RENDERED: MARCH 15, 2024; 10:00 A.M. NOT TO BE PUBLISHED
Commonwealth of Kentucky Court of Appeals
No. 2023-CA-0605-MR
JAMES JONES APPELLANT
APPEAL FROM FRANKLIN CIRCUIT COURT v. HONORABLE PHILLIP J. SHEPHERD, JUDGE ACTION NO. 22-CI-00208
ENERGY AND ENVIRONMENT CABINET; NICK DARNELL; MICHAEL DARNELL; AND DARNELL PUMPKINS APPELLEES
OPINION AFFIRMING
** ** ** ** **
BEFORE: THOMPSON, CHIEF JUDGE; EASTON AND GOODWINE, JUDGES.
EASTON, JUDGE: This is an administrative appeal of the revocation of Appellant
James Jones’ (“Jones”) construction permit for a Concentrated Animal Feeding Operation (in this case, “Hog Barns”) by the Energy and Environment Cabinet,
Division of Water (“Cabinet”). After review of the record, and for the reasons
which follow, we affirm the Franklin Circuit Court.
FACTUAL AND PROCEDURAL HISTORY
In June 2019, Jones filed an application for a permit to construct a
wean-to-finish deep pit hog facility1 consisting of two barns, designed for 7,800
hogs, in Graves County, Kentucky. The Hog Barns would be serviced by animal
waste containment pits, which must be approved by the Cabinet as part of a waste
handling system. In October 2019, the Cabinet issued a construction permit to
Jones for his Hog Barns with waste containment pits.
The permit application required identification of “significant features”
within one mile of the boundaries of the property where the Hog Barns would be
built. The application process also required siting criteria for certain “setback
features” which must be located at least 1,500 feet away from the Hog Barns
operation. The wording of “setback features” includes a “dwelling not owned by
applicant, church, school, schoolyard, business, park or other structure to which the
general public has access.”
1 In this model, pigs are brought in at weaning and are housed at the same facility until they have reached the desired weight. -2- In February 2020, Jones received a letter from the Cabinet that his
construction permit was being revoked. The letter stated two reasons for the
revocation. First, a neighboring farm with a seasonal business, Darnell Pumpkins,
has public access and, if the entire acreage of the Darnell farm is considered, then
Darnell Pumpkins is a business located within the setback of the siting criteria for
the permit. Second, Jones had failed to include a Nutrient Management Plan
(“NMP”) with his application. The letter stated the revocation of the permit is a
final decision, but it would not preclude the submission of an application for the
same site or facility. The letter also gave instructions on how to request a hearing
to challenge the revocation.
Jones requested such a hearing. In March 2020, he filed a complaint
with the Cabinet’s Office of Administrative Hearings, challenging the revocation
of the construction permit. Virginia Baker Gorley was assigned as the Hearing
Officer. In July 2020, the Hearing Officer allowed Nick Darnell, Michael Darnell,
and Darnell Pumpkins (collectively, “Darnells”) to intervene. Michael Darnell is
the owner of Darnell Pumpkins, and Nick Darnell operates the pumpkin patch part
of the family business. A hearing was held in April 2021.
The Hearing Officer issued her report in August 2021, recommending
the revocation be upheld on the basis that Jones failed to identify a “significant
feature,” the Darnell Pumpkins patch, which existed within one mile of the
-3- property boundary of the facility proposed in his application. The Hearing Officer
recommended that the basis of the revocation should not be because Jones did not
submit an NMP with his application, as the Hearing Officer believed the law did
not require an NMP to be submitted for a “construction” application. The Hearing
Officer further stated the Cabinet acted in accordance with the requisite statutes in
revoking Jones’ permit without a prior hearing. Finally, the Hearing Officer
determined that the issues regarding the setback criteria were moot because the
revocation should be upheld for other reasons.
The Cabinet’s Secretary, Rebecca Goodman (“Secretary”), issued her
Final Order in February 2022. The Secretary partially adopted and partially
rejected the Hearing Officer’s conclusions. The Secretary determined the permit
revocation should be upheld both because Jones failed to identify a significant
feature in his application and because he did not include an NMP with the
application. The Secretary agreed with the Hearing Officer that the setback criteria
finding was moot and that the Cabinet complied with the law in revoking the
permit without a hearing.
