Morgan v. Natural Resources & Environmental Protection Cabinet

6 S.W.3d 833, 1999 Ky. App. LEXIS 157, 1999 WL 1256189
CourtCourt of Appeals of Kentucky
DecidedFebruary 26, 1999
DocketNo. 1997-CA-002645-MR
StatusPublished
Cited by11 cases

This text of 6 S.W.3d 833 (Morgan v. Natural Resources & Environmental Protection Cabinet) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Morgan v. Natural Resources & Environmental Protection Cabinet, 6 S.W.3d 833, 1999 Ky. App. LEXIS 157, 1999 WL 1256189 (Ky. Ct. App. 1999).

Opinion

OPINION

KNOX, Judge:

This is an appeal from a judgment entered by the Franklin Circuit Court affirming an order of the Secretary of the Natural Resources and Environmental Protection Cabinet (Cabinet) in which appellant was assessed civil penalties for violations of water quality laws and regulations. We affirm.

In 1977, appellant, Robert Morgan, acquired a portion of the working interest in an oil and gas lease on a tract of land located in Daviess County, Kentucky. Included in the lease was one oil well which produced one to one-and-a-half barrels of oil per day, a tank battery, and a holding berm (dike) surrounding the tank. Apparently, the well was not producing any water at the time Morgan acquired the interest. However, at some point between 1984 and 1987, the well began producing water, and Morgan placed a 25-barrel holding tank in the dike to collect the water, known as brine water. Allegedly, Morgan employed a water hauling service on an [836]*836occasional basis to empty the tank and dike, and dispose of the water.

On October 14, 1991, an inspector from the Cabinet discovered the brine tank was overflowing into the dike, but was not leaving the dike area. The following day, by way of telephone conversation, the inspector told Morgan to have the overflow hauled away. On October 17, 1991, the Cabinet issued Morgan a notice of violation, alleging that Morgan had violated 401 KAR 5:055 § 1 requiring a permit for the discharge of pollutants into “waters of the Commonwealth.” The inspector’s report stated, “[d]o not drain brine inside of dike area into natural drainage.”

When the inspector returned to the site on November 6, 1991, he again found a slow leak at the top of the holding tank and, further, discovered a garden hose was being used to siphon the brine water from the dike into a natural drainage ditch. The inspector collected a sample of the water at the point where it exited the hose. Lab tests revealed a high level of chloride. Once again, the Cabinet issued a notice of violation under 401 KAR 5:055 § 1. Shortly thereafter, Morgan ceased the production of oil at the site.

The Cabinet filed an administrative complaint against Morgan on September 28, 1993. The complaint not only alleged violations of 401 KAR 5:055 § 1, but further alleged that Morgan had also violated KRS 224.70-110, 401 KAR 5:065, and 401 KAR 5:090 for: (1) discharging a pollutant in excess of permit standards promulgated by the Kentucky Pollutant Discharge Elimination System (KPDES); (2) improperly disposing of produced water; and, (3) failing to report the spill of produced water. An evidentiary hearing was held in the matter on April 6, 1994, after which the hearing officer issued his report finding Morgan had violated KRS 224.70-110’s general prohibition against discharging pollutants into the waters of the Commonwealth, and had further violated several administrative regulations implemented pursuant to that statute. Recommended penalties totaled $6500.

The Secretary of the Cabinet adopted the hearing officer’s report on December 22, 1995. Morgan appealed the matter to the Franklin Circuit Court which, by order entered September 27, 1997, affirmed the Secretary’s order and dismissed Morgan’s complaint. This appeal ensued.

As we review the trial court’s decision, we are mindful of the limitations placed on the reviewing court, as set out in KRS IBB.150(2):

The court shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. The court may affirm the final order or it may reverse the final order, in whole or in part, and remand the case for further proceedings if it finds the agency’s final order is:
(a) In violation of constitutional or statutory provisions;
(b) In excess of the statutory authority of the agency;
(c) Without support of substantial evidence on the whole record;
(d) Arbitrary, capricious, or characterized by abuse of discretion;
(e) Based on an ex parte communication which substantially prejudiced the rights of any party and likely affected the outcome of the hearing;
(f) Prejudiced by a failure of the person conducting a proceeding to be disqualified pursuant to KRS 13B.040(2); or
(g) Deficient as otherwise provided by law.

SUBSTANTIAL EVIDENCE TEST

In its order, the trial court referenced that portion of Bourbon County Bd. of Adjustment v. Currans, Ky., 873 S.W.2d 836 (1994), identifying the proper manner in which to review a decision by a board or agency, i.e. if the claimant is successful before the agency, then the adverse party [837]*837appealing the order of the agency must demonstrate the agency’s decision was not supported by substantial evidence in the record; if, however, the claimant is unsuccessful and appeals to the trial court, he must show the evidence was so overwhelming, it compelled a decision in his favor. Id. at 838. Morgan maintains the trial court’s analysis under Currans placed the burden on Morgan to produce overwhelming evidence compelling a decision in his favor. We disagree.

The trial court correctly identified the Cabinet, which filed the administrative complaint, as the “claimant.” As such, Morgan, as the adverse party appealing the order of the Secretary, had the burden of establishing the order was not supported by substantial evidence in the record. The trial court specifically, and correctly, stated in its judgment that Morgan would be successful on appeal “if he can demonstrate that the Cabinet’s decision is not based on substantial evidence or is incorrect as a matter of law.” We see nothing in the trial court’s opinion indicating any test other than the substantial evidence test was applied. We believe Morgan’s argument stems from his mistaken belief that he was the “claimant” in the matter when, in fact, he was not.

Morgan further argues that substantial evidence in the record does not support the hearing officer’s findings that he had violated administrative regulations. Substantial evidence has been defined as evidence which “when taken alone or in the light of all the evidence ... has sufficient probative value to induce conviction in the minds of reasonable men.” Kentucky State Racing Comm’n v. Fuller, Ky., 481 S.W.2d 298, 308 (1972) (citation omitted).

A. OCTOBER 14,1991

Morgan was found to have violated 401 KAR 5:090 § 5 and § 13 on October 14,1991. Section 5 states:

Produced Water Disposal.

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Bluebook (online)
6 S.W.3d 833, 1999 Ky. App. LEXIS 157, 1999 WL 1256189, Counsel Stack Legal Research, https://law.counselstack.com/opinion/morgan-v-natural-resources-environmental-protection-cabinet-kyctapp-1999.