Neifert v. Dept. of Environment
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In the Circu it Court for W orcester Co unty Case No. 23-C-03-000298 IN THE COURT OF APPEALS OF MARYLAND No. 10 September Term, 2006 EUGENIA M. NEIFERT, ET AL. v. DEPARTMENT OF THE ENVIRONMEN T, ET AL. Bell, C.J. Raker Wilner Cathell Harrell Battaglia Greene, JJ. Opinio n by Rak er, J. Filed: November 14, 2006 Eugenia M. N eife rt, M elvin D. K rolczyk, and Teresa A. Krolczyk, appellants, own four lots in the Cape Isle of Wight subdivision in Worce ster Coun ty. Appellants have been denied sewer service and w etland fill permits and therefore are unable to develop their lots. We must decide whether the Maryland Department of the Environment violated appellants equal protection rig hts by denying sewer service and whether the denial of sewer and wetland fill permits cons titutes an unconstitutional taking. We shall hold that the denial of sewer service under the 1992 Policy satisfies rational basis review u nder equ al protection a nalysis and tha t appella nts did n ot suff er an un constitu tional tak ing. I. Appellan ts own four contiguous lo ts within the C ape Isle of W ight subdiv ision in Worcester County. Eugenia M. Neifert owns in fee simple lots 9, 10, and 11 and Melvin D. Kro lczyk and Teresa A. Krolczyk own in fee simple Lot 8. Eu genia Ne ifert acquired her lots by gift from her mother in 1975; her parents acquired title to the lots in 1962. The Krolczyks purchased their lot in 1974. The deed to each lot contains a restriction requiring that any [s]eptic tanks, sewage disposal systems and drinking water facilities shall co nform to a ll requireme nts established by the Maryland State Department of Health and the Worcester County Maryland Health authorities. Each of appellants lots also abut Marlowe Road, a dedicated b ut unimpro ved 40-f oot wide s treet. The Cape Isle of Wight subdiv ision was e stablished in th e early 1950 s and is comprised of land created by excavating canals in a tidal marsh and sidecasting the excavated material on both sides to cover the marsh and cre ate upla nds. Cape Isle of Wight contains 625 lots and, as of 1972, approximately 128 homes existed in the subdivision. Each of these homes used a sep tic system that was approved based on percolation tests that could be completed at any time throug hout the year. 1 In the mid-19 70's, a sewa ge disposa l problem d eveloped in the We st Ocean City area of Worcester County, Maryland.2 See Department of Environment v. Showe ll, 316 Md. 259, 558 A.2d 3 91 (19 89). Approximately half of the septic systems actively used in the area failed.3 Id. at 260, 558 A.2d at 391. Untreated sewage leaked into drinking water supplies and created a pu blic health hazard . Id. Worcester County responded to the situation by requiring that lots pass a seasonal p ercolation tes t conducte d during Ja nuary throug h April, the wettest mo nths of the yea r and wh en the wa ter table wa s at its highest. 4 As a resu lt, 1 A perco lation test is used to determine if the soil will absorb and drain water adequate ly enough to install and use a domestic sewage-disposal system. The testing procedure, generally speaking, involves digging several holes, filling them with water, and measuring the rate at which the water-level decreases. 2 Several cases h ave dis cussed the sep tic system f ailures in West O cean C ity. See Shanty Town Assocs. Ltd. P ship v. EPA, 843 F.2d 782 (4th Cir. 1988); Department of Environment v. Showell, 316 M d. 259, 558 A.2d 39 1 (1989); Shanty Town Assocs. Ltd. P ship v. Dep t of En v t, 92 Md. Ap p. 103, 607 A.2d 66 (1992). 3 The diff iculties presen ted by a high g roundw ater table and poorly drained soils were exacerbated by the fact that more people were residing in the area year-round as opposed to just the summer months. 4 Seasonal testing was required under Regulation 10.03.27, Governing the Installation of Private Water Supply and Sew age Disposal Systems a nd Directive Policy GS -6 ( GS-6 Policy ). -2- eighty to ninety p erce nt of new applications for s eptic perm its in Wes t Ocean C ity were denied. Id. In the Cape Isle of Wight subdivision, approximately 150 lot owners requested septic tank perm its from 1976-1979 and 148 of those requests w ere denied because th e lots were unable to pass the seasonal percolation testing. Appellants lots were among those denied on-site septic system permits in 1979 and they did not appeal this decision.5 A central sew age collectio n system wa s propose d for the West Ocean C ity area to allow for the development of new homes and b usinesses. Each of ap pellants four lots are located in the sewer system district. The considerable expense associated with the project required the County to seek additional funding from the State of Maryland and the U.S. Environmental Protection Agency (EPA). EPA s 1983 Final Environmental Impact Statement (EIS) concluded that EPA could o nly provide a c onstruction grant if certain restrictions were met. EPA s funds were conditioned on the system not providing sewer service to an y parcel of land within any wetlands, as defined by the U.S. Fish and Wildlife Service, or to any parcel of land within the 100 year floodplain if it was platted as a building lot afte r Ma y 31, 1977.6 EPA also required the Worcester County Sanitary Commission 5 The W orcester Co unty Depar tment of P ublic Health informed Melvin Krolcyzk on June 12, 1979 that Lot 8 was not buildable under Regulation 10.03.27, Governing the Installation of Private W ater Supp ly and Sewage Disposal Systems and Directive Policy GS6. The Worcester County Department of Public Health informed Eugenia Neifert on October 25, 1 979 that L ots 9 , 10 a nd 11 we re no t buildab le un der the G S-6 P olicy. 6 Executive Orders require federal agencies to evaluate the effects of their actions on floodplains and w etlands . Exec. O rder N o. 11,99 0, 42 F ed. Re g. 26,96 1 (Ma y 24, 1977); Exec. Order No. 11,988, 42 Fed. Reg. 26,951 (May 24, 1977). The Environmental Protection (contin ued...) -3- ( Sanitary Commission ) to submit maps that clearly delineated all non-service areas. The Maryland Department of Health and Mental Hygiene (DHMH) and the Sanitary Commission formalized their commitment to these restrictions in a Consent Order on June 28, 1983.7 The total sewer system cost was funded by the EPA (75%), the State of Maryland (12.5%), and Worcester Co unty (12.5%). The Worcester County Sanitary Commission hired the engineering firm of George, Miles & Buhr to create a set of m aps ( 1 984 M aps ) id entifying non-se rvice ar eas, i.e. those parcels that fell within wetlands as defined by the Fish and Wildlife Service or were located in the 100-year floodplain and were platted after 1977. The 1983 EIS maps were not relied upon because lot lines were not visible. Instead, George, Miles & Buhr created the 1984 Maps by enlarging N ational W etland Inve ntory maps d eveloped by the Fish an d Wildlife Service from large-scale aerial photography and superimposing them onto a map of the sewer service area. The 1984 Maps provided approximate wetland delineations and were used as general guidance in granting sewer service.8 6 (...continued) Agen cy is requi red to co mply wi th these Execu tive Or ders. 40 C.F.R . § 6.302 (2006 ). Appellants lots are located in the 100-year floodplain and were platted prior to 1977 so their lots are not precluded from eligibility for s ewer serv ice based o n the flood plain restriction set forth by EPA. 7 The regu latory functions and responsibilities of the Department of Health and Mental Hygiene related to this case even tually were tran sferred to the Departm ent of En vironmen t. See 1987 M d. Law s, Chap . 306 (es tablishin g the D epartm ent of E nviron ment). 8 Wetland delineations outline the borders around wetland areas. -4- According to the 1984 Maps, lots 8, 9, and 10 and much of the portions of Marlowe Road adjacent to th e lots contained wetlands.9 Appellan ts applied to D r. Donald Harting, the Health Officer of Worcester County, for sewer connections in 1985 and their request was denied.10 Dr. Harting s September 10, 1985 letter denied sewer system access because the southerly portion of Marlowe Road and lots 8, 9, 10, and 11 were classified as wetlands . . . [A]ll lots which are classified as wetlands are prohibited from connecting to the sewerage system. Appellan ts requested a review of D r. Hartin g s dec ision by R ichard B . Sellars, J r., Director of the Water Management Administration at DHMH. Director Sellars affirmed D r. Harting s decision to deny service because the Consent Order prohibited service for a ny lots within wetlands as defined by the Fish and Wildlife Service. Appellants appealed to the DHM H s Office of Hearings. On December 23, 1986, Arthur E. Cohen, a DHMH hearing examiner, affirmed Dr. Harting s decision to deny sewer service to Lots 9 and 10, but reversed the decisio n with r egard to Lots 8 a nd 11. The Final Decision Maker, Timmerman T. Daugherty, issued a Final Decision and Order on July 16, 1990 affirming Dr. Harting s 9 Lots 8 and 10 had small portions of wetlands, lot 9 was approximately 20-25% wetlands, and lot 11 was entirely upland. Almost a ll of Marlo we Ro ad adjacen t to lots 8, 9, and 10 was w ithin w etlands . 