Spectre, LLC v. South Carolina Dhec

• Decision Date: 01 February 2010
• Docket Number: No. 26764.,26764.
• Citation: 688 S.E.2d 844,386 S.C. 357
• Parties: SPECTRE, LLC, Respondent, v. SOUTH CAROLINA DEPARTMENT OF HEALTH AND ENVIRONMENTAL CONTROL, League of Women Voters of Georgetown County, South Carolina Wildlife Federation, League of Women Voters of South Carolina, South Carolina Coastal Conservation League, and League of Women Voters of Charleston Areas, Appellants.
• Court: South Carolina Supreme Court

688 S.E.2d 844

386 S.C. 357

SPECTRE, LLC, Respondent, v. SOUTH CAROLINA DEPARTMENT OF HEALTH AND ENVIRONMENTAL CONTROL, League of Women Voters of Georgetown County, South Carolina Wildlife Federation, League of Women Voters of South Carolina, South Carolina Coastal Conservation League, and League of Women Voters of Charleston Areas, Appellants.

No. 26764.

Supreme Court of South Carolina.

Heard October 21, 2009.

Decided February 1, 2010.

Chief Counsel Elizabeth Applegate Dieck and Staff Attorney Davis Whitfield-Cargile, both of SC DHEC, of North Charleston, General Counsel Carlisle Roberts, of SC DHEC, of Columbia, Evander Whitehead, of Haynsworth Sinkler Boyd, of Florence, and David E. Shipley, of University of Georgia School of Law, of Athens, GA, all for Appellant SC DHEC.

James S. Chandler and Amy E. Armstrong, both of South Carolina Environmental Law Project, for Appellants League of Women Voters of South Carolina, et al.

Ellison D. Smith, IV and Stanley E. Barnett, both of Smith, Bundy, Bybee & Barnett, of Mt. Pleasant, and James B. Richardson, Jr., of Columbia, for Respondent.

Christopher Holmes, of Mt. Pleasant, for Amicus Curiae The S.C. Tourism & Land Counsil, Christopher Kaltman DeScherer, of Southern Environmental Law Center, of Charleston, for Amicus Curiae Waccamaw Riverkeeper, and Kerry L. Murphy, of Mays, Foster, Gunter & Murphy, of Columbia, for Amici Curiae SC Landowners Association, Home Builders Association of SC and the SC Association of Realtors.

Justice PLEICONES.

Respondent Spectre, LLC's (Spectre) request for a stormwater/land disturbance permit so that it may fill 31.76 acres of freshwater wetlands in Horry County was denied by the South Carolina Department of Health and Environmental Control (DHEC). The Administrative Law Court (ALC) determined that the permit must issue as a matter of law. Because we find that DHEC properly exercised its authority under the Coastal Zone Management Act (CZMA) in denying the permit request, we now reverse.

FACTS

I. CZMA and CMP

As part of the CZMA, passed in 1978, DHEC was required by statute to develop a comprehensive coastal management program (CMP) for the "coastal zone," an area defined as Beaufort, Berkeley, Charleston, Colleton, Dorchester, Horry, Jasper, and Georgetown counties. See S.C.Code Ann. § 48-39-80. In developing the CMP, DHEC was required to develop a system whereby it was authorized to review all State and federal permits for compliance with the CMP. Id. DHEC developed the plan and promulgated it in accordance with procedures set forth in the CZMA. Based on its interpretation of S.C.Code Ann. § 48-39-80, DHEC conducted what is in essence a consistency review for every state and federal permit application to determine compliance with the CMP.

II. The Spectre site

Spectre sought to develop 62.93 acres in Horry County for commercial and retail purposes. As part of the plan, Spectre proposed to fill 31.76 acres of isolated freshwater wetlands and applied to DHEC for a stormwater/land disturbance permit, as required by S.C.Code Ann. §§ 48-14-10, et seq., and S.C. Reg. 72-305. DHEC denied Spectre's application because it found the project inconsistent with various provisions of the CMP, including the following provision:

1) In the coastal zone, [Office of Ocean and Coastal Resource Management] review and certification of permit applications for commercial buildings will be based on the following policies:

b) Commercial proposals which require fill or other permanent alteration of salt, brackish or freshwater wetlands will be denied unless no feasible alternatives exist and the facility is water-dependent. Since these wetlands are valuable habitat for wildlife and plant species and serve as hydrologic buffers, providing for storm water runoff and aquifer recharge, commercial development is discouraged in these areas. The cumulative impacts of the commercial activity which exists or is likely to exist in the area will be considered.

