STATE OF NORTH CAROLINA IN THE OFFICE OF
ADMINISTRATIVE HEARINGS
COUNTY OF NEW HANOVER 00 EHR 0423
HOLLY RIDGE ASSOCIATES, LLC, )
Petitioner, )
)
v. )
)
NORTH CAROLINA DEPARTMENT OF )
ENVIRONMENT AND NATURAL )
RESOURCES AND ITS DIVISION ) RECOMMENDED DECISION
OF LAND RESOURCES, )
WILLIAM P. HOLMAN, Secretary )
of the Department of Environment )
And Natural Resources, in his official )
Capacity and CHARLES H. GARDNER, )
Director of the Division of Land )
Resources, in his official capacity, )
Respondents, )
)
and NORTH CAROLINA SHELLFISH )
GROWERS ASSOCIATION and )
NORTH CAROLINA COASTAL )
FEDERATION, )
Intervenor‑Respondents. )
This contested case was heard by the Honorable James L. Conner, II, Administrative Law Judge, on July 31, August 1 and 2 in Carolina Beach, North Carolina, and on August 8, 9, and 21, and September 4, 5, 6, and 20 in Raleigh, North Carolina. The parties filed proposed Recommended Decisions and Memoranda of Law on October 15, 2001, and presented closing arguments on October 18, 2001.
APPEARANCES
For Petitioners: Craig Bromby and Jason Thomas, Hunton & Williams, One Hannover Square, Suite 1400, Fayetteville Street Mall, Raleigh, NC 27601 or P.O. Box 109, Raleigh, NC 27602; George House and Randall Tinsley, Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P., 2000 Renaissance Plaza, 230 North Elm Street, P.O. Box 26000, Greensboro, NC 27420‑6000
For Respondents: Mary Penny Thompson and Ryke Longest, North Carolina Department of Justice, 114 W. Edenton Street, P.O. Box 629, Raleigh, NC 27602
For Respondent‑Intervenors: Donnell Van Noppen, III, Southern Environmental Law Center, 200 W. Franklin Street, Suite 330, Chapel Hill, NC 27516
ISSUES
This matter is an appeal by Petitioner of a Civil Penalty Assessment issued by the North Carolina Department of Environment and Natural Resources, Division of Land Resources, assessed against the Petitioner for violations of the North Carolina Sediment Pollution Control Act ("SPCA"). The Civil Penalty Assessment was issued on March 5, 2000, and encompassed violations beginning April 24, 1999 and ending on December 14, 1999.
The parties submitted a PreTrial Order that included the parties' contentions regarding the issues to be decided. The undersigned determines that the issues to be decided are:
1. Whether Petitioner has met its burden in proving that its land‑disturbing activities covered in the March 5, 2000 Civil Penalty Assessment are exempt from regulation under the SPCA.
2. Whether Respondents and Respondent‑Intervenors have met their burden in proving that Petitioner violated the SPCA as determined in the Civil Penalty Assessment?
3. Whether Petitioner has met its burden of proving that DLR erred in calculating the amount of the penalty assessed.
WITNESSES
For Petitioner: Lionel Yow, Russell Lea, Gary Mitchell
For Respondents and Respondent‑Intervenors: Daniel E. Sams, Janet Paith, Charles Hollis, Charles A. Gardner, John Wesley Parker, Linda Lewis, Kelli Blackwelder, Moreland Gueth
EXHIBITS RECEIVED INTO EVIDENCE
Petitioner:
P‑1. 12/16/99 Sedimentation Inspection Report
Note: The document was admitted over Respondents’ objection (Tr. 2059).
P‑2. 12/28/99 Handwritten Notes by Janet Paith
Note: This document was admitted over Respondents’ objection (Tr. 2059).
P‑3. Forest Water Quality Program ‑ Policy 4808
P‑4. 15A NCAC 1I
P‑5. 10/24/86 Joint Venture Agreement
P‑6. 11/1/89 Partnership Authorization of Holly Ridge Associates
P‑7. Holly Ridge ‑ Proposed Timber Sale
P‑10. 1/97‑11/97 Corbett Lumber Receipts
P‑11. Dr. Russ Lea c.v.
P‑13. 1999 Forest Statistics for the Southern Coastal Plain of North Carolina, 1999
Note: This document was admitted over Respondents’ and Respondent‑Intervenors'
objections (Tr. 1329).
