Court Opinion

ID: 4470308
Source: CourtListenerOpinion
Date Created: 2020-01-08 16:09:35.202431+00
Date Added: 2024-06-11T08:49:02.534559
License: Public Domain

THE STATE OF SOUTH CAROLINA
           In The Court of Appeals

Pickens County, Appellant,

v.

South Carolina Department of Health and Environmental
Control and MRR Pickens, LLC, Respondents.

Appellate Case No. 2017-000066

       Appeal From the Administrative Law Court
     Shirley C. Robinson, Administrative Law Judge

                  Opinion No. 5707
       Heard May 6, 2019 – Filed January 8, 2020

           REVERSED AND REMANDED

Gary W. Poliakoff, of Poliakoff & Assoc., PA, of
Spartanburg, Amy Elizabeth Armstrong, of S.C.
Environmental Law Project, of Pawleys Island, and
Michael Gary Corley, of S.C. Environmental Law
Project, of Greenville, all for Appellant.

Robert Fredrick Goings and Jessica Lee Gooding, of
Goings Law Firm, LLC, of Columbia, and Jessica James
Orrick King, of Williams Mullen, of Columbia, all for
Respondent MRR Pickens, LLC; Etta R. Linen and
Karen Christine Ratigan, of Columbia, both for
Respondent South Carolina Department of Health and
Environmental Control.
MCDONALD, J.: Pickens County (the County) appeals an Administrative Law
Court (ALC) order dismissing its challenges to an unnoticed permit modification
issued to MRR Pickens, LLC (MRR) by the South Carolina Department of Health
and Environmental Control (DHEC). The County argues the ALC erred in (1)
dismissing the County's challenge to DHEC's permitting decision as untimely
without considering whether DHEC complied with statutory and regulatory notice
requirements; (2) dismissing based on the County's purported failure to exhaust
administrative remedies; (3) granting MRR and DHEC's (collectively,
Respondents) motions to dismiss based on evidence beyond the pleadings while
denying the County the opportunity to conduct discovery; and (4) dismissing the
case as untimely without resolving the status of the proposed intervenors. We
reverse and remand.

Facts and Procedural History

In early 2007, MRR was involved in negotiations with the County regarding the
construction of a Class Two Landfill at 2180 Greenville Highway in the town of
Liberty. 1 MRR and the County entered into a Development Agreement and Host
Agreement (collectively, the Agreements) for the Class Two Landfill in March
2007. 2 The Agreements specify MRR "shall construct and operate a Long-term
Construction and Demolition and Land-Clearing Debris Landfill" and that the
County will serve as the host local government for such operation.

On September 19, 2008, DHEC issued a draft permit for the Class Two Landfill.
DHEC publicly noticed the draft permit in two local newspapers, the Easley
Progress and The Pickens Sentinel, on September 24, 2008. DHEC also sent
notice to adjacent landowners, the County, and others on its mailing list. After the
public comment period expired, DHEC issued Solid Waste Permit LF2-00003 to

1
  DHEC classifies landfills that accept Construction and Demolition (C&D) waste
as Class Two landfills. See S.C. Code Ann. Regs. 61-107.19.IV (outlining
requirements for this classification).
2
  Although the Host Agreement included in the record is not signed, it is
incorporated by reference in the signed Development Agreement.
MRR for the Class Two Landfill3 on November 3, 2008.4 The 2008 Permit
contained the following special condition as to the nature of waste authorized for
disposal: "This permit is limited solely to the disposal of items listed in Appendix
I of R. 61-107.19. All other wastes, including animal carcasses, are prohibited
from disposal in this landfill." Regulatory Appendix I, as referenced in the special
condition, lists "acceptable waste for class two landfills" and contains materials
typically associated with land clearing, yard work, and construction, such as:
brush and limbs, logs, rock, masonry, paint cans, glass, pipes, and plaster.

The County's Solid Waste Management Plan (SWMP), a local planning document
required by state law, 5 prohibits "special waste" from being deposited in the
County and states "[t]here are no operating Class Three Landfills in Pickens
County." 6 The SWMP specifies "[a] Class Three Landfill is one designed to
receive wastes such as household waste, sludge, incinerator ash[,] and certain
industrial waste."

In 2014 and 2015, MRR and DHEC conducted a series of meetings and
discussions regarding modifications to the landfill design approved in the 2008
Permit. 7 While MRR was designing its modifications and communicating with
DHEC, MRR misrepresented to the County and the Pickens County Planning
Commission the nature of its plan for the landfill facility and operation. Dan
Moore of MRR appeared before the Planning Commission on January 12, 2015,

3
  The County did not request final review by the DHEC Board on the decision to
issue the 2008 Permit or ask to be notified of any future decisions relating to the
2008 Class II Permit as issued.
4
    The permit's effective date is November 18, 2008.
5
  See S.C. Code Ann. § 44-96-80 (setting forth the requirements for county or
regional solid waste management plans).
6
  DHEC classifies landfills accepting municipal solid waste as Class Three
landfills. See S.C. Code Ann. Regs. 61-107.19.V (outlining requirements for this
classification).
7
  From 2008 through 2014, MRR requested and obtained permit extensions,
informing DHEC each year that the economic downturn warranted postponement
of development of the landfill.
for the purpose of securing a land use approval, and stated there were "no changes"
from the Class Two Landfill design approved in 2008. He made no mention of
MRR's ongoing meetings with DHEC, certain engineering reports related to the
permit modification MRR was discussing in the meetings with DHEC, or coal ash.
When questioned about a landfill liner, Moore represented no liner would be
required.

