Missouri Court of Appeals
Southern District
Division Two
FOWLER LAND COMPANY, INC., )
and MARGARET LEIST REVOCABLE )
TRUST, SANDY RUNNELS and )
LINDA HENDERSON, Trustees, )
)
Petitioners-Appellants, )
)
vs. ) No. SD33166
)
MISSOURI DEPARTMENT OF ) Filed May 6, 2015
NATURAL RESOURCES, MISSOURI )
LAND RECLAMATION PROGRAM, )
ALTERNATE FUELS, INC., )
CONTINENTAL INSURANCE )
COMPANY, and CONTINENTAL )
CASUALTY COMPANY, )
)
Respondents-Respondents. )
APPEAL FROM THE CIRCUIT COURT OF BARTON COUNTY
Honorable James R. Bickel, Circuit Judge
REVERSED AND REMANDED WITH DIRECTIONS
Fowler Land Company, Inc., and the Margaret Leist Revocable Trust (individually
“Fowler” and “Leist,” respectively, and collectively “property owners”) appeal the trial court’s
judgment affirming the decision of the Missouri Land Reclamation Commission (“Commission”)
upholding the approval by the Missouri Department of Natural Resources Land Reclamation
Program (“Program”) of Alternate Fuels, Inc.’s (“AFI”) application filed in 2011 to revise Permit
1
No. 1991-02 (“2011 Permit Revision”). Property owners claim the Commission had no legal
authority to uphold the 2011 Permit Revision without their consent to the creation of the water
impoundments envisioned by the permit revision and that they never gave such consent. Finding
that the Commission ignored and failed to apply and follow 10 CSR § 40-6.060(4)(E).5, which
requires property owners’ consent for the creation of such water impoundments, we reverse the
Commission’s decision and remand with directions to deny AFI’s application for the 2011
Permit Revision.
Factual and Procedural Background
The Commission is a Missouri instrumentality or agency created and domiciled for
administrative purposes with the Department of Natural Resources. Section 444.520. 1 It is
authorized to administer and enforce the Missouri Surface Coal Mining Law, sections 444.800 to
444.970 and its implementing regulations (“Missouri SCML”), as well as the orders and permits
issued under that law.
The Program is a Missouri governmental instrumentality or agency, which under the
supervision of its director and the Commission, implements the Missouri SCML on behalf of the
Commission.
AFI is a coal mining company and is now a debtor pursuant to Title 11 U.S.C. Chapter
11, and Christopher Redmond (“Trustee”) is its duly appointed trustee in bankruptcy. 2 AFI
previously mined coal in Barton County under Permit No. 1991-02 (“Original Permit” or “1991
Permit”) issued by Program under the Missouri SCML, which authorized coal mining in a
1
All statutory references are to RSMo 2000, unless otherwise indicated.
2
Differentiating between AFI and Trustee is not critical or necessary to the resolution of the issues in this appeal.
For clarity and continuity of thought, therefore, this opinion will refer to AFI even when those actions were taken by
Trustee following AFI becoming a debtor in bankruptcy.
2
permitted area that included, among others, property owners’ land. Property owners leased their
land to AFI for the purpose of allowing mining to occur.
As part of its application for the Original Permit, 10 CSR § 40-6.050(10) required AFI to
submit a reclamation plan that contained a detailed description of the proposed land use
following reclamation of the land within the proposed permit area, including a description of any
land use different from the pre-mining land uses and the information necessary to approve an
alternative post-mining land use under 10 CSR § 40-3.130. The Original Permit included a
reclamation plan prescribing each aspect of the reclamation required of AFI with respect to
property owners’ land, as required by the Missouri SCML. Continental Insurance Company and
Continental Casualty Company (collectively “Continental”) acted as one of AFI’s sureties for
reclamation under the Original Permit and its reclamation plan.
The pre-mining land use of Fowler’s land consisted of 15 acres of prime farmland, 55
acres of cropland, 15 acres of pasture, and 25 acres of undeveloped land. The Original Permit
provided for post-mining land use of Fowler’s land as follows: 15 acres of prime cropland, 69
acres of pasture, 11 acres of water, and 15 acres of wildlife habitat. During the application
process, Fowler consented to the permanent establishment of an 11-acre water impoundment in
the center of the western portion of the Fowler land. This was the only final water impoundment
on Fowler’s land approved by the Original Permit.
