[NOTE: THE DECISION BY THE NRC WAS REVERSED ON JUDICIAL REVIEW (49D05-9409-CP-0982). MARION COURT FINDINGS, CONLUSIONS OF LAW, AND ORDER FOLLOW ALJ DECISION.]
1. The waters of the lagoon situated on property owned by I-275 Enterprises, Inc. which are connected to the Great Miami River in Dearborn County Indiana are navigable in fact and by law and under IC 13-2-18.5-5(2) must be dedicated to public use.
2. By ordering these waters be dedicated to public use, the Indiana Legislature has not imposed an unconstitutional taking upon I-275 Enterprises, Inc. as the statute is designed to promote the public welfare and the economic effect upon the uses of the parcel of land in question is slight.
FINDINGS OF FACT
1. On July 28, 1992, the Department of Natural Resources (the "department") issued a special status determination by its chief counsel, Claudia Clark.
2. This type determination is authorized by 310 IAC 0.6-1-13 and is appealable under IC 4-21.5-3. The rule section cited provides for "quasi'' declaratory judgment relief. See Scales v. State, 1991 Ind. App., 563 N.E.2d 554, 666.
3. The determination stated that a lagoon situated on property owned by I-275 Enterprises (I-275) which abuts the Great Miami River in Dearborn County was public water, and therefore, 1-275 could not exclude the public from its use.
4. 1-275 disagreed with the determination and filed a request for review with the Division of Hearings of the Natural Resources Commission (the "commission") on August 17, 1992.
5. I-275 requests a judgment to the effect that the waters in question are not public, but rather the property of 1-275. In that case, the public could be excluded. I-275 requests, in the alternative, compensation for the taking if its property right to the lagoon if public access is mandated.
6. IC 4-21.5, IC 13-2, IC 14-3, and 310 IAC 0.6-1 and 310 IAC 0.6-1-3 apply to this proceeding.
7. The department is an agency as defined in IC 4-21.5-1-3.
8. As defined in IC 4-21.5-1-15, "ultimate authority" means the individual or panel in whom the final authority for an agency is vested.
9. Pursuant to IC 13-2-22, the commission is the ultimate authority for this type proceeding. Tim Rider was assigned this case as the commission administrative law judge (ALJ).
10. This matter is before the ALJ on crossmotions for summary judgment.
11. Summary judgment is appropriate only where no genuine issue of material fact dispositive of the litigation exists and there the moving party is entitled to judgment as a matter of law. See Marsym Development Corporation v. Winchester Con. Drive Devel. Comm'n, Ind. App., 447 N.E.2d 1187, trans. den., 457 N.E.2d 542.
12. The body of water in question is referred to by I-275 as a lagoon, and by the department, an embayment. These words are synonyms when used to describe waters created here. See "Webster's Seventh New Collegiate Dictionary" (1965). Therefore, the ALJ's use of the word "lagoon" has no significance.
13. The lagoon's waters are located in Dearborn County, Indiana.
14. The lagoon is a body of water which connects via a channel to the Great Miami River near river mile 500.
[sic. Finding 15 omitted from original document.]
16. The mouth of the lagoon is approximately 500 feet from the state of Ohio and approximately 1 3/4 miles from the state of Kentucky.
17. I-275 presented a lengthy history of how these waters were created, but the ALJ omits most of it because there is no disputing the fact that the lagoon was created by Olinger Construction, Inc. ("Olinger") upon its land. Ownership was later conveyed to I-275.
18. The lagoon was created by dredging the material from the bank of the Great Miami River progressing landward.
19. The dredging occurred in the 1970s and was performed primarily to develop several tracts of farm real estate while recouping some of the costs of dredging by selling the dredged material for the construction of Interstate 275.
20. The historical use of the real estate in question was row crop farming.
21. At the time this litigation was begun, the majority of the real estate in question was planted in row crops.
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No permanent construction had been performed, and the only part of I-275's development plan executed was the dredging.
22. During the course of the dredging, Clinger, at all times maintained the proper permits from the U.S. Army corps of Engineers (the "corps") and the department. The operation was approved by the Indiana Stream and Pollution Control Board.
23. I-275 makes the point that the department certificate of approval of construction in a floodway did not condition its approval upon the waters of the lagoon being dedicated to public use. The department chooses to note that the certificate was "silent" in this regard.
24. I-275 maintains that it has continuously attempted to exclude the public from entering the waters of the lagoon.
25. These attempts include placing a cable across the entrance and, after removing the cable by order of the corps in August 1979, by posting "no trespassing" signs; face-to-face requests to leave; and requests to local law enforcement officials to exclude anyone not bearing I-275 written permission for access.
26. Numerous affidavits presented by the department clearly indicate that the I-275 attempts to exclude the public have been unsuccessful as boat traffic is constant from the Great Miami River in and out of the lagoon.
27. The first question to be considered goes to the status of the waters of the lagoon. I-275 declares them private property while the department maintains that they are navigable, and as such, are public.
28. The Great Miami River is a navigable waterway at its point of confluence with the waters of the lagoon. Miami Valley Conservancy District v. Alexander, 692 F.2d 447 (6 Cir., 1982); "Roster of Indiana Waters Declared Navigable or Non-navigable", Natural Resources Commission Information Bulletin #3, Indiana Register, Vol. 15, No. 10, p. 2385 (July 1, 1992).
29. The Ohio River is navigable at its confluence with the Great Miami River. Roster at 2392.
30. Indiana courts have determined navigability based upon a body of water's navigability in fact. Bath v. Courts (1984), Ind. App., 459 N.E.2d 72, 75, citing State v. Kivett (1950), 228 Ind. 623, 629, 95 N.E.2d l45, 149.
31. Man-made bodies of water such as the lagoon are said to be navigable if the waters are "capable or susceptible to being used as an interstate highway for commerce over which trade or travel is or may be conducted in the customary modes of travel." Reed v. United States, 604 F. Supp. 1253, 1267 (N.D. Ind. 1984), citing Finneseth v. Carter, 712 F.2d 1041 (6 Cir. 1984).
32. In Reed, the court writes that pleasure boat travel bears a sufficient nexus to traditional maritime activity to sustain a waterway's navigability. 604 F. Supp at 1266, citing Foremost Insurance Company v. Richardson, 457 U.S. 668, 102 S.Ct. 2654, 73 L. Ed.2d 300 (1982).
33. The presence of the previously noted boat traffic using the waters of the lagoon supports a finding that the waters thereof are navigable in fact.
34. Water near state lines has been held to be an interstate highway for commerce. Reed, 604 F. Supp. at 1267.
35. As previously noted, the waters of the lagoon are less than two miles from Kentucky, about 500 feet from Ohio, and lie within Indiana.
36. The waters of the lagoon are susceptible and capable to being used as part of an interstate highway for commerce, thereby rendering the waters navigable in fact.
37. Navigability of a body of water extends to connected waters which are also navigable. Goodman v. City of Crystal River, 669 F. Supp. 394 (M.D. Fla. 1987) citing States v. Chandler-Dunbar Water Power Com., 229 U.S. 53, 33 S.Ct. 667, 57 L.Ed. 1068 (1912).
38. Accordingly, the navigability of the Great Miami River makes the waters of the I-275 lagoon navigable in fact and by law.
39. The Indiana legislature in 1971 instructed all applicants for permits for construction of channels that "[i]n the case of a channel connecting to a navigable river or stream, thereby creating additional water areas which will be connected to such navigable river or stream, dedicate any and all waters so created to the general public use." IC 13-2-18.5-5(2).
40. This statute was in effect at the time the I-275 application to the department was submitted and granted.
41. Accordingly, the expressed intent of the legislature is far more significant than the department's silence toward the dedication of the waters of the lagoon to public use.
42. In fact, the department's silence in this area indicates knowledge that it had no authority to state any condition other than "general public use".
43. I-275 argues that subsequent U.S. Supreme Court decisions have declared that such automatic dedication of privately owned waters to public use cannot be made without the payment of just compensation for deprivation of use, benefit and enjoyment of private property.
44. Indiana
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courts have not specifically addressed this issue nor has any Indiana court adopted any of the U.S. Supreme Court cases mentioned.
45. Therefore, the U.S. Supreme Court cases used by I-275 will later be examined and compared to the facts of the instant case.
46. An overview of takings law begins with the Fifth Amendment to the United States Constitution which contains the words "nor shall private property be taken for public use, without just compensation. Also, see Indiana Constitution, Article 1 and 21.
47. Historical records show that what the drafters had in mind was to permit the government to take private property for public use but only upon payment of compensation. See Duerksen and Roddewig, "Takings Law in Plain English" 1 (1994).
48. Early experience in Colonial America did not suggest that by simply regulating, the government could take someone's property. Where landowners sought compensation, courts were typically unsympathetic. For example, see Hadacheck v. Sebastion, 239 U.S. 394 (1915).
49. In Hadacheck, the City of Los Angeles banned brickmaking because of its polluting effect on residential areas. Such a ban reduced the value of the property from $800,000 to $60,000. The Court ruled that the city was promoting a legitimate public need, and the property owner could still use the parcel, even if for a different purpose.
