CADDNAR

[Cite: Hoosier Environmental Council v. Foertsch Constr. Co. and DNR, 8 CADDNAR 178 (2003)]

Based on the foregoing Findings of Fact and Conclusions of Law, the Natural Resources Commission hereby dissolves the findings and nonfinal order of Special ALJ Penrod entered on February 20, 2003. The Natural Resources Commission further issues the above Findings of Fact and Conclusions of Law, and denies any fees and expenses to Claimant Hoosier Environmental Council in this proceeding.

The Natural Resources Commission, pursuant to Ind. Code 4-21.5-3-28(g), hereby identifies the following differences between this Final Order and the Non-Final Order:

(a) The Non-Final Order entered by Special ALJ Wayne Penrod on February 20, 2003 directed Respondent Department of Natural Resources, pursuant to Ind. Code 14-34-15-10 and 312 IAC 3-1-13(d), to pay Claimant Hoosier Environmental Council the sum of $183,906.44 as compensation for costs and expenses, including allowable reasonable attorney's fees and litigation expenses, incurred in this proceeding, underlying Administrative Cause Nos. 95-169R and 95-170R, and on judicial review to the Daviess Circuit Court in Cause Nos. 14CO1-9703-CP-095 and 14CO1-9703-MI-096.

(b) In the Final Order entered here, and in accordance with the Findings of Fact and Conclusion of Law cited above, the Natural Resources Commission directs that Claimant Hoosier Environmental Council receive no fees and expense under Ind. Code 14-34-15-10 and 312 IAC 3-1-13(d) and that Respondent Department of Natural Resources is not legally required to pay same.

FINDINGS OF FACT

1. On May 20, 2003, the Natural Resources Commission considered the timely objections filed by Respondent Department of Natural Resources to the Findings of Fact, Conclusions of Law and Non-Final Order entered by Special Administrative Law Judge ("Special ALJ") Wayne E. Penrod on February 20, 2003.

2. In the Findings of Fact, Conclusions of Law and Non-Final Order entered on February 20, 2003, Special ALJ Wayne E. Penrod found that Claimant Hoosier Environmental Council ("HEC") was a substantially prevailing party in the case and should be awarded aggregate costs and expenses claimed by HEC as follows:

[VOLUME 8, PAGE 179]

3. Special ALJ Wayne E. Penrod awarded an additional amount of $29,825.56 to Michael A. Mullett based on his second verified statement filed on or about June 13, 2002 and found that costs and expenses due Claimant HEC through May 2002 total $183,906.44. Counsel for Claimant HEC, Michael A. Mullett, acknowledges that the Special ALJ erred and awarded excess fees to him in the amount of $15,533.48.

4. In his non-final order, Special ALJ Wayne E. Penrod directed Respondent Department of Natural Resources to pay Claimant HEC the amount of $183,906.44 for its costs and expenses, including allowable reasonable attorney's fees and litigation expenses incurred.

5. In his non-final order, Special ALJ Wayne E. Penrod issued Findings concluding that:

A. HEC prevailed and made a substantial contribution to a full and fair determination on Issue A regarding the filing of a timely petition for administrative review (Findings 24-29).

B. HEC prevailed and made a substantial contribution to a full and fair determination on Issue B regarding the application of collateral estoppel to a number of issues (Findings 30-36).

C. HEC failed to prevail on Issue C regarding whether the permit applications presented adequate characterizations of pre-existing geological and hydrological data (Findings 37-40).

D. HEC failed to prevail on Issue D regarding whether the monitoring wells were adequate in number, construction, and design (Findings 41-44).

E. HEC partially prevailed and made a substantial contribution to a full and fair determination on Issue E regarding whether coal combustion waste (CCW) storage areas were adequately isolated and separated so as to prevent damage (Findings 45-56).

F. HEC failed to prevail on Issue F regarding whether the permit was invalidated due to the absence of established threshold or minimum compliance standards for the monitoring samples (Findings 57-60).

G. HEC prevailed and made a substantial contribution to a full and fair determination on Issue G regarding whether the permit should contain a mechanism to restrict future land use or caution purchasers about the presence of CCW on the property (Findings 61-66).

[VOLUME 8, PAGE 180]

H. HEC prevailed and made a substantial contribution to a full and fair determination on Issue H regarding whether the amount of CCW disposal allowed should bear some relationship to the amount of coal mined (Findings 68-81).

I. HEC prevailed and made a substantial contribution to a full and fair determination on Issue I regarding whether long-term monitoring of the site can and should be required (Findings 82-89).

J. HEC partially prevailed and made a substantial contribution to a full and fair determination on Issue J regarding whether adequate testing was performed in accordance with Memorandum 92-1 to justify granting of the permit (Findings 91-102).

6. The claims for relief can be ascertained by reviewing the petition for administrative review filed by Jeff Stant on behalf of Claimant HEC on June 9, 1995, in which HEC requested denial and stay of the permit.

7. As to Issue H identified in Finding of Fact numbered 5 above, Claimant HEC objected to the 25% CCW disposal limitation originally imposed in the underlying case and the NRC modified the CCW disposal limitation to 50%.

8. On judicial review, the Daviess Circuit Court determined that the NRC's modification of the CCW disposal limitation from 25% to 50% was within its inherent policy functions as authorized by Ind. Code 14-34-2-1 and Ind. Code 14-34-2-2.

9. On judicial review, the Daviess Circuit Court further determined that DNR was in compliance with state and equivalent federal Surface Mining Control and Reclamation Act ("SMCRA") provisions with respect to its issuance of the Foertsch CCW permit and that Claimant HEC was incorrect in asserting that DNR was in violation of state or federal SMCRA.

10. The Daviess Circuit Court further affirmed the NRC's Final Order and totally denied Claimant HEC's petition for judicial review in a judgment entered on September 13, 1999. 11. No party requested an appellate court to review the judgment of the Daviess Circuit entered on September 13, 1999.

CONCLUSIONS OF LAW

The Natural Resources Commission issues the following Conclusions of Law:

1. It is within the discretion of the Natural Resources Commission to either grant or deny a request for costs and expenses, including attorney's fees since Ind. Code 14-34-15-10 provides:

Whenever an order issued:

(1) under this chapter or under IC 13-4.1-11 (before its repeal); or

(2) as a result of an administrative proceeding under this article or under IC 13-4.1 (before its repeal) instituted at the request of a person;

the court, resulting from judicial review, or the commission MAY assess against either party to the proceeding an amount of money, determined by the commission, equal to the aggregate amount of all costs and expenses, including attorney's fees, reasonably incurred by the person for or in connection with the person's participation in the proceedings, including any judicial review of agency actions (emphasis added).

[VOLUME 8, PAGE 181]

2. The rule implementing Ind. Code 14-34-15-10 is found at 312 IAC 3-1-13(d)(2) and provides:

(d) Appropriate costs and expenses, including attorney fees, may be awarded under IC 14-34-15-10 only as follows:

...

(2) To a person from the department, other than to a permittee or the permittee's authorized representative, who initiates or participates in a proceeding and who prevails in whole or in part, achieving at least some degree of success on the merits, upon a finding that the person made a substantial contribution to a full and fair determination of the issues.

3. The use of the word "may" in Ind. Code 14-34-15-10 grants this Commission discretion as to whether or not to assess fees and expenses against a party. Claimant HEC failed to establish any legal basis to justify the award of any fees and expenses to Claimant HEC from Respondent DNR.

4. Issues A and B identified in Finding of Fact numbered 5 above were at most "trivial success on the merits" or "purely procedural victories" for which the recovery of fees and expenses is not authorized or warranted. See RUCKELSHAUS v. SIERRA CLUB, 463 U.S. 680, 688, 103 S.Ct. 3274, 3279, 77 L.Ed.2d 938, 945 n.9 (1983) (holding "that trivial success on the merits or purely procedural victories" do not justify an award of fees).

5. Claimant HEC failed to prevail on Issues C, D, and F identified in Finding of Fact numbered 5 above.

6. Remaining Issues E, G, H, I, and J identified in Finding of Fact numbered 5 were either not a specific claim for relief raised by Claimant HEC in its petition for administrative review filed on June 9, 1995, or at most a "trivial success on the merits". HEC failed to achieve its overall objective of obtaining relief on the merits in the form of a denial and stay of the permit as requested in its petition for administrative review filed on June 9, 1995. See RUCKELSHAUS v. SIERRA CLUB, 463 U.S. at 688 n.9. (holding "that trivial success on the merits" does not justify an award of fees).

7. It is not appropriate within the meaning of 312 IAC 3-1-13(d) to award any fees and expenses to Claimant HEC since HEC failed to achieve a denial and stay of the permit as requested in its petition for administrative review filed on June 9, 1995.

8. It is not appropriate within the meaning of 312 IAC 3-1-13(d) to award any fees and expenses to Claimant HEC since the Daviess Circuit Court determined on judicial review that DNR complied with state and equivalent federal SMCRA provisions when it issued the permit and that Claimant HEC was incorrect in asserting that DNR was in violation of these provisions.

9. It is not appropriate within the meaning of 312 IAC 3-1-13(d) to award any fees and expenses to Claimant HEC since the Daviess Circuit Court affirmed the NRC's Final Order on judicial review and totally denied Claimant HEC's petition for judicial review.

10. The federal counterpart of Ind. Code 14-34-15-10 regarding fees is nearly identical to Section 525(e) of SMCRA [30 U.S.C. 1275(e)]. In UTAH INTERNATIONAL, INC. v. DEPARTMENT OF THE INTERIOR, 643 F.Supp. 810 (1986), the court held it would be unjust to interpret the federal version of Ind. Code 14-34-15-10 as requiring a successful party pay its adversary's fees. Since DNR was a successful party, it is not required under Ind. Code 14-34-15-10 to pay the fees and expenses of any other successful or unsuccessful party in the underlying litigation.

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[VOLUME 8, PAGE 181A]

[NONFINAL ORDER AND FINDINGS OF SPECIAL ADMININSTRATIVE LAW JUDGE PENROD FOLLOWS.]

NONFINAL ORDER: Pursuant to Ind. Code 14-34-15-10 and 312 IAC 3-1-13(d) and consistent with the Findings of Fact and Conclusions of Law above, the Department of Natural Resources is ordered and directed to pay Claimant Hoosier Environmental Council, within sixty (60) days of this Order becoming final, the amount of $183,906.44 to compensate Petititioner [sic] herein for its costs and expenses, including allowable reasonable attorney's fees and litigation expenses incurred in this proceeding and the underlying Administrative Cause Nos. 95-169R and 95-170R, and related appeal Nos. 14C01-9703-CP-095 and 14C01-9703-MI-096.

FINDINGS OF FACT, CONCLUSIONS OF LAW: This matter comes before the presiding Special Administrative Law Judge ("SALJ") for findings of fact, conclusions of law, and non-final order regarding the petition for attorney's fees and litigation expenses of Claimant, Hoosier Environmental Council ("HEC"), incurred in this proceeding and the underlying Administrative Cause Nos. 95-169R and 95-170R, and related appeal Nos. 14C01-9703-CP-095 and 14C01-9703-MI-096.

I. BACKGROUND

1. On June 9, 1995, HEC petitioned for administrative review of a coal combustion waste ("CCW") disposal permit amendment for the Foertsch Little Sandy #10 mine in Daviess County.

2. As a result of the administrative review petition, a twelve-day hearing was held by Administrative Law Judge ("ALJ") Teeguarden. HEC produced a number of witnesses, four of whom qualified as experts, to contest the adequacy and appropriateness of the permit.

3. On October 10, 1996, the NRC issued its Report, Findings of Fact, and Non-final Order of the Administrative Law Judge ("Teeguarden Order") in this matter. The Teeguarden Order upheld the permit amendment in part and made several significant modifications.

4. The Teeguarden Order identified ten issues that had been presented in the evidence and briefs submitted by the parties, and identified which party or parties had prevailed as to each issue. Teeguarden Order, Finding No. 13, pp. 3-4. Those issues are identified as follows:

5. The Teeguarden Order found that HEC had prevailed as to issues A, B, G, H, and I; and partially prevailed as to issues E and J.

6. Both HEC and Foertsch objected to the ALJ's determination and order, and filed their objections with the Natural Resources Commission ("NRC"). The NRC, in its Final Order, upheld the ALJ's Report, Findings of Fact and Non-final Order, with one exception: the NRC increased the ALJ's disposal recommendation by 25 percent. This amount was still 50% less than that sought by Foertsch in its appeal and provided for in the original permit.

7. Both HEC and Foertsch sought judicial review of the NRC's determination. On September 13, 1999, the Daviess County Circuit Court upheld the NRC's Final Order.

8. ALJ Rider, who had assumed jurisdiction of the case in mid-1997, on March 9, 2001, issued a Preliminary Decision Regarding Prevailing Party Status and Opportunity to Negotiate as to Amount of Fees Award ("Rider Order"). The Rider Order found that HEC prevailed as to Issue H, and partially prevailed as to Issues E and J. The Rider Order recommended that HEC was not entitled to recover fees and expenses related to procedural issues or judicial review.

9. ALJ Rider left the employ of the NRC on March 16, 2001.

10. On March 27, 2001, HEC filed its objections to the Rider Order.

11. Subsequently, on March 30, 2001, Respondent DNR filed its motion for reconsideration and clarification of the Rider Order.

12. On June 21, 2001, the NRC appointed Rider as SALJ to bring closure to the case.

13. On February 27, 2002, SALJ Rider filed a Status of Case and advised the parties that a "decision" would not be forthcoming until later in 2002 . SALJ Rider also offered to withdraw from the case at either parties' request. On March 6, 2002, HEC made such a request.

14. The parties were notified of SALJ Rider's March 27, 2002, withdrawal on April 4, 2002, and were also then notified of SALJ Penrod's appointment.

15.SALJ Penrod set his first Status Conference for April 26, 2002. Settlement efforts continued through June, 2002.

16. Pleading in the case continued through August 16, 2002.

17. In November, 2002, HEC requested a prompt entry of a non-final order by the SALJ.

18. On December 12, 2002, SALJ advised the parties that a non-final order in the nearly eight (8) year old case would be forthcoming by February 21, 2003.

[VOLUME 8, PAGE 181B]

II. ISSUES UPON WHICH HEC SUBSTANTIALLY PREVAILED

19. Ind. Code 14-34-15-10 (2) provides for recovery of costs and expenses incurred during administrative proceedings or judicial review (a governing provision of the Indiana Coal Mining and Reclamation Act, referred to herein as "ISMCRA").

20. IC 14-34-15-10 reads in relevant part:

...(2) as a result of an administrative proceeding under this article...instituted at the request of a person; ...the [C]ommission may assess...an amount of money, determined by the [C]ommission, equal to the aggregate amount of all costs and expenses, including attorney's fees, reasonably incurred by the person for or in connection with the person's participation in the proceedings, including any judicial review of agency actions.

21. The implementing rule, 312 IAC 3-1-13(d), explains that such recovery may be awarded

...(2) To a person from the department, other than to a permittee or the permitee's authorized representative, who initiates or participates in a proceeding and who prevails in whole or in part, achieving at least some degree of success on the merits, upon a finding that the person made a substantial contribution to a full and fair determination of the issues. (Emphasis added.)

