Bill Musgrave v. Squaw Creek Coal Co. and Indiana Dept. of Natural Resources ( 2012 )

FOR PUBLICATION
ATTORNEYS FOR APPELLANT: ATTORNEYS FOR APPELLEES:
PETER M. RACHER Squaw Creek Coal Company:
STEPHANIE T. ECKERLE
JOSH S. TATUM E. SEAN GRIGGS
Plews Shadley Racher & Braun LLP DAVID R. GILLAY
Indianapolis, Indiana Barnes & Thornburg LLP
Indianapolis, Indiana
Indiana Department of Natural Resources:
GREGORY F. ZOELLER
Attorney General of Indiana
FRANCES BARROW
Deputy Attorney General
FILED
Indianapolis, Indiana
Mar 21 2012, 9:31 am
IN THE
COURT OF APPEALS OF INDIANA CLERK
of the supreme court,
court of appeals and
tax court
BIL MUSGRAVE, )
)
Appellant-Respondent, )
)
vs. ) No. 49A05-1104-MI-164
)
SQUAW CREEK COAL COMPANY and )
INDIANA DEPARTMENT OF NATURAL )
RESOURCES, )
)
Appellees-Petitioners. )
APPEAL FROM THE MARION SUPERIOR COURT
The Honorable Michael D. Keele, Judge
Cause No. 49D07-1001-MI-3153
March 21, 2012
OPINION - FOR PUBLICATION
BAILEY, Judge
Case Summary
Bil Musgrave (“Musgrave”), a former coal miner, appeals the trial court’s order in
favor of Squaw Creek Coal Company (“SCCC”) and the Indiana Department of Natural
Resources (“DNR”) on SCCC’s petition for judicial review. SCCC petitioned the trial court
for judicial review of an order issued by an Indiana Natural Resources Commission
(“Commission”) Administrative Law Judge (“ALJ”) vacating the DNR’s decision to release
certain portions of SCCC’s reclamation bond on its surface mining permit, and the trial court
reversed. The DNR cross-appeals the trial court’s order. We affirm.
Issues
The parties raise several issues for our review, which we consolidate and restate as
the following three issues:
I. Whether the trial court erred by denying Musgrave’s motion to dismiss
SCCC’s petition for judicial review for lack of jurisdiction because
SCCC did not serve summonses upon the Commission, the DNR, and
the Indiana Attorney General, and did not pay the Marion County
Superior Court filing fee;
II. Whether Musgrave is collaterally estopped from challenging the
DNR’s decision to release the reclamation bond at issue; and
III. Whether the trial court erred by reversing the ALJ’s order and
remanding for entry of judgment in favor of SCCC and the DNR.
2
Facts and Procedural History
SCCC was formed in 1960 as a joint venture between Alcoa, Inc. and Peabody Coal
Company to mine the coal from Squaw Creek Mine. The extracted coal was used to power
Alcoa’s nearby aluminum production facility on the banks of the Ohio River. Musgrave is a
former miner who worked at Squaw Creek Mine.
The Squaw Creek Mine was mined in segments using a method called “surface
mining.” (App. 636) Using this method, SCCC drilled and blasted the overburden1 that
covered the coal, removed the blasted and drilled pieces with draglines and shovels, and
dumped the pieces to the side, making “structureless pile[s] of debris” (App. 692) that ranged
from twenty-five to eighty feet tall. The exposed coal was then extracted and transported to a
processing area using “haul roads” that were approximately fifty feet wide and inclined
because the mine floor was well below the original grade of the land. (App. 636)
Between 1965 and 1979, Alcoa used abandoned haul roads in Squaw Creek Mine to
dispose of waste generated at its aluminum production facility, such as chromium sludge,
spent pot lining, and tarry wastewater and tars from tunnel kilns. Because the haul roads
were lower than the surrounding spoil, the waste was dumped at relatively low levels. Alcoa
dumped its wastes in coordination with the Indiana Department of Health, the predecessor to
the Indiana Department of Environmental Management (IDEM), and the wastes were
covered with native overburden. It is estimated that Alcoa dumped its waste at twelve
locations in Squaw Creek Mine, but some former miners assert that waste was dumped in
1
Overburden is material of any nature except topsoil that overlies a coal deposit. 312 IAC § 25-1-93.
