ARKANSAS POLLUTION CONTROL AND ECOLOGY COMMISSION IN THE MATTER OF OSAGE BASIN ) DOCKET NO P WASTEWATER DISTRICT ) ORDER NO.

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1 ARKANSAS POLLUTION CONTROL AND ECOLOGY COMMISSION IN THE MATTER OF OSAGE BASIN ) DOCKET NO P WASTEWATER DISTRICT ) ORDER NO. 3 ORDER On December 31, 2004, the Arkansas Department of Environmental Quality ( ADEQ ) issued a discharge permit (AR ) and a construction permit (AR C) to Osage Basin Wastewater District ( Osage ). On January 31, 2005, a number of interested persons filed a Third Party Request for Commission Review and Adjudicatory Hearing ( Request ) with the Arkansas Pollution Control and Ecology Commission ( Commission ). These interested persons were Johnny Pockrus, Theresa Pockrus, LaJoyce Vann, Daulton Vann, Brant Holland, Nadene Holland, Beth Lile, Aulton Patrick, Jerry Patrick, Greg Davis, Pansy Martin, Leonard Martin, Nathan Smith, Crystal Smith, John Smith, Emma Smith, Robert B. Johnson, Stowe Hoffius, Helen Smith, Harry Steve Smith, Mike Priest, and Ed Brocksmith. They are referred to in this order as Petitioners. On February 24, 2005, the administrative hearing officer ( AHO ) held a preliminary hearing with Petitioners, Osage, and ADEQ. The AHO planned to decide whether the parties, issues, and the request for hearing complied with the provisions of

2 Page 2 Arkansas Code Annotated However, ADEQ and Osage claimed that many of the Petitioners were not proper parties, and that most of the issues and the Request did not conform to the requirements set out in the statute. The AHO set a schedule for filing a motion, a response, and briefs by each party. The AHO also continued the preliminary hearing pending a decision on ADEQ and Osage s motion. On April 14, 2005, the AHO heard oral arguments on ADEQ and Osage s Joint Motion to Dismiss. 1. Statutory Requirements The AHO must make three decisions in every appeal of a permitting decision. First, the AHO must decide whether the person requesting a hearing has standing to make the request. If the person did not make a public comment, then that person does not have standing to request a hearing and is not a proper party. A.C.A (b)(1). Second, the AHO must decide whether each issue was raised in public comments. If an issue was not identified in the public comments, it cannot be raised in the hearing. A.C.A (b)(2). Third, the AHO must decide whether the request for hearing contains a complete and detailed statement identifying the legal and factual objections to the permit action. A.C.A (b)(3).

3 Page 3 2. Proper Parties a. Undisputed parties Osage and ADEQ have no objection to Theresa Pockrus, LaJoyce Vann, Dalton Vann, Jerry Patrick, and Ed Brocksmith being parties in this docket. They submitted public comments on the record during the public comment period as required by Arkansas Code Annotated (b)(1). The AHO finds that Theresa Pockrus, LaJoyce Vann, Dalton Vann, Jerry Patrick, and Ed Brocksmith qualify as proper parties. b. Document submitted by Theresa Pockrus Osage and ADEQ claim Johnny Pockrus, Nadene Holland, Brant Holland, Beth Lile, and Aulton Patrick do not qualify as proper parties. Osage and ADEQ argue that these Petitioners lack standing to request a hearing. They did not submit any public comments in their own capacity, but relied on Theresa Pockrus to file their comments for them. Therefore, these Petitioners lack standing because another person cannot file comments for them. A document signed by each of the above named Petitioners was attached to a public comment letter from Theresa Pockrus dated March 10, Motion to Dismiss. Exhibit C to Brief in Support of Joint The document states that it is a public comment on a draft construction permit. It further states that

4 Page 4 the persons signing it agree with comments made by Pockrus in a public comment letter she dated February 27, In addition, the document states that the Petitioners support denial of a final construction permit. Exhibit C to Brief in Support of Joint Motion to Dismiss. Arkansas Code Annotated (b)(1) only requires the submission of public comments during the public comment period. There is no evidence that Pockrus failed to submit her March 10, 2004 letter and the document containing Petitioners public comment to ADEQ during the public comment period. ADEQ and Osage offer no support for their position that Petitioners cannot have some other person relay their public comments to ADEQ. The AHO finds that Petitioners public comment document was submitted to ADEQ during the public comment period. Therefore, the AHO finds that Johnny Pockrus, Nadene Holland, Brant Holland, Beth Lile, and Aulton Patrick qualify as proper parties. c. Comments not submitted ADEQ and Osage contend that Greg Davis, Pansy Martin, Leonard Martin, Nathan Smith, Crystal Smith, John Smith, Emma Smith, Robert Johnson, Stowe Hoffius, Helen Smith, Harry Steve Smith, and Mike Priest are not proper parties. They did not