P‑14. Best Management Practices for Forestry in the Wetlands of North Carolina, DENR, June 1990
P‑15. Forestry Best Management Practices Manual, NC Division of Forest Resources, September 1989
P‑16. Wetlands/401 Certification Unit Wetlands Ditching and Draining Policy, July 9, 1999
Note: This document was admitted over Respondents’ and Respondent‑Intervenors' objections (Tr. 1399)
P‑17. 3/4/99 Letter from Linda Lewis to Lionel Yow
P‑19. 9/13/99 Ditch/spoils grassing program from Parker & Associates to Lionel Yow
P‑20. Morton Trucking Receipts
P‑22. Parker & Associates invoice for work performed from 8‑17‑99 through 10‑27‑99
P‑23. 1/3/00 Invoice from Charlie Hollis
P‑24. Gary Mitchell photographs (consisting of photographs separately Numbered 1‑4 and 6‑9)
P‑25. 1998 Receipts
P‑26. 1999 Receipts
P‑27. 1/19/01 Respondent‑Intervenor NCCF Discovery
Note: This document was admitted over Respondents’ and Respondent-Intervenors’ objections (Tr. 1852-57).
P‑28. 1/19/01 Respondent‑Intervenor NCSGA Discovery
Note: This document was admitted over Respondents’ and Respondent-Intervenors’ objections (Tr. 1852-57).
P‑29. 6/8/01 Respondent‑Intervenor Joint Supplemental Discovery
Note: This document was admitted over Respondents’ and Respondent-Intervenors’ objections (Tr. 1852-57).
P‑31. 8/18/00 Letter from Robin Smith of NCDENR to Derb Carter of SELC
Note: This document was admitted over Respondent and Respondent‑Intervenors' objections (Tr. 1972).
P‑32. 4/20/00 Email correspondence with NCFS regarding EPA Ditching
Respondents and Respondent‑Intervenors:
R‑1. 5/29/99 Aerial photograph of Morris Landing Tract
R‑2. undated Sketch of ditches shown on aerial photograph
Note: This document was admitted over Petitioner's objection that it is representative and not to scale (Tr. 109).
R-3 10/24/86 Joint Venture Agreement between Westminter Company, Henry E. Miller, Jr., and Lionel L. Yow
Note: This document was admitted as Petitioner’s Exhibit 5 (Tr. 1132).
R‑4. 5/12/95 Letter of Transmittal from John Parker to Jim Hughes
R‑5. 5/12/95 Letter of Transmittal
R‑6. 1995 Development Plans for Morris Landing Tract
R‑7. 1995 Development Plans for Morris Landing Tract
R‑9. 5/27/97 Letter conveying Mr. Hollis' proposal for the work to be done
R‑10. 1/19/01 Summary of work performed by Mr. Hollis
R‑11. 8/97 Wetland map of Morris Landing Tract by Mitchell & Assoc.
R‑12. 8/97 Wetland map of Morris Landing Tract by Mitchell & Assoc.
R‑13. 8/97 Wetland map of Morris Landing Tract by Mitchell & Assoc.
R‑14. Wetland map of Morris Landing Tract by Mitchell & Assoc.
Note: This document was admitted over Petitioner’s objection (Tr. 823-24).
R‑15. 6/3/98 Letters of Transmittal and Project Schedule by Parker & Assoc.
R‑16. 2/16/99 Preliminary Planning Layout #2
R‑17. 2/16/99 Letter of Transmittal by Parker & Assoc. sending layout plans
R‑18. 2/16/99 Preliminary Planning Layout #1
R‑19. 2/5/99 Fax transmission from Mr. Yow to Mr. Parker
R‑20. 2/26/99 Sedimentation Inspection Report
Note: This document was admitted subject to an objection, which will be referred to hereafter as the "conclusion of law objection" in which the undersigned that statements in the exhibit regarding matters of law are not determinations of the larger issue in question. (Tr. 155)
R‑21. 2/26/99 Photographs taken during inspection (consisting of photographs separately numbered A & B)
R‑22. 3/3/99 Notice of Violations from NCDENR (signed by Daniel Sams) to Holly Ridge Associates
Note: This document was admitted subject to the conclusion of law objection (Tr. 162).
R‑23. 3/4/99 Fax sent by Charles Hollis to Lionel Yow
R‑24. 4/23/99 Sedimentation Inspection Report
Note: This document was admitted subject to the conclusion of law objection (Tr. 489).
R‑25. 4/28/99 Notice of Continuing Violation(s) from NCDENR (signed by Daniel Sams) to Holly Ridge Associates
Note: This document was admitted subject to the conclusion of law objection (Tr. 173).