The pre-mining land use of Leist’s land subject to the Original Permit consisted of 95
acres of pasture land and 41 acres of undeveloped pre-mined land (with 2 acres of water included
in the 41 acres of undeveloped pre-mined land). The Original Permit provides for post-mining
usage of the Leist land as follows: 90 acres pasture, 41 acres of pasture pre-mined land
(containing approximately 1/3 acre of water), and 5 acres of wildlife habitat.
3
AFI conducted mining operations under the Original Permit from approximately March
1993 to late 1996. In mining the permitted area and as a result of its unpermitted and
unauthorized change in mining methods, AFI constructed, without Fowler’s consent, four water
impoundments either partially or wholly located on Fowler’s land. These impoundments are
identified as FWI 6-7 (8.8 acres), 3 FWI-8 (2.3 acres), Pond No. 4 (1.9 acres), and Pond No. 5
(2.4 acres). Ponds Nos. 4 and 5 are generally located in the area in which the single 11-acre
water impoundment was to be located as authorized by the Original Permit, but FWI 6-7 and
FWI-8 are not. The total post-mining result is that AFI created 15.4 acres of water on the Fowler
land in four different water impoundments of which only 4.3 acres, in two separate ponds, is
located within the single 11-acre water impoundment area authorized in the Original Permit.
AFI’s unauthorized change in mining methods also created, without Leist’s consent, two
water impoundments either partially or wholly located on Leist’s land, identified as Pond No.
001 (1.7 acres) and FWI-4 (4 acres), for a total of 5.7 acres of water. The Original Permit
authorized and contemplated only a one-half-acre water impoundment on Leist’s land in the
location of Pond 001. 4
The Program initiated formal enforcement actions against AFI in response to AFI’s
construction of each of these six unauthorized water impoundments, as well as other permit
violations. 5 In 1995, AFI submitted a proposed permit revision ("1995 Permit Revision")
requesting a change in its reclamation plan to reflect the change in the nature and direction of its
mining operations, which would result in a change in post-mining land uses. In its 1995 Permit
3
Acreages shown in parentheticals following the identifier for each water impoundment indicate the number of acres
the water impoundment covers on just Fowler’s land and Leist’s land, respectively.
4
The record sometimes refers to the size of this water impoundment as one-third of an acre and sometimes as one-
half of an acre. The difference, however, is immaterial to the resolution of any issue in this appeal.
5
For an explanation of the enforcement process, see State ex rel. Nixon v. Alternate Fuels, Inc., 181 S.W.3d 177,
179 (Mo.App. 2005).
4
Revision application, AFI sought to revise the Original Permit to leave in place the six water
impoundments presently located on property owners’ land as permanent water impoundments.
The Commission attempted to work with AFI to approve the 1995 Permit Revision and engaged
in numerous rounds of comments, as well as enforcement actions, for several years. In
December 2002, the Program denied AFI’s 1995 Permit Revision because AFI had not obtained
property owners’ consent to the creation of the water impoundments. This denial was not
appealed.
In June 2011, AFI filed a second application for a revision of the Original Permit ("2011
Permit Revision"). In its application, AFI claimed that the Commission exceeded its authority
when it denied AFI’s 1995 permit revision request because AFI could not obtain property
owners’ consent for the six permanent water impoundments as they existed post-mining.
Relying upon 10 CSR § 40-3.130(3) and 10 CSR § 40-6.070(4)-(5), the Program
provided an opportunity to consult with the property owners, Fowler and Leist, and at their
request an informal conference was held on September 29, 2011. Property owners did not
appear in person, but relied upon written comments to the proposed 2011 Permit Revision
submitted through their counsel. In those comments objecting to the proposed permit revision,
property owners asserted, among other things, that
10 CSR 40-6.060(4)(E).5, specifically applicable to revision of permits, provides,
in relevant part, as follows:
Issuance of Permit. A permit for the mining and reclamation of prime
farmland may be granted by the director if s/he first finds, in writing, upon
the basis of a complete application, that… [t]he aggregate total prime
farmland acreage has not decreased from that which existed prior to
mining. Water bodies, if any, to be constructed during mining and
reclamation operations must be located within the post-reclamation
nonprime farmland portions of the permit area. The creation of any
such water bodies must be approved by the regulatory authority and
the consent of all affected property owners within the permit area
must be obtained.
