ROY CAMPBELL v. NATURAL RESOURCES AND ENVIRONMENTAL PROTECTION CABINET
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RENDERED:
JULY 2, 2004; 2:00 p.m.
ORDERED NOT PUBLISHED BY THE KENTUCKY SUPREME COURT:
MAY 11, 2005 (2004-SC-0592-D)
Commonwealth Of Kentucky
Court of Appeals
NO. 2003-CA-001413-MR
ROY CAMPBELL
v.
APPELLANT
APPEAL FROM PERRY CIRCUIT COURT
HONORABLE DOUGLAS C. COMBS, JR., JUDGE
ACTION NO. 00-CI-00320
NATURAL RESOURCES AND
ENVIRONMENTAL PROTECTION CABINET
APPELLEE
OPINION
REVERSING AND REMANDING
** ** ** ** **
BEFORE:
BARBER, KNOPF, AND SCHRODER, JUDGES.
SCHRODER, JUDGE.
This is an appeal from an order of the Perry
Circuit Court affirming a decision of the Secretary of Natural
Resources and Environmental Protection Cabinet adjudging that
appellant violated KRS 350.060 by engaging in mining operations
without a permit and assessing a fine of $5,000.
Appellant
argues the fine was unlawful because his excavation of the coal
was not for the purpose of obtaining coal as required by KRS
350.010(1).
We agree with appellant that KRS 350.010(1) and (2)
contain an “intent” requirement that the extraction of the coal
must be for the purpose of obtaining coal or extracting
minerals, ores or other solid matter.
Since the evidence was
undisputed that appellant did not act for the purpose of
obtaining the coal, the citation was issued in error.
Hence, we
reverse the order and remand the matter for further proceedings
consistent with this opinion.
The facts in this case are essentially undisputed.
Appellant, Roy Campbell, is self-employed as a developer of
commercial and residential properties.
In late summer of 1998,
Campbell hired employees to conduct landscape excavation on a
piece of property on Highway 80 in Perry County with a view
toward commercial development.
At the same time, Campbell
agreed to build a new road for several homes located above the
initial excavation site.
The existing road had failed, and
Campbell had persuaded the Perry County Fiscal Court Judge to
accept a deed from him so that a more stable road could be built
to the homes.
As construction of the road progressed and
material was moved, Campbell was notified by the Highway
Department not to push any resulting dirt and material onto the
highway right-of-way property adjoining the site, which Campbell
sought to repurchase, until the buy-back was consummated.
At
some point during the road construction, a Hazard City employee
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asked Campbell to build an access road across the construction
site to a city water pump that was adjacent to Campbell’s
property on the side opposite the access road to the homes.
Campbell agreed and engaged the services of Mark Perry to build
the road to the water pump.
Thereafter, Campbell did not visit
the site everyday because he was working at another job site.
In early September, while Campbell was in Somerset, Perry
uncovered and stacked up a pile of coal that totaled
approximately 345 tons.
The evidence established that the coal,
which had previously been mined in the 1960’s or 1970’s, was of
very poor quality and was lying under a shallow layer of leaves
and other debris.
When Campbell next visited the site on September 3,
1998, and saw what Perry had done, he told Perry, “You’ve got us
in trouble.
You should have left it laying.”
Perry replied
that he decided to pile it back against the highway until it
could be thrown onto the highway property Campbell was in the
process of buying back from the county.
It is undisputed that no coal was ever sold or moved
from the site, and after Campbell’s discovery of the coal, no
coal was added to the pile.
The pile of coal was easily visible
from Highway 80.
Unbeknownst to Campbell, the Natural Resources and
Environmental Protection Cabinet (the “Cabinet”) began an
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investigation of the coal in early September once it became
aware of its existence.
As part of the investigation, motion-
sensitive surveillance cameras were installed on September 18,
1998, on Campbell’s property and were pointed toward the pile of
coal.
One of Campbell’s employees discovered the surveillance
cameras on or about October 2, 1998, while working in the area.
When Campbell confronted the individuals taking the cameras
down, they told Campbell that the cameras had been installed to
catch people from the trailer park dumping raw sewage in the
area.
It should be noted that no evidence relative to what the
surveillance cameras captured was presented by the Cabinet at
the hearing.
On October 5, 1998, the Cabinet issued a citation to
Campbell for mining coal without a permit in violation of KRS
350.060 and fined him $10,000 (Non-Compliance No. 610667 and
Illegal Mining Cessation Order No. 061103).
Subsequently, upon
the direction of Cabinet employees present at the site, Campbell
buried the coal two or three days later.
Campbell contested the citation, and thereafter a
formal hearing was held on the matter on January 11, 2000,
before the Chief Hearing Officer (the “CHO”).
