FILED

March 13, 1996

Cecil W. Crowson

Appellate Court Clerk

LAIDLAW ENVIRONMENTAL SERVICES)

OF NASHVILLE, INC., )

 )

Plaintiff/Appellant, )

 ) Davidson Chancery

 ) No. 94-2747-III

VS. )

 ) Appeal No.

 ) 01-A-01-9507-CH-00310

METROPOLITAN BOARD OF HEALTH )

FOR NASHVILLE AND DAVIDSON )

COUNTY, )

 )

and )

 )

ROBERT ORR/SYSCO FOOD SERVICES )

COMPANY, )

 )

and )

 )

BRING URBAN RECYCLING TO )

NASHVILLE TODAY, )

 )

Defendants/Appellees. )

IN THE COURT OF APPEALS OF TENNESSEE

MIDDLE SECTION AT NASHVILLE

APPEAL FROM THE CHANCERY COURT OF DAVIDSON COUNTY

AT NASHVILLE, TENNESSEE

HONORABLE ROBERT S. BRANDT, CHANCELLOR

Thomas V. White

TUNE, ENTREKIN & WHITE

First American Center, 21st Floor

Nashville, Tennessee 37238

JOHN P. WILLIAMS

1900 Cedar Lane

Nashville, Tennessee 37212

ATTORNEYS FOR PLAINTIFF/APPELLANT

James L. Murphy, III

Director of Law

John L. Kennedy

Metropolitan Attorney

Liz Foster

Metropolitan Attorney

DEPARTMENT OF LAW

METROPOLITAN GOVERNMENT OF NASHVILLE

204 Metropolitan Courthouse

Nashville, Tennessee 37201

FOR DEFENDANT/APPELLEE

METROPOLITAN BOARD OF HEALTH FOR

NASHVILLE AND DAVIDSON COUNTY
-2-

GARY A. DAVIS

Post Office Box 2346

Knoxville, Tennessee 37901

Frank M. Fly

BULLOCK, FLY & McFARLAND

Post Office Box 398

Murfreesboro, Tennessee 37133-0398

ATTORNEYS FOR DEFENDANT/APPELLEE

ROBERT ORR/SYSCO FOOD SERVICES COMPANY

DAVID BORDENKIRCHER

3221 Nolensville Road, Suite 207

Nashville, Tennessee 37211

ATTORNEY FOR DEFENDANT/APPELLEE

BRING URBAN RECYCLING TO NASHVILLE TODAY

REVERSED AND REMANDED

HENRY F. TODD

PRESIDING JUDGE, MIDDLE SECTION

SAMUEL L. LEWIS, JUDGE, CONCURS;

AND WILLIAM C. KOCH, JR., JUDGE, FILES

SEPARATE CONCURRING OPINION.
-3-

LAIDLAW ENVIRONMENTAL SERVICES)

OF NASHVILLE, INC., )

 )

Plaintiff/Appellant, )

 ) Davidson Chancery

 ) No. 94-2747-III

VS. )

 ) Appeal No.

 ) 01-A-01-9507-CH-00310

METROPOLITAN BOARD OF HEALTH )

FOR NASHVILLE AND DAVIDSON )

COUNTY, )

 )

and )

 )

ROBERT ORR/SYSCO FOOD SERVICES )

COMPANY, )

 )

and )

 )

BRING URBAN RECYCLING TO )

NASHVILLE TODAY, )

 )

Defendants/Appellees. )

O P I N I O N

The captioned plaintiff has appealed from the judgment of the Trial Court affirming

the administrative action of the captioned Board reversing 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 parties initiated and prosecuted the

administrative proceedings before the Board to reverse the renewal of the permits and

actively defended the action of the Board in the Trial Court and this Court.

The issues presented by the parties require a thorough review of the background of the

present controversy.

The subject plant was constructed in 1990 by Osco Treatment Systems, Inc. In June,

1991, the Director of Health issued six annual permits for operating the plant and the plant

began operations consisting of converting hazardous wastewater. Copies of said permits are

not found in the record, but it appears from the renewal licenses that various activities were
-4-

authorized to neutralize and to separate metals, oils and other toxic wastes and ship them to

other disposal sites. The remaining wastewater was to be rendered non-hazardous in

biological treatment tanks and discharged into the public sewer system. Annual permits for

this operation were renewed in June, 1992, by the Director of Health; and Osco Treatment

Systems, Inc. continued the operation. 

