Disclosing environmental violations

A recent ruling by the state’s chief environmental judge puts limits on how the Indiana Department of Environmental Management determines what might be considered a danger to public health or the environment.

The administrative case before the Office of Environmental Adjudication serves as the first test of an Indiana disclosure statute enacted three years ago. That law allows state officials to go after “bad actors” that are putting the environment in danger with confined feeding operations, requiring operators who want new or expanded permits to disclose any past violations and detail whether those situations created any public health or environmental dangers.

“This case is really important because it takes a look at what the statute really says and gets the agency to follow the written law,” said Justin Schneider, a staff attorney with the Indiana Farm Bureau.

The case

Minnesota-based New Fashion Pork runs pork production facilities in six states, including two Indiana locations in Linton and Bloomfield. The company submitted three applications in early 2010: one requested that IDEM approve a manure storage impoundment at its Linton site; the other two involved the Bloomfield location and requested a general permit renewal. New Fashion Pork also asked the agency to allow it to expand the number of production buildings and operating capacity.

In submitting its applications, New Fashion Pork disclosed a past discharge of manure into Bogard Creek and referenced the agreement between New Fashion Pork and IDEM made in 2009 acknowledging the discharge, but New Fashion Pork didn’t admit by signing that agreement that the spill created any “substantial threat to human health or the environment.”

New Fashion Pork declined to submit in its applications an accompanying form that amounted to admitting the spill was a substantial threat to people’s health or the environment because the company disagreed with IDEM’s interpretation that any material violation was a substantial danger to the environment, said Indianapolis attorney Dan McInerny with Bose McKinney & Evans, who represented New Pork Fashion. It believed there was no danger because there was no fish kill and no humans were affected.

After looking back at the 2009 agreement, IDEM refused to grant the permit requests, returned the submissions as incomplete, and ultimately denied the requests. The agency determined New Fashion Pork violated state law by intentionally misrepresenting or concealing a material fact in the applications relating to the past discharge.

“We felt it was inappropriate and incorrect to check that box because we’d be admitting to something we didn’t agree with,” McInerny said.

New Fashion Pork appealed the agency decision to the OEA, which handles all the administrative appeals. In a Jan. 5 decision, Chief Environmental Law Judge Mary Davidsen ruled against IDEM and found in favor of New Fashion Pork.

McInerny said New Fashion Pork properly filled out the form, but IDEM had interpreted the law to mean that any release, no matter the size or impact, required applicants to check a box and fill out a form admitting the spill was a substantial danger.

IDEM officials testified that in order to make sure it is consistent and accurate in its permit application review, the agency does not analyze, evaluate or take into account the volume of the alleged release; the concentration of

the alleged release; whether the alleged release resulted in a fish kill; or the civil penalty worksheets prepared in response to the alleged release. At the same time, IDEM said it did not consult with experts in deciding whether there was a substantial endangerment to human health or the environment.

Davidsen cited Indiana Code 13-18-10-1.4 in finding that more review by IDEM is required to determine if a substantial danger occurred. The judge didn’t set a standard – and none of the parties asked for a standard – as to what documents should be reviewed and what constitutes a substantial danger when reviewing these applications. The 2009 law says the disclosure requirement only applies to those acts or omissions that “presented a substantial endangerment to human health or the environment.” No statutory or regulatory definition exists for that phrase and the law specifically says that the onus is on each applicant and responsible party to determine whether a substantial endangerment occurred.

Davidsen ordered IDEM to approve the applications and IDEM did not appeal within the required 30 days.

The Office of the Indiana Attorney General and deputy attorney general April Lashbrook declined to comment on the case or its legal ramifications, referring any comment to its client, IDEM. IDEM public information officer Barry Sneed said the agency could not comment on any aspect of the case or how the agency might be responding.

“IDEM reviews its policies and interpretations in light of OEA and judicial decisions, but we have no comment on this case,” Sneed told Indiana Lawyer.

Impact

Attorneys working in environmental and agricultural law say they feel the case turned out correctly, but admit that it will likely result in more work for both IDEM officials and lawyers applying for these types of CAFO and CFO permits.

Schneider foresaw this issue when the law was enacted, but it took this case to flesh out how the state agency follows what was written. He said the process may be more difficult for both state officials and applicants, but it’s necessary to comply.

“Honestly, it’s good for an applicant to sit back and look at the past and think about what had happened,” he said. “Are they capable and qualified to expand or do what they’re requesting? This is about transparency in how we protect the environment.”

Indianapolis attorney Todd Janzen said this draws a line between those farmers who might be doing something wrong and those who are not. Some farms do occasionally have manure spills, but Janzen said that doesn’t mean the farmer did anything wrong or the spill endangered people or waterways.

“We have to look at it, and ask if we’re going to deny a permit if it didn’t really impact the environment,” he said. “To me, that doesn’t seem like a fair way to analyze the disclosure. IDEM wanted more control on who it would allow to be a permitted operation in the state because before, it didn’t have the authority to deny permits for those historically bad actors.”

Attorney Josh Trenary with Indiana Pork Producers Association said the trade association has been disappointed with how IDEM has interpreted the law.

“The idea of a specific factual analysis each time there’s a question about endangerment is time consuming and might not be the best move, but the problem is that they’ve tried to cut off the analysis for anything above a paperwork violation,” he said. “Obviously, there’s more to it than that.”

He agrees that a bright line shouldn’t be established for what might be a “substantial” danger because so many factors can be a part of these environmental regulations. A review of each case to some degree is probably needed, he said.

“That’s unfortunately where it creates a lot of legwork on the part of the agency and the attorneys submitting the application, to make sure that the facts of each situation are being considered, the environment’s being protected, and the businesses aren’t being penalized unnecessarily,” Trenary said.•