50. The clear line between physical and regulatory takings was later blurred beginning with Pennsylvania Coal Company v. Mahon, 260 U.S. 393 (1922).
51. In MAHON, the Court accepted the notion that while property may be regulated to a certain extent, if regulation goes too far, it will be recognized as a taking.
52. It has become clear as takings law has evolved subsequent to MAHON that no hard and fast numerical formulas exist to determine when a regulatory taking has occurred. The question must be decided on a case-by-case basis.
53. Most courts in recent years have assessed the economic impact of a land-use regulation by determining whether the owner is left with a reasonable economic use of the property. Simply denying the so-called "highest and best use" does not give rise to a taking. See "Takings Law", at 6.
54. The current state of the law in Indiana is found in Foreman v. State of Indiana Department of Natural Resources (1979) 180 Ind. App. 94, 387 N.E.2d 455.
55. In Foreman, the court held that "acts done in the proper exercise of governmental powers requiring adherence to regulations and statutes which promotes order, safety, health, and general welfare do not amount to a taking", at 461. (citing State v. Ensley (1960), 240 Ind. 472, 164 N.E.2d 342, and City of Gary By and Through Department of Redvelopment v. Ruberto (1976) Ind. App., 354 N.E.2d 786.
56. Further, in Foreman, the court stated that "[b]efore property is taken in a constitutional sense, there must be a substantial interference with the owner's use and enjoyment of the specific property taken. The determination of whether interference is substantial is a factual question to be resolved by the trier of fact", at 462. (citing Indiana and Michigan Electric Co. v. Stevenson (1977), Ind. App., 363 N.E.2d 1254).
57. In applying the holdings in Foreman, and the general rules articulated by the U.S. Supreme Court mentioned previously to the undisputed facts of this case, it becomes clear that no taking exits.
58. The requirement that the waters of the lagoon be dedicated to public use do not impair the claimant's use of the parcel in question.
59. The claimant can still develop the property around the lagoon, and such development can include the use of the waters.
60. The value of the development might be effected slightly since the purchaser would not have exclusive use of the waters of the lagoon.
61. However, such slight decrease in value is far outweighed by the Indiana Legislature's declaration that "the general welfare of the people of the state of Indiana requires that surface water resources of the state be put to beneficial uses to the fullest extent. . . that the best interests and welfare of the people of the state will be served." IC 13-2-1-1.
62. An examination of the U.S. Supreme Court cases decided since Foreman, and cited by I-275 for the proposition that a taking has occurred, shows that each is distinguishable from the situation above here.
63. I-275 presents Kaiser Aetna v. United States, (1979) 444 U.S. 164, 100 S.Ct. 383, 62 L. Ed.2d 332, and Vaughn v. Vermillion Corp., (1979) 444 U.S. 206, 100 S.Ct. 399, 62 L. Ed.2d 365, in which the court opined that even though a body of water may be determined navigable for the purpose of regulation by the Corps acting under the authority delegated it by Congress in the Rivers and Harbor Act, such a determination does not mean that the public has a right of access to that body of water.
64. In Kaiser Aetna,
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a developer had developed a multi-million dollar marina-style subdivision community around a private lagoon separated from the Pacific ocean by a barrier beach. Under Hawaii law, this lagoon was private property. The developer, as a result of improvements, connected the lagoon to the Ocean to allow for in and out boat traffic. The Corps then filed suit in Federal District Court to, among other things, require public access to the lagoon.
65. This case is distinguishable from Kaiser Aetna because I-275 dredged its lagoon from the river landward. At all times the lagoon was connected to the Great Miami River. In addition, no development has occurred, and under Indiana law previously cited, these waters are dedicated to public use.
66. In Vaughn, respondent Vermillion Corp. leased a substantial amount of acreage from the Exxon Company in Louisiana. This land was traversed by a system of man-made canals. Vermillion subleases a portion of the land to hunter, trappers and fishers. Vermillion employed people to supervise these activities and to exclude strangers. The petitioners insist that they are entitled to enter the canals to conduct commercial fishing and shrimping activities.
67. Obviously, Vermillion Corp. had a substantial financial interest in excluding Vaughn, et al. from the leased area. In addition, Vaughn's intent was to conduct commercial activities on the waters at no expense while others paid Vermillion to sublease rights to perform the same activities. This situation bears no resemblance to the activities of the state of Indiana in preserving public waters for use of all citizens.
68. The next cited case Boon v. United States, 944 F.2d 1489 (9 Cir. 1991) involves another situation which arose in Hawaii. It involves a pond separated from the Pacific Ocean by seawall since around 1829. The seawall was partially damaged by a tidal wave in 1946. As in Kaiser Aetna, this pond was private property under Hawaii law. A developer spent millions of dollars to acquire and improve this area, one improvement being a dredging operation to create an approach channel between the pond and the beach area.
69. Boone involves complicated questions, such as, federal navigational servitude and whether its natural state pre-1829 determines its navigability. The situation in Boone is not comparable with facts presented for the case at bar.
70. Lastly, the claimant relies upon Lucas v. South Carolina Coastal Council, (1992), 505 U.S.___, 112 S.Ct. ___ , 120 L. Ed.2d 798. In Lucas, a state coastal regulation had the effect of denying all economic use of a particular property. The court concluded that when a regulation goes so far as to deny all economic use of property, it will constitute a taking.
71. I-275's use of its property is unimpaired except for its inability to exclude the public from the waters of the lagoon. The regulatory effect here is not nearly as severe as the one in Lucas.
72. An overall examination of case law in the takings area would lead to a four part analysis:
(a) What is the impact on the owner?
(b) Does imposition promote a valid public purpose?
(c) What is the character of the government action? (d) What impact on economic use? NOTE: The above analysis was endorsed by Chief Justice Shepard at a seminar on may 5, 1994 and advanced by the Indiana Supreme Court in an opinion dated August 3, 1994, No. 49S04-9408-CV-684 on page 25 in a streamlined version of what is offered above.
73. In applying this analysis to this case, it shows that the impact on I-275 of allowing the public to use the waters is slight; the statute requiring dedication to public use furthers a valid public purpose; the government action fits into a broad category of environmental protection; and the impact on economic use of the area is also slight.
74. The result of the above analysis is clearly that no taking occurred here.
MARION COURT FINDINGS, CONCLUSIONS OF LAW, AND ORDER
This matter came before the Court on January 26, 1996, for oral argument on Petitioner I-275 Enterprises, Inc.'s ("I-275") Verified Petition for Judicial Review of Final Agency Action and Respondent, The Natural Resources Commission of the State of Indiana's ("NRC") response thereto. I-275 appeared at the hearing by its counsel, Peter A. Velde. NRC appeared at the hearing by the Attorney General of the State of Indiana, by Myra P. Spicker, Deputy Attorney General.
After hearing oral argument by both I-275 and NRC, this matter was taken under advisement by the Court.[FOOTNOTE 1] The Court, after having: taken this matter under advisement; reviewed and considered the record of the administrative proceeding filed with the Court in this matter; reviewed and considered the respective Briefs submitted by the parties, now enters its Findings of Fact, Conclusions of Law and Judgment Entry.
FINDINGS OF FACT
Based on either the uncontroverted facts set forth in the record of the administrative proceeding (to which no objection or Motion to Strike was filed by NRC) or the admissions set forth in NRC's response to I-275's petition or both, the following facts are undisputed:
1. At all times prior to the commencement of construction of the embayment and the channel connecting the embayment to the Great Miami River ("Miami River") which are the subject matter of this proceeding (hereinafter the embayment and the channel connecting the embayment to the Miami River are jointly, severely, and collectively referred to as the "Lagoon"), the real estate on which the Lagoon was subsequently created, was farm real estate located in Dearborn County, Indiana (hereinafter the "Real Estate"). (Notice of Filing Report, Findings of Fact, and Non-Final Order of the ALJ dated June 28, 1994, filed with the NRC (hereinafter the "ALJ Report"), Finding 19.[FOOTNOTE 2]
2. At all times prior to the commencement of construction of the Lagoon, the Real Estate had never been used for any purpose other than for row crop farming operations (ALJ Report, Findings 20, 21).
3. Sometime during 1969 -1970 - 1971, William R. Pfister ("Pfister") and Donald Savage ("Savage") began discussing different methods for extracting fill material which would be needed for the construction of Interstate Highway No. 275, located in Dearborn County, Indiana (the "Highway Project") (Pfister Affidavit filed with the NRC on October 15, 1993 in support of I-275's Cross Motion for Summary Judgment (hereinafter "Pfister Affidavit"), paragraph 8; Savage Affidavit filed with the NRC on October 15, 1993 in support of I-275's Cross Motion for Summary Judgment (hereinafter "Savage Affidavit"), paragraph 6; ALJ Report, Finding 17).
4. As the discussions between Pfister and Savage continued, they determined the best method for extracting the needed fill material was through the use of a hydraulic method employing a river dredge (the "Dredge") (Pfister Affidavit, paragraph 9; Savage Affidavit, paragraph 7; ALJ Report, Finding 17).