The statutory enactment and regulatory promulgation are specific as to availability of costs and expense recovery, including attorneys fees, and govern any legal analysis of these issues. There is no need to resort to consideration of the "American Rule" (where a prevailing litigant is ordinarily not entitled to collect a reasonable attorney's fee from the loser in the absence of a fee-shifting statute) as the provisions of the above statute and rule are tantamount to a fee-shifting prescribed by the Indiana Legislature and Executive Branch and a limited waiver of sovereign immunity as to a monetary award. There is no compelling Indiana statutory authority or governing case law which would dictate the use of a "percentage-of-success method or a 'lodestar (aggregate) plus multiplier'".

22. HEC initiated the appeal of the permit at issue here, and prevailed variously in whole or in part on certain issues, achieving a significant degree of success on the merits, making a substantial contribution to a full and fair determination of the issues.

23. In particular, HEC's participation resulted in modification of the original permit to include four provisions that would not have been included had HEC not initiated its appeal of the permit. The NRC, acting in its official capacity entered its final order thereby sanctioning a change in the legal relationship between the DNR and Foertsch Construction Company. The SALJ finds that the allegations of HEC's original petition had a reasonable basis both in law and in fact and the claims were objectively reasonable as a basis for adjudication.

A. HEC prevailed as to Issue A: "Did HEC file a timely petition for review?"

24. HEC filed its petition for administrative review of the permit approval on June 9, 1995. "easily within the 30 day time limit required by ISMCRA and the three day mailing addition provided by IC 4-21.5." Teeguarden Order, Finding 35, at 5. There would have been no administrative review absent the filing of the petition by HEC.

25. Foertsch contested the petition in part because it was signed by now former HEC Executive Director Jeffrey Stant, who is not an attorney. As a result, HEC was required to defend its contention that it had timely filed its petition.

26. The Teeguarden Order found that "the petition for review must be considered timely." Finding 46, at 6. The NRC has twice ruled that a lay person may represent a group in an administrative adjudication. Teeguarden Order, Finding 40, at 6. The NRC found that in the "absence of a binding, precedential court ruling" requiring attorney representation in an administrative adjudication, HEC's petition was timely. Teeguarden Order, Finding 46, at 6.

27. HEC prevailed on its contention that it had timely filed its petition. Had HEC not prevailed on the issue of timeliness, HEC's appeal would have been dismissed and HEC could not have prevailed in obtaining permit modifications. Prevailing on the timeliness of its filing of the petition was a critical and necessary, and therefore a substantial step to HEC's prevailing on other issues.

28. The Rider Order found that HEC achieved some success in regard to Issue A. Rider Order, at 1.

29. The SALJ FINDS that HEC prevailed as to Issue A, making a substantial contribution to a full and fair determination of the issue.

[VOLUME 8, PAGE 181C]

B. HEC prevailed as to Issue B: "Does collateral estoppel apply to a number of the issues raised by HEC?"

30. Both Foertsch and the DNR contended that the decision in Hoosier Environmental Council v. DNR and Solar Sources, INC., 7 Caddnar 38 (1995), precluded HEC from litigating a number of issues in the administrative review of the Foertsch permit. Teeguarden Order, Finding 47, at 6. Specifically, collateral estoppel was raised as a concern regarding Issues G, I , and J.

31. Issue G concerned whether there should be a mechanism in the permit to restrict future land use or caution future purchasers. HEC's testimony evidenced the concern that absent such a mechanism a future land purchaser might discover after the fact that his well is placed in a CCW monofill. Teeguarden Order, Finding 163, at 14. ALJ Teeguarden found that the NRC did not directly deal with the issue in SOLAR, and that the issue was not collaterally estopped. Teeguarden Order, Finding 161, at 14. In fact, the Teeguarden Order modified the permit to require the landfill operator to file an affidavit with the Daviess County Recorder. HEC prevailed on the position that collateral estoppel did not apply to Issue G.

32. Issue I concerned whether DNR can and should require long term site monitoring. HEC contended that the permit as approved by DNR would allow a final release of Foertsch's bond and loss of control over the property before pollution by the CCW occurs. The Teeguarden Order found that this was not a significant issue in the SOLAR case, and that the issue was not collaterally estopped. Finding 189, at 17. In fact, the Teeguarden Order modified the permit to include a condition that requires a complete recharge of the groundwater in and near the permit area before final bond release can be considered. Teeguarden Order, at 20. HEC prevailed on the position that collateral estoppel did not apply to Issue I.

33. Issue J concerned whether tests performed in accordance with 92-1 were adequate to justify granting the permit. The Teeguarden Order found that collateral estoppel did apply "to some degree" to Issue J. Finding 195, at 17. Specifically, collateral estoppel applied to the testing done to the proposed CCW which was the same as in SOLAR. Teeguarden Order, Finding 196, at 17. However, the "controversy involving base line testing of samples from monitoring wells is not so easily decided." Teeguarden Order, Finding 203, at 18. The permit was, in fact, modified to address HEC's concerns regarding the adequacy of the testing by prohibiting CCW storage until further base line testing had been performed. Teeguarden Order, Finding 223, at 19. HEC partially prevailed on the position that collateral estoppel did not apply to Issue J.

34. HEC prevailed on its contention that collateral estoppel did not apply with regard to Issues G and I and prevailed in part on the contention that collateral estoppel did not bar dealing with all of its concerns regarding Issue J. Had HEC not prevailed as to the collateral estoppel issue, it would not have achieved the three permit modifications associated with Issues G, I, and J.

35. The Rider Order found that HEC achieved some success in regard to Issue B. Rider Order, at 1.

36. The SALJ FINDS that HEC prevailed as to Issue B, making a substantial contribution to a full and fair determination of the issues.

C. HEC did not prevail as to Issue C: "Do the permit applications present adequate characterization of pre-existing geological and hydrological data?"

37. HEC produced witnesses who testified regarding the inadequacy of the information regarding pre-existing conditions. HEC witnesses Haitjema and Norris challenged the adequacy of the data in establishing the existing hydrology of the area. HEC Post Hearing Brief, at 31. Specifically, Haitjema and Norris challenged the identification of existing aquifers and water flows as well as the system of monitoring wells. HEC Post Hearing Brief, at 33-38.

38. The Teeguarden Order found that the "decision to grant the permit was not only based on the S-312 and S-312-1 applications but also the S-298 permit application submitted by Solar a few years earlier." Finding 55, at 7.

39. The Teeguarden Order found that although more information could have been provided by the permit applicant, the information submitted in the S-312, S-312-1, and S-298 permits adequately characterized existing conditions in or near the permit area. Findings 57-77, at 7-9.

40. The SALJ FINDS that HEC did not prevail as to Issue C.

[VOLUME 8, PAGE 181D]

D. HEC did not prevail as to Issue D: "Are the monitoring wells adequate in number, construction, and design?

41. HEC contended that the monitoring wells were inadequate and sought to require the use of wells to monitor specific zones rather than collection wells used in connection with the permit as originally issued. Teeguarden Order, Findings 80-81, at 9.

42. HEC witnesses Haitjema, Norris and Boulding all testified as to the inadequacy of monitoring wells CCW1, CCW2, and CCW3. HEC Post Hearing Brief, at 34-35.

43. The Teeguarden Order found that the permit area is already subject to extensive mining, and that any problem from the permitted well system already exists without the issuance of the permit at issue. Finding 89, at 10. Due to the extent of current mining operations, the extent of current water pumping operations and the pumping of water for irrigation, extended projections of water flows in the future are uncertain. Teeguarden Order, Findings 88-105, at 10-11. The six CCW wells plus additional domestic wells which will be monitored were found to be sufficient for the purposes of the current permit. Teeguarden Order, Findings 127-130, at 12.

44. The SALJ FINDS that HEC did not prevail as to Issue D.

E. HEC partially prevailed as to Issue E: "Are the CCW storage areas adequately isolated and separated so as to prevent damage?"

45. HEC contended that the permit does not require sufficient isolation and separation of toxic-forming compounds so as to prevent damage. HEC Post Hearing Brief, at 45. ISMCRA includes a basic requirement to avoid placing materials into mines in a manner that will degrade ground and surface waters. HEC Post Hearing Brief, at 45.

46. HEC objected to the lack of physical barriers to prevent substantial tonnage of CCW from groundwater exposure. HEC Post Hearing Brief, at 45-78. Specifically, HEC witness Dr. Anne Spacie, an aquatic biologist, testified that the permit would allow groundwater to be exposed to CCW, resulting in significant increases in pH concentration and potentially toxic or lethal effects to bio-organisms. Spacie Testimony, Day 11, at 65-68. HEC also raised this issue in its Post Hearing Brief. HEC Post Hearing Brief, at 49-50.

47. HEC witnesses Hailer, Boulding and Norris further testified the contamination would not be buffered, diluted or attenuated by spoil or the surrounding geology and would likely reach Aikman Creek and Mud Creek, which have little potential to dilute the problem. HEC Post Hearing Brief, at 50-52.

48. HEC witness Norris testified that the physical separations being proposed would "have virtually no net effect in terms of isolating the coal combustion waste." Norris Testimony, Day 2, at 50. Norris discussed several alternatives for increasing isolation, such as creating an inward gradient, using synthetic liners, or employing carefully constructed compacted clay liners and leachate pumping systems.

49. Norris also testified that cation exchange and adsorption would have limited mitigative effects, and characterized as speculative the claims by Foertsch witnesses that dispersion, dilution, and other factors such as spoil and geologic conditions would attenuate the effects of leachate from the monofill. Norris Testimony, Day 2, at 50.

50. HEC witness Spacie testified that high pH resulting from leachate may cause solids to accumulate on the gills of aquatic organisms and cause them to die. Spacie Testimony, Day 11, at 69-71.

51. ALJ Teeguarden found that Dr. Spacie's testimony regarding the effects of high pH and long term, low level RCRA metal exposure on fish was "more than enough evidence to require a special handling of this CCW as if it were a toxic material." Teeguarden Order, Finding 136, at 12.

52. However, the Teeguarden Order did not adopt all of HEC's recommendations as to CCW storage. HEC contended that IC 14-34-10-2 (17) required Foertsch to dispose "all toxic materials" in a manner "designed to prevent contamination of ground or surface water." HEC Post Hearing Brief, at 21. HEC argued that CCW should be stored so that water will not come in contact with the ash. The Teeguarden Order found there are other methods for preventing contamination and minimizing contamination and adverse effects. Findings 138-9, at 13.

53. The Teeguarden Order found that there was insufficient evidence to show that spacing and buffers would not adequately minimize contamination. Teeguarden Order, Finding 146, at 13.

54. Thus, the Teeguarden Order found for HEC on the subissue of whether the CCW must be handled as a toxic material, but did not find for HEC on the subissue of whether the CCW must be stored so as to prevent water coming into contact with the ash. Findings 136-146, at 12-13.

55. The Rider Order similarly found that HEC partially prevailed on Issue E and "must get at least partial credit." Rider Order, Finding 4, at 2.

56. The SALJ FINDS that HEC partially prevailed as to Issue E, making a substantial contribution to a full and fair determination of the issue.

[VOLUME 8, PAGE 181E]

F. HEC did not prevail as to Issue F: "Does the fact that there are no established threshold danger standard or minimum compliance standard for the monitoring samples invalidate the permit?"

57. HEC contended that the permit should be invalidated because leachate from the CCW site exceeds primary drinking water standards in certain categories. Teeguarden Order, Finding 149, at 13. HEC further argued that without some monitoring standard or concentration limit in groundwater monitoring wells to serve as a trigger for requiring remedial action, the permit did not provide a mechanism for protecting the hydrologic resources outside the permit area from contamination and degradation. HEC Post-Hearing Brief, at 28.

58. The Teeguarden Order found that Primary Drinking Water Standards ("PDWS") are not the appropriate standards for well water and that no one has declared a drilled well unsafe because it did not meet PDWS. Findings 150, 153, at 13-14. Although EPA has published and distributed safe drinking water standards, they are not mandatory. Teeguarden Order, Findings 154-5, at 14.

59. ALJ Teeguarden further found that until a mandatory rule is in effect, the DNR and NRC should require monitoring to determine if health related elements show a steady increase over baseline data and take action to address the problem. Teeguarden Order, Finding 160, at 14.

60. The SALJ FINDS that HEC did not prevail as to Issue F.

G. HEC prevailed as to Issue G: "Should there be a mechanism in the permit to restrict future land use or caution purchasers of the presence of CCW on the property?"

61. HEC contended that absent a permit modification, the sites of CCW monofills could one day be developed into home sites for unsuspecting citizens. HEC Post Hearing Brief, at 85. HEC argued that those home sites would likely rely on wells for water use, putting the residents at risk. HEC Post Hearing Brief, at 85. HEC contended that additional permit conditions are necessary unless and until the NRC enforces 310 IAC 12-5-68 to ensure that every mined area which was previously capable of supporting a rural home site is restored to that capability. HEC Post Hearing Brief, pp. 85-86.

62. HEC voiced concern "for an unknowing party who purchases three acres decades from now for his dream home and discovers his well is placed in a CCW monofill." Teeguarden Order, Finding 163, at 14.

63. The Teeguarden Order found that this issue was not collaterally estopped by the decision in SOLAR. In the SOLAR case, Solar was the sole owner of the permit property, and prior uses of the land would be a record of title and clearly ascertainable by prospective future buyers. Teeguarden Order, Finding 161, at 14. In contrast, Teeguarden found, Foertsch does not own any of the property at issue in this permit and is relying on leases and consents. Teeguarden Order, Finding 162, at 14.

64. The Teeguarden Order found for HEC on this issue, stating that "[t]he NRC should require disclosure of CCW disposal to future buyers." Teeguarden Order, Finding 164, at 14.

65. The Non-final Order subsequently made final by the NRC modified the permit to provide cautionary notice to future purchasers and imposes the following permit condition "a." which was retained by the NRC final order:

"Once coal combustion waste disposal has commenced on a parcel of leased property, the operator shall file an affidavit with the Daviess County Recorder which contains the legal description of the property and a statement that coal combustion waste has been disposed on the property. The affidavit shall also include a statement that information as to the location of the disposal and other relevant information may be obtained from the Division of Reclamation of the Indiana Department of Natural Resources."

Teeguarden Order, at 20.

66. The Rider Order does not include findings regarding whether HEC prevailed as to Issue G.

67. The SALJ FINDS that HEC prevailed as to Issue G, making a substantial contribution to a full and fair determination of the issue.

[VOLUME 8, PAGE 181F]

H. HEC prevailed as to Issue H: "Should the amount of CCW disposal allowed bear some relationship to the amount of coal mined?"

68. The original permit allowed for disposal of CCW at the rate of one ton of CCW for each ton of coal removed, or a 1:1 ratio by weight. Teeguarden Order, Finding 166, at 15.

69. HEC objected to the 1:1 ratio in the original permit. Rider Order, Finding 4, at 2.

70. HEC witness Norris testified that the volume of coal combustion waste going into the monofill would be 7 million cubic yards, rather than the 3.5 million cubic yards described by the permit. Norris Testimony, Nov. 27, 1995, at 88.

71. In its Post Hearing Brief, HEC cited the testimony of opposing witness Hassett who stated that the best practice would be to return ash materials to the place they came from "in no greater amount than those materials existed in the coal that was mined from that location." HEC argued that this contrasted with the permit at issue, "which allows for ash from 4-5 times more coal than is mined at the Little Sandy #10 Mine to be dumped there." HEC Post Hearing Brief, at 68.

72. ALJ Teeguarden found that the permit as approved would allow "approximately four times the RCRA elements to be returned to the mine site as were originally present in the coal." Teeguarden Order, Finding 169, at 15.

