Brod v. Agency of Natural Resources

Brod v. Agency of Natural Resources (2006-032)

2007 VT 87

[Filed 24-Aug-2007]


       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.


                                 2007 VT 87

                                No. 2006-032


  Ernest Brod and Residents Concerned            Supreme Court
  About Omya
                                                 On Appeal from
       v.                                        Washington Superior Court


  Agency of Natural Resources                    February Term, 2007


  Helen M. Toor, J.
    
  David K. Mears, Environmental and Natural Resources Law Clinic, South
    Royalton, for  Plaintiffs-Appellants.

  William H. Sorrell, Attorney General, and Bridget C. Asay and Holly A.
    Harris, Assistant Attorneys General, Montpelier, for Defendant-Appellee.


  PRESENT:  Dooley, Johnson, Skoglund and Burgess, JJ., and 
            Davenport, Supr. J.,  Specially Assigned

       ¶  1.  BURGESS, J.  Plaintiffs Ernest Brod and Residents Concerned
  About Omya appeal a superior court order dismissing their complaint
  challenging the validity of a now defunct administrative rule adopted by
  defendant Agency of Natural Resources (ANR).  Plaintiffs' complaint alleged
  that the rule resulted in waste from a neighboring mining operation
  polluting the environment.   The trial court dismissed plaintiffs' action
  for lack of standing.  We affirm.
   
       ¶  2.  Plaintiffs "must demonstrate standing for a court to have
  jurisdiction over a petition for declaratory relief."  Parker v. Town of
  Milton, 169 Vt. 74, 77, 726 A.2d 477, 480 (1998).  Accordingly, our review
  of dismissal for lack of standing is the same as that for lack of subject
  matter jurisdiction.  We review the lower court's decision de novo,
  accepting all factual allegations in the complaint as true.  Town of
  Bridgewater v. Dep't of Taxes, 173 Vt. 509, 510, 787 A.2d 1234, 1236
  (2001). 

       ¶  3.  Plaintiffs' complaint asserts the following relevant facts. 
  Omya operates a quarry in Florence, Vermont that produces calcium
  carbonate.  As part of its production process, Omya grinds marble ore and
  mixes it with water to produce calcium carbonate in slurry form.  It then
  uses various "flotation" chemicals and bleaching agents to purify or
  separate the calcium carbonate.  The waste from this purification process,
  known as the tailings, is deposited into open, onsite pits and quarries
  called Tailings Management Areas.  On several occasions, tailings from
  Management Areas have spilled.  Plaintiffs live near Omya's facility and
  are concerned that such tailings are harmful to public health and the
  environment.
   
       ¶  4.  ANR is charged with administering the Solid Waste Management
  Act, 10 V.S.A. §§ 6601-32 ("the Act"), and promulgating rules to implement
  it.  Id. § 6603.  The Act defines "solid waste" broadly to include
  discarded mining material and provides just two exemptions to the
  regulation of solid waste.  Id. § 6602(2).  ANR enacted eleven additional
  exemptions pursuant to its rule-making authority.  Solid Waste Management
  Rules ("Rules") § 6-301(b), 8 Code of Vermont Rules 12 036 003-6.  One such
  exemption, the so-called earth materials exemption, excludes from
  regulation "earth materials resulting from mining . . . except where the
  [ANR] Secretary determines that these materials may pose a threat to public
  health and safety, the environment, or cause a nuisance."  Id. §
  6-301(b)(2).  For a number of years, until 2003, ANR declined to regulate
  Omya's disposal and storage of tailings under the agency's Solid Waste
  Management Program, having determined that the waste fell within the
  regulatory exemption for earth materials.  Plaintiffs' complaint alleges
  that the earth materials exemption exceeded ANR's statutory authority and
  conflicted with the Act.
   
       ¶  5.  In 2002, Omya requested the Director of ANR's Solid Waste
  Management Program to confirm Omya's exemption from regulation in
  connection with the company's application for a land use permit.  In
  response, the Director preliminarily determined that Omya's tailings
  constituted earth materials and were therefore exempt from regulation. 
  Plaintiffs requested that this decision be reconsidered, and in November
  2003, the Commissioner of Environmental Conservation issued a final
  determination, concluding that although the tailings fit the definition of
  "earth materials," they were nevertheless subject to regulation because the
  tailings' chemical content "may pose a threat to human health and safety,
  the environment, or create a nuisance."  Omya then asked the Secretary of
  ANR to review the Commissioner's determination.  Plaintiffs also requested
  review, asking the Secretary both to confirm that Omya's tailings were not
  exempt earth materials and to declare unlawful the earth materials
  exemption itself.  The Secretary, without overturning the Commissioner's
  prior decision, remanded the matter to the Commissioner to give the parties
  an opportunity to supplement the record and to give the Commissioner the
  opportunity to consider any additional information.  On remand, the
  Commissioner appointed a designee to review the final determination.  While
  declining to consider the validity of the earth materials exemption, the
  designee concluded that the tailings fell outside of the exemption, because
  two chemicals contained in the waste posed a threat to public health and
  the environment.  In April 2005 the Commissioner issued his decision on
  remand, again concluding that Omya's tailings were not exempt from
  regulation because of the potential threat to public health.  No further
  review of the Commissioner's determination was sought. 


