In re Woodford Packers, Inc.

In re Woodford Packers, Inc.  (2002-056); 175 Vt. 579; 830 A.2d 100

2003 VT 60

[Filed 26-Jun-2003]

                                 ENTRY ORDER

                                 2003 VT 60

                      SUPREME COURT DOCKET NO. 2002-056

                              MARCH TERM, 2003

       In re Woodford Packers, Inc.     }     APPEALED FROM:
                                        }
                                        }
                                        }     Environmental Board
                                        }     
                                        }
                                        }     DOCKET NO. 8B0542-EB


       In the above-entitled cause, the Clerk will enter:
       
       ¶  1.   Woodford Packers, Inc. (WPI) appeals the Environmental Board's
  decision vacating a land use permit that had been granted to it by the
  District Environmental Commission.  WPI claims that the Board erred by: (1)
  permitting the Secretary of the Agency of Natural Resources (ANR) to
  determine both the floodway and floodway fringe when no such determination
  had been made by the Agency at the District Commission level; (2) allowing
  the ANR to change the standard for determining floodways and floodway
  fringes without following the Vermont Administrative Procedure Act (VAPA),
  and enabling the Secretary of ANR to determine the floodway and the
  floodway fringe on a case-by-case basis; (3) finding that the proposed
  development project was located in the floodway; and (4) finding that the
  project failed to meet Act 250 criteria concerning floodways, shorelines,
  and soil erosion.  We affirm.

       ¶  2.   WPI proposed to build a thirty-unit retirement village on a
  12.5 acre parcel in Bennington, Vermont, bordered on the north by the
  Roaring Branch River and on the south and east by Route 9.  WPI applied to
  District Commission # 8 for an Act 250 permit, which was granted in October
  2000.  The Commission found that both WPI's and ANR's engineers agreed that
  no proposed buildings or roads would be located within the floodway or
  floodway fringe of the Roaring Branch River.  See 10 V.S.A. § 6086(a)(1)
  (requiring the district commission to find that the development will not
  result in undue water pollution and, "[i]n making this determination it
  shall at least consider "the elevation of land above sea level; and in
  relation to the flood plains, the nature of soils and subsoils and their
  ability to adequately support waste disposal . . . .").  The Commission
  further determined that the project would not impinge upon the ability of
  the river to carry flood waters in the event of a 100-year flood, which the
  Commission explained was a "theoretical time frame" for determining the
  frequency of major flooding occurrences.  ANR filed a motion to alter the
  District Commission's decision, which was denied.  ANR appealed the
  Commission's decision to the Environmental Board, asserting that the
  Commission erred in its conclusions regarding criteria 1(D) "floodways,"
  1(F) "shorelines," 4 "erosion," and 9(K) "development affecting public
  investments" under 10 V.S.A. § 6086(a)(1).

        
       ¶  3.   The Environmental Board concluded that WPI's proposed project
  failed to comply with criterion 1(D) for floodways.  See id. §
  6086(a)(1)(D)(ii) ("A permit will be granted whenever it is demonstrated by
  the applicant that, in addition to all other applicable criteria . . . the
  development . . . of lands within a floodway fringe will not significantly
  increase the peak discharge of the river or stream . . . and endanger the
  health, safety, or welfare of the public or riparian owners during
  flooding.").  The Board found that, for the purposes of Act 250, the
  Secretary of ANR determined that the entire project would be situated in
  the floodway.  Consequently, the Board observed that placement of buildings
  and other materials in the floodway would restrict or divert the flow of
  waters in the event of a 100-year flood, resulting in a significant
  increase in peak flow adjacent to and downstream from the project, thereby
  "pos[ing] a safety risk to anyone on the Project site, including but not
  limited to the senior citizens residing at the Project."  The Board also
  concluded that the project did not meet criterion 1(F), pertaining to
  shorelines, because WPI failed to show that the project served some
  water-related purpose necessitating its location on the shoreline of the
  Roaring Branch River, pursuant to 10 V.S.A. § 6086(a)(1)(F) (applicant must
  demonstrate that the project "must of necessity be located on a shoreline
  in order to fulfill the purpose of the development").  Furthermore, the
  Board found that the project failed to meet criterion 4 for soil erosion,
  due to the presence of substantial erosion at and near the proposed project
  site.  Because WPI's project failed to comply with three separate criteria
  under Act 250, the Environmental Board vacated WPI's land use permit.  This
  appeal followed.

