CADDNAR

[CITE: Mottley, et al. v. Vigo Coal Company and DNR, 10 CADDNAR 114 (2005)]

[NOTE: ON JUNE 28, 2005, THE CLAIMANT FILED FOR JUDICIAL REVIEW IN THE WARRICK COUNTY CIRCUIT COURT IN CAUSE NO. 87C01-0506-MI-268. ON SEPTEMBER 20, 2006, THE WARRICK CIRCUIT COURT AFFIRMED THE ALJ. THE WARRICK CIRCUIT COURT'S ORDER FOLLOWS THE ADMINISTRATIVE ORDER.]

1. The Department and Vigo have have sustained their burden of proving that no genuine issue of material fact exists and that they are entitled to judgment as a matter of law.

2. The Department's approval of Permit 352 and issuance of Permit 352 to Vigo for purposes of operating the Chili Pepper Mine is hereby affirmed and approved.

FINDINGS OF FACT AND CONCLUSIONS OF LAW:

1. At issue in this proceeding is a surface coal mining and reclamation operation permit # S-352, (hereinafter "Permit 352") issued to Vigo Coal Company, Inc. (hereinafter "Vigo") by the Department of Natural Resources (hereinafter "Department") for the operation of the Chili Pepper Mine located in Sections 21, 22, 23 & 26, Township 6 South, Range 8 West, Warrick County, Indiana.

2. This proceeding was commenced by Larry and Rhonda Back, Don Mottley, Mark Barton and Tammy and Mike Jenkins through the filing of correspondence with the Natural Resources Commission (hereinafter "Commission") between July 8, 2004 and July 14, 2004.[FOOTNOTE 1]

3. On July 31, 2004, Don Mottley, Larry Back, Rhonda Back, Tammy Jenkins, Mike Jenkins, and Mark Barton (hereinafter "Claimants") filed their "Request for Hearing Consolidation," which was granted on August 3, 2004.

4. I.C. 4-21.5, commonly referred to as the Administrative Orders and Procedures Act or "AOPA", controls this proceeding. The Commission has also adopted rules at 312 IAC 3-1 to assist in its administration of AOPA, and 312 IAC 3-1 is also applicable to this proceeding.

5. On August 27, 2004 a prehearing conference was held. Kayla Barton, the spouse of Mark Barton, was joined as a Claimant to administrative cause 04-140R, without objection. It was also determined that administrative cause numbers 04-134R and 04-136R were duplicate proceedings resulting from the Commission's receipt of two different letters from Larry and Rhonda Back, one received on July 8, 2004 and the other received on July 14, 2004. It was agreed that administrative cause number 04-136R would be dismissed to eliminate the duplication.

6. Don Mottley, on behalf of the Claimants, filed "Claimant's More Definite Statement/Statement of Contentions" (hereinafter "Claimant's Contentions") on September 30, 2004 outlining the following eleven (11) bases for the Claimants' position that Permit 352 was improperly approved.

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a) Coal combustion by-product disposal authorized under Permit 352 should be conditioned upon identification of the actual source and additional waste stream analysis.
b) Permit 352 should require long-term water monitoring for the protection of Country Lake from contamination.
c) The Department should not have issued Permit 352 in advance of Vigo's receipt of its National Pollution Discharge Elimination System (hereinafter "NPDES") permit.
d) The Department should not have issued Permit 352 in advance of Vigo's receipt of its Air Construction Permit.
e) The Department should not have issued Permit 352 in advance of Vigo's receipt of its Explosives Storage Permit.
f) Vigo failed to provide proper notice of Permit 352 to all adjacent property owners.
g) Language contained within Appendix B of Permit 352 rendered the permit unenforceable.
h) Appendix B of Permit 352 does not require proper water monitoring.
i) A preliminary injunction entered by the Warrick County Superior Court # 2 in 1995 prevents digging within three-quarters (3/4) of a mile from Country Lake and prevented the issuance of Permit 352, which allows for digging with that three-quarter (3/4) mile radius.
j) The property control map submitted by Vigo fails to identify all houses and structures in existence.
k) Dust and particulate matter involved in the mining authorized by Permit 352 will increase Jenna Back's, granddaughter of Larry and Rhonda Back, symptoms relating to asthma and tracheomalacia.