Jones then filed an Appeal and Petition for Review in the Franklin
Circuit Court in March 2022. All parties briefed their positions, and oral
arguments were held in November 2022. The circuit court issued its Opinion and
Order on February 24, 2023. From this Order Jones appeals.
-4- The circuit court’s Order affirmed the Secretary’s Final Order to
revoke Jones’ construction permit. The circuit court concluded Jones’ permit was
issued prematurely, and the Cabinet acted properly in revoking the permit. The
circuit court also concluded that the post-revocation hearing afforded due process
to Jones. According to the circuit court, Jones’ application was incomplete, as it
did not have the required NMP attached. The circuit court also found Jones’
application deficient as it did not disclose Darnell Pumpkins as a “significant land
feature,” which then should have been identified as being within one mile of the
property boundaries of the Hog Barns operation. The circuit court’s Order did not
address whether the setback criteria issue was moot.
In the hearings below, Jones challenged the propriety of the Cabinet
revoking the permit prior to an administrative hearing, but he appears to have
abandoned that argument, as it was not addressed in his brief. Failure to address an
issue in an appellant brief is deemed to waive that argument. Grange Mut. Ins. Co.
v. Trude, 151 S.W.3d 803, 815 (Ky. 2004).
There are essentially three questions. The first two questions were
addressed by the circuit court as a basis for its Order. First, was an NMP required
for a construction permit? Second, was Darnell Pumpkins a “significant feature”
that must be disclosed with the permit application? Finally, was the 1,500 feet set-
-5- back determination regarding the pumpkin patch rendered moot by the Secretary’s
holdings, or must we decide that question?
STANDARD OF REVIEW
“Generally, our review of the decision of an administrative agency is
highly deferential, and we reverse only if the decision was arbitrary, unsupported
by substantial evidence, or otherwise erroneous as a matter of law. Substantial
evidence means evidence of substance and relevant consequence having the fitness
to induce conviction in the minds of reasonable men. However, we review
questions of law de novo, including the application and interpretation of statutes.”
River City Fraternal Ord. of Police Lodge No. 614, Inc. v. Louisville/Jefferson
Cnty. Metro Gov’t, 664 S.W.3d 486, 493 (Ky. 2022), reh’g denied (Feb. 16, 2023)
(internal quotation marks and citations omitted). In determining arbitrariness, “the
administrative agency must have acted within its statutory authority, afforded the
parties procedural due process, and supported its decision with substantial
evidence.” Drakes Creek Holding Co., LLC v. Franklin-Simpson Cnty. Bd. of
Zoning Adjustment, 518 S.W.3d 174, 179 (Ky. App. 2017).
“Kentucky courts give substantial deference to an administrative
agency’s construction of applicable statutes and regulations as long as that
interpretation is consistent with the statutory or regulatory language at issue.
Indeed, in the event of any ambiguity, ‘the courts grant deference to any
-6- permissible construction of that statute [or regulation] by the administrative agency
charged with implementing it,’ regardless of whether the Court would reach the
same conclusion de novo.” Louisville Gas & Elec. Co. v. Kentucky Waterways
Alliance, 517 S.W.3d 479, 489-90 (Ky. 2017) (citations omitted).
ANALYSIS
Was the NMP required to be submitted with the construction permit application?
Jones argues it was arbitrary for the Secretary and the circuit
court to rule that the permit revocation should be upheld on the basis that he did
not attach an NMP to his application. The Kentucky Pork Producers Association,
Inc. (“Association”), filed an amicus brief in support of Jones on this point.
Kentucky law requires an owner or operator of an “Agricultural
Wastes Handling System” to obtain a permit to construct, modify, or operate the
facility pursuant to the requirements found in 401 KAR2 5:005 Sections 2, 24, 25,
and 30(1). “Agricultural Wastes Handling System” is defined as a structure or
equipment that conveys, stores, or treats manure from an animal feeding operation
prior to land application. 401 KAR 5:002(5). Jones’ proposed Hog Barns included
such a system and thus met this definition subject to the regulations.
