# FILED

March 13, 1996 Cecil W. Crowson Ap pellate Cou rt Clerk LAI DLAW E NVI RONMENTA

L SERV ICES) OF NASHVIL

LE, I NC., ) ) Plaintiff /Appella nt, )

) Davidson Chancery ) No. 94- 274 7-III VS. ) ) Appeal No. ) 01-A-01-9507-CH-00310 METROPOLI

TAN BOARD OF HEAL TH ) FOR NASHVIL

LE AND DAVI

DSON ) COUNTY, ) ) and ) ) ROBERT O RR/SYSCO FO OD SERVI CES ) COMPANY, ) ) and ) ) BRING URBAN RECYCL ING TO ) NASHVIL

LE TODAY, ) ) Defend ants/Appe

llees. ) IN THE COURT OF APPEALS OF TENNESSEE MIDD LE S EC TION AT N AS HVILLE APPEAL FROM THE CHANCERY COURT OF DAVI DSON COUNTY AT NASHVIL

LE, TENNESSEE HONORABLE ROB ERT S. BRANDT, CHANCELL OR

Thomas V. White TUNE, ENTREKIN &

WHITE First American Center, 21st Floor Nashville, Tennessee 37238 JOHN P. WI

LL IAMS 1900 Cedar Lane Nashville, Tennessee 37212 ATTORNEYS FOR PLAI NTIFF/APPEL

LANT
Ja mes L. Mu rph y, III Director of Law John L. Kennedy Metropolitan Attorney Liz Foster Metropolitan Attorney DEPARTMENT OF LAW MET ROP OLITA N GO VER NME NT O F NA SH VILLE 204 Metro

politan Cou

rthouse Nashville, Tennessee 37201 FOR DEFENDANT/APPELL EE METROPOLI

TAN BOARD OF HEAL TH FOR NASHVIL

LE AND DAVI

DSON COUNTY-2-

GAR Y A. DAV IS Post Office Box 2346 Knoxville, Tennessee 37901 Frank M . Fly BULL OCK, FLY & McF

ARLAND Post Office Box 398 Murfreesboro, Tennessee 37133-0398 ATTORNEYS FOR DEFENDANT/APPEL LEE ROBERT ORR/SYSCO FOOD SERVICES COMPANY

DAVID BORDEN KIRCHER 3221 Nolensville Road, Suite 207 Nashville, Tennessee 37211 ATTORNEY FOR DEFENDANT/APPEL LEE BRING URBAN RECYCL ING TO NASHVI

LL E TODAY

REVERSED AND REMANDED

HENRY F. TODD PRESIDING

JUDGE, MIDDL

E SECTION

SAMUEL

L. L EWIS, JUD GE, CONCU RS; AND WIL

LI AM C. KOCH, JR., JUDGE, FILES SEPARATE CONCURRING OPINI ON.-3-

LAI DLAW E NVI RONMENTA

L SERV ICES) OF NASHVIL

LE, I NC., ) ) Plaintiff /Appella nt, )

) Davidson Chancery ) No. 94- 274 7-III VS. ) ) Appeal No. ) 01-A-01-9507-CH-00310 METROPOLI

TAN BOARD OF HEAL TH ) FOR NASHVIL

LE AND DAVI

DSON ) COUNTY, ) ) and ) ) ROBERT O RR/SYSCO FO OD SERVI CES ) COMPANY, ) ) and ) ) BRING URBAN RECYCL ING TO ) NASHVIL

LE TODAY, ) ) Defend ants/Appe

llees. )

O P I N I O N
The captioned plaintiff has appealed from the judg ment of the Trial Court affirming the administrative action of the captioned Board re versing the previous action of the Director of the Metropolitan Department of Health in renewing six permits previously issued for operation of a waste disposal plant. The other captioned par ties initiated and prosecuted the administrative proceedings before the B oard to reverse the renewal of the permits and actively defended the act

ion of the Board i n the Tria

l Court and

this Court.

The issues presented by

the parties require a thorough re view of the background of the
pr es en t c on tr ov er sy.

The subject plant was constructed in 1990 by Osco Treatment Syste

ms, Inc. I n June, 1991, the Director of Health issued six annual permits for operating the pla nt and the plant began operations consisting of conver ting hazardous wastewater. Copies of said permits are not found in the record, but it appears from the renew al licenses that various activities were-4-

authorize d to neutr

alize and to separ ate meta ls, oils and

other toxic

wastes a nd ship the

m to other dis posal site s. The re maining wastewa ter was t o be rend ered non -hazardous in biological treatment tanks and discharged into the public sewer system. Annua l permits for this operation were renewed in June, 1992, by the Director of Health; and Osco Trea tment Systems, I

nc. continued the operation.

On December 23, 1992, Osco Treatment Sy stems, Inc., became a subsidiary of plaintiff, Laidlaw Environmental Service s of Nashville, Inc.

On February

26, 1993, the Director of the Health Department issued the following order: THE METROPOLI TAN GOVERNMENT OF NASHVI LL E AND DAVIDSON COUNTY, TENN ESSEE Actin g By and Thro ugh THE METROPOLI

TAN BOARD OF HEAL TH IN THE MATTER OF THE METROPOLI

TAN DEPARTMENT OF HEALTH, FREDI

A S. WADLEY, M.D., DIRECTOR OF HEAL

TH, Complaina

nt, vs. Case No. A-93-001 OSCO TREATMENT SYSTEMS, INC., Responde nt. ORDER Pursuant to the authority of Tenne ssee Code Annotated Sections 68-25-101, et seq. and the Code of La ws of The Metropolitan Gove

rnment of Nashville

and Davi dson County Chapter 1 0.56, the

Metropol itan Depa rtment of Health (“Department”) has issued the following Or der:
FIN DIN GS OF FA CT 1. OSCO Tre atment Sy stems, I nc., (“R esponde nt”) is the owne r and/or operato r of a wa stewate

r treatm ent fac ility located at 7230 Centennial Place, Nashville, Tennessee. The Respondent is a “person” within the meaning of Section 10.56.010 of the Me

tropolita n Code of L

aws “Code ” and is thereby subject to the provisions of Section 10.56.170 of the Code.-5- 2. On September 16, 1992, the Department received a complaint regarding odor in the Centennial B oulevard area. Upon inve stigatio n, the De partmen t determined that t

he odor in question was a sulfide type and was emanating from a sodium hydrosulfide (Na

