TOPICS:

PRESIDING = JUDGE:

Mary L. Davidsen

PARTY REPRESENTATIVES:

IDEM: &= nbsp; &nbs= p; &= nbsp; Julie E. Lang, Esq.

Pro se Petitioners:&nb= sp; &= nbsp; Frank Revalee, Gary Hoagland

Respondent/Permittee:&= nbsp; &nbs= p; Philip B. McKiernan, Esq., Joseph M. Hendel, Esq.;

&nbs= p; &= nbsp; &nbs= p; &= nbsp; Hackerman Hulett & Cracraft, LLP

ORDER ISSUED:

December 15, 2010

INDEX CATEGORY:

Water

FURTHER CASE ACTIVITY:

Case in litigation during non-final order

[2010 OEA 13nf, page 14 begins]

STATE OF INDIANA &= nbsp; &nbs= p; ) &= nbsp; &nbs= p; BEFORE THE INDIANA OFFICE OF

= ; &n= bsp; = ; &n= bsp; = ; ) &= nbsp; &nbs= p; ENVIRONMENTAL ADJUDICATION

COUNTY OF MARION<= /st1:PlaceName> &= nbsp; )

IN THE MATTER OF: = &nb= sp; = &nb= sp; = )

= ; &n= bsp; = ; &n= bsp; = ; &n= bsp; = ; &n= bsp; )

OBJECTION TO ISSUANCE OF &nbs= p; &= nbsp; &nbs= p; &= nbsp; )

CONSTRUCTION PERMIT APPLICATION FOR= &nb= sp; )

SANITARY SEWER PERMIT APPROVAL NO. 19694 )

AQUA INDIANA, INC. = ; &n= bsp; = ; &n= bsp; = ; ) &= nbsp; &nbs= p;

FORT WAYNE, ALLEN COUNTY, <= st1:place w:st=3D"on">INDIANA &n= bsp; )

______________________________________________ ) &= nbsp; CAUSE NO. 10-W-J-4380

Frank Revalee, Gary Hoagland, = &nb= sp; = &nb= sp; )

Pe= titioners, &= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp; &nbs= p; )

Aqua Indiana, Inc., &nbs= p; &= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp; )

Permittee/Respondent, &nb= sp; = &nb= sp; = &nb= sp; )

Indiana Department of Environmental Management, = )

Respondent &n= bsp; = ; &n= bsp; = ; &n= bsp; = ; )

= FINDINGS OF FACT, CONCLUSIONS OF LAW and ORDER on STAY HEARING

= ; This matter is before the Office of Environmental Adjudication (“OEA” or “Court”) follo= wing a stay hearing, held on August 31, 2010, and on the parties’ later submission of proposed findings, on Petitioners Frank Revalee and Gary Hoagland’s (“Petitioners”) Petition for Review of the Ind= iana Department of Environmental Management’s June 1, 2010 Decision of Approval Permit No. 19694 issued to Utility Center, Inc., d/b/a Aqua Indian= a, Inc., for the construction of a sanitary sewer system extension in Fort Way= ne, Allen County, Indiana. The Ch= ief Environmental Law Judge (“ELJ”) having considered the petition, record of the proceeding, evidence, and proposed findings of fact, conclusi= ons of law and orders now finds that judgment may be made upon the record as to= whether Permit No. 19693 should be stayed pending a final order in this cause. The ELJ, by a preponderance of the evidence, and being duly advised, now makes the following findings of fact = and conclusions of law and enters the following non-final Order:<= /b>

FINDINGS OF FACT<= /o:p>

1.      Pe= rmittee/Respondent Utility Center, Inc., d/b/a Aqua Indiana, Inc. (“Respondent” or “Aqua”) operates a sanitary sewer system in Fort Wayne, Allen County, Indiana.   On June 1, 2010, the Indiana Department of Environmental Management (“IDEM”) issued Permit N= o. 19694 (“Permit”), approving Aqua’s application to extend = the existing sanitary sewer system in the Cadillac Drive area.

[2010 OEA 13nf, page 15 begins]

2.      The Permit specifications authorize Aqua to install approximately 2,890 feet of 8-inch PVC pipe (SDR 35) and 361 feet of 8-inch diameter PVC (SDR 21) ASTM D2241 (“Project”) in order to provide sanitary sewer service to= 31 single-family homes along Cadillac Drive and Dicke Road, Fort Wayne, Allen County, Indiana (“Site”).

