Hammond Lumber Co. v. Finance Authority of Maine

• Decision Date: 11 February 1987
• Citation: 521 A.2d 283
• Parties: HAMMOND LUMBER COMPANY v. FINANCE AUTHORITY OF MAINE et al.
• Court: Maine Supreme Court

Page 283

521 A.2d 283

HAMMOND LUMBER COMPANY v. FINANCE AUTHORITY OF MAINE et al.

Supreme Judicial Court of Maine.

Argued Nov. 12, 1986.

Decided Feb. 11, 1987.

Bernstein, Shur, Sawyer & Nelson Lee K. Bragg, Augusta, Bernstein, Shur, Sawyer & Nelson Edward J. Kane (orally), Portland, for plaintiff.

Verrill & Dana, Michael T. Healy (orally), Augusta, for Lombard & millett.

Verrill & Dana, Timothy S. Keiter, Portland, Logan, Kurr & Hemilson, Michael S. Haenn (orally), Bangor, for Finance Authority of Maine.

Before NICHOLS, ROBERTS, WATHEN, GLASSMAN, SCOLNIK and CLIFFORD, JJ.

CLIFFORD, Justice.

Hammond Lumber Company (Hammond) appeals from a judgment of the Superior Court, Kennebec County, dismissing for lack of standing its petition for review of a final agency action by the Finance Authority of Maine (Authority). Although we agree with Hammond that it had standing to seek review, our own careful direct review of the administrative record reveals that the Authority's action was justified by the evidence before it and that the Authority acted within its discretion in declining to disclose certain documents to Hammond. Therefore we vacate the Superior Court's dismissal of Hammond's petition and remand for entry of judgment affirming the Authority.

In March, 1985, the City of Augusta submitted an application under the Municipal Securities Approval Program to the Authority to obtain approval for the financing of the construction of a large facility (project) by Western Avenue Associates (Western) on Western Avenue in Augusta. ¹ Western intended to lease the facility to Augusta Lumber Company (Augusta Lumber) for use in the wholesale and retail lumber business. The estimated cost of the proposed facility was $557,000, of which Western requested $500,000 in funding through municipal revenue obligation securities. Pursuant to 10 M.R.S.A. § 1063(1) (Supp.1986), ² notice of the application was given to the public generally and specifically to all known competitors of Augusta Lumber, one of which was Hammond.

At a public hearing in June, 1985, held by the Authority before deciding whether to approve the project, Hammond appeared in opposition to the project, presented evidence and requested access to all the documents submitted by Western in support of its application in order fully to develop its opposition. Acting under 10 M.R.S.A. § 1063(2)(B), ³ the Authority, finding that Hammond had presented its objections with "reasonable specificity and persuasiveness," released to Hammond a copy of the building plans for the proposed facility and a summary of the then current sales of Augusta Lumber. The Authority released no other information to Hammond.

After hearing, the Authority issued a certificate of approval for the project and made certain findings and conclusions in accordance with 10 M.R.S.A. § 1063(2). ⁴ The Authority found specifically that the project would make a significant contribution to the economic growth of the State of Maine and that the project would not result in substantial detriment to existing industry in the state. Finding that the statutory criteria were satisfied, the Authority issued its certificate of approval on July 26, 1985.

Pursuant to M.R.Civ.P. 80C and 5 M.R.S.A. §§ 11001 and 11002 (1979 & Pamph.1986), Hammond filed a petition in the Superior Court, seeking review of the Authority's action approving Western's project. In Count I Hammond alleged that the Authority's findings were not supported by substantial evidence in the record. In Count II, Hammond asserted that the Authority had unlawfully refused to release the application and supporting documents to Hammond, and that the Authority's refusal prevented Hammond from adequately presenting its objections to the project to the Authority.

After reviewing the entire record and finding that Hammond had demonstrated neither actual nor potential particularized injury by virtue of the Authority's action, the Superior Court granted Western's motion to dismiss for lack of standing. In response to Hammond's motion to amend the judgment brought pursuant to M.R.Civ.P. 59(e), the court held that the dismissal applied to both Counts I and II. The court added that, based upon a review of the entire record, the Authority did not abuse its discretion in refusing to release more documents to Hammond. This appeal followed.

We agree with Hammond that it met minimum standing requirements and that the Superior Court's dismissal of the petition was error, but upon our own direct review of the administrative record we conclude that the Authority's findings of fact were based on substantial evidence in the record and that its certificate of approval for the project was properly issued. As to Hammond's access to documents, the Superior Court correctly determined that the Authority acted within its discretion in limiting the information provided to Hammond.

