Ogburn-Matthews v. Loblolly Partners

• Decision Date: 03 August 1998
• Docket Number: No. 2876.,2876.
• Citation: 332 S.C. 551,505 S.E.2d 598
• Court: South Carolina Court of Appeals
• Parties: Virginia OGBURN-MATTHEWS, Appellant, v. LOBLOLLY PARTNERS (RICEFIELDS SUBDIVISION), and DHEC Office of Ocean and Coastal Resource Management, Respondents.

332 S.C. 551

505 S.E.2d 598

Virginia OGBURN-MATTHEWS, Appellant, v. LOBLOLLY PARTNERS (RICEFIELDS SUBDIVISION), and DHEC Office of Ocean and Coastal Resource Management, Respondents.

No. 2876.

Court of Appeals of South Carolina.

Heard February 4, 1998.

Decided August 3, 1998.

James S. Chandler, Jr., Pawleys Island, for appellant.

Douglas L. Hinds, of Hinds, Cowan, Strange, Geer & Lumpkin, Georgetown; and Mary Duncan Shahid, Charleston, for respondents.

HOWARD, Judge:

Virginia Ogburn-Matthews (Matthews) appeals the issuance of a certificate of consistency by the South Carolina Environmental Control Office of Ocean and Coastal Resource Management (the Agency) to fill a 0.38 acre wetland (the Wetland) which adjoins her residence. The special referee affirmed the certification of consistency issued by the Agency in connection with a federal Nationwide 26 permit application to fill the Wetland. The certificate of consistency enabled the developer, Loblolly Partners (Loblolly), to obtain a Nationwide 26 permit allowing the Wetland to be filled.

I. PROCEDURAL HISTORY

The Agency issued its "Notice of Intent" to certify that the filling of the Wetland was consistent with the South Carolina Coastal Zone Management Program (the Program) as a required step in the federal permitting process under 16 U.S.C. § 1456(c)(3)(A) (1985 & Supp.1997). Matthews filed an objection to the "Notice of Intent" before the Agency council. The council adopted the consistency certification recommendation as the final agency action, and Matthews filed this suit to review the decision in circuit court. The action was referred to the special referee with finality. The special referee affirmed the issuance of the certification. Matthews filed a motion for a rehearing and/or amendment of judgment, which the special referee denied. We reverse and remand.

II. STATUTORY FRAMEWORK

A. Nationwide 26 Permits

The Nationwide 26 permit program is a federal regulatory process for the issuance of permits for a variety of federal activities having environmental impacts. South Carolina adopted the complementary Coastal Zone Management Program which establishes South Carolina's policy on these environmental impacts. The Nationwide 26 permit is issued by the federal government through the Department of the Army, Charleston District Corps of Engineers (the Corps), and is "designed to regulate with little, if any, delay or paperwork certain activities having minimal impacts." 3 C.F.R. § 330.1(b) (1997). Before issuance, the Corps requires the applicant to seek a "consistency determination" from the appropriate state agencies to confirm a project complies with state coastal environmental policies. See Coastal Zone Management Act, 16 U.S.C. § 1456 (1985 & Supp.1997). If the state does not act on the permittee's request for consistency certification within six months, concurrence is presumed by the Corps. 33 C.F.R. § 330.4(d)(6) (1997). If the state agency does not find the candidate project consistent with state policy, the federal government may make an independent determination that "the activity is consistent with the objectives of [the federal Coastal Zone Management Act] or is otherwise necessary in the interest of national security" and issue the Nationwide 26 permit notwithstanding the state's objection. 16 U.S.C. § 1456(c)(3)(A) (1985 & Supp.1997).

B. The South Carolina Coastal Zone Management Program

The South Carolina legislature authorized the development of the Program which dictates the manner in which the Agency "shall have the authority to review all state and federal permit applications in the coastal zone, and to certify that these do not contravene the management plan." S.C.Code Ann. § 48-39-80(B)(11) (Supp.1997). The consistency determination required for a Nationwide 26 permit represents a statement of assurance by the Agency that a permit candidate's project complies with South Carolina's Program for coastal zone management. § 48-39-80.