3.      In addition to imposing specific and general conditions, the Permit requires t= he Project to conform to all provisions of 327 IAC 3.

4.      Pe= titioners are property owners in the Cadillac Drive area.&n= bsp; Petitioners submitted letters objecting to the Permit on June 14, 20= 10 and June 15, 2010, respectively, OEA deemed Petitioners’ letters to be Petitions for Administrative Review (“Petition”), and assigned = the above-captioned cause number. After filing her Petition, Ms. Kimberly Snyder-Quinn’s did not participate = in these proceedings; thus, her Petition was dismissed per Court Order issued = on August 6, 2010.

5.      In= their Petitions, Petitioners requested that the Permit be stayed. OEA set a stay hearing on July 22,= 2010, continued at the parties’ request until August 31, 2010.

6.      At= the August 31, 2010 Stay Hearing, Petitioner Revalee did not attend in person o= r by counsel, nor did he seek leave from attending. Petitioner Hoagland attended in pe= rson and represented himself. Aqua appeared by legal counsel, and its witness, project manager Mr. Patrick Callahan, P.E. IDEM appeared = by legal counsel and by witness Mr. Dale Schnaith.

7.      In= his Petition, during the stay hearing, and in his September 13, 2010 Closing Comments letter, Petitioner Hoagland presented testimony on following issue= s:

a.       Th= e home owner cost of the proposed project is over $20,000 per property. The project does not include all o= f the total properties in the area, only 70%.

b.      To support the Project, each home owner would experience a $320 per month cost= increase, placing a sizeable financial burden on the property owners.

c.       The project will be funded totally by the property owners, without contribution from Aqua or the City of Ft. Wayne.

d.      A = nearby area east of Lutheran Hospital has been designated for future commercial development by the Ft. Wayne Planning Commission. The proposed 8-in= ch sewer lines lack capacity sufficient to support future commercial developme= nt, therefore new, larger sewer lines would be required in the future.

e.       The proposed 8-inch sewer line (serving 31 properties) will connect to the exis= ting 8-inch line which already services several commercial businesses located on= Jefferson Boulevard. Therefore, it is questionable as to whether the current line will support the additional properties.

f.        Mr. Hoagland noted that local health officials were involved in the project are= a, due to e. coli contamination and runoff.

[2010 OEA 13nf, page 16 begins]

g.       In response to circumstances presented by Aqua that one of the properties which would be served by this project has a septic tank which overflows sewage on= to the ground unless it is emptied monthly, Mr. Hoagland testified that the properties are adequately and safely served by existing means.

h.       At= the stay hearing, Mr. Hoagland confirmed his testimony on cross examination, th= at he was not aware of any laws or rules that were violated by IDEM’s issuance of Permit 19694.

8.      Aq= ua is responsible to serve an area of Allen County which includ= es the project area. See Testimony of Patrick Callahan. Requests from area residents led A= qua to pursue the project. = Id.

9.      Pr= oject plans incorporated into the Permit show that 31 homes[1] will connect to the sanitary sewer plant.&= nbsp; The Project will connect to Aqua’s existing sanitary sewer sys= tem at the intersection of Sco= ttwood Drive and Cadillac Drive. Testimony of Patrick Callahan.= From the interconnection point at Scottwood Drive and Cadillac Drive, the wastewater gene= rated in the project area will flow to an existing wastewater treatment facility through existing 8-inch and 15-inch mains.= The current 15-inch main currently operates at less than half of its planned capacity. Id. When completed, the 8-inch main= s will have a service capacity of 400 homes, but will serve 31 homes. = Id.   The 15-inch mains will have = a service capacity of 1300 homes when completed, but will serve the equivalent of 64 homes. Id.

10. Mr. Hoagland cross-examined Mr. Callahan about approximately 12 lots north and = east of the project area, which Mr. Hoagland stated might be subject to commerci= al development in the future. Due to the topography of the project area, and the 12 lots to the north and east, the = area to the north and east of the project area would not be served by the facili= ties installed in the project area. Testimony of Patrick Callahan.