       ¶  6.  In November 2004, prior to the Commissioner's decision on
  remand, plaintiffs filed this suit asking the Washington Superior Court to
  declare the earth materials exemption unlawful and to issue a prospective
  injunction prohibiting ANR from granting Omya, or any other entity, that
  exemption in the future.  ANR responded by moving to dismiss, claiming: (1)
  plaintiffs lacked standing because ANR had already ruled that the exemption
  did not apply to Omya's tailings, and thus no case or controversy existed;
  and (2) the court should refuse to exercise jurisdiction because the
  doctrines of primary jurisdiction and exhaustion of administrative remedies
  prohibited it from doing so while the parties participated in an ongoing
  administrative proceeding.  The trial court ruled that plaintiffs' alleged
  injury, the potential environmental impact of the earth materials
  exemption, was not an injury to a legally protected interest, because ANR
  had already determined that the exemption did not apply to Omya.  The court
  also found that it could not redress plaintiffs' alleged injury, because
  any ruling that the exemption was invalid would not change "the current
  state of affairs" with respect to Omya.  Finally, the court concluded that
  it could not rule on the overall validity of the exception because
  plaintiffs could not demonstrate that they would suffer any harm from its
  existence. (FN1)  Deciding that plaintiffs lacked standing, the court
  declined to reach the issues of primary jurisdiction and exhaustion of
  administrative remedies. 
                    
       ¶  7.  Plaintiffs brought their challenge pursuant to 3 V.S.A. §
  807, which provides, in relevant part: 

    The validity or applicability of a rule may be determined in an
    action for declaratory judgment in the Washington superior court
    if it is alleged that the rule, or its threatened application,
    interferes with or impairs, or threatens to interfere with or
    impair, the legal rights or privileges of the plaintiff. 

  While § 807 grants Washington Superior Court jurisdiction to hear
  challenges to a rule adverse to  plaintiffs' legal rights, the statute does
  not eliminate the prerequisite of a justiciable controversy.  Williams v.
  State, 156 Vt. 42, 59-60, 589 A.2d 840, 851 (1990).  The statutory
  authority "to award declaratory judgments does not permit litigants to
  raise such claims, by their own bootstraps, where jurisdiction is otherwise
  lacking."  Id. at 58-59, 589 A.2d  at 850.  Rather, § 807 codifies the
  injury-in-fact and actual-case-or-controversy requirements of standing. 
  Consequently, plaintiffs must still demonstrate "a personal injury
  traceable to the defendant's conduct that the court can remedy by granting
  the sought-after relief." Brigham v. State, 2005 VT 105, ¶ 16, 179 Vt. 525,
  889 A.2d 715.

       ¶  8.  Vermont courts are vested with subject matter jurisdiction only
  over actual cases or controversies involving litigants with adverse
  interests.  Agency of Natural Res. v. U.S. Fire Ins. Co., 173 Vt. 302, 306,
  796 A.2d 476, 479 (2001).  To have a case or controversy subject to the
  jurisdiction of the court, the plaintiffs must have standing.  See
  Hinesburg Sand & Gravel Co. v. State, 166 Vt. 337, 341, 693 A.2d 1045, 1047
  (1997) (recognizing that "standing doctrine is fundamentally rooted in
  respect for the separation of powers of the independent branches of
  government.").  In the absence of standing, any judicial decision would be
  merely advisory, and Vermont courts are without constitutional authority to
  issue advisory opinions.  Parker, 169 Vt. at 77, 726 A.2d  at 480. 
   
       ¶  9.  For standing, plaintiffs must present a real - not merely
  theoretical - controversy involving "the threat of actual injury to a
  protected legal interest" rather than "merely speculating about the impact
  of some generalized grievance."  Id. (quoting Town of Cavendish v. Vt.
  Public Power Supply Auth., 141 Vt. 144, 147, 446 A.2d 792, 794 (1982)).  To
  satisfy this burden, plaintiffs must "show (1) injury in fact, (2)
  causation, and (3) redressability."  Id.  An  injury in fact is defined as
  an "invasion of a legally protected interest."  Hinesburg Sand & Gravel
  Co., 166 Vt. at 341, 693 A.2d  at 1048 (citation omitted).  In a suit for
  declaratory judgment, an injury in fact must be reasonably expected and not
  based on fear or anticipation.  Robtoy v. City of St. Albans, 132 Vt. 503,
  504, 321 A.2d 45, 46 (1974).  