HS) delivery sy stem on Respondent’s premises. According to the Respondent, the NaHS tank wa s filled with a substantial excess of free sulfide which had been introduced into the tank by employ ees of the Respondent. The ensuing chemica l reacti on relea sed exces s sulfide a t a rate exceeding the capacity

of the thermal oxidizer odor control sys tem. 3. On numerous occasions during September and October, 1992, the Departm ent rec eived co mplaints of , and did, in fact, detect, odors in the Centennial Boulevard area . Upon investigation, the Department determined such odors wer e being generated by

bio-sludge stored in various roll-off boxes located on Respondent’s premises. Such fact was confirmed by employ ees of the Respond

ent. 4. The Respondent was acquired by Laidlaw Environmental Services, Inc. on Dec ember 23, 1992. On the date of acquisition there were approximately ninety roll-off c ontainers which held odiferous bio-sludge material on site.

The or der als o cont ains t he fol lowi ng: CONCLUSIO N OF LAW 1. Respondent has violated Section 10.56.170 of the Cod

e on repe ated occ asions. ORDER IT I S ORDERED that the Respondent is hereby a ssessed a civil penalty in the amount of One H undred Fifty

Thousand and No/100 Dollars ($150,000.00) for violation of Section 10.56.170 of the Me

tropolita n Code of L

aws. Said

penalty shall be paid by ce

rtified check, pay able to the order of the Metropolitan Department of Health, within thirty (30) days of the execu ted date of this CON SENT AGRE EMENT an d shall be mailed or delivered to: . . . .
On April 2, 1993, the Director issued an “Amendment” to the Fe bruary 26, 1993, order c ontai ning t he fol lowi ng:

AMENDMENT TO ORDER ASSESSING CI VIL PENALTY Comes the Director of Health to amend the Order issued on February 26, 1993, assessing a civil penalty in the above-styled matter, by deleting

paragraph 3 of said Order and in its place substituting the following paragraph 3. 3. In addition to the incident refere nced above, the Depa rtment received n

umerous c omplaints-6- of, and staff members did in fact, detect, odors in the Centennial Boulevard area on the following dates in October, 1992; December, 1992; January, 1993; Februa ry, 1993; and March, 1993: October 5, 1992 October 8, 1992 (tw o occasi ons) October 9, 1992 October 13, 1992 (two occa sions) October 15, 1992 Decemb er 1, 199 2 (two oc casions) December 2, 1992 December 15, 1992 December 17, 1992 January 21, 1993 February 12, 1993 February 16, 1993 Upon investigation, staff members of the Health Depa rtment determined that the odors or iginate d in bio-slu dge stor ed in various roll-off boxes located on Respondent’s premises. The origin of the odors detected in October, 1992, wa s confirmed by e mploy ees of th

e Respond

ent. THE METROPOLI

TAN GOVERNMENT OF NASHVI LL E AND DAVIDSON COUNTY DEPARTMENT OF HEALTH /s/_______________________________________ FREDIA S. WADL

EY, M.D. Directo r of Hea lth Dated: April 2, 1993
On April 28, 1993, plaintiff applied for renewal of the six permits for operation of the plant. On June 28, 1993, after inspection of the plant, the Director of Health re newed the permits.

Each of the six perm

its descr ibes a specific “E

mission Sour

ce” and specific “Emission

Points” wit

h specif ied condi tions of op eration . A copy of Permit No. 6-1, is attached to this opinion as “Exhibit A.”

On July 26, 1993, and July 28, 1993, the second and third captioned appellees appealed to the Board to reverse the renewal of the permits. The Board a dopted the contested-7-

case provisions of the Uniform Procedures Act, T.C.A. Section 7-7-105, a nd requested an Administra

tive L aw Judge

(ALJ) to presid

e over th e proce edings.

On November 8, 1993, prior to the administrative hearing, a “consent agreement” wa s approved by the

Board. The agree

ment was signed by

the Director of Health and the president of Osco Treatment Sy stems, Inc. I t contains the following caption and “Factual Backg round:” IN THE MATTER OF THE METROPOLI

TAN DEPARTMENT OF HEALTH, FREDI

A S. WADLEY, M.D., DIRECTOR OF HEAL

TH, Complaina

nt, V. OSCO TREATMENT SYSTEMS, INC., Responde nt.

. . . . FACTUAL BACKGROU ND 1. Respondent became a subsidiary of Laidlaw Environmental Services, Inc., e ffective December 23, 1992. 2. Operational control of Respondent was assumed by its current management in early 1993. 3. Respondent’s current management has take n a number of steps to minimize the potential emission of odors from t he faci lity. Th ese st eps ha ve inc luded the fo llow ing: A. Respondent has undertaken an ongoing compreh ensive r eview of the fac ility

and its ope

rations. B. Approximately 90 rolloff boxes containing biosludge, which were on the premises when Responde nt’s current management assumed control, we re removed by Responde nt. The re

moval wascomplete d three w eeks in advance of the date promised to the Depar tment by curre

nt manage ment. Bio sludge i s a potent ial sourc e of odor s. This accelerated removal cost about $51,000.00 in addition to the normal removal expense. C. Since about February

1993, biosludge has been accumulated for a shorter period of time than before, a nd shipped offsite for final disposal more frequently. Responde

nt has incurred more than $300,000. 00 in addit

ional expe

nse (thr ough July-8- 1, 1993) resulting from these more frequent shipments. D. Respondent installed an air sparger for the equalization tank at a cost of more than $13,000.00. E. Respondent has added hy drogen peroxide and powdered activated carbon to the biologic al treatment tanks as a part of its routine

wastewa ter proc essing p

rocedur es. F. Respondent has r

etained consulta nts to assis t it in ad dr es si ng th e p ot en ti al fo r e mi ss io n o f o do rs fr om th e f ac il it y.
The agre ement also c ontai ns th e foll owing: 1. This Consent Agreement constitutes a full and final settlement of all complaints alleging violations of Code §10.56.170 by Respondent throug h the date of this Consent Agree ment.