Spectre filed a request for review by the DHEC Board as allowed by S.C.Code Ann. § 44-1-60(E) (2006). Spectre argued, inter alia, that (1) the land in question is not subject to the requirements of the CMP, (2) the CMP is not enforceable as it is not a valid regulation promulgated and approved by the General Assembly in accordance with the South Carolina Administrative Procedures Act (APA), and (3) there is no statutory or regulatory authority for DHEC to deny a stormwater permit based on alleged inconsistency with the CMP.¹

The DHEC Board unanimously affirmed the denial based entirely on the policy review of the permit, i.e., the proposal was inconsistent with the CMP. The Board rejected Spectre's argument that the CMP is unenforceable because it was not promulgated as a regulation pursuant to the APA. Applying the CMP, the Board found that the proposed project contravened numerous provisions and that DHEC properly denied the application since Spectre did not show an alternative analysis, that there were no feasible alternatives to the amount of fill, or an overriding public interest in the project.

Spectre appealed to the ALC which reversed the Board and concluded Spectre is entitled to the permit as a matter of law. The ALC concluded (1) the CMP policies by their own terms do not apply to the property in question, (2) the CMP is not enforceable as it is not a valid regulation promulgated in compliance with the APA, and (3) as Spectre was in compliance with the stormwater regulations, the permit must issue by operation of law.

DHEC and Intervenors appealed to the Court of Appeals. On DHEC's motion, this Court issued an order transferring the case from the Court of Appeals.

ISSUES

I. Did the ALC err in finding that the CMP, by its own terms, does not apply to the property in question?

II. Did the ALC err in finding that, even if the CMP purports to apply to the property in question, it is unenforceable because it was not promulgated in accordance with the APA?

DISCUSSION

I. Did the ALC err in finding that the CMP, by its own terms, does not apply to the property in question?

The ALC found that the CMP, by its own terms, does not apply to the property in question. We disagree.

The CMP was published in the State Register in 1978 in response to the General Assembly's statutory instruction to DHEC to develop a program for the South Carolina coastal zone. See S.C.Code Ann. § 48-39-80. The "coastal zone" was defined to include all lands and waters in Beaufort, Berkeley, Charleston, Colleton, Dorchester, Horry Jasper, and Georgetown counties. See S.C.Code Ann. § 48-39-10. The ALC cites two portions of the CMP as limiting its jurisdiction.

First, the ALC noted the following passage:

In addition to the extensive areas of salt and brackish marsh within the critical areas along the South Carolina coastline, the State's coastal zone also contains over 60,000 acres of fresh-water marshes. These wetlands further up the creeks and rivers, beyond the reach of saltwater at high tides, have great diversity of plant species. They play a vitally important role in contributing nutrients to the waters which eventually reach the estuarine system (the critical areas). Fresh-water marsh areas are active filters for improving water quality, and since they are linked with the downstream system, they affect water quality in the critical areas. The fresh-water marshes are important flood buffers and also function in maintenance of salinity levels in downstream estuaries.

The ALC found the phrase "since they are linked with the downstream system" to be a limitation on the reach of the CMP and concluded the program applied "only to contiguous wetlands," i.e., those connected to saltwater and not to isolated wetlands like those located on the Spectre site.

The ALC next noted that the CMP was amended in 1993 through a set of "refinements," which he found expanded the applicability of the CMP. The refinements included the following:

The Corps of Engineers is mandated by Federal law to delineate wetlands. Once delineated by the Corps of Engineers, Coastal Council² manages the wetlands through the policies contained in Chapter III of the State's Coastal Zone Management Program document.

Based on the above language, the ALC noted that "[d]espite the clear language of Section III-73(e) of the CMP limiting its application to those wetlands linked with the downstream system' of coastal rivers and creeks, the Coastal Council began to regulate any wetland which was subject to the jurisdiction and regulation by [sic] the Army Corps" under the Clean Water Act. However, the United States Supreme Court in Solid Waste Agency of Northern Cook County v. United States Army Corps of Engineers, 531 U.S. 159, 121 S.Ct. 675, 148 L.Ed.2d 576 (2001) (SWANCC), held that the Clean Water Act does not extend to bodies of water not adjacent to open water, thereby severely limiting the jurisdiction of the Army Corps of Engineers. The ALC noted that as a result of the SWANCC decision "DHEC lost the ability to review federal permit applications for projects involving isolated wetlands" like the Spectre site.³

Because the site Spectre proposes to develop is unconnected to open water and is not subject to the jurisdiction of the Army Corps of Engineers, the ALC concludes that the CMP does not apply to the site. We find the ALC's interpretation inconsistent with the CMP when read as a whole.

Chapter II of the CMP sets forth the broad scope of the program as follows:

The scope of the coastal management program and of the Coastal Council's authority is based on definitions of the geographic areas and specific resources which must be considered in development of this program. Two types of management authority are granted in two specific areas of the State. The Council has direct control through a permit program over critical areas, which are defined as coastal waters, tidelands, beaches and primary ocean-front sand dunes. Direct permitting authority...