Except as required to implement the clarifications set forth in Footnote 6, temporary relief is denied.
FINDINGS OF FACT
1. Cessation Order C30930-Hoesli (the "CO") was issued by Timothy A. Corn, an authorized representative of the director (the "Director") of the department of natural resources (the "Department"), with service on John Hoesli on October 1, 1993. Corn is employed by the division of reclamation (the "Division") of the Department.
2. The CO was directed to several persons. Among these were John J. Hoesli, Maurice Kane, Thomas F. Mechtenberg, Middlefork Development Company, and Austin Powder Company (collectively, the "Petitioners").
3. The legal basis on which the CO purports to be grounded is the Indiana version of the federal surface mine control and reclamation act. The Indiana law is found primarily in IC 13-4.1 and 310 IAC 12, collectively referred to as "ISMCRA".
4. The situs to which the CO was directed is a tract of real estate containing about 25 acres and located in Perry County, Indiana. The real estate is bounded on the north by the corporate limits of Tell City, on the east by State Route 66 and on the south and west by a gravel or earthen county roadway. Just beyond the county roadway is the Ohio River. The situs to which the CO was directed is referred to as the "Site".
5. In a pleading entitled "Petition for Review and Request for Temporary Relief from Cessation order of the Indiana Department of Natural Resources, Division of Reclamation" and filed with the natural resources-commission (the "Commission"), the Petitioners sought timely relief from the CO on October 29, 1993.
6. With the filing of their petition, two proceedings were initiated by the Petitioners which are governed by IC 4-21.5, sometimes referred to as the "Administrative Orders and Procedures Act" or "AOPA". One of these proceedings will determine the merits of the CO. The other of the proceedings, and the one now in issue, will determine whether temporary relief should be granted from the Co.[FOOTNOTE 1]
7. The Commission has also adopted a multi-section rule, codified at 310 IAC 0.6-1, to assist in the administration of the AOPA.
8. Pursuant to 310 IAC 0.6-1-4, Stephen Lucas qualified on October 29, 1993 as the administrative law judge for the Commission in these proceedings.
9. Temporary relief from cessation orders issued under ISMCRA is governed most typically by IC 13-4.1-118(e). The subsection provides, that while awaiting a final determination on the merits of a cessation order, an aggrieved person "may file with the [C]ommission, a written request that the (Commission grant temporary relief from any notice or order issued under this chapter. The written request shall include a detailed statement of the reasons why temporary relief is appropriate.... [I]f the applicant requests relief from an order for cessation of coal mining and reclamation operations. . . . the [C]ommission shall issue the order or decision on that request within five (5) days of receipt of the request. The [C]ommission may grant temporary relief, under such conditions as the [C]ommission may prescribe, if:
(1) a hearing was held in the locality of the permit area on the request for temporary relief in which all parties were given an opportunity to be heard;
(2) the applicant showed there is substantial likelihood that the findings of the [C]ommission will be favorable to him; and
(3) temporary relief will not adversely affect the health or safety of the
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public or cause significant, imminent environmental harm to land, air, or water resources."
10. ISMCRA provides that the administrative law judge is the ultimate authority for the Department for cessation orders. IC 13-4.1-2-1(c) and Rose Disposal Services, Inc. v. DNR, 6 Caddnar 104 (1992).[FOOTNOTE 2]
11. The administrative law judge in this proceeding is the ultimate authority for the Department with respect to the temporary relief sought by the Petitioners from the Co. In making a final determination with respect to temporary relief, the administrative law judge must apply ISMCRA through the vehicle of the AOPA.
12. Neither the Petitioners nor any other person has sought a permit under ISMCRA to conduct surface coal mining operations at the Site. The gravamen is whether a permit is required.
13. Whether a permit is required pursuant to ISMCRA is essentially equivalent to whether the Department has jurisdiction pursuant to ISMCRA over the subject-matter of the activity sought to be regulated. If a permit is required to engage in surface coal mining activities, the Department has jurisdiction over the subject-matter.
14. Subject matter jurisdiction is implicit to many cessation orders. A permittee who receives a cessation order for some action associated with its permit is unlikely to present a serious jurisdictional argument. Where the issue is the necessity of a permit, however, the existence of subject-matter jurisdiction is a threshold matter which must be determined before reference to IC 13-4.1-11-8(e). [FOOTNOTE 3].
