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

Decision Date15 November 1988
Docket NumberNo. 8710SC430,8710SC430
Citation92 N.C.App. 1,373 S.E.2d 572
PartiesIn 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.
CourtNorth Carolina Court of Appeals

Beach & Correll, P.A. by J. Michael Correll, Lenoir, for petitioner-appellees.

Atty. Gen. Lacy H. Thornburg by Sp. Deputy Atty. Gen. Daniel F. McLawhorn and Asst. Atty. Gen. Walter M. Smith, Raleigh for respondent-appellant.

GREENE, Judge.

This appeal arises from an attempt by the Department of Natural Resources and Community Development (the "Department") to assess a civil penalty against petitioners for violations of the Sedimentation Pollution Control Act of 1973 (the "Act"). See N.C.G.S. Sec. 113A-50 et seq. (1983). The administrative record tends to show petitioners Harris and Hall own and have subdivided an approximately eighteen acre tract of land in Caldwell County, North Carolina. In enlarging a subdivision of this tract, petitioners allegedly disturbed approximately two and one-half acres of land by grading, cutting and filling in order to construct a street. Petitioners had previously paid the Department civil penalties in connection with earlier phases of the subdivision's development. Subsequent inspections by the Department revealed that petitioners continued to violate various requirements of the Act. The Department sent petitioners a Notice of Violation which specified the violations of the Act, the steps necessary to correct them, set a deadline for compliance and warned that a civil penalty could be imposed if the violations were not corrected. After the alleged violations were not corrected, the Department assessed a $4,200 civil penalty against petitioners pursuant to Section 113A-64 which provides in part:

Any person who violates any of the provisions of this [Act] ... shall be subject to a civil penalty of not more than one hundred dollars.... Each day of a continuing violation shall constitute a separate violation under G.S. 113A-64(a)(1).... The Secretary ... shall determine the amount of the civil penalty to be assessed ... and shall make written demand for payment upon the person responsible for the violation.... If payment is not received or equitable settlement reached 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 State in the superior court of the county in which the violation is alleged to have occurred to recover the amount of the penalty....

N.C.G.S. Sec. 113A-64(a)(1), (2) (1983).

Petitioners subsequently challenged this assessment in a hearing before a Department hearing officer whose findings, conclusions and proposed decision were adopted by the Secretary in his final assessment and demand for payment in October 1985. Upon petitioners' appeal to superior court, the trial court concluded the Department's assessment under Section 113A-64 was "not affected by error of law" but vacated the penalty as arising from a legislative grant of judicial power prohibited by Article IV, Section 3 of the North Carolina Constitution. The Department appeals the judgment of the superior court.


As this case commenced before 1 January 1986 and as there is no other procedure for judicial review of the Department's penalty assessment under Section 113A-64, the general scope of our review is governed by former Section 150A-51 (codified 1 January 1986 as N.C.G.S. Sec. 150B-51). N.C.G.S. Sec. 150A-51 (1978 & 1984 Cum.Supp.); N.C.G.S. Sec. 150A-43 (1978) (administrative procedure act only applies if no other procedure for judicial review); cf. N.C.G.S. Sec. 113A-64(a)(2) (1983) (providing for judicial enforcement of civil penalty after Department's final assessment).

Thus, the issues presented are: I) given the errors raised by the Department on appeal, what is the proper scope of judicial review of these proceedings under Section 150A-51; and II) whether petitioners' substantial rights were prejudiced by the Department's assessing a civil penalty under Section 113A-64(A) in an arbitrary and capricious manner based solely on the Secretary's "absolute" discretion, or (B) which arose from a legislative grant to the Department of a judicial power prohibited by Article IV, Section 3 of the North Carolina Constitution.


Section 150A-51 permits our courts to reverse or modify agency decisions if a petitioner's substantial rights have been prejudiced because the agency's findings, inferences, conclusions, or decision are:

(1) in violation of constitutional provisions; or (2) in excess of the statutory authority or jurisdiction of the agency; or (3) made upon unlawful procedure; or (4) affected by other error of law; or (5) unsupported by substantial evidence ... in view of the entire record as submitted; or (6) arbitrary or capricious.

