Opinion ID: 2302071
Heading Depth: 1
Heading Rank: 8

Heading: Wrongful Standard Applied By The Board

Text: Hovnanian needed a license because four elements of its project impacted, in particular ways, 9,939 square feet of State wetlands. The nature of those impacts, in light of the conditions recommended and the mitigation agreed to by Hovnanian, was considered by DOE and the Wetlands Administrator and was properly the subject of their respective reports recommending issuance of the license. There is nothing in the record before the Board challenging, or even purporting to challenge, the conclusions reached in those Reports. Neither the Comptroller nor the Governor, in explaining the reasons for their vote, addressed that impact. Neither of them even suggested that they disagreed with the conclusions reached by DOE or the Administrator that the direct impact on the State wetlands was minimal and that, through the 2:1 replacement ratio and other mitigation efforts, any adverse impact was well compensated. Neither of them expressed any disagreement with any of the subsidiary conclusions noted in the two Reports or with the recommended conditions. As we have observed, although seemingly recognizing that the Board's authority was limited to whether a wetlands license should be issued at the particular site and not whether the project as a whole should proceed, the Governor made absolutely clear in his remarks that his negative vote was based entirely on his common sense view that putting 1,350 units densely crammed into a critical area of the bay would do further damage to the wetlands and critical areas of the bay, not to mention the public safety problem of evacuating 1,350 senior citizens in the event of a hurricane. It is clear from that statement and others made during the course of the hearing that the Governor viewed the role of the Board in considering a wetlands license as extending beyond that of DOE and the Wetlands Administrator and encompassing a broader mandate to protect the ecology of the Chesapeake Bay and its tributaries and the public safety of the residents of Kent Island and Queen Anne's County. We do not question whether the environmental concerns expressed by the Governor were genuine. The Treasurer and the Comptroller also expressed reservations about the location of the project, as did the Secretaries of DOE and Planning and the Director for Emergency Services for Queen Anne's County, all of whom felt that current laws and regulations regarding the placement of large developments in the vicinity of the Chesapeake Bay needed to be changed. The point, clearly explained by the two Secretaries, however, is that, in deciding whether to issue a wetlands license, the Board does not actis not authorized to actas a super land use authority. Its own regulation, COMAR 23.02.04.10, limits its focus to considering the recommendations of DOE and the Wetlands Administrator and taking into account the ecological, economic, developmental, recreational, and aesthetic values to preserve the wetlands and prevent their despoliation and destruction, not to determine whether the project as a whole is environmentally sound at its particular location. That authority lies elsewhere. The decision to allow a development to proceed within the Chesapeake Bay or Atlantic Coastal Bays Critical Area is specifically committed by law to the jurisdiction of the affected counties and the Critical Area Commission for the Chesapeake and Atlantic Coastal Bays, created by Md. Code, § 8-1803 of the Natural Resources Article (NR). See Critical Area Commission v. Moreland, 418 Md. 111, 12 A.3d 1223 (2011); Smith v. Kent County, 418 Md. 692, 18 A.3d 16 (2011). In enacting the laws governing development in those critical areas, the General Assembly made clear that its purpose was: (1) [t]o establish a Resource Protection Program for [those areas] by fostering more sensitive development activity for certain shoreline areas so as to minimize damage to water quality and natural habitats; and (2) [t]o implement the Resource Protection Program on a cooperative basis between the State and affected local governments, with local governments establishing and implementing their programs in a consistent and uniform manner subject to State and local leadership, criteria, and oversight. NR § 8-1801(b). The State agency given general supervisory authority over the development and implementation of the Resource Protection Program is the Chesapeake and Atlantic Coastal Bays Critical Area Commission, a unit within the Department of Natural Resources. See NR §§ 8-1803 and 8-1806. Nowhere in that entire subtitle that creates and governs the program is the Board of Public Works even mentioned, much less given any authority to control development. That is the case as well with the designation of priority funding areas, which is likely to be critical to large developments generally and was critical to this one. As was explained, that program is part of the State's smart growth initiative codified in SFP §§ 5-7A-01 through 5-7B-10. Although the Board has approval power over State funding for developments in areas other than designated priority funding areas ( see SFP §§ 5-7B-05 and 5-7B-06), it is given no such approval power over developments within priority funding areas designated by the counties and municipalities. See SFP §§ 5-7B-03(a)(1) and 5-7B-04. The language of ENV § 16-202(c)(1) [now § 16-202(g)(1)] cannot reasonably be read to broaden the jurisdiction of the Board in such a manner as to trump the clear commitment of land use policy to the local governments and, in part, to the Critical Area Commission and other State agencies. The requirement that the Board consider the ecological, economic, developmental, recreational, and aesthetic values presented in the application in determining whether issuance of the license is in the State's interest has reference to the impact of the proposed dredging or filling on the affected wetlands. Section 