       ¶  4.   When reviewing a decision of the Environmental Board, this
  Court gives deference to the Board's "interpretations of Act 250 and its
  own rules, and to the Board's specialized knowledge in the environmental
  field."  In re Wal*Mart Stores, Inc., 167 Vt. 75, 79, 702 A.2d 397, 400
  (1997).  Absent a compelling indication of error, we will sustain the
  Board's interpretations on appeal.  Id.  Given this deferential standard of
  review, we conclude that the Environmental Board did not abuse its
  discretion when vacating WPI's Act 250 permit.

       ¶  5.  WPI's principal contention is that the Board erred in vacating
  WPI's land-use permit for failing to meet Act 250's 1(D) "floodways"
  criterion under 10 V.S.A. § 6086(a)(1)(D).  In support of its argument, WPI
  contends that: (1) it was error to permit the Secretary of ANR to determine
  the floodway when no such determination had been made by ANR at the
  District Commission level; (2) ANR should not be allowed to determine
  floodways and floodway fringes on a case-by-case basis, and it was error to
  allow ANR to determine floodways and floodway fringes without first
  proceeding through VAPA; and (3) the Board erred in finding that the
  proposed development would be located in the floodway.
  
       ¶  6.  WPI first asserts that the Environmental Board erred by
  permitting the Secretary of ANR to determine the floodway when no such
  determination had been made by the agency at the District Commission level. 
  Act 250 provides that "the [environmental board] shall hold a de novo
  hearing on all findings requested by any party that files an appeal or
  cross appeal, according to the rules of the board."  10 V.S.A. §
  6089(a)(3).  In a de novo proceeding, the board is required to hear the
  issues "as if there had been no prior proceedings in the district
  commission."  In re Killington, Ltd., 159 Vt. 206, 214, 616 A.2d 241, 246
  (1992).  WPI argues that ANR filed an appeal on four separate Act 250
  criteria, yet it only presented testimony on two criteria at the District
  Commission level.  However, the statute is clear that an appeal to the
  Environmental Board is heard de novo, and the District Commission made
  findings on all four criteria appealed, including 1(D) floodways criterion.

       ¶  7.  Nor are we persuaded by WPI's alternative theory that ANR
  should have been estopped from appealing the District Commission's decision
  because an ANR employee made a prior determination that WPI's project would
  not be located in the floodway or floodway fringe.  Assuming arguendo, that
  WPI relied on the representations of an ANR employee that the proposed
  project was not located in the floodway or floodway fringe when using the
  Federal Emergency Agency (FEMA) National Flood Insurance Program (NFIP)
  maps, ANR was not foreclosed from presenting evidence on appeal regarding
  the inadequacy of the NFIP maps to support a finding that the site would be
  free from flood hazards.  Estoppel is rarely invoked against the government
  and is only appropriate when the injustice that would ensue from a failure
  to find an estoppel sufficiently outweighs any effect upon the public
  interest that would result from estopping the government in a particular
  case.  In re Letourneau, 168 Vt. 539, 547, 726 A.2d 31, 37 (1998).  However
  well-founded WPI's criticism that the current permit system enables ANR to
  burden an applicant with inconsistent and contradictory information, the
  remedy is more likely to be found in the executive and legislative
  branches, rather than by resorting to the rarely invoked judicial estoppel
  of a governmental agency.  The determination of the floodway and floodway
  fringe was properly before the board.

       ¶  8.  WPI next argues that ANR's alteration of its long-standing
  practice of relying on NFIP maps to determine whether a proposed
  development was within a floodway or floodway fringe required ANR to
  promulgate the change by rule pursuant to VAPA's rulemaking procedures set
  forth in 3 V.S.A. §§ 836-844.  As a corollary to this argument, WPI
  contends that without such promulgation, the Secretary of ANR is without
  legal authority to make floodway determinations on a case-by-case basis.