5. Pfister and Savage concluded that by using a Dredge, the extracted fill material could be directly pumped to the Highway Project, instead of being transported by truck as required by conventional extraction methods (Pfister Affidavit, paragraph 10; Savage Affidavit, paragraph 8; ALJ Report, Finding 17).
6. As Pfister and Savage refined their Dredge operation plans, they began to discuss the possibility of using the Dredge to develop the Real Estate (Pfister Affidavit, paragraph 11; Savage Affidavit, paragraph 9; ALJ Report, Finding 19).
7. As Pfister's and Savage's discussions proceeded, they determined that since the Real Estate was located near the Miami River, the Dredge could be used to create a Lagoon on the Real Estate, while at the same time the fill material needed for the Highway Project could be extracted from the Real Estate (Pfister Affidavit, paragraph 13; Savage Affidavit, paragraph 11; ALJ Report, Finding 19).
8. Pfister and Savage specifically envisioned that the Dredge would cut into the bank of the Miami River and then, while extracting the fill, proceed inland until the desired size and shape of a privately owned Lagoon was created (Pfister Affidavit, paragraph 14; Savage Affidavit, paragraph 12).
9. By use of the Dredge, Savage and Pfister recognized that an additional benefit of this process could be the recapture of some of the costs of land acquisition and construction of the Lagoon, through the sale of fill material (Pfister Affidavit, paragraph 15; Savage Affidavit, paragraph 13; ALJ Report, Finding 19).
10. On or about June, 1972, Olinger Construction, Inc. ("Olinger") entered into a contract with the Indiana State Highway Commission for the construction of the fill for the Highway Project (Affidavit of Max Olinger filed with the NRC on October 15, 1993 in support of I-275's Cross Motion for Summary Judgment (hereinafter "Olinger Affidavit"), paragraph 9).
11. To satisfy its contractual requirements, Olinger planned to extract the fill material by conventional earth moving methods (Olinger Affidavit, paragraph 10).
12. Sometime in the fall of 1972, Max Olinger, the Treasurer of Olinger, and Pfister, discussed the concept developed by Pfister and Savage for using a Dredge to obtain fill material and for the creation of a privately owned Lagoon which would have commercial value (Pfister Affidavit, paragraph 16; Olinger Affidavit, paragraph 11).
13. Based on the discussions between Max Olinger and Pfister, Olinger, Pfister, and Savage entered into an oral agreement for extracting the fill material from and for the construction of a privately owned Lagoon on the Real Estate (Pfister Affidavit, paragraph 17; Savage Affidavit, paragraph 14; Olinger Affidavit, paragraph 15).
14. The oral agreement entered into between Olinger, Pfister, and Savage was subsequently reduced to writing, was signed by the parties on December 3, 1974 (both the oral agreement and written agreement hereinafter referred to as the "Agreement"), and was ultimately recorded on April 27, 1979, in the Office of the Recorder of Dearborn County, Indiana (Pfister Affidavit, paragraph 17 and Exhibit "A"; Savage Affidavit, paragraph 14 and Exhibit "A"; Olinger Affidavit, paragraph 15 and Exhibit "A"; Tender of Official Record filed with the NRC on October 15, 1993 in support of I-275's Cross Motion for Summary Judgment (hereinafter "Tender of Official Record"), Exhibit "25").
15. Pursuant to the Agreement, Olinger, or its subsidiary, Huntingburg Machinery and Equipment Rental, Inc. ("Huntingburg"), with the legal services of Pfister, used its financial resources to acquire the Real Estate from which the fill material would be extracted and on which the Lagoon would be constructed (Pfister Affidavit, paragraph 18 and Exhibit "A"; Olinger Affidavit, paragraph 16; Tender of Official Record, Exhibits "1", "2", "3", "4", "5", "6", "7", "8", "9", "10", "11", "12", "13", "14", "15", "16", and "17"; ALJ Report, Finding 17).
16. In acquiring the Real Estate from which the fill would be extracted and upon which the privately owned Lagoon would be constructed, Olinger expended the sum of Seven Hundred Seventy Eight Thousand Eight Hundred Thirty & 30/100 Dollars ($778,830.30) (1972-1973 Dollars) (Pfister Affidavit, Exhibit "C").
17. Concurrently with Olinger's acquisition of the Real Estate, Savage, in accordance with the Agreement, began preparing preliminary plans for extraction of the fill material and for the construction of the privately owned Lagoon on the Real Estate (Savage Affidavit, paragraphs 15, 16 and Exhibits "B" and "C").
18. On May 14, 1973, Savage, in accordance with the Agreement, acting through the firm of Savage, Chappelaer, Schultz & Associates, Inc., submitted on Olinger's behalf, an application to the Corps of Engineers, United States Department of the Army (the "Corps") to obtain a permit to allow Olinger through the use of the Dredge, to extract the fill material from the Real Estate (Admitted by NRC; ALJ Report, Finding 22).
19. On May 23, 1973, the Corps conducted a section 10 field investigation report (environmental review of section 10 permits) of the proposed dredging operation and the Real Estate (Admitted by NRC).
20. As to the issue of whether the dredging operation would impact on the navigability of the Miami River, the Corps in its written section 10 field investigation report, stated: "the potential effects with regard to Navigation is extremely limited since a majority of the work will be away from the river with the exception of the cutting of the channel at the bank line." (Admitted by NRC).
21. On May 29, 1973, the Corps as part of Olinger's permit application process, issued public notice (Admitted by NRC).
22. On June 1, 1973, the Stream Pollution Control Board of the State of Indiana submitted its response of no objection to Olinger's permit application to the Corps (Admitted by NRC; ALJ Report, Finding 22).
23. On June 13, 1973, the Department of Natural Resources, State of Indiana, submitted to the Corps its response to Olinger's permit application along with is Certificate of Approval of construction in a floodway (Admitted by NRC).
24. In submitting its responses to the Corps, the Department of Natural Resources, State of Indiana, did not condition its approval upon, nor did it require Olinger to dedicate the Lagoon to the State of Indiana (Tender of Official Record, Exhibit "28"; ALJ Report, Finding 23).
25. On June 26, 1973, the Corps approved Olinger's permit application and issued permit no. 73-38 (Admitted by NRC; ALJ Report, Finding 22).
26. Permit No. 73-38 issued by the Corps to Olinger, provides in part:
(a) That this instrument does not convey any property rights either in real estate or material, . . .
(k) That no attempt shall be made by the permittee to forbid the full and free use by the public of all navigable waters at or adjacent to the structure or work authorized by this permit. (Attachment 1 to NRC's Brief)[FOOTNOTE 3]
27. Pursuant to permit no. 73-38, Olinger was authorized to dredge a channel from the bank of the Miami River and inland to extract fill material from the Real Estate (Admitted by NRC).
28. Pursuant to permit no. 73-38 and in accordance with the plans submitted by Savage with the permit application, Olinger by use of the Dredge, dredged a channel inland from the bank of the Miami River, extracted material for the Highway Project from the Real Estate, and started creating the Lagoon (Admitted by NRC; ALJ Report, Findings 17, 18).
29. Prior to the expiration of permit no. 73-38, Olinger, with Savage's assistance, requested the Corps either extend or modify permit no. 73-38, or alternatively, issue a new permit (Olinger Affidavit, paragraph 21; Savage Affidavit, paragraph 21; Tender of Official Record, Exhibit "27").
30. By its request, Olinger was seeking authority to continue dredging operations on the Real Estate in order to satisfy the Indiana State Highway Commission's award of a second contract for the construction of fill for the Highway Project to Olinger (Olinger Affidavit, paragraph 22; Tender of Official Record, Exhibit "27").
31. On January 12, 1977, public notice of Olinger's application for a new permit to continue dredging operations on the Real Estate was issued by the Corps (admitted by NRC).
32. On January 14, 1977, the Stream Pollution Control Board, State of Indiana in writing advised the Corps that its June 1, 1973 approval of the dredging operation was still in full force and effect, and "willingly extend our original certification letter for the time necessary to complete the project" (Admitted by NRC).
33. In response to Olinger's permit application, the Department of Natural Resources, State of Indiana on January 17, 1977 in writing advised the Corps that is Certificate of Approval on construction in a floodway remained valid, "and no further approvals are required" (Tender of Official Record, Exhibit "28"; ALJ Report, Finding 23).
34. In submitting its response to the Corps, the Department of Natural Resources, State of Indiana, did not condition its approval upon, nor did it require Olinger to dedicate the Lagoon to the State of Indiana (Tender of Official Record, Exhibit "28"; ALJ Report, Finding 23).
35. In connection with Olinger's permit application, the Corps in its March 30, 1977 written statement of findings found: "the proposed work would have no effect on the navigability or recreational use of either the Great Miami or Ohio Rivers, since all work will be conducted in an embayment outside of channel limits" (Admitted by NRC).
36. On March 31, 1977, the Corps approved Olinger's permit application and issued permit no. 77-23 (Admitted by NRC; ALJ Report, Finding 22).
