COURT OF APPEALS OF VIRGINIA Present: Chief Judge Felton, Judges Elder, Fra nk, Humphreys, Kelsey, Petty, Beales, Alston, McCullough, Huff and Chafin Argued at Richmond, Virginia

VIRGINIA MARINE RE SOURCES COMMISSION OPINION BY v. Record No. 0086-12-1 JUDGE GLEN A. HUFF JANUARY 8, 2013 CHINCOTEAGUE INN AND RAYMOND BRITTON

UPON A REHEARING EN BANC
FROM THE CIRCUIT COUR T OF ACCOMACK COUNTY Frederick B. Lowe, Judge Paul Kugelman, Jr., Assistan t Attorney General (Kenneth T. Cuccinelli, II, Attorney General; Elizabeth A. An drews, Senior Assistant Attorney General; David C. Grandis, Assistant Attorney General, on briefs), for appellant. Jon C. Poulson for appellees.

This matter comes before this Court on a rehearing en banc from a published panel decision rendered on August 14, 2012. See Va. Ma rine Res. Comm’n v. Chincoteague Inn, 60 Va. App. 585, 731 S.E.2d 6 (2012). The Virgin ia Marine Resources Commission (“VMRC”) initially appealed an order of the Circuit C ourt of Accomack County (“circuit court”) holding that VMRC lacked jurisdiction to order Chincot eague Inn (“Inn”) to remove a vessel from over state-owned subaqueous bottomland. The three-judge panel of this Court reversed the circuit court holding that federal maritime law did not preempt VMRC’s authority to regulate state-owned subaqueous bottomland and, therefore, VMRC had authority to order the removal of the vessel. By order dated September 18, 2012, we granted the Inn’s petition for rehearing en banc. Va. Marine Res. Comm’n v. Chincoteague Inn, 60 Va. App. 719, 732 S.E.2d 45 (2012). UponPUBLISHED- 2 - rehearing en banc, we hold that the circuit court did not err in hol ding that VMRC lacked jurisdiction to order the rem oval of a temporarily moored vessel from over state-owned subaqueous bottomlands. Therefore, we a ffirm the judgment of the circuit court.
I. BACKGROUND At some point prior to June 8, 2010, the Inn borrowed a barge from BIC, Inc., moored it to the dock outside the Inn along the Chincoteague Channel, outfitted it with a new deck, tables, and chairs, and installed and conn ected the barge to shore power and water. The Inn did this with the intent of using the vessel 1 for four months as additiona l seating for its restaurant. On June 8, 2010, another restaurant owner notified VMRC staff that the Inn had made this addition. VMRC staff conducted a site inspection on June 11, 2010, and determined that part of the vessel was over state-owned s ubaqueous bottomland. On June 15, 2010, VMRC sent a notice to comply to the Inn, through Raym ond Britton (“Britton”), the manager of the Inn, regarding the portion of the ve ssel that was over state-owned subaqueous bottomland without a permit. Specifically, the letter notified the Inn that the “western 54-foot by 13.6-foot portion” of the “71.5-foot long by 13.6-foot wide floating platform/pier a nd a 30-foot by 33.5-foot floating platform with a 22-foot by 12-foot roof struct ure that is open on three sides” was within VMRC’s jurisdiction and needed to be removed with in ten days of receipt of the letter. The letter stated further that the matter would be placed before the full Commission for an enforcement action if the Inn failed to comply within the time specified. The Inn then submitted a joint permit application (“application”) to the Commission on June 18, 2010, for an after-the-fact-permit for th e entire vessel. By e-mail on June 22, 2010, VMRC notified the Inn that they would not proce ss the Inn’s application until the structure was

1 At oral argument, VMRC c onceded that the barge in question was a “vessel.” “The word ‘vessel’ includes every description of waterc raft or other artificial contrivance used, or capable of being used, as a means of transportation on water.” 1 U.S.C. § 3.- 3 - removed. VMRC sent a second e-mail to the I nn on June 24, 2010, asking whether the Inn was going to withdraw its applicati on, reiterating that VMRC could not proceed with the application until the vessel was removed, and restating that the Inn’s failure to remove the vessel would result in a VMRC enforcement action. VMRC staff conducted another site inspection on June 28, 2010, and found that the vessel had not been removed and was secured to the pier with mooring lines. On August 24, 2010, the Commission held a hear ing on the Inn’s failure to comply. At the hearing, Britton testified that he had been in marine construction for about twenty-five years and that his company, BIC, Inc., owned several ba rges, one of which is the vessel at issue, and that the barges were moored at the Inn when they were not in use. With regard to the subject vessel, Britton testified that they installed new d ecking and a handrail on it. Britton also testified there was additional seating on the barge and two gangways from the restaurant to the barge, each connected to the restaurant so that the gangwa ys could be raised. Brit ton then stated that on July 19, 2010, they disconnected the water a nd electricity lines, pulled the gangways up, removed the vessel from her slip by use of its push boat, traveled down the Chincoteague Channel to the old drawbridge, returned to the slip, moored it to the Inn’s dock, and reconnected the lines all within thirty-two minutes. During the hearing, there was division among the Commissioners as to whether the barge was a vessel and whether the Commission had any authority over the vessel – regardless of whether it was a barge or floating platform. At the conclusion of the hearing, the Commission concluded that the “floating structure” was an unlawful use of state-owned subaqueous bottomland, pursuant to Code § 28.2-1203, and direct ed the Inn to remove the portion of the vessel under VMRC’s jurisdiction within ten da ys. The Commission ma de no express finding that the structure was a vessel. On August 26, 2010, the Commissi on sent a letter to the Inn- 4 - setting forth its holding and dire cting the removal of the portion of the vessel over state-owned subaqueous bottomlands. On September 16, 2010, VMRC notified the Inn that it was violat ing the Commission’s order due to its failure to rem ove the vessel within the established time frame. VMRC then referred the matter to the Attorney General to pe tition the appropriate circuit court for an order requiring removal of part of the vessel as well as the assessment of civil penalties. The Inn mailed its notice of appeal to VMRC on September 23, 2010. On appeal to the circuit court, the Inn argued that VMRC lacked jurisdiction under Code § 28.2-1203 to regulate a temporarily moored vessel floa ting over state-owned subaqueous bottomland and that federal maritime law precludes state regulation over a vessel in navigation. 2 In response, VMRC argued that the Commonwealth owned the subaqueous bottomland and VMRC had jurisdiction to regulate the vessel because VMRC’ s scope of authority included regulating encroachments over state-owned subaqueous bottomla nds pursuant to Code § 28.2-1203. On October 14, 2011, the circuit court hear d argument and accepted the Inn’s position, ruling that VMRC lacked jurisdiction over the vessel as its mooring was not a permanent attachment to land and it was capable of being mo ved from place to place in navigable waters. The circuit court then de ferred ruling on the Inn’s request for fe es and costs. In its final order issued on December 20, 2011, the circuit court found that VMRC erred in determining that it had