7. Vigo filed its response to Claimants' more definite statement on October 28, 2004 and the Department filed its answer and affirmative defenses on October 29, 2004.

8. A status conference was held on November 18, 2004. Neither Tammy Jenkins nor Mike Jenkins was present. A Notice of Proposed Dismissal was issued in JENKINS v. VIGO COAL COMPANY, INC. & DNR, Administrative Cause 04-142R and ultimately a Final Order of Dismissal was entered in that individual proceeding on December 9, 2004.

9. The Commission has jurisdiction over the subject matter of nine (9) of the Claimants' eleven (11) issues and over the persons of the parties.

10. The Department administers surface coal mining and reclamation operations pursuant to I.C. 14-34 and under I.C. 14-10-2-3 and I.C. 4-21.5-1-15; the Commission is the "ultimate authority" for the Department.

11. On December 29, 2004, Vigo, by counsel filed its Motion for Summary Judgment and Designation of Materials and Brief in Support. (hereinafter "Vigo Summary Judgment") and on January 7, 2005 the Department filed its Motion for Judgment on the Pleadings. (hereinafter "Department Motion")

12. The Claimants filed their Response to Vigo's Summary Judgment and the Department's Motion for Judgment on the Pleadings (hereinafter "Claimants' Response") on February 6, 2005.

[VOL. 10, PAGE 116]

13. Following the grant of extensions of time the Department filed "Respondent DNR's Reply to Claimant's Response" on February 28, 2005. Vigo filed its Reply on March 1, 2005.

14. Trial Rule 12 (C) states that "...if on a motion for judgment on the pleadings, matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to a motion pursuant to Trial Rule 56 and I.C. 4-21.5-3-23. Because Vigo and the Department, will inure to the benefit of the others' motions and briefs and because Respondent, Vigo, sought summary judgment and designated material outside the pleadings, which were not excluded, the Department's Motion for Judgment on the Pleadings pursuant to Trial Rule 12(C) will be viewed and disposed of in accordance with Trial Rule 56. Indiana Trial Rules 12(C), SAMUELS, ET AL. v. BUSCH AND DNR, 9 CADDNAR 99, 100 (2003).

15. Summary judgment is appropriate where the moving party has sufficiently established that there exists no genuine issue of material fact and the movant is entitled to judgment as a matter of law. INDIANA DEPARTMENT OF ENVIRONMENTAL MANAGEMENT v. SCHNIPPEL CONSTRUCTION, INC., 778 N.E.2d 407 (Ind. App. 2002), Id, at 101.

16. Summary judgment is provided for in AOPA at I.C. 4-21.5-23, which states, in part:

a) A party may, at any time after a matter is assigned to an administrative law judge, move for a summary judgment in the party's favor as to all or any part of the issues in a proceeding. The motion must be supported with affidavits or other evidence permitted under this section and set forth specific facts showing that there is not a genuine issue in dispute.

(b) The motion must be served at least five (5) days before the time fixed for the hearing on the motion... The judgment sought shall be rendered immediately if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits and testimony, if any, show that a genuine issue as to any material fact does not exist and that the moving party is entitled to a judgment as a matter of law. A summary judgment may be rendered upon fewer than all the issues or claims (such as the issue of penalties alone) although there is a genuine issue as to damages or liability, as the case may be... Summary judgment may not be granted as a matter of course because the opposing party fails to offer opposing affidavits or evidence, but the administrative law judge shall make a determination from the affidavits and testimony offered upon the matters placed in issue by the pleadings or the evidence...

(f) If a motion for summary judgment is made and supported under this section, AN ADVERSE PARTY MAY NOT RELY UPON THE MERE ALLEGATIONS OR DENIALS MADE IN THE ADVERSE PARTY'S PLEADINGS AS A RESPONSE TO THE MOTION. THE ADVERSE PARTY SHALL RESPOND TO THE MOTION WITH AFFIDAVITS OR OTHER EVIDENCE PERMITTED UNDER THIS SECTION AND SET FORTH SPECIFIC FACTS SHOWING THAT THERE IS A GENUINE ISSUE IN DISPUTE. If the adverse party does not respond as required by this subsection, the administrative law judge may enter summary judgment against the adverse party.

