Leventis v. SOUTH CAROLINA DHEC

Decision Date17 January 2000
PartiesSenator Phil LEVENTIS; Citizens Asking for a Safe Environment; and Laidlaw Environmental Services of South Carolina, Inc., formerly GSX Services of South Carolina, Inc., separately as, Petitioners, v. SOUTH CAROLINA DEPARTMENT OF HEALTH AND ENVRONMENTAL CONTROL and South Carolina Board of Health and Environmental Control, Respondents, Energy Research Foundation; County of Sumter; Sierra Club; South Carolina Public Service Authority (Santee Cooper); South Carolina Wildlife and Marine Resources Department; and Clarendon County, Intervenors. In Re Financial Responsibility Determination: GSX Services of South Carolina, Pinewood Facility, Sumter County, South Carolina, RCRA Permit Decision: GSX Services of South Carolina, Inc., Hazardous Waste Permit SCD 070 375 985, of whom Senator Phil Leventis; Citizens Asking for a Safe Environment; Sierra Club; and Energy Research Foundation are, Primary Appellants, and South Carolina Department of Natural Resources, formerly South Carolina Wildlife and Marine Resources Department; South Carolina Public Service Authority (Santee Cooper); County of Sumter; and Laidlaw Environmental Services of South Carolina, Inc., formerly GSX Services of South Carolina, Inc., are Secondary Appellants.
CourtSouth Carolina Court of Appeals

Robert Guild; Robert T. Bockman and Deborah A. Hottell, both of McNair Law Firm; James L. Werner, of Ellzey & Brooks, all of Columbia; and M.M. Weinberg, Jr., of Weinberg, Brown, McDougall & McMillan; Kathy W. Cuttino and Senator Phil P. Leventis, all of Sumter; and James Andrew Quinn, of SC Department of Natural Resources; and William LeRoy Want, both of Charleston; and John H. Tiencken, Jr., of Moncks Corner; and James S. Chandler, Jr., of Pawleys Island; and James M. Kuszaj, of Ogletree, Deakins, Nash, Smoak & Stewart, of Raleigh, NC, for appellants.

John S. Simmons, of Griffin & Lydon; and Jacquelyn S. Dickman, of South Carolina Department of Health and Environment Control Office of General Counsel, both of Columbia, for respondents.

ORDER GRANTING PETITION FOR REHEARING IN PART, DENYING IN PART, AND SUBSTITUTING OPINION

PER CURIAM:

Pursuant to Secondary Appellant Laidlaw's Petition for Rehearing, it is ordered that the opinion heretofore filed, Opinion No. 3103, heard September 9, 1999, and filed January 17, 2000, be withdrawn and the attached Opinion be substituted. Secondary Appellant Laidlaw's petition for rehearing is granted, but further oral argument is denied. After careful consideration of Primary Appellants' and the remaining Secondary Appellants' Petitions for Rehearing, the Court is unable to discover any material fact or principle of law that has been either overlooked or disregarded and, hence, there is no basis for granting a rehearing. It is, therefore, ordered that the Primary Appellants' and remaining Secondary Appellants' Petitions for Rehearing be denied.

HEARN, Chief Judge:

Senator Phil P. Leventis, Sierra Club, and six other non-profit organizations (collectively Sierra Club) appeal the South Carolina Department of Health and Environmental Control's (DHEC) issuance of a permit granting Laidlaw Environmental Services of South Carolina authority to operate a hazardous waste disposal facility located near Pinewood, South Carolina (Pinewood Facility). Laidlaw appeals certain conditions imposed by the permit. We affirm in part, reverse in part, and vacate in part.

FACTS

In 1977, Bennett Mineral Company (BMC) mined materials used to produce "kitty litter" and other absorbent materials from land now known as the Pinewood Facility. When BMC completed mining operations, it became responsible for reclaiming the mined areas. To satisfy this obligation, and because the site still contained absorbent materials, BMC applied for a permit to operate a waste disposal facility.

In November 1977, DHEC issued BMC Industrial Waste Permit (IWP)-145 to fill the mined areas with industrial waste. DHEC issued the permit without providing a public notice or hearing1 and prior to the promulgation of either state or federal regulations governing such facilities. The IWP-145 omitted an explicit expiration date or capacity limit. After receiving the permit, BMC conducted limited disposal activity, primarily disposing of liquid industrial waste.

In April 1978, William Stilwell, Jr., a former DHEC employee, incorporated South Carolina S.C.A. Services, Inc. (SCA). SCA purchased the Pinewood Facility, including a transfer of IWP-145, from BMC. DHEC never required a public notice, comment, hearing, or adjudication prior to transferring the permit. On July 11, 1979, DHEC extended IWP-145 after conducting public meetings and a joint public hearing with the Environmental Protection Agency (EPA).