The CHO rendered
his report and recommendation in which he found that Campbell
was not engaged in surface coal mining or strip mining.
Accordingly, he recommended that the Cabinet enter an order
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adjudging that Campbell did not violate the provisions of KRS
350.060.
The Cabinet then filed its exceptions.
On March 16,
2000, the Cabinet Secretary entered an order adopting the
Cabinet’s exceptions and certain of the CHO’s findings, but
ultimately rejected the CHO’s recommendation to vacate the
citation and remanded the case to the CHO to assess a penalty
between $5,000 and $25,000.
On remand, the CHO recommended a
civil penalty of $5,000 which was adopted by the Cabinet
Secretary in a final order entered on May 18, 2000.
Campbell
thereafter filed his petition for review in the Perry Circuit
Court on June 16, 2000.
On March 13, 2003, the Perry Circuit
Court entered its opinion and order affirming the Cabinet
Secretary’s decision.
From the order denying Campbell’s motion
to alter or amend, this appeal followed.
The first argument we must address is the Cabinet’s
assertion that the Perry Circuit Court did not have jurisdiction
over Campbell’s petition for review because a summons was never
issued on the Cabinet as was required by KRS 350.0305 and CR
3.01.
However, this argument was not raised in a protective
cross-appeal, but rather in the Cabinet’s appellee’s brief.
We
adjudge that it was improperly raised in the appellee’s brief in
this case because the jurisdiction argument was not related to
Campbell’s arguments on appeal on the merits of the case and,
thus, was not properly raised as a response to those arguments.
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Thompson v. Piasta, Ky. App., 662 S.W.2d 223 (1983).
was a completely separate ground for cross-appeal.
Rather, it
CR 74.01.
Although the Cabinet concedes that the issue should have been
raised in a separate cross-appeal, the Cabinet maintains that
subject matter jurisdiction can be raised at any time.
It has
been held that failure of service of process is a matter of
personal jurisdiction, Foremost Ins. Co. v. Whitaker, Ky. App.,
892 S.W.2d 607 (1995), and, unlike subject matter jurisdiction,
personal jurisdiction can be waived.
Ramirez v. Com. ex rel.
Brooks, Ky. App., 44 S.W.3d 800 (2000).
Accordingly, since the
argument was not raised in a protective cross-appeal, it is
precluded from our review.
See Smith v. Wal-Mart Stores, Inc.,
Ky., 6 S.W.3d 829 (1999); Lainhart v. Rural Doxol Gas Co., Ky.,
376 S.W.2d 681 (1964); and Center v. Rose, 252 Ky. 463, 67
S.W.2d 698 (1934).
We now move on to Campbell’s argument that under the
definitions of surface mining and strip mining in KRS 350.010(1)
and (2), it must be shown that Campbell’s actions in unearthing
the coal were with the intent to obtain the coal.
It is
Campbell’s position that there was no evidence of said intent
and that the Cabinet’s interpretation effectively imposed
vicarious strict liability on him for his employee’s mere
incidental extraction of the coal during excavation for the road
in question.
KRS 350.010(1) provides:
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"Surface coal mining operations" means
activities conducted on the surface of lands
in connection with a surface coal mine and
surface impacts incident to an underground
coal mine. The activities shall include
excavation for the purpose of obtaining
coal, including such common methods as
contour, strip, auger, extended depth
secondary recovery systems, mountaintop
removal, box cut, open pit, and area mining,
the use of explosives and blasting, and in
situ distillation or retorting, leaching, or
other chemical or physical processing, and
cleaning, concentrating, or other processing
or preparation, and the loading of coal at
or near the mine site. Excavation for the
purpose of obtaining coal includes
extraction of coal from refuse piles. The
activities shall not include the extraction
of coal by a landowner of fifty (50) tons or
less within twelve (12) successive calendar
months for his own noncommercial use from
land owned or leased by him; the extraction
of twenty-five (25) to two hundred fifty
(250) tons of coal as an incidental part of
privately financed construction where the
coal is donated to a charitable or
educational organization for noncommercial
use or noncommercial distribution; the
extraction of coal as an incidental part of
federal, state, or local government financed
highway or other construction under
administrative regulations established by
the cabinet; the extraction of, or intent to
extract, twenty-five (25) tons or less of
coal by any person by surface coal mining
operations within twelve (12) successive
calendar months; the extraction of coal
incidental to the extraction of other
minerals where coal does not exceed sixteen
and two-thirds percent (16-2/3%) of the
tonnage of minerals removed for purposes of
commercial use or sale; or coal exploration
subject to KRS 350.057. Surface coal mining
operations shall also include the areas upon
which the activities occur or where the
activities disturb the natural land surface.