(emphasis added by the commission)

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17. A genuine issue of material fact exists when facts are in actual dispute or when the facts, while undisputed, are capable of supporting conflicting inferences on a particular issue. SCHNIPPEL, SUPRA; DOWNS v. PANHANDLE EASTERN PIPELINE CO, 694 N.E.2d 1198, 1200 (Ind. App. 1998), trans denied, 706 N.E.2d 178.

Issues Withdrawn By the Claimants

18. At the status conference held November 18, 2004 the Claimants withdrew their claims relating to the failure of Vigo to provide notice to all adjacent landowners (issue "f," above). The Claimants also withdrew their complaint with respect to their belief that coal combustion by-product disposal authorized by Permit 352 should be conditioned upon identification of the actual source of the by-product and additional waste stream analysis (issue "a," above).

Issues Over Which the Commission Lacks Subject Matter Jurisdiction:

A. Preliminary Injunction (issue "i"):

19. The Claimants contend that the Department's issuance of Permit 352 was improper for the reason that issuance of the permit constitutes the violation of or authorizes the violation of a Preliminary Injunction Order entered by the Warrick County Court.

20. Vigo established through its designated material that a Preliminary Injunction Order was entered by the Warrick County Superior Court on October 23, 1995 as claimed by the Claimants. Vigo Summary Judgment, Exhibit "H."

21. Actions relating to injunctions are controlled by I.C. 34-26-1 et seq.

22. I.C. 34-26-1-14 expressly states that upon notice of willful disobedience of an injunction, "the court or judge shall award an attachment for contempt..." and that such attachment shall be issued to the county court clerk for service by the county sheriff.

23. Enforcement of a preliminary injunction remains within the jurisdiction of the issuing court.

24. The Commission possesses no jurisdiction over the subject matter of this issue and evidentiary material provided by the parties is not considered further.

B. Health Issues Relating to Particulate Material Pollution (issue "k"):

25. The Claimants have stated that air pollution relating to particulate material is a causative factor in many health problems and speculate that Vigo's activities will increase particulate material air pollution thereby worsening symptoms experienced by Jenna Back.

26. Regardless of evidentiary issues relating to this contention, substantive regulations regarding particulate material air pollution, including PM 2.5 and the designation of areas of the State of Indiana as "non-attainment areas" as cited by Claimants', were established by the Indiana Department of Environmental Management and the EPA.

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27. Substantive matters relating to limits on PM 2.5 emissions are not within the regulatory scheme of the Commission, but are instead within the jurisdictional province of the Indiana Department of Environmental Management. I.C. 13-13-5-1(3)

28. Substantive arguments made by the parties on this issue are also not being considered in light of such lack of jurisdiction regarding this claim.

Long-Term Monitoring for Contamination of Country Lake and the Enforceability of Permit 352. (Issues "b," "g," and "h," above)

29. The Claimants, throughout this proceeding, have alleged that the failure of Permit 352 to provide for long-term water monitoring relating to the authorized coal combustion by-product disposal will result in contamination of Country Lake and leave them without recourse to effectuate mitigation. Claimant's More Definite Statement/Statement of Contentions; Claimants' Response.

30. The Claimants have also maintained that language used in the CHIA, (reference by Claimants as "Appendix B") for example "should," "may," "timely manner," and "if possible," render Permit 352 unenforceable. Furthermore, the Claimants maintain that the CHIA does not specify proper surface water monitoring parameters.

31. The Respondents contend that Claimants' conclusion that the disposal of coal combustion by-products will create contamination in Country Lake is based purely upon speculation and additionally cite to the Claimants' failure to produce the "draft papers" upon which the Claimants have based this allegation.[FOOTNOTE 2]

32. The Respondents have also revealed that the CHIA is not an enforcement document, but is instead a written report prepared by the Department as required by 312 IAC 25-4-115 memorializing the assessment conducted by the Department based upon information submitted by Vigo in its application for Permit 352 and other information available.

