Indiana Environmental Management Bd. v. Indiana-Kentucky Elec. Corp.
| Decision Date | 20 August 1979 |
| Docket Number | No. 2-576A180,INDIANA-KENTUCKY,2-576A180 |
| Citation | 393 N.E.2d 213,181 Ind.App. 570 |
| Parties | INDIANA ENVIRONMENTAL MANAGEMENT BOARD and Air Pollution Control Board of the State of Indiana, Appellants (Defendants Below), v.ELECTRIC CORPORATION, Indiana & Michigan Electric Company, Indiana Statewide Rural Electric Cooperative, Inc., Indianapolis Power & Light Company, Northern Indiana Public Service Company and Public Service Company of Indiana, Inc., Appellees (Plaintiffs Below). |
| Court | Indiana Appellate Court |
Jerry P. Belknap, Jon D. Noland, Bryan G. Tabler, Indianapolis, for appellees; Charles W. Campbell, Plainfield, Schroer, Eichhorn & Morrow, Hammond, Livingston, Dildine, Haynie & Yoder, Fort Wayne, Parr, Richey, Obrenskey, Pedersen & Morton, Lebanon, Marcus E. Woods, Barnes, Hickam, Pantzer & Boyd, Indianapolis, of counsel.
Appellants Indiana Environmental Management Board (EMB) and the Indiana Air Pollution Control Board (APC) (hereinafter jointly referred to as "Agencies"), appeal from a summary judgment in favor of appellees Indiana-Kentucky Electric Corporation, et al. (Utilities), which invalidated several regulations enacted by the EMB and APC for failure to make sufficient findings and recommendations in rule-making, claiming those procedures were unnecessary, and the judgment was contrary to law.
We affirm in part and reverse in part.
The EMB was created by the Indiana Environmental Management Act, Ind.Code 13-7-1-1, and given the responsibility of developing a long-range plan to guarantee the best possible air, water and land quality for the state. 1 In that capacity, the EMB oversees the activities of the APC (which was vested with specific authority to safeguard the air resources of this state), Ind.Code 13-1-1-1, Et seq., and must approve all actions taken by it.
Pursuant to its statutory mandate, and in fulfillment of the requirements of the federal Clean Air Act Amendments of 1970, 2 the APC enacted a series of regulations ("old" APC-13, APC-14, APC-17, APC-19, APC-22, and "new" APC-13) between 1972 and 1974 which limited various industrial waste emissions including sulphur dioxide and nitrogen dioxide. These regulations became part of Indiana's implementation plan to achieve the air quality goals established by the Congress in the federal act.
On June 27, 1973, six Indiana electric generating utilities (Utilities) commenced this cause by filing a complaint for a declaratory judgment and an injunction against the EMB and APC, seeking to nullify APC-13, APC-14, APC-17 and APC-19 because the APC had failed to comply with procedural requirements in promulgating these regulations, and because the regulations were technologically impossible to comply with.
On February 19, 1975, an amended complaint was filed by the Utilities which similarly attacked a newer version of APC-13 ("New" APC-13) 3 and APC-22 because of the Agencies' failure to comply with applicable procedural requirements in enacting those regulations.
On February 20, 1975, the Utilities filed the following motion for summary judgment:
Plaintiffs move the Court for a summary judgment determining that Regulations APC 13, APC 14, APC 19 and APC 22 as adopted by defendant Air Pollution Control Board of the State of Indiana and, in the case of APC 13, APC 19 and APC 22, approved by defendant Indiana Environmental Management Board, are invalid because administrative action in so adopting and approving such Regulations did not comply with the procedures prescribed by law.
This motion is based upon defendants' Response to Plaintiffs' Request for Admissions, filed herein on or about February 21, 1974, and the attached affidavit of Bryan G. Tabler, which establish that the record made by defendants of their action in adopting and approving these regulations shows that neither defendant made any finding or other record with respect to what consideration they gave to matters which they are required by law to take into account in so adopting or approving rules and regulations.
There is no genuine issue as to this material fact and plaintiffs are entitled to the judgment as a matter of law.
On March 25, 1975, the Utilities again amended their complaint to include "Old" APC-13 because of its continued enforcement by the Environmental Protection Agency in several Indiana counties, and again sought summary judgment because the state APC did not comply with the procedures prescribed by law in adopting this rule.
