Court Opinion

ID: 4686927
Source: CourtListenerOpinion
Date Created: 2021-05-14 14:19:54.157667+00
Date Added: 2024-06-11T08:04:37.328892
License: Public Domain

NOTICE: This opinion is subject to motions for reargument under V.R.A.P. 40 as well as formal
revision before publication in the Vermont Reports. Readers are requested to notify the Reporter
of Decisions by email at: JUD.Reporter@vermont.gov or by mail at: Vermont Supreme Court, 109
State Street, Montpelier, Vermont 05609-0801, of any errors in order that corrections may be made
before this opinion goes to press.

                                          2021 VT 34

                                         No. 2020-092

In re Champlain Parkway SW Discharge Permit                   Supreme Court
(Fortieth Burlington, LLC, Appellant)
                                                              On Appeal from
                                                              Superior Court,
                                                              Environmental Division

                                                              October Term, 2020

Thomas S. Durkin, J.

Judith L. Dillon of Lisman Leckerling, P.C., Burlington, for Appellant.

Thomas J. Donovan, Jr., Attorney General, and Robert F. McDougall, Assistant Attorney
 General, Montpelier, for Appellee Vermont Agency of Natural Resources.

Jonathan T. Rose and Malachi T. Brennan of Dunkiel Saunders Elliott Raubvogel & Hand,
 PLLC, Burlington, for Appellee City of Burlington.

PRESENT: Reiber, C.J., Robinson, Eaton, Carroll and Cohen, JJ.

       ¶ 1.   COHEN, J. The City of Burlington and the Vermont Agency of Transportation

(VTrans) are jointly in the process of constructing the Champlain Parkway, a roadway project

intended to connect Interstate 189 to downtown Burlington and make numerous improvements to

the surrounding area. Fortieth Burlington, LLC (Fortieth) owns property adjacent to the project

and has challenged the decision of the Vermont Agency of Natural Resources (ANR) to grant the

project a renewed stormwater discharge permit.          Fortieth argued before ANR and the

Environmental Division that the agency unlawfully waived a filing deadline in its 2017 stormwater

regulations and misinterpreted a provision of its 2017 Stormwater Management Manual. We
affirm the Environmental Division’s grant of summary judgment for the City and VTrans on these

claims.

                                          I. Background

          ¶ 2.   First, some background. In 10 V.S.A. § 1264, the Legislature directed ANR to

implement a stormwater permitting program and adopt rules to manage stormwater runoff

throughout the state. See id. § 1264(a)(2)(B), (f). On October 11, 2012, ANR granted the City a

stormwater discharge permit for the Champlain Parkway project. The permit expired five years

after the date of issue and provided: “The permittee shall reapply for a renewed discharge permit

ninety days prior to the expiration date of this permit.” The City’s permit was thus set to expire

on October 11, 2017.

          ¶ 3.   Effective July 1, 2017, ANR promulgated a set of regulations to manage stormwater

discharge in the state. Environmental Protection Rules, Chapter 22, Stormwater Management Rule

for Stormwater-Impaired Waters [hereinafter 2017 Regulations], https://dec.vermont.gov/

sites/dec/files/documents/StormwaterManagementRule_ForStormwaterImpairedWaters_Ch22_F

inalAdopted_2016-12-15.pdf [https://perma.cc/3QJC-AWYF]. One of the 2017 regulations

provided: “A permittee who wishes to continue to discharge after the expiration date of . . . her

individual permit shall file an application for reissuance of the individual permit, on a form

provided by [ANR], at least 90 days prior to its expiration.” Id. § 22-309(k)(1).1

          ¶ 4.   Also effective July 1, 2017, ANR adopted the 2017 Stormwater Management

Manual (VSMM). 2017 Vermont Stormwater Management Manual Rule and Design Guidance,

§ 1.4 [hereinafter 2017 VSMM], https://dec.vermont.gov/sites/dec/files/wsm/stormwater/docs/

Permitinformation/2017%20VSMM_Rule_and_Design_Guidance_04172017.pdf [https://perma