33. The Claimants contend that "neither DNR's Division of Reclamation nor the Permittee can prove that no long term contamination will occur to the adjacent lake because there is no long term monitoring" Claimants' Response, page 2. (emphasis added by the commission), and that this conclusion is bolstered by the Department's characterization of the CHIA as "an assessment of probable cumulative impacts" of the mining proposed in Permit 352. Claimants Response, page 4.

34. While the Claimants desire guarantees that no harm to the hydrologic balance will occur, the Department's oversight of surface coal mining and reclamation is merely to "assure that the coal supply essential to the nation's energy requirements and economic and social well-being is provided and strike a balance between protection of the environment and agricultural productivity and the nation's need for coal as an essential source of energy." I.C. 14-34-1-3(7).

35. In striking this balance, the Respondents are not obligated by Indiana Code or the Indiana Administrative Code, to prove that contamination will not occur.

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36. However, Vigo must provide its determination of probable hydrologic consequences that the Department is then obligated to assess in determining the "probable cumulative impact" of the mining on the hydrologic balance. I.C. 14-34-3-3(11), 312 IAC 25-4-115(a).

37. The Department is then disallowed to issue any surface coal mining and reclamation permit unless it determines in written findings that the applicant has demonstrated that measures necessary to avoid such damage have been included within the mining and reclamation operation. I.C. 14-34-4-7(3), 312 IAC 25-4-115(a), 312 IAC 25-4-47.

38. 312 IAC 25-4-115 states, in pertinent part:

and 312 IAC 25-4-47 states as follows:

emphasis added by the Commission.

39. In the event that despite the assessment of the Department, domestic water supplies are affected or disrupted, I.C. 14-34-6-15 does, in fact, provide for the replacement of those supplies.

40. With respect to the improper surface water monitoring parameters contained within the CHIA, the Department has established that this is a consequence of an erroneous citation contained within the CHIA and that the proper surface water monitoring parameters, which are the same as the parameters sought by the Claimants for inclusion, are contained within the enforceable portions of Permit 352, at Attachment IV.O, Item C.3.b.

41. Vigo, in its designated material included the "Cumulative Hydrologic Impact Assessment" (hereinafter "CHIA") completed and prepared by the Department as

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required by 312 IAC 25-4-115(a)(5) and 312 IAC 25-4-47. Vigo Summary Judgment, Exhibit G, page1.

42. The CHIA clearly states that Vigo submitted, in conjunction with its surface coal mine and reclamation permit application, its determination of the "probable hydrologic consequences" of the mine and reclamation operation as required by I.C. 14-34-3-3(11).

43. A thorough review of the CHIA also reveals that it constitutes the written findings by the Department following its assessment required by 312 IAC 25-4-115(a)(5) of the "probable cumulative impacts" of coal mining in the area and incorporates all considerations required by 312 IAC 25-4-47.

44. The Department's assessment resulted in the conclusion "that the proposed operations have been designed to prevent material damage to the hydrologic balance outside the permit area" as required by 312 IAC 25-4-115(a)(5). Id at page 9.

45. The Claimants do not allege any errors in the Department's methodology in making its assessments and further makes no allegation that the assessment was based upon faulty or misrepresented information provided by Vigo.

46. The statutory and administrative rule language are unambiguous that the CHIA, or Appendix B as referred to by the Claimants, does not, and was not intended to, contain enforceable provisions of Permit 352, but is merely a determination of "probabilities" following an assessment by the Department.

47. The Respondents have presented designated material establishing their compliance with the surface coal mining and reclamation permit review process relative to the assessment of mining activity authorized by Permit 352 relating to the protection of the hydrologic balance. The Respondents' designated material similarly establishes that the CHIA is not an enforcement document and as such the language contained therein will have no impact upon the enforceability of Permit 352.

48. The Department has clearly explained that the CHIA contains a mis-citation regarding the surface water monitoring parameters, but because the CHIA does not form an enforceable portion of Permit 352 and the error is aptly memorialized through this proceeding, such error is harmless.

49. The Respondents have borne their burden of going forward in establishing the absence of a material fact with respect to these three issues presented by the Claimants.

50. The Claimants, as the non-moving parties, are then obligated to set forth, through designated material, the existence of a genuine issue of fact. ESTATE OF PFLANZ v. DAVIS, 678 N.E.2d 1148, 1150 (Ind. Ct. App. 1997), SAMUELS, supra at 101, and it is insufficient for the Claimants to rely upon their allegations contained within Claimant's Response. I.C. 4-21.5-3-23(f).

