Permit X-13,451, issued by the Department of Natural Resources in favor of Peabody Coal Company for construction activities in the floodway of Pigeon Creek in Warrick County, is in all aspects affirmed.
FINDINGS OF FACT
1. On May 29, 1992, the department of natural resources (the "Department") made an initial determination to issue to Peabody Coal Company Company ("Peabody") a Certificate of Approval for Construction in a Floodway within Docket Number X-13,451 (the "Permit").
2. The permit would authorize under IC 13-2-22 (sometimes referenced as the "Flood Control Act") and 310 IAC 6-1 the placement by Peabody of a coal mining and levee extension along the east edge of the Pigeon Creek floodplain in Sections 3, 10, 11,14 and 15 in Township 5 South, Range 9 West, near Millersburg, Warrick County. The permit is subject to numerous written limitations and conditions.
3. On June 19, 1992, Elmer H. Brown, Jr. and Linda D. Brown (the "Browns") filed, by counsel, their Petition for Administrative Review of the initial determination by the Department to issue the permit. This petition also contained a request for stay of effectiveness of the permit.
4. This proceeding was initiated with filing of the Petition for Administrative Review and is governed by IC 4-21.5 (sometimes referred to as the "Administrative orders and Procedures Act" or "AOPA") and 310 IAC 0.6-1. There is subject-matter jurisdiction and jurisdiction over the persons of the Browns, the Department, and Peabody (collectively, the parties).
5. A prehearing conference was scheduled and held in this proceeding on July 29, 1992 in Evansville; and as agreed by the parties, the prehearing conference was recessed then resumed by telephone on August 5, 1992.
6. The issues were identified during the prehearing conference and memorialized in a Report of Prehearing Conference entered by the administrative law judge on August 6, 1992. The Browns contend a final determination should not be made to grant the permit, and effectiveness of the permit should be stayed, for any of the following reasons:
(A) Peabody has no legal right of entry to the site (which is property of the Browns).
(B) There are Indian artifacts and historical sites within the affected area, and an adequate environmental impact study has not been performed relative to the construction activities proposed by Peabody.
(C) There are numerous species of fish and wildlife within the affected area. There will be detrimental effects from the proposed construction activities, and subspecies of plant and animal life may be threatened by the construction.
(D) The proposed construction will adversely affect the efficiency of, or unduly restrict the capacity of the floodway and interfere with flood control within the affected area.
7. The request by the Browns for a stay of the permit was scheduled for a preliminary hearing on August 20, 1992 in Evansville. The hearing was conducted as scheduled.
8. The parties stipulated during a status conference held on September 9, 1993 that the hearing held an August 20, 1992 to consider the stay request is also the hearing to consider the merits of the permit.
9. The permit is a form of "license" as defined by IC 4-21.3-1-8 (sic, IC 4-21.5-1-8].
10. The request by the Browns to stay the permit is governed by IC 4-21.5-3-5(h).
11. Pursuant to IC 4-21.53-5(h), the burden of proof during a preliminary hearing to consider a request to stay the effectiveness of a license is on the person requesting the stay. Similarly, the burden of proof rests with the person seeking to set aside a
[VOLUME 6, PAGE 137]
permit given initial determination by the Department. Amax Coal Company v. Department of Natural Resources and Jack Jarrett, 89-099R, as determined by the Commission on May 20, 1992.
12. The burden of proof relative to the August 20, 1992 hearing, whether applicable to the stay request or applicable to the request to finally set aside the permit, is upon the Browns. IC 4-21.5-3-14(c).
13. The appropriate standard for determining whether to grant a stay is the equitable standard applicable for whether to grant a preliminary injunction. State ex rel Indiana Alcoholic Beverage Commission v. Lake Superior Court, Room 4, (1972) 259 Ind. 123, 284 N.E.2d 746. The relief provided in the AOPA by a stay process has similarly been characterized as "quasi-equitable" or "administrative equitable". Indiana Administrative Practice, "Administrative Hearings", (Professional Education Systems, Inc., Eau Claire, Wisconsin, 1990), p. 37.[FOOTNOTE i]
14. In deciding whether to issue a preliminary injunction, a judge in a civil court considers the following factors:
(A) Has the plaintiff shown a reasonable likelihood of success on the merits?
(B) Would the plaintiff suffer irreparable harm if the injunction is denied?
(C) Does the threatened injury to the plaintiff outweigh the harm to the defendants threatened by the granting of the injunction?
