[NOTE: SULLIVAN CIRCUIT COURT (77C01-9805-MI-150) AFFIRMED NRC FINAL ORDER. (Decision following Administrative findings.) DNR TOOK APPEAL. ON NOVEMBER 16, 2000, THE COURT OF APPEALS (77A04-9909-CV-429) AFFIRMED JUDGMENT OF TRIAL COURT IN REPORTED CASE 740 N.E.2d 129.]
Each of the permits at issue in Administrative Cause Numbers 93-503R, 93-504R, 93-512R, 93-513R, and 94-183R is remanded to the Department of Natural Resources so that it may determine whether portions of the subsoil should be removed and segregated, stockpiled and redistributed as subsoil in accordance with 310 IAC 12-5-12.1(d) and (e), where the portions are necessary to comply with the revegetation requirements of 310 IAC 12-5-59, 310 IAC 12-5-61, 310 IAC 12-5-62, 310 IAC 12-5-63, and 310 IAC 12-5-64.1. Any determination must be site specific and must include soil analysis by a qualified professional which demonstrates that soil replacement, in addition to existing topsoil, is needed to achieve the revegetation requirements of the approved postmining land use.
FINDINGS OF FACT
(1) Indiana SMCRA requires all topsoil[FOOTNOTE 1] be removed as a separate layer from the area to be disturbed for surface coal mining activities. The topsoil must then be segregated. 310 IAC 12-5-12.1(a). If the topsoil is less than six inches thick, an operator may remove the topsoil and the unconsolidated materials immediately below the topsoil to a total depth of six inches "and treat the mixture as topsoil." 310 IAC 12-5-12.1(a)(2). More stringent standards apply at 310 IAC 12-5-146 to the removal and segregation of topsoil for prime farmland, but none of the areas at issue in these proceedings contain prime farmland.
(2) The rule subsection of Indiana SMCRA which bears most directly upon topsoil and subsoil replacement for surface coal mining operations is 310 IAC 12-5-12.1(f). This subsection authorizes the DNR to require portions of the subsoil to be removed and segregated, thenstockpiled and redistributed as subsoil, if the DNR finds these subsoil layers are needed to comply with the revegetation requirements of 310 IAC 12-5.
(3) The federal equivalent of 310 IAC 12-5-12.1(f) is 30 CFR 816.22(e). In its preamble to final implementation of this federal regulation, the Office of Surface Mining and Reclamation explained: "Subsoil segregation may be required when the regulatory authority determines that it is necessary to achieve compliance with revegetation requirements. The regulatory authority will be in the best position to determine the extent of soil reconstruction needed to achieve the desired physical or chemical soil characteristics for revegetation. Since revegetation is required elsewhere, this rule does not impose an undue burden on operators: it provides recognition that in some limited circumstances separate handling of subsoil strata may be necessary to meet those standards."
(4) 30 CFR 816.22(e) also identifies what are the revegetation requirements. "The Regulatory Authority may require that the B horizon, C horizon or other underlying strata, or portions thereof, be removed and segregated. . . if it finds such subsoil layers are necessary to comply with the revegetation requirements of sections 816.111, 816.113, 816.114, and 816.116 of this Chapter." The counterparts to these federal regulations are set forth in Indiana SMCRA at 310 IAC 12-5-59, 61, 62, 63, and 64.1.
(5) These requirements are directed to approved postmining land uses. As provided in pertinent part in 310 IAC 12-5-59(a), "Each person who conducts surface
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mining activities shall establish . . . a diverse, effective, and permanent vegetative cover of the same seasonal variety native to the area and that supports the approved postmining land use." As provided in pertinent part in section 59(b), "All revegetation shall be carried out in a manner . . . compatible with the approved postmining land use. . . ." Section 61 speaks to seeding and planting during the first normal period for favorable planting conditions after final soil preparation following mining "with a temporary cover of small grains, grasses, or legumes until a permanent cover is established." Mulching and other soil stabilization practices are prescribed by 310 IAC 12-5-62 which will provide adequate soil erosion control to be replaced by perennial species "approved by the postmining land use." Additionally, chemical soil stabilizers may be used "in conjunction with vegetative covers approved for the postmining land use." Section 64.1 identifies how success is measured for revegetation with respect to approved postmining land uses.
