The Permit to Change the Shoreline of a Public Freshwater Lake for PL-16,040 and granted by the Department of Natural Resources in favor of George Lauder and Joan Lauder should be affirmed but with the following modifications:
(1) The lakeward face of the concrete seawall shall form a straight line and connect with
the lakeward face of existing seawalls on properties located immediately north and immediately south of the Lauder property. The length of this seawall is anticipated as approximately 70 feet.
(2) Fill placed landward of the seawall shall consist of nonhazardous earthen materials
consistent with the surrounding soils and terrain. Vegetation must be established, straw mulch placed, or erosion control blankets used to enhance stand establishment and to prevent erosion of the fill.
(3) No structure or fixture shall be placed within the filled area or upon the seawall which
might pose an additional safety hazard to persons moving on or immediately adjacent to the paved portion of CR 210.
(4) The permit authorized by PL-16,040 and this order shall become void if construction
has not been completed by June 1, 1999.
AMENDED FINDINGS OF FACT
STATEMENT OF THE CASE
1. The department of natural resources (the "DNR") is an "agency" within the meaning of IC 4-21.5-1-3.
2. This proceeding is governed by IC 4-21.5, sometimes referred to as the "administrative orders and procedures act" (or "AOPA").
3. The parties to this proceeding are the claimants, George and Joan Lauder (the "Lauders"), the DNR, and the Starke County Commissioners.
4. The proceeding was commenced when, on November 28, 1994, George Lauder by letter sought administrative review of a licensing decision by the DNR. The Starke County Commissioners and later Joan Lauder were subsequently added as parties needed for complete adjudication.
5. At issue is administrative review of an initial determination by the division of water of the DNR to condition the grant of a permit (delineated as PL-16,040) to the Lauders for the placement of a seawall along Bass Lake, Starke County, Indiana (the "subject permit").
6. The DNR is the state agency responsible for approving, conditioning, or denying permits to alter the bed or shoreline of a "public freshwater lake" under IC 13-2-11.1 (since recodified at IC 14-26-2).[FOOTNOTE 1] The natural resources commission ("NRC") has adopted a rule, codified at 310 IAC 6-2, to assist in the administration of IC 13-2-11.1.
7. When an administrative law judge conducts a hearing to review evidence on administrative review, the hearing is conducted de novo. The administrative law judge is required to weigh evidence and reach independent conclusions rather than deferring to the initial determination rendered by the division of water of the DNR. This status is in sharp contrast to judicial review by a trial court following a final agency action by the NRC. During judicial review, the trial court views the record in light most favorable to the administrative proceeding and does not reweigh the evidence. Arbitrary and capricious is a standard which applies on judicial review but not administrative review.
8. In this proceeding, the administrative law judge must weigh the evidence and reach independent conclusions rather than deferring to the initial determination made by the division of water of the DNR with respect to the subject permit.
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CHARACTERIZATION OF THE SITE AND THE PERMIT APPLICATION
9. Bass Lake, Starke County, covers approximately 1,345 acres and is the third largest
inland lake of natural origin in Indiana. Bass Lake is relatively shallow with an average depth of 3.5 feet and a maximum depth of 28 feet. The lakebed is primarily sand with some gravel deposits. A pressure ridge is often formed along the shoreline as a result of winter wave and ice action, which if undisturbed would ultimately form a protective dune, but
adjacent landowners typically flatten the land toward the shoreline. Large waves during storm events can cause a "complete turnover" when deeper inland lakes remain stratified. Bass Lake has very active boating activity during summer months, and this activity also contributes to its turbidity. Testimony of Robert Robertson.
10. Bass Lake is a "public freshwater lake" and subject to IC 13-2-11.1. Krivak v. DNR, Dempsey, Lenzen, and Amelio, 6 Caddnar 176 (1994).
11. The water level of Bass Lake has been legally established by the Starke Circuit Court at 713.65 feet elevation, Sea Level Datum. In the Matter of the Establishment of the Water Level of Bass Lake in Starke County, Indiana, Cause No. 15327, Starke Circuit Court, August 10, 1948 (Respondent's Exhibit 3).