3
several additional locations.
On March 28, 1984, SCCC obtained Permit S-008 to mine a certain area of Squaw
Creek Mine’s North Field. The entire area covered by Permit S-008 is approximately 4,467
acres, 1,273.01 acres of which were actually mined. Successful reclamation of the land that
was mined was secured with a bond.
All active mining at Squaw Creek Mine ended in 1987, and on October 26, 2007,
SCCC applied for release of certain portions of the bond on Permit S-008. The DNR held a
public hearing on the bond release petition on January 3, 2008 at which Musgrave and other
concerned citizens testified, as did an Alcoa safety representative. Much of the hearing
focused on Alcoa’s disposal of the waste, whether all disposal locations had been discovered,
and the various health and environmental impacts that the waste disposal has allegedly had
on Squaw Creek Mine. On January 4, 2008, the DNR conducted a field investigation of the
area covered by the bond and approved SCCC’s bond release application on February 1,
2008. In approving the bond release, the DNR concluded that “[t]he actual or theoretical
threat of pollution from industrial wastes is not the type of impact anticipated by the bond
release requirements.” (App. 96)
On February 15, 2008, Musgrave sought administrative review of the DNR’s decision
from the Commission. After the parties filed several motions and participated in multiple
conferences, Musgrave moved for summary judgment on April 3, 2009. SCCC and the DNR
filed responses and cross motions for summary judgment on June 25, 2009 and June 26,
2009, respectively.
4
On December 28, 2009, the ALJ issued an order affirming the DNR’s decision to
release parts of the bond on certain portions of SCCC’s reclamation bond, but vacating the
DNR’s decision to affirm the release on others.2 Although the ALJ concluded that none of
the identified sites where Alcoa dumped waste were located within the bonded area, the ALJ
vacated the DNR’s decision as to certain portions of land because she concluded that “the
migration of waste or constituents of that waste from the disposal sites throughout [Squaw
Creek Mine] and possibly beyond is facilitated by the permeable overburden layer created
throughout [Squaw Creek Mine] by SCCC’s mining operations.” App. 69. The ALJ based
this conclusion on evidence that the mining spoil was behaving as an “unconfined aquifer”
(App. 748) where lateral migration of water occurs.
SCCC sought judicial review of the ALJ’s order by filing its Verified Motion for
Judicial Review in Marion County Superior Court on January 22, 2010. That same day,
SCCC sent a copy of its petition for judicial review to Musgrave, the Indiana Attorney
General, the DNR, and the Commission. It also sent a summons with the petition sent to
Musgrave. SCCC did not send summonses to the Attorney General, the DNR, or the
Commission.
On January 27, 2010, Attorney April Lashbrook of the Indiana Attorney General’s
Office entered an appearance on behalf of the DNR. On February 8, 2010, Attorney Peter
Racher entered an appearance on behalf of Musgrave. Then, on March 17, 2010, Attorneys
2
As we discuss below, bonds on reclamation permits are released in three phases. Each phase requires
satisfaction of certain criteria before it may be released. In its bond release application, SCCC applied for
phase I release on some parts of the land, phase II release on other parts, and phase III release on yet other
parts. The ALJ affirmed the DNR’s decision to release the bond on the land that SCCC requested phase I and
phase II releases. The ALJ vacated the DNR’s approval on the land for which phase III release was requested.
5
Peter Racher and Stephanie Eckerle filed an “Amended Limited Appearance by Attorneys in
a Civil Case” (App. 98) as well as a motion to dismiss SCCC’s petition for lack of subject
matter jurisdiction, lack of personal jurisdiction, insufficiency of process, insufficiency of
service of process, and failure to state a claim upon which relief may be granted. The trial
court denied Musgrave’s motion to dismiss on May 26, 2010.
The parties briefed the issue of whether the ALJ properly reversed the DNR’s decision
on phase III release of the bond, and the trial court held oral argument on December 16,
2010. On March 11, 2011, the trial court issued its “Order on Verified Petition for Judicial
Review” reversing the ALJ’s order and remanding for entry of judgment in favor of SCCC
and the DNR.
