Title: Pfeil v. Amax Coal West, Inc.

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Pfeil v. Amax Coal West, Inc.1995 WY 208908 P.2d 956Case Number: 95-34Decided: 12/19/1995Supreme Court of Wyoming
Roger D. PFEIL and Linda 
Jo Pfeil, husband and wife, for themselves

 and for their minor children; and Joseph 
M. Gilsdorf and Karla J. Oksanen,

 Appellants 
(Petitioners),

v.

AMAX COAL WEST, INC., a 
subsidiary of Cyprus Amax Coal Company;

 and Environmental Quality Council of the 
State of Wyoming,

 Appellees (Respondents).

Appeal from the District 
Court, Campbell County, O'Brien, J.

Anthony T. 
Wendtland of Davis and Cannon, Sheridan, for appellants.

Marilyn S. Kite, 
P.C. of Holland & Hart, Jackson; and Steven R. Youngbauer of Amax Coal West, 
Inc., Gillette, for appellee Amax Coal West, Inc.

William U. Hill, 
Attorney General; Mary B. Guthrie, Deputy Attorney General; Ron Arnold, Sr. 
Assistant Attorney General; and Kristi T. Sansonetti, Legal Intern, Cheyenne, 
for appellee Environmental Quality Council.

Before 
GOLDEN, C.J., and THOMAS, MACY, TAYLOR and LEHMAN, JJ.

GOLDEN, Chief 
Justice.

[¶1]      We review 
property owners' (objectors) contentions that the Environmental Quality Council 
(EQC) and Amax Coal West, Inc. (Amax) failed to provide them with sufficient and 
timely notice of a proposal to revise the mining plan for the Eagle Butte Mine. 
The mine is located near the Rawhide Village subdivision, nine miles north of 
Gillette, Wyoming. The objectors also contend the EQC's decision to approve the 
revision to the mining plan was arbitrary, capricious, an abuse of discretion, 
otherwise not in accordance with law, as well as not supported by substantial 
evidence.

[¶2]      The order is 
affirmed.

ISSUES

[¶3]      The objectors, 
Roger D. and Linda Jo Pfeil, Joseph M. Gilsdorf, and Karla J. Oksanen, supply 
this statement of the issues:

1.         Were 
Gilsdorf and Oksanen denied proper statutory notice of their right to object to 
Amax's Form 11 Revision application?

2.         Did 
the public notice provided by the EQC and Amax to [objectors] deprive them of 
full and fair notice of the proceedings as required by statute, DEQ (Department 
of Environmental Quality) rules and Wyo. Const. Art. 1, § 6?

3.         Is 
the mandatory twenty (20) day time limit set forth in W.S. § 35-11-406(k) 
unconstitutional under Wyo. Const. Art. 1, § 6 as applied to citizen 
objectors?

4.         Did 
the EQC commit reversible error when it denied the Pfeils' motion for a 
continuance?

5.         Was 
the EQC's decision making process arbitrary and capricious?

[¶4]      The EQC states 
these issues:

I.          
Whether [objectors] received adequate notice of the AMAX permit 
revision.

II.          
Whether holding a hearing within twenty days after the objection period 
closed violated [objectors'] procedural due process [rights].

III.         
Whether the [EQC's] denial of [the Pfeils'] motion for continuance was 
proper.

IV.        Whether the 
[EQC's] decision that the permit revision be approved should be 
affirmed.

[¶5]      Amax summarizes 
the issues, thus:

A.        Did the 
method Amax used to mail notice of the permit revision comply with applicable 
law?

B.        Did the 
content of the notice of the permit revision comply with applicable 
law?

C.        Did the 
[EQC's] decision to deny . . . Pfeils' motion for a continuance constitute an 
abuse of discretion?

D.        Is the 
statutory procedure for permit revisions constitutional?

E.        Was the 
[EQC's] decision to grant the permit revision supported by substantial 
evidence?

FACTS

[¶6]      In 1976, Amax was 
issued a mining permit for operating the Eagle Butte Mine north of Gillette, 
Wyoming. Shortly afterwards, Rawhide Village subdivision was developed 
immediately to the west of the mine area. The Pfeils moved into Rawhide Village 
in 1978 and have since acquired other lots in the subdivision. Gilsdorf and 
Oksanen (Oksanen) purchased their home in Rawhide Village in 1988, and purchased 
other lots in the subdivision in 1990 and 1994.

