Indiana Dept. of Environmental Management v. Conard

• Decision Date: 14 April 1992
• Docket Number: No. 36A01-9107-CV-223,36A01-9107-CV-223
• Citation: 589 N.E.2d 1195
• Parties: The INDIANA DEPARTMENT OF ENVIRONMENTAL MANAGEMENT and Westinghouse Electric Corporation, Appellants-Respondents, v. Dale CONARD and Connie Conard, Appellees-Petitioners.
• Court: Indiana Appellate Court

Page 1195

589 N.E.2d 1195

The INDIANA DEPARTMENT OF ENVIRONMENTAL MANAGEMENT and Westinghouse Electric Corporation, Appellants-Respondents, v. Dale CONARD and Connie Conard, Appellees-Petitioners.

No. 36A01-9107-CV-223.

Court of Appeals of Indiana First District.

April 14, 1992.

Opinion on Denial of Rehearing June 15, 1992.

David R. Berz, Peter M. Gillon, Steven L. Humphreys, Weil, Gotschal & Manges, Washington, D.C., Joseph B. Carney, James W. Clark, Baker & Daniels, Indianapolis, for appellants-respondents.

David S. McCrea, McCrea & McCrea, Bloomington, for appellees-petitioners.

RATLIFF, Chief Judge.

STATEMENT OF THE CASE

Westinghouse Electric Corporation ("Westinghouse") appeals from a judgment reversing a final administrative order of the Water Pollution Control Board ("WPCB"). The judgment determined that a certain consent decree ("Decree") does not mandate a one part per billion ("ppb") limit for polychlorinated biphenyls ("PCBs") in certain treated waters, and that the Decree's provisions are not binding on a permitting process. ¹ We affirm.

ISSUE

We address one consolidated and restated issue on appeal:

Did the trial court properly hold that the Decree does not mandate the establishment of a one ppb maximum effluent limitation for PCBs in the National Pollutant Discharge Elimination System ("NPDES") permitting process? ²

FACTS

This dispute stems from a lawsuit filed in 1981 in the United States District Court for the Southern District of Indiana ("Court") by the City of Bloomington ("City") to require Westinghouse to remedy PCB contamination in the Bloomington area. Negotiations between the United States, the State of Indiana, the City, and Westinghouse commenced in 1983 and culminated in a proposed settlement in 1984. Throughout the negotiations, the community was briefed on the settlement discussions. Ultimately, the Decree was entered in August of 1985.

In May of 1984, the United States Department of Justice filed notice of the proposed Decree in the Federal Register and allowed the public an additional thirty-day period in which to comment on the Decree. This public comment period was subsequently extended at the request of several Bloomington area residents.

In December of 1984, nine months before the Decree was adopted, a draft decree was released to the public and extensive public hearings were held at which technical experts and the parties' legal representatives made presentations and answered questions. A series of meetings was held over the next several months to review and evaluate the proposed Decree and solicit public comment.

After considering the testimony of the parties and their experts, the Court accepted the Decree and ruled that it was "fair, adequate, reasonable and appropriate," and that each of the parties thereto had validly consented to it. Record at 62. The Decree was duly entered by the Court on August 22, 1985. During the public review process prior to entering the Decree, IDEM and the Environmental Protection Agency ("EPA") determined that the one ppb PCB limitation set forth in the Decree adequately protected public health and was consistent with state and federal standards. Record at 121. An official from IDEM also articulated the source of the one ppb PCB limitation at a public hearing on December 9, 1987:

"By way of explanation of the 1 ppb limit, which is a daily maximum limit from the outfall 001 for total PCB's, this limitation as proposed is derived from the Consent Decree."

Record at 495. At the time it entered the Decree, the Court also denied the motion of Dale Conard and Connie Conard ("Conards") ³ to intervene in the lawsuit, ⁴ finding that their interests were adequately represented by the existing parties, and that they had ample opportunity to comment regarding the Decree. Record at 58.

The Decree contains several sections which are pertinent to this appeal. Paragraph 59(a) requires Westinghouse to construct a system to capture and treat natural spring water which is contaminated with PCBs. ⁵ Record at 38-39. It also requires that PCB concentrations be limited to a maximum of one ppb. Record at 39-42. This paragraph further details the procedures to be used in treating the PCB contaminated water. See Record at 39-46.

On June 7, 1988, IDEM issued Westinghouse an NPDES permit ("Permit") for the discharge of treated water from a spring water treatment facility near Bloomington. Record at 173-75. The Permit required Westinghouse to treat the spring water processed through the facility to a level of one ppb of PCBs. Record at 176, 192. The Permit was reviewed and approved by the EPA, as required by the Clean Water Act, 33 U.S.C. Sec. 1251 et seq. (1987 and Supp.1991). Id. at 173-74.