2 Kentucky Administrative Regulations. -7- Jones and the Association insist that the Cabinet’s published
guidelines do not require the submission of an NMP with its application for a
construction permit. They point to the Kentucky Pollutant Discharge Elimination
System Fact Sheet.3 But this Fact Sheet is clearly titled: “General Kentucky No
Discharge Operational Permit (KNDOP) for Small and Medium Animal Feeding
Operations (AFO).” (Emphasis added.) Jones’ application stated the total number
of hogs he was planning to house in the Hog Barns was 7,800, with the
approximate weight of each animal being 140 pounds.
By the Fact Sheet definition, a “Large Animal Feeding Operation
means an AFO that stables or confines as many as or more than the numbers of
animals specified in any of the following categories: (4) 2,500 swine, each
weighing fifty-five (55) pounds or more.” Jones’ Hog Barns cannot be classified
as a small or medium AFO. The plain language of the Short Form B application,
which is specifically incorporated into the governing regulation, requires that a
large AFO have an NMP attached to the application.
On the other hand, Jones is correct in that the Cabinet’s witnesses
testified that it was a common practice to allow an NMP to be submitted after the
issuance of the construction permit, but prior to the issuance of the operational
3 https://eec.ky.gov/Environmental-Protection/Water/PermitCert/KPDES/Documents/ KNDOP(AFO)%20Fact%20Sheet.pdf. -8- permit. Jones argues that requiring an NMP prior to the issuance of a construction
permit is a new policy requirement of the Cabinet, contrary to established practice,
and therefore arbitrary. We must disagree.
Even if some in the Cabinet previously had a practice of not requiring
an NMP to be submitted with a construction permit, this practice was clearly
contrary to the governing regulation. “[A] public officer’s failure ‘to correctly
administer the law does not prevent a more diligent and efficient’ officer’s proper
administration of the law, as ‘[a]n erroneous interpretation of the law will not be
perpetuated.’” Nat. Res. & Env’t Prot. Cabinet v. Kentucky Harlan Coal Co., 870
S.W.2d 421, 427 (Ky. App. 1993) (citing Delta Air Lines, Inc. v. Revenue Cabinet,
689 S.W.2d 14, 20 (Ky. 1985)). Adhering to the law as it is written cannot be
arbitrary.
It is at this juncture we should explain the importance of an NMP for a
large AFO. An NMP is defined as “the plan for an individual operation developed
for the purpose of recycling nutrients from animal waste onto cropland or pasture.”
401 KAR 5:002(119). The previously referenced Fact Sheet further explains:
“The primary purpose of the NMP is to achieve the correct nutrient level (nitrogen
and phosphorus) needed to grow the planned crop by balancing nutrients already in
the soil with nutrients in animal waste that is land applied. The NMP should
-9- prevent the application of nutrients at rates that will exceed the capacity of the soil
and crops to assimilate them.”
As argued by the Cabinet, the NMP is more than just “bureaucratic
paperwork.” It is an essential regulatory tool that ensures those wishing to operate
an AFO will have an effective plan in place to prevent eventual pollution because
of the inability of the land to contain the waste. This would include nearby water
pollution.
An NMP must include “protocols for testing of manure, litter, process
wastewater, and soil; protocols to land apply manure, litter, or process wastewater
in accordance with site-specific nutrient management practices that ensure
agricultural utilization of the nutrients in the manure, litter, or process
wastewater.”4 This practice requires the applicant to test their soil to ensure the
soil will properly absorb the nutrients from the animal waste. If the soil is not
compatible with the waste, it makes sense to have that information prior to the
building of a large AFO.
The lack of a NMP alone was sufficient reason for the Cabinet to
revoke Jones’ construction permit.
4 Fact Sheet KNDOP GP for Small & Medium AFOs, pages 8 and 9. -10- Is Darnell Pumpkins a “significant feature” required to be disclosed on the construction permit application?
The next question is whether a seasonal pumpkin patch should be
considered a “significant feature” that must be disclosed with a permit application.
The Cabinet and the Darnells argue that it is, while Jones insists it is not.
