People v. Fremont Energy Corp.

• Decision Date: 29 September 1982
• Docket Number: No. 5670,5670
• Citation: 651 P.2d 802
• Parties: PEOPLE of the State of Wyoming, Appellant (Plaintiff), v. FREMONT ENERGY CORPORATION, Appellee (Defendant).
• Court: Wyoming Supreme Court

Page 802

651 P.2d 802

PEOPLE of the State of Wyoming, Appellant (Plaintiff), v. FREMONT ENERGY CORPORATION, Appellee (Defendant).

No. 5670.

Supreme Court of Wyoming.

Sept. 29, 1982.

Steven F. Freudenthal, Atty. Gen., Walter Perry III, Sr. Asst. Atty. Gen., Dennis M. Boal, Asst. Atty. Gen., argued, and Weldon S. Caldbeck, Asst. Atty. Gen., for appellant.

John Burk, argued, of Burk & Hunter, P.C., Casper, and Thomas J. Constantine of Constantine & Prochnow, Englewood, Colo., for appellee.

Before ROSE, C.J., and RAPER, THOMAS, ROONEY and BROWN, JJ.

RAPER, Justice.

This appeal is taken from the dismissal of a complaint filed by the People of the State of Wyoming, appellant (State), which sought to collect a penalty from Fremont Energy Corporation, appellee (Fremont), for violation of the Wyoming Environmental Quality Act, § 35-11-101, et seq., W.S.1977, and which also sought to enjoin such further violations. The basis for the dismissal was that, while the district court believed it had jurisdiction over the subject matter, it declined to exercise jurisdiction until all administrative remedies had been exhausted by the State. The question for us to decide is whether, under the circumstances, the district court acted properly in dismissing the State's complaint.

We will reverse and remand for further proceedings.

The facts leading up to the district court's dismissal of the State's complaint are set out in the complaint and motion to dismiss and, for purposes of this appeal, are not in dispute. We note that, although there is no dispute about the facts relevant to our disposition of this matter, it is well accepted that, for purposes of a motion to dismiss, the entire matter will be viewed in a light most favorable to the plaintiff with all facts alleged in the complaint accepted as true. People v. Platte Pipe Line Co., Wyo., 649 P.2d 208 (1982); Moxley v. Laramie Builders, Inc., Wyo., 600 P.2d 733 (1979); State Highway Commission v. Bourne, Wyo., 425 P.2d 59 (1967).

Prior to June 2, 1981, Fremont Energy Corporation had, from 1977, drilled and abandoned 1,036 drill holes in Sweetwater County, Wyoming, while exploring for non-coal minerals. Fremont had reported these drill holes to the State by submitting an Abandoned Drill Hole Report. On June 2, 1981, a representative of the Land Quality Division of the Wyoming Department of Environmental Quality (DEQ) randomly selected twenty of Fremont's abandoned drill holes to inspect for compliance with the Environmental Quality Act and the rules and regulations promulgated thereunder. The inspection of the twenty abandoned drill holes was conducted that same day and led to the eventual claim by DEQ that sixteen of the drill holes inspected were not filled, capped, sealed, or the site restored in accordance with the requirements set out in § 35-11-404(c)(ii), (iii) and (v), W.S.1977. ¹

On July 22, 1981, DEQ, pursuant to § 35-11-701, W.S.1977, Cum.Supp.1981, ² issued a written notice of violation detailing various violations of § 35-11-404, supra, at eight of the twenty inspected drill holes. No cease and desist order was issued with the notice of violation. ³ There is no record of when the notice of violation was served upon Fremont; however, the State's complaint indicates that Fremont received the notice of violation on July 28, 1981.

On August 3, 1981, Fremont, through its attorney, mailed a letter to DEQ requesting a hearing before the environmental quality council on the violations alleged by DEQ in its notice of violation. Fremont based its request on the provisions of § 35-11-701(c)(ii), W.S.1977, Cum.Supp.1981. The request was apparently timely.

On August 17, 1981, the attorney general, representing DEQ, denied Fremont's request for a hearing before the environmental quality council. The denial was based on an interpretation of § 35-11-701(c)(i) and (ii), supra, that the right to a hearing provided in § 35-11-701(c)(ii), is only provided where a cease and desist order has been issued with a notice of violation and not simply when a notice of violation alone has been issued. Since the attorney general believed that the notice of violation was not an order by itself, Fremont was not entitled to its requested hearing before the council. No further action was apparently taken on the request for a hearing.

