ORDERS:
FINAL ORDER AND DECISION
STATEMENT OF THE CASE
This matter is before
the Administrative Law Court (ALC or Court) upon Petitioners’ request for a
contested case hearing pursuant to the Administrative Procedures Act to challenge
the Final Agency Decision of the Board of the South Carolina Department of
Health and Environmental Control (DHEC or Department), issued October 11, 2007,
of a 401 water quality certification and coastal zone consistency
certification, provided in response to a permit application pending before the
United States Army Corps of Engineers (Corps), P/N # 2006-3476-4IV. The permit
application, which was submitted by Respondent Wedgefield Plantation
Association (WPA), seeks authorization to perform maintenance dredging in the
existing canals within the Wedgefield Plantation subdivision in Georgetown County, South Carolina, and to dispose of the dredged material in an area
identified by WPA as an existing disposal basin.
Petitioners are not
challenging the authorization to dredge the canal system at Wedgefield
Plantation, but are contesting the certification of use of the area identified
as “existing disposal basin” for dredge disposal, since that area is
characterized as a freshwater wetland. Specifically, Petitioners argue that WPA’s
proposal to place dredged spoil material into a previously-constructed spoil
disposal basin that is located within a freshwater wetland violates the S.C.
Pollution Control Act, S.C. Code Ann. §48-39-10 (Supp. 2006), the water quality
certification regulations, and the Coastal Zone Management Program.
Petitioners also filed
a Motion for Summary Judgment related to WPA’s efforts in 2003 to obtain a
permit for dredging the canals and for spoil disposal. The earlier application
was denied by the Department. Petitioners sought review of that denial before
the ALC, in a contested case involving the same parties, Docket No.
04-ALJ-07-0351-CC. However, the action was dismissed for lack of jurisdiction
based upon WPA’s failure to timely file a request for a contested case.
Petitioners thus assert that the certification of the disposal of the dredged spoil
material in this case is barred by res judicata. Additionally, Respondent WPA
filed a Motion to Dismiss based on the timeliness of Petitioners’ request for
review. Those Motions are addressed herein.
After
notice to the parties, a contested case hearing on the merits of this matter was
held on August 25 and 26, 2008, at the Administrative Law Court in Columbia, South Carolina.
FINDINGS OF FACTS
Having
observed the witnesses and exhibits presented at the hearing and taking into
consideration the burden of persuasion and the credibility of the witnesses, I
make the following findings of fact by a preponderance of evidence:
General
Findings
The Wedgefield
Plantation subdivision is located adjacent to the Black River in Georgetown County, South Carolina. Wedgefield Plantation was initially developed in 1970.
There are approximately 580 home sites, including 81 lots that front the canal
system. In its permit application, WPA seeks authorization to perform
maintenance dredging of 99,400 cubic yards of material in the existing canals
within the Wedgefield subdivision, and to dispose of the dredged material in an
area identified as an existing 12.8 acre spoil disposal basin.
Permitting
Background
The history of dredging
operations at Wedgefield Plantation dates back to the 1970’s when the
subdivision was first developed. The Department of the Army, through the Corps
of Engineers, issued a permit dated July 27, 1970, authorizing the dredging of
canals in abandoned rice fields at Wedgefield Plantation. The drawings
attached to the permit indicate dredging proposed in a series of finger canals,
and a main canal that connected to the Black River. The drawings also include
the notation that “[a]pproximately 265,000 cubic yards to be dredged which will
be placed in the disposal areas as shown behind a retention embankment.” There
was no specific authorization in the 1970 permit for construction of a spoil
disposal basin.
Over time the canals
began silting in, and in 1982 Wedgefield Plantation Association applied for a
new permit for authorization to conduct maintenance dredging of the existing
canals. This application triggered comment from State and Federal resource
agencies.
In their initial comments, the State and Federal resource agencies objected to
the permit application. In response, Wedgefield modified the permit
application. The modifications depicted a reduction in the size of the
proposed spoil disposal area from 22 acres to 9.2 acres. They also revealed
multiple 20' wide cuts to be made in an existing adjacent impoundment that
would open that impounded area to exchange with the Black River, along with the
installation of pipes under an existing causeway identified as Boat House Road. In addition, Wedgefield reduced the depth of the canals. Based on these
modifications, the state and federal resource agencies reviewing the application
withdrew all objections.
The Corps issued a
permit to Wedgefield Plantation on May 13, 1983, authorizing maintenance dredging
of the existing canals. The permit included a “Statement of Findings” from the
Corps’ District Engineer that federal agency objections were removed “provided
certain modifications were made to the project and that the Federal permit
incorporate mitigation plans for wetland losses that were discussed with the
applicant during the processing of this application.” These above-mentioned
modifications included reducing the size of the dredged material disposal area
to avoid major filling of wetland areas and reducing the depth of all finger
canals from 8’ to 6’ below mean low water. The mitigation plan consisted of
breaching an adjacent rice field’s embankments at several locations in order to
allow a daily exchange of water between the Black River and the rice field.
