Noey v. Department of Environmental Conservation, S-1274
| Decision Date | 29 May 1987 |
| Docket Number | No. S-1274,S-1274 |
| Citation | 737 P.2d 796 |
| Parties | Stephen W. NOEY, Appellant, v. DEPARTMENT OF ENVIRONMENTAL CONSERVATION, Appellee. |
| Court | Alaska Supreme Court |
Before RABINOWITZ, C.J., and BURKE, COMPTON and MOORE, JJ.
This appeal arises from a decision of the Commissioner of the Alaska Department of Environmental Conservation which upheld the Department's refusal to approve Stephen Noey's proposed subdivision wastewater treatment and disposal plans. The superior court affirmed the Commissioner's decision. We reverse and remand for further proceedings.
Stephen Noey owns 16.17 acres of land on the east shore of Bear Cove, which is located on the south side of Kachemak Bay, sixteen air miles from Homer. Bear Cove is accessible only by boat or float plane, and neither electricity nor groundwater is available on the property. Water can be transported to the property or collected from precipitation, which averages twenty-five inches annually.
Noey, a real estate developer, subdivided the property into fifteen one-acre lots, which he intended to sell as remote recreational lots. The Kenai Peninsula Borough platting authority approved the subdivision. Thereafter, in September 1982, Noey submitted his first subdivision plan for review by the Alaska Department of Environmental Conservation (DEC) as required by 18 AAC 72.065. Recognizing that the Bear Cove soil investigation data demonstrated conditions which would severely limit the range of wastewater disposal systems available, Noey's engineer proposed the use of a mound waste treatment and disposal system. In October 1982, DEC rejected Noey's subdivision plan.
Noey then requested an administrative appeal, but continued discussions with various DEC officials in attempts to resolve the wastewater treatment and disposal issue. In February 1983, Noey submitted his second subdivision plan, proposing the use of propane-fired waste treatment and disposal systems. DEC also rejected this proposal. Thereafter, on April 11, Noey submitted his third plan, proposing a composting system for treating and disposing of human and food wastes, and a sand filter or settling tank system for graywater treatment and disposal. 1 Again, DEC rejected Noey's proposal.
In July 1983, Noey renewed his demand for an adjudicatory hearing pursuant to 18 AAC 15.200. In this demand, he also requested that DEC accept his proposal to use propane incinerators for waste treatment and disposal. 2
A hearing was held on March 5-6, 1984, at which Noey and DEC presented testimonial and documentary evidence. The hearing officer, a DEC environmental engineer, subsequently issued proposed findings of fact and conclusions of law affirming DEC's rejection of Noey's proposals. The Commissioner of DEC adopted the hearing officer's findings and conclusions and thus affirmed the DEC decisions. Noey appealed to the superior court, which affirmed the Commissioner's decision. This appeal followed.
Noey argues that DEC has not adopted regulations setting standards governing the subdivision of land and may not prohibit his proposed subdivision in the absence of standards. This issue involves basic principles of statutory interpretation and thus presents a question of law. Accordingly, no particular deference is owed to the agency's interpretation of the applicable statutes. Kelly v. Zamarello, 486 P.2d 906, 916-17 (Alaska 1971), quoted in Mukluk Freight Lines v. Nabors Alaska Drilling, 516 P.2d 408, 411-12 (Alaska 1973); see also 4 K. Davis, Administrative Law Treatise § 30.14, at 269 (1958).
DEC cites three statutory provisions as the basis for its promulgation of 18 AAC 72.065 (Eff. 2/23/77), pursuant to which it denied Noey's proposed subdivision plans. 3
AS 46.03.020(10) provides in part that "[t]he department may ... adopt regulations necessary to effectuate the purposes of this chapter, including, by way of example and not limitation, regulations providing for (A) control, prevention and abatement of ... pollution," and "(D) collection and disposal of sewage...." AS 46.03.050 provides that "[t]he department has jurisdiction to prevent and abate the pollution of the waters of the state." AS 46.03.090 provides:
PLANS FOR POLLUTION DISPOSAL. The department may require the submission of plans for sewage and industrial waste disposal or treatment or both for a publicly or privately owned or operated industrial establishment, community, public or private property subdivision or development.