[¶7]      Amax planned to 
begin mining adjacent to Rawhide Village in 1983 but in 1985 revised that date 
to 1993. Further revisions occurred in 1988 and 1990 causing the 1993 date to 
change to the year 2007. In 1993, Amax applied for another permit revision. The 
only change in the mine plan proposed by this revision was to alter the sequence 
and timing of the mining operations, essentially returning to the earlier 
schedule by which mining would occur near Rawhide Village in 1994.

[¶8]      The Wyoming 
Department of Environmental Quality's Land Quality Division (LQD) reviewed the 
application for revision to the mine permit and on May 13, 1994, authorized Amax 
to publish notice of its intent to seek permit revision. The LQD drafted a 
notice to comply with WYO. STAT. § 35-11-406(j) (1994) which Amax placed in the 
Gillette newspaper on May 20, May 26, June 1, and June 6, 1994. On May 23, 1994, 
Amax mailed copies of the notice to surface owners of record of all lands within 
the permit area, immediately adjacent to the permit area, and within one-half 
mile of the proposed mining site. 

[¶9]      Amax identified 
these owners through the services of Campbell County Abstract Company which 
searched county real estate records for names and addresses. The Pfeils received 
their mailed notice; however, Oksanen did not receive the mailed notice. 
Instead, during the last week of June, she learned of the proposed revision 
through neighbors. After contacting Amax, notice was mailed to her which she 
received on July 5, 1994. The objectors filed timely protests to the permit 
revision and the EQC scheduled a hearing on those protests on July 26, 1994. On 
July 20, the Pfeils moved for a continuance. Ruling was reserved and the hearing 
held on July 26. The motion for a continuance was denied although the hearing 
examiner ruled the parties could submit additional arguments and information 
through September 2, 1994.

[¶10]   The objectors' protests were 
further considered by the EQC at public meetings held on October 5 and 24, 1994. 
On November 7, 1994, the EQC issued its Findings of Fact, Conclusions of Law and 
Order granting Amax's request to revise the permit. Objectors filed a petition 
for review with the district court. That court certified the petition to this 
Court under WYO.R.APP.P. 12.09.

DISCUSSION

Standard of 
Review

[¶11]   An administrative agency's decision 
certified under WYO.R.APP.P. 12.09 is reviewed by this Court under appellate 
standards applicable to a reviewing court of the first instance. In the Matter 
of Nyquist, 870 P.2d 360, 362 (Wyo. 1994). The scope of review of administrative 
actions is defined in WYO. STAT. § 16-3-114(c) (1990). Olheiser v. State ex rel. 
Workers' Comp. Div., 886 P.2d 269, 271 (Wyo. 1994).

Adequate 
Notice

[¶12]   Oksanen contends Amax violated 
statutory notice requirements when it did not mail notice to her current mailing 
address available from official property records. The objectors also contend the 
content of the notice did not comply with the statute's requirements. Whether 
Amax complied with statutory notice requirements is a question of law. See Grams 
v. Environmental Quality Council, 730 P.2d 784, 787 (Wyo. 1986). The standard of 
review for an agency's conclusions of law is straightforward; if the conclusion 
is in accordance with the law, it is affirmed, and if it is not, it is 
corrected. Powder River Basin Resource Council v. Wyoming Environmental Quality 
Council, 869 P.2d 435, 437 (Wyo. 1994).

[¶13]   WYO. STAT. § 35-11-406(j) requires 
the applicant to both publish and mail notice of its application for permit 
revision:

(j) The applicant shall 
cause notice of the application to be published in a newspaper of general 
circulation in the locality of the proposed mining site once a week for four (4) 
consecutive weeks commencing within fifteen (15) days after being notified by 
the administrator. The notice shall contain information regarding the identity 
of the applicant, the location of the proposed operation, the proposed dates of 
commencement and completion of the operation, the proposed future use of the 
affected land, the location at which information about the application may be 
obtained, and the location and final date for filing objections to the 
application. The applicant shall mail a copy of the notice within five (5) days 
after first publication to all surface owners of record of the land within the 
permit area, to surface owners of record of immediately adjacent lands, to any 
surface owners within one-half (1/2) mile of the proposed mining site. . . . 
Proof of notice and mailing shall be attached to and become part of the 
application.