On August 8, 2003, Wedgefield
Plantation Homeowners Association again submitted a permit application to the
Corps of Engineers for maintenance dredging and spoil disposal. The
application depicted a 14.92 acre “proposed confined disposal basin” described
as “wetlands proposed to be impacted.” The permit drawings depicted depths of
dredging in most locations as -8 MLW. After reviewing the application, the
Department issued a “Notice of Proposed Decision” on July 28, 2004, in which it
denied the water quality certification and coastal zone consistency
certification. In that decision, the Department determined that using the
wetlands for spoil disposal was not the least damaging alternative and that it
would result in unnecessary, permanent impacts. The Department further found
that rather than using the proposed disposal area, “[a]n existing intact spoil
disposal area or a contained upland disposal area should be used for this type
of project.” WPA filed a request with the ALC for review of the Department’s
denial, but that request was ultimately dismissed because the request was made
after the 30-day deadline for filing set forth in ALC Rule 11.
On May 31, 2006, WPA
filed the application at issue in this case with the Corps of Engineers seeking
authorization to perform maintenance dredging and to deposit spoil material in
the existing spoil disposal basin. That application was subsequently revised
on November 2, 2006, to provide an alternative analysis related to spoil
disposal methods. The application differed from the 2003 application in that:
· the size of the “existing confined disposal basin” was shown as
12.8 acres;
· the depth of dredging was adjusted in one section of the canals;
· the width of the dredge cut was reduced to allow for a 10’ wide
buffer on either side of the canal; and
· the shape of the dredge cut was altered from a box cut to a “v”
shaped cut.
The Department concluded that the
permit application was consistent with the S.C. Coastal Zone Management Program,
and it issued its 401 water quality certification on July 13, 2007. More
specifically, the Department determined that the area that it had previously concluded
was not a confined disposal area was indeed a confined disposal area that was
appropriate to receive the spoils from the proposed dredging.
On July 30, 2007, Petitioners
sought review by the DHEC Board. The Board conducted a final review conference
on September 7, 2007 and subsequently concluded that “Department staff properly
evaluated applicable legal requirements in issuing the permit, 401 water
quality certification and coastal zone consistency determination under review.”
Dredging
WPA seeks approval to
“dredge 99,400 cubic yards of material from two entrance canals and portions of
the adjacent canal system.” The Black River’s considerable sediment, and
sediment transport from the River into the canals is the primary cause of
siltation in the canals. As a result, the canals have gradually silted in
since the dredging operation that occurred following the issuance of the 1983
permit.[4]
In some instances there is no evidence of a channel, but only of a large flat
expanse of mud. WPA members who own property along the canals can currently navigate
from their docks within an hour on either side of high tide. This allows for only
a two-hour window of opportunity for boating. If property owners boat longer
than two hours, they must stay out eleven hours, or until the next high tide,
before they can return to their docks. There is also very little wildlife or
fishery resources in the canals as a result of the decreased water depths.
Therefore, the canals
are no longer navigable at low tide and the navigability at high tide has been
greatly reduced. It also appears that following a maintenance dredging event the
canals are useable for approximately fifteen to twenty years. Accordingly, if WPA
is not able to perform maintenance dredging, the canals will, in time, be
rendered non-navigable at any tidal stage. Furthermore, dredging will allow
the return of aquatic life that once inhabited the canals.
Spoil
Disposal Area
WPA proposes to place
the spoil material from the above-referenced dredging in an adjacent 12.8 acre
disposal basin.
The existing 12.8 acre disposal area that WPA proposes to utilize is a “confined” or “contained” area. More specifically,
the disposal area is surrounded by an intact dike, or embankment, separating
the disposal area from the Black River, surrounding marshes, and the main
canal. The embankment is at a significantly higher elevation than the area
inside the embankment and can be described as “high ground.” The spoil
disposal area also includes water control structures such as a “flash board
riser” and an “overflow pipe” which are designed to prevent water from the Black River and surrounding marshes from flowing into the disposal area and to only allow
water to flow out of the area.
These structures, described as the return water discharge, were required as a
condition of the 401 water quality certification of the 1983 permit. Therefore,
the embankment and water control structures prevent any exchange between the
area inside the embankment and the surrounding marshes, the Black River, and
the main canal. Any outfall from those pipes would be extremely limited under
present conditions.
Since the proposed
spoil disposal area is a completely confined or contained area, the proposed
activity in WPA’s permit application will have no effect on the Black River and surrounding marshes. This finding is significant in light of the
permitting history of this site. The Department previously denied the 2003
coastal zone consistency certification and 401 water quality certification
based on the assumption that the embankment surrounding the spoil disposal area
was breached and that there was a connection between the spoil disposal area
and the surrounding marshes and the Black River. Because of this assumption,
the Department concluded that allowing the applicant to repair the existing embankment
and utilize the area for spoil disposal would adversely affect water quality in
the Black River. That adverse impact would occur because the repair of the
embankment would cut off the spoil disposal area from the Black River and thus eliminate
the functions and values of the area to the ecosystem of the Black River.
However, in reality, those functions and values did not exist. The Department’s
staff had erroneously assumed that the embankment had not been maintained.
