Indiana Dept. of Environmental Management v. Chemical Waste Management of Indiana, Inc.

• Decision Date: 03 December 1992
• Docket Number: No. 49A02-9205-CV-209,49A02-9205-CV-209
• Citation: 604 N.E.2d 1199
• Parties: The INDIANA DEPARTMENT OF ENVIRONMENTAL MANAGEMENT and Kathy Prosser in her official capacity as Commissioner of the Indiana Department of Environmental Management, Appellants-Defendants, v. CHEMICAL WASTE MANAGEMENT OF INDIANA, INC., Appellee-Plaintiff.
• Court: Indiana Appellate Court

Page 1199

604 N.E.2d 1199

The INDIANA DEPARTMENT OF ENVIRONMENTAL MANAGEMENT and Kathy Prosser in her official capacity as Commissioner of the Indiana Department of Environmental Management Appellants-Defendants, v. CHEMICAL WASTE MANAGEMENT OF INDIANA, INC., Appellee-Plaintiff.

No. 49A02-9205-CV-209.

Court of Appeals of Indiana Second District.

Dec. 3, 1992.

Transfer Denied Feb. 9, 1993.

Linley E. Pearson, Atty. Gen., Lisa McCoy, Leslie H. Williams, Deputy Attys. Gen., Indianapolis, for appellant-defendant.

John D. Gay, Gay and McCombs, Versailles, amicus curiae Hoosier Environmental Council.

George M. Plews, Sue A. Shadley, Timothy J. Paris, Jeffrey D. Claflin, Plews & Shadley, Indianapolis, for appellee-plaintiff.

Edward O. Roberts, Jacqueline A. Simmons, Ice Miller Donadio & Ryan, Indianapolis, amicus curiae Indiana Chamber of Commerce, Indiana Manufacturers Ass'n.

BUCHANAN, Judge.

CASE SUMMARY

Defendants-appellants Indiana Department of Environmental Management (Department) and Kathy Prosser, the Department's Commissioner, appeal from the trial court's entry of partial summary judgment in favor of plaintiff-appellee Chemical Waste Management of Indiana, Inc. (Chemical), claiming that Chemical should have exhausted its administrative remedies and that the trial court's judgment was contrary to law.

We affirm.

FACTS

The facts most favorable to the trial court's decision reveal that Chemical, an Indiana corporation, is the owner of the Adams Center Hazardous Waste Treatment and Disposal Facility (Facility), located in Allen County, Indiana. The Facility has operated since 1975 and is the only hazardous waste disposal installation in Indiana that accepts commercially generated hazardous waste. Chemical purchased the Facility in 1984 and has invested more than $24 million in the installation.

The Department is the state agency that administers the State's environmental legislation as well as a number of federal environmental laws, including the Resource Conservation and Recovery Act (RCRA). 42 U.S.C. Sec. 6901, et seq. The United States Environmental Protection Agency has authorized the Department to administer In November, 1980, a "Part A" RCRA permit was obtained by the Facility, which enabled it to continue operating until a permanent "Part B" permit could be issued. In January, 1984, Chemical applied for a permanent Part B permit for three distinct phases of its operation at the Facility, referred to as Phases I, II and III. Each phase is a specific section of the Facility consisting of "discrete lined cells" for the storage of waste.

and enforce the federal RCRA program through the State's regulations. Included in this authority is the power to approve or deny applications for hazardous waste disposal permits required by RCRA.

In 1987, Chemical determined that it needed additional disposal capacity and on September 25, 1987, amended its still pending Part B permit application. The amendment included plans to redesign Phases II and III, and additional plans for newly developed Phases IV and V. In 1988, the Department decided to process Chemical's Part B permit application only for Phases I, II and III, as those phases already had interim status through the previously issued Part A permit. The Department informed Chemical that it would process Chemical's amendments as a "major modification" of its Part B permit. After negotiation, Chemical agreed to have its amendments treated as a major modification and the Department agreed to process the modification within one year. The Department issued Chemical a Part B permit for Phases I, II and III on September 30, 1988.

On December 28, 1988, Chemical submitted a revised Part B permit application which included its redesign of Phases II and III and the additional Phase IV, but omitted the planned Phase V to speed review of the application. The Department's technical review of the major modification application was completed in August, 1989, but the Department did not grant Chemical's application.

