Md. Bd. of Pub. Works v. K. Hovnanian's Four Seasons at Kent Island, LLC.

• Decision Date: 23 April 2012
• Docket Number: Sept. Term, 2011.,No. 67,67
• Citation: 42 A.3d 40,425 Md. 482
• Parties: MARYLAND BOARD OF PUBLIC WORKS, et al. v. K. HOVNANIAN'S FOUR SEASONS AT KENT ISLAND, LLC.
• Court: Maryland Court of Appeals

425 Md. 482

42 A.3d 40

MARYLAND BOARD OF PUBLIC WORKS, et al.

v.K. HOVNANIAN'S FOUR SEASONS AT KENT ISLAND, LLC.

No. 67, Sept. Term, 2011.

Court of Appeals of Maryland.

April 23, 2012.

Adam D. Snyder, Asst. Atty. Gen. (Douglas F. Gansler, Atty. Gen. of Maryland, John B. Howard, Jr., Deputy Atty. Gen.; Baltimore, MD), on brief, for appellants.

C. Daniel Saunders (Cristina Harding Landskroener, Chestertown, MD), on brief, for appellants.

John H. Zink, III (Venable LLP, Towson, MD); Charles R. Schaller, Jr. of Linowes and Blocher, LLP, Annapolis, MD; Joseph A. Stevens (Stevens & McCann, LLC, Centreville, MD), on brief, for appellee.

Argued before BELL, C.J., HARRELL, BATTAGLIA, GREENE, ADKINS, BARBERA and ALAN M. WILNER (Retired, specially assigned), JJ.

ALAN M. WILNER (Retired, specially assigned), J.

This is an action for judicial review to determine whether the Maryland Board of Public Works—a body created by the Maryland Constitution and consisting of the Governor, the State Comptroller, and the State Treasurer (the Board)—committed legal error in denying, by a two-to-one vote, respondent's application for a license to fill and dredge on certain State wetlands. The Circuit Court for Queen Anne's County concluded that the Board did err, by basing its decision on considerations outside the lawful scope of its discretion. The court reversed the Board's negative decision and remanded the matter to the Board for further proceedings in conformance with the findings and principles set forth in the court's judgment and accompanying memorandum.

The Board and several individuals who had appeared at the Board's informational hearing in opposition to the project appealed, and we granted certiorari prior to any significant proceedings in the Court of Special Appeals. We agree with most of the findings and holdings of the Circuit Court and, in particular, with its ultimate conclusion that the Board, through its majority vote, committed legal error by basing its decision on factors outside the scope of its authority and discretion. We shall vacate the Circuit Court judgment and remand the case to that court with instructions to vacate the Board's decision and remand the case to the Board for further proceedings in conformance with this Court's opinion.

BACKGROUND

Regulation of Wetlands In General

The Maryland Code does not define the broad term “wetlands,” and definitions of it seem to vary. The State Departmentof the Environment (DOE) has noted, with seeming approval, the definitional characteristics articulated by Ralph W. Tiner and David G. Burke, Wetlands of Maryland(1995)—areas that hold water for significant periods during the year characterized by anaerobic conditions favoring the growth of specific plant species and the formation of specific soil types. See An Overview of Wetlands and Water Resources of Maryland, prepared by DOE for the Maryland Wetland Conservation Group (Jan.2000). Wetlands may be permanently flooded by shallow water, permanently saturated by groundwater, or periodically inundated or saturated for varying periods. Id.

Being a coastal State blessed with a large portion of one of the world's great estuaries—the Chesapeake Bay—as well as several coastal bays and numerous tributaries, Maryland has an abundance of wetlands. According to the U.S. Fish and Wildlife National Wetlands Inventory, 9.5% of the State's land surface—some 600,000 acres—is covered by vegetated wetlands. See id. All are subject to some form of State regulation.

For purposes of regulation, the Code defines three types of wetlands—State, private, and non-tidal. Md.Code, § 16–101( o ) of the Environment Article (ENV) defines State wetlands as “any land under the navigable waters of the State below the mean tide, affected by the regular rise and fall of the tide” except wetlands of that category that have been transferred by the State by valid grant, lease, patent, or grant confirmed by Art. 5 of the Md. Declaration of Rights. ENV § 16–101(k) defines private wetlands as “any land not considered ‘State wetland’ bordering on or lying beneath tidal waters, which is subject to regular or periodic tidal action and supports aquatic growth,” including wetlands transferred by the State by valid grant, lease, patent, or grant confirmed by Article 5 of the Declaration of Rights.¹ State and private wetlands, under those definitions, are tidal. Non-tidal wetland is defined in ENV § 5–901(i), the important aspect of which, for our purposes, is that is does not include tidal wetlands regulated under Title 16 of the Article.

