[CITE: Musgrave v. IDNR and Squaw Creek Coal Co., 10
CADDNAR 178 (2006)]
[VOLUME 10, PAGE 178]
Cause #: 05-180R
Caption: Musgrave v. Department of Natural Resources
and Squaw Creek Coal Company
Administrative Law Judge: Jensen
Attorneys: Musgrage, pro se; Boyko; Phillips
Date: February 1, 2006
FINAL ORDER:
The Musgraves' complaint is hereby ordered dismissed.
FINAL ORDER OF DISMISSAL
1. Under consideration in this administrative proceeding is a bond release determination
made by the Department of Natural Resources
(Department) relating to the Squaw Creek
Mine under Permit # S-009 held by the Squaw Creek Coal Company
(Squaw Creek).
2. The Claimants, Bil Musgrave and Kim Musgrave
(the Musgraves), sought administrative review of the Department’s determination in correspondence filed with the
Natural Resources Commission
(Commission) on September 30, 2005.
3. A prehearing conference was scheduled and conducted on December 20,2005.
4. On November 3, 2005, before the prehearing conference, Squaw Creek, by counsel
Michael K. Phillips, filed its Motion to Dismiss claiming the Commission lacked
jurisdiction over the subject matter of the Musgraves’ complaint and that the
Musgraves’ complaint failed to state a claim upon which relief can be granted.
5. On November 14, 2005, the Department, by counsel Ihor N. Boyko, filed its Motion to
Dismiss on the bases of lack of jurisdiction, lack of the Musgraves’ standing,
and for failure to state a claim upon which relief can be granted.
6. At the prehearing conference the following preliminary determinations were set forth:
- The Musgraves’ correspondence relates to bond release involving surface coal mining
and reclamation.
[VOLUME 10, PAGE 179]
- Surface coal mining and reclamation are matters under the control of the Department’s
Division of Reclamation.
- As the “ultimate authority” for matters under the control of the Department, the
Commission arguably possessed jurisdiction over the subject matter of the
Musgraves’ complaint.
- However, the Musgraves’ correspondence was insufficient to establish that they possessed
standing to initiate the action and further was insufficient to place the
adverse parties on notice as to the matters in dispute.
7. Because the subject matter of the Musgraves’ complaint is potentially within the subject
matter jurisdiction of the Commission, it was determined, pursuant to
well-established precedent of the Commission, that the Musgraves would be
provided the opportunity to plead over.
Bieda v. B&R Development
and DNR, 9 CADDNAR 1 (2001).
8. The Musgraves timely filed correspondence entitled “Purpose of Letter,” which is
construed as their amended pleading.
9. Squaw Creek and the Department timely filed supplemental Motions to Dismiss on January
23, 2006 and January 24, 2006, respectively.
10. Procedurally, this cause is governed by IC 4-21.5-3 (commonly referred to as the
Administrative Orders and Procedures Act or AOPA) and the procedural
requirements of IC 14-34, (commonly referred to as the Indiana Surface Coal Mine
and Reclamation Act or I-SMCRA).
11. Pursuant to IC 14-34-2-2(b) and 312 IAC 3-1-2 the appointed administrative law judge
serves as the “ultimate authority” regarding orders under IC 14-34 except those
orders relating to the approval or disapproval of a permit application or
renewal or proceedings for the suspension or revocation of a permit.
For purposes of this proceeding, which
involves solely issues relating to bond release, the administrative law judge is
the “ultimate authority.”
[VOLUME 10, PAGE 180]
12. An “ultimate authority” is an individual or panel of individuals in whom the final
authority of an agency is vested by law or executive order. IC 4-21.5-1-15
13. A state administrative agency possesses only those powers conferred upon it by the
Indiana General Assembly.
Morrison Estate v. Department and Black
Beauty Coal, 7 CADDNAR 57 (1994);
Pratt v. Indianapolis Water
Co. & DNR, 9 CADNAR 17, 18, (2001),
citing Bell v. State Board
of Tax Commissions, 615 N.E.2d 816 (Ind.Tax Ct. 1995) and
Fort Wayne
Education Association, Inc. v. Aldrich, 527 N.E.2d 201, 216 (Ind. Ct. App.
1998)
14. The Department, the Commission, and consequently the Commission’s appointed
administrative law judge are possessed of only those powers expressly granted by
the Indiana General Assembly.
Morrison, supra, citing Dyer Baptist Church v. Town of Dyer and DNR, 8 CADDNAR 79
(1998)
15. The amount of a bond relating to surface coal mining must be sufficient to assure
completion of the approved reclamation plan relating to the surface coal mine
and reclamation permit.
IC 14-34-6-2(a).
16. The Musgraves repeatedly state that IC 14-34-6-2 mandates that hydrology be
“considered in bond release.”
Musgraves’ “Letter of Purpose,” pps.
5-8.
