State v. Fisher Sand & Gravel Co.
| Decision Date | 03 March 2015 |
| Docket Number | No. 1 CA-CV 13-0608,1 CA-CV 13-0608 |
| Court | Arizona Court of Appeals |
| Parties | STATE OF ARIZONA ex rel. HENRY R. DARWIN, Director, Arizona Department of Environmental Quality, Plaintiff/Appellee, v. FISHER SAND & GRAVEL CO., a North Dakota corporation, Defendant/Appellant. |
STATE OF ARIZONA ex rel. HENRY R. DARWIN, Director,
Arizona Department of Environmental Quality, Plaintiff/Appellee,
v.
FISHER SAND & GRAVEL CO.,
a North Dakota corporation, Defendant/Appellant.
No. 1 CA-CV 13-0608
ARIZONA COURT OF APPEALS DIVISION ONE
March 3, 2015
NOTICE: NOT FOR PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.
Appeal from the Superior Court in Maricopa County
No. CV2011-007962
The Honorable Sally Schneider Duncan, Judge
AFFIRMED
COUNSEL
Arizona Attorney General's Office, Phoenix
By James T. Skardon
Counsel for Plaintiff/Appellee
Ryley Carlock & Applewhite, PA, Phoenix
By John C. Lemaster, Albert H. Acken, Samuel L. Lofland
Counsel for Defendant/Appellant
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MEMORANDUM DECISION
Judge Kenton D. Jones delivered the decision of the Court, in which Presiding Judge Peter B. Swann joined. Judge Michael J. Brown specially concurred in part and dissented in part.
JONES, Judge:
¶1 Fisher Sand & Gravel Company (Fisher) appeals from a judgment awarding the Arizona Department of Environmental Quality (ADEQ) stipulated monetary penalties after finding Fisher violated a consent judgment previously entered into with ADEQ prohibiting further violation of air pollution statutes and regulations. For the following reasons, we affirm.
¶2 Fisher, a North Dakota corporation, produces road-building materials at its hot mix asphalt and crushing and screening plants located in Gila Bend, Glendale, and Peoria, Arizona.
¶3 In April 2011, ADEQ filed suit against Fisher pursuant to Arizona Revised Statutes (A.R.S.) sections 49-262,1 -462, and -463, alleging numerous violations of state air and water pollution statutes and regulations. The litigation resolved with a settlement and entry of a Consent Judgment requiring Fisher to pay $125,000 in civil penalties. The Consent Judgment also provided:
If [Fisher], or any entity owned, controlled or managed by [Fisher], commits civil violations of A.R.S. Title 49, Chapter 3, Article 2 [A.R.S. §§ 49-421 to -467], rules adopted thereunder, or air quality permits issued thereunder at any time during the next two (2) years, commencing on [April 25, 2011], [ADEQ] in its sole discretion, shall have the option of either collecting stipulated penalties pursuant to this section, or pursuing statutory penalties.
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The Consent Judgment further afforded ADEQ the ability to "enter any property of [Fisher] at any location" for the purpose of ensuring compliance, as well as the "right to take enforcement action for any and all violations of [the] Consent Judgment . . . and pursue all legal and equitable remedies."
¶4 Just before the expiration of the two-year period, ADEQ obtained an order to show cause for Fisher's alleged failure to comply with the Consent Judgment and moved for the assessment of additional penalties against Fisher following inspections of its portable crushing and screening plants and hot mix asphalt plants. ADEQ alleged Fisher had committed three violations of Arizona's air quality and permitting laws by: (1) operating two pieces of equipment for one day without an appropriate permit at its Peoria plant, in violation of A.R.S. § 49-426(A)(2) and Arizona Administrative Code (A.A.C.) R18-2-302(A); (2) creating a new, single stationary source by co-locating an ADEQ permitted portable source with a Maricopa County permitted stationary source, and operating this new source for 355 days without obtaining a new permit; and (3) failing to conduct required pollution tests.2 Although these violations could have resulted in stipulated damages pursuant to the Consent Judgment totaling $2,409,000, ADEQ sought recovery of only $500,000.
¶5 After briefing and oral argument, the trial court found in favor of ADEQ on each claim and imposed the requested $500,000 penalty. Fisher timely appealed. We have jurisdiction pursuant to A.R.S. § 12-2101(A)(1).
I. Standard of Review
¶6 We review the trial court's interpretation of regulations and statutes, and its application of the law to the facts, de novo. Sedona Grand, L.L.C. v. City of Sedona, 229 Ariz. 37, 40, ¶ 8, 270 P.3d 864, 867 (App. 2012). We apply the same principles of construction when interpreting regulations as we do when construing statutes. DaimlerChrysler Servs. N. Am., L.L.C. v. Ariz. Dep't of Revenue, 210 Ariz. 297, 301, ¶ 12, 110 P.3d 1031, 1035 (App. 2005). Because neither party requested findings of fact or conclusions of law pursuant to Arizona Rule of Civil Procedure 52(a), we "'presume the trial court found every fact necessary to support its judgment and will
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affirm if any reasonable construction of the evidence justifies it.'" Canyon Ambulatory Surgery Ctr. v. SCF Ariz., 225 Ariz. 414, 422, ¶ 28, 239 P.3d 733, 741 (App. 2010) (quoting Garden Lakes Cmty. Ass'n, Inc. v. Madigan, 204 Ariz. 238, 240, ¶ 9, 62 P.3d 983, 985 (App. 2003)).
