Gurley v. Mathis

• Decision Date: 14 June 1993
• Docket Number: No. 92-1017,92-1017
• Citation: 856 S.W.2d 616,313 Ark. 412
• Court: Arkansas Supreme Court
• Parties: William Martin GURLEY and Gurley Refining Co., Inc., Appellants, v. Randall MATHIS, Director of the Arkansas Department of Pollution Control & Ecology and Arkansas Pollution Control & Ecology Commission, Appellees.

Page 616

856 S.W.2d 616

313 Ark. 412

William Martin GURLEY and Gurley Refining Co., Inc., Appellants, v. Randall MATHIS, Director of the Arkansas Department of Pollution Control & Ecology and Arkansas Pollution Control & Ecology Commission, Appellees.

No. 92-1017.

Supreme Court of Arkansas.

June 14, 1993.

Elton A. Rieves IV, William J. Stanley, West Memphis, for appellants.

Steve Weaver, Little Rock, for appellees.

HOLT, Chief Justice.

This is a case of first impression involving the Remedial Action Trust Fund Act, Ark.Code Ann. § 8-7-501, et seq. (Repl.1991) (RATFA), which was enacted by the General Assembly in 1985 to provide the state through its environmental agencies with the necessary authority and funds to investigate, control, prevent, abate, treat, or contain releases of hazardous substances, and among other things, to disburse funds required to assure payment of the state's participation in response to environmental actions taken by the federal government, specifically pursuant to the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) of 1980. 42 U.S.C. § 9601 et seq.

We hold that the state's actions under RATFA were proper and affirm the trial court.

In the past, William Martin Gurley and Gurley Refining Co., Inc. (Gurley) operated a motor oil re-refining company. From 1970 to 1975, Gurley disposed of its secondary oil refining waste, which contained PCBs, lead, and zinc, in a pit near Edmondson, Arkansas known as the "Gurley Site." Gurley had obtained a permit issued by the Arkansas Department of Pollution Control and Ecology (hereafter ADPC & E) to place the residues in the pits. Due to overflows from the abandoned pit in 1978 and 1979, the United States Environmental Protection Agency (EPA) undertook periodic enforcement actions.

In 1983, following congressional passage of CERCLA, the Gurley Site was added to the National Priority List (NPL) for remedial action mandated by 42 U.S.C. § 9605(c). It remained one of 1,072 such sites listed in the 1991 version of the NPL. Hazardous waste sites are listed by the President on the NPL under CERCLA's National Contingency Plan as a means of prioritizing these sites and designating them for a remedial response under CERCLA. 42 U.S.C. § 9605. The ADPC & E objected to aspects of the Gurley Site's NPL ranking by the EPA and the EPA's proposed remedy for the site. These concerns, however, were never formalized.

In 1987, the United States sued the Appellants to recover administrative costs incurred by the EPA during investigation of the Gurley Site. That case resulted in a holding by the U.S. District Court for the Eastern District of Arkansas that the EPA could recover costs despite its dispute with the ADPC & E and that the owners responsible for release of the hazardous substances were liable for response costs. United States v. Gurley Ref. Co., 788 F.Supp. 1473 (E.D.Ark.1992).

During the pendency of this federal litigation, ADPC & E and the EPA resolved their differences over the Gurley Site remedy. Hence, in a memorandum dated March 8, 1991, the ADPC & E staff recommended to the Arkansas Pollution Control and Ecology Commission (the Commission) that the Gurley site be added to the Remedial Action Trust Fund Priority List (RATF Priority List) as authorized by Ark.Code Ann. § 8-7-501 et seq. (Repl.1991) as a prerequisite to the ADPC & E Director expending monies from the Hazardous Substance Remedial Action Trust Fund to (1) pay the costs and expenses reasonably necessary for the administration of RATFA, (2) pay the ten percent state share mandated by CERCLA, 42 U.S.C. § 9604(c)(3), or (3) pay for the investigation, identification, containment, abatement, treatment, or control, including monitoring and maintenance of hazardous waste sites within the state. Ark.Code Ann. § 8-7-509(d) (Supp.1991).

The Commission held a meeting on March 22, 1991, at which time the ADPC & E staff memorandum and attachments as well as Gurley's written comments in opposition to the proposed action were submitted Gurley appealed to Crittenden County Circuit Court from both the ADPC & E staff memorandum (Crittenden County Circuit Court No. CIV 91-177) and the Commission's order pursuant to Ark.Code Ann. § 8-7-519 (1991) (Crittenden County Circuit Court No. CIV 91-178). Following Gurley's request for findings of fact and conclusions of law, the circuit court first found in Case No. CIV 91-177 that the Department's memorandum did not constitute a final, appealable order and then made the following findings of fact with reference to the Commission's order in Crittenden County Circuit Court Case No. CIV 91-178:

to the Commission. Gurley's attorney and the Director of the ADPC & E Hazardous Waste Division addressed the Commission. Thereafter, the Commission voted in favor of adding the Gurley Site to the RATF Priority List as recorded in Minute Order No. 91-05.