37. Permit No. 77-23 issued by the Corps to Olinger, provides in part:
(a) That this instrument does not convey any property rights either in real estate or material, . . .
(k) That no attempt shall be made by the permittee to forbid the full and free use by the public of all navigable waters at or adjacent to the structure or work authorized by this permit. (Attachment 1 to NRC's Brief)[FOOTNOTE 4]
38. Pursuant to permit no. 77-23 and the plans approved by the Corps, Olinger was authorized to use the Dredge to extract additional fill material needed for the Highway Project from both the Lagoon and the Real Estate (Admitted by NRC).
39. Pursuant to permit 77-23, Olinger, in accordance with the plans prepared by Savage, continued to dredge additional fill material from the Lagoon and the Real Estate and continued to create the Lagoon (Tender of Official Record, Exhibit "28").
40. While the dredging process on the Real Estate was proceeding under both Corps permits, Olinger, Savage, and Pfister continued to revise their plans as to the construction of and use of the privately owned Lagoon. These revisions were reflected in plans subsequently prepared by Savage (Pfister Affidavit, paragraph 20; Savage Affidavit, paragraphs 19, 20, 23 and Exhibits "D" and "E"; Olinger Affidavit, paragraphs 26 and 27).
41. On or about June 29, 1979, the dredging process fro extracting the fill material needed for the Highway Project from the Real Estate and the construction of the privately owned Lagoon on the Real Estate was completed (Olinger Affidavit, paragraph 25; Tender of Official Record, Exhibit "28").
42. On October 21, 1981, Olinger, pursuant to the Agreement, conveyed all of its interest in the Real Estate to I-275 and pursuant to the terms of the Agreement and its performance thereunder, was released by Pfister, Savage, and I-275 from its contractual obligation to convey (Olinger Affidavit, paragraph 29; Tender of Official Record, Exhibits "18", "20", "26"; Pfister Affidavit, paragraph 23 and Exhibit "D"; Savage Affidavit, paragraph 25 and Exhibit "F", ALJ Report, Finding 17).
43. From the time construction of the Lagoon began, I-275 has attempted to enforce its property rights in the Lagoon by demanding individuals not authorized to use the Lagoon to leave the Lagoon and the Real Estate (ALJ Report, Finding 24).
44. From the time construction of the Lagoon began, I-275 advised local law enforcement officers, including game wardens of the Department of Natural Resources, that I-275 would not grant oral permission to anyone to hunt, trap, swim, boat, camp, or fish on I-275's Lagoon or Real Estate (Admitted by NRC; ALJ Report, Finding 25).
45. During the dredging operation and the construction of the Lagoon, a cable and barricade blocking the entrance to the Lagoon was installed and maintained as required by both permits issued by the Corps (Admitted by NRC).
46. After the construction of the Lagoon, the cable blocking the entrance to the Lagoon remained in place (Admitted by NRC; ALJ Report, Finding 25).
47. On June 20, 1980, I-275's position regarding the denial of public access to the Lagoon was restated by Pfister in a letter to one of the local newspapers (Pfister Affidavit, paragraph 26 and Exhibit "E").
48. Although the cable was subsequently removed from the entrance to the Lagoon, I-275 has continuously attempted to exclude public access to the Lagoon by posting "no trespassing" signs and by requesting trespassers to leave the premises (Pfister Affidavit, paragraphs 27, 28; Savage Affidavit, paragraph 28; ALJ Report, Finding 25).
49. During 1992, but prior to June 22, 1992, the Department of Natural Resources ("DNR") for the first time notified I-275 that DNR was considering the waters of the Lagoon to be public waters from which the public could not be denied access by I-275 (Pfister Affidavit, Exhibit "F").
50. DNR's first notification to I-275 that the DNR was considering the waters of the Lagoon to be public waters from which the public could not be denied access by I-275 was made:
(a) Approximately thirteen years after construction of the Lagoon as allowed by the Corps' permits was completed;
(b) Approximately fifteen years after the DNR in writing notified the Corps of its unconditional approval of the construction of the Lagoon;
(c) Approximately nineteen years after the DNR in writing notified the Corps of its unconditional approval of the construction of the Lagoon; and
(d) A substantial and considerable period of time (thirteen years or longer) after the expenditure of considerable sums of money, time and effort by Pfister, Savage, Olinger and I-275, including but not limited to the expenditure of three-quarters of a million dollars (1972-1973 Dollars) for acquisition of the Real Estate.
51. Consistent with its prior actions, I-275 on June 22, 1992, in writing notified DNR that it considered the Lagoon to be private property from which the public could be excluded (Admitted by NRC).
52. On August 17, 1992, I-275 timely commenced the administrative proceeding by timely filing its request for review of the DNR's status determination that the public could not be denied access to the waters of the Lagoon by I-275 (ALJ Report, Section II; Findings 1, 2, 3, 4).
53. On October 13, 1993, I-275 filed its motion to strike certain language from Affidavits filed by DNR in the administrative proceeding.
54. On December 28, 1993, the ALJ granted in part I-275's motion to strike and struck from the Affidavits filed by DNR in the administrative proceeding, the following:
(a) That portion of paragraph 4 of Gerry Newell's Affidavit which states "the Great Miami River is navigable at the point of the connection";
(b) Paragraph 6 of the Affidavit of John Wesley McIntosh, IV in its entirety;
(c) Paragraph 6 of the Affidavit of Col. John Stivers in its entirety; and
(d) Paragraph 6 of the Affidavit of Kenneth E. Smith in its entirety.
55. On June 28, 1994, the ALJ issued the ALJ Report (admitted by NRC).
56. On July 15, 1994, petitioner, pursuant to IC 4-21.5-3-29(d), timely filed with the NRC, I-275's "Notice of Filing and Serving of Claimant, I-275 Enterprises, Inc.'s:
(1) Objections to the Administrative Law Judge's Report, Findings of Fact, and Non-final Order dated June 28, 1994; and
(2) Brief in support of I-275 Enterprises, Inc.'s objections (admitted by NRC).
57. On August 11, 1994, the ALJ filed his "Notice of Intent to Modify a Finding" (admitted by NRC).
58. On August 18, 1994, I-275, pursuant to IC 4-21.5-3-29(d), timely filed with NRC, I-275's "Notice of Filing and Serving of Claimant, I-275 Enterprises, Inc.'s:
(1) Objections to the Administrative Law Judge's Notice of Intent to Modify a Finding dated August 11, 1994; and
(2) Brief in Support of I-275 Enterprises, Inc.'s objections" (admitted by NRC).
59. On August 30, 1994, the NRC, over I-275's objections, entered its "Final Order", which is the agency action in issue in this proceeding (admitted by NRC).
60. I-275 and DNR were the only parties who appeared at and who participated in the administrative proceeding (admitted by NRC).
61. On September 26, 1994, I-275 timely commenced this proceeding by filing with this Court and serving on the NRC, I-275's Verified Petition for Judicial Review of Final Agency Action, within thirty (30) days from the date notice of the agency action which is the subject of this proceeding was served on I-275 (admitted by NRC).
62. On October 7, 1994, I-275 in compliance with IC 4-21.5-5-13, timely filed its "Notice of Petitioner's Filing of Certified Copy of Agency Record for Judicial Review".
63. The Lagoon was created by Olinger upon its land (ALJ Report, Finding 17).
64. The waters of the Lagoon are manmade.
65. At no time prior to I-275's expenditure of development dollars were the waters of the Lagoon in their natural and ordinary condition, part and parcel of the navigable waters of the United States of the State of Indiana.
66. At no time prior to I-275's expenditure of development dollars, were the waters of the Lagoon in their natural and ordinary condition, actually used in commerce.
67. As evidenced by the field investigation reports issued by the Corps prior to its issuance of both permits to Olinger, the construction of the Lagoon had little if any effect on the navigability or recreational use of either the Great Miami or Ohio Rivers.
68. I-275 did not construct the Lagoon either in whole or in part by means of diversion or destruction of a pre-existing natural navigable waterway.
69. If it is determined that any of these findings of fact are conclusions of law, said findings of fact are incorporated by reference and made a part of this Court's conclusions of law.
CONCLUSIONS OF LAW
I. Court Has Jurisdiction Over This Action
1. I-275 has complied with and has satisfied the provisions of IC 4-21.5-5-2 in that:
(a) Pursuant to IC 4-21.5-5-3(a)(1), as the person to whom the agency action is specifically directed, I-275 has standing to obtain judicial review of the final agency action.
(b) Pursuant to IC 4-21.5-5-3(a)(2), as a person who was a party to the agency proceedings that led to the agency action, I-275 has standing to obtain judicial review of the final agency action.
(c) The requirements of IC 4-21.5-5-4 (exhaustion of administrative remedies) have been satisfied in that:
(1) I-275 timely objected to the orders entered during the agency proceeding;
(2) I-275 has exhausted all administrative remedies available to it within the agency whose action is being challenged; and
(3) The Final Order entered by NRC on August 30, 1994, is a final agency action, is not subject to review by a second agency, and is an agency action from which I-275 can petition the Court for judicial review.