5
Property owners also alleged that neither Fowler nor Leist had given consent for the creation of
the six unauthorized water impoundments. And, specifically in reference to 10 CSR § 40-
6.060(4)(E).5, property owners reminded the Program that it “is bound to the terms of its own
rules and regulations and cannot ignore or violate them.”
On December 2, 2011, the Program director (“Director”) approved the 2011 Permit
Revision, finding that AFI’s application complied with all of the requirements of 10 CSR § 40-
6.090(4) and 10 CSR § 40-3.130(3). At the same time, Director responded in writing to property
owners’ comments objecting to the proposed permit revision. In regard to 10 CSR § 40-
6.060(4)(E).5, Director stated, in toto:
The [property owners] also cite to 10 CSR 40-6.060( 4)(E).5 in support of their
argument. This regulation contains requirements applicable to permit applicants
who intend to reclaim prime farmland to the postmining land use of cropland.
This authority is found at 10 CSR 40-6.060(4)(B) and (E). It provides that as part
of the issuance of a permit “the creation of [water bodies within the post-
reclamation nonprime farmland portions] must be approved by the regulatory
authority and the consent of all affected property owners within the permit area
must be obtained.” Ms. Leist did not have any prime farmland on her property
prior to mining, so this regulation does not apply to her. The Fowler Land
Company had 15 acres of prime farmland, but this acreage amount will not
change as a result of the proposed permit revision. Consequently, the regulation
at 10 CSR 40-6.060 does not apply here.
Even if this regulation did apply, it is clear from Program files that at the time of
the issuance of Permit No. 1991-02, [Fowler] approved the creation of 10 acres of
water impoundments on the Fowler property. A 1995 affidavit signed by Fowler
approved 11 acres of water to be left on the property as part of the reclamation.
Margaret Leist specifically approved no less than 5 acres of water impoundment
to be created on her property in 1993. In a September 22, 1995 affidavit, she
approved 4 acres for water. The proposed permit revision will result in 15.4 acres
of water impoundment on the Fowler property and 5.7 acres of water
impoundment on the Leist property. This results in a difference of less than 6
acres from the originally approved acreages for water impoundments for both
landowners.
In accordance with the provisions of 10 CSR § 40-6.080(1)(A), property owners timely
filed an appeal to the Commission of the Program’s decision approving the 2011 Permit
6
Revision. In its complaint on appeal, property owners expressly challenged Director’s “finding
that the increase in acreage and the change in location of the water impoundments does not
violate . . . 10 CSR 40-6.060(4)(E).5.” In their answers to property owners’ complaint, the
Program, AFI, and Continental admitted that the Program “concluded in the Director’s Findings
that the current permit revision applications are consistent with . . . 10 CSR 40-6.060(4)(E).5[,]”
and specifically denied that this regulation required “landowner consent for the permit revisions
at issue in this case.”
In its written decision, the Commission upheld the Program’s approval of the 2011
Permit Revision. Without any mention of 10 CSR § 40-6.060(4)(E).5 or any of its provisions in
its decision, but rather expressly relying only upon 10 CSR § 40-3.130(3), 6 the Commission held
that
The regulatory requirement that [Program] consult with the landowner
does not mean that [Program] must obtain the landowner’s consent before it can
approve a permit revision. The Commission finds the [sic] AFI met each of the
requirements set forth in 10 CSR 40-6.130(3) [sic] and more specifically, the
Commission finds that AFI [sic] adequately consulted with the landowners before
6
Quoted by the Commission in its decision, 10 CSR § 40-3.130(3) provides:
(3) Criteria for Alternative Postmining Land Uses. Higher or better uses may be approved by the
regulatory authority as alternative postmining land uses after consultation with the landowner or
the land management agency having jurisdiction over the lands, if the proposed uses meet the
following criteria:
(A) There is a reasonable likelihood for achievement of the use;
(B) The use does not present any actual or probable hazard to public health or safety, or threat
of water diminution or pollution;
(C) The use will not—
1. Be impractical or unreasonable;
2. Be inconsistent with applicable land use policies or plans;
3. Involve unreasonable delay in implementation; or
4. Cause or contribute to violation or federal, state or local law.
(Italicized emphasis added by Commission in its decision and underlined emphasis added by this Court). The
Commission’s decision did not address or discuss in any respect whether or how any of the post-mining water
impoundments authorized by the 2011 Permit Revision were “higher or better uses” than the pre-mining land uses
recognized in the Original Permit. During oral argument, the Commission’s and AFI’s counsels were unable to
direct us to any regulation, and we have found none, that establishes a hierarchy of land uses upon which to make a
determination as whether one particular use is “higher or better” than another particular use.