On December 23, 1992, Osco Treatment Systems, Inc., became a subsidiary of

plaintiff, Laidlaw Environmental Services of Nashville, Inc.

On February 26, 1993, the Director of the Health Department issued the following

order:

THE METROPOLITAN GOVERNMENT OF NASHVILLE AND

DAVIDSON COUNTY, TENNESSEE

Acting By and Through

THE METROPOLITAN BOARD OF HEALTH

IN THE MATTER OF

THE METROPOLITAN DEPARTMENT OF

HEALTH, FREDIA S. WADLEY, M.D.,

DIRECTOR OF HEALTH,

Complainant,

vs. Case No. A-93-001

OSCO TREATMENT SYSTEMS, INC.,

Respondent.

ORDER

Pursuant to the authority of Tennessee Code Annotated

Sections 68-25-101, et seq. and the Code of Laws of The

Metropolitan Government of Nashville and Davidson County

Chapter 10.56, the Metropolitan Department of Health

(“Department”) has issued the following Order:

FINDINGS OF FACT

1. OSCO Treatment Systems, Inc., (“Respondent”) is

the owner and/or operator of a wastewater treatment facility

located at 7230 Centennial Place, Nashville, Tennessee. The

Respondent is a “person” within the meaning of Section

10.56.010 of the Metropolitan Code of Laws “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 Boulevard area. 

Upon investigation, the Department determined that the odor in

question was a sulfide type and was emanating from a sodium

hydrosulfide (NaHS) delivery system on Respondent’s

premises. According to the Respondent, the NaHS tank was

filled with a substantial excess of free sulfide which had been

introduced into the tank by employees of the Respondent. The

ensuing chemical reaction released excess sulfide at a rate

exceeding the capacity of the thermal oxidizer odor control

system.

 3. On numerous occasions during September and October,

1992, the Department received complaints of, and did, in fact,

detect, odors in the Centennial Boulevard area. Upon

investigation, the Department determined such odors were

being generated by bio-sludge stored in various roll-off boxes

located on Respondent’s premises. Such fact was confirmed by

employees of the Respondent.

 4. The Respondent was acquired by Laidlaw Environmental

Services, Inc. on December 23, 1992. On the date of

acquisition there were approximately ninety roll-off containers

which held odiferous bio-sludge material on site.

The order also contains the following:

CONCLUSION OF LAW

 1. Respondent has violated Section 10.56.170

of the Code on repeated occasions.

ORDER

 IT IS ORDERED that the Respondent is hereby assessed a

civil penalty in the amount of One Hundred Fifty Thousand and

No/100 Dollars ($150,000.00) for violation of Section

10.56.170 of the Metropolitan Code of Laws. Said penalty

shall be paid by certified check, payable to the order of the

Metropolitan Department of Health, within thirty (30) days of

the executed date of this CONSENT AGREEMENT and shall

be mailed or delivered to: . . . .

On April 2, 1993, the Director issued an “Amendment” to the February 26, 1993,

order containing the following:

AMENDMENT TO ORDER ASSESSING CIVIL 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 referenced above,

the Department received numerous complaints
-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; February, 1993; and

March, 1993:

October 5, 1992

October 8, 1992 (two occasions)

October 9, 1992

October 13, 1992 (two occasions)

October 15, 1992

December 1, 1992 (two occasions)

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 Department

determined that the odors originated in bio-sludge stored in

various roll-off boxes located on Respondent’s premises. The

origin of the odors detected in October, 1992, was confirmed

by employees of the Respondent.

THE METROPOLITAN GOVERNMENT OF NASHVILLE AND 

DAVIDSON COUNTY DEPARTMENT OF HEALTH

/s/_______________________________________

FREDIA S. WADLEY, M.D.

Director of Health

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 renewed the

permits.

Each of the six permits describes a specific “Emission Source” and specific

“Emission Points” with specified conditions of operation. 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 adopted the contested
-7-

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

Administrative Law Judge (ALJ) to preside over the proceedings.

On November 8, 1993, prior to the administrative hearing, a “consent agreement” was

approved by the Board. The agreement was signed by the Director of Health and the

president of Osco Treatment Systems, Inc. It contains the following caption and “Factual

Background:”

IN THE MATTER OF

THE METROPOLITAN DEPARTMENT OF

HEALTH, FREDIA S. WADLEY, M.D.,

DIRECTOR OF HEALTH,

Complainant,

V.

