ORDERS:
ORDER LIFTING AUTOMATIC STAY
This
matter came before me upon motion of Respondent South Carolina Electric &
Gas Company (hereinafter "SCE&G") to lift the automatic stay
imposed by former S.C. Code Ann. § 1-23-600(G)(2). SCE&G’s Motion was
filed on May 1, 2008. Respondent South Carolina Department of Health and
Environmental Control took no position on this motion. Prior to the hearing on
the Motion, the Governor signed into law H. 3575, which revised the automatic
stay provisions and prescribed the standard to be used by the Administrative
Law Court in deciding a motion to lift the automatic stay. The Court held a
hearing on June 25, 2008. After reviewing the motion, the memoranda submitted
by the parties, and the arguments presented at the hearing, the Court lifts the
automatic stay.
FACTS
SCE&G
operates the Wateree Station power plant (“Wateree Station”) near Eastover,
South Carolina. Wateree Station has operated since 1970 and generates 700
megawatts of electricity when operating at peak capacity. The Clean Air
Interstate Rule (“CAIR”), 70 Fed. Reg. 25162 (May 12, 2005), promulgated by the
U.S. Environmental Protection Agency (“EPA”) pursuant to the Federal Clean Air
Act, requires SCE&G to install pollution controls to further reduce sulfur
dioxide emissions from the combustion of coal. To comply with the new
regulations, SCE&G will install a $250 million flue gas desulfurization
(“FGD”) scrubber system. The scrubber uses calcium carbonate (limestone) as
the catalyst in a chemical reaction to remove more than 95% of the sulfur
dioxide (“SO2”) produced during coal combustion, which results in
the creation of calcium sulfate, or gypsum – the primary component of drywall.
SCE&G must dispose of gypsum and ash from the FGD scrubber system.
Petitioner
H. Heath Hill (“Petitioner”) is a resident of the Eastover community of
Richland County. His family has owned and farmed extensive lands in the Eastover
community for generations. He owns and farms food and other crops on over
1,000 acres in the vicinity of the proposed ash landfill, including land
contiguous to the proposed landfill site. Surface and subsurface water flows
from the proposed landfill site onto the land owned by Petitioner. Petitioner
breathes the air, drinks water, uses and enjoys property and other natural
resources of the Eastover Community of Richland County in the vicinity of the
proposed facility. Petitioner contests the issuance of the SCE&G permit.
On
May 14, 2007, SCE&G submitted an application to the South Carolina
Department of Health and Environmental Control (“DHEC”) to construct and
operate a Class 2 Industrial Solid Waste Landfill (“ISWLF”) at the Wateree
Station to dispose of the gypsum byproduct and ash generated by the FGD
system. DHEC issued the permit for a Class 2 ISWLF on February 11, 2008.
As
required by the Administrative Procedures Act (“APA”), S.C. Code Ann. §§
1-23-310, et seq., Petitioner requested a Final Review Conference before
the South Carolina Board of Health and Environmental Control (“DHEC Board”),
which was denied. Petitioner timely filed a Petition for Administrative Review
with the South Carolina Administrative Law Court (“ALC”) pursuant to S.C. Code
Ann. § 1-23-600(G)(2), requesting a contested case hearing on DHEC’s decision
to issue the ISWLF permit. The ISWLF permit was automatically stayed pursuant
to the then-existing statute, S.C. Code Ann. § 1-23-600(G)(2). On May 1, 2008,
SCE&G filed a Motion to Lift Automatic Stay (“Motion”) pursuant to the
then-existing provisions of S.C. Code Ann. § 1-23-600(G)(4).
On
June 16, 2008, Governor Sanford signed H. 3575, which amended various
provisions of the APA, including the provisions relating to the automatic
stay. The statute, effective upon the Governor’s signature, amended the stay
provisions to prescribe for the first time the standard by which the ALC must
evaluate motions to lift the automatic stay. Code Section 1-23-600(H)(4) now
provides as follows:
After
a contested case is initiated before the Administrative Law Court, a party may
move before the presiding administrative law judge to lift the stay imposed
pursuant to this subsection. Upon motion by any party, the court shall
lift the stay for good cause shown or if no irreparable harm will occur, then
the stay shall be lifted. A hearing must be held within thirty days
after the motion is filed with the court and served upon the parties to lift
the automatic stay or for a determination of the applicability of the automatic
stay. The judge must issue an order no later than fifteen business days after
the hearing is concluded. [emphasis added]
STANDARD
OF REVIEW
Prior
to the recent amendments to the APA, the statute was silent on the standard of
review applicable to a motion to lift the automatic stay. The ALC granted
motions to lift automatic stays in the past under the former stay provisions
(e.g., Rules 16 and 34, SCRALC, and S.C. Code Regs. 61-72 § 205). The test
most often used in the ALC was a “balancing of the hardships” analysis pursuant
to Rule 16, SCRALC, and Rule 65, SCRCP. Thorton v. Alford, 274 S.C. 1,
260 S.E.2d 179 (1979); Columbia Broadcasting System, Inc. v. Custom
Recording Co., 258 S.C. 465, 189 S.E.2d 305 (1972).