II. The Statutory and Regulatory Framework
¶7 Arizona's statutory scheme addressing air pollution is aimed at "control[ling] present and future sources of emission of air contaminants" by regulating "every type" of air polluting activity in an effort to "insure[] the health, safety and general welfare of all the citizens of the state . . . protect[] property values and protect[] plant and animal life." A.R.S. § 49-401(A). To effectuate this purpose, the legislature placed "primary responsibility for air pollution control and abatement in [ADEQ]" and reserved to the individual counties "the right to control local air pollution problems as specifically provided [by statute]." Id.
¶8 As pertinent here, both stationary and portable pollution sources are subject to that scheme. A stationary source is "any facility, building, equipment, device or machine that operates at a fixed location and that emits or generates air contaminants." A.R.S. § 49-401.01(36). A portable source is "any stationary source that is capable of being transported and operated in more than one county of this state." A.R.S. § 49-401.01(30).
¶9 ADEQ has original jurisdiction over sources, permits, and violations relating to, among other activities, "[a]ir pollution by portable sources." A.R.S. § 49-402(A)(6). For all other sources not listed within § 49-402(A), "the review, issuance, administration and enforcement of permits issued under [A.R.S. Title 49, Chapter 3] shall be by the county or multi-county air quality control region" unless ADEQ specifically asserts jurisdiction over a source through written notice to the county. A.R.S. § 49-402(B).
¶10 Under this statutory arrangement, and with limited exception, in order for an emission source to be constructed or operated, the operator must first apply for and obtain a permit from either ADEQ or the appropriate county agency. See A.R.S. § 49-426(A)(2) (state permit requirement); A.R.S. § 49-480(C) (county permit requirement). An operator may obtain either an individual permit for each source, or, if appropriate, an Authorization to Operate (ATO) pursuant to a general permit promulgated by ADEQ or the county. A.R.S. § 49-426(A)(2), (H); A.R.S. § 49-480(C), (J); A.A.C. R18-2-503(A).
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III. Co-Location of Fisher's Portable Source with Its County Permitted Stationary Source Created a New, Unpermitted Stationary Source.
A. Background of Alleged Violation
¶11 In May 2010, in accordance with a 2010 Hot Mix Asphalt Plant General Permit, Fisher obtained, from ADEQ, an ATO for its portable hot mix asphalt plant (the portable source). Pursuant to the ATO, Fisher was able to operate the portable source in any county in Arizona. Fisher originally operated the portable source in Gila Bend, Arizona.
¶12 In April 2011, Fisher filed a Notice of Equipment Transfer (Notice) with ADEQ as required by A.A.C. R18-2-324(D), stating its intent to relocate the portable source to an address in El Mirage, Arizona and identifying the equipment permitted under the ATO. Fisher did not volunteer that the new location was adjacent to an existent hot mix asphalt plant (the Maricopa source), which Fisher operated pursuant to a separate county issued air quality permit. Fisher thereafter relocated the portable source to its El Mirage facility and operated both sources at this location.
¶13 In its petition for order to show cause, ADEQ alleged the co-located portable and Maricopa sources created a single new "stationary source" under A.A.C. R18-2-101(139), which provides in relevant part:
"Stationary source" means any building, structure, facility or installation subject to regulation pursuant to A.R.S. § 49-426(A) which emits or may emit any air pollutant. "Building," "structure," "facility," or "installation" means all of the pollutant-emitting activities which belong to the same industrial grouping, are located on one or more contiguous or adjacent properties, and are under the control of the same person or persons under common control.
ADEQ argued the information provided to obtain the previous ATO was not germane to the newly constructed El Mirage facility's operation, and Fisher violated A.R.S. § 49-426(A)(2) by operating the new stationary source without obtaining a new permit. ADEQ acknowledged that had Fisher obtained such a permit, it could have legally operated the co-located plant.
¶14 Fisher disputes the imposition of penalties for this alleged violation, arguing (1) it had valid, albeit separate, permits for each of the individual hot mix asphalt plants co-located at the El Mirage facility; (2) Fisher was not required to obtain a new permit from ADEQ for co-locating its portable and stationary sources; (3) ADEQ lacks permitting and
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enforcement authority over the co-located El Mirage facility; (4) ADEQ is estopped from seeking penalties because it did not object following notification of the portable source's relocation to El Mirage; (5) this action is an unauthorized "collateral attack" on Fisher's ADEQ permit; and (6) the imposition of penalties violated Fisher's...
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