Thus, its previous conclusion that the 2003 permit application would have had an
adverse effect on the Black River and surrounding marshes was marred by its
erroneous assumption that the embankment was not intact. Had the Department’s
staff been made aware of the actual condition of the embankment in 2003, it is
likely that the certifications would have been issued.
Environmental
Impact of Disposal in the Basin
The area inside the
embankment is a freshwater wetland. Phragmites grass dominates the ecology of
the wetland within the spoil area, and Phragmites grass is a productive
component of wetland ecosystems. If spoil material is pumped onto the proposed
disposal area, it will result in the elimination of the wetlands in the 12.8
acre disposal area. The wetlands in this area would be replaced with an upland
ecosystem, which is not as productive as a marsh ecosystem. Nevertheless, as
explained below, the use of a freshwater wetland area as a spoil disposal area
is not prohibited under the S.C. Coastal Management Program.
Mitigation
The mitigation
accomplished through the 1983 permitting action and the previous use of the
area at issue in this case are significant considerations in evaluating the feasibility
of avoiding the placement of dredged material in this area. See S.C.
Coastal Management Program p. III-57 (“[t]o the maximum extent feasible,
dredged material must not be placed on high value natural habitats such as
salt, brackish or freshwater wetland”). In 1983, Wedgefield Plantation sought
approval to construct and maintain a 22 acre spoil disposal site. The proposed
spoil disposal area, however, consisted of wetlands.
As is clear from the Corps’ Statement of Findings appended to the 1983 permit,
Wedgefield Plantation agreed to reduce wetland impacts by significantly
reducing the size of the spoil disposal area. It also agreed to a mitigation
plan to address all of the wetland losses associated with the project. OCRM,
through its certification of the 1983 permit, concluded that the mitigation
adequately addressed the loss.
The 1983 mitigation
continues to benefit the surrounding area and functions as compensation for the
losses associated with the creation, maintenance, and continued use of the
spoil disposal area. The 20' breaches that were created in the adjacent impoundment
greatly enhanced the tidal exchange between the Black River and the adjoining
marshes and significantly enhanced the exchange of nutrients. Moreover, it
also notable that the same area that was certified in 1983 as consistent with
the Coastal Management Program was certified under the same policies as applied
to this permit application. That certification resulted in the construction of
the very spoil disposal basin at issue in this case.
Aquatic
Ecosystem and Water Quality Impacts
While the placement of
spoil material from dredging will eliminate the wetlands inside the disposal
area, it will not permanently alter the aquatic ecosystem in the vicinity of
the project such that its functions and values are eliminated or impaired. Here,
the vicinity of the project is not limited to the spoil disposal area, but is
rather the canals in Wedgefield Plantation, the marshes surrounding the Black
River, and the Black River. Since the spoil disposal area is separated from
the Black River and the surrounding marshes, it will not impact the adjacent
aquatic ecosystem. Furthermore, the removal of the functions and values of the
wetlands within the spoil disposal area will not have an adverse impact on
water quality in the adjacent aquatic ecosystem.
Feasible
Alternatives
Nevertheless, in
accordance with the regulations, several options were presented as feasible
alternatives to the proposed project. Those options included:
· dewatering and hauling sediment off site for disposal, including rapid
dewatering;
· use of geotextile tubes as bulkheading along the canals; and
· taking no action to preserve the navigation in the Wedgefield
Plantation canals and using the existing community dock and boat ramp as access
to the Black River.
Dewatering can be accomplished
through different methods. The cost of the dewatering alternatives ranged from
five to seven times greater than the cost of disposal in the 12.8 acre spoil
site. Moreover, these alternatives would require WPA to purchase an upland
site for disposal, or to find an available landfill to accept a significant
amount of fill material. The dewatering alternatives are thus too costly in
comparison to the impacts of using the spoil site.
The geotextile tubes alternative also involves hauling and disposal off-site
and thus is too costly in comparison to the impacts of using the spoil site.
It is also notable that the Petitioners presented no evidence to demonstrate
that either dewatering or use of the geotextile tubes is feasible. Furthermore,
input from other agencies should be evaluated in determining feasibility. In
that regard, neither the S.C. Department of Natural Resources nor the U.S. Fish
and Wildlife Service has commented on the permit application or objected to the
project.
Additionally,
use of the existing community dock and boat ramp is not an acceptable
alternative. While this alternative provides some form of water access, it
certainly does not address the condition of the canal system in Wedgefield
Plantation. Moreover, the Court must consider the substantial number of Wedgefield
Plantation owners that would be required to use the area and the significant
impact that loss of the use of the canals would have upon WPA and the
environment. Finally, this Court cannot overlook the fact that the 12.8 acre
disposal site was constructed for the exclusive purpose of maintaining the canals
at Wedgefield Plantation and has been specifically used for this purpose. In
fact, compensation for the wetland losses at the 12.8 acre spoil site disposal
has already been considered, approved and implemented. Therefore, there is no
identified feasible alternative to this project’s proposed use of the existing
confined disposal facility for spoil disposal.
This Court has subject
matter jurisdiction in this case pursuant to S.C. Code Ann. § 1-23-600(A) (as
amended by 2008 S.C. Act No. 334) and S.C. Code Ann. § 44-1-60(F)(2) (2008).
