SC Administrative Law Court Decisions

This matter comes before me by way of request of S.C. Crab Company (S.C. Crab or the Facility) for a contested case hearing by appealing Administrative Orders 98-087-W, DWP and 98-66-DWP,W, issued by the South Carolina Department of Health and Environmental Control (DHEC or the Department). This appeal is made pursuant to S.C. Code Ann. §§ 1-23-310, et seq. (1986 and Supp. 1999) and 25 S.C. Code Ann. Regs. 61-72 (Supp. 1997).

The Department asserts that S.C. Crab violated the South Carolina Pollution Control Act, S.C. Code Ann. §§ 48-1-10, et seq. (1987 and Supp. 1997), by discharging process water without a permit into the waters of Jeremy Creek from its crab processing facility in McClellanville, South Carolina, and that S.C. Crab also violated the State Safe Drinking Water Act found at S.C. Code Ann. §§ 44-55-10, et seq. (1976 and Supp. 1997), by installing and maintaining an unpermitted public water system at the Facility. The Department imposed a $33,660.00 fine for these violations: $14,100.00 for the alleged violation of the State Safe Drinking Water Act and $19,560.00 for the alleged violation of the Pollution Control Act.

S.C. Crab contests both the finding of the violations and the amount of the fines. A contested case hearing on this matter was held on October 3, 2000, at the offices of the Administrative Law Judge Division (ALJD or Division). Before the hearing into this matter, I granted partial summary judgment to the Department finding that S.C. Crab violated the Pollution Control Act as set forth in the Department's April 12, 2000 Administrative Order. However, the amount of the fine imposed for that violation was an issue to be determined at trial, as well as whether a violation of the State Safe Drinking Water Act had occurred and, if so, the amount of the fine imposed for that violation.

Although S.C. Crab violated the Pollution Control Act, due to factors which include that the Facility was forced to cease operations for almost a four-week period due to this violation, the Department had allowed the violation to occur for seventeen years with no real action, there was no proof of any harm to the public or environment as a result of this violation, and other actions by the Department discussed herein, I find that no fine should be imposed. Additionally, I find that the Department failed to establish that S.C. Crab's water was used for drinking water. Therefore, I find that S.C. Crab did not violate the State Safe Drinking Water Act.

Having observed the witnesses and exhibits presented at the hearing and closely passed upon their credibility, taking into consideration the burden of persuasion by the parties, I make the following Findings of Fact by a preponderance of evidence:

1. S.C. Crab is a South Carolina corporation located in McClellanville, South Carolina. S.C. Crab has been owned and operated by the Respondent, Gordon Enterprises, Inc., since 1988. Gordon Enterprises is owned by William Eddie Gordon. It operates on a facility which was owned by and leased from Loy Marlowe between 1984 to 1988, and from Pinckney Street Docks from 1988 to the present. Mr. Gordon is a partner in Pinckney Street Docks.

2. S.C. Crab produces several products, including blue crabmeat and conch. During the course of processing blue crabmeat, water from wells is used to wash the crabs before cooking, to cook the crabs in a retort chamber, to wash the crabs after cooking, and to wash the Facility at the beginning of each work day. Until March 31, 1998, all of the water generated during these various processes had been discharged either from a pipe or through a hole in the building directly into Jeremy Creek. S.C. Crab previously held a National Pollution Discharge Elimination System (NPDES) permit which had been issued in the 1970s by DHEC. That permit allowed the discharge of S.C. Crab's wastewater into Jeremy Creek. However, that permit expired in 1980 while the business was owned by Loy Marlowe.

3. DHEC notified S.C. Crab by letter dated February 26, 1991, that the Facility was discharging wastewater without an NPDES permit, and that S.C. Crab was required to apply for a permit for the wastewater discharge. On August 31, 1993, DHEC again notified S.C. Crab that it was required to apply for a permit for the wastewater discharge within ninety days of the date of that letter. S.C. Crab took no action on either the 1991 or 1993 notification by DHEC and continued to discharge wastewater into Jeremy Creek.

