Sugarloaf Citizens' Ass'n v. Department of Environment

• Decision Date: 20 December 1996
• Docket Number: No. 60,60
• Citation: 344 Md. 271,686 A.2d 605
• Parties: SUGARLOAF CITIZENS' ASSOCIATION et al. v. DEPARTMENT OF ENVIRONMENT et al. Sept. Term 1995.
• Court: Maryland Court of Appeals

Page 271

344 Md. 271

686 A.2d 605

SUGARLOAF CITIZENS' ASSOCIATION et al. v. DEPARTMENT OF ENVIRONMENT et al.

No. 60 Sept. Term 1995.

Court of Appeals of Maryland.

Dec. 20, 1996.

Mick G. Harrison (Richard E. Condit, on brief), Washington, DC, for Petitioner.

Lawrence P. Fletcher-Hill, Assistant Attorney General (Joseph J. Curran, Jr., Attorney General; Ann Marie DeBiase, Assistant Attorney General, on brief), Baltimore, for Appellee.

Deborah E. Jennings (Roger D. Redden, Gina M. Zawitoski, Piper & Marbury, L.L.P., on brief), Baltimore, for Respondent.

Charles W. Thompson, Jr., County Attorney (A. Katherine Hart, Senior Assistant County Attorney, Diane Schwartz Jones, Associate County Attorney, on brief) Rockville, for Montgomery County.

Andrea C. Ferster, Laura D. Middleton, Washington, DC, Amicus Curiae for Montgomery Cty.

Argued before MURPHY, C.J., ^* and ELDRIDGE, RODOWSKY, CHASANOW, KARWACKI and BELL, JJ.

ELDRIDGE, Judge.

The dispute in this case concerns the decision of the Maryland Department of the Environment (the Department) to issue two permits which authorized the construction of a solid waste incinerator near Sugarloaf Mountain in Dickerson, Maryland. A group comprised of local landowners, environmental organizations and citizens' groups challenged the Department's decision by filing in the Circuit Court for Montgomery County an action for judicial review under the Maryland Administrative Procedure Act, Maryland Code (1984, 1995 Repl.Vol.), § 10-222 of the State Government Article. ¹ The circuit court dismissed the action on the ground that none of the plaintiffs had standing to seek review of the Department's decision. The Court of Special Appeals affirmed. Sugarloaf v. Dept. of Environment, 103 Md.App. 269, 653 A.2d 506 (1995). We issued a writ of certiorari to determine whether the two courts below correctly interpreted and applied Maryland law regarding standing to maintain actions for judicial review of adjudicatory administrative decisions. Since we shall hold that both courts below erred with respect to standing, we shall also determine whether the administrative decision should be upheld on the merits in light of the judicial review criteria set forth in the Administrative Procedure Act, § 10-222(h)(3) of the State Government Article.

I.

The Potomac Electric Power Company (PEPCO) owned a tract of land, containing over 1,000 acres, in the Dickerson area of Montgomery County, Maryland. Two generating stations operated by PEPCO and auxiliary structures were on the tract. In 1987, PEPCO and Montgomery County entered into a transaction whereby the County purchased a 35-acre portion of the PEPCO tract to build a Resource Recovery Facility which would incinerate solid waste and would produce energy for sale to PEPCO. The facility was to be designed and constructed jointly by Montgomery County and the Northeast Maryland Waste Disposal Authority.

Among the several plaintiffs who opposed the construction of this facility were the Buchanans, owners of approximately 234 acres of land immediately adjacent to the PEPCO tract. About two hundred of the Buchanans' acres are devoted to farming, while the remaining acreage constitute woodland. ² The Buchanans' property is located approximately 2,000 feet from the facility, and is separated from the PEPCO property by a narrow road. ³

In 1988 Montgomery County and the Northeast Maryland Waste Disposal Authority filed an application with the Department for a Prevention of Significant Deterioration (PSD) permit, the first permit in the PSD permit process required by the federal Clean Air Act, 42 U.S.C. § 7401 et seq., the Maryland Air Quality Control statutes, Code (1982, 1996 Repl.Vol.), Title 2 of the Environment Article, and implemented by the Air Management Administration of the Maryland Department of the Environment. ⁴

The present case had its genesis in this Court's opinion in Sugarloaf v. Waste Disposal, 323 Md. 641, 594 A.2d 1115 (1991) (Sugarloaf I ), where some of the present plaintiffs argued that they were entitled to a "contested case" administrative hearing on the application by the County and the Authority for the PSD approval permit. ⁵ In rejecting this argument, we held that, although a full contested case hearing was available upon an application for a construction permit, it was not available at the PSD approval stage. ⁶ The Court did not, however, determine whether any of the plaintiffs would have standing to seek judicial review of a Department decision to issue a construction permit. Sugarloaf I, supra, 323 Md. at 650-651 n. 6, 594 A.2d at 1119 n. 6.