The hearing before the ALC is a contested case hearing pursuant to the APA and
is heard de novo. Marlboro Park Hosp. v. S.C. Dep’t of
Health and Envtl. Control, 358 S.C. 573, 595 S.E.2d 851 (2004). The proper
standard of proof to be applied is a preponderance of the evidence. Anonymous
(M-156-90) v. State Bd. of Med. Examiners, 329 S.C. 371, 496 S.E.2d 17
(1998); National Health Corp. v. Dep’t of Health and Envtl. Control, 298
S.C. 373, 380 S.E.2d 841 (Ct. App. 1989). Furthermore, the burden of proof is
upon the party asserting the affirmative of an issue and, therefore, Petitioners
bears the burden in this case of proving that the agency decision was in error
under the statutory and regulatory standards. Leventis v. Dep’t of Health
and Envtl. Control, 340 S.C. 118, 530 S.E.2d 643 (Ct. App. 2000).
Permit
Application Process
This contested case was
initiated by a permit application pending before the Corps. In response to
this permit application, the Corps and the Department issued a “Joint Public
Notice” pursuant to Section 10 of the Rivers and Harbors Act of 1899 (33 U.S.C.
§403), Sections 401 and 404 of the Clean Water Act (33 U.S.C. §1344), the South
Carolina Coastal Zone Management Act (S.C. Code Ann. §48-39-10 et. seq. (Supp.
2006)), and the South Carolina Construction in Navigable Waters Permit Program
(23 S.C. Code Ann. Reg. 19-450, et seq. (Supp. 2006)). The proposed activity of
maintenance dredging and spoil disposal triggered multiple reviews by the Corps
and the Department.
The Corps’ permitting
authority derives from the Clean Water Act, 33 U.S.C. §1344. In accordance
with 33 U.S.C. §1344(a):
The Secretary[11] may issue permits, after notice and opportunity for public hearings for the discharge
of dredged or fill material into the navigable waters at specified disposal
sites. Not later than the fifteenth day after the date an applicant submits all
the information required to complete an application for a permit under this
subsection, the Secretary shall publish the notice required by this subsection.
The Department’s Bureau of Water also
reviews these permit applications pursuant to 33 U.S.C. §1341(a):
Any applicant for a Federal license or permit to conduct any
activity including, but not limited to, the construction or operation of
facilities, which may result in any discharge into the navigable waters, shall
provide the licensing or permitting agency a certification from the State in
which the discharge originates or will originate …that such discharge will
comply with the applicable provisions of … this Act.
The Department’s review of a “401
water quality certification,” is governed by 25A S.C. Code Reg. 61-101(A)(2).
Regulation 61-101(A)(2) provides that “[a]ny applicant for a Federal license or
permit to conduct any activity which during construction or operation may
result in any discharge to navigable waters is required by Federal law to first
obtain a certification from the Department.”
In addition to its
water quality certification review, the Department must also determine whether
to issue a permit authorizing WPA’s activities in the State’s navigable waters.
The Department has promulgated regulations governing the review of the State’s
Navigable Waters permits in 23 S.C. Code Ann. Reg. 19-450, et seq.
Nonetheless, when an applicant submits a permit application seeking both a 401
water quality certification and a permit for construction in State navigable
waters, “the review for the water quality certification will consider issues of
that permit and the Department will not issue a separate permit for
construction in State navigable waters. The certification will serve as the
permit.” 25A S.C. Code Ann. Regs. 61-101(A)(9) (Supp. 2006).
Finally, since WPA
permit application is for an activity within the State’s coastal zone, review
by the Department’s Office of Ocean and Coastal Resource Management, described
as a coastal zone consistency certification, is required under 15 CFR 930.57:
Following the appropriate coordination and cooperation with
the State agency, all applicants for required federal licenses or permits
subject to State agency review shall provide in the application to the federal
licensing or permitting agency a certification that the proposed activity
complies with and will be conducted in a manner consistent with the management
program.
15 CFR 930.64 provides that
[f]ollowing receipt of a State agency objection to a consistency certification,
the Federal agency shall not issue the federal license or permit except as
provided in subpart H of this part.”
The Department’s
procedures allow for combined coastal zone consistency review and 401 water
quality certification review as set forth in 25A S.C. Code Reg. 61-101(A)(7):
For Federal permits that require both a water quality
certification and a coastal zone consistency certification, the coastal zone
consistency certification determination shall be issued as a component of, and
concurrently with, the water quality certification ….
Permit
Certifications
The Department’s 401
Water Quality Certification and Coastal Zone Consistency were triggered by the
permit applicant’s request for a permit from the U. S. Army Corps of Engineers
in accordance with the Clean Water Act, 33 U.S.C. §1344. Petitioners maintain
that the issuance of a 401 Water Quality Certification, Navigable Waters
Permit, and Coastal Zone Consistency Certification were wrongfully made.
Coastal
Management Certification
Pursuant to 25A S.C.