       ¶  9.  WPI asserts that for approximately twenty years ANR used NFIP
  maps to determine whether a proposed development was within either a
  floodway or a floodway fringe for Act 250 purposes, and that during WPI's
  permit application process, ANR unilaterally changed the floodway standards
  by employing fluvial geomorphology techniques in lieu of the maps.(FN1) 
  The Environmental Board's opinion noted that NFIP maps, while accurate at
  the time they were first drafted, often contain inaccuracies, since flood
  volumes change over time.  Because of these inaccuracies, it is common for
  developers to have more detailed surveys done when the NFIP maps show that
  part of a proposed development is within the 100-year floodplain.  The
  Board found that it is also customary for ANR to review the resurveyed maps
  when making its floodway determinations.
          
       ¶  10.  That is what happened in this case.  In 1998, WPI's
  predecessor-in-interest, Aaron & Sons, Inc., had the project resurveyed. 
  The new survey of the property revealed that a smaller portion of the
  project site was located in the floodplain than was depicted on the NFIP
  maps.  During the Board proceedings, ANR Floodplain Engineer Karl
  Jurentkuff testified that he reviewed both the NFIP maps and the new survey
  map, and determined that the new survey map was more accurate.  In a letter
  to the Bennington Zoning Administrator, however, he cautioned that because
  the Roaring Branch River is a "wild stream," no fill should be placed
  beyond the floodway line scaled from the NFIP maps.   

       ¶  11.  After examining all of the relevant data and extensive
  testimony, the Board found that the NFIP maps showed that a significant
  portion of the project site was located within the 100-year floodplain of
  the Roaring Branch River.  Additionally, the Board found that because the
  banks of the river are unstable, the flooding risk presented in this case
  is largely erosional.  The Board concluded that while the NFIP maps are
  useful for predicting flooding risks due to inundation, fluvial
  geomorphology more accurately depicts flooding risks due to erosion.  In
  addition to these findings, the Board held that the determination of
  whether a proposed development is located in a floodway is made by the
  Secretary of ANR.      

       ¶  12.  The authorizing statute at issue in this case is Act 250. 
  Section 6001(6) defines "floodway" as:

       the channel of a watercourse which is expected to flood on an
       average of at least once every 100 years and the adjacent
       land areas which are required to carry and discharge the
       flood of the watercourse, as determined by the secretary of
       natural resources with full consideration given to upstream
       impoundments and flood control projects.
       
  10 V.S.A. § 6001(6) (emphasis added).  Moreover, § 6001(7) defines
  "floodway fringe" as "an area which is outside a floodway and is flooded
  with an average frequency of once or more in each 100 years as determined
  by the secretary of natural resources with full consideration given to
  upstream impoundments and flood control projects."  Id. § 6001(7) (emphasis
  added).  The plain language of the statute states that the Secretary of ANR
  is authorized to make determinations as to what constitutes a floodway or a
  floodway fringe.  See In re Handy, 171 Vt. 336, 341, 764 A.2d 1226, 1233
  (2000) ("We assume that the Legislature intended the plain, ordinary
  meaning of the language, and if the meaning of the language is plain on its
  face, we normally ascertain legislative intent solely from the statutory
  language."). 

       ¶  13.  In essence, WPI contends that the Secretary of ANR is without
  authority to implement the "floodway" and "floodway fringe" determinations
  without promulgating a rule pursuant to VAPA.  We disagree.  An agency is
  not required to adopt rules or regulations to carry out what its
  authorizing statute specifically directs it to do.  See State v. Wuerslin,
  ___ Vt. ___, ___, 816 A.2d 445, 446-47 (2002) (mem.) (Department of Liquor
  Control not required to promulgate "sting operation" procedure pursuant to
  VAPA because Department has express statutory authorization to enforce
  liquor laws with respect to minors by investigating violations and
  forwarding them for prosecution).  While ANR's alteration of its
  methodology for determining floodways may have been a surprise to
  WPI-apparently the first applicant to undergo "fluvial geomorphology"
  analysis-we cannot conclude that it lacked authority to do so. 
    