73. Additionally, CCW has a "much higher" pH than the coal which was extracted. Teeguarden Order, Finding 170, at 15. HEC witness Spacie "gave compelling testimony as to the long term effects of exposure to small amounts of trace metals on fish and the effects of high pH." Teeguarden Order, Finding 175, at 16.

74. HEC witness Norris testified regarding the inability of the natural environment to buffer or neutralize all of the effects of the leachate. Norris Testimony, Day 2, at 72-73. Norris further testified that the formation of ettringite would not successfully prevent the leaching of the CCW, and that ettringite is likely to dissolve over time. Norris Testimony, Day 2, at 81-82.

75. ALJ Teeguarden similarly found that ettringite is likely to break down. Teeguarden Order, Findings 180-181, at 16.

76. The Teeguarden Order concluded that disposal under this permit "should be restricted to an amount approximately equal to the ash created by the coal removed or in this case, roughly 25% of the total disposal tonnage approved in this permit." Teeguarden Order, Finding 185, at 16.

77. The Non-final Order accordingly adjusted the volume approved for disposal by imposing the following permit condition "b.":

"The total volume of coal combustion waste approved for disposal, as specified on page 1 of permit S-312-1, is reduced by 75%."

Teeguarden Order, at 20.

78. The NRC, in its Final Order, upheld the ALJ's Report, Findings of Fact and Non-final Order, with one exception: the NRC increased the ALJ's disposal recommendation by 25 percent. Thus, HEC ultimately achieved a 50% reduction in the volume of coal combustion waste approved for disposal compared with the original permit.

79. "Such a reduction would not have occurred if HEC had not pursued [its] appeal" of the original permit. Rider Order, Finding 3, at 2.

80. "HEC clearly met the requirements" in order to be eligible for an award of attorney fees on Issue H. Rider Order, Finding 3, at 2.

81. The SALJ FINDS that HEC prevailed as to Issue H, making a substantial contribution to a full and fair determination of the issue.

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I. HEC prevailed as to Issue I: "Should (and can) the DNR require long term monitoring of the site?"

82. HEC contended that under ISMCRA and its implementing rules, release of the permittee's performance bond is conditional upon faithful performance of the requirements of ISMCRA, including a requirement to avoid contamination outside the permit area. HEC Post Hearing Brief, at 28-29. HEC further argued that this liability extends to all affected areas for the duration of the mining and reclamation effort. HEC Post Hearing Brief, at 28-29.

83. HEC witness Norris testified that because it is impossible to predict when the permit area would reach equilibrium resaturation, it is impossible to know in advance when "it would be possible to measure any down gradient leachate that are leaving at the permit boundary." Norris Testimony, Day 2, at 88-95.

84. HEC argued that allowing a bond to be released, as is normally done by DNR, at the end of active reclamation of the surface environment and vegetation may not prevent contamination, because significant damage to biota may occur years after reclamation has ceased, when the permit area is resaturated. HEC Post Hearing Brief, at 84. HEC contended that a proper construction of the statute and ruless regarding performance bonding would require that a performance bond not be released until after resaturation has occurred. HEC Post Hearing Brief at 84.

85. The ALJ found that "HEC has a valid concern that the DNR will release the final bond and lose control over the property and the mine before any problem can occur." Teeguarden Order, Finding 188, at 17.

86. Although the DNR staff hydrologist testified under cross examination by HEC that "full recharge must occur and full exposure of CCW to groundwater leaching must be complete before he would approve a final bond release," the finder of fact took official notice that the staff hydrologist was no longer a DNR employee, and "no one can state with any degree of certainty what the opinion of his successor would be." Teeguarden Order, Findings 190-193, at 17.

87. In response to the concerns raised by HEC, the ALJ found the appropriate solution would be "to include a condition in the permit which requires complete recharge of the groundwater in and near the permit area and stabilized post-mining flow before any petition for final bond release can be considered." Teeguarden Order, Finding 194, at 17.

88. The Non-final Order accordingly imposed the following permit condition "c." which was retained by the NRC final order:

"An application for final bond release must show the area addressed by the application has completely recharged and groundwater flow has stabilized before the application can be approved."

Teeguarden Order, at 20.

89. The Rider Order does not include findings regarding whether HEC prevailed as to Issue I.

90. The SALJ FINDS that HEC prevailed as to Issue I, making a substantial contribution to a full and fair determination of the issue.

J. HEC partially prevailed as to Issue J: "Were the tests performed in accordance with 92-1 adequate to justify granting the permit?"

91. HEC witnesses Boulding, Norris and Haitjema all testified to the inadequacy of the hydrologic assessment. HEC Post Hearing Brief, at 30-44. HEC witnesses Boulding and Norris testified that due to the timing of the tests, they did not account for seasonal variations or provide sufficient data. The tests occurred only between late May and mid-September, leaving a significant portion of the calendar year untested. HEC Post Hearing Brief, at 37-38.

92. HEC also argued that the tests did not imitate field conditions. Teeguarden Order, Findings 198-199, at 17.

93. HEC witnesses further testified as to the inadequacy of the base line testing conducted by the permittee, and contended that the "chemical analyses that were submitted with the permit on baseline ground water qualtiy [sic] were largely flawed. Evidence of the flaws are clear in the data themselves on cursory examination, and some were identified by the laboratory in footnotes and acknowledged in the CHIA [Cumulative Hydrological Impact Assessment]." HEC Post Hearing Brief, at 41.

94. Although certain of HEC's arguments were barred by collateral estoppel, ALJ Teeguarden ultimately agreed with HEC that certain aspects of the testing were inadequate. Teeguarden Order, Findings 195-196, 213-214, at 17-18.

95. The Order stated that taking six samples between late May and mid-September "do not conform to the letter of 92-1 or the spirit of SMCRA."

96. The Order found "further problems with the tests." Teeguarden Order, Finding 214, at 18. Specifically, the following problems with the tests were identified:

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The first test of samples from CCW I did not include information for items as basic as field pH and water elevation. Finding 215, at 18.

The May 27, 1994 test for CCW II had a number of discrepancies including "an absurd level of aluminum, calcium, manganese, nickel, zinc, TDS, iron, hardness, and magnesium." Finding 216, at 18.

The cation/anion balance for two of the CCW II samples are "so unexpected and so unreal that the laboratory indicates there are problems with this sample." Finding 217, at 18.

Similar problems exist with the samples taken from CCW III on three dates. Finding 218, at 18.

97. The ALJ ultimately agreed with HEC that the baseline testing was inadequate to allow CCW storage. "While six months of baseline testing is generally adequate for the issuance of permits, this means six months of accurate, meaningful data." Teeguarden Order, Finding 219, at 18.

98. The Order found that, in light of the inadequate testing, the permit should be modified to include a condition that no CCW could be stored until consistent, meaningful, baseline data on groundwater for six separate months has been provided to the department. Teeguarden Order, Finding 223, at 19.

99. The Non-final Order subsequently made final by the NRC accordingly modified the permit by imposing the following permit condition "d." which was retained by the NRC final order:

"No coal combustion waste can be disposed of on site until the operator provides the department with base line testing results of groundwater for 33 parameters which are valid and meaningful and which are not considered flawed by the laboratory."

Teeguarden Order, at 20.

100. This permit condition would not have been imposed had HEC not challenged the original permit and raised the issue of the adequacy of the testing.

101. The Rider Order found that "HEC also appears to have at least prevailed on Issue J."

102. The SALJ FINDS that HEC partially prevailed as to Issue J, making a substantial contribution to a full and fair determination of the issue.

III. EXPENSES WHICH HOOSIER ENVIRONMENTAL COUNCIL IS ENTITLED TO RECOVER.

103. The SALJ FINDS, as a matter of apparent first impression in Indiana, that the applicable measure of recoverable fees to a substantially prevailing party under this particular statute and rule is properly interpreted as the aggregate amount of all costs and expenses (without consideration of a percentage-of-success method or lodestar with multiplier) reasonably incurred in participation in the entire adjudicatory proceeding, including the fee recovery stage. The SALJ arrived at this holding after an exhaustive review of relevant federal and state judicial and administrative surface mining and environmental law cases the majority of which can be found as part of the U.S. Department of the Interior, Office of Surface Mining COALEX Research Reports, maintained in LEXIS-NEXIS, an on-line research service. (See variously, Reports 120, 163, 180, 220, 233, 266, 281 and 328 for an extensive listing of relevant cases). In arriving at this finding the SALJ used the following governing principle to evaluate the case: where administrative powers are granted in an enabling statute for the express purpose of effectuating broad regulatory programs which are deemed to be essential to the public welfare, a liberal interpretation and construction should be made that ensures that full benefits of the legislation may be realized.

104. The SALJ FINDS that HEC is entitled to recovery fees, costs and expenses consistent with the following statutory and regulatory provisions.

105. Ind. Code 14-34-15-10 provides for recovery of costs and expenses incurred during administrative proceedings or judicial review.

106. The implementing rule, 312 IAC 3-1-13(d), explains that such recovery " may" be awarded

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...(2) To a person from the department, other than to a permittee or the permitee's authorized representative, who initiates or participates in a proceeding and who prevails in whole or in part, achieving at least some degree of success on the merits, upon a finding that the person made a substantial contribution to a full and fair determination of the issues. (Emphasis added.)

107. HEC initiated the appeal of the permit at issue here, and prevailed in whole or in part, achieving a significant degree of success on the merits, making a full and fair contribution to the issues (See Part II, "Issues Upon Which HEC Substantially Prevailed" which includes findings of the SALJ relating to those issues).

108. The SALJ FINDS that HEC substantially prevailed as to issues A, B, G, H, and I; and partially prevailed as to issues E and J (See Part II, "Issues Upon Which HEC Substantially Prevailed").

109. Attorney Max E. Goodwin, of the Mann Law Firm of Terre Haute, Indiana, represented HEC in its administrative appeal and petition for judicial review, from 1995 until his untimely death in December of 2000. While there is cursory evidence to suggest that Attorney Goodwin was providing his services to HEC on a pro-bono basis, with no formal contract with HEC establishing fee recovery on a contingency basis, (where fees would be recoverable only if the lawsuit was successful), the SALJ is convinced that Attorney Goodwin was relying on the fee recovery provisions of the applicable Indiana Code for compensation. There is compelling evidence of this fact supplied in a note hand-written by Attorney Goodwin, which is part of this record.

110. The Affidavit filed by Max E. Goodwin on May 23, 2000 in support of HEC's fee petition states that he spent a minimum of four hundred and fifty-eight (458) hours between 1995 and 2000 on this case. MEG Affidavit at 4.

111. The Affidavit filed by Mr. Goodwin states that he has typically used a rate of $225 per hour, payable at the successful conclusion of a case, which includes an allowance for assistance from paralegals and other firm attorneys and the lack of any compensation until the conclusion of the case. MEG Affidavit at 3.

112. The Affidavit filed by Mr. Goodwin states his reasonable certainty that this rate "is lower than rates charged by the attorneys having similar qualifications and experience who appear for the coal mining companies in this and similar litigation." MEG Affidavit at 3.

113. The SALJ FINDS that the rate of $225 per hour was a reasonable rate at the time and was the prevailing rate in the legal community for similar work based on the skill and experience of the attorney; the skill necessary to win a complex, multiparty litigation which required expert scientific testimony; and the general undesirability of taking such a case. HEC's limited resources always placed in jeopardy the receipt of any substantial fee by Mr. Goodwin, who was of exceptional reputation and demonstrated excellent litigation abilities, in the event the case was lost. Based on the purposes and goals of HEC as a public environmental protection organization, and the intent and purpose of the statute and rule, it is clearly in the interests of justice to grant fee recovery to HEC.

114. The SALJ finds that HEC is a substantially prevailing party in this case.

115. Under relevant SMCRA case law, a substantially prevailing party is entitled to recover attorneys fees for the hours expended on that case based upon the attorney's usual hourly rate, or where there is no established rate, at the prevailing market rate for an attorney of his experience practicing in the geographic region.

116. The SALJ FINDS and recommends to the NRC that HEC is entitled to recovery of the aggregate of attorney fees as a substantially prevailing party, it is therefore entitled to recovery of attorney fees as follows: 458 hours expended by Mr. Goodwin at a rate of $225 per hour equals $103,050.00. The SALJ FINDS that the $103,050.00 is the appropriate attorney fee in this case.

117. Under relevant SMCRA case law, a substantially prevailing party is also entitled to recover expenses incurred by attorneys. See, e.g., Save Our Cumberland Mountains v. Hodel, 651 F.Supp. 1528, 1532 (D.D.C. 1986); Utah International, Inc. v. Department of the Interior, 643 F.Supp. 810, 816 (D. Utah 1986).

118. The Affidavit filed by Max E. Goodwin on May 23, 2000 in support of HEC's fee petition states that he incurred $2,704.82 in expenses between 1995 and 2000 on this case. MEG Affidavit at 4. The SALJ's examination of the claimed expenses finds them reasonable.

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119. The SALJ FINDS that HEC is entitled to recovery of the aggregate of attorney expenses as a substantially prevailing party, it is therefore entitled to recover $2,704.82 in expenses. The SALJ FINDS that the $2,704.82 is the appropriate recovery for expenses.

120. The SALJ FINDS that HEC is entitled to recover expert witness fees and expenses. The Affidavit signed by Charles H. Norris on May 8, 2000 in support of HEC's fee petition states that he testified on behalf of HEC on July 21, 24 and 25, 1995 and November 27, 1995. CHN Affidavit at 1. Charles H. Norris testified on behalf of HEC during the administrative hearing regarding the Foertsch permit. There is no provision in applicable law, which precludes recovery of expert witness fees in SMCRA litigation even when the witness provides testimony pro bono publico. It is consistent with the intent of the law that a prevailing party recovers reasonable fees and expenses on behalf of such witness. The Affidavit Signed by Mr. Norris states that HEC paid $8873.75 for his services prior to April 1996, and $1726.76 for his expenses prior to April 1996. Mr. Norris further states that HEC paid $3801.50 for his services between April 1996 and November 1996. CHN Affidavit at 1.

121. The Affidavit filed by Mr. Norris states that during this period, he was typically compensated at a rate of $120 per hour, which was "less than the hourly rate typically charged by hydrogeologists having qualifications and experience similar to mine." CHN Affidavit at 1-2.

122. The SALJ FINDS and recommends that HEC is entitled to recovery of the aggregate of the expenses related to Mr. Norris' testimony, it is therefore entitled to recover $14,402.01. The SALJ FINDS that the $14, 402.01 to be the appropriate fee.

123. HEC is entitled to recover attorney fees and expenses incurred by Mullett & Associates related to the Fee Petition.

124. Ind. Code 14-34-15-10 provides for the recovery of costs and expenses, including attorney's fees, reasonably incurred by a party's participation in the proceeding. The implementing rule, 312 IAC 3-1-13, similarly provides for recovery of appropriate costs and expenses, including attorney's fees.

125. It is a well-resolved matter that attorneys' time reasonably spent in obtaining fees is recoverable under SMCRA. See. e.g. Save our Cumberland Mountains v. Hodel, 651 F.Supp. 1528, 1532 (D.D.C. 1986); utah International, Inc. v. Department of the Interior, 643 F.Supp. 810, 816 (D. Utah 1986).

126. After the death of HEC attorney Max Goodwin, Mullett & Associates appeared in March 2001 to represent HEC in prosecuting this fee petition before the NRC.

