[2006 OEA 16, page 16 begins]

 

TOPICS:

Enforcement

spill rule

manure

burden of proof

penalty policy

penalty

corrective action

confined animal feeding operation

 

PRESIDING JUDGE:

Gibbs        

 

PARTY REPRESENTATIVES:

Complainant:    Nicole Lyn Sipe, IDEM

Respondent:     Ronnie Scherb, pro se

 

ORDER ISSUED:

July 19, 2006

 

INDEX CATEGORY:

Water

Enforcement

 

FURTHER CASE ACTIVITY:

[none]

[2006 OEA 16, page 17 begins]

STATE OF INDIANA                        )                       BEFORE THE INDIANA OFFICE OF

                                                            )                       ENVIRONMENTAL ADJUDICATION

COUNTY OF MARION                    )

 

IN THE MATTER OF:                                                )

                                                                                    )

COMMISSIONER, INDIANA DEPARTMENT        )

OF ENVIRONMENTAL MANAGEMENT               )

                                                                                    )

            Complainant                                                     )

                                                                                    )

                        v.                                                         )           CAUSE NO. 05-S-E-3561

                                                                                    )

RONNIE SCHERB d/b/a SCHERB DAIRY               )

                                                                                    )

            Respondent                                                      )

 

FINDINGS OF FACT, CONCLUSIONS

OF LAW AND FINAL ORDER

 

This constitutes notice of a Final Order.  This matter having come before the Court on the final hearing of the petition for administrative review by James Butcher, held on June 21, 2006; and the Environmental Law Judge, being duly advised and having considered the pleadings and evidence presented at the hearing, makes the following findings of fact, conclusions of law and Order:

Findings of Fact

 

1. On May 15, 2003, the Indiana Department of Environmental Management (IDEM) issued a Notice of Violation (NOV) to Ronnie Scherb d/b/a Scherb Dairy (the “Respondent”) for violations of 327 IAC.  The parties were unable to reach a settlement agreement.

 

2. On June 1, 2005, the IDEM issued a Notice and Order of the Commissioner of the Department of Environmental Management (the “CO”) to the Respondent. 

 

3. On June 20, 2005, the Respondent, by his counsel, Mark Shere, filed his Petition for Review in this matter. 

 

4. A prehearing conference was held on July 6, 2005, at which both parties were present by counsel.  A case management order was issued, including, but not limited, to a date for completing discovery.  This deadline was subsequently extended to January 23, 2006.

 

5. On December 7, 2005, the IDEM filed its Notice of Filing of Discovery Request. 

[2006 OEA 16, page 18 begins]

6. On January 19, 2006, counsel for Respondent filed his Notice of Withdrawal of Counsel and Scherb’s Motion for Extension.  On January 26, 2006, this Environmental Law Judge (the “ELJ”) granted counsel’s request to withdraw and granted the Respondent an extension until February 7, 2006 to answer IDEM’s discovery requests.

 

7. The Respondent did not answer the discovery requests.

 

8. On February 22, 2006, IDEM filed its Motion for Proposed Order of Dismissal and Suspension of Dispositive Motion Deadline.  On February 24, 2006, this ELJ granted the motion for extension of time to file dispositive motions and ordered the Respondent to answer the IDEM’s discovery requests within ten (10) business days of the receipt of the order.  The IDEM’s Requests for Admission were deemed admitted.

 

9. The Respondent failed to respond to the discovery requests.

 

10. On March 15, 2006, IDEM filed its Renewed Motion for Proposed Order of Dismissal. 

 

11. On March 17, 2006, this ELJ issued its Notice of Proposed Order of Default to the Respondent allowing him seven (7) days from service of the Notice to respond or be held in default.  The Respondent failed to respond.

 

12. On March 31, 2006, the Notice of Proposed Order of Default was re-issued by certified mail, return receipt requested.  The Respondent received the notice on April 3, 2006. 

 

13. On April 19, 2006, counsel for the IDEM filed its Request for Entry of Order of Dismissal or, in the Alternative, Motion for Suspension of Dispositive Motion Deadline.

 

14. On April 19, 2006, this ELJ issued its Order of Default and for Status Conference (April 19, 2006 Order).  The Respondent was held in default and found to be in violation of the regulations specified in the CO.  The amount of penalty and corrective actions were unresolved. 

 

15. On April 26, 2006, the IDEM filed its Motion to Reconsider the April 19, 2006 Order of Default and for Status Conference.

 

16. A status conference was held on May 5, 2006 with the Respondent present and counsel for IDEM participating by telephone.  The remaining issues were set for hearing on June 14, 2006.   

 

17. On May 22, 2006, the IDEM filed another Motion to Reconsider.

 

18. On June 14, 2006, a hearing was held.  The IDEM presented evidence regarding the amount of the penalty and the corrective actions that the Respondent needed to undertake.

 

19. IDEM’s Request for Admission #38 states “The civil penalty of $10,000 set out in the Notice and Order is not arbitrary and capricious.”  Exhibit IDEM #3.

 

[2006 OEA 16, page 19 begins]

 

20. The civil penalty in this matter was calculated in accordance with the Civil Penalty Policy.  This policy was published by the IDEM under IND. CODE § 13-14-1-11.5.  IDEM’s Civil Penalty Policy is a nonrule policy document, ID No. Enforcement 99-0002-NPD, originally adopted on April 5, 1999.

 

21. There are no aggravating or mitigating factors to consider in this matter nor did the Respondent receive any economic benefit.

 

22. The Respondent continues to operate a small animal feeding operation. 

 

Conclusions of Law

 

1. The Office of Environmental Adjudication (“OEA”) has jurisdiction over the decisions of the Commissioner of the IDEM and the parties to the controversy pursuant to IC 4-21.5-7-3.