OSCO TREATMENT SYSTEMS, INC.,

Respondent.

. . . .

FACTUAL BACKGROUND

1. Respondent became a subsidiary of Laidlaw

Environmental Services, Inc., effective December 23, 1992.

2. Operational control of Respondent was assumed by

its current management in early 1993.

3. Respondent’s current management has taken a

number of steps to minimize the potential emission of odors

from the facility. These steps have included the following:

A. Respondent has undertaken an ongoing

comprehensive review of the facility and its operations.

B. Approximately 90 rolloff boxes containing

biosludge, which were on the premises when Respondent’s

current management assumed control, were removed by

Respondent. The removal was completed three weeks in

advance of the date promised to the Department by current

management. Biosludge is a potential source of odors. 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, and

shipped offsite for final disposal more

frequently. Respondent has incurred more than

$300,000.00 in additional expense (through 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 hydrogen peroxide and

powdered activated carbon to the biological treatment tanks as

a part of its routine wastewater processing procedures.

F. Respondent has retained consultants to assist it in

addressing the potential for emission of odors from the facility.

The agreement also contains the following:

 1. This Consent Agreement constitutes a full and final

settlement of all complaints alleging violations of Code

§10.56.170 by Respondent through the date of this Consent

Agreement.

 . . . .

 3. The Department has taken the cost to Respondent of past

and future remedial measures into account in determining an

appropriate penalty and corrective measures incorporated into

this Consent Agreement.

 4. Respondent will pay a civil penalty to the Department 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 biological 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 and

installing this scrubber is $250,000.00.

 8. . . . As long as Respondent is proceeding in a manner

which reasonably may be expected to result in completion of

the agreed actions by the target dates, and otherwise 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 referred

to in the preceding paragraph, as long as the equipment

installed by Respondent pursuant to this Consent Agreement is

in good working order and is in normal operation, Respondent

shall not be subject to enforcement action under Code
-9-

§10.56.170 unless and until Code §10.56.170 is substantially

amended. . . .

On April 4, 1994, plaintiff moved the Administrative Judge to dismiss the appeal

from the order of the Director renewing the permits on the grounds of the Consent Order. On

April 5, 1994, the motion was overruled.

On June 15, 1994, after a hearing on the merits of the appeal, the Board voted 4 - 1 to

reverse the renewal of permits granted by the Director on June 28, 1993. On July 12, 1994,

the Board approved written findings of fact and conclusions of law under the following

caption:

BEFORE THE METROPOLITAN BOARD OF HEALTH 

OF THE METROPOLITAN GOVERNMENT OF

NASHVILLE AND DAVIDSON COUNTY, TENNESSEE

ROBERT ORR/SYSCO, INC.

And

BRING URBAN RECYCLING TO NASHVILLE

TODAY (BURNT)

Petitioners,

V. No. 43.01-34-0597J

OSCO TREATMENT SYSTEMS, INC.,

Respondent.

The findings of fact include the following:

Background

. . . 12. Under the current zoning regulations activities in

Industrial Restrictive Districts, such as OSCO, must be

performed in enclosed buildings. At OSCO, sources of some

of the offensive odors, the waste storage and treatment tanks,

are not in enclosed buildings [IV-75-76].

Impact of OSCO on Neighboring Businesses and Institutions

 13. During the period April 1, 1991, to March 24, 1994, there

were at least 131 air pollution complaints to the Metropolitan

Health Department from neighbors of OSCO concerning air

pollution from the OSCO facility. Of the total of 131

complaints, 90 (70%) of those complaints were received after
-10-

January 1, 1993, when Laidlaw began operating the OSCO

facility. [II-142; Ex. S-6].

 . . . .

 15. Of the 131 documented air pollution complaints received

by the Metropolitan Health 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

complaints. [Ex. S-5, 6].

 . . . .

Objectionable Odors from the OSCO Facility

 20. When the original air pollution permit application was 

pending for the OSCO facility, OSCO’s consultant, Resource

Consultants, Inc., assured the Director of the Bureau of

Environmental Health Services of the Metropolitan Health

Department that there would be no odor problems. (VI-144-

147; VII-129-131) 

 21. Instead, in the three years that the facility has been

operating, there have been 40-50 emissions of objectionable

odors beyond the property line which were considered to be

violations of Section 10.56.170 of the Air Pollution Code

(Emission of Gases, Vapors, or Objectionable Odors) by the

Metropolitan Health Department. [VI-140].

