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Cause #: 03-082W
Caption: Brown, et al. v. DNR (Order of Stay)
Administrative Law Judge: Lucas
Attorneys: Cornelius (Brown); Knotek (DNR)
Date: June 13, 2003
STAY REGARDING PLACEMENT OF TEMPORARY PIERS
This proceeding is a consolidation of four separate requests by applicants for the administrative review of licensure denials to place piers from their properties into Clear Lake, Steuben County. More specifically, the proceedings arose when the Department of Natural Resources (the "Department") denied an application by Alan V. Brown to place a pier identified as PL-19,423; an application by Tom Kramer to place a pier identified as PL-19,364; an application by David E. Russert to place a pier identified as PL-19,440; and, an application by Jon Zachrich and Janet Zachrich to place a pier identified as PL-19,428. Alan V. Brown, Tom Kramer, David E. Russert, Jon Zachrich, and Janet Zachrich are collectively referred to as the Claimants.
In a letter dated April 23, 2003, the Claimants urge that 312 IAC 11-3-2 authorizes them to maintain their piers, unless otherwise ordered by an administrative law judge, "until the later of 90 days after filing the request for administrative review or January 1 of the following year." [Emphasis supplied by the Claimants.]
The Claimants renewed this contention during a prehearing conference held on May 30, 2003. During the prehearing conference, the parties agreed upon a briefing schedule with respect to this issue. On June 9, 2003, the "Claimants' Brief in Support of Stay Pending Hearing" was filed. A "Motion in Opposition to Entry of Stay Pursuant to 312 IAC 11-3-2" was filed on behalf of the Department on June 10, 2003.
Being duly advised, a stay is entered in favor of the Claimants and against the Department regarding the placement of the temporary piers. The reasons for issuance of the stay, and conditions pertaining to the stay, are set forth below:
FINDINGS:
1. Clear Lake in Steuben County, Indiana is a "public freshwater lake" as the phrase is defined at IC 14-26-2-3 and at 312 IAC 11-2-7. As a consequence, Clear Lake is subject to the regulatory requirements of IC 14-26-2 (sometimes referred to as the "Lakes Preservation Act") and rules adopted at 312 IAC 11 to assist in the implementation of the Lakes Preservation Act.
2. The purposes of the Lakes Preservation Act are described in IC 14-26-2-5:
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Sec. 5. (a) As used in this section, "natural scenic beauty" means the natural condition as left by nature without manmade additions or alterations.
(b) As used in this section, "recreational purpose" means the following:
(1) Fishing.
(2) Boating.
(3) Swimming.
(4) The storage of water to maintain water levels.
(5) Any other purpose for which lakes are ordinarily used and adapted.
(c) The:
(1) natural resources and the natural scenic beauty of Indiana are a public right; and
(2) public of Indiana has a vested right in the following:
(A) The preservation, protection, and enjoyment of all the public freshwater lakes of Indiana in their present state.
(B) The use of the public freshwater lakes for recreational purposes.
(d) The state:
(1) has full power and control of all of the public freshwater lakes in Indiana both meandered and unmeandered; and
(2) holds and controls all public freshwater lakes in trust for the use of all of the citizens of Indiana for recreational purposes.
(e) A person owning land bordering a public freshwater lake does not have the exclusive right to the use of the waters of the lake or any part of the lake.
As added by P.L.1-1995, SEC.19.
3. The Lakes Preservation Act includes several licensure provisions. Prominent among these is IC 14-26-2-9. In 1997, the Indiana Third District Court of Appeals of Indiana addressed Department licensure of pier placement under this section. The Court determined this section and the Lakes Preservation Act did not vest authority in the Department to require licenses for the seasonal installation of piers using augered posts. Department of Natural Resources v. Town of Syracuse, et al., 686 N.E.2d 401 (Ind. App. 1997).
4. Also, in 1997, the Indiana General Assembly established the Indiana Lakes Management Work Group. The work group included citizens with a breadth of knowledge and interests in lakes, as well as bipartisan representation with two members from the Indiana Senate and two from the Indiana House of Representatives. The substantive charge to the work group was to develop proposed solutions to problems affecting Indiana lakes. P.L. 239-1997. In response to this charge, the work group met 24 times between 1997 and 1998 and offered numerous recommendations. One of the recommendations was directed to the Town of Syracuse decision:
On October 16, 1997, the Court of Appeals ruled that the Indiana Department of Natural Resources (DNR) has no statutory authority under [the] Lakes Preservation Act to require permits for seasonal installation of piers or other
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structures that are of a temporary nature, so long as the installation method has minimal impact on the bed of the lake.