It is always " 'necessary ... to determine under which criterion for review the Court of Appeals [and the superior court] should address' " the proceeding. Brooks v. McWhirter Grading Co., Inc., 303 N.C. 573, 579, 281 S.E.2d 24, 28 (1981) (parenthetical in original) (quoting State ex rel. Util. Comm'n v. Bird Oil Co., 302 N.C. 14, 20-21, 273 S.E.2d 232, 236 (1981)). In determining the superior court's and our own scope of review under Section 150A-51, we are guided by our Supreme Court's statement that "the proper scope of review can be determined only from an examination of the issues presented for review by the appealing party. The nature of the contended error dictates the applicable scope of review." Bird Oil, 302 N.C. at 21, 273 S.E.2d at 236. Review in this court is further limited to the exceptions and assignments of error properly noted to the superior court's judgment. Watson v. N.C. Real Estate Comm'n, 87 N.C.App. 637, 639, 362 S.E.2d 294, 296, disc. rev. denied, 321 N.C. 746, 365 S.E.2d 296 (1987).

As the Department correctly stated in its brief to the superior court, the statutory grounds raised by the petition for review under Section 150A-51 challenged the Secretary's assessment as made upon unlawful procedure, as affected by other error of law, as unsupported by substantial evidence and as arbitrary and capricious. Cf. Sec. 150A-51(3), (4), (5), (6). However, after noting its consideration of the record, arguments and briefs, the trial court simply found the assessment was not "[a]ffected by error of law," but vacated the penalty as arising from an "unlawful delegation of absolute discretion to the Secretary" which was not "reasonably necessary" to the Department's purposes as required by Article IV, Section 3 of the North Carolina Constitution. Although neither the petition for judicial review nor supporting briefs raised any specific constitutional grounds, the trial court found petitioners' complaint that the civil penalty was "arbitrary, excessive and without adequate guidelines" constituted an allegation the penalty arose from a transfer of judicial power to the Department prohibited by Article IV, Section 3. Article IV, Section 3 states that "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, sec. 3 (1970).

We first note the trial court's apparent conclusion under Section 150A-51(4) that the penalty was not "affected by error of law" does not specifically address petitioners' contentions that petitioner Hall had not been properly notified and that various findings and conclusions were not supported by substantial evidence. However, petitioners have neither assigned any error to that conclusion nor to the trial court's failure to make additional conclusions concerning the other grounds for review arguably raised by the petition for judicial review. Thus, insofar as the trial court may have erroneously failed to render conclusions concerning all the statutory grounds for review raised by the petition for review, petitioners' failure to cross-appeal any such error to this court waives our consideration on appeal. Watson, 87 N.C.App. at 639, 362 S.E.2d at 296; N.C.G.S. Sec. 150A-52 (1983); N.C.R.App.P. 10(a).

While the superior court did not specifically address all the errors asserted in the petition for review, the court conversely based its judgment on a constitutional objection that was apparently not asserted in the petition or in supporting briefs to the trial court. Petitioners did not specifically challenge the constitutionality of Section 113A-64 but only complained the Department's assessment was arbitrary, excessive and not based on adequate guidelines. While arbitrary and capricious agency action is itself prohibited by federal and state due process, we reject the court's reasoning that any assertion of arbitrary agency action necessarily requires the agency's action be reviewed for compliance with every other requirement under our state and federal constitutions, much less that it specifically asserts a violation of Article IV, Section 3. There is a rebuttable presumption that an administrative agency has properly performed its official duties. See In re Broad and Gales Creek Community Ass'n, 300 N.C. 267, 280, 266 S.E.2d 645, 654 (1980). As Section 150A-51(1) charges petitioners with proving their "substantial rights" may have been constitutionally violated, petitioners here had the burden to establish their substantial rights were prejudiced by a constitutional defect in the Department's assessment. See Raleigh Mobile Home Sales, Inc. v. Tomlinson, 276 N.C. 661, 668-69, 174 S.E.2d 542, 548 (1970); State ex rel Comm'r of Ins v. North Carolina Rate Bureau, 300 N.C. 381, 428-29, 269 S.E.2d 547, 578 (1980). The record does not...

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