[NOTE: CLAY CIRCUIT COURT REVERSED ALJ (11CO1-9307-MI168). CLAY DECISION FOLLOWS ALJ FINDINGS. DNR APPEALED. COURT OF APPEALS DECISION, AFFIRMING TRIAL COURT, FOLLOWS TRIAL COURT FINDINGS.]
Notice of Violation N11114-S-00236 is affirmed.
FINDINGS OF FACT
1. On December 11, 1991, B&LS Contracting, Inc. filed a Petition for administrative review of Notice of Violation (NOV) N11114-S-236.
2. B&LS, at all times relevant to this proceeding, held permit S-236 which allows surface coal mining to be conducted at its Eel Mine in Clay County, Indiana.
3. Division of Reclamation (DOR) inspector, Russell Retherford, issued the NOV in question here.
4. IC 21.5, IC 13-4.1, 310 IAC 0.6, and 310 IAC 12 apply to this proceeding.
5. The Department of Natural Resources ("Department") is an agency as defined in IC 4-21.5-1-3.
6. As defined in IC 4-21.5-1-15, "ultimate authority" means the individual or panel in whom the final authority of an agency is vested.
7. Pursuant to IC 13-4.1-2-1(c), the administrative law judge (ALJ) is the ultimate authority for the Department in this proceeding.
8. The NOV was written for "failure to mine according to the approved operations plan. Specifically, failure to install a road crossing in the approved location."
9. The NOV specifies "provision violated: 310 IAC 12-3-4 condition of permit Part 11 A(4)."
10. The NOV was written at the DOR field office after the inspector discussed the situation with his superiors.
11. The inspection leading to the issuance of the NOV was conducted in response to a citizen complaint.
12. The citizen, David Kirkpatrick, complained that the placement of the haul road in question was causing a severe dust problem at his residence.
13. The process followed by the inspector, i.e. receiving and investigating a citizen complaint, discussing the situation with his superiors, and issuing a Notice of violation, if indicated, is a proper course of action.
14. 310 IAC 12-3-4 simply states that a miner shall comply with the law and with the terms of his permit to mine coal.
15. B&LS permit condition Part II A(4) is evidently the part of the permit which includes the operations map.
16. The ALJ determines, after careful examination of the law and the evidence, that this case deals with whether changing the placement of a road crossing from the location depicted in the permit needs prior approval from the Department.
17. B&LS made a lengthy argument as to the lack of accuracy of the maps involved.
18. B&LS also pointed out that there is no published standard as to how much deviation from a map is allowed.
19. B&LS is quite correct that the maps submitted to the ALJ are not exact and that the Department presented no guidelines as to how much deviation is allowed and how the deviation can be arrived at.
20. The Department, in it post hearing brief/proposed findings, advanced a complicated method for determining a range of accuracy for an operations map.
21. There is no evidence that B&LS was or should have been aware of the Department's method for calculating map deviation.
22. Given a scenario in which B&LS made its best effort to place the road crossing where depicted in the permit and the Department then wrote an NOV alleging that they were not quite close enough, the ALJ would be hard pressed to rule due to the lack of a standard.
23. Fortunately, the above scenario does not exist here because B&LS made a conscious decision to place the haul road at a location it knew to be different from the location depicted in the permit.
24. Mr. Kevin
[VOLUME 6, PAGE 112]
Wilkinson, who is the mine manager for the area in question here, testified to the findings that follow.
25. He was involved in locating the road crossing.
26. He asked Sam Elder, an engineer, to locate the position of the crossing as it appeared on the operations map.
27. He then reviewed the location and decided that it was not ideal from a safety aspect.
28. He decided the road crossing should be moved 300 to 400 feet to the east so as to be more visible to members of the public traveling on CR 80E.
29. He and Mr. Elder discussed the matter and determined there would "be no problem" with said relocation.
30. He then ordered Mr. Elder to place the crossing at the new location.
31. Unfortunately, the B&LS employees failed to discuss the relocation with the Department.
32. It is clear that miners are bound by the terms of their permits.
33. Permit applications are thoroughly reviewed by the Department prior to approval.
34. It stands to reason that changes to approved permits must be reviewed as well.
35. Mr. Wilkinson made a conscious decision to place the road crossing at a location different than that depicted in Permit S-236.