10 The Consent Order established a permit system for obtaining sewer serv ice where lot owners applied to the Worcester County Health O fficer for a permit. Lot o wners co uld then appeal to the Director of the Water Management Administration of the Department of Health an d obtain fu rther review pursuant to the Marylan d Adm inistrative Proc edure A ct. -5- denial of sewer service to all of appellants lots.11 Appellan ts sought judicial review in the C ircuit Co urt for W orceste r Coun ty. On July 16, 1991, the Circuit Court held that it was not error to base a wetland determination upon additional evidence which co nflicts with the 1984 Maps as the maps were not binding and held that Dr. Harting s decision to deny sewer service to appellants was not supported by substantial evidence . The Circuit Court remanded the case for the County to re-consider whether appellants lots qualified as wetlands . Appellan ts held the sew er service ap peal in abeyance while they pursued wetland permits and did not readdress the sewer service proceedings until 1998. By 1986, the Sanitary Commission was concerned that the 1984 Maps did not accurately show nontidal wetlands. At a meeting on February 7, 1986, representatives from the Worc ester Cou nty Sanitary District, the Department of Natural Resources and the U.S. Army Corps of Engineers ( Corps of Engineers ) met to identify lots, not then mapped as wetlands, that needed on-site investigations to determine accurate wetland delineations for a set of revised maps ( 1 986 Map s ).12 Appellan ts lots were in cluded in th e list for on-site investigation. Appellants lots had also been in spected in A pril of 1985 by individuals from the Corps of Engineers, the Department of Natural Resou rces, and the Worces ter County 11 The Final Dec ision Maker of th e Secretary of the Depa rtment of th e Environ ment, as opp osed to the DH MH , determ ined this case. See supra note 7. 12 Formally, the 1986 Maps are labeled as the 1984 Maps with amended revisions. -6- Health Departm ent. 13 As a result of these visits and investigations, appellants lots on the 1986 Maps w ere reclassifie d as contain ing 60-100% mapped w etlands.14 The Co unty continued to use the 1986 Maps as guidance, but sewer service was denied to any property mapped as a wetland or any property defined as a wetland under the applicable Fish and Wildlife Service delineation. Thus, up until 1992, any property within wetlands was denied sewer serv ice, wheth er mappe d or not. 15 In 1991, the Maryland Department of the Environment ( Department ) became aware that many lot owners who had invested in the purchase of lots in reliance on the wetland guidance maps felt that their investment-backed expectations were frustrated by the 13 This investigation wa s initiated by the ow ner of lot 7 in order to dete rmine his eligibility for sewer service. While evaluating the lot 7 property, it was determined by the experts from th e Corp s of En gineers , the Depa rtment of Natural Resources, and the Worcester County Health Department that the southerly portio n of M arlowe R oad and lo ts 8, 9, 10, and 1 1 were w etlands. An on-site visit was completed by the same agencies on September 26, 1985. Additionally, on July 14, 1986, Robert Zepp of the U.S. Fish and Wildlife Service made a site visit of appellants properties. 14 Lot 8 is depicted a s 90% w etlands, lot 9 is 1 00% w etlands, lot 10 is approxim ately 75% wetlands , and lot 11 is approximately 60% wetlands. All of Marlowe Road adjacent to lots 8, 9, 10, and 11 is designated as wetlands. 15 Specifically, between 1984 and 1992, sew er service was denied to (1) lots that contained mapped wetlands, as field-verified, and (2) lots that were not mapped as wetlands but that turned o ut to contain wetlands after a we tland delinea tion. How ever, the C ounty would grant sewer service to a lot partially within wetlands if the own er could de monstrate that the lot satisfied the structures test, meaning that all buildings and ancillary structures would be constructed within the upland portions of the lots. -7- application of new wetland delineation methodologies. 16 As a result, the Department requested that EPA reconsider the Consent Order s prohibition of sewer serv ice for lots within wetlands in light of the recent implementation of the Corps of Engineers Federal Manual for Identifying and Delineating Jurisdictional Wetlands ( 1989 Federal Man ual ). Interior lots were cla ssified as w etlands even though they were identified on the guidance maps as entirely non-wetland as a result of the application of the 198 9 Federa l Manu al in West Oce an C ity. 17 In response, the Departm ent, after con sulting with the Worc ester Cou nty Sanitary Commission, proposed a change in how the Consent Order would be implemented. The Department wrote EPA on November 20, 1991, seeking its concurrence with the proposed policy chang e. In its letter, the Department summarized the difficulties the 1989 16 Worces ter County an d Maryland Departm ent of En vironment were promp ted to propose a change to the interpretation of the Consent Order when an entire block of interior lots in Section C of the C ape Isle of Wight subdivision, which had been issued building permits and we re not close to the wetlan d line on th e guidance maps, were defined as wetlands under the Corps of Engineers Federal Manual for Identifying and Delineating Jurisdictional Wetlands and, as a result, denied sewer service. 17 The presence of non-ma pped w etlands w as always gro unds for s ewer serv ice denial, but use of the 1989 Federal Manual by the Corps of Engin eers resulted in identification of more wetlands during the b uilding con struction perm it process. Prior to 1989, the definition of wetlands used by the Corps of Engineers required a positive wetland indicator be present for each para mete r (vegeta tion, soils and hydro logy) while th e Fish and Wildlife Service required only a positive indicator for any one of the three param eters. See U.S. A RMY C ORPS OF E NGINEERS E NVIRONM ENTAL L ABORATORY, C ORPS OF E NGINEERS W ETLANDS D ELINEATION M ANUAL, Tec hnic al Re port Y-8 7-1, U.S . Arm y Eng inee r Wa terw ays Experiment Station , Vicks burg, M S (1987). As the Corps of Engin eers was m ore likely to identify wetlands under the 1989 Federal M anual, sewer service to the building would be denied because the structure was located in a wetland, regardless of how that wetland was defined and even if the lot owner had secured a construction permit under the 1989 Federal Man ual. -8- Federal Manual had caused as follows: Cases have arisen of late where lot owners relied on the maps of record and determined that sewer service was available. They then arranged financing, only to find that they were precluded from proceeding with construction due to the discovery of wetlands on the pro perty. The disc overy wou ld come a s a result of the later use o f a more s tringent def inition of the term wetlands. At that point the lot owner w ould attempt to work with the proper wetlands regulatory authorities to gain approval to construct the proposed building. The problem is, how ever, that if the lot owner was successful in securing a permit from the Corps of Engineers to construct a building, sewer service to that building would b e denied u nder the pre mise that service to a structure in a wetland, no matter how or when that wetland came to be defined, is prohibited under the terms of the Consent Order. While field verifications of the guidance maps in 1985 and 1986 adjusted the wetland boundaries of lots already reflected on the 1984 maps as containing wetlands, implementation of the 1989 Federal Manual resulted in large blocks of interior lots those not close to mapped wetland lines being defined as wetlands. The Department realized that individuals who had purchased lots in reliance on the maps found that they were no longer able to build on their lots because, based on the delineation methods in the 1989 Federal Manual, their lots were now categorized as wetlands. As more lots became ineligible for sewer service, the Department also became concerned about the C ounty s ability to retire the debt it had a ssumed in order to fina nce its share of the p roject. The Department proposed what it believed to be a reasonable solution to the problem that would not contraven[e] the purpose or intent of the consent order or -9- grant co ndition . 