Code Ann. Reg. 61-101 and the policies set forth in the S.C. Coastal Zone
Management Program Document, WPA is required to demonstrate that there are no
feasible alternatives to its proposal to dispose of dredged material in the
12.8 acre spoil disposal area. The Coastal Management Program also provides
that any residential project which “requires filling or other permanent
alteration of salt, brackish or freshwater wetlands will be denied, unless no
feasible alternatives exist or an overriding public interest can be
demonstrated.” Coastal Management Program policy Chapter III, Policy Section
I(1)(b) & (e). This policy applies to wetlands, whether or not they are isolated
from surrounding waters by a dike or whether they are open to tidal flow via
breaches in a dike.
“Feasible alternative”
is undefined in Regulation 61-101. “Where a word is not defined in a statute,
our appellate courts have looked to the usual dictionary meaning to supply its
meaning.” Lee v. Thermal Engineering Corp., 352 S.C. 81, 91-92, 572
S.E.2d 298, 303 (Ct. App. 2002); see also State v. Landis,
362 S.C. 97, 606 S.E.2d 503 (Ct. App. 2004) (“When faced with an undefined
statutory term, the court must interpret the term in accord with its usual and
customary meaning.”). “Feasible” is defined in the dictionary as “capable of
being done or carried out” and “reasonable, likely.” Merriam-Webster’s
Online Dictionary, http://www.merriam-webster.com/dictionary.
This dictionary meaning
accords with the definition contained in the regulations governing permits for
construction in navigable waters, 23 S.C. Code Ann. Regs. 19-450.2(G).
There, the definition of feasible includes “the concepts of reasonableness and
likelihood of success of achieving the purpose.” Moreover, Regulation 19-450.2(G)
further provides that the Department is authorized to consider “economic” and
“social” factors when determining the feasibility of a particular alternative.
Likewise, Regulation 61-101(F)(5), in requiring that a certification be denied
when there is a feasible alternative, does so under the caveat that the
alternative “reduces adverse consequences on water quality and classified uses.”
That caveat also recognizes that the alternative must have a reasonable
purpose. Therefore, not only must a “feasible alternative” be possible,
but it must also be reasonable. Furthermore, in making the analysis of
reasonableness, it is proper to weigh the economic cost of the proposed
alternatives.
Petitioners identified
one alternative – that of using a community dock and boat ramp.
Respondent WPA also identified the dewatering and geotextile tube
alternatives. None of those alternates are reasonable under the circumstances
of this case. The proposal to allow the canals to silt in and become non-functioning
is, in its purest sense, an alterative to activity, but it is manifestly not a
reasonable one. This alternative would eliminate navigation in established
waterways and would result in loss of important ecological functions and values
in the canals. It also is not a viable alternative to replace the significant
number of docks that have access to the canals themselves and the waterways of
the surrounding area. Thus, this alternative is not only infeasible, but such
an alternative would be adverse to the overriding public interest.
The dewatering and
geotextile tube alternatives are also not feasible. Though these alternatives
would allow dredging of the canals, the significant cost of those methods of
spoil disposal is economically prohibitive. Moreover, that cost is further
magnified by the environmental impact (though much less than the proposed
project) upon the upland disposal elsewhere. Accordingly, based upon the above
facts, the dewatering and geotextile tube alternatives are also not feasible
alternatives.
401
Water Quality Certification
The criteria for the
401 Water Quality Certification are found primarily at 25A S.C. Code Ann. Reg.
61-101. The relevant provisions for a Navigable Waters Permit are found at 23
S.C. Code Ann. Regs. 19-450. In assessing the water quality impacts of a
project, the following factors should be considered:
(a) whether the activity is water
dependent and the intended use of the activity;
(b) whether there are feasible alternatives to the
activity;
(c) all potential water quality
impacts of the project, both direct and indirect, over the life of the project
. . .
25A S.C. Code Ann. Reg.
61-101(F)(3). Regulation 61-101(F)(5) further sets forth the standards when
the Department must deny water quality certification. Petitioners contend that
Regulation 61-101(F)(5) (a) and (b) require that this certification be denied.
Those provisions state that the certification must be denied if:
(a) the proposed activity
permanently alters the aquatic ecosystem in the vicinity of the project such
that its functions and values are eliminated or impaired;
(b) there is a feasible alternative
to the activity, which reduces adverse consequences on water quality and
classified uses.
25A S. C. Code Ann. Reg.
61-101(F)(5) (a) and (b).
Here, the environmental
impact is limited to the existing 12.8 acre area spoil disposal site. That
site does not, as the Petitioners contend, constitute the entire “aquatic
ecosystem in the vicinity of the project.” As noted above, the vicinity of the
project is rather the canals in Wedgefield Plantation, the marshes surrounding
the Black River, and the Black River. Since the spoil disposal area is
separated from the Black River and the surrounding marshes, it will not impact
or permanently alter that adjacent aquatic ecosystem. Therefore, the evidence
did not establish that the removal of the functions and values of the wetlands
within the spoil disposal area will have an adverse impact on water quality in the
adjacent aquatic ecosystem. Moreover, as explained above, there are no other
feasible alternatives to the proposed project which reduces adverse
consequences on water quality and classified uses.