2 A temporarily moored maritime vessel is a vessel in navigation. See Stewart v. Dutra Constr. Co., 543 U.S. 481, 490, 493-94, 496 (2005) (noti ng that the focus of whether a vessel is “in navigation” is on whether the watercraft is “capable of being used” for maritime transport and whether such use is a practical possibility or merely a theoretical one); see also, Chandris, Inc. v. Latsis, 515 U.S. 347, 373 (1995) (“‘[A] vesse l does not cease to be a vessel when she is not voyaging, but is at anchor, berthed, or at dockside.’” (quo ting DiGiovanni v. Traylor Bros., Inc., 959 F.2d 1119, 1121 (1st Cir. 1992))); Leathers v. Blessing, 105 U.S. 626, 629 (1882) (“[A]lthough the transit of the vessel was comple ted, she was still a ve ssel occupied in the business of navigation at the time. The facts, that she was securely moored to the wharf, and had communication with the shore by a gang-plank, did not make her a part of the land or deprive her of the character of a water-borne vessel.”).- 5 - jurisdiction over the vessel and was not in co mpliance with the statutory authority and/or jurisdiction limitations set forth in Code § 2.2-402 7. The circuit court also awarded the Inn its fees and costs since it had “substantially prevailed.” On August 14, 2012, a panel of this Court reve rsed the circuit court’s decision holding that VMRC had jurisdiction to order the removal of the vessel, and reversing and remanding for the circuit court to determine the issues presente d in the Inn’s petition fo r appeal to the circuit court, including the scope of Code § 28.2-1203. Va. Marine Res. Co mm’n, 60 Va. App. at 599, 731 S.E.2d at 13. On appeal, the panel held that the issue was “whether federal maritime law preempts the state’s ability to order the remova l of the structure” while noting that VMRC never ruled on federal preemption. Id. at 591, 731 S.E.2d at 9. Based on four factors, the panel held that federal law did not preempt VMRC from orde ring the removal of the vessel pursuant to its right to regulate encroachment s upon or over the state-owned subaqueous bottomlands. Id. at 597-99, 731 S.E.2d at 12. The panel also vacated the circuit court’s award of fees and costs to the Inn, and remanded for a determination of f ees and costs, if any, based on Code § 2.2-4030. Id. at 599, 731 S.E.2d at 12-13. On September 18, 2012, this Court granted the In n’s petition for a rehearing en banc with regard to the issues raised by the Inn in the pe tition, stayed the mandate of the panel’s decision, and reinstated the appeal. Va. Marine Res. Comm’n, 60 Va. App. at 720, 732 S.E.2d at 46. This appeal followed.
II. STANDARD OF REVIEW Judicial review of an agency decision is authorized by Code § 2.2-4027 of the Virginia Administrative Process Act. “J udicial review of an agency d ecision is limited to determining ‘1. [w]hether the agency acted in accordance with law; 2. [w]hether the agency made a procedural error which was not harmless error; and 3. [w]hether the agency had sufficient- 6 - evidential support for its findings of fact.’” Commonwealth ex rel. Va. State Water Control Bd. v. Blue Ridge Envtl. Def. League, Inc., 56 Va. App. 469, 480, 694 S.E.2d 290, 296 (2010) (alteration in original) (quoting Johnston- Willis, Ltd. v. Kenley, 6 Va. App. 231, 241, 369 S.E.2d 1, 6 (1988)), aff’d, 283 Va. 1, 720 S.E.2d 138 (2012). “‘On reviewing the claims of error, an agen cy’s factual determinati on is given substantial judicial deference, and is review ed ‘only for whether they have s upport in substantial evidence.’” Id. (quoting Mazloumi v. Dep’t of Envtl. Quality, 55 Va. App. 204, 208, 684 S.E.2d 852, 854 (2009)). On appeal of an agency’s determination of law, “where the question involves an interpretation which is within the specialized competence of the ag ency and the agency has been entrusted with wide discretion by the General Assembly, the agency’s decision is entitled to spec ial weight in the courts[, and] . . . ‘judicial interference is pe rmissible only for relief against arbitrary or capricious action th at constitutes a clear abuse of delegated discretion.’” Evelyn v. Commonwealth, 46 Va. App. 618, 624, 621 S.E.2d 130, 133 (2005) (alteration in original) (quoting Johnston-Willis, 6 Va. App. at 244, 369 S.E.2d at 8). “However, courts do not defer to an agency’s interpretation ‘[i]f the issue falls outside the area generally entrusted to the agency, and is one in which the courts have special competence, i.e., the common law or constitutional law . . . .’” Commonwealth ex rel. Va. State Water Control Bd., 56 Va. App. at 481, 694 S.E.2d at 296 (alteration in orig inal) (quoting JohnstonWillis, 6 Va. App. at 243-44, 369 S.E.2d at 8). “An agen cy’s ‘legal interpretations of statutes’ is accorded no deference because ‘[w]e have long he ld that pure statutory interpretation is the prerogative of the judiciary, and thus, Virginia c ourts do not delegate that task to executive agencies.’” Id. (quoting The Ma ttaponi Indian Tribe v. Commonwea lth Dep’t of Envtl. Quality, 43 Va. App. 690, 707, 601 S.E.2d 667, 676 (2004), aff’d in part, rev’d in part sub nom, Alliance- 7 - to Save the Mattaponi v. Commonw ealth Dep’t of Envtl. Quality ex rel. State Wate r Control Bd., 270 Va. 423, 621 S.E.2d 78 (2005)). [W]here the issue involves a legal determination or statutory interpretation, this Court does a de novo review, especially if the statutory language is clear. We are required to construe the law as it is written. An erroneous cons truction by those charged with its administration cannot be permitted to override the clear mandates of a statute. When an agency’s statutory interpretation conflicts with the language of the statute or when the interpretation has not been consistently and regularly a pplied, the usual deference to an agency’s interpretation should be withheld. Id. at 481-82, 694 S.E.2d at 296-97 (alteration in original) (int ernal quotation marks omitted) (citations omitted) (quoting Shippers’ Choice of Va., Inc. v. Smith, 52 Va. App. 34, 37-38, 660 S.E.2d 695, 696-97 (2008), rev’d on other grounds, 277 Va. 593, 674 S.E.2d 842 (2009)).
III. ANALYSIS On appeal, VMRC contends that the circuit court’s ruling that VMRC lacked jurisdiction over the vessel should be reversed because the Commission has jurisdicti on to order cessation of encroachments over state-owned subaqueous bottoml ands and this jurisdiction is not preempted by federal maritime law particularly as it relates to floating additions to restaurants. The Inn argues, however, that the circuit court did no t err because the scope of Code § 28.2-1203 does not create jurisdiction in VMRC to regulate a vessel either in tr ansit or temporarily moored over state-owned subaqueous bottomland so as to require it to be permitted under Code §§ 28.2-1203 and -1204, or removed. Before addressing whether federal law preempts state law, we must first determine if the statute grants VMRC jurisdiction to order the removal of a temporar ily moored vessel. Thus, the threshold issue in this case is whether Code § 28.2-1203 provides VMRC jurisdiction over vessels temporarily moored over state-owne d subaqueous bottomlands. In making this- 8 - determination, we must look to th e language of the statute and the legislature’s intent in enacting it. Evelyn, 46 Va. App. at 629-30, 621 S.E.2d at 136. “In construing statutes, courts ar e charged with ascertaining and giving effect to the intent of the legislature.” Crown Cent. Petroleum Corp. v. Hill, 254 Va. 88, 91, 488 S.E.2d 345, 346 (1997). “That intention is initially found in the words of the statute itself, and if those words are clear and unambi guous, we do not rely on rules of statutory constr uction or parol evidence, unless a literal application would produce a meaningless or absurd result.” Id. (citations omitted). “[W]ords and phrases used in a statute should be given their ordinary and usually accepted meaning unless a different intention is fairly manifest.” Id. (quoting Woolfolk v. Commonwealth, 18 Va. App. 840, 847, 447 S.E.2d 530, 534 (1994)). Thus, “‘[w]hen the language of a statute is unambiguous, we are bound by the plain meaning of that language. . . . If[, however, ] a statute is subject to more than one interpretation, we must apply the interpretation that will carry out the legislative intent behind the statute.’” Scott v. Commonwealth, 58 Va. App. 35, 48, 707 S.E.2d 17, 24 (2011) (quoting Evans v. Evans, 280 Va. 76, 82, 695 S.E.2d 173, 176 (2010)). Although Code § 28.2-1203 is part of the la w that has been codified by the General Assembly and entrusted to VMRC to apply, the out come of this appeal turns on the statutory interpretation of Code § 28.2-1203. Therefore, we do not give the agency’s interpretation of its jurisdiction under the statute any deference. Se e Commonwealth ex rel. Va. State Water Control Bd., 56 Va. App. at 481, 694 S.E.2d at 296 (quoting Th e Mattaponi Indian Tribe, 43 Va. App. at 707, 601 S.E.2d at 676). Furthermore, while the stat ute is penal, it “has a primarily regulatory, non-penal purpose and should be construed liberally in favor of the public interest rather than against it.” Evelyn, 46 Va. App. at 631, 621 S.E.2d at 137. In 1953, the United States Congress ceded title and ownership of la nds beneath navigable waters within a state’s boundaries to that respective state, as we ll as the natural resources within- 9 - such lands and waters. 3 Submerged Lands Act, 43 U.S.C. § 1311; see also Taylor v. Commonwealth, 102 Va. 759, 770, 47 S.E. 875, 879 ( 1904) (recognizing that “the navigable waters and the soil under them, within the territo rial limits of a State, are the property of the State, to be controlled by the State, in its own discretion, for the benefit of the people of the State.” (citing McCready v. Virginia, 94 U.S. 391 (1877))). Pursuant to Code § 28.2-1200, [a]ll the beds of the bays, rivers, creeks and the shores of the sea within the jurisdiction of th e Commonwealth, not conveyed by special grant or compact according to law, shall remain the property of the Commonwealth a nd may be used as a common by all the people of the Commonweal th for the purpose of fishing, fowling, hunting, and taking and catching oysters and other shellfish. See also Taylor, 102 Va. at 765-70, 47 S.E. at 877- 80 (noting that the predecessor to this code section was not “an arbitrary assumption of righ t upon the part of the State,” but was merely a declaration of the common law). Article XI, Section I of the Constitution of Virginia established the following policy regarding waters owned by the Commonwealth: [t]o the end that the people have clean air, pure water, and the use and enjoyment for recreation of ad equate public lands, waters, and other natural resources, it shall be the policy of the Commonwealth to conserve, develop, and utilize its natural resources, its public lands, and its historical sites and bui ldings. Further, it shall be the Commonwealth’s policy to protect its atmosphere, lands, and waters from pollution, impairment, or destruction, for the benefit, enjoyment, and general welf are of the people of the Commonwealth. In furtherance of this policy, Article XI, Section II of the Constitution of Virginia provides that “the General Assembly may undertake the . . . pr otection of its atmosphere, lands, and waters from pollution, impairment, or destruction, by agencies of the Commonwealth . . . .”