12. The Lauders are the owners of real estate adjacent to Bass Lake in California Township and more particularly described as the Northwest Quarter (NW ¼) of the Southeast Quarter (SE ¼) of the Southwest Quarter (SW ¼) of Section 12, Township 32 North, Range 2 West (Bass Lake Quadrangle). The real estate is in the vicinity of Lot 11 and Lot 12 of the Fitz Subdivision for Bass Lake. This real estate is referenced here as the "subject property." Testimony and Lauders Application (Respondent's Exhibit 1).
13. Crossing the subject property is a roadway, currently maintained by the Starke County Commissioners and known as County Road 210 ("CR 210"). CR 210 was established between 1905 and 1907 as an Indiana state highway, with a dedicated fifty foot right-of-way. In 1967, the Indiana Department of Highways terminated state maintenance and transferred ownership to Starke County. Claimant's Exhibit 5.
14. The shoreline of Bass Lake along the subject property is undergoing serious and continuing erosion. The erosion caused the lake to move landward approximately six feet between 1988 and 1994. Additional erosion has taken place since 1994, and the shoreline in early 1997 was within approximately three feet of the paved portion of CR 210. Testimony and Lauders Application (Respondent's Exhibit 1).
15. In 1994, the Lauders filed their application for the subject permit. By the application, the Lauders sought authorization to place a concrete seawall along approximately 70 feet of the shoreline within the subject property. Testimony and Lauders Application (Respondent's Exhibit 1).
16. The subject property is located in a highly-developed area characterized by residences and summer vacation homes. Seawalls are already in existence along the shoreline of the properties immediately north and immediately south of the subject property. In its geographical context, the proposed seawall does not raise primary concerns for aesthetics or the environment.[FOOTNOTE 2]
17. The dispute among the parties does not center upon whether a seawall can be placed or whether the seawall should be constructed of concrete or another material. Rather the dispute centers upon where the face of the seawall should rest relative to Bass Lake, CR 210, and the subject property.
18. Stated in general terms, the Lauders seek placement of a seawall along a line within the present shoreline of the lake, outside the right-of-way for CR 210, and somewhat lakeward of the seawalls on adjacent properties. They contend the placement of a seawall as requested would benefit their enjoyment of the subject property and would also help control siltation and soil erosion into Bass Lake.[FOOTNOTE 3]
19. The Starke County Commissioners concur with the Lauders, at least insofar as the commissioners would prefer the seawall to be outside the right-of-way to CR 210. On the other hand, Harry Harness, Starke County Surveyor, testified he believed the commissioners would welcome any reasonable solution. He also testified that one of the functions of a county surveyor was to determine highway rights-of-way, but the commissioners did not authorize a survey to identify the right-of-way of CR 210 at the subject property.[FOOTNOTE 4]
20. Harry Harness examined the subject property in 1996
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and performed preliminary measurements relative to the positioning of the subject property, CR 210, and the shoreline of Bass Lake. These measurements did not include a reference to any known point. Harness testimony. The measurements by Harness are without probative value as a legal or professional survey. Neither was other creditable evidence presented upon which to delineate the right-of-way for CR 210 at the subject property.
21. Harness is a former Indiana State Trooper (20 years) and a former Starke County Highway Superintendent (four years). With this experience and background, he reflected that the seawall placement as urged by the DNR would be "very close" to the traveled portion of CR 210 and would pose a safety hazard to the motoring public. Harness urges a seawall on the subject property which connects on a straight line the corners of the seawalls on the two adjoining properties.
22. No creditable evidence was tendered by the Department to rebut the testimony by Harness that placement of the seawall as specified in the approved permit would create a safety hazard to the motoring public on CR 210. The testimony of Harness is persuasive relative to roadway safety.[FOOTNOTE 5]
23. The DNR gave initial approval for placement of the seawall at what the division of water determined to be the "shoreline" of the lake. The shoreline was determined based on a 1994 site inspection with calculations of where the water and land would meet at the legal elevation of the lake. The approval is described in its "Permit to Change the Shoreline or Bed of a Public Freshwater Lake" for the subject property dated November 10, 1994.