36. He should have submitted that change in location to the Department for approval prior to construction.
CLAY CIRCUIT COURT'S FINDINGS OF FACT, CONCLUSIONS OF LAW AND JUDGMENT
1. On November 18, 1991, the Division issued the NOV to B&LS, by which DNR alleged that B&LS had violated a certain provision of surface coal mining operating Permit No. S-00236 ("Permit"), by which B&LS was authorized to conduct surface coal mining operations at its Eel Mine located in Clay County, Indiana, as well as 310 IAC 12-3-4. The basis for the issuance of the NOV was B&LS's construction of a haul road crossing of County Road 80E at a location allegedly different than that previously approved by the Division as part of a nonsignificant revision to the Permit, which the Division alleged constituted: "Failure to mine according to the approved operations plan. Specifically, failure to install a road crossing in its approved location.
2. B&LS sought administrative review of the Division's issuance of the NOV, pursuant to 310 IAC 12-6-9; and a hearing was held in that regard by ALJ Rider on October 29, 1992.
3. On June 15, 1993, Judge Rider issued the ALJ Report, which affirmed the issuance of the NOV.
4. Surface coal mining is, and has been for a number of years, an intensely regulated activity. At present, surface coal mining in Indiana is subject to the provisions of the Indiana Surface mining Control & Reclamation Act ("I-SMCRA"), IC 13-4.1, the State's analog to the Federal surface Mining Control & Reclamation Act ("SMCRA") of 1977, and the regulations implementing I-SMCRA set forth at 310 IAC 12. I-SMCRA and its regulations are administered in Indiana by the Division.
5. B&LS has been conducting surface coal mining operations at its Eel Mine located in Clay County, Indiana pursuant to the Permit since February 1990. The agency action that is the subject of this Petition was taken in connection with this Permit.
6. At all times, B&LS' operations at the Eel Mine have been conducted pursuant to the Permit, as duly issued by the commission pursuant to I-SMCRA and its regulations.
7. On or about June 14, 1991, the Clay County Commissioners granted permission to B&LS to construct a haul road crossing on County Road 80E, east of the intersection with County Road 90S ("Road Crossing") .
8. On or about July 11, 1991, B&LS submitted to DNR a request for a non-significant departure from the Permit's then existing terms for operations at the Eel Mine, which included a request to construct the Road Crossing. B&LS attached a copy of the Clay County Commissioners, Resolution granting authority to build the Road Crossing and also submitted a revised operations map illustrating the Road Crossing. These non-significant departures were approved by DNR.
9. When B&LS prepared for construction of the Road Crossing, it determined that the "location" of the Road Crossing as depicted on the operations map relative to the distance from the intersection -- but not relative to the crest of the rise in County Road 80E to the east -- needed to be moved to the east for safety reasons.
10. Because the location of the Road Crossing did not (and does not) impact upon B&LS's ability to comply with any performance standards established by 310 IAC 12-5 or the Permit, this was not the type of "departure" from the Permit terms requiring prior approval by DNR under 310 IAC 12-3-121. Furthermore, the Division had never treated this type of situation as one for which it required pre-approval. Therefore, B&LS implemented the so-called "departure" without first obtaining approval from the Division.
11. Following construction of the Road Crossing, the Division inspector, Russell Retherford, and his supervisor, Kevin Geier, conducted an inspection of the Road crossing in response to a citizen complaint.
12. While at the site, Retherford and Geier determined that the "departure" did not warrant the issuance of an NOV and communicated this decision to B&LS representatives who were present during the inspection.
13. Subsequent to the site inspection, a meeting was held by Division personnel, which included Retherford, Geier, Timothy Taylor (Assistant Director of the Division), and Michael Sponsler (Director of the Division). At this meeting, a decision was made to issue an NOV because these persons concluded that the actual crossing was "Too far off" from the approved location. The NOV was issued "for failure to mine according to the approved operations plan. Specifically, failure to install a road crossing in the approved location".
14. On or about December 11, 1991, B&LS petitioned for administrative review of the issuance of the NOV, which petition was docketed as Administrative Cause No. 91-473R and referred to ALJ Rider for hearing.