Musgrave now appeals. Additional facts will be supplied as necessary.
Discussion and Decision
The Trial Court’s Jurisdiction
We first address Musgrave’s argument that the trial court should have dismissed
Musgrave’s petition because it lacked jurisdiction to review the ALJ’s order. Specifically,
Musgrave maintains that SCCC committed certain errors in petitioning for judicial relief,
namely that it did not serve summonses upon the Commission, the DNR, and the Indiana
Attorney General with its petition; did not name the DNR and Attorney General as parties on
the summons it served upon Musgrave; and did not pay a filing fee in Marion County Court.
According to Musgrave, as a result of these alleged errors, SCCC’s petition for judicial
review was untimely and thus the trial court should have dismissed SCCC’s petition.
6
Decisions concerning surface coal mining and reclamation under Indiana Code article
14-34 are subject to judicial review under the Indiana Administrative Orders and Procedures
Act (AOPA). Ind. Code § 14-34-17-1. AOPA “establishes the exclusive means for judicial
review of an agency action.” I.C. § 4-21.5-5-1. Judicial review of an administrative order is
initiated by filing a petition for review in the appropriate court. I.C. § 4-21.5-5-2. A person
is entitled to judicial review only if that person has standing, has exhausted administrative
remedies, files a petition for review within thirty (30) days after the date that notice of the
agency action is served, and timely transmits the agency record. I.C. § 4-21.5-5-2(b). The
petition must be filed with the clerk of the court, be verified, and contain certain information.
I.C. § 4-21.5-5-7. In addition:
A petitioner for judicial review shall serve a copy of the petition for judicial
review upon:
(1) the ultimate authority issuing the order;
(2) the ultimate authority for each other agency exercising
administrative review of the order;
(3) the attorney general, and
(4) each party to the proceeding before an agency;
in the manner provided by the rules of procedure governing civil actions in
the courts.
I.C. § 4-21.5-5-8.
We first turn to Musgrave’s argument that the summons he received was defective and
that SCCC did not send summonses to the DNR, Attorney General, or the Commission. The
parties dispute the meaning of AOPA’s directive to serve the petition for judicial review “in
7
the manner provided by the rules of procedure governing civil actions.” I.C. § 4-21.5-5-8.
Musgrave argues that it refers to the Indiana Trial Rules’ requirements governing process and
service for the commencement of a new civil action which require a summons along with the
complaint. Under Indiana Trial Rule 3, a party commences a civil action by filing the
complaint or equivalent pleading specified by statute, paying a prescribed filing fee, and,
where service of process is required, furnishing the clerk with as many copies of the
complaint and summons as is necessary. Trial Rule 4, entitled “Process”, addresses the
various requirements of the form and content of a summons. Trial Rules 4.1 through 4.17
govern how that process (the summons and complaint) is served, depending on the type of
party to be served or the method by which service is to be effected.
SCCC, on the other hand, argues that it needed only to serve the petition for judicial
review and did not need to include a summons. Working from the position that judicial
review of an administrative order is merely the continuation of an ongoing dispute, SCCC’s
argues that AOPA’s reference to the trial rules means rules governing actions already
commenced.3 Trial Rule 5 governs the service of subsequent pleadings and papers, such as
written motions, pleadings subsequent to the original complaint, written motions, briefs,
documents related to discovery, and other written notices.
Both parties attempt to support their position here by directing us to our opinion in
Lindsey v. De Groot Dairy LLC, 867 N.E.2d 602 (Ind. Ct. App. 2007), trans. denied. In that
3
In its brief, SCCC explains that the person who assisted in filing the petition saw Musgrave’s name in the
caption and, out of familiarity and “perhaps overzealously”, prepared and sent a summons to Musgrave.
Appellee’s Br. p. 22.
8
case, we addressed whether the service of a summons and the petition for judicial review on
a party’s attorney, rather than the party himself, met the service requirements of AOPA. We
concluded that it did, and wrote that “service pursuant to Trial Rule 5 satisfies Indiana Code
Section 4-21.5-5-8” and that “[i]f the General Assembly would prefer service be achieved
under Trial Rule 4, it should so specify.” Id. at 605.