6. The Appellants were in the business in West Memphis, Arkansas of re-refining and selling motor oil In the re-refining process they removed impurities and other waste from used motor oil, and this waste was disposed of by placing it in a pit near Edmondson in Crittenden County.

7. The Gurley Site was, after investigation by the federal agency charged with such under the Super Fund Program, and added to the National Priority List as a site that required remedial action, and the addition by the state of the site to the RAT List was need (sic) to trigger action. It is admitted by the Commission that prior to September, 1990 a conflict existed between the federal agency and Arkansas Department of Pollution Control and Environment concerning the remedy proposed by EPA. However, the court finds that those differences were resolved as stated by Mike Bates of the staff to the Commission.

8. The court further finds that proper notice as set out in Rule 8 of the Administrative Procedures Manual was given to the public for public hearing held February 20, 1991, concerning the proposed additions to the State Priority List; Gurley's representatives appeared and their attorney and one Edward Lucas presented comments and further were allowed to add written statements including transcripts of testimony of Arkansas Department of Pollution Control and Environment employees in a federal court action concerning the pit.

9. That at the March 22, 1991 meeting Gurley's attorney was again allowed to present his views concerning the addition of the site to the RAT List, and from the questions asked of the staff by the Commission, it is apparent that the Commission considered the record.

10. The Appellant is asking this court to take jurisdiction and ignore the federal statutes that give the federal courts the authority and the method to protect the rights of all affected by [CERCLA].

11. This court is of the opinion that the action appealed from is a rulemaking or legislative function, made in accordance with Regulation 8 of the Commission, and not subject to review by this court. The Federal Acts set out in detail where the jurisdiction, venue, and remedies lie concerning the Appellants' complaints, and it is not in this court.

12. The stay granted by this court pending a decision by this court is hereby set aside and this appeal is dismissed.

By separate orders, the court dismissed the appeal from the ADPC & E staff memorandum and affirmed the Commission's Minute Order No. 91-05. From these decisions, this appeal arises. We make short shrift of the appeal from the staff memorandum as it clearly does not constitute a final order but merely a step in the overall administrative proceeding to place the Gurley site on the RATF List. Thus, we affirm the trial court's dismissal of the appeal from the staff memorandum.

The balance of this opinion relates to Gurley's appeal from the circuit court rulings with reference to the Commission's Minute Order No. 91-05.

PROCEDURAL ISSUES

As a preliminary matter, Gurley raises a procedural issue concerning its notice of appeal to the trial court and ADPC & E's failure to properly respond as raised in Point V of Gurley's brief. Gurley argues that ADPC & E failed to admit or deny Paragraph 22 of its notice of appeal to the trial court relating to the Commission's orders in case No. CIV-91-178, so it was entitled to a judgment on the pleadings as to that point, and that the trial court erred in denying Gurley's motion in this regard.

Paragraph 22 provides:

22. The action taken by the [ADPC & E] was arbitrary, capricious, and characterized by an abuse of discretion in that:

(a) The record clearly reflects that the Department had long opposed EPA actions with regard to the Gurley Site in the following particulars:

(i) The Department disputed the Hazardous Ranking Score of 40.13 given the Gurley Site by the EPA because it was based upon faulty data. Department personnel, using the proper data, gave the Gurley Site a Hazardous Ranking Score well below that required for placement of a site on the National Priority List. Thus it is clear that the Department knew, at the time of the March 8, 1991 memorandum recommending addition of the Gurley Site to the RAT Fund List to the Commission that the Gurley Site did not meet the criteria set by the Commission for the addition of the Gurley Site to the RAT Fund List.

(ii) The Department did not accept the EPA Enforcement Decision Document and the EPA Record of Decision as evidenced by the fact that the Department on several occasions referred to the EPA remedy contained in those documents as "gold plated" and did, in fact, propose an alternate remedy. Thus it is also clear that the Department knew, at the time of the March 8, 1991 memorandum recommending addition of the Gurley Site to the RAT Fund List to the Commission that the Gurley Site did not meet this criterion set by the Commission for the addition of the Gurley Site to the RAT Fund List.

(b) The record is utterly devoid of any adequate explanation or good...