Crushed Rock, Inc., In re, 86-479

• Citation: 557 A.2d 84,150 Vt. 613
• Decision Date: 30 December 1988
• Docket Number: No. 86-479,86-479
• Parties: In re CRUSHED ROCK, INC.
• Court: Vermont Supreme Court

Page 84

557 A.2d 84

150 Vt. 613

In re CRUSHED ROCK, INC.

No. 86-479.

Supreme Court of Vermont.

Dec. 30, 1988.

Abell, Kenlan, Schwiebert & Hall, P.C., Rutland, for appellant Crushed Rock, Inc.

Gregory S. Clayton of Downs Rachlin & Martin, St. Johnsbury, for appellant Pike Industries, Inc.

William J. Bloomer, Rutland, for appellee Town of Clarendon.

Sullivan, Sullivan & Enzor, Rutland, for appellees McCormack, Sokolich and Witham.

Jeffrey L. Amestoy, Atty. Gen., and Mark J. Di Stefano, Asst. Atty. Gen Montpelier, for amicus curiae Environmental Bd.

Before ALLEN, C.J., PECK and DOOLEY, JJ., BARNEY, C.J. (Ret.) and KEYSER, J. (Ret.), Specially Assigned.

DOOLEY, Justice.

This is an appeal by Crushed Rock, Inc. (Crushed Rock) and Pike Industries, Inc. (Pike) from the decision of the Environmental Board to revoke an Act 250 permit that had been issued to Crushed Rock. The permit allowed Crushed Rock to extract sand, gravel and stone and run a quarrying operation on land it owns in the Town of Clarendon. Actually, the quarry was being run by Pike under a lease with Crushed Rock. On appeal, the appellants allege that the Board prejudged the revocation issue, failed to afford them a hearing on the remedy to be imposed for the violations it found and had insufficient evidence to revoke the permit. We reject the appellants' first contention but find error on the second contention and, accordingly, reverse for further proceedings without reaching the third contention.

Crushed Rock received its permit in 1984. Based on certain representations from Crushed Rock, the District Environmental Commission made findings on the way the quarrying operation would be conducted and its environmental impacts. For example, the commission found with respect to blasting that: "There will be a maximum of 250 lbs. of explosives per delay with a maximum of 1000 lbs. per shot." For some period, Crushed Rock operated under the permit and apparently abided by its conditions and stayed within the limits set forth in the findings of fact.

In 1986, Crushed Rock leased the gravel and quarry operation to Pike and assigned to Pike its Act 250 permit. Pike began operating the quarry to extract rock as a sub-base for a new road it was building under contract with the state. In May of 1986, Pike obtained an amendment to the Act 250 permit to expand the hours of operation. It sought a second amendment to operate an asphalt plant on site but ran into extensive community opposition based in part on allegations that Pike was violating conditions imposed on the Act 250 permit and operating outside of limits contained in the findings of fact.

On August 19, 1986, a group of surrounding landowners (petitioners) filed a petition with the Environmental Board alleging that the conditions of the Crushed Rock Act 250 permit were being violated and requesting that it be revoked. A prehearing conference on the petition was held by the Board chairman on August 29th, resulting in a September 17th hearing before the full Board. The prehearing conference order specified that the hearing would deal with the grounds for revocation first and, if grounds for revocation were found, would proceed to "testimony and oral argument as to whether revocation or some other remedy is appropriate at this time."

Before the hearing, the Board acting through the Vermont Attorney General brought an action in the superior court against both Pike and Crushed Rock seeking a declaratory judgment that defendants had violated the terms of the Act 250 permit, an injunction against "blasting and operating the quarry contrary to the terms of the permit" and a civil penalty of $10,000 for each intentional violation of the permit. The complaint alleged that defendants had violated the limits on blasting, truck operations and the amount of rock extracted, and that the violations were intentional. The parties stipulated to a temporary restraining order prohibiting all blasting.

The filing of the superior court action led to complications in the revocation proceeding. Crushed Rock asked the Board to stay the revocation hearing and, when the Board refused, attempted unsuccessfully to have the superior court enjoin the Board from going forward. During the hearing, Crushed Rock moved to disqualify the Board, arguing that the Board's involvement in the superior court proceeding meant that it had prejudged the issues in the revocation proceeding. The Board denied the motion.