3 In doing so, however, the federal governme nt reserved the power to regulate the bottomlands for the “constitutional purposes of commerce, navigation, national defense, and international affairs, . . . .” Submerged Lands Act of 1953, 43 U.S.C. § 1314(a) (2006).- 10 - In 1962, jurisdiction over the Commonw ealth’s permit program to regulate encroachments on or over state-owned bottomla nds was transferred from the Office of the Attorney General to VMRC. To that end, Code § 28.2-101 specifically provides that VMRC’s jurisdiction shall include the Commonwealth’s te rritorial sea and extend to the fall line of all tidal rivers and streams except in the case of state-owned bottomlands where juri sdiction extends throughout the Commonwealth. The Commission shall have jurisdiction over all commercial fishing and all marine fish, marine shellfish, marine organisms, and habitat in such areas. In waters of the Albemarle and Currituck watersheds, the Commission’s fisheries management jurisdiction is limited to the recreational and commercial harvest of blue crabs. The Commission’s ju risdiction shall also include the power to exercise regulatory au thority over all structures and improvements built or proposed by ri parian property owners in the Potomac River appurtenant to th e shore of the Commonwealth. (Emphasis added). Code § 28.2-1204 sets forth VMRC’s au thority over submerged lands to 1. Issue permits for all reasonable uses of state-owned bottomlands not authorized under subsection A of [Code] § 28.2-1203, including but not limited to, dredging, the taking and use of material, and the placement of wharves, bulkheads, and fill by owners of riparian land in the waters opposite their lands, provided such wharves, bulkheads, and fill do not extend beyond any lawfully establis hed bulkhead lines; 2. Issue permits to recover underw ater historic pr operty pursuant to [Code] §§ 10.1-2214 and 28.2-1203; and 3. Establish bulkhead and private pier lines on or over the bays, rivers, creeks, streams, and shores of the ocean which are owned by or subject to the jurisdiction of the Commonwealth for this purpose, and to issue and publish maps and plats showing these lines; however, these lines shall not conflict with those established by the United States Army Corps of Engineers. Code § 28.2-1203(A), titled “[u]nlawful use of suba queous beds; penalty,” pr ovides, in pertinent part, [i]t shall be unlawful for any pe rson to build, dump, trespass or encroach upon or over, or take or use any materials from the beds- 11 - of the bays, ocean, rivers, streams, or creeks which are the property of the Commonwealth, unless such act is performed pursuant to a permit issued by the Commission . . . . In exercising its authority to grant or deny a permit, Code § 28.2-1205(A) directs VMRC to be guided by Article XI, Secti on I of the Constitution of Virgin ia, to consider the public and private benefits of proposed projects as well as the effects of the pr ojects on a list of factors, and to exercise its authority consistent with the publ ic trust doctrine as de fined by common law. In Virginia, the public trust doctrine is as follows: “The state holds the land lying be neath public waters as trustee for the benefit of all citizens. As tr ustee, the state is responsible for proper management of the resource to ensure the preservation and protection of all appropriate curr ent and potential future uses, including potentially conflicting uses, by the public.” Palmer v. Commonwealth Marine Res. Comm’n, 48 Va. App. 78, 88-89, 628 S.E.2d 84, 89-90 (2006) (quoting Virginia Marine Resources Commission, Subaqueous Guidelines, 21 Va. Reg. Regs. 1708 (Feb. 21, 2005)). Thus, in determining the legislative intent, consideration of the public trust doctrine is proper. See Ev elyn, 46 Va. App. at 631 n.3, 621 S.E.2d at 137 n.3 (“Thus, the Constitution makes clear it is entire ly appropriate for the VMRC and judiciary to consider the legislature’s express duty to ‘safeg uard the public right to the use and enjoyment of the subaqueous lands of the Commonwealth held in trust by it for the benefit of the public as conferred by the public trust doctrine and the Constitution of Virginia,’ Code § 28.2-1205(A), when interpreting and applying all legislative enactments, includi ng Code §[] 28.2-1203 . . . .”). It is within this context that we exam ine the meaning of Code § 28.2-1203. As noted above, Code § 28.2-101 specifically provides th at VMRC has jurisdic tion over state-owned subaqueous bottomlands. Pursuant to Code §§ 28.2-1203, and -1204, VMRC’s jurisdiction includes its authority to require permits from any person who “build[s], dump[s], trespass[es] or encroach[es] upon or over , or take[s] or use[s] any material s from the beds of the bays, ocean,- 12 - rivers, streams, or creeks which are the prope rty of the Commonwealth, . . . .” (Emphasis added). While Code § 28.2-1203(A) makes it unlawful, absent th e issuance of a permit, for a person to “encroach upon or over” state-owned subaqueous bottomlands, it does not define the term “encroach.” Webster’s Third International Dictionary defines “encroach” as “to enter by gradual steps or by stealth into the possessions or rights of another” or “to a dvance beyond desirable or normal limits.” Webster’s Third Intern ational Dictionary 747 (2002). Black’s Law Dictionary also defines “encroach” as “[t]o enter by gradual steps or stealth into the posse ssions or rights of another,” but also defines it as “[t]o gain or intrude unlawfull y upon another’s lands, property, or authority.” Black’s Law Dictionary 607 (9th e d. 2009). Thus, when applying the plain meaning of the word in conjunction with the legislative intent behind the statute, one must be unlawfully over the state-owned bottomlands such that it violates the right of “all the people of the Commonwealth” to use the bottomlands “for th e purpose of fishing, fo wling, hunting, and taking and catching oysters and other shellfish,” Code § 28.2-1200, and prohibits the Commonwealth from properly managing the bottomlands in order for the action to const itute an encroachment under Code § 28.2-1203. 4 Although a portion of the vessel was temporar ily moored over state-owned bottomlands, it was not unlawfully encroaching over the bottoml ands such that it violated the rights of the people of the Commonwealth to use the bottoml ands. Neither did it interfere with VMRC’s