I. STANDING

The Superior Court, in dismissing Hammond's petition, determined that Hammond lacked standing to bring the matter before the court in that Hammond was not a person "aggrieved" within the meaning of 5 M.R.S.A. § 11001. A person is aggrieved within the meaning of 5 M.R.S.A. § 11001 if that person has suffered particularized injury, Ricci v. Superintendent, Bureau of Banking, 485 A.2d 645, 647 (Me.1984), the agency action "operat[ing] prejudicially and directly upon a party's property, pecuniary or personal rights." Jamison v. Shepard, 270 A.2d 861, 862-63 (Me.1970).

Hammond, a competitor of Augusta Lumber, was a party to the proceedings before the Authority, ⁵ and its petition can be fairly read to allege: 1) that the project approved by the Authority is primarily retail in nature and thus that the agency action directly contravenes 10 M.R.S.A. § 1061-A(1); 2) that the project would result in substantial detriment to Hammond, which is part of existing industry; and 3) that the project would result in insufficient demand for lumber products in the greater Augusta area, adversely affecting the efficient capacity of Hammond and other existing lumber businesses.

Although these allegations are conclusory in nature and lack specificity, they are minimally sufficient to withstand a motion to dismiss the petition based on standing alone. The Municipal Securities Approval Act requires that special notice of the application and hearing be given to competitors of businesses seeking to invoke the benefits of municipal industrial revenue bonds and contemplates their participation at the agency level. See 10 M.R.S.A. § 1063(1). Approval can be granted only if the Authority finds, among other things, that the project will not result in a substantial detriment to existing business in the state. 10 M.R.S.A. § 1063(2)(B). In considering whether there is such a detriment, the Authority must consider the demand within the market area of the benefited business and its effect on the capacity of existing competitor businesses, 10 M.R.S.A. § 1063(2)(B)(1), and weigh any adverse effect of the project on existing business against the economic benefits to be gained, 10 M.R.S.A. § 1063(2)(B)(2). There is no better way to effectuate the statutory purposes than for competitive businesses like Hammond to participate at the agency level and, if necessary, to challenge the Authority's actions by seeking direct judicial review.

II. SUFFICIENCY OF THE EVIDENCE

Hammond alleged in Count I of its petition that the findings of the Authority were prejudicial to its business interest and not based on any substantial evidence. Specifically, Hammond asserted that the project was primarily retail in nature, ⁶ would not make a significant contribution to the economic growth of the state, would result in substantial detriment to existing industry, and that there was insufficient demand in the area to employ the efficient capacity of existing industry. See 10 M.R.S.A. § 1063(2).

Findings of fact made by an administrative agency must be upheld if supported by substantial evidence in the record. 5 M.R.S.A. § 11007(4)(C)(5) (1979); Gulick v. Board of Environmental Protection, 452 A.2d 1202, 1207-08 (Me.1982). In reviewing administrative agency action, this court can directly review the administrative record in exactly the same manner as the Superior Court, and need not remand the case to the Superior Court for its review of that record. Gulick, 452 A.2d at 1209 n. 6; City of Bangor v. A.F.S.C.M.E., Council 74, 449 A.2d 1129, 1134-35 (Me.1982); Driscoll v. Gheewalla, 441 A.2d 1023, 1026 (Me.1982). A careful review of the entire record in this case demonstrates that the Authority had substantial evidence upon which to base its findings.

The Authority justifiably found that the project would result in the retention of 25 existing jobs and the creation of 8 new positions, would add to and diversify the tax base of the City of Augusta, a community with many non-taxpaying government facilities, and would make a significant contribution to the economic growth of the State of Maine. 10 M.R.S.A. § 1063(2)(A).

Although Hammond asserted that the retail sales of Augusta Lumber would dramatically increase at its new location, in violation of 10 M.R.S.A. § 1061-A(1), there was substantial evidence concerning Augusta Lumber's past business and future intentions to justify the Authority's finding that less than 25% of the proceeds of the securities would be used for retail sales space.

In concluding that the project would not result in substantial detriment to existing businesses under 10 M.R.S.A. § 1063(2)(B), the Authority considered whether the demand within the market area would be sufficient to employ the efficient capacity of existing businesses, see 10 M.R.S.A. § 1063(2)(B)(1), and balanced the contribution the project would make to the economic growth of the state against any adverse economic effect of the project on those businesses, see 10 M.R.S.A. § 1063(2)(B)(2). The evidence showed that Augusta Lumber was a going concern that,...