South Carolina              
Administrative Law Court
Edgar A. Brown building 1205 Pendleton St., Suite 224 Columbia, SC 29201 Voice: (803) 734-0550

SC Administrative Law Court Decisions

CAPTION:
Heath Hill vs. SCDHEC, et al

AGENCY:
South Carolina Department of Health and Environmental Control

PARTIES:
Petitioners:
Heath Hill

Respondents:
South Carolina Department of Health and Environmental Control and SCE&G
 
DOCKET NUMBER:
08-ALJ-07-0183-CC

APPEARANCES:
n/a
 

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).[1]

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).[2] 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.[3] 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



[1] See Slovic v. S.C. Dept. of Health & Envt’l Control, 1999 WL 988662 (99-ALJ-07-0196-CC, Oct. 7, 1999) Greenville Metro Treatment Center v. S.C. Dept. of Health & Envt’l Control, 1998 WL 166271 (97-ALJ-07-0143-CC, Mar. 27, 1998); Bishop v. S.C. Dept. of Health & Envt’l Control, 1995 WL 930057 (95-ALJ-07-0513-CC, Nov. 16, 1995)(all granting motions to lift automatic stays)

[2] In analyzing good cause to set aside an entry of default, judges must consider (1) the timing of the motion for relief; (2) whether the defendant has a meritorious defense; and (3) the degree of prejudice to the plaintiff if relief is granted. Wham v. Shearson Lehman Bros., Inc., 298 S.C. 462, 381 S.E.2d 499 (Ct. App. 1989). The Wham factors have also been applied in the ALC where a party sought relief from dismissal because of a procedural default. See also S.C. Dept. of Revenue v. Sandy’s Lakeside Bar & Grill, 2006 S.C. Tax LEXIS 192 (Nov. 1, 2006)(under Rule 55(c) standard, finding good cause to relieve respondent from dismissal for failure to timely file Letter of Protest); S.C. Dept. of Revenue v. Place to Go Management, 2006 S.C. Tax LEXIS 184 (Oct. 16, 2006)(finding no good cause to relieve respondent from dismissal for failure to timely file Letter of Protest); Duffey v. SC. Dept. of Health and Human Services, 2005 SC ALJ LEXIS 741 (finding no good cause to relieve respondent from dismissal for failure to file a brief).

[3] The Court rejects the argument that it “seems plausible that the court would be unlikely, or at least reluctant, to require SCE&G to modify its landfill design once the actual landfill is constructed.” While the Court has formed no opinion as to whether the DHEC permit complies with the requirements of South Carolina law and regulations, the Court fully intends to make its determination following a hearing on the merits and to rule accordingly. SCE&G’s explicit agreement to proceed at its own risk means that if the ultimate decision in this case requires that the landfill design be modified, then SCE&G will make the modification.


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