7
approving AFI’s application for the 2011 Permit Revision. The Commission,
therefore, upholds [Program’s] decision to approve the 2011 Permit Revision
because it was reasonable, based on substantial and competent evidence, and not
arbitrary and capricious.[ 7]
Property owners timely filed a petition for review of the Commission’s decision in the
Circuit Court of Barton County. In their petition, property owners alleged that the Commission’s
decision was unlawful in that the Commission ignored 10 CSR § 40-6.060(4)(E).5, its own
regulation. The trial court entered its judgment affirming the Commission’s decision, and
property owners timely appealed.
Applicable Legal Principles
Upon appeal of an administrative decision, we review the decision of the administrative
agency rather than the decision of the circuit court. Klein v. Mo. Dep’t of Health & Senior
Servs., 226 S.W.3d 162, 164 (Mo. banc 2007). “When the agency’s decision involves a question
of law, the Court reviews the question de novo.” Stone v. Mo. Dep’t of Health & Senior Servs.,
350 S.W.3d 14, 20 (Mo. banc 2011).
“Rules duly promulgated pursuant to properly delegated authority have the force and
effect of law and are binding on the agency adopting them.” State ex rel. Stewart v. Civil Serv.
Comm’n of City of St. Louis, 120 S.W.3d 279, 287 (Mo.App. 2003) (citing Martin-Erb v. Mo.
Comm’n on Human Rights, 77 S.W.3d 600, 607 (Mo. banc 2002)). Accordingly, a court can
compel an agency to follow its own rules. State ex rel. Stewart, 120 S.W.3d at 287. “‘Once an
agency exercises its discretion and creates the procedural rules under which it desires to have its
actions judged, the agency denies itself the right to violate those rules.’” Id. (quoting Martin-
7
After initially referencing and quoting 10 CSR § 40-3.130(3) in this section of its decision, the Commission then
twice refers and cites to 10 CSR 40-6.130(3) (emphasis added). Because no 10 CSR § 40-6.130 exists, we conclude
that in the context of this section of its decision, such references and citations were typographical errors and were
intended by the Commission as a reference and citation to 10 CSR § 40-3.130(3). Similarly, in the quoted paragraph
from this section, the Commission refers to “AFI” as having consulted with the landowners. In its findings of fact
earlier in its decision, however, the Commission found that the “Program” had consulted with the landowners.
8
Erb, 77 S.W.3d at 608 n.6). “‘Administrative agencies, just as the general public, are bound by
the terms of rules promulgated by them.’” State ex rel. Stewart, 120 S.W.3d at 287 (quoting
Kabir v. Dep’t. of Social Servs., 782 S.W.2d 706, 708 (Mo.App. 1989)).
Discussion
Property owners raise eight points on appeal. In their third point, they contend, among
other reasons, that the Commission misapplied the law by ignoring its “own regulation under 10
CSR § 40-6.060(4)(E).5.” 8 We agree. Because the resolution of this point is dispositive of the
appeal, we need not reach or address any other points.
The parties stipulated to the Commission and it found that property owners never gave
their consent to the creation of the six water impoundments in the sizes, locations, or
configurations as proposed by AFI in its application for the 2011 Permit Revision. The Program
recognized and acknowledged this lack of consent when it relied upon it in 2002 as the basis to
deny AFI’s application for the 1995 Permit Revision, which involved the same six water
impoundments. The legal issue before the Commission, therefore, in order to determine the
propriety of the Program’s approval of the 2011 Permit revision, was whether property owners’
consent was legally required, as maintained by the Program in denying the 1995 Permit
Revision, or not legally required, as maintained by the Program in approving the 2011 Permit
Revision. 9 Without any mention or discussion of 10 CSR § 40-6.060(4)(E).5, as raised by
8
No respondent mentioned or otherwise addressed this regulation in its responding brief. Although a respondent is
not required to file a brief, and therefore, not required to respond to any issue raised by an appellant and suffers no
penalty for failing to do so, we are left to adjudicate property owners’ point without the benefit of whatever
argument might have been raised. Erskine v. Dir. of Revenue, 428 S.W.3d 789, 790 n.1 (Mo. App. 2014).
