1 

### NRB v. Stratton Corporation

ENTRY REGARDING MOTION

Count 1, NRB Enfc. Land Use Panel AOD (106-7-14 Vte c)

Title: Motion to Amend Scheduling Order (Motion 12 ) Filer: Treetop at Stratton Condo Assn Attorney: A. Jay Kenlan Filed Date: September 25, 2015

Response filed on 10/12/2015 by Attorney Lisa B. Sh elkrot for Respondent Stratton Corporation Opposition

**The motion is DENIED.**

Count 1, NRB Enfc. Land Use Panel AOD (106-7-14 Vte c)

Title: Motion to Add Expert Witness (Motion 13) Filer: Treetop at Stratton Condo Assn Attorney: A. Jay Kenlan Filed Date: September 25, 2015

Response filed on 10/15/2015 by Attorney Lisa B. Sh elkrot for Respondent Stratton Corporation Opposition

**The motion is DENIED.**

This matter is an enforcement action brought by the Natural Resources Board (NRB) against Treetop Development Company, LLC; Treetop T hree Development Company, LLC; Intrawest Stratton Development Corporation; and The Stratton Corporation (collectively, Stratton) for violations of Stratton’s Act 250 perm it for a development of 25 three-unit townhome buildings near Stratton Mountain in the to wn of Stratton, Vermont (the Project).
Stratton and the NRB entered into an assurance of d iscontinuance (AOD), and filed the AOD with the Court. Treetop Condominium Association (t he Association), which represents the owners of the townhome development Stratton constru cted, intervened to challenge the adequacy of the AOD.

When the Association first intervened, it primarily challenged the adequacy of certain
remedial measures referenced in the AOD. In a deci sion dated July 13, 2015, the Court 

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SUPERIOR COURT ENVIRONMENTAL DIVISION Environmental Division Unit Docket No. 106-7-14 Vte c2

dismissed on summary judgment the Association’s cha llenges to the adequacy of the remedial measures, holding that those challenges amounted to an impermissible collateral attack on a related Act 250 permit. See NRB v. Stratton Corp., No. 106-7-14 Vtec, slip op. at 1 (Vt. Super. Ct. Envtl. Div. July 3, 2015). After the Court’s J uly 2015 decision, the only issue remaining before the Court is the adequacy of the monetary pe nalty in the AOD.

Since the July 2015 decision, the parties have been involved in a discovery dispute that has consumed significant judicial resources. On Ma y 29, 2015, the Association served a broad list of interrogatories on Stratton, essentially se eking any communication, record, or observation of the Project’s stormwater system made by Stratton or its independent contractors from June 1, 2002 to the present. Stra tton objected, and the Association filed a motion to compel. In a September 9, 2015 hearing o n the motion, the Court ordered Stratton to respond to the interrogatories, but determined t hat much of the information had already been disclosed in previous civil litigation between Stratton and the Association. The Court
therefore ordered Stratton to make available all do cuments produced in the civil litigation as well as any other documents relevant to the penalty factors laid out in 10 V.S.A. § 8010.

The Association filed a motion to amend the schedul ing order on September 25, 2015, asking this Court to require Stratton to reorganize the documents it produced in civil litigation either by topic or to mimic “the usual course of bu siness.” The Association also moved to add an expert witness to the trial list. The deadline for expert disclosures, which has not been extended, was June 5, 2015.

Meanwhile, the Court had been concerned for some ti me about the Association’s standing in this appeal. The particularized intere st the Association articulated during its initial motion to intervene was in ensuring the adequacy of stormwater remediation measures. The Court’s July 13, 2015 summary judgment decision rem oved that issue from the scope of our review, leaving only the size of the monetary penal ty in issue. The Court was concerned that any injury suffered by the Association was no longe r redressable, since any monetary penalty would be paid into public funds. In response to th e Association’s motions, the Court issued an entry order on October 27, 2015, sua sponte raising the issue of standing and requesting briefing from all parties.

