Pickard v. Tenn. Water Quality Control Bd.

• Decision Date: 06 January 2014
• Citation: 424 S.W.3d 511
• Parties: E. Ron PICKARD et al. v. TENNESSEE WATER QUALITY CONTROL BOARD et al.
• Court: Tennessee Supreme Court

424 S.W.3d 511

E. Ron PICKARD et al.

v.TENNESSEE WATER QUALITY CONTROL BOARD et al.

Supreme Court of Tennessee,

at Nashville.

May 31, 2013 Session.

Dec. 17, 2013.

Opinion on Denial of Rehearing Jan. 6, 2014.

Robert E. Cooper, Jr., Attorney General and Reporter; William E. Young, Solicitor General; Elizabeth P. McCarter, Senior Counsel; Patrick N. Parker, Assistant General Counsel, for the appellants, Tennessee Water Quality Control Board and Tennessee Department of Environment and Conservation.

Elizabeth L. Murphy and W. David Bridgers, Nashville, Tennessee, for the appellees, E. Ron Pickard and Linda Pickard.

OPINION

WILLIAM C. KOCH, JR., J., delivered the opinion of the Court, in which GARY R. WADE, C.J., JANICE M. HOLDER, CORNELIA A. CLARK, and SHARON G. LEE, JJ., joined.

This appeal involves the proper procedure for persons desiring to obtain administrative and judicial review of a decision by the Tennessee Department of Environment and Conservation (“TDEC”) regarding the issuance or denial of a waste water and storm water discharge permit. After TDEC issued a final permit allowing the operator of a limestone quarry to discharge water into Horse Creek, the owners and managers of a neighboring wildlife sanctuary filed a petition with the Tennessee Water Quality Control Board (“Board”) seeking to appeal TDEC's decision to issue the permit and also requesting the Board to issue a declaratory order regarding the proper interpretation of the Antidegradation Rule, Tenn. Comp. R. & Regs. 1200–04–03–.06. After the Board scheduled a contested case hearing, an administrative law judge dismissed the request for a declaratory order on the ground that Tenn.Code Ann. § 69–3–105(i) (2012) provides the exclusive procedure to obtain administrative review of TDEC's decision to issue the discharge permit. Rather than pursuing the permit appeal already pending before the Board, the wildlife sanctuary filed a petition in the Chancery Court for Davidson County seeking a declaratory judgment regarding the proper interpretation of the Antidegradation Rule. The trial court granted the wildlife sanctuary's motion for summary judgment and issued a declaratory judgment regarding the interpretation and application of the Antidegradation Rule to the permit at issue in this case. TDEC and the Board appealed. The Court of Appeals reversed the summary judgment on the ground that the trial court had failed to give “any deference to TDEC's interpretation of the Antidegradation rule” and remanded the case to the trial court to conduct a trial “to determine the proper interpretation of the Antidegradation rule.” Pickard v. Tennessee Dep't of Env't and Conservation, No. M2011–02600–COA–R3–CV, 2012 WL 3834777, at *24–25 (Tenn.Ct.App. Sept. 4, 2012). We granted the Board's and TDEC's joint application for permission to appeal. We conclude that Tenn.Code Ann. § 69–3–105(i) disallows parties challenging the issuance of a discharge permit from seeking a declaratory order from the Board regarding matters involved in the issuance of the permit and requires that parties desiring to seek judicial review of a decision to issue a discharge permit must first exhaust their administrative remedies before seeking judicial review of TDEC's decision. Because the wildlife sanctuary's appeal from TDEC's issuance of the discharge permit was still pending before the Board, the trial court should have declined to adjudicate the wildlife sanctuary's petition for a declaratory judgment. Accordingly, the judgment of the Court of Appeals is reversed and the case is remanded to the trial court with directions to dismiss the petition because the wildlife sanctuary failed to exhaust its administrative remedies before the Board.

I.

The Horse Creek Wildlife Sanctuary and Animal Refuge (“Sanctuary”) consists of over 2,500 acres of forested land, streams, and ponds in Hardin County near the city of Savannah. The Sanctuary is managed and operated by the Sharon Charitable Trust and is made available to churches, civic groups, and other organizations for retreats, excursions, and other outdoor activities. The recreational facilities available at the Sanctuary include the Rock House Lodge and two camping areas on Horse Creek.

Tennessee Materials Corporation decided to operate a limestone quarry on a tract of undeveloped land across Highway 69 from the Sanctuary. The property is less than one-half mile from Horse Creek. It is bordered on the west by Buck Branch and on the east by Pyburn Creek. Both of these streams flow into Horse Creek upstream from the Sanctuary's property.