127. Between March 2001 and September 2001, Mullett & Associates had expended time and expense totaling $15,533.48 in prosecuting this fee petition. See Verified Statements of June M. Lyle and Michael A. Mullett.

128. This total reflects an hourly rate of $180 for Mr. Mullett and $100 for Ms. Lyle. These rates are significantly less than would be charged in similar proceedings by attorneys of similar administrative law experience practicing in the Indianapolis area. See MAM Statement, at 6. In fact, Mr. Mullett's rate in this proceeding is substantially less than that approved by the Indiana Utility Regulatory Commission for Mr. Mullett in prior fee proceedings before that agency. See MAM Statement, at 6. Mr. Mullett's and Ms. Lyle's hourly rates are reasonable. Firm records document the time spent by Mr. Mullett and Ms. Lyle. See MAM Statement, at 1-2. JML Statement, at 1-2. The total amount of time expended on the fee petition is not excessive.

129. The SALF FINDS that HEC is thus entitled to recover $15,533.48 for the time and expense incurred by its law firm, Mullett & Associates, to prosecute its fee petition.

130. HEC is entitled to recover staff attorney time and expense related to the litigation.

131. Ind. Code ' 14-34-15-10 provides for the recovery of costs and expenses, including attorney's fees, reasonably incurred by a party's participation in the proceeding. The implementing rule, 312 IAC 3-1-13(d), similarly provides for recovery of appropriate costs and expenses, including attorney's fees.

132. The time of staff attorneys, paralegals and law clerks is compensable as a litigation expense under SMCRA.

133. Attorney Robert C. Fry served as Legal Defense Fund Coordinator for HEC during the litigation in this case.

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134. The Affidavit signed by Mr. Fry on May 22, 2000 in support of HEC's fee petition states that he engaged in legal research, writing, and document review in support of HEC's litigation in this matter, as well as assisting Mr. Goodwin with preparation of the fee petition and related affidavits. RCF Affidavit at 1.

135. The Affidavit signed by Mr. Fry states that he worked 246 hours on this matter for HEC throughout the litigation, and that his hourly compensation at HEC was $16.67 per hour.

136. HEC thus incurred $4,100.82 in staff salary expense for Mr. Fry in relation to the Foertsch litigation.

137. In addition, Mr. Fry's affidavit notes that HEC incurred $347.25 in mileage, parking and copying expenses related to his work on the Foertsch litigation. RCF Affidavit at l.

138. The SALJ FINDS that HEC is entitled to recovery of the aggregate of Mr. Fry's salary expense and other expenses as a substantially prevailing party, it is therefore entitled to recover a total of $4,448.07. The SALJ FINDS the sum of $4, 448.07 the appropriate expense for recovery.

139. HEC is entitled to recover staff time and expense for paralegal-equivalent expenses related to the litigation.

140. Ind. Code 14-34-15-10 provides for the recovery of costs and expenses reasonably incurred by a party's participation in the proceeding. The implementing rule, 312 IAC 3-1-13(d), similarly provides for recovery of appropriate costs and expenses.

141. The time of staff attorneys, paralegals and law clerks is compensable as a litigation expense under SMCRA. See HEC Brief in Support, at 16-20.

142. Jeffrey Stant served as Executive Director for HEC during the litigation in this case.

143. In order to minimize the time and expense of HEC attorney Max Goodwin, and because HEC does not have a paralegal on staff, Mr. Stant acted in the role of a paralegal for HEC throughout this litigation. Mr. Stant is not a paralegal; however, the SALJ takes judicial notice of the fact that paralegals do not have to be certified to provide legal services under the supervision of a licensed attorney in Indiana.

144. The Affidavit signed by Mr. Stant on May 22, 2000 in support of HEC's fee petition states that he "directly assisted HEC's attorney in every aspect of this permit challenge, including permit review, witness preparation, and preparation of legal pleadings." JS Affidavit at 1.

145. The Affidavit signed by Mr. Stant states that he worked a minimum of 590 hours on this matter for HEC throughout the litigation, and that his hourly compensation at HEC was $20 per hour.

146. HEC thus incurred $11,800 in staff salary expense for Mr. Stant in relation to the Foertsch litigation.

147. In addition, Mr. Stant's affidavit notes that HEC incurred $1,027.40 in mileage, meals for expert witnesses, mailing, parking and copying expenses related to his work on the Foertsch litigation. JS Affidavit at 1.

148. The SALJ FINDS and recommends that HEC is entitled to recovery of the aggregate of Mr. Stant's salary expense and other expenses as a substantially prevailing party. HEC is therefore entitled to recover a total of $12,827.40. The SALJ FINDS the $12, 827.40 a compensable expense.

149. Matt Waldo served as Solid Waste Policy Director for HEC during the litigation in this case.

150. In order to minimize the time and expense of HEC attorney Max Goodwin, and because HEC does not have a paralegal on staff, Mr. Waldo acted in the role of a paralegal for HEC from time to time during the litigation. Mr. Waldo is not a certified paralegal; however, paralegals do not have to be certified to provide legal services under the supervision of a licensed attorney in Indiana.

151. Mr. Waldo's Affidavit in support of HEC's fee petition states that he "assisted HEC's attorney with expert witness preparation and review of hearing testimony." Affidavit at 1.

152. The Affidavit signed by Mr. Waldo states that he worked a minimum of 60 hours on this matter for HEC throughout the litigation, and that his hourly compensation at HEC was $13 per hour.

153. HEC thus incurred $780.00 in staff salary expense for Mr. Waldo in relation to the Foertsch litigation.

154. In addition, Mr. Waldo's affidavit notes that HEC incurred $335.00 in mileage and copying expenses related to his work on the Foertsch litigation. MW Affidavit at 1.

155. The SALJ FINDS and recommends that HEC is entitled to recovery of the aggregate of Mr. Waldo's salary expense and other expenses as a substantially prevailing party, it is therefore entitled to recover a total of $1,115.00. The SALJ FINDS $1,115.00 to be the compensable expense.

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156. The SALJ FINDS and recommends that HEC is entitled to the aggregate amount of its costs and expenses as a substantially prevailing party, that HEC has met its burden of proof and its submission of proof far exceeds any threshold standard required to determine appropriate attorneys fees and it is therefore entitled to recover costs and expenses incurred through September 30, 2001, as follows:

Total $154,080.88

157. Exhibit E to the "Second Supplemental Verified Statement of Michael A. Mullett" filed on or about June 13, 2002, summarizes additional costs and expenses incurred from March 2001 through May 2002. The SALJ having thoroughly reviewed the filing now FINDS that the costs and expenses therein are reasonable, not duplicitous of earlier statements, and due and owing to HEC in the additional amount of $29,825.56.

158. The SALJ FINDS costs and expenses due HEC through May 2002 total $183,906.44.

159. All pending motions have been resolved by the entry of this Non-final Order.

160. The SALJ FINDS that DNR was not able to successfully defend the issuance of the permit in the form in which it was issued. While DNR (and NRC on Judicial Review) was not found arbitrary or capricious in its decision making relating to its issuance of the permit, the DNR is the only proper entity in this case against whom an award for fees can be made under the applicable statute and rule. Foertsch Construction Company is not a party to the Petition for Fees proceeding although it is the underlying Permittee. The award of costs and expenses is not more stringent than the requirements of federal SMCRA and is consistent with the purposes of ISMCRA as found at IC 14-34-1-3 (2), (5) and (10). The reliance on an aggregate fee methodology (without a percentage-of-success calculation or multiplier) as the governing legal standard is consistent with the intent of the federal SMCRA, current governing federal case law, ISMCRA and applicable state law and consistent with principles of statutory and rule construction in Indiana; the ordered compensation is a proper imposition against the State of Indiana and DNR under Indiana's implementing rule.

161. Any Finding of Fact herein that should be construed as a Conclusion of Law and any Conclusion of Law that should be construed as a Finding of Fact are so deemed.

162. The parties are encouraged once again to settle this matter to avoid the additional expense, inconvenience and delay attendant to continued legal wrangling.

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THE PAGES THAT FOLLOW ARE NOT NUMBERED, ARE ADDED FOR HISTORIC INFORMATION, AND DO NOT HAVE A CADDNAR CITATION.]

MARION COUNTY SUPERIOR COURT FINDINGS OF FACT CONCLUSIONS OF LAW, AND ORDER, OF MAY 24, 2004 (CAUSE NO. 49D03-0310-PL-1806)

FINDINGS OF FACT CONCLUSIONS OF LAW, AND ORDER

This matter is a judicial review, initiated by Petitioner Hoosier Environmental Council, Inc. ("HEC") pursuant to Ind. Code Section 4-21.5-5-1 ET SEQ., of the final order of the Natural Resources Commission ("NRC") issued July 22, 2003, in HOOSIER ENVIRONMENTAL COUNTIL v. INDIANA DEPARTMENT OF NATURAL RESOURCES & FOERTSCH CONSTRUCTION CO., Administrative Cause No. 97-065R ("HEC Fee Proceeding").

The subject matter of the HEC Fee Proceeding was HEC's petition, pursuant to Ind. Code Section 14-34-15-10 and 312 IAC 3-1-13(d), for an award of attorney's fees and litigation expenses in the amount of $168,495.93 associated with HEC's participation in prior proceedings ("Foertsch Permit Proceedings") before the NRC and the Daviess Circuit Court relating to an amendment to a coal combustion waste ("CCW") disposal permit issued by Respondent Department of Natural Resources ("DNR") to Respondent Foertsch Construction Company ("Foertsch"). The NRC's final order in the HEC Fee Proceeding ("NRC Fee Order") denied HEC's petition in its entirety.

Pursuant to Ind. Code Sections 4-21.5-5-14 and 15, HEC seeks in its Verified Petition for Review to have the Court set aside the NRC Fee Order on the grounds that it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law" and "short of statutory right" and then remand the case to the NRC for entry of a lawful final order in accordance with the Court's opinion. By its Answer, DNR seeks to have the Court deny HEC's Verified Petition and affirm the NRC Fee Order in all respects.

The matter comes before the Court on cross-motions for summary judgment filed by HEC and DNR.

I. PROCEDURAL HISTORY

A. Foertsch Permit Proceedings

On June 9, 1995, HEC petitioned the NRC for administrative review of a coal combustion waste ("CCW") disposal permit amendment issued by DNR for the Little Sandy #10 mine of the Foertsch Construction Company ("Foertsch"). (Supp.R.3).[FOOTNOTE 1] At a twelve-day hearing conducted by Administrative Law Judge ("ALJ") Teeguarden, HEC produced a number of witnesses, four of whom qualified as experts, to contest the adequacy and appropriateness of the permit.

On October 10, 1996, Judge Teeguarden issued his Report, Findings of Fact, and Nonfinal Order of the Administrative Law Judge ("Teeguarden Order"). (Supp.R. 103). The Teeguarden Order identified ten issues (A through J) that had been raised and addressed in the evidence and briefs submitted by the parties. (Supp.R. 105-06). The Teeguarden Order made extensive findings with respect to the ten issues it identified. (Supp.R. 108-121). Based on its findings, the Teeguarden Order upheld the permit amendment in part, but added four conditions to address HEC's concerns. (Supp.R.122). HEC, Foertsch, and DNR all filed objections to the Teeguarden Order with the NRC.

On February 19, 1997, the NRC issued its Final Order in the Foertsch Permit Proceedings ("NRC Permit Order"). (Supp.R. 181). The NRC Permit Order upheld the Teeguarden Order and its permit conditions, with one substantive exception. On March 21, 1997, both HEC and Foertsch sought judicial review of the NRC Permit Order. (Supp.R.259,277). On September 13, 1999, the Daviess Circuit Court upheld the NRC Permit Order in its entirety.(Supp. R. 323).

B. HEC Fee Proceeding

On March 21, 1997, HEC and its then attorney, Max E. Goodwin, initiated the HEC Fee Proceeding by filing a verified petition with the NRC pursuant to Ind. Code Section 14-34-15-10 and 310 IAC 0.6-1-13 (now 312 IAC 3-1-13). (R. 739). On April 7, 1997, DNR filed its objection and moved to dismiss the HEC petition. (R. 693, 744). On December 2, 1997, presiding Administrative Law Judge Rider denied DNR's motion to dismiss but placed the HEC Fee Proceeding in abeyance pending completion of judicial review in the Foertsch Permit Proceedings (R. 677). When proceedings resumed on May 23, 2000, HEC tendered affidavits and a brief in support of its verified petition for attorney's fees and expenses. (R. 605, 609, 621). On August 31, 2000, DNR filed its response and objections (R. 583).

Subsequently, on March 9, 2001, ALJ Rider issued a Preliminary Decision Regarding Prevailing Party Status and Opportunity to Negotiate as to Amount of Fees Award ("Rider Order"). (R.577). The Rider Order preliminarily determined that HEC was a prevailing party in the Foertsch Permit Proceedings because it had prevailed at lease as to Issues E and J. The Order also determined that HEC was not entitled to recover fees related to procedural issues or judicial review. Finally, the Rider Order directed the parties to use these preliminary determinations as the basis for negotiations on the amount of the fee HEC should be awarded.

On March 27, 2001, HEC filed its objections to the Rider Order. (R. 567). Subsequently, on March 30, 2001, Respondent DNR filed its motion for reconsideration and clarification of the Rider Order. (R. 563). Following his departure from the NRC for other employment, Judge Rider was appointed Special Administrative Law Judge by the NRC with the consent of both HEC and DNR. (R. 537). Subsequently, on November 5, 2001, HEC submitted its Proposed Findings of Fact, Conclusions of Law, and Order and supporting brief for consideration by Judge Rider. (R. 466, 487). So did DNR. (R. 512, 519). To provide the requisite evidentiary support for its proposed findings, conclusions and orders, HEC also submitted on November 5, 2001, the Verified Statements of June M. Lyle and Michael A. Mullett, who had replaced the deceased Mr. Goodwin as HEC's counsel. (R. 454, 458). Each of these statements were supplemented on November 15, 2001. (R. 440, 444). However, on March 27, 2002, Judge Rider withdrew from the proceedings without entry of a nonfinal order. (R. 423).

On April 4, 2004, the NRC appointed Wayne Penrod as Special Administrative Law Judge to replace Judge Rider. (R. 420). On May 17, 2002, HEC submitted citations to additional authority to supplement its filings of November 5, 2001. (R. 392). DNR did also. (R. 396). On May 24, 2002 Judge Penrod conducted oral argument and invited HEC and DNR to make certain post-argument evidentiary submissions regarding the precise nature and amounts of fees and expenses being sought. HEC completed its Submission on June 24, 2002, seeking an award of $168,495.93 (R. 239). DNR completed its Responses opposing any award on July 26, 2002 (R 198, 201, 205, 209, 212, 215, 217, 222, 226). HEC filed its Reply in support of its request award on august 13, 2002. (R. 168).

On February 20, 2003, Judge Penrod issued his Findings of Fact, Conclusions of Law, and Non-Final Order ("Penrod Order") directing DNR to pay HEC the entire amount of the award of attorney's fees and litigation expenses sought by HEC.[FOOTNOTE 2] (R. 138). On March 7, 2003, DNR filed its Objections to the Penrod Order. (R. 67). On July 22, 2003, the NRC entered its Findings of Fact, Conclusions of Law and Final Order ("NRC Fee Order") vacating the Penrod Order and directing that HEC receive no fees and expenses for its participation in the Foertsch Permit Proceedings. (R. 12).