          1
          We refer to the ninety-day provisions in the permit and the 2017 regulations collectively
as “the filing deadline” or simply, “the deadline.” The agency has since adopted a new set of
regulations and rescinded the ninety-day provision. Environmental Protection Rules, Chapter 22,
Stormwater Permitting Rule, https://dec.vermont.gov/sites/dec/files/wsm/stormwater/docs/
2019_02_15%3B%20Final%20Adopted%20Chapter%2022%2C%20Stormwater%20Permitting
%20Rule.pdf [https://perma.cc/BYE4-29XR].
                                                 2
.cc/NGV5-LC6S]. The 2017 VSMM updates the stormwater management practices and site

design approaches of its predecessor, the 2002 VSMM. See id. § 1.0. As relevant here, the

transition clause of the 2017 VSMM provides that “the standards in the 2002 VSMM shall apply

to a project if the redevelopment or expansion is a public transportation project, and as of January

1, 2017, the Agency of Transportation or the municipality principally responsible for the project

has initiated right-of-way valuation activities.” Id. § 1.4.

       ¶ 5.    It is uncontested that the City filed an application to renew the permit on September

15, 2017—after the filing deadline, but twenty-six days before the permit was set to expire. ANR

accepted the City’s filing as timely and placed a proposed, renewed permit up for public comment,

essentially waiving the deadline.

       ¶ 6.    Fortieth filed comments challenging the proposed permit, among other reasons,

because the City did not comply with the filing deadline and because the renewal application did

not indicate compliance with the 2017 VSMM. ANR rejected the deadline challenge, concluding

that the application was timely because it was filed before the permit expired. The agency also

rejected the VSMM challenge, pointing to the 2017 VSMM transition clause. It thus issued the

project a renewed permit and indicated that the project complied with the 2017 regulations and the

2002 VSMM.

       ¶ 7.    Fortieth appealed to the Environmental Division, arguing that the filing deadline

had to be enforced as written and that the project did not qualify for the transition clause of the

2017 VSMM because right-of-way valuation activities were not initiated until after January 1,

2017. The City and ANR moved for partial summary judgment on the deadline issue. They argued

that the filing deadline was waivable as a mere procedural rule designed to benefit ANR and that

the waiver did not prejudice Fortieth in any respect. The movants submitted evidence that it was

ANR’s consistent practice to accept renewal applications filed after the filing deadline if they were

submitted before the permit expired. The Environmental Division agreed that the deadline was an

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internal procedural rule, deviation from which resulted in no prejudice. The court therefore granted

partial summary judgment on this issue.

       ¶ 8.    Separately, the City moved for partial summary judgment on the VSMM issue and

marshalled evidence that right-of-way valuation activities were initiated as far back as the 1980s,

when the first steps were taken to secure a right-of-way for the project, and more recently in 2016,

when property valuation activities were undertaken for a new section of the roadway. The

Environmental Division granted partial summary judgment for the City on this issue as well.

       ¶ 9.    We review the Environmental Division’s grant of summary judgment without

deference, and we apply the same standard as that court. In re Mathez Act 250 LU Permit, 2018

VT 55, ¶ 5, 207 Vt. 537, 192 A.3d 400. Summary judgment is appropriate “when there is no

genuine issue of material fact and the moving party is entitled to judgment as a matter of law.” Id.

                             II. ANR’s Waiver of the Filing Deadline

       ¶ 10.   On appeal, Fortieth first argues that the plain language of the permit and the 2017

regulations must be enforced without deferring to the agency’s interpretation. It argues that the

permit and regulations do not confer discretion on ANR to waive the filing deadline it adopted.

Fortieth further contends that the deadline is not an internal procedural rule that ANR can disregard

and that it was prejudiced by the agency’s waiver of the deadline.