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The areas shall also include any adjacent
land, the use of which is incidental to the
activities, all lands affected by the
construction of new roads or the improvement
or use of existing roads to gain access to
the site of the activities and for haulage,
and excavations, workings, impoundments,
dams, ventilation shafts, entryways, refuse
banks, dumps, stockpiles, overburden piles,
spoil banks, culm banks, tailings, holes or
depressions, repair areas, storage areas,
processing areas, shipping areas, and other
areas upon which are sited structures,
facilities, or other property or materials
on the surface resulting from or incident to
the activities. This definition shall
include the terms "strip mining" of coal and
the "surface effects of underground mining"
of coal as used in this chapter; (emphasis
added.)
Section 2 of the above statute provides:
"Strip mining" means the breaking of the
surface soil in order to facilitate or
accomplish the extraction or removal of
minerals, ores, or other solid matter; any
activity or process constituting all or part
of a process for the extraction or removal
of minerals, ores, and other solid matter
from its original location; and the
preparation, washing, cleaning, or other
treatment of minerals, ores, or other solid
matter so as to make them suitable for
commercial, industrial, or construction use;
but shall not include the extraction of coal
by a landowner for his own noncommercial use
of fifty (50) tons or less within twelve
(12) successive calendar months from land
owned or leased by him; the extraction of
coal as an incidental part of federal,
state, or local government financed highway
or other construction under administrative
regulations established by the cabinet; the
extraction of, or intent to extract, twentyfive (25) tons or less of coal by any person
by surface coal mining operations within
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twelve (12) successive calendar months; the
extraction of coal incidental to the
extraction of other minerals where coal does
not exceed sixteen and two-thirds percent
(16-2/3%) of the tonnage of minerals removed
for purposes of commercial use or sale; coal
exploration subject to KRS 350.057; nor
shall it include the surface effects or
surface impacts of underground coal mining;
(emphasis added.)
The basic scope of judicial review of an
administrative decision is limited to a determination of whether
the agency’s action was arbitrary.
380 S.W.2d 233 (1964).
Bobinchuck v. Levitch, Ky.,
If an administrative agency’s findings
of fact are supported by substantial evidence of probative
value, they must be accepted as binding and it must then be
determined whether or not the agency has applied the correct
rule of law to the facts so found.
Kentucky Unemployment Ins.
Comm’n v. Landmark Community Newspapers of Kentucky, Inc., Ky.,
91 S.W.3d 575 (2002).
The Court of Appeals is authorized to
review issues of law involving an administrative agency decision
on a de novo basis.
Aubrey v. Office of Attorney General, Ky.
App., 994 S.W.2d 516 (1998).
The Cabinet maintains that as Perry’s employer,
Campbell is responsible for Perry’s actions in extracting and
stockpiling the coal, as they were within the scope of his
employment.
Further, according to the Cabinet’s interpretation
of KRS 350.010(1) and (2), the Cabinet is not required to prove
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that Campbell’s employee’s excavation of the property at issue
was for the purpose of obtaining coal.
In support of their
position, the Cabinet cites to an unpublished decision that we
will not address, see CR 76.28(4)(c), and Natural Resources and
Environmental Protection Cabinet v. Adams, Ky. App., 812 S.W.2d
159 (1991).
In Adams, this Court held that there was substantial
circumstantial evidence to support the Cabinet’s determination
that appellee was engaged in surface coal mining activities
pursuant to KRS 350.010(1) without a permit.
In that case,
appellee was discovered on the subject property drilling holes
for explosives with other mining equipment on the site.
A road
had been cut from an old permitted road to the subject site.
Overburden had been removed from the site and the coal seam
exposed.
However, at that time, there was no evidence that coal
had been removed from the property.
Approximately two weeks
later, an inspection of the site revealed a pit in the area
where appellee’s drill had been operating from which it was
estimated that 1,000 – 1,500 tons of coal had been removed.
In
reversing the circuit court’s order reversing the Cabinet’s
issuance of the citation for mining without a permit, this Court
stated, “The circuit court seemed to think that [appellee] had
to be caught ‘redhanded’ removing the coal, but we do not
believe the cabinet had that strict a burden.”
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Adams, 812
S.W.2d at 161.
This Court also specifically upheld the
Cabinet’s finding that appellee’s activities fell within the
definition of “surface coal mining operations” in KRS
350.010(1).
From our reading of Adams, it stands solely for the
proposition that circumstantial evidence is sufficient to prove
an individual is engaged in surface or strip mining activities
under KRS 350.010(1) and (2).