As the result of an additional inspection by DHEC personnel on August 1, 1997, S.C. Crab was again notified by letter on August 4, 1997 of the requirement to obtain an NPDES permit to discharge. On August 5, 1997, Mr. Gordon responded by submitting to DHEC analytical results of samples collected on July 24, 1991 and September 14, 1992 from the washdown, retort, and boiler discharge at S.C. Crab.

However, the Department did not take any action to thwart the Respondent's discharge of wastewater into Jeremy Creek until August 15, 1997 - - several years after DHEC's initial inspection of the location. On that date, DHEC informed Mr. Gordon by letter that S.C. Crab was in violation of the South Carolina Pollution Control Act and was required to apply for a permit for the wastewater discharge within fifteen days. Mr. Gordon responded that he was contracting with Albrecht and Associates to complete a permit application and that his engineer requested an additional thirty days.

Mr. Gordon also requested a meeting with DHEC officials to discuss the wastewater issue. This meeting took place on October 9, 1997. At that meeting, Mr. Gordon asked whether S.C. Crab's wastewater could be disposed of in a septic tank. However, Andrew Yasinsac of DHEC stated that placing S.C. Crab's wastewater into a septic tank was not an acceptable method of wastewater disposal. Mr. Gordon was told that a wastewater treatment facility would be needed in order for him to obtain an NPDES permit to discharge his wastewater. On October 17, 1997, the Department sent S.C. Crab a letter which summarized the meeting. The letter set forth that the Facility needed a permit for the wastewater discharge and requested that S.C. Crab submit an application by December 1, 1997.

Again, S.C. Crab did not submit an application for an NPDES permit within the time allowed and during the months of December, January and February, S.C. Crab continued to discharge wastewater into Jeremy Creek, although the amount of process water was reduced. As a result of the Respondent's failure to obtain the permits necessary for its operations, S.C. Crab was closed by DHEC on March 3, 1998 and was not able to begin operating again until March 31, 1998. At that time, S.C. Crab received permits to dispose of the wastewater by pump-and-haul.

4. S.C. Crab was obligated, under the applicable statutes and regulations, to obtain an NPDES permit for its discharge of wastewater into Jeremy Creek or to dispose of its wastewater in an alternate manner approved by the Department. Therefore, S.C. Crab violated the Pollution Control Act by its actions. Furthermore, the evidence in this case reflects the Respondent disregarded the Department's edict that S.C. Crab obtain an NPDES permit.

However, while the Department was notifying the Respondent of the need to obtain an NPDES permit, it was also issuing periodic inspection reports that indicated that the Respondent's wastewater disposal was acceptable to DHEC. Additionally, DHEC's Bureau of Water continued to renew S.C. Crab's Annual Certificates of Operation. Those Certificates stated that Gordon Enterprises "has complied with the Regulations prescribed by the South Carolina Department of Health and Environmental Control governing equipment and methods used in the production, processing, transportation, or sale of crab . . . ."

More importantly, the Department's delay in stopping the wastewater discharge and refusal to allow the disposal of wastewater through a septic tank not only prolonged the resolution of the wastewater discharge but also resulted in considerable expense to the Respondent. In 1998, when it became apparent to Mr. Gordon that operating under the pump-and-haul system would not be economically feasible to continue, he submitted an application to dispose of his wastewater in a septic tank, even though he had been told this would not be possible by DHEC officials. However, S.C. Crab obtained approval for septic tank disposal once relatively simple modifications were made to the system. The cost of those modifications was only $2,500.00. In fact, the Department's Environmental Health Division considered the septic tank disposal of the Respondent's wastewater to be a typical means of disposing of the wastewater. Steve Caulk of the Environmental Health Division testified that Mr. Gordon's wastewater is similar to that produced by a restaurant and that many restaurants dispose of their wastewater by septic tank. Additionally, the only other crab processing plant in South Carolina has always been allowed to dispose of its processing water by septic tank. The Department has never required that facility to submit an NPDES permit application.

Furthermore, it was probably either impossible or impractical for S.C. Crab to build and operate a wastewater treatment facility. This was based not only on the costs involved, but in the fact that his plant is located in a flood plane and the Department's Regulations indicated that a wastewater treatment facility would not be allowed. Therefore, the Respondent spent money attempting to implement a new chitosan manufacturing process to eliminate his discharge. The chitosan manufacturing process would have eliminated virtually any discharge. Moreover, though the Department could not produce examples of pump and haul permits being required for similar operations, the Respondent paid to have S.C. Crab's wastewater pumped and hauled to a treatment facility until he obtained the permit for septic tank disposal. The cost of the pumping and hauling was at least $1000.00 per week.