SHORELINE DELINEATION
24. In support of the initial determination, the DNR cites 310 IAC 6-2-16(b)(2) which authorizes the DNR to issue a permit for a new seawall if the DNR "determines that the location of the lakeward face of the sea wall is along the waterline or shoreline." The rule does not specify how the waterline or shoreline is to be delineated.[FOOTNOTE 6]
25. As a matter of internal policy, the division of water of the DNR uses the date of the site inspection as the measuring date for identifying the shoreline. Even so, the DNR may allow fill to relocate the shoreline lakeward if there is some "public benefit."[FOOTNOTE 7] As a "sound engineering practice," the DNR will "round the corners between existing seawalls" to reduce the likelihood that debris will be collected or that erosion will occur. Scott McClarney testimony and McClarney affidavit of March 1, 1995.
26. The internal policy is not in itself unreasonable, but it must be applied with flexibility. Indeed, consideration by the DNR of public benefits and sound engineering practices demonstrates the agency has not historically adhered to a slavish application of the internal policy. Nothing in the governing law precludes the DNR from considering shoreline erosion or other historical factors in identifying the shoreline of a lake. Recent erosion may properly be considered, particularly where evidenced by the positioning of adjacent seawalls. The internal DNR policy is a rule of thumb and not a rule of law.
27. In delineating the shoreline for the Lauders, recent erosion and the fixed location of the roadway should be considered. The shoreline should be designated in a way which is harmonious with the shorelines of adjoining properties and consistent with public safety.
PUBLIC TRUST DOCTRINE
28. The DNR also argues that placement of the seawall lakeward of the shoreline violates the "public trust doctrine." As provided by IC 13-2-11.1-2(b), the state holds public freshwater "lakes in trust for the use of all of its citizens for recreational purposes."[FOOTNOTE 8]
29. Historically, the public trust doctrine in natural resources law has been closely associated with the state sovereign ownership doctrine. The latter doctrine holds that when states achieve sovereignty, one consequence is immediate state ownership of certain lands and waters. When Indiana achieved statehood in 1816, it obtained title to its navigable waters. State v. Kivett, 228 Ind. 623, 95 N.E.2d 145 (1950) and The Public Trust Doctrine, 4 Waters and Water Rights §30.02 (Michie Co. 1996).
30. At the core of the public trust doctrine is the fiduciary obligation of the state to hold state sovereign
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resources for the benefit of the general public. State sovereign ownership and the public trust doctrine are "founded upon the necessity of preserving to the public the use of navigable waters from private interruption and encroachment." Phillips Petr. Co. v. Mississippi, 484 U.S. 469, 488 (1988).
31. The NRC has found that IC 13-2-11.1-2(b) "amounts to a statutorily created public trust in which the DNR is the trustee" of public freshwater lakes. Phillabaum v. DNR, 6 Caddnar 6 (1991). Similarly, a judicial inclination to merge IC 13-2-11.1 with the Indiana law governing navigable waters is demonstrated by Bath v. Courts, 459 N.E.2d 72, Ind. App. (1984); there the Indiana Court of Appeals found it unnecessary to determine whether a public freshwater lake was navigable, then it applied both IC 13-2-11.1 and statutory provisions governing navigable waters to render a decision. Acknowledging application of the public trust doctrine to Indiana public lakes generally is Lake Sand Co. v. State, 68 Ind.App. 439, 120 N.E. 714 (1918).
32. Placement of the seawall along a shoreline harmonious with adjoining seawalls does not infringe upon public trust waters. Although the legal shoreline of a lake or navigable water may shift with accretion or erosion due to natural conditions, accretion or erosion attributable in part to man-made structures does not generally result in a change to the legal shoreline. To the extent recent ice erosion results from the presence adjoining seawalls, public trust lands are not created. Considering the consequence of accretion due to man-made structures is Burk v. Simonson, 104 Ind. 175, 2 N.E. 309, 54 Am. Rep. 304 (1855).
33. Even assuming arguendo that lands to be filled landward of the seawall are within the public trust, the public trust doctrine is not an absolute. An exception to the restriction on alienation of public trust lands is provided where the purpose of alienation is for a public purpose or benefit. Illinois Central R.R. Co. v. Illinois, 146 U.S. 387 (1892). Examples of valid alienations cited in Illinois Central at page 453 include the "the foundation for wharves, piers, docks and other structures in aid of commerce."