During the week of September 7, 1981, DEQ made another inspection of the abandoned drill holes it had previously inspected in June. The State declares that none of the violations DEQ had noted, as a result of its earlier inspection, had been corrected. Therefore, on September 18, 1981, the attorney general initiated a civil action against Fremont, as the driller of the abandoned drill holes in question. The complaint alleged that Fremont had failed to adequately fill, cap, seal, or perform the proper site restoration when it abandoned sixteen of the twenty drill holes inspected by DEQ in violation of § 35-11-404(c)(ii), (iii) and (v), W.S.1977, together with the DEQ rules and regulations promulgated thereunder. ⁴ Fremont was thus liable for the civil penalties set out in § 35-11-901(a), W.S.1977, Cum.Supp.1981. ⁵

On October 14, 1981, Fremont, under the provisions of Rule 12(b)(1), W.R.C.P., moved the district court to dismiss the complaint for lack of jurisdiction over the subject matter. On November 13, 1981, Fremont filed its brief in support of its motion. Fremont's argument was that, since it had requested a hearing before the council on the alleged violations set out in the notice of violation in accordance with its interpretation of § 35-11-701(c)(ii), supra, such hearing must be held before the State could seek penalties in a civil action in district court.

The State, in response, argued that § 35-11-901(a) and (b), supra, provides that the State can institute a civil action to recover monetary penalties for violation of the Environmental Quality Act and that the violations of § 35-11-404, supra, complained of, were violations of that act. The State further argued that § 35-11-701(d), supra fn. 2, clearly indicates that the State is not required to exhaust the administrative remedies provided in § 35-11-701, supra, in any event, prior to filing a civil action under § 35-11-901, supra.

On January 25, 1982, the district court granted Fremont's motion. However, the district court did not dismiss on the ground that it lacked jurisdiction over the subject matter. The district court specifically acknowledged that it did not lack jurisdiction. The district court ordered "that jurisdiction is declined in favor of the appropriate administrative procedures for hearing * * *." In its opinion letter, the district court also indicated that the State's interpretation of § 35-11-701(c), supra, was too narrow and that DEQ's notice of violation was an order entitling Fremont to a hearing before the council. Therefore the district court ordered that Fremont be given "a hearing before the Environmental Quality Council on all violations raised by the Complaint * * *."

To decide whether the district court's dismissal of the State's complaint was proper, we shall discuss the pertinent issues that have been raised by the parties for our consideration in this case. These issues are in essence:

1. Is the State required to exhaust the administrative remedies set forth in § 35-11-701, supra, before commencing a civil action under § 35-11-901, supra, to collect penalties for violation of the Environmental Quality Act?

2. Was Fremont entitled to a hearing before the council under § 35-11-701(c)(ii), supra, on the allegations contained in the notice of violation it received from DEQ?

3. In dismissing the State's complaint, did the district court rely on either the doctrine of exhaustion of administrative remedies or the doctrine of primary jurisdiction; and if so, did it do so properly?

To decide those questions, we are compelled to begin by examining the statutory framework that has been created to enforce the provisions of the Environmental Quality Act (Act). Specifically, we examine § 35-11-701, supra, and § 35-11-901, supra, hereinafter referred to as § 701 and § 901. At this point we note that this court has observed frequently that where a statute is clear on its face, there is no need to resort to rules of statutory construction. People v. Platte Pipe Line Co., supra, 649 P.2d 208; Board of County Commissioners of Cty. of Campbell v. Ridenour, Wyo., 623 P.2d 1174 (1981); State v. Sinclair Pipeline Co., Wyo., 605 P.2d 377 (1980); Matter of North Laramie Land Co., Wyo., 605 P.2d 367 (1980). We have also made it clear that the goal of the Environmental Quality Act is to protect the public. Therefore, when we deal with provisions of the Act, we recognize that they are entitled to a liberal construction to insure that the public is in fact protected from the menace the legislature has seen fit to address in the Act. People v. Platte Pipe Line Co., supra.

As an overview, without going into great detail at this point, the general thrust of § 701 is to require that DEQ investigate suspected violations of the Act, notify the responsible party of alleged violations if the investigation has confirmed the earlier suspicions, and seek to eliminate the source of the violation without resort to the imposition of monetary penalties. Section 701 is the only section in article 7 of the Act entitled "Complaints." Section 901, on the other hand, is in the "Penalties" article of the Act and is geared toward the actual determination of a violation of the Act, as a matter of law, and the imposition of monetary penalties for the violation of the Act. Where § 701 is aimed at seeking to uncover and correct alleged violations without resort to the harshness of monetary penalties, § 901 provides the means to deal finally with violations not corrected by resort to § 701. Also, anytime after DEQ has discovered a suspected violation and feels compelled to seek enforcement by direct...