11. Aq= ua presented information to residents for financing their share of the project costs. Id.

12. Mr. Callahan presented evidence that if the project was stayed, Aqua would suff= er a hardship of complicating its ability to manage the project and delay the recovery of costs already invested in the project. Testimony of Patrick Callahan. A delay in the project might c= ause hardship to some residents within the project area now experiencing septic system failures. Id.

13. At= the stay hearing, IDEM presented evidence that the rules governing issuance of sewer construction permits do not have any provisions, requirements, or limitations related to the financial burden placed on affected property own= ers by such construction. See Testimony of IDEM Office of Water Quality Facility Construction and Support Section Chief Dale Schnaith.

[2010 OEA 13nf, page 17 begins]

cONCLUSIONS OF LAW

=

= 1.&n= bsp;            = ;            &n= bsp; The Indiana Department of Environmental Management (“IDEM”) is authorized to implement and enforce specified Indiana environm= ental laws, and rules promulgated relevant to those laws, per I.C. § 13-13, = et seq. The Office of Environmental Adjudi= cation (“OEA”) has jurisdiction over the decisions of the Commissioner= of IDEM and the parties to this controversy pursuant to I.C. § 4-21.5-7, = et seq.

= 2.&n= bsp;            = ;            &n= bsp; This is a non-final Order issued pursuant to I.C. § 4-21.5-3-27. Findings = of Fact that may be construed as Conclusions of Law and Conclusions of Law that may be construed as Findings of Fact are so deemed.

= 3.&n= bsp;            = ;            &n= bsp; This Court must apply a de novo standard of review to this proceeding when determining the facts at issue. Indiana<= /i> Dept. of Natural Resources v. United Refuse Co., Inc., 615 N.E.2d 100 (Ind. 1993), Jennings Water, Inc. v. Office of Envtl. Adjudication, 909 N.E.2d 1020, 1025 (Ind. Ct. App. 200= 9). Findings of fact must be based exclusively on the evidence presented to the Environmental Law Judge (“ELJ”), and deference to the agency’s initial factual determination is not allowed. Id.; I.C. § 4-21.5-3-27(d). “The ELJ . . . serves as the= trier of fact in an administrative hearing and a de novo review at that level is necessary. Indiana Department of Natural Resources v. United Refuse Co., Inc., 615 N.E.2d 100, 103 (Ind. 1993).<= span style=3D'mso-spacerun:yes'> The ELJ does not give deference to= the initial determination of the agency.” Indiana-Kentucky Elec. Corp v. Comm’r, Ind. Dep’t of Envtl. Mgmt., 820 N.E.2d 771 (Ind. Ct. App. 2005). “= De novo review” means that “all issues are to be determined an= ew, based solely upon the evidence adduced at that hearing and independent of a= ny previous findings.” = Grisell v. Consol. City of Indianapolis, 425 N.E.2d 247 = (Ind. Ct. App. 1981).

= 4.&n= bsp;            = ;            &n= bsp; Per 315 IAC 1-3-2.1(b), a party requesting a stay of effectiveness has the burden of demonstrating, by a preponderance of the evidence, that:

= (a)&= nbsp;           &nbs= p;            The person will suffer irreparable harm pending the resolution of the case on the merits because its remedies at law are inadequate;

= (b)&= nbsp;           &nbs= p;            The person is likely to prevail on the merits;

= (c)&= nbsp;           &nbs= p;            The threatened injury to the person requesting the = stay outweighs the threatened harm that the grant of the stay may inflict on the other party; and

= (d)&= nbsp;           &nbs= p;            The public interest will be served by the grant of a stay.

= 5.&n= bsp;            = ;            &n= bsp; In order to grant a stay in this cause, OEA must fi= nd that Petitioner Hoagland presented evidence of all four elements stated in 315 I= AC 1-3-2.1(b). Thus, Petitioner Hoagland must have presented evidence of irreparable harm in the event that= a stay is not granted; that he is likely to prevail on the merits of this cas= e; that if a stay is not granted, the threatened injury to Petitioner Hoagland will outweigh the threatened harm to Aqua if a stay is granted; and that the public interest will be served by the grant of a stay.

