Title: Sandusky Dock Corp. v. Jones

State: ohio

Issuer: Ohio Supreme Court

Document:

[Cite as Sandusky Dock Corp. v. Jones, 106 Ohio St.3d 274, 2005-Ohio-4982.] 
 
 
SANDUSKY DOCK CORPORATION, APPELLEE, v. JONES, DIR., APPELLANT. 
[Cite as Sandusky Dock Corp. v. Jones, 106 Ohio St.3d 274, 2005-Ohio-4982.] 
Environmental protection — Emissions standards — Modification of permit to 
operate under R.C. 3704.03(G) compared to abatement order under R.C. 
3704.03(R) — Consideration of technical feasibility and economic 
reasonableness. 
(No. 2004-0261 — Submitted February 15, 2005 — Decided October 5, 2005.) 
APPEAL from the Court of Appeals for Franklin County,  
No. 03AP-98, 2003-Ohio-7027. 
__________________ 
 
PFEIFER, J. 
{¶ 1} Appellee, Sandusky Dock Corporation, operates a coal-loading 
facility in Sandusky on the shores of Lake Erie.  At the facility, Sandusky Dock 
receives, stores, and loads extensive amounts of coal.  Sandusky Dock has a 
permit to operate (“PTO”) issued by the Ohio Environmental Protection Agency 
(“OEPA”). Before the modification of the permit at issue, certain rules limiting 
visible emissions were inapplicable to the facility because of its geographical 
location.  Ohio Adm.Code 3745-17-08(A).  In 1996, Sandusky Dock voluntarily 
implemented a control system, consisting primarily of cannons that spray water on 
the coal, to limit the amount of fugitive coal dust.  “ ‘Fugitive dust’ means 
particulate matter which is emitted from any source by means other than a stack.”  
Ohio Adm.Code 3745-17-01(B)(6).  Despite these control measures, large 
stockpiles of coal, at times reaching heights of 60 feet, combined with strong 
winds off Lake Erie, often result in fugitive coal dust. 
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{¶ 2} In June 2000, a patron from a local marina filed a verified 
complaint with the OEPA concerning coal-dust emissions from Sandusky Dock’s 
facility.  An accompanying petition of nearly 100 marina patrons complained of 
dust settling on and damaging boats docked in the marina.  In response to the 
complaint, appellant, the Director of Environmental Protection, commenced an 
investigation, which culminated in a finding that probable cause existed to support 
the conclusion that fugitive coal dust from Sandusky Dock’s facility constituted a 
public nuisance in violation of Ohio Adm.Code 3745-15-07(A).  The director 
modified Sandusky Dock’s PTO, pursuant to R.C. 3704.03(G), by requiring 
Sandusky to use emission-control measures pursuant to Ohio Adm.Code 3745-17-
08(B).  The control measures were expected to bring the facility’s coal-dust 
emissions into compliance with Ohio Adm.Code 3745-17-07(B)(6), which limits 
visible emissions to 13 minutes in any hour. 
{¶ 3} Sandusky Dock appealed to the Environmental Review Appeals 
Commission (“ERAC”), arguing in its first assignment of error that the modified 
PTO was unlawful because the requirements were “technically infeasible and 
economically unreasonable” and thus did not comport with R.C. 3704.03(R).  
Sandusky Dock argued in its second assignment of error that the conclusion that 
the fugitive coal dust constituted a public nuisance under Ohio Adm.Code 3745-
15-07(A) was unsupported.  Upon the director’s motion, the ERAC dismissed 
Sandusky Dock’s first assignment of error and excluded all evidence pertaining to 
the technical feasibility and economic reasonableness of the PTO modification.  
The ERAC then concluded that the director had been justified in finding that the 
fugitive dust constituted a public nuisance. 
{¶ 4} Sandusky Dock appealed, and the court of appeals reversed.  The 
court disagreed with the director’s interpretation that R.C. 3704.03(G) and (R) 
constitute distinct authorizations of action that can be applied at the discretion of 
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the director in restricting the emissions of a facility having a PTO.  The court 
concluded:  
{¶ 5} “When R.C. 3704.03(G) is read in conjunction with R.C. 
3704.03(R), it is readily apparent that the director may not act by PTO to require 
the abatement of or prohibit emissions which violate visible emission standards * 
* *, or require emission control measures * * *.  Rather, pursuant to R.C. 
3704.03(R), the director must take such action by order, giving consideration to, 
and basing his determination on, evidence relating to the technical feasibility and 
economic reasonableness of compliance with the order.  Only after such an order 
has been issued, may the director take action with respect to a PTO pursuant to 
R.C. 3704.03(G).”  2003-Ohio-7027, 2003 WL 22999379, at ¶ 9. 
{¶ 6} Based on this reasoning, the court of appeals reversed the decision 
of the ERAC, ruling that the director had exceeded his authority by modifying the 
PTO without consideration of the technical feasibility and economic 
reasonableness of compliance with the emissions restrictions imposed by the 
modified PTO.  The court also declared the second assignment of error, that the 
finding of nuisance was unsupported, moot, and remanded the cause to the ERAC. 
{¶ 7} The cause is before this court upon the acceptance of a 
discretionary appeal. 
{¶ 8} We are guided by two potentially conflicting principles when 
reviewing the director’s interpretation of the provisions of R.C. Chapter 3704.  
First, we will give due deference to the director’s “reasonable interpretation of the 
legislative scheme” governing his agency.  Northwestern Ohio Bldg. & Constr. 
Trades Council v. Conrad (2001), 92 Ohio St.3d 282, 287, 750 N.E.2d 130.  
Second, “any uncertainty with regard to the interpretation of R.C. Chapter 3704 
and rules promulgated thereunder should be construed in favor of the person or 
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entity (manufacturer or otherwise) affected by the law.”  State ex rel. Celebrezze 
v. Natl. Lime & Stone Co. (1994), 68 Ohio St.3d 377, 385, 627 N.E.2d 538. 
{¶ 9} R.C. 3704.03(G) provides: 
{¶ 10} “The director of environmental protection may do any of the 
following: 
{¶ 11} “* * * 
{¶ 12} “(G) Adopt, modify, suspend, and rescind rules prohibiting the 
operation or other use of any new, modified, or existing air contaminant source 
unless an operating permit has been obtained from the director or his authorized 
representative, [or1] the air contaminant source is being operated in compliance 
with the conditions of a variance issued pursuant to division (H) of this section. * 
* *  No application shall be denied or permit revoked or modified without a 
written order stating the findings upon which denial, revocation, or modification 
is based.” 
{¶ 13} R.C. 3704.03(R) provides: 
{¶ 14} “The director of environmental protection may do any of the 
following: 
{¶ 15} “* * * 
{¶ 16} “(R)  Issue, modify, or revoke orders requiring abatement of or 
prohibiting emissions which violate applicable emission standards or other 
requirements of this chapter and rules adopted thereunder, or requiring emission 
control devices or measures in order to comply with applicable emission standards 
or other requirements of this chapter and rules adopted thereunder.  * * *  In the 
making of such orders, the director, to the extent consistent with the federal Clean 
Air Act, shall give consideration to, and base his determination on, evidence 
                                                 
