In re Vermont Verde Antique International, Inc.

In re Vermont Verde Antique International, Inc. (2001-116); 174 Vt. 208;
811 A.2d 181

[Filed 06-Sep-2002]


       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.

     	
                                No. 2001-116



  In re Vermont Verde Antique                    Supreme Court
  International Inc.	

                                                 On Appeal from
                                                 Environmental Board



                                                May Term, 2002


  Marcy Harding, Chair

  John D. Hansen, Rutland, for Appellant.

  William H. Sorrell, Attorney General, Rebecca M. Ellis, Assistant Attorney
   General, and Laura Wood, Law Clerk (On the Brief), Montpelier, 
   for Amicus Curiae State.

  PRESENT:  Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.

        
       MORSE, J.   Vermont Verde Antiques International, Inc. (VVA) appeals
  from an Environmental Board decision upholding the jurisdictional opinion
  of its district coordinator that VVA's quarrying operation fell within the
  jurisdiction of Act 250 because it had undertaken a substantial change to
  its operations.  VVA contends the Board erroneously: (1) issued a  sua
  sponte jurisdictional opinion without statutory authority; (2) failed to
  provide an adequately detailed statement of the matters at issue in the
  case; (3) ruled against VVA in the absence of an adverse party or evidence
  of a substantial change; and (4) placed the burden of production of
  evidence showing 

 

  no substantial change on VVA instead of requiring the State to prove that
  there had been a substantial change.  We agree with the first contention,
  and therefore reverse.                      

       The underlying facts may be summarized as follows.  In 1993, VVA
  purchased a marble quarrying business that had been in operation for many
  years and thus qualified as an existing operation that did not require a
  permit under Act 250.  See 10 V.S.A. § 6081(b) (projects and subdivisions
  existing prior to June 1, 1970 do not require Act 250 permit).  In
  September 1999, the District No. 3 Environmental Coordinator sent a letter
  to VVA stating that she had received a complaint about the quarry and
  requesting a history of its operations.  VVA complied with the request.  In
  February 2000, the assistant environmental coordinator issued a
  jurisdictional opinion, finding that the quarry had undergone a
  "substantial change" in its operation that required an Act 250 permit.  See
  10 V.S.A. § 6081(b) (exemption for preexisting development does not apply
  "to any substantial change in such excepted . . . development");
  Environmental Board Rule 2(g) (substantial change is "any change in
  development . . . which may result in significant impact with respect to
  any of the [ten Act 250 criteria].")  The jurisdictional opinion stated
  that it was issued "in response to correspondence between [VVA] and [the
  coordinator] . . . which began with [the coordinator's] letter of September
  1, 1999." 
   
       VVA sought a reconsideration of the jurisdictional opinion with the
  district coordinator, who affirmed the decision.  VVA then petitioned the
  Board for a declaratory ruling.  In July 2000, following a pre-hearing
  conference attended only by VVA, the Board chair issued a pre-hearing
  conference report and order stating that the issue on appeal was "[W]hether
  there has been a 'substantial change' to the Project, a pre-existing
  development, that requires an Act 250 Permit pursuant to 10 V.S.A. 6081(b)
  and EBR 2(G)."  VVA objected to the report on several grounds, including: 
  (1) VVA should not have the burden of production in disproving an increase
  in the level 

 

  of quarrying activity; (2) the Board had not articulated a substantive
  legal standard by which the case would be adjudicated; and (3) the Board
  lacked the statutory authority to issue a jurisdictional opinion on its own
  motion.  These objections were referred to the full Board.  In a memorandum
  of decision issued in September 2000, the Board rejected VVA's objections
  but noted that VVA had not waived its right to an evidentiary hearing or
  its right to raise constitutional issues.     

       The Board conducted a hearing on VVA's petition in December 2000.  VVA
  was the only party to participate in the hearing, and offered no evidence,
  arguing that the Board lacked the statutory authority to issue a sua sponte
  jurisdictional order, and  that VVA did not have the burden of production
  to disprove a substantial change.  The Board nevertheless upheld the
  jurisdictional order and dismissed the petition because of VVA's "failure
  to meet its burden of producing  evidence."  This appeal followed.

       VVA essentially challenges the validity of Environmental Board Rule
  3(c), part of which authorizes disctrict coordinators to issue
  jurisdictional orders sua sponte.  See Envionmental Board Rule 3(c) ("In
  addition, district coordinators may issue Jurisdictional Opinions when, in
  their judgment, the applicability of Act 250, these rules or an order of
  the board needs to be determined.").  VVA argues that the rule is outside
  of the scope of authority conferred on the Board by 10 V.S.A. § 6007(c),
  which sets forth the procedures for obtaining a jurisdictional order.  It
  is, of course, axiomatic that an administrative body may promulgate only
  those rules within the scope of its legislative grant of authority.  See In
  re Agency of Admin., 141 Vt. 68, 76, 444 A.2d 1349, 1352 (1982) (agency
  cannot use its rule-making authority to exceed or compromise its statutory
  purpose).  An agency rule must be reasonably related to the intent of the
  enabling legislation.  In re Baptist Fellowship of Randolph, Inc., 144 Vt.
  636, 638, 481 A.2d 1274, 1275 (1984).  To determine the scope of authority
  vested in an administrative agency by a statutory grant of power, we look
  to its 

 

  enabling legislation.  Lemieux v. Tri-State Lotto Comm'n, 164 Vt. 110, 113,
  666 A.2d 1170, 1172-73 (1995).  Our objective in construing a statute is to
  give effect to the Legislature's intent.  Mass. Mun. Wholesale Elec. Co. v.
  State, 161 Vt. 346, 355, 639 A.2d 995, 1001 (1994).  In determining that
  intent, we examine the whole statute as well as its parts, considering its
  subject matter, its effect and consequences, and the "reason and spirit of
  the law."  Winey v. William E. Dailey, Inc., 161 Vt. 129, 136, 636 A.2d 744, 749 (1993). 