34. In addition to Phillabaum cited previously, the DNR in its briefs identifies two other administrative decisions by the NRC in which it applied the public trust doctrine to activities along public freshwater lakes. These cases reflect that there is a "broad public right to the waters of a public freshwater lake," and in order to fill a portion of the lake, "very special circumstances" must be present. Maloney v. DNR, 6 Caddnar 7 (1990). "The public trust doctrine applies to public freshwater lakes. . . . The public trust doctrine ordinarily prohibits the annexation of a portion of the bed of a public freshwater lake for a private purpose." [Emphasis added.] Dickerhoff and Bolinger v. DNR, 6 Caddnar 65 (1992), citing Phillabaum.[FOOTNOTE 9]
35. Private landowner initiatives to place fills were ultimately denied in Phillabaum, Maloney, and Dickerhoff. Upon their facts, these denials properly demonstrated sensitivity for the public resources of a public lake. Yet the facts in the present case include a critical element not present in those prior decisions. The waters of Bass Lake are eroding toward, and are in dangerous proximity to, the traveled portion of public roadway CR 210. A very modest lakefill behind a seawall, incorporating exclusively areas which were until recently dry land, would support safety for the motoring public. In Phillabaum, Maloney, and Dickerhoff only private purposes were to be served. In the instant case, the placement of a private seawall at a safe distance from CR 210 would also serve a public purpose.
36. In the "DNR's Post-Hearing Brief," the Department argued that if lands subject to the public trust doctrine were filled by placement of the seawall, the lands would be "subject to the public trust doctrine, and [should be] dedicated to the general public use."
37. States have addressed fills of public trust lands in a variety of ways. The most-notable illustration in Indiana is the placement of fill within the public trust lands of Lake Michigan, which requires a permit pursuant to IC 14-18-6 and payment to the treasurer of state of $100 before a land patent is issued to the private landowner. Another illustration is offered by Ohio, which provides by rule for a schedule of "lease" payments as determined on an individual site and use basis for fills within Lake Erie. Fills placed before 1989 (and not subject to the terms of a site-specific lease) are assessed at $0.01 per square foot, annually, with an escalator based upon the National
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Consumers Price Index. Ohio Department of Natural Resources Rules for Leasing of Lake Erie Submerged Lands (1501-6-01 to 1501-6-06).
38. The "Department of Natural Resources' Argument on Issues of Dedication" urges that "any fill placed lakeward of the legal shoreline be dedicated to the public. Further, should a boat ramp[FOOTNOTE 10] be permitted, despite it's [sic.] obvious lack of public benefit, it too, should be dedicated to the public through the recording of a deed covenant. The site should be marked by a sign which states public access site'."
39. Recordation of a deed covenant, and even some payment for a land patent or for an annual lease fee, may be legally supportable.
40. Marking the subject property with a sign marked "public access site" is neither factually nor legally supportable. As a factual matter, a primary consideration to placement of the seawall in a straight line harmonious with adjoining properties, and at a greater distance from CR 210 than determined by the division of water, is public safety. Making the subject property a "public access site" would demonstrate a callous disregard for public safety. As a legal matter, real estate between CR 210 and the seawall is in private ownership and not by any measure public trust land. The public has no right or privilege of perpendicular access to cross or trespass upon privately owned land in order to reach the water.[FOOTNOTE 11] To appropriate the Lauders land as a public access site would constitute an unlawful taking without compensation.
CONCLUSIONS OF LAW AS APPLIED TO THE PROCEEDING
41. Hearing de novo of this proceeding, and application of pertinent legal principles, requires that modifications be made to the subject permit. The Permit to Change the Shoreline of a Public Freshwater Lake issued by the DNR in favor of the Lauders on November 10, 1994 must be modified consistent with these Findings of Fact and Conclusions of Law and as more specifically set forth in the Order.
FOOTNOTES
1. The recodification was accomplished through P.L.-1995. The recodification did not affect any proceedings begun before July 1, 1995. IC 14-8-3-4(a). Because this proceeding was initiated in November 1994 when George Lauder requested administrative review, the recodification does not apply. If the proceeding were governed by IC 14-26-2, however, the result would be the same. See, also, IC 14-8-3-5.