1.  The word “or,” needed to make sense of the sentence, was originally in the statute but was 
deleted by 1993 Am.Sub.S.B. No. 53, 145 Ohio Laws, Part I, 1454. 
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relating to the technical feasibility and economic reasonableness of compliance 
with such orders and their relation to benefits to the people of the state to be 
derived from such compliance.” 
{¶ 17}  The director contends that R.C. 3704.03(G) and (R) independently 
authorize him to address emission standards.  He concludes, therefore, that the 
modification of Sandusky Dock’s PTO was authorized pursuant to R.C. 
3704.03(G), which does not incorporate the feasibility and reasonableness tests of 
R.C. 3704.03(R).  Sandusky Dock counters that the modification of its PTO is 
governed by R.C. 3704.03(R) because the modification imposes restrictions on 
emissions and that the application of R.C. 3704.03(R) should not hinge on 
whether a facility needs a PTO.  We are persuaded that Sandusky Dock’s position 
is more sound and, furthermore, that the director’s position is not reasonable. 
{¶ 18} The modified PTO compels Sandusky Dock to comply with Ohio 
Adm.Code 3745-17-07(B)(6), which requires that there be “no visible particulate 
emissions from any material storage pile except for a period of time not to exceed 
thirteen minutes during any sixty-minute observation period.”  Although the 
director’s order is consistent with his authority under R.C. 3704.03(G), we cannot, 
as the director urges, consider R.C. 3704.03(G) and (R) independently.  The 
unavoidable conclusion is that when a modification of a PTO authorized generally 
by R.C. 3704.03(G) implicates a more specific provision of R.C. Chapter 3704, 
the director’s general authority must give way.  When, as in this case, a PTO 
modification “requir[es] abatement of or prohibit[s] emissions,” R.C. 3704.03(R) 
governs the director’s authority.  R.C. 3704.03(R) requires the director to “give 
consideration to, and base his determination on, evidence relating to the technical 
feasibility and economic reasonableness of compliance.”  The record does not 
indicate that the director complied with this requirement. 
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{¶ 19} If the director’s authority in this case were not governed by R.C. 
3704.03(R), he could modify a facility’s PTO to restrict emissions without 
considering feasibility and reasonableness, even though he would have to consider 
feasibility and reasonableness before restricting emissions of a facility that had no 
PTO.  That distinction would disadvantage facilities having PTOs and defies 
common sense.  The legislative scheme does not evince an intent to more 
stringently regulate facilities with PTOs than facilities without PTOs. 
{¶ 20} The director’s PTO modification in this case was issued without 
formal consideration of “technical feasibility and economic reasonableness.”  
Consideration of these factors is necessary to ensure that the balance between 
regulation and encouragement of business is properly struck.  See Natl. Lime, 68 
Ohio St.3d at 384, 627 N.E.2d 538 (“the General Assembly intended to strike a 
balance between the prevention, control and abatement of air pollution and 
excessive regulation or unwarranted interruption of a business to the point where 
it can no longer function competitively”). 
{¶ 21} Finally, the director states in his brief that “as a practical matter, 
the Director does, of course, take [technical feasibility and economic 
reasonableness] into account.”  The director essentially recognizes that the 
standards of R.C. 3704.03(R) are appropriate to this case and admits that he 
considered these factors, though not formally.  We deem it a short but necessary 
step for the director to formally comply with R.C. 3704.03(R).  For the foregoing 
reasons, we affirm the judgment of the court of appeals. 
Judgment affirmed. 
 
MOYER, C.J., RESNICK, LUNDBERG STRATTON, O’CONNOR, O’DONNELL 
and LANZINGER, JJ., concur. 
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January Term, 2005 
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Jim Petro, Attorney General, Douglas R. Cole, State Solicitor, Diane 
Richards Brey, Deputy Solicitor, and John K. McManus, Assistant Attorney 
General, for appellant. 
Tucker, Ellis & West, L.L.P., Martin H. Lewis, and Richelle W. Kidder, 
for appellee. 
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