51. The Claimants solely allege, without providing affidavits or designating other appropriate evidence, that the "draft papers" reveal serious groundwater contamination at other mines as a result of coal combustion by-product disposal.

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52. The Claimants have failed to designate any material, including the "draft papers" cited in Claimant's Contentions[FOOTNOTE 3], establishing that a genuine issue of material fact exists with respect to the Respondents' determinations of possible hydrologic consequences of the mining and reclamation operations authorized by Permit 352.

Submission of Inaccurate Property Control Map (Issue "j," above):

53. The Respondents provided designated material indicating that the original property control map submitted to the Department in December 2002 with its application for Permit 352 was based in part upon aerial photographs taken in April 2002 and that a secondary submission of the map in October 2003 was required by the Department for the specific purpose of identifying utilities. Vigo Summary Judgment, Exhibit J, page 3.

54. Vigo is responsible for the submission of "[a]ccurate maps to an appropriate scale clearly showing the land affected on the date of application," that reveal the location of all buildings within one thousand (1,000) feet of the permit area. I.C. 14-34-3-3(13).

55. Vigo's designated material reveals that Permit 352 was applied for on December 5, 2002. Vigo Summary Judgment, Exhibit A, page 4.

56. The Claimants' Statement of Contentions dated September 30, 2004 clearly states that the pole barn in question was constructed near March 2003 and the home in question was "finished in late September 2003." Vigo Summary Judgment, Exhibit B, paragraph 10.

57. The evidence is not in dispute that the December 2002 property control map was accurate in its depiction of structures within one thousand (1000) feet of the permit area as of the application submission date of December 5, 2002.

58. The fact that a second control map, submitted by Vigo in October 2003 for the specific purpose of providing additional information sought by the Department regarding utilities, does not identify these structures does not constitute a failure to comply with application requirements.

Failure to Obtain or Apply for NPDES, Air Construction and Explosives Storage Permits Before Issuance of Permit 352.

59. 312 IAC 25-4-23 states:

Each application shall contain a list of all other licenses and permits needed by the applicant to conduct the proposed surface mining activities. The list shall identify each license and permit by the following:

60. The language of 312 IAC 25-4-23(1) and (2) certainly required Vigo's application for Permit 352 to identify all other licenses and permits necessary

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to conduct the proposed mining activity and to further identify the issuing authority for the permits and licenses so identified.

61. The parties do not dispute that Vigo's application for Permit 352 complies with the requirements of subsections (1) and (2). Vigo Summary Judgment, Exhibit E; Claimants' Response, Attachment 1.

62. However, Claimants maintain that 312 IAC 25-4-23(3) required Vigo's application for Permit 352 to provide application identification numbers for the other necessary permits. Claimants continue that this subsection's obligation to provide permit application identification numbers implies that Vigo was required to submit applications for those remaining permits in advance of the Department's issuance of Permit 352. Claimants' Response, Paragraph #2, Pages 2-3.

63. To the contrary, the Department and Vigo contend that 312 IAC 25-4-23 creates only the obligation to list the other necessary permits and licenses. Vigo Summary Judgment and Department's Motion. In furtherance of this position, the Department points out that nothing contained within 312 IAC 25-4-23 prohibits the Department from issuing Permit 352 while the remaining necessary permits were pending review or approval. Department's Motion, Paragraph 3, pages 3-4.

64. When a statute is open to multiple interpretations it is appropriate for the court to consider the implications of the particular constructions. INDIANA ALCOHOLIC BEVERAGE COMMISSION v. OSCO DRUG, INC., 431 N.E.2nd 823 (Ind. App. 1982). In construing administrative rules the same rules of statutory construction are applicable, STATE v. MOLNAR, 803 N.E.2d 261 (2004 Ind. App.) and requires the consideration of the entire act. ERNST AND ERNST v. UNDERWRITERS NATIONAL ASSURANCE COMPANY, 381 N.E.2d 897 (Ind. App. 2 Dist. 1978).