15. On October 29, 1992, Judge Rider conducted a formal hearing on B&LS petition in Jasonville, Indiana.
16. On June 15, 1993, ALJ Rider issued the ALJ Report, which contains certain findings of Fact and/or conclusions of law.
CONCLUSIONS OF LAW
1. This Court has jurisdiction over this Petition pursuant to IC 4-21.5-5 and IC 13-4.1.
2. B&LS has exhausted all administrative remedies available to it within DNR and no other agency is authorized to exercise administrative review; and B&LS has not failed to timely object to any order or timely petition for review of an order within the period prescribed by 4-21.5, nor is B&LS in default by 4-21.5, nor is B&LS in default under 4-21.5 in any way.
3. B&LS has standing under IC 4-21.5-5-3 to pursue the matters that are the subject of this Petition in that
(a) the agency action that is the subject of this Petition is specifically directed
to B&LS,
(b) B&LS was a party to the DNR proceedings that led to the agency action that is the
subject of this Petition, and
(c) B&LS is aggrieved and adversely affected by the agency action
that is the subject of this Petition, as that agency action affects the B&LS Permit and the B&LS
operating and compliance history.
4. Venue properly lies with this Court in that
(a) B&LS
"resides", for venue purposes, in Clay County, and
(b) the agency action that is subject of this
Petition is to be carried out and/or enforced in Clay County.
5. The ALJ Report constitutes an agency action that is arbitrary, capricious, unsupported by substantial evidence when the entire record is considered, contrary to law, and in excess of the authority of the ALJ, the Division, DNR and/or the Commission. Specifically, ALJ Findings 13, 16, 32, 33, 34 and 36 in the ALJ Report are erroneous for the following reasons:
6. ALJ Findings 13 and 16 are erroneous because under the particular facts of this action it was improper for the Division to issue an NOV.
a.
When B&LS submitted its request to the Division for non-significant revisions to its Permit,
including the request to construct the Road Crossing, B&LS only sought to have DNR
incorporate into the Permit the authority already granted by the Clay County Commissioners.
b.
I-SMCRA and its regulations do not address, and thus do not regulate, the location of haul road
crossings of public roads. In contrast to other types of structures, neither I-SMCRA nor its
regulations require that such haul road crossings be illustrated on an operations map.
c. B&LS
had no notice that this type of "departure" from its approved operations map would require prior
approval by the Division. At the time the NOV was issued, the Division had no policy
addressing the subject of changes in operations plans. However, after the NOV was issued, the
Division adopted an internal policy requiring prior approval for any discrepancies between field
conditions and the operations plan.
7. ALJ Findings 32, 33, 34 and 36 are erroneous for the reasons that the "location" of the Road Crossing is not a matter as to which DNR has the authority to regulate. a. First, the location of the Road Crossing has no impact upon reclamation, environmental, or other operational matters; therefore, this type of departure is not subject to regulation by DNR. b. Second, neither I-SMCRA nor its regulations require that the operations plan or map specifically describe where a road crossing will be located. When information on an operations map is not required, DNR has no authority to treat a departure from this information as a violation of an approved plan. CF. Indiana State Bd. of Embalmers & Funeral Directors v. Kaufman (1984), Ind. App., 463 N.E.2d 513, 521. DNR's authority to regulate surface mining is created and limited by I-SMCRA and I-SMCRA regulations.
8. The ALJ totally disregarded and failed to address B&LS's arguments regarding DNR's failure to provide B&LS with fair notice, thereby denying B&LS its procedural due process rights.
a. DNR has a fundamental duty to provide B&LS (and all other operators) with
appropriate notice of the standards the agency intends to apply in evaluating a permittee's
conduct in connection with the Divisions' determination as to whether or not mining is being
conducted in accordance with the terms and conditions of a permit. Department of
Environmental Management v. Amax, Inc. (1988), Ind. App., 529 N.E.2d 1209, 121213; see
also Natural Resources Comm'n v. Sullivan (1981), 428 N.E.2d 92, 101.
b. DNR failed to give
notice to B&LS that the Division would treat a 200 feet relocation of a road crossing as a
non-significant departure requiring prior approval by the agency. B&LS and other operators rely
on what the division has required in the past to determine whether prior revision approval is
necessary.