4 Although not referenced during oral argumen t and only mentioned in passing on brief, VMRC’s authority to regulate a “trespass . . . upon or over” state-owned subaqueous bottomlands would similarly fail. Code § 28.2-12 03. Webster’s Third Inte rnational Dictionary defines “trespass” as follows: “to enter unlaw fully upon the land of another.” Webster’s, supra, at 2439. Black’s Law Dictionary defines “trespas s” as “[a]n unlawful act committed against the person or property of another; es p., wrongful entry on another’s real property.” Black’s, supra, at 1642. Accordingly, VMRC’s jurisdiction over “t respass” would requir e an unlawful contact or connection to or over the bottomland, neither of which occurred here for the same reasons set forth above.- 13 - management of state-owned bottomlands or fish and shellfish habitats. The focus of Code § 28.2-1203 is to ensure the continued use and enj oyment of the bottomlands consistent with the Commonwealth’s policy as well as th e public trust doctrine. To th at end, VMRC is authorized to regulate and require permits where such use of the bottomlands is in contravention of Code § 28.2-1203. The statute, however, does not requir e an individual temporarily mooring a vessel over bottomlands, without more, to first obta in a permit nor did the legislature intend a temporarily moored vessel to constitute an “encr oachment” requiring a permit. If that were the case, every vessel owner would be in jeopardy whenever they were temporarily moored over state-owned bottomlands. Furthermore, if the statute authorized VM RC to require a permit for a vessel every time it was temporarily moored, it would be impossible for VMRC to implement as vessels can move and stop over the bottomlands numerous times in one day. In addition, under VMRC’s sweeping conception of “encroachment,” any owner of a vessel temporarily moored over state-owned bottomland who did not obtain a permit from VM RC would be subject to a fine of up to $25,000 per day and prosecution for a Class 1 misdem eanor. See Code §§ 28.2-1203(B) (Class 1 misdemeanor); -1211 (injunction against violations of Code § 28.2-1203); -1212 (monitoring, inspections, compliance, and restoration); -1213 (penal ties). Accordingly, th is Court declines to utilize such a broad interpretati on as it would produce an absurd result in contravention to the legislature’s intent, and holds th at a vessel, such as the one at issue, temporarily moored over state-owned bottomlands is not an encroachment – an unlawful intrusion – requiring a permit.
IV. CONCLUSION Based on the foregoing, this Court holds that the circuit court did not err in holding that VMRC lacked jurisdiction under Code § 28.2-1203 to order the removal of the temporarily moored vessel. Because we hold that the circuit court did not e rr in its ruling on jurisdiction, we- 14 - need not address whether federal law preempts st ate law as there is no state law applicable. Accordingly, we affirm the circuit court’s order including its award of fees and costs to the Inn. Affirmed.- 15 - Elder, Frank, Humphreys, and Petty, JJ ., dissenting. We dissent for the r easons stated in the panel opinion. See Va. Marine Res. Comm’n v. Chincoteague Inn, 60 Va. App. 585, 731 S.E.2d 6 (2012).

