Appeal from Civil Penalty Assessed for Violations of Sedimentation Pollution Control Act, Matter of, 543A88

• Docket Nº: No. 543A88
• Citation: 379 S.E.2d 30, 324 N.C. 373
• Case Date: May 04, 1989
• Court: United States State Supreme Court of North Carolina

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379 S.E.2d 30 324 N.C. 373 In the Matter of the APPEAL FROM the CIVIL PENALTY ASSESSED
FOR VIOLATIONS OF THE SEDIMENTATION POLLUTION CONTROL ACT
Administered by the Department of Natural Resources and
Community Development by Dennis W. Harris and wife, Natalie
G. Harris and Roy J. Hall. No. 543A88. Supreme Court of North Carolina. May 4, 1989.

Lacy H. Thornburg, Atty. Gen. by Andrew A. Vanore, Jr., Chief Deputy Atty. Gen., Daniel F. McLawhorn, and Daniel C. Oakley, Sp. Deputy Attys. Gen., Raleigh, for respondent-appellant Department of Natural Resources and Community Development.

Beach & Correll, Lenoir, P.A. by J. Michael Correll, and W.P. Burkhimer, Lenoir, for petitioners-appellees Dennis W. Harris, Natalie G. Harris, and Roy J. Hall.

Carolina Legal Assistance by Christine O'Connor Heinberg, and The North Carolina Council of Trout Unlimited and The North Carolina Wildlife Federation, by Thomas W. Earnhardt, Special Counsel, Raleigh, amici curiae.

MEYER, Justice.

This case arises from an assessment of a civil penalty against appellees Dennis W. Harris, his wife, Natalie G. Harris, and Roy [324 N.C. 375] J. Hall for violations of the Sedimentation Pollution Control Act of 1973, N.C.G.S. §§ 113A-50 to -66 ("the Act") by the North Carolina Department of Natural Resources and Community Development ("NRCD").

The administrative record tends to show that appellees own and have subdivided two adjacent tracts of land totalling approximately eighteen acres near Lenoir in Caldwell County. While enlarging one of the subdivisions on the property, between October and December 1983, appellees disturbed approximately two and one-half acres of land by grading, cutting and filling, in order to construct a street to provide access to residential lots. Appellees had been assessed civil penalties by NRCD

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for prior violations of the Act during earlier phases of the subdivision development, but these penalties had been settled.

The site was inspected by NRCD personnel on 20 October 1983. The inspection revealed that measures to control erosion and sedimentation resulting from the activities associated with the subdivision expansion had not been placed on the site. On 24 October 1983, NRCD sent appellees a Notice of Violation, which (1) stated that the property was in violation of the Act, (2) specified the violations and steps necessary to correct them, (3) set a deadline for compliance, and (4) warned that a civil penalty could be imposed if the violations were not corrected.

The violations were not corrected. On 10 November 1983, a Continuing Notice of Violation was mailed to appellees. Site inspections by NRCD personnel and meetings with appellees revealed that by 20 December 1983, adequate erosion control measures had still not been placed on the site and off-site sedimentation was still occurring. On 26 January 1984, pursuant to N.C.G.S. § 113A-64(a), NRCD assessed a civil penalty against appellees of $75.00 per day for fifty-six days beginning 25 October 1983 through 20 December 1983, totalling $4,200.

Appellees requested and received a hearing before an NRCD Hearing Officer. Consistent with the Hearing Officer's recommended decision, the Secretary of NRCD affirmed the penalty in October 1985, and demand for payment was made. Appellees petitioned for judicial review in Superior Court. In a judgment filed 11 February 1987, the trial court vacated the civil penalty. The trial court concluded that although the assessment was "not effected [324 N.C. 376] [sic] by error of law," the authority conferred pursuant to N.C.G.S. § 113A-64 allowed the Secretary of NRCD to assess civil penalties in his "absolute discretion," and thus the statute constituted a legislative grant of judicial power prohibited by article IV, section 3 of the North Carolina Constitution.

