CADDNAR


[CITE: Musgrave v. IDNR and Squaw Creek Coal Co., 10 CADDNAR 178 (2006)]

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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:

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.”

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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.

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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

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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.

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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.

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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

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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

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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.