The
new statute prescribes two circumstances under which the ALC “shall” lift the
automatic stay: (1) “for good cause shown,” or (2) “if no irreparable
harm will occur.” The use of the term “or” appears to mean that upon a finding
of either “good cause” or “no irreparable harm,” the Court must lift the stay.
However, Court need not reach that question of statutory interpretation in this
case, because it is clear that SCE&G has demonstrated “good cause.”
South
Carolina courts have addressed the meaning of “good cause” in other contexts,
most often in determining whether a party has shown “good cause” for granting
relief from an entry of default under S.C.R.Civ.P. 55(c). The ALC recently addressed “good cause” for relief from an automatic rule in
the context of restoring the privilege to operate a motor vehicle after a
license has been suspended. In S.C. Dept. of Motor Vehicles v. Lajuenesse,
2008 SC ALJ LEXIS 20 (Mar. 4, 2008), Judge Gossett considered whether Mr.
Lajuenesse had shown good cause for reducing the term of his habitual offender
suspension. The court stated:
"Good
cause" has been defined as "[a] legally sufficient ground or
reason." Black's Law Dictionary 692 (6th ed. 1990). It is a
"substantial reason amounting in law to a legal excuse for failing to
perform an act required by law." Id. The term is "relative and highly
abstract," and its meaning must be determined not only by the verbal
context of the statute in which the term is used but also by the context of the
action and procedures involved in type of case presented. Id.
In
various contexts, courts have found that "good cause" requires more
than personal circumstances or facts that are common to the population in
general. See, e.g., Faile v. S.C. Employment Sec. Comm'n, 267 S.C. 536,
541-42, 230 S.E.2d 219, 222-23 (1976); S.C. Dep't of Motor Vehicles v.
Watts, 07-ALJ-21-0134-AP, at 5 (S.C. Admin. Law Ct., Jan. 24, 2008). A
determination of whether good cause exists may require a balancing of the needs
of the parties and public policy. See, e.g., Doe v. Ward Law Firm, 353
S.C. 509, 514-15, 579 S.E.2d 303, 305 (2003) (finding good cause to examine the
medical records of the biological parents based upon the compelling needs of
the adopted child and balancing the privacy rights of the parties against the
best interest of the child). Good cause must be determined on a case-by-case
basis. See Watts, 07-ALJ-21-0134-AP, at 6; Black's Law Dictionary 692
(6th ed. 1990).
Lajuenesse,
2008 SC ALJ LEXIS 20, pp. 17-18.
In Lajuenesse, it was the Respondent’s failure to show some reason to
reduce his suspension “beyond that which is generally common to all drivers”;
i.e., the inconvenience of being without a license, that was fatal. The
principle articulated in the case is that “good cause” requires some showing
more than “any cause,” which would render the word “good” meaningless. See Lajuenesse, 2008 SC ALJ LEXIS 20, p. 21.
CAIR requires SCE&G to
install pollution controls to reduce sulfur dioxide emissions from the
combustion of coal. To comply with the new regulations, SCE&G will install
a $250 million FGD scrubber system. Affidavits from SCE&G project managers
Philip Dooley and Jean-Claude Younan establish that SCE&G must have the FGD
scrubber system installed and operable no later than June 17, 2009. An
integral feature of the FGD scrubber system is a place to manage the gypsum and
ash from the system. SCE&G determined that an on-site landfill was the preferred
disposal alternative. Even if off-site disposal capacity were available for
the expected volume of material to be generated, moving the material to an
off-site location would require fully loaded trucks to leave the Wateree site
every 20 to 30 minutes around the clock. The resultant noise, safety issues,
and diesel emissions would create environmental concerns for the area.
To meet the project deadline,
SCE&G needs to begin construction of the landfill no later than July 2008.
If the stay is not lifted, SCE&G risks being unable to meet the deadlines
set by EPA to achieve mandatory reductions in air pollution.
SCE&G
seeks to have the automatic stay lifted to complete construction of the ISWLF,
not to begin to place any waste in the landfill. SCE&G’s contractor is
currently clearing and grading the landfill site pursuant to the Construction
Stormwater Permit issued by DHEC on February 26, 2008 after Richland County
approved the construction plans on January 17, 2008. The approved
construction plans cover Cells 1-5 (in Phase 1) of the landfill.