In June 2007, Tennessee Materials applied to TDEC for a permit to discharge water from its quarry.¹ In February 2008, Amy Fritz, a state biologist, conducted a survey of Horse Creek, and TDEC reported the results of this survey in May 2008. Although a copy of this survey is not in the record, the parties appear to agree that Ms. Fritz determined that Horse Creek had a Biological Index Score that rendered the stream “slightly impaired” and a Habitat Score that rendered the stream “moderately impaired.” Nevertheless, TDEC decided that Horse Creek did not require an elevated degree of protection. Accordingly, on August 6, 2008, TDEC issued a draft permit for Tennessee Materials's quarry for public comment.²

E. Ron Pickard and Linda Pickard, the trustees of the Sharon Charitable Trust, opposed the draft permit. They objected to the permit in writing and also expressed their concerns at a public meeting in October 2008 organized by TDEC. The Pickards argued that the draft permit was invalid because TDEC had misinterpreted and misapplied the Antidegradation Rule.

In addition, the Pickards filed a petition with the Board in January 2009 seeking a declaratory order ³ regarding the “proper interpretation and application” of the Antidegradation Rule.⁴ In mid-February 2009, the Board declined to convene a contested case hearing to consider the Pickards' petition for a declaratory order because a hearing would be premature. The Board explained that “the permit at issue has not been issued or denied therefore there is no final administrative action by the Commissioner.” The Board also explained that it was not considering the petition for a declaratory order at that time in order “to maintain the delegated responsibilities of the Division and the Board; to prevent against the Board rendering impermissible advisory opinions based on hypothetical facts; and to protect the waters and citizens of the [S]tate of Tennessee.”

Thereafter, TDEC issued Tennessee Materials a final discharge permit in mid-March 2009. This action prompted the Pickards to seek two forms of administrative relief from the final permit. On April 6, 2009, they filed a direct appeal with the Board challenging the issuance of the permit in accordance with Tenn.Code Ann. § 69–3–105(i).⁵ Second, they again requested the Board to issue a declaratory order regarding the proper interpretation and application of the Antidegradation Rule.

The Board scheduled a contested case hearing on the Pickards' petitions for October 20–21, 2009. Prior to the hearing, TDEC moved to dismiss the Pickards' request for a declaratory order on the ground that Tenn.Code Ann. § 69–3–105(i) provided the exclusive means for obtaining administrative review of TDEC's issuance or denial of a permit. An administrative law judge granted TDEC's motion on October 6, 2009. As far as this record shows, the Board's contested case hearing scheduled for October 20–21, 2009 was never held. Thus, the Pickards' direct appeal pursuant to Tenn.Code Ann. § 69–3–105(i) remains pending and undecided before the Board at this time.

Rather than proceeding with the scheduled hearing before the Board, the Pickards decided to fight Tennessee Materials's discharge permit on another front. On December 4, 2009, they filed two petitions in the Chancery Court for Davidson County. The first petition sought judicial review of the administrative law judge's dismissal of their earlier request for a declaratory order. The second petition sought a declaratory judgment in accordance with Tenn.Code Ann. § 4–5–225 (2011).⁶ This appeal is limited solely to the latter petition.

The parties litigated this case for almost two more years in the trial court. On April 11, 2011, the trial court filed its first Memorandum and Order applicable to both petitions. The court decided that the administrative law judge had erred by dismissing the Pickards' petition for a declaratory order. Based on this decision, the trial court also decided that the Pickards' petition for a declaratory judgment was moot. The court then set another hearing to determine the appropriate remedy for the administrative law judge's erroneous dismissal of the Pickards' petition for a declaratory order.

The parties had markedly different reactions to the trial court's order. TDEC and the Board observed that the order “recognizes that, because of the jurisdictional question below, the Board cannot be said to have refused to hear the petition for declaratory order.” The Pickards insisted that their pending petition for declaratory judgment should not be dismissed but rather should be held in abeyance while the companion case was remanded to the Board for a final opportunity to determine whether it would address their Antidegradation Rule claims.

On May 10, 2011, the trial court entered separate Memorandums and Orders in the two cases. In the proceeding challenging the administrative law judge's dismissal of the Pickards' petition for a declaratory order, the trial court changed its mind about remanding the case to the Board based on its conclusion that the Board had “refused, pursuant to Tenn.Code Ann. § 4–5–223(a)(2), to consider the claim for declaratory relief,⁷ and that claim is pending before this Court for disposition.” ⁸ In the proceeding seeking a declaratory judgment under Tenn.Code Ann. § 4–5–225, the trial court decided that the petition...