18 The De partment e xplained a s follows: Our proposal is to allow the wetlands delineation procedures that existed at the time of the signing of the Consent Order to be utilized for the purpose of determining a lot s ability to receive sewer service. If post-Consent O rder wetland delineations a re conducted using current delineation procedures, which presuma bly result in a larger expanse of land defined as wetlands, then the matter falls outside of the scope of the Consent Order. Resolution of the matter would lie between the lot owner a nd the Co rps of En gineers. If th e final outco me is the issuance of a wetlands construction permit and construction does not infringe upon the wetland areas defined under the procedures that existed as of 1983, then sewer service would be allowed. In 1992, EPA responded to the Department by expressing its adoption of the Departmen t s proposal in two sep arate letters, one to the Corp s of Eng ineers and o ne to the D epartmen t. EPA sta ted in its letter to the Corps of Enginee rs as follow s: Specif ically, we have interpreted the implication of wetland delineation methodology changes since 1983 and the impact of these ch anges o n sew er hook up eligib ility . . . [W]e interpret the restrictions of the 1983 E IS to apply to on ly those wetlan d areas origina lly identifie d in the 1 983 E IS. Those areas outside of the 1983 delineation but within current jurisdictional wetland boundaries will be eligible for hook up provided they receive a Section 404 permit, a 401 Water Quality Certification, a State Non-Tidal Wetlands permit or other authorization and all other required State and local permits. 18 Unde r 40 C.F .R. § 35.965, E PA s R egional A dministrator m ay impose sa nctions if the Administrator determines that a grantee has not complied with the terms of a grant for construction of a sewer system. Sanctions authorized by 40 C.F.R. § 35.965 include termination of the grant, suspension of work, or a determination that the grantee is ineligible for future Federal assistance. -10- Under this 1992 Policy, parcels lacking mapped w etlands on the 1986 maps were granted sewer service if they obtained all necessary wetland fill permits.19 At least 26 lo ts have obtained th e proper fill p ermits and were granted sewer service under the 1992 Po licy; each of these lots contained u nmapped w etlands ( List of 26"). 20 Conversely, lots with mapped wetlands were ineligible for sewer service according to the 1992 Policy unless all buildin gs and ancillary st ructure s could be loca ted on u plands , i.e. meet the structures test. No sewer service has been granted to a mapped wetland lo t. Appellants lots contain mapped wetlands under the delineation methodology in place as of 1983.21 In 1992, appellants filed a joint application with the Department of Natural Resources to fill the nontidal wetlands delineated on their four lots and the adjacent Marlowe Road. 22 The Department of Natural Resources denied appellants applications in February 1993, 19 The 198 3 delineation referred to in the EPA policy letter dated March 24, 1992 refers to all wetland guidance maps that were developed in response to the Consent Order, i.e. the 198 3, 1984 and 19 96 M aps. 20 The actual number of lots may be as low as 25 because of a duplicate lot listing or more than 50, according to the testimony of Richard L. Wells, Director of Environmental Programs. We use List of 26" because this is the number of lots listed in an exhibit as nonmapped lots that are, on the g round, actu al in fact wetlands and received sewer service under the 1992 Policy. The C ircuit Court u tilized the num ber 25 be cause it was thought that one lot was listed in d uplicate on the L ist of 26 . 21 Lots 8, 9, and 10 and Marlowe Road contained mapped wetlands on the 1984 Maps. Lots 8, 9 , 10, and 11 and Marlo we R oad co ntained mapp ed we tlands o n the 19 86 M aps. 22 As of July 1, 1995, the regulatory functions and responsibilities of The Department of Natural Resources s Water Resources Administration were transferred to the Maryland Department of the Environment s Water Management Administration. 1995 M d. Laws, Chap. 488. -11- finding that the econ omic benefits did not outw eigh the eco logical costs and that ap pellants had not demonstrated that the project was nec essary to meet a demons trated public need.23 Appellan ts sought administrative and judicial review. Appellants filed for a contested case hearing with the independent Maryland Office of Administrative Hearings. Administrative Law Judge Joan C. Ross held a hearing and issued a Recommended Decision on August 15, 199 4 that affirmed the D epartment of N atural Resources s denial of th e permit application. On April 21, 1995, Robert D. Miller, the Director of the Department of Natural Resources s Water Resources Administration, filed a Final Decision and Order also affirming the denial. Ap pellants sought judicial review in the Circuit Court for Worcester County. In April 1997, the Circuit Court for Worcester County held that the denial of a fill permit was not supported by substantial evidence and was arbitrary, capricious and erroneous as a matter of law beca use the D epartmen t of Natural Resources had not properly evaluated the econom ic and ecological value of the nontidal wetlands. The Court remanded the case to the Depa rtment o f the E nviron ment f or a new hearing . In August 1997, appellants filed additional wetland permits with the Department of the Environm ent. Follow ing a public hearing on the permit applications, the Department denied this second request for permits on October 13, 1998 because of the high value of the 23 During these proceedings, the Nontidal Wetlands Protection Act was moved from the Natural R esources A rticle to the En vironmen t Article in the Maryland Code. Regulations on the subject of nontidal w etlands were moved from COM AR A rticle 8 to CO MAR Article 26. The De partment o f Natural R esources was required to evaluate the economic and ecological value of nontidal w etlands under CO MAR 08.05.04.05 (D)(2)(d), cu rrently COM AR 26.23.02 .04 (D)(2)(d). -12- wetland functions and the lack of a demons trated public n eed for the ir proposed project. Appella nts filed for a contested case hearing with the Office of Administrative Hearings. Administrative Law Judge Geraldine A. Klauber filed a Recommended Order on January 6, 2000 affirming the Depa rtment s den ial of the perm it because the record reflected that the Department performed its statutory duty in reviewing the wetland fill permit applications. The Department s Final Decision Maker, A. Katherine Hart, filed a Final Decision and Order on May 9, 2001 affirming the decision to deny appe llants fill permits. Appellants did not seek judicial review. In 1998, appellants reinitiated their application for sewer service under the 1992 Policy. Richard L . Wells, the W orcester Co unty Environ mental Pro grams A dministrato r, denied sewer service to appellants in November 1998. Appellants filed for a contested case hearing. At the hea ring, appellan ts argued that the Department was interpreting EPA s 1992 Policy improperly and arbitrarily and that the Department s interpretation denied them due process. Administrative Law Judge L ouis N. H urwitz concluded that the Department did not act in an arbitrary and capricious manner in applying the 1992 Policy to appellants lots and affirmed the denial of service on February 10, 2000. The Department s Final Decision Maker, A. Katherine Hart, affirmed the denial of sewer service on November 16, 2001. Appe llants did not see k judicia l review . Appellan ts filed the present suit in the Circuit Court of Worcester County on April 3, 2003. Appellants sought damages and attorneys fees from the D epartmen t and, pursu ant to -13- 42 U.S.C. § 1983, from the officials responsible for the permit denials claiming the denial of equal protection and an unconstitutional taking under both the United States and Maryland Constitutions. The parties filed cross-motions for summary judgment and the Department filed a motion in limine, arguing that appellants were precluded from re-litigating the issue of whether their four lots w ere similarly situated with other w etland lots tha t had obtained sewer service under the 1992 Policy because they had litigated the same issue in the earlier contested case hearin g. The C ircuit Court h eld a hearing on the motions on April 18, 2005 and granted su mmary judg ment in the Department s favor on all counts, ruling that the denial of wetland fill permits and sewer hookups did not constitute a taking or violate appellants equal protection rights. Appellan ts noted a timely appeal to the Court of Special Appeals. We granted certiorari on our ow n initiative prior to decision by tha t court. Neifert v. Department of Environment, 393 Md. 160 , 900 A.2d 206 (2006). II. Before this court, appellants argue that the Department s denial of sewer service under the 1992 Policy denies them equal protection of the law under the Equal Protection Clause of the United States Constitution and A rticle 24 of th e Maryland Declaratio n of Righ ts because there is no rational basis for providing service to non-mapped wetlands lots and -14- denying service to mapped wetlands lots.24 Appellan ts assert also tha t the denial of sewer service and