A divided panel of the Court of Appeals upheld the trial court's judgment. The majority set aside the trial court's finding that N.C.G.S. § 113A-64 authorized NRCD to assess civil penalties based solely on the Secretary's "absolute discretion," but, relying on Lanier, Comr. of Insurance v. Vines, 274 N.C. 486, 164 S.E.2d 161 (1968), concluded nevertheless that article IV, section 3 of the North Carolina Constitution "does not permit an administrative agency to assess a civil penalty whose amount varies with any agency discretion," In the Matter of Appeal from Civil Penalty, 92 N.C.App. at 11, 373 S.E.2d at 578, and that therefore N.C.G.S. § 113A-64 was an unconstitutional attempt to confer reserved judicial powers on an administrative agency. The dissent concluded that (1) the majority declined to follow a prior Court of Appeals' interpretation of Lanier, N.C. Private Protective Services Bd. v. Gray, Inc., 87 N.C.App. 143, 360 S.E.2d 135 (1987); and (2) the issue of constitutionality was controlled by the fact that N.C.G.S. § 113A-64 included adequate guiding standards to govern NRCD's exercise of adjudicative powers, thereby satisfying the constitutional requirement for such delegations of quasi-judicial powers.

On 18 November 1988, NRCD filed its notice of appeal based on the dissent in the Court of Appeals and also petitioned for discretionary review on the issue of whether article IV, section 3 of the North Carolina Constitution prohibits the legislature from conferring the power on administrative agencies to exercise discretion in determining civil penalties within an authorized range. The petition was allowed 5 December 1988. Accordingly, this appeal presents three questions for review: (1) whether article IV, section 3 of the North Carolina Constitution prohibits the legislature from conferring the power on administrative agencies to assess civil penalties, specifically, the power of NRCD to assess civil penalties under N.C.G.S. § 113A-64; (2) whether article IV, section 3 of the North Carolina Constitution prohibits the legislature from conferring on administrative agencies the power to exercise discretion in determining civil penalties within an authorized range; and (3) whether a panel of the Court of Appeals is [324 N.C. 377] bound by a prior

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decision of another panel of the same court on the same issue.

I.

The first question we address is whether article IV, section 3 of the North Carolina Constitution prohibits the legislature from conferring the power on administrative agencies to assess civil penalties. In this case, the Court of Appeals majority concluded that the Constitution does not permit NRCD to assess any civil penalties pursuant to N.C.G.S. § 113A-64.

Article IV, section 3 of the North Carolina Constitution provides in part:

The General Assembly may vest in administrative agencies established pursuant to law such judicial powers as may be reasonably necessary as an incident to the accomplishment of the purposes for which the agencies were created.

N.C. Const. art. IV, § 3 (1984).

The statute at issue here provides in pertinent part as follows:

(a) Civil Penalties.--(1) Any person who violates any of the provisions of this Article or any ordinance, rule, regulation, or order adopted or issued pursuant to this Article by the Commission or by a local government, or who initiates or continues a land-disturbing activity for which an erosion control plan is required except in accordance with the terms, conditions, and provisions of an approved plan, shall be subject to a civil penalty of not more than one hundred dollars ($100.00). No penalty shall be assessed until the person alleged to be in violation has been notified of the violation. Each day of a continuing violation shall constitute a separate violation under G.S. 113A-64(a)(1).

(2) The Secretary, for violations under the Commission's jurisdiction, ... shall determine the amount of the civil penalty to be assessed under G.S. 113A-64(a) and shall make written demand for payment upon the person responsible for the violation, and shall set forth in detail the violation for which the penalty has been invoked. If payment is not received or equitable settlement reached [324 N.C. 378] within 30 days after demand for payment is made, the Secretary shall refer the matter to the Attorney General for the institution of a civil action in the name of the...