       ¶ 11.   As a preliminary matter, there is no agency interpretation to defer to in this deadline

issue. While we defer to an agency’s interpretation of its own regulations, see, e.g., In re Joyce,

2018 VT 90, ¶ 18, 208 Vt. 226, 197 A.3d 378, ANR did not interpret the 2017 regulations or the

permit differently than their plain meanings dictate.        The regulations and the permit are

unambiguous: A permittee must file for renewal ninety days prior to the expiration date of the

permit. See supra, ¶¶ 2-3. ANR did not interpret these provisions otherwise; it waived the deadline

altogether. Moreover, this is not a case where a substantive issue requiring agency interpretation

is woven into a procedural matter, as in In re Stowe Cady Hill Solar, LLC, where an agency rule

required the agency to determine whether certain applications “substantially” complied with
                                            4
prescribed requirements. 2018 VT 3, ¶ 19, 206 Vt. 430, 182 A.3d 53. ANR’s action here of

waiving a filing deadline in its own regulations is the type of procedural ruling we review for abuse

of discretion, which exists “where an agency has declined to exercise its discretion or has done so

on untenable or unreasonable grounds.” Id. ¶ 17.

       ¶ 12.   We accordingly consider whether ANR abused its discretion in waiving the filing

deadline it established. Generally, administrative agencies must follow their own regulations until

they rescind or amend them. This settled principle is reflected in our state law, federal law, and

the law of other states. See, e.g., Columbia Broad. Sys., Inc. v. United States, 316 U.S. 407, 422

(1942); Jordan Towing, Inc. v. Hebbville Auto Repair, Inc., 800 A.2d 768, 777 (Md. 2002); N.Y.

Times Co. v. Comm’r of Revenue, 693 N.E.2d 682, 685 (Mass. 1998); In re Peel Gallery of Fine

Arts, 149 Vt. 348, 351, 543 A.2d 695, 697 (1988). But, as ever, there are exceptions to the rule.

       ¶ 13.   The U.S. Supreme Court adopted one such exception in American Farm Lines v.

Black Ball Freight Services, 397 U.S. 532 (1970). There, federal statutes granted the Interstate

Commerce Commission (ICC) the power to grant motor carriers expedited, temporary operating

authority to meet urgent transportation needs. Further to that power, the ICC promulgated rules

requiring applications for temporary authority to include statements with specified information

designed to establish the need for the temporary authority. American Farm Lines filed an

application with statements generally describing the need for the authority but omitting some of

the specified information required by the ICC rule. The ICC nevertheless granted the application,

an action other carriers challenged as an unlawful failure of the ICC to require strict compliance

with its own rules.

       ¶ 14.   The Court observed that the agency was “entitled to a measure of discretion in

administering its own procedural rules.” Id. at 538. It then held that an agency may waive a

procedural rule “adopted for the orderly transaction of business” to aid the agency in exercising its

discretion and “not intended primarily to confer important procedural benefits upon individuals in

the face of otherwise unfettered discretion.” Id. at 538-39. Such a waiver may be lawful if the
                                                5
agency does not fail to exercise discretion mandated by rule, and no “substantial prejudice” befalls

a complaining party. Id. at 539. The Court there considered that the failure to supply the required

information did not prejudice the protesting carriers in voicing their objections to the application.

Id.

       ¶ 15.    The federal courts of appeal have since applied American Farm Lines to uphold

agency waivers of administrative deadlines such as the one at issue here. For example, the Court

of Appeals for the D.C. Circuit upheld the ICC’s acceptance of a late petition for a stay of an order

where the deadline was “designed not primarily to safeguard private rights but rather to facilitate

the Commission’s orderly transaction of its business” and there was no substantial prejudice to

complaining parties. Dana Corp. v. ICC, 703 F.2d 1297, 1300 (D.C. Cir. 1983); see also Health

Sys. Agency of Okla., Inc. v. Norman, 589 F.2d 486, 489-90 (10th Cir. 1978) (holding that agency

had discretion to waive filing deadline administratively chosen to ensure that applications were

received with time to review and make necessary determination).

       ¶ 16.    State high courts have embraced the American Farm Lines exception as their own.

See, e.g., Forquer v. State, Commercial Fisheries Entry Comm’n, 677 P.2d 1236, 1243-44 (Alaska

1984); Pollock v. Patuxent Inst. Bd. of Review, 823 A.2d 626, 650 (Md. 2003); W. Bloomfield

Hosp. v. Certificate of Need Bd., 550 N.W.2d 223, 227 (Mich. 1996). We join these courts in

adopting American Farm Lines as a sound principle of state administrative law. Failure to do so

would force agencies to adhere inflexibly to all their procedural rules, producing irrational

consequences in many cases and resulting injustice. Or, it would deter agencies from adopting

numerous procedural rules that facilitate their work, creating unnecessary administrative

inefficiency.

