Martin Marietta Corp. v. Wake Stone Corp.

• Decision Date: 03 August 1993
• Docket Number: No. 9110SC1162,9110SC1162
• Citation: 111 N.C.App. 269,432 S.E.2d 428
• Parties: MARTIN MARIETTA CORPORATION, Martin Marietta Aggregates, and John F. Long, Jr., Plaintiffs, v. WAKE STONE CORPORATION and Thomas B. Oxholm, Defendants.
• Court: North Carolina Court of Appeals

Page 428

432 S.E.2d 428

111 N.C.App. 269

MARTIN MARIETTA CORPORATION, Martin Marietta Aggregates, and John F. Long, Jr., Plaintiffs, v. WAKE STONE CORPORATION and Thomas B. Oxholm, Defendants.

No. 9110SC1162.

Court of Appeals of North Carolina.

Aug. 3, 1993.

Petree Stockton & Robinson, by Ralph M. Stockton, Jr., Jeffrey C. Howard and Stephen R. Berlin, Winston-Salem, for plaintiffs-appellants.

McMillan, Kimzey & Smith, by James M. Kimzey, Katherine E. Jean and Martha K. Walston, Raleigh, for defendants-appellees.

ORR, Judge.

In early 1989, Martin Marietta began the process of locating and opening a rock quarry in Nash County, North Carolina. This process included filing applications with state and local regulatory authorities for various permits that are required. On 1 December 1989, Martin Marietta filed an application for a state mining permit. On 26 February 1990, Steve Conrad, the Director of the Division of Land Resources of the North Carolina Department of Environment, Health, and Natural Resources (the DEHNR), notified Martin Marietta that an environmental assessment was needed in order to review their application for a mining permit because the widening of a state road associated with the proposed quarry would be considered a public expenditure of money.

On 27 February 1990, Assistant Attorney General Philip Telfer sent a memorandum to Conrad, the acting mining specialist within the Land Quality Section of the DEHNR, Tracy Davis, and to Charles Gardner, the Chief of the Land Quality Section of the DEHNR. This memorandum was in response to the DEHNR's inquiry about the requirements of the North Carolina Environmental Policy Act (NCEPA). In this memorandum, Telfer stated that the NCEPA requires that an environmental document be prepared where a project "has a potential for significant environmental impact".

Further, Telfer responded to the Land Quality Section's inquiry about whether a permit could be issued without considering the environmental document if conditions were placed on the permit that would mitigate environmental damage. On this issue, Telfer stated:

It is my opinion that conditions to be placed on the permit being issued may not be the basis for failing to require compliance with [NCEPA]. The purpose of [NCEPA] is to require consideration of environmental information prior to the State action, in this case the issuance of the permit. Thus, [NCEPA] requires the completion of the environmental documentation before it is determined what conditions the State will place on the permit. To do otherwise would vitiate [NCEPA].

On 2 March 1990, Conrad informed Martin Marietta by letter that further information was needed before determining whether NCEPA applied to its proposed quarry. On 23 March 1990, Telfer sent a memorandum to Conrad stating that if Martin Marietta placed a bond to cover any damage to the roads caused by it exceeding the posted weight limits, these weight limits would be removed. Further, Telfer stated that Martin Marietta had promised to place this bond. Based on these statements, Telfer told Conrad that a permit could be issued to Martin Marietta without an environmental assessment.

On 26 March 1990, Acting Mining Specialist Tracy Davis sent a memorandum to Conrad with a proposed draft permit recommending that Martin Marietta's permit be approved with certain conditions. Davis noted that Martin Marietta had applied for an air quality permit and a NPDES (water discharge) permit but had not yet received them. The mining permit was issued the same day to Martin Marietta with the condition that Martin Marietta comply with the State water and air quality regulations. On 28 March 1990, Marvin Pridgen, the Nash County Planning Director, issued Martin Marietta a Land Use Permit.