Although there are other areas of law that suggest DNR has the authority to regulate temporary structures in public freshwater lakes, the authority is not definitive and is cumbersome to apply.
The result of this condition of law is that DNR is unable to effectively manage public freshwater lakes in the full spirit of "public trust" as mandated by law. Additionally, the ability of public freshwater lakes, users, property owners, and local governments to resolve disputes short of expensive court battles is unrealistically limited.
Structures that are considered temporary, and have "de minimis" impact on the lake bed are left to uncontrolled proliferation. The result is loss of public usage of areas within 150 feet of shore, an increase in riparian owner disputes, and environmental harm to the lakes.
DNR has attempted to manage this problem through agency rule-making authority. This process has not adequately dealt with the problem, and clear authority must be re-established by the legislature to protect Indiana's public freshwater lakes for property owners, current users, and future stakeholders.
The work group recommended:
The Indiana Lakes Management Work Group recommends that the Indiana General Assembly amend the public freshwater lake law to add a new section that reads as follows:
IC 14-26-2-5.5. The Commission shall adopt rules under IC 14-10-2-4 to assist in the administration of this chapter. The rules must, as a minimum, do the following:
(1) Provide objective standards for licensing the placement of any temporary or permanent structure or material, or the extraction of material, over, along, or within the shoreline or waterline. These standards shall exempt any class of activities from licensing where the Commission finds the class is unlikely to pose more than a minimal potential for harm to the public rights or public trust as described in IC 14-26-2-5.
(2) Establish a process under IC 4-21.5 for the mediation of a dispute among riparian owners, or by a riparian owner against the department, relative to the usage of an area over, along, or within the shoreline or waterline for a matter within the jurisdiction of this chapter. If after a good faith effort mediation under this subdivision fails to achieve a settlement, the department shall make a determination of the dispute. A person affected by the determination may seek administrative review by the Commission.
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"Final Report of the Indiana Lakes Management Work Group", (Indiana Department of Environmental Management, Dec. 1999), pp. 40 and 41.
5. The Indiana General Assembly enacted P.L. 62-2000, in part to implement this work group recommendation and to clarify that the Lakes Preservation Act was intended to have broader application than stated in the Town of Syracuse. The most pertinent provision was codified at IC 14-26-2-23:
Sec. 23. The commission shall adopt rules in the manner provided in IC 14-10-2-4 to do the following:
(1) Assist in the administration of this [Lakes Preservation Act] chapter.
(2) Provide objective standards for licensing:
(A) the placement of a temporary or permanent structure or material; or
(B) the extraction of material;
over, along, or within the shoreline or waterline. The standard shall exempt any class of activities from licensing if the commission finds that the class is unlikely to pose more than a minimal potential for harm to the public rights described in section 5 of this chapter.
(3) Establish a process under IC 4-21.5 for the mediation of disputes among riparian owners or between a riparian owner and the department concerning usage of an area over, along, or within a shoreline or waterline for a matter within the jurisdiction of this chapter. The rule must provide that:
(A) if good faith mediation under the process fails to achieve a settlement, the department shall make a determination of the dispute; and
(B) a person affected by the determination of the department may seek administrative review by the commission.
The rules anticipated by this statute, including new provisions pertaining to mediation, are set forth at 312 IAC 11.
6. The Claimants argue, and their position is persuasive, that the Lakes Preservation Act does not eliminate riparian rights. They cite Zapfee v. Srbeny, 587 N.E.2d 177 (Ind. App. 1992) and Bath v. Courts, 459 N.E.2d 72 (Ind. App. 1984). The current law is stated succinctly by the Court of Appeals of Indiana in Lake of the Woods v. Ralston, 748 N.E.2d 396 (Ind. App. 2001). The Lakes Preservation Act is "[p]ublic trust legislation" intended to recognize "the public's right to preserve the natural scenic beauty of our lakes and to recreational values upon the lakes." The Court further observed that "Riparian landowners...continue to possess their rights with respect to a public freshwater lake, but their rights are now statutory and must be balanced with the public's rights."