On March 30, 2015, MRR applied to DHEC for a "minor modification" of the
2008 Permit, requesting an option to install a liner and associated leachate
collection system for a portion of the Highway 93 Class Two Landfill.8

After determining MRR's application to modify the 2008 Permit met the regulatory
definition of a "minor" permit modification, DHEC issued a permit modification
(the Permit Modification) on August 10, 2015. This "minor modification"
authorized the following changes from the 2008 Permit:

            • The addition of a landfill liner, a characteristic of Class
            Three Landfills not present in any other Class Two
            landfill in the state;

8
  DHEC's landfill regulations define the term "modification" to include changes to
a solid waste landfill as follows:

            a. "Minor modification" means a change that keeps the
            permit current with routine changes to the facility or its
            operations, or an administrative change; and,

            b. "Major modification" means a change that
            substantially alters the facility or its operations, e.g.,
            tonnage increase above 25%, any volumetric capacity
            increase, alternate designs that vary from the design
            prescribed in this regulation.

S.C. Code Ann. Regs. 61-107.19, Part I, 48. A major permit modification requires
public review and comment while a minor permit modification does not. R.61-
107.19, Part IV, 1.2; Part I, D.2.c.
            • Design changes from Class Two to Class Three
            characteristics, including changes to the final landfill
            cover;

            • Elimination of language prohibiting "all other wastes"
            and replacement with language authorizing "any other
            waste approved by the Department"; and

            • Allowance for disposal of "special wastes," defined as
            "nonresidential or commercial solid wastes, other than
            regulated hazardous wastes, that are either difficult or
            dangerous to handle and require unusual management at
            municipal solid waste landfills."[9]

Notably, the requested modifications to the 2008 Permit did not seek to change the
existing permitted landfill classification from a Class Two (construction and
demolition debris) to Class Three (municipal solid waste) landfill. And because
DHEC labeled this action as only a minor permit modification, DHEC deemed
public notice and comment unnecessary under its solid waste regulations. Rather,
DHEC determined it was only required to provide notice to MRR and to any
affected persons who had requested in writing to be notified. 10

The County did not receive notice of these modifications prior to DHEC's issuance
of the Permit Modification. During this time period, MRR's engineering consultant
submitted several engineering drawings and reports to DHEC reflecting a plan to
convert the 2008 Permit to allow modification from Class Two Landfill
characteristics to those of a Class Three Landfill. These reports note the following

9
 See S.C. Code Ann. § 44-96-390 (setting out the approval procedures for landfills
accepting special wastes).
10
   See S.C. Code Ann. § 44-1-60(E)(1) ("Notice of a department decision must be
sent by certified mail, returned receipt requested to the applicant, permittee,
licensee, and affected persons who have requested in writing to be notified.
Affected persons may request in writing to be notified by regular mail or electronic
mail in lieu of certified mail. Notice of staff decisions for which a department
decision is not required pursuant to subsection (D) must be provided by mail,
delivery, or other appropriate means to the applicant, permittee, licensee, and
affected persons who have requested in writing to be notified.").
observation from MRR's consultant: "During recent meetings between MRR and
DHEC, it was confirmed that a modification of the Class Two Landfill Permit to
meet the requirements of Regulation R.61.107.19 Part V Class Three Landfills
would require a minor permit modification."

Months after the Permit Modification had been issued, the County learned MRR
might be changing the design of the Highway 93 Landfill to prepare it to accept
coal ash. Gerald Wilson, Public Works Director for the County, then submitted a
Freedom of Information Act request and sought a meeting with DHEC regarding
the Highway 93 Landfill. On December 15, 2015, DHEC staff met with County
officials, including Wilson, and informed them the 2008 Permit had been modified
in August 2015. On January 11, 2016, DHEC emailed a copy of the Permit
Modification to Wilson. On March 23, 2106, the County submitted a request for
administrative review to DHEC. On April 21, 2016, DHEC declined to conduct a
final review conference.

On February 1, 2016, MRR filed a lawsuit (MRR Pickens, LLC v. Pickens County,
et al., civil action number 2016-CP-39-100) against the County and members of
the Planning Commission. This provided the County with the opportunity to
depose Kent Coleman, then director of the Division of Mining and Solid Waste
Management at DHEC, who signed both the 2008 Permit as well as the 2015
Permit Modification. Regarding the distinction between minor and major permit
modifications, Coleman

            • Admitted the definition of major modification in the
            relevant regulation includes alternate designs.