. . . . 3. The De

partmen t has take n the cost to Respond

ent of pa st and future remedial measures into account in dete rmining an appropr iate pen alty

and corr ective me asures i ncorpor

ated into this Consen

t Agre ement. 4. Respond

ent will pa

y a civil pen alty

to the Dep artment in the amount of eighty

thousand dollars ($80,000.00) to settle the allegations of the order. . . .5. Respondent will purchase, install, and operate a new twostage scrubber for the biolog ical treatment tanks to replace the existing scrubber. . . . The estimated project cost of purchasing and installing this scrubber is a minimum of $90,000.00. . . .

. . . . 7. Respondent will install a new multi-stage scrubber to serve certain tanks known as the T-1, T-14, T-15, T-18, and T- 19 tanks. . . . The estimated project cost of purchasing a nd installing this scrubber is $250,000.00. 8. . . . As long as Respondent is proceeding in a manne r which reasonably

may be expected to re sult in completion of the agr eed act ions by the targ et dates , and othe rwise is in compliance with this Consent Agreement, Respondent shall be deemed to be in compliance with Code §10.56.170. . . . 9. After the completion of the compliance schedule re ferred to in the preceding parag

raph, as long as the equipment installed by R esponde nt pursua nt to this Con sent Ag

reemen t is in good working order and is in normal opera tion, Respondent shall not be subject to enforcement action under Code-9- §10.56.17 0 unless a

nd until Code

§10.56.17 0 is substa

ntially amended. . . .
On April 4, 1994, plaintiff moved the Administrative Judge to dismiss the appeal from the order of the Director rene wing the permits on the grounds of the Consent Order. O n April 5, 1994, the motion was overruled.

On June 15, 1 994, afte

r a hear ing on the merits of the appe al, the B oard vote d 4 - 1 to reverse the renewal of per mits granted by

the Director on June 28, 1993. On July 12, 1994, the Board approved written findings of f act and conclusions of law under the following caption:

BEFORE THE METROPOLI TAN BOARD OF HEAL TH OF THE METROPOLI

TAN GOVERNMENT OF NASHVIL

LE AND DAVI

DSON COUNTY, TENNESSEE

ROBERT O RR/SYSCO, I NC. And BRIN G UR BAN RE CYC LING T O NA SH VILLE TODAY (BURNT) Petitioner s, V. No. 43.01-34-0597J OSCO TREATMENT SYSTEMS, INC., Responde nt.

The fi ndin gs of fac t incl ude th e foll owing: Background
. . . 12. Un der the c

urrent zo ning re gulatio ns activit ies in Industrial Restrictive Districts, such as OSCO, must be perfor med in enc losed buil dings. A t OSCO, sour

ces of so me of the of fensive odors, the

waste sto rage a nd treat ment tank s, are n ot in e

nclo sed b uildi ngs [ IV -75- 76]. Impact of OSCO on Neighbor ing Businesses and I

nstitutions 13. During the period April 1, 1991, to March 24, 1994, there were at least 131 air pollution complaints to the Metropolitan Health D epartme

nt from ne

ighborsof OSCO co ncernin g air pollution from the OSCO facility. Of the total of 131 complaints, 90 (70%) of those complaints were received a fter-10- January 1, 1993, when L aidlaw be gan ope rating the OSCO faci lity . [II- 142; E

x. S-6]

.

. . . . 15. Of the 131 documented air pollution complaints received by the Metropolitan Hea

lth Department, the presence of an odor from OSCO was confirmed by a Metropolitan inspector or was confirmed by

OSCO’s own admission for at least 82 of the comp laint s. [Ex. S-5, 6 ].

. . . . Objectio nable Odors from t he OSCO F acility 20. When the

origina l air pollu tion permi

t applica tion was pending for the OSCO facility , OSCO’s consultant, Resource Consultants, Inc., assured the Direc tor of the Bureau of Environme

ntal Hea lth Servic es of the

Metropolitan Hea

lth Department that there would be no odor problems. (VI-144- 147; VII -129-131) 21. Instead, in the three y ears that the facility

has been operati ng, the

re have been 40- 50 emission s of objectionable odors beyond the prope

rty line which wer

e considered to be violations of Section 10.56.170 of the Air Pollution Code (Emission of Gases, Vapors, or Objectionable Odors) by the Metr opolitan H ealt

h Dep artm

ent. [VI -140 ].

. . . . 23

. . . . Th er e h av e b ee n a t l ea st ni ne te en da ys s in ce Ja nu ar y, 1993 when the Metropolitan Health Department found objectionable odors emitted by O SCO beyond the property line that m et the stand ard s et out in Se ction 10.56 .170. [VI -141 ].

. . . . 32. OSCO maintained log sheets of pH measurements of the scrubbing liquid in the bioscrubber. During the two-y ear period from April, 1991, to April, 1993, there were at least 296 readings that were below a pH of 9.0, each of which constituted a violation of the operating permit. On several day s the pH was permitted to remain well below 9.0 for hours at a time. [I I-136- 139; VI -44; VI -164; Ex. S-1 3]. In a ddition, in

1993 OSCO allowed the pH in the bioscrubber to fall below 9.0 more than two times in

January , 1993, onc e in Marc h, 1993, once in April, 1993, and once in September, 1993. [VI-27; 44-45]. . . .

. . . . 34. OSCO has agreed to replace the ineffective bioscrubber with a new thermal oxidizer. This thermal oxidizer, however, will not solve all of the odor problems from the biological treatment units, since there would not be an effective ba ckup control device for the times when the thermal oxidizer-11- malfunctions or is out of service for maintenance. The biological treatment units cannot be simply turned off when this occurs because of the necessity to keep the bacteria alive, and odors would continue to be generated. [I I-148; I V-134].

. . . . 36. The only backup pla nned for the proposed new thermal oxidizer is a scrubber. As with the existing bioscrubber, such a backup scrubber would not be very effective at removing odors. [IV-135].