5. The Department's calculation finds that the only harm created by this violation is the "potential" for harm as there was an unpermitted discharge entering the environment. Dr. Ron Thomas, a professor in the Food Science Department of Clemson University whose credentials include a degree in biology and a master's degree in biochemistry, analyzed test results of water samples taken from a station adjacent to S.C. Crab by DHEC. He also analyzed lab reports of Mr. Gordon's wastewater. Based on this information, Dr. Thomas constructed a graph of the Biological Oxygen Demand (BOD) levels in Jeremy Creek. His testimony shows that the BOD levels of Jeremy Creek were not harmfully affected by Mr. Gordon's discharge. Furthermore, there was no significant change other than expected seasonal changes in the BOD level even after S.C. Crab's discharge was eliminated. Thus, while the BOD levels of Mr. Gordon's wastewater may appear high, they are not of a quantity that could cause harm to the environment.

6. The Department asserts that Mr. Gordon received an economic benefit by not having his wastewater sampled and tested monthly from March 1996, "when [the] Department began concerted effort[s] to permit [the] facility, until February 1998." However, I find that the Department's "concerted efforts" did not begin until August 15, 1997, when Robin Caldwell required the Respondent to submit an NPDES permit application within fifteen days. Furthermore, the Department's calculation does not take into account the economic detriment that resulted from the shut-down of S.C. Crab from March 3, 1998 until March 31, 1998. Additionally, the total engineering fees for Mr. Albrecht's services to S.C. Crab exceeded $19,000.00.

7. There is no public water or sewer system in McClellanville, South Carolina. Therefore, the water supplied to S.C. Crab comes from a well located on the Facility grounds. However, S.C. Crab is a wholesale facility -- not a retail facility. In other words, it processes crabmeat and sells the meat to restaurants and markets. Specifically, the water from S.C. Crab's well is used only for the processing of crabmeat, specifically to wash, steam and cool crabs. No one drinks the water at S.C. Crab. Rather, S.C. Crab has always provided bottled water for its employees to drink.

The Department's evidence consisted primarily of the results of sanitary surveys conducted on May 18, 1993, July 29, 1997, and January 13, 1998. The well water at S.C. Crab services the employee restrooms. A water softener is used to reduce minerals in the water which can stain toilets. The 1993 survey notes that the water softening unit and sand filter were installed without a permit to construct or a permit to operate and, therefore, the Department gave the system an "unsatisfactory rating." However, correspondence was sent to Mr. Gordon from Foster Coleman, Director, Trident District EQC, dated October 26, 1993, which indicated that if the treatment system was for specific crab processing units only, it would be designated "point of use." Additionally, a Department Memo dated September 28, 1993, set forth:

If the water softening unit treats only the water used in the crab cooking process, the softening unit would be considered a "point of use" treatment not under the regulatory control of the Public Water Supply Supervision Program. The Shellfish section agrees to this concept with the collection of one bacti sample per month from the softening unit during monthly shellfish inspection.

No further action was taken by the Department as to the water system until the August 15, 1997 letter was issued. The water system was also discussed at the October 9, 1997 meeting. Afterwards, the Department requested that Mr. Gordon submit a permit application by December 1, 1997. Mr. Gordon submitted four bonded copies S.C. Crab's Construction Application with plans and specifications prepared by Albrecht and Associates. The Department did not respond until January 9, 1998, at which time the Department cited sixteen deficiencies.

S.C. Crab's engineer, Mr. Albrecht, then attempted to correct these deficiencies, but he had numerous problems in complying with the demands of the Department. For instance, he could not find particular components that the Department requested. Mr. Albrecht even traveled to Columbia to consult with DHEC officials in his efforts to bring the system into compliance. Mr. Gordon's operations were ceased from March 3, 1998 until March 31, 1998 , when Mr. Albrecht was able to bring the system into compliance.