After the evidence was taken on the alleged violations of the permit, the Board asked for offers of proof on a proper remedy if permit violations were found. Both Crushed Rock and Pike made offers of proof. The Board recessed and returned to render an oral decision that the permit conditions had been violated and the permit would be revoked. A memorandum decision was issued the next day revoking the permit because of "repeated violations" of the limits set forth in the permit.

Approximately three weeks later, the Board issued extensive findings of fact and conclusions of law. The Board found that the quarry operator exceeded the permit limit on explosive per shot and the limit on explosive per delay. It found that the operator blasted outside the permitted days and hours on a number of occasions and extracted more gravel in 1986 than the permit allowed. Finally, the Board found that the truck traffic from the quarry exceeded the maximum traffic volumes and that, at least prior to mid-August, trucks were not covered to minimize fugitive dust. Based on these findings, the Board concluded that both Crushed Rock and Pike had violated the conditions attached to the Act 250 permits. It further concluded that revocation of the permit was the proper remedy because of the substantial and continuing nature of the violations, the impact of the violations, the financial benefits that Crushed Rock and Pike had obtained and the lack of corrective action taken in the face of complaints by neighbors and the town.

The Board also detailed its decision on the disqualification motion. It found that the superior court proceeding was necessary to prevent further blasting while the administrative proceeding was pending. It stated that the Board did not "predetermine that violations had occurred or that revocation was the appropriate remedy if violations had in fact occurred." It concluded that the Board had to go to court because it lacked any alternative means of taking summary action when faced with allegations of violations and substantial harm.

The first issue raised on appeal--that the Board prejudged the permit revocation question by bringing the injunction action--is an umbrella under which appellants gather four theories--denial of due process, violation of Chapter II, § 28 of the Vermont Constitution, violation of the Code of Judicial Conduct and violation of 12 V.S.A. § 61. After setting forth the relevant Act 250 statutes, we analyze these theories in order.

Two statutes are relevant to the first appeal issue. 10 V.S.A. § 6090(c) provides that: "A permit may be revoked by the board in the event of violation of any conditions attached to any permit or the terms of any application, or violation of any rules of the board." It was under this statute that the Board acted in conducting the revocation proceeding and revoking the permit. 10 V.S.A. § 6004 provides:

In addition to the other penalties herein provided, the board may ... institute any appropriate action, injunction, or other proceeding to prevent, restrain, correct or abate any violation of this chapter, or the rules promulgated under it or the terms or conditions of any permit issued under it....

It was under this statute that the Board brought the action in superior court to enjoin violations of the permit.

Appellants' argument is that the two proceedings are such that the bringing of the superior court action necessarily means that the Board has prejudged whether permit violations were present so that the Board can no longer act as a fair and impartial decision-maker in the revocation proceedings. Thus, appellants argue that the continuation of the revocation hearing denied appellants' right to an unbiased decision-maker. Since the whole Board must be disqualified under appellants' view, the necessary consequence of appellants' theory is that petitioners' motion to revoke the Crushed Rock permit must be denied since no adjudication body is available to hear the petition.

Most of appellants' argument is centered around the first theory--that the Board's actions deny to appellants due process of law. The parties agree that the critical precedent to appellants' argument is Withrow v. Larkin, 421 U.S. 35, 95 S.Ct. 1456, 43 L.Ed.2d 712 (1975), although they disagree on the application of Withrow to this case. Withrow involved a constitutional attack on Wisconsin's procedures for discipline of licensed physicians. The Wisconsin procedure started with a closed investigatory hearing which could result in a warning or reprimand or a finding of probable cause to bring a criminal prosecution or action to revoke the physician's license. The physician and his attorney could attend the investigatory hearing. In Withrow, this hearing was held and resulted in a finding of probable cause to believe the physician had violated criminal provisions and probable cause to revoke the physician's license. Based on these findings the Wisconsin Medical Examining Board gave notice of a contested hearing to determine whether the physician engaged in prohibited acts and, if he did engage in such acts, whether he would be temporarily suspended from practice. It also directed the filing of criminal proceedings. At that point, the federal court enjoined further proceedings finding that the procedure denied the physician due process of law since the board was no longer an independent decision-maker since it had investigated the charges and presented them for prosecution.

While accepting...