C. Judicial Review

HEC filed its Verified Petition for Judicial Review and Request for Agency Record on August 21, 2003, in cause No. 49F12-0308-PL2768. The Certified Record of Agency Proceedings was filed on September 18, 2003. Pursuant to DNR's Motion for Automatic Change of Judge, this Court assumed jurisdiction of this matter pursuant to Ind. Rule of Trial Procedure 79(F)(4) and the matter was redocketed as Cause No. 49D02-0310-PL1806 on October 1, 2003. On October 15, 2003, DNR filed its Answer and Affirmative Defenses.

On February 5, 2004, a Supplemental Certified Record of Administrative Proceedings was filed. On February 6, 2004, HEC and DNR filed their respective Motions for Summary Judgment, with HEC also filing a supporting Brief and Designated Materials and DNR filing a supporting Memorandum of Law. On February 25, 2004, Foertsch moved for dismissal with prejudice as a Respondent, without objection from either HEC or DNR.

On March 5, 2004, a third volume of the Supplemental Certified Record of Administrative Proceedings was filed. On March 8, 2004, HEC and DNR filed, respectively, a Response and a Memorandum of Law in opposition to each other's Motion for Summary Judgment. On March 18, 2004, the Court entered an order dismissing, with prejudice, Foertsch as a Respondent.

On April 26, 2004, the Court heard oral argument by HEC and DNR with respect to their cross-motions for summary judgment.

II. STANDARD OF REVIEW

Indiana Code Sections 4-21.5-5-14 and 15 control the scope of this Court's review of the NRC Fee Order and the nature of the remedy it may direct if it concludes that the NRC Order is in error.

The burden of demonstrating the validity of the NRC Fee Order rests with HEC. Ind. Code Section 4-21.5-5-14(a). To meet this burden, HEC must show that it was prejudiced by the Fee Order and that the Order is:

In its Verified Petition, HEC alleges that it was prejudiced by the NRC's denial of the fee and expense award that it sought and that the Fee Order is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law" and "short of statutory right."

In performing its judicial review function pursuant to Ind. Code Section 4-21-5.5-14, the Court will not reweigh the evidence but only determine whether the NRC Order is supported by substantial evidence. See INDIANA CIVIL RIGHTS COMM'N v. ALDER, 714 N.E.2d 632 635-636 (Ind. 1999). However, the Court is not bound by the NRC's interpretation of law and is free to decide any legal question that arises out of the HEC Fee Proceedings. See INDIANA FAMILY & SOCIAL SERVICES ADMIN. v. CULLEY, 769 N.E2d 680, 682 (Ind. Ct. App. 2002); INDIANA FAMILY & SOCIAL SERVICES ADMIN. v. METHODIST HOSPITAL, 669 N.E.2d 186, 188 (Ind. Ct. App. 1996). Where there is no genuine dispute as to the material facts, "the court's task is to apply the relevant law to the undisputed facts." SPEEDWAY INT'L TRUCKS, INC. v. ROSSELLE, 648 N.E.2d 1161, 1162 (Ind. 1995).

Interpretation of the meaning and effect to be given to Ind. Code Section 14-34-15-10 and 312 IAC 3-1-13(d) are questions of law properly subject to de novo analysis on judicial review. See INDIANA DEPT. OF PUB. WELFARE v. PAYNE, 622 N.E.2d 461, 465 (Ind. 1993); CULLEY, 769 N.E.2d at 682. Furthermore, an agency's findings of ultimate fact, defined as factual conclusions derived from basic facts, are subject to a reasonableness standard of review. WEATHERBEE v. INDIANA CIVIL RIGHTS COM'N, 665 N.E.2d 9435, 947 (Ind. Ct. App. 1996). Whether an ultimate fact is a reasonable inference from the basic facts is a question of law properly subject to review and determination by the Court. ID.

Ind. Code Section 4-21.5-5-15 limits the remedy that the Court may order to a remand to the NRC for further proceedings consistent with the Court's opinion. If upon remand the NRC unlawfully withholds or unreasonably delays the redetermination of the case, then the Court may compel agency action by direct order. Otherwise, the Court does not have power to compel agency action as part of its initial review function. See CULLEY, 769 N.E.2d at 684-85.

III. DISCUSSION

Under the standard of review applicable here, the Court makes the following findings of basic facts which are undisputed on the agency record and reaches the following conclusions with respect to the key issues of law (including the ultimate facts to be reasonably inferred from undisputed basic facts) which have been properly presented by HEC and DNR for judicial review.

Issue One: The Proper Standards for an Award of Fees and Expenses under 312 IAC 3-1-13(d)(2)

Special ALJ Penrod expressly construed 312 IAC 3-1-13(d) to impose two requirements on a participant in an ISMCRA permit proceeding seeking an award of attorney's fees and expenses: the participant must "prevail in whole or in part, achieving at least some degree of success on the merits" and have made a "substantial contribution to a full and fair determination of the issues." Penrod Order, Finding 21 (R. 14) (emphasis not included for publication in CADDNAR). The NRC expressly vacated this interpretation, construing the applicable Indiana rule to confer on it unlimited discretion to award fees and expenses as it deems appropriate. NRC Fee Order, Findings 1, 2 and 3 (R. 16-17). As a result, the parties present the purely legal issue of the proper standards for an award of attorney's fees and litigation expenses under 312 IAC 3-1-13(d)(2).

This is an issue of first impression in Indiana. However, the Indiana appellate courts have made clear generally how provisions of I-SMCRA and its implementing regulations should interpreted. As stated in PEABODY COAL v. INDIANA DEPARTMENT OF NATURAL RESOURCES, 629 N.E.2d 925, 930 (Ind. Ct. App. 1994), SUMMARILY AFFIRMED, 664 N.E.2d 1171, 1175 (Ind. 1996):

[ISMCRA] is largely a copy of the SMCRA. . . . In enacting the [ISMCRA], our General Assembly made clear its unequivocal intent to avoid federal control of Indiana surface coal mining and land reclamation. In deed, the first purpose of the [ISMCRA] is to implement and enforce SMCRA. Therefore, because our first goal is in construing a state is to give effect to the intent of the legislature . . . we will look to SMCRA and the federal rules adopted under it as we analyze the [SMCRA]. With regard to the SMCRA and the regulations promulgated by the Secretary of the Interior under the SMCRA, the state laws and regulations must be no less stringent than, meet the minimum requirements of, include all applicable provisions of, and be no less effective than the SMCRA.

See also INDIANA DEPT. OF NATURAL RESOURCES v. UNITED MINERALS, INC., 686 N.E.2d 851, 855 (Ind. Ct. App. 1998), TRANSFER DENIED.

Moreover, the West Virginia Supreme Court has addressed the precise question at issue here. A state regulation enacted pursuant to a state SMCRA statute "must be read in a manner consistent with federal regulations enacted in accordance with [federal] SMCRA." SCHULTZ v. CONSOLIDATION COAL CO., 475 S.E.2d 467, 476 (W.Va.1996), CERT. DENIED, 519 U.S. 1091 (1997). This principle applies specifically to a state regulation relating to the award of attorney's fees and litigation expenses. LOUDEN v. WEST VIRGINIA DIV. OF ENVIRONMENTAL PROTECTION, 551 S.E2d 25, 28 (W.Va. 2001). Thus, the I-SMCRA fee award regulation must be read in a manner consistent with the essentially identical federal regulation.

The standards for an award of fees and expenses under the essentially identical federal regulation are well-established: "The fee petitioner must thus satisfy two requirements under the regulation: first, what is called the 'eligibility requirement' (achieving at least some degree of success on the merits); and second, what is called the 'entitlement requirement' (making a substantial contribution to the determination of the issues)." WEST VIRGINIA HIGHLANDS CONSERVANCY, INC. v. NORTON, 343 F.3d 239, 245 (4th Cir. 2003).

Thus, in the present case, HEC is entitled to an award if it both achieved "some success on the merits" and made a substantial contribution to a full and fair determination of the issues" in the Foertsch Permit Proceedings. By concluding that it has discretion under Indiana law not only to apply, but to change these criteria for a fee and expense award mandated by federal law, the NRC has clearly erred. The NRC has the authority to determine, in the sound exercise of its statutory discretion, whether HEC has satisfied those federally-mandated criteria, but it does not have the authority to change them.

Issue Two: HEC's Status as a Partially Prevailing Party

Special ALJ Penrod expressly found that HEC "prevailed variously in whole or in part on certain issues, achieving a significant degree of success on the merits." Penrod Order, Finding 22 (R. 141). The Commission expressly vacated this finding, concluding that "Claimant HEC failed to establish any legal basis to justify the award of any fees and expenses." NRC Fee Order, whether HEC is a partially prevailing party eligible for an award of fees and expenses.

A. Findings of Fact

The presiding ALJ, Judge Teeguarden, found that there were ten issues, two procedural issues and eight substantive issues in the Foertsch Permit Proceedings, which he designated by letters A through J. Teeguarden Order, Finding 13 (Supp. R. 105-06). Based on the undisputed findings of basic fact in the Teeguarden Order as affirmed or modified by the NRC Final Order, the Court makes the following findings on the ultimate facts of whether HEC prevailed in whole or in part on each of the ten issues designated by Judge Teeguarden.

(1) HEC prevailed as to Issue A: "Did HEC file a timely petition for review?"

HEC filed its petition for administrative review of the Foertsch permit renewal on June 9, 1995, "easily within the 30 day time limit required by I-SMCRA and the three day mailing addition provided by IC 4-21.5." Teeguarden Order, Finding 35 (Supp. R. 106). However, Foertsch contested whether a timely petition had been filed because it was signed by HEC's then Executive Director, Jeffrey Stant, who was not an attorney.

Teeguarden Order found that the NRC had twice ruled that a lay person may represent a group in an administrative adjudication. Teeguarden Order, Finding 40 (Supp. R. 108). Consequently, Judge Teeguarden ruled that, in the absence of a binding, precedential court ruling requiring attorney representation in an administrative adjudication, HEC's petition was timely. Teeguarden Order, Finding 46 (Supp. R. 108).

Clearly, then, HEC prevailed as to Issue A. Penrod Order, Finding 29 (R. 142). This was significant because there would have been no administrative review or modification of the Foertsch permit renewal absent the timely filing of HEC'' petition. Penrod Order, Finding 27 (ID.).

(2) HEC prevailed as to Issue B: "Does collateral estoppel apply to a number of the issues raised by HEC?"

Both Foertsch and the DNR "vigorously" contended that the decision in HOOSIER ENVIRONMENTAL COUNCIL v. DNR & SOLAR SOURCES, Inc., 7 Caddnar 38 (1995), precluded HEC from litigating a number of issues in the administrative review of the Foertsch permit. Teeguarden Order, Finding 47 (Supp. R. 108). Specifically, collateral estoppel was raised as a concern regarding Issues G, I, and J.

Judge Teeguarden ruled that collateral estoppel did not bar HEC from litigation Issues G. and I and did not bar dealing with its central concerns regarding Issue J. Teeguarden Order, Findings 161, 189 and 203 (Supp. R. 116, 119, and 120). Indeed, as explained INFRA, Judge Teeguarden ultimately found for HEC with regard to all three issues.

Thus, HEC prevailed as to Issue B. Penrod Order, Finding 36 (R. 143). This was significant because HEC could not have subsequently prevailed on issues G, I and J or succeeded in obtaining the associated permit modifications if it has not previously prevailed on Issue B. Penrod Order, Finding 34 (Id.).

(3) HEC did not prevail as to issue C: "Do the permit applications present adequate characterization of pre-existing geological and hydrological data?"

HEC produced witnesses who testified regarding the inadequacy of the information regarding pre-existing conditions at the Foertsch site. HEC witnesses Haitjema and Norris challenged the adequacy of the data in establishing the existing hydrology of the area. HEC Post Hearing Brief, at 31 (Supp. R. 41). Specifically, Haitjema and Norris challenged the identification of existing aquifers and water flows as well as the system of monitoring wells. HEC Post Hearing Brief, at 33-38 (Supp. R. 43-48).

However, the Teeguarden Order found that the "decision to grant the permit was not only based on the S-312 and S-312-1 applications but also the S-298 permit application submitted by Solar a few years earlier." Teeguarden Order, Finding 55 (Supp. R. 109). The Teeguarden Order also found that although more information could have been provided by the permit application, the information submitted in S-312, S-312-1, and S-298 permits adequately characterized existing conditions in or near the permit area. Teeguarden Order, Findings 57-77 (Supp. R. 109-111).

Consequently, HEC did not prevail as to Issue C. Penrod Order Finding 40 (R. 144).

(4) HEC did not prevail as to Issue D: "Are the monitoring wells adequate in number, construction, and design?"

HEC contended that the monitoring wells were inadequate and sought to require the use of wells to monitor specific zones rather than collection wells used in connection with the permit as originally issued. Teeguarden Order, Findings 80-81 (Supp. R. 111). Specifically, HEC witnesses Haitjema, Norris and Boulding all testified as to the inadequacy of monitoring wells CCW1, CCW2, and CCW3. HEC Post Hearing Brief, at 34-35 (Supp. R. 44-45).

The Teeguarden Order found that the permit area already was subject to extensive mining, and that any problem from the permitted well system already existed without the issuance of the permit at issue. Teeguarden Order, Finding 89 (Supp. R. 112). Due to the extent of current mining operations, the extent of current water pumping operations and the pumping of water for irrigation, extended projections of water flows in the future were uncertain. Teeguarden Order, Findings 88-105 (Supp. R. 112). The six CCW wells plus additional domestic wells, which would be monitored, were found to be sufficient for the purposes of the Foertsch permit. Teeguarden Order, Findings 127-130 (R. 114).

Clearly, HEC did not prevail as to Issue D. Penrod Order, Finding 44 (R. 144).

(5) HEC partially prevailed as to Issue E: "Are the CCW storage areas adequately isolated and separated so as to prevent damage?"

HEC contended that the permit did not require sufficient isolation and separation of toxic forming compounds so as to prevent damage. HEC Post Hearing Brief, at 45 (Supp. R. 57). I-SMCRA includes a basic requirement to avoid placing materials into mines in a manner that will degrade ground and surface waters. (Id.).

HEC also objected to the lack of physical barriers to prevent substantial tonnage of CCW from groundwater exposure. HEC Post Hearing Brief, at 45-78 (Supp. R. 57-93). Specifically, HEC witness Dr. Anne Spacie, an aquatic biologist, testified that the permit would allow groundwater to be exposed to CCW, resulting in significant increases in pH concentration and potentially toxic or lethal effects to bio-organisms. Spacie Testimony, Day 11, at 65-68 (Supp. R. 205-208). HEC also cited this testimony in its Post Hearing Brief. HEC Post Hearing Brief, at 49-50 (Supp. R. 61-62). Based on the testimony of its witnesses Hailer, Boulding and Norris, HEC also argued that the CCW contamination would not be buffered, diluted or attenuated by spoil or the surrounding geology and would likely reach Aikman Creek and Mud Creek, which had little potential to dilute the problem. HEC Post Hearing Brief, at 50-52 (Supp. R. 62-64).