 . . . .

 23. . . . There have been at least nineteen days since January,

1993 when the Metropolitan Health Department found

objectionable odors emitted by OSCO beyond the property line

that met the standard set out in Section 10.56.170. [VI-141].

 . . . .

 32. OSCO maintained log sheets of pH measurements of the

scrubbing liquid in the bioscrubber. During the two-year

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 days the pH was

permitted to remain well below 9.0 for hours at a time. [II-136-

139; VI-44; VI-164; Ex. S-13]. In addition, in 1993 OSCO

allowed the pH in the bioscrubber to fall below 9.0 more than

two times in January, 1993, once in March, 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 backup

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. [II-148; IV-134]. 

. . . .

 36. The only backup planned 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 oxidizer would eliminate all objectionable

odors emitted from the OSCO facility. . . .

 39. OSCO has not demonstrated the ability to properly

operate the relatively simple air pollution control equipment

that it currently has at the plant. It is likely that operational

problems will increase with the more technically sophisticated

and difficult-to-operate equipment that OSCO is planning to

install. [III-49-50].

 40. Another source of odor from the OSCO plant is the filter

press area, which filters odorous sludge from the biological

units and is in an open building without any air pollution

control devices. [IV-120].

 41. The storage of rolloff boxes containing sludge from the

biological units is also a potential source of odor, which is

somewhat mitiated when they are covered. [IV-121]. These

rolloff boxes have been the source of odor complaints in the

past. (Ex. S-5)

 42. Another source of odors is overflow of foam and liquid

from the biological treatment units, which have frequently

overflowed through foaming into the dike around the tanks

producing a biological sewer odor that would not be routed

through the new thermal oxidizer. [III-88].

 43. The odor problems with the OSCO facility have not been

solved by Laidlaw Environmental Services since it acquired

OSCO. [VI-142]. It is likely that there will be objectionable

odors from the OSCO facility in the future, even with the

installation of a new thermal oxidizer. [II-149]. The thermal

oxidizer to be installed on the biological treatment units will

not address odors from the filter press area or the roll-off boxes

or any other fugitive emissions from the facility. [IV-131].

 44. OSCO has accepted numerous shipments of hazardous

waste with very strong odors as determined by OSCO

laboratory personnel. [VI-33-40]. Hazardous waste codes

D001 and D002 were those that were most frequently

designated as having very strong odors. [VII-263]. These
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include shipments accepted for treatment in parts of the plant

without air pollution controls. Many of these shipments with

very strong odors are from other Laidlaw facilities. [VI-33-40].

 45. Toxic waste disposal plants like OSCO cannot operate

anywhere without potentially creating odors, and OSCO

therefore needs a more remote site with a buffer zone to reduce

the impact on neighboring businesses. [III-54]. The lack of a

buffer zone contributes to OSCO’s odor violations. [IV-154].

 46. OSCO’s own consultant, Resource Consultants, Inc.,

which confidently predicted 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

odors from OSCO will not be a problem in the future. [VII148]. 

Emissions of Volatile Organic Compounds

 47. The OSCO facility accepts hazardous and other industrial

waste with volatile organic compounds (VOCs), some with

over 4-5% volatile organic compounds, and some of which

have thousands of parts per million of benzene, which is a

carcinogen. OSCO also accepts hazardous waste with volatile

organic compounds that are chlorinated solvents, many of

which are carcinogens. [VII-115; II-152].

 48. Odors from the OSCO facility are related to VOCs

emissions, since odor-causing compounds are for the most part

VOCs. [III-23].

 49. OSCO has a thermal oxidizer in place for the control of

VOCs emissions from certain storage and treatment tanks at the

facility, but not all of the VOCs emissions from the OSCO

facility are routed to the thermal oxidizer. VOCs emissions

from the biological system are routed to the bioscrubber, as

discussed in the section above, and there are several sources of

fugitive emissions not controlled by any air pollution control

device. [II-135].

 50. The drum storage and drum decant building, where drums

are stored and unloaded into tanks, does not have any air

pollution controls. Also, in the same building is the chemical

fixation system, where certain liquids and sludges are mixed

with cement material for solidification. Volatile organic

compounds emitted from these operations are not controlled

and are released to the atmosphere. [II-125-128]. 

 . . . .