Musgrave, however, presents a slightly different issue here in that his challenge is one
of insufficiency of process, not insufficiency of service of process. A claim of insufficiency
of process is a challenge to the content of a summons, whereas a challenge of insufficiency
of service of process challenges the manner or method of service. Cotton v. Cotton, 942
N.E.2d 161, 164 (Ind. Ct. App. 2011). Musgrave does not argue that SCCC sent its petition
to the wrong person. Nor does he argue that SCCC incorrectly sent the petition or otherwise
deficiently served the petition. Rather, Musgrave takes issue with the content of his
summons and the fact that no summons was sent to DNR, the Commission, and the Attorney
General.
AOPA states that a party shall serve “a copy of the petition for judicial review” and
says nothing of a summons. The petition is therefore the only process required by AOPA.4
Just like Trial Rule 4, Indiana Code Section 4-21.5-5-7 lists the content requirements of the
process (the petition) necessary under AOPA. Service of this process is then to be achieved
in the manner provided for under the trial rule relevant to the particular party to be served, be
4
This makes sense because AOPA requires service of the petition on the “ultimate authority issuing the order.”
Practically speaking, there is no need to serve a summons on the ALJ that contains, among other things, “the
time within which these rules require the person to be served to respond, and a clear statement that in case of
his failure to do so, judgment by default may be rendered against him for the relief demanded in the
complaint.” T.R. 4(C)(5).
9
it on an individual, organization, the Attorney General, or through a party’s attorney. See De
Groot, 867 N.E.2d at 605.
Here, the ALJ issued her order on December 28, 2009. SCCC filed its Verified
Motion for Judicial Review in Marion Superior Court less than thirty days later on January
22, 2010. That same day, SCCC sent a copy of its petition to Musgrave, the Indiana Attorney
General, the DNR, and the Commission. SCCC’s process and service thereof was sufficient.
Similarly, we find no error in the trial court’s refusal to dismiss SCCC’s petition even
though it did not pay a filing fee. AOPA makes no mention of a filing fee. Even if we were
to accept Musgrave’s interpretation of AOPA’s language, Trial Rule 3 merely requires that a
party pay the “prescribed filing fee.” The Marion Superior Court prescribed no filing fee in
this case and SCCC should not be penalized for not paying a filing fee that it was never
required to pay. The trial court did not err by refusing to dismiss.
Issue Preclusion
Both SCCC and the DNR argue that Musgrave is collaterally estopped from
challenging the bond release on Permit S-008 because he challenged the bond release on
another permit, S-009, raising the same legal issues. In general, collateral estoppel, or issue
preclusion, bars subsequent litigation of a fact or issue that was necessarily adjudicated in a
former suit if the same fact or issue is presented in a subsequent lawsuit. Indianapolis
Downs, LLC v. Herr, 834 N.E.2d 699, 704 (Ind. Ct. App. 2005), trans. denied. Where issue
preclusion is applicable, the former adjudication will be conclusive in the subsequent action
even if the two actions are different claims. Id. However, the former adjudication will only
10
be conclusive as to those issues that were actually litigated and determined therein. Id. Issue
preclusion does not extend to matters that were not expressly adjudicated and can be inferred
only by argument. Id.In order for a matter to have been “necessarily adjudicated” such that issue preclusion
applies, the determination must have been essential to the decision. Watson Rural Water Co.
v. Indiana Cities Water Corp., 540 N.E.2d 131, 137 (Ind. Ct. App. 1989), trans. denied.
Moreover:
If a judgment of a court of first instance is based on determinations of two
issues, either of which standing independently would be sufficient to support
the result, the judgment is not conclusive with respect to either issue standing
alone…
[A] determination in the alternative may not have been as carefully or
rigorously considered as it would have if it had been necessary to the result,
and in that sense it has some of the characteristics of dicta…
There may be cases where, despite these considerations, the balance tips in
favor of preclusion because of the fullness with which the issue was litigated
and decided in the first action. But since the question of preclusion will almost
always be a close one if each case is to rest on its own particular facts, it is in
the interest of predictability and simplicity for the result of nonpreclusion to be
uniform.