5 Page 5 submit any public comments to ADEQ and therefore, they have no standing to request a hearing. Petitioners argue that any person who will be directly affected by a final order has the right to be heard at the hearing, to submit evidence, and to be represented by counsel. A.C.A (b). Each of the above named Petitioners is located outside the Osage Basin Wastewater District and each of them will be directly impacted by any order regarding the issue of eminent domain. Pursuant to the above statute, Petitioners assert that they have standing to appeal the permitting decision even though they admittedly did not submit any public comments to ADEQ. The AHO does not accept Petitioners argument regarding standing. Arkansas Code Annotated (b) applies to a person that has standing under subdivision (a) of the statute. To request a hearing in a permit appeal case, the General Assembly established procedures an interested person must follow in order to obtain standing. A.C.A (b)(1). Any person aggrieved by an ADEQ decision that will be directly affected by a final Commission order resolving a permitting decision must comply with Arkansas Code Annotated 8-4-

6 Page 6 205(b)(1). This applies to any aggrieved person seeking to appeal under Arkansas Code Annotated (b). The AHO concludes that a person who submits public comments on the record during the public comment period has standing to request a hearing on a permitting decision. The AHO finds that Greg Davis, Pansy Martin, Leonard Martin, Nathan Smith, Crystal Smith, John Smith, Emma Smith, Robert Johnson, Stowe Hoffius, Helen Smith, Harry Steve Smith, and Mike Priest did not submit public comments during the public comment period. Therefore, they do not qualify as proper parties and are dismissed from this docket. d. Comments made on behalf of another person Mr. Jerry Patrick orally commented about the proposed permit at a public hearing. He was speaking on behalf of himself and claimed to be speaking on behalf of Mr. Kevin Patrick. As a result, Kevin Patrick is listed as one of the Petitioners. There is no evidence that Jerry Patrick is an attorney who was representing Kevin Patrick at the public hearing. There is no evidence that Kevin Patrick authorized Jerry Patrick to make any oral comments on his behalf. There is no evidence that Kevin Patrick submitted any public comments in this docket.

7 Page 7 Therefore, the AHO finds that Kevin Patrick does not qualify as a proper party and he is dismissed from this docket. e. Osage and ADEQ Pursuant to Regulation No. 8, Section 2.5.1(2), the permit applicant is a party to an appeal of the applicant s permit. In this case, Osage is the applicant for a permit and is a proper party to this proceeding. ADEQ is a party to this proceeding pursuant to the provisions of Regulation No. 8, Section 2.5.1(1). This rule provides that the Director is a party to any adjudicatory proceeding. 3. Subject matter jurisdiction ADEQ and Osage move to dismiss a number of issues because the Commission lacks jurisdiction over them. Rule 12(b)(1) of the Arkansas Rules of Civil Procedure ( ARCP ). ADEQ and Osage urge the Commission to dismiss the issues of eminent domain, bad faith, improper formation of the Osage Basin Wastewater District, negligent conduct of the Board, and the unauthorized practice of law. ADEQ and Osage Brief in Support of Joint Motion to Dismiss at pages 6-7. Petitioners contend that all the issues are proper because they were raised in public comments as required by Arkansas Code

8 Page 8 Annotated (b)(2). ADEQ and Osage do not dispute this fact, but contend the Commission must have subject matter jurisdiction to hear and decide the issues. The AHO agrees with ADEQ and Osage. Before the Commission can decide an issue, it must have subject matter jurisdiction, even if the issue was raised in public comments. Petitioners also argue that these issues are appropriate for the hearing because Petitioners must raise them so as to exhaust their administrative remedies. If Petitioners fail to raise these issues at the administrative level, they will be precluded from appealing them to circuit court. The Arkansas Court of Appeals addressed the matter of subject matter jurisdiction applicable to a court or an agency in Weniger v. Weniger, 1991 WL (Ark.App). A court or agency is said to have subject matter jurisdiction of an action if the case is one of the types of cases that the court or agency has been empowered to entertain by the sovereign from which the court or agency derives its authority. Hood v. Ark. School Bd. Ins. Coop., 35 Ark. App. 1, 811 S.W.2d 1 (1991). Jurisdiction of the subject matter is power lawfully conferred on a court to adjudge matters concerning the general question in controversy. Banning v. State, 22 Ark. App. 144, 737 S.W.2d 148 (1986). The Petitioners failed to cite any statute, regulation, or case law giving the Commission jurisdiction to decide the issues