. . . . 38. There was no testimony by any expert witness that the proposed thermal o xidizer woul d eliminat e all obje ctionabl e odors emitted from the OSCO facility. . . . 39. OSCO ha s not demon strated t he ability to proper ly operate the relatively

simple air pollution control equipment that it currently has a

t the plant. It is likely

that operational problems will increase with the more technically sophisticated and diff icult-to- operate

equipmen

t that OSCO i s planning

to insta ll. [I II-49- 50]. 40. Another source of odor from the OSCO plant is the filter press area, which filters odorous sludge f rom the biological units and is in an open building without any air pollution cont rol de vice s. [I V-12 0]. 41. The storage of rolloff boxes containing sludg e from the biologic al units is a

lso a pote ntial sour ce of odo r, which is somewha t mitiated w

hen they are cov ered. [I

V-121]. Th

ese rolloff boxes have been the source of odor complaints in the past. (Ex. S-5) 42. Anothe

r source of odors i s overfl ow of foa m and liquid from the b iologic al treat

ment units, which ha

ve freq uently overflowed through foaming into the dike a round the tanks producing a biological sewer odor that would not be routed throu gh the new

ther mal oxi dizer . [III-88]. 43. The odor problems with the OSCO facility ha ve not been solved by L

aidlaw Environmental Services since it acquired OSCO. [VI -142]. I

t is likely that ther e will be o

bjection able odors from the OSCO facility in the futur e, even with the installation of a new thermal oxidizer. [II- 149]. The thermal oxidizer to be

installed on the biol ogical

treatme nt units will not address odors from the filter press area or the roll-off boxes or an y o ther fug itive emiss ions f

rom th e facility . [I

V-13 1]. 44. OSCO has accepted numerous shipments of hazardous waste with very

strong o dors as de

termined by O SCO laboratory pe

rsonnel. [VI-33-40]. Hazardous waste code s D001 and D 002 were

those tha t were mo st frequ ently designa ted as ha ving ve ry strong o dors. [VI

I-26 3]. These-12- include shipments accepted for treatment in parts of the plant without ai

r pollution

controls . Many

of these shipments with very stron g odo

rs ar e fro m othe

r L aidla w fac ilitie s. [VI

-33- 40]. 45. Toxic wa ste dispos al plants l ike OSCO c annot ope

rate anywhere w ithout pote

ntially creating odors , and OSCO therefore needs a more re mote site with a buffer zone to reduce the impact on neighboring businesses. [I II -54]. The lack of a buff er zon e con tribu tes to OSCO’ s odor

viola tions . [I V-15 4]. 46. OSCO’s own consultant, Resource Consultants, Inc., which confidently pr

edicted that there would be no odor problems before the facility began operation, is unable to state, even with the proposed addition of new odor controls, that odo rs f rom OS CO w il l n ot be a pro bl em i n t he f ut ure . [ VII148]. Emissions of Volatile Organic Compounds 47. The OSCO facility ac cepts hazardous and other industrial waste with volatile

organ ic compou

nds (VOCs ), some wi

th over 4-5% volatile organic compounds, and some of w hich have thou sands of p arts per million of b enzene, w

hich is a carcin ogen. O SCO also ac cepts ha zardous w aste with

volatile organic compounds that are chlorinated solvents, many of whic h are carc inog ens. [VI

I- 115; I I- 152]. 48. Odorsfrom the O SCO facil ity a re rela ted to VOCs emissions, since odor-causing compounds are for the most par t VOCs. [II

I- 23]. 49. OSCO has a thermal oxidizer in place for the control of VOCs emissions from certain storage and treatment tanks a t the facility , but not all of the VO Cs emission s from the OSCO facility are

routed to the thermal oxidizer. VOCs emissions from the biological sy stem are routed to the bioscrubber, as discussed in the section above, and there are seve ral sources of fugitive emissions not controlled by a ny air pollution control devi ce. [I I- 135]. 50. The dr

um storag e and dru

m decant building , where

drums are stor ed and un loaded in to tanks, d

oes not ha

ve any air pollution controls. Also, in the same building is the chemical fixation system, where cer tain liquids and sludges are mixed with ceme

nt materi al for so lidifica

tion. Vola

tile org anic compounds emitted from these operations are not controlled and are released to the atmosphere. [I I-125-128].

. . . . 55. The OSCO 1993 operating permits at issue in the hearing control volatile organic compound emissions only through a calcula tion of emi ssions bas ed upon the amount o f VOCs in waste processed at the facility . There is no direct measurement of VOCs emitted, and the calculations are done once pe r year by OSCO’s consultants, in spite of the fac t that the operating-13- per mi ts hav e da il y and hou rly l im it s on VOC emi ss io ns. [II149]. OSCO do es not re

port to Me

tro on com

pliance with daily VOC th roug hput limits, only

annu al. [V II-112 -113 ]. 56. No VOCs monitoring from emission points or in ambient air is required by

the permits. [VI-147]. The permits do not specific ally

regula te the emi ssions of a

ny t oxic chemic als, inclu ding benze ne. [V I- 147]. 57. The permit requirement for analy zing VOCs in incoming waste is unclear and has not alway s been followed by OSCO. [V-33; Ex. S-20]. Waste shipments have been unloaded prior to determining the pounds of VOCs contained in them for det erm in ati on o f co mp li anc e wi th dai ly th rou ghp ut li mi ts . [ VI45-46; Ex. S-30].

. . . . 59. The 1993 operating permits do not adequately control emissions of volatile organic compounds and particularly do not adequ ately

control e missions of

volatile o

rganic compounds that are carcinogenic. [I I-160-161]. Hazardous Waste Ac cepted b y O SCO
60. OSCO ac cepts bot

h drums of

hazardou s waste a

nd bulk shipments. Drums of hazardous waste come to OSCO by truck. Bulk hazardous waste comes to the OSCO facility by rail tank er and by truc k tan ker. [II -123 ; 125- 126; 1 30-1 32; Ex. S-12]. Altho

ugh the hazardou s waste pe

rmit for th

e OSCO facility allows onl

y tw o rail ca

rs to be pr

esent on t he OSCO facility at any given time, seve

ral more are stor ed at any time on the rail siding immediately a djacent to the OSCO facility. [I- 146; I I- 130- 132; E

x. S-12 ; Ex. S- 1]. 61. Under

its hazard

ous waste permit OSCO

is permitted to accept virtually

every ty pe of hazardous waste from any location. . . .