Restatement (Second) Judgments § 27, cmt. i.
The ALJ wrote the following in dismissing the Musgraves’5 challenge to the release of
the bond on Permit S-009:
30. However, the Musgraves [sic] complaint focuses on matters that are
either outside the scope of the bond release relating to Squaw Creek’s
Permit # S-009 or are outside the control or jurisdiction of the
Department, the Commission or the administrative law judge.
5
Both Musgrave and his wife challenged the release of the bond on Permit S-009.
11
*****
37. Therefore, the Department is without authority to deny bond release on
Permit # S-009 as a result of activities that allegedly occurred within
the permit area covered by Permit # S-008 or for the purpose of
facilitating the remediation of contamination resulting from activities
that allegedly occurred within the permit area covered by Permit # S-
008.
38. In the event it were appropriate for the Department to deny any bond
release relating to the Musgraves’ complaint of toxic dumping and
the resulting contamination it would have to be the bond related to
Permit # S-008, not the bond posted on Permit # S-009.
*****
47. The Musgraves’ complaint fails to state a claim upon which relief
may be granted for two reasons. First, the complaint relates to
activities within the permit area of Permit # S-008, which is not the
subject of bond release at issue in this proceeding. Second, the relief
sought is the remediation of contamination resulting from alleged
past toxic dumping, which is not within the jurisdiction of the
Department, the Commission or the administrative law judge.
DNR App. 1-6.
The ALJ’s decision was clearly based upon two separate but individually sufficient
grounds. The first was that the complaint challenged the release of the bond on Permit S-009
based on activities within the area covered by Permit S-008. The ALJ could have dismissed
the Musgraves’ action without more. However, it went on to state that neither the DNR nor
the Commission had jurisdiction to grant the requested relief over the waste that was
dumped. This, too, could have independently supported dismissal. Because the jurisdictional
question was one of two separate but independently sufficient grounds for dismissal, we
cannot conclude that it was necessarily adjudicated in the prior proceeding. Consequently, it
12
cannot be the basis of issue preclusion, and the trial court was correct to conclude that
Musgrave is not collaterally estopped from challenging the release of the bond on Permit S-
008.
Release of the Bond
Standard of Review
We now turn to the trial court’s order on SCCC’s judicial review petition. When we
review the decision of an administrative agency, we are bound by the same standard as the
trial court. Indiana Dep’t of Natural Res. v. Hoosier Envtl. Council, Inc., 831 N.E.2d 804,
808 (Ind. Ct. App. 2005). We do not try the case de novo and do not substitute our judgment
for that of the agency. Id. Pursuant to AOPA, we will reverse the administrative decision
only if it is (1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
with law; (2) contrary to a constitutional right, power, privilege, or immunity; (3) in excess of
statutory jurisdiction, authority, or limitations, or short of statutory right; (4) without
observance of procedure required by law; or (5) unsupported by substantial evidence. I.C. §
4-21.5-5-14; also Hoosier Envtl. Council, Inc., 831 N.E.2d at 808. While an appellate court
grants deference to an administrative agency’s findings of fact, no such deference is accorded
to its conclusions of law. LTV Steel Co. v. Griffin, 730 N.E.2d 1251, 1257 (Ind. 2000). The
burden of demonstrating the invalidity of the agency action is on the party who asserts the
invalidity. Dep’t of Natural Res. v. Peabody Coal Co., 740 N.E.2d 129, 134 (Ind. Ct. App.
2000).
The ALJ’s order was entered on cross motions for summary judgment. In an
13
administrative proceeding, a party may, at any time after the matter has been assigned to an
administrative law judge, move for a summary judgment in the party’s favor as to all or any
part of the issues in the proceeding. I.C. § 4-21.5-3-23. When a party files a summary
judgment motion, the administrative law judge considers the motion as a court would if
considering a motion for summary judgment filed under Trial Rule 56.