       ¶ 17.    But the exception is strictly circumscribed by American Farm Lines itself and our

established principles governing agency application of regulations. To invoke the exception, the

agency action must first and foremost be consistent with governing statutes. See, e.g., Stowe Cady

Hill Solar, 2018 VT 3, ¶ 21 (observing that agency regulations cannot be “applied in a way that
                                               6
exceeds the statutory mandate under which the regulation was promulgated”); Martin v. State,

Agency of Transp. Dep’t of Motor Vehicles, 2003 VT 14, ¶ 28, 175 Vt. 80, 819 A.2d 742

(“Agencies generally may not choose to ignore their statutory mandate because they believe it is

administratively inefficient or infeasible.” (quotation omitted)). Second, the rule at issue must be

a procedural rule adopted for the orderly transaction of business to aid the agency in exercising its

discretion, not one intended to confer important procedural benefits upon individuals. Am. Farm

Lines, 397 U.S. at 538-39. Third, the agency action must not substantially prejudice a complaining

party. Id. at 539. Fourth, the agency action cannot constitute a failure to exercise independent

discretion mandated by regulation. Id.; see also Bennington Hous. Auth. v. Bush, 2007 VT 60,

¶¶ 13-14, 182 Vt. 133, 933 A.2d 207 (holding that agency abused its discretion in evicting entire

family following lease violation of one member when regulations granted agency more flexible

discretion in addressing such violations). Finally, the agency must apply the rule consistently, not

arbitrarily, unreasonably, or discriminatorily. Stowe Cady Hill Solar, 2018 VT 3, ¶ 21 (“A

fundamental norm of administrative procedure requires an agency to treat like cases alike.”

(quotation omitted)); see also In re Apple Hill Solar LLC, 2019 VT 64, ¶ 25, 211 Vt. 54, 219 A.3d

1295 (noting that agency departure from prior holdings “cannot rest on bases that are arbitrary,

unreasonable, or discriminatory”).

       ¶ 18.   ANR complied with the above requirements in waiving the filing deadline and

consequently did not abuse its discretion. To begin, the agency action is consistent with the

governing statute. Among other things, the stormwater management statute directs ANR to

implement a stormwater permitting program, grants the agency the power to adopt rules to manage

the program, outlines land uses requiring a discharge permit, and specifies that a permit is valid

for a period “not to exceed five years.” See 10 V.S.A. § 1264(a)(2)(B), (c), (f), (h)(1). Although

the statute establishes certain substantive requirements for permit renewal, see, e.g., id.

§ 1264(h)(2)(A)(ii), it does not specify the process for renewal or mandate the ninety-day filing

deadline.
                                                 7
        ¶ 19.   For interrelated reasons, the filing deadline was a procedural rule adopted for the

orderly transaction of business to aid the agency in exercising its discretion; it was not intended to

confer important procedural benefits upon individuals; and the waiver did not result in prejudice.

The rule did not regulate the agency’s determination of whether the project complied with

substantive requirements to renew a permit. It did not even govern the information required in

renewal applications. The permittee and the public would have been in the same position if the

renewal application had been filed ninety-one days before expiration as they were when it was

filed twenty-six days before expiration. ANR’s substantive review of the permit was no different

in the second instance than in the first.

        ¶ 20.   Nor was the deadline adopted to allow other parties sufficient time to oppose or

otherwise influence the renewal. Like the protesting carriers in American Farm Lines, Fortieth

had an unhindered opportunity to voice its concerns or opposition to the renewal. See 397 U.S. at

538. ANR’s regulations required the agency to determine when a renewal application was

complete and then submit the application and a draft, renewed permit to at least thirty days of

public comment or an extended public-comment period. See 2017 Regulations, supra, § 22-

309(k)(1) (“A renewal application shall be noticed subject to the public participation requirements

set forth in subsection 309(d) of this section.”); id. § 22-309(d) (establishing thirty-day comment

period with possibility of extension and public hearing). Once ANR accomplished these tasks, the

public had at least thirty days to comment, regardless of when the application was filed. Fortieth

fully availed itself of that process.