[2010 OEA 13nf, page 18 begins]

= 6.&n= bsp;            = ;            &n= bsp; A stay is equivalent to a preliminary injunction. A party seeking a preliminary inju= nction must show injury to be imminent, certain and irreparable, in order to show a prima facie case for relief. = Courts are limited to issuing injunctive relief sparingly, only in rare circumstan= ces where the law and facts are clearly within the favor of the party seeking t= he injunction. In the Matter of Southern Indiana Gas and Electric Company v. Commissioner of the Indiana Department of Environmental Management, OEA= Cause No. 98-A-J-2129, 1999 WL 202455 (March 24, 1000); Doe v. O’Connor, 781 N.E.2d 672, 674 (Ind. 2003); Indiana Family and Social Services Administration v. Walgreen Co., 769 N.E.2d 158 (Ind. 2002); Scales v. Hospitality House of Bedford= , 593 N.E.2d 1283 (Ind. Ct. App. 1992).

= 7.&n= bsp;            = ;            &n= bsp; Petitioners failed to present evidence that they wi= ll suffer irreparable harm, or that they lack adequate legal remedies if the Permit is not stayed and construction of the Project begins during administrative review before OEA. Should OEA determine that IDEM should not have issued the Permit, Aq= ua will not be able to use the Project. Depending on the type of harm suffered, Petitioners would be able to seek redress through a court with jurisdiction over the type of harm averred. Should the Project be stayed, Aqua and the local citizens will suffer irreparable harm of increas= ed costs and harm incidental to insufficient sewer facilities, such as e. coli contamination and failed s= eptic systems.

= 8.&n= bsp;            = ;            &n= bsp; Petitioners did not present a preponderance of evid= ence that they will suffer irreparable harm pending the resolution of the case on the merits because its remedies at law are inadequate, as required in 315 I= AC 1-3-2.1(a). Nor did Petitione= rs present a preponderance of evidence that the threatened harm to them outwei= ghs the threatened harm that the grant of a stay would inflict on Aqua, as requ= ired in 315 IAC 1-3-2.1(c).   = For lack of a preponderance of evidence on two of the four required elements fo= r a stay, Petitioners’ request for a stay must be denied.

= 9.&n= bsp;            = ;            &n= bsp; To prevail on the merits of this case, Petitioner Hoagland must show that the applicable regulations for construction of sani= tary sewers stated in 327 IAC 3 were not met in the Permit issued to Aqua. OEA reviews IDEM’s decisions= to determine whether IDEM acted in conformity with controlling statutes and regulations. See, g.g, In re: Objection to Issuance of Section 401 Water Quality Certification COE ID No. 198800247 Conagra Soybean Processing Co., 1998 WL 918585, at *3, OEA Cause = No. 98-W-J-2052 (Nov. 12, 1988). Allegations that fail to raise any issue concerning compliance with controlling legal requirements fail to state a valid claim. In re: Objections to Issuance of Public Water Supply Construction Permit No. WS-2924 Issued to the City of <= st1:place w:st=3D"on">Mishawaka, Indiana, 1989 W: 436899, at *6, OEA Cause No. 89-W-J-241 (IDEM, Sept. 1, 1989). IDEM is prohibited from expanding = its requirements for such a Permit beyond those specified in 327 IAC 3.

[2010 OEA 13nf, page 19 begins]

= 10.&= nbsp;           &nbs= p;          Mr. Hoagland’s testimony and pleadings show t= hat Petitioners oppose the Project based on the costs they may incur if they are required to connect to the completed Project. Determination of the appropriate c= ost is allocated to other governmental entities, not OEA or IDEM. Neither OEA nor IDEM may consider = cost in determining whether a project was properly approved, in compliance with = 327 IAC 3. See In Re: Wastewater Treatment Plant and Sanitary Sewer Construction Approval No. 16684, Sidney, Indiana, 2004 OEA 99, 102.

= 11.&= nbsp;           &nbs= p;          Mr. Hoagland’s claim that the Project will not sufficiently accommodate future commercial development, and will require replacement after it is paid for the by the residents does not raise an iss= ue within IDEM or OEA’s authority to review under 327 IAC 3. OEA cannot base its decision to gr= ant a stay or to deem the Permit invalid based upon pecuniary or economic impact,= or upon speculations about possible future impact. In re: Objection to the Denial of Water Quality Certification 2005-576-RDC-A, 2007 OEA 82, 91. In this case, a preponderance of t= he evidence supported the opposite conclusion, that the Project will be able to accommodate additional usage, but that commercial development anticipated by Mr. Hoagland would not involve the Project facilities.

