ORDERS:
ORDER OF DISMISSAL
This contested case matter involving a critical area permit is before me pursuant to a
Motion to Dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), SCRCP, filed by
Respondent South Carolina Department of Health and Environmental Control, Bureau of
Ocean and Coastal Resource Management ("OCRM"). A motion hearing was conducted via
teleconference on March 2, 1998. For the reasons set forth below, the Motion is granted and this
case is dismissed.
This case originated with Respondent Tony A. Berenyi's ("Berenyi") application for a
critical area permit to construct a 12' x 1,085' timber bridge across tidelands critical area to access
an 8.3 acre island. Public notice of the application was given to adjoining landowners and others,
including Petitioners. OCRM denied the permit application on June 9, 1997, and Berenyi timely
requested a contested case hearing. The case was transmitted to the Administrative Law Judge
Division and entitled Tony A. Berenyi v. Department of Health and Environmental Control,
Bureau of Ocean and Coastal Resource Management, Docket No. 97-ALJ-07-0329-CC.
The only parties to that contested case were Berenyi and OCRM. The current
Petitioners were notified of the pendency of that contested case proceeding, but neither moved to
intervene in the proceedings pursuant to ALJD Rule 20. Prior to a full adjudication on the
merits, the parties entered into a settlement agreement for issuance of a permit for the proposed
construction, but with reduction of the bridge width from 12 to 6 feet. OCRM issued this permit
pursuant to a Consent Order of Dismissal filed October 27, 1997.
After the Consent Order was filed, OCRM mistakenly issued a notice to "All Interested
Parties", including the current Petitioners, informing them of a right to appeal the permit issuance
within fifteen days. Petitioners subsequently filed a request for a contested case hearing within
fifteen days. OCRM then transmitted this case to the Administrative Law Judge Division and
filed the Motion to Dismiss on December 22, 1997.
OCRM asserts the following grounds for dismissal of the action: (1) Petitioners lack
standing to challenge the permit issuance pursuant to a Consent Order in a previous proceeding;
and (2) Petitioners were afforded adequate notice and opportunity to intervene in the previous
action so as to protect their due process rights.
Clearly, Petitioners were kept well informed during the application process. Petitioners
had notice of the initial application filing and an opportunity to make comments to OCRM staff
regarding the application. Petitioners then received notice of OCRM's staff decision to deny the
application. Once Berenyi requested a contested case hearing, Petitioners were given notice of
that request and the pendency of the action before the Administrative Law Judge Division.
Petitioners did not intervene as parties or participate in the contested case proceedings in any
way.
ALJD Rule 20 provides:
Any person may intervene in any pending contested case hearing
upon a showing that:
(1) the movant will be aggrieved or adversely affected by the final order;
(2) the interests of the movant are not being adequately represented by existing parties, or that it is
otherwise entitled to intervene;
(3) that intervention will not unduly prolong the proceedings or otherwise prejudice the rights of existing parties.
Petitioners assert that until OCRM changed its agency position on the Berenyi application
from denial to issuance (as modified by the consent order), Petitioners were not aggrieved, and
therefore not entitled to intervene. Petitioners claim that the issuance of the Consent Order gave
them their first opportunity to initiate contested case proceedings, and that they rightfully did so
in the manner set forth in OCRM's own public notice.
Petitioners construe ALJD Rule 20(B)(1) too narrowly. Such an interpretation would
allow for collateral attack of all orders reversing an administrative agency's initial determination,
including those issued after a full adjudicatory hearing. For intervention purposes, a person "will
be aggrieved or adversely affected by the final order" if final disposition of a matter may impair
his ability to protect his interests. ALJD Rule 20(B)(1); cf. Rule 24(a)(2), SCRCP; Berkeley
Electric Cooperative, Inc. v. Town of Mt. Pleasant, 302 S.C. 186, 394 S.E.2d 712, 714-715
(1990). For example, if OCRM had continued opposition to permit issuance, the possibility
existed that OCRM would not appeal an order requiring permit issuance following a full
adjudicatory hearing, leaving Petitioners with no protection due to their non-party status.
Petitioners' choice to refrain from intervention may have also been based on a practical
assessment that OCRM was adequately representing their interests at the time. See ALJD Rule
20(B)(2). While OCRM may have initially shared Petitioners' position on the permitting
decision, OCRM's interest in the overall subject matter of the case was not necessarily the same
as an adjoining landowner or a private environmental organization. See Berkeley Electric
Cooperative, Inc. v. Town of Mt. Pleasant, 302 S.C. 186, 394 S.E.2d 712, 714 (1990)("The
question of [the prospective intervenor's] interest must be determined in relation to the overall
subject matter of the action and not in relation to the particular issue that is before the [c]ourt.").