 55. The OSCO 1993 operating permits at issue in the hearing

control volatile organic compound emissions only through a

calculation of emissions based upon the amount of VOCs in

waste processed at the facility. There is no direct measurement

of VOCs emitted, and the calculations are done once per year

by OSCO’s consultants, in spite of the fact that the operating
-13-

permits have daily and hourly limits on VOC emissions. [II149]. OSCO does not report to Metro on compliance with

daily VOC throughput limits, only annual. [VII-112-113].

 56. No VOCs monitoring from emission points or in ambient

air is required by the permits. [VI-147]. The permits do not

specifically regulate the emissions of any toxic chemicals,

including benzene. [VI-147].

 57. The permit requirement for analyzing VOCs in incoming

waste is unclear and has not always 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

determination of compliance with daily throughput limits. [VI45-46; Ex. S-30]. 

 . . . .

 59. The 1993 operating permits do not adequately control

emissions of volatile organic compounds and particularly do

not adequately control emissions of volatile organic

compounds that are carcinogenic. [II-160-161]. 

Hazardous Waste Accepted by OSCO

 60. OSCO accepts both drums of hazardous waste and bulk

shipments. Drums of hazardous waste come to OSCO by

truck. Bulk hazardous waste comes to the OSCO facility by

rail tanker and by truck tanker. [II-123; 125-126; 130-132; Ex.

S-12]. Although the hazardous waste permit for the OSCO

facility allows only two rail cars to be present on the OSCO

facility at any given time, several more are stored at any time

on the rail siding immediately adjacent to the OSCO facility. 

[I-146; II-130-132; Ex. S-12; Ex. S-1].

 61. Under its hazardous waste permit OSCO is permitted to

accept virtually every type 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 migrated off the plant site. [Ex. S-2, 16]. 

The small scrubber on tank T-1 was overwhelmed by the gas,

and much of the gas exited from the top of the tank instead of

the scrubber. [III-139; V-110; Ex. S-16]. 

 . . . .

 90. In order to prevent sudden releases of toxic chemicals,

such as those that have occurred at OSCO, it is normal practice

in the chemical industry and in the hazardous waste industry to

have a formalized preventative maintenance program, which

OSCO does not have. [III-158]. Although OSCO may have

commenced the development of a preventative maintenance
-14-

program since the beginning of the hearing of this appeal, it is

not yet fully documented. [V-26]. 

 . . . .

 94. The OSCO facility as it is currently operated is not a safe

operation. There are many potential accidents that can occur

that would release toxic chemicals. [III-159-160]. 

 . . . .

Monitoring for Compliance

 104. Monitoring of emissions for compliance with permit

limits for the OSCO facility is technically and economically

feasible and is the trend under the federal Clean Air Act

Amendments of 1991. It is required in some permits 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 causing compounds. 

[III-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. [VII-256-257]. 

 107. Continuous fenceline monitoring, where a monitoring

device detects low levels of chemicals in the ambient air at a

facility property boundary, is technically and economically

feasible for OSCO. [VII-252; VII-265-266].

 108. None of these conditions in a permit for a waste

management facility would be a new precedent. [VII-281].

Conclusions of Law

. . . .

5. Section 10.56.170 of the Air Pollution Chapter states:

No person shall cause, suffer, allow or permit

any emission of gases, vapors, or objectionable

odors beyond the property line from any source

whatsoever which causes injury, detriment,

nuisance or annoyance to any considerable

number of persons or to the public, or which

causes or has a natural tendency to cause injury

or damage to business or property.

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 conclusions of law include the following:

7. Section 10.56.170 is valid without the promulgation of

regulations for its implementation and is not unconstitutionally

vague or overbroad. It 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 Metropolitan 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 three years of operations.

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 required

in the permits. By violating Sections 10.56.170 OSCO has also

failed to comply with the provisions of its operating permits.

14. Based upon the design, constructions, and operation of the

OSCO facility, and the types of hazardous waste that OSCO

accepts and is permitted to accept, it is likely that OSCO will

operate in violation of the Air Pollution Control Chapter in the

future.

The decision of the Board reads as follows:

 WHEREFORE, the Metropolitan Nashville and Davidson

County Board of Health hereby reverses the decision of the

Metropolitan Health Department approving the OSCO

Treatment Systems, Inc., application for Operating Permits

Number 6-1 through 6.5. These operating permits are

considered void and of no effect as of the effective date of this

Order. 