       ¶  10.  When a suit for declaratory judgment challenges "the legality
  of government action or inaction," and the plaintiff's alleged injury is
  not a direct result of that government action, the plaintiff often has a
  greater burden in showing injury in fact.  Lujan v. Defenders of Wildlife,
  504 U.S. 555, 561-62 (1992).  This is because, unlike conduct expected to
  directly cause a plaintiff's injury, a plaintiff's injury arising out of
  allegedly unlawful regulation (or lack of regulation) of a third party is
  dependent upon the response of that third party to the regulation.  Id. 
  The plaintiff then has the burden to show that the third-party's response
  to regulation will "produce causation and permit redressability of injury." 
  Id.    
   
       ¶  11.  Plaintiffs' claimed injury is that ANR's application of the
  earth materials exemption to Omya's operation poses a threat to their
  health, the general public's health, and to the environment. (FN2)  The
  claimed injury lacks merit, because ANR decided not to exempt Omya from
  regulation.  Indeed, ANR required Omya to certify compliance of the entire
  facility under the Act.  At no point during the course of this lawsuit,
  including at the time of filing, did ANR apply or threaten to apply the
  earth materials exemption to Omya's tailings.  As a result, plaintiffs
  cannot establish that the government regulation they seek to have enforced
  will have any effect on the third party causing the alleged harm, Omya,
  because the regulation sought was already applied before the suit was
  filed.    
   
       ¶  12.  Plaintiffs' contention that the ANR Secretary might have
  reversed or still could change its determination does not change the
  analysis or the result.  While the alleged injury need  only be threatened
  to establish standing, Town of Cavendish, 141 Vt. at 148, 446 A.2d  at 794,
  the threat must be real and apparent.  An abstract potential for a change
  in regulatory course, either when the superior court action was commenced
  or even now, raises a purely speculative injury that cannot form a basis
  for declaratory relief.  See Ladd v. Valerio, 2005 VT 81, ¶ 3, 178 Vt.
  614, 883 A.2d 764 ("[W]e have stated that the availability of declaratory
  relief turns on whether the plaintiff is suffering the threat of actual
  injury to a protected legal interest, or is merely speculating about the
  impact of some generalized grievance." (citation omitted)).  Thus,
  plaintiffs' comparison of this case to Richards v. Town of Norwich, 169 Vt.
  44, 226 A.2d 81 (1999), is unpersuasive.  In Richards, the plaintiff
  challenged town approval of a neighboring property's septic system that did
  not conform to state or municipal standards, and we held that "the
  potential to create an olfactory nuisance" created by issuing a permit for
  the project was a sufficient threat of injury to confer standing.  Id. at
  49, 726 A.2d  at 83.  Here, unlike in Richards, Omya could not, either at
  the time the case was filed or now, legally proceed with the actions that
  will cause the alleged potential injury.  That ANR relied upon the
  exemption to justify non-regulation of the tailings in the past is not
  sufficient to make the potential for future non-regulation anything more
  than speculative.

       ¶  13.  Finally, plaintiffs cannot sustain a facial challenge to the
  validity of the earth materials exemption absent a context in which its
  application adversely affects plaintiffs' interests.  The exemption does
  not now apply to Omya.  Assuming the mere existence of the regulation, it
  does not have an impact on plaintiffs at all.  Plaintiffs must be directly
  affected by a government action, rule or law in order to have standing to
  challenge it.  Lujan, 504 U.S.  at 563.  They must stand among persons
  actually affected by, not just concerned about, the regulation and its
  administration in order to satisfy the injury-in-fact requirement.  Id. 
  Plaintiffs cannot establish that ANR threatens to apply the exemption to
  Omya, and so cannot prove their interests are imperiled by the exemption,
  or that they are otherwise directly affected by ANR's future enforcement or
  lack of enforcement of the Rules.  As a result, they have no standing to
  challenge the validity or application of a purely theoretical regulatory
  exemption not actually in play.

       ¶  14.  The trial court was correct in determining that plaintiffs
  lack standing.  The court did not err in dismissing plaintiffs' claim for
  lack of subject matter jurisdiction.  We need not reach the issues of
  primary jurisdiction and exhaustion of administrative remedies.   

       Affirmed.  
       


                                       FOR THE COURT:


                                       _______________________________________
                                       Associate Justice


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                                  Footnotes


FN1.  ANR has since abolished the exemption and so now urges that the issue
  is moot.  Because the case is resolved on grounds of standing, we need not
  address the question of mootness.

FN2.  Plaintiffs' alleged concern about potential or possible adverse effects
  on groundwater from Omya's past exemption from regulation is irrelevant to
  the remedy sought by plaintiffs - declaratory judgment and an injunction
  against the future exemption of Omya's tailings - which is entirely
  prospective.