Although not a per se rule, a governmental entity is likely to be an inadequate representative of
private party's interests. Berkeley, 394 S.E.2d at 716 (1990)(dictum), citing National Farm Lines
v. Interstate Commerce Commission, 564 F.2d 381 (10th Cir. 1977).(1)
Therefore, if this tribunal had denied a motion to intervene on the basis that Petitioners'
interests were being adequately represented by OCRM, due process would have required
additional notice to Petitioners prior to adoption of any settlement agreement in a final order.
But this tribunal is not in a position to grant relief to persons choosing not to act, whatever the
underlying motivation. Petitioners' failure to move for intervention in the prior contested case
proceedings deprived this tribunal of any discretion to grant them relief, as an agency is bound by
its own order. 2 Am.Jur.2d Administrative Law § 380 (1994).
Only an order entered by an administrative agency which lacks the inherent power to
make it is void and open to collateral attack. Id. Generally, an administrative order cannot be
collaterally attacked unless the agency acted in excess of its jurisdiction or by fraud or mistake so
as to justify the reopening of the judgment. Id. It makes little difference whether the final order
is one issued after a full hearing on the merits or one entered into by consent. An order entered
upon stipulation or by consent has the same binding force as any administrative order. 2
Am.Jur.2d Administrative Law § 381 (1994).
The efficiency of the administrative adjudicatory process would be greatly impaired if
consent orders, signed by all admitted parties and the presiding judge, are not final, binding
decisions. To allow collateral attack of an Administrative Law Judge's final order by a nonparty
with notice of, and an opportunity to intervene in, a contested case proceeding would result in
endless litigation. After all due process requirements have been met, this tribunal has a duty to
preserve the public trust in the integrity of rights acquired on the faith of the adjudicatory
process. Cf. 47 Am.Jur.2d Judgments § 898 (1995)(purpose of rule prohibiting collateral attack
on a judgment).
The South Carolina Court of Appeals examined a procedural problem almost identical to
that of Petitioners in Home Health Services, Inc. v. South Carolina Dept. of Health and
Environmental Control, 298 S.C. 258, 379 S.E.2d 734 (Ct. App.. 1989). In that case, a state
agency staff's initial decision to deny a permit was reversed in a consent order, and the permit
was granted without the consent of an interested person who never sought party status. The
Court held that the nonparty lacked standing to commence an action for judicial review of the
administrative order and affirmed the circuit court's dismissal of the action under Rule 12(b)(1),
SCRCP.
The South Carolina Supreme Court reached a similar result in Ex parte Reichlyn, 310
S.C. 495, 427 S.E.2d 661 (1993). In that case, the Court affirmed the denial of a motion for
intervention filed after a consent order was entered in the case. The Court aptly noted that there
was no longer any judicial "action" into which the movant could intervene. Ex parte Reichlyn,
427 S.E.2d at 664 (1993)(alternative holding).
By not seeking party status in the agency proceedings, as they properly could have done,
Petitioners removed themselves from an active role in the administrative decision making
process. Because they were not "parties," as defined by the Administrative Procedures Act
("APA"), in the previous proceedings, Petitioners lack standing under the APA to challenge the
resulting order. Home Health Services, Inc., 379 S.E.2d at 736 (Ct. App.. 1989); David E.
Shipley, South Carolina Administrative Law at 7-25 (2d ed. 1989) (to have standing to seek
judicial review of an agency's decision, a person aggrieved by a final decision in a contested case
must have had standing in the initial agency proceeding, and he also must have participated in the
case as a "party;" and if a person "received notice and decided not to participate in the agency
proceeding, then he should not have standing to secure review.").
For the foregoing reasons, this contested case is dismissed for lack of subject matter
jurisdiction.
AND IT IS SO ORDERED.
_____________________________________
STEPHEN P. BATES
ADMINISTRATIVE LAW JUDGE
April 14, 1998
Columbia, South Carolina
970763.wpd
1. It would be good public policy for OCRM to consult with non-party interested persons
opposed to permit issuance before it enters into a consent order granting a permit it previously
sought to deny. OCRM has ready access to the identity of those persons potentially aggrieved by
a given outcome in a permitting dispute. The Administrative Law Judge Division, however, has
neither the authority nor the inclination to dictate internal policy for another state agency. |
