Maryland Port Admin. v. QC Corp.

• Decision Date: 01 September 1986
• Docket Number: No. 119,119
• Citation: 310 Md. 379,529 A.2d 829
• Parties: MARYLAND PORT ADMINISTRATION, et al. v. QC CORPORATION. ,
• Court: Maryland Court of Appeals

Page 379

310 Md. 379

529 A.2d 829

MARYLAND PORT ADMINISTRATION, et al. v. QC CORPORATION.

No. 119, Sept. Term, 1986.

Court of Appeals of Maryland.

Aug. 21, 1987.

Motion for Reconsideration Denied Oct. 5, 1987.

Ralph S. Tyler, Asst. Atty. Gen. (Stephen H. Sachs, Atty. Gen., Andrew H. Baida, Tracy V. Drake, Asst. Atty. Gen. and Janice G. Salzman, Sp. Asst. Atty. Gen., on the brief), Baltimore, for appellant.

Richard A. Reid (C. Larry Hofmeister, Jr., Keith R. Truffer and Royston, Mueller, McLean & Reid, on the brief), Towson, for appellee.

Argued before MURPHY, C.J., ELDRIDGE, COLE, RODOWSKY, COUCH ^* and McAULIFFE, JJ., and CHARLES E. ORTH, Jr., Associate Judge of the Court of Appeals (retired), Specially Assigned.

RODOWSKY, Judge.

Maryland Constitution, Art. III, § 40 prohibits the General Assembly from enacting any law "authorizing private property, to be taken for public use, without just compensation...." Taking private property for public use without compensation is also barred by the Fifth Amendment to the United States Constitution. This case involves whether, by operating a hazardous waste disposal facility on its own land, the State of Maryland has taken adjacent leasehold property of the plaintiff. The Court of Special Appeals concluded that there was sufficient evidence from which a jury could find that a taking had occurred. QC Corporation v. Maryland Port Administration, 68 Md.App. 181, 510 A.2d 1101 (1986). We shall hold that there was no taking.

In a corner of the Baltimore City harbor, between Curtis Bay and the Anne Arundel County line, lies Thoms Cove, an indentation of the Patapsco River between Leading Point and Hawkins Point. Motor vehicle access to the area is by way of Quarantine Road. ¹ Arrayed along the west side of Thoms Cove in a roughly north to south fashion are four properties owned by the petitioner, Maryland Port Administration (M.P.A.), an agency of the State of Maryland within the Department of Transportation. ² Northernmost of these parcels is a six acre lot (the North site). Adjacent to the North site is a roughly two acre parcel leased by M.P.A. to a corporate predecessor of the respondent, QC Corporation (QC), under a lease most recently renewed in January 1979. The initial term of the renewal lease was for five years, with options in QC to renew for two successive terms, each of five years. The lessee covenanted to use the property "solely for the purpose of a chemical processing plant and for associated purposes[.]" Contiguous to the QC site on the south is Disposal Site Two, a twelve acre parcel, and south of that, across Thoms Creek, is a twenty acre parcel, Disposal Site One. At the times relevant to this case, Disposal Sites One and Two were used as landfills for hazardous wastes.

The substances deposited at Disposal Site One included, and at Site Two consisted exclusively of, chromium ore tailings from Allied Chemical Corporation (Allied). Approximately five percent of these tailings are hexavalent chromium (chrome), a carcinogen. In 1967 M.P.A. had contracted to dispose of chromium ore tailings for Allied until August 31, 2007, up to a maximum of six million cubic yards. Until February 1975 M.P.A. used the material from Allied as fill at the Dundalk Marine Terminal. From February 1975 until July 1975 Allied disposed of its chrome refuse at a commercial landfill. Thereafter Allied delivered much of that material to Site One. Under 1977 legislation M.P.A. needed a license to continue accepting chrome and, when it stopped doing so, Allied in February 1978 sued M.P.A. On August 5, 1980, state health officials licensed Site Two for three years and Allied, which had been using a commercial facility in the interim, resumed depositing chrome bearing material at the Hawkins Point facility of M.P.A.

