SC Administrative Law Court Decisions

This matter comes before me on a Motion to Dismiss by Respondent South Carolina Department of Health and Environmental Control ("DHEC"). Respondent Wal-Mart Stores, Inc. ("Wal-Mart") joined in this motion on February 27, 2001. A hearing on the Motion to Dismiss was held on August 21, 2001, with counsel for all parties participating.

Respondents seek dismissal of Citizens for Responsible Growth in Clemson's ("Citizens" or "Petitioner") appeal from DHEC's issuance of a water quality certification for the construction site of a proposed Wal-Mart Supercenter Store at Clemson, in Pickens County. Upon review of the memoranda submitted by the parties and consideration of the arguments made at the hearing, the Motion to Dismiss is granted for the reasons stated herein.

In filing its Petition for Administrative Review, the Petitioner requests a contested case hearing to review DHEC's issuance of a Water Quality Certification. Under the current regulatory scheme in South Carolina, any entity seeking to discharge into a wetland must apply to the Army Corps of Engineers for a permit under §404 of the Clean Water Act. See U.S. Code Title 33, §1344. In administering the §404 Permit Program, the Army Corps may authorize such activities in two separate ways: (1) with an individual permit, which extends only to a given project, based upon a site-specific review of the particular activities proposed there; or (2) with a general permit, commonly known as a "nationwide permit," which authorizes a certain category of activities that are substantially similar in nature and cause minimal individual and cumulative environmental impact. Nationwide permitting has been upheld as a valid procedure across the country. Interstate Properties v. Schregardus, 1999 WL 1267309 (Ohio App. 10 Dist.).

A nationwide permit generally authorizes any party to engage in the activity described in the nationwide permit without seeking prior, project-specific authorization. Id. For example, in some cases, an entity will request a permit where the area covered is very small and the relative impact is minimal, so the Army Corps has chosen to deal with such cases by issuing nationwide permits for certain classes of activities. In making the decision to issue nationwide permits, however, the Army Corps must first request and receive a Water Quality Certification from participating states.

In South Carolina, the certification is provided through S.C. Code Ann. Regs. 61-101 (Supp. 2000) ("401 Certification"). DHEC is vested with the authority to decide whether a 401 certification should be issued, and the Administrative Law Judge Division ("ALJD" or "Division") has jurisdiction to decide controversies arising thereunder. In this case, Petitioner challenges no particular DHEC decision, but argues that the regulatory scheme of nationwide permits, which allows a party to obtain approval for certain limited activities without having to receive project-specific, individual certification, deprives it of due process.

The permit at issue was granted under Nationwide Permit 26, ⁽¹⁾ which generally regulates the discharge of dredged or fill material into headwaters and isolated waters. See DHEC-NWP-96. Nationwide Permit 26 provides for automatic approval for limited activities, but only in cases where the entity seeking the permit can establish that specific criteria enumerated in the Permit have been met. Activities falling outside the criteria require individual certification. Specifically, where the area to be filled is shown to be less that one-third of an acre, as is the case here, DHEC is not required to issue an individual certification.

The record reflects that the Army Corps renewed a number of Nationwide Permits, including Nationwide Permit 26, by publication in the Federal Register on December 13, 1996. As part of the issuance of any nationwide permit and as alluded to earlier, the Army Corps must first obtain a Water Quality Certification from each state for each permit sought to be issued or renewed. As such, DHEC placed the Notice of Intent to Issue the §401 Certification, with conditions, for Nationwide Permit 26 on public notice on January 23, 1997. One of the conditions specified in DHEC's certification was that, in cases of an impact to wetlands of less that one-third of an acre, permits are automatically approved and no individual certification is required; DHEC must simply be notified, and takes no action whatsoever in such cases. In this case, the permittee applied for and received coverage from the Army Corps under Nationwide Permit No. 26 on February 10, 2000. Because the area to be filled was shown to be less than one-third of an acre, certification was automatic and DHEC was not required to take any action in the case. There was no appeal of the federal permit.

Petitioner contends general certification deprives it of due process. It argues that notice and opportunity to be heard are required by our Constitution with regard to any administrative decision which adversely affects a citizen's interest. S.C. Const. Art. 1, § 22; Stono River Envtl. Protection Ass'n v. S.C. Dep't. of Health and Envtl. Control, 305 S.C. 90, 94, 406 S.E.2d 340, 342 (1991). Petitioner also argues that it has a right to appeal this certification pursuant to S.C. Code Ann. Regs. 61-101 (Supp. 2000), entitled "Water Quality Certification," which requires public notice, an opportunity for public comment and hearing, a project-specific certification decision and an opportunity for administrative review through individualized adjudication.

Administrative agencies are required to meet minimum standards of due process. S.C. Const. Art. 1, § 3; Smith & Smith, Inc., v. S.C. Public Service Comm'n, 271 S.C. 405, 247 S.E.2d 677 (1978). "Due process is flexible and calls for such procedural protections as the particular situation demands." Morrissey v. Brewer, 408 U.S. 471, 481, 92 S.Ct. 2593, 2600, 33 L.Ed.2d 484 (1972). "Due process encompasses all rights which are of such fundamental importance as to require compliance with due process standards of fairness and justice and includes procedural . . . rights of citizens against government actions that threaten the denial of life, liberty, or property." Anonymous v. State Bd. of Med. Exam'rs, 323 S.C. 260, 264, 473 S.E.2d 870, 872 (Ct. App. 1996), rev'd on other grounds, 329 S.C. 371, 496 S.E.2d 17 (1998). To prove the denial of due process in an administrative proceeding, a party must show that it was substantially prejudiced by the administrative process. Ogburn-Matthews v. Loblolly Partners (Ricefields Subdivision), 332 S.C. 551, 505 S.E.2d 598 (Ct. App. 1998), citing Palmetto Alliance, Inc. v. S.C. Public Service Comm'n, 282 S.C. 430, 319 S.E. 2d 695 (1984); Ka Fung Chan v. Immigration and Naturalization Serv., 634 F.2d 248 (5^th Cir. 1981).

In Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976), the Supreme Court articulated three identifiable factors for assessing the constitutional requirements of due process. These are:

• First, the private interest that will be affected by the official action;
• Second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and
• Finally, the government's interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.

The court must decide whether the administrative procedures provided herein are constitutionally sufficient through an analysis of the governmental and private interests that are affected. First Federal Sav. & Loan Ass'n v. Board of Bank Control, 263 S.C. 59, 65, 207 S.E.2d 801, 804 (1974). It is recognized that due process does not require a trial-type hearing in every conceivable case of government impairment of private interest; and consideration of what procedures due process may require under any given set of circumstances must begin with a determination of the precise nature of the government function involved as well as of the private interest that has been affected by governmental action. Cafeteria and Restaurant Workers Union Local 473 v. McElroy, 367 U.S. 886, 894-95, 81 S.Ct. 1743, 6 L.Ed.2d 1230 (1961).

With respect to the private interest involved here, the Petitioner does not have a direct economic interest which will be affected by the issuance of this certification. While Petitioner alleges that the value of property owned by its members will be adversely affected by the construction of the proposed Wal-Mart store, the only issue properly before this Court is not whether construction of the Wal-Mart is appropriate, but whether a wetland of less than 1/3 of an acre in size may be filled. Petitioner's individual interest with regard to the filling of the wetland is in its use and enjoyment of the wetland. This type of interest was held to be minimal by the South Carolina Supreme Court in Ogburn-Matthews, supra. Further, the Nationwide 26 permit is designed to administratively regulate action having "minimal impact." The amount of wetland to be filled here is less than 1/3 acre. Petitioner has no possessory right of access to the wetland. Under these circumstances, I find and conclude that Petitioner's private interests which would be affected by the filling of the wetland are relatively insignificant.

Second, when the information essential to a decision is of a technical nature, as was the case here, the risk of an erroneous deprivation of a private interest has been held to be small. This factor weighs against requiring a trial-type hearing in order to meet due process requirements. Ogburn-Matthews, supra, 505 S.E.2d at 606-07.

The third consideration in achieving an appropriate due process balance is an assessment of the governmental interest at stake. The court must strike the appropriate due process balance in assessing the government's interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail. Although our supreme court stated that the process of certification by trial is the only meaningful opportunity for an interested person to be heard on the issue of consistency of a proposed project with state policy, the final permitting authority is the Corps, irrespective of consistency. Stono River Envtl. Protection Ass'n v. S.C. Dep't of Health and Envtl. Control, 305 S.C. 90, 406 S.E.2d 340 (1991). Nationwide 26 permits are "a type of general permit issued by the Chief of Engineers and are designed to regulate with little, if any delay or paperwork certain activities having minimal impacts." 3 C.F.R. § 330.1 (b) (1997). In this case, requiring individual certification decisions for every project which would otherwise be automatically certified under Nationwide Permit 26 would result in a heavy and unreasonable administrative burden upon DHEC, and would defeat the purpose of the Nationwide permitting program.

Finally, Petitioner's argument ignores the fact that the regulation Petitioner relies upon in asserting its right to a contested case hearing, Regs. 61-101, contains special language for processing and certifying nationwide permits. Section 61-101(A)(3) allows "general certification for categories of activities or for activities specified in nationwide . . . permits. Such general certifications are subject to the same process as individual certifications." In this case, DHEC followed the procedure set forth in the regulations when it placed the Notice of Intent to issue the 401 certification for Nationwide Permit 26 on public notice on January 23, 1997. The sufficiency of this notice is uncontested, and is supported by the fact that several groups did indeed challenge the certification as a result of the public notice in 1997. See South Carolina Coastal Conservation League and League of Women Voters of Georgetown County v. DHEC and Home Builders Ass'n of South Carolina, 97-ALJ-07-0068-CC and 97-ALJ-07-0067-CC. However, Petitioner did not request a contested case hearing at that time. Thus, DHEC's §401 Water Quality Certification became final and enforceable as a matter of law in 1997, after the entry of a Consent Order of Dismissal in the Coastal Conservation League cases. Petitioner's Petition for Administrative Review, which was filed on February 5, 2001, was not filed within the allowed fifteen (15) day period [after the 1997 public notice] to seek administrative review of relevant departmental decisions, as provided in 25 S.C. Code Ann. Regs. 61-72 (2000). "One cannot complain of a due process violation if he has recourse to a constitutionally sufficient administrative procedure but merely declines or fails to take advantage of it." Zaman v. S.C. State Bd. of Medical Examiners, 305 S.C. 281, 408 S.E.2d 213 (1991), cert. denied, 112 S.Ct. 200 (1991). Had the Petitioner responded to the public notice, its members could have filed a request for a contested case hearing in a timely manner. Having failed to do so, however, Petitioner is now foreclosed from challenging the 401 certification. Accordingly, the Respondents' Motion to Dismiss must be granted.

In light of the foregoing, it is hereby:

ORDERED that Respondent Department of Health and Environmental Control's and Respondent Wal-Mart, Inc.'s Motion to Dismiss is hereby granted; and it is further

ORDERED THAT Petitioner's Petition for Administrative Review is dismissed; and

AND IT IS SO ORDERED.

__________________________________

MARVIN F. KITTRELL

Chief Administrative Law Judge

October 25, 2001