65. It is further necessary to note that due deference and weight must be given to an agency's reasonable interpretation of an administrative rule it is responsible for administering. INDIANA DEPARTMENT OF ENVIRONMENTAL MANAGEMENT v. BOONE COUNTY RESOURCE RECOVERY SYSTEM, INC. 803 N.E.2d 267 (Ind. Ct. App. 2004).

66. The Department is prohibited from issuing a surface coal mining and reclamation permit until making a determination that "the permit application is accurate and in compliance with all requirements of IC 14-34, the federal Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 1201 et seq.) and this article." 312 IAC 25-4-115(a)(1).

67. 312 IAC 25-4-23 requires only that Vigo provide certain information regarding other necessary permits as part of its application for Permit 352. Vigo is not obligated to verify that the remaining necessary permits have been obtained.

68. In that light, it is important to note that an applicant for a surface coal mining and reclamation permit is required to provide the Department with information regarding the approval or disapproval, if known, of the other permits necessary to conduct the mining activities at issue in the surface coal mining and reclamation permit. 312 IAC 25-4-23(4).

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69. The Department is correct in its position that 312 IAC 25-4-23 does not contain any prohibitions against the issuance of a surface coal mining and reclamation permit beyond those established in 312 IAC 25-4-115.

70. By providing the Department with notification under subsection 4 that another necessary permit had been denied, an applicant for a surface coal mining and reclamation permit has complied with the requirements of 312 IAC 25-4-23(4) and despite the fact that a necessary permit had been denied, the Department would not be prohibited under 312 IAC 25-4-23 or 312 IAC 25-4-115 from issuing a surface coal mining and reclamation permit to that applicant.

71. If the Department is not prohibited from issuing a surface coal mining and reclamation permit to an applicant that has been denied another permit necessary for conducting the mining activity, it is illogical to conclude that the Department is prohibited from issuing a surface coal mining and reclamation permit to an applicant who has not yet applied for another necessary permit.

72. Upon a consideration of the implications of the different interpretations of 312 IAC 25-4-23(3) espoused herein and by providing proper weight to the Department's interpretation of the rule it is required to enforce, it is more sensible to interpret subsection 3 to require an applicant for a surface coal mining and reclamation permit to provide the application identification number for all other necessary permits only if application for those permits has been made.

73. The Department and Vigo have indicated that pursuant to 327 IAC 15-1-1, Vigo may be authorized to conduct mining activities at the Chili Pepper Mine under a general NPDES permit, in which case no permit number or permit application number would be assigned. It is unnecessary and improper to reach this level of analysis.

74. Any determination as to whether Vigo is required to obtain individual NPDES or air quality permits or whether Vigo qualifies for operation of the Chili Pepper Mine under general licensing provisions of the Indiana Administrative Code requires substantive consideration of matters outside the scope of the Commission. Substantive matters relating to NPDES and air quality permits remains strictly within the jurisdiction of the Indiana Department of Environmental Management. This is similarly true of the explosives storage permits, which substantive consideration lies squarely within the jurisdiction of the State Fire Marshall.

FOOTNOTES:

1. The correspondence initiated the following administrative proceedings: Back v. Vigo Coal Company, Inc. & DNR, Administrative Cause 04-134R and 04-136R; Mottley v. Vigo Coal Company, Inc. & DNR, Administrative Cause 04-135R, Barton v. Vigo Coal Company, Inc. & DNR, Administrative Cause 04-140R and Jenkins v. Vigo Coal Company, Inc. & DNR, Administrative Cause 04-142R.

2. While Claimants have raised the possibility that they were informed by Commission staff that they were not required to provide the Respondents with a copy of these "draft papers" as a part of their preliminary witness and exhibit lists, the report of status conference issued to the parties on November 22, 2004 clearly states "...the Claimants are to provide Respondents with the "draft

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papers" referenced in Claimants' More Definite Statement... not later than December 18, 2004."

3. The controversy surrounding the Claimant's failure to provide the "draft papers" to the Respondents in compliance with the preliminary discovery order is insignificant here. On summary judgment, it is the necessity of the non-moving party to set forth those materials that create a genuine issue of material fact.