# VIRGINIA: In the Court of Appe als of Virginia on Tuesday 

### the 18th 

### day of September, 2012

. Virginia Marine Resour ces Commission, Appellant, against Record No. 0086-12-1 Circuit Court No. 001-CL0000399 Chincoteague Inn and Raymond Britton, Appellees.
Upon a Petition for Rehearing En Banc Before Chief Judge Felton, Judges El der Frank, Humphreys, Kelsey, Pe tty, Beales, Alston, McCullough, Huff and Chafin
On August 27, 2012 came the appellees, by counsel, and filed a petition requesti ng that the Court set aside the judgment rendered herein on August 14, 2012, and grant a rehearing en banc on the issue(s) raised in the petition. On consideration whereof, the petition for rehearing en banc is granted with rega rd to the issue(s) raised therein, the mandate entered herein on August 14, 2012 is stayed pending th e decision of the Court en banc , and the appeal is reinstated on the docket of this Court. The parties shall file briefs in compliance with Rule 5A:35(b). The appellant shall attach as an addendum to the opening brief upon rehearing en banc a copy of the opinion pr eviously rendered by the Court in this matter. It is further ordered that the a ppellees shall file twelve addi tional copies of the appendix previously filed in this case. In addition, any party represented by counsel shall file twelve electronic copies of their brief (and the appendi x, if the party filing the appe ndix is represented by counsel) with the clerk of-2- this Court. The electronic copies must be filed on twelve separate CD s or DVDs and must be filed in Adobe Acrobat Portable Document Format (PDF). 1

A Copy,
Teste: Cynthia L. McCoy, Clerk original order signed by a deputy clerk of the By: Court of Appeals of Virginia at the direction of the Court Deputy Clerk

1 The guidelines for the creation and submissi on of a digital brief package can be found at www.courts.state.va.us, in the Court of Appeals s ection under “Resources and Reference Materials.”COURT OF APPEALS OF VIRGINIA

Present: Judges Elder, Frank and Humphreys Argued at Chesapeake, Virginia

VIRGINIA MARINE RESOURCES COMMISSION OPINION BY v. Record No. 0086

- 12

- 1 JUDGE ROBERT P. FRANK AUGUST 14, 2012 CHINCOTEAGUE INN AND RAYMOND BRIT TON

FROM THE CIRCUIT COURT OF ACCOMACK COUNTY Frederick B. Lowe , Judge Paul Kugelman, Jr., Assistant Attorney General (Kenneth T. C uccinelli, II, Attorney General; Elizabeth A. Andrews, Senior Assistant Attorney General ; David C. Grandis, Assistant At torney General, on brief s ) , for appellant. Jon C. Poulson for appellee s . Appellant, the Virginia Marine Resources Commission (VMRC) , appeals from an order of the circuit court of Accomack County, holding that VMRC lacked jurisdiction to order appelle e, the Chincoteague Inn (the Inn), to remove a floating platform from over state

- owned bottomland. VMRC argues the c ircuit c ourt erred in ruling that VMRC considered the floating addition a vessel where VMRC made no such determination. VMRC also alleges the c ircuit

c ourt erred in holding that VMRC had no jurisdiction to order the removal of the floating platform. Finally, VMRC assigns error to the c ircuit c ourt’s award of fees and costs to the Inn

. For the reasons stated , we reverse and remand.
PROCEDUR AL HISTORY On June 15, 2010, VMRC wrote to Raymond Britton, as manager of the Inn, notifying him that he needed to remove a portion of an unauthorized floating platform next to the Inn,- 2

- because the platform was in violation of Code § 28.2

- 1212(B). VMRC s ubsequently brought the matter before its Commission for enforcement action. On August 24, 2010, the Commission held a hearing and heard argument. By letter dated August 26, 2010, VMRC informed the Inn that the Commission found the floating addition to be an unlawful use of state

- owned bottomland, in violation of Code § 28.2

- 1203, and ordered the portion of the platform over state

- owned bottomland to be removed within ten days. The Inn mailed a notice of appeal on September 23, 2010. On October 14, 20 11, the circuit court of Accomack County heard the appeal and ruled the VMRC lacked jurisdiction over the floating platform. At that time, the c ircuit c ourt deferred ruling on the Inn ’s request for fees and costs. The c ircuit c ourt issued its final order on December 20, 2011, finding that VMRC lacked jurisdiction to order the removal of the floating platform. The c ircuit c ourt also ruled that the Inn had substantially prevailed and awarded attorney’s fees and costs.
BACKGROUND In June of 2010, VMRC le arned that a large floating platform had been placed adjacent to the Inn and was reportedly over state