(6) Beginning in 1989, the DNR pursued a regulatory policy which applied 310 IAC 12-5-12.1(f) to "any and all situations in which the amount of topsoil is less than 18" in depth." This policy was not supported by rule or statute and was found on administrative review not to have the force of law. Peabody Status of Subsoil Replacement on Non-Prime Farmland, 6 Caddnar 8 (1991). The administrative decision was affirmed on judicial review. "The most reasonable interpretation of 310 IAC 12-5-12.1(f) is that the subsection contemplates an exception to the general principle that subsoil is not required to be salvaged and replaced. The exception would be applied only within limited circumstances as found appropriate by the [DNR] director with respect to a particular case. If the . . . [DNR] intends to establish 18 inches as a minimum standard for soil replacement, regardless of whether 18 inches of topsoil existed before mining and regardless of whether or not the site qualifies as prime farmland, that minimum standard should be established by rule or by statute." (Finding enumerations omitted.) IDNR v. Peabody, 77CO1-9112-MI-232 (Sullivan Circuit Court 1993). Since this decision, neither rule adoption nor statutory enactment have established 18 inches as the minimum standard for soil replacement on non-prime farmland.
(7) The soil (topsoil plus subsoil) replacement depth stated in the four Peabody permits is 18 inches for non-prime cropland. This 18-inch minimum resulted from the all-inclusive regulatory policy disapproved in Peabody Status of Subsoil Replacement on Non-Prime Farmland. While that case was pending, Peabody and the DNR agreed to continue implementation of the 18-inch soil replacement for cropland, but they also agreed to be bound by the decision of the Sullivan Circuit Court on judicial review. Pursuant to the agreement, Peabody with reservation submitted permit revisions incorporating the 18-inch minimum soil replacement depths, and it said that if the 18-inch policy was determined invalid, Peabody would submit a revision to seek removal of the language.
(8) In the Amax permit, the stated soil replacement depth is 18 inches of soil (topsoil plus topsoil) for cropland and twelve inches for wildlife land use. Prior to initiation of the policy disapproved in Peabody Status of Subsoil Replacement on Non-Prime Farmland, Amax received approval in the permit at issue to change cropland to wildlife land use. The approval did not condition the change upon replacement of 18 inches of soil.
(9) Peabody and Amax now seek to remove and distribute eight to twelve inches of topsoil. An operator which seeks to change the status quo of an existing permit has the burden of going forward to secure a reduction of, may even be foreclosed by res judicata or stare decisis from reducing, the amount of soil to be replaced. The history of these permits does not support the result here. Both parties understood Peabody agreed to modify the permits to provide for 18 inches of soil replacement upon the reservation its
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agreement rested with the legality of a DNR policy then in litigation. That policy was ultimately rebuffed by the Sullivan Circuit Court.
(10) The DNR is attempting to require 18 inches as a standard soil replacement for each of the five permits in question. As stated, for example, in November 8, 1993 correspondence from the DNR to Peabody with respect to Permit S-246: The applicant proposes to restore an average of 8 to 12 inches of topsoil on graded cast overburden for all non-prime farmland areas. Based upon the information available to the Director, the Director finds in this specific case, a soil replacement of 8 to 12 inches is inadequate to comply with the land capability restoration and revegetation requirements of 310 IAC 12 -5. Therefore, the Director has made a special finding that it is appropriate with respect to this particular case to require a portion of the subsoil be removed and segregated, and redistributed in accordance with 310 IAC 12-5-12.1 since he finds such subsoil layers are necessary to comply with the land capability restoration and revegetation requirements of 310 IAC 12-5. Nearly identical language is contained in correspondence from the DNR to the permittee requiring 18 inches as a standard soil replacement for the other four permits.
(11) In "Peabody and Amax's Response to Directive for Clarification or to Augment the Administrative Record" filed on February 18, 1998[FOOTNOTE 2], the Claimants reference DNR answers to Interrogatory No. 7 and DNR Deposition at 55, answer 128: "In response to Interrogatory No. 7(a), (b), and (c) above, the Department would state that pursuant to 310 IAC 12-5-68, IC 13-4.1-8-1(2) and IC 13-4.1-3-4, proposed reclamation plans for soil replacement must support a variety of alternative uses, dependent upon the premining soils capability. The Department's original response has not changed as the Department does not look at any particular land use, but reclamation plans for soil replacement must support a variety of alternative land uses, dependent upon the premining soil capability. . . ."