C. DNR's decision to determine on a situation-by-situation basis whether or not a
particular deviation from an approved operations plan is acceptable or not is arbitrary and
capricious.
d. After the NOV was issued, the Division issued a policy statement to all operators,
Memorandun 91-8, by which the agency stated that it will require all operators to seek approval
of all changes in operations plans prior to instituting them in the field.
e. At the very least,
Memorandum 91-8 cannot be used to justify the issuance of the NOV since it was issued post
NOV.
9. B&LS has been prejudiced by the agency action that is the subject of the Petition, in that, among other things:
a. B&LS has been required to incur internal costs, attorney fees, and
other expenses in defending against the NOV; and
b. The agency action that is the subject of this
petition has adversely affected B&LS's history of violation and therefore will affect the Division's
determinations regarding the assessment of a penalty with respect to all future situations, if any,
in which B&LS actually commits a violation of ISMCRA, an I-SMCRA violation, or a Permit
provision.
10. For these reasons, the law is with B&LS and against DNR and the Commission so that B&LS is entitled to judgment in its favor and against DNR and the Commission.
JUDGMENT
Petitioner, B&LS Contracting, Inc. having heretofore filed its Petition for Judicial Review of Agency Action and For Other Relief in the following words and figures, to-wit: (H.I.) and the court being duly advised, IT IS HEREBY ADJUDGED, ORDERED AND DECREED as follows:
1. That the aforesaid Petition for Judicial Review of Agency Action And For other Relief be, and hereby is GRANTED.
2. THAT THIS MATTER BE, AND HEREBY IS, REMANDED to DNR with instructions:
(a) That the Report, Finding of Facts and Final Order
of Administrative Law Judge issued on June 15, 1993 by Administrative Law Judge Tim Rider in
Administrative Cause 91-473R be VACATED.
(b) That Notice of Violation No.
N11114-S-00236 issued by the DNR Division of Reclamation of WITHDRAWN forthwith.
Memorandum Decision of the Indiana Court of Appeals
The Indiana Department of Natural Resources (DNR) issued a citation against B & LS Contracting, Inc. (B & LS) for allegedly violating certain provisions of the Indiana Surface Coal Mining and Reclamation Act. An Administrative Law Judge affirmed the violations, and on judicial review the Clay County Circuit Court set aside the decision. DNR now appeals raising four issues for our review which we consolidate and rephrase as follows: whether the trial court erred in vacating the ALJ's decision. Finding no error, we affirm.
(1) Since February 1990, B & LS has conducted surface coal mining at its Eel Mine in Clay County, Indiana, pursuant to a permit issued by the DNR. When its mining operations approached County Road 80E which runs through the Eel Mine area, B & LS petitioned the Clay County Board of Commissioners for permission to mine through the roadway. The Board denied the petition but approved a subsequent request allowing B & LS to construct a haul road across County Road 80E connecting mining operations on both sides. Thereafter B & LS notified DNR that it would be crossing County Road 80E instead of mining through the road, as indicated in B & LS's operations plan. B & LS submitted to DNR a copy of the resolution from the Board of Commissioners authorizing construction of the haul road and a revised operations map illustrating the road. DNR treated the change as a "nonsignificant departure" from B&LS' operations plan and revised B&LS' permit accordingly.
(2) When the haul road was completed, it did not cross County Road 80E at the location illustrated in B & LS's revised operations map. After surveying the area, B & LS had determined that for safety reasons the haul road should be moved approximately two hundred and eighty-nine feet to the east. B & LS did not notify DNR of the change. DNR discovered the discrepancy between the actual location of the haul road and the mapped location while investigating a complaint by an area homeowner. On November 18, 1991, DNR issued a citation against B & LS known as a Notice of Violation (NOV) for "[f]ailure to mine according to the approved operations plan. Specifically, failure to install a road crossing in the approved location." Record at 14. On December 4, 1991, B & LS petitioned the Natural Resources Commission (NRC), the enforcement arm of DNR, for administrative review. Following a hearing, an ALJ affirmed the DNR's action finding in part "that miners are bound by the terms of their permits" and that B & LS "should have submitted that change in location to the [DNR] for approval prior to construction." Record at 422. On judicial review, the Clay County Circuit Court ruled that these and four other of the ALJ's findings were erroneous. The court determined in part that "[t]he ALJ Report constitutes an agency action that is arbitrary, capricious, unsupported by substantial evidence when the entire record is considered, contrary to law, and in excess of the authority of the ALJ, [DNR]." Record at 688.