Pursuant to Indiana Trial Rule 56(C), summary judgment is appropriate when there
are no genuine issues of material fact and when the moving party is entitled to judgment as a
matter of law. “A genuine issue of material fact exists where facts concerning an issue which
would dispose of the litigation are in dispute or where the undisputed facts are capable of
supporting conflicting inferences on such an issue.” Mahan v. American Standard Ins. Co.,
862 N.E.2d 669, 675 (Ind. Ct. App. 2007) (quoting Scott v. Bodor, Inc., 571 N.E.2d 313, 318
(Ind. Ct. App. 1991)), trans. denied. The party moving for summary judgment bears the
burden of making a prima facie showing that there is no genuine issue of material fact and
that he or she is entitled to a judgment as a matter of law. Indiana-Kentucky Elec. Corp. v.
Comm’r, Ind. Dep’t of Envtl. Mgmt., 820 N.E.2d 771, 776 (Ind. Ct. App. 2005). Once the
moving party meets these two requirements, the burden shifts to the non-moving party to
show the existence of a genuine issue of material fact by setting forth specifically designated
facts. Id.The fact that the parties made cross-motions for summary judgment does not alter our
standard of review. Mahan, 862 N.E.2d at 676. Instead, we consider each motion separately
to determine whether the moving party is entitled to judgment as a matter of law. Id.14
Indiana Surface Mining Control and Reclamation Act
The United States Congress has acknowledged that coal mining operations contribute
significantly to the energy requirements of the United States, and that surface coal mining is
an appropriate method of obtaining the natural resource. Natural Resources Comm’n of Ind.
v. AMAX Coal Co., 638 N.E.2d 418, 419 (Ind. 1994). However, recognizing the negative
environmental impacts and the public health and safety hazards associated with surface
mining operations, Congress adopted the federal Surface Mining Control and Reclamation
Act of 1977. Id. Indiana’s counterpart to F-SMCRA, the Indiana Surface Mining Control
and Reclamation Act (I-SMCRA), similarly recognizes the need to protect society and the
environment and assure the rights of surface land owners and others by preventing and
minimizing the adverse effects of surface mining operations. Id.I-SMCRA is codified at Indiana Code Article 14-34. Pursuant to I-SMCRA, a person
may not open, develop, or operate a new or previously mined or abandoned site for surface
coal mining in Indiana without holding a valid surface coal mining and reclamation permit.
I.C. § 14-34-3-1. The permit application must contain, among other things, a reclamation
plan. I.C. § 14-34-3-3(17). Each reclamation plan must include a proposed use of the land
following reclamation, and a description of the various steps necessary to achieve that
proposed use. I.C. § 14-34-3-12.
After the mining and reclamation permit is approved but before it is issued, the
applicant must file a bond for performance payable to the state and conditional upon faithful
performance of all the requirements of the Indiana Code and the permit. I.C. § 14-34-6-1. In
15
order to secure release of the bond, the operator must notify certain parties, including
adjoining property owners, and run a public notice advertising that the operator has applied
for release of the bond. I.C. § 14-34-6-7. Within thirty days of receipt of a bond release
application, the DNR must conduct an inspection and evaluation of the reclamation work
involved. I.C. § 14-34-6-9. That evaluation must include:
(1) The degree of difficulty to complete a remaining reclamation.
(2) Whether pollution of surface and subsurface water is occurring.
(3) The probability of continuance or future occurrence of the pollution.
(4) The estimated cost of abating the pollution.
Id.
A person with a legal interest affected by the bond may file written objections and
request a public hearing within thirty days. I.C. § 14-34-6-10. If the DNR is satisfied that
the reclamation covered by the bond has been accomplished, then it may release the bond in
three phases. I.C. § 14-34-6-13. Sixty percent of the bond may be released in phase I when
the permittee completes backfilling, regrading, and drainage control in accordance with the
reclamation plan. I.C. § 14-34-6-13. After revegetation has occurred, the director may
release phase II of the bond. The final portion of the bond, phase III, may only be released
when the permittee has “successfully completed all surface coal mining activities” and “all
reclamation requirements of [I-SMCRA] are fully met.” I.C. § 14-34-6-13. One of these
duties is to ensure that:
All debris, acid-forming materials, toxic materials, or materials constituting
a fire hazard are treated, buried, and compacted or otherwise disposed of in
a manner designed to prevent contamination of ground or surface water.