15. The fundamental provision delineating the jurisdiction of ISMCRA is found in IC 13-4.1-3-1: "No person may open, develop, or operate a new or previously abandoned site for surface coal mining operations in this state without first holding a valid surface coal mining and reclamation permit."
16. The Director (or his authorized representative) is required by ISMCRA to "order any person who does not hold a valid permit to conduct operations governed by this article [IC 13-4.1] to cease those operations and reclaim the area affected to the standards required by this article [IC 13-4.1]." IC 13-4.1-2-2(a)(3).
17. If the unpermitted activities of the Petitioners constitute surface coal mining operations, ISMCRA requires that the Director or his authorized representative issue a cessation order against them to cease operations and to reclaim the affected area. The question is whether the Petitioners engaged in surface coal mining operations.
18. "Surface coal mining operations" are defined in IC 13-4.1-1-3(12) to mean "[a]ctivities conducted on the surface of lands in connection with a surface coal mine... the products of which enter commerce or the operations of which directly or indirectly affect interstate commerce. These activities include excavation for the purpose of obtaining coal, including such common methods as contour, strip, auger, hilltop removal, boxcut, open pit, and area mining, the extraction of coal from coal refuse piles, the use of explosives and blasting, and in situ distillation or retorting, leaching, or other chemical or physical processing, and the cleaning, concentrating or other processing or preparation of coal." A functionally identical definition for "surface coal mining operations if provided by 310 IAC 12-0.5-125.
19. Two basic elements must then exist within IC 13-4.1-1-3(12) in order to qualify as a "surface coal mining operation". First, there must be a surface coal mine. Second, the product of the coal mine must be placed into interstate commerce.
20. The language contained within IC 13-4.1-1-3(12) provides a clear legislative intent to describe what is a surface coal mine in very broad terms. With the illustration of exotic methodologies as retorting, leaching, in situ distillation, and the removal of coal from refuse piles, together with more traditional mining techniques, the Indiana General Assembly established a regulatory program which was designed to include every commercial technique might which be used to extract coal from the ground.
21. The evidence in this proceeding is that the Petitioners removed the top of a river bluff and systematically exposed what was indisputably marketable coal. This activity might be characterized as strip mining or hilltop removal. In either event, the activity qualified as a surface coal mine.
22. The Petitioners urge that intent is an essential factor to determining whether a surface coal mine exists and that they did not intend to operate a surface coal mine. "[T]he activities conducted by the Petitioners ... [at the Site] are not in connection with a surface coal mine, but are in connection with the activities of the development of a commercial and retail site." "Petitioners' Memorandum in Support of Request for Temporary Relief from Cessation Order of the Indiana Department of
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Natural Resources, Division of Reclamation" filed on November 12, 1993.
23. The Department urges that intent is not an essential factor to a determination of whether a site is a surface coal mine. The Department points to Rose Disposal v. DNR, 6 Caddnar 104 (1992), where an administrative law judge found that a "bona fide landfill operator" who encountered and sold coal extracted during the course of landfilling activities was also engaged in a surface coal mining operation. "Rather, the dispositive question is whether coal was extracted and placed into commerce." Department's "Memorandum in Opposition to Temporary Relief" filed on November 12, 1993.
24. If intent is an essential factor to determining the existence of a surface coal mine, that intent must reasonably be the objective intent manifested by action and not the subjective intent of the actor. A primary function of ISMCRA is to "protect society and the environment from the adverse effects of surface coal mining operations." IC 13-4.1-1-2. The consequences of a construction activity are related to deeds and not disclosed or undisclosed thought processes. ISMCRA regulates operation not imagination.
25. John Hoesli directed a major earthmoving operation which involved blasting, removing the top of a bluff, and stockpiling topsoil. The operation was consistent both with-the development of a commercial and retail site and with the operation of a surface coal mine. Standing alone, the surface coal mine may not have been economically viable, but it was a venture purposefully entered as part of a larger commercial enterprise. When the Petitioners treated the upper coal seam as a substance worthy of segregation and separation, the earthmoving operation became a surface coal mine.
26. The existence of a surface coal mine not, however, in is itself sufficient to invoke ISMCRA. The product of the coal mine must be placed directly or indirectly into interstate commerce.
