COUNTY OF CARTERET / IN THE OFFICE OF
ADMINISTRATIVE HEARINGS
09 EHR 5042
RUFUS E. MURRAY,
Petitioner,
v.
NORTH CAROLINA DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES, DIVISION OF MARINE FISHERIES,
Respondent. / DECISION
STATEMENT OF THE CASE
This contested case was heard before Beecher R. Gray, Administrative Law Judge, on March 12, 2010, in New Bern, North Carolina. This case involved an appeal of the denial to renew and termination of shellfish lease number 9518 because of Petitioner’s failure to meet the required standards for commercial production and marketing of shellfish from this lease.
APPEARANCES
For Petitioner: Rufus E. Murray (appearing pro se)
1050 West Corbett Ave.
Swansboro, NC 28584
For Respondent: Amanda P. Little
Assistant Attorney General
N.C. Department of Justice
P.O. Box 769
Morehead City, NC 28557
STATUTE AND RULES
N.C.G.S. § 113-202 (2009)
Marine Fisheries Commission Rule 15A N.C.A.C. 3O .0201 (2007 & 2009)
Marine Fisheries Commission Rule 15A N.C.A.C. 3O .0205 (2009)
Marine Fisheries Commission Rule 15A N.C.A.C. 3O .0207 (2009)
Marine Fisheries Commission Rule 15A N.C.A.C. 3O .0208 (2009)
ISSUE
Whether Respondent acted arbitrarily or capriciously, or otherwise substantially prejudiced Petitioner’s rights by denying his application for renewal of shellfish lease 9518 and issuing a notice of intent to terminate Petitioner’s shellfish lease 9518 for failure to meet the required commercial production and marketing standard through the harvest and sale of shellfish in accordance with N.C.G.S. §113-202 and Marine Fisheries Commission Rule 15A N.C.A.C. 3O .0201.
WITNESS
Craig Hardy, for Respondent
EXHIBITS ADMITTED INTO EVIDENCE
PETITIONER:
P-1 Petitioner’s prehearing package
RESPONDENT:
R-1 Petitioner’s Renewal Application for Shellfish Lease 9518
A. Original Lease contract dated February 24, 1997
R-2 Map of Shellfish Lease 9518
R-3 “Notice of Intent to Decline to Renew Shellfish Lease 9518” letter dated February
15, 2008
R-4 Petitioner’s letter to Division dated March 21, 2008
R-5 Extension of Time letter from the Division to Petitioner dated March 28, 2008
R-6 1997-2009 shellfish lease rent notices for Shellfish Lease 9518
R-7 1997-2008 Production/Utilization Reports for Shellfish Lease 9518
R-8 “Notice of Intent to Terminate Shellfish Lease 9518” letter dated August 5, 2009
R-9 A copy of N.C.G.S. § 113-202
R-10 Copy of Marine Fisheries Commission’s administrative rules for shellfish leases
A. Standards for Shellfish Leases (15A N.C.A.C. 03O .0201)
B. Lease Renewal (15A N.C.A.C. 03O .0205)
C. Production Reports (15A N.C.A.C. 03O .0207)
D. Cancellation (15A N.C.A.C. 03O .0208)
FINDINGS OF FACT
Based upon careful consideration of the official record of this proceeding, including the sworn testimony of the witness, the undersigned finds the following facts:
1. The parties received notice of hearing by certified mail more than 15 days prior to the hearing and each stipulated on the record that notice was proper.
2. Petitioner is a citizen and resident of Onslow County, North Carolina, acting on his own behalf. (Ex. R-1; T p 6)
3. Respondent is a state agency established under N.C.G.S. § 143B-279.1 et seq. and vested with statutory authority to enforce the state’s marine fisheries laws, including laws regarding the proprietary use of public trust resources through the Shellfish Lease Program. (T pp 9-10)
4. Shellfish lease 9518 is a 3.123 acre shellfish lease located in White Oak River, near the Carteret County and Onslow County line. On February 24, 1997, Petitioner was granted a ten year lease of this site. (Ex. R-1A, R-2; T pp 11-12, 22, 46)
5. On or about January 23, 2007, Petitioner submitted a shellfish lease renewal application for shellfish lease 9518 to Respondent, Division of Marine Fisheries (hereinafter “DMF”). (Ex. R-1; T pp 10-13)
6. After review of Petitioner’s application, Respondent, on February 15, 2008, sent a “Notice of Intent to Decline to Renew Shellfish Lease 9518” to Petitioner signed by Dr. Louis B. Daniel III, DMF’s Director. The notice provided that Petitioner had not met the production/use requirements through planting efforts and through the harvest and sale of shellfish from this lease in accordance with Marine Fisheries Commission Rule 15A N.C.A.C. 3O. 0201 and that the lease would not be renewed unless Petitioner took corrective action, as provided in the notice, within thirty days from receipt of the notice. (Ex. R-3; T pp 13-20, 44)
7. On March 13, 2008, Petitioner came into compliance with the planting requirement for shellfish lease 9518. On March 21, 2008, Petitioner sent a letter to Respondent requesting an extension of time to meet the harvest and sale requirement for shellfish lease 9518. Respondent granted an extension to Petitioner until October 1, 2008. (Ex. R-4, R-6; pp 20-21, 25)