9 Page 9 of eminent domain, bad faith, improper formation of the Osage Basin Wastewater District, negligent conduct of the Board, and the unauthorized practice of law. The AHO finds no legal authority giving the Commission jurisdiction over these issues. Therefore, the AHO dismisses the issues of eminent domain, bad faith, improper formation of the Osage Basin Wastewater District, negligent conduct of the Board, and the unauthorized practice of law. 4. Proper Issues No interested party may raise any issue in the hearing that was not raised in the public comments. A.C.A (b)(2). ADEQ admits Petitioners raised population growth, interceptor lines, and projected costs as issues during the public comment period. T Osage does not agree that those issues were raised during the public comment period because it could not find them. T The AHO relies on ADEQ s admission that the issues of population growth, interceptor lines, and projected costs were raised during the public comment period. Therefore, the AHO finds that these are proper issues for the hearing. Petitioners also alleged that Osage failed to disclose relevant facts in the permit application and presented data in a

10 Page 10 misleading manner. ADEQ and Osage contend Petitioners did not raise the issue of Osage s failure to disclose facts during the public comment period. In addition, Petitioners have not presented any good cause showing why this issue was not raised during the public comment period. ADEQ and Osage Brief in Support of Motion to Dismiss at 10. Arkansas Code Annotated (b)(2) provides that a party raising an issue that was not raised in public comments must show good cause why the issue could not have been discovered and raised during the public comment period. Petitioners claim there are some facts that Osage disclosed after the public comment period. Petitioners did not know about those facts until after they were disclosed. They cite the disclosure of the facts after the comment period as good cause for allowing this issue to be considered at the hearing. The AHO finds some facts were not disclosed until after the public comment period and this constitutes good cause for finding that the failure to disclose facts is a proper issue. At the hearing, Petitioners may present the facts that were not disclosed until after the public comment period as they relate to the issues of population growth, interceptor lines, and projected costs.

11 Page Complete and detailed statement ADEQ and Osage contend the Request does not contain a complete and detailed statement identifying the legal issues and factual objections to the permit action. ADEQ and Osage Brief in Support of Joint Motion to Dismiss at 12. The Request is sixteen (16) pages in length and attached to it are Exhibits A through S. The AHO finds the Request identifies the permit action and date as required by Arkansas Code Annotated (b)(3). It also contains a statement that the AHO finds identifies legal and factual objections to the permit action. The AHO finds the Request meets the requirements of Arkansas Code Annotated (b)(3). IT IS, THEREFORE, ORDERED: 1. That the Joint Motion to Dismiss is granted in part and denied in part. 2. That Theresa Pockrus, LaJoyce Vann, Dalton Vann, Jerry Patrick, Ed Brocksmith, Johnny Pockrus, Nadene Holland, Brant Holland, Beth Lile, and Aulton Patrick are parties to this docket. 3. That Osage Basin Wastewater District is a party to this docket.

12 Page That the Arkansas Department of Environmental Quality is a party to this docket. 5. That the only issues Petitioners may present at the hearing are population growth, interceptor lines, projected costs, and facts that were not disclosed during the public comment period that concern population growth, interceptor lines, and projected costs. 6. That the Third Party Request for Commission Review and Adjudicatory Hearing is proper. This 8 th day of June Michael O Malley Administrative Hearing Officer

13 Page 13 CERTIFICATE OF SERVICE I, Patricia Goff, Commission Secretary, hereby certify that a copy of the foregoing, IN THE MATTER OF OSAGE BASIN WASTEWATER DISTRICT; DOCKET NO P, has been mailed by certified mail or by first class mail, postage prepaid, to the following parties of record, this 8 Th day of June, CERTIFIED MAIL Ms. Theresa L. Pockrus The Nixon Law Firm 2340 Green Acres Rd., Ste 12 Fayetteville, AR Phone: (479) Fax: (479) CERTIFIED MAIL Mr. Jeffrey Reynerson Cypert, Crouch, Clark & Harwell PO Box 1400 Springdale, AR (479) Dawn Guthrie Arkansas Department of Environmental Quality 8001 National Drive Little Rock, AR (501) (501) Patricia Goff Commission Secretary Arkansas Pollution Control and Ecology Commission 101 East Capitol, Suite 205 Little Rock, Arkansas Phone: (501) FAX: (501)