16-102(b), which declares the public policy behind the Wetlands Law, makes abundantly clear that those considerations are tied to the desire to preserve the wetlands and prevent their despoliation and destruction, not to control all development near the Chesapeake Bay, and the Board's own regulation confirms that narrower focus. That same limitation dooms the Board's reliance on COMAR 23.02.04.01B as a basis for considering the environmental impact of the entire project, rather than just the effect of the four elements on the 9,939 square feet of wetlands directly impacted by those elements. Section 01B of the regulation deals with Public Interests. Paragraph (1) defines public interests as the demonstrable environmental, social, and economic benefits which would accrue to the public at large as a result of a proposed action or activity involving State wetlands, and which would exceed all demonstrable environmental, social, and economic costs of the proposed action or activity. Paragraph (3) includes within public interests the preservation of tidal wetlands, conservation of natural values and living resources, fishing and crabbing, navigational needs, water access and related recreation, and maritime commerce. That is what the Board is to consider. Paragraph (2) of the regulation requires that [i]n determining the public interest in a request for a private use, structure, or activity over, on, in, or under State wetlands or severance of materials from State wetlands, the Board of Public Works shall consider the ultimate project and beneficial purposes to be served. The Board, weaving in its view that it is the agency with exclusive authority over the disposition of State property, latches on to the requirement that it consider the ultimate project to argue that it was entitled to look beyond the impact of the four elements on the small area of wetlands and consider, and find conclusive, the impact of the entire project on the economy, ecology, and public safety of the entire area, including the entire Chesapeake Bay, as authorized by the COMAR regulation. Hovnanian, dismissing the relevance of the Board's approval authority over the actual disposition of State property under SFP, contends, first, that the Board is misreading the regulation and second, that if the Board's interpretation is correct, the regulation is inconsistent with the statute and, to that extent, invalid. Hovnanian is correct in both respects. Although a reviewing court is required to give considerable deference to an agency's interpretation of its own regulation, the interpretation of a regulation is akin to the interpretation of a statute. It is an issue of law which, ultimately, the court must decide. See Cathey v. Dept. of Health, 422 Md. 597, 604, 31 A.3d 94, 98 (2011) (despite the deference due to an agency's interpretation of its own regulation, [f]or cases in which an agency interprets its own regulations, we have held that `questions of law are completely subject to review by the courts.' and that this Court `is not bound by the agency's legal conclusions; we are, in short, under no constraints in reversing an administrative decision which is premised solely upon an erroneous conclusion of law'). Paragraph B(2) of the regulation must be read in harmony with paragraph B(1). Its clear intent is to allow the Board, if it finds demonstrable environmental, social, and economic costs of the proposed action or activity (emphasis added) which, taken alone, might make issuance of a license not in the State's interest, to consider whether the ultimate project and beneficial purposes to be served exceed those costs, thereby, on balance, making the license consistent with the State's interest. As we have observed, evidence was presented to the Board by both the Wetlands Administrator and the president of the Queen Anne's County Chamber of Commerce indicating a positive economic benefit from the project, which the Board chose to ignore. The Board seeks to reverse that analysis and allow it to consider the environmental cost of the ultimate project on the ecology of the entire region as a basis for denying a license that would have a minimal cost on the affected wetlands. Such a reading is not only contrary to the plain wording of the regulation but would achieve what the statutory scheme does not permit. Finally, in this regard, a comment on the rationale expressed by the Comptroller. To the extent that he based his decision on his view of the effect of the entire project on the Chesapeake Bay as a whole, it suffers from the same defect as that of the Governor. His principal concern, however, seemed to be his belief, gleaned from some ex parte private conversations he apparently had with some of the Queen Anne's County Commissioners and a letter from the county attorney, that, despite the views of the Attorney General's Office to the contrary, there was a gag order of some kind that precluded Queen Anne's County Commissioners from expressing opposition to the application. [16] The Comptroller expressed that view at the May 9 hearing and maintained it even after he received the opinion from the Attorney General's Office and had the opportunity to question the Deputy Attorney General at the May 23 hearing. There is no indication in the record that either the Comptroller or the Board itself ever formally requested that the current commissioners appear or submit written material or that they ever formally notified the Board that they felt precluded from appearing. The issue before the Board, as we have noted, was whether the impact on the affected wetlands of the four elements that comprised the application was sufficiently adverse as to make it in the State's interest to deny the application. There is nothing in the record before the Board to indicate that any commissioner had a view with respect to that issue. Accordingly, as stated by the Deputy Attorney General, it was, indeed a red herring and not a legitimate basis for denying the application.