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Cause #: 97-248W[NOTE: THIS ORDER WAS A FINAL DISPOSITION OF THE ADMINISTRATIVE REVIEWS SOUGHT BY THE JUDAY CREEK TASK FORCE AND BY THE FRIENDS OF JUDAY CREEK. CONCURRENT WITH THIS FINAL DISPOSITION WAS AN INTERLOCUTORY ORDER WHICH DECLINED TO DISMISS THE CLAIMS OF TWO OTHER CLAIMANTS. THE PORTIONS OF THE INTERLOCUTORY ORDER PERTAINING TO THE OTHER CLAIMANTS HAVE BEEN HERE DELETED.]
. . . .[T]he Administrative Law Judge, acting as the ultimate authority pursuant to IC 14-34-2-2(b), now dismisses with prejudice the requests for administrative review initiated by the Juday Creek Task Force and by the Friends of Juday Creek.
Application of the Administrative Orders and Procedures Act
1. This proceeding is controlled by IC 4-21.5 (the "Administrative Orders and Procedures Act" or "AOPA") and rules adopted by the natural resources commission (the "Commission") to assist in the implementation of the AOPA. At issue is administrative review of Permit FW-18,358 (the "subject permit") for which an initial determination was made by the Department of Natural Resources (the "Department") in favor of Ralph M. Williams and Associates ("Williams"). Pursuant to 312 IAC 3-1-1(b), an affected person who is aggrieved by a determination of the Department may apply for administrative review of the determination under IC 4-21.5 and 312 IAC 3-1.
2. Persons entitled to notice under the AOPA are identified in IC 4-21.5-3-5(b).
This subsection provides in pertinent part:
Sec. 5(b) When an agency issues an order. . . , the agency shall give a written notice of the order to the
following persons:
(1) Each person to whom the order is specifically directed.
(2) Each person to whom the law requires notice to be given.
(3) Each competitor who has applied to the agency for a mutually exclusive license. . . .
(4) Each person who has provided the agency with a written request for notification of the order, if the
request:
(A) describes the subject of the order with reasonable particularity; and
(B) is delivered to the agency at least seven (7) days before the day that notice is given under this section.
(5) Each person who has a substantial and direct proprietary interest in the subject of the order.
(6) Each person who absence as a party in the proceeding concerning the order would deny another party
relief in the proceeding or who claims an interest related to the subject of the order and is so situated that
the disposition of the matter, in the person's absence, may:
(A) as a practical matter impair or impede the person's ability to protect that interest; or
(B) leave any other person who is a party to a proceeding concerning the order subject to a substantial risk
of incurring multiple or otherwise inconsistent obligations by reason of the person's claimed interest. . . .
3. Statutory requirements for a petition for administrative review are set forth in IC 4-21.5-3-7. This section provides in pertinent part:
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Sec. 7. (a) . . . To qualify for review of any other order described in section 4, 5, or 6 of this chapter, a
person must petition for review in a writing that does the following:
(1) States facts demonstrating that
(A) the petitioner is a person to whom the order is specifically directed;
(B) the petitioner is aggrieved or adversely affected by the order; or
(C) the petitioner is entitled to review under any law .
. . . .
(3) Is filed:
(A) if an order described in section 4, 5, 6(a)(1), or 6(a)(2) of this chapter,
with the ultimate authority for the agency issuing the order within fifteen (15) days after the person is given
notice of the order or any longer period set by statute; . . .
Overview of "Standing"
4. "Standing" is primarily a judicial doctrine, and it focuses on "whether the complaining party is the proper person to invoke the court's power." Pence v. State, 652 N.E.2d 486, 488 (Ind. 1995). Standing serves to limit jurisdiction over a particular case, for a court may only resolve real controversies in which the complaining party has a personal stake in the outcome of the lawsuit and has sustained, or is in immediate danger of sustaining, direct injury as a result of the complained conduct. Musgrave v. State Bd. of Tax Comm'rs, 658 N.E.2d 135, 138 (Ind. Tax 1995). Pense v. State cited previously.