        ¶ 21.   Fortieth argues that the waiver resulted in prejudice because the City was allowed

to renew the permit under an older set of stormwater regulations than those in effect at the time of

renewal. It maintains that if the City had been forced to apply for an entirely new permit, the new

regulations would have applied. We disagree. First, though ANR reviewed the permit under the

2002 VSMM, it did apply the 2017 regulations. Thus, the project was not allowed to circumvent

all existing regulations at the time of renewal. Second, the fact that the permit was subjected to
                                                 8
the 2002 VSMM instead of the 2017 VSMM is a function of ANR’s regulatory choice to adopt

the transition clause and its determination that the project satisfied the clause. The 2002 VSMM

would have applied whether ANR processed the City’s application as a renewal or as a new

application, and thus irrespective of ANR’s waiver of the deadline to renew. No prejudice

stemmed from renewal or the deadline waiver.

       ¶ 22.   Finally, because the agency action here did not constitute a failure to exercise

independent discretion mandated by regulation, what remains is to determine whether the agency

applied the rule inconsistently. Before the Environmental Division, the City and ANR submitted

an affidavit from the program manager of ANR’s stormwater program, who had applied the

agency’s stormwater regulations and issued permits since 2007. According to the manager, ANR

processed permit renewal applications received beyond the filing deadline, considered a renewal

application to be timely if it was filed before the permit expired, and in his experience, ANR had

never denied a renewal application for failure to comply with the filing deadline. A former ANR

stormwater district manager from 2010 to 2016 echoed these statements in a separate affidavit.

Fortieth disputed these statements but did not adduce any evidence to contradict them. Although

we consider the summary judgment record in the light most favorable to the nonmoving party, that

party may not “rest on bare allegations to demonstrate that disputed material facts remain.” Baptie

v. Bruno, 2013 VT 117, ¶ 10, 195 Vt. 308, 88 A.3d 1212 (quotation omitted). Given the

unchallenged record evidence that the agency has applied the rule consistently, we consider the

fact undisputed. See V.R.C.P. 56(c)(1)(A), (e)(2). There is no genuine dispute as to any material

fact, and the City and ANR are entitled to judgment as a matter of law on the deadline issue.

       ¶ 23.   We do not easily deviate from the principle that “[a]n administrative agency must

abide by its regulations as written until it rescinds or amends them.” Peel Gallery, 149 Vt. at 351,

543 A.2d at 697. This was and remains the law. But, when an agency scrupulously satisfies the

elements we have here outlined, fairness demands the exception as much as the rule.

                                                 9
                                 III. Transition Clause of the 2017 VSMM

       ¶ 24.   The second issue on appeal is whether ANR erred in concluding that the project

qualifies for the transition clause of the 2017 VSMM, which allows the project to implement the

standards of the 2002 VSMM. Fortieth contends that the project does not qualify because right-

of-way valuation activities were not initiated until after January 1, 2017. Specifically, it argues

that these activities were not begun by that date because certain right-of-way plans mandated by

the 2012 Vermont Agency of Transportation’s Right-of-Way Manual (VTrans Manual) were not

completed until April 2018 and a necessity hearing required under 19 V.S.A. § 502 did not occur

until May 2018.

       ¶ 25.   In determining that the project satisfied the transition clause, ANR interpreted its

own rules, employing its expertise in a regulatory area statutorily entrusted to it. See 10 V.S.A.

§ 1264. We therefore accord substantial deference to the agency’s interpretation of the VSMM.

In re ANR Permits in Lowell Mountain Wind Project, 2014 VT 50, ¶¶ 15, 17, 196 Vt. 467, 98

A.3d 16 (extending substantial deference to ANR interpretation of VSMM because

“[i]nterpretation of the VSMM is squarely within ANR’s expertise as its authoring agency”). We

nevertheless undertake an independent review and “will overturn an agency’s interpretation of its

own promulgated regulation that exceeds the authority granted under the state enabling statute;

that conflicts with past agency interpretations of the same rule; that results in unjust, unreasonable

or absurd consequences; or that demonstrates compelling indications of error.” In re Conservation

Law Found., 2018 VT 42, ¶ 16, 207 Vt. 309, 188 A.3d 667 (quotations omitted) (citations omitted).

