was salvaged. Color and texture she observed were indicative of the unremoved topsoil. With respect to texture, the inspector testified that the feel of topsoil material is different from what is classified as C-grade material or C horizon; whereas topsoil material is loamy or crumbly between the fingers, like potting soil, the C material has a lot of rock in it. With respect to color, the inspector testified, with regard to the material she identified as the soil material required to be salvaged:
I surely believe that topsoil had not been removed. You'll notice the brown coloration of the material. It's not your typical gray clay material that's in the area.
Further, grassy vegetation, roots and other organic matter were present immediately adjacent to removed overburden or 'spoil.'
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(18) Inspector Gerace was, however, a seasoned professional who had educational and field experience with respect to geology and minesites, who was a frequent visitor to the subject site and was familiar with that site, and who had, at the time of the NOV issuance, 'four years of experience watching operators pick up topsoil.'
(19) Mr. Staley, who did not observe the area of violation until a week or so after the NOV was written, testified that the material under the spoil could have been topsoil and that, indeed, there were small areas where topsoil had been left.
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(25)(c) Additionally, the ALJ ignored DNR evidence of spoil piles placed on unremoved topsoil, grubbed trees, soil covered with overflow spoil from the pit excavation, no soil removal ten feet in advance of mining activities as well as pictures indicated vegetation growing in unremoved topsoil and spoil pushed over onto topsoil. The NOV for failing to remove all topsoil material as required by 310 IAC 12-5-12 is supported by substantial evidence presented by the DNR which was ignored by the ALJ.
(26) The evidence in this case supported the issuance of the NOV."
Record, pp. 128-32 (original emphasis) (citations omitted).
"(6) Following the filing of post-hearing briefs, the {ALJ} issued his Report, Findings of Fact, and Final Order vacating the NOV on August 31, 1993. He determined, inter alia, that the NOV could not be supported on the ground that Peabody failed to maintain 'an appropriate topsoil bench' (i.e. remove topsoil material) at least ten feet in advance of the mining operation since '[T]he NOV does not make specific reference to the NOV being based on the failure to maintain the topsoil bench.' Peabody does not dispute the DNR contention that the ten-foot bench was not maintained, i.e. it does not claim it, in fact, removed topsoil material at least ten feet in advance of the mining operation.
(7) Permit Condition IV.B.(5) recites, in pertinent part, that:
Topsoiling material will be removed prior to any mine related surface disturbance. . . . Efforts will be made to remove all existing topsoil. Topsoil removal will stay ahead of the active operation. . . . . Climatic conditions [will] cause the area of removal to vary from ten to 3,000 feet in advance of the mine operation. . . . [emphasis not included in CADDNAR].
(8) Peabody was, therefore, in violation of Permit Condition IV.B.(5) because it failed to remove all the soil delineated in the permit.
Record, pp. 127-28 (original emphasis). [Emphasis not included in CADDNAR.]
The trial court in this case did not accord deference to the ALJ's decision as required by statute and caselaw. As stated previously, the trial court has authority under I.C. 4-21.5-5-14(d) to review the ALJ's decision and determine whether it was in accordance with the law. However, the trial court proceeding is not intended to be a trial de novo, but rather a review of the record as a whole to determine whether the agency findings are supported by substantial evidence. See United Refuse, 615 N.E.2d at 103. The trial court's judgment contradicts I.C. 4-21.5-5-11, which states:
"Judicial review of disputed issues of fact must be confined to the agency record for the agency action supplemented by additional evidence taken under section 12 [IC 4-21.5-5-12] of this chapter. The court may not try the cause de novo or substitute its judgment for that of the agency." I.C. 4-21.5-5-11.
"12. The evidence presented at the hearing by Peabody indicated that the area in question was 'dozed' in order to salvage the top soil.
13. Peabody's witnesses readily admit 'dozing' is the least effective method of removing top soil but that because of the wet conditions, it was the only method that would work.
14. Likewise, testimony of Peabody's witnesses indicated a loss of 5 - 15% of top soil during handling was to be expected. The DNR did not dispute this figure or contend that such a handling loss is a violation.
15. Department testimony clearly showed that any loss of top soil [sic] was slight and would not affect the ability to reclaim the area."
Record, p. 144.
On review, the trial court determined that the ALJ's findings were erroneous. In its findings of fact and conclusions of law, the trial court stated:
"20. All topsoil material must be salvaged, 310 IAC 12-5-12.1(a). See, also, Burgess Mining and Construction Corp. v. Office of Surface Mining, 1 IBSMA 293 (1979), interpreting an equivalent federal requirement under the federal Surface Mining Control and Reclamation Act of 1977 ("SMCRA"), 30 U.S.C. Sections 1201 et seq.
(21) The amount of topsoil loss does not determine whether a violation has occurred; the amount of loss is taken into account when a civil penalty assessment is made following the issuance of an NOV. 310 IAC 12-6-12(b)(2) makes provision for the assessment of penalty points with respect to the extent of actual damage.
(22) The ALJ's Findings Nos. 14 and 15 that any loss of topsoil was slight and would not affect the ability of the operator to reclaim the area erroneously impliedly [sic] concludes that slight topsoil loss is acceptable under ISMCRA. Such a conclusion is contrary to law.
(23) Findings No. 15 also erroneously implies that mine operators under ISMCRA jurisdiction do not have to comply with environmental performance standards contained in Ind. Code. Section 13-4.1-8-1 and 310 IAC 12-5 so long as areas disturbed by mining can be approved for bond release under Ind. Cod 13-4.1-6 and 310 IAC 12-4. Such a conclusion is also contrary to law.
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(25)(a) There is no de minimum standard under ISMCRA; operators must conform their behavior to the mandates and prohibitions of ISMCRA; extent of actual or potential harm is addressed by the civil penalty assessment."
Record, pp. 130 - 131.
The ALJ found that the "5 - 15%" loss of topsoil was de minimis. This finding is a factual determination based on the evidence presented at the hearing.
REVERSED AND REMANDED.