CADDNAR

[CITE: Musgrave v. DNR & Squaw Creek, 12 CADDNAR 163 (2009)]

 

 

[VOLUME 12, PAGE 163]

 

Cause #:09-077R

Caption: Musgrave v. DNR and Squaw Creek

Administrative Law Judge: Jensen

Attorneys: pro se (Musgrave); Boyko (DNR); Phillips (Squaw Creek)

Date: August 24, 2009

 

 

ORDER

 

39.  The instant proceeding is hereby ordered dismissed.

 

ORDER GRANTING SQUAW CREEK COAL COMPANY’S AND THE DEPARTMENT OF NATURAL RESOURCES’ MOTIONS TO DISMISS

 

 

Case History

 

1.      The instant proceeding was initiated by Bil Musgrave and Kim Musgrave (collectively “the Musgraves”) through correspondence (“Complaint”) filed with the Natural Resources Commission “Commission”) on April 22, 2009.

 

2.      On May 6, 2009, the appointed administrative law judge issued notice to the Musgraves advising them that their “correspondence fails to establish an actionable claim” and offering them an opportunity to supplement their original correspondence.

 

3.      On May 22, 2009, the Musgraves filed supplemental correspondence (“Amended Complaint”) providing further explanation as to their standing and their claims.

 

4.      A prehearing conference was scheduled for June 29, 2009 and on June 25, 2009 Squaw Creek Coal Company (SCCC) filed its Trial Rule 12(B) Motion to Dismiss Amended Petition of Claimants.

 

5.      At the prehearing conference a briefing schedule was established with respect to SCCC’s motion.  That scheduled provided the Department of Natural Resources (Department) an opportunity to join in SCCC’s motion, an opportunity for the Musgraves to respond to the motion of SCCC and any joinder motion of the Department.  Also authorized was the opportunity for the moving parties, SCCC and the Department to file reply briefs.

 

6.      The Musgraves were advised during the prehearing conference that they are entitled by Commission precedent to amend their complaint “once as a matter of course before a response is filed”, Juday Creek, et al. v. Ralph Williams and Associates and DNR, 8 CADDNAR 90, 93 (1998).  In this instance, SCCC had filed its motion to dismiss and the Department had filed its answer and affirmative defenses.  Consequently the administrative law judge rejected any effort of the Musgraves to further amend their complaint.  See Report of Prehearing Conference dated July 1, 2009.

 

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7.      Each party participated fully in the briefing process.

 

8.      The Musgraves, in filing their response to SCCC’s and the Department’s motions to dismiss, included additional factual elaborations relating to the claims as set forth in their supplemental correspondence filed on May 22, 2009 and they included Exhibits A, B & C in further support of their Complaint and Amended Complaint.

 

9.      The Department in filing its reply, viewing certain non-responsive portions of the Musgraves’ response as well as the Exhibits as an attempt to further amend or elaborate upon their Complaint and Amended Complaint, sought to have the non-responsive portions of the Musgraves’ response and the Exhibits stricken from the record.

 

10.  The administrative law judge at this time determines that the Exhibits attached to the Musgraves response should be and are hereby stricken from the record.  While certain portions of the Musgraves response are not truly responsive to SCCC’s and the Department’s motions to dismiss, the content does, in fact, relate strictly to the issues raised in their Amended Complaint.  Therefore, no portion of the Musgraves’ response will be stricken. 

 

11.  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 (“I-SMCRA”).

 

12.  An administrative law judge is authorized to issue a final order of dismissal if the person seeking administrative review does not qualify or a dismissal could be entered in a civil court.  312 IAC 3-1-9(b)(3) and (4).

 

 

Findings and Conclusions

 

13.  In this instance, a Trial Rule 12(B)(6) motion to dismiss for failure to state a claim is determinable by a review of the Musgraves’ Complaint and Amended Complaint to determine the sufficiency in stating a claim for which the Commission may grant relief.  Regina Bieda v. B & R Development and DNR, 9 CADDNAR 1, (2001).

 

14.  “A complaint in an administrative proceeding need not "enumerate precisely every event to which a hearing examiner may finally attach significance." L.G. BALFOUR CO. v. FEDERAK TRADE COMM'N, 442 F.2d 1, 19 (7th Cir. 1971). Rather, the purpose of the administrative complaint is to give the responding party notice of the charges against him. Id. Reversal shall not occur absent evidence that a party is misled by an administrative complaint, resulting in prejudicial error. Id.”   Regina Bieda v. B & R Development and DNR, 9 CADDNAR 1, 4 (2001).

 

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15.  While a complaint may place the responding party on notice as to the allegations against him, the allegations may, nonetheless, be of such a nature that the Commission is without the authority to grant the relief sought. 