9
“Within the context of the landowner consultation issue,” the Commission found a 2008 Cole County Circuit Court
judgment to be “persuasive authority” supporting its decision that property owners’ consent to the creation of the six
water impoundments at issue was not required for the approval of the 2011 Permit Revision. This circuit court
judgment arose out of AFI’s appeal of the Commission’s 2004 decision to revoke its permits, including the Original
Permit, and forfeit the bonds securing those permits. Property owners were not parties to this action. In its
judgment, the circuit court found:
9
property owners in their complaint for review, the Commission decided that property owners’
consent was not required and that the Program was only required under 10 CSR § 40-3.130(3) to
consult with property owners before approving the 2011 Permit Revision. This decision failed to
address and ignored the express, clear, and plain language of 10 CSR § 40-6.060(4)(E).5. 10
The Commission’s regulations are codified in ten chapters under Division 40 of Title 10
of the Code of State Regulations. Chapter 6 addresses “Permitting Requirements for Surface . . .
Coal Mining and Reclamation Operations.” This chapter applies to permit revisions as well as to
the original issuance of a permit. 10 CSR § 40-6.090(4); see section 444.840. AFI, as the
applicant for a permit revision, had the burden of establishing that its application was in
compliance with all the requirements of the regulatory program. 10 CSR § 40-6.090(4)(E).
Section 60 of Chapter 6 is directed toward “Requirements for Permits for Special
Categories of Surface Coal Mining and Reclamation Operations.” 10 CSR § 40-6.060.
Subsection (4) of that section regulates the special category entitled “Prime Farmlands.” As
There was a good faith effort on the part of AFI and others on its behalf to comply with the
Surface Coal Mining Law and the supporting Regulations and rules. The evidence does not
demonstrate any willful violations or unwarranted failures to comply with the Surface Coal
Mining Law and Regulations.
Based upon these findings, the Cole County Circuit Court held that AFI had sufficiently shown cause why its
permits should not be revoked. The circuit court partially premised these findings upon its legal conclusion, without
any analysis of the Commission’s regulations, that the Program exceeded its authority in denying the 1995 Permit
Revision for lack of property owners’ consent because “there is no statute or regulation authorizing this
requirement.” This judgment was not appealed. The circuit court’s failure to support this legal conclusion with any
legal analysis of the Commission’s regulations, especially the permitting requirements of 10 CSR §§ 40-6.010--.120
and the express landowner consent provisions of 10 CSR § 40-6.060(4)(E).5, as fully discussed infra, deprives its
judgment of any persuasiveness in this Court.
10
In addition to raising and maintaining the applicability of 10 CSR 40-6.060(4)(E).5 at each step in the
administrative and judicial review processes, property owners have similarly raised and maintained that landowner
consent is required for the creation of all water impoundments because such impoundments do not maintain the
approximate original contour of the land as required by section 444.855.2. While the Commission’s decision
ignored the former issue, it expressly addressed the latter issue, holding that the 2011 Permit Revision “returns the
permitted land to its approximate original contour.” Property owners also challenge this holding in their third point
in this appeal. We need not reach or decide this larger issue and its applicability to the creation of all water
impoundments because of our holding, infra, that 10 CSR § 40-6.060(4)(E).5 applies to the creation of the six water
impoundments at issue here due to the existence of prime farmland within the permit area, thereby requiring
property owners’ consent to their creation regardless of whether they changed the approximate original contour of
the land.
