2. KRS 224.10-470 provides in relevant part that: Appeals may be taken from all final orders of the Environmental and Public Protection Cabinet. The appeal shall be taken to the Franklin Circuit Court within thirty (30) days from entry of the final order. The party or parties affected by the final order shall file in the Circuit Court a petition which states fully the ground upon which a review is sought and assign all errors relief on.
3. The final order from which this appeal is taken was entered on August 16, 2007. A copy of that order is affixed to this Appeal and Petition for Review and is incorporated herein by reference.
4. This appeal is timely filed within the meaning of KRS 224.10-470, since it is being filed within the thirty (30) day period prescribed by statute following the execution of the Final Order by the Secretary and filing by the Office of Administrative Hearings.
5. This court has jurisdiction to hear this petition for review pursuant to KRS 224.10-470. The August 16, 2007 Cabinet Order is a final and appealable order within the meaning of KRS 224.10-470.
6. Venue is proper in the Franklin Circuit Court pursuant to K.R.S. 224.10-470.
7. The Petitioners herein are proper parties-appellant of the Secretary’s Final Order within the meaning the K.R.S. 224.10-470 applicable statutes, inasmuch as they are “parties affected by the final order” who participated below as petitioners challenging the issuance of the subject construction and operating permits, and properly filed exceptions preserving the claims presented below. Each person is a person owning property within close proximity to one or more of the challenged permits, and who have and will suffer adverse property, aesthetic, economic and other impacts due to the presence of the operations and the failure of the agency to require proper application of available technologies to prevent, abate and minimize air and water pollution from such facilities.
8. Petitioners Barry Sharp and Shirley Sharp are residents of Fulton County and property owners who reside at 312 Hickory Lane Fulton, Kentucky.
9. Petitioner Jenny Varden is the property owner of 257 Taylor Road, Fulton, Fulton County, Kentucky.
10. Plaintiff Bill Fenwick is a resident of Fulton County and property owner of 846 US Highway 45 N, Fulton, Kentucky.
11. Petitioners Gene Nettles and Nancy Nettles are residents of Fulton County and property owners of 6989 State Route 125, Hickman, Kentucky.
12. Petitioners Larry Lewis and Mary Jo Lewis are residents of Hickman County and are property owners of 3304 State Route 1529, Fulton, Kentucky.
13. Petitioners Paul Beck and Katie Beck are residents of Hickman County and property owners of 1899 State Route 1529 E, Fulton, Kentucky, 42041.
14. Petitioners Max Wilson and Lucy Bondurant Wilson reside in Fulton County and are property owners of 2480 State Route 1127, Hickman, Kentucky.
15. Defendant, Commonwealth of Kentucky, Environmental and Public Protection Cabinet, Teresa Hill, Secretary (“Cabinet”) is the agency charged by statute with protecting the environment within the Commonwealth of Kentucky with duties as set forth generally in KRS Chapter 224, including without limitation, to “[p]rovide for the prevention, abatement, and control of all water, land, and air pollution including, but not limited to, that related to particulates, pesticides, gases, dust, vapors, noise, radiation, odor, nutrients, heated liquid, or other contaminants[.]”
16. Defendants, Smith & Hancock Farm, LLC, Ralph Wayne Adams Hog Farm, J. P. Amberg Hog Farm, Charles Cannon Hog Farm, Caleb Deweese Hog Farm, Mike Hancock Hog Farm, Marsh Hunt Hog Farm, Keith Kimbell Hog Farm, and Matt & Jim Moss Hog Farm (Permittees) are each property owners who have entered into a contract to raise swine owned by Defendant Jimmy Tosh (“Tosh Farms, LLC”), on properties in Hickman, Fulton and/or Carlisle Counties, Kentucky, or have declared an intent to enter into such contract, and each Permittee applied for certain construction and operating permits from the Cabinet, which permits were issued and appealed. During the pendency of the administrative appeals, one or more Permittees proceeded with construction of the facilities described in the construction permit applications, and one or more received swine from Tosh Farms, LLC and commenced operations.
17. Defendant Jimmy Tosh Hog Farms (Tosh Farms, LLC) is a hog integrator and a resident of Henry County, Tennessee, who owns swine and contracts with others to rent space for his swine to be raised from weanling (15 lbs) to finishers (270 lbs) in confined conditions and in accordance with explicit instructions concerning every material decision affecting the swine, including the manner of confinement, feed, medication, ventilation of confinement structure into the ambient air, temperature, manure storage, manner of manure land application, dead animal disposal, and other matters set forth in materials and under contract terms that Tosh Farms, LLC provides.