(12) Similarly, as reflected in "DNR's Summary of Issues" filed on December 12, 1997: The DNR has consistently asserted throughout the briefs filed in this matter that the . . . [Claimants'] request to reduce their approved soil replacement depths should not be viewed solely in relation to the revegetation requirements for cropland. . . . Indeed, the findings of the director clearly indicate that his determination was based on the land capability restoration and revegetation requirements of 310 IAC 12-5, which include the land capability restoration requirements of 310 IAC 12-5-68.
(13) As provided in 310 IAC 12-5-68(a), all areas affected by surface coal mining are to be restored in a timely manner to either:
(A) conditions capable of supporting uses which they were capable of supporting before any
mining; or
(B) higher or better uses approved under Indiana SMCRA.
(14) "Higher or better uses" is a phrase defined in Indiana SMCRA at IC 14-34-10-2(a) to mean "postmining land uses that have a higher:
(1) economic value; or
(2) nonmonetary benefit;
to the landowner or the community than the premining land uses."
(15) As specified in IC 14-34-10-2(b)(3), one of the duties of an operator is to "[r]estore the land affected to a condition capable of supporting the uses that the land was capable of supporting
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before mining or higher or better uses."
(16) The clear statutory purpose of Indiana SMCRA is to require an operator to reclaim land to as "good or better shape as it was prior to mining." JH&L Coal Company, d/b/a Miller Mining v. Department of Natural Resources, 7 Caddnar 28 (1994). To that end, unless a site is restored to the same use as existed prior to mining, the site must be restored to a higher and better use. A corollary is that the approved postmining land use for a particular site is either the same as, or better than, the premining land use.
(17) The "special finding" made by the DNR for the subject permits requires a two-prong standard be met in order for an operator not to provide 18 inches as a standard soil replacement. Reference is made both to "land capability restoration" and to "revegetation" requirements.
(18) As described in Finding 5, compliance with the revegetation requirements for the approved postmining land use is a cornerstone of Indiana SMCRA. Since the approved postmining land use is either the same as or better than the premining land use, compliance with the revegetation requirements assures an operator must reclaim the land to as good as or a better condition than existed prior to mining.
(19) In the Peabody cases, the approved postmining land use is cropland. Revegetation requirements must be measured within the context of cropland. In the Amax cases, the approved postmining land use was changed from cropland to the higher and better use of wildlife. Revegetation requirements must be measured within the context of wildlife.
(20) No general "land capability" standard is set forth in 310 IAC 12-5-12.1(f), however, apart from the revegetation requirements in 310 IAC 12-5-59, 61, 62, 63, and 64.1. Soil replacement, land use, and revegetation are inextricable. Attainment of the approved postmining land use, as demonstrated by compliance with the revegetation requirements for that land use, insure that the land will be restored to a condition capable of supporting that use. 310 IAC 12-5-68 requires an operator reclaim either to the land use which existed prior to mining or to another approved "higher and better use." Section 68 does not require an operator to establish "land capability" of the approved postmining land use, as well as a variety of other land uses. The "land capability" of the two-prong test sought to be established by the DNR in the "special finding" is not supported by Indiana SMCRA.
(21) The documentation listed by the DNR in support of each "special finding" is general and pervasive. Soil types are listed. Literature is listed. Nowhere does the DNR provide findings which are derived from specific postmining land uses. The broad sweep of these "special findings" precludes administrative review. The broad sweep of these "special findings" does not comport with the narrow, precise strokes anticipated by the regulatory structure and embodied most directly by 310 IAC 12-5-12.1(f).
(22) The DNR has the burden of going forward to show under 310 IAC 12-5-12.1(f) that the land to be reclaimed under the subject permits embodies those "limited circumstances" where additional soils from subsoil layers are needed to comply with the revegetation requirements of 310 IAC 12-5 for the approved postmining land use. The documentation in the record fails to meet the burden because it fails to provide the site specificity anticipated by 310 IAC 12-5-12.1(f). The documentation in the record also fails to meet the burden because it applies a standard not set forth in 310 IAC 12-5-59, 61, 62, 63 or 64.1 for approved postmining land uses. The DNR's "special finding" exemplified by Permit S-246 is a template which could be applied to all non-prime farmland, resulting in universal application of the 18-inch soil replacement minimums. Public policy may support a universal 18-inch soil replacement minimum, but if so, it is a public policy properly embodied by rule or statute.