HEC witness Norris testified that the physical separations being proposed would "have virtually no net effect in terms of isolating the coal combustion waste." Norris Testimony, Day 2, at 50 (Supp. R. 186). Norris discussed several alternatives for increasing isolation, such as creating an inward gradient, using synthetic liners, or employing carefully constructed compacted clay liners and leachate pumping systems. Norris also testified that cation exchange and adsorption would have limited mitigative effects, and characterized as speculative the claims by Foertsch witnesses that dispersion, dilution, and other factors such as spoil and geologic conditions would attenuate the effects of leachate from the monofill. (Id.). HEC witness Spacie testified that high pH resulting from leachate may cause solids to accumulate on the grills of aquatic organisms and cause them to die. Spacie Testimony, Day 11, at 69-71 (Supp. R. 209-211).

Judge Teeguarden found that Dr. Spacie's testimony regarding the effects of high pH and long term, low level RCRA metal exposure on fish was more than enough evidence to require a special handling of this CCW as if it were a toxic material." Teeguarden Order, Finding 136 (Supp. R. 114). However, the Teeguarden Order did not adopt all of HEC's recommendations as to CCW disposal. In particular, HEC argued that CCW should be disposed so that water would not come in contact with the ash. But, the Teeguarden Order found that there were other methods for preventing contamination and minimizing contamination and adverse effects. Teeguarden Order, Findings 138-9 (Supp. R.115). Specifically, the Teeguarden Order found that there was insufficient evidence to show that spacing and buffers would not adequately minimize contamination. Teeguarden Order, Finding 146 (Supp. R. 115). In short, the Teeguarden Order found for HEC on the sub-issue of whether the CCW must be stored so as to prevent water coming into contact with the ash. Penrod Order, Finding 54 (R. at 145).

Thus, HEC partially prevailed on Issue E. Penrod Order, Finding 56 (R. at 146). This success was significant because the NRC Final Order adopted the ALJ's finding that the CCW at the Big Sandy Mine must be handled as a toxic material and, thus, disposed in a manner designed to prevent contamination of ground or surface water. (Id.).

(6) HEC did not prevail as to Issue F: "Does the fact that there are no established threshold danger standard or minimum compliance standards for the monitoring samples invalidate the permit?"

HEC contended that the Foertsch permit should be invalidated because leachate from the CCW site exceeded primary drinking water standards ("PDWS") in certain categories. Teeguarden Order, Finding 149 (Supp. R. 115). HEC further argued that without some monitoring standard or contamination limit in groundwater monitoring wells to serve as a trigger for requiring remedial action, the permit did not provide a mechanism for protecting the hydrologic resources outside the permit area from contamination and degradation. HEC Post Hearing Brief, at 28 (Supp. R. 38).

The Teeguarden Order found that PDWS are not the appropriate standard for well water and no one has declared a drilled well unsafe because it did not meet PDWS. Findings 150, 153, at 13-14. Although EPA has published and distributed safe drinking water standards, they are not mandatory. Teeguarden Order, Findings 154-5 (Supp. R. 116). ALJ Teeguarden further found that until a mandatory rule is in effect, the DNR and NRC should require monitoring to determine if health related elements show a steady increase over baseline data and take action to address the problem. Teeguarden Order, Finding 160 (Supp. R. 116).

Consequently, HEC did not prevail as to Issue F. Penrod Order, Finding 60 (R. 146).

(7) HEC prevailed as to Issue G: "Should there be a mechanism in the permit to restrict future land use or caution purchasers of the presence of CCW on the property?"

Pointing to the lessons learned at other dump sties such as Love Canal and Times Beach, HEC contended that absent a permit modification, the sites of CCW monofills could one day be developed into home sites for unsuspecting citizens. HEC Post Hearing Brief, at 85 (Supp. R. 100). HEC argued that those home sites would likely rely on wells for water use, putting the residents at risk. (Id.). HEC contended that additional permit conditions were necessary unless and until the NRC enforced 310 IAC 12-5-68 to ensure that every minded are which had previously been capable of supporting a rural home site was restored to that capacity. HEC Post Hearing Brief, pp. 85-86 (Supp. R. 100-101). HEC voiced concern "for an unknowing party who purchases three acres decades from now for his dream home and discovers his well is placed in a CCW monofill." Teeguarden Order, Finding 163 (Supp. R. 116).

The Teeguarden Order again made clear that this issue was not collaterally estopped by the decision in HOOSIER ENVIRONMENTAL COUNCIL v. DNR & SOLAR SOURCES, INC., 7 Caddnar 38 (1995). In that case, Solar Sources was the sole owner of the permit property, and prior uses of the land would be in a record of title and clearly ascertainable by prospective future buyers. Teeguarden Order, Finding 161 (Supp. R. 116). In contrast, Teeguarden found, Foertsch does not own any of the property at issue in this permit and is relying on leases and consents. Teeguarden Order, Finding 162 (Supp. R. 116).

The Teeguarden Order found for HEC on this issue, stating that "[t]he NRC should require disclosure of CCW disposal to future buyers." Finding 164 (Supp. R. 116). In addition, it modified the permit by imposing the following permit condition "a," which was retained by the NRC Final Order:

Once coal combustion waste disposal has commenced on a parcel of leased property, the operator shall file an affidavit with the Daviess County Recorder, which contains the legal description of the property and a statement that coal combustion waste has been disposed on the property. The affidavit shall also include a statement that information as to the location of the disposal and other relevant information may be obtained from the Division of Reclamation of the Indiana Department of Natural Resources.

Teeguarden Order, at 20 (Supp. R. 122).

As a result, HEC prevailed as to Issue G. Penrod Order, Finding 67 (R. 147). In prevailing, HEC achieved significant success on the issue because the NRC Final Order adopted the ALJ's finding requiring disclosure of CCW disposal to future buyers and imposing permit condition "a." Penrod Order, Findings 64, 65 (R. 147).

(8) HEC prevailed as to Issue H: "Should the amount of CCW disposal allow bear some relationship to the amount of coal mined?"

The original permit allowed for disposal of CCW at the rate of one ton of waste for each ton of coal removed, or a 1:1 ratio by weight. Teeguarden Order, Finding 166 (Supp. R. 117). HEC objected to the 1:1 ratio in the original permit. Rider Order, Finding 3 (R. 578).

HEC witness Norris testified that the volume of coal combustion waste going into the monofill would be 7 million cubic yards, rather than the 3.5 million cubic yards described by the permit. Penrod Order, Finding 70 (R. 148). In its Post Hearing Brief, HEC cited the testimony of opposing witness Hassett who had stated that the best practice would be to return ash materials to the place they came from "in no greater amount than those materials existed in the coal that was mined from that location." HEC argued that this contrasted with the permit as issued, "which allows for ash from 4-5 times more coal than is mined at the Little Sandy #10 Mine to be dumped there." HEC Post Hearing Brief, at 68 (Supp. R. 83).

ALJ Teeguarden found that the permit as approved would allow "approximately four times the RCRA elements to be returned to the mine site as were originally present in the coal." Teeguarden Order, Finding 169 (Supp. R. 117). Additionally, CCW has a "much higher" pH than the coal, which was extracted. Teeguarden Order, Finding 170 (Supp. R. 117). HEC witness Spacie "gave compelling testimony as to the long term effects of exposure to small amounts of trace metals on fish and the effects of high pH." Teeguarden Order, Finding 175 (Supp. R. 118).

HEC witness Norris testified regarding the inability of the natural environment to buffer or neutralize all of the effects of the leachate. Norris Testimony, Day 2, at 72-73 (Supp. R. 187-188). Norris further testified that the formation of ettringite would not successfully prevent the leaching of the CCW, and that ettringite is likely to dissolve over time. Norris Testimony, Day 2, at 81-82 (Supp. R. at 189-190). ALJ Teeguarden similarly found that ettringite is like to break down. Teeguarden Order, Findings 180-181 (Supp. R. 118).

The Teeguarden Order concluded that disposal under this permit "should be restricted to an amount approximately equal to the ash created by the coal removed or in this case, roughly 25% of the total disposal tonnage approved in this permit." Teeguarden Order, Finding 185 (Supp. R. 118).

The Teeguarden Order accordingly adjusted the volume approved for disposal by imposing the following permit condition "b." "The total volume of coal combustion waste approved for disposal, as specified on page 1 of permit S-312-1, is reduced by 75%." Teeguarden Order, at 20 (Supp. R. 122). It its Final Order, the NRC retained condition "b" but substituted a disposal volume reduction of 50% for the ALJ's recommendation of 75%. (Supp. R. 181). Thus, HEC ultimately achieved a 50% reduction in the volume of coal combustion waste approved for disposal compared with the original permit.

Therefore, HEC prevailed as to Issue H. Penrod Order, Finding 81 (R. 149). In so doing, it achieved an extremely significant success when the NRC final order adopted the ALJ's finding that the amount of CCW disposal should bear some relationship to the amount of coal mined and cut the amount of CCW authorized for disposal in half. Simply put, "Such a reduction would not have occurred if HEC had not pursued [its] appeal." Rider Order, Finding 3 (R. 578); Penrod Order, Finding 79 (Supp. R. 149).

(9) HEC prevailed as to Issue I: "Should (and can) the DNR require long term monitoring of the site?"

HEC contended that under I-SMCRA and its implementing regulations, release of the permittee's performance bond is conditional upon faithful performance of the statutory requirements, including a requirement to avoid contamination outside the permit area. HEC Post Hearing brief, at 28-29 (Supp. R. 38-39). HEC further argued that this liability extends to all affected areas for the duration of the mining and reclamation effort. (Id.)

HEC witness Norris testified that because it is impossible to predict when the permit area would reach equilibrium resaturation, it is impossible to know in advance when "it would be possible to measure any down gradient leachate that are leaving at the permit boundary." Norris Testimony, Day 2, at 88-95 (Supp. R. 191-198).

HEC argued that allowing a bond to be released, as is normally done by DNR, at the end of active reclamation of the surface environment and vegetation may not prevent contamination, because significant damage to biota may occur years after reclamation has ceased, when the permit area is resaturated. HEC Post-Hearing Brief, at 84 (Supp. R.99). HEC contended that a proper construction of the statute and regulations regarding performance bonding require that a performance bond not be released until after resaturation has occurred. (Id.)

Judge Teeguarden found that "HEC has a valid concern that the DNR will release the final bond and lose control over the property and the mine before any problem can occur." Teeguarden Order, Finding 188 (Supp. R. 119). Although the DNR staff hydrologist testified under cross examination by HEC that "full recharge must occur and full exposure of CCW to groundwater leaching must be completed before he would approve a final bond release," the finder of fact took official notice that the staff hydrologist was no longer a DNR employee, and "no one can state with any degree of certainty what the opinion of his successor would be." Teeguarden Order, Findings 190-193 (Supp. R. 119). Consequently, in response to the concerns raised by EHC, the ALJ found the appropriate solution would be "to include a condition in the permit which requires complete recharge of the groundwater in and near the permit area and stabilized post-mining flow before any petition for final bond release can be considered." Teeguarden Order, Finding 194 (Supp. R. 194).

The Teeguarden Order accordingly imposed the following permit condition "c," which was retained by the NRC Permit Order: "An application for final bond release must show the area addressed by the application has completely recharged and groundwater flow has stabilized before the application can be approved." Teeguarden Order, at 20 (Supp. R. 122).

Thus, HEC prevailed regarding Issue I. Penrod Order, Finding 90 (R. 150). In prevailing, HEC achieved a very significant success on the merits when the NRC adopted ALJ Teeguarden's findings regarding the timing of bond release and retained permit condition "c." Penrod Order, Findings 87, 88 (R. 150).

(10) HEC partially prevailed as to Issue J: "Were the tests performed in accordance with 92-1 adequate to justify granting the permit?"

HEC relied on the testimony of three of its witnesses (Boulding, Norris and Haitjema) to challenge the adequacy of the Foertsch hydrologic assessment. HEC Post Hearing Brief, at 30-44 (Supp. R. 40-54). HEC witnesses Boulding and Norris testified that due to the timing of the tests, they did not account for seasonal variations or provide sufficient data. The tests occurred only between late May and mid-September, leaving a significant portion of the calendar year untested. HEC Post Hearing Brief, at 37-38 (Supp. R. 47-48). HEC also argued that the tests did not imitate field conditions. Teeguarden Order, Findings 198-199 (Supp. R. 119).

HEC witnesses further testified as to the inadequacy of the baseline testing conducted by the permittee, and contended that the "chemical analyses that were submitted with the permit on baseline ground water quality [sic] were largely flawed. Evidence of the flaws are clear in the data themselves on cursory examination, and some were identified by the laboratory in footnotes as acknowledged in the CHIA [Cumulative Hydrologic Impact Assessment]." HEC Post Hearing Brief, at 41 (Supp. R. 51).

Although he found that certain of HEC's arguments were barred by collateral estoppel, ALJ Teeguarden ultimately agreed with HEC that key aspects of the testing were inadequate. Teeguarden Order, Findings 195-196, 213-214 (Supp. R. 119, 120). The Order stated that taking six samples between late May and mid-September "do[es] not conform to letter of 92-1 or the spirit of SMCRA."" Teeguarden Order, Finding 213 (Supp. R 120).

The Order also found "further problems with the tests." Teeguarden Order, Finding 214 (Supp. R. 120). Specifically, the following problems with the tests were identified:

The first test of samples from CCW I did not include information for items as basic as field pH and water elevation. Finding 215 (Supp. R. 120).

The May 27, 1994 test for CCW II had a number of discrepancies including "an absurd level of aluminum, calcium, manganese, nickel, zinc, TDS, iron, hardness, and magnesium." Finding 216 (Supp. R. 120).

The cation/anion balance for two of the CCW II samples are "so unexpected and so unreal that the laboratory indicates there are problems with this sample." Finding 217 (Supp. R. 120)

Similar problems exist with the samples taken from CCW III on three dates. Finding 218 (Supp. R. 120).

The ALJ ultimately agreed with HEC that the baseline testing was inadequate to allow CCW disposal. "While six months of baseline testing is generally adequate for the issuance of permits, this means six months of accurate, meaningful data." Teeguarden Order, Finding 219 (Supp. R. 120). The Order found that, in light of the inadequate testing, the permit should be modified to include a condition that no CCW could be disposed until consistent, meaningful, baseline data on groundwater for six separate months has been provided to the department. Teeguarden Order, Finding 223 (Supp. R. 121).

The Teeguarden Order accordingly modified the permit by imposing the following condition "d," which was retained by the NRC Final Order. "No coal combustion waste can be disposed of on site until the operator provides the department with base line testing results of groundwater for 33 parameters which are valid and meaningful and which are not considered flawed by the laboratory." Teeguarden Order, at 20 (Supp. R. 122).

Consequently, HEC partially prevailed as to Issue J. Penrod Order, Finding 102 (R. 152). Even though it only partially prevailed, HEC achieved significant success on Issue J because the NRC adopted the ALJ'' findings that Foertsch had failed to provide adequate baseline test data and retained condition "d," delaying CCW disposal until such data had been provided to DNR. It is also clear that "[t]his permit condition would not have been imposed had HEC not challenged the original permit and raised the issue of the adequacy of the testing." Penrod Order, Finding 100 (R. 152).

B. Conclusions of Law

The Court finds that there is no genuine dispute that HEC prevailed in whole or in part on seven of the ten issues and five of the eight substantive issues in the Foertsch Permit Proceedings - specifically, Issues A, B, E. G. H, I and J. Both the Penrod and the NRC Fee Orders find that HEC did not prevail at all only with respect to Issues C, D, and F. Thus, the only genuine issue is whether the success, which HEC achieved, was sufficient to meet the applicable legal standard of eligibility for an award. Under the applicable standard of review, this is clearly an issue of law for the Court to determine de novo.