R‑26. 7/9/99 Civil Penalty Assessment (LQS 99‑044)
Note: This document was admitted subject to the conclusion of law objection (Tr. 176).
R‑27. 7/15/99 Letter sending Civil Penalty Assessment
Note: This document was admitted subject to the conclusion of law objection (Tr. 178).
R‑28. 7/21/99 Postal Return Receipt documenting Civil Penalty received
R‑29. 7/15/99 Erosion Control Permit Application
R‑30. 7/15/99 Map submitted with Erosion Control Permit Application
R‑31. 7/15/99 Map submitted with Erosion Control Permit Application
R‑32. 7/20/99 Notice of Receipt of Erosion Control Plan
R‑33. 8/12/99 Letter to Janet Paith from Parker & Assoc.
R‑34. 8/13/99 Letter of Disapproval
R‑35. 9/10/99 Inspection Report
Note: This document was admitted subject to the conclusion of law objection (Tr. 202).
R‑36. 9/10/99 Photographs taken during inspection (consisting of photographs separately numbered 1‑8 and 11‑16)
R‑37. 10/21/99 Sedimentation Inspection Report
Note: This document was admitted subject to the conclusion of law objection (Tr. 202).
R‑38. 10/21/99 Photographs taken during inspection (consisting of photographs separately numbered 1‑18)
R‑39. 11/10/99 Notice of Additional Violations of the SPCA
Note: This document was admitted subject to the conclusion of law objection (Tr. 203).
R‑40. 11/19/99 Letter from Mr. Parker to LQS
R‑41. 12/8/99 Letter from David Scibetta to John Parker
R‑42. 12/16/99 Sedimentation Inspection Report
Note: This document was admitted subject to the conclusion of law objection (Tr. 215).
R‑43. 12/16/99 Photographs taken during inspection (consisting of photographs separately numbered 1‑2)
R‑44. 1/5/00 Notice of Continuing Violation of the SPCA
Note: This document was admitted subject to the conclusion of law objection (Tr. 216).
R‑45. 3/5/00 Second Civil Penalty Assessment LQS 99‑098
Note: This document was admitted subject to the conclusion of law objection (Tr. 900).
R‑46. 3/8/00 Letter sending Second Civil Penalty Assessment
Note: This document was admitted subject to the conclusion of law objection (Tr. 901).
R‑47. 7/28/00 Letter from C. Moreland Gueth to Brian McGinn
R‑48. Draft letter from C. Moreland Gueth
Note: This document was admitted over Petitioner's objection (Tr. 1907‑08).
R‑49. Draft letter from C. Moreland Gueth
Note: This document was admitted over Petitioner's objection (Tr. 1910).
R‑50. 8/30/00 Letter from Kelli Blackwelder of DFR to Mell Nevils
Note: This document was admitted subject to the conclusion of law objection (Tr. 2054).
R‑51. 4/25/00 Handwritten notes by Kelli Blackwelder
R‑54. 10/3/00 Inspection Report
Note: This document was admitted subject to the conclusion of law objection (Tr. 393).
R‑55. 10/3/00 Photographs taken during inspection
R‑56. 8/89 Memorandum of Agreement between DLR and DFR
R‑57. 5/5/92 Memorandum Re: Referral Procedures for Land‑Disturbances
R‑58. 4/22/99 Aerial Photo of Forestry Site
Note: This document was admitted over Petitioner's objection (Tr. 121-124)
R‑59. 4/22/99 Aerial Photo of Development Site
Note: This document was admitted over Petitioner's objection (Tr. 125-126).
R‑60. 5/7&6/23/99 Guidelines on 1st Civil Penalty Assessment - both Dan Sams and David Ward’s signatures
R‑62. 3/30/99 Letter from John W. Parker to Dan Sams
R‑63. Undated Historical Chronology (Case 2 NOAV)
Note: Only pages 1 and 2 of this document were admitted, page 3 was not admitted (Tr. 603).
R‑64. Undated Historical Chronology (1st Civil Penalty)
Note: This document was admitted over Petitioner's objection (Tr. 603).
R‑65. Undated SPCA Violations/Date Tracking (1st Civil Penalty)
R‑66. Undated SPCA Violations/Date Tracking (2nd Civil Penalty)
R‑67. 11/18/91 Wetland Mapping Plat certified by Corps of Engineers
R‑68. 11/18/91 Wetland Mapping Plat certified by Corps of Engineers
R‑69. 1/28/00 Guidelines for Assessing Civil Penalties (2nd Civil Penalty ‑Dan Sams and David Ward's signatures)
Note: This document was admitted subject to the conclusions of law objection (Tr. 908).