I.C. § 14-34-10-2(b)(17)(a).
16
Another requirement is to:
Minimize disturbances to the prevailing hydrologic balance at the mine site
and associated offsite areas and to the quality and quantity of water in surface
and ground water systems during and after surface coal mining and
reclamation operations by doing the following:
(A) avoiding acid or other toxic mine drainage by measures such as
the following:
(i) Preventing or removing water from contact with toxic-
producing deposits.
(ii) Treating drainage to reduce toxic content that adversely
affects downstream water upon being released to watercourses.
(iii) Casing, sealing, or otherwise managing boreholes, shafts,
and wells and keep acid or other toxic drainage from entering
ground and surface water.
I.C. § 14-34-10-2(b)(13).
Phase III Release
The parties dispute the meaning of several of I-SMCRA’s reclamation terms,
specifically, the “pollution” the DNR must evaluate, I.C. § 14-34-6-9, the “toxic materials”
of which SCCC must properly dispose, I.C. § 14-34-10-2(b)(17), and the “toxic mine
drainage” that SCCC must avoid, I.C. § 14-34-10-2(b)(13). Musgrave argues that these
terms do not have causal requirements, and therefore any material that could reasonably fall
within the meanings of the words—in this case Alcoa’s waste—must be evaluated by the
DNR and remediated by SCCC, regardless of whether SCCC caused the pollution or not.
SCCC and the DNR maintain that Alcoa’s hazardous waste and any migration thereof falls
within IDEM’s jurisdiction.
17
Words and phrases in Indiana statutes shall be taken in their plain, ordinary, or usual
sense, unless the construction is plainly repugnant to the intent of the legislature or of the
context of the statute. I.C. § 1-1-4-1. However, an interpretation of a statute by an
administrative agency charged with the duty of enforcing the statute is entitled to great
weight, unless this interpretation would be inconsistent with the statute itself. LTV Steel Co.,
730 N.E.2d at 1257. But an administrative agency does not have the power to make
decisions properly committed to another agency. Id. An administrative agency has only
those powers that the legislature has conferred to it, and unless we find the grant of powers
and authority in the statute, we conclude that no power exists. Id.
The Commission6 and Musgrave broadly interpret the DNR’s requirement to evaluate
pollution and toxic waste so as to include Alcoa’s hazardous waste and the effect that
SCCC’s mining had thereon, but we think that this reading is in excess of DNR’s powers,
and is therefore unreasonable. The Indiana General Assembly has given IDEM, not the
DNR, the duty to “regulate and require the proper and safe transportation, treatment, storage,
and disposal of hazardous waste that is generated in or transported into Indiana.” I.C. § 13-
22-2-1. IDEM is also designated as the state agency to implement and enforce federal laws
concerning hazardous waste. For example, IDEM is the solid waste agency for all purposes
of the federal Resource Conservation and Recovery Act and is the agency tasked with
implementing and enforcing the federal Comprehensive Environmental Response,
6
Although the DNR supervises the administration and enforcement of I-SMCRA, I.C. § 14-34-2-3, the
Commission is the “final authority” for the agency under AOPA except in consolidated proceedings with the
Office of Environmental Adjudication and proceedings concerning the approval or disapproval, suspension, or
revocation of a surface mining permit (but not reclamation bonds). I.C. § 14-34-2-2.
18
Compensation, and Liability Act of 1980 (CERCLA). I.C. § 13-13-5-1. Alcoa coordinated
its dumping of hazardous waste with IDEM’s predecessor. IDEM continues to work with
Alcoa on monitoring the hazardous waste and the potential migration of water with waste
constituents.
We therefore conclude that the DNR’s duty under I-SMCRA to evaluate “pollution”
and SCCC’s obligation to properly dispose of “toxic materials” refers to those materials that
result from surface mining. As for “toxic mine drainage”, the term is defined in the Indiana
Administrative Code as “water that is discharged from active or abandoned mines or other
areas affected by coal exploration or surface coal mining and reclamation operations that
contains a substance that through chemical action or physical effects is likely to kill, injure,
or impair biota commonly present in the area that might be exposed to the substance.” 312
IAC § 25-1-155. By its very name and definition, then, toxic mine drainage means water
discharged as a result of mining operations. It does not include Alcoa’s waste, which was
dumped before SCCC started mining the bonded area at issue here.