18. The Environmental and Public Protection Cabinet is named as respondent, as directed by K.R.S. 224.10-470(1), and service will be had upon the Secretary as directed by statute.
19. While not required by statute, Petitioners have named and served each of the Permittees who possess and are constructing and operating under the Construction and KNDOP Permits challenged herein.
Petitioners do so in order to facilitate timely resolution of the underlying claims since Petitioners intend to seeking injunctive relief as against both the Cabinet and the holders of the improperly issued permits.
20. In March, 2006, the Permit Applicants each submitted revised applications for construction permits under administrative regulation 401 KAR 5:005, section 24, and Kentucky No Discharge Operating Permits (KNDOPs) under 401 KAR 5:005 section 25. Previously, in 2005, these applicants had applied for construction permits and Kentucky Pollutant Discharge Elimination System Permits (KPDES), but after public comment on the draft permits, these applications were found by the Cabinet to be deficient and the Permit Applicants were instructed to reapply.
21. Each construction permit sought approval for two animal waste handling facilities , to wit: a “deep pit” - a concrete pit under a swine facility capable of housing 2490 swine from their arrival weight of 15 pounds until they are ready for slaughter at about 270 pounds. The swine would generate an estimated 1.78 million gallons per year of liquid manure, urine and other swine waste. Each application included the same generic drawing of a “Tosh Farms Hog Barn.”
22. Each barn is ventilated with fans designed to pump out the accumulated build-up of air pollutants inside the barn, including ammonia and hydrogen sulfide. There are no filters or other controls to capture any air pollutants so ventilated nor is there monitoring of the concentration or amount of such air pollutants.
23. In March of each year, the accumulated swine waste is proposed to be agitated (mixed) and pumped out to be land applied on land owned or “available” to the Permittee. Each application included a nutrient management plan (NMP) or comprehensive nutrient management plan (CNMP) for the purpose of describing the amount of manure that would be land applied to each field, and for related animal waste handling matters.
24. None of the Permittees would own any swine. Each made application for facilities to house and feed swine owned by Tosh Farms, LLC. The proposed [or actual] contracts with Tosh Farms, LLC and the Tosh Farm swine handing and management requirements referenced in the contracts were not included in the applications nor considered by the Cabinet.
25. As a result of proceedings brought by the Kentucky Attorney General to determine compliance with the laws regulating the offering and sale of business opportunities, the proposed contracts were revised, as requested by the Attorney General, and made part of the public record. The handling and management requirements imposed by Tosh on contract growers were subsequently produced to Plaintiffs under seal as confidential business information (CBI).
26. Extensive public comments were submitted in opposition to these applications by the Petitioners and others.
27. On July 7, 2006, the Cabinet issued the requested construction and operating permits. On August 6, 2006, the above Petitioners, with fifty (50) other residents and property owners appealed each of these construction and operating permits to the Cabinet’s Office of Administrative Hearings (OAH).
28. During discovery and during a multi-week formal hearing in January 2007, several Permittees testified that they were under contract with Tosh Farms, LLC and that they had begun construction – or completed construction of their hog barns, and expected to receive swine – or had received swine - and were therefore operating under their challenged KNDOP permits.
29. On May 4, 2007, the OAH Hearing Officer recommended that all nine (9) of the operating permits be vacated and remanded. The Hearing Officer recommended that the nine challenged KNDOP permits be vacated and remanded with explicit instructions to the Permit Applicants on reapplication to demonstrate that each would fully comply with the portions of 401 KAR 63:020 that require them to both: (1) “provide the utmost care and consideration, in the handling of these materials, to the potential harmful effect of the emissions resulting from such activities,” and (2) prevent the discharge of potentially hazardous matter or toxic substances in such quantities or for such duration as to be harmful to the health and welfare of humans, animals and plants. Upon such reapplication, the Hearing Officer recommended that the Cabinet conduct a 401 KAR 63:020 analysis.
30. The Hearing Officer did not vacate the construction permits, instead allowing the Permittees to continue construction of animal waste handling facilities without any air toxic controls, ignoring the testimony that in areas with more experience with large scale swine facilities, “deep pits” are not considered “utmost care” in handling air toxics from swine waste, but that separation of manure from urine and securely containing the waste in a sealed container not located under the swine are techniques that demonstrate “utmost care.”