(D) Would the injunction disserve the public interest? Indiana State Department of Public Welfare v. Stagner, (Ind. App. 1980) 410 N.E.2d 1348.
15. In deciding whether to issue a stay, an administrative law judge in a proceeding under the AOPA considers the following factors:
(A)Has the person seeking the stay shown a reasonable likelihood of success on the merits?
(B) Would the person seeking the stay suffer irreparable harm if the stay were denied?
(C) Does the threatened injury to the person seeking the stay outweigh the harm to persons threatened by the granting of the stay?
(D) Would the stay disserve the public interest?
16. The factors described in Finding 15 apply to the request by the Browns for a stay as defined by the issues set forth in Finding 6.
17. The Browns are the owners of a 40 acre tract of land described as the "Southeast Quarter of the Southeast Quarter of Section 3, Township 5 South, Range 9 West, containing 40 acres more or less" (the "subject property") Respondent's Exhibits B-1 and B-2.
18. When acquired by the Browns, the subject property was encumbered by a coal lease in favor of Jesse R. Wasson.
19. Wasson has sought to sublease to Peabody his coal lease in the subject property.
20. In 1987, the Browns recorded an Affidavit of Notice of Termination of Lease and mailed to a Wasson family representative a letter notifying Wasson that the Browns considered the coal lease to have been terminated for nonpayment of royalties. Respondent's Exhibits B-1 and B-2.
21. After 1987, Wasson resumed sending royalty checks to the Browns, but the Browns did not cash those checks.
22. A civil action is pending in the Warrick Superior Court, Cause Number 87DOl-9111-CP-249, in which Frances R. Wasson, surviving spouse of Jesse R. Wasson, has filed a complaint against the Browns seeking to quiet title in the coal lease. Petition for Administrative Review filed by the Browns on June 19, 1992.
23. Although the Commission has exclusive jurisdiction (subject to judicial review under the AOPA) to consider licensing issues under the Flood Control Act, property questions are generally beyond the Commission's administrative competence. Apart from the Commission's role to determine the propriety of the permit, the Commission would be legally incompetent to decide the dispute among the Browns, Wasson, and Peabody concerning the subject property.
24. The question of the extent of administrative jurisdiction, when a proceeding includes issues that are beyond administrative competence, is governed by the doctrine of primary jurisdiction. The doctrine essentially holds that when any part of the proceeding is within the exclusive jurisdiction of the agency, the whole proceeding may first be heard by the agency. Schlens v. Egnatz (1987 Ind. App.), 508 N.E.2d 44, 46. Prohosky v. DNR and Prudential Insurance, 5 Caddnar 193 (1991) and Kuss v. DNR and Prudential Insurance, 5 Caddnar 51 (1989).
25. Application of the doctrine of primary jurisdiction supports administrative and judicial efficiency. A determination of all relevant issues in the administrative forum also assures a single forum on judicial review. Agency expertise is incorporated where there is administrative competence, but the trial court is not bound by the ordinary limitations of judicial review where administrative competence does not exist. A patchwork of litigation, in which parties must seek delays in one forum pending resolutions by another forum, is avoided.
26. The Indiana General
[VOLUME 6, PAGE 138]
Assembly evinces an intention, by its enactment of IC 14-3-18, that the Department consider proprietary issues for permitting functions under the Flood Control Act. A permit applicant is required to notify the owner of each parcel of real property reasonably known to be adjacent to the real property where a licensed activity would occur. IC 14-3-18-1(4) and IC 14-3-18-8.
27. In order to identify who are adjacent property owners under IC 14-3-18, there must be some determination of who is the owner of the parcel of property where a proposed activity would take place. Distinctive parcel ownership is implicit to the notification of an adjacent property owner.
28. The Department here made some inquiry, before making an initial determination to issue the permit, into whether Peabody had a right of entry into the parcel of property where the proposed activity would take place. Although this inquiry was understandably a cursory one, there was an appropriate demonstration of concern for property interests relative to a permit under the Flood Control Act. A more serious inquiry into property rights can be made within the AOPA, and this proceeding offers a forum for the exercise of the doctrine of primary jurisdiction.[FOOTNOTE ii]
29. The Browns showed during the August 1992 hearing that a question exists concerning Peabody's right of access to the subject property. Having raised the property issue, however, the Browns have opted not to present evidence in this proceeding upon which a favorable determination could be made. As to the permit, the issue is waived; but this decision is not intended to prejudice the Browns ability to pursue the property issue in a civil action.
