Oceanport Industries, Inc. v. Wilmington Stevedores, Inc.
| Decision Date | 13 April 1993 |
| Citation | 636 A.2d 892 |
| Parties | OCEANPORT INDUSTRIES, INC., a Delaware Corporation, Appellee Below, Appellant, and Environmental Appeals Board of the State of Delaware, Appellee Below, v. WILMINGTON STEVEDORES, INC., a Delaware Corporation, Appellant Below, Appellee. . Submitted: |
| Court | United States State Supreme Court of Delaware |
On appeal from the Superior Court. REVERSED.
Jeremy W. Homer (argued), Parkowski, Noble & Guerke, P.A., Dover, for appellant Oceanport Industries, Inc.
John J. Schreppler, II (argued), Bayard, Handelman & Murdoch, P.A., Wilmington, for appellee Wilmington Stevedores, Inc.
Steven C. Blackmore, Dept. of Justice, for Environmental Appeals Bd.
Before VEASEY, C.J., HORSEY and MOORE, JJ.
We accepted this interlocutory appeal by Oceanport Industries, Inc. ("Oceanport") from a decision of the Superior Court, reversing a decision of the Environmental Appeals Board (the "Board" or "EAB"). The Superior Court ruled that, pursuant to 7 Del.C. §§ 6008(a) and 7210, Wilmington Stevedores, Inc. ("WSI") had standing to appeal the issuance of environmental permits to Oceanport by the Secretary of the Department of Natural Resources and Environmental Control ("DNREC" or "Department"). Additionally, the Superior Court remanded the case to the EAB with instructions to remand in turn to the Secretary of the DNREC for a review of the status of Oceanport's project under the Coastal Zone Act ("CZA"), 7 Del.C. §§ 7001-7013.
The issue of standing is one of first impression, as is the scope of the EAB's jurisdiction in matters pertaining to the CZA. We conclude that the Superior Court erred in determining that WSI has an interest that is substantially affected by the Secretary's decision. With regard to the remand to consider the CZA status decision, the Superior Court confused the application of the CZA, found in Title 7, Chapter 70, of the Delaware Code, to the issuance of permits granted under the authority of Chapters 60 and 72. Accordingly, we reverse.
Oceanport, a Delaware corporation, is a wholly owned subsidiary of Granite State Minerals, Inc., a New Hampshire corporation. Oceanport is engaged in the business of off-loading, storing, and transferring bulk products.
WSI is a corporate citizen and taxpayer of the State of Delaware, engaged in the stevedoring business at the Port of Wilmington. WSI does not own or control the Port, which is owned and operated by the City of Wilmington. WSI contracts to use the Port's facilities, which are open to Oceanport and all others who wish to do business there. WSI currently competes with Oceanport at the Port of Wilmington.
The Oceanport terminal is located in the coastal zone at Claymont, Delaware, approximately six miles north of Wilmington. The site occupies 46.9 acres with eight hundred feet of frontage on the Delaware River. Once known as the Paragon Oil Petroleum Tank Farm, Texaco began operations at the site in 1905. The property includes petroleum storage tanks and a wooden pier extending 740 feet into the Delaware River, which have been used for the off-loading and storage of petroleum for at least thirty-five years. Oceanport purchased the site from Texaco in September 1986, and has operated it since that time.
The area surrounding the Oceanport facility is zoned for heavy industrial use. Airco is on the southwest; Citisteel is next to Airco on the south; General Chemical abuts on the northeast; and the manufacturing facility and pier of the Allied Chemical Company is to the immediate north.
The CZA prohibits the construction of new bulk product transfer facilities outside of the Port of Wilmington, 7 Del.C. §§ 7002(f) and 7003. However, a bulk product transfer facility in operation on June 28, 1971 constitutes a non-conforming use and is not subject to the CZA prohibition. Id. Although Texaco had obtained non-conforming use status for the facility in 1972, Oceanport sought a new determination that its proposed use of the facility constituted the continuation of a non-conforming use.
On May 14, 1987 Oceanport requested a Coastal Zone Status Decision, an administratively created mechanism for the determination of whether or how proposed projects are regulated by the CZA. Oceanport requested a finding that its facility was exempt from the CZA as a docking facility or pier for a single industrial facility under 7 Del.C. 7002(f), or alternatively, that the site and its proposed use constituted a bulk product transfer facility which was in operation on June 28, 1971, and was therefore a non-conforming use under Sections 7003 and 7002(f).