            • Admitted the definition of minor modification does not
            include alternate designs.

            • Admitted that in an August 10, 2015 letter
            accompanying the Permit Modification, he characterized
            the Permit Modification as an "alternate liner design" and
            "design change."

            • Admitted that when DHEC determines a proposed
            landfill change to be a major modification, DHEC
            follows "our normal process, which would include
            [notice to] adjacent owners, concerned parties, local
            governments."
Coleman later engaged in the following exchange:

            Q. In answers to Ms. King's questions one time today,
            you said this was a "new design for the landfill." Is that a
            fair statement?

            A. Yeah, I mean it is.

            Q. Okay.

            A. It was a new design.

            Q. And I wrote down also a quote earlier today when
            your answer to Ms. King's questions that this was
            "essentially the same design as a Class Three."

            A. Yes, I recall saying that, yes.

            Q. Alright. And that is basically the change from the
            [2008 Permit] to the 2015 [Permit ] [M]odification was
            essentially the same design as a Class Three. Is that
            right?

            A. Yes, uh-huh.

            Q. So in other words, what we're doing is changing a
            Class Two by adding Class Three features. It became
            essentially the same design as a Class Three.

            (objection)

            A. The design became very similar to a Class Three, yes.

Coleman also testified regarding the wastes that could be disposed of in MRR's
proposed landfill under the Permit Modification, admitting that:

            • Construction and Demolitions (C&D) landfills are not
            required to have liners.
             • MRR's landfill would be the first commercial Class
             Two landfill in South Carolina to have a liner.

             • Coleman knew MRR was considering placing coal ash
             into this landfill when it applied for the Permit
             Modification.

             • Coal ash would not have been allowed or accepted
             under the 2008 Permit.[11]

             • The Permit Modification application requested to
             accept "certain special wastes" into this landfill, even
             though such wastes, by statute, must be placed in Class
             Three Landfills.

             • MRR submitted stability calculations that would be
             appropriate for coal ash, in addition to stability
             calculations for C&D waste, so it was clear to DHEC that
             MRR was planning to put both types of waste in the
             modified landfill.

On May 19, 2016, the County filed a request for a contested case hearing with the
ALC. DHEC moved to dismiss. Subsequently, MRR filed motions to dismiss and

11
  Coal ash requires special handling due to its propensity to create dust, contain
toxic substances (such as mercury, lead, and arsenic), and contaminate
groundwater and surface water. As such, coal ash qualifies as a "special waste"
under South Carolina law and is generally unsuitable for disposal in a Class Two
landfill. See, e.g., S.C. Code. Ann. § 58-27-255 (providing "coal combustion
residuals that result from an electrical utility, an electric cooperative, a
governmental entity, a corporation, or an individual producing electricity for sale
or distribution by burning coal must be placed in a commercial Class 3 solid waste
management landfill, unless the coal combustion residuals are: (1) located
contiguous with the electric generating unit; (2) intended to be beneficially reused;
(3) placed into beneficial reuse; or (4) placed in an appropriate landfill which
meets the standards of the Department of Health and Environmental Control
Regulation 61-107, and that is owned or operated by the entity that produced the
electricity which resulted in the coal combustion residuals").
to stay discovery. On August 18, 2016, the County, filed a motion to intervene on
behalf of various County property owners (Neighboring Property Owners). On
September 7, 2016, the ALC held a telephone conference with the parties, and
granted MRR's motion to stay discovery. The ALC held the motion to intervene in
abeyance pending the court's decision on the motions to dismiss. Following a
hearing on the motions to dismiss, the ALC granted the motions in a December 12,
2016 order, finding the County did not timely fulfill the procedural requirements
for bringing a contested case before the ALC. The ALC further found the County's
failure to file a timely request for final review and participate in the Department's
review process foreclosed any contested case action before the ALC. Regarding
the County's request for final review to the DHEC Board, the ALC stated "the
County's request was filed 226 days after the staff decision was issued, ninety-nine
days after the meeting where the decision was discussed with the County, and
seventy-two days after the decision was emailed to the County." The ALC held the
County did not state a legally valid or compelling reason for its failure to timely
file a request for review and, therefore, the case did not warrant the application of
equitable tolling.

The County appealed on January 11, 2017. On March 29, 2017, the Neighboring
Property Owners moved to intervene as parties to the appeal. This court denied the
motion to intervene.

Standard of Review

The Administrative Procedures Act (APA) provides the standard for judicial
review of cases decided by the ALC. S.C. Code Ann. § 1-23-610(C); S.C. Coastal
Conservation League v. S.C. Dep't of Health and Envtl. Control, 380 S.C. 349,
360, 669 S