Because we ultimately conclude that the Association does have standing to challenge monetary penalties, we address both standing and th e underlying discovery motions.

**I. Standing** 

Section 8020 of Title 10 of the Vermont Statutes al lows an “aggrieved person” to
intervene in an Act 250 enforcement matter in order to challenge the adequacy of an administrative order, assurance of discontinuance, or civil citation. 10 V.S.A. § 8020(c), (h). To be an aggrieved person, a party must allege an “inj ury to a particularized interest” protected by
one of the environmental statutes listed in 10 V.S. A. § 8003(a), and that injury must be attributable to respondent’s violations. See 10 V. S.A. § 8020(a). The Court infers a final requirement in the “aggrieved person” definition—th at a party’s particularized injury be redressable in a given proceeding. A redressabilit y requirement ensures that the aggrieved3

party’s participation is relevant to the specific m atter before the court, and prevents the expenditure of court resources on unresolvable conc erns. 1

In response to the Court’s request for briefing, th e Association pointed to Friends of the Earth, Inc. v. Laidlaw Environmental Services, 528 U.S. 167 (2007), which held that plaintiffintervenors have standing in a federal Clean Water Act enforcement action, even when the only issue before the Court is the size of the monetary penalty. 2 Id. at 185–86. The Laidlaw Court reasoned that the deterrent effect of a monetary pe nalty was enough to redress the plaintiff’s particularized injury, so long as there is a reason able possibility violations could recur. See id. a t 187–88. The Court did acknowledge, however, that “ there may be a point at which the deterrent effect of a claim for civil penalties bec omes so insubstantial or so remote that it cannot possibly support citizen standing.” Id. at 186.

Two of the other parties in this suit, the NRB and the Vermont Agency of Natural Resources filed briefs to support the Association’s standing. These state agencies are required by statute to support third parties’ standing to in tervene in enforcement matters. See 10 V.S.A. § 8020(i); see also 40 C.F.R. § 123.27(d) (requirin g states with delegated enforcement authority under the federal Clean Water Act to provide for pu blic participation in enforcement suits).

In response to the Association’s brief, Stratton ar gues that standing under Act 250 is more restrictive than standing under the federal Cl ean Water Act. The federal Clean Water Act employs a “citizen attorney general” model of enfor cement, in which private citizens can bring enforcement actions. Under Act 250, only the NRB c an initiate an enforcement action; there is no “citizen suit” provision in the Act. This diffe rence, Stratton argues, means that, while intervenors have a statutorily defined interest in enforcing the law under the Clean Water Act, their role (and their standing) is more narrow in V ermont. See Mem. of the Stratton Corp. Addressing Redressability Requirement at 6 n.4, fil ed Dec. 14, 2015; see also Lujan v. Defenders of Wildlife, 504 U.S. 555, 579 (1992) (Kennedy, J., concurring) (“In my view, Congress has the power to define injuries and articulate chains of c ausation that will give rise to a case or controversy where none existed before. . . .”). 3

The Court appreciates this difference in the state and federal statutory schemes. But the redressability element in the “aggrieved person ” definition stems from constitutional

1 The Court also infers a redressability requirement in Section 8020(a) because the statutory language generally tracks the constitutional requirements fo r standing, and redressability is a component of th e constitutional test. See, e.g., Parker v. Town of M ilton, 169 Vt. 74 (1998) (outlining requirements for standing). Furthermore, the Vermont Supreme Court has interpret ed the phrase “aggrieved” in other statutes to inco rporate the general constitutional requirements to for stan ding. See, e.g., Blum v. Friedman, 172 Vt. 622, 624 (2001) (interpreting the word “aggrieved” in Vermont’s open meeting law to incorporate the general standing do ctrine, and noting that “[w]e have applied general standing doctrine to similar statutory standing requirement s.”); see also In re Goddard College CU, No. 175-12-11 Vtec, s lip op. at 3 (Vt. Super Ct. Envtl. Div, Jul. 5, 2012 ) (Walsh, J.) (incorporating a redressability requirement into th e test for interested party status in Act 250 proce edings).