31. The Hearing Officer allowed the construction permits, as affirmed, to serve as “interim operating permits” pending the reapplication by the Permit Applicants for no-discharge operating permits.
32. The Hearing Officer attempted to limit the environmental damage to be caused by facilities operating under permits he found to be inadequate to protect against air toxics and water pollution by putting these restrictions in a footnote: These conditions are as follows: i) follow all conditions on the issued and remanded operational permits, as a condition of interim authorization; ii) pursue the remanded operational applications in good faith, including making timely and appropriate submittals in response to any requests from DOW; iii) do not land apply or transfer any of the manure from the facilities until the remanded operational permits are actually issued and the revised CNMPs are approved and, if the permits are denied, follow the appropriate procedures to close the facilities and to dispose of the waste held therein consistent with all legal requirements and with DOW approval; and iv) cease operations (cease receiving any more pigs for feeding operations for the particular bar) once the required pit monitoring establishes the pit for that particular bar is half full.
33. The KNDOP issued to each of the Hog Farm Permit Applicants included setbacks, requiring that the swine barn to be 3,000 feet from incorporated city limits, but requiring only 1,500 feet from another person’s dwelling, or a church, or school, schoolyard, business, other structure to which the public has access, and park.
34. In two cases the Cabinet issued the KNDOP with smaller setbacks. Matt & Jim Moss were issued a KNDOP with a setback of 800 feet from another person’s dwelling, or a church, or school, schoolyard, business, other structure to which the public has access, and park, and Mike Hancock was issued a KNDOP with a setback of 650 feet from another person’s dwelling, or a church, or school, schoolyard, business, other structure to which the public has access, and park.
35. The Cabinet witness testified that the Cabinet justified greater setbacks from incorporated city limits than for residences in the country because, “[t]o some degree, I believe that they assume some of that risk [of odor] when they chose to live in the area that they live, an agricultural area.” Transcript January 10, 2007, page 186.
36. All parties took exception to portions of the Hearing Officer’s recommended findings and conclusions.
37. On August 16, 2007, the Cabinet Secretary issued a “Secretary’s Final Order,” rejecting the Hearing Officer’s recommendations for remanding the subject permits, and directing that the Permittees amend their Comprehensive Nutrient Management Plans to eliminate inconsistencies and anomalies and to require that any and all assumptions and methodologies be “clearly and sufficiently” stated.
38. In tacit recognition of the superficial agency review conducted of the initial plans, the Secretary also directed that the Division of Water “SHALL” conduct a thorough review of the amended plans.
39. Respondent Hog Farm Permit Applicants Marsh Hunt, Charles Cannon, and Sam Hancock completed construction on the hog confinement structures and received swine from Tosh Farms, LLC prior to the Hearing Officer’s recommendation that their KNDOP operating permits be vacated.
40. Respondent Ralph Wayne Adams was constructing or had completed construction of his barns prior to the Hearing Officer’s recommendation on May 4, 2007. However, he did not have swine on site and was not operating prior to the May 4, 2007 recommendation of the Hearing Officer. On information and belief Ralph Wayne Adams began receiving swine in late June 2007, in the period from June 18 through June 22, 2007.
41. On information and belief, Defendants J.P. Amberg Hog Farm and Matt and Jim Moss Hog Farm have each begun constructing their respective “deep pits” as of this date, July 13, 2007.
42. Plaintiff Bill Fenwick, and members of his family live and use and occupy land that is proximate to the facilities of Sam Hancock, Smith and Hancock, LLC, and they are entitled to the protection against air pollution and odor and air toxics and nuisance conditions afforded by KRS 224.10-100, KRS 224.01-010(3), KRS 224.20-100, KRS 224.20-110, and 401 KAR 63:020, as are each of the other Plaintiffs. Plaintiffs Shirley Sharp, Barry Sharp, Jenny Varden and members of their families live and use and occupy farm land that is proximate to the facilities of Defendant Ralph Wayne Adams, and these plaintiffs are entitled to the protection against air pollution and odor and air toxics and nuisance conditions afforded by KRS 224.10-100, KRS 224.01-010(3), KRS 224.20-100, KRS 224.20-110, and 401 KAR 63:020, as are each of the other Plaintiffs. Plaintiffs Max Wilson and Lucy Bondurant Wilson and members of their family live and use and occupy farm land that is proximate to the facilities of Defendant Matt Moss and Jim Moss, and these plaintiffs are entitled to the protection against air pollution and odor and air toxics and nuisance conditions afforded by KRS 224.10-100, KRS 224.01-010(3), KRS 224.20-100, KRS 224.20-110, and 401 KAR 63:020, as are each of the other Plaintiffs.