 

2. This office must apply a de novo standard of review to this proceeding when determining the facts at issue.  Indiana Dept. of Natural Resources v. United Refuse Co., Inc., 615 N.E.2d 100 (Ind. 1993).  Findings of fact must be based exclusively on the evidence presented to the ELJ, and deference to the agency’s initial factual determination is not allowed.  Id.; I.C. 4-21.5-3-27(d).  “De novo review” means that:

 

all are to be determined anew, based solely upon the evidence adduced at that hearing and independent of any previous findings.

 

Grisell v. Consol. City of Indianapolis, 425 N.E.2d 247 (Ind.Ct.App. 1981).

 

3. The IDEM has filed two Motions to Reconsider this ELJ’s April 19, 2006 Order finding the Respondent in default as to the violations, but not as to the civil penalty or the corrective actions.  The IDEM complains that the ELJ has improperly placed the burden of proof on the IDEM and that, the Respondent, as the person who initiated this appeal, should have the burden of proof.  However, it is apparent from the statutes that the IDEM, as the complainant, has the burden in this case.  IND. CODE § 13-3-3-9 states “In hearings under this chapter, the burden is on the complainant to show the alleged violation.” 

 

[2006 OEA 16, page 20 begins]

 

4. In addition, IDEM complains that this ELJ was incorrect in not finding in IDEM’s favor on all issues.  However, it is clear that, under the trial rules, it is proper to enter a limited order as a sanction for failure to respond to discovery.[1]  Indiana Rules of Trial Procedure, Rule 37(B)(2) lists the possible sanctions:

 

(2)  Sanctions by court in which action is pending. If a party or an officer, director, or managing agent of a party or an organization, including a governmental organization, or a person designated under Rule 30(B)(6) or 31(A) to testify on behalf of a party or an organization, including a governmental organization, fails to obey an order to provide or permit discovery, including an order made under subdivision (A) of this rule or Rule 35, the court in which the action is pending may make such orders in regard to the failure as are just, and among others the following:

(a)        An order that the matters regarding which the order was made or any other designated facts shall be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order;

(b)        An order refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting him from introducing designated matters in evidence;     

(c)        An order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or proceeding or any part thereof, or rendering a judgment by default against the disobedient party;

(d)        In lieu of any of the foregoing orders or in addition thereto, an order treating as a contempt of court the failure to obey any orders except an order to submit to a physical or mental examination under Rule 35;

(e)        Where a party has failed to comply with an order under Rule 35(A) requiring him to produce another for examination, such orders as are listed in paragraphs (a), (b), and (c) of this subdivision, unless the party failing to comply shows that he is unable to produce such person for examination. In lieu of any of the foregoing orders or in addition thereto, the court shall require the party failing to obey the order or the attorney advising him or both to pay the reasonable expenses, including attorney's fees, caused by the failure, unless the court finds that the failure was substantially justified or that other circumstances make an award of expenses unjust.

 

In accordance with IND. CODE § 4-21.5-3-22, 315 IAC 1-3-1(b)(18) and Indiana Trial Rule 37(B)(2), it was within the ELJ’s discretion to issue this order. The April 19, 2006 Order issued by this ELJ is affirmed and IDEM’s Motions to Reconsider are DENIED.

 

[2006 OEA 16, page 21 begins]

 

5. The IDEM used the Civil Penalty Policy[2] to determine the appropriate penalty in this matter.  According to this policy, a civil penalty is calculated by “(1) determining a base civil penalty dependent on the severity and duration of the violation, (2) adjusting the penalty for special factors and circumstances, and (3) considering the economic benefit of noncompliance.”  The base civil penalty is calculated taking into account two factors:  (1) the potential for harm and (2) the extent of deviation.  

 

6. The policy states that the potential for harm may be determined by considering “the likelihood and degree of exposure of persons or the environment to pollution” or “the degree of adverse effect of noncompliance on statutory or regulatory purposes or procedures for implementing the program”.  There are several factors that may be considered in determining the likelihood of exposure.  These are the toxicity and amount of the pollutant, the sensitivity of the human population or environment exposed to the pollutant, the amount of time exposure occurs and the size of the violator.

 

7. The Requests for Admissions establish that as a result of the Respondent’s activities, liquid animal manure ran into a tributary to Little Birch Creek from the farm field used by the Respondent for land application (Request for Admission #19) and that dead minnows were observed in this tributary on the same date and place as the manure spill (Request for Admission #25).  

 

8. The policy also considers the extent of deviation from the rule.  In this instance, the Respondent admits that he did not incorporate the manure into the soil even though he believed that it was going to rain on that date and that, in fact, it did rain (Request for Admissions #13 and #15).  The Respondent also admits that he took no action to contact IDEM to report the spill (Requests for Admissions #20, 21 and 22) or to mitigate the spill until IDEM personnel appeared (Request for Admissions #26, 27, 28 and 29).  He also admits that he did not have a permit authorizing the discharge of manure from the farm field (Request for Admissions #31, 32, 33, 34 and 35).

 

9. The ELJ concludes that the potential for harm and the extent of deviation should both be classified as moderate.

 

10. The ELJ finds that there were no aggravating or mitigating factors to consider and that the Respondent received no economic benefit.  Therefore, the appropriate penalty is the lowest amount in the penalty matrix for a moderate/moderate violation.  The Respondent is assessed a penalty of seven thousand and five hundred dollars ($7,500). 

 

[2006 OEA 16, page 22 begins]

 

11. Pursuant to 327 IAC 16-2-5, a confined animal feeding operation is defined as including an animal feeding operation that causes a violation of the water pollution control laws or regulations.  As a confined animal feeding operation, Scherb’s operation must have approval to operate (327 IAC 16-4-1) and must have an emergency spill response plan (327 IAC 16-9-4).