WYO. STAT. § 
35-11-406(j) (1994).1

[¶14]   County property records held a 
warranty deed to Oksanen listing the address to which Amax first mailed notice. 
The county records also held several quitclaim deeds to Oksanen listing her 
current mailing address. Oksanen contends that since she received notice only 
one day before the deadline to file objections, the approval of the mine permit 
revision must be reversed because the decision was without observance of 
procedure as required by WYO. STAT. § 16-3-114(c)(ii)(D). Amax charges this 
issue is improperly raised on appeal for the first time. Alternatively, Amax 
insists it employed procedures reasonably calculated to achieve notice and, 
although not successful, their efforts satisfied the statutory notice 
requirements. The EQC determined that mailing notice to the address of legal 
record satisfied the legal requirements of mailing notice to 
Oksanen.

[¶15]   This Court has previously 
considered similar contentions about compliance with statutory notice 
requirements. Grams; State ex rel. State Hwy Comm'n v. Stringer, 77 Wyo. 198, 
310 P.2d 730 (1957); Cottman v. Lochner, 40 Wyo. 378, 278 P. 71 (1929). Our 
decision in Grams held that an error must be prejudicial and affect the 
substantial rights of the appellant to warrant reversal. Grams, 730 P.2d  at 787. 
Although Amax failed to mail notice to Oksanen's current address, she was not 
deprived of notice of the proposed revision. She had actual notice, timely filed 
an objection, and did not make a request for a continuance. The record indicates 
that after the EQC was advised through posthearing briefs and affidavits that 
notice had been mailed to the wrong address, the EQC considered whether there 
had been compliance with the statutory notice requirements. Oksanen did not 
claim to the EQC that she was prejudiced. The record indicates Oksanen 
participated in the proceedings and stated concerns about hydrology and 
blasting, which were considered by the EQC. We conclude prejudice has not been 
demonstrated.

[¶16]   We also conclude objectors have not 
demonstrated prejudice with their claim that the content of the notice did not 
comply with the statute or agency rules and regulations. Objectors maintain that 
under the statute they should have been notified when the proposed revision 
would begin and end and what future use of the affected land was proposed. 
Additionally, they assert the notice did not contain an index indicating the 
portion of the permit to be revised and an explanation for a proposed change as 
required by agency rules. The objectors claim that the failure to include this 
information in the notice prejudiced them since they could not understand what 
Amax was proposing and did not have sufficient information to research the 
issue.

[¶17]   Under these statutes providing for 
notice and a hearing to consider citizen-objections, any errors must be 
prejudicial before an agency decision will be reversed. Grams, 730 P.2d  at 787; 
WYO. STAT. § 35-11-406(j), (k) (1994). As the objectors note, the purpose of the 
notice was to provide them with an understanding of the issues. The record 
indicates Mr. Pfeil reviewed the application at the address listed in the 
notice. At the hearings, the objectors did not voice complaints concerning the 
absence of any of this information from the notice. All fully voiced their 
concerns about an alteration in the direction and sequence of the mining plan. 
The objectors' actions indicate they recognized and understood they were 
protesting against any alteration in the direction and sequence of the mine plan 
progression. From objectors' actions, we can conclude that notice served to 
inform adjoining property owners that a significant revision to a mining permit 
was under consideration and they were not prejudiced by the omission of the 
information.

Due 
Process

[¶18]   Objectors claim that a failure to 
strictly comply with statutory and agency notice requirements violates the 
Wyoming Constitution's due process requirements of Art. 1, § 6 since Oksanen had 
inadequate preparation time and the Pfeils had inadequate time for experts to 
review complex hydrology, blasting, and air quality reports. In response, Amax 
and the EQC claim time was adequate and point out that, unlike Grams which 
involved a complicated permit revision based on a state regulatory program, this 
revision changed only mining sequence and timing and was not complex. The record 
indicates Oksanen did not request a continuance and Pfeils have not provided 
evidence supporting their contention they intended to hire experts to review 
reports.

[¶19]   WYO. CONST. ART. 1, § 6 states: 

No person shall be 
deprived of life, liberty or property without due process of law.