7. The Lakes Preservation Act provides the substantive law backdrop against which the current stay request must be decided. In order to complete the analysis, the procedural law and facts particular to this proceeding
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must also be considered.
8. The governing procedural law is IC 4-21.5. This statutory article is sometimes referred to as the "Administrative Orders and Procedures Act" or "AOPA". AOPA establishes opportunities to "stay" agency actions in several contexts. Those that may be relevant to this proceeding are the licensure provisions of IC 4-21.5-3-5 and the sanction provisions of IC 4-21.5-3-6. Section 5 is the general licensure provision within AOPA and applies to most regulatory programs of the Department of Natural Resources, including the Lakes Preservation Act. Section 6 is a special sanctioning provision made applicable to IC 14-26 (including the Lakes Preservation Act) by IC 14-25.5.
9. As stated in pertinent part in IC 4-21.5-3-5:
Sec. 5. (a) Notice shall be given under this section concerning...(1) The grant, renewal, restoration, transfer, or denial of a license....
....
(f) ....If both a petition for review and a petition for stay of effectiveness [of an order described in subsection (a)] are filed before the order becomes effective, any part of the order that is within the scope of the petition for stay is stayed for an additional fifteen (15) days. Any part of the order that is not within the scope of the petition is not stayed....
....
(h) On the motion of any party..., an administrative law judge shall, as soon as practicable, conduct a preliminary hearing to determine whether the order should be stayed. The burden of proof in the preliminary hearing is on the person seeking the stay. The administrative law judge may stay the order in whole or in part. The order concerning the stay may be issued before or after the order described in subsection (a) becomes effective. The resulting order concerning the stay shall be served on the parties.... It must include a statement of the facts and law on which it is based.
10. As stated in pertinent part in IC 4-21.5-3-6:
Sec. 6. (a) Notice shall be given under this section concerning...(2) Any order that:
(A) imposes a sanction on a person or terminates a legal right, duty, privilege, immunity, or other legal interest of a person..., and
(C) by statute becomes effective without a proceeding under this chapter if there is no request for review of the order within a specified period after the order is issued or served.
....
(e) If a petition for review of an order described in subsection (a) is filed within the period set by section 7 of this chapter and a petition for stay of effectiveness of the order is filed by a party..., an administrative law judge shall, as soon as practicable, conduct a preliminary hearing to determine whether the order should be stayed in whole or in part. The burden of proof in the preliminary hearing is on the person seeking the stay. The
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administrative law judge may stay the order in whole or in part. The order concerning the stay may be issued after an order described in subsection (a) becomes effective. The resulting order concerning the stay shall be served on the parties.... It must include a statement of the facts and law on which it was based.
11. In implementing the Lakes Preservation Act, IC 14-26-2-23(2) directs the Commission to exempt any class of activities from licensing if the Commission finds that the class is "unlikely to pose more than a minimal potential for harm to the public rights" described in IC 14-26-2-5. A similar concept already existed at IC 14-10-2-4(b) before the 2000 enactment of IC 14-26-2-23.
12. In furtherance of these authorities, the Commission adopted 312 IAC 11-3-1 to establish a general license for temporary structures (including piers), the placement of which conforms to specifications set forth in the rule. For a qualified pier, the substantial notice requirements to affected persons, that would otherwise apply to licensure under the Lakes Preservation Act, are eliminated. The rights of affected persons are not eliminated, but they are activated only if someone presents a complaint to the Commission with respect to the temporary structure. In large measure, 312 IAC 11-3-2 is an accommodation to the character of the general license that is established by 312 IAC 3-1. In effect, 312 IAC 11-3-2(d) establishes an automatic stay of limited duration, albeit one that can be set aside by the administrative law judge, where a person contests the placement of a temporary structure. Both the interests of the person who places a temporary structure, and those of affected persons, are protected. The subsection provides:
(d) Unless otherwise ordered by the administrative law judge or agreed in writing by all the parties, any structure placed by a party under section 1 of this rule [312 IAC 11-3-1] must be removed from within the waterline or shoreline upon the later of the following:
(1) Ninety days after filing of the request for administrative review.
(2) January 1 of the year following the filing of the request for administrative review.
