Bio Energy, LLC v. Town of Hopkinton

• Decision Date: 30 December 2005
• Docket Number: No. 2004–847.,2004–847.
• Citation: 153 N.H. 145,891 A.2d 509
• Court: New Hampshire Supreme Court
• Parties: BIO ENERGY, LLC and another. v. TOWN OF HOPKINTON.

153 N.H. 145

891 A.2d 509

BIO ENERGY, LLC and another.

v.TOWN OF HOPKINTON.

No. 2004–847.

Supreme Court of New Hampshire.

Argued: June 15, 2005.

Opinion Issued: Dec. 30, 2005.

Rehearing Denied Feb. 8, 2006.

Sheehan Phinney Bass + Green, P.A., of Manchester (William J. Donovan and another on the brief, and Mr. Donovan orally), for the plaintiffs.

Upton & Hatfield, LLP, of Concord (Russell F. Hilliard and Matthew R. Serge on the brief, and Mr. Hilliard orally), for the defendant.

New Hampshire Municipal Association, of Concord (Cordell A. Johnston on the brief) as amicus curiae.

BRODERICK, C.J.

The parties appeal decisions of the Superior Court (Fitzgerald , J.) pertaining to Bio Energy, LLC's proposed use of construction and demolition debris woodchips as a source of fuel in its co-generation facility, and a cease and desist order issued by the defendant Town of Hopkinton (town), regarding operation of the facility. We affirm in part, reverse in part, and remand.

I

Since 1983, plaintiff Bio Energy, LLC (Bio Energy) has operated a wood co-generation facility in Hopkinton. The business involves the combustion of woodchips to generate steam and electricity. The electricity is sold to Public Service of New Hampshire and other utility companies. Because the facility is located in the town's Industrial M–1 zone, which does not expressly allow the use of wood co-generation, Bio Energy was required to obtain a variance from the town's zoning board of adjustment (ZBA) and site-plan approval from the planning board in order to construct and operate its facility.

In February 1983, Bio Energy appeared before the planning board for site plan approval. At the public hearing on Bio Energy's application, the issue of whether the facility would "always burn woodchips or at some point will [Bio Energy] want to burn pelletized tires" was raised. Bio Energy's representative stated that "they had talked about the possibility of burning rubber but the defin[i]te plan [was] to burn woodchips." The representative acknowledged that in any event, the company "would have to conform with air pollution standards." The board conditioned site plan approval for the facility upon Bio Energy's receipt of necessary State and federal environmental permits. No separate condition was placed upon the source of the fuel to be used.

In March 1983, Bio Energy appeared before the ZBA to request a variance to construct and operate the wood co-generation facility. Discussions between Bio Energy and the ZBA focused upon the proper storage of the fuel source, not the source or nature of the fuel. In granting the variance, the ZBA did not place any limitation upon the source or nature of the wood fuel to be used.

Bio Energy's emissions are regulated by the Environmental Protection Agency (EPA) under the Clean Air Act, 42 U.S.C. §§ 7401 et seq ., and by the New Hampshire Department of Environmental Services (DES) under the Air Pollution Control Act, RSA chapter 125–C (2005 & Supp.2005), and the Air Toxic Control Act, RSA chapter 125–I (2005). In the 1990's, DES established the Title V permitting program, which places limitations on Bio Energy's facility, including on its fuel use and fuel mixtures.

Bio Energy has continually modified and adjusted its fuel source to respond to changing environmental regulations and economic conditions. Its use of construction and demolition woodchips (C & D woodchips) as a fuel source has increased over the years as a lower cost source of fuel. C & D woodchips are woodchip fuel prepared from wood that has been separated from other material following construction and demolition activities and then cleaned.

In December 2001, Bio Energy applied to the town's building inspector for a building permit to mechanize the delivery of C & D woodchips from the wood fuel storage area to the power plant. In submitting the building permit application, Bio Energy informed the town that it was doing the work so as to be able to use woodchips derived from C & D wood. The building permit was issued by the board of selectmen (selectmen) on December 10, 2001.

In January 2002, the town administrator sent a letter on behalf of the selectmen to Bio Energy supporting its plan to use C & D woodchips and requesting a meeting to establish whether Bio Energy could accept the town's C & D material. As the letter stated:

Our office has been watching with great interest and we hope, also, helping in whatever way we could, your application for a Solid Waste Permit from the State of New Hampshire. As we understand the permit, this would enable BioEnergy to burn painted wood and plywood together with clean woodchips. The Board of Selectmen cordially extends an invitation to meet with them, and their Transfer Station Superintendent to discuss the possibility of BioEnergy taking a percentage of our C & D and to negotiate a rate acceptable to both parties.