. . . . 76. The August 25, 1993, nitrogen dioxide release from tank T-1 created a large

orange cloud that extended far above the OSCO facility and migr

ated off the plant site. [Ex. S-2, 16]. The small scrubbe r on tank T -1 was ov erwhelm ed by the gas , and much of the gas exited from the top of the tank instead of the scrubber. [II

I-139; V-110; Ex. S-16].

. . . . 90. I n order t o preven t sudden r elease s of toxic ch

emicals, such as those that have occurred at OSCO, it is normal practice in the che mical indu stry

and in the

hazardou s waste in dustry to have a formalized preventative maintenance pr ogram, which OSCO does not have. [II I-158]. Although OSCO may have commenced the development of a preventative ma intenance-14- progra m since the

beginn ing of th e hearing of thi s appeal , it is not yet fully

documented. [V-26].

. . . . 94. The OSCO facility as it is curre ntly operated is not a saf

e operation. There are many potential accidents that can occur that would release toxic chemicals. [II I-159-160].

. . . . Monitoring for Compliance 104. Monito

ring of emissions f

or complia

nce with p ermit limits for t

he OSCO fa

cility is technic ally

and eco nomically feasible and is the trend under the federa l Clean Air Act Amendmen

ts of 1991. It is r

equired in some pe

rmits now in the State of Tennessee. [VII -252-254; 271-272]. 105. Continuous stack monitoring was available in June 1993. [III -25-27]. Continuous monitoring devices are sufficiently sensitive to monitor for odor c ausing compounds. [II I- 63]. 106. Other air pollution permits in the State of Tennessee include odor restrictions and specific limits on and monitoring requirements for odor causing compounds. [VI I-256-257]. 107. Continuous fenceline monitoring, where a monitoring device d etects lo w levels o f chemic als in the a mbient air

at a facility propert y bo undary , is techn

ically and eco nomically feas ible f or OSC O. [VI

I- 252; V II-265 -266 ]. 108. None

of these condition s in a per

mit for a w aste mana gem ent f acil ity would be a new pr

ece dent . [VI

I- 281]. Conclusions of Law

. . . . 5. Section

10.56.170

of the Air

Pollution Cha

pter stat es: No perso n shall ca

use, suff er, allo w or per

mit any emission of

gases, vapors, o

r object ionable odors beyond the prope

rty line from any

source whatsoever which causesinjury , detrime nt, nuisance or annoy ance to a ny c onsidera

ble number of persons or to the public, or which causes or has a natural tendency to cause injury or da ma ge to bu si ne ss or pr op er ty. 6. Odor falls within the definition of air pollution in the Tennessee Air Pollution Control Act, and it is within the Board’s authority

to regulate odor emissions. Tenn. AG. Op. No. 83-299.-15- The con clusi ons of

law in clude the fo llow ing: 7. Section 10.56.170 is valid without the promulgation of regula tions for i ts impleme

ntation a nd is not unc onstitution ally vague or overbroad. I

t is within the experience and expertise of the Metropolitan Health Department to enforce this provision through consideration of complaints from the public and verification by Me

tropolitan inspectors of the source, nature, and intensity of emissions.

. . . . 12. By allowing

the pH of the bioscrubber to fall below 9.0, OSCO has violated Operating Permit Number 6-4 over 300 times in its t

hree y ears of operati ons. 13. Under the air operating permits reissued to OSCO on June 28, 1993, compliance with the requirements of Section 10.56.170 of the Air Pollution Chapter is specifically r equired in the per mits. By violating Sections 1 0.56.170 O SCO has als o failed to comply with the pr

ovisions of

its opera ting per mits. 14. Based upon the design, constructions, and opera tion of the OSCO fac ility , and the t

ype s of hazar

dous wast e that OSCO accept s and is pe

rmitted to accept , it is likely

that OSCO w ill operate in violation of the Air Pollution Control Chapter in the future.

The dec ision of the

Board r eads as f ollows: WHEREFORE, the Metropolitan Nashville and Davidson County Board of

Health hereby

reverses the decision of the Metropolitan Hea

lth Depar tment app roving t he OSCO Treatme nt Sy stems, I

nc., app lication f

or Oper ating Pe rmits Number 6-1 through 6.5. These operating permits are consider ed void and of no ef

fect as of the ef

fective date of t his Order.
On the same date, plaintiff filed a motion for stay supported by an a

ffidavit that plaintiff had spent or obligated itself for pay ment of $2,679,302 in good faith compliance with the “Consent Agreement” approved by the Board on November 8, 1993. The Boa rd de ni ed th e s ta y.

Upon filing of petition for judicial review, plaintiff aga in applied for stay supporte d by a ffidavit of the Dir

ector of Health th at: Since the installation of the new air pollution control equipment at the Laidlaw fac ility, it is my opinion that the-16- facility will pose no risk to human health which is g reater than that pose d by

severa l other fa cilities in Cockrill B end. I

t is also my opinion that the likelihood of odors has been reduced substantia lly b y th e additio n of this ne

w equipme

nt.
Stay was gr anted and continue d during this appe al.