In the application, Oceanport proposed to use the property to off-load and store solid bulk product, such as road salt, crushed stone, cement, and other non-toxic products. Oceanport indicated that it would reduce 25% of the oil storage capacity of the facility, including a cluster of eight tanks closest to the water, and remove two pipelines from the pier, to be replaced with a conveyor belt for the solid bulk products. Although the application indicated that the substitution of the conveyor belt for the pipelines would not in and of itself result in a restructuring, reconfiguration or widening of the existing pier, it also stated that the existing pier would be extended and improved to eliminate the need for frequent dredging.
On June 25, 1987, the Secretary of the DNREC issued a status decision which determined that the proposal was not governed by the Coastal Zone Act. In making the determination, he made three findings about the proposed project:
1. Because the use of the site as an offshore bulk product transfer facility predates enactment of the Coastal Zone Act, the facility enjoyed nonconforming use status at the time the Coastal Zone Act was enacted.
2. The use of the site as an offshore bulk transfer facility had continued to the present despite the temporary decrease in transfer operations caused by the pier fire in May 1987.
3. The proposed modifications did not constitute a significant expansion or extension since there would be no significant increase in production capacity (no production/manufacturing existed), no significant increase in land area encompassing the proposed operation, and no significant increase in environmental impact.
The three-part test applied in the status decision to the proposed modifications is derived from the regulatory definition of "expansion or extension" of non-conforming uses under the CZA. 1
The status decision was not appealed by WSI or any other entity and, according to its terms, became final fourteen days following the date of the legal notice of the decision.
Thereafter, Oceanport started work on the pier. On November 10, 1988, DNREC filed a complaint in the Superior Court against Oceanport, alleging that on September 29, 1988, the Department discovered a project involving "the construction, modification, repair or reconstruction" of an industrial pier without the appropriate permits for the work in private subaqueous lands. On the same day Oceanport executed a consent decree with DNREC, agreeing to submit the appropriate permit application in accordance with 7 Del.C. § 7205. In return, the consent agreement authorized work to continue without the permit, but with strict guidelines on the physical size of the pier. Additionally, the DNREC reserved the right to order the removal of portions of the pier in the event the DNREC later determined they were unstable or environmentally unsound.
On December 18, 1990, DNREC filed another complaint in Superior Court against Oceanport, alleging that Oceanport had constructed a conveyor system and hopper on the pier over public subaqueous lands in the Delaware River. The same day, a second consent agreement was filed, which imposed a $20,000 fine against Oceanport and provided that Oceanport was not to conduct any commercial activity on the pier until such time as the DNREC permits were issued.
On November 28, 1988, Oceanport filed its application for the permit to undertake the pier improvements in subaqueous lands pursuant to 7 Del.C. § 7205. Following revisions to the application at DNREC's request, public hearings were held on March 7 and 15, 1989. During these hearings, the Department determined that Oceanport's application was incomplete and that no final decision could be reached without additional information. As a result, the hearing process was suspended to allow Oceanport an opportunity to amend its presentation after consultation with the DNREC on what was needed to cure the deficiencies.
That process continued for nineteen months until October 1990, when the hearings resumed. Before the hearing resumed, the second consent decree was executed regarding the requirement of an air discharge permit to construct the conveyor and other solid bulk product transfer equipment on the pier, which had created the potential for fugitive air emissions. The scope of the hearing was expanded to include a permit pursuant to 7 Del.C. § 6003 to discharge stormwater runoff into the Delaware River (the "NPDES" permit), and a permit pursuant to 7 Del.C. § 6003 to construct a bulk product transfer facility.
The public hearing on all the permits was held on November 18, 19 and 30, 1990, and concluded on December 13, 1990. The outcome of the hearing was mixed for Oceanport. On one hand, the hearing officer found that in its request for the Coastal Zone Status Decision, Oceanport did "not fully disclose the details of the project...." On the other hand, the hearing officer noted that "Oceanport made a strong technical case in support of its various permit applications."
Ultimately, however, the hearing officer concluded that the two consent decrees estopped the DNREC from denying the permit request or reopening the status decision. The...
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