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FOOTNOTES
1. The parties may have some disagreement as to the amount of topsoil present. In "Peabody and Amax's Response to Directive for Clarification or to Augment the Administrative Record," they suggest "The topsoil present at the sites . . . averages 8-12 inches for all five permits." In "DNR's Response to Directive for Clarification or to Augment the Administrative Record," it suggests "individual sites can have topsoil depths ranging over twelve inches." This disagreement, if it truly is one, is not material to the issues presented. As a baseline to reclamation and in support of revegetation, the operators are required by Indiana SMCRA to replace all existing topsoil.
2. Whether a land use differing from the premining land use actually is a higher or better use may form the legitimate basis for a contest between an operator and the DNR or among an operator, the DNR, and an affected third-party. That issue is not, however, presented by these proceedings.
SULLIVAN CIRCUIT COURT
FINDINGS OF FACT AND CONCLUSIONS OF LAW
. . . The Court having considered the administrative agency record, briefs of the parties, proposed Findings of Fact And Conclusions of Law and oral aruguments at the hearing April 13, 1999, now enters the following findings pursuant to Ind. R. Tr. P. 52 (A)(2) and IC 4-21.5-5-14(c):
1. Petition, 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 surface coal mining known as the Indiana Surface Mining Control and Reclamation Act ("ISMCRA") and consisting of a statute, IC 14-34 (formerly 13-4.1) and implementing regulations, 310 IAC 12, approved by the Secretary of the Interior initially on July 26, 1982 (30 CFR 914).
2. Respondent, Peabody Coal Company ("Peabody") is a corporation which operates surface coal mining operations in the State of Indiana under ISMCRA permits issued by DNR.
3. On December 9, 1993, Peabody petitioned for administrative review of a decision by DNR to disapprove proposed revisions to Permit S-246 and S-274 which would restore topsoil only on non-prime farmland (i.e. cropland). On December 20, 1993, Peabody filed similar petitions for administrative review with respect to Permit A-10, Permit S-10 and Permit S-268.
4. The DNR made a written finding that topsoil only was inadequate to comply with "land capability restoration and revegetation requirements" of 310 IAC 12. The DNR required an unspecified (in thickness and location) portion of the subsoil to be removed and replaced.
5. The original soil (topsoil plus subsoil) replacement depth stated in the Peabody permits is 18 inches for non-prime farmland. This 18-inch minimum resulted from the all-inclusive regulatory policy disapproved by this Court in Indiana Department of Natural Resources v. Peabody Coal Company, Cause No. 77C01-9112-MI-232 (June 23, 1993). While that case was pending, Peabody and DNR agreed to continue implementation of the 18-inch soil replacement for cropland, but they also agreed to be bound by the decision of this Court on judicial review. Pursuant ot the agreement, Peabody with reservation of rights submitted permit revisions incorporating the 18-inch minimum soil replacement depths. Peabody further state that if the 18-inch policy was determined invalid, Peabody would submit a revision to seek removal of the language.
6. On April 14, 1998, the Administrative Law Judge entered his report, findings of fact and final order on PCC's request for administrative review of DNR's determination (the "Final Order"). The Administrative Law Judge entered the following findings among others:
(1) Indiana SMCRA requires all topsoil be removed as a separate layer from the area to be disturbed for surface coal mining activities. The topsoil must then be segregated. 310 IAC 12-5-12.1(a). If the topsoil is less than six inches thick, an operator may remove the topsoil and the uncosolidated materials immediately below the topsoil to a total depth of six inches "and treat themisture as topsoil." 310 IAC 12-5-12.1(a)(2). More stringent standards apply at 310 IAC 12-5-146 to the removal and segregation of topsoil for prime farmland, but none of the areas at issue in these proceedings contain prime farmland.