13. The Claimants urge in their brief that 312 IAC 11-3-2(d) entitles a party "to maintain a pier until the later of 90 days after filing the request for administrative review or January 1 of the year following the filing of the request. The Department of Natural Resources maintains that this rule only applies to Section 1 of the rule, which deals with piers for which no permit is required. Obviously, this is not logical."
14. The Department urges that 312 IAC 11-3-2(d) applies only to a structure that would qualify for a general license under 312 IAC 11-3-1. "The specific requirement for a pier is found at paragraph (b)(6) [312 IAC 11-3-2(b)(6)], which states, 'If a pier, not extend over water that is continuously more than six (6) feet deep to a distance of one hundred fifty (150) feet from the legally established or average normal waterline or shorelines.'"
15. The Department is correct that 312 IAC 11-3-2(d) has application only to a pier placed in accordance with 312 IAC 11-3-1. The language of subsection 2(d) is unambiguous in that it specifically cross-references section 1. Neither is the regulatory structure illogical. It helps implements a process to accommodate the use of general
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licenses for conforming piers, while helping to assure pier owners and affected persons will have an opportunity to resolve conflicts without undue interference with existing uses. The Claimants here seek to place piers that are substantially in excess of 150 long. These piers do not qualify for the general license that is established by 312 IAC 11-3-1. If the Claimants are to prevail, they must establish they are entitled to specific licenses approved under the Lakes Preservation Act. The Claimants are not entitled to the relief offered by 312 IAC 11-3-2(d).
16. Even so, 312 IAC 11-3-2(d) is merely an implementation of the "stay" opportunities of AOPA. The rule is established within the context of general licenses for temporary structures placed on public freshwater lakes, but it is a particular implementation of a general concept. That a person does not qualify for relief within 2(d) is not equivalent to a determination the person is unqualified to obtain a stay under AOPA.
17. The Claimants could be entitled to a stay under either IC 4-21.5-3-5 or IC 4-21.5-3-6. Of these, the former has the more direct application. Section 5 applies to licensure actions, and this proceeding is for the review of the denial of licenses to place four piers in Clear Lake. Although it may be an unusual circumstance, IC 4-21.5-3-5 seemingly authorizes a stay against the denial of a license. On the other hand, the real concern of the Claimants may not be so much that they wish a stay of the denial of a license as that they wish to avoid receipt from the Department of a notice of violation. The true goal may be to achieve protection from a sanction. In either event, the burden of proof rests with the Claimants. During a prehearing conference held on May 30, 2003, the parties agreed to a review of the stay request based upon concurrent briefings.
18. 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 Suprior Court Room 4, 259 Ind. 123, 284 N.E.2d 746 (Ind. 1972). In evaluating a petition for stay, common law pertaining to preliminary injunctions may be applied.
19. The relief provided in 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. The Commission applied these concepts in Brown v. DNR and Peabody Coal Company, 6 Caddnar 136 (1993).
20. As the Claimants correctly observe, an element of the equitable standard is the likelihood of success on the merits by the persons seeking the stay. Indiana State Department of Public Welfare v. Stagner, 410 N.E.2d 1348, (Ind. App. 1980).
21. To obtain a stay, the moving party must show some likelihood of success on the merits, no adequate remedy at law, and irreparable harm if the relief is denied. Anderson v. U. S. F. Logistics (IMC), Inc., 274 F.3d 470 (C.A. 7th Cir., Ind. 2001); and, Standard Register Co. v. Cleaver, F. Supp. 2d 1084 (N.D. Ind., 1998). A stay is an extraordinary remedy intended to preserve the status quo until the merits of the case may be resolved. Indiana Civil Liberties union v. O'Bannon, 259 F.3d 766 (C.A. 7th Cir., Ind.), rehearing en banc denied, certiori denied 122 S. Ct. 1173, 152 L. Ed. 2d 117.
22. This proceeding is at an early stage, and the likelihood of success is difficult to assess, but a few preliminary observations are
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possible. Although the parties seriously contest the length of piers to which the Claimants are entitled, the Department acknowledges that they are entitled to temporary piers although at some lesser length than sought.