In March 1980, the South Carolina General Assembly approved South Carolina's hazardous waste management regulations. In accordance with these regulations, on September 25, 1980, SCA submitted its part A application for a permit to operate a hazardous waste disposal facility.2 Submitting the application qualified SCA for interim status to operate the hazardous waste facility. Subsequently, Laidlaw Environmental Services of South Carolina purchased SCA.3

In response to Laidlaw's permit application, DHEC issued a draft permit and gave notice of a public hearing. Over 2500 people attended the hearing held in November 1988.4 DHEC subsequently prepared a response to the oral and written comments received from the hearing and, after reviewing the comment record, application, and compliance history, DHEC concluded Laidlaw would operate the Pinewood Facility in accordance with the relevant rules and regulations while protecting the public health and environment. On July 27, 1989, DHEC issued Laidlaw a final hazardous waste permit effective September 1, 1989.

Also on July 27, 1989, DHEC issued a draft financial responsibility determination. The draft required Laidlaw to maintain a $30,000,000 environmental impairment liability insurance policy for third party property and bodily injury coverage. The draft also required Laidlaw to maintain a $114,250,000 trust fund for cleanup costs and environmental restoration necessitated by the Pinewood Facility's operations. The trust fund required a minimum $11,425,000 initial payment.

On June 22, 1992, DHEC issued a final financial responsibility determination requiring Laidlaw to maintain a 833,588,431 environmental impairment liability insurance policy and a $132,885,373 trust fund with a minimum $14,765,041 initial payment.

Laidlaw challenged numerous conditions set forth in the final permit and financial responsibility determination. Energy Foundation, Citizens Asking for a Safe Environment (C.A.S.E.), and Sierra Club challenged the final permit's issuance and financial responsibility determinations. Santee Cooper intervened to support DHEC's financial responsibility determination. An adjudicatory hearing was scheduled to address these contentions.

Prior to the scheduled hearing, Laidlaw and DHEC entered into a stipulated agreement providing in pertinent part as follows. First, Laidlaw agreed to provide $30,000,000 in financial assurance for third party liability. Second, Laidlaw agreed to provide an environmental impairment fund, which, when combined with the State Permitted Sites Fund, amounted to $100,000,000. The impairment fund consisted of a corporate guarantee by Laidlaw's Canadian parent corporation and a trust fund established through Laidlaw's contributions based on the amount and type of waste disposed. Third, the agreement established a 2250 acre-foot5 hazardous waste capacity limit and, ostensibly under IWP-145, a 2461 acre-foot nonhazardous waste capacity limit. Fourth, DHEC and Laidlaw agreed to abide by and support the stipulated agreement in subsequent judicial and quasi-judicial challenges.

In light of the stipulated agreement, Laidlaw withdrew its objections to the final permit, submitted documentation substantiating its corporate guarantee, and withdrew as a complaining party. Thereafter, Sierra Club amended its pleadings to contest the stipulated agreement.

Following an extensive hearing, the hearing examiner recommended upholding DHEC's decision to issue Laidlaw the final permit "as clarified, updated, explained, revised and/or amended by the Stipulated Agreement." The hearing examiner further recommended upholding as proper and adequate the financial assurances established in the stipulated agreement. Sierra Club appealed to the DHEC Board.

On review, the DHEC Board found Sierra Club failed to prove DHEC erred in issuing the permit. However, the DHEC Board found Sierra Club established, by a preponderance of the evidence, that the stipulated agreement's provisions on capacity and financial assurances must be modified. The Board ruled all waste disposed at the Pinewood Facility, hazardous and nonhazardous, should count towards the final permit's 2250 acre-foot capacity limit. However, the Board ruled that only hazardous waste placed in the landfill prior to the Board's order counted towards the 2250 acre-foot capacity limit.

The DHEC Board found the stipulated agreement's financial assurance provisions reasonable except for the amounts required for cleanup costs and environmental restoration. Therefore, the Board modified the final permit to require an environmental impairment fund consisting of two parts: (1) a $133,000,000 cash trust fund beginning with a $30,000,000 initial contribution followed by additional contributions in amounts sufficient to ensure the fund reached $133,000,000 by the year 2000 and (2) a corporate guarantee from Laidlaw's Canadian parent corporation until the cash fund reached full funding. The Board noted a corporate guarantee is prudent only as a short term measure until cash funding is promptly accumulated.

Finally, the DHEC Board deemed the Pinewood Facility an "existing unit"...

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