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WARRICK CIRCUIT COURT (CAUSE NO. 87C01-0506-MI-268)
FINDINGS OF FACT, CONCLUSIONS OF LAW, AND JUDGMENT
DAVID O. KELLEY, JUDGE
FILED SEPTEMBER 20, 2006

This cause comes before the Court on the Petitioner's Verified Petition for Judicial Review of the Natural Resources Commission's May 26, 2005 Final Order of Summary Judgment, which granted Vigo Coal Company, Inc.'s and the Indiana Department of Natural Resources' Motion for Summary Judgment. The issues having been heard before the Court, the Court now enteres its Findings of Fact, Conclusions of Law, and Judgment.

1. The Petitioner is Don Mottley.

2. The Respondent, the Indiana Department of Natural Resources ("IDNR") is the state administrative agency charged with the administrative and enforcement of the Indiana Surface Mining Control and Reclamation Action [sic] ("I-SMCRA"), codified at Ind. Code 14-31 et seq., and the administrative regulations associated with I-SMCRA, found at 312 IAC 25 et seq. The Respondent, Vigo County Coal Company, Inc. ("Vigo") is a corporation that operates surface coal mining operations under I-SMCRA permits issued by IDNR.

3. On June 8, 2004, the Division of Reclamation of the IDNR approved the surface coal mining and reclamation operations permit application for Vigo's Chili Pepper Mine. The Petitioner, Don Mottley, and others who are not parties to these proceedings, requested administrative review of the issuance of Permit #S-352 ("Permit 352").

4. The Petitioner alleged that there were eleven reasons that the permit was improperly issued. The three allegations relevant to this cause were: (1) that the IDNR should not have issued Permit 352 in advance of Vigo's receipt of a National Pollution Discharge Elimination System ("NPDES") permit; (2) that the IDNR should not have issued Permit 352 in advance of Vigo's receipt of an Air Construction Permit; and (3) that the IDNR should not have issued Permit 352 in advance of Vigo's receipt of its Explosives Storage Permit.

5. Petitioner Mottley argued that 312 IAC 25-4-23(3) requires permit applications to include application identification numbers of the other necessary permits, and the Vigo was thus required to submit applications for the other necessary permits in advance of being issued a surface coal mining and reclamation operations permit.

6. Vigo's surface coal mining and reclamation operations permit application identified all other licenses and permits required for operations at the mine. For the three permits at issue, Vigo listed the permits as pending and included the name and address of the issuing authorities for each.

7. On December 29, 2004, Vigo filed a Motion for Summary Judgment, and IDNR filed a Motion for Judgment on the Pleadings on February 6, 2005.

8. The Petitioner filed his "Verified Petition for Judicial Review" of the NRC's Final Order on June 28, 2005.

9. The Petitioner subsequently filed a brief in support of his Petition. IDNR and Vigo filed Responses, and Petitioner Mottley filed a reply brief.

10. A hearing on Petitioner's Verified Petition for Judicial Review was held on August 10, 2006 during which the Court heard oral argument from all parties.

11. To the extent any of these findings of fact are construed to be conclusions of law, they are hereby included as additional conclusions of law. To the extent that the conclusions of law are construed to be findings of fact, they are hereby included as additional findings of fact.

1. The role of a court in judicial review of an agency action is limited by the Indiana Administrative Orders and Procedures Act. Indiana Code 4-21.5-5-14 places the burden of demonstrating the invalidity of an agency action on the party that is challenging the agency action, and permits the court only to grant relief when the moving party demonstrates that the action is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; contrary to constitutional right, power, privelege, or immunity; in excess of statutory jurisdiction, authority, or limitations, or short of statutory right; without observance of procedure required by law; or unsupported by substantial evidence."

[sic] 1. The NRC concluded that the relevant regulations did not prevent IDNR from issuing a surface coal mining and reclamation permit before other necessary permits are obtained and, therefore, that IDNR acted reasonably in granting Vigo's permit.

2. The Petitioner claims that 312 IAC 312 IAC 25-4-23 prevents IDNR from issuing a surface coal mining and reclamation permit before the applicant has applied for or received other necessary permits. 312 IAC 25-4-23 states:

Each application shall contain a list of all other licenses and permits needed by the applicant to conduct the proposed surface mining activities. This list shall identify each license and permit by the following:
(1) The type of permit or license.
(2) The name and address of issuing authority.
(3) Identification numbers of applications for those permits or licenses or, if issued, the identification numbers of the permits or licenses.
(4) If a decision has been made, the date of approval or disapproval by each issuing authority.