R‑70. 3/5/00 Worksheet (2nd Civil Penalty)
Note: This document was admitted subject to the conclusions of law objection (Tr. 909).
R‑71. North Carolina Coastal Boating Guide
R‑73. Mitchell & Associates, Inc. Brochure
R‑74. Various Invoices from Hollis to Holly Ridge Associates
R‑75. 9/99 Weather Data for September 1999
R‑76. 3/1/00 Photograph of Site on or about March 1, 2000
R‑77. 3/1/00 Photograph of Site on or about March 1, 2000
R‑78. 3/1/00 Photograph of Site on or about March 1, 2000
R‑79. List of permits held by either Lionel Yow or John Elmore, from stormwater database
R‑80. 4/28/00 Email correspondence within NCFS regarding ditching tract (consisting of email correspondence identified separately as A, B, and C)
Note: This document was admitted over Petitioner's objection (Tr. 1903‑04).
R-81 9/05/01 Letter from U.S. EPA to Holly Ridge Associates
Note: This document was not admitted and was offered as proof (Tr. 1903-04).
R‑82. 4/28/00 Email correspondence with NCFS regarding wetland drainage
Note: This document was admitted subject to Petitioner's objection of relevance for a portion of the document (Tr. 2020).
R‑83. 10/3/00 Handwritten notes by Kelli Blackwelder during site visit to tract
R‑84. Photograph of Site
R‑85. Photograph of Site
R‑86. Photograph of Site
Official Notice:
Sedimentation Pollution Control Act of 1973, N.C. Gen. Stat. § 113A-50 through 113A-82 (1999) (prior to amendments effective October 1, 1999).
Sedimentation Control regulations, N.C. Admin. Code tit. 15A, r. 4A.0001 through 4A.0005, r. 4B.0001 through .0030. r. 4C.0001 through .0011, r. 4D.0001 through .0003 (1999) (prior to amendments and recodification effective July 1, 2000).
Stormwater Management regulation, N.C. Admin. Code tit. 15A, r. 2H.1001 through 2H.1013 (1999).
STATUTES AND RULES IN ISSUE
The substantive statutes involved are North Carolina Sediment Pollution Control Act, N.C.G.S.§§ 113A‑51 et seq. (1999), the Erosion and Sediment Control Rules and Sedimentation Control Civil Penalty Rules codified at subchapters 4B and 4C of Title 15A of the North Carolina Administrative Code (1999), and the North Carolina Forest Practices Guidelines Related to Water Quality, codified at subchapter 1I of Title 15A of the North Carolina Administrative Code. The procedural statute involved is the North Carolina Administrative Procedure Act. N.C. Gen. Stat. §§ 150B-1 et seq. (2000).
DISPOSITIVE MOTIONS
On July 18, 2001, Respondents and Respondent‑Intervenors filed a Joint Motion for Partial Summary Judgment. In response, Petitioner opposed the motion and contended that summary judgment should be granted in Petitioner's favor. Oral argument was held on July 31, 2001. At the argument, the undersigned verbally granted Respondents and Respondent‑Intervenors partial summary judgment on any challenge to the DLR's assessment of a prior Civil Penalty Assessment against the Petitioner, and denied Respondent and Respondent‑Intervenors' Motion for Partial Summary Judgment concerning any issue related to the March 5, 2000 Civil Penalty Assessment. Summary judgment for the Petitioner was denied.
On August 9, 2001, at the conclusion of the Respondents and Respondent‑Intervenors' evidence, Petitioner made an oral Motion for Involuntary and Summary Dismissal, which was followed by a written Motion filed August 15, 2001. The parties submitted briefs in support of and in opposition to that motion, and oral argument was heard on the motion on August 21, 2001. At the argument, the undersigned verbally denied the motion.
Pursuant to N.C. Gen Stat. § 150B‑34 and ‑36, these rulings on the Joint Motion for Partial Summary Judgment, for Summary Judgment, and for Involuntary and Summary Dismissal are parts of this Recommended Decision. All such rulings are hereby incorporated herein.
STIPULATIONS
In the Pretrial Order and during the hearing, the parties agreed to and the undersigned approved the following stipulations:
Procedural Stipulations from Pretrial Order:
1. Petitioner is a "party aggrieved," within the meaning of Chapter 150B of the General Statutes, by the March 5, 2000 Civil Penalty Assessment for Violations of the Sedimentation Pollution Control Act.