23. Other contentions by the Claimants, at least at this stage of the proceedings, are less persuasive. Citing IC 14-15-3-17, they claim that public usage between the piers is limited to trolling and approaching the shoreline, even though the piers extend more than 200 feet into the lake. They contend that it is "impossible to troll within the length of the piers", although whether the claimed impossibility is legal or factual cannot be ascertained. The affidavit of Jon Zachrich urges that the piers are necessary to reach "navigable water", but at the 238-foot distance, he can achieve "access to navigable water." As suggested by Bath v. Courts, legal navigability is not a test that has application to the Lakes Preservation Act. The ordinary test for navigability is whether a river or lake was susceptible to boating "according to the general rules of river transportation at the time Indiana was admitted to the Union" in 1816. State v. Kivett, 228 Ind. 629, 95 N.E.2d 148 (Ind. 1950). There may be an informal recreational sense of navigability that should be applied, but documentation in the record is currently insufficient for a meaningful application of term "navigable" in this proceeding.
24. Taking the current record as a whole, although a determination would be premature that the Claimants are likely to fully succeed with their request for administrative review, they have sustained the burden for the limited purposes of a stay by showing at least some likelihood of success.
25. Another important consideration is the timing of the license applications and the Department's resulting evaluation. The Claimants pursued their remedies in a timely fashion through license applications. Timing of the Department's evaluation of the applications is the primary cause for administrative review taking place during the ordinary boating season. In their brief, the Claimants urge:
During the late summer of 2002, the Claimants herein were advised by the enforcement officers of the Department of Natural Resources that their piers were beyond the new limits imposed by the adopted rules of the Department of Natural Resources, and that they would have to apply for permits. The Claimants all submitted permits in a timely fashion in the fall of 2002, anticipating that their permits would either be approved or denied, so that they could proceed during the course of the winter months, with their appeal process. Unfortunately, the Department of Natural Resources did not issue a ruling upon their permits until April 15, 2003, as counsel for the Claimants directed a letter to the Department of Natural Resources on April 3rd, requesting a decision, so that the Claimants could move forward either with the placement of their piers in accordance with the permits, or an appeal. It would be patently unfair, to now deny access to navigable water to the Claimants, during the course of this appeal, as had the Department of Natural Resources acted in a prompt fashion, this issue would be decided, and the question of the stay would not be necessary.
The Claimants outlined a similar perspective regarding timing of their license applications, and the Department's evaluations, during a prehearing conference held on
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May 30, 2003. The Department has not seriously contested the Claimants' statements as to timing.
26. If a stay is not granted, and the Claimants are now required to remove their piers, they will be deprived of the full enjoyment of riparian rights during the 2002 boating season. In the absence of a stay, they have no adequate remedy at law. They will lose the full enjoyment of the season, and their harm will be irreparable. The Claimants have sustained their burdens that, in the absence of a stay, they have no adequate remedy at law. In addition, they have sustained their burden of showing the harm will be irreparable.
27. The affidavit of Jon Zachrich suggests that piers extending approximately 238 feet into the lake have been regularly placed along the Claimants' properties for 13 years, and this placement has apparently resulted in no serious incident. Granting of a stay would appear to preserve the status quo pending a disposition of this proceeding.
28. The preponderance of evidence in the record, at least at this early stage, supports the issuance of a stay in favor of the Claimants and against the Department. The stay should be under IC 4-21.5-3-5 against the denial of their licenses and under IC 4-21.5-3-6 against the issuance of notices of violations or other sanctions.
29. At the same time, the stay is issued with the understanding the Claimants must vigorously pursue final relief on the merits.
30. Also, the stay is issued with the understanding the proceeding will not be mooted by the conclusion of the current boating season. Administrative review of the propriety of the placement of temporary, seasonal piers presents challenges to timely and complete dispositions of active claims. The "public interest exception" to the general doctrine of mootness is invoked. The issues presented here involve questions of "great public importance" that are "likely to recur in a context" that may "continue to evade review." Ridenour v. Furness, 504 N.E.2d 336, 342 (Ind. App. 1987), quoting from Bartholomew County Hospital v. Ryan, 440 N.E. 2d 754, 757 (Ind. App. 1982).
31. Finally, this stay considers important matters of public interest including several that are of first impression. An opportunity should be immediately accorded to the parties to seek judicial review. If a party petitions for judicial review of the stay, however, the Commission and its Administrative Law Judge are not deprived of jurisdiction to consider matters pertaining to final relief of the underlying claims.