wetland fill permits has rendered their lots undevelopable and constitutes an unconstitutional taking of property without just compensation under the Fifth Amendment of the U .S. Con stitution a nd Ar ticle III, § 4 0 of the Marylan d Con stitution. The Department of the Environment responds that appellants equal protection c laim fails because th eir mappe d wetland lots are not similarly situated to the non-mapped wetland lots that were provided sewer service, an issue appellants are collaterally estopped from contesting, and that the 1992 Policy is rationally related to the Department s concerns about fairness, fiscal integrity, and ecological soundness. The Department asserts that appellants lots were undevelopable as of 1979 and that appellants have no constitutionally protected right to sewer access. Consequently, the Department contends, there was no unconstitutional taking a ssociate d with t he den ial of se wer se rvice. III. The standards for review of a trial court s grant of su mmary judg ment are w ellestablished. We review de novo the Circ uit Cou rt s gran t of sum mary jud gmen t. Livesay v. Baltimore, 384 Md. 1, 9, 862 A.2d 33 , 38 (2004). In reviewing a grant of summ ary judgmen t, we indep endently review the record to determine whether the parties pro perly 24 All of th e lots are contain ed on a record ed plat. The use of non-mapped and mapped lots refers to whether a lot was delineated as wetlands on a map of a particular agency as of a releva nt time. -15- generated a dispute of material fac t and, if not, w hether the m oving par ty is entitled to judgment as a ma tter of law . Id. at 9-10, 862 A.2d at 38. We review the record in the light most favorable to the non-moving party and construe any reasonable inferences that may be drawn from the f acts agai nst th e mo ving party. Id. at 10, 862 A.2d at 38. In the present case, both parties filed motions for sum mary judgment, there is no dispute of material fact, and the only que stions b efore u s relate to the app lication o f equa l protect ion and takings law. IV. We address first whether the Department of the Environment violated appellants equal protection rights by denying sewer service under the 1992 Policy. Appellants contend that the 1992 Policy, as applied, violates the Equal Protection Clause of the United States Cons titution a nd Ar ticle 24 o f the M aryland D eclaratio n of R ights. The Equal Protection Clause of the Fourteenth Amendment of the United States Constitution provides that no State shall deny to any person within its jurisdiction the equal protection of the la ws, and directs th at all persons s imilarly situated be treate d alike. Plyler v. Doe, 457 U.S. 202, 216, 102 S.Ct. 2382, 2394, 72 L.Ed.2d 786 (1982). Article 24 of the Maryland Declaration of Rights states [t]hat no man ought to be taken or imprisoned or disseized of his freehold, liberties or privileges, or outlawed, or exiled, or, in any manner, destroyed, or deprived of his life, liberty or property, but by the judgment of his peers, or by the Law of the land. Although Article 24 does not contain an express equal protection -16- clause, this Court h as held that th e concep t of equal pro tection is embodied within the Article. Frankel v. Bd. of Regents , 361 Md. 298, 312-13, 761 A.2d 324, 332 (2000) (quoting Renko v. McLean, 346 Md. 464, 482, 697 A.2d 468, 477 (1997)). United States Supreme Court cases applying the Equal Protection Clause of the Fourteenth Amendment are binding on this Court when applying that clause and are persuasive when applying Article 24 of the Decla ration o f Righ ts. Id. Appellan ts are not members of a suspect class and a fundamental right is not at issue; therefore, our standard of review is the traditional and deferential rational basis analysis. City of Cleburne v. Cleburne Living Ctr., 473 U.S. 432, 440, 105 S.Ct. 3249, 3254, 87 L.Ed.2d 313 (198 5) (reiterating th at any classification by rac e, alienage, o r national orig in is suspect and must be evaluated under a strict scrutiny stand ard); Broad water v . State, 306 Md. 597, 603, 510 A.2d 58 3, 586 (1986) (stating that gen eral rule of sustaining a statutory classification if it is rationally related to a legitimate state interest gives way when a statute classifies by race, alienage or national origin (quoting City of Cleburne v. Cleburne Living Ctr., 473 U.S . 432, 440, 1 05 S.Ct. 32 49, 3254 )); see Attorney General of Maryland v. Waldron, 289 Md. 683, 706, 426 A.2d 929, 942 (1981) (documenting fundamental rights or interests guaranteed by the federal constitution). Under rational basis review, a legislative classification is sustained if the classification is ration ally related to a legitim ate state interest. 25 See City of Cleburne, 473 U.S. at 440, 105 S.Ct. at 3254; Ehrlich v. P erez ex rel. 25 The majority of rational basis cases have involved judicial review of legislative (contin ued...) -17- Perez, ___ A.2d ___, 2006 WL 2882834, at *11 (2006). There is a strong presumption of constitutional validity when social or economic legislation is at issue. See City of Cleburne, 473 U.S. at 440, 105 S.C t. at 3254; Lamers Dairy, Inc. v. U.S. Dept. of Agric., 379 F.3d 466, 473 (7th Cir. 2004) (applying deference to agency established classification); Piscatelli v. Board of Liquor License Comm rs, 378 Md. 623 , 643, 837 A.2d 9 31, 943 (2003). In reviewing legislation, we have stated as follows: [E]qual protection is not a license for courts to judge the wisdom, fairness, or logic of legislative choices. In areas of social and economic policy, a statutory classification that neither proceeds along suspect lines nor infringes fundamental constitutional rights must be upheld against equal protection challenge if there is any reaso nably conce ivable state of facts that could provide a rational basis for the classification·A·A·A·A This sta ndard o f review is a para digm o f judicia l restraint . Maryland Aggreg ates Ass'n v. S tate, 337 Md. 658, 673, 655 A.2d 886, 893 (1995) (quoting FCC v. Beach Communications, Inc., 508 U.S. 307, 313, 113 S.Ct. 2096, 2101, 124 L.Ed.2d 211 (1993)). The rational basis test requires appellants to prove that (1) the government treated 25 (...continued) decisions, but the same basic standard of review applies to judicial review of administrative decisions. Nordlinger v. Hahn, 505 U.S. 1, 15-16 & n.8, 112 S.Ct. 2326, 2334-35 & n.8, 120 L.Ed.2d 1 (1992) (explaining that rational basis review applies to administrative decisions and that the standard of review is no different from the one applied to legislative classifications); Sunday Lake Iron Co. v. Wakefield Tp., 247 U.S. 350, 352, 38 S.Ct. 495, 495, 62 L.Ed . 1154 (19 18) ( Th e purpose of the equ al protection c lause of th e Fourteenth Amendment is to secure every person within the state s jurisdiction against intentional and arbitrary discrimination, whether occasioned by express terms of a statute or by its improper execution through d uly constituted agents. ). -18- them differently than it treated others similarly situated, and (2) the d isparate treatm ent did not bear a ration al relationship to a legitimate interest. Lawrence v. Texas, 539 U.S. 558, 579, 123 S.Ct. 2472, 2484, 156 L.Ed.2d 508 (2003) (O Connor, J., concurring) (noting that the Equal Pro tection Clau se is essentially a direction that all persons similarly situated should be treated alike (quoting City of Cleburne v. Clebu rn Livin g Ctr., 473 U.S. 432, 439, 105 S.Ct. 3249 , 3254, 87 L .Ed.2d 31 3 (1985))); Village of Willowbrook v. Olech, 528 U.S. 562, 564, 120 S.Ct. 1073, 1074, 145 L.Ed.2d 1060 (20 00); Broadwater, 306 Md. at 602, 510 A.2d at 585 (1986) (quoting City of Cleburne v. Cleburn Living Ctr., 473 U.S. 432, 439, 105 S.Ct. 3249, 3254, 87 L.Ed.2d 313 (1 985)). V. We turn to appellees argument that appellants are collaterally estopped from relitigating the finding in the earlier contested case that their lots are similarly situated to the non-mapped wetlands lots in the West Ocean City area that obtained sewer service. The Circuit Court held that appellants a re not collatera lly estopped fro m arguing that their lots are sim ilarly situate d. We a gree. An administrative agency s decision is given preclusive effect based on three factors: (1) whether the agency was acting in a quasi-judicial capacity, (2) whether the issue presented to the circuit court was actually litigated before the agenc y, and (3) whether resolution of the issue was necessa ry to the agency s decisio n. Batson v. S hiflett, 325 Md. -19- 684, 701, 602 A.2d 1191, 1200 (1992). The Department s final decision maker acted in a quasi-judicial capacity when she issued a Final Decision and Order on November 16, 2001 that affirmed Administrative Law Judge (ALJ) Hurwitz s recommendation to deny sewer service to Lots 8, 9, 10, and 11. The similarly situated issue was addressed in each parties briefs in connection with ap pellants due process claim. R esolution of the issue, how ever, was not necessary to the agency s decision. The ALJ and the