(d) As required by IC 4-21.5-5-5, I-275's Verified Petition for Judicial Review of Agency Action was filed within thirty (30) days from the date notice of the agency action which is the subject of I-275's petition, was served on I-275; and
(e) As required by IC 4-21.5-5-13, a certified copy of the agency record for judicial review of the agency action was filed by I-275 within thirty (30) days after the date of I-275's filing its Verified Petition for Judicial Review of Agency Action.
2. This Court has jurisdiction over the parties to this action and the subject matter of this action.
II. The NRC's Determination That The Public Cannot Be Denied Access To The Waters Of The Lagoon, Is Contrary To Law.
A. "Navigability"
3. As first articulated by the United States Supreme Court in Kaiser Aetna v United States (1979) 44 U.S. 164, 100 S. Ct. 383, 62 L.Ed. 2d 332, and its companion case of Vaughn v. Vermillion Corp. (1979) 444 U.S. 206, 100 S.Ct. 399, 62 L.Ed. 2d 365 (see also Boone v. U.S., 944 F.2d 1498 (9th Cir. 1991); Dardar v. LaFarouche Realty Co., Inc., 985 F.2d 824 (5th Cir. 1993)),. navigability for purposes of imposing the "Navigable Servitude" (taking), is not coterminous with navigability for purposes of regulatory power or admiralty jurisdiction.
4. As first articulated by Kaiser Aetna and Vaughn (see also Boone; Dardar), even though the waters of the Lagoon:
(a) may be "navigable" both in law and in fact, such a determination does not mean, warrant, or mandate that the public has a right of access to the waters of the Lagoon;
(b) may be "navigable" for purposes of regulation, such a determination does not mean, warrant, or mandate that the public has a right of access to the waters of the Lagoon;
(c) may be "navigable" both in law and in fact, such a determination does not mean, warrant, or mandate that the public has a right of access to the waters of the Lagoon, without the payment of compensation by the state of Indiana to I-275;
(d) may be "navigable" for purposes of regulation, such a determination does not mean, warrant, or mandate that the public has a right of access tot he waters of the Lagoon without the payment of compensation by the state of Indiana to I-275;
(e) may be "navigable" both in law and in fact, such a determination does not mean, warrant, or mandate that I-275 can be deprived of its right to the use, benefit and enjoyment of the waters of the Lagoon constructed by it on its private property, with private funds and means, including the right to deny public access thereto, without the payment of just compensation by the state of Indiana;
(f) may be "navigable" for regulatory purposes, such a determination does not mean, warrant, or mandate that I-275 can be deprived of its right to the use, benefit and enjoyment of the waters of the Lagoon constructed on its private property, its private funds and means, including the right to deny public access thereto, without the payment of just compensation by the state of Indiana.
5. As first articulated by Kaiser Aetna and Vaughn (see also Boone; Dardar), the mere fact that a man made body of water, such as the waters of the Lagoon, built on private property and with private funds and means in such a manner as to ultimately join with other navigable waters, does not mean, warrant or mandate that such man made waters are open to use by the public.
6. The cases of Reed v. United States, 604 F. Supp. 1253 (1984), Finneseth v. Carter, 712 F.2d 104 (6th Cir. 1984), Chapman v. United States, 575 F.2d 147 (7th Cir. 1978), and Foremost Insurance Co., v. Richardson (1982) 457 U.S. 668, 102 S.Ct. 2654, 73 L.Ed.2d 300, cited by the NRC in both the Final Order and its Brief filed with this Court, did not address the issue of navigability in the context of whether a private citizen had the right to exclude public access to private waters, but instead, addressed only the issue of navigability in the context of whether the Court had admiralty jurisdiction. Based on the rule of law set forth in Kaiser Aetna, Vaughn, Boone and Dardar that a determination that a body of water is navigable for admiralty jurisdiction purposes is not, as a matter of law, a determination that the public has the right of access to the waters of the Lagoon, the cases of Reed, Finneseth, Chapman and Foremost are inapplicable, unpersuasive, and of no authority. Further, based on the undisputed facts of this proceeding and the rule of law set forth in Kaiser Aetna, Vaughn, Boone and Dardar, the Reed, Finneseth, Chapman and Foremost cases neither support or provide authority for the NRC's Final Order that the waters of the Lagoon are public waters and public access to the waters of the Lagoon cannot be denied by I-275.
7. The case of Goodman v. City of Crystal River, 669 F.Supp. 394 (1987, N.D.Fla,) cited by the NRC in both the Final Order and its Brief filed with this Court, did not address the issue now before this Court of whether the rule of law set forth in Kaiser Aetna applies to a man made body of water which prior to its creation was never in its natural and ordinary condition part and parcel of the navigable waters of the United States and was never actually used in commerce before creation, but instead, addressed the issue of whether the rule of law set forth in Kaiser applied to a body of water which in its natural and ordinary condition was part and parcel of the navigable waters of the United States and was actually used in commerce long before a single development dollar was spent. Based on this factual distinction, Goodman is inapplicable, unpersuasive, of no authority, and does not overrule the rule of law set forth in Kaiser Aetna, Vaughn, Boone and Dardar. Further, because the undisputed facts of this proceeding are totally distinguishable from the facts of Goodman, Goodman neither supports or provides authority for the NRC's Final Order that the waters of the Lagoon are public waters and public access tot he waters of the Lagoon cannot be denied by I-275.
8. The cases of Owen v. U.S., 851 F.2d 1404 (Fed. Cir. 1988), U.S. v. Cherokee Nation of Oklahoma, 107 S.Ct. 1487 (1987), and Lewis Blue Point Oyster Cultivation Co. v. Briggs, 229 U.S. 82, 33 S.Ct. 679, 57 L.Ed. 1083 (1913), cited by the NRC in its Brief filed with this Court, did not address the issue of whether the "Navigable Servitude" could be imposed on a man made body of water which prior to its creation was never in its natural and ordinary condition part and parcel of the navigable waters of the Unites States and prior to its creation never actually used in commerce, but instead, addressed the issue of whether the "Navigable Servitude" could be imposed without the payment of compensation to deprive the rights of private citizens in a body of water which in its natural and ordinary condition was part and parcel of the navigable waters of the United States and had been used in commerce. Based on this factual distinction, Owen, Cherokee Nation and Lewis are inapplicable, unpersuasive, of no authority and do not overrule the rule of law set forth in Kasier Aetna, Vaughn, Boone and Dardar. Further, because the undisputed facts of this proceeding are totally distinguishable from the facts of Owen, Cherokee Nation and Lewis, Owen, Cherokee Nation and Lewis neither support or provide authority for the NRC's Final Order that the waters of the Lagoon are public waters and public access to the waters of the Lagoon cannot be denied by I-275.
9. The case of State v. Chandler - Dunbar Water Tower Co., (1912), 229 U.S. 53, 33 S.Ct. 667, 57 L.Ed. 1063, cited by the NRC in both the Final Order and its Brief filed with this Court, did not apply the rule of law articulated by Kaiser Aetna and Vaughn to the issue of navigability for the purposes of imposing a "Navigable Servitude", but instead, applied prior law in addressing the issue of navigability for the purposes of imposing a "Navigable Servitude". Based on the rule of law set forth in Kaiser Aetna which (as explicitly stated by Kaiser Aetna) overrules Chandler-Dunbar, Chandler -Dunbar is inapplicable, unpersuasive and of no authority. Further, based on Kaiser Aetna's explicit overruling of Chandler-Dunbar, Chandler-Dunbar neither supports or provides authority for the NRC's Final Order that the waters of the Lagoon are public waters and public access to the waters of the Lagoon cannot be denied by I-275.
10. Applying the undisputed facts of this proceeding to the law as articulated by Kaiser Aetna, Vaughn, Boone and Dardar, the waters of the Lagoon are not the sort of great navigable stream that the Courts have previously recognized as being incapable of private ownership.
11. Applying the undisputed facts of this proceeding to the law as articulated by Kaiser Aetna, Vaughn, Boone and Dardar, the waters of the Lagoon constructed by I-275 entirely within its property, with its own private funds and means, are the private property of I-275.
12. Applying the undisputed facts of this proceeding to the law as articulated by Kaiser Aetna, Vaughn, Boone and Dardar, I-275 cannot be deprived of its right to the use, benefit, and enjoyment of its private property (the waters of the Lagoon), including the right to deny public access thereto, without the payment of just compensation by the state of Indiana.
13. Applying the undisputed facts of this proceeding to the law as articulated by Kaiser Aetna, Vaughn, Boone and Dardar, the NRC cannot impose a "Navigable Servitude" on I-275's private property (the waters of the Lagoon), without the payment of just compensation to I-275.
14. Based on the undisputed facts of this case and the law as articulated by Kaiser Aetna, Vaughn, Boone and Dardar, the NRC's Final Order determining that the waters of the Lagoon are public waters from which I-275 cannot deny public access thereto, is contrary to law.