17. The Musgraves conclusion that IC 14-34-6-2 mandates consideration of hydrology for
purposes of bond release is erroneous. Instead, IC 14-34-6-2 identifies those items that the Department must
consider in determining what amount of bond will be sufficient to assure
compliance with an approved reclamation plan associated with a surface coal
mining permit. One item for
consideration in determining the appropriate bond amount is hydrology.
18. IC 14-34-6-7 through IC 14-34-6-14 as well as 312 IAC 25-5-16 control bond release
relating to surface coal mining and reclamation.
[VOLUME
10, PAGE 181]
19. The Department is obligated, upon receipt of a bond release application, to “conduct
an inspection and evaluation of the reclamation work involved.” This evaluation must consider the
following:
(1) The degree of difficulty to complete remaining reclamation.
(2) Whether pollution of surface and subsurface water is occurring.
(3) The probability of continuance or future occurrence of the pollution.
(4)The estimated cost of abating the pollution.
IC 14-34-6-9
(1) When the operator completes the backfilling, regrading, and drainage control of a bonded area in accordance
with the
approved reclamation plan, the release of sixty percent (60%) of the bond or collateral for the applicable
permit area.
(2) After revegetation is established on the regraded mined land in accordance with the
approved reclamation plan. When determining the amount of bond to be released after successful revegetation has been established, the director
shall retain the amount of bond for the revegetated area that would be sufficient for a third party to cover the cost of establishing revegetation….
The director may not release a part of the bond or deposit under this subdivision:
(A) if the land to which the release would be applicable is contributing suspended solids to stream flow or
runoff outside the permit area in excess of the requirements set forth in IC
14-34-10-2(b).
(B) until soil productivity for prime farmland has returned to equivalent levels of yield as nonmined land of
the same soil type in the surrounding area under equivalent management practices
as determined from the soil survey performed under IC 14-34-3-3(16). If a silt dam is to be retained as a
permanent impoundment under IC 14-34-10-2(b)(11), the appropriate part of the
bond may be released under this subdivision if provisions for sound future
maintenance by the operator or landowner are made with the
director.
(3) When the operator has successfully completed all surface coal mining and reclamation activities, the
release of the remaining part of the
[VOLUME 10, PAGE 182]
bond, but not before expiration of the period specified for operator responsibility in IC 14-34-10. However, the director may not fully
release a bond or deposit until all reclamation requirements of this article are
fully met.
Emphasis added
21. Bond release, which by law may occur in phases, is dependent upon completion, in
phases, of reclamation activities
within the permit area pursuant to an
approved reclamation plan.
See generally, Bell v. Department of Natural Resources and Solar Sources, Inc., 7 CADDNAR 54, (1994).
22. Squaw Creek and the Department allege that the Musgraves lack standing to initiate the
instant proceeding for the reason that they have not demonstrated that they are
persons with a legal interest that “might be adversely affected by the release
of the performance bond…”
Squaw Creek Motion to Dismiss.
23. In addition, the Department cites to
Huffman v. Indiana Office of
Environmental Adjudication, Indiana Department of Environmental Management and
Eli Lilly and Company, 811 N.E.2d 806 (Ind. 2004), in support of its
position that the Musgraves possess only a generalized concern as a member of
the public and that they have failed to establish that the bond release will
result in a “denial of some personal or property right or the imposition upon a
party of a burden or obligation.”
Department’s Motion to
Dismiss.
24. Under
Huffman, to qualify for administrative review it is insufficient that a person’s interest be merely one
of a generalized nature as a member of a public and instead the person seeking
review under AOPA must “have suffered or be likely to suffer in the immediate
future harm to a legal interest, be it a pecuniary, property, or personal
interest.”
Huffman at 9.
25.
Huffman involves a proceeding
initiated and controlled solely by AOPA while a determination of standing in
this instant proceeding must, in addition to the standing requirements of AOPA,
consider standing as specified at IC 14-34-6-10. As such Huffman is
distinguishable.
[VOLUME 10, PAGE 183]
26.I-SMCRA
is required to conform to its federal counterpart, the Federal Surface Coal Mine
and Reclamation Act (F-SMCRA) and
primacy requires the State of Indiana to adhere to the F-SMCRA concept of
standing. Hoosier Environmental Council v. DNR and
Solar Sources, Inc., 7 CADDNAR 85 (1995), Roberts d/b/a
Enterprise Oil & Associates v. DNR & Black Beauty Coal Co., 7
CADDNAR 206 (1999).
27.Under
F-SMCRA standing “is much broader than standing in more traditional cases, and
includes injury to aesthetic or recreation interest.” Further, an allegation that harm “could
happen” is adequate to show standing.Hoosier Environmental
Council, supra at 86, see also National Wildlife Federation v. Hodel,
839 F.2d 694, (D.C. Circuit 1988).
28. The Musgraves state that a portion of their claim involves enjoying the aesthetic
value of the area as well as boating and fishing there. Additionally, the Musgraves state that
Bil is a member of the Chandler Volunteer Fire Department, whose response area
includes the permit area of the Squaw Creek Mine under Permit #
S-009.
