Katie Stancombe for www.theindianalawyer.com

A Grant County couple must now abide by a Department of Natural Resources order to bring a dam into compliance with the Dam Safety Act following a divided Indiana Supreme Court decision that affirmed the order’s enforcement.

John and Mae Moriarity began building a large pond on their Grant County property in the 1990s, with the structure holding at least 100 acre-feet of water. The Moriaritys also built a related dam, parts of which hold back the water in areas taller than 20 feet.

Throughout the early 2000s, the DNR sought to have the Moriaritys correct what it considered “significant safety deficiencies” in the dam, according to Indiana Code chapter 14-27-7.5, known as the Dam Safety Act. Specifically in May 2012, the couple was ordered to make changes to their pond and dam and received $35,000 in civil penalties for past violations, as well as daily penalties for any continuing violations.

On administrative appeal to the Natural Resources Commission, the commission ruled in favor of DNR on the May 2012 notice of violation, ordering the couple to either hire a professional to safely inspect and repair the dam, or to hire an engineer to “permanently decommission” the dam. The commission also ordered them to pay $10,000 in civil penalties for violations of the Dam Safety Act.

The Grant Circuit Court likewise ordered the Moriaritys to take the action ordered by the DNR, and the Indiana Court of Appeals affirmed nearly one year ago, rejecting the couple’s argument that the department erred by exercising jurisdiction over the dam. Similarly on appeal to the Indiana Supreme Court, the Moriaritys argued the trial court erred in upholding the DNR’s administrative decision, specifically challenging DNR’s jurisdiction over the dam, the dam’s high-hazard classification and the actions ordered against them.

First, the Moriaritys argued DNR improperly defined the word “stream” when it claimed jurisdiction over the dam and failed to provide an ascertainable standard of what constitutes a stream. But the majority justices, in an opinion written by Justice Christopher Goff, found the definition of “stream” used by the DNR was not inconsistent with the Dam Safety Act, nor with the plain, ordinary and usual meaning of the word.

The court, therefore, found the definition to be reasonable, noting the Moriaritys failed to show that the DNR’s exercise of jurisdiction over their dam based on the statutory language of the Dam Safety Act was arbitrary or capricious. Additionally, Goff said the Moriaritys had adequate notice of the applicable definition of “stream.”

The majority justices then found substantial evidence to support the DNR’s contention that the dam on the Moriaritys’ property was a high-hazard structure, pointing to DNR testimony to that effect and an inundation study conducted on the dam.

“Kenneth Smith, the Assistant Director of DNR’s Division of Water, testified that the presence of a church, a home, and a road below the dam made it ‘visually obvious’ that it would likely be a high-hazard dam,” Goff wrote for the majority. “George Crosby, the Manager of DNR’s Dam Safety Section, testified that, if the dam broke above the house situated below the dam, it would cause ‘serious damage.’”

Therefore, the high court affirmed the trial court’s final order in John E. Moriarity and Mae E. Moriarity v. Indiana Department of Natural Resources, 18S-PL-296, noting the couple could modify the dam to remove it from DNR’s jurisdiction. The case was remanded for further proceedings.

In a closing footnote, Goff wrote that DNR “likely could have avoided this protracted litigation in the first place by defining the word stream for purposes of the Dam Safety Act.”

“It clearly knows to define words for the Act…and, as this case demonstrates, DNR employees have a shared understanding of the word stream,” Goff wrote. “Defining the word would presumably reduce the complexity of enforcement actions and increase public confidence in the agency’s decisions.

Justice Mark Massa concurred in result with the majority’s ruling without a separate opinion. But writing in a dissenting opinion, Justice Geoffrey Slaughter said the prerogative to interpret the law authoritatively belongs to the high court, not the DNR, so he would not have given deference to the department’s interpretation of “stream.”

“And we disserve separation-of-powers principles when we allow agencies within the executive branch to usurp a core judicial function,” Slaughter wrote in regard to the deferential standard of review.

The dissenting justice also argued the majority’s conclusion that the DNR properly exercised jurisdiction over the Moriaritys’ property followed from that incorrect standard of review.

“Its application of the wrong standard has caused it to reach the wrong result,” Slaughter concluded. “…A more robust standard would have led to a different outcome on the threshold question of the Department’s exercise of jurisdiction over the Moriaritys’ property.”