15. Based on the undisputed facts of this case and the law as articulated Kaiser Aetna, Vaughn, Boone and Dardar, the NRC's Final Order imposing a "Navigable Servitude" on I-275's private property (the waters of the Lagoon), without the payment of just compensation, is contrary to law.
B. "Taking"
1. "Physical Takings" and "Regulatory Takings" Are Clearly Distinguishable
16. As stated by the United States Supreme Court in First English Evangelical Lutheran Church v. County of Los Angeles (1987) 482 U.S. 304, 107 S.Ct. 3278, 96 L.Ed. 2d 250, Lucas v. South Carolina Coastal Counsel (1992), 505 U.S.___________, 112 S.Ct._________, 120 L.Ed. 2d 798, Kaiser Aetna, Loretto v. Teleprompter Manhattan CATV Corp. (1982), 458 U.S. 419, 102 S.CT. 3164, 73 L.Ed. 2d 868 and The Indiana Supreme Court in Natural Resources Commission v. Ammex Coal Company, 638 N.E. 2d 418 (1994) (through its citation of First English Evangelical Lutheran Church v. County of Los Angeles), there are tow (2) distinct types of taking of private property, to-wit: a physical taking and a regulatory taking.
17. As articulated by First English Evangelical, Lucas, Kaiser Aetna and Loretto, a "physical taking" occurs when no matter how slight or how minute, private property on either a temporary or permanent basis, is seized by or invaded by the government.
18. As articulated by First English Evangelical, Lucas, Kaiser Aetna and Loretto, when a "physical taking" of private property occurs, the government must pay compensation.
19. As articulated by First English Evangelical, Lucas, Kaiser Aetna and Loretto, when a physical taking of private property occurs, the government must pay compensation regardless of how strong the public purpose or benefit is behind the taking.
20. As articulated by First English Evangelical, Lucas, Kaiser Aetna and Loretto, Ammex Coal, Nolan v. California Coastal Comm'n (1987), 483 U.S. 825, 107 S.Ct 6. 3141, 97 L.Ed. 2d 677 and Dolan v. City of Tigaird (1994), 512 U.S._________; 114 S.Ct.__________ 129 L. Ed. 2d 304, a "regulatory taking" does not deprive the private property to such an extent that the imposed regulation denies the private owner of all economically beneficial or productive use of land.
21. The cases of Ammex Coal and Foreman v. State of Indiana, Department of Natural Resources, 387 N.E. 2d 455, Ind. App. (1979), cited by the NRC in its Final Order, did not address the issue of a physical taking of property by the government, but instead, addressed the issue of whether a regulation of the use of private property had gone so far as to constitute a "regulatory taking" for which compensation must be paid by the government. Unlike the undisputed facts of this case, the regulation under consideration in Ammex and Foreman did not divest the private citizen of property ownership rights nor the private citizen's right to exclude others from his property, but only limited the private citizen's use of the property. Based on both the factual distinction and issue distinction between this case and Ammex and Foreman, Ammex and Foreman are inapplicable, unpersuasive and of no authority. Further, because both the undisputed facts of this proceeding and the issue before this Court in this proceeding are totally distinguishable from the facts and issues of Ammex and Foreman, Ammex and Foreman neither supports or provides authority for the NRC's Final Order that a "taking" of the waters of the Lagoon for which compensation must be paid has not occurred.
22. Applying the undisputed facts of this proceeding to the law as articulated by First English Evangelical, Lucas, Kaiser Aetna, Ammex Coal and Loretto, the NRC's Final Order is and does constitute a "physical taking" of I-275's private property (the waters of the Lagoon).
23. Applying the undisputed facts of this proceeding tot he law as articulated by First English Evangelical, Lucas, Kaiser Aetna, Ammex Coal and Loretto, the NRC cannot deprive I-275 of its right to the use, benefit and enjoyment of its private property (the waters of the Lagoon), including the right to deny public access thereto, without the payment of just compensation by the State of Indiana.
24. Based on the undisputed facts of this case and the law as articulated by First English Evangelical, Lucas, Kaiser Aetna, Ammex Coal and Loretto, the four (4) party analysis (ALJ Report, Finding No. 72 as modified) relied upon by the NRC in its Final Order in support of its determination that the taking of I-275's private property (the waters of the Lagoon) was not a "taking" for which compensation was required to be paid to I-275 by the State of Indiana (ALJ Report, Findings 58, 59, 60, 61, 17, 73, 74; Non-Final Order No. 2 on page 10), applies only to a "regulatory taking" and not as in this case, a "physical taking". Further, the NRC's reliance on the four (4) part analysis in support of its Final Order taking I-275's private property (the waters of the Lagoon) and denying I-275's right to deny public access thereto, without the payment of just compensation, is contrary to law.
25. Based on the undisputed facts of this case and the law as articulated by First English Evangelical, Lucas, Kaiser Aetna, Amax Coal and Loretto, the NRC's Final Order taking I-275's private property (the waters of the Lagoon) and denying I-275 the right to exclude public access thereto without the payment of just compensation, is contrary to law.
2. I.C. 13-2-22-1, et. seq. Governs And Not I.C. 13-2-18.5-1, et. seq.
26. IC 13-2-22-1, et. seq. ("Flood Control Act") governs any construction in a floodway, including dredging (Natural Resources Comm'n v. Drainage Board, 555 N.E.2d, 1387, Ind.App. (1990)).
27. The Flood Control Act specifically states that in order to engage in any construction in a floodway, a permit must be obtained from the NRC (IC 13-2-22-13(b)).
28. The Flood Control Act specifically states that if private property is to be taken by the State of Indiana pursuant to the Flood Control Act, the State of Indiana is required to exercise its powers of eminent domain (IC 13-2-22-9; IC 13-2-22-10).
29. IC 13-2-18.5-3 which was in effect at all times pertinent to this action, provides that a permit must first be obtained from the NRC prior to constructing an artificial channel which connects to a navigable river or stream and which creates additional water areas that will be connected to a navigable river or stream.
30. IC 13-2-18.5-5 which was in effect at all times pertinent to this action, provides that as part of and as a condition to obtain a permit to construct an artificial channel, the permittee must dedicate any waters created to general public use.
31. I.C. 13-2-18.5-9 which was in effect at all times pertinent to this action, explicitly provides that the provisions of I.C. 13-2-18.5-1, et. seq. were in no way to be construed as affecting any of the provisions of the Flood Control Act, but shall be considered as a supplement thereto.
32. By relying solely on I.C. 13-2-18.5-5 (which was in effect at all times pertinent to this action) in support of its Final Order, the NRC failed to consider the limiting provisions of I.C. 13-2-18.5-9 (which was in effect at all times pertinent to this action).
33. By relying solely on I.C. 13-2-18.5-5 (which was in effect at all times pertinent to this action) in support of its Final Order, the NRC failed to consider the provisions of the Flood Control Act (I.C. 13-2-22-9; I.C. 13-2-22-10) which requires the State of Indiana to exercise its powers of eminent domain if private property is to be taken by the State of Indiana.
34. By relying solely on I.C. 13-2-18.5-5 (which was in effect at all times pertinent to this action) to the exclusion of I.C. 13-2-22-9 and I.C. 13-2-22-10, the NRC has negated these statutory provisions which require the State of Indiana to pay compensation if it decides to take private property.
35. Based on the rules governing statutory interpretation, the NRC's sole reliance on the provisions of I.C. 13-2-18.5-5 (which was in effect at all time pertinent to this action) in support of its Final Order that I-275's private property (the waters of the Lagoon) shall be (and are) dedicated to the public use without the payment of compensation by the State of Indiana, is directly contrary to the provisions of the Flood Control Act (I.C. 13-2-22-9; I.C. 13-2-22-10) which require the State of Indiana to pay compensation if it determines to take private property.
36. Based on the rules of statutory interpretation, I.C. 13-2-18.5-5 (which was in effect at all times pertinent to this action) is subject to and is limited by the provisions of the Flood Control Act (I.C. 13-2-22-9; I.C. 13-2-22-10) which requires the State of Indiana to pay compensation if it determines to take private property.
37. Based on the rules of statutory interpretation, if the NRC pursuant to IC 13-2-18.5-5 (which was in effect at all times pertinent to this action) requires I-275 to dedicate its private property (the waters of the Lagoon) to the state, the NRC must comply with the provisions of the Flood Control Act (IC 13-2-22-9; IC 13-2-22-10) by paying compensation to I-275.
38. Based on the rules of statutory interpretation, the NRC's sole reliance on the provisions of IC 13-2-18.5-5 (which was in effect at all times pertinent to this action) in support of its Final Order that I-275's private property (the waters of the Lagoon) shall be (and are) dedicated to the public use without the payment of compensation by the State of Indiana, is contrary to law.
39. Based on the rules governing statutory interpretation, the NRC's sole reliance on the provisions of IC 13-2-18.5-5 (which was in effect at all times pertinent to this action) in support of its Final Order taking I-275's private property (the waters of the Lagoon) and denying I-275 the right to exclude public access thereto without the payment of just compensation, is contrary to law.