 

 

Standing

 

16.  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 have or are likely to suffer immediate or future harm to a pecuniary, property or personal interest as required by I.C. 4-21.5-4-3-7(a)(1)(B) or Huffman v. Indiana Office of Environmental Adjudication, Indiana Department of Environmental Management and Eli Lilly and Company, 811 N.E.2d 806 (Ind. 2004).

 

17.  In addition to being controlled by the Administrative Orders and Procedures Act, the present case is also brought under I-SMCRA, which states that “any person having an interest that is or may be adversely affected by the decision of the director will have the right to administrative and judicial review…” 312 IAC 25-4-131.

 

18.  “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.”  Musgrave v. IDNR and Squaw Creek Coal Co., 10 CADDNAR 178, (2006), citing Hoosier Environmental Council v. DNR and Solar Sources, Inc., 7 CADDNAR 85 (March 23, 1995) Roberts d/b/a Enterprise Oil & Associates v. DNR & Black Beauty Coal Co., 7 CADDNAR 206 (October 26, 1999).

 

19.  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.  Musgrave v. IDNR and Squaw Creek Coal Co., 10 CADDNAR 178 (2006), citing Hoosier Environmental Council, supra at 86, see also National Wildlife Federation v. Hodel, 839 F.2d 694, (D.C. Circuit 1988).

 

20.  The Musgraves state in their Amended Complaint that “Our family also enjoys fishing and boating in the downstream watershed of the Squaw Creek S-008 mine permit area… We still drive through the permitted area enjoying the aesthetic value of the area, bird watching and observing wildlife.”  Further, the Musgraves state that “Bil is President of the Chandler Volunteer Fire Department whose response area includes Range Line Mine, Squaw Creek Mine, and Cypress Creek Mine.”

 

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21.  The administrative law judge determines that under the broader concept of standing as established under F-SMCRA and applicable to I-SMCRA, the Musgraves have stated sufficient facts upon which to establish standing to initiate this proceeding.

 

 

Collateral Estoppel

 

22.  The doctrine of res judicata and collateral estoppel are applicable in administrative proceedings.  Galbreath v. Griffith, 11 CADDNAR 224 (2007).

 

23.  As stated in Galbreath, at page 227,

“The doctrine of res judicata bars litigation of a claim after a final judgment has been rendered in a prior action involving the same claim between the same parties or their privies.”  Small v. Centocor, Inc., 731 N.E.2d 22 at 26 (Ind. Ct. App. 2000), citing Indiana Insurance Company v. American Community Services, Inc., 718 N.E.2d 1147, 1155 (Ind. Ct. App. 1999).  “The principle behind this doctrine, as well as the doctrine of collateral estoppel, is the prevention of repetitive litigation of the same dispute.”  Id.  As explained by the Small Court, “the following four requirements must be satisfied for a claim to be precluded under the doctrine of res judicata:

 

1.) The former judgment must have been rendered by a court of competent jurisdiction;

 

2.) The former judgment must have been rendered on the merits;

 

3.) The matter now at issue was or, could have been, determined in the prior action; and

 

4.) The controversy adjudicated in the former action must have been between the parties to the present suit or their privies.”  Id.

 

24.  Collateral estoppel is not applicable to the present proceeding for two reasons.  First, the adjudication of Musgrave v. IDNR and Squaw Creek Coal Co., 10 CADDNAR 178 (2006) involved the matter of bond release and as such did not involve the same claim as the present litigation, which involves a permit renewal.  Second, because the present litigation involves a permit renewal action taken by the Department and the first involved a bond release action taken by the Department the matter at issue presently could not have been determined in the prior action.

 

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Failure to State a Claim Upon Which Relief Can Be Granted.

 

25.  At issue is the renewal of a permit issued to SCCC by the Department pursuant to the I-SMCRA.

 

26.  A permit renewal such as the one at issue here is controlled by 312 IAC 25-4-128 through 312 IAC 25-4-131, which state,

 

312 IAC 25-4-128 Permit reviews; revisions, renewals, transfer, sale, and assignment of rights granted under permits; permit renewals, general requirements

Sec. 128. (a) Any valid, existing permit issued under this program shall carry with it the right of successive renewal upon expiration of the term of the permit in accordance with sections 129 through 131 of this rule. Successive renewal shall be available only for those areas that were specifically approved by the director on the application for the existing permit as within the boundaries of the permit.