Comprehensive regulation of the State's wetlands, both State-owned and in private hands, came about with the enactment of the Wetlands Act of 1970, which this Court described in Bd. of Pub. Works v. Larmar Corp., 262 Md. 24, 277 A.2d 427 (1971) and Hirsch v. Md. Dep't of Nat. Resources, 288 Md. 95, 416 A.2d 10 (1980). The regulation was prompted by legislative concern over the loss or despoliation of the wetlands, which the General Assembly considered an important natural resource, as the result of unregulated dredging, dumping, filling, and like activities. That concern and the statement of public policy regarding the need to preserve the wetlands and prevent further loss or despoliation was expressed in the Code and now appears in ENV § 16–102. ²

As we pointed out in Hirsch, 288 Md. at 100–01, 416 A.2d at 12–13, the Act established a bipartite regulatory scheme, one part for State-owned wetlands and one for private wetlands. Activities on State wetlands always were subject to being regulated, precisely because the State owned them. What the 1970 Act did was to put in place a scheme for actually regulating the filling and dredging of State wetlands and, for the first time, to regulate activity on private wetlands. The effect of the Act was to preclude riparian owners from freely exercising rights on adjacent wetlands that, under common law or pre-existing statutory law, they previously could exercise. In Larmar, the Court observed that, under an 1862 statute, a riparian owner “had the right to make artificial landfill in navigable waters in front of his shore, limited only to the extent that he could not obstruct navigation” and that the 1970 Act unqualifiedly repealed that right. Larmar, supra, 262 Md. at 44, 277 A.2d at 436.

The nature and scope of the regulatory scheme differ based on the type of wetland involved. Certain activities on non-tidal or privately owned wetlands require a permit from DOE. See ENV §§ 5–905, 5–906, and 16–307. Activities on State wetlands that fall within the definition of dredging or filling (ENV § 16–101(e) and (f)) require a license from the Board of Public Works. ENV § 16–202. We are dealing here with the latter, so, except for purposes of comparison, when relevant, our focus will be on the statutes and regulations governing the licensing procedure relating to those kinds of activity on State wetlands.

Regulation of State Wetlands

Before considering the actual procedures, it is important to note some general propositions that govern those procedures. First, the requirement of a license and the Board's authority to issue one are entirely statutory. Though implemented to a large extent by regulations adopted either by the Board ( see COMAR 23.02.04) or by DOE ( see COMAR 26.24), the nature of the activities on State wetlands that require a license, the authority of the Board to issue a license, the nature of a license, some of the conditions which may be attached to it, and the procedures and basic ground rules for the issuance of a license are provided by the statutes in ENV, title 16, subtitles 1 and 2. Except that those aspects of regulation must comport with basic due process, they are not Constitutionally mandated and are not within any inherent power of the Board. The Legislature, if it wished, could have delegated that authority to any State agency.

Some of the applicable regulations, unfortunately, are not easy to follow and interpret, especially when read in conjunction with the statutes. The Board regulations and the DOE regulations overlap to some degree, and, in part through cross-references to each other and to the statutes, they appear to contain exceptions to exceptions and other facial ambiguities. Some parts of the license procedure are dealt with in the Board's regulations and other parts in the DOE regulations, requiring one to bounce back and forth between them to see the whole picture. Persons who deal regularly with those regulations may have no problem understanding these intricacies, but, for the uninitiated, they are a challenge.

ENV § 16–202(a) precludes a person from dredging or filling on State wetlands without a license. “Dredging” is defined in § 16–101(e) as “the removal or displacement by means of soil, sand, gravel, shells, or other material, whether or not of intrinsic value, from any State or private wetlands.” The term “filling” is defined in § 16–101(f). It is a longer definition because it lists the things it expressly includes and excludes, but generally it means “[t]he displacement of navigable water by the depositing into State or private wetlands of soil, sand, gravel, shells, or other materials” or “[t]he artificial alteration of navigable water levels by any physical structure, drainage ditch, or otherwise.” That is the extent of the Board's authority to issue, or deny, a license.³

The term “license” is not defined in either the general definitions applicable to the Environment Article as a whole (§ 1–101) or in the definitions applicable to title 16 (§ 16–101). The only definition appears in the regulations. COMAR 23.02.04.01A defines a wetland license as “the authorization issued by the Board of Public Works under Environment Article, Title 16 ... for the performance of dredging, filling, the construction of structures, or the conduct of certain other activities on land and waters of the State which are tidal wetlands.” A license, it...