STATE OF VERMONT

ENVIRONMENTAL COURT

Secretary, Vermont 

Agency of Natural 

Resources, Plaintiff,

v.

Mountain Valley 

Marketing, Inc., , 

Respondents

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}

}

}

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Docket No. 41-2-02 

Vtec

(Stage II Vapor 

Recovery)

Secretary, Vermont 

Agency of Natural 

Resources, Plaintiff,

v.

Premium Petroleum, 

Inc., Respondents

}

}

}

}

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Docket No. 278-12-02 

Vtec

(Stage II Vapor 

Recovery)

Secretary, Vermont 

Agency of Natural 

Resources, Plaintiff,

v.

Premium Petroleum, Inc, 

Odessa Corp., 

Timberlake Associates, 

and Wesco, Inc.,

Respondents

}

}

}

}

}

Docket No. 176-8-02 

Vtec

(Stage I Vapor 

Recovery)

Secretary, Vermont 

Agency of Natural 

Resources, Plaintiff,

}

}

}

Docket No. 175-8-02 

Vtec

(Hazardous Waste 
v.

Premium Petroleum, Inc, 

Odessa Corp., 

Timberlake Associates, 

and Wesco, Inc., 

Respondents

}

}

Management 

Regulations)

Decision and Order on Motions for Summary Judgment - Constitutional 

Grounds

In Docket No. 41-2-02 Vtec on January 24, 2002, the Secretary of the 

Vermont Agency of Natural Resources (ANR) issued an administrative 

order pursuant to 10 V.S.A. ' 8008 regarding Respondent Mountain 

Valley Marketing, Inc., which timely requested a hearing in 

Environmental Court. This administrative order alleged violations of 

the Air Pollution Control Regulations regarding Stage II Vapor 

Recovery. In Docket No. 278-12-02 Vtec on November 26, 2002, the 

Secretary of the Vermont Agency of Natural Resources (ANR) issued 

another administrative order pursuant to 10 V.S.A. ' 8008 also alleging 

violations of the Stage II Vapor Recovery Regulations regarding 

Respondent Premium Petroleum, Inc., which also timely requested a 

hearing in Environmental Court.

In Docket No. 176-8-02 Vtec, on July 31, 2002 the Secretary of the 

Vermont Agency of Natural Resources (ANR) issued an administrative 

order pursuant to 10 V.S.A. ' 8008 regarding Respondents Premium 

Petroleum, Inc, Odessa Corp., Timberlake Associates, and Wesco, Inc., 

which timely requested a hearing in Environmental Court. This 

administrative order alleged violations of the Air Pollution Control 

Regulations regarding Stage I Vapor Recovery. 

In Docket No. 175-8-02 Vtec, on July 31, 2002 the Secretary of the 

Vermont Agency of Natural Resources (ANR) issued an administrative 

order pursuant to 10 V.S.A. ' 8008 regarding Respondents Premium 

Petroleum, Inc, Odessa Corp., Timberlake Associates, and Wesco, Inc., 

which timely requested a hearing in Environmental Court. This 

administrative order alleged violations of the Hazardous Waste 

Management Regulations regarding exempt and small-quantity 

generators of hazardous waste. 

In all the above-captioned cases, all Respondents (which are all 

related corporations or entities) are represented by Jon Anderson, 
Esq., William E. Simendinger, Esq. and Kathryn Sarvak; and the 

Agency of Natural Resources is represented by Catherine Gjessing, 

Esq.

Applicability of Summary Judgment procedure

The Secretary first argues that V.R.C.P. 56, providing for summary 

judgment, does not apply to proceedings under 10 V.S.A. Chapter 

201. V.R.C.P. 76(a)(3). The Secretary is correct that V.R.C.P. 56 

summary judgment does not apply, but the Court may provide for the 

A disposition of legal issues prior to the hearing@ as it has done in 

these cases, by allowing the filing of memoranda analogous to motions 

for summary judgment. V.R.C.P. 76(d)(3)(D).

Nondelegation Doctrine

Respondents argue that they are entitled to judgment as a matter of 

law because all the regulations under which the above-captioned 

administrative orders were issued were adopted under statutes that 

violate the doctrine of separation of powers between the legislative 

and the executive branches of government, in that the statutes 

delegate legislative power to the Agency of Natural Resources without 

adequate standards to guide its use, and also violate the constitutional 

principles of due process and equal protection.