Accordingly, the trial court ordered DNR to vacate the ALJ's decision and withdraw the NOV. This appeal ensued in due course. Upon judicial review of an administrative decision the trial court is limited to determining whether the agency action is:
(1) Arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;
(2) Contrary to constitutional right, power, privilege, or immunity;
(3) In excess of statutory
jurisdiction, authority, or limitations, or short of statutory right;
(4) Without observance of
procedure required by law; or
(5) Unsupported by substantial evidence.
Ind. Code 4-21.5-5-14(d); Natural Resources Comm'n of the State of Indiana v. Amax Coal Co.,
638 N.E.2d 418, 423 (Ind. 1994), reh'g denied.
On appeal, we review the trial court's decision to determine whether the trial court followed the law. Id. "Both trial and appellate courts reviewing administrative determinations are prohibited from reweighing the evidence or judging the credibility of witnesses and must accept the facts as found by the administrative body." Peabody Coal Co. v. Indiana Dept. of Natural Resources, 606 N.E.2d 1306, 1308 (Ind. App. 1992). However deference is not granted to an agency's legal conclusions. Amax Coal Co., 638 N.E.2d at 423. If an agency misconstrues a statute that it is charged with enforcing, the trial court is required to reverse the agency's action as being arbitrary and capricious. Peabody Coal Co., 606 N.E. 2d at 1308. DNR contends the ALJ correctly construed the facts and the law, and therefore the trial court erred in vacating the administrative decision. In support DNR makes several arguments. However, the crux of its claim is that B & LS was required to build its haul road in the exact location illustrated on B & LS's July 11, 1991, revised operations map. B & LS has submitted the map to DNR along with other materials requesting its operations plan be revised to include the construction of a haul road. According to DNR, when the revision was approved on August 7, 1991, the location of the haul road as illustrated on the revised operations map became a binding term of B & LS's mining permit. Thus, the argument continues, any deviation from that location required another revision of B & LS's operations plan including DNR approval. DNR relies on the following regulations: 310 IAC 12-3-44(1) (A permit application should include maps and plans depicting the lands proposed to be affected throughout the operation.); 310 IAC 12-3-38(5) (A permit application should include maps showing the location of surface and subsurface man-made features within, passing through, or passing over the proposed permit area.); 310 IAC 12-3-39(k) (A permit application should include cross sections, maps, and plans showing sufficient slope measurements or cross-sectional profiles with slope measurements to adequately represent the existing land surface configuration of the proposed permit area.) DNR maintains these regulations require a permit applicant to designate on its operations map the exact location of a proposed road. We disagree. The only I-SMCRA regulation which explicitly addresses the mapping of proposed roads is 310 IAC 12-3-55 which in relevant part dictates as follows: "[e]ach plan shall contain a general description of each road...to be constructed, used, or maintained within the proposed permit area." 310 IAC 12-3-55(c). The foregoing language is inconsistent with DNR's assertion that permit applicants are bound to construct proposed roads at the exact location illustrated on their operations maps. Rather, by directing permit applicants to give only a "general description" of proposed roads in their operations plans and maps, 310 IAC 12-3-55(c) appears to anticipate that location adjustments may be required prior to construction once surveying and other preparations are conducted. Thus a plain reading of the I-SCMRA regulations reveals no regulation requiring an operations map to show the exact location where a proposed road will be constructed. Accordingly, B & LS needed only to give DNR a "general description" of where the haul road would be located, and it did not violate its permit by constructing the haul road 289 feet east of the location illustrated on its July 11, 1991, revised operations map.
(3) We conclude the trial court properly vacated the ALJ's decision. Judgment affirmed. Barteau, J. and Darden, J., concur.
FOOTNOTES
1. Appellee's Petition for Oral Argument is denied.
2. Under terms of Ind. Code 13-4.1-5-5 the DNR may approve an application to revise a permit without the necessity of conducting a public hearing where the revision does not represent a significant alteration from the original permit.
3. The issue of whether this deviation violates the "general description" requirement under 310 IAC 12-3-55 is not before us.