The undisputed evidence is that the Darnells’ farm consists of
approximately 144 acres, but only a portion of that acreage consists of crops with
seasonal public access. Testimony indicated that the farm includes a pumpkin
patch of approximately seven acres where the public may enter to pick their own
pumpkins. There are also hayrides that take place through the pumpkin patch, and
there is a corn maze which is also open to the public. This is a seasonal operation,
in which this portion of the farm is open from September to the end of October
each year.
The regulations require an owner or operator of an Agricultural
Wastes Handling System to submit a completed Short Form B. This form requires
several attachments, depending on what the applicant is requesting. As we have
explained, an NMP was required in this case. The first listed requirement under
the attachments portion of the application states:
Attach a site location map with the facility clearly marked. Provide either a U.S. Geological Survey 7 ½ - minute quadrangle map, aerial map, topographic map, or other map that identifies the site location and significant
-11- features within an aerial of at least 1 mile beyond the property boundaries.
An instruction sheet is included with the application. Under “Section VI.
Attachments,” a more specific direction is given:
Attach either a US Geological Survey 7 ½ minute quadrangle map, aerial map, topographic map, or other map with an area of at least 1 mile beyond the property boundaries. Depict or mark the facility and its intake structure, treatment system and disposal area. Also, mark the locations of the wells, springs, surface water bodies, and drinking water wells listed in public records or otherwise known to the applicant within one-quarter mile of the facility property boundary.
The dispute between the parties lies in the definition of “significant
features.” There is no definition given in either the regulation or in Short Form B.
Kentucky’s Commissioner of Agriculture (“Commissioner”) filed an Amicus brief
in support of Jones on this issue. The Commissioner argues that a neighboring
landowner’s land usage cannot be determined to be a “significant land feature” as a
matter of law. The Commissioner’s basic argument applies equally to the actual
wording of “significant feature” without the insertion of the word “land.” The
Commissioner, the Secretary (in her revocation letter), and the circuit court
inserted the word “land” in the phrase, although this word is not part of the
phrasing in the regulation or on the form.
The Cabinet’s letter to Jones which informed him of the revocation of
his construction permit listed two reasons for the revocation, one being Jones’ -12- failure to name Darnell Pumpkins as a “significant land feature” within one mile of
his property boundary for the proposed facility in his application. The revocation
letter reads:
The Kentucky Division of Water (DOW) issued a Construction Permit (Permit) for the above-referenced facility on October 23, 2019. The DOW has recently found significant land features that were not identified with the application submitted for the Permit received by the DOW on June 28, 2019. In particular, a local business, Darnell Pumpkins, which has general public access, is located within the setback required in the Sitting [sic] Criteria of the Permit. Also, for large feeding operations, the application form states that a Nutrient Management Plan must be attached, but no such plan was attached. Therefore, the DOW is revoking the issuance of the Permit as of the date of this letter. Revocation of this Permit is considered a permit final decision and it shall not preclude the submission of an application for the same site or facility.
Jones argues that the Cabinet’s determination that Darnell Pumpkins
was a “significant feature” which must be disclosed is arbitrary because it is
without precedent or logical explanation. Jones and the Commissioner insist that
the phrase “significant features” is limited to permanent significant land features,
such as streams, lakes, or hills – not a seasonal crop grown on the land.
As previously stated, the phrase “significant features” is not defined in
the application, the form, the regulation, or in any relevant statute. KRS5 13A.222,
5 Kentucky Revised Statutes. -13- entitled “Drafting rules,” explains the process for drafting administrative
regulations. Subsection 4(e)5. states: “Definitions shall be used only: (a) When a
word is used in a sense other than its dictionary meaning, or is used in the sense of
one (1) of several dictionary meanings[.]” Because “significant features” is not
defined anywhere, it was logical to use an ordinary dictionary meaning, which is
what the Hearing Officer attempted to do.
“[A]n administrative agency’s interpretation of its own regulations is
entitled to substantial deference. A reviewing court is not free to substitute its
judgment as to the proper interpretation of the agency’s regulations as long as that
interpretation is compatible and consistent with the statute under which it was
promulgated and is not otherwise defective as arbitrary or capricious.”
