Mississippi Commission on Environmental Quality v. Bell Utilities of Mississippi, LLC
| Docket Number: | 2013-CC-00165-SCT | |
| Oral Argument: | 02-12-2014 | |
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| Supreme Court: | Opinion Link Opinion Date: 04-10-2014 Opinion Author: King, J. Holding: Affirmed in part, vacated in part and rendered. |
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| Additional Case Information: |
Topic: Environmental - Transfer of wastewater permit - Section 49-17-44(1) - Financial assurance regulations - Nonsignatory to agreed order - Administrative Procedures Act - Section 25-43-1.103(3)&(4) - Due process - Evidentiary hearings - Section 49-17-29(4)(b) - Interested party Judge(s) Concurring: Waller, C.J., Randolph, P.J., Lamar, Kitchens, Chandler and Pierce, JJ. Concur in Part, Concur in Result 1: Dickinson, P.J., With Separate Written Opinion Concur in Part, Concur in Result Joined By 1: Coleman, J. Procedural History: Admin or Agency Judgment Nature of the Case: CIVIL - STATE BOARDS AND AGENCIES |
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| Trial Court: |
Date of Trial Judgment: 01-08-2013 Judge: DEBORAH J. GAMBRELL Disposition: The chancery court revered the Permit Board, finding that its actions were arbitrary and capricious because it has not promulgated regulations on how to conduct a regulatory hearing and on when and whether to demand financial assurances prior to permit transfer. Case Number: 12-0470-GN-G |
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| Party Name: | Attorney Name: | |||
| Appellant: | Mississippi Commission on Environmental Quality, Mississippi Department of Environmental Quality and Mississippi Environmental Quality Permit Board |
LISA THOMPSON OUZTS, ROY FURRH |
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| Appellee: | Bell Utilities of Mississippi, LLC | KATHRYN H. HESTER |
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| Topic: | Environmental - Transfer of wastewater permit - Section 49-17-44(1) - Financial assurance regulations - Nonsignatory to agreed order - Administrative Procedures Act - Section 25-43-1.103(3)&(4) - Due process - Evidentiary hearings - Section 49-17-29(4)(b) - Interested party |
| Summary of the Facts: | Bell Utilities purchased the Black Creek Water and Wastewater systems in 2005 and vastly improved it. Bell entered into an Agreed Order with the Mississippi Department of Environmental Quality in which compliance issues were addressed, and in which Bell agreed to put up a $20,000 financial assurance that would be returned to Bell after two years of adequate compliance. In 2010, Bell sought to sell the Black Creek systems to Utility One, LLC, and to transfer the attendant permits to it. MDEQ refused to transfer Bell’s wastewater permit to Utility One unless Utility One put up a $20,000 financial assurance. Bell appealed to chancery court which reversed the Permit Board. The court ordered MDEQ and the Permit Board to promulgate regulations on how to conduct a regulatory hearing and on when and whether to demand financial assurances prior to permit transfer. MDEQ appeals. |
| Summary of Opinion Analysis: | MDEQ argues that “[t]he Permit Board denied transfer because of unresolved compliance issues.” However, the record shows that the Permit Board’s decision was not based solely, or even primarily, on compliance issues. MDEQ and the Permit Board made it clear that, notwithstanding the compliance and other issues, the permit would have been transferred had Utility One provided $20,000 in financial assurance. Section 49-17-44(1) provides that “[t]he commission shall establish by regulation the acceptable forms of financial security and the amount of financial security required for the various types and sizes of facilities.” Because the Commission has not established financial assurance regulations for wastewater treatment systems, the Permit Board cannot require financial assurance from an applicant such as Utility One. The Agreed Order states that it is between Mississippi Commission on Environmental Quality, the Mississippi State Department of Health, Bell, and Elliott (previous owner). The Agreed Order declares that no change in ownership of the system will relieve Bell of its duties under the Order and indicates that the Order applies to and follows Bell and does not follow the Black Creek System. The language of the Order indicates that, once Bell has achieved compliance as contemplated by the order, the order is no longer in effect. The Order indicates that the financial assurance provision is specific to Bell. The Agreed Order plainly does not apply to Utility One, a nonsignatory. Therefore, denying the permit transfer because of the lack of financial assurance from Utility One is beyond the power of the Permit Board, because the Commission has not promulgated financial assurance regulations for wastewater systems. Since the $20,000 was beyond the Permit Board’s authority to demand, and since it was the lone impediment to transferring the permit, the Permit Board’s decision is reversed and rendered. Section 25-43-1.103(3)&(4) of the Administrative Procedures Act provides that “[s]pecific statutory provisions which govern agency proceedings and which are in conflict with any of the provisions of this chapter shall continue to be applied to all proceedings of any such agency to the extent of such conflict only” and that “to the extent that the provisions of any other law conflict or are inconsistent with the provisions of this chapter, the provisions of such other law shall govern and control.” Even if the APA applies to evidentiary proceedings, the specific statute of the Permit Board, which is in conflict and inconsistent with the APA, trumps the APA because that statute is clearly permissive, not mandatory. Thus, the Permit Board is not required by the APA to promulgate rules and regulations for its evidentiary hearings. To the extent the chancery court judgment ordered the Permit Board and MDEQ to promulgate rules and regulations for its formal hearings, it was in error, as the agencies are not required to do so under the APA. Bell also argues that the Permit Board’s lack of rules and regulations are arbitrary and capricious because the lack thereof results in “ad hoc” procedures which do not allow for a fair and impartial hearing. Administrative agencies must afford minimal due process consisting of notice and an opportunity to be heard. Section 49-17-29(4)(b), which governs Permit Board hearings, provides that “[a]t a hearing, any interested party may present witnesses and submit evidence and cross-examine witnesses.” An “interested party” is defined as “any person claiming an interest relating to the property or project which is the subject of the permit action, and who is so situated that the person may be affected by the disposition of that action.” MDEQ is put on notice that, without formal rules and regulations, every proceeding before it may be subject to a claim of violation of some statutory or constitutional right of the complaining party. |
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