As stated above, the Trial Court affirmed the action of the B oard. On appeal, plaintiff present s the follo wing issu es:

1. Whether the Trial Court erred by holding that it was not arbitra ry and cap ricious f or the Me tropolita n Board of Healt h to revoke Laidlaw' s permits even though the Board had orde red Laidlaw to install expensive new air pollution control equipment just eight months earlier. 2. Whether

the Tria l Court er red by holding t hat the a pplicabl e section of the air pollution control ordinance for Nashville and Davidson County is not unconstitutionally vague. 3. Wh ether t he Tri al Cou rt erre d by hold ing th at the Board's choice of remedies was not arbitrary , capricious, or abusive of its discretion. 4. Whether the Trial Court erred by holding that the Board correctly applied §10.56.040(A) of Nashville's air pollution control ordinance to the facts of this case. 5. Wh ether t he Tri al Cou rt erre d by hold ing th at the Board's decis ion wa s not made u pon un lawfu l proc edure e ven th ough the Director of the Metropolitan Department of Hea lth made no effort, during the proceeding s before the Board, to defend he r decision to issue the permits to Laidlaw. 6. Wh ether t he Tri al Cou rt erre d by hold ing th at the Board's reliance upon the location of the L aidlaw facility a s a basis for its decisi on was not

arbitra ry , capric ious, or ill egal.

The Boa rd prese nts and pla

intiff dis cusses th

e issue of whether this judici al review is governed by

the Administrative Procedure Act, T.C.A. §4-5-322, or certiora ri as provided by T.C.A. §27-8-101. The question was presented to the Trial Judge who ruled:

It is u nclear whether judicial r eview of the Boa rd’s dec ision is governed by

the UAPA, T.C.A. § 4-5-322, or by the common law writ of certiorari, T.C.A. § 27-8-101. By its own terms, the UAPA applies only to judicial review of state agency

decisions. But in 1994, the Tennessee General Assembly passed a law that permits Me

tropolita n Govern ment boar

ds and co mmissions to conduct contested case hearing s “substantially in accor dance-17- with the contested case provisions” of the UAPA. The legislature did not, however, specify whether the UAPA’s judicial review standards or the common law certiorar i standards should apply to appe als from Metropolitan Government’s UAPA-conducted contested case decisions. There is a difference between the standards. Under the UAPA, the

agenc y decision must

be suppor

ted by “substan tial” evidenc e. T.C.A. § 4-5-322 (h). Und er commo n law ce

rtiorar i, the agency

decision need only be

supported by “a

ny” evidenc e. Tennessee Cartage Co. v. Pharr, 199 S.W.2d 119, 120-21 (Tenn. 1 947). The

differe nce betw een the t

wo standa

rds, though subtle, can be important when there is a dispute over the sufficiency

of the evidence. In this case though, the distinction betwee n the two standards is not important. Laidlaw attacks the Boar d of Health’s decision not to renew its permits on a number of grounds, but sufficiency

of the evidence is not one of them. I n its brief, Laidlaw does not raise the issue. The refore, this court does not need to decide whether the UAPA’s “substantial” e vidence st and ard or c ert io rar i’s “an y” ev id enc e st and ard app li es. In other respects, the standard of review unde r both types of review is the same.

T.C.A. Section 7-7- 105, provides as f ollows: (a) In lieu of appointing a hearing officer a s authorized hereinabove, any

county having

a metropolitan form of gover nment and

a populat ion of ove

r four hu ndred fi fty thousand (450,000) according to the 1990 census or a ny subsequent federal census is empowered to contra ct with the secret ary of state f or use of administr

ative law judges, duly appointe d pursuan

t to § 4-5- 102(1), o n a case -by -case b asis to conduct hearings on any

matters appealed to boards and co mm is si on s o f t he co un ty. (b) An y appeal co nduct ed by an adm inis trati ve law judge under thi s section

shall be c onducted

substantia

lly in accordance with the contested ca se provisions of the Uniform Administrative Procedures Act compiled in title 4, ch. 5, part 3. The boar d or commis sion that c onsiderssuch app eals sha ll promulgate rules which specify the provisions of the Uniform Administra

tive Proc edures A

ct compile d in title 4, ch. 5, pa rt 3 applica ble to such appea

ls.
Nothing is found in the quoted statue to authorize the judicial review of administr ative ac tions unde

r T.C.A. Section 4-5 -322, whi ch is appl icable o nly

to state agencies. T.C.A. § 4-5-102(2).-18- Accord ingly this judici al review of the d ecision o f a munic ipal ag ency is by certior ari as provided by T.C.A. § §27-8- 101, et seq, and or §§ 27-9-101, et seq. McCallen v. City of Memphis, 1990, 786 S. W.2d 633; Wheeler v. Memphis, Tenn. App. 1984, 685 S.W.2d 4. The Board’s action may

be invalidated when it is “illegal, arbitrary or capricious,” McCallen v. City of Memphis, supra. The reviewing court is required to dete rmine whether there is any material evidence that supports the action of the administrative ag ency. Lansden v . Tucker , 204 Tenn. 388, 321 S.W.2d 795 (1959).

Plaintiff ’s first a nd third iss ues, abo ve, asse rt that the decision of the B oard to “revoke” the plaintiff’s permits was arbitrar y and ca pricious. The Board did not “revoke” plaintiff’s permits. It reverse d the renewal of the permits as gra nted by the Director on June 28, 1993.

Some consideration must be given to the change of ownership of the plant on December 23, 1992. Even though the cha nge in ownership resulted in the continuation of existence of Osco Treatment Sy stems, Inc., as a subsidiary of plaintiff, the record shows convincingly

that, upon

the assum

ption of ownership b y pl aintiff, chang es and imp rovemen ts were begun. Shortly

after the transfer, plaintiff removed a n accumulation of “roll-off boxes” of waste, sent them to another state, and reduced the number of roll-off boxes permitte d on the pr

emises to t

hree. T he Director of air

pollution c ontrol of

the Hea lth Departm ent testif ied withou

t contra diction a nd the Bo ard found that the accumul ation of r

olloff boxes was the principal cause of the odor complaints. Plaintiff undertook other cor rective measures which were effe ctive but inadequate to satisfy the Board.