GROUNDS UPON WHICH REVIEW IS SOUGHT AND ASSIGNMENT OF ERRORS
43. On August 16, 2007, the Cabinet Secretary issued a Final Order pursuant to K.R.S. Chapter 224, rejecting the Hearing Officer’s recommendations that the challenged permits be remanded to address the deficiencies both in the Comprehensive Nutrient Management Plans and the want of compliance with 401 KAR 63:020. While directing that the permits be amended to provide for Comprehensive Management Plans that lacked “anomalies and inconsistencies,” and tacitly acknowledging that the initial review by the Cabinet was superficial and that mandatory recordkeeping measures were lacking, the Secretary did not require that the permits be remanded to address these legal insufficiency in the permits but instead allows the deficiencies to be cured by permit amendment.
44. As mentioned above, K.R.S. 224.10-470 provides a right of statutory appeal of a Final Order of the Cabinet Secretary within thirty days of the entry of that order. K.R.S. 224.10-470 requires that the party seeking review “state fully the grounds upon which a review is sought and assign all errors relied on.”
45. The grounds upon which review is sought and the errors relied on in seeking review are as follows:
a. The Secretary’s Final Order was contrary to law and fact, and is arbitrary, capricious and otherwise inconsistent with law in failing to require compliance with 401 KAR 63:020 by the Permit Applicants, and in failing to properly apply the requirements of 401 KAR 63:020 to the releases of ammonia, hydrogen sulfide, and other pollutants and emissions from the hog confinement structure and other components of the animal waste handling system, including land application and underfloor pit storage. The Cabinet Secretary misapplied the standards for permit review and misapplied the provisions of 401 KAR 63:020 in reversing the recommendation of the Hearing Officer to remand the subject permits for want of compliance and analysis under 401 KAR 63:020. As a matter of law and fact, the agency failed to properly apply and to require permit applicant compliance with 401 KAR 63:020.
b. Additionally, the Cabinet’s failure to apply 401 KAR 63:020 based on a claimed lack of conclusive evidence of harm to public health and welfare or purported lack of “reliable methodologies to quantify emissions” is inconsistent with the factual record, and is inconsistent with KRS 224 and 401 KAR 63:020, which obligate the agency to evaluate the source where potentially harmful or toxic substances may be emitted.
c. The Cabinet acted in a manner contrary to law by applying an informal agricultural exemption from 401 KAR 63:020. In direct and flagrant violation of state statute and regulation, and of KRC Chapter 13A, the Cabinet created a de facto categorical exemption from application of a regulation where such exemption does not exist, and in a post-hoc rationalization sought to cover this failure by claiming a lack of obligation or data. This creation by administrative fiat of an exemption not properly adopted through adherence to K.R.S. Chapter 13A requirements is inconsistent with law and constitutes an ultra vires action by the Cabinet that has potentially profound health and property consequences to the Petitioners and others.
d. The Secretary’s Final Order was contrary to law and fact, and is arbitrary, capricious and otherwise inconsistent with law in allowing Comprehensive Nutrient Management Plans that are admitted to contain “inconsistencies and anomalies” to remain in place and to be amended rather than rather than to remanding the legally and factually deficient plans for correction and for proper permit review.
e. The Cabinet acted in a manner contrary to law in failing to undertake an individualized evaluation of the emissions from the proposed facilities as required by 401 KAR 63:020.
f. The Cabinet failed to comply with K.R.S. Chapter 224 and applicable regulations when it issued construction and operational permits for swine waste handling facilities without permit limits or any other pathogen controls.
g. The Cabinet violated K.R.S. Chapter 224 and applicable regulations where it issued construction and operational permits for swine waste handling facilities without requiring adequate construction and performance standards and without monitoring construction and performance.