       ¶  14.  Where an administrative agency's policy is challenged due to a
  failure to enact that policy pursuant to VAPA, we must discern whether the
  policy is a "rule" subject to the rulemaking procedures of VAPA or whether
  that policy is a "practice" that is exempt from those procedures.  King v.
  Gorczyk, 2003 VT 34,  15, ___ Vt. ___, ___ A.2d ___.  VAPA contains
  provisions that define both a rule and a practice.  A rule is defined in 3
  V.S.A § 801(b)(9) as "each agency statement of general applicability which
  implements, interprets, or prescribes law or policy; or practice which has
  been adopted in the manner provided by sections 836-844 of this title."  On
  the other hand, a "practice" is defined as "a substantive or procedural
  requirement of an agency, affecting one or more persons who are not
  employees of the agency, which is used by the agency in the discharge of
  its powers and duties.  The term includes all such requirements, regardless
  of whether they are stated in writing."  Id. § 801(b)(7).  A practice is
  exempt from rulemaking requirements unless an interested person requests
  that an agency officially "adopt a procedure describing an existing
  practice."  Id. § 831(b); King, 2003 VT 34,  16.  In addition, an agency
  "shall initiate rulemaking to adopt as a rule an existing practice or
  procedure when so requested by 25 or more persons or by the legislative
  committee on administrative rules."  3 V.S.A. § 831(c).  Furthermore, VAPA
  provides that "[w]here due process or a statute directs an agency to adopt
  rules," the rule or practice in question shall be promulgated according to
  VAPA's rulemaking procedures set forth in 3 V.S.A. §§ 836-844.  Id. §
  831(a); King, 2003 VT 34,  16.

       ¶  15.  In this case, ANR's decision to utilize fluvial geomorphology
  to determine the presence of a floodway did not constitute the creation of
  a rule consisting of an "agency statement of general applicability which
  implements, interprets, or prescribes law or policy."  3 V.S.A. §801(b)(9). 
  While ANR's change in methodology in this case diverged from previous
  floodway assessments, this change did not alter any preexisting rule. 
  ANR's use of the NFIP maps was never formally adopted as a rule.  There was
  no written policy stating that the NFIP maps were used to determine whether
  development projects were located in floodways, nor was there any generally
  applicable written policy regarding ANR's use of the new methodology. 
  There was also evidence suggesting that the NFIP maps were quite
  out-of-date, and fluvial geomorphology was a more accurate technique for
  making the floodway determination in this case.

       ¶  16.  We noted in King that "there is no bright line between exempt
  procedures and those rules requiring adoption pursuant to rulemaking
  requirements."  Id. at  23.  The instant case, however, differs
  significantly from cases in which we have determined that an alteration in
  policy fell within the ambit of rulemaking under VAPA.  This case can be
  distinguished from In re Diel, 158 Vt. 549, 550, 614 A.2d 1223, 1224-25
  (1992), which involved a challenge to the Department of Social Welfare's
  switch in policy not to consider federal fuel and utility subsidies when
  recalculating the income of Aid to Needy Families with Children (ANFC)
  recipients.  This Court held that the Department's action fell within the
  ambit of rulemaking under VAPA, because it "both prescribed and implemented
  a policy intended to apply generally to a class of ANFC recipients."  Id.
  at 554, 614 A.2d  at 1227.  Similarly, this case is distinguishable from
  Parker v. Gorczyk, 173 Vt. 477, 479-80, 787 A.2d 494, 497-98 (2001) (mem.),
  where the Department of Corrections' revised furlough policy constituted a
  generally applicable change in an existing agency policy that affected the
  rights of all prisoners convicted of violent felonies, and thus constituted
  a rule subject to proper promulgation under VAPA. 

        
       ¶  17.  WPI's claim that ANR's application of its floodway
  determination on a case-by-case basis is without legal authority must also
  fail.  The statutory authority enabling the Secretary of ANR to determine
  floodways and floodway fringes does not compel the determination be made by
  rules promulgated pursuant to VAPA.  Standardless alteration of ANR's
  practice of determining floodways may give rise to a violation of due
  process if arbitrarily and capriciously applied, but in the matter before
  us the Environmental Board's finding that the Secretary's application of
  fluvial geomorphology was soundly grounded and supported by the evidence
  was not error.  Nor are we persuaded that the Board erred in relying upon
  the Secretary's determination that the project would be in the floodway or
  floodway fringe.  As with all Act 250 criteria, the applicant bears the
  burden of proof.  We will accept the Board's findings unless the appealing
  party demonstrates that they are clearly erroneous.  In re EHV-Weidmann
  Indus., Inc., 173 Vt. 581, 582, 795 A.2d 1185, 1187 (2002) (mem.).  We
  cannot conclude that the Board committed clear error with respect to the §
  6086(a)(1)(D) floodways criterion.
   