On the same date, plaintiff filed a motion for stay supported by an affidavit that

plaintiff had spent or obligated itself for payment of $2,679,302 in good faith compliance

with the “Consent Agreement” approved by the Board on November 8, 1993. The Board

denied the stay.

Upon filing of petition for judicial review, plaintiff again applied for stay supported

by affidavit of the Director of Health that:

 Since the installation of the new air pollution control

equipment at the Laidlaw facility, it is my opinion that the
-16-

facility will pose no risk to human health which is greater than

that posed by several other facilities in Cockrill Bend. It is also

my opinion that the likelihood of odors has been reduced

substantially by the addition of this new equipment.

Stay was granted and continued during this appeal.

As stated above, the Trial Court affirmed the action of the Board. On appeal, plaintiff

presents the following issues:

1. Whether the Trial Court erred by holding that it was not

arbitrary and capricious for the Metropolitan Board of Health to

revoke Laidlaw's permits even though the Board had ordered

Laidlaw to install expensive new air pollution control

equipment just eight months earlier.

2. Whether the Trial Court erred by holding that the applicable

section of the air pollution control ordinance for Nashville and

Davidson County is not unconstitutionally vague.

3. Whether the Trial Court erred by holding that 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. Whether the Trial Court erred by holding that the Board's

decision was not made upon unlawful procedure even though

the Director of the Metropolitan Department of Health made no

effort, during the proceedings before the Board, to defend her

decision to issue the permits to Laidlaw.

6. Whether the Trial Court erred by holding that the Board's

reliance upon the location of the Laidlaw facility as a basis for

its decision was not arbitrary, capricious, or illegal.

The Board presents and plaintiff discusses the issue of whether this judicial review is

governed by the Administrative Procedure Act, T.C.A. §4-5-322, or certiorari as provided by

T.C.A. §27-8-101. The question was presented to the Trial Judge who ruled:

 It is unclear whether judicial review of the Board’s decision 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 Metropolitan Government boards and commissions to

conduct contested case hearings “substantially in accordance
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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 certiorari

standards should apply to appeals from Metropolitan

Government’s UAPA-conducted contested case decisions. 

 There is a difference between the standards. Under the

UAPA, the agency decision must be supported by “substantial”

evidence. T.C.A. § 4-5-322(h). Under common law certiorari,

the agency decision need only be supported by “any” evidence. 

Tennessee Cartage Co. v. Pharr, 199 S.W.2d 119, 120-21

(Tenn. 1947). The difference between the two standards,

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

the sufficiency of the evidence.

 In this case though, the distinction between the two standards

is not important. Laidlaw attacks the Board of Health’s

decision not to renew its permits on a number of grounds, but

sufficiency of the evidence is not one of them. In its brief,

Laidlaw does not raise the issue. Therefore, this court does not

need to decide whether the UAPA’s “substantial” evidence

standard or certiorari’s “any” evidence standard applies. In

other respects, the standard of review under both types of

review is the same.

T.C.A. Section 7-7-105, provides as follows:

 (a) In lieu of appointing a hearing officer as authorized

hereinabove, any county having a metropolitan form of

government and a population of over four hundred fifty

thousand (450,000) according to the 1990 census or any

subsequent federal census is empowered to contract with the

secretary of state for use of administrative law judges, duly

appointed pursuant to § 4-5-102(1), on a case-by-case basis to

conduct hearings on any matters appealed to boards and

commissions of the county.

 (b) Any appeal conducted by an administrative law judge

under this section shall be conducted substantially in

accordance with the contested case provisions of the Uniform

Administrative Procedures Act compiled in title 4, ch. 5, part 3. 

The board or commission that considers such appeals shall

promulgate rules which specify the provisions of the Uniform

Administrative Procedures Act compiled in title 4, ch. 5, part 3

applicable to such appeals.

Nothing is found in the quoted statue to authorize the judicial review of

administrative actions under T.C.A. Section 4-5-322, which is applicable only to state

agencies. T.C.A. § 4-5-102(2). 
-18-

Accordingly this judicial review of the decision of a municipal agency is by certiorari 

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 determine whether there is any

material evidence that supports the action of the administrative agency. Lansden v. Tucker,

204 Tenn. 388, 321 S.W.2d 795 (1959).

Plaintiff’s first and third issues, above, assert that the decision of the Board to

“revoke” the plaintiff’s permits was arbitrary and capricious. The Board did not “revoke”

plaintiff’s permits. It reversed the renewal of the permits as granted 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 change in ownership resulted in the continuation of

existence of Osco Treatment Systems, Inc., as a subsidiary of plaintiff, the record shows

convincingly that, upon the assumption of ownership by plaintiff, changes and improvements

were begun. Shortly after the transfer, plaintiff removed an accumulation of “roll-off 

boxes” of waste, sent them to another state, and reduced the number of roll-off boxes

permitted on the premises to three. The Director of air pollution control of the Health

Department testified without contradiction and the Board found that the accumulation of rolloff boxes was the principal cause of the odor complaints. Plaintiff undertook other corrective

measures which were effective but inadequate to satisfy the Board.