It is not denied that employ ees of neighboring industries suffer ed ill effects from the dischar ge of g ases fr

om the subj ect plan

t. It i s not asse

rted tha t the plan t is without f

ault in design or operation. However, it is clear and uncontroverted that on November 8, 1993, the-19-

Board approved, (i.e. joined in) a settlement ag reement which bound plaintiff to make expensive improveme

nts in the p lant and a

greed that: As long as respondent is proceeding in a manner which may reasonably

be expected to result in completion of the agreed actions b y the targ et dates , and othe rwise is in

complian ce with this Consen

t Agre ement, r

esponde nt shall be

deemed t o be in compliance with Code § 10.56.170.
This record contains no evidence that plaintiff has not “proc eeded in such a manner which may re asonably be e xpected to result in completion of the agreed actions by the target dates” or is not “otherwise in compliance with the Consent Agreement.” Therefore, for purposes of this action, plaintiff must be “deemed to be in compliance with Code §10-56- 170,” which is the applicable air pollution ordinance.

Moreover, the issue before the Boa rd was not whether the six permits should be revoked , but whet

her to re verse the June 28, 1 993 renewal of exis ting per mits. The c

riteria for issuance and renewal of per mits is set out in pertinent parts of §10.56.040 of the “Nashvi lle Air Pol lution Contr ol Ordina nce” asfollows: Operating permit. A. After

the const ruction p ermit hasbeen issu ed and it i s demonstr ated to the satisfa

ction of th

e direc tor that th

e fuelburning equipment, incinerator, process equipment, control device o r any equipmen

t pertain ing ther eto can b e opera

ted in compliance with this chapter, an application for an opera ting permit shall be filed in duplicate in the office of the director on forms adopted by the dir

ector and supplied by

the metropolitan health department. If the director de termines that the source does or will operate in violation of this chapter, or if the source will operate so as to prevent attainment or maintenance of a ny lawful national ambient air quality standard, he shall either impose co nditions on

the fac e of the o

peratin g permit that, in his opinion, will promote compliance with this chapter, or he shall den y the applic ation for

an opera ting per mit

. . . . B. The operating permit shall be issued for a one-yea r period or for such longer period as the director may desig nate but not to exceed five ye ars. Applications for renewal of the opera ting permit shall be made in writing upon forms furnished by the metropolitan health department and shall be made not less than sixty day s prior to expiration of the certificate for which renewal is sought. Disclosures of information, tests and other prerequisites to the issue of a construction permit, temporary-20- operating permit, or operating pe rmit may be required by the directo r prior to the rene wal of an operati ng per

mit. (Emphasis supplied.)
Presumably, when the D irector renewed the permits on June 28, 1993, she determined that the “source does or will not operate in violation of this chapter.” I n order to reverse the action of the Director, it would be necessary for the Board to find that “the source” did, on June 28, 1993, or would thereafter “operate in violation of this chapter.” During the pendency of this proceeding, and prior to its decision, the Board joined in a Consent Agreement establishing compliance with this chapter by compliance with the terms of the Consent Agreement. For this reason, the B oard acted arbitrarily , capriciously, without factual justifica tion illeg ally

in rever sing the

renewa l of the pe

rmits.

This conclusion is based upon justice and fair dealing. Even thoug h the Board acted out of a ze alous ca

re for th e comfor t and saf ety of individ

uals in the

vicinity , the eff

ect of its action was so inconsistent with fairness and justice as to be unconscionable and irr ational. To enter into a solemn compact promising amnesty in exchange for $2.5 million worth of plant improvements, and to abrogate the terms of that compact before it can be carried out under its terms is not within the bounds of decency and justice.

This is not to say that the public or the Boa rd is without means of relief from violations of the air pollution ordinance.

The Boa rd improp erly

dealt wit h six permits as if they

were one permit. Each pe rmit allowed the use of a particular outlet for g ases into the atmosphere.

Under the provisions of the Air Pollution Control Ordinance, quoted above, it was the duty of the Director and, upon appeal, of the Board to evalua te the facts relating to each permit separately

and to make separate determinations of whether the equipment authorized by that permit “ca

n be operated in compliance with this Chapter.” Following suc h-21-

determination, a separate conclusion was required as to whether to renew the particular permit, to impose additional conditions of operation, or to refuse renewal of the pa rticular permit fo r stated r easons.

The record does not reflect whethe r this process was followed by the Director, but the record plainly

reflects that this process was not followed by the Board. Instea

d, the Board chose to determine generally that the operation of the plant should be terminated by refusing

renewa l of all pe rmits.

Moreover, reasonable procedur e would require that the operators of the plant be placed on notice of deficiencies and allowe d reasonable time to correct deficienc ies before refusa l to rene w a permi

t. The Bo ard had t

he inher ent right and duty

to monitor a

nd regulate the operation of the processes and equipment producing the gases discharged throug h each permitted outlet. The record indicates that this duty was not performed, but that the principal means of monitoring was complaints from the public of offensive odor.

The record indicates and the Boar d found that a major cause of pollution was the “P.H.” ( acid-a

lkali bala nce) of the liquid in variousprocess ing tank s was not a dequate ly monitored or maintained. This factor was remediable by the addition of a condition to the appropriate permits to require responsible monitoring and c ontrol of PH by an employ ee of the Board at the expense of plaintiff.

Other objectionable emanations were shown to be ame nable to monitoring and control by an employ

ee of the Board at the expense of the plaintiff.

“Conditions on the face of the permit” could have require d that the permittee bear the expense of

necessa ry monitoring

for the d aily

informat ion of the Board. Any

unacce ptable level of discharge of dang erous product would justify the suspension of ope rations producing-22-

the excessive discharge until the cause was c orrected. This action would affect only the permit of the involv ed outlet

and not the

operati on under

the other five per mits.

It ha s been we

ll said tha t it is seldo m necess ary

to burn a b arn to g et rid of i ts rats.

It is true that the administrative procee ding in which the “Consent Agreement” w as made was not, technically , the proceeding under review in this appeal. However, the two proceedings were contempor aneous, related to the same subject matter, the same pa rties and the same purposes, and, for the most part, the same improper discha rges from the plant. Further more, by its expressterms, the

“Consent Agree ment” in o ne case

stipulate d facts which were determinative of the other.

The disposition of this appeal is without prejudice to reasonable measures by the Board and its staff to discover, correct and prevent the illegal discharge of pollutants by plaintiff.

The foregoing discussion of the first and third issues is dispositive of this appeal and the remaining issues are therefor e pretermitted.