Res
Judicata
Petitioners argue that the
doctrine of res judicata barred WPA from reapplying for 401 water quality
certification and coastal zone consistency certification after the Department
denied WPA’s 2003 application on July 28, 2004. Petitioners contend that,
because the Department’s 2004 denial decision was not appealed, it must be
given preclusive effect. The Court disagrees.
Res judicata is a
court-created rule that “is designed to draw a line between the meritorious
claim on the one hand and the vexatious, repetitious and needless claim on the
other hand.” Purter v. Heckler, 771 F.2d 682, 689-90 (3rd Cir. 1985).
Generally speaking, it bars subsequent actions “by the same parties on the same
issues,” as well as subsequent actions by the same parties when the claims
arise out of the same transaction or occurrence that was the subject of a prior
action between those parties. Sub-Zero Freezer Co. v. R.J. Clarkson Co.,
308 S.C. 188, 190-91, 417 S.E.2d 569, 571 (1992). Under the doctrine of res
judicata, “[a] litigant is barred from raising any issues which were
adjudicated in the former suit and any issues which might have been raised in
the former suit.” Hilton Head Center of South Carolina, Inc.
v. Pub. Serv. Comm’n of South Carolina, 294 S.C. 9, 11, 362 S.E.2d 176, 177
(1987).
Res judicata is based
on the judicial policy that “a losing litigant deserves no rematch after a
defeat fairly suffered, in adversarial proceedings, on an issue identical in
substance to the one he subsequently seeks to raise.” Astoria Federal Savings & Loan Ass’n v. Solimino, 501 U.S. 104, 107 (1991). A contrary rule “would, as a general matter, impose unjustifiably upon those
who have already shouldered their burdens, and drain the resources of an
adjudicatory system with disputes resisting resolution.” Id. at
107-08. Nevertheless, “[b]ecause res judicata may govern grounds and defenses
not previously litigated” thereby “blockad[ing] unexplored paths that may lead
to truth,” it should be invoked “only after careful inquiry.” Brown v.
Felsen, 442 U.S. 127, 132 (1979). “The ease and efficiency of res judicata
as a means of quickly avoiding an evaluation of the merits of a plaintiff’s claim
does not imply that the decision to apply the doctrine should be either facile
or hasty.” Purter v. Heckler, 771 F.2d at 690.
The doctrine of res
judicata may, under certain circumstances, apply to decisions of administrative
agencies. In Astoria, the U.S. Supreme Court explained that “[w]hen an
administrative agency is acting in a judicial capacity and resolves disputed
issues of fact properly before it which the parties have had an adequate
opportunity to litigate, the courts have not hesitated to apply res judicata to
enforce repose.” Astoria, 501 U.S. at 107 (quoting United States v.
Utah Constr. & Mining Co., 384 U.S. 394, 422 (1966)). However, the
court cautioned that “[a]lthough administrative estoppel is favored as a matter
of general policy, its suitability may vary according to the specific context
of the rights at stake, the power of the agency, and the relative adequacy of
agency procedures.” Astoria, 501 U.S. at 109-10. Courts, in
interpreting Astoria, have held that an agency acts in a “judicial
capacity” when it provides the following safeguards: (1) representation by
counsel, (2) pretrial discovery, (3) the opportunity to present memoranda of
law, (4) examinations and cross-examinations at the hearing, (5) the
opportunity to introduce exhibits, (6) the chance to object to evidence at the
hearing, and (7) final findings of fact and conclusions of law. Reed v.
AMAX Coal Co., 971 F.2d 1295, 1300 (7th Cir. 1992) (per curiam); In re Kaiser Aluminum Corp., 365 B.R. 447 (D. Del. 2007); Durko v.
OI-NEG TV Products, 870 F. Supp. 1278 (M.D. Pa. 1994); Buckley v. U.S., 51 Fed. Cl. 174 (Fed. Cl. 2001); see also In Maryland State Dep’t of
Educ. v. Shoop, 704 A.2d 499 (Md. Ct. App. 1998) (in holding that the
Maryland State Department of Education was not acting in a “judicial capacity”
when it suspended a vocational instructor for violating tool security policies,
Maryland Court of Appeals explained that the hearing was not conducted by a
judicial officer, the proceedings were not recorded in any way, and no rules of
evidence or trial procedure were recognized); Delamater v. Schweiker,
721 F.2d 50, 53 (2d Cir. 1983) (per curiam) (“An action taken by an
administrative agency to grant or deny a benefit is not an adjudicated action
unless the agency has made its decision using procedures substantially similar
to those employed by the courts.”).
In this case, Petitioners
have not contended that the safeguards described above were present during the
application process that ultimately led to DHEC staff’s denial of WPA’s 2003 application.
Moreover, it is notable that, as discussed above, at the time of the denial of
WPA’s 2003 application, DHEC staff decisions were reviewed by the ALC as
“contested cases” and thus de novo. S.C. Code Ann. § 1-23-610 (2005); Marlboro,
358 S.C. at 579, 595 S.E.2d at 854 (ALJs hear contested cases de novo).
This fact suggests that the General Assembly did not view the decision process utilized
by DHEC staff as containing the types of safeguards that would warrant the application
of res judicata to its unappealed decisions. Accordingly, the Court concludes
that the doctrine of res judicata did not bar Respondent from reapplying for 401
water quality certification and coastal zone consistency certification.
