Dept. of Environmental Mgt. v. Lake County

• Decision Date: 19 May 2006
• Docket Number: No. 45A04-0507-CV-398.,45A04-0507-CV-398.
• Citation: 847 N.E.2d 974
• Parties: INDIANA DEPARTMENT OF ENVIRONMENTAL MANAGEMENT and Midwest Medical Solutions, LLC, Appellants-Respondents, v. LAKE COUNTY SOLID WASTE MANAGEMENT DISTRICT, Appellee-Petitioner.
• Court: Indiana Appellate Court

847 N.E.2d 974

INDIANA DEPARTMENT OF ENVIRONMENTAL MANAGEMENT and Midwest Medical Solutions, LLC, Appellants-Respondents, v. LAKE COUNTY SOLID WASTE MANAGEMENT DISTRICT, Appellee-Petitioner.

No. 45A04-0507-CV-398.

Court of Appeals of Indiana.

May 19, 2006.

COPYRIGHT MATERIAL OMITTED

Steve Carter, Attorney General of Indiana, David L. Steiner, Deputy Attorney General, Indianapolis, for Appellant Indiana Department of Environmental Management.

Richard VanRheenen, George T. Patton, Jr., Bryan H. Babb, Bose McKinney & Evans, Indianapolis, for Appellant Midwest Medical Solutions, LLC.

Kenneth D. Reed, Abrahamson, Reed and Bilse, Hammond, Clifford E. Duggan, Jr., Lake County Solid Waste, Management District, Merrillville, for Appellee.

OPINION

CRONE, Judge.

Case Summary

The Indiana Department of Environmental Management ("IDEM") and Midwest Medical Solutions, LLC ("Midwest"), appeal the trial court's reversal of a judgment of the Office of Environmental Adjudication ("OEA") in favor of IDEM and Midwest and adverse to the Lake County Solid Waste Management District (the "District").¹ We reverse.

Issues

IDEM and Midwest raise three issues:

I. Whether the trial court erred in reversing the OEA's judgment and concluding that IDEM must wait on a local waste management district to decide whether there is a "local" need for a waste processing facility before IDEM can issue a facility permit;

II. Whether the trial court erred in ordering Midwest to appear before the District and submit materials to demonstrate that a "local need" exists for its permitted and operating medical waste processing facility; and III. Whether the trial court erred in determining that Midwest had not demonstrated a "local need" for a solid waste facility when this fact-based issue was never before the OEA.

Facts and Procedural History

Midwest is an Indiana limited liability company in the business of collecting, processing, and disposing of infectious waste in Gary, Indiana. Appendix at 10. The District, a political subdivision created by statute, has numerous powers,² including making solid waste policy at the local level. Id. (citing Ind.Code § 13-21-3-1).

In a March 5, 2001 letter to Jeffrey Langbehn, executive director of the District, Midwest's counsel inquired whether the District would support Midwest's application for a solid waste processing facility permit. Id. at 424. In particular, Midwest asked for the District's "concurrence that there is a local or regional need for its proposed autoclave." Id. Midwest enclosed a suggested letter to IDEM that the District could sign. Id. at 427-29. The District did not respond to Midwest's request.³

Approximately seven months later, on October 9, 2001, Midwest applied to IDEM for a permit. Id. at 16. As part of its application, Midwest submitted to IDEM information to demonstrate a local or regional need for the proposed facility. In particular, Midwest represented that at the time of its application,⁴ only two commercially available medical waste treatment facilities existed in Indiana, both of which were in Indianapolis, and one of which was operating at capacity. Id. at 1060.

From the date of Midwest's original permit application through September 17, 2003, the permitting process was continued, suspended, and/or extended either by requests for additional information ("RAI") from IDEM or by agreement between Midwest and IDEM. Id. at 16. Within that time period, the District was given notice of every RAI issued by IDEM to Midwest, including an RAI that requested Midwest to provide additional information demonstrating a need for its facility. Id. at 461-88. The District remained uninvolved, providing no input and asking no questions.

On September 17, 2003, IDEM denied Midwest's permit application, finding that Midwest did not have proper zoning approval. Id. at 17. On October 3, 2003, Midwest petitioned for administrative review of IDEM's permit denial. On December 19, 2003, IDEM received notice that the City of Gary and Midwest had settled their zoning dispute. Id. at 16. Accordingly, on January 13, 2004, IDEM and Midwest entered into an agreed order, which reinstated Midwest's permitting process and stated that the "schedules for determinations on permits contained in Indiana Code 13-15-4 will not be applicable to IDEM's continued review of the Permit Application." Id. at 16, 587-90. Also in January 2004, Anthony Portone, a representative from a company called Abrade, contacted the District and indicated that he too "wanted his chance to become a medical waste processor, in the event that the district would find a need." Id. at 717.