8. Marine Fisheries Commission Rule 15A N.C.A.C. 3O .0201 provides that in order for a lessee to avoid termination of his shellfish bottom lease, the lessee must produce and market ten (10) bushels of shellfish per acre per year. The DMF calculates the production and marketing rates for leases by averaging over the most recent three-year period after January 1 following the second anniversary of initial bottom leases and throughout the terms of renewal leases under Marine Fisheries Commission Rule 15A N.C.A.C. 3O .0201(c)(6) (2007).[1] (Ex. R-9, R-10A; T pp 20, 24-27, 32-33)
9. Petitioner was required to harvest and sell, through a North Carolina Trip Ticket Dealer, a total of ninety-four bushels of shellfish from shellfish lease 9518 to comply with the commercial production and marketing standard set forth in Marine Fisheries Commission Rule 15A N.C.A.C. 3O .0201. (Ex. R-3, R-5; T pp 16, 21)
10. From February 24, 1997 through October 1, 2008, Petitioner harvested and sold zero bushels of shellfish, verified by Respondent through the N.C. Trip Ticket Program which had no record of Petitioner selling shellfish during these years. (Ex. R-6, R-7, R-10C; T pp 19-20, 22-24, 26-27, 29-30, 33)
11. N.C.G.S. §113-202 (l) provides that an action to terminate a leasehold shall commence upon notice of failure by the lessee to utilize the leasehold on a continuing basis for the commercial production of shellfish. (Ex. R-9, T pp 29, 31)
12. On August 5, 2009, Respondent sent a “Notice of Intent to Terminate Shellfish Lease 9518” to Petitioner signed by Dr. Louis B. Daniel III, DMF’s Director. The notice stated that Petitioner had not met the harvest and sale requirement and that shellfish lease 9518 would be terminated within thirty days of receipt of the notice unless Petitioner provided trip tickets showing the sale of the required ninety-four bushels of shellfish from the lease site. (Ex R-8, T pp 28-30)
13. On September 4, 2009, Petitioner filed his Prehearing Statement alleging that the DMF acted arbitrarily or capriciously, and otherwise substantially prejudiced his rights by declining to renew and commencing action to terminate shellfish lease 9518. (Ex P-1, T pp 53-54)
CONCLUSIONS OF LAW
1. The parties properly are before the Office of the Administrative Hearings and the Office of Administrative Hearings has jurisdiction to hear this case in accordance with N.C.G.S. §150B-23 as a dispute over an agency action, specifically the denial of a renewal application and termination of shellfish lease 9518 located in the White Oak River near the Carteret County and Onslow County line.
2. Petitioner bears the burden of proof on this issue and has failed to meet his burden of showing that Respondent deprived him of property contrary to law.
3. Petitioner has failed to meet the commercial production and marketing of ninety-four bushels from shellfish lease 9518 as required by N.C.G.S. §113-202 and Marine Fisheries Commission Rule 15A N.C.A.C. 3O .0201.
4. Based upon the evidence presented, Respondent did not act arbitrarily or capriciously, or otherwise substantially prejudiced Petitioner’s rights, but did use proper procedure as required by law or rule in making the decision to decline to renew and terminate shellfish lease 9518 since Petitioner failed to meet the required standard for commercial production and marketing of shellfish from this lease site.
DECISION
Based on the foregoing Findings of Fact and Conclusions of Law, the undersigned determines that Respondent’s decisions denying Petitioner’s application to renew shellfish lease 9518 and terminating Petitioner’s shellfish lease 9518 for lack of commercial production and marketing, as required of shellfish leases in public trust waters, is supported by the evidence and is AFFIRMED.
NOTICE
Under N.C.G.S. § 113-202(m), the Secretary of Environment and Natural Resources makes the final agency decision for a lease termination. The agency making the final decision is required to give each party an opportunity to file exceptions to this recommended decision and to present written arguments to those in the agency who will make the final decision. N.C.G.S. § 150B-36(a).
The agency is required by N.C.G.S. § 150B-36(b)(3) to serve a copy of the final decision on all parties, the parties’ attorney of record and to the Office of Administrative Hearings.
IT IS SO ORDERED.
This, the 22nd day of July, 2010.
Beecher R. Gray,
Administrative Law Judge
1
[1] As indicated in the record, Marine Fisheries Rule 15A N.C.A.C. 3O .0201(c)(6) was amended effective October 1, 2008 regarding how the DMF calculates the production and marketing rates for shellfish leases. The amendment, however, had no effect on this appeal because Petitioner failed to the meet the required standard for commercial production and marketing of shellfish regardless of the calculation method used by the DMF since Petitioner harvested and sold zero bushels of shellfish from shellfish lease 9518. (Ex. R-10A, T p 32)