The two primary cases
relied upon by Petitioners, Leviner v. Richardson, 443 F.2d 1338 (4th Cir. 1971) and S.C. Dep’t of Social Servs. v. Winyah Nursing Homes, Inc.,
282 S.C. 556, 320 S.E.2d 464 (Ct. App. 1984), do not mandate a different result.
In Leviner, the plaintiff filed an application seeking disability
benefits. His application was denied, without a hearing, on the basis that his
disability was not present at the time his insured status had expired. The
plaintiff did not request reconsideration of the denial decision, but
subsequently filed a second, third and fourth application for benefits. All of
his ensuing applications were denied. On appeal of the denial of the plaintiff’s
fourth application, the Fourth Circuit held that the doctrine of res judicata “may
apply” in cases where no administrative hearing was requested or held. Leviner,
443 F.2d at 1343. However, the court also noted that: In Grose v. Cohen, supra, we
said that the doctrine [of res judicata], as applied to administrative
decisions, “is not encrusted with the rigid finality that characterizes the
precept in judicial proceedings.” We added that “practical reasons may exist
for refusing to apply it” and “when traditional concepts of res judicata do not
work well, they should be relaxed or qualified to prevent injustice.”
Id. at 1342 (quoting Grose
v. Cohen, 406 F.2d 823, 824-825 (4th Cir. 1969) (internal
citations omitted). The court further held that a prior administrative
determination should not be res judicata “where new and material evidence is
offered which is of sufficient weight that it may result in a different
determination.” Id. at 1343. Ultimately, the court chose to remand the
case to the district court for it to decide whether the evidence proffered in
support of the plaintiff’s fourth application could be deemed “new and material
evidence” sufficient to result in a different determination. Id.
Leviner, a
Fourth Circuit case, is not binding on this Court. However, even it were
binding, the Court concludes that “practical reasons” exist for refusing to
apply administrative res judicata in this case. First, the Department has admitted
that its denial of WPA’s 2003 permit was largely based upon its erroneous
assumption that the embankment surrounding the spoil disposal area had been
breached. This admission is significant since courts have refused to apply
administrative res judicata in cases where there is manifest error in the
record. See, e.g., Oubre v. District of Columbia Dep’t of
Employment Servs., 630 A.2d 699 (D.C. 1993); Grose v. Cohen, 406
F.2d 823 (4th Cir. 1969); Purter, 771 F.2d 682; Perkins v.
Kramer, 198 P.2d 475 (Mont. 1948); see also Wright v. Marlboro
County School Dist., 317 S.C. 160, 452 S.E.2d 12 (Ct. App. 1994) (res
judicata does not apply in cases where an administrative tribunal is asked to judge allegations of its own wrongdoing).
Similar to those cases, the Department’s admission that its denial of WPA’s
2003 application was based primarily on its misunderstanding of a material fact
relating to the condition of the proposed disposal site cautions against a
rigid application of res judicata in this case.
Second, WPA’s 2006
application is different than WPA’s 2003 application. As discussed above, the
2006 application differs from the 2003 application in that the size of the
“existing confined disposal basin” is now shown as 12.8 acres, the depth of
dredging has been adjusted in one section of the canals, the width of the
dredge cut has been reduced to allow for a 10’ wide buffer on either side of
the canal, and the shape of the dredge cut has been altered from a box cut to a
“v” shaped cut. The Department apparently viewed these changes (along with its
reversal in opinion regarding the existence of a breach in the spoil disposal
basin) as sufficient to result in a “different determination” ― as
discussed, the Department approved the 2006 application whereas it had denied
the 2003 application. Thus, these changes to WPA’s application constitute
another “practical reason” for refusing to apply res judicata here.
Like Leviner, Winayh also does not mandate the application of res judicata in this case. In Winayh,
the Department of Social Services (DSS) brought an action against a corporate nursing
home and several of its officers, directors and shareholders to enforce a final
agency decision that found the nursing home liable for medicaid overpayments.
The final agency decision sought to be enforced by DSS had been made by DSS
after a “fair hearing,” and it had not been appealed by the nursing home. In
the action to enforce the final agency decision, the nursing home’s principal
shareholder sought to raise issues that could have been, but were not, raised
at the fair hearing. On appeal of the matter, the Court of Appeals held that
the doctrine of res judicata precluded the raising of those issues, concluding
that “the unappealed DSS decision bound the Nursing Home and its privies on all
issues that were or could have been addressed at the fair hearing.” Winyah,
282 S.C. at 563, 320 S.E.2d at 468.
In this case,
Petitioners have not contended that anything resembling a “fair hearing” was
held when Respondent’s 2003 application was denied in 2004.
Accordingly, Winyah does not dictate the application of res judicata here.
