Opinion ID: 852986
Heading Depth: 2
Heading Rank: 2

Heading: The General Requirement to Exhaust Administrative Remedies

Text: We have repeatedly emphasized the value of completing administrative proceedings before resorting to judicial review. State Bd. of Tax Comm'rs v. Montgomery, 730 N.E.2d 680, 684 (Ind.2000) (quoting State v. Sproles, 672 N.E.2d 1353, 1358 (Ind.1996)). The reasons for this requirement are well established: (1) premature litigation may be avoided; (2) an adequate record for judicial review may be compiled; and (3) agencies retain the opportunity and autonomy to correct their own errors. Even if the ground of the complaint is the unconstitutionality of the statute, which may be beyond the agency's power to resolve, exhaustion of administrative remedies may still be required because administrative action may resolve the case on other grounds without confronting broader legal issues. Turner v. City of Evansville, 740 N.E.2d 860, 862 (Ind.2001); Austin Lakes Joint Venture v. Avon Utils., Inc., 648 N.E.2d 641, 644 (Ind.1995); Sproles, 672 N.E.2d at 1358. Ordinarily, an administrative agency must resolve factual issues before the trial court acquires subject matter jurisdiction. Turner, 740 N.E.2d at 862. But exhaustion of administrative remedies is not required if a statute is void on its face, and it may not be appropriate if an agency's action is challenged as being ultra vires and void. Id. More generally, if an action is brought upon the theory that the agency lacks the jurisdiction to act in a particular area, exhaustion of remedies is not required. Frank E. Cooper, State Administrative Law 577 (1965). To the extent the issue turns on statutory construction, whether an agency possesses jurisdiction over a matter is a question of law for the courts. State ex rel. Paynter v. Marion County Superior Court, Room No. 5, 264 Ind. 345, 350, 344 N.E.2d 846, 849 (1976). The issues presented by this case can be summarized as: (1) does IDEM have the authority to regulate waters of the state previously regulated by the Section 404 program; (2) if IDEM is so authorized, can it properly exercise that authority through the NPDES permitting process; (3) if IDEM does have the authority to prohibit a discharge without an NPDES permit as to some waters, does that authority extend to discharges into private ponds and isolated wetlands in general and these waters in particular. We agree with Twin Eagle that its challenge to IDEM's authority to apply the NPDES program to dredged and fill permits does not require exhaustion of remedies because at least the first two of these issues turn on issues of law. IDEM either does or does not have the legislative authority to regulate introduction of dredged and fill materials into waters that are not waters of the United States. Similarly, if the waters are subject to regulation, IDEM either is or is not authorized to apply the NPDES permitting system. Whether ponds and isolated wetlands are subject to regulation is a matter of construction of a statutory exemption from the grant of regulatory authority over waters. Finally, Twin Eagle claims the absence of an approved state administered Section 404 program precludes IDEM from acting. All of these issues are pure issues of law. [3] For the reasons explained below, we resolve these abstract issues of law in favor of IDEM's ability to apply the interim process to waters of the state no longer subject to federal regulation. Assuming any waters on Twin Eagle's land are indeed private ponds and isolated wetlands, as explained below, if a discharge from a pond threatens to cause pollution of other waters, IDEM may regulate even a private pond. I.C. § 13-11-2-265 (2002). Twin Eagle may be correct that the particular waters at issue are not subject to regulation, but the proper forum to address this fact sensitive issue is through the administrative process. We therefore defer to the administrative process to determine whether potentially dispositive factual circumstances exist here. I.C. § 13-11-2-265(a); Turner, 740 N.E.2d at 862.