In light of this Court's decision in Sugarloaf I, the Secretary of the Department delegated authority to the Office of Administrative Hearings, under Code (1984, 1995 Repl.Vol.), § 10-207 of the State Government Article, to hold a contested case hearing on the issue of whether a permit to construct should be issued to the applicants. The Secretary later expanded this authority to include consideration of whether a refuse disposal permit should be issued. ⁷ The Secretary also requested that the Administrative Law Judge (ALJ) "entertain arguments on the issue of standing and make findings." ⁸ Thereafter, Administrative Law Judge Suzanne S. Wagner conducted a 15-day hearing on these issues.

After the conclusion of the hearing, the ALJ submitted an opinion containing extensive findings and conclusions as well as a proposed order. The ALJ concluded: (1) the construction and refuse disposal permit applications conformed to applicable federal and state law, and the permits should be issued; (2) all of the plaintiffs lacked standing either under the Maryland Environmental Standing Act, Code (1974, 1989 Repl.Vol., 1995 Cum.Supp.), §§ 1-501 through 1-508 of the Natural Resources Article, or under Maryland common law principles of standing embodied in the Administrative Procedure Act, § 10-222(a) of the State Government Article, to bring an action challenging the Department's decision to issue the permits. ⁹ The Department adopted, without modification, the ALJ's findings, conclusions, and proposed decision, and issued the two permits.

The plaintiffs then brought the present action in the Circuit Court for Montgomery County, seeking judicial review of the final administrative decision. The circuit court, in a brief order, dismissed the action on the ground that all of the plaintiffs lacked standing to seek judicial review of the administrative decision.

The Court of Special Appeals, agreeing that the plaintiffs lacked standing, affirmed. Sugarloaf v. Dept. of Environment, supra, 103 Md.App. 269, 653 A.2d 506. In its opinion, the Court of Special Appeals indicated that the standing issue in the present case concerned the plaintiffs' standing to bring a judicial review action in the circuit court and not their standing to be parties at the administrative hearing. The intermediate appellate court thus stated (103 Md.App. at 277, 653 A.2d at 510):

"To have standing under common law principles to challenge a final order or decision of an administrative agency entered in a contested case, a person must show two things--that he was a party to the administrative proceeding and that he is 'aggrieved' by the agency's order or decision. Medical Waste v. Maryland Waste, supra, 327 Md. 596, 612 A.2d 241 (1992); Bailey v. Dep't. of Public Safety, 333 Md. 397, 635 A.2d 432 (1994). There is no question here that appellants were parties to the administrative proceeding; with the county's acquiescence, they were permitted to participate in the proceeding, and they did participate by giving evidence and presenting argument. The only question is whether any of them were 'aggrieved,' in the legal sense."

The Court of Special Appeals also pointed out that, in determining whether the plaintiffs were "aggrieved" by the final administrative decision and thus had standing to bring a judicial review action, a court may look to the evidence adduced at the administrative hearing as well as the pleadings and any evidence submitted to the circuit court. The Court of Special Appeals, however, went further and held that, in determining whether plaintiffs had standing to bring a judicial review action, the findings and conclusions of the ALJ regarding standing could be accepted if supported by substantial evidence. The intermediate appellate court stated (103 Md.App. at 279, 653 A.2d at 511):

"Where ... the issue of standing has been litigated at the administrative level and findings based on substantial evidence have been made, the court need not relitigate that issue de novo."

The Court of Special Appeals reviewed some of the evidence concerning the emission of "toxic and potentially harmful" substances from the facility, and a "study carried out for Montgomery County ... showing that more of these emissions will likely fall on [plaintiffs'] properties than on properties much farther from the site." 103 Md.App. at 280, 653 A.2d at 511. The appellate court next pointed to the ALJ's findings discounting certain evidence that the emissions " 'may have unacceptable levels of ... arsenic, mercury, dioxins, and PCB's,' " and the ALJ's findings that the emissions would be "insignificant or well within acceptable limits established by national health and environmental agencies." 103 Md.App. at 281, 653 A.2d at 512. The Court of Special Appeals then concluded (ibid.):

"As we have indicated, where the issue of standing has been fully litigated by the agency, parties do not achieve the status of aggrieved persons gratis, or based on bare allegations, or solely on evidence they have produced. A court is entitled to credit the agency's findings if there is substantial evidence in the record as a whole to support them. Here, there was."

The plaintiffs filed a petition for a writ of certiorari challenging the Court of Special Appeals' decision on the standing issue, and we granted the petition. During oral...