27. The broad reach of interstate commerce is almost legendary but can present a legitimate issue in a proper case. The evidence here indicated the coal was segregated, removed by truck from the Site on the same date the CO was issued, and delivered across the river in Kentucky. About 1,500 tons of coal were delivered at a price of approximately $18 a ton; the total gross value for all the coal was estimated to be between $300,000 and $1,000,000. Because of its low-sulfur content, the coal was then blended with high-sulfur coal from another location in an effort to meet energy emissions standards. Clearly upon the evidence, the coal removed from the Site was placed in interstate commerce.
28. By October 1, 1993, the Petitioners were engaged in surface coal mining operations for which a permit was required under ISMCRA. Their operations were being conducted without a valid permit. In accordance with IC 13-4.1-2-2(a)(3), issuance of the CO to cease those operations and to reclaim the affected areas was then not only appropriate but mandatory.[FOOTNOTE 4]
29. With a determination that the Petitioners needed but did not have a permit for their operations at the Site, they must qualify pursuant to IC 13-4.11-8(e) in order to achieve temporary relief.
30. Subdivision 8(e)(1) requires that a hearing be held in the locality of the activity in which all parties are given an opportunity to be heard. A hearing was held in this proceeding in Evansville at which the parties provided evidence in the form of testimony and exhibits. Witnesses were examined and cross-examined. Their attorneys have thoroughly briefed their positions. Subdivision 8(e)(1) is satisfied.
31. Subdivsion 8(e)(2) requires that the person seeking temporary relief establish a substantial likelihood that the findings on the merits of a cessation order will be favorable. The evidence does not support this finding. In order to secure a permit pursuant to ISMCRA, a number of environmental standards must be satisfied relative to historical and archeological resources, blasting, surface water discharges, topsoil protection, and earthen fills. The evidence does not support a conclusion that the Petitioners have made any attempt to comply with these standards.
32. Subdivision 8(e)(3) requires that the applicant establish temporary relief will not affect the health or safety of the public or cause significant, imminent environmental harm to land, air, or water resources. Again, the evidence does not support this finding. A complete recitation of the Petitioner's deficiencies is unnecessary, but the absence of blasting documentation is illustrative. To date, the Petitioners have not informed adjacent property owners of their survey and notification rights with respect to blasting. Neither have the petitioners shown any effort to comply with the substantive mandates for a blasting plan. Similarly, the Petitioners have not
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demonstrated that fill compactions and gradients are safe or environmentally sound.
33. The Petitioners also assert another issue ("Issue Two"). They contend that their activities were "conducted under the supervision and scrutiny" of the Department and relate that the Department performed five inspections before issuing the CO. "The Petitioners relied upon the conduct and scrutiny received form the DNR, believing that the Petitioners were in compliance with the law .... The ... [Department] has not adopted a position that these activities are not transformed into 'surface coal mining operations', retroactively." The Petitioners then argue that the portions of the CO which are dependent upon activities which occurred before September 29, 1993 "should be vacated". "Petitioners' Memorandum in Support of Request for Temporary Relief from Cessation order of the Indiana Department of Natural Resources, Division of Reclamation."
34. The evidence is not entirely consistent with the contents set forth in Petitioners' Issue Two. Their activities may have been conducted under the "scrutiny" of the Department but not under its "supervision". To "supervise" is to "direct and watch over". Webster's II New Riverside University Dictionary. The Riverside Publishing Company (1988 Houghton Mifflin Company). The testimony was essentially unrefuted that Corn did not believe he had jurisdiction over the Site until the activities became a surface coal mining operation. Corn could not supervise an activity over which the Department had no jurisdiction. Corn also communicated, and Hoesli testified he understood, that if the Petitioners proceeded to mine coal from the Site without a ISMCRA permit, Corn believed those activities would violate the law and would be subject to a cessation order.
35. Perhaps even more importantly, the Petitioners' Issue Two is simply unnecessary to a determination of temporary relief. As set forth in Finding 28, the Petitioners have engaged in a surface coal mining operation without obtaining a valid permit. Any additional activities at the site must be consistent with all requirements pertaining to Indiana to surface coal mines. Temporary relief cannot be granted based upon Issue Two.[FOOTNOTE 5]
36. The Petitioners also present what they characterize as Issue Three. This issue suffers the same malady as Issue Two. Once a site is determined to be a surface coal mining operation, activities cannot continue at the site except as would be authorized by ISMCRA. As most directly applicable here, those activities are governed by IC 13-4.1-2-2(a)(3). The Petitioners must cease their operations and reclaim the area which they affected. The Petitioners cannot continue with activities which are inconsistent with this legislative pronouncement. [FOOTNOTE 6]
FOOTNOTES
1. Reference will ordinarily be made here to the Petitioners as a group. For consideration is whether to grant temporary relief from the CO and not the responsibility of all or some of the Petitioners for the sanctions specified in the CO. Reference to the Petitioners as a group is for the convenience of the administrative law judge in making disposition of the temporary relief request and carries with it no implication as to the joint or several liability of the individual Petitioners.