Department s final decisionmaker could have denied appellants d ue proces s claims w ithout addre ssing the sim ilarly situated issue because appe llants were given full procedural due process and did not have a valid substan tive due proces s claim. La Chance v. Erikson, 522 U.S. 262, 26 6, 118 S.C t. 753, 756, 139 L.Ed.2d 695 (1998) ( The core of due process is the right to notice and a meaningful opportun ity to be heard. ); Front Royal and Warren County Indus. Park Corp. v. Town of Front Royal, 135 F .3d 275 , 286-87 (4 th Cir. 1998) (affirming that access to government provided sewer service is not a constitutionally protected right under V irginia law); Blue Cross v. Franklin Sq. Hosp., 277 Md. 93, 101, 352 A.2d 798, 804 (1976) ( Generally, due process requires that a party to a proceeding is entitled to both notice and an opportunity to be heard o n the issues to be decided in a case.). Moreover, our review of ALJ Hurwitz s Recommended Order on Remand indicates that the contested case focused primarily on whether lots 8, 9, 10, and 11 were eligible for sewer service and was not c oncerned with how the Depa rtment implemented the Consent Order for similarly situated lots that received sewer service. Although the Department s -20- Final Decision Ma ker conclu ded that, the lots were n ot treated diff erently than sim ilarly situated lots in the West Ocean City area, it is not apparent from the record h ow this decision was made. T he Departmen t s Final Decision M aker s conclusion was based on the determin ation by ALJ Hurwitz that the delineation procedures in place at the time of the Consent Order w ere proper ly applied to lots 8 , 9, 10, 11; A LJ Hurw itz did not dire ctly address whether the Department and the County properly applied the appropriate wetlands delineation procedures under the Consent Order to similarly situated lots. In fact, ALJ Hurwitz stated, [e]ven if [the Department] has implemented the Consent Order in an arbitrary and capricious manner regarding other lots, its treatment of those lots have no bearing upon the sewer service eligibility of Appellants lots. We hold that appellants are not collaterally estopped from asserting that their lots are similarly situated to the nonmap ped wetland s lots that o btain ed se wer serv ice u nder the 1992 Po licy. VI. Appellants properly raised the simila rly situated issue and we now determine it on the merits. We hold that appellants lots are not similarly situated to those lots that have received sewer service under the 1992 Policy. Appellants lots contain mapped wetlands and are not similarly situated to non-mapped wetland lots that received se wer connections . In fact, appellants concede that their lots constitute mapped wetlands; they concede also that the County has applied the distinction consistently between mapped and non-mapped wetland -21- lots to determine sewer service eligibility under the 1992 Policy. Lots 8, 9, and 10 contained a small area of mapped wetlands on the 1984 Maps and on the 1986 Maps (the revised 1984 Maps) each lot was 60-100% mapped wetlands. The List of 26 lots do not contain mapped wetlands on either of the Consent Order maps. The 1992 Policy distinguishes between mapped and non -mapped wetlands. Based on this distinction, appellants m apped lots are not sim ilarly situate d to non -mapp ed lots o n the L ist of 26 . VII. The distinction between mapped and non-mapped wetlands as used in the 1992 Policy bears a rational relatio nship to sev eral legitimate state interests. The distinc tion is rationally related to the State s legitimate interest in addressing the unfairness created by changing definitions of wetlands and ensuring the fiscal integrity of the sewer system while adhering to the en vironm ental res trictions s et forth in the C onsen t Order conditio ning E PA s g rant. By conditionin g sewer s ervice eligibility on the wetland guidance maps and the wetland delineation methodologies in place as of 1983, the 1992 Policy addresses fairness concerns by restoring property owners expectations; expectations that were established when they purchased lots in reliance on the maps and then eliminated when they were caught up in the implementation of new wetland delineation methodologies. As the State argues, the restoration of property owners expectations in turn addresses the Department s concerns about the solvency of the sewer system because the number of lots over which to spread the -22- cost of the system is maintained. Furthermore, in applying the service prohibition of the Consent Order to all of the lots reflected on the EPA mandated wetland guidance maps, the 1992 Policy ensure s that federa l funding of the sewer system does not result in the destruction of wetlands that were known to exist at the time the Consent Ord er was effectuated. The record reveals the Department s concern with fairness. The Department received letters from Jeff M umford and M att Engle in Septemb er 1991 appealing the Departmen t s determination on a July 29, 1 991 field v isit that their form erly buildable lots in West Ocean City were wetlands. Mr. Engle asserts that he believed the lots were totally buildable when purchased in August of 1991. Mr. Mumford s letter indicates that he paid the annual front foot assessment on his lots since it was imposed.26 The Department received an additional letter in January 19 92 from Lal Kesw ani s attorney. Th e letter stated tha t Mr. Keswani purchased his lot on November 21, 1989 after ensuring that it was eligible for sewer service under the Consent Order. Subsequently, Mr. Keswani was denied sewer service because of the identification of wetlands on his parcel. Each of these individuals relied upon the Consent Order m aps to their detriment and their cases demonstrate that the Department had a rational basis for seeking EPA assistance to address the unfairness created by the changing 26 A sewer system often charges an annual front foot assessment to repay the cost of constru ction. -23- definitions of wetlands.27 These letters demonstrate that the Department and County proposed the mapped/nonmapped distinction to address issues associated with the implementation of the Corps of Engineers 1989 Fe deral Ma nual. Spec ifically, the Adm inistrator of the Capital Pro jects Program at the Department, Angelo Bianca, wrote a letter to EPA on Nov ember 20 , 1991 to address issues of fairness and adherence to environmental restrictions.28 Mr. Bianca noted that use of the 1989 Federal Manual was unfair to lot owners who rely on the maps to square away the issue of sewer service and that a reasonable solution was to allow the wetlands delineation procedures that existed at the time of the signing of the Consent Order to be util ized fo r the pu rpose o f determ ining a lo t s ability to re ceive se wer se rvice. The Department s fairness concern is supported also by the confusion and criticism associated with implementation of the 1989 Federal Manual. The 1989 Federal Manual provided a uniform method for wetland delineations by the EPA, the Corps of Engineers, the Soil Conserv ation Servic e, and the F ish and W ildlife Service , but it was criticized for increasing the Corps of Engineers scope of regulatory jurisdiction under the Clean Water Act beyond historica l limits. See Michael C . Blum m, The Clinton Wetlands Plan: No Net 27 Appellants assert that the maps were not recorded in any public office, but the Consent Order requires that the map showing boundaries of the wetlands identified by Fish and Wildlife Service and the 100-yea r food plain s hall be a vailable for pu blic insp ection. The letters from individuals also indicate that the maps were accessible to prospective property owners and other parties. 28 See facts supra Part I fo r full tex t of the le tter. -24- Gain In Wetlands Protection, 9 J. Land U se & En vtl. L. 20 3, 20 8 (19 94); Mic hael S. N agy, The Definition of Wetlands Under Section 404 of the Clean Water Act: Past, Present, and Future, 3 U. Balt. J. Envtl. L. 92, 94-96 (199 3) (noting compan ies , farmers , and builders dislike of the Manual because it was too strict). In response to the criticism, the Corps of Engineers and E PA de velope d and p ublishe d for p ublic co mmen t on Au gust 14 , 1991 proposed revisions to th e 1989 F ederal M anual. 