5. The issue of standing is properly raised through a T.R. 12(B)(6) motion for a party's lack of standing will deprive a court of jurisdiction over a particular case. Musgrave cited previously. Pursuant to 312 IAC 3-1-9(b)(3), the Commission has delegated to its administrative law judges the authority to dismiss a petition if the "person seeking administrative review does not qualify for review under IC 4-21.5-3-7."
6. In essence, Williams and the Department contest the standing of the Claimants in two ways: First, they attack the adequacy of the respective petitions for administrative review. Second, they urge the nature of the interests asserted by the Claimants are insufficient to provide them individually with a legal basis for seeking review. These matters will be separately explored, but there is also a preliminary item which must be addressed.
Contrasting Administrative Review and Judicial Review
7. Most of the decisions cited by Williams and the Department in support of their arguments are tests applied on judicial review. Currently for consideration is administrative review by the Commission of a determination by the Department. A discussion of standing for judicial review appears pertinent to a discussion of administrative review, since the scope of administrative review can be no less than of judicial review. The opposite does not follow.
8. Whether a person has standing to seek administrative review is an issue separate and apart from whether the person may take judicial review. "These two types of standing are not necessarily coextensive; for example, a party conceivably could have standing to participate in an administrative proceeding but lack standing to litigate." Selmi and Manaster, State Environmental Law, 11.02[5] (1997), citing Medical Waste Assocs., Inc. v. Marylandwaste Coalition, Inc., 327 Md. 596, 612 A.2d 241, 249 (1992).
9. This dichotomy results
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because the functions of administrative review and judicial review differ. On administrative review, an agency must develop a full and complete record. An administrative law judge must make specific findings to crystallize the agency's analysis of evidence so as to provide a court with the opportunity for an intelligent judicial review of the agency decision. Indaina Dept. of Natural Resources v. United Refuse Co., 598 N.E.2d 603, (1992 Ind. App.), decision adopted in part and vacated in part at 615 N.E.2d 100. The administrative law judge conducts a hearing de novo, weighing evidence and reaching conclusions, rather than deferring to the initial determination by the agency. Indiana Dept. of Natural Resources v. United Refuse Co., 615 N.E.2d 100 (1993 Ind.).
10. Administrative review authorities evolve policy through a case-by-case process. Adjudicatory policy making is particularly appropriate where the administrative review authority is also the ultimate authority for the agency. Koch, Administrative Law and Practice, 2d, 5.28 (1997).
11. The Indiana General Assembly has developed a statutory relationship between the Department and the Commission which is designed to support meaningful review of decisions at the agency level. In the late 1980s, both the Department and the Commission were subjected to "Sunset" evaluation under IC 4-26-3. Within that process, the Indiana Legislative Services Agency ("LSA") offered recommendations concerning whether the Commission should have a continued existence. The first alternative recommendation of LSA was to abolish the Commission, an alternative which the legislature rejected with the retention of the Commission under P.L. 28-1990. The second alternative, and the one more closely identified with the policy choice of the Indiana General Assembly, was supported by the following critique by LSA:
1. The Director of the DNR [the Department] would receive all day-to-day decision-making authority. Departmental decisions would be appealed through the administrative adjudication process, with the Commission acting as final adjudicative authority. This change in authority would be particularly effected in the DNR regulatory functions such as mining and water, as it would serve to process applications more efficiently on items with no conflict. Public notification and input would be continued on such initial actions.
Sunset Audit, Indiana Legislative Services Agency, Matters of Resources, Recreation, and the Arts (May 1989).