On March 20, 1990, the Indiana General Assembly enacted P.L. 109-1990, which added a new chapter to Indiana's environmental laws, codified at Ind.Code 13-7-10.2 (1990) (hereinafter referred to as the Character Law), which became effective upon enactment. The new chapter, titled "Good Character Requirements for Solid Waste Management Board Permits," required applicants to disclose information regarding past or pending civil, criminal or administrative complaints filed or judgments against the applicant, its officers, directors, managers or owners with more than a 20% interest, for violations of state or federal environmental protection laws. IC 13-7-10.2-3. The Character Law also allowed applications to be denied on a variety of bases. IC 13-7-10.2-4.

On March 30, 1990, the Department issued its public notice of intent to grant Chemical's application, and held a public hearing on the application on May 7, 1990. In July, 1990, the Department notified Chemical that it would apply the newly enacted Character Law to all pending applications, including Chemical's. Although Chemical objected to the Department's retroactive application of the Character Law, it submitted additional information in August, 1990, relying on the Department's promise to issue a final decision by the end of September, 1990.

In November, 1990, the Department informed Chemical that it would invite public comment on the disclosures made by Chemical, even though the Character Law did not require public comment or hearings. In April, 1991, the Department requested more information from Chemical, which Chemical provided. The Department also denied Chemical's request for a conditional permit subject to revocation if the Department issued an adverse ruling on Chemical's character.

In January, 1992, four and one-half years after Chemical first sought to amend its Part B permit application, Chemical filed its complaint for declaratory and injunctive relief. Chemical alleged that the Character Law should not be applied retroactively to applications pending on its effective date The trial court granted Chemical a preliminary injunction, preventing the Department from rejecting Chemical's application under the Character Law until a decision could be rendered on Chemical's motion for partial summary judgment as to the retroactive application of the Character Law. The Department filed an interlocutory appeal from the issuance of the preliminary injunction. The Department also sought to dismiss Chemical's action, claiming Chemical had failed to exhaust its administrative remedies.

and that the law was impermissibly vague, standardless and unconstitutional. Chemical also sought to enjoin the Department from denying its application based on the Character Law during the pendency of its action.

The trial court granted Chemical's motion for partial summary judgment, determining that the Character Law could not be applied retroactively to pending applications. The Department now appeals from the trial court's entry of partial summary judgment, and has consolidated its appeal with the previously filed interlocutory appeal from the preliminary injunction.

ISSUES

The Department raises three issues, which we consolidate and restate as: ¹

1. Whether Chemical should have exhausted its administrative remedies?

2. Whether the Character Law should be applied retroactively?

DECISION

ISSUE ONE--Should the trial court have dismissed Chemical's action because it did not exhaust its administrative remedies?

PARTIES' CONTENTIONS--The Department argues that the trial court did not have jurisdiction of Chemical's complaint because administrative review of Chemical's permit application had not been completed. Chemical responds that it demonstrated declaratory relief was appropriate and the trial court properly considered the merits of its claim.

CONCLUSION--The trial court did not err when it denied the Department's motion to dismiss Chemical's action.

The Department first seeks to enervate Chemical's claim by attacking the trial court's jurisdiction, alleging Chemical should have exhausted its administrative remedies before seeking redress in the courts. With respect to this argument, our Supreme Court has observed:

"It is true, as a general rule, that no one is entitled to judicial relief for an alleged or threatened injury until the prescribed administrative remedy has been exhausted. However, this rule should not be applied mechanistically. Rather, in determining whether or not a plaintiff should be allowed to bypass available administrative channels a court should consider the following factors: the character of the question presented, i.e., whether the question is one of law or fact; the adequacy or competence of the available administrative channels to answer the question presented; the extent or imminence of harm to the plaintiff if required to pursue administrative remedies, and; the potential disruptive effect which judicial intervention might have on the administrative process."

Wilson v. Board of the Ind. Employment Sec. Div. (1979), 270 Ind. 302, 305, 385 N.E.2d 438, 441, cert. denied 444 U.S. 874, 100 S.Ct. 155, 62 L.Ed.2d 101.

The Court went on to conclude:

"In the present case, the question presented is of constitutional character. With all due respect, we think that the resolution of such a purely legal issue is beyond the expertise of the Division's administrative channels and is thus a subject more appropriate for judicial consideration.

In sum, we hold that given the constitutional character of the issue presented by Wilson's complaint, it was not necessary for her to press the issue through administrative channels as a precondition to judicial review. We therefore conclude that the trial court had jurisdiction over this matter...."

Id.

We arrive at the same place. Chemical's complaint challenged the constitutionality of the Character Law and the legality of applying it...