Lake Ozark-Osage Beach Joint Sewer Bd. v. Mo. Dep't of Natural Res.

• Decision Date: 14 June 2016
• Docket Number: WD 78869
• Citation: 491 S.W.3d 667
• Parties: Lake Ozark–Osage Beach Joint Sewer Board, et al., Appellants, v. Missouri Department of Natural Resources, Land Reclamation Commission and Magruder Limestone Co., Inc., Respondents.
• Court: Missouri Court of Appeals

491 S.W.3d 667

Lake Ozark–Osage Beach Joint Sewer Board, et al., Appellants,
v.
Missouri Department of Natural Resources, Land Reclamation Commission and Magruder Limestone Co., Inc., Respondents.

WD 78869

Missouri Court of Appeals, Western District.

OPINION FILED: June 14, 2016

Steven Mauer, Kansas City, MO, Counsel for Appellants.

S. Jay Dobbs, St. Louis, MO, Adam Troutwine, Co–Counsel, Amy Fitts, Kansas City, MO, Counsels for Respondent Magruder Limestone.

491 S.W.3d 670

Timothy Duggan, Jefferson City, MO, Counsel for Respondents, MO. Dept. of Natural Resources and MO. Land Reclamation Commission.

Before Division Three: Gary D. Witt, P.J., James Edward Welsh, and Anthony Rex Gabbert, JJ.

James Edward Welsh, Judge

The Lake Ozark–Osage Beach Joint Sewer Board and Larry and Vicky Stockman (“Appellants”) appeal the Missouri Land Reclamation Commission's decision to grant Magruder Limestone Co., Inc., (“Magruder”) a permit to operate a limestone quarry on a site adjacent to a wastewater treatment plant owned and operated by the Lake Ozark–Osage Beach Joint Sewer Board (“Sewer Board”).¹ We affirm.

Statutory Framework

Missouri's Land Reclamation Act (“the Act”), §§ 444.760–.790,² is administered by the Director of the Department of Natural Resources (“Department”). § 640.010.6. The stated purpose of the Act is to “strike a balance” between the surface mining of minerals and the reclamation of land subjected to surface disturbance by that mining. § 444.762. To that end, the Act grants the Land Reclamation Commission (“Commission”) the power to “[e]xamine and pass on all applications and plans and specifications submitted ... for the method of operation and for the reclamation and conservation of the area of land affected by the operation.” § 444.767(3).

The Act requires any operator desiring to engage in surface mining to “make written application to the director for a permit.” § 444.772.1. Once the Director deems the application complete, there is a period of public notice and comment. Saxony Lutheran High Sch., Inc. v. Mo. Dep't of Nat. Res., 404 S.W.3d 902, 906 (Mo.App.2013) (citing § 444.772.10). The Director must promptly investigate the application and then make a recommendation to the Commission as to whether the permit should be issued or denied. § 444.773.1. If the Director's recommendation is to issue the permit, the Commission is authorized to grant a formal hearing “to formally resolve concerns of the public” before passing on the application. § 444.773.3.

Factual and Procedural Background

Magruder operates several quarries under a permit from the Commission. This case originated in April 2007, when Magruder filed an application to expand its permit to operate a limestone quarry on a 212–acre site in Miller County. Magruder sought permission from the Commission to engage in surface mining on 205 of those acres. The new quarry site is adjacent to a wastewater treatment plant operated by the Sewer Board. Magruder's application proposed quarry activity approximately 700 feet from that plant. In addition, two force main sewer lines transverse through the center of the proposed quarry site and transmit all the sewage from the City of Osage Beach to the sewer treatment plant.³

Magruder's application was deemed complete, and it published the required notice. Both Magruder and opponents of

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its permit application then made presentations at the Commission's next public meeting. The Sewer Board and several citizens thereafter requested a formal public hearing, which the Commission granted. The Commission appointed a hearing officer, who conducted seven days of hearings. The hearing officer ultimately recommended that Magruder's expansion permit be approved, with special conditions,⁴ for the area west of the sewer line easement. The approved mining area was limited to approximately fifty-two acres. On July 29, 2008, the Commission approved the hearing officer's recommended order and adopted the hearing officer's findings of fact and conclusions of law as its final decision.