Timeliness
Respondent WPA argues
that the ALC does not have jurisdiction over this matter because Petitioners
failed to comply with the statutory procedural prerequisites for perfecting contested
case review of the Department’s decision. S.C. Code Ann § 44-1-60(E) provides
that:
Notice of the
department decision must be sent to the applicant, permittee, licensee, and
affected persons who have asked to be notified by certified mail, return
receipt requested. The department decision becomes the final agency decision
fifteen days after notice of the department decision has been mailed to the
applicant, unless a written request for final review is filed with the
department by the applicant, permittee, licensee, or affected person.
(emphasis
added). Therefore, Section 44-1-60(E) sets forth a fixed period of time by
which an affected person can seek review of a Final Department Determination.
Moreover, if a party fails to meet the deadline for requesting a review before
the Department’s Board, the decision becomes the final agency decision. At
that point, the DHEC Board lacks jurisdiction to “validly exercise dominion
over the matter” and the ALC thus cannot subsequently invoke jurisdiction to
hear the matter. South Carolina Coastal Conservation League v. South
Carolina Dept. of Health and Environmental Control, South Carolina Department
of Transportation, and South Carolina State Ports Authority, --- S.E.2d
----, 2008 WL 4693075 (Ct. App. 2008).
The Department clearly issued
its 401 water quality certification on July 13, 2007. However, Section 44-1-60(E)
requires that a request for a Final Review Conference be filed within fifteen
days of mailing of notice of the department decision, not fifteen days
from the issuance of the decision. Here, the evidence simply did not establish
when the Notice of the Department’s decisions was mailed. Accordingly, since
there is no date to show when the mandatory fifteen day deadline began running,
Respondent failed to establish that the request for a Final Review Conference
was untimely.
Moreover, even if the Court
presumes that the Notice was mailed on the date that it was issued, the
fifteenth day after July 13, 2007 was July 28, 2007, a Saturday. Generally,
“if the last day for the performance of an act falls on a Saturday, Sunday or
holiday the period will be extended and the act may be performed on the
following secular or business day.” C.J.S. Time § 42 (2006). This
tenet is specifically applicable to the filing of request for judicial
proceedings. See C.J.S. Time § 43 (2006) (“If the last day of a
period allowed by law for taking any stated action in a judicial proceeding
falls on a Saturday, Sunday, or legal holiday, the general rule is to exclude
such terminal Saturday, Sunday, or holiday, and to allow the action to be taken
the following day.”). South Carolina has followed this rule for computing
timeframes to take action in the South Carolina Rules of Civil Procedure.
SCRCP Rule 6, which mirrors SCALC Rule 3, states that:
In computing any period of time prescribed or allowed by
these rules, by order of court, or by any applicable statute, the day of the
act, event, or default after which the designated period of time begins to run
is not to be included. The last day of the period so computed is to be
included, unless it is a Saturday, Sunday or a State or Federal holiday, in
which event the period runs until the end of the next day which is neither a
Saturday, Sunday nor such holiday.
Likewise, in the administrative
venue, ALC Rule 3(A) provides that:
In computing any period of time prescribed or allowed by
these rules, by order of court, or by any applicable statute, the day of the
act, event, or default after the designated period of time begins to run is not
included. The last day of the period so computed is to be included, unless it
is a Saturday, Sunday or a State or Federal holiday, in which event the period
runs until the end of the next day which is neither a Saturday, Sunday nor such
holiday.
In fact, the Department itself has
taken this position. When issuing its notice of proposed decision, the
Department attaches a “Notice of Appeal Procedure” which specifically states
that:
In order to be timely, a request for final review must be
received by the Clerk of the Board within 15 days after notice of the decision
has been mailed to the applicant or respondent. If the 15th day occurs on a
weekend or State holiday, the request is due to be received by the Clerk of the
Board on the next working day.
Therefore, the result
that WPA proposes would ignore an overwhelming body of law that would allow
Petitioners to file on a Monday when the statutory deadline terminated on a
Saturday, and would ignore the Department’s own application of the statute. I
find Petitioner’s interpretation to be clearly erroneous. Furthermore, the
Department is a State office that is not open for business on Saturday or
Sunday. The Clerk of the Board would thus not be present to clock in a request
for review conference on a Saturday or Sunday. Consequently, under WPA’s
reasoning, the last day for filing a request for review would be on a day in
which such a request could not be filed, thereby reducing the limited timeframe
to fourteen days. I find that such reasoning would lead to an absurd result. See Kiriakides v. United Artists Communications, Inc., 312 S.C. 271, 275,
440 S.E.2d 364, 366 (1994) (when construing a statute, the Court will reject
meaning that would lead to an absurd result not intended by the legislature).
In
this case, the next day which is not a Saturday or a Sunday was Monday, July
30, 2007 – the date that Petitioners filed their request for a Final Review Conference
with the Clerk of the DHEC Board. Thus, I find that Petitioners’ request was
filed within the statutory fifteen-day time period prescribed in Section
44-1-60(E).
ORDER
IT
IS HEREBY ORDERED that the Department shall issue to WPA the Water Quality
Certification and Coastal Zone Consistency Certification requested by WPA pursuant
to its permit application filed on May 31, 2006 and subsequently revised on November
2, 2006.
AND IT IS SO ORDERED.
_________________________________
Ralph
King Anderson III
Administrative
Law Judge
December 15, 2008
Columbia, South Carolina
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