10
relevant here, “[f]or purposes of this section . . . revision of the permit shall mean a decision by
the regulatory authority to allow changes in the method of mining operations within the original
permit area[.]” 10 CSR § 40-6.060(4)(A).1 (emphasis added). According to AFI’s application,
the proposed 2011 Permit Revision sought the approval for changes in the method of mining
operations within the original permit area that resulted in the creation of the six water
impoundments at issue. As to the scope of section 60, it “applies to any person who conducts or
intends to conduct surface coal mining and reclamation operations on prime farmlands
historically used for cropland.” 10 CSR § 40-6.060(4)(B). AFI falls within this scope because it
intended to and did conduct surface coal mining and reclamation operations on prime farmlands
in the permitted area under both the Original Permit and as alleged in its application for the 2011
Permit Revision. For those falling within its scope, this section has additional requirements for
“[a]ll permit applications for areas in which prime farmland has been identified within the
proposed permit area.” 10 CSR § 40-6.060(4)(C) (emphasis added). Also, “[b]efore any permit
is used for areas that include prime farmland[,]” Director is required to consult with the state
conservationist. 10 CSR § 40-6.060(4)(D).4 (emphasis added). Finally, subsection E of section
60 provides, in relevant part:
Issuance of Permit. A permit for the mining and reclamation of prime farmland
may be granted by the director if s/he first finds, in writing, upon the basis of a
complete application, that—
****
5. The aggregate total prime farmland acreage has not decreased
from that which existed prior to mining. Water bodies, if any, to
be constructed during mining and reclamation operations must be
located within the post-reclamation nonprime farmland portions of
the permit area. The creation of any such water bodies must be
approved by the regulatory authority and the consent of all affected
property owners within the permit area must be obtained.
10 CSR § 40-6.060(4)(E).5 (emphasis added).
11
The Commission has defined “permit area” as meaning “the area of land indicated on the
approved map submitted by the operator with his/her application, which area of land shall be
covered by the operator's bond and shall be readily identifiable by appropriate markers on the
site[.]” 10 CSR § 40-8.010(1)(A).66. It is uncontested here that the six water impoundments at
issue are on property owners’ lands located within the permit area of the Original Permit and
AFI’s application for the 2011 Permit Revision.
The Commission has also defined “impoundment” as meaning “all water . . . holding
structures and depressions, either naturally formed or artificially built.” 10 CSR § 40-
8.010(1)(A).49. The Commission has not, however, defined a water body. In the absence of a
regulatory definition, we turn to the ordinary meaning of the word “body.” See Natural Res.,
Inc. v. Mo. Highway & Transp. Comm'n, 107 S.W.3d 451, 453 (Mo. App. 2003) (ordinary
meaning of a word is usually derived from the dictionary when a word used in a regulation is not
defined therein). The dictionary definition of the noun form for “body” is “a mass of matter
distinct from other masses [.]” MERRIAM-WEBSTER’S COLLEGIATE DICTIONARY
11th edition (2005). Comparing the regulatory definition of “impoundment” with the ordinary
dictionary definition of “body,” a water impoundment describes the structure holding a distinct
mass of water, which is a water body. The six water impoundments at issue here, therefore, hold
“water bodies” as that term is used in 10 CSR § 40-6.060(4)(E).5.
Moreover, these six water bodies were “constructed during mining . . . operations” and
are all “located within the post-reclamation nonprime farmland portions of the permit area,” as
regulated and required by 10 CSR § 40-6.060(4)(E).5. 11 (Emphasis added). As such, their
11
The requirement that water bodies be located “within the post-reclamation nonprime farmland portions of the
permit area,” (emphasis added) expressly refutes any notion that 10 CSR § 40-6.060 only applies to prime farmland,
as advanced by Director in his response to property owners’ objections to AFI’s application for the 2011 Permit
Revision. By reserving certain uses to “nonprime farmland” portions of the permit area, this section logically and
12
creation required not only Program approval, but also required that “the consent of all affected
property owners within the permit area must be obtained.” 10 CSR § 40-6.060(4)(E).5. AFI’s
creation of these water bodies on property owners’ land within the permit area obviously affected
property owners and under the express, clear, and plain provisions of 10 CSR § 40-
6.060(4)(E).5, their consent to such creation was required.
The Commission’s reliance upon 10 CSR § 40-3.130(3) to decide otherwise is misplaced.