- owned bottomland. VMRC conducted a site inspection on June 11, 2010 and determined that at least part of the platform was not over state

- owned bottomlan d. On June 15, VMRC sent the Inn a notice to comply, through Britton, regarding the unauthorized portion of the floating platform. The notice gave the Inn ten days to remove the illegal portion of the platform. On June 22, VMRC sent another letter to th e Inn , stating that failure to remove the floating platform would result in VMRC enforcement action. A site inspection on June 28 showed that the platform had not been removed.- 3

- VMRC held a hearing on August 24. At the hearing, Britton testified that th e floating platform had a bar, tables, and a gangplank leading to the Inn’s restaurant. Britton intended to use the platform for four months, to accommodate seasonal restaurant and bar overflow. Britton also testified that the platform was a barge normal ly used in his construction business and therefore was a vessel, noting that on July 19, 2010, the barge was disconnected from electric and water lines, taken out of its slip by its normal push boat, taken up Chincoteague Channel to the old draw bridge, the n returned to its slip and reconnected, all in 32 minutes. After considerable debate over whether the Commission had jurisdiction over a vessel, the Commission ultimately concluded that the “floating structure” was an unlawful use of

state

- owned bottomlan d and directed the Inn to remove the offending portion of the platform under VMRC’s jurisdiction within ten days. The Commission never made a finding that the

structure was a vessel. On September 16, 2010, VMRC notified the Inn that because it had not re moved the platform from the Inn, it was violating the Commission’s order. VMRC then referred the matter to the Attorney General to petition the appropriate c ircuit c ourt for an order requiring removal of part of the platform, as well as the assessment of civil penalties. The Inn mailed a notice of appeal to VMRC on September 23, 2010. On appeal to the

c ircuit c ourt, Britton argued that VMRC lacked jurisdiction over a temporarily moored barge or vessel because federal maritime law pre empts state regulatio n over any vessel. On October 14,
201 1 , the c ircuit c ourt heard argument and accepted the Inn’s position, ruling th at VMRC lacked jurisdiction over the platform adjacent to the Inn, as it was moored and docked, not permanently- 4

- attac h ed to land, and beca use it was capable of being moved from place to place in navigable

waters. This appeal follows. 1
ANALYSIS
VMRC first contends the circuit court erred when it ruled that VMRC considered the floating addition a vessel where VMRC made no such determination and where making this determination is beyond the scope of a circuit court ’s review of an administration case decision. The Inn argues that this issue is waived. We agree with the Inn that this argument was not preserved in the circuit court

. At oral a rgument, VMRC conceded the issue was not preserved and that the structure in question was a vessel.
VMRC next contends the circuit court erred in finding that VMRC did not have any jurisdiction to order the removal o f the portion of the floating addition over state

- owned bottomland

. 2 Here, we review whether the circuit court correctly ruled VMRC had no jurisdiction because the structure in question is a vessel. The issue, as framed by both parties and as presented at oral argument , is whether federal ma ritime law preempts the state’s ability to order the removal of the structure. The C ommission never ruled on federal preemption.

1 VMRC alleges that the Inn’s brief contains unsupported facts and inadequate citation to the record, in violation of Rule 5A:21(c). We have thoroughly reviewed the reco rd in this case, not merely the briefs of the parties. Our analysis is not based on the Inn’s statement of facts, but on the record. See Ward v. Charlton , 177 Va. 101, 107, 12 S.E.2d 791, 792 (1941).

2 On appeal, the Inn supports the circuit court ’s dec ision, contending that Code § 28.2

- 1203 applies only to fixed structures. It is not clear from the circuit court ’s ruling whether Code § 28.2

- 1203 barred the Commission from exercising jurisdiction. The arguments before the circuit court were 1) the scop e of Code § 28.2

- 1203 and 2) whether state regulations were preempted by federal maritime law . The scope of Code § 28.2

- 1203 would appropriately be addressed by the circuit court on remand.- 5

- T he preemption issue is one of law. Code § 2.2

- 4027 of the Virginia Administrative Process Act (VAPA) allows judicial review of an agency decision. Under VAPA, the circuit court reviews an agency’s action in a manner “‘ equivalent to an appellate court’s role in an appeal from a trial court. ’” J. P. v. Carter , 24 Va. App. 707, 721, 485 S.E.2d 162, 169 (1997) (quoting Sch. Bd. v. Nicely , 12 Va. App. 1051, 1061

- 62, 408 S.E.2d 545, 551 (1991)). “ In this sense, the General Assembly has provided that a circuit court acts as an appellate tribunal. ” Gordon v. Allen , 24 Va. App. 272, 277, 482 S.E.2d 66, 68 (1997) (citation omitted). “ The burden is upon the party complaining of the agency action to demonstrate an error of law subject to review. ” Johnston

- Willis, Ltd. v . Kenley , 6 Va. App. 231, 241, 369 S.E.2d 1, 6 (1988) (citing Code § 9

- 6.14:17; Roanoke Memorial Hospitals v. Kenley , 3 Va. App. 599, 603, 352 S.E.2d 525, 527 (1987)). Commonwealth v. Blue Ridge Env tl

. Def . League, Inc. , 56 Va. App. 469, 479

- 8 0 , 694 S.E.2d 290, 295

- 96 (2010). Under the “substantial evidence” standard, the reviewing court may reject an agency’ s fa ctual findings only when, on consideration of the entire record, a reasonable mind would necessarily reach a different conclusion. Alliance to Save the Mattaponi v. Commonwealth Dep’t of Envtl. Quality ex rel. State Water Control Bd. , 270 Va. 423, 441, 62 1 S.E.2d 78, 88 (2005) ( citing Aegis Waste Solutions v. Concerned Taxpayers , 261 Va. 395, 404, 544 S.E.2d 660, 665 (2001) )

. Although we are bound on appeal to the trial court’s findings of historical fact, Dep ’ t of Med. Assistance Servs

. v. Beverly Healthc are of Fredericksburg , 41 Va. App. 468, 490, 585 S.E.2d 858, 869 (2003), we review q uestions of law de novo