The DNR determined that SCCC had completed all the necessary requirements for the
phase III release on certain portions of the land. Before reaching this conclusion, the DNR
held a public hearing and conducted a field investigation. The field investigation included an
evaluation of the hydrological balance and confirmed that the surface water, ground water,
and water impoundments were all acceptable. The report also concluded, among other
things, that acceptable practices to control and minimize water pollution were implemented,
pollution of ground water by drainage from acid and toxic-forming materials was avoided,
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and the quality of impounded water is suitable for use. The quality in the bonded area had a
pH level of between 6.5 and 7, and traces of metals were negligible.
The DNR therefore fully investigated whether pollution or other toxic materials
resulting from mining were occurring or will occur in the future. If it is determined in the
future that SCCC’s mining spoil within the bonded area or elsewhere is indeed causing the
spread of groundwater containing waste constituents, it will be the responsibility of IDEM—
the agency tasked with such waste and its migration—to investigate and, if necessary, hold
those responsible for remediation of damage. Insofar as the reclamation requirements of I-
SMCRA are concerned, however, there is no genuine issue of material fact that they have
been satisfied.
Indiana Administrative Code and Reclamation Plan
Musgrave also argues that SCCC’s bond release was premature because it has not
satisfied all the requirements of the Indiana Administrative Code. Pursuant to the
Administrative Code, the DNR may release phase III of a surface mining reclamation bond
only after the “operator has successfully completed all surface coal mining and reclamation
activities required in IC 14-34, this article, or the permit.” 312 IAC § 25-5-16 (emphasis
supplied). According to Musgrave, the bond release is premature because:
Surface mining activities shall be planned and conducted to minimize changes
to the prevailing hydrologic balance in both the permit area and adjacent areas,
to prevent material damage to the hydrologic balance outside the permit area,
in order to prevent long term adverse changes in that balance which could
result from those activities.
312 IAC § 25-6-12.
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We are doubtful that the above rule is a reclamation requirement, as it only refers to
planning and conducting activities. Even so, the Indiana Administrative Code requires that
the operator satisfy the requirements of Indiana Code article 14-34, the Indiana
Administrative Code, or the permit. 312 IAC § 2-5-16. As we have already discussed,
SCCC met the reclamation requirements of Indiana Code article 14-34 and, as such, release
of phase III is in compliance with the Indiana Administrative Code.
Finally, Musgrave contends that SCCC has not met all the requirements of its own
reclamation plan. SCCC’s plan states that “[i]n general non-coal waste will be hauled away
from the mine by contract trash haulers” and that “[a]ny non-coal waste which remains after
reclamation of the final pit will also be removed from the permit area for disposal.” App.
827. “Non-coal wastes” include grease, lubricants, paints, flammable liquids, garbage,
abandoned mining machinery, lumber, and other combustibles generated during surface
mining activities.” 312 IAC § 25-6-42. The definition of non-coal wastes clearly refers to
wastes that were generated during surface mining activities. SCCC began mining the bonded
area here after Alcoa finished dumping its waste, and we cannot agree with Musgrave that
the reclamation plan’s reference to non-coal wastes includes Alcoa’s hazardous waste.
Musgrave presents no error concerning SCCC’s failure to comply with its reclamation plan.
Conclusion
The trial court had jurisdiction to consider SCCC’s petition for judicial review and did
not err by refusing to dismiss it. Musgrave is not collaterally estopped from challenging the
DNR’s decision to release the bond on Permit S-008 because the jurisdictional issue
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regarding Alcoa’s hazardous wastes was not necessarily adjudicated in the prior proceeding.
There is no genuine issue of material fact that SCCC met the phase III release requirements
of I-SMCRA. SCCC has also satisfied the requirements of the Indiana Administrative Code
and its own permit. The trial court’s order reversing the ALJ’s order and remanding for entry
of judgment in favor of SCCC and the DNR is affirmed.
Affirmed.
BAKER, J., and DARDEN, J., concur.
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