S.C. Crab's water has been monitored pursuant to South Carolina Blue Crab Processing Regulations. Its product is also monitored by the Department and by the Federal Food and Drug Administration through a program known as HACCP.

Based upon the above Findings of Fact, I conclude the following as a matter of law:

1. The Administrative Law Judge Division has subject matter jurisdiction of this case pursuant to the South Carolina Administrative Procedures Act, S.C. Code Ann. §§ 1-23-310 et seq. (1986 and Supp. 1999).

2. The Department has the duty and authority to regulate the discharge of pollutants through the Pollution Control Act, S.C. Code Ann. §§ 48-1-10 et seq. (1987 & Supp.1997). The Department also has the duty and authority to regulate drinking water supplies through the State Safe Drinking Water Act, S.C. Code Ann. §§ 44-55-10 et seq. (1976 & Supp.1997).

3. In weighing the evidence and deciding a contested case on the merits, the Administrative Law Judge must make findings of fact and conclusions of law by a preponderance

of the evidence. Anonymous (M-156-90) v. State Board of Medical Examiners, 329 S.C. 371, 496 S.E.2d 17 (1998).

4. In matters involving the assessment of civil penalties and the enforcement of administrative orders, the agency shall have the burden of proof. Rule 29(B), ALJDRP. Additionally, it is a generally recognized principle of administrative law that the fact-finder has the authority to impose an administrative penalty, as established by the legislature, after the parties have had an opportunity for a hearing on the issues. See, e.g., Walker v. S.C. ABC Commission, 305 S.C. 209, 407 S.E.2d 633 (1991).

5. During the period from 1980 until 1998 when it was discharging wastewater into Jeremy Creek, S.C. Crab was required to have an NPDES permit from the Department pursuant to S.C. Code Ann. § 48-1-90(a) (1987 and Supp. 1997). Therefore, S.C. Crab was in violation of the Pollution Control Act and subject to the requisite fines and penalties. S.C. Crab received permission to operate an alternative waste disposal system on March 31, 1998, thus permanently eliminating its discharge to Jeremy Creek on or about that date. The maximum civil penalty for violation of any provisions of the Pollution Control Act is $10,000.00 per day pursuant to S.C. Code Ann. § 48-1-330 (1987 and Supp. 1997).

However, the facts and evidence presented in this matter do not support the imposition of a fine in the amount sought to be imposed by the Department. The penalty calculation does not take into account that Mr. Gordon's operation was ceased from March 3, 1998 until March 31, 1998. Also, the NPDES permit had been expired since 1980, but the Department took no real action until August 15, 1997 -- approximately seventeen years after the permit had expired. Moreover, according to Dr. Thomas, there has been no actual harm to the public or the environment due to the violation, and the Department has presented no evidence to indicate otherwise. The "potential" for harm that the Department cited in its computation was not realized. Furthermore, the potential for harm did not exist based on Dr. Thomas' analysis of the content and quantity of the water discharged.

Though the Respondent never submitted an NPDES permit application to the Department, S.C. Crab was trying to find an economically feasible method to dispose of its wastewater. Moreover, its efforts to use an existing septic tank, which required only $2,500.00 in modifications, were deterred by DHEC. While the Department takes the position that S.C. Crab never submitted an application to use the existing septic tank for wastewater disposal, it was reasonable for Mr. Gordon to assume that submitting an application would be a wasted effort after he was told that a septic tank was not an available option. The Department knew or should have known that the only other crab processing facility in the state used this method of disposal, and should not have given such negative responses to Mr. Gordon's inquiries.

In assessing no further penalty against Mr. Gordon, I am not excusing his actions in continuing to discharge wastewater into Jeremy Creek. Mr. Gordon was forced to cease operations for almost one month. He presented his 1997 Federal Income Tax Return (which includes the time period in March 1998, when he was shut down) that indicates that the business operated at a loss. Mr. Gordon has also paid over $19,000.00 in engineering costs as well as pump-and-haul costs. This penalty is sufficient in light of the conduct of the Department in these proceedings and in that there was no harm to the public or the environment.