The
Construction Stormwater Permit allows the area where the landfill will be
located to be excavated and graded. To perform the actual construction; that
is, to place the clay liner in the landfill cells, SCE&G must have
the stay lifted. SCE&G needs to construct the clay liner system
contemporaneously with the excavation for both logistical and cost reasons. As
material is excavated from the cells, the contractor will determine what
material has the proper characteristics for compaction to meet the permeability
requirements for the landfill liner system and will construct the liner using
that material (and offsite material as necessary). The remaining material will
be stockpiled. To construct the liner in a separate step would create
logistical problems because of the need for excess stockpile area, and cost
issues because of the handling the material twice.
SCE&G
has agreed that it is proceeding at its own risk, i.e, that when this
contested case ends, SCE&G will be responsible for ensuring that the
landfill is used, if at all, in accordance with the final order in the
contested case.
In
this case, compliance with Federal clean air laws is an urgent and compelling
reason to lift the automatic stay; thus, lifting the stay is in the public
interest. See Superior Servs. v. Dalton, 851 F. Supp. 381 (S.D. Cal.
1994) (court held that the Navy set forth compelling reasons for lifting an
automatic stay, including the need to award a contract to a qualifying entity
and the need to provide essential health and safety services); Dairy Maid
Dairy v. U.S., 837 F. Supp. 1370 (E.D. Va. 1993) (by statute, protest of a
government procurement contract automatically stays the award of the contract
pending a decision by the Government Accounting Office, unless “urgent and
compelling circumstances that significantly affect interests of the United
States will not permit waiting for the decision of the Comptroller General
concerning the protest”).
If
the stay is lifted, construction of the landfill pursuant to the terms of the
DHEC permit will not preclude SCE&G from complying with any terms the court
may impose upon the permit. The public policy underlying the automatic
stay—the risk that a party’s right to challenge a regulatory action might be negated
if the regulatory action were not stayed—simply is not a consideration here.
Thus, when SCE&G’s need to begin construction is balanced with the public
policy represented by the stay, the balance is in SCE&G’s favor.
Petitioner
argues that he will suffer irreparable harm if the stay is lifted. First, he
argues that construction of the landfill will lead to contamination of adjacent
areas, principally from the contaminants present in coal ash. This argument,
however, relates to the alleged ill effects of placement of waste in the
landfill, not to any harm from the construction itself.
At the hearing, Petitioner introduced the affidavit of his proposed expert
witness, Dr. David Freedman, and argued that current stormwater controls at the
site are inadequate. This argument, even if true, is irrelevant to the issue
of the stay of the landfill permit. SCE&G is clearing and grading the site
under its stormwater permit, which prescribes the stormwater controls which
must be established and maintained during clearing and grading. The stormwater
permit has not been appealed, and allegations of noncompliance with the
stormwater permit are not properly before me in this matter.
Petitioner’s
second argument relates to alleged harm resulting from construction.
Petitioner claims wetlands on the site and a possible archaeological site will
be destroyed if the stay is lifted.
As
an initial matter, the Court notes that the authorization to clear and grade
the site was granted under the stormwater permit. The issue before the Court
is whether the landfill permit should continue to be stayed or whether the stay
should be lifted. Continuing the stay of the landfill permit will do nothing
to avert impacts to wetlands and archaeological sites where those areas may be
cleared and graded under the stormwater permit.
At
the hearing, the parties attempted to identify on an aerial map the approximate
location of the wetlands and archaeological site. It appears that the
archaeological site and most of the alleged wetlands are outside the footprint
of Phase I of the landfill. Following the hearing, SCE&G submitted an
affidavit of Project Manager Jean-Claude Younan regarding the location of these
areas. The alleged wetlands included an isolated 1.75 acre area and three
ditches. During the clearing and grading performed under the stormwater permit,
SCE&G graded part of the ditches but has otherwise not impacted the alleged
wetlands. The archaeological site is located in Phase 2 of the landfill and
has not been impacted. SCE&G’s stormwater permit allows clearing and
grading of 120 acres in association with the construction of Cells 1-5 (in
Phase 1) of the landfill. Cells 1-5 comprise approximately 35 acres of the
total 120-acre area covered by the stormwater permit. Cells 1-5 are projected
to have sufficient capacity for disposal of five years of gypsum and ash from
the FGD system, assuming maximum production and no gypsum recycling. SCE&G
will have to obtain another stormwater permit before beginning site work on
additional cells and does not anticipate doing so for about four years, well
after this case is resolved.
CONCLUSION
The
Court finds that SCE&G has demonstrated good cause for lifting the stay in
order for SCE&G to construct cells 1-5 in Phase I of the landfill.
Therefore, it is ORDERED that the stay is lifted pursuant to S.C. Code
Ann. § 1-23-600 (H)(4).
AND
IT IS SO ORDERED.
___________________________________
Carolyn
C. Matthews
Administrative
Law Judge
July 10, 2008
Columbia, SC
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