       ¶  18.  We do not find error with respect to the Environmental Board's
  determination that WPI's project failed to comply with criterion 1(F) for
  "shorelines."  See 10 V.S.A.  § 6086(a)(1)(F).  In order to develop on a
  shoreline, Act 250 requires the applicant to prove that the proposed
  project "must of necessity be located on a shoreline in order to fulfill
  the purpose of the development."  Id. § 6086(a)(1)(F).  Act 250 defines
  "shoreline" as "the land adjacent to the waters of lakes, ponds, reservoirs
  and rivers.  Shorelines shall include the land between the mean high water
  mark and the mean low water mark of such surface waters."  Id. § 6001(17).  

       ¶  19.  WPI asserts that the Board erred by (1) improperly considering
  the project "adjacent" to the Roaring Branch River and (2) adopting a new
  standard for determining whether a proposed project meets the "of
  necessity" requirement of criterion (1)(F).  We decline to address WPI's
  claim that its project was "not adjacent" to Roaring Branch River because
  the claim was not raised below.  See Bull v. Pinkham Eng'g Assocs., Inc.,
  170 Vt. 450, 459, 752 A.2d 26, 33 (2000) ("Contentions not raised or fairly
  presented to the trial court are not preserved for appeal.").  Indeed,
  WPI's argument before the Board was that location of the project on the
  shoreline was necessary to fulfill "applicant's overall purpose in
  providing a high quality of life for the senior residents of the project." 
  WPI cannot now argue that the Board erred in failing to address an argument
  never before it.  

       ¶  20.  WPI further contends that the Board's application of the "must
  of necessity" language in § 6086(a)(1)(F) represented a change in the
  Board's interpretation of the statute.  The Board, in fact, acknowledged as
  much, noting in its decision that it now placed more emphasis on the
  "threshold question" of whether the project must "of necessity" be located
  on a shoreline to fulfill its purpose.  We find no error in the Board's
  consideration of whether a project's shoreline location "serves an integral
  part of the developmental scheme."  We have previously held that "criterion
  1(F) requires that the Board make its own determination that a development
  need be located on a shoreline . . . ."  In re McShinsky, 153 Vt. 586, 591,
  572 A.2d 916, 919 (1990).  Here, the Board reasonably concluded, on the
  facts before it, that the applicant's laudable objective of providing
  walking paths and other facilities to meet the needs of the project's
  residents was not so integral to the developmental scheme to "of necessity"
  require location on a shoreline.  

       ¶  21.  In addition, we agree with the Environmental Board's decision
  that WPI's project failed to comply with criterion 4 for "soil erosion,"
  which provides that a proposed development must not cause "unreasonable
  soil erosion or reduction in the capacity of the land to hold water so that
  a dangerous or unhealthy condition may result."  10 V.S.A. § 6086(a)(4). 
  In its decision, the Board explained that there had been significant
  erosion at and near the project site, and that the flood controls
  implemented by WPI, while intended to prevent the river from inundating
  heavily eroded areas, may actually increase the damage done by the river. 
  The Board concluded that the existing erosion would be exacerbated by the
  proposed development, and therefore the project failed to comply with
  criterion 4.
   
       ¶  22.  Act 250 mandates that "before granting a permit, the board or
  district commission shall find that the subdivision or development" meets
  all ten criteria under 10 V.S.A. § 6086.  Id. § 6086(a).  Because WPI's
  proposed project fails to meet three of these criteria, the Environmental
  Court properly vacated the Act 250 permit.

       Affirmed.


       BY THE COURT:



       _______________________________________
       Jeffrey L. Amestoy, Chief Justice

       _______________________________________
       John A. Dooley, Associate Justice
       _______________________________________
       Denise R. Johnson, Associate Justice

       _______________________________________
       Marilyn S. Skoglund, Associate Justice

       _______________________________________
       Frederic W. Allen, Chief Justice (Ret.)
       Specially Assigned

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                                  Footnotes

FN1.  Fluvial geomorphology is described by the Environmental Board as a
  science that "analyzes physical, chemical, biological, and social data to
  explain historical causes of problems being experienced in water bodies and
  to resolve or avoid conflicts between fluvial system dynamics and human
  investments in the landscape."