29 56 Fed. Reg. 40,446-01 (Aug. 14, 1991). On August 17, 1991, federal legislation was enacted that pre cluded the Corps o f Engineers from relying on the 1989 Fede ral Man ual. See Energy and Water Development Appropriations Act of 1992, Pub. L. No. 102-104, 105 Stat. 510, 518 (1991). As a result, the Corps of Engineers returned to using the 1987 M anual, thou gh it was n ot until January 1993 that EPA abandoned its attempt to incorporate revisions to the 1989 Federal Manual and that both the Corps of Engineers and EPA agreed to adopt the 1987 Manual for purposes related to the Clean Water A ct. See Nagy, 3 U. Balt. J. Envtl. L. at 95, 97. Thus, even after August 1991, there was little certainty regarding the standards for wetland delineations un til January 1993. In light of this his torical context a nd the letters f rom con cerned W est Ocean City residents, we are persuaded that the Department s desire to adopt the 1992 Policy was rationally related to a leg itimate state intere st in avoiding unfairnes s to those pro perty owners who were impacted by the introduction of the 1989 Federal Manual and its resulting wetland 29 Over 100,000 comme nts were su bmitted du ring the 210 day extende d public comment pe riod. 58 Fed. Reg. 4,99 5-01 (Jan. 19, 1993). -25- determinations. EPA articulated that fairness was an interest when it announced its approval of the 1992 Policy to the Baltimore District of the Corps of Engineers, [w]e base our findings on one of fairness to local long range planning efforts. The 1992 Policy clarified for all property owners that the wetland delineation procedures in effect were those that existed at the time of the Cons ent Orde r and, in doin g so, achiev ed a legitima te state interest. The 1992 Policy was also rationally adopted with a legitimate interest in protecting the fiscal integrity of the sewer system. The Department and Worcester County each provided 12.5% of the funding for the sewer system, a value of approxim ately 2.3 million dollars. On July 15, 1991, the Director of the Department s Water Management Administration, J.L. Hearn, wrote to the Corps of Engineers expressing his concern with the financial status of the sewer system: [T]here was an agreem ent reac hed be tween NRD C, EPA, MDE and the Sanitary Commission that allows sewer service to be provided in the 100 year floodplain to lots platted prior to June 1, 1977 and lots containing wetlands, provided there is enough upland area on which to situate a house and its supporting facilities. Had it not been for these two allowances on service, the number of connections to the sewer system would have been limited to existing homeo wners an d 500-year flo odplain developm ent. These two groups alone cou ld not have borne the entire local cost of the sewer system, and the decisio n would likely have been made in the planning stage not to go forward with the sewer project. Had this indeed been the decision, and [sic] the failing septic system p roblem the re would continue to exist today. In configuring the layout of the West Ocean City sewer system, the service allowances and the information known at the time relative to floodplain and wetlands boundaries were take n into -26- consideration. This was done by preparing drawings identifying environm entally sensitive areas. Thus, the planned sewer infrastructure and the later EPA grant were built upon a unique set of assum ptions and conditions th at carry conside rable weight in deciding th e fate of sewe r service in the are a. As su ch, I believe every effort sh ould be made to p ermit sew er service to platted lots as originally planned. The financial integrity and the physical integrity of the system depend on this happening. Appellants assert that there is no competent evidence demonstrating any existing or potential fiscal problem that wa s allevia ted by the adoptio n of the 1992 P olicy. We disagree. The letter by J.L. Hea rn of the D epartmen t to EPA presents a c onceivab le state of fac ts that could provide a rational basis for the classific ation. See Marylan d Aggregates A ss n, 337 Md. at 674, 655 A.2d at 894. Even though the Worcester County Sewer District s district engineer and person respo nsible for all fiscal matters stated that, [t]he District never had or foresaw any problem regarding its bond payments, it is undisputed that the Department had concerns about the fiscal integrity of the system.30 Angelo Bianca, Administrator of Capital Projects Pro gram at the Departm ent, stated in his affidavit: My concern arose of out my own e xperience . . . that the ability of the locality to pay off even a small share of projects costs typically no more than 12.5% is a concern that runs through every project the Maryland Department of Environment funds. 30 The affidavit of Norman Connell, the WCSD s district engineer and the person responsible for all fiscal affairs also stated: At no time, howev er, did the rejection or potential for rejection of sewer service to lots fronting on an orig inally installed sewer line (as to which the WCSD would have assessed and been collecting an annual front-foot charge) cause any fiscal problem or con cern that such rejections m ight impair the District s ability to pay back its bond indebtedness. -27- . . . I was concern ed about th e situation an d felt that, if something was not done to correct for the application of the 1989 [M]an ual, the San itary Comm ission may w ell begin to experie nce pro blems w ith the fis cal integ rity of the s ystem. Mr. Bianca s comments and the letter from the Department to EPA demonstrate that the Department was worried about the impact of the implementation of the 1989 Federal Manual and the resulting denial of sewer service to unmapped lots. The Department s adoption of the 1992 Po licy was rationa lly related to the Department s legitimate concern for the financ ial succe ss of the sewer system. Furthermore, the 1992 Policy is rationally related to the Department and the County s interest in adhering to the grant conditions imposed in the Consent Order which protect against development within the 100-year floodplain and wetlands as then defined. Rich ard L. Wells, the Worcester County Director of Environmental Programs, is responsible for implementing the Consent Order and his first affidavit submitted in the Circuit Court case stated as follows: During the first few years of implementing the C onsent Order, the system worked well. Although on-site delineations resulted in the discovery of some wetlands outside of those reflected on the wetland g uidance m aps, it was rare for a lot reflected as entirely upland on the guidance maps to be identified as wetlands through an on-site delineation. The Department and the Coun ty had an oblig ation to satisfy E PA s gra nt condition s and it is rational and in no way arbitrary that the D epar tmen t sou ght a return to a fam iliar p olicy, especially since the previous policy had implemented and satisfied EPA s requirem ents to -28- ensure protection of floodplain and wetland areas. See Hornbeck v. Somerset Co. Bd. of Educ., 295 Md. 597, 656-57, 458 A.2d 758, 789-90 (1983) (stating that a statutory classification enjoys a strong presumption of constitutionality and the party attacking it must show by clear and convincing evidence that it does not rest upon a ny rational basis, b ut is essentia lly arbitrary ) . EPA, in response to the Department s request for the 1992 Policy, emphasized that the terms of the Consent Order gave the agency the right to restrict access to any lot within wetlands.31 EPA went on to acknowledge that, [w]e do, nevertheless, have an obligation to be reasonable in the exercise of the grant condition. Minor construction activity which affects jurisdictional w etlands outs ide of those mapped . . . should not be constrained by [the restriction to not allow service to wetland areas]. EPA allowed this revised policy because the Corps of Engineers considers avoidance and mitigation of wetland impacts when determining whether or not to gra nt a building construction permit. 32 The Department recognized that the ecolo gical com mitments a ssumed in the Conse nt Order could not be waived and proposed a policy that maintained the genera l effec t of the C onsen t Order . The Department is not required to choose the fairest or best me ans of ad vancing its 31 EPA s February 27, 1992 letter reiterated that the requirement that service not be granted to areas within wetlands does not restrict us to the wetlands designation shown on the ma ps if the y do not c oincide with ju risdiction al wetla nd area s. 32 The building construction permit process is governed by the Clean Water A ct s Section 404 program, which regulates the discharge of dredged or fill material into the naviga ble wa ters. See 33 U.S .C. § 13 42. -29- goals. See Pisca telli, 378 Md. at 644, 837 A.2d at 943 ( Further, a classification having some reasonab le basis need not be ma de with m athematica l nicety and may result in some ineq ualit y. If any state of facts reasonably can be conceived that would sustain the classification, the existence of that state of facts at the time the law was enacted must be assumed. ) (quoting Whiting-T urner Co ntract. Co. v. C oupar d, 304 Md. 340, 352, 499 A.2d 178, 185 (1985)). The 1992 Polic y, and its reliance on mapped wetlands, is justified as a means to achieve the goals of fairness, fiscal integrity, and protection of ecological areas. Appellants can assert that the goals could be achieved through other means (e.g., granting all pre-June 1 , 1977 platted lots sewer serv ice), but it is not this C ourt s role to determine the wisdom, fairness, or lo gic of th e Dep artmen t s line-d rawing . See Heller v. Doe, 509 U.S. 312, 319, 113 S.Ct. 2637, 