Issue Two, Sub-Issue B(1): HEC's Failure to Prevail Completely on Every Issue

The NRC concluded that it was not appropriate to award HEC any fees and expenses "since HEC failed to achieve a denial and stay of the permit as requested in its petition for administrative review." The NRC also concluded that it was not appropriate to compensate HEC for any of its fees and expenses because HEC did not prevail before the NRC on Issues C, D and F. NRC Fee Order, Conclusions 5, 6 and 7 (R. 17-18). In support of this conclusion, the Commission cited RUCKELSHAUS v. SIERRA CLUB, 463 U.S. 680, 688 n.9 (1983), for the proposition that a "trivial success on the merits" does not justify an award of fees. NRC Fee Order, Conclusion 6 (R. 17). However, the NRC conclusion is clearly contrary to the applicable law.

In the first place, the NRC's reliance on RUCKELSHAUS for its conclusion is misplaced. As the District of Columbia District Court has explained in the federal SMCRA context:

The RUCKELSHAUS court held that attorneys' fees may not be awarded to a party completely unsuccessful in legal action pursued to 42 U.S.C. § 7607(f) [Section 307(f) of the Clean Air Act]. But, it does not even remotely suggest that compensation must be denied for portions of the litigation on which plaintiffs failed to prevail and, in fact, holds just the opposite. As the Court stated: 'Section 307(f) was meant to expand the class of parties eligible for fee awards from prevailing parties to partially prevailing parties - parties achieving some success, even if not a major success.' 463 U.S. at 688, 103 S. Ct. at 3279 (emphasis in original not included in CADDNAR).

SAVE OUR CUMBERLAND MOUNTAINS v. HODEL, 651 F. Supp. 1528, 1533 (D.D.C. 1986).

In the second place, the specific circumstance of a partially prevailing party not receiving all the relief which it initially sought has also been addressed under SMCRA § 525(e) and determined not to be a basis for reducing, let alone denying an award of fees and expenses:

[W]e conclude that the ultimate relief granted in a particular case is not the only factor which determines whether the petitioner has achieved 'some degree of success on the merits.' In Natural Resources Defense Council I, we concluded that OSMRE failed, prior to approving West Elk's permit, to conduct an adequate PCI assessment; to make its AVF determination; and to require a sedimentation control plan for the loadout facility. These conclusions confirmed, at least in part, the charge made by NRDC et al. in their original petition for review that OSMRE had improperly approved ARCO's permit. In view of this partial vindication of its position, we must conclude that the petitioners achieved 'at least some degree of success on the merits,' regardless of whether they failed to succeed on their other charges or to obtain that relief which they regarded as appropriate. By focusing only on whether NRDC et al. achieved the desired ultimate result, West Elk has overlooked the success, which NRDC et al. did achieve. NRDC et al. must be regarded as eligible for an award of costs and expenses, including attorney's fees, under section 525(e) of SMCRA.

NATURAL RESOURCES DEFENSE COUNCIL v. OFFICE OF SURFACE MINING & RECLAMATION, 107 IBLA 339. 366, 1989 IBLA LEXIS 255, at **44.

The circumstances here are generally comparable to those in NRDC. HEC was the only party challenging the Foertsch permit renewal; both DNR and Foertsch sought to sustain the permit as originally issued. HEC offered extensive testimony and oral and written argument challenging the permit in eight substantive respects, including as in NRDC the adequacy of site characterization studies and data. As discussed under Issue Two, supra, five of those eight challenges were upheld in significant respects and four conditions were included in the permit as a result of administrative review that had not been there before. Those conditions were substantive and significant; they were sustained on judicial review in the face of a challenge from Foertsch. Most significantly, the critical findings would not have been made and the remedial conditions would not have been included had HEC not petitioned for administrative review and participated as it did in the resulting Foertsch Permit Proceedings. As Special ALJ Penrod found, "HEC's participation resulted in modification of the original permit to include four provisions that would not have been included had HEC not initiated its appeal of the permit." Penrod Order, Finding 23 (R. 141).

Given these circumstances, the Court concludes that HEC's failure to prevail on three of ten issues and the NRC's modification of the permit in lieu of the stay and revocation preferred by HEC are not lawful bases for denying HEC an award of fees and expenses for which it would otherwise be eligible and the NRC conclusion to the contrary is clearly erroneous as a matter of law. Compare SCHARTIGER v. LAND USE CORP., 420 S.E.2d 883, 887 (W.Va. 1991) (For a party to "prevail" for purposes of a fee and expense award under a state SMCRA statute, he need not show success on every claim but must demonstrate significant success on a significant claim).

Issue Two, Sub-Issue B(2): HEC's Procedural Success

The NRC concluded that it was not appropriate to compensate HEC for any of its fees and expenses because the results achieved on Issues A and B, even though HEC prevailed on those issues, were at most "trivial success on the merits" or "purely procedural victories." The NRC again cited RUCKELSHAUS v. SIERRA CLUB, 463 U.S. 680, 688 n.9 (1983) in support of this conclusion. NRC Fee Order, Conclusion 4 (R. 17). This conclusion is clearly erroneous.

In the first place, Judge Penrod did not find HEC entitled to an award solely because it prevailed on Issues A and B. He did so on the basis that HEC had prevailed as to issues A, B. G, H, and I, and had partially prevailed as to issues E and J-and that prevailing on procedural Issues A and B were a legal prerequisite to its success on the other issues. Penrod Order, Findings 108, 27, 34 (R. 16, 5, 6). Thus, the NRC's conclusion is premised on a misreading of the Special ALJ's Order.

In the second place, the lesson of the RUCKELSHAUS footnote is simply not applicable in the situation here, where HEC prevailed on substantive as well as procedural issues and the success on the procedural issues was a prerequisite to success on the substantive issues. This precise situation was addressed in UTAH INTERNATIONAL, INC. v. DEPARTMENT OF THE INTERIOR, 643 F. Supp. 810 (D. Utah 1986). There, the United States objected to an award for the remand phase of the proceedings on the ground that "the remand motion was purely procedural and that under RUCKELSHAUS, a party must achieve some degree of success on the merits before it is eligible for an award." Id., at 828. But, the court rejected the government's argument:

We agree that, absent success on the merits, a party is not entitled to an award of fees for purely procedural victories. [Citation omitted]. However, this is not a case where petitioners did achieve some success on the merits. [Footnote omitted]. Because, in the opinion of this court, their success on the remand motion was integral to that success, petitioners are entitled to an award for their efforts on that motion. It is often the case that one or more procedural victories are behind a substantive victory. A party entitled to an award for the substantive victory is certainly entitled to an award for the procedural victories, which contributed to the ultimate success.

Id. Consequently, the Court concludes that, as a matter of law, the NRC finding that two of the seven issues on which HEC prevailed were procedural issues is not a lawful reason for denying HEC an award of fees and expenses for which it would otherwise be eligible.

Issue Two, Sub-Issue B(3): The Daviess Circuit Court Decision

The NRC concluded that it was not appropriate to award HEC any fees and expenses "since the Daviess Circuit Court affirmed the NRC's Final Order on judicial review and totally denied Claimant HEC's petition for judicial review." NRC Fee Order, Conclusion 9 (R. 18).

However, Ind. Code Section 14-34-15-10 expressly provides for recovery by a substantially contributing, prevailing party in an ISMCRA administrative proceeding of the reasonable fees and expenses incurred in a related judicial review. Moreover, HEC prevailed in substantial part on judicial review because the Daviess Circuit Court upheld in the face of Foertsch's challenge the permit modifications made during NRC administrative review in response to HEC's testimony and arguments. Conclusion H (Supp. R. 337).

The circumstances here are comparable to those in SAVE OUR CUMBERLAND MOUNTAINS, where the court found that the government should bear the entirety of plaintiff's reasonable fees and expenses for an appeal, despite the government's argument that the plaintiff should not be compensated for an unsuccessful aspect of the appeal.. 651 F. Supp. at 1533. Consequently, the Court concludes that the Daviess Circuit Court's affirmance of the NRC Permit Order in the face of challenges from both HEC and Foertsch is clearly not a lawful basis for the NRC to deny HEC any award of fees and expenses and the NRC finding to the contrary is clearly erroneous as a matter of law.

While the NRC did not reach such a conclusion in its Fee Order, DNR contends on judicial review that the Daviess Circuit Court decision is res judicata with respect to HEC not being a prevailing party in the Foertsch Permit Proceeding. DNR Memorandum: 15-17. For several reasons, however the Court rejects this contention as contrary to law.

In the first place, HEC bases its status as a partially prevailing party eligible for fees and expenses on the findings made and the conditions imposed by the NRC as contrasted with the provisions of the Foertsch permit as issued by DNR. As discussed supra, the NRC Permit Order did not affirm the Foertsch permit; it modified the permit as issued by DNR in a number of significant respects. On judicial review, the Daviess Circuit Court affirmed the NRC Permit Order, changing not so much as a single word. Thus, the decision of the Daviess Circuit Court does not affect in any way HEC's status as a partially prevailing party because it affirmed the very NRC findings and permit modifications on which HEC's fee and expense claim is based.

In the second place, the claim preclusion branch of the res judicata doctrine does not apply here. The claim in a pending action is precluded only if it is identical to the claim in a prior concluded action. Two claims are identical only if identical evidence will support the issues presented in both. See GORSKI v. DEERING, 465 N.E.2d 759, 762 (Ind. Ct. App. 1984); MIDDLEKAMP v. HANEWICH, 173 Ind. App. 571, 585, 364 N.E2d 1024, 1033 (1977). However, two or more separate claims may arise from the same occurrence. Judgment in one action under these circumstances does not bar suit on the other claim. GORSKI, 465 N,E.2d at 762. HEC's petition for administrative review of the Foertsch permit plainly presents a related but different claim from that presented in HEC's petition for fees and expenses at issue here - the relief sought, the statues cited, and the legal standards applied are all different.

In particular, the Foertsch Permit Proceeding involved a claim for revocation or modification of the permit issued to Foertsch by DNR for disposal of coal combustion waste at the Little Sandy No. 10 mine. That claim was based on I-SMCRA's provisions for the permitting of waste sites and relied on evidence relating to legal, policy and technical considerations relating to CCW disposal generally and in the Little Sandy No. 10 mine particularly. By contrast, the HEC Fee Proceeding involved a claim which was based on I-SMCRA's provisions for the payment of attorney's fees and litigation expenses and relied on evidence relating to the results achieved and the contribution made by HEC in the Foertsch permit Proceedings. Consequently, the two claims are clearly different and the claim preclusion branch of the res judicata doctrine cannot bar HEC's claim for fees and expenses here.

In the third place, the issue preclusion branch of res judicata does not apply, either. A final decision on one issue in a prior action does not preclude raising a different issue in a subsequent action. See CASTON SCHOOL CORP. v. PHILLIPS, 689 N.E.2d 1294, 1296 (Ind. Ct. App. 1998) (Because the issue that was addressed in the first trial court's decision is not the issue we are asked to resolve, the principle of res judicata does not foreclose our review). See also SPEEDWAY REALTY CO. v. GRASSHOFF REALTY CORP., 206 N.E.2d 632, 635 (Ind. Ct. App. 1965) (the adjudication of an issue in an earlier case is not conclusive of an entirely different issue arising in the second. Here, DNR agees with HEC that the key issues which the Court is being asked to resolve are (1) whether HEC had "some success on the merits" in the Foertsch Permit Proceedings, and (2) whether HEC made a "substantial contribution to a full and fair determination of the issues" in the Foertsch Permit Proceedings. DNR Memorandum: 13-14. Yet, none of the findings or conclusions of the Daviess Circuit Court cited by DNR even address let alone resolve either of these issues. Consequently, the issue preclusion branch of the res judicata doctrine does not bar this Court's consideration of HEC's eligibility and entitlement to a fee and expense award as a result of its participation in the Foertsch Permit Proceeding.

Fourth, the form of res judicata termed "law of the case" is also inapplicable here. The law of the case doctrine mandates that an appellate court's determination of a particular legal issue binds both the trial court and the court on appeal in any subsequent appeal involving the same case and substantially the same facts. CHA v. WARNICK, 476 N.E.2d 109, 114 (Ind. 1985), REH'G DENIED, CERT. DENIED, 474 U.S. 920. The doctrine's admittedly important purpose is to minimize unnecessary relitigation of the same legal issues between the same parties - but only after they have been resolved by an appellate court. STATE v. HUFFMAN, 643 N.E.2d 899, 901 (Ind. 1994). Thus, even if the Daviess Circuit Court had decided the same issue presented here (which it did not), its decision would not be the law of the case because it is a trial court, not an appellate court.

Finally, a defense of res judicata is waived on appeal when it is not presented below. See LINCOLN NAT. BANK AND TRUST CO. v. SHRINERS HOSPITALS FOR CRIPPLED CHILDREN, 588 N.E.2d 597, 600 (Ind. Ct. App. 1992). Here, DNR filed a motion to dismiss the HEC Fee Proceeding. (R. 744). However, the motion to dismiss did not present the defense of res judicata. Consequently, DNR's res judicata defense has been waived.

Issue Two, Sub-Issue B(4): The UTAH INTERNATIONAL PRECEDENT

The NRC concluded that it was not appropriate to award HEC any fees and expenses because the court in UTAH INTERNATIONAL "held it would be unjust to interpret the federal version of Ind. Code 14-34-15-10 as requiring a successful party to pay its adversary's fees" and DNR was a successful party in the Foertsch Fee Proceedings. NRC Fee Order, Conclusion 10 (R. 18). However, this conclusion badly misconstrues the holding in UTAH INTERNATIONAL.

In that case, the court held that where a non-governmental party is aligned with a governmental party during a particular phase of a proceeding and both parties prevail during that phase, "it would not be proper to award fees to petitioners and assess them against the government for those phases of the litigation during which petitioners were aligned with the government." 643 F. Supp. at 820. This holding is inapposite here because there was no phase of the Foertsch proceeding in which HEC and DNR were aligned and DNR does not assert such an alignment. Indeed, correctly interpreted, the UTAH INTERNATIONAL decision supports an award of fees and expenses here against an agency renewing a permit under a state SMCRA program and to an environmental group opposing the permit renewal in subsequent administrative proceedings. See POWDER RIVER BASIN RESOURCE COUNCIL v. WYOMING ENVIRONMENTAL QUALITY COUNCIL, 869 P.2d 435, 439 (Wyo. 1994). Consequently, the Court concludes that, properly interpreted, the UTAH INTERNATIONAL decision is not a lawful basis for denying HEC a fee and expense award for which it would otherwise be eligible and the NRC finding the contrary is clearly erroneous as a matter of law.

Overall Conclusion on Issue Two

The Court concludes that HEC is a partially "prevailing party" eligible for an award of fees and expenses under I-SMCRA and the NRC finding to the contrary is clearly erroneous as a matter of law for the following reasons:

Issue Three: HEC's Contribution to Full and Fair Determination of the Issues

Special ALJ Penrod expressly found, "HEC's participation resulted in modification of the original permit to include four provisions that would not have been included had HEC not initiated its appeal of the permit. The NRC, acting in its official capacity entered its final order thereby sanctioning a change in the legal relationship between the DNR and Foertsch Construction Company." Penrod Order, Finding 23 (R. 141). As a result, he concluded that HEC had made "a substantial contribution to a full and fair determination of the issues." Penrod Order, Finding 22 (R. 141). The NRC expressly vacated these findings, concluding that "Claimant HEC failed to establish any legal basis to justify the award of any fees and expenses." NRC Fee Order, Finding 3 (R. 18). Thus, the parties present for the Court's consideration the mixed issue of law and fact as to whether HEC substantially contributed to a full and fair determination of the issues in the Foertsch Permit Proceedings.