There is no such showing here.

       ¶ 26.   This Court construes administrative rules “to discern the intent of the drafters, and

we so do by examining the plain meaning of the regulatory language.” Id. ¶ 15; see also In re

Vitale, 151 Vt. 580, 584, 563 A.2d 613, 616 (1989) (“The primary rule when reviewing

construction of an administrative rule is to give language its plain, ordinary meaning.”). Under

the relevant portion of the transition clause, the standards in the 2002 VSMM apply to this
                                               10
concededly public transportation project if “as of January 1, 2017, the Agency of Transportation

or the municipality principally responsible for the project has initiated right-of-way valuation

activities.” 2017 VSMM, supra, § 1.4 (emphasis added). To “initiate” means “to cause or facilitate

the beginning of” something. Initiate, Merriam Webster Online Dictionary, https://www.merriam-

webster.com/dictionary/initiate [https://perma.cc/4G63-CZKY].           “Valuation” means “[t]he

process of determining the value of a thing or entity,” Valuation, Black’s Law Dictionary (11th

ed. 2019), or more specifically, “appraisal of property,” Valuation, Merriam Webster Online

Dictionary,    https://www.merriam-webster.com/dictionary/valuation         [https://perma.cc/9R7X-

J8EJ]. Plainly, the drafters intended the transition clause to apply to projects for which the process

of appraising the land necessary to build the project had begun as of January 1, 2017.

       ¶ 27.   The plain language of the transition clause is inconsistent with Fortieth’s suggestion

that the clause is tied to the timing of the necessity hearing required under 19 V.S.A. § 502(c) to

acquire property to construct a highway. The clause does not reference this statute or provide other

evidence of the reference Fortieth suggests. Nor does the language of the transition clause support

Fortieth’s argument that the clause references the 2012 VTrans Manual. If the drafters of the

transition clause had intended to make the clause turn on 19 V.S.A. § 502 or the VTrans Manual,

they would have referenced the statute or the manual.2

       ¶ 28.   Finally, there is evidence in this record that right-of-way valuation activities had

been initiated as of January 1, 2017. Before the Environmental Division, the City filed two

affidavits indicating that right-of-way valuation activities were undertaken in the 1980s and in

       2
           We do not interpret the statute or the manual here. But we do note that the statute and
the part of the manual Fortieth identifies refer to acquisition of property, not property valuation
activities. See 19 V.S.A. § 502(c)(1) (“A public hearing shall be held . . . prior to the Agency’s
initiating proceedings under this chapter for the acquisition of any property.”); Vermont Agency
of Transportation 2012 Right of Way Manual, 2-5, https://vtrans.vermont.gov/sites/aot/
files/highway/documents/rightofway/RightofWayManual2012.pdf [https://perma.cc/YDB29LZJ]
(“Right of way plans are prepared . . . to provide the title and technical data necessary when
acquiring land and/or rights for the construction of transportation projects.”). We see nothing in
the statute or cited portion of the manual prohibiting or discouraging the initiation of property
valuation activities until the public hearing or right-of-way plans are finalized.
                                                   11
2016. The City’s assistant director of public works, responsible for overseeing development of

the project, attested that valuation to build a southern portion of the roadway began in the 1980s.

The director also stated that in 2016, VTrans undertook valuation activities for a northern portion

of the project. VTrans’ acquisition chief, who has worked on the project since the 1980s, provided

the same information. Fortieth did not produce any evidence contesting these statements and

therefore failed to create a genuine dispute of fact. See Baptie, 2013 VT 117, ¶ 10; V.R.C.P.

56(c)(1)(A), (e)(2). The agency’s interpretation of the transition clause is consistent with its plain

language and was reasonably applied to the facts before us. We find no inconsistency with the

governing statute or previous agency interpretations, no unjust, unreasonable, or absurd

consequences, and no compelling indications of error. The City is entitled to judgment as a matter

of law on this issue.

       Affirmed.

                                                FOR THE COURT:

                                                Associate Justice

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