The Miller County Circuit Court reversed the Commission's decision to grant the permit. On appeal, this Court found that the decision was made upon unlawful procedure because the Commission incorrectly imposed the burden of persuasion on the petitioners in contravention of § 444.773 and 10 C.S.R. 40–10.80(3). Lake Ozark/Osage Beach Joint Sewer Bd. v. Mo. Dep't of Nat. Res., 326 S.W.3d 38, 45 (Mo.App.2010). Consequently, we reversed the Commission's decision to grant the permit and remanded with instructions to apply the correct burden of proof in a new hearing. Id.

On remand, the Commission designated Commissioner Winn from the Administrative Hearing Commission to take evidence and make recommendations. Following a five-day hearing, the Commissioner issued a Recommended Decision. She found that the Sewer Board met its burden of production by “establishing issues of fact regarding the impact, if any, of the permitted activity on [its] health, safety, or livelihood” but the individual petitioners (including the Stockmans⁵ ) did not. See § 444.773. The Commissioner also found, however, that Magruder met its burden of persuasion that the expanded permit, subject to certain conditions, “will not unduly impair the health, safety or livelihood of the petitioners.” She recommended, therefore, that Magruder's application for permit expansion be granted with eight specific conditions.

The Commission took up the matter at its next public meeting. It voted unanimously to adopt the recommendations and findings of Commissioner Winn and to grant Magruder's permit, but it incorporated only the first five of the recommended conditions. The Commission also modified Condition 4 to make it easier to understand.

The Appellants filed a petition for judicial review, claiming that the Commission erred in failing to accept all of the hearing officer's suggested conditions, and that the Commission lacked the authority to impose any conditions that were not in Magruder's application. The circuit court rejected those arguments, stating that it had reviewed the Commission's reasons for removing Conditions 6, 7, and 8 and found no basis for rejecting the Commission's findings. The court also found that the “Commission had the authority to impose or reject conditions when issuing a permit” and affirmed the Commission's decision to grant the permit with conditions.

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The Sewer Board and the Stockmans appeal.

Standard of Review

On appeal from the circuit court's review of an agency's decision, we review the agency's actions and not those of the circuit court. Albanna v. State Bd. of Registration for Healing Arts, 293 S.W.3d 423, 428 (Mo. banc 2009). Our review is limited to determining whether the agency's decision was constitutional; was within the agency's statutory authority and jurisdiction; was supported by competent and substantial evidence upon the whole record; was authorized by law; was made upon lawful procedure with a fair trial; was not arbitrary, capricious or unreasonable; and was a proper exercise of discretion. Lagud v. Kansas City Bd. of Police Comm'rs, 136 S.W.3d 786, 791 (Mo. banc 2004) ; § 536.140.2. In reviewing the agency's decision, we must consider the entire record and not simply the evidence that supports the agency's decision. Coffer v. Wasson–Hunt, 281 S.W.3d 308, 310 (Mo. banc 2009). “If the evidence permits either of two opposing findings, deference is afforded to the administrative decision.” Id. We review questions of law de novo. Saxony, 404 S.W.3d at 906.

Point I

The Appellants first contend that the Commission erred in granting Magruder's permit because the Commissioner's Order is not supported by competent and substantial evidence and is arbitrary and capricious, in that the Commission removed Conditions 6, 7, and 8, which Commissioner Winn deemed necessary to the grant of the permit.

Section 444.773.3 of the Act provides that, where the Director recommends issuing a permit, a formal hearing may be held upon a timely petition from “any person whose health, safety or livelihood will be unduly impaired by the issuance of this permit.” Lake Ozark/Osage Beach, 326 S.W.3d at 43. Following the formal hearing, if the Commission finds, “based on competent and substantial scientific evidence on the record, that an interested party's health, safety or livelihood will be unduly impaired by the issuance of the permit,” then the Commission may deny the permit application. § 444.773.4; 10 C.S.R. 40–10.080(3)(D). At least four of the Commission members must approve any “final action by the commission.” § 444.787.4.

Pursuant to section 444.789.3, the Commission may designate a hearing officer to hold a hearing and make recommendations to the Commission. Here, the Commission designated Commissioner Winn to do so. In the course of the hearing, the Commissioner accepted portions of the evidence from the 2008 hearing that the parties designated and heard additional testimony. As noted, the Commissioner ultimately found that the...