Contrary to the Cabinet’s and the
circuit court’s interpretation of Adams in the present case,
Adams’ holding had no bearing on the “intent” issue - whether it
must be proven that the individual’s actions were for the
purpose of obtaining coal.
The second sentence in the definition of “surface coal
mining operations” in KRS 350.010(1) clearly states, “The
activities shall include excavation for the purpose of obtaining
coal, including . . . .”
Similarly, the definition of “strip
mining” in KRS 350.010(2) requires that the individual act to
“facilitate or accomplish the extraction or removal of minerals,
ores, or other solid matter . . . .”
Where a statute is
unambiguous, it should be given effect according to its literal
language.
Hillard v. U.S., 310 F.2d 631 (6th Cir. 1962).
We do
not see that either section could be interpreted other than to
contain an “intent” element – that the individual acted with the
intent to obtain the coal.
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In Adams, there was an abundance of circumstantial
evidence that appellee’s activities were for the purpose of
obtaining coal.
The site appeared to have been prepared for
mining in that a road had been built to the site, overburden had
been removed and the coal seam exposed.
The appellee was
thereafter seen drilling the telltale holes for mining
explosives at the same time mining equipment with defaced serial
numbers was found on the site.
Two weeks later, a pit was
observed in the same place appellee had been drilling from which
1,000 – 1,500 tons of coal had been removed.
In the present case, the only evidence that Campbell
was engaged in mining activities was the stockpile of coal
itself, which the Cabinet maintains was all it needed to prove
he was mining without a permit.
The Cabinet apparently
interprets KRS 350.010(1) and (2) such that if no coal has yet
been removed, then it must prove that the individual’s actions
were for the purpose of obtaining coal.
If, however, coal has
been removed, such intent need not be shown.
The circuit court
noted in its opinion that such an interpretation of the statute
by the administrative body was entitled to great deference.
Hagan v. Farris, Ky., 807 S.W.2d 488 (1991).
However, it has
been held that a reviewing court is not bound by an erroneous
interpretation of the law no matter how longstanding the
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interpretation is.
Camera Center, Inc. v. Revenue Cabinet, Ky.,
34 S.W.3d 39 (2000).
The Cabinet’s interpretation of KRS 350.010(1) and (2)
essentially creates an irrebuttable presumption of intent to
obtain the coal whenever coal is removed, regardless of whether
the extraction was purposeful, inadvertent or incidental.
We do
not believe such a presumption can be read into the statute.
As
stated above, the statutory definitions of “surface coal mining”
and “strip mining” unambiguously require the person to be acting
for the purpose of obtaining coal or extracting minerals, ores,
or other solid matter, respectively.
In the present case, all the evidence relative to the
excavation of the coal tended to show that its extraction was
not for the purpose of obtaining coal.
Although we agree with
the Cabinet that Campbell would be vicariously liable for the
actions of Perry within the scope of his employment, see
Commonwealth of Kentucky, Natural Resources and Environmental
Protection Cabinet v. MIC-BAR, Inc., Ky. App., 765 S.W.2d 585
(1988), there was no direction by Campbell to Perry relative to
doing anything with coal prior to the excavation.
The evidence
established that neither Campbell nor Perry was in the coal
business, and the sole purpose of the excavation at issue was to
construct a road to a nearby water pump.
Campbell testified
that Perry told him that he piled the coal up so it could be
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easily thrown over the hill onto property Campbell was in the
process of repurchasing from the county.
It is undisputed that
after the coal was stockpiled, the pile was not moved in any way
and nothing was added to or removed from the pile until it was
wasted in accordance with the Cabinet’s instructions.
Neither
Campbell nor Perry in any way attempted to benefit from
obtaining the coal.
To the contrary, the extraction of the coal
appears to have been only a burden for Campbell.
All of the
evidence indicated that the extraction of the coal was
incidental to the excavation for the road.
We acknowledge there
could exist a situation where the intent to obtain coal would
not be present at the outset of the excavation, but could
thereafter be formed after the coal has incidentally been
accessed or extracted, e.g., where a contractor incidentally
encounters and extracts the coal in the process of excavating on
a construction site and thereafter sells the coal.
that is not what happened in the instant case.
However,
There was simply
no evidence that Campbell’s (or Perry’s) actions were ever for
the purpose of obtaining the coal.
For the reasons stated above, we reverse the order of
the Perry Circuit Court affirming the Cabinet’s imposition of
the penalty for mining without a permit and remand the matter
for further proceedings consistent with this opinion.
ALL CONCUR.
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BRIEF AND ORAL ARGUMENT FOR
APPELLANT:
BRIEF AND ORAL ARGUMENT FOR
APPELLEE:
Charles Allen
Hazard, Kentucky
Jennifer Cable Smock
Frankfort, Kentucky
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