First it is necessary to point out that administrative agencies such as 

the Agency of Natural Resources carry out at least two distinct 

functions in our modern system of government: rulemaking functions 

and adjudicative functions. The function challenged in the present 

cases is the rulemaking or quasi-legislative function. The function 

challenged in several of the cases relied upon by Respondents, notably 

In re Handy, 171 Vt. 336 (2000), is the adjudicative or quasi-judicial 

function.

The adjudicative function, whether exercised by a court, an 

administrative tribunal, a municipal zoning board, or, as in Handy, the 

legislative body of the town considering a permit application in place of 

the zoning board, must be exercised based on objective standards, 

whether found in regulations or in state statute or local ordinance, 

simply to avoid the arbitrary exercise of the adjudicator= s discretion. 

In Handy, the zoning enabling statute and the particular municipality=

s zoning ordinance presented the necessary objective standards for a 

zoning board (or the court in a de novo appeal) properly to adjudicate 

whether a particular permit applicant should be granted a permit. 
However, during the period during which a new zoning regulation had 

been proposed but was not yet effective, the zoning enabling statute 

transferred the permit-issuing authority to the selectboard, but without 

any objective standards at all (that is, without directing the 

selectboard to apply the old zoning ordinance, to apply the proposed 

ordinance amendment, or to apply the standards for approval of a 

conditional use.) It was the state statute that was held to be 

unconstitutional in Handy, for its complete lack of guiding standards; 

that statute was later amended to correct the problem by requiring the 

use of the proposed ordinance amendment as of the date on which the 

proposed ordinance amendment was noticed for public hearing. 24 

V.S.A. ' 4443(d) (as amended).

By contrast, in the present cases Respondents do not challenge 

whether the regulations adopted by the Agency of Natural Resources 

provide sufficient objective standards for an adjudicative decision to be 

made about Respondents= behavior under those regulations. Rather, 

Respondents argue that the enabling statutes do not provide sufficient 

guidance to the Agency for it properly to have produced those 

objective standards in the regulations.

Other than two cases1 decided by the United States Supreme Court in 

1935, in the context of extensive government intervention in the 

economy during the Great Depression, the U.S. Supreme Court has 

not invalidated statutory delegations of rulemaking power to 

administrative agencies, and, indeed, has overturned lower federal 

court decisions which had attempted to follow those two cases2. 

Rather, the U.S. Supreme Court has consistently applied the test of 

whether the enabling statute sets out an A intelligible principle@ to 

guide the exercise of administrative rulemaking authority. See 

discussion of the history of this test in Whitman v. American Trucking 

Assns., Inc., 531 U.S. 457, 472-476 (2001); and in Richard J. Pierce, 

Jr. Administrative Law Treatise3, ' 2.6 at pp. 86-107 (2002). The Court 

has A almost never felt qualified to second-guess [the legislature] 

regarding the permissible degree of policy judgment that can be left to 

those executing or applying the law.@ Whitman, 531 U.S. at 474-75, 

quoting Justice Scalia= s dissent in Mistretta v. United States, 488 U.S. 

361, 416 (1989). In the Whitman case, the Court found the scope of 

discretion allowed to the federal Environmental Protection Agency by '

109(b)(1) of the federal Clean Air Act to be A well within the outer 

limits of our nondelegation precedents.@ Whitman at 474.
Section 109(b)(1) of the federal Clean Air Act required the federal EPA 

to set ambient air quality standards which, A in the judgment of the 

Administrator,@ based on criteria documents required under ' 108 and 

A allowing an adequate margin of safety,@ are A requisite to protect 

the public health.@

The Court in Whitman noted (at p. 475) that the greater the power 

conferred on the agency, the more restrictive the acceptable degree of 

agency discretion, but that even in > sweeping regulatory schemes=

the statute is not required to define how much of the regulated harm 

is too much. That is, the statute is not required to state how >

imminent= is too imminent, or how > necessary= is sufficiently 

necessary, or how > hazardous= is too hazardous, or, as in Whitman, 

what is the > requisite= level is, that is, neither too high nor too low, to 

protect the public health with an adequate margin of safety.