3. The Petitioner contends that IDNR should not have issued Vigo a permit because its permit application stated that its NPDES permit, Air Construction Permit, and Explosive Storage Permit were "pending" and did not include permit application numbers or permit numbers. The Respondents argued that the regulation only requires that a permit applicant identify the other necessary permits and that it is not necessary for the applicant to obtain them prior to being issued a surface coal mining and reclamation permit.

4. The NRC agreed with IDNR's interpretation of the 312 IAC 25-4-23. The NRC based its ruling on the prohibitions for issuing a surface coal mining and reclamation permit listed at 312 IAC 25-4-115. 312 IAC 25-4-115 does not prevent IDNR from issuing a permit to an applicant who has not received another necessary permit.

5. The NRC also noted that while 312 [sic., IAC] 25-4-23 requires permit applicants to report to IDNR whether their other permit applications had been granted or denied, 312 IAC 25-4-115 does not prevent IDNR from issuing a surface coal mining and reclamation permit to an applicant who has been denied a required permit. It is illogical that IDNR could grant a surface coal mining and reclamatio permit to an applicant who had been denied a necessary permit but could not grant a surface coal mining and reclamation permit to an applicant who had not yet applied for the other necessary permits.

6. Interpreting 312 IAC 25-4 as a whole, the NRC concluded: "it is more sensible to interpret [312 IAC 25-4-23] to require an applicant for a surface coal mining and reclamation permit to provide the application identification number for all other necessary permits only if application[s] for those permits has been made." "Findings of Fact, Conclusions of Law and Final Order on Respondents' Motion for Summary Judgment," Administrative Record at 23.

7. The rules of statutory construction are applicable to the interpertation of regulations. See, e.g. Department of Natural Resources v. Peabody Coal Co., 740 N.E.2d 129, 134 (Ind.App.2000). The NRC's interpretation of 312 IAC 25-4-23 is supported by the rules of statutory construction, discussed by the Court of Appeals in Avemco Ins. v. State ex rel. McCarty:

When interpreting the words of a single section of a statute, this court must construe them with due regard for all other sections of the act and with regard for the legislative intent to carry out the spirit and purpose of the act. Further, we will not read into the statute that which is not the expressed intent of the legislature. As such, it is just as important to recognize what the statute does not say as it is to recognize what it does say. 812 N.E.2d 108, 122 (Ind.App.2004).

It is reasonable to interpret 312 IAC 25-4-23 to allow IDNR to issue a permit to an applicant who has not yet applied for other necessary permits.

8. When parties present two competing interpretations of a statute or regulation, the court must defer to the enforcing agency's reasonable interpretation:

In the context of judicial review of administrative action, our supreme court has resolved the issue of which of two conflicting statutory interpretations should be followed. As the court held in Indiana Wholesale Wine & Liquor Co., Inc. v. State ex rel. Indiana Alcoholic Beverage Com'n, 695 N.E.2d 99, 105 (Ind.1998), once an administrative agency's interpretation of a regulatory statute is deemed reasonable, the reviewing court shall terminate it's analysis and not address the reasonableness of a conflicting interpretation. Indiana Dept. of Environmental Mangement v. Boone County Resources Recovery Systems, Inc., 803 N.E.2d 267, 274 (Ind.App.2004).

9. Since IDNR's and the NRC's interpretation of 312 IAC 25-4-23 is reasonable, this court may not inquire into whether the Petitioner's interpretation of the rule is also reasonable.

10. The Petitioner has not met his burden of demonstrating that the agency action at issue was either: arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; contrary to constitutional right, power, privilege, or immunity; in excess of statutory jurisdiction, authority, or limitations, or short of statutory right; without observance of procedure required by law; or unsupported by substantial evidence.

It is therefore ORDERED that the Petitioner's Verified Petition for Judicial Review is hereby DENIED.

So ORDERED this 20 day of Sept., 2006.

David O. Kelley
Judge, Warrick Circuit Court