The disposal sites at Hawkins Point are divided into specially prepared subareas called "cells." A cell is a large, elongated, earthen cavity with sloping sides. The sides and bottom are lined with a relatively impervious clay, two feet thick. Tailings are brought to the disposal site in tarpaulin covered dump trucks. The material ideally should have about twenty percent moisture content so that it will neither blow freely in the air nor drip to the ground. The tailings are dumped into the current working area of a cell and bulldozed across the width of the cell. When approximately 100 feet down the length of the cell has been filled, that working area is covered with one foot of dirt and the process is repeated in the next working area. Depending on the volume of deliveries, a working area can have tailings exposed to the air for as long as one week at a time. Each cell also contains one or more wells so that, when the cell is completely covered, it can be tested for leachate and excess liquid pumped out of the cell. When Disposal Site Two was approaching capacity under the 1980 permit, the state health department in November 1982 licensed Site Two to accept chrome in additional cells to be constructed overtop of the original, filled cells.

During the process leading to the 1982 permits there were meetings between public officials and members of a small residential community in Hawkins Point. During that period the City of Baltimore was interested in improving access to Hawkins Point by completing an interchange between the Baltimore Beltway and Quarantine Road and in acquiring land in Hawkins Point for a trash landfill. Because of the land use impact of these public improvements on the Hawkins Point residential community, the State agreed to relocate the residents. There is no evidence that public health officials ever recommended the relocation. A witness for the State who participated in the relocation decision denied that health concerns were a factor and that denial is unrebutted.

The 1982 hazardous waste disposal permit ran for three years. In February 1983 the Allied-M.P.A. litigation was settled. Pursuant to that settlement M.P.A. leased the landfills at Hawkins Point to Maryland Environmental Service (M.E.S.), a state agency in the Department of Natural Resources which had been operating the landfills for M.P.A. since 1980.

M.E.S. was created by the General Assembly

to provide water supply and waste purification and disposal services in compliance with State laws, regulations, and policies governing air, land, and water pollution to public and private instrumentalities, and with safeguards to protect the autonomy of the political subdivisions and the rights of the private entities it serves. [Md.Code (1974, 1983 Repl.Vol.), § 3-102(a) of the Natural Resources Article.]

QC and its predecessors have operated a chemical processing plant at the QC site since 1965. For many years the business bought moist ferrous sulfate crystals from Glidden Corporation, dried the crystals, packaged them, and sold them for treating drinking and waste water and for use in fertilizers and animal feeds. Due to changes in the availability of raw materials and concern that Phizer Incorporated would become a competitor, QC began reducing the processing of moist ferrous sulfate at Hawkins Point in April or May of 1982 and began buying a finished product from Phizer which QC at Hawkins Point bagged under its own label. By approximately April of 1983, QC had discontinued all processing at Hawkins Point. ³ On July 21, 1983, the instant suit was filed. The plant was kept in operational readiness until September or October 1983 when it was manned by not more than two employees. In January 1984 QC began dismantling the Hawkins Point plant and by April of that year had removed all salvagable equipment to its other plant in Missouri.

QC's position in this litigation is that, but for the adjoining hazardous waste landfill, it would have continued to do business out of Hawkins Point until the expiration of the last renewal term under its lease. The president of QC testified, in essence, that QC closed the Baltimore plant out of concern for the integrity of its environmentally sensitive product and for the health of QC's employees. There was evidence that material from the landfill, as well as material which dripped from the truck beds or fell from the truck tires, dried and blew onto QC's property.

The evidence based on air monitoring reveals no measurement at the QC plant or at Disposal Site Two which exceeded two micrograms of chrome per cubic meter of air. The maximum permissible exposure to chrome under state health and safety regulations applicable to workplaces is fifty micrograms, i.e., twenty-five times higher than the measured quantities.

QC's complaint sounded in (1) breach of the implied in law covenant of quiet enjoyment, (2) constructive eviction, (3) inverse condemnation, and (4) nuisance. The trial court sustained a demurrer to the nuisance claim due to QC's failure to give the notice required under the statutory waiver of sovereign immunity. That determination has not been challenged on appeal. A directed verdict was granted on the quiet enjoyment and constructive eviction claims. The unconstitutional taking issue was submitted to the jury, but it was unable to agree. Thereupon the circuit court granted judgment n.o.v. in favor of M.P.A. on that claim.

The Court of Special Appeals reversed as to all three of the claims appealed. We issued the writ of certiorari on the State's petition but limited our review to the taking question. We deemed that issue to be of general public importance, as contrasted with the factually unique questions of constructive eviction and quiet enjoyment arising where a landlord both limits the use of the demised premises to chemical processing and also operates a hazardous waste landfill on adjoining property.

The Court of Special Appeals believed that the trial court had incorrectly concluded that QC's property could not have been taken unless QC had been deprived of all beneficial use thereof. The intermediate appellate court...