= 12.&= nbsp;           &nbs= p;          Mr. Hoagland confirmed his testimony on cross examination, that he was not aware of any laws or rules that were violated = by IDEM’s issuance of Permit 19694.&nbs= p;

= 13.&= nbsp;           &nbs= p;          Conversely, IDEM and Aqua each presented evidence t= hat Petitioner would not prevail on the merits in this case. Aqua presented evidence that the capacity of the proposed sewer lines would support projected volumes in the= Cadillac Drive area. Testimony by IDEM concu= rred, and further provided a preponderance of evidence that the Permit complies w= ith requirements stated in 327 IAC 3. IDEM was= not authorized to review the financial impact a project might have of property owners. IDEM further provided= a preponderance of evidence that its review, although excluding review of the financial impact on property owners, complied with the authority conveyed to IDEM by the Indiana Legislature and the Water Pollution Control Board. Petitioner Hoagland did not present evidence to refute testimony that the Permit complied with 327 IAC 3, as st= ated by IDEM and Aqua.

= 14.&= nbsp;           &nbs= p;          Petitioners did not present a preponderance of evid= ence that they are likely to prevail on the merits, as required in 315 IAC 1-3-2.1(b). For lack of a preponderance of evidence of one of the four required elements for a stay, Petitioners’ request for a stay must be denied.

= 15.&= nbsp;           &nbs= p;          Petitioners did not present a preponderance of evid= ence that the public interest would be served by the grant of a stay in this cas= e, as required in 315 IAC 1-3-2.1(d). The Project Area is experiencing e. coli contamination. Its s= eptic systems are failing. For these reasons, other residents in the Project Area requested Aqua’s develop= ment of sanitary sewer service. A preponderance of evidence showed that the public interest would be served by denying a stay of the Permit.

[2010 OEA 13nf, page 20 begins]

= 16.&= nbsp;           &nbs= p;          Petitioners did not present a preponderance of evid= ence to meet their burden of persuasion that a stay should be issued per 315 IAC 1-3-2.1. Petitioners failed t= o show that they will suffer irreparable harm pending the resolution of the case on the merits because its remedies at law are inadequate, as required in 315 I= AC 1-3-2.1(a). Petitioners failed to show that they are likely to prevail on t= he merits of their case, as required in 315 IAC 1-3-2.1(b). Petitioners failed to show that th= at the threatened injury to them outweighs the threatened harm that the grant of a stay might inflict on Aqua, as required in 315 IAC 1-3-2.1(c). Petitioners failed to show that the public interest would be served by granting their request for stay, as requ= ired in 315 IAC 1-3-2.1(d). OEA ha= s no authority to issue a stay of construction permit number 19694 issued to Aqua.

FINAL ORDER=

      = ;      For all of the foregoing reasons, IT IS THEREFORE ORDERED, ADJUDGED AND DECR= EED that Petitioners Frank Revalee and Gary Hoagland’s request to stay the effectiveness = of Permit No. 19694, issued to Utility Center, Inc., d/b/a Aqua Indiana, Inc.,= for a sanitary sewer extension is DENI= ED. The parties are ordered to con= fer and to submit a joint proposed case management order by January 10, 2011. If the parties cannot agree upon a joint submission, then individual submissio= ns are to be submitted by January 10, 2011.

      = ;      You are further advised that, pursuant = to I.C. § 4-21.5-5, et seq., = this non-final Order is subject to judicial review if so provided under I.C. &se= ct; 4-21.5-5, et seq., and only if = it is timely filed with a civil court of competent jurisdiction within thirty (30) days after the date this notice is served.

      = ;      IT IS SO ORDERED this 15th day of December, 2010 in Indianapolis, IN.         =

Hon. Mary L. Davidsen=

Chief Environmental Law Judge

[2010 OEA 13nf: end of decision]

2010 OEA 13nf in .doc format

2010 OEA 13nf in .pdf format

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