(b) Permit renewal shall not be available for conducting surface coal mining and reclamation operations on lands beyond the boundaries of the permit area approved under the existing permit except as provided in section 129(b)(2) of this rule. (Natural Resources Commission; 312 IAC 25-4-128; filed Jun 21, 2001, 2:53 p.m.: 24 IR 3496, eff Dec 1, 2001; readopted filed May 29, 2007, 9:51 a.m.: 20070613-IR-312070146RFA)

 

312 IAC 25-4-129 Permit reviews; revisions, renewals, transfer, sale, and assignment of rights granted under permits; completed applications

Sec. 129. (a) Complete applications for renewals of a permit shall be made within the time prescribed by section 5(b) of this rule. Renewal applications shall be in a form and with contents required by the director under this program and in accordance with subsection (b)(2), including, at a minimum, the following:

(1) A statement of the name and address of the permittee, the term of the renewal requested, the permit number, and a description of any changes to the matters set forth in the original application for a permit or prior permit renewal.

(2) A copy of the newspaper notice and proof of publication of same under section 109(a) of this rule.

(3) Evidence that a liability insurance policy will be provided by the applicant for the proposed period of renewal.

(b) Processing and review of renewals shall satisfy the following:

(1) Complete applications for renewal shall be subject to the requirements of public notification and participation contained in sections 109 through 112 of this rule.

 

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(2) If a complete application for renewal of a permit includes a proposal to extend the mining and reclamation operation beyond the boundaries authorized in the existing permit, the portion of the complete application for renewal of a valid permit that addresses any new land areas shall be subject to the full standards applicable to new permit applications under:

(A) IC 14-34;

(B) sections 2 through 8 of this rule;

(C) sections 16 through 128 of this rule;

(D) this section;

(E) sections 130 through 143 of this rule;

(F) 312 IAC 25-5; and

(G) the regulatory program.

(3) Before the permit renewal becomes valid, the permittee shall submit to the director any additional performance bond required to comply with 312 IAC 25-5.  (Natural Resources Commission; 312 IAC 25-4-129; filed Jun 21, 2001, 2:53 p.m.: 24 IR 3496, eff Dec 1, 2001; readopted filed May

29, 2007, 9:51 a.m.: 20070613-IR-312070146RFA)

 

312 IAC 25-4-130 Permit reviews; revisions, renewals, transfer, sale, and assignment of rights granted under permits; terms

Sec. 130. Any permit renewal shall be for a term not to exceed the period of the original permit established under section 119 of this rule. (Natural Resources Commission; 312 IAC 25-4-130; filed Jun 21, 2001, 2:53 p.m.: 24 IR 3496, eff Dec 1, 2001; readopted filed May 29, 2007, 9:51 a.m.: 20070613-IR-312070146RFA)

 

312 IAC 25-4-131 Permit reviews; revisions, renewals, transfer, sale, and assignment of rights granted under permits; approval criteria

Sec. 131. (a) The director shall, upon the basis of a complete application for renewal and completion of all procedures required under sections 129 and 130 of this rule, issue a renewal of a permit unless it is established and written findings by the director are made that:

(1) the terms and conditions of the existing permit are not being satisfactorily met;

(2) the present surface coal mining and reclamation operations are not in compliance with the environmental protection standards under IC 14-34 and 312 IAC 25-6;

(3) the requested renewal substantially jeopardizes the operator's continuing responsibility to comply with IC 14-34 and the regulations on existing areas;

(4) the operator has not provided evidence that any performance bond required to be in effect for the operations will continue in full force and effect for the proposed period of renewal, as well as any additional bond the director might require under 312 IAC 25-5; or

 

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(5) any additional revised or updated information required by the director has not been provided by the applicant.

(b) In determining whether to approve or deny a renewal, the burden shall be on the opponents of renewal.

(c) The director shall send copies of the director's decision to the following:

(1) The applicant.

(2) Any persons who filed objections or comments to the renewal.

(3) Any persons who were parties to any informal conference held on the permit renewal.

(d) Any person having an interest that is or may be adversely affected by the decision of the director will have the right to administrative and judicial review set forth in sections 122 and 123 of this rule. (Natural Resources Commission; 312 IAC 25-4-131; filed Jun 21, 2001, 2:53 p.m.: 24 IR 3496, eff Dec 1, 2001; readopted filed May 29, 2007, 9:51 a.m.: 20070613-IR-312070146RFA)

 

27.  The Musgraves’ Amended Complaint makes numerous allegations relating to the dumping of hazardous waste at the site by Alcoa and raise actual claims relating to allegations of Departmental wrongdoing in (1) granting SCCC extensions for backfilling and grading at the site that was the subject of the renewal application, (2) granting SCCC grade deferrals for the site that was the subject of the renewal application, (3) not addressing an existing open highwall that the Musgraves’ characterize as an “imminent danger to the health and safety of the public”, (4) finding that mining was ongoing at the time of issuing the renewal permit, (5) finding that exploratory drill holes had been backfilled when IDEM stated previously that they had not been backfilled and were capable of facilitating leaching.  Further, the Musgraves offer a variety of concerns stemming from an ongoing investigation being conducted by IDEM into the matter of the alleged toxic waste dumping by Alcoa and findings of remedial measures that should be taken at the site associated with the permit renewal. 

