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Wednesday, April 14, 2010

Ind. Decisions - One opinion today from the Supreme Court

In Robert E. Carter, Jr., et al. (IDNR) v. Nugent Sand Co., et al., an 8-page, 5-0 opinion, Chief Justice Shepard writes:

Landowners and lessees obtained state approval a decade ago to dig a channel from the Ohio River to a nearby lake so that they could use the lake for a sand and gravel operation. They now seek judicial relief from conditions imposed within their 1999 permits. We conclude that that the present action should be dismissed for failure to exhaust administrative remedies. * * *

Nugent sought and acquired a permit from the Department of the Army, Corps of Engineers, because the excavation would connect the lake to the Ohio River, a navigable waterway. It also obtained certificates of regulatory approval from the Indiana Department of Natural Resources because the construction would take place in a floodway and involved construction of an access channel. Among the conditions contained in DNR‟s granted certificates were provisions mandated by a section of the Indiana Code: “If a channel will: (A) connect to a navigable river or stream; and (B) create additional water areas that will be connected to the navigable river or stream; dedicate any water created to general public use.” Ind. Code § 14-29-4-5(2) (2008); (App. at 95.) * * *

Around 2005, boaters began entering the lake for recreational purposes through the excavated channel. Many of the boaters created traffic and barge obstructions for Nugent Sand‟s operations by tying boats together, swimming in the lake, and engaging in various forms of raucous behavior. Nugent Sand posted and attempted to enforce “No Trespassing” and “Danger Barge Operations” signs at the entrance of the channel. The efforts to remove these unauthorized persons were largely unsuccessful. Third-party harbor boats subsequently began to decline to work in the lake, and a number of Nugent‟s own employees became apprehensive because of the heightened risk of property damage and serious bodily injury. * * *

Nugent Sand moved for summary judgment, arguing essentially that the lake and the channel were private property from which they could exclude the public and that any attempt to force them to dedicate the property for public use without compensation would be an unconstitutional taking. (App. at 245–276.) DNR‟s response contended that Nugent exchanged providing public access to the lake and channel as a condition for digging the channel, and the public gained access to the property by virtue of Indiana statute as well as various common law principles. (App. at 290–313.) On October 28, 2008, the trial court agreed with Nugent Sand and entered a permanent injunction.

As the trial court held unconstitutional one of the statutes under which DNR had acted during the permitting process, DNR filed an appeal directly with this Court. Ind. Appellate Rule 4(A)(1)(b).

The Takings Claim. Whether there is a winning takings claim at the heart of Nugent Sand‟s situation is doubtful. * * *

Doubtful as the takings claim may be, we conclude that the constitutional question need not be adjudicated in light of DNR‟s contention that it was entitled to a dismissal.

Exhaustion of Administrative Remedies. The Department urges that it was entitled to a dismissal because Nugent Sand failed to exhaust available administrative remedies.

The basis of this argument is that remedies have existed and that the permits themselves informed Nugent Sand of the processes by which it could appeal any condition contained in the two permits. * * *

DNR maintains that instead of filing the present court action, Nugent should have undertaken these remedies for an interpretation of the dedication to public use requirement of Ind. Code § 14-29-4-5(2) and the application of this statue to the property at issue. * * *

By contrast, Nugent Sand had an administrative remedy. Indeed, each permit contained information about how to appeal. (See App. at 91–102.) Moreover, the terms imposed by DNR, “requiring all additional waters created by this project be dedicated to the public as required under IC-14-29-4,” were explicitly set forth in the “Special Conditions” section of the approval documents. (See App. at 94–95, 100–101.) As for whether this language was adequate to alert Nugent to the fact that it was giving up exclusive use by virtue of obtaining the permits, there might have been some basis for debating whether the statute and the permit conditions applied to the channel and the lake or just to the channel. But Nugent has forcefully insisted that it gave up nothing at all (“even a single boater getting „in the way‟. . . is an unacceptable interference,” Appellees‟ Br. at 26) when the statute is plain that at least the channel (“all additional waters”) were being dedicated to public use. DNR gave plain enough notice. * * *

Conclusion. We reverse the trial court and remand with directions to grant the Department‟s motion to dismiss.

Sullivan, Boehm, and Rucker, JJ., concur. Dickson, J., concurring in result.

Posted by Marcia Oddi on April 14, 2010 02:19 PM
Posted to Ind. Sup.Ct. Decisions