. See Clark v. Marine Res.
Comm’n , 55 Va. App. 328, 334

- 35, 685 S.E.2d 863, 866 (2009) (citing Moreau v. Fuller , 276 Va. 127, 133, 661 S.E.2d 841, 8 45 (2008)). [J]udicial review of a legal issue requires little deference, unless it

. . . falls within an agency’s area of particular expertise. Whether the issue is one of law or fact or substantial evidence, we are directed to take account of the role for which agencies are created- 6

- and public policy as evidenced by the basic laws under which they operate. Thus, the degree of deference afforded an agency decision depends upon not only the nature of the issue, legal or factual, but also upon whether the issue falls within the area of experience and specialized competence of the agency. Appalachian Voices v. Air Pollution Control , 56 Va. App. 282, 289 , 693 S.E.2d 295, 298 (2010) (internal citations and quotations omitted). VMRC challenges the circuit c ourt ’s ruling that the Commission had no jurisdiction to order the removal of a portion of the floating structure. Specifically, VMRC contends it does have jurisdiction to order cessation of encroachments over state

- owned bottomlands and that
f

ederal mari time jurisdiction does not preempt state jurisdiction. The Inn responds that the structure is a moored vessel and is subject exclusively to f ederal admiralty or maritime law. The
Inn further argues that any state attempt to regulate a moored vessel is pr eempted by f ederal law
if the state law is inconsistent with federal law

. 3 Essentially, our analysis is whether th e vessel in question is state

- or federally

- regulated. We begin by acknowledging that “ the operation of a boat on navigable waters, no matte r what its size or activity, is a traditional maritime activity to which the admiralty jurisdiction of the federal courts may extend .” St. Hilaire Moye v. Henderson , 496 F.2d 973, 979 (8 th Cir. 1974). However, assuming maritime law is applicable, it does not nece ssarily follow that state regulations are preempted . According to McCready v. Commonwealth , 68 Va. ( 27 Gratt. ) 985 , aff’d , 94 U.S. 391 (1876), the navigable waters within the state’s territorial limits , as well as the soil beneath those waters, a re the property of the state and may be controlled by the state in its

3 The Inn, in its brief, argues the C ommission erred in certain findings, i.e. the structure did not encroach on state bottomlands , and it was not a permanent structure or improvement constructed on or over state bottomlands. We do not address these allegations because the Inn did not assign cross

- error to them, and under Rule 5A:21(b), an appellee’s brief must contain any additional assignments of error it wishes to present.- 7

- discretion for the benefit of the people, as long as the state does not interfere with the authority of the federal government in regulating commerce and navigation. Article XI , § I of the Virginia Constitution expresses this Commonwealth’s policy to protect its waters from pollution and impairment for the benefit, enjoyment , and general welfare of the people. To that end, Code § 28.2

- 101 provides, inter alia , that VMRC’s jurisdiction “shall include the Commonwealth’s territorial sea and extend to the fall line of all tidal rivers and streams except in the case of state

- owned bottomlands where jurisdiction extends throughout the Commonwealth.” Further, Code § 28.2

- 1203(A) provides, int er alia It shall be unlawful for any person to build, dump, trespass or encroach upon or over, or take or use any materials from the beds of the bays, ocean, rivers, streams, or creeks which are the property of the Commonwealth, unless such act is performe d pursuant to a permit i ssued by the Commission . . . . Code § 2 8 .2

- 1200 states in part: All the beds of the bays, rivers, creeks and the shores of the sea within the jurisdiction of the Commonwealth, not conveyed by special grant or compact according t o law, shall remain the property of the Commonwealth and may be used as a common by all the people of the Commonwealth for the purpose of fishing, fowling, hunting, and taking and catching oysters and other shellfish. The f ederal government has enacted a statutory scheme defining the roles of federal and state governments in regulating navigable waters. 43 U.S.C. § 1311(a) states in part: It is determined and declared to be in the public interest that (1) title to and ownership of the lands beneath navig able waters within the boundaries of the respective States, and the natural resources within such lands and waters, and (2) the right and power to manage, administer, lease, develop, and use the said lands and natural resources all in accordance with appli cable State law be, and they are, subject to the provisions hereof, recognized, confirmed, established, and vested in and assigned to the respective States or the persons who were on June 5, 1950, entitled thereto under the law of the respective States in which the land is- 8

- located, and the respective grantees, lessees, or successors in interest thereof. 4 Section (d) states: Authority and rights of United States respecting navigation, flood control and production of power. Nothing in this subchapter or su bchapter 1 of this chapter shall affect the use, development, improvement, or control by or under the constitutional authority of the United States of said lands and waters for the purposes of navigation or flood control or the production of power, or be c onstrued as the release or relinquishment of any rights of the United States arising under the constitutional authority of Congress to regulate or improve navigation, or to provide for flood control, or the production of power. Within this statutory fram ework, we now determine whether federal maritime jurisdiction, under the facts of this case, preempts state law. The Inn contends that the operation of a vessel on navigable waters is a traditional maritime activity and that VMRC’s order of removal is rep ugnant to the right of navigation. The United States Supreme Court, in Yamaha Motor Corp. v. Calhoun , 516 U.S. 199 (1996) , provide s us with the criteria to determine this issue . In Yamaha , the appellee decedent was killed while riding a jet ski manufactu red by Yamaha. The decedent’s parents brought an admiralty action for damages, invoking Pennsylvania’s wrongful death and survival statutes. Yamaha responded that the state remedies could not be applied because the d ecedent died on navigable waters, cont ending that federal maritime wrongful death law provided the exclusive basis for recovery. The conflict between maritime law and Pennsylvania’s wrongful death statute was the extent of damages.