3. IC 13-2-18.5-1 et seq. Is An "End Run" Around Constitutional Prohibition
40. As articulated by the United States Supreme Court in Nollan v. California Coastal Comm'n (1987), 483 U.S. 825, 107 S.Ct. 3141, 97 L.Ed. 2d 677, and Dolan v City of Tigaird, (1994), 512 U.S._____________; 114 S.Ct.____________, 129 L.Ed. 2d 304, Kaiser Aetna and Vaughn, the Federal Courts in Boone and Dardar, and the Indiana Supreme Court in Ammex Coal and DNR v. Indiana Coal Council, Inc.__________ Ind. (________), if in order to obtain a discretionary permit a regulation requires:
(a) a private person t convey private property to the government; or
(b) requires a private person to be deprived of the right to exclude others from private property, without the payment of just compensation, such regulation is an "end run" around the constitutional prohibition of the government taking private property without payment of compensation.
41. As articulated by Nollan, Dolan, Kaiser Aetna, Vaughn, Boone, Dardar, Ammex Coal, DNR v. Indiana Coal Council, no matter how strong the public purpose and policy behind the regulation, if in order to advance the public purpose and policy the regulation requires:
(a) a private person to convey private property to the government; or
(b) requires a private person to be deprived of the right to exclude others from private property, without the payment of just compensation, such a regulation is an "end run" around the constitutional prohibition of the government taking private property without paying compensation.
42. The statute (which was in effect at all times pertinent to this action) relied upon by the NRC in support of its Final Order that I-275's private property (waters of the Lagoon) shall be (and are) dedicated to the public use without the payment of compensation by the State of Indiana, provides in part: 13-2-18.5-2. Construction of channels connecting to rivers and streams - Legislative finding. The general assembly finds that the unregulated construction of channels may be injurious to the public health, safety and welfare and that the construction of these channels shall be regulated.
43. IC 13-2-18.5-2 states in clear and unambiguous language that the purpose of IC 13-2-18.5-1, et. seq. is to regulate construction of channels connecting to rivers and streams.
44. To enforce IC 13-2-18.5-1, et. seq. regulation of the construction of channels, the legislature provided a process for applying for a permit to construct a channel (IC 13-2-18.5-4).
45. IC 13-2-18.5-1 by its clear and unambiguous terms is purely a regulatory statute.
46. Based on the clear legislative intent and purpose behind IC 13-2-18.5-1 et. seq. and the statute's permitting process (IC 13-2-18.5-4), the State of Indiana can advance the statute's public purpose through the denial of those applications requesting a permit to construct a channel which when constructed, would be injurious to the public health, safety and welfare.
47. Based on the clear legislative intent and purpose behind IC 134-2-18.5-1 et. seq. and the statute's permitting process (IC 13-2-18.5-4), the State of Indiana can advance the statute's public purpose and can obtain the benefits of the statute's public purpose without:
(a) requiring private property be dedicated to the sate; or (b) requiring a private citizen being deprived of the right to exclude others from private property.
48. IC 13-2-18.5-5 (which was in effect at all times pertinent to this action) clearly provides that the dedication of any waters created to the general public use is a condition to obtain a permit to construct an artificial channel. The Court finds that the provisions of this statute clearly and unambiguously impose as a condition to obtaining a discretionary permit, a private citizen must:
(a) convey private property to the government; or
(b) relinquish the right to exclude others from private property, without the payment of just compensation.
49. Applying the undisputed facts of this proceeding to the law as articulated by Nollan, Dolan, Kaiser Aetna, Vaughn, Boone, Dardar, Ammex Coal and DNR v. Indiana Coal Council, IC 13-2-18.5-1, et. seq., which is cited by the NRC in the Final Order (and its Brief) as authority for its determination that I-275's private property (waters of the Lagoon) shall be (and are) dedicated to the public use without the payment of compensation by the State of Indiana, is under the guise of regulation, an impermissible taking and "end run" around the constitutional prohibition of the taking of private property or depriving a private person of the right to exclude others from private property without just compensation.
50. Based on the undisputed facts of this case and the law as articulated by Nollan, Dolan, Kaiser Aetna, Vaughn, Boone, Dardar, Ammex Coal and DNR v. Indiana Coal Council, the NRC's Final Order determining under the authority of IC 13-2-18.5-1, et. seq. that I-275's private property (the waters of the Lagoon) shall be (and are) dedicated to the public use without the payment of just compensation by the State of Indiana is contrary to law.
51. Based on the law as articulated by Nollan, Dolan, Kaiser Aetna, Vaughn, Boone, Dardar, Amax Coal and DNR v. Indiana Coal Council, IC 13-2-18.5-5(2) which mandates a taking of private property without the payment of just compensation by the State of Indiana, is under the guise of regulation, an impermissible taking and "end run" around the constitutional prohibition of the taking of private property or depriving a private person of the right to exclude others from private property without just compensation and is therefore, unconstitutional.
52. Based on the undisputed facts of this case and the law as articulated by Nollan, Dolan, Kaiser Aetna, Vaughn, Boone, Dardar, Ammex Coal and DNR v. Indiana Coal Council, while the State of Indiana has a legitimate public purpose and policy in regulating the construction of channels, the State of Indiana cannot impose as a party of its regulation, a private person's dedication of private property to the State of Indiana or a private person being denied the right to exclude others from private property, without the payment of just compensation.
53. Based on the undisputed facts of this case and the law as articulated by Nollan, Dolan, Kaiser Aetna, Vaughn, Boone, Dardar, Amax Coal and DNR v. Indiana Coal Council, if the NRC's wants I-275's private property (the waters of the Lagoon) to be dedicated to the State of Indiana, the NRC must pay compensation to I-275.
54. Based on the undisputed facts of this case and the law as articulated by Nollan, Dolan, Kaiser Aetna, Vaughn, Boone, Dardar, Ammex Coal and DNR v. Indiana Coal Council, if the NRC wishes to deprive I-275 of its right to exclude others from its private property (the waters of the Lagoon), the NRC must pay compensation to I-275.
4. I-275 Had Reasonable Expectations That The Waters of the Lagoon Were Private Property
55. Notwithstanding the NRC's total silence during the permitting process regarding the requirement that I-275 dedicate the waters of the Lagoon to the public[FOOTNOTE 5], the NRC asserts that because of the existence of IC 13-2-18.5-1, et. seq., I-275 did not have any reasonable expectation, that the waters of the Lagoon were private property.
56. The NRC's argument is contrary to the undisputed facts of this case which show:
(a) The NRC not only remained silent, but in fact stated no further permits or approvals were required fort he construction of the Lagoon;
(b) Based on the NRC's actions or inactions or both, I-275 expended substantial funds in creating the Lagoon;
(c) I-275's consistent actions in maintaining and asserting its private ownership rights in and to the Lagoon, including, but not limited to making the Agreement a matter of public record approximately 14 years prior to the NRC's notification to I-275 that the NRC was considering the waters of the Lagoon to be public waters;
(d) The extreme length of time between the time the permitting process was began by I-275 and the NRC's notification to I-275 that the NRC was considering the waters of the Lagoon to be public waters.
57. Based on the undisputed facts of this case, the actions of the NRC led to the fruition in I-275 of a number of expectancies embodied in the concept of "property", to-wit the right of I-275 to exclude the public from the waters of the Lagoon.
58. Based on the undisputed facts of this case and the law as articulated in Kaiser Aetna, Vaughn, Boone, Dardar, even though the actions of the NRC cannot "estop" the NRC's attempt to enforce the dedication provisions of IC 13-2-18.5-5(2), the actions of the NRC led to the fruition of an expectancy in I-275 that it could exclude the public from the waters of the Lagoon and therefore, I-275 had a reasonable expectancy that the waters of the Lagoon were private property.
59. Based on the undisputed facts of this case and the law as articulated in Kaiser Aetna, Vaughn, Boone, Dardar, even though the actions of the NRC cannot "estop" the NRC's attempt to enforce the dedication provisions of I.C. 13-2-18.5-5(2), the actions of the NRC led to the fruition of an expectancy in I-275 that it could not be deprived of its private ownership of the waters of the Lagoon or deprived of its right to exclude the public from the waters of the Lagoon, without the payment of compensation by the State of Indiana.
60. Notwithstanding NRC's total silence during the permitting process regarding the requirement that the waters of the Lagoon be dedicated to public use, the NRC asserts that Sections (a) and (k) of the Corps' permits provide ample authority that the waters of the Lagoon are public waters.
61. As noted in Footnotes 3 and 4 of these Findings of Fact, the NRC's reliance Sections (a) and (k) of the Corps' permits in support of its position that I-275 did not have a reasonable expectancy that the waters of the Lagoon were private property, was raised by the NRC for the first time in its Brief filed with this Court and during oral argument. The Court further notes that the NRC did not rely on Sections (a) and (k) of the Corps' permits in support of its determination made in the Final Order that the waters of the Lagoon are public waters from which public access thereto could not be denied by I-275.