Case law interpreting the fee recovery provisions of the federal SMCRA analogous to those at issue here establish the standard for determining whether a party has made a significant contribution to a full and fair determination of the issues within the meaning of I-SMCRA and its implementing regulations. This standard requires "a causal nexus between the plaintiffs' actions in prosecuting the appeal . . . and the corrective action taken by the [administrative agency]." KENTUCKY RESOURCES COUNCIL, INC. v. BABBITT, 997 F. Supp. 814, 820 (E.D. Ky. 1998). See also WEST VIRGINIA HIGHLAND CONSERVANCY, 152 IBLA 66, __ (2000), 2000 IBLA NEXIS 33, at *23 (the key to determining whether petitioners made a "substantial contribution" to the outcome of a SMCRA case is whether there is a "causal nexus" between petitioner's actions in prosecuting the administrative appeal and the relief obtained).

The Supreme Court of Appeals of West Virginia has followed this same standard in determining whether a party is entitled to fee recovery under its state SMCRA: "For a party to have been successful so as to entitle him/her to an award of attorney's fees, 'there must be some causal connection between the lawsuit and a change in the defendant's conduction'" LOUDEN, 551 S.E.2d at 30 (quoting DAILY GAZETTE CO., INC. v. WEST VIRGINIA DEVELOPMENT OFFICE, 521 S.E.2d 543, 553-54 (W.Va. 1999)). . Thus, the key consideration in determining whether the requisite "significant contribution" has been made is whether the administrative agency changed its conduct or took corrective action as the result of a challenge brought by the party seeking recovery of costs and expenses. Under the circumstances here, this is clearly a conclusion of ultimate fact and law for the Court to determine de novo.[FOOTNOTE 3]

A. Findings of Fact

As discussed in deciding Issue Two, supra, it is undisputed that HEC was the only party challenging the Foertsch permit renewal in the Foertsch Permit Proceedings; both DNR and Foertsch sought to sustain the permit as originally issued. It is also undisputed that HEC was represented by counsel throughout the Foertsch Permit Proceedings, presented the testimony of four expert witnesses, and offered extensive oral and written argument challenging various aspects of the permit. It is further undisputed that four conditions were included in the Foertsch permit as a result of administrative review that had not been there before and those conditions were sustained on judicial review in the face of a challenge from Foertsch. As the Court previously concluded in resolving Issue Two, supra, those conditions were substantive and significant. Most significantly, it is undisputed on the record below that the conditions would not have been included had HEC not petitioned for administrative review and participated as it did in the resulting Foertsch Permit Proceedings.

B. Conclusion of Law

Given the basic facts undisputed on the record below and the legal conclusions previously reached by the Court in resolving Issue Two, supra, the only reasonable inference is that the requisite "causal nexus" exists between HEC's initiation of and participation in the Foertsch Permit Proceedings and changes in the Foertsch permit which were made during administrative review and sustained on judicial review. As a result, the Court concludes as a matter of ultimate fact and law that HEC made a "substantial contribution to a full and fair determination of the issues" in the Foertsch Permit Proceedings and is therefore entitled to an award of attorney's fees and litigation expenses reasonably incurred in those proceedings and the subsequent Fee Proceedings. The NRC finding to the contrary is clearly erroneous as a matter of law.

Issue Four: The Proper Measurement of HEC's Award

Special ALJ Penrod found, as a matter of fact impressions in Indiana, that a substantial contributing, prevailing party is entitled to "the aggregate amount of all costs and expenses (without consideration of a percentage-of-success method or lodestar with multiplier) reasonably incurred in participation in the entire adjudicatory proceeding, including the fee recovery stage." Penrod Order, Finding 103 (R.152). Additionally, Special ALJ Penrod found that:

The reliance on an aggregate fee methodology (without a percentage-of-success calculation or multiplier) as the governing legal standard is consistent with the intent of the federal SMCRA, current governing federal case law, ISMCRA and applicable state law and consistent with principles of statutory and rule construction in Indiana . . .

Penrod Order, Finding 160 (R. 159). However, the NRC vacated these findings in its Fee Order. (R. 18). As a result, the parties present for judicial review the purely legal issues of the proper measure of HEC's award under I-SMCRA.

In his findings, the Special ALJ did nothing more than give an unambiguous statute its plain meaning. The statute expressly states that the measure of recovery for a person entitled to recover is "equal to the aggregate amount of all costs and expenses reasonably incurred by the person for or in connection with the person's participation in the proceedings, including any judicial review of agency actions." Ind. Code Section 14-34-15-10. Moreover, an essentially identical SMCRA fee provision to the one at issue here has previously been found to be unambiguous by a state court of last resort. POWDER RIVER BASIN RESOURCES COUNCIL v. WYOMING ENVIRONMENTAL QUALITY COUNCIL, 869 P.2d 435, 439 (Wyo. 1994) (considering an essentially identical statute). Under Indiana law, an unambiguous statute is to be given its plain meaning. See, e.g. SUPERIOR CONSTRUCTION CO. v. CARR, 564 N.E.2d 281, 284 (Ind. 1990) ("Courts do not interpret statutes which are clear and unambiguous on their face").

But, to make sure that he was not missing something, the Special ALJ also reviewed the meaning given the same or similar language in other jurisdictions: "The SALJ arrived at this holding after an exhaustive review of relevant federal and state judicial and administrative surface mining and environmental law cases." Penrod Order, Finding 103 (R. 152). Indeed, the virtually identical fee recovery provisions of SMCRA have consistently been interpreted by federal courts to allow eligible parties to recover the totality of their costs and expenses. As a general matter, recovery of costs and expenses under SMCRA is determined by the "lodestar" analysis. As noted by the District Court for the District of Columbia in making a SMCRA fee award, "The determination of an appropriate award begins with the calculation of a 'lodestar' - the number of hours reasonably expended multiplied by a reasonable hourly rate." SAVE OUR CUMBERLAND MOUNTAINS v. HODEL, 651 F. Supp. 1528, 1532 (D.D.C. 1986); see also UTAH INTERNATIONAL, 643 F. Supp. at 828. A prevailing, substantially contributing party is also entitled to recover reasonable litigation costs. 651 F. Supp. at 1546.

More specifically, a prevailing substantially contributing party is entitled to recovery of the entirety of its reasonable fees and expenses even though it has not prevailed on every issue in a proceeding. For example, in SAVE OUR CUMBERLAND MOUNTAINS, the court found that the government should bear the expense of plaintiff's fee for an entire appeals proceeding, despite the government's argument that the plaintiff should not be compensated for an unsuccessful aspect of its appeal. 651 F. Supp. at 1533. See also KENTUCKY RESOURCES COUNCIL v. OFFICE OF SURFACE MINING RECLAMATION & ENFORCEMENT, 151 IBLA 324, 331, 2000 IBLA LEXIS, at *20 (2000) (on remand) ("when a petitioner seeking attorney fees achieves substantial success on the merits of his claim, the fee award properly includes all time reasonably expended on the litigation including presentation of an alternative ground for success arising from the same facts and involving a related legal theory even though the alternative theory is rejected"); NATIONAL WILDLIFE FEDERATION, 152 IBLA 352, 363, 2000 LEXIS 37, at *26-27 (2002) (Petitioners entitled to a "full award" of fees and expenses, even though they did not prevail on some of their principle theories, because their claims "grew out of a common core of facts and involved related legal theories").

Here, all of the fees and expenses claimed by HEC clearly grew out of a common core of facts and involved related legal theories for denying or, alternatively, modifying the Foertsch permit. Special ALJ Penrod found that all of the fees and expenses claimed were both allowable by type and reasonable in amount, stating "HEC has met its burden of proof and its submission of proof far exceeds any threshold standard required to determine appropriate attorney's fees . . . costs, and expenses." Penrod Order, Finding 156 (R. 158). While as discussed under Issue Two, supra, the NRC erroneously concluded that HEC was not eligible for a fee and expense award of any amount because of a supposed lack of success on merits, the Commission did not find any of the fees or expenses claimed as unallowable by type or unreasonable in amount. Consequently, the Court concludes that, as a matter of law, HEC is entitled to an award in the aggregate amount of its claimed fees and expenses.

Issue Five: Other Statutory Provisions re Fees and Expenses

In its Memorandum of Law, DNR initially asserts, "This entire case primarily turns on this Court's interpretation of one Indiana statute, Ind. Code Section 14-34-15-10 and one NRC rule, 312 IAC 3-1-13." DNR Memorandum: 9. Subsequently, however, the agency maintains that "HEC should be limited in its recovery based on the existence of state statutes and associated case law limiting a state agency's liability for costs." DNR Memorandum: 21-24. DNR makes this legal argument even though the NRC did not rely on it in its Fee Order.

The specific statutes on which DNR relies are Ind. Code Section 34-52-1-1(b) and Ind. Code Sections 34-52-2-1 et seq. Essentially, DNR relies on these statutes to argue that an Indiana court cannot award fees and expenses against parties generally or against a state agency particularly absent "bad behavior" of one or more of the types specified in the statutes. Moreover, DNR relies on Ind. Code Section 34-52-2-1 et seq. to argue that there are numerous conditions and limitations on any award to be paid by a state agency. DNR Memorandum: 21-24.

But, DNR is clearly in error. The statutes cited by DNR represent alternatives to, not substitutes for or constraints on the authority conferred by Ind. Code Section 14-34-15-10 and 312 IAC 3-1-13(d) for the award of fees and expenses against DNR. Ind. Code Section 34-52-1-1 is simply the 1986 codification of one of the common law exceptions to the "American Rule" - the so-called "obdurate behavior" exception. STATE BD. OF TAX COM'RS v. TOWN OF ST. JOHN, 751 N.E.2d 657, 659 (Ind. 2001) With respect to Ind. Code Sections 34-52-2-1 et seq., the Indiana Supreme Court has said:

Indiana has scores of statutes that provide some form of fee shifting. Several of those statutes allow private citizens to bring suit to redress wrongs that involve the public interest, and to recover attorney fees if they prevail. For example, Indiana housing discrimination statute recognizes a private right of action and allows recovery of attorney's fees. Ind. Code Ann. Section 22-9.5-7-2 (West 2001). A prevailing plaintiff in a historic preservation action may also recover attorney fees. Ind. Code Ann. Section 36-7-11-21 (West 2001). Indiana's Open Door Law, Ind. Code Ann. Section 5-14-1.5-7 (West 2001), and Access to Public Records statute, Ind. Code Ann. Section 5-14-3-9 (West 2001), both allow attorney fees but only if the plaintiff follows certain specific procedural prerequisites before filing suite. In 1986, our legislature added a general statute governing fee-shifting in actions involving the State, to supplement the various statutes providing for fee-shifting in particular areas of law. Under what is now Ind. Code Ann. Section 34-52-2-2,3 (West 2001), small businesses and not-for-profit organizations may recover limited attorney fees against state agencies that have act3ed unreasonably.

Id. at 661-62 (emphasis not included in CADDNAR publication).

Plainly, Ind. Code Section 14-34-15-10 is one of "the various statutes providing for fee-shifting in particular areas of law" which the other statutes DNR cites are intended "to supplement but not supplant. Ind. Code Section 34-52-1-1(b) and Ind. Code Sections 34-52-2-1 et seq. are simply not constraints on any award of fees and expenses to HEC under Ind. Code Section 14-34-15-10 and 312 IAC 3-1-13(d).

Issue Six: Ind. Const., Art. 10, Section 3

DNR asserts (without record citation or supporting affidavit), "There is no line item or program element [in the agency's budget] for paying another party's costs, expenses or attorney's fees." DNR Memorandum: 24. It then argues that, given this absence and the State's budgetary constraints, Ind. Const., Art. 10, Section 3 would prohibit - or at least delay indefinitely - any payment of an award of fees and expenses to HEC. DNR Memorandum: 25.

This argument is fallacious. The fee and expense award sought by HEC is expressly authorized by I-SMCRA and its implementing regulations. If approved, the award would satisfy the requirements of the applicable statute and regulations. Consequently, the award would clearly be within DNR's authority to pay. As the Indiana Supreme Court ruled long ago in construing Art. 10, Section 3:

It is true, as claimed, that no money can be rightfully drawn from the treasury except in pursuance of an appropriation made by law; but such an appropriation may be made impliedly as well as expressly, and in general as well as in specific terms. The use of technical words in a statute making an appropriation is not necessary. There may be an appropriation of public moneys to a given purpose without in any manner designating the act as an 'appropriation.' It may be said, generally, that a direction to the proper officer or officers to pay money out of the treasury on a given claim or class of claims, or for a given object, may by implication be held to be an appropriation of a sufficient amount of money to make the required payments.

But, that issue is really for another day. The issues currently before the Court are HEC's eligibility and entitlement to an award, not many difficulties HEC may have in collecting an award when and if made. As the Court of Appeals said when presented with an objection similar to the one here regarding an award of damages against the Highway Commission soon after the State's immunity for tort liability had been abolished, "We are not immediately concerned with the manner of enforcing this judgment, but it is well settled that this court, like the other courts of this State, possesses an array of inherent powers sufficient to enforce its final judgments." STATE v. TURNER, 286 N.E.2d 697, 699 (Ind. Ct. App. 1972) (citing Ind. Const., Art. 12, § 1).

IV. ORDER

Based on the foregoing Discussion and pursuant to Ind. Code Sections 4-21.5-5-14 and 15, the Court HEREBY FINDS that the NRC Fee Order is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law" and "short of statutory right." Accordingly, the NRC Fee Order is HEREBY REVERSED and this case is HEREBY REMANDED to the Commission for entry of a replacement order consistent with the Court's foregoing findings and conclusions.

IT IS SO ORDERED this 24th day of May, 2004.

FOOTNOTES:

1. Throughout this Order, citations to the Certified Record of Administrative Proceedings in NRC Cause No. 97-065R will be in the form "R. [page #]"; citations to the supplemental Certified Partial Record of Administrative Proceedings in NRC Cause Nos. 95-169R and 95-170R (including the related judicial review in Daviess Circuit Court Cause Nos. 14C01-9703-CP-095 and 14C01-9703-MI-096) will be in the form "Supp. R. [page #]."

Daviess County Circuit Court upheld the NRC Permit Order in its entirety. (Supp.R. 323).

2. Due to inadvertently double-counting certain fees and expenses sought by HEC, Judge Penrod's Non-Final Order mistakenly approved an award in the amount of $183,906.44 rather than the $168,495.93 actually requested by HEC.

3. DNR implies that the Court cannot reach this conclusion because the requisite "causal nexus" sub-issue is a factual rather than a legal issue, which the NRC must first decide. DNR Memo: 14. In drawing this implication, DNR cites to the remand decision in WEST VIRGINIA HIGHLANDS CONSERVANCY, 343 F.2d at 248, a decision also cited by HEC. However, the WEST VIRGINIA HIGHLANDS CONSERVANCY court remanded rather than decided the substantial contribution issue because the IBLA had not previously addressed the causal nexus sub-issue. Here, however, the NRC did address casual nexus: Special ALJ Penrod expressly found the requisite casual nexus existed (Finding 23, R. 141) and the Commission vacated that finding (R. 18). So, the ultimate issue of substantial contribution is properly before this Court in this case.