[¶20]   Procedural due process principles 
require reasonable notice and a meaningful opportunity to be heard before 
government action may substantially affect a significant property interest. 
Amoco Production Co. v. State Bd. of Equalization, 882 P.2d 866, 872 (Wyo. 
1994). Due process considerations are invoked in administrative proceedings. Id. 
A party claiming infringement has the burden of demonstrating that infringement 
by first showing the existence of a protected property interest and then showing 
the interest has been affected in an impermissible way. Meyer v. Norman, 780 P.2d 283, 289 (Wyo. 1989). As appellees claim, objectors do not articulate the 
specific nature of the property interest at stake. Their arguments, however, do 
suggest they perceive either that the statutory procedure itself gives rise to 
an independent property interest protected by the state constitution or that 
they anticipated enjoyment of their property for at least another fourteen years 
without adjacent mining. Objectors have not provided authority and argument that 
these interests rise to the level of a constitutionally protected property 
interest. Because a mere allegation of constitutional violation does not suffice 
to justify inquiry, objectors' due process claim is not further considered. 
Id.

Constitutionality

[¶21]   Objectors challenge the 
constitutionality of the statute affording a hearing within twenty days after 
the objection deadline. Statutes are presumed to be constitutional. Challengers 
bear the burden of proving that a statute is unconstitutional. Meyer v. Kendig, 
641 P.2d 1235, 1238-39 (Wyo. 1982).

[¶22]   WYO. STAT. § 35-11-406(k) (1994) 
provides:

(k) Any interested person 
has the right to file written objections to the application with the 
administrator within thirty (30) days after the last publication of the above 
notice. For surface coal mining operations, the director may hold an informal 
conference if requested and take action on the application in accordance with 
the department's rules of practice and procedure, with the right of appeal to 
the council which shall be heard and tried de novo. A conference shall be held 
if the director determines that the nature of the complaint or the position of 
the complainants indicates that an attempt to informally resolve the disputes is 
preferable to a contested case proceeding. An informal conference or a public 
hearing shall be held within twenty (20) days after the final date for filing 
objections unless a different period is stipulated to by the parties. The 
council or director shall publish notice of the time, date and location of the 
hearing or conference in a newspaper of general circulation in the locality of 
the proposed operation once a week for two (2) consecutive weeks immediately 
prior to the hearing or conference. The hearing shall be conducted as a 
contested case in accordance with the Wyoming Administrative Procedure Act, and 
right of judicial review shall be afforded as provided in that act.

[¶23]   The objectors claim they were 
denied due process under WYO. CONST. ART. 1, § 6 because the short notice period 
did not afford them a meaningful opportunity to meet Amax's claims. Objectors 
correctly state that compliance with statutory requirements of notice and 
hearing does not always satisfy constitutional requirements of due process. 
Objectors' due process claim again fails, however, for the same reason that 
there is no showing that a protected property interest has been affected in an 
impermissible way.

Motion For 
Continuance

[¶24]   The objectors claim the EQC abused 
its discretion when it failed to grant their motion for a continuance. Relying 
on Grams, the EQC ruled that WYO. STAT. § 35-11-406(k) denies the EQC the 
discretion to grant a continuance beyond the prescribed twenty-day limit unless 
there is a stipulation to the continuance among the parties. The parties did not 
stipulate to a continuance. Grams found it was not an abuse of discretion for 
the EQC to comply with the time specified in § 35-11-406(k). Grams, 730 P.2d  at 
788.

[¶25]   Objectors claim more time would 
have permitted them to refute the evidence supporting the EQC's conclusion that 
any change in mining sequence and direction would not adversely affect the 
hydrologic balance under the Rawhide Village Subdivision. The EQC found that the 
hearing examiner had denied the continuance before evidence was presented and 
reconsidered the motion at the conclusion of the hearing. Finding that only the 
Pfeils had requested a continuance, the hearing examiner determined they had an 
obligation to pursue their protest in a diligent and timely manner. The hearing 
examiner found that despite having two months actual notice, the Pfeils had 
delayed in contacting an attorney. The EQC affirmed the hearing examiner's 
denial. In Grams, we observed that an abuse of discretion will not result when 
the complaining party's failure to conduct discovery was due to its own delay. 
We, therefore, find no abuse of discretion. Grams, 730 P.2d  at 788.

Substantial 
Evidence

[¶26]   Objectors contend the EQC's 
conclusion that the hydrologic balance would not be harmed was not supported by 
substantial evidence.