(2) The rule subsection of Indiana SMCRA which bears most directly upon topsoil and subsoil replacement for surace coal mining operations is 310 IAC 12-5-12.1(f). This subsection authorizes the DNR to require portions of the subsoil to be removed and segregated, then stockpiled and redistributed as subsoil, if the DNR finds these subsoil layers are needed to comply with the revegetation requirements of 310 IAC 12-5.
(3) The federal equivalent of 310 IAC 12-5-12.1(f) is 30 CFR 816.22(e). In its preamble to final implementation of this federal regulation, the Office of Surface Mining and Reclamation explained: "subsoil segregation may be required when the regulatory authority determines that it is necessary to achieve compliance with revegetation requirements. The regulatory authority will be in the best position to determine the extent of soil reconstruction needed to achieve the desired physical or chemical soil characteristics for revegetation. Since revegetation is required elsewhere, this rule does not impose an undue burden on operators: it provides recognition that in some limited circumstances separate handling of subsoil strata may be necessary to meet those standards."
(4) 30 CFR 816.22(e) also identifies what are the revegetation requirements. "The Regulatory Authority may require that the B horizon, C horizon or other underlying strata, or portions thereof, be removed and segregated. . . If it finds such subsoil layers are necessary to comply with the revegetation requirements of sections 816.111, 816.113, 816.114, and 816.116 of this Chapter." The counterparts to these federal regulations are set forth in Indiana SMCRA at 310 IAC 12-5-59, 61, 62, 63, and 64.1.
(5) These requirements are directed to approved postmining land uses. As provided in pertinent part in 310 IAC 12-5-59(a), "each person who conducts surface mining activities shall establish a diverse, effective, and permanent vegetative cover of the same seasonal variety native to the area and that supports the approved postmining land use." As provided in pertinent part in section 59(b), "All revegetation shall be carried out in a manner. . . compatible with the approved postmining land use. . ." Section 61speaks to seeding and planting during the first normal period for favorable planting conditions after final soil preparation following mining "with a temporary cover of small grains, grasses, or legumes until a permanent cover is established." Mulching and other soil stabiliation practices are prescribed by 310 IAC 12-5-62 which will provide adequate soil erosion control to be replaced by perennial species "approved by the postmining land use." Additionally, chemical sol stabilizers may be used "in conjunction with vegetative covers approved for the postmining land use." Section 64.1 identifies how success is measured for revegetation with respect to approved postmining land uses.
(6) The "special finding" made by the DNR for the subject permits requires a two-prong standard be met in order for an operator not to provide 18 inches as a standard soil replacement. Reference is made both to "land capability restoration" and to "revegetation" requirements.
(7) As described in Finding 5, compliance with the revegetation requirements for the approved postmining land use is a cornerstone of Indiana SMCRA. Since the approved postmining land use is either the same as or better than the premining land use, compliance with the revegetation requirements assures an operator must reclaim the land to as good as or a better condition than existed prior to mining.
(8) No general "land capability" standarsd is set forth in 310 IAC 12-5-12.1(f), however, apart from the revegetation requirements in 310 IAC 12-5-59, 61, 62, 63 and 64.1. Soil replacement, land use, and revegetation are inextricable. Attainment of the apporved postmining land use, as demonstratved by compliance with the revegetation requirements for that land use, insure that the land will be restored to a condition capable of supporting that use. 310 IAC 12-5-68 requires an operator reclaim either to the land use which existed prior to mining or to another apporved "higher and better use." Section 68 does not require an operator to establish "land capability" of the approved postmining land use, as well as a variety of other land uses. The "land capability" of the approved postmining land use, as well as a variety of other land uses. The "land capability" of the two-prong test sought to be established by the DNR in the "special finding" is not supported by Indiana SMCRA.
(9) The DNR has the burden of going forward to show under 310 IAC 12-5-12.1(f) that the land to be reclaimed under the subject permits embodies those "limited circumstances" where additional soils from subsoil layers are needed to comply with the revegetation requirements of 310 IAC 12-5 for the approved postmining land use. . .