2 The majority of the Association’s brief was devote d to arguing either the merits of its case (for a l arger penalty) or the merits of the case we have held the y may not argue (that remediation measures under th e amended Act 250 permit are unsatisfactory). We hav e gleaned from its brief, however, that the Associa tion’s primary argument is that, according to Laidlaw, a l arger penalty will deter future violations, which w ill redress the Association’s injury.

3 In the alternative, Stratton argues that the Court should reverse its decision granting the Associati on’s
motion to intervene. We decline to do so.4

principles implicit in the statute, and these princ iples are the same under state and federal law. See Parker v. Town of Milton, 169 Vt. 74, 76–77 (19 98). Laidlaw, which addressed constitutional standing, therefore sets the applica ble redressability standard.

Under the Laidlaw standard, a higher monetary penal ty will provide sufficient deterrence to redress, at least in some measure, th e Association’s injury. The Association and Stratton have a close relationship, in that Stratto n constructed the development in which the Association’s members own property, and the Associa tion will assume control of the development’s infrastructure in the future. We the refore conclude that the Association has demonstrated standing to challenge the adequacy of the monetary penalty.

**II. Discovery Motions** 

**a. Motion to Amend Scheduling Order** 

In accordance with the Court’s ruling in the Septem ber 9, 2015 motion hearing, Stratton has made all the documents it produced in its civil litigation with the Association available to
the Association’s current counsel. 4 Stratton has not rearranged those documents—they are boxed as they were when they were presented to the Association in the civil matter.

The Association objects to the mode of presentation , arguing that Stratton should be required to reorganize the documents for the conven ience of the Association, citing V.R.C.P. 34(b)(i). The Association argues that “to simply p rovide the Association with boxes of the material, and let the Association sort through it t o see if it can find anything relevant, is not an appropriate discovery response.” Treetop at Stratt on Condominium Ass’n, Inc.’s Request to Modify Scheduling Order at 5, filed Sept. 25, 2015.

Rule 34(b)provides, “Unless the parties otherwise a gree, or the court otherwise orders: (i) a party who produces documents for inspection s hall produce them as they are kept in the usual course of business or shall organize and labe l them to correspond with the categories in the request.” The purpose of this requirement is t o “prevent[] a party from mixing critical documents with others in the hope of obscuring thei r significance.” V.R.C.P. 34(b)(i), Reporter’s

Notes.

There is no suggestion that Stratton deliberately r earranged documents to frustrate discovery. So long as Stratton has not deliberatel y rearranged the produced documents to hide significant material, it has complied with Rule 34( b)(i), and the Court will not order Stratton to rearrange the documents for the Association’s conve nience. While the Association may have to “sort through [the boxes] to see if it can find any thing relevant,” this sorting is a necessary part of litigation, and a predictable consequence of iss uing broad discovery requests. The Court
therefore **DENIES** the Association’s motion to alter the Court’s Septe mber 9, 2015 scheduling
order.

**b. Motion to Add Expert Witness** 

The Association has also moved to add an expert wit ness, Mr. Thomas Barden, to the trial list. Mr. Barden has significant experience in construction management and consulting. The Association proposes to have Mr. Barden testify as to the economic benefit Stratton

4 The Association was represented by different couns el in the civil litigation.5

derived from its Act 250 violations. See 10 V.S.A. § 8010(c)(2) (“[T]he secretary may also recapture economic benefit resulting from a violati on up to the $170,000.00 maximum . . . .”).