Subsequently, the Nash County Board of Commissioners (the "Board") had been considering zoning the area containing plaintiffs' proposed quarry site. On 3 January 1990, Martin Marietta sent a letter to the Nash County Office of County Planning requesting that the tract of land including their proposed quarry site "be designated as a heavy industrial, mineral mining and processing category." On 16 January 1990, the Planning Board held a meeting to discuss, among other things, the proposed zoning of this land. On 19 March 1990, the Planning Board held another meeting where they discussed the zoning of this property, and the members voted unanimously to recommend that it be zoned as A-1, Agricultural District. Martin Marietta then applied to the Board for an exemption to the proposed zoning regulation so that it could place the quarry on this land as a non-conforming use.

Since the Spring of 1989, defendant Wake Stone has owned and operated a rock quarry in Nash County. After learning that Martin Marietta had been issued a conditional land use permit and that the Board was going to consider Martin Marietta's application for an exemption to the proposed zoning regulation, defendant Thomas Oxholm, Wake Stone's Vice President of Planning and Administration, telephoned Commissioner Martin, a member of the Board. Oxholm informed Commissioner Martin of the conditional nature of plaintiffs' permits and of the special treatment he felt Martin Marietta had received as compared to the treatment that Wake Stone had received when it had applied for permits.

At the request of Commissioner Martin, Oxholm put his comments in writing. Subsequently, the statements in this document (the "Document") are the subject of this complaint. The Document states:

INFORMATION CONCERNING MARTIN MARIETTA CORPORATION'S MINING PERMIT AND RECEIPT OF A NASH COUNTY LAND USE PERMIT

1. MARTIN MARIETTA RECEIVED A MINING PERMIT DATED MARCH 26, 1990. THE PERMIT WAS ISSUED BY

STEVE CONRAD, DIRECTOR OF THE DIVISION OF LAND RESOURCES. A DIVISION OF THE DEPARTMENT OF ENVIRONMENT, HEALTH AND NATURAL RESOURCES. THE DEPARTMENT MAY DENY A PERMIT REQUEST UPON FINDING ...:

"(3) THAT THE OPERATION WILL VIOLATE STANDARDS OF AIR QUALITY, SURFACE WATER QUALITY, OR GROUND WATER QUALITY...."

SPECIFICALLY, THE DEPARTMENT REQUIRES A NUMBER OF ADDITIONAL PERMITS, WHICH IN THIS CASE INCLUDES A NPDES WATER DISCHARGE PERMIT AND A NSPS AIR POLLUTION DISCHARGE PERMIT. NEITHER OF THESE PERMITS HAVE BEEN ISSUED AND ARE NOT EXPECTED FOR AT LEAST 30 DAYS.

HOW CAN THE LAND RESOURCES DEPARTMENT ISSUE A MINING PERMIT BEFORE THEY KNOW WHETHER AN OPERATION WILL MEET THE CRITERIA OF ITEM 3 ABOVE?

PER TRACY DAVIS, ACTING MINING SPECIALIST, IT HAS BECOME STANDARD PRACTICE TO ISSUE THE PERMIT BEFORE AIR AND WATER PERMITS, WITH THE COMPANY BEING NOTIFIED THAT THE PERMIT IS ONLY VALID UPON THE RECEIPT OF THOSE ADDITIONAL PERMITS.

MARTIN MARIETTA PRESENTED THE MINING PERMIT TO MARVIN PRIDGEN AND REQUESTED A LAND USE PERMIT FOR ITS QUARRY PREPARATION KNOWING THAT THE PERMIT WAS NOT VALID UNTIL THE OTHER PERMITS WERE RECEIVED. THE LAND USE PERMIT WAS ISSUED BUT DUE TO WET WEATHER NO WORK HAS YET BEGUN.

IT SHOULD BE NOTED THAT THE PERMIT WAS SPECIALLY HANDLED BY STEVE CONRAD, BYPASSING TRACY DAVIS, AT THE REQUEST OF JOHN LONG, VICE PRESIDENT OF MARTIN MARIETTA AND A MEMBER OF THE NORTH CAROLINA STATE MINING COMMISSION. MR. CONRAD RETIRES FROM STATE GOVERNMENT ON FRIDAY, MARCH 30, 1990.