Based on his findings, the Administrative Law Judge entered the following Final Order: Each of the permits at issue in Administrative Cause Numbers 95-503R, 93-504R, 93-512R, 93-513R, and 94-183R is remanded to the Department of Natural Resources so that it may determine whether portions of the subsoil should be removed and segregated, stockpiled and redistributed as subsoil in accordance with 310 IAC 12-5-12.1(d) and (e), where the portions are necessary to comply with the revegetation requirements of 310 IAC 12-5-59, 310 IAC 12-5-61, 310 IAC 12-5-62, 310 IAC 12-5-63, and 310 IAC 12-5-64.1. Any determination must be site specific and must include soil analysis by a qualified professional which demonstrates that soil replacement, in addition to existing topsoil, is needed toachieve the revegetation requirements of the approved postmining land use.
7. On May 14, 1998, the Department filed a timely petition for judicial review of the Final Order in the Sullivan Circuit Court. 8. The Department challenges certain factual findings made by the Administrative Law Judge and contends that the Final Order is not in accordance with law.
Based on the foregoing findings, the Court makes the foregoing conclusions of the law:
1. The Department is an administrative agency whose orders and determinations are subject to administrative and judicial review under IC 4-21.5.
2. IC 4-21.5-5 governs judicial review of administrative agency decisions. IC 4-21.5-5-14(d) provides:
"(d) The Court shall grant relief under Section 15 (IC 4-21.5-5-15) of this chapter only if it determines that a person seeking judicial relief has been prejudiced by an agency action that is:
(1) Arbitrary, capricious, an abuse of discretion, or otherwise no in accordance with law;
(2) Contrary to constitutional right, power, privilege, or immunity;
(3) In excess of statutory jurisdiction, authority, or limitation, or short of statutory right;
(4) Without observance of procedure required by law; or
(5) Unsupported by substantial evidence."
3. In reviewing the Administrative Law Judge's legal conclusions relating to I-SMCRA to determine whether the Administrative Law Judge correctly interpreted and applied the I-SMCRA legal requirements, this Court owes great deference to the Administrative Law Judge's interpretation of the surface mining law and will not overturn a reasonable interpretation of I-SMCRA or its regulations and its Federal counterparts.
4. The regulation which bears most directly on topsoil and subsoil is 310 IAC 12-5-12.1.
5. The clear language of the regulation requires replacement of topsoil only unless DNR finds subsoil is necessary to meet revegetation requirements.
6. The revegetation requirements, found in 310 IAC 12-5-59 thru 64.1, are clearly directed to the approved postmining land use. See also 30 CFR 816.11, 816.113, 816.114, and 816.116.
7. The Administrative Law Judge's conclusion that attainment of the apporved postmining land use, as demonstrated by compliance with the revegetation requirements for that land use, insures that the land will be restored to a condition capable of supporting that use is correct and is a reasonable interpretation of the regulations owed great deference by the Court.
8. The DNR contends that 310 IAC 12-5-68, requiring that the land be restored to a condition capable of supporting the uses it was capable of supporting before mining, supports its contention that the restored land must be capable of supporting a variety of uses.
9. Such a reading of the regulation ignores the clear language of 310 IAC 12-5-12.1. This section is clearly directed to revegetation requirements for the approved postmining land use. See also 30 CFR 816.22(e).
10. The Administrative Law Judge's conclusion that the "land capability" prong of two-prong test sought to be established by the DNR is not supported by I-SMCRA is a reasonable interpretation of law.
11. DNR also contends the Administrative Law Judge erred because IC 14-34-4-7(a), requiring the permit applicant to affirmatively demonstrate compliance with the statute, places the burden of proof on the permit applicant.
12. DNR's argument fails because, as set forth above, DNR used an erroneous legal standard in determining more than topsoil was necessary. Peabody was not required to demonstrate compliance with DNR's erroneous standard. As set forth in 310 IAC 12-5-12.1, Peabody's proposal for replacement of topsoil only is in compliance with the statute and sufficient soil replacement unless DNR "finds" more is required to comply with revegetation requirements.
13. The Final Order is in accordance with the law, and is not arbitrary, capricious, or an abuse of discretion, in excess of statutory jurisdiction, authority, or limitations, nor short of statutory right.
14. The Report,
Findings of Fact and Order of the Administrative Law Judge dated April 14, 1998, is in all things
affirmed. ALL IS SO ORDERED this 27th day of July 1999. (Signed P. J. Pierson, Judge of the
Sullivan Circuit Court.)