In Vermont, equally, the legislature must avoid unconstitutional 

delegations of legislative authority to administrative agencies. Vincent 

v. Vermont State Retirement Board, 148 Vt. 531, 535 (1987). The 

Vermont Supreme Court in that case noted that the A enabling 

legislation of virtually every administrative agency must include a 

certain degree of discretion given to the administrative agency to deal 

with issues unforeseen by its creators@ and that A such discretion 

may be delegated by the legislature, but that it A must not be >

unrestrained and arbitrary.= @ [Citations omitted.] The Court required 

that A the entire statute must be examined to determine whether the 

discretion afforded an administrative agency is sufficiently defined so 

as to warrant noninterference by this Court.@ Id.,148 Vt. at 535.

Air Pollution Control Regulations - Stage II and Stage I Vapor Recovery

Both the Stage I and Stage II Vapor Recovery regulations were 

adopted by the Vermont Agency of Natural Resources pursuant to 

Vermont= s Air Pollution Control Act, 10 V.S.A. Chapter 23, and in 

particular its ' 558. The Stage I Vapor Recovery regulations regulate 

the recapture of vapors from in-ground gasoline storage tanks when 

those tanks are refilled from bulk tanker trucks. The Stage II Vapor 

Recovery regulations regulate the recapture of vapors from individual 

vehicle gasoline tanks into those in-ground gasoline storage tanks 

when the individual vehicles are refueled. Both regulations are 

emission control requirements; that is, even though they do not set a 

numerical level for acceptable levels of emissions, they do operate to 

regulate the release into the outdoor atmosphere of gasoline vapor, 
which in turn falls within the definition of > air contaminant.= 10 V.S.A 

' ' 552(2) and (5).

Section 558 provides in full that:

The secretary may establish such emission control requirements, by 

rule, as in his judgment may be necessary to prevent, abate, or 

control air pollution. The requirements may be for the state as a whole 

or may vary from area to area, as may be appropriate to facilitate 

accomplishment of the purposes of this chapter, and in order to take 

necessary or desirable account of varying local conditions. 

The legislature= s A declaration of policy and purpose@ regarding 

Vermont= s Air Pollution Control Act further provides in ' 551(a) that it 

is the A public policy of this state and the purpose of this chapter to 

achieve and maintain such levels of air quality as will protect human 

health and safety, and to the greatest degree practicable, prevent 

injury to plant and animal life and property, foster the comfort and 

convenience of the people, promote the economic and social 

development of this state and facilitate the enjoyment of the natural 

attractions of this state.@ Section 558 alone states a sufficiently 

intelligible principle: that the Secretary is to promulgate regulations 

setting emission control requirements which will have the result of 

preventing, abating, or controlling air pollution. When the statute is 

read as a whole, that is, when ' 551(a) is applied to it, the statute 

provides an > intelligible principle= to guide the Agency= s discretion 

sufficient to uphold the statute against challenge on the basis of the 

nondelegation doctrine and the constitutional principles of due process 

and equal protection. 

Hazardous Waste Management Regulations

Vermont= s Hazardous Waste Management Regulations were adopted 

under the authority of the state= s Waste Management Act, described 

as follows by the Vermont Supreme Court in State of Vermont v. BenMont Corporation, 163 Vt 53, 57-58 (1994): 

Vermont= s Waste Management Act, 10 V.S.A. chapter 159, was 

enacted to address the increasingly complex social, economic and legal 

problems of managing solid and hazardous wastes. 10 V.S.A. ' 6601 ; 

see also Note, Solid Waste Source Reduction and the Product Ban: A 

Commerce Clause Violation?, 13 Vt. L. Rev. 691, 696-98 (1989) 

(describing history of Vermont= s solid waste management legislation). 

Chapter 159 was modeled after and enacted to comply with the 
Resource Conservation and Recovery Act of 1976 (RCRA), 42 U.S.C. ' '

6901-6991, chapter 82 (Solid Waste Disposal). See Note, supra, at 

696 (discussing enactment of chapter 159 in response to RCRA). Like 

RCRA, chapter 159 outlines a comprehensive cradle-to-grave scheme 

for managing the generation, treatment, storage, transportation and 

disposal of waste. See United States v. Johnson & Towers. Inc., 741 

F.2d 662, 666 (3d Cir. 1984) (describing scope and purpose of RCRA). 