THE PERMIT USUALLY TAKES 30 DAYS TO BE ISSUED FOLLOWING THE RESOLUTION OF ALL PENDING MATTERS. IN THIS CASE THE PENDING MATTER WAS THE ENVIRONMENTAL ASSESSMENT STUDY REQUESTED OF MARTIN MARIETTA. THIS ISSUE WAS RESOLVED BY A LETTER FROM THE ATTORNEY GENERAL'S OFFICE TO STEVE CONRAD DATED FRIDAY, MARCH 23, 1990. ON THE FOLLOWING MONDAY THE PERMIT WAS DRAFTED, TYPED, REVIEWED, RECLAMATION BOND POSTED, APPROVED AND SIGNED BY MR. CONRAD. (NOTE: BE SURE TO SEE ATTACHED COPIES OF RELATIVE INFORMATION FROM THE MARTIN MARIETTA FILE INCLUDING A DRAFT OF THE CONDITION RESOLVING THE USE OF PUBLIC FUNDS FOR THE PROJECT, a.k.a. THE ENVIRONMENTAL ASSESSMENT ISSUE--THE DRAFT WAS WRITTEN BY STEVE CONRAD).

2. THE COUNTY IS CONCERNED ABOUT BEING SUED BY MARTIN MARIETTA FOR THEIR VESTED INTEREST IN THE QUARRY LOCATION. PER MR. DAVID OWENS AT THE INSTITUTE OF GOVERNMENT IN CHAPEL HILL ..., AN ENTITY DOES NOT HAVE A VESTED INTEREST UNTIL ALL PERMITS ARE RECEIVED. THEN THEIR VESTED INTERST [sic] BECOMES EXPENDITURES FROM THAT TIME FORWARD. NOT PRIOR EXPENDITURES. FROM AN EXPLANATION OF THE FACTS OF THE PERMITTING VERSUS ZONING SITUATION MR. OWENS STATED THAT THERE WAS DEFINITELY NO CLEAR CUT CASE WHICH WOULD SET PRECEDENCE. THE ISSUANCE BY THE COUNTY OF THE LAND USE PERMIT COULD BE THE MOST DAMAGING EVENT SO FAR. ONLY THE PROMPT REVOCATION

OF THAT PERMIT WOULD STOP ANY VESTED INTERESTS (EXPENDITURES) FROM ACCRUING.

3. WAKE STONE CORPORATION WAS TOLD BY MARVIN PRIDGEN THAT WHEN IT HAD ALL ITS PERMITS, IT COULD GET A LAND USE PERMIT FROM THE COUNTY. THE MINING PERMIT WAS ISSUED NOVEMBER 1, 1989. ALL OTHER PERMITS WERE RECEIVED JUST PRIOR TO CHRISTMAS, 1989. A LAND USE PERMIT WAS APPLIED FOR AND RECEIVED IN JANUARY, 1990. LAND PREPARATION COULD HAVE BEGUN ALMOST THREE MONTHS EARLIER.

4. WAKE STONE CORPORATION DOES NOT EXPECT THE COMMISSIONERS TO HANDLE THEIR COMPETITION FOR THEM. HOWEVER, WE BELIEVE IT ONLY FAIR THAT ALL APPLICATIONS BY INDUSTRY BE HANDLED FAIRLY AND IN THE SAME MANNER, NOT IN A WAY WHICH CAN BE BYPASSED BY POLITICAL INFLUENCE OR PRESSURE. WE BELIEVE THE VOTERS, TAXPAYERS AND ALL CITIZENS WOULD EXPECT THE SAME MANNER OF CONDUCT.

After Oxholm created this Document, Commissioner Martin came by Oxholm's office and picked it up. Then, Oxholm and John Bratton, the President of Wake Stone, distributed the Document to Commissioners Robert Siler, Claude Mayo, and Tommy May. Oxholm also delivered copies to Marvin Pridgen, to an attorney for Nash County, James W. Keel, Jr., and to a citizen opposing the Martin Marietta zoning exemption, Kathy Smith. Commissioner Siler took responsibility for delivering the Document to Commissioners Billy Morgan, Kermit Richardson and James Odom.

On 2 April 1990, a public...