h. The Cabinet violated K.R.S. Chapter 224 and applicable regulations where it permitted land application of swine manure without adequate protection of water and air quality, including lack of proper characterization of the constituents of the wastewaters and solids, adequate characterization of soil and water conditions, adequate monitoring of application, and adequate monitoring of runoff and of receiving waters, sufficient to determine adequacy of the permit conditions and CNMPs to assure compliance with KRC Chapter 224.
i. The Cabinet exercised “best professional judgment” in a manner that was arbitrary, capricious, and inconsistent with law, and which failed to properly assure compliance with K.R.S. Chapter 224 and the applicable regulations. Among these failures in application of PBJ are a failure to impose controls on rate and timing of waste application, failure to comprehensively and properly review the CNMPs to assure no excess application leading to water pollution, failure to utilize best cost-effective technologies to prevent air and water pollution from waste storage and disposal / utilization; failure to assure access to lands sufficient to allow for proper land application of wastes; use of inadequate setbacks rather than alternative control strategies for odor control and abatement; failure to consider alternative control methods and waste handling strategies;
j. The Cabinet’s acted in a manner that is contrary to law and fact, and is arbitrary, capricious and otherwise inconsistent with law in imposing setback requirements that it knew were inadequate to satisfy the mandate of K.R.S. Chapter 224 to prevent air pollution, and in utilizing other people’s property for calculation of the setbacks in a manner that restricts the full utilization of those other properties in a manner repugnant to K.R.S. Chapter 224 and Kentucky Constitution Article 2;
k. The Cabinet acted in a manner that is arbitrary, capricious and inconsistent with law in applying best professional judgment with respect to control of odors and emissions, and in the application of and selection of setbacks as well as use of receptors other than property boundaries for imposition of such setbacks with respect to odor;
l. The Cabinet erred as a matter of law and fact in failing to require that each person having primary responsibility for the overall operation of the facility sign the application. Specifically and without limitation, the agency failed to properly investigate the degree of ownership and control that Jimmy Tosh / Tosh Farms would exercise, and despite sufficient evidence in the record demonstrating that Tosh should have been the signatory due to overwhelming responsibility and control over the various design and input aspects of the animal waste handling system, the agency reflected a passive approach to proper implementation of the law and regulations that is inconsistent with its statutory obligations;
m. The Cabinet erred as a matter of law and fact in failing to require the Permit Applicants to obtain KPDES Permits as “concentrated animal feeding operations;”
n. The Secretary’s Final Order was contrary to law and fact, and is arbitrary, capricious and otherwise inconsistent with law in utilizing comprehensive nutrient management plans as regulatory surrogates for enforceable permit conditions and allowing such plans to be approved absent proper permit review and without assuring that the plans were internally consistent and contained conditions sufficient to satisfy applicable statutes and regulations. Reliance on such plans as assurance of compliance with state law while allowing such deficient plans to remain in place and to authorize operations on the premise of future actions to cure graphic deficiencies, is inconsistent with law and arbitrary;
o. The issuance of the challenged permits containing setback provisions based on proximity to existing dwellings and other structures on the property of others, rather than being established at a distance from the property line of the facility and in a manner sufficient to prevent any unreasonable interference with use and enjoyment of the neighboring properties, is inconsistent with the Cabinet’s statutory obligation under K.R.S. Chapter 224 and is arbitrary and capricious, since it effects an unconstitutional taking of property in violation of Kentucky Constitution Section 2, 13 and 242 which prohibit such exercises of absolute and arbitrary power over lives, liberty and property. The utilization of other people’s property in order to establish buffer zones around the storage and management of wastes through land application constitutes an impermissible taking of property in derogation of the 5th and 14th Amendment to the U.S. Constitution and the Kentucky Constitution, including Articles 2, 13, and 242;
p. The lessening of setbacks in certain instances in the issuance of the challenged permits effects an unequal, arbitrary and retaliatory application of regulatory power in a manner that is inconsistent with the statutory and constitutional restraints on that power imposed by KRS Chapter 224, and is violative of Kentucky Constitution Article 2.
q. The Secretary’s Final Order was otherwise contrary to law and fact, and arbitrary, capricious.
WHEREFORE, Petitioners pray the Court accept jurisdiction over the appeal of the Secretary’s Final Order under K.R.S. 224.10-470 and vacate, reverse and remand the Secretary’s Final Order as being arbitrary, capricious and otherwise inconsistent with law, and for any and all other relief to which they may appear entitled.
W. Henry Graddy
Graddy & Associates
Kentucky Resources COuncil, Inc.