30. Elmer Brown, Jr. testified during the hearing concerning the presence of artifacts associated with Native American habitation along the banks of Pigeon Creek in and near the subject property. His testimony demonstrated a genuine interest in prehistoric and historic preservation; and he established a level of expertise in Southern Indiana archeology which clearly exceeds that of the ordinary lay person.
31. Elmer Brown also testified, however, that while a ridge near the subject property and along the former bed of Pigeon Creek is "loaded with artifacts", he has discovered "no significant habitations" within the subject property. Although he concluded it is "absolutely possible" that significant archeological sites are present within the subject property, this testimony would not support a decision in his favor even if historic preservation might properly be considered under the Flood Control Act.
32. Yet the criteria appropriate to deciding whether a permit should be granted under the Flood Control Act are set forth primarily in IC 13-2-22-13, and these criteria do not include historic preservation. "Historic preservation is not a criteria [criterion] on which the DNR or NRC may rely in deciding to grant or deny a floodway construction permit." Michigan City Historical Society v. DNR and Francik, supra at 170.[FOOTNOTE iv]
33. As a matter of both fact and law, the Browns cannot prevail based upon concerns for historic preservation.
34. Elmer Brown, Jr. testified that the construction activities anticipated by the permit would have detrimental effects upon fish, wildlife, or botanical resources. He expressed a particular concern that the proposed levee would "dry up" the wetlands which are prominent on the subject property. He testified that the fisheries on Pigeon Creek have improved significantly in recent years, but he worries that the proposed project will reverse this positive trend. He has restricted hunting and trapping on the subject property in order to favor wild animals which are present; and these include muskrats, beavers, opossums, deer, raccoons, minks, coyotes, and foxes. Numerous species of timber are present on the subject property, including black oaks, white oaks, poplars, birches, willows, walnuts, pecans, hickories, and catalpas. Elmer Brown expressed a belief that activities anticipated by the permit would cause serious damage to all of these natural resources.
35. The testimony by Elmer Brown was provided based upon a fundamental misunderstanding of the permit. He believed the permit would authorize construction activities adjacent to Pigeon Creek and nearly to the west side of the subject property.
36. Initially, Peabody had sought approval for a more ambitious project. Because of concerns for fish, wildlife, or botanical resources, the Department persuaded Peabody to locate the levee farther from pigeon Creek so that it would involve only the southeastern corner of the subject property.[FOOTNOTE v]
37. The testimony by Elmer Brown must be weighed in light of his misunderstanding of the physical scope of the permit. The proposed project would not cause the magnitude of harm which he had supposed and
[VOLUME 6, PAGE 139]
feared.
38. Bill Maudlin of the Department also testified regarding the impact which the permit would have on fish, wildlife, or botanical resources. He is a biologist with a B.S. from Purdue University. Both by education and experience, he has special expertise in environmental factors which effect biological resources.
39. Maudlin made two field inspections to the vicinity of the subject property. He testified that the original proposal by Peabody would have disturbed 300 to 400 acres in the floodway, including numerous oxbows on Pigeon Creek where wetlands are present. The original proposal would have interfered with a great blue heron rookery. He observed a northern copperbelly watersnake in the vicinity, a subspecies of a species listed as endangered or threatened in 310 IAC 3.1-5-4(4); and under the original proposal, valuable habitat for the northern copperbelly watersnake would have been destroyed. Also, a rare plant species, the spider lily, might have been impacted by the original proposal.[FOOTNOTE vi]
40. Maudlin contrasted the potential which the original proposed project would have had against the project as given initial approval by the Department. The project given initial approval would not interfere with the heron rookery, would not cross the old channel of Pigeon creek, and would disturb less than 20 acres of wildlife habitat in the floodway. He testified that because the levee disturbance to the floodway "is very limited," and because Peabody is required to mitigate damages to wetlands, "there should be limited adverse impacts" from activities under the permit. In addition, Maudlin testified that the permit would require the appointment of a biologist to monitor construction and that there would be "very little effect" to the wetlands. Maudlin concluded that while the activities authorized by the permit would have some effect, he did not believe that there would be "unreasonably detrimental effects upon fish, wildlife, or botanical resources".
41. In comparing the testimonies of Elmer Brown, Jr. and Bill Maudlin, the testimony of Maudlin is more persuasive. To the limited extent their testimonies truly differ, Maudlin had superior expertise and a more accurate understanding of the area which would be impacted by the permit.[FOOTNOTE vii]
42. The Browns urge that an environmental impact statement should have been prepared for the permit. None was prepared and none is required. IC 13-2-22-13(d). An environmental impact statement "is not required for the issuance of a permit" under the Flood Control Act. Dustin v. DNR and Allen County, 5 Caddnar 104 (1990), affirmed on judicial review in Thomas E. Dustin, et al. v. State of Indiana, Department of Natural Resources, Natural Resources Commission, and Allen County Board of Commissioners, 92COl-9012-CP-454 (March 21, 1991).