10 CSR § 40-3.130 establishes “Postmining Land Use Requirements.” The general rule is that
“[a]ll affected areas shall be restored in a timely manner to either (A) [c]onditions that are
capable of supporting the uses which they were capable of supporting before any mining; or (B)
[h]igher or better uses achievable under criteria and procedures of this rule.” 10 CSR § 40-
3.130(1) (emphasis added). If higher or better uses are contemplated under (B), then 10 CSR
§ 40-3.130(3) establishes the applicable criteria and procedures under the rule. It provides:
(3) Criteria for Alternative Postmining Land Uses. Higher or better uses may be
approved by the regulatory authority as alternative postmining land uses after
consultation with the landowner or the land management agency having
jurisdiction over the lands, if the proposed uses meet the following criteria:
(A) There is a reasonable likelihood for achievement of the use;
(B) The use does not present any actual or probable hazard to public
health or safety, or threat of water diminution or pollution;
(C) The use will not—
1. Be impractical or unreasonable;
2. Be inconsistent with applicable land use policies or plans;
3. Involve unreasonable delay in implementation; or
necessarily applies to and seeks to regulate the entire permit area within which prime farmland is located. This logic
is reinforced by this section’s additional requirements for “[a]ll permit applications for areas in which prime
farmland has been identified within the proposed permit area” 10 CSR § 40-6.060(4)(C) (emphasis added), and the
requirement that Director consult with the state conservationist “[b]efore any permit is used for areas that include
prime farmland.” 10 CSR § 40-6.060(4)(D).4 (emphasis added).
13
4. Cause or contribute to violation or federal, state or local law.
10 CSR § 40-3.130(3) (emphasis added).
All of the evidence before the Commission supported that the post-mining uses for
property owners’ land contemplated under the Original Permit fell under (A)—“uses which [the
lands] were capable of supporting before any mining.” 10 CSR § 40-3.130(1). There is no
evidence in the record before the Commission supporting that the six post-mining water
impoundments proposed by AFI in its application for the 2011 Permit Revision fell under (B)—
“higher or better uses[.]” Id. In that context, 10 CSR § 40-3.130(3) is not applicable to AFI’s
application for the 2011 Permit Revision. The Commission, therefore, misapplied it in relying
upon it as the legal basis for its decision affirming the Program’s approval of the 2011 Permit
Revision.
Moreover, even if the water impoundments were considered higher or better uses and 10
CSR § 40-3.130(3) was applicable, none of its provisions purport to limit or restrict the special
permitting requirements of 10 CSR § 40-6.060(4) for the special category of prime farmland
within the permit area, as is the case here. The Commission, therefore, rather than relying upon
one regulation and ignoring the other, should have required the Program to comply with both in
approving the 2011 Permit Revision. In other words, before approving the 2011 Permit
Revision, the Program was required to not only consult with property owners about higher or
better uses as provided in 10 CSR § 40-3.130(3), but to also obtain property owners’ consent to
the creation of the six water bodies in the nonprime farmland portions of the permit area as
required by 10 CSR § 40-6.060(4)(E).5 because of the special situation created by the existence
of prime farmland within the permit area.
Because its activities under its application for the 2011 Permit Revision involved prime
farmland within the permit area, AFI was brought within the scope of 10 CSR § 40-6.060. The
14
requirements of 10 CSR § 40-6.060(4)(E).5, therefore, were applicable to the 2011 Permit
Revision. It requires that any water bodies be located within the post-reclamation nonprime
farmland portions of the permit area, and it also requires that “[t]he creation of any such water
bodies must be approved by the regulatory authority and the consent of all affected property
owners within the permit area must be obtained.” Because the six water impoundments at issue
here hold water bodies, their creation on Fowler’s and Leist’s respective properties within the
permit area required their consent. AFI’s application for the 2011 Permit Revision should not
have been approved without such consent, and the Commission misapplied the law in upholding
the Program’s approval of it. Property owners’ third point is granted.
Decision
The trial court’s judgment affirming the Commission’s decision upholding the Program’s
approval of the 2011 Permit Revision is reversed, and the case is remanded. The trial court is
directed to enter a new judgment, consistent with this opinion, reversing the Commission’s
decision and remanding the case back to the Commission with directions to the Commission to
enter a new order, consistent with this opinion, denying AFI’s application for the 2011 Permit
Revision.
GARY W. LYNCH, J. – Opinion author
NANCY STEFFEN RAHMEYER, J. – concurs
DON E. BURRELL, J. – concurs
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