It is not denied that employees of neighboring industries suffered ill effects from the

discharge of gases from the subject plant. It is not asserted that the plant is without fault in

design or operation. However, it is clear and uncontroverted that on November 8, 1993, the
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Board approved, (i.e. joined in) a settlement agreement which bound plaintiff to make

expensive improvements in the plant and agreed that:

 As long as respondent is proceeding in a manner which may

reasonably be expected to result in completion of the agreed

actions by the target dates, and otherwise is in compliance with

this Consent Agreement, respondent shall be deemed to be in

compliance with Code § 10.56.170.

This record contains no evidence that plaintiff has not “proceeded in such a manner

which may reasonably be expected 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 Board was not whether the six permits should be

revoked, but whether to reverse the June 28, 1993 renewal of existing permits. The criteria

for issuance and renewal of permits is set out in pertinent parts of §10.56.040 of the

“Nashville Air Pollution Control Ordinance” as follows:

Operating permit.

 A. After the construction permit has been issued and it is

demonstrated to the satisfaction of the director that the fuelburning equipment, incinerator, process equipment, control

device or any equipment pertaining thereto can be operated in

compliance with this chapter, an application for an operating

permit shall be filed in duplicate in the office of the director on

forms adopted by the director and supplied by the metropolitan

health department. If the director determines 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 any

lawful national ambient air quality standard, he shall either

impose conditions on the face of the operating permit that, in

his opinion, will promote compliance with this chapter, or he

shall deny the application for an operating permit. . . .

 B. The operating permit shall be issued for a one-year period

or for such longer period as the director may designate but not

to exceed five years. Applications for renewal of the operating

permit shall be made in writing upon forms furnished by the

metropolitan health department and shall be made not less than

sixty days 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 permit may be required by the

director prior to the renewal of an operating permit. 

(Emphasis supplied.)

Presumably, when the Director renewed the permits on June 28, 1993, she determined

that the “source does or will not operate in violation of this chapter.” In 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 Board acted arbitrarily, capriciously, without factual

justification illegally in reversing the renewal of the permits.

This conclusion is based upon justice and fair dealing. Even though the Board acted

out of a zealous care for the comfort and safety of individuals in the vicinity, the effect of its

action was so inconsistent with fairness and justice as to be unconscionable and irrational. 

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 Board is without means of relief from

violations of the air pollution ordinance.

The Board improperly dealt with six permits as if they were one permit. Each permit

allowed the use of a particular outlet for gases 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 evaluate the facts relating to each

permit separately and to make separate determinations of whether the equipment authorized

by that permit “can be operated in compliance with this Chapter.” Following such
-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 particular

permit for stated reasons.

The record does not reflect whether this process was followed by the Director, but the

record plainly reflects that this process was not followed by the Board. Instead, the Board

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

renewal of all permits.

Moreover, reasonable procedure would require that the operators of the plant be

placed on notice of deficiencies and allowed reasonable time to correct deficiencies before

refusal to renew a permit. The Board had the inherent right and duty to monitor and regulate

the operation of the processes and equipment producing the gases discharged through 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 Board found that a major cause of pollution was the

“P.H.” (acid-alkali balance) of the liquid in various processing tanks was not adequately

monitored or maintained. This factor was remediable by the addition of a condition to the

appropriate permits to require responsible monitoring and control of PH by an employee of

the Board at the expense of plaintiff.

Other objectionable emanations were shown to be amenable to monitoring and

control by an employee of the Board at the expense of the plaintiff.

“Conditions on the face of the permit” could have required that the permittee bear the

expense of necessary monitoring for the daily information of the Board. Any unacceptable

level of discharge of dangerous product would justify the suspension of operations producing
-22-

the excessive discharge until the cause was corrected. This action would affect only the

permit of the involved outlet and not the operation under the other five permits.