The deadline for disclosure of expert witnesses was June 5, 2015. This deadline came nearly a full year after the Association first inte rvened in this matter. The Association did not
move to extend the deadline until almost four month s after the deadline had passed, almost three months after the Court’ summary judgment deci sion narrowed the issues in this matter, and two days after this matter was originally set f or trial. 5

As the Vermont Supreme Court has noted, “The burden of disclosing experts is not a heavy one.” Follo v. Florindo, 2009 VT 11, ¶ 21. Thus, where a party moves to extend an expert disclosure deadline several months after it has expired, and many months into the case, the Court does not abuse its discretion in denying the motion, even where the movant claims the proposed expert is “crucial.” Id. ¶¶ 20–21. H ere, the Association did not move to extend the deadline until many months after it expired and two days after the case was originally set for trial, all without offering any reason for its delay. Furthermore, the Association seeks to have Mr. Barden testify about the economic benefit Stratton derived from its violations. This issue has been on the table since the very start of this litigation. While the Court recognizes
that the focus of this trial has narrowed since the original deadline for expert disclosures, the issues themselves have not changed. Furthermore, t hough there was a discovery dispute ongoing throughout the summer of 2015, that dispute should not have affected the Association’s ability to identify and disclose expe rts, and the original discovery schedule did not require discovery responses to be received before e xpert disclosures were due. 6 The Court therefore sees no reason to extend the expert discl osure deadline to allow an additional expert,
and the Court **DENIES** the Association’s motion.

**III. Conclusion** 

In the Court’s initial request for briefing on stan ding (issued October 27, 2015), the Court suspended three discovery deadlines—a Novembe r 16, 2015 deadline for depositions; a November 30 deadline for additional pre-filed testi mony; and a December 1 trial-ready date— pending resolution of the standing issue. Having r esolved that issue in the Association’s favor, and assuming that the parties suspended discovery a fter the Association filed its discovery motions on September 25, 2015, the Court will reins tate these deadlines with the same amount of time as the parties had between the Association’ s motion and the original deadlines. Thus:

1. The parties will complete all depositions by June 1 5, 2016.

2. The parties will file all additional pre-filed test imony by July 6, 2016.

3. The parties will be trial-ready by July 8, 2016.

5 At the time the Association filed its motion to co mpel, trial was set for September 23, 2015. Counse l
for Stratton moved to continue trial because of a c onflict with a religious holiday, and the Court gra nted the motion to continue at its September 9, 2015 hearing on the motion to compel. But for this continuance , the Association would have gone to trial without this w itness.

6 The original deadline for written discovery reques ts was May 29, 2015. The original deadline for exp ert disclosures was June 5, 2015. The deadline for res ponses to written interrogatories is 30 days after receipt. See V.R.C.P. 33(a). Therefore, the original schedule di d not envision that all discovery responses would b e received by the time expert disclosures were due.6

The Association has requested a five-day trial in t his matter. As the Court has noted throughout this case, it is highly unusual for the Court to devote more than a few hours of trial time to the size of monetary penalties in an enforc ement matter. There are also many matters
on the Court’s docket that involve broader and more complex legal issues than those presented in this appeal. In the interest of preserving judi cial resources, the Court will allot two days of trial time for this matter: half a day for the NRB to present its case, half a day for Stratton to present its case, half a day for the Association to present its case, and half a day held in reserve.

The parties must file their dates of unavailability for a two-day trial in July, August, or September of 2016 by **May 13, 2016.**

So ordered.

Electronically signed on April 26, 2016 at 03:25 PM pursuant to V.R.E.F. 7(d).

_________________________________________ Thomas G. Walsh, Judge Superior Court, Environmental Division

Notifications: Peter J. Gill (ERN 4158), Attorney for Petitioner N atural Resources Board Lisa B. Shelkrot (ERN 2441), Attorney for Responden t Stratton Corporation A. Jay Kenlan (ERN 3775), Attorney for Intervenor T reetop at Stratton Condo Assn Elizabeth B. Schilling (ERN 5715), Attorney for Int erested Person Agency of Natural Resources

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