The Conards filed objections to the one ppb PCB limitation contained in the Permit. An administrative law judge ("ALJ") heard the Conards's challenge on January 9, 1989. Prior to the hearing, the parties had agreed that the binding effect of the Decree was a threshold legal issue to be resolved before the ALJ heard expert opinion on the PCB limitation set in the Decree. On February 17, 1989, the ALJ concluded that as a matter of law, the Decree mandated an absolute discharge limitation of one ppb for PCBs. The ALJ further held that the Conards's challenge to the discharge limitation constituted "an impermissible collateral attack" on the Decree. Record at 581.

The Conards objected to the ALJ's decision. On May 16, 1989, after a hearing and review of the record, the WPCB rejected the Conards's objections and adopted the ALJ's findings, conclusions, and order. Record at 577-78. The Conards then sought judicial review of the WPCB's decision, contending that IDEM was not bound by the Decree and that the WPCB's decision was arbitrary, capricious, and contrary to law. The parties filed cross motions for summary judgment regarding whether the Decree was binding on the Permit's PCB limitation.

On April 2, 1991, the trial court reversed the WPCB's ruling, granting the Conards's motion for summary judgment, and denying the motions of Westinghouse and IDEM for summary judgment. Record at 1950. The trial court held that IDEM was estopped from asserting that the NPDES permitting process is bound by the Decree; ⁶ that the NPDES permitting process was not bound by the Decree; that the NPDES permitting process requires a public hearing before a permit can issue; and, that the Permit was not bound by the terms, conditions, and limitations of the Decree. Record at 1949.

Westinghouse appeals. Other relevant facts will be stated in our discussion.

DISCUSSION AND DECISION ⁷

Westinghouse argues that the trial court erred in finding that the NPDES permitting process is not bound by the PCB limitation set in the Decree. We disagree with Westinghouse's interpretation of the Decree's preclusive effect.

Judicial review of an administrative decision is limited to whether the agency possessed jurisdiction over the 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. State Board of Tax Commissioners v. Jewell Grain Co. (1990), Ind., 556 N.E.2d 920, 921. Westinghouse's main argument is that the trial court's judgment violates principles of finality of judgments and ignores the Decree's preclusive effect on further proceedings involving the PCB effluent limitation. Because we hold that IDEM is not bound by the Decree to adopt a maximum effluent limitation for PCBs of one ppb and that further proceedings in Indiana are required before issuing the Permit, we need not address Westinghouse's additional issues presented regarding the Conards's standing to bring suit in launching an alleged collateral attack on the Decree.

In essence, Westinghouse's argument presents a question of the preclusive effect of the Decree on further NPDES permitting procedures relating to the affected area. The doctrine of claim preclusion applies where a final judgment on the merits has been entered which acts as a complete bar to a subsequent action on the same claim between the same parties or those in privity with them. In re Marriage of Moser (1984), Ind.App., 469 N.E.2d 762, 765. In contrast, issue preclusion applies when a particular issue, which was adjudicated in the prior action, is raised in a subsequent suit on a different cause of action. Id. at 765-66. When claim preclusion applies, all matters that were or might have been litigated are deemed conclusively settled by the judgment in the prior action. Id. at 766. However, where issue preclusion applies, the previous judgment is conclusive only regarding those matters actually litigated and determined therein. Id.

A logical first step would be to determine whether claim preclusion or issue preclusion applies to the Conards's claim. It is undisputed that consent decrees are treated as final judgments on the merits and accorded full res judicata effect. Indiana Public Interest Research Group v. City of Bloomington (InPIRG ) (1986), Ind.App., 501 N.E.2d 476, 478-79. However, we find that whether Westinghouse's argument is read as one sounding in claim preclusion or issue preclusion, it fails to demonstrate error. Both types of preclusion require an identity of, at the very least, issues in the previous action and the one presently pending. See Moser, 469 N.E.2d at 765-66. Even if Westinghouse could show that the remaining elements for either claim preclusion or issue preclusion were present, we find that it has failed to show the identity of issues required. ⁸ We need only compare Paragraph 59 of the Decree, discussing the effluent PCB limitation, to the ALJ's findings and the trial court's conclusions, to see that rather than controverting the Decree, IDEM is acting within the Decree's allowable parameters for setting PCB limitations. Thus, the Conards's claim is not...