The action taken by

the Board is not the only r elief available to the neighboring property owne

rs and/or those individuals endangered or injured by the wrongful discharge of pollutants into the atmosphere. The disposition of this appeal will not prejudice the rights of any injured par

ty to recourse

by an ac tion for injunction and/or damages.

Plaintiff ’s secon d issue as serts tha t Metropo litan Code

§10.56.17 0 is unconstit utionally vague . Said Sec tion rea

ds as follo ws: Emission o

f gases, vapo rs or obje

ctionable odors. No person shall cause, suffer, allow or per mit any emission of gases, vapors or objectionable odors bey ond the property line-23- from any source w hatsoeve r which c auses inj ury , detrime nt, nuisance or annoy ance to any considerable number of persons or to the public, or

which ca uses or ha s a natur

al tende ncy to cause injury or

damage to business or property . (Prior code § 4-1-10)
Plaintiff asserts that the general term, “objectionable,” without definition renders the section vague. The text of the section supplies adequate def inition of the word, “objectionable.”

Plaintiff cites authority for the obsc urity of the words “ detriment,” and “annoy ance” but this Cour

t is satisfi ed that the words in clude the qualify ing adjective, “unreaso nable,” so as to pass constitutional muster.

Plaintiff’s fourth issue challenges the application of Metropolitan Code § 10.56.040(A) (quoted above) to the facts of this case.

If th e Direc tor (and

on appea l, the Bo ard) de

terminesthat “the

source” does or w ill operate in violatio n of the or

dinance , the Director (or

Board) is requir

ed to impos e suitable conditions on the face of the permit or deny it entirely. Subsection B of the quoted section provides for renewal upon the “prere quisites to the issue of a construction, temporary operating or operating per mit.” The present appeal relates to applications for re newal which, according to subsection (B), ar e subject to the same conditions as prescribed in Subsection A for the is suance o

r denial of an ori ginal pe

rmit.

Plaintiff argues that the ordinance does not requir e absolute guarantee ag ainst any accidental discharge of odor s. The ordinance must be interpreted and applied re asonably. Thus, the words “does or will operat e in viola tion of thischapter

” refe rs to rea sonable
ap pr eh en si on of

pr es en t o r f

ut ur e v io la ti on s; an d “ im po se co nd it io ns . . . o r . . . de ny” authorize such actions in reasonable conformity with the facts and circumstances, which-24-

include the “Consent Agreement,” which stipulated c ertain extensive improvements on agreed conditions.

Plaintiff’s fifth issue asserts that the procedure of the Boa rd was unlawful because the Director failed to defend her dec ision to renew plaintiff’s permits. Even though it may be the general practice of subor

dinate administrators to defend their actions upon appeal to higher administrative authority, no rule of la w is cited or known to this Court which would require such practice or grant any relief for the failure to follow such practice . Moreover, it does not appear that plaintiff raised the issue before the Board. See In Re: Billing and Collection, Tariffs of South Central Bell, Tenn. App. 1989, 779 S.W.2d 375.

Plaintiff’s sixth and last issue asserts that the Board improperly acted on the ground that plaintiff’s plant was improperly located in spite of its location in a zone in which such plants are permitted and in spite of the approval of the location by the Tennessee Department of Environment and Conservation.

The “Findings of Fact and Conclusions of L aw” by the

Board contains a section entit led “R eason s for D ecisi on” wh ich in turn c ontai ns th e foll owing:

. . . 2. Sec tion 10.56. 100 of the Air Pollutio n Chapter

directs the Board to consider in the exercise of its powers such pertinent facts and circumstances, including but not limited to: A. The character and deg ree of injury

to, or interference with, the protection of the hea lth, general welfare a

nd physical proper

ty of the residents of the Metropolitan Government area; B. The so cial and

economic

value of the air pollutant source; C. The deg

ree of d etriment al effe ct of the

air pollutants upon the achievement of the national ambient a ir quality standar d for such pollutan

t; D. The te chnical

practic ability

and eco nomic reasonableness of reducing or eliminating the emission of

such air pollutants ;-25- E. The suitability

or unsuita

bility of the ai r pollution so

urce to t he area in which it

is located; and F. The e conomic b enefit g ained by the air pollutantssource t

hrough any failure to comply with the provisions of this Chapter and regulations adopted pursuant to this Chapter. 3. The Board has considered its responsibilities and the factors listed above and notes that parag raphs A and E are particu lar rea sons for its decisio n. It i s obvious th at the OSCO facility cannot op erate in

its locati on without u

nreason ably interfe ring wit h the othe r busines ses and in stitutions in Cockrill Bend.
The qu oted p ortio ns of t he ord inanc e are pr efaced b y the foll owing: In the exercise of its powe

rs to prevent, aba

te and co ntrol air pollution, the Board shall give due consideration to such pertinent facts and circumstances including, but not limited to:
The Board is clearly

authorized to consider the location and surrounding area of the source of pollution “in exercising its powers,” but the exercise of its powers must be reasonable. This Court has determined that the reversa l of renewal of all permits for operation was not a reasonable exercise of the pow ers of the Board under the circ umstances. The “consideration” of the location and surrounding s of the plant was not unreasonable, but severity and unf

airness under the circumstances rende red the decision of the Board unreasonable.

For the foregoing r

easons, the judgment of the Chancellor affirming the action of the Board is reversed and vaca ted. The action of the Board in rever sing the renewal of plaintiff’s six operating permits is reversed and vacated without prejudice to other remedial actions which the Directo r or the B oard may

see fit to assure p laintiff

’s lawful operat

ion under its permits. A

ll costs, including

costs of th

is appea l, are a ssessed t

o the Boa rd. The c ause is remanded to the Trial Court for entry and enforcement of a judgment in conf ormity herewith.-26- Reversed and Remanded.

_______________________________________ HENRY F. TODD PRESIDING

JUDGE, MIDDL

E SECTION

_____________________________________ SAMUEL

L. L EWIS, JUD GE, CONCU RS

WILL IAM C. KOCH, JR., JUDGE, FIL ES SEPARATE CONCURRING OPINI ON.