6. The State Safe Drinking Water Act provides that no public water supply may be constructed, expanded or modified without a permit from DHEC. S.C. Code Ann. § 44-55-40(a) (1976 and Supp. 1997). A "public water supply" is "any publicly or privately owned water works system which provides drinking water, whether bottled or piped, for human consumption." S.C. Code Ann. § 44-55-20(g) (1976 and Supp. 1997) (emphasis added). The Department contends that because the water at S.C. Crab is used for hand-washing, it is use for "human consumption." ⁽²⁾ At trial, the Department also argued that the fact that the Respondent's water is used in crab processing (the washing, steaming and cooling of crabs) should bring it within the purview of the act. The Department further argues that since its staff has determined that the water system at S.C. Crab is a public water supply as defined in the State Safe Drinking Water Act, this determination should be afforded great deference.

The construction of a statute by the agency charged with its administration will be accorded the most respectful consideration and will not be overruled absent compelling reasons. Dunton v. S.C. Board of Examiners in Optometry, 291 S.C. 221, 353 S.E.2d 132 (1987). However, the rule of "executive construction is usually and properly restricted to cases in which the meaning of a statute is really in doubt . . . ." Davidson v. Eastern Fire & Casualty Insurance Co., 245 S.C. 472, 141 S.E. 2d 135 (1965). The Department contends that because the water at S.C. Crab is used for hand-washing, it is used for "human consumption. However, this argument ignores the fact that the definition of "public water supply" refers specifically to "drinking water" (S.C. Code Ann. § 44-55-20(g) (1976 and Supp. 1997)) and that the Act is entitled the "State Safe Drinking Water Act." S.C. Code Ann. § 44-55-10 (1976) (emphasis added).

In construing a statute , the language should be given its usual and ordinary meaning without resort to subtle and forced construction. ⁽³⁾ Additionally, it is an accepted practice in South Carolina to use the dictionary to determine the literal meaning which words embrace. Hay v. South Carolina Tax Commission, 273 S.C. 269, 253 S.E. 2d 837 (1979). In its noun form, "drink" is defined as "a liquid suitable for swallowing." Merriam-Webster's Collegiate Dictionary 354 (10^th ed. 1993). Furthermore, there is no evidence in this case that the Department has formally adopted the above construction of the State Safe Drinking Water Act, other than the position presented by the staff attorney in this case. Therefore, I find that the water system located at S.C. Crab does not provide drinking water and is thus not subject to the State Safe Drinking Water Act.

7. Additionally, Crab processors are required to have a permit for their operations. 24A S.C. Code Ann. Regs. 61-49 (1982). Furthermore, the water supply for crab processors is to be approved as safe by the Department prior to issuing an operating permit pursuant to 24A S.C. Code Ann. Regs. 61-49 (8)(a) (1982). As explained in the Findings of Fact, the Department's Bureau of Water continued to renew S.C. Crab's Annual Certificates of Operation finding that Gordon Enterprises "has complied with the Regulations prescribed by the South Carolina Department of Health and Environmental Control governing equipment and methods used in the production, processing, transportation, or sale of crab . . . ." Thus, S.C. Crab's water complied with the regulations that are meant to insure that the water used in crab processing is safe.

IT IS THEREFORE ORDERED that though S.C. Crab has violated the State Pollution Control Act, no penalty should be assessed for the reasons stated herein. Furthermore, the water system at S.C. Crab is not within the purview of the State Safe Drinking Water Act and that therefore no violation of that act occurred.

AND IT IS SO ORDERED.

Ralph King Anderson, III

Administrative Law Judge

March 1, 2001

Columbia, South Carolina

1. The Department presented only the testimony of Anastasia Hunter Shaw on this issue. She had no personal knowledge of this matter, and her testimony was based solely on a penalty computation worksheet and accompanying document.

2. In support of this position, the Department cites the case of United States v. Midway Heights County Water District, 695 F.Supp. 1072 (E.D. CA 1988). However, the water system in Midway was a public water system that delivered water from a reservoir to the homes of its customers. Id. That situation is clearly not analogous to the situation at hand.

3. An exception to this rule of construction is that if the words have a well recognized meaning in law different from their ordinary meaning, then the words are presumed to have been used in their legal meaning. Hughes v. Edwards, 265 S.C. 529, 220 S.E. 2d 231 (1975). However, there is no argument in this case that the term "drinking water" has a legal meaning different than the ordinary meaning.