12. Under the current legislative design, the director or a Department employee delegated by the director issues all "licenses" for the Department. IC 14-11-3-1. The Commission is the "ultimate authority" for the Department under the AOPA. IC 14-10-2-3. The Department makes the day-to-day licensing decisions, but these are subject to administrative review by the Commission. Administrative review is particularly noteworthy for issues involving "mining" and, here "water," which are likely to invoke public interest. Working properly together, the Department and the Commission form a complete administrative record supportive of reasoned agency action. Administrative review forms an element of policy making in which the Commission as ultimate authority for the Department has an important role.
13. On the other hand, both the doctrine of separation of powers and the AOPA limit the scope of judicial review. Medical Licensing Bd. of Indiana Provisor, 653 N.E.2d 1035 (1995 Ind. App.). Judicial review is limited to determining whether an agency possessed jurisdiction over the
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subject matter, and whether the agency's decision was made pursuant to proper procedures, was based upon substantial evidence, was not arbitrary or capricious, and was not in violation of any constitutional, statutory, or legal principle. Indiana Dept. of Natural Resources v. Peabody Coal Co., 654 N.E.2d 289 (1995 Ind. App.).
14. The role of the administrative law judge in the instant proceedings is not to determine who has standing to take judicial review. That is the exclusive province of the courts. Rather the determination is limited to deciding standing for administrative review.
Sufficiency of Petitions for Administrative Review
15. The fundamental purpose of pleadings in an administrative process is to inform each party of the other's position so that each can properly prepare. Generally, initial pleadings can be amended where justice would be served. Two Market Square Associates Ltd. Partnership v. State Bd. of Tax Com'rs, 656 N.E.2d 308 (1995 Ind.).
16. Consistent with this judicial interpretation, the Commission has provided by rule for the amendment of petitions for administrative review under IC 4-21.5-3-7 and other pleadings filed before it under the AOPA. As provided at 312 IAC 3-1-6:
Sec.6. (a) A pleading described in section 3(a) of this rule may be amended once as a matter of course before a response is filed, but not later than the initial prehearing conference or fifteen (15) days before a hearing (whichever occurs first), except by leave of the administrative law judge. Leave shall be granted where justice requires. (b) If the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading.
17. As determined recently by the Commission, the purpose of a petition is to provide any respondents of "reasonable notice as to the subject of administrative review. The general rules for civil pleadings require that a claim include a short and plain statement showing that the pleader is entitled to relief and a demand for the relief to which he deems himself entitled. Trial Rule 8(A)." Hoosier Environmental Council v. DNR and Vigo Coal Company, 8 Caddnar 13 (1997). As noted by the Commission, "[a]ll civil pleadings are to be construed as to do substantial justice, lead to disposition on the merits, and avoid litigation of procedural points. Trial Rule 8(F). Where not otherwise inconsistent with the AOPA or 312 IAC 3-1, a provision of the trial rules may be applied. That application appears appropriate to the construction of requests for administrative review as well. 312 IAC 3-1-10. The result would be both incongruous and inequitable if a more stringent standard for initiating a claim were required for the informal AOPA than for a more formal civil proceeding." Id.
18. Even applying the most liberal interpretations to the claims raised by the Juday Creek Task Force and by the Friends of Juday Creek, however, they do not sustain a jurisdictional basis for administrative review of the subject permit. The Juday Creek Task Force reflects that it is concerned the subject permit "has the potential for degrading Juday Creek" without providing any particulars as to what the degradation might entail. Also, no where in the Flood Control Act is there a prohibition on projects which might result in any stream degradation. Rather the
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protections of the Flood Control Act are couched in terms of a reasonableness standard. The
Friends of Juday Creek urge the project anticipated by the subject permit could cause creek
degradation resulting in diminution of adjacent property values. No where in the Flood Control
Act is there a prohibition upon projects which might reduce property values because of stream
degradation. If relief can be accorded on this basis, the relief must be secured in a civil action or
elsewhere outside the protections of the Flood Control Act. As to the Juday Creek Task Force
and the Friends of Juday Creek, their claims must properly be dismissed.