4 43 U.S.C. § 1313 exempts federally

- owned lands from § 1311, retaining all the federal government’s navigational servitude and rights in and powers of regulation and control over t hose lands for the constitutional purposes of commerce, navigation, national defense , and international affairs.- 9

- The Supreme Court held : Because this case involves a water craft collision on navigable waters, it falls within admiralty’s domain. See Sisson v. Ruby , 497 U.S. 358, 361

- 367 ( 1990); Foremost Ins. Co. v. Richardson , 457 U.S. 668, 677 (1982). “With admiralty jurisdiction,” we have often said, “comes the applicatio n of substantive admiralty law.” East River S. S. Corp. v. Transamerica Delaval Inc. , 476 U.S. 858, 864 (1986). The exercise of admiralty jurisdiction, however, “does not result in automatic displacement of state law.” Jerome B. Grubart, Inc. v. Great L akes Dredge & Dock Co. , 513 U.S. 527, 545 (1995). Yamaha , 516 U.S. at 206. The Yamaha C ourt recognized that vindication of maritime policies demanded uniform adherence to a federal rule, with no leeway for variation or supplementation by state law

. See i d.

at 210. State law cannot interfere “with the harmonious operation of maritime law.” Id. However, t he United State s Supreme Court concluded that the damages available for the decedent ’s death were proper l y governed by state law , because Congress has not prescribed damages for wrongful death of a non

- seafarer in territorial waters. State of Maryland Dept. Natural Resources v. Kell u m , 51 F

. 3d 1220 ( 4th Cir. 1995), addressed whether Maryland’s strict liability statute was preempted by federal admiralty law , which premised liability on negligence. Kellum’s barge went aground on and damaged

state

- owned oyster grounds. Maryland brought an action as an admiralty or maritime claim, alleging strict liability under Maryland law. The Fourth Circuit concluded the injury to the oyster ground resulted from an occurrence unique to maritime law, namely the stranding of a vessel

. Id. at 1223. I t concluded “the result for such a maritime tort is in admiralty and grounded on maritime theories of negligence and dama ges . ” Id. Maritime law governing a traditional maritime tort “requires findings of fault and causation as predicates for liability.” Id.

at 1224. However, the application of the Maryland “strict liability” statute eliminates the need for fault. Furthe r, the Fourth Circuit found that federal law requires that damages be allocated- 10

- proportionally according to fault. State “strict liability” eliminates th e federally

- mandated proportionality analysis. The Fourth Circuit concluded state law made changes to the substantive maritime law. While states can modify or supplement federal maritime law, states cannot “flatly contradict it or deprive any person of a substantive federal right.” Id. at 1226. The Kell u m C ourt found that Maryland law changed substanti ve maritime law and concluded that federal maritime law preempted state law. See also Pope & Talbot, Inc. v. Hawn , 346 U.S. 406 (1953) (superseded on other grounds ) ( In a personal injury suit, state contributory negligence law was preempted by federal mar itime law of comparative negligence) ; Garrett v. Moore

- McCormack , 317 U.S. 239 (1942) ( In an action brought pursuant to the Jones Act, federal law preempted a state regulation on the burden of proof , a substantive right of the petitioner ). From these case s, we conclude that we must look at a number of factors to determine whether state law is preempted by federal maritime law.
1. Whether state law works a material prejudice to the characteristic features of general maritime law ; 2. Whether state law in terferes with the proper harmon y and uniformity of federal law;
3. Whether state law attempts to change substantive maritime law ; 4. Whether state law flatly contradicts federal law or deprive s any person of a substantive federal right. In this case, t he Inn cites to no predicate facts from which we can conclude that the Commonwealth’s right to regulate encroachment over its bottomlands is preempted by federal law. In fact, t he Inn argue d to the circuit court that federal maritime jurisdiction automat ically preempts state law. Neither a t the circuit court hearing, nor in its brief, did the Inn address any of the factors set forth above.- 11

- We must remember the structure is solely used for additional seating for the restaurant, due to seasonal increases in patrons. VMRC’s order to remove the vessel in no way works a material prejudice, o r any prejudice to the characteristic features of general maritime law, nor does it interfere with the proper harmony and uniformity of federal law in its international a nd interstate relations. The sole effect of the order is a decrease in the Inn’s revenue and number of patrons that can be seated at any given time during the tourist season. VMRC’s removal order only affects a single vessel and has no broader implicatio ns. It did not interfere with the barge’s navigation in navigable waters. VMRC’s order does not attempt to change substantive maritime law which generally regulates maritime transactions, 5 customs, duties , and trade, regulating navigation of navigable

wa ters, injury to person or property caused by a vessel on navigable waters, Longshore and Harbor Workers Compensation Act, 33 U

. S

. C

. § 901, Death on the High Seas Act, 46 U

. S

. C

. § 30301 , and the Jones Act , 46 U.S.C. § 688 . This list is not exhaustive but i llustrative of the nature of federal maritime law.

5 “Maritime transactions”, as defined herein, means charter parties, bills of lading of water carrie rs, agreements relating to wharfage, supplies furnished vessels or repairs to vessels, collisions, or any other matters in foreign commerce which, if the subject of controversy, would be embraced within admiralty jurisdiction; “commerce”, as herein defined , means commerce among the several States or with foreign nations, or in any Territory of the United States or in the District of Colombia, or between any such Territory and another, or between any such Territory and any State or foreign nation, or between the District of Columbia and any State or Territory or foreign nation, but nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce. 9 U.S.C. § 1.- 12

- Federal maritime law does not preempt VMRC from ordering the removal of the vessel. In fac t, the Federal Submerged Lands Act, 43 U

. S

. C

. § 1311 , recognizes the state’s ownership of lands beneath navigable waters and allows the states to “manage, administer, lease, develop and use said lands and natural resources . . . and subject to the provisions hereof . . . .” 43 U

. S

. C

. § 1311 carves out an exception to this general grant, dealing with navigation, floo d control, and production of power , none of which applies here . In con formity with 43 U

. S

. C

. § 1311, Code § 28.2

- 1203 prohibits the encroachment upon or over rivers, ocean , and streams of the Commonwealth. Thus we conclude that, under the facts of this c ase, federal maritime law did not preempt VMRC’s authority to order the removal of the vessel. Finally, VMRC assigns error to the circuit court ’s award of fees and costs to the Inn . The parties appear to agree that this issue rises or falls with our reso lution of the other issues presented on appeal. Because we reverse and remand this case to the circuit court , we vacate the circuit court ’s award of fees and costs and remand for a determination of fees and costs, if any, based on Code § 2.2

- 4030.
CONCLUS ION Having found that the circuit court erred in holding that VMRC did not have jurisdiction

t o order the removal of the vessel, we reverse and remand for the circuit court to determine the issues presented in the Inn’s petition for appeal before the circ uit court , to include the scope of Code § 28.2

- 1203

. Reversed and remanded.