(Emphasis and ellipsis omitted.)

In July 2002, Bio Energy applied to the air resources division of DES for a modified Title V permit to allow it to burn up to 100% woodchips derived from C & D debris. Pursuant to DES permitting requirements, Bio Energy filed an application with the State for a permit to use C & D woodchips in its fuel mix. The permit program, overseen by the solid waste division of DES, regulates the quality of the C & D woodchips that enter the facility and the management of the woodchips prior to combustion.

In July 2003, after a review period that included public notice of the proposed revised permit and a public hearing in the town, DES issued a Title V permit allowing Bio Energy to burn C & D woodchips.

In September 2003, several residents of Hopkinton filed a petition with the selectmen requesting the issuance of a cease and desist order to prevent Bio Energy from utilizing C & D woodchips as a fuel source. Following a public hearing, the selectmen informed Bio Energy that they would issue a cease and desist order if Bio Energy did not apply to the ZBA or the planning board for a new permit, asserting that the 1983 variance did not contain allowance for "any factor such as significant lead or similar emissions into the air." The selectmen stated that "[t]he Town now has every reason to conclude ... that the change in fuel constitutes a change in use and, therefore, the requirement to apply for a new permit."

In November 2003, the selectmen issued a cease and desist order to Bio Energy, which provided:

Pursuant to RSA 676:17–a, you are hereby ordered to cease and desist from any activity in connection with the burning of construction or demolition debris at the Bio Energy facility in West Hopkinton, NH, and from any further activity pursuant to the building permit issued on December 10, 2001.

As to the burning of construction or demolition debris, the Board [of Selectmen] determined, on October 7, 2003, that the existing variance issued for this facility in 1983 did not include within its scope the burning of construction or demolition debris, and thus any activity in this regard violates the Hopkinton Zoning Ordinance, which does not permit such a use in any zone. The corrective action required is a statement by you within seven (7) days to the effect that you will not undertake any such activities unless and until all necessary approvals and permits have been obtained.

In December 2003, Bio Energy filed a petition for declaratory and injunctive relief and damages against the town. Bio Energy sought: (1) a declaratory judgment that the town's cease and desist order was unlawful, that it was authorized to proceed with construction under its 2001 building permit, and that the legal doctrine of preemption barred the town from enforcing the zoning ordinance against Bio Energy's use of C & D woodchips; (2) a permanent injunction to prevent the town from regulating its use of C & D woodchips; (3) monetary damages based on the town's unconstitutional partial taking of its land; and (4) legal fees and costs associated with litigating the lawfulness of the cease and desist order. The town counterclaimed, asserting that Bio Energy's use of C & D woodchips as a fuel source constituted an impermissible change in use because it was beyond the scope of permitted uses allowed under the 1983 variance and was in violation of the town's zoning ordinance. In addition to seeking various findings, as well as attorney's fees and costs, the town sought injunctive relief in the form of an order directing Bio Energy to cease any operations involving the burning of C & D woodchips.

In March 2004, the trial court vacated the town's cease and desist order on the basis that the town lacked authority to issue it, and ruled that the change in use resulting from Bio Energy's use of C & D woodchips did not require the granting of a new variance. In April 2004, the trial court dismissed the town's counterclaim for injunctive relief and denied Bio Energy's request for permanent injunctive relief against the town. In October 2004, the trial court granted the town's motion to dismiss Bio Energy's takings claim. In November 2004, the trial court ruled that the issue of the construction and modification to Bio Energy's existing facility was not ripe for review because the town had not yet attempted to regulate any portion of Bio Energy's three-phase plan. These appeals followed.

After oral argument before this court, we became aware that DES may have revoked one of Bio Energy's operating permits and that the legislature had established a moratorium on the disposal of construction and demolition waste by incineration until July 1, 2006. We accordingly directed the parties to submit memoranda addressing whether any or all of the issues on appeal are ripe for judicial review and whether any or all of the issues on appeal are moot. The doctrine of mootness is designed to avoid deciding issues that "have become academic or dead." Petition of Brooks, 140 N.H. 813, 816, 678 A.2d 140 (1996) (quotation omitted). Our review of the parties' memoranda...