Commonwealth, Cabinet for Health Servs. v. Fam. Home Health Care, Inc., 98
S.W.3d 524, 527 (Ky. App. 2003) (citations omitted).
As we have said, we defer to administrative agencies to some degree
when they define a term they must apply. It would not necessarily be out of line to
interpret the phrase “significant features” to refer to “land” features. But even with
this clarification by the Cabinet, the parties present fair arguments about the status
of the pumpkin patch as a land feature.
We must keep in mind that the government oversight here is by the
Division of Water as part of the Cabinet tasked with legitimate environment
-14- concerns. It is noteworthy that the application specifies water features (e.g., wells
and streams) as particularly relevant in the process. In keeping with this
understanding, it would be logical to apply the phrase “significant features” to only
features of the land itself. Because of topsoil displacement, significant features
could include buildings and parking lots for businesses. A significant feature may
also be hills or slopes raising concerns about the ability of the land in the vicinity
to contain waste or other water drainage issues. But the mere presence of crops
alone may not be intended to be a “significant feature” relevant to protection of
water or other environmental resources.
With or without the required deference to the Cabinet, we are
presently unpersuaded that the mere presence of crops on farmland was intended to
be within the definition of significant features. If so, why is the pumpkin patch
different from other crops grown on the Darnell property? Perhaps because of the
business component. The relationship between significant features and setback
features needs to be considered.
When we examine the interaction of significant features and setback
features, we see that setback features could be considered a subset of significant
features in the application process. If something requires a setback, then it is
significant. On the other hand, a significant feature, like a nearby stream for
example, may not fit within the definition of a setback feature. So, a crop grown
-15- on land may not be a significant feature impacting the lay of the land itself, but it
could be a setback feature and thus significant if it is part of a business open to the
public.
Growing of crops alone would not seem to be a significant feature for
the purpose of the use of the phrase in the context of environmental protection.
Agricultural operations have a statutory definition. KRS 224.71-100(1). But this
definition has not been incorporated into the amorphous phrase “significant
features” in any statute or regulation. Because we base this Opinion primarily on
another reason offered by the circuit court, we need not ultimately decide this
question of “significant features” to be disclosed. This should be addressed again
if another application is filed.
After the filing of a new and complete application, the Cabinet may be
able to show a significant impact of crops being on land as opposed to open fields
or forested areas with respect to land waste containment or water drainage. A
determination that a pumpkin patch or other crops is a significant feature
theoretically might be sustainable. The Cabinet did not ultimately make this
particular finding, again conflating significant feature with setback feature. We
express some concern about the potential impact of such a broad definition of
significant feature as any crops growing in neighboring fields. This could
-16- significantly and perhaps unnecessarily limit many land uses by Jones, the
Darnells, or anyone else for that matter.
The conflation by the parties of significant features with a business
requiring a setback is present throughout this case. Both Jones and the Agriculture
Commissioner argue that a business open to the public has never before been
considered a “significant feature” that must be identified in an application. They
argue the Cabinet violated KRS 13A.130 by this interpretation, which states: “(1)
An administrative body shall not by internal policy, memorandum, or other form of
action: (a) Modify a statute or administrative regulation; (b) Expand upon or limit
a statute or administrative regulation[.]” Jones argues the Cabinet’s interpretation
expanded the requirements of the permit application and departed from precedent.
While it may be the case that a seasonal crop-related business open to
the public has not been required to be disclosed as a significant feature on the
application previously, there was testimony that this particular situation had never
arisen before. The deposition testimony of Jory Becker (“Becker”), the manager of
the Water Infrastructure Branch of the Cabinet, indicated that he could not recall
an instance where a farm that included a business open to the public was within a
mile radius of a proposed large AFO that required a waste handling system permit.
Becker testified that most farms and other agricultural operations are not open to
the public and are therefore not considered a significant feature or subject to the
-17- setback requirement. He does not believe this is a new condition or way of doing
things; this is just a situation that had not previously been encountered.
The testimony of Jason Hurt (“Hurt”) supported Becker’s statements.