62. The Court notes that the language of Sections (a) and (k) of the Corps' permits relied upon by the NRC, is identical to the language of Section (a) and (k) of the Corps' permits addressed by the Court in Boone v. U.S., 725 F.Supp. 1509 (D. Hawaii, 1989). The Court further notes that in Boone v. U.S., 725 F.Supp. 1509 (D.Hawaii, 1989), the issue of whether Sections (a) and (k) of the Corps' permits prohibited a private person from excluding the public from waters, like the waters in issue in this proceeding, was, raised by the Corps (like NRC in this case) for the first time at oral argument.
63. As held by the Court in Boone v. U.S., 725 F.Supp. 1509 (D.Hawaii, 1989), Section (k) of the Corps' permit read in connection with Section (a) of the Corps' permit does not prevent a private person from denying public access to a "Lagoon in its present navigable state when the Lagoon was originally not navigable and was only rendered navigable by dredging".
64. Applying the undisputed facts of this proceeding to the rule of law set forth in Boone v. U.S., 7235 F.Supp. 1509 (D.Hawaii, 1989), Sections (a) and (k) of the corps permits do not prevent or prohibit I-275 from excluding the public from the waters of the Lagoon.
65. Based on the undisputed facts of this case and the rule of law as set forth in Boone v. U.S., 725 F.Supp. 1509 (D.Hawaii, 1989), Sections (a) and (k) of the corps permits, do not negate I-275's reasonable expectancy that the waters of the Lagoon are private property.
66. Based on the undisputed facts of this case and the rule of law set forth in Kaiser Aetna, Vaughn, Boone, Boone v. U.S., 725 F.Supp. 1509 (D.Hawaii, 1989) and Dardar, I-275 had a reasonable expectancy that the waters of the Lagoon were private property and that I-275 could exclude the public from the waters of the Lagoon.
67. Based on the undisputed facts of this case and the rule of law set forth in Kaiser Aetna, Vaughn, Boone, Boone v. U.S., 725 F.Supp. 1509 (D.Hawaii, 1989) and Dardar, if the NRC wishes to negate I-275's reasonable expectancy that the waters of the Lagoon were private property and that I-275 had the right to exclude the public from the waters of the Lagoon, the NRC must pay compensation to I-275.
III. The NRC's Final Order Is Not Supported By Sufficient Evidence And Is Contrary To The Evidence
68. IC 4-21.5-3-37(b) in clear and unambiguous language that the Final Order: Must include, separately stated, findings of fact for all aspects of the order, including the remedy prescribed and, if applicable the action taken on a petition for stay of effectiveness. Findings of ultimate fact must be accompanied by a concise statement of the underlying basic facts of records to support findings.
69. As noted by the Court in Indiana DNR v. united Refuse Co., 598 N.E.2d 603 (1992), the purpose behind the statutory mandate is to: Crystallize the agency's analysis of the evidence presented to provide a review in Court with an opportunity for intelligent review of its decision.
70. The NRC's determination that the rule of law articulated in Kaiser Aetna, Vaughn, Boone, and Dardar does not apply to the facts of this case, is a determination unsupported by the undisputed evidence of this proceeding.
71. The substantial similarity of the facts of Kaiser Aetna, Vaughn, Boone, and Dardar to the undisputed facts of this proceeding make it clear that the NRC's determination that Kaiser Aetna is distinguishable from the facts of this proceeding (Finding of Fact No. 65), is contrary to the undisputed facts of this proceeding.
72. Based on the undisputed facts of this case and the applicable law, the NRC's Final Order is unsupported by substantial evidence and therefore is not in compliance with statutory requirements.
IV. I-275's Motion to Strike Granted
73. I-275's Motion to Strike certain language from the Affidavits appended as attachments to NRC's Brief filed in this action is granted for the following reasons:
(a) As shown by the record of the administrative proceedings filed with this Court, on October 15, 1993, I-275 filed in the administrative proceeding, its motion to strike certain language from the Affidavits filed by DNR in the administrative proceeding.
(b) As shown by the record of the administrative proceedings filed with this Court, the ALJ by ruling dated December 28, 1993, granted in part I-275's motion to strike certain language from the Affidavits filed by DNR in the administrative proceeding, as being legal conclusions which must be made by the ALJ.
(c) The language stricken from the Affidavits filed by DNR in the administrative proceeding are not part of the record of the administrative proceeding filed with this Court.
(d) As shown by the record of the administrative proceeding filed with this Court, the Affidavits filed by DNR in the administrative proceeding, are identical to the Affidavits which are appended as attachments to NRC's Brief filed with this Court.
(3) The language previously stricken by the ALJ should also be stricken from the Affidavits appended as attachments to NRC's Brief filed with the Court for the reason that:
(1) said language is not part of the record of the administrative proceedings filed with this Court; and (2) the stricken language sets forth a legal conclusion which must be made by this Court on the issue of "navigability".
74. Fort he above and foregoing reasons, I-275's motion to strike the following language from the following Affidavits appended to NRC's Brief filed with this Court, to-wit:
(1) That portion of paragraph 4 of Gerry Newell's Affidavit which states "the Great Miami River is navigable at the point of the connection";
(2) Paragraph 6 of the Affidavit of John Wesley McIntosh, IV in its entirety;
(3) Paragraph 6 of the Affidavit of Col. John Stivers in its entirety; and
(4) Paragraph 6 of the Affidavit of Kenneth E. Smith in its entirety; is hereby granted and said language is stricken from the Affidavits appended as attachments to NRC's Brief filed with this Court. If it is determined that any of this Court's Conclusions of Law are Findings of Fact, then said Conclusions of Law are incorporated by reference and made a part of this Court's Findings of Fact.
JUDGMENT ENTRY
The Court having entered its Findings of Fact and Conclusions of Law, no HEREBY ORDERS ADJUDGES AND DECREES:
1. I-275's Motion to Strike is granted and those portions of the Affidavits attached as attachments to NRC's Brief as set forth in Paragraph 74 of Section IV of this Court's Conclusions of Law are stricken.
2. The NRC's Order determining that the waters of the Lagoon are navigable fact and by law and under IC 13-2-18.5-5(2) must be dedicated to public use is not supported by substantial evidence.
3. The NRC's Order determining that the waters of the Lagoon are navigable in fact and by law and under IC 13-2-18.5-5(2) must be dedicated to public use is contrary to law.
4. The NRC's Final Order determining that the dedication of the waters of the Lagoon to public use without the payment of just compensation, is an impermissible, unconstitutional taking of private property.
5. The NRC's Final Order determining that the dedication of the waters of the Lagoon to public use without the payment of just compensation, is an impermissible, unconstitutional depression of a private person's right to exclude others from private property.
6. The NRC's Final Order determining that the waters of the Lagoon are dedicated to public use without the payment of just compensation is unsupported by substantial evidence.
7. The NRC's Final Order determining that the waters of the Lagoon are dedicated to public use without the payment of just compensation is contrary to law.
8. IC 13-2-18.5-5(b) mandating dedication of private property or deprivation of a private person's right to exclude others from private property, without the payment of just compensation as a condition to obtain a permit pursuant to IC 13-2-18.5-1 et. seq., is unconstitutional for the reason it constitutes a taking of private property without the payment of just compensation by the State.
9. The NRC's Final Order is reversed in total.
10. The waters of the Lagoon are the private property of I-275.
11. I-275 can deny public access to the waters of the Lagoon.
FOOTNOTES
1. Prior to hearing oral argument, I-275 moved this Court to strike certain portions of the Affidavits attached as attachments to NRC's Brief for the reason those portion(s) of the Affidavit(s) had previously been stricken by a ruling entered by the Administrative Law Judge ("ALJ") during the administrative proceedings. I-275's Motion to Strike was taken under advisement by the Court. The ruling on I-275's Motion to Strike is set forth in these Findings of Fact, Conclusions of Law and Judgment Entry.
2. The ALJ's Report, as modified by the ALJ's "Notice of Intent to Modify a Finding", was adopted in full by the NRC and incorporated by reference in the NRC's Final Order.
3. As pointed out by I-275 during oral argument, the cited language of permit no 73-28 was not raised by NRC in support of its position during the administrative proceeding, but instead, was raised for the first time in the Brief filed by NRC in this action and at oral argument. Nonetheless, since permit no. 73-38 is part of the administrative proceeding record filed with this Court it is addressed both in this Court's Findings of Fact and Conclusions of Law.
4. As pointed out by I-275 during oral argument, the cited language of permit no. 77-23 was not raised by NRC in support of its position during the administrative proceeding, but instead, was raised for the first time in the Brief filed by NRC in this action and at oral argument. Nonetheless, since permit no. 77-23 is part of the administrative proceeding record filed with this Court it is addressed both in this Court's Findings of Fact and Conclusions of Law.
5. As set forth in this Court's Findings of Fact 24 (ALJ Report, Finding 23), 33 (ALJ Report, Finding 23) and 34 (ALJ Report, Finding 23), not only did the NRC remain silent as to the requirement that the waters of the Lagoon be dedicated to the public, the NRC clearly stated no further permits or approvals were required.