2. Caddnar was adopted by the Commission in November 1988 as the agency index contemplated by IC 4-21.5-3-32. The Commission also specified that material included in Caddnar may be used as precedent for actions controlled by IC 421.5 and 310 IAC 0.6-1.
3. The Department urges in its "Memorandum in Opposition to Temporary Relief" filed on November 12, 1993 that its regulatory jurisdiction is an issue properly determined pursuant to IC 13-4.1-11-8(e)(2). According to this position, a party seeking temporary relief must show that it has a "substantial likelihood" of success by demonstrating a lack of jurisdiction. If successful in that effort, the party must proceed also to establish, pursuant to subdivision 8(e)(3), that "temporary relief will not adversely affect the health or safety of the public or cause significant, imminent environmental harm to land, air or water resources." The administrative law judge specifically disapproves this aspect of the Department's argument. Unless the Department has subject-matter jurisdiction over an activity pursuant to ISMCRA, none of the provisions of IC 13-4.1 apply. A person might engage in an activity which is devastating to the environment but where coal mining is not involved. ISMCRA (including IC 13-4.1-8(e)) would then have no application.
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4. Corn and Hoesli had several conversations concerning the activities of the Petitioners prior to issuance of the CO. Hoesli testified that he understood Corn planned to issue a cessation order as soon as coal was encountered, but the Petitioners elected to continue their activities without seeking either a permit or some other regulatory relief (such as a quasideclatory judgment under 310 IAC 0.6-1-15). Corn testified that he would not have considered the operation to be a coal mine and would not have issued the CO if the Petitioners had merely incorporated the coal into the fill they were placing on and adjacent to the Site. The Petitioners expressed concerns for the suitability of coal as a fill material, but their actions demonstrated no similar reservations for the placement of old tires and tree stumps. Seeking to draw the temporal line for when a regulated activity commences is always difficult. Here Corn expressed to Hoesli in terms which were both understandable and understood that Corn considered that line to be crossed when coal was encountered. Whether in a legal sense the line was actually crossed when the coal was encountered, or soon after when it was segregated and trucked to Kentucky, now matters little. In a deliberate action, the Petitioners have crossed the line.
5. For example, even if the Petitioners had never conducted blasting activities at the Site, any future blasting activities must conform to the blasting requirements of ISMCRA. What transpires before a cessation order, issued for surface coal mining without a permit, is relevant to determining whether surface coal mining operations are taking place. It is also relevant to determining matters critical to IC 13-4.1-11-8(e). In addition, activities before the issuance of a cessation order may be critical to determining the merits of the underlying cessation order. These activities are not essential to determining whether a person, who should have but did not obtain a surface coal mining permit, may continue to act without benefit of the permit. The person may not. Taking the Petitioners' argument in Issue Two to its logical conclusion, a person who removes all the coal from a site, before a cessation order is issued, would never be required to comply with the stringent reclamation requirements of ISMCRA. Under the Petitioners' argument, the person would then be engaged in an activity other than surface coal mining. The person might claim that a site was being prepared for residential purpose, a commercial purpose, a recreational purpose, an agricultural purpose, and industrial purpose, or some other equally meritorious purpose viewed without reference to the challenges and responsibilities of surface coal mining. The social and environmental purposes of ISMCRA continue after the removal of coal, and once the jurisdiction of ISMCRA attaches, these purposes must be satisfied. Temporary relief cannot be granted to ignore the mandates of ISMCRA.
6. The CO should not be viewed so inflexibly as to preclude the Petitioners from seeking a permit under ISMCRA or, in the alternative, a limited exemption from ISMCRA with a permit under IC 13-4-6. Similarly, the CO should not be viewed as precluding construction activities consistent with reclaiming the site, or stabilizing the site for the winter months, under direction of the Division. Although an amendment to the CO is not viewed as necessary to these purposes, the CO should be interpreted consistently with this footnote.