It was uncontroverted that the APC had dispatched a single member to conduct the evidentiary hearing for several of the proposed regulations that was required by statute (Ind.Code 13-7-7-1), and that at the conclusion of those hearings the member had made no findings or recommendations to the full board regarding those regulations. Similarly, it was uncontroverted that the APC had made no findings of fact nor had it filed an environmental impact statement before enacting these regulations. Consequently, on November 10, 1975, the trial court entered the following judgment:
The Court having heretofore taken the cause under advisement the parties having fully advised the Court by briefs and oral argument, the Court now finds for the plaintiffs and against the defendants on the plaintiffs' motion for summary judgment. Plaintiffs' motion is granted as follows:
Regulations APC-13, including "Old" APC-13, APC-14, APC-19 and APC-22 are hereby declared invalid for failure to comply with the proper procedural requirements in violation of the limitations of the Indiana statutes governing the adoption of these rules and regulations. The specific violations are as follows:
1.) That the individual agency member presiding at the hearings held prior to the adoption of these rules and regulations failed to file the required findings and recommendations.
2.) That the agency failed to file the required environmental impact statement, and finally,
3.) That the agency or board failed to make findings of fact as to each of the factors set forth in Ind.Code 13-7-7-2(b).
IT IS THEREFORE ORDERED that the Motion for Summary Judgment of Plaintiffs Indiana-Kentucky Electric Corporation, et al., be and the same is hereby granted in accordance with the above decree. Further, the defendants are hereby enjoined from further enforcement of these regulations.
The EMB and APC raise these issues:
1. Were the regulations invalid because of the hearing officer's failure to make findings and recommendations after holding a hearing?
2. Did the Utilities fail to exhaust their administrative remedies before seeking relief through the courts?
3. Was the controversy regarding "old" APC-13 moot?
4. Should the EMB and the APC be required to "take into account" the factors listed in Ind.Code 13-7-7-2(b) before promulgating "clean air" regulations.
ISSUE ONE Were the regulations invalid because of the hearing officer's failure to make findings and recommendations after holding a hearing?
PARTIES' CONTENTIONS The Agencies initially object to the trial court's finding that the agency's hearing officer failed to make the statutorily required findings of fact claiming that there is insufficient evidence in the record to support such a finding. Further, they claim that such a finding is improper since it was not raised by the Utilities in their Motion for summary judgment.
The Utilities reply that their motion for summary judgment attacks all procedural deficiencies in the enactment of these regulations. Additionally, they claim that although Indiana statutes allow the EMB to dispatch a single member to conduct hearings on proposed regulations, it also requires that such member make findings and recommendations to the full board. Ind. Code 13-7-7-1. As the interrogatories and affidavits indicate this was not done, the regulations were properly struck down.
CONCLUSION "Old" APC-13, "New" APC-13, and APC-19 were properly invalidated because the hearing officer failed to make the required findings and recommendations.
In the grand statutory scheme of the Indiana Environmental Management Act (Ind. Code 13-7-1-1 to 13-7-18-1) to "provide for . . . policies for comprehensive environmental development and control on a statewide basis," 4 the EMB and APC were given the authority to adopt regulations and standards (Ind. Code 13-7-7-1(c)). This provision allows any such board to designate a single member to conduct a hearing as to any proposed regulation and make a report to the board of his findings and recommendations. The exact language is:
(c) The board, or an agency with the approval of the board, may designate by resolution a single member of the board or agency, or any other individual, to hold a hearing on behalf of such board or agency, on rules of procedure, regulations or standards, or enforcement, or any other hearing. Any such Person so conducting a hearing shall report to the board his findings and recommendations, and the appropriate order thereon shall be entered by the board or agency after review. (IC 1971, 13-7-7-1, as added by Acts 1972, P.L. 100, § 1, p. 555.) (emphasis supplied).
By the terms of this statute, the Agencies are granted some flexibility in the manner they conduct hearings, but if they do use a single member, it is mandatory ("shall report") that findings and recommendations be submitted to the full board. The stated intent is to assure public impact on proposed regulations so that adequate consideration be given thereto by the full board. Ind.Code 13-7-7-4.
The Agencies concede that no such findings were made in the adoption of "Old" APC-13, and further admit in their answer to the Utilities' Interrogatories that no such findings or recommendations were made as to "New" APC-13 or APC-19. So there is no material issue of fact as...
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