29. It is determined that the Musgraves have presented sufficient interests to establish
standing to initiate this proceeding.
30. However, the Musgraves complaint focuses on matters that are either outside the scope of
the bond release relating to Squaw Creek’s Permit # S-009 or are outside the
control or jurisdiction of the Department, the Commission or this administrative
law judge.
31.
32. The bond release at issue herein does not involve the permit area included in Permit #
S-008 but is restricted solely to the permit area included in Permit #
S-009.
[VOLUME 10, PAGE 184]
Musgraves’ “Purpose of Letter,” Squaw Creek’s Motion to Dismiss, and Department’s Motion to
Dismiss
33. The Musgraves acknowledge their inability to determine whether “any of this toxic
material was dumped in the South field S-009 permit area which we are
appealing,” but instead their complaint focuses on past dumping activities, and
recent events relating to that dumping, occurring within the permit area of
Permit # S-008. Musgraves’ “Purpose of Letter.”
34. The Musgraves further acknowledge that contamination that might occur within the
permit area included within Permit # S-009 would be a result of alleged past
activities that occurred within the permit area of Permit # S-008. “A consulting firm hired by Alcoa says
that toxic chemicals buried on Squaw Creek Mine property (referring to the
permit area associated with Permit # S-008) could leach to the city of Boonville
in 35 to 70 years, this is in a direct path for the S-009 area, yet either DNR
didn’t research this information or chose to not take this into
consideration.” Musgraves’ “Purpose of
Letter.”
35. Bond release relating to Permit # S-009 relates solely to the completion of an
approved reclamation plan for mining activities occurring within that particular
permit area.
36. Notwithstanding the fact that Squaw Creek is the permittee associated with both Permit # S-008
and # S-009, the bond posted on Permit # S-009 serves the purpose of assuring
that reclamation relating to mining activities occurring within that particular
permit area is completed. IC 14-34-6-2.
37. Therefore, the Department is without authority to deny bond release on Permit # S-009 as a
result of activities that allegedly occurred within the permit area covered by
Permit # S-008 or for the purpose of facilitating the remediation of
contamination resulting from activities occurring within the permit area of
Permit # S-008.
38. In the event it were appropriate for the Department to deny any bond release relating
to the Musgraves’ complaint of toxic dumping and the resulting contamination it
[VOLUME 10, PAGE 185]
would have to be the bond related to Permit # S-008, not the bond posted on Permit #
S-009.
39. The Department’s approval of Permit # S-009 and its reclamation plan constitutes an
“order” that became a final order after the expiration of the statutory time for
taking administrative review. The
reclamation plan associated with Permit # S-009, upon becoming a final order may
not be collaterally attacked. Bell v. Department of Natural Resources
and Solar Sources, Inc., 7 CADDNAR 54 (1994).
40. If the
Musgraves were dissatisfied with the sufficiency of the reclamation plan
associated with Permit # S-009, they were required to take administrative review
at the time of its approval, not now.
41. The
Musgraves do not allege that Squaw Creek has failed to complete reclamation
relating to Permit # S-009 as required in its approved reclamation plan and may
not now expect to obtain imposition of additional requirements to those
reclamation obligations.
42. The
Musgraves have not alleged that conditions prerequisite to bond release, as set
forth at IC 14-34-6-13, have not been met with respect to the permit area
associated with Permit # S-009.
43. The
pollution to surface or subsurface water referred to by the Musgraves that may
be presently occurring or may in the future occur and any costs associated with
that pollution would be the result of past activities occurring within the
permit area of Permit # S-008. Musgraves’ “Purpose of
Letter.”
44. What the
Musgraves do allege relates in large part to the manner in which toxins
allegedly dumped within the permit area of Permit # S-008 may in the future
impact the permit area included with Permit # S-009. Addressing the impact of contamination
associated with past dumping is not within the purview of I-SMCRA’s reclamation
requirements.
45. The Musgraves acknowledge their awareness of the Indiana Department of Environmental
Management’s (IDEM) and the U.S. Environmental Protection
[VOLUME 10, PAGE 186]
Agency’s (EPA) role in the investigation and remediation of contaminated sites and those
agencies’ involvement with the permit area relating to Permit # S-008. Musgraves’ “Letter of
Purpose.”
46. As was previously stated, administrative agencies possess only those powers expressly
granted by the Indiana General Assembly, Morrison and Pratt,
supra. The Department correctly concludes that matters relating to Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA) and the Resource Conservation
and Recovery Act (RCRA) were placed solely and squarely under the jurisdiction of IDEM by the Indiana General
Assembly.
47. The Musgraves’ complaint fails to state a claim upon which relief may be granted for
two reasons. First, the complaint relates to activities within the permit area of Permit # S-008, which is not the
subject of bond release at issue in this proceeding. Second, the relief sought is the
remediation of contamination resulting from alleged past toxic dumping, which is
not within the jurisdiction of the Department, the Commission or the
administrative law judge.