Both RCRA and chapter 159 rely heavily on environmental agencies to 

implement their statutory goals. Compare 10 V.S.A. ' 6603(1) 

(secretary has authority to promulgate rules to implement purpose of 

statute) with 42 U.S.C. ' 6907 (same); and 10 V.S.A. ' 6610 (secretary 

of agency authorized to enforce compliance) with 42 U.S.C. ' 6928 (a) 

(same).

Respondents argue that the Vermont Waste Management Act only 

allows the Agency to impose the requirements of Subchapter 7 of the 

Hazardous Waste Management Regulations by way of issuing a permit 

under 10 V.S.A. ' 6606; that the Agency cannot impose those 

regulations on a generator of hazardous waste exempt from the 

requirements of obtaining a ' 6606 permit; and that the legislature has 

established no standards for the enactment of the Subchapter 7 rules.

Section 6604(a) requires the Secretary of the Agency of Natural 

Resources to adopt a comprehensive solid waste management plan for 

the state. With respect to the subset of solid waste that is hazardous, '

6604(b) provides additional specific authority for the Secretary to:

manage the hazardous wastes generated, transported, treated, stored 

or disposed in the state by administering a regulatory and 

management program which, at a minimum, meets the requirements 

of subtitle C of the Resource Conservation and Recovery Act of 1976, 

and amendments thereto, codified as 42 U.S.C. chapter 82, 

subchapter 3, and the Comprehensive Environmental Response, 

Compensation, and Liability Act of 1980, as amended. 

By authorizing Vermont=s Agency of Natural Resources to manage 

hazardous wastes through a Aregulatory@ program, this section 

authorizes it to adopt regulations. Further, by adopting by reference 

the regulatory requirements of two specific federal laws, ' 6604(b) 

provides ample authority and a specific intelligible principle to guide 

the Agency= s rulemaking process. The Vermont legislature specifically 

directed the Agency of Natural Resources to adopt regulations to 

create a program which at a minimum was consistent with subtitle C of 

RCRA (dealing with hazardous waste management) and with CRCLA. It 
did so to ensure that Vermont could operate its regulatory program 

within the state and avoid the preemption of that program by the

federal Environmental Protection Agency. See Note, supra, 13 Vt. L. 

Rev. 691(1989). The provisions of Subchapter C of RCRA, 42 U.S.C. ' '

3001 et seq., and in particular the provisions of ' 3001(d), provide 

specific guidance for the Vermont Agency=s adoption of the 

Subchapter 7 Waste Management Regulations at issue in the present 

case.

Accordingly, based on the foregoing, it is hereby ORDERED and 

ADJUDGED that Respondents= motions for judgment as a matter of 

law on constitutional issues are DENIED. We will hold a further 

telephone conference under V.R.C.P. 76(d)(3)(D) on July 23, 2003 to 

discuss whether and when these matters may be set for trial. (Please 

see enclosed conference notice and two other orders issued this date 

in the above-captioned cases.)

Done at Barre, Vermont, this 7th day of July, 2003.

___________________

Merideth Wright 

Environmental Judge

Footnotes

1. Panama Refining Co. v. Ryan, 293 U.S. 388 (1935) and A.L.A. Schechter Poultry 

Corp., 295 U.S. 495 (1935); see discussion in Richard J. Pierce, Jr. Administrative Law 

Treatise, §2.6 at pp. 91-92 (2002). 

2. See, e.g., Fahey v. Mallonee, 332 U.S. 245 (1947), discussed in Richard J. Pierce, Jr. 

Administrative Law Treatise, §2.6 at p. 93 (2002). 

3. This current treatise is by the same commentator who wrote the 1985 article cited by 

Respondents. The treatise describes the current status of the field of administrative law, 

while the 1985 article proposed an alternative theory to apply to the nondelegation 
problem: judicial deference to increased Presidential control of agency policy-making, to 

insure that policy-making power be vested in an elected official. This is an interesting 

theory, but does not describe the current state of either federal or Vermont administrative 

law some seventeen years after it was written.