2642, 125 L.Ed.2d 257 (1993) (quoting FCC v. Beach Communications, Inc., 508 U.S. 307, 313, 113 S.Ct. 2096, 2100-01, 124 L.Ed.2d 211 (1993)); Harden v. Mass Transit Admin., 277 M d. 399, 4 14, 354 A.2d 8 17, 825 (1976) (quoting Allied American v. Comm r., 219 M d. 607, 6 24, 150 A.2d 421, 432 (1959)); Hornbeck, 295 M d. at 658 , 458 A .2d at 79 0. We hold that there is a rational relationship between the implementation of the 1992 Policy and the D epartmen t and Wo rcester Cou nty s desire to ensure fairness, fiscal integ rity, and ecological protection of the sewer system service. We hold also that appellants have not demonstrated that they are similarly situated to the List of 26. Thus, appellants equal protecti on claim fails. -30- VIII. We turn to the issue of wh ether the Departme nt s denial of sewer service and wetland fill permits con stitute an unc onstitutional tak ing. App ellants argum ent is that the Department s failure to give them sewer service and fill permits constitutes a taking of their proper ty. The Circuit Court, J. Eschenburg, found that no taking had occurred on the following grounds: (1) the sewer service an d fill permit were not a taking because the lots were already undevelo pable as of 1979 when they did not pass seasonal percolation testing, (2) prohibition of a nuisance does not c onstitute a tak ing and the refore den ial of an on -site septic system on appellants lots was proper, (3) the titles to appellants lots required that the lots meet State and local septic reg ulations, (4) ap pellants nev er regained the right to de velop their lo ts because the EPA grant that fu nded the s ewer system prohibited s ervice to lots in wetlands and under the 1 992 Polic y appellants lots remain ineligible for sewer service, and (5) access to sewer service is not a constitutionally protected property interest. We agree with the conclusion of the Circuit Court and with all of the supporting grounds. We briefly review federal takings law. It is axiomatic that private property may not be taken for public use without just compensation.33 U.S. Const. Amend. V.34 The Takings 33 As stated in Green Party v. Board of Elections, 377 Md. 127, 166, 832 A.2d 214, 237 (2003), the Fifth and Fourteenth Amendments to the United States Constitution and Article III, § 40, of the Marylan d Constitu tion have th e same m eaning an d effect, and it is well established that the decisions of the Suprem e Court are practically direct authorities for both provisions (quoting Bureau of Mines v. George s Creek, 272 Md. 143, 156, 321 (contin ued...) -31- Clause of the Fifth Amendment to the United States Constitution does not prohibit regulation of property, but if a regulation goes too far, it will be recognized a s a takin g. See Pennsylv ania Coal Co. v. Mahon, 260 U.S. 393, 415 , 43 S.Ct. 158, 160, 67 L .Ed. 322 (1922); Belvoir Farms v. North, 355 Md. 259, 281-82, 734 A.2d 227, 240 (quoting Lucas v. S outh Carolina Coastal Council, 505 U.S. 1003, 1015, 112 S.Ct 2886, 2893, 120 L.Ed. 2d 798 (1992)). Whether a particular regulation constitutes a taking depends on the particular circumstances of each case. It has been recognize d that most re gulatory taking s cases sho uld be resolved by balancing the public and private interests at stake, considering three prima ry factors: (1) the economic impact of the regulation on the claimant, (2) the extent to which the regulation has interfere d with distinct investment-backed expectations, and (3) the character of the governmental action. See, e.g., Penn Central Transp. Co. v. City of New York, 438 U.S. 104, 124, 98 S.Ct. 2646, 2659, 57 L.Ed .2d 631 (1 978); District Intown Properties Ltd. P ship v. District of Columbia, 198 F.3d 874, 879 (D.C.Cir. 1 999); Dodd v. Hood River County , 136 F .3d 121 9, 1228 -29 (9th Cir.199 8). A property ow ner who is denied all ec onomica lly beneficial or productive use of his 33 (...continued) A.2d 748, 75 5 (197 4)). See als o Allied Amer ican v. C omm 'r, 219 Md. 607, 616, 150 A.2d 421, 426-427 (1 959). 34 The Fifth Amendment of the U.S. Constitution states, nor shall private property be taken for public use, without just compensation. Article III, § 40 of the Constitution of Maryland states, [t]he General Assembly shall enact no Law authorizing private property to be taken f or public use without just compensation, as agreed upon between the parties, or award ed by a ju ry, being f irst paid o r tender ed to the party entitle d to suc h com pensat ion. -32- or her land in the name of the public at large has l ikely suffered a taking, unless the regulation prohibits a common law nu isance. See Lucas v. South Carolina Coastal Counc il, 505 U.S. 1003, 1022-30, 112 S.Ct. 2886, 2897-2901,120 L.Ed.2d 798 (1 992). Causation is a necessary elem ent to establishing a valid takings claim.35 See Pe nn Ce ntral, 438 U.S. at 124, 98 S.Ct. at 2659. The proximate cause requirement was addressed in Penn Central when the Supre me Cou rt discussed th e difficulty in developing a set formula for determining when economic injuries caused by public action require compensation because whether losses proximately caused by government regulation merit com pensation la rgely depends upon the particular circumstances of the c ase. Id. (emphasis added). The decisions of the Supreme Court are practically direct authorities f or the Fifth a nd Fourte enth Am endmen ts to the United States Constitution and Article III, § 40, of the Maryland Constitution and we acknowledge that, as discusse d in Penn Central, proximate cause is a nec essary element to establishing a valid tak ings cla im. Bureau of Mines v. George's Creek, 272 Md. 143, 156, 321 A.2d 748, 755 (1974); Allied A merica n v. Co mm'r , 219 Md. 607, 616, 150 A.2d 421, 426-427 (195 9). Appellan ts have not d emonstra ted that the de nial of their p ermits under the 1992 Policy was a proximate cause of their lots being undevelopable. In fact, it was the 35 There has been little discussion of a causation requirement in federal takings cases. As the Ninth Circuit explained in Tahoe-Sierra Pres. Council v. Tahoe Reg l Planning Agency, 216 F.3d 764, 783 (9th Ci r. 2000 ), aff d, 535 U.S. 302, 122 S.Ct. 1465, 152 L.Ed.2d 517 (2002), this is due to nothing more than the fact that, in most regulatory takings cases, there is no doubt whatsoever about whether the government s action was the cause of the alleged taking. -33- implementation of seasonal septic system testing that caused appellants lots to be undevelopable, not the denial of fill permits or a sewer connection. Worcester County used seasonal testing starting in 1972; it was required by the State in 1976 through the GS-6 Policy, and appellants lots failed seasonal testing in 1979. Appellants concede that the denial of an on-site septic system under the GS-6 Policy rendered th eir lots undev elopable until the possibility of sewer came to fruition and that they did not appeal this decision.36 Moreover, although the septic denials rendered appellants lots undevelopable, the denials did not constitute a taking because they fall within the takings nuisance exception recognized by the Supreme Court in Lucas. Nuisances that are recognized at common law and prohibit all economically beneficial use of land do not constitute a taking. See Lucas, 505 U.S. at 1028-29, 112 S.Ct. at 2900. As stated by the Supreme Court in Lucas: We believe similar treatment must be accorded conf iscatory regulations, i.e., regulations th at prohibit all e conomically beneficial use of land: Any limitation so severe cannot be newly legislated or decreed (withou t compensation), but m ust inhere in the title itself, in the restrictions that background principles of the State s law of property and nuisance already place upon land ownership. A law o r decree w ith such an e ffect mu st, in other words, do no more than duplicate the result that could have been achieved in the courts by adjacent landowners (or other uniquely affected persons) under the State s law of private nuisance, or by the State under its complementary power to abate n uisanc es that af fect the public g enerally, o r otherw ise. Id. See als o Roe ser v. An ne Aru ndel, 368 M d. 294, 3 18, 793 A.2d 5 45, 560 (2002 ). Judge Cathell, then a Judge o f the Cou rt of Specia l Appeals and now a memb er of this 36 Appe llants lot s are de ed restric ted to res idential u se. -34- Court, applied the nuisance exception in Erb v. Department of Environment, 110 Md. App. 246, 676 A.2d 10 17 (1996). The c ourt found that the denial of an on-site septic system does not constitute a taking where permitting the system would allow for the maintenance of a nuisance. Id. at 264-65 , 676 A.2d at 1026-2 7. Writing f or a unan imous pa nel, Judge C athell explained as follow s: The regulatory scheme set up by the [Maryland Department of the Environment] does no more than could be accomplished under the nuisance laws o f this State. Even if M DE s regulatory scheme a scheme designed to prevent appellant from creating a nuisance on his property