Hurt is the environmental engineering branch manager at the Cabinet, and he
works in the surface water permits branch. While he agrees the term “significant
feature” is undefined in the regulations, he believes it is a common sense meaning
of the word. He testified that a “significant feature” includes a business open to
the public. Hurt testified that what makes Darnell Pumpkins significant in this
case is that it is open to the public. The previous director of the Division of Water,
Peter Goodmann, also agreed in his testimony that the Cabinet has the right to
interpret its own rules. There cannot be a departure from precedent to complain
about when there is no precedent. A well-reasoned precedent is needed, and that
should follow a proper application, which recognizes the debate by designation in
its attachments, with a record of evaluation of these questions when that
application is evaluated.
Was the 1,500-feet setback requirement rendered moot by the Secretary’s other conclusions?
Finally, Jones argues the circuit court erred in upholding the
Secretary’s finding that his failure to comply with the setback requirement was
moot. He states the 1,500-feet setback requirement was the basis for the permit
revocation, and it therefore cannot be moot. In the alternative, Jones argues that if -18- this determination is moot, it should still be reviewed because it meets the
mootness exception of capable of repetition, yet evading review.
The Hearing Officer explained the reasoning for the mootness finding.
She explained that the initially granted construction permit was written with certain
factual assertions in mind, and these assertions did not include knowledge of the
pumpkin patch. When the Cabinet issued the permit and its conditions, it did so
without knowledge of the pumpkin patch. The application lacked necessary
information – that a business open to the public existed within a mile – in order to
issue the necessary requirements. Had the Cabinet known about the existence of
the pumpkin patch, it could have investigated further and created requirements to
make sure all parties were properly protected. Because the application did not
contain that information, the requirements listed in that permit were null and void.
Therefore, the disagreement as to whether the Hog Barns could meet the setback
requirements was moot.
Given the conflation we have discussed, it is not obvious to what
extent the setback issue is truly moot, but it is premature for this Court to
determine this on this record. Despite the revocation of Jones’ construction permit
at issue, there is nothing preventing Jones from filing a new application containing
the necessary and required information. Should Jones wish to do so, the Cabinet
must then determine if the Pumpkin Patch is a significant feature and a setback
-19- feature and whether Jones’ proposed Hog Barns operation is able to meet any
setback requirement. From the record, we now know that the actual area used for
the seasonable activities (as opposed to the entire Darnell farm) is in fact beyond
the 1,500-foot minimum for a setback. But all this should be reconsidered upon a
new application.
In this context, we note how the wording of setback features suggests
the presence of a “structure” or other alteration of the land itself which impacts the
land in conjunction with a business, not necessarily a crop, which might be
seasonally sold to the public. Is the Cabinet going to apply this rule to every road-
side corn stand where farmers sell some of their corn in season? These questions
were rendered moot due to the lack of an NMP with Jones’ application. But the
question will arise again. We should await evaluation first by the Cabinet when a
proper application is filed. Rather than deciding on an ad hoc basis that a
significant feature, perhaps including setback features, is whatever someone wants
it to be in a particular case, it may well be time for more specific regulatory
definitions to be drafted with input from all those affected.
CONCLUSION
Because of the absence of the required NMP with Jones’ application,
we affirm the Franklin Circuit Court’s order upholding the Cabinet Secretary’s
revocation of a construction permit.
-20- ALL CONCUR.
BRIEFS FOR APPELLANT: BRIEF FOR APPELLEE ENERGY AND ENVIRONMENT CABINET: John W. Walters Gary W. Thompson Leilani K. M. Martin Lexington, Kentucky Frankfort, Kentucky
AMICUS BRIEF FOR KENTUCKY BRIEF FOR APPELLEES NICK PORK PRODUCERS DARNELL, MICHAEL DARNELL, ASSOCIATION, INC.: AND DARNELL PUMPKINS:
Michael W. McCain, Jr. Tom FitzGerald Springfield, Kentucky Frankfort, Kentucky
AMICUS BRIEF FOR JONATHAN SHELL, COMMISSIONER OF AGRICULTURE:
Joseph A. Bilby Frankfort, Kentucky
-21-