43. The preponderance of evidence supports neither a stay of the permit nor its denial based upon unreasonably detrimental effects upon fish, wildlife, or botanical resources. Indeed, the preponderance of evidence on this issue supports the granting of the permit.
44. John LaTurner, hydraulic engineer for the Department, testified that under the permit, the levee would be constructed "just slightly inside" the floodway of Pigeon Creek. A HEC 2 computer modeling was performed, and the proposed levee was determined to raise flood stages by less than 0.1 foot. He stated that in his professional opinion, the proposed construction would not adversely affect the efficiency of or unduly restrict the capacity of the floodway. This testimony was unrefuted.
45. There is no evidence upon which a stay could be issued, or the permit denied, based upon an adverse affect to the efficiency of or undue restriction to the capacity of the floodway. The evidence in this regard supports the issuance of the permit.
46. The Browns have not shown a reasonable likelihood of success on the merits in this proceeding. For this reason, the other factors listed in Finding 15 for deciding whether to issue a stay need not be addressed.
47. The Browns have not carried their burden of proof that a stay should be issued against the effectiveness of the permit.
48. Similarly, the Browns have not carried their burden of proof to set aside the initial determination to issue the permit. To the contrary, the preponderance of evidence supports issuance of the permit. Issuance of the permit should in all aspects be affirmed.
FOOTNOTES
i. Parallel analyses were applied by administrative law judges for the natural resources commission (the "Commission") relative to stay hearings held in Dustin v. DNR and Allen County, 89-064W, and in Wawasee Homeowners v. Byrd, 89-193W.
ii. Peabody cites three cases which it contends preclude a Commission inquiry
[VOLUME 6, PAGE 140]
into ownership, or at least a right of entry, to the property where the levee, would be placed under the permit. Each of these cases is appropriately distinguishable.
Snyder v. Department and Indy Sand and Gravel, 6 Caddnar 18 (1991), and Michigan City Historical Society v. DNR and Franik, 5 Caddnar 169 (1990) both reject efforts by litigants to extend the Commission's regulatory functions under the Flood Control Act to areas not contemplated by the Indiana General Assembly. To the contrary, propriety issues are anticipated by IC 14-3-18 as applied to the Flood Control Act.
In Schuh Ditch Citizens v. DNR, A-1 Disposal, et al., 2 Caddnar 41 (1985), a right of entry to the affected property was not in issue. A grievance was raised by a party who had no proprietary interest in the affected property that the permit applicant and the landowner were not the same, and the Commission correctly determined that their identity was unnecessary. Here, there is no dispute that lee ownership rests with the Browns. Peabody claims to have a valid right of entry, a right it asserts based upon the coal lease. That claim is contested by the Browns. Schuh Ditch provides that if a valid right of entry is found, Peabody could not be denied a permit merely because it is not the fee owner.
iii. [Note: Original administrative order did not contain a Footnote "iii".]
iv. John LaTurner testified that historic preservation is considered by the Department if a permit under the Flood Control Act effects a navigable stream. See, also, 320 IAC 21-3. He testified that the portion of Pigeon Creek which passes through the subject property has not been declared navigable. Testimony by Elmer Brown, Jr. indicates that he also believes Pigeon Creek to be non-navigable within the subject property.
v. Elmer Brown, Jr. was among a group of citizens who requested a pre-licensing public hearing under 310 IAC 0.6-3 to express concerns relative to the permit. Although not established by the. testimony offered during the hearing, these expressions of concern may have contributed to the Department's conclusion that the permit should be modified to better address fish, wildlife, or botanical resources. If so, Brown has already succeeded in his effort to mitigate the potential adverse effects of the permit.
vi. The Commission lists the northern copperbelly watersnake (Nerodia erythrogaster neglecta) as "threatened" and the Carolina spider-lily (Liliaceae: Hymenocallis occidentalis) as "rare" in the "Roster of Indiana Animals and Plants which are Extirpated, Endangered, Threatened, or Rare", 15 Ind. Reg. 1312 (April 1, 1992).
vii. Following the August 1992 hearing, Brown could have re-evaluated the permit in light of its reduced impact area. He chose not to do so.