[¶27]   Under WYO. STAT. § 16-3-114(c) 
(1990), an appeal of an administrative agency's decision requires that we review 
the entire record to determine if the agency's actions are supported by 
substantial evidence. If the agency's actions are supported by substantial 
evidence, this Court will not substitute its judgment for that of the agency. 
Substantial evidence is defined as such relevant evidence as a reasonable mind 
might accept as adequate to support a conclusion. Holly Sugar Corp. v. State Bd. 
of Equalization, 839 P.2d 959, 963 (Wyo. 1992). The burden of proving a lack of 
substantial evidence rests upon the party attacking the agency's decision. 
Montana Dakota Utilities v. PSC, 847 P.2d 978, 983 (Wyo. 1993).

[¶28]   The objectors contend the EQC 
relied upon groundwater modeling which had not been properly updated. Objectors 
claim that under cross-examination an expert witness conceded he was speculating 
when he gave an opinion that no new modeling was needed. They believe that 
without this factual basis the EQC's finding and conclusion that the hydrologic 
balance would not be adversely affected was not supported by substantial 
evidence. The record shows that in response to the question whether the expert 
was in fact speculating that modeling the revision was unnecessary, the expert 
witness stated, "I was using my judgment" and "you can call it a guess, I 
guess." The record later shows, however, that the expert explained reasons for 
his determination that modeling the revision was unnecessary, thus providing a 
factual basis.

[¶29]   The EQC made the following findings 
of fact concerning hydrologic impacts:

14.       At the hearing, 
the Protestants raised concerns about possible impacts of mining on water levels 
or the hydrologic balance beneath their property. Evidence at the hearing showed 
that the Protestants have no water rights to be protected by the law, but the 
Council considered this issue to the extent the law also protects public water 
supplies.

15.       The evidence 
showed that a change in the mining sequence did not change the hydrologic 
impacts, and that a series of geologic and hydrologic barriers isolate Rawhide 
Village from the mining operation, making it unlikely that mining will have any 
adverse impact on Rawhide Village water supplies. Furthermore, actual monitoring 
of water levels indicates that, even though a pit close to Rawhide Village is 
presently being dewatered, no declines in water levels have ever been detected 
in wells in or near Rawhide Village. Evidence also showed that the Rawhide 
Village water supply well is completed at over a thousand feet deep, much deeper 
than the mining operation will ever reach. Based on this evidence, the Council 
finds and concludes that a change in the mining sequence of Amax's mining 
operations is unlikely to have any hydrologic impacts on Rawhide Village or its 
water supplies.

16.       Even if Amax's 
mining operations should have an impact on Rawhide Village's water supply wells, 
Wyo. Stat. § 35-11-415(b)(xii) requires the mine operator to:  

replace . . . the water 
supply . . . where the supply has been affected by contamination, diminution or 
interruption proximately resulting from the surface coal mine operation. . . 
.

Evidence at the hearing 
showed that Amax has a history of meeting this commitment as required by 
law.

17.       For these 
reasons, the Council finds and concludes that the evidence does not support 
concerns over the revision in mining sequence causing hydrologic impacts, and 
that Amax adequately demonstrated compliance with all applicable legal 
requirements relating to hydrologic impacts.

[¶30]   These findings and conclusions 
reveal the EQC based its decision upon several factors and that these findings 
and conclusions were appropriately based upon evidence in the 
record.

The EQC'S 
Decision-Making Process

[¶31]   Finally, objectors claim that the 
EQC's decision-making process concerning whether or not Amax had properly 
provided notice was arbitrary and capricious in violation of WYO. STAT. § 
16-3-114(c). Specifically, objectors assert that after one member of the board 
voted against the permit revision because of improper notice during one meeting, 
that member suddenly reversed his decision during a later meeting without reason 
and arbitrarily and capriciously. The record indicates that the board discussed 
the notice issue at length. The mere fact that a vote changed does not 
constitute an arbitrary and capricious act.

[¶32]   Affirmed.

FOOTNOTE

1 The requirement of 
section (j) at issue in this case, namely mailed notice to surface owners, was 
changed in 1995 to require notice only be mailed to surface owners for "initial 
applications or additions of new lands." WYO. STAT. § 35-11-406(j) (Supp. 
1995).