It has been well said that it is seldom necessary to burn a barn to get rid of its rats.

It is true that the administrative proceeding in which the “Consent Agreement” was

made was not, technically, the proceeding under review in this appeal. However, the two

proceedings were contemporaneous, related to the same subject matter, the same parties and

the same purposes, and, for the most part, the same improper discharges from the plant. 

Furthermore, by its express terms, the “Consent Agreement” in one case stipulated 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 therefore pretermitted.

The action taken by the Board is not the only relief available to the neighboring

property owners 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 party to recourse by an action for injunction and/or damages. 

Plaintiff’s second issue asserts that Metropolitan Code §10.56.170 is

unconstitutionally vague. Said Section reads as follows:

 Emission of gases, vapors or objectionable odors.

 No person shall cause, suffer, allow or permit any emission of

gases, vapors or objectionable odors beyond the property line
-23-

from any source whatsoever which causes injury, detriment,

nuisance or annoyance to any considerable number of persons

or to the public, or which causes or has a natural tendency 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 definition of the word, 

“objectionable.”

Plaintiff cites authority for the obscurity of the words “detriment,” and “annoyance”

but this Court is satisfied that the words include the qualifying adjective, “unreasonable,” 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 the Director (and on appeal, the Board) determines that “the source” does or will

operate in violation of the ordinance, the Director (or Board) is required to impose suitable

conditions on the face of the permit or deny it entirely. Subsection B of the quoted section

provides for renewal upon the “prerequisites to the issue of a construction, temporary

operating or operating permit.” The present appeal relates to applications for renewal which,

according to subsection (B), are subject to the same conditions as prescribed in Subsection A

for the issuance or denial of an original permit.

Plaintiff argues that the ordinance does not require absolute guarantee against any

accidental discharge of odors. The ordinance must be interpreted and applied reasonably. 

Thus, the words “does or will operate in violation of this chapter” refers to reasonable

apprehension of present or future violations; and “impose conditions . . . or . . . deny”

authorize such actions in reasonable conformity with the facts and circumstances, which
-24-

include the “Consent Agreement,” which stipulated certain extensive improvements on

agreed conditions. 

Plaintiff’s fifth issue asserts that the procedure of the Board was unlawful because the

Director failed to defend her decision to renew plaintiff’s permits. Even though it may be the

general practice of subordinate administrators to defend their actions upon appeal to higher

administrative authority, no rule of law 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 Law” by the Board contains a section

entitled “Reasons for Decision” which in turn contains the following:

. . . 2. Section 10.56.100 of the Air Pollution 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 degree of injury to, or

interference with, the protection of the health,

general welfare and physical property of the

residents of the Metropolitan Government area;

B. The social and economic value of the air

pollutant source;

C. The degree of detrimental effect of the air

pollutants upon the achievement of the national

ambient air quality standard for such pollutant;

D. The technical practicability and economic

reasonableness of reducing or eliminating the

emission of such air pollutants;
-25-

E. The suitability or unsuitability of the air

pollution source to the area in which it is

located; and

F. The economic benefit gained by the air

pollutants source through 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 paragraphs A and E are

particular reasons for its decision. It is obvious that the OSCO

facility cannot operate in its location without unreasonably

interfering with the other businesses and institutions in Cockrill

Bend.

The quoted portions of the ordinance are prefaced by the following:

In the exercise of its powers to prevent, abate and control 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 reversal of renewal of all permits for

operation was not a reasonable exercise of the powers of the Board under the circumstances. 

The “consideration” of the location and surroundings of the plant was not unreasonable, but

severity and unfairness under the circumstances rendered the decision of the Board

unreasonable.

For the foregoing reasons, the judgment of the Chancellor affirming the action of the

Board is reversed and vacated. The action of the Board in reversing the renewal of plaintiff’s

six operating permits is reversed and vacated without prejudice to other remedial actions

which the Director or the Board may see fit to assure plaintiff’s lawful operation under its

permits. All costs, including costs of this appeal, are assessed to the Board. The cause is

remanded to the Trial Court for entry and enforcement of a judgment in conformity herewith.
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Reversed and Remanded.

_______________________________________

HENRY F. TODD

PRESIDING JUDGE, MIDDLE SECTION

_____________________________________

SAMUEL L. LEWIS, JUDGE, CONCURS

WILLIAM C. KOCH, JR., JUDGE, FILES

SEPARATE CONCURRING OPINION.