       Although we approach the examination of actions of an administrative
  body under a presumption of validity, Vt. Ass'n of Realtors v. State, 156
  Vt. 525, 530, 593 A.2d 462, 465 (1991), adjudicatory functions of an
  administrative body are reviewed with special vigilance.  See  Agency of
  Admin., 141 Vt. at 75, 444 A.2d  at 1352 ("Where [an administrative body]
  exercises its adjudicative function we will be especially vigilant, since
  proper utilization of the judicial process is unrelated to expertise in any
  particular subject matter.").  

       Here, the Board derives its general rule-making authority from 3
  V.S.A. § 2803(b), which grants the Board "the power to adopt, amend and
  repeal rules and regulations, to conduct hearings, to adjudicate
  controversies and to issue and enforce orders, in the manner and to the
  extent to which those powers are given to [it] by law."  The enabling
  legislation specifically at issue in this case is 10 V.S.A. § 6007(c),
  which provides that "any person may submit to the district coordinator an
  'Act 250 Disclosure Statement' and other information required by the board,
  and may request a jurisdictional opinion from the district coordinator
  concerning the applicability of this chapter."  After a request is filed,
  the statute requires the district coordinator to make a jurisdictional
  determination, which then becomes final unless it is appealed to the Board
  by any statutory party within thirty days.  10 V.S.A. § 6007(c). 

 

       The State in its amicus curiae brief argues that, by referring to "any
  person," the statute plainly authorizes district coordinators to issue
  jurisdictional opinions on their own motion.  The words of a statute are
  not to be read in isolation, however, but rather in the context and
  structure of the statute as a whole.  Winey, 161 Vt. at 136, 636 A.2d  at
  749.  Here, the statute provides that "any person" may request a
  jurisdictional opinion "from the district coordinator."  10 V.S.A. §
  6007(c) (emphasis added).  Read in context, this suggests that "any person"
  refers broadly to third parties exclusive of the coordinator, who is
  authorized to rule on such requests, but not to make them. 

       This conclusion is reinforced by the overall enforcement structure of
  the statute.  The Legislature has created several enforcement provisions
  for the Board to prosecute violations of Act 250 in either superior or
  environmental court.  See 10 V.S.A. § 8004 (secretary of agency of natural
  resources shall commence enforcement actions at the request of the Board); 
  id. § 8221 (secretary of agency of natural resources or Board may bring
  civil actions in superior court).  Under these provisions, landowners
  potentially subject to Act 250 jurisdiction may avail themselves of all of
  the protections and processes of a formal, adversarial proceeding. 
  Jurisdictional opinions, by way of contrast, cast the Board in the role of
  adjudicator, determining the applicability of Act 250 to the project or
  development in question.  The statutory scheme thus indicates that the
  Legislature contemplated separate roles for the Board as a party in an
  enforcement action, and as an adjudicatory body in jurisdictional
  determinations made at the request of the landowner or a third party.  
   
       The Legislature has taken care to separate the prosecutorial and
  adjudicatory functions of the Board, which serves in turn to maintain its
  integrity when functioning as an adjudicatory forum for resolving
  jurisdictional questions.  Viewed in this context, nothing in the language
  of § 6007(c) indicates a legislative intent to transform the request for a
  jurisdictional opinion into the equivalent of an enforcement action. 
  Although the statute provides that "any person" may request a

 

  jurisdictional opinion, the statutory context and structure demonstrates a
  legislative understanding that the request will originate from the
  landowner or an interested third party, not from an official of the Board
  itself.

       An alternative ruling would result in a peculiar scenario.  Not only
  would the Court be granting the Board the right to exceed its legislative
  mandate, but it would be allowing the district coordinators to issue
  jurisdictional orders in the absence of a landowner or third party request. 
  This would put the Environmental Board in the awkward position of
  adjudicating orders based on evidence offered by its constituent officers. 
  The district coordinator did not even appear and offer evidence at VVA's
  hearing before the Board. VVA was both denied the opportunity to confront
  an opposing party and shouldered with the burden of disproving allegations
  raised by the very entity charged with deciding their outcome.  Accepting
  such a situation would put future parties before the Board in the manner
  that a schoolboy goes before the principal, and at a comparable
  disadvantage. 

       We are compelled, therefore, to conclude that Environmental Board Rule
  3(c), to the extent that it authorizes the issuance of a jurisdictional
  opinion at the request of a district coordinator, exceeds the scope of §
  6007(c) and is invalid.  Accordingly, the jurisdictional opinion in this
  case was unenforceable and invalid, and the Board's decision affirming the
  order must be reversed.

       Reversed.



                                       FOR THE COURT:



                                       _______________________________________
                                       Associate Justice