The Program requires that, to obtain a consistency determination, an applicant must submit the proposed activity plans to the Agency. The Agency then assesses the application and, upon determining that it is consistent with the Program, issues a proposed determination of consistency. The Agency is then required to provide public notice of the proposed certification and to review the objections to the certification that are submitted. See 1993 Coastal Zone Management Program Final Refinements p. 18-19. The Agency's decision to issue a consistency certification despite objections is also subject to review. These review procedures were adopted in the Program refinements in 1993. These refinements provide as follows:

a) The decision of the staff or Management Committee shall be deemed a final agency decision in the matter unless three members of the full Council request in writing that oral arguments be had before the full Council.

b) If three members of the full Council make written demand for oral arguments, then oral arguments shall be heard after the ten day comment period by the full Council. Upon review of the decision by the full Council, the written order of the Council affirming, reversing or modifying the decision shall be deemed the final agency action in this matter.

1993 Coastal Zone Management Program Final Refinements p. 20. Matthews attacks this review procedure as constitutionally defective.

III. FACTS

A. Administrative Action

Loblolly is the developer of Ricefields Subdivision, located in Georgetown County, South Carolina. In 1994, Loblolly applied to the Corps for a Nationwide 26 permit to fill the Wetland. The Corps issued a letter stating the project would be a candidate for authorization if the Agency certified the activity would be consistent with the Program and a mitigation proposal acceptable to the Agency was submitted and approved by the Corps.

An Agency biologist conducted an environmental review of the project, concluding the Wetland was contiguous with Ricefields Lake and was a permanently flooded, forested wetland. His recommendation was to deny certification of consistency with the Program.

Loblolly submitted a revised application to the Corps on May 3, 1995, which contained a wetland master plan to minimize wetland impacts. By then the development had grown to 286 lots in eight phases on approximately 171 acres of land. Loblolly proposed to place the mitigation provisions in a recorded deed restriction. A second Agency environmental review was conducted on May 16, 1995. Again, the reviewing biologist concluded the Wetland was contiguous with Ricefields Lake, was seasonally flooded, and filling it was inconsistent with the Program.

On May 23, 1995, the Agency received a letter from the South Carolina Department of Natural Resources offering no objection to the project as long as 35' upland buffers were established adjacent to all project wetlands and restrictive covenants were placed on all set-aside wetlands and buffer areas. A third environmental review was then performed on June 6, 1995. The complete report consisted of only the following:

"Certify permit. Deed—OCRM/COE approved—restriction must be recorded within 60 days." ¹

That same day the Agency issued a "Notice of Intent" to find the project consistent with the Program. "Interested parties" were provided ten days to file an objection.

Matthews filed an objection with supporting information on several grounds, including that the Wetland is not isolated, and is therefore excluded from the "isolated wetlands" portion of the pre-development wetland master planning policy.

Matthews' appeal and Loblolly's response were transmitted to the Agency-council members, sitting as the review board, in compliance with the 1993 Coastal Zone Management Program Refinements. No request was made for oral argument by three or more members of the council, and in default thereof, the staff recommendation was affirmed as the final agency action.

B. Judicial Review

Matthews filed a complaint with the circuit court seeking review under S.C.Code Ann. § 1-23-380 (Supp.1997) of the Administrative Procedures Act (the APA) or, in the alternative, upon writ of certiorari. In her complaint, Matthews cited the same grounds as in her objection, but added that the Agency's review procedure denied her due process of law.

The special referee reviewed the appeal on a writ of certiorari, concluding there was evidence to support the decision to certify that the project was consistent, and to support the specific finding that the Wetland was isolated. The referee also concluded the Agency's review procedure complied with minimum standards of due process and the Agency had applied its policies correctly.

Matthews moved for a rehearing and/or amendment of judgment, which was denied.

IV. ISSUES PRESENTED:

A. Was Matthews afforded due process of law by the Agency's review procedure?

1. Do minimum standards of due process require a procedural step by which council members affirmatively respond to a contestant's objection before finalizing agency action, in order to assure they have received and considered a contestant's position?

2. Does due process require that a contestant objecting to consistency certification by the Agency in connection with a Nationwide 26 permit application be afforded a trial-type, adversarial hearing, with an opportunity to confront and cross-examine witnesses?

B. Is a Program consistency administrative review proceeding a "contested case" falling under the APA?

C. Did the special referee err in affirming the Agency's consistency certification where the administrative record contains no evidence that Loblolly's project complies with the Program?

V. DISCUSSION/ANALYSIS

A. Due Process

According to Matthews, the Agency's review procedure adopted by the 1993 Program refinements does not comply with minimum standards of due process because the procedure does not afford the opportunity to be heard "at a meaningful...