2. The DNR would require several "specific conditions" in the permit addressed to environmental protection, such as requiring the revegetation of disturbed areas and the control of erosion. These conditions are not in dispute. In the "Report of Final Prehearing Conference and Notice of Hearing" entered on October 16, 1995, the factual issues in dispute were identified as
(1) how and when the shoreline of Bass Lake has been altered at the subject property by water and ice erosion;
(2) the location of the easement in favor of Starke County (or one of its subdivisions) with respect to County Road 210; and
(3) whether, or the extent to which, placement of a seawall, the continued erosion of the Bass lake shoreline, or both, will contribute to a traffic safety hazard on CR 210.
3. The record is devoid of credible evidence that the placement of a seawall will provide a net environmental benefit to Bass Lake. On the other hand, neither is there evidence that its placement will cause significant environmental harm. The issue is not whether, but where, a seawall is to be constructed. The "DNR's Response to Briefs of Claimant and Third Party Respondent County" is persuasive: "Lauder also argues that '[b]y ignoring the benefit provided to Bass Lake of undesirable erosion and silting, the DNR is not even considering environmental benefits.' Lauder Brief, p. 9. This argument might be tenable if the DNR had denied altogether Lauder's application for construction of a seawall. However, the DNR approved construction of a seawall here. This issue is where that seawall is to be located."
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4. Although the hearing was conducted in the county seat, no commissioner testified. The record does not disclose what are the rights and privileges of the Starke County Commissioners relative to the right-of-way. Must the commissioners approve every construction activity within the right-of-way? If so, what are the standards for approval or disapproval of an activity? Do the commissioners claim a regulatory or proprietary interest in the right-of-way? It cannot be gainsaid that the commissioners have a legitimate concern in maintaining a roadway which is safe for the motoring public. The concern is part and parcel of the "public trust doctrine" discussed later, however, and must be evaluated based upon the evidence in the record.
5. In the "Brief in Support of Starke County's Position" filed on April 3, 1997, counsel for the Starke County Commissioners urges that there is an infringement upon its sovereignty for the DNR to require the placement of a seawall within its right-of-way. "Starke County doesn't want the lake or sea wall in their easement of CR 210 because of safety concerns." This argument fails to match the evidence. First, the right-of-way has not been delineated, although the Starke County Commissioners could have caused the Starke County Surveyor to delineate the right-of-way. Second, assuming arguendo the right-of-way is as speculated, Bass Lake is already within the right-of-way. Third, if the right-of-way is as speculated, an adjoining seawall is already in the right-of-way. Fourth, the DNR is not requiring the placement of a seawall anywhere. it is merely the permitting authority for the placement of structures within public freshwater lakes by adjoining property owners, in this instance the Lauders. If the interests of DNR are not absolute, neither are those of the Lauders or Starke County. Finally, and perhaps most importantly, the only witness with expertise as to roadway safety was Harry Harness, who testified that a straight-line seawall connecting the two adjoining seawalls was appropriate.
6. The terms "waterline" and "shoreline" are synonymous.
7. There was some suggestion the DNR has interpreted "public benefit" to relate only to public access. Testimony of Scott McClarney. Nothing in the history of 312 IAC 6-2 mandates so narrow an interpretation. Both the ordinary meaning of "public benefit" and the public trust doctrine, discussed later, support broader interpretations.
8. With recodification, see IC 14-26-2-5(d)(2).
9. There is language in Phillabaum which might suggest the public trust doctrine provides absolute state control which can never be encumbered. The language was unnecessary to the outcome, however, and must properly be limited. Dickerhoff is the more recent pronouncement and is in accord with the common law.
10. The evidence does not allow a detailed analysis as to the propriety of the placement by the Lauders of a boat ramp apart fro the location and placement of a seawall. Reference is made, however, to the permit condition posed by the order below: "No structure of fixture shall be placed within the filled area or upon the seawall which might pose an additional safety hazard to persons moving on or immediately adjacent to the paved portion of CR 210." This condition would also apply to the placement of a boat ramp.
11. Diversion Lake Club v. Heath, 126 Tex. 129, 138-139 (1935) cited in Slade, Putting the Public Trust Doctrine to Work (1990). See also Hoban v. Bucklin, 88 N.H. 73, 88 (1936) which recognized the exclusive rights of the property owner adjacent to a lake for lands outside the shoreline.