Noey contends that 18 AAC 72.065 neither sets nor intimates standards by which DEC will grant or withhold approval of submitted subdivision plans. Noey argues that when the law directs an executive agency to establish standards by which executive action will be taken, the agency must announce the standards by which it decides matters before it undertakes to make a decision. 4
There is no question that DEC has in fact adopted many regulations which set standards for the quality of domestic wastewater that may be disposed of into the environment, as well as standards for the design, construction, and installation of systems for the treatment and disposal of domestic wastewater. 5 Noey admits as much, but asserts that these types of activities are not activities in which he is proposing to engage at Bear Cove. Implicit in Noey's argument is the notion that to the extent that DEC has chosen to require submission of plans for treatment and disposal of sewage in proposed subdivisions, it must comply with AS 44.46.020(2) and set standards which will guide the agency's decisionmaking and afford individual developers notice of what standards they are expected to meet. Otherwise the agency wields unbridled administrative discretion.
The question thus becomes whether DEC is required to promulgate regulations setting specific standards by which it approves or rejects subdivision plans. Although there is nothing in AS 44.46.020 that expressly requires DEC to do so, we hold that the DEC has promulgated minimum standards in 18 AAC 72.065.
DEC correctly asserts that a reviewing court should not set aside an agency's findings of fact and determinations except upon a showing that they are not supported by substantial evidence in the record as a whole or that they have no reasonable basis in law. City of Fairbanks v. Alaska Public Utils. Comm'n, 611 P.2d 493, 495 (Alaska 1980). This standard serves three purposes:
First, it helps to ensure that the agency does not make decisions that have no adequate basis in fact; second, it gives opposing parties the opportunity to challenge the agency's reasoning process and the correctness of the decision; and third, it affords reviewing courts the opportunity to evaluate the decision.
United States v. RCA Communications, Inc., 597 P.2d 489, 507 (Alaska 1978) (quoting Alaska Public Utils. Comm'n v. Greater Anchorage Area Borough, 534 P.2d 549, 558-59 (Alaska 1975)), aff'd on rehearing, 597 P.2d 512 (Alaska 1979). The reasonable basis test is similar to the standard of unreasonable, arbitrary, and capricious action under which actions committed to agency discretion are traditionally reviewed. Storrs v. State Medical Bd., 664 P.2d 547, 554-55 (Alaska) (per curiam), cert. denied, 464 U.S. 937, 104 S.Ct. 346, 78 L.Ed.2d 312 (1983); Jager v. State, 537 P.2d 1100, 1107 (Alaska 1975).
In his first proposal submitted in September 1982, Noey recommended that mound-type systems for waste treatment and disposal should be installed. Noey submitted the basic data required by 18 AAC 72.065. Noey also stated that it was his intention to place a note of restriction on the plat of his subdivision: Noey's plat restriction is similar to the restrictions which the Alaska Department of Natural Resources (DNR) utilized, with DEC's approval, in three recent state subdivision notices. These DNR subdivision notices state in part:
All lots have been approved by the Department of Environmental Conservation for non-water carried type sewage disposal systems (i.e. chemical, humus, incendiary, etc.). Anyone wishing to install any other type of disposal system must first receive approval from the Department of Environmental Conservation.
No individual water supply system or sewage disposal system shall be permitted on any lot unless such system is located, constructed and equipped in accordance with the requirements of the Alaska Department of Environmental Conservation. Approval of such systems shall be obtained from said authority.
DEC refused to approve Noey's first subdivision plan because "[i]t has not been demonstrated that there will exist practical means of sewage treatment and disposal within the subdivision which meets [sic] the requirements of 18 AAC 72 and 18 AAC 70." DEC also asserted that "[t]he inclusion of a plat note indicating that all systems must be approved by the Department of Environmental Conservation prior to installation does not provide sufficient evidence that practical systems can be designed." DEC observed that mound systems typically require electricity to power...
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