 

28.  The Musgraves’ Response to SCCC’s and the Department’s motions to dismiss provides little except to expound upon the allegations contained within their Amended Complaint and to provide administrative rule citations in support of those allegations.  The Musgraves explains “if current Indiana Law was enforced, Squaw Creek Coal Company would be found in violation of 312 IAC 25-6-48” for failing to conduct contemporaneous reclamation, and for failing to backfill and grade disturbed areas as required by 312 IAC 25-6-49 and 312 IAC 25-6-50.  According to the Musgraves, the Department should take action to terminate SCCC’s permit for nonuse under I.C. 14-34-5-3 and for SCCC’s failure to reclaim a steep highwall running adjacent to a county road that in the Musgraves’ opinion represents and imminent danger to health and safety of the public.

 

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29.  The Musgraves have failed to set forth a legal basis for their belief that the issues as set forth in the Musgraves’ Amended Complaint and their response to SCCC’s and the Department’s motions to dismiss, as restated by the administrative law judge in Findings 26 and 27, are sufficient to allow the Department to deny SCCC’s permit renewal application. 

 

30.  The administrative law judge’s independent comparison of 312 IAC 25-4-131, which controls the Department’s review of permit renewals under I-SMCRA, to the Musgraves’ allegations, as set forth in Findings 26 and 27, at best results in speculation that the Musgraves’ claims are based upon the belief that if the Department had taken action on the matters they identified, the SCCC would have been in noncompliance with “the terms and conditions of the existing permit”, which would have justified the Department’s denial of SCCC’s permit renewal application.  312 IAC 25-4-131(a)(1).

 

31.  If the administrative law judge’s interpretation of the Musgraves Amended Complaint is correct, the Amended Complaint is self-defeating.  In reviewing SCCC’s permit renewal application, the Department is required to issue the renewal unless it determines that the terms and conditions of the permit are “not being satisfactorily met.” 312 IAC 25-4-131(a)(1).  While the Musgraves may believe that the Department should take the noted enforcement measures and may further believe that terms and conditions of SCCC’s existing permit are not being met, the Musgraves, in their own Amended Complaint and response to SCCC’s and the Department’s motions to dismiss, acknowledge that these enforcement actions have not been taken.

 

32.  It is the Musgraves’ responsibility to file a Complaint that places the responding parties clearly on notice of the charges against them.  While the administrative law judge has offered some thought as to potential legal bases of the Musgraves claims as restated in Findings 26 and 27, it is not certain that those thoughts are a correct interpretation of the Musgraves’ Amended Complaint.

 

33.  The Musgraves have failed to state the legal basis of their claim and the bases of their claim cannot rest upon speculative interpretation of the trier of fact.  Therefore, the claims made by the Musgraves that are restated in Findings 27 and 28 are deemed insufficient to state a claim upon which relief may be granted.

 

34.  The Musgraves make additional claims related to the alleged hazardous waste that has been dumped at the site associated with SCCC’s renewal application ,alleging more particularly in their response to SCCC’s and the Department’s motions to dismiss that there is the “possibility of contaimed (contaminated) water leaching from old prospect drill holes into subsurface water pathways…”

 

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35.  With respect to the issue of leaching of hazardous waste, the Musgraves, again, fail to state the legal bases of their belief that this provided grounds upon which the Department could have or should have denied SCCC’s permit renewal application.

 

36.  The only possible theory that can be identified by the administrative law judge involves Musgraves possible belief that the potential for the leaching of contaminated water from the drill holes would have justified the Department’s denial of the permit renewal because SCCC was not “in compliance with the environmental protection standards under IC 14-34 and 312 IAC 25-6,” 312 IAC 25-4-131(1)(b), however this, again is mere speculation by the administrative law judge.

 

37.  It is observed once again that 312 IAC 25-4-131(b)(2) would require SCCC to be in actual non-compliance with the requisite standards in order to for the Department to be authorized to deny the permit renewal application.  Under this interpretation by the administrative law judge the Musgraves’ Amended Complaint would, again, be self-defeating because they site merely the possibility of some leaching but not any actual non-compliance by SCCC.

 

38.  With respect to the hazardous waste leaching issues, the Musgraves also have failed to state a claim upon which relief may be granted.

 

 

[EDITOR’S NOTE: The original format of the Administrative Law Judge’s Final Order has been changed to match CADDNAR format.]