Court Opinion

ID: 9762431
Source: CourtListenerOpinion
Date Created: 2023-08-29 02:23:29.494188+00
Date Added: 2024-06-11T07:29:34.346858
License: Public Domain

GANT, Justice.
These four cases involve the strip mining statutes and regulations of the Commonwealth of Kentucky. The court considered these cases together, and oral arguments were heard on the same day because each of the cases is concerned with a regulation of the Natural Resources and Environmental Protection Cabinet of the Commonwealth of Kentucky — viz., 405 KAR 7:090(4), and Chapters 350 and 224 of the Kentucky Revised Statutes. Also, as will appear later herein, each case is concerned with the Kentucky and United States constitutions.
The pertinent regulations provide that, after a “Notice of Non-Compliance and Order for Remedial Measures” is issued, a preliminary hearing will be held. This hearing, by design, is an informal hearing, at which no records are kept; and thus the findings of the hearing officer are not ap-pealable on the record. If fines and penalties are imposed by the hearing officer, the sole remedy for the companies is to request a formal hearing within 30 days. This request must be accompanied by a payment into escrow of all sums assessed for the non-compliance and for violation of the cessation order, should said order be issued.
Of these four cases, John P. King and Kip Elkins, d/b/a K & K Coal Company, and James D. Franklin applied for a formal hearing, but their applications were not accompanied by the required payment of the assessed penalties. The other two mining companies — Ray Maiden and Charlotte Fallahi (now McLemore) — did not file application for formal hearing, as neither party had sufficient funds to pay the assessed penalty levied by the preliminary hearing officer. The first two cases mentioned above come before us on direct appeal, while the latter two constitute an attack initiated as a defense to an action by the Cabinet to collect the penalties assessed.
In actuality, the four cases are so similar that their separation on grounds of exhaustion of administrative remedy is a fiction. An application for formal hearing, according to 405 KAR 7:090(4), which is not accompanied by the mandated payment of the assessed penalties into escrow is, in fact, a nullity.
In these cases, the Cabinet utilized failure to exhaust administrative remedy as a defense, but we feel that this should not be considered as a defense. It has been well set out in Harrison’s Sanitarium, Inc. v. Commonwealth, Department of Health, Ky., 417 S.W.2d 137 (1967), that a party may have direct judicial relief without exhaustion of administrative remedies when there are no disputed factual questions to be resolved and the issue is confined to the validity or application of a statute or ordinance, or administrative regulation properly adopted which has the full effect of law and required to be enforced. Supra, p. 138.
In these four cases, three basic grounds are urged for holding that the procedure *3required pursuant to 405 KAR 7:090(4), et seq., is invalid and void.
First, it is contended that the statutes by which the regulation purports to have been enacted — viz., KRS 224.033, 350.-020, 350.028, 350.225, 350.465, and 350.610 —do not mention nor do they authorize prepayment of penalties as a condition precedent to a formal hearing. We agree.
KRS 350.028(2) provides that the Cabinet has the power to conduct hearings under Chapter 224, which, in turn, provides in KRS 224.081 and KRS 224.083 that, whenever the Cabinet has reason to believe that a violation has occurred, it shall serve a written notice upon the violator and hold a hearing thereon. The statutes state that the hearing shall be one at which the party may be represented by counsel, may make oral or written arguments, offer testimony, cross-examine, issue subpoenas, etc. Of additional note is that KRS 224.083 provides that a record shall be kept of such hearing and made available. Under the regulation herein, the preliminary hearing does not follow the statute and the only way in which a formal hearing may be obtained is by the prepayment of the penalties and fines, which procedure is not mentioned or authorized by the statute.
KRS 350.028(4) provides that the Cabinet has the power to issue an order imposing civil penalties for violations after an opportunity for hearing, but again makes no reference to prepayment of these penalties as a prerequisite to obtain a proper hearing.
KRS 13A.120(l)(i) prohibits an administrative agency from promulgating administrative regulations which modify or vitiate a statute or its intent. It is our holding that the prepayment requirement of 405 KAR 7:090(4) to obtain a formal hearing as prescribed by the statutes above referred to is a clear violation of this caveat and modifies and vitiates the statute, rendering the regulation “null, void and unenforceable” as set out in KRS 13A.120(2).
The second argument running through these cases also finds roots in KRS 13A.120(1), which provides that when regulations are required by federal law, they shall be no more stringent than the federal law or regulations. These statutes and the attendant regulations grew out of the Federal Surface Mining Control and Reclamation Act of 1977, 30 U.S.C. § 1201, et seq. Pursuant to that Act, Kentucky adopted KRS 350.010, et seq., (the surface mining act), and the regulations in 405 KAR. However, the federal act and its regulations provide for a parallel procedure by which the accused strip miner is provided a formal hearing, with a full record, rights of examination, cross-examination, subpoenas, etc. From this full hearing there is an appeal to an Administrative Law Judge and ultimately to the federal court system.
By not providing a similar proceeding, the Kentucky regulations are more stringent than the federal law and regulations, and this is also in violation of KRS 13A. 120(1), making 405 KAR 7:090(4), which provides for hearing only upon prepayment, “null, void and unenforceable.”
The third argument in these cases is the constitutionality of the regulation. We are aware of the line of cases which holds that “When the constitutionality of a statute is challenged, the Court should try not to destroy it but to construe it, if consistent with the will of the legislature, so as to comport with constitutional limitations.” See United States Civil Service Commission v. National Association of Letter Carriers, 413 U.S. 548, 571, 93 S.Ct. 2880, 2893, 37 L.Ed.2d 796 (1973). However, in the instant cases, we are concerned with a regulation, not a statute, which regulation is on its face inconsistent with the legislative intent. As pointed out in Harrison’s Sanitarium, Inc. v. Dept. of Health, supra, the regulations properly adopted and filed have the full effect of the law and must be enforced. In these cases before us, we have no disputed facts, but a total legal issue. We feel that, because of the myriad of cases subject to strip mine regulation, and because we are not creating any conflict between the legislative and judicial branches by so interpreting, this regulation which denies the due process hearing to an aggrieved party based solely on his financial inability to pay the penalties which he *4seeks to appeal is unconstitutional, in violation of the equal protection clauses of both the United States and Kentucky constitutions.
Thus, it is our holding that that portion of 405 KAR 7:090(4) which requires prepayment of fines and penalties before a formal appeal may be perfected is contrary to Kentucky law and more stringent than the federal law, thereby rendering it null, void and unenforceable. We further hold that it is unconstitutional.
All concur except WINTERSHEIMER, J., who dissents and files a dissenting opinion.