were to leave his property economically barren, no compensation would be due because the State ha s a right an d, indeed, an obligation to regulate agains t the crea tion of n uisanc es. ***** Appellant s property has not been taken fo r public use; rather, his development of it has been restricted to prevent public harm. In general, a property owner must use his property so as not to injure others, and a state is allowed to promulgate regulations that achiev e this res ult. Along the same lines, a property owner generally has the con stitutional right to m ake any use o f his property he desires, so long as he does not endanger or threaten the health and safety of the general public. Were appellant allowed to install a septic s ystem, given th e expert testimony that, in all likelihood, the system wou ld fail, it would constitute a threat to public health. The State may prohibit such use, and the fact that MDE s regulations prevent appellant from enjoying his property in the manner h e would like does not render the agency s actions a taking for which compensation is due. There is no right, and there has never been any, incidental to the use of private property to create, conduct, or permit a nuisance thereon. A regulation prohibiting a nuisance is not, and cannot be, the taking or interference with a right in cident to the use of p rivate prop erty. A right to m aintain a nu isance doe s not exist in the -35- first insta nce. Id. at 264- 66, 676 A.2d a t 1026- 28 (citat ions om itted). On-site septic systems failed in the West Ocean City area and, in particular, in the Cape Isle of Wight subdivision, and resulted in the contamination of drinking wells and creation of a public health haza rd. See Showell, 316 Md. at 260, 558 A.2d at 391. The operation of an on-site septic system on appellants lots most likely would have contributed to the contamination problem and constituted a nuisance. That contamination of drinking wells or the spread of other sewerage contaminants generally would constitute a nuisance and thus not be p ermissib le. See Lucas, 505 U.S. at 1030, 112 S.Ct. at 290 1; Erb, 110 Md. App. at 265, 676 A.2d at 1027. Thus, no taking occurred when the State denied appellants permits for on-site septic systems in 1979. Moreover, the express condition in appellants deeds requires that any sewer system for the lots confor m to State h ealth require ments. Th e restriction is set f orth in the deed as follows: No privy or other o utside toilet fac ility shall be constructed or maintained on any lo t. Septic tanks, sewage disposal systems and drinking w ater facilities sha ll conform to all requirem ents established by the Maryland State Department of Health and the Worc ester C ounty M aryland H ealth au thorities. Upon receipt or purchase of lots 8, 9, 10, and 11, appellants were subject to State imposed restrictions on their land ownership, as set forth in their title. The Department s denial of sewer service and the resulting deprivation of the lots economically beneficial use was -36- justified and did no t constitute a taking because the proscribed use interests were not part of appellants title to begin with and because of the State s background nuisan ce princ iples. See Lucas, 505 U.S. at 1027, 112 S.Ct. at 2899; Erb, 110 Md. App. at 266, 676 A.2d 1027-28. Appellants lots have remained undevelopable since 1979 and remain undevelopable, despite construction of the sewer system and implementation of the 1992 Policy. Appe llants assert that the 1992 Policy rendered their lots developable and thus a taking resulted when they were denied sewer perm its un der that P olicy. 37 In their earlier contested case hearing, Administrative Law Ju dge Lou is N. Hurw itz conclud ed that under the 1992 policy Appellants lots 8, 9, 10, and 11 remain ineligible for sewer service. The Department s final decision maker, A. Katherine Hart, agreed and ruled on November 16, 2001 as follows: The Proposed Decision correctly concluded that, as the Lots have been properly determined to be wetlands under the Consent Order, the 1992 EPA policy change did not app ly, and the Lots remained ineligible for service. I find that this determination of ALJ Hurwitz is supported by the preponderance of the evidence in the record. Appellan ts did not seek judicial review of this decision and instead filed the case sub judice. 37 We agre e with the C ircuit Court s finding that appellants p reviously litigated th eir eligibility for sewer service under the 1992 Policy. As discussed supra Part V, an administrative agency s dec ision is given preclusive effect if the agency was acting in a quasi-judicial capacity, the issue currently presented was actually litigated befo re the age ncy, and resolution of the issue was n ecessa ry to the ag ency s de cision. Batson v. S hiflett, 325 Md. 684, 701, 602 A.2d 1191, 1200 (1992). Each of these elements was met in the contested case hearing regarding the eligibility of sewer service under the 1992 Policy. In contrast, resolution of the contention that appellants were barred by collateral estoppel from arguing that their lots w ere sim ilarly situate d, supra Part V, do es not merit preclusion because the issue was not necessary to the agency s decision in the contested case. -37- Thus, no taking resulted from the denial o f sewer o r wetland f ill permits beca use the lots were already undevelopable as of 1979 and remained so even after implementation of the 1992 Po licy. Appellants takings claim fails also because they have not demonstrated that access to sewer service is an interest that qualifies for protection as property under the Unite d States or Ma ryland C onstitutio n. See Lucas, 505 U.S. at 1031, 11 2 S.Ct. at 2901-0 2; Front Royal, 135 F.3d at 286-87 (4th Cir. 1998) (determining that failure to confer the benefit of sewer service is no t a taking because there is no constitutional right to government provided sewer service under Virginia law). In order to make a successful claim under the Takings Clause, appellants must establish first that they possess a constitution ally protected pro perty interest. See Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1000-01, 104 S.Ct. 2862, 2871-72, 81 L.Ed.2d 815 (1984) (determining whether hea lth, safety, and en vironmen tal data submitted to EPA is protected property under Fifth Amendment s Takings Clause); Washlefske v. Winston, 60 F.Supp. 2d 534, 538 (E.D. V a 1999 ), aff d, 234 F.3d 179 (4th Cir. 2000) (noting that a ppellant m ust demo nstrate a prote cted prope rty interest before the court proceeds to the question of whether the use or regulation of that property constitutes a taking). Appellan ts have not demonstrated that the denial of sewer serv ice has interf ered with interests that were sufficiently bound up with the reasonable expectations of the claimant to constitu te prop erty for F ifth Am endm ent pur poses. See Penn Central, 438 U.S. at 124- -38- 25, 98 S.Ct. at 2659. In fact, appellants recognize that they do not have any Constitutional right to sewer service. Appellants reply brief asserts, [a]pellants right to receive sewer service is not a right created or established by either the United States or Maryland Cons titution. We agree. Appellants also fail to demonstrate a property interest established by existing rules or understandings that stem from an independent source such as state la w. Phillips v. Washington Legal Found., 524 U.S. 156, 164, 118 S. Ct. 1925, 1930, 141 L.Ed.2d 174 (1998) (quoting Board of Regents o f State Colleg es v. Roth, 408 U.S . 564, 577, 9 2 S.Ct. 2701, 2709, 33 L.E d.2d 54 8 (197 2)). Appellants deeds contain a restriction requiring that any sewage disposal system conform to State and County requirements and they have no right to maintain a nuisance. Worcester County decided to provide a government benefit in developing a sewer system for West Ocean City, but access to the system was limited to the terms o f the C onsen t Order . Failure to prov ide a be nefit do es not c onstitute a taking . Fina lly, we address briefly whether the denial of wetland fill permits constitutes a taking. Appellants lots are deed restricted to residen tial use. Witho ut sewer se rvice, it is not possible for appellants to build on their lots. A s we d iscusse d, supra, appellants lost the right to develop their lots when their lots failed seasonal testing in 1979. Appellants have not regained the right to sewer access. The denial of w etland fill perm its does not c onstitute a taking because even with fill permits, appellants lots are undevelopable under traditional common law nuisance principles. We hold that the denial of permits in 2001 did not constitute an unconstituti onal taki ng becau se ap pella nts la ck a c onst itutio nally protected right -39- to sewer service and the right to develop their lots was absent already from their bundle of rights as of 1979. JUDGMENT OF THE CIRCUIT COURT FOR WORCE STER COUNTY AFFIRMED. COSTS TO BE PAID BY APPELLANTS. -40-
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