Between January 30 and March 7, 2004, IDEM held a public comment period, which provided interested parties with the opportunity to make written and oral technical comments regarding changes and additions to Midwest's permit application. Id. at 569, 593. On February 4, 2004, Langbehn sent a letter to IDEM stating that the District Board had "voted to become active and involved in making a needs determination for medical waste processing facilities within the District" and that it planned to "publish a notice to any and all individuals who have an interest in constructing such a facility in Lake County, Indiana." Id. at 569, 594. The February 4 letter continued:

The District Board further intends to examine any and all information relevant, arrive at findings of fact, and forward a recommendation to IDEM as to the District's need for such a facility, or lack thereof. Therefore, the District Board respectfully requests that IDEM suspend any current or future applications for a medical waste processing facility in Lake County, Indiana until the District Board has made its determination accordingly.

Id. at 594.⁵

In its "Response to Public Comments," IDEM replied to the District's comment:

IDEM is required to process permit applications in accordance with specific timeframes in the statute and does not have the authority to suspend the review based on the subject request. IDEM also does not have the authority to incorporate permit conditions that are outside its regulatory authority and must make decisions based on the facts that are presented at the time of the decision.

Id. at 593 (emphasis added). The Response also contained the following reply to a comment that the facility was "not needed, particularly in light of local hospitals like Methodist Hospital with their own autoclaves, and thus does not meet the needs requirements found at IC 13-20-1 and 329 IAC 11-9-5":

IDEM reviewed the information provided concerning needs and determined that while some medical facilities treat their own infectious waste on-site, there are a significant number of medical facilities that rely on commercial disposal of their infectious waste. IDEM has made a determination that the facility meets the demonstration of need criteria found at IC 13-20-1 and 329 IAC 11-9-5.

Id.

Prior to its January 2004 board meeting during which it voted "to become involved in the needs determination for medical processing facilities, the District had not taken any steps to perform a needs determination for medical processing facilities." Id. at 491-92 (District's response to request for admission). Portone's January 2004 contact with the District on Abrade's behalf seems to have spurred the District's involvement. Id. at 718 (deposition of Langbehn).

In a letter dated April 5, 2004, Midwest's counsel noted that the District had left a voice mail message inviting Midwest to make a presentation at the District's April meeting. Id. at 595. Midwest requested additional information about the invitation, specifically, the type of presentation expected, the purpose of the presentation, the amount of time permitted, the name(s) of other companies to which an invitation had also been extended, etc. On April 16, 2004, Midwest's counsel sent another letter to the District, this one memorializing the fact that the District's counsel had since left a voice mail message indicating that the District "would be sending a letter that would go into detail regarding what the [District] was looking for in the way of a presentation." Id. at 596. However, the District never sent a letter to Midwest outlining details or guidance about the presentation, and the District's counsel did not at anytime thereafter "formulate" what he was looking for in the presentations. Id. at 708 (District's counsel's deposition).

On May 7, 2004, IDEM issued to Midwest a permit to build and operate a facility to treat infectious medical waste. Id. at 865. On May 25, 2004, the District filed with the OEA a petition ("Petition") for adjudicatory hearing, administrative review, and stay. Id. at 150-65. In the Petition, the District challenged IDEM's issuance of the permit to Midwest as arbitrary, capricious, and an abuse of discretion and otherwise not in accordance with the law "because it is contrary to Ind.Code §§ 13-20-1, 13-21 and 329 IAC 11-9." Id. at 151. In particular, the District alleged it "has not made [a] determination of whether there is a need for the facility as required by Ind.Code §§ 13-20-1, 13-21 and 329 IAC 11-9-5. By issuing the Permit without the [District] determining there is a need for the facility, the Commissioner has usurped the authority of the [District]." Id. The District later admitted that it "has not alleged that there is a lack of need for the [Midwest] facility," and that it "has not alleged that there is such a need." Id. at 491 (responses to request for admission).

In an October 26, 2004 order, Environmental Law Judge Catherine Gibbs ("ELJ") of the OEA granted the motion for summary judgment filed by IDEM and Midwest against the District and denied the motion for summary judgment filed by the District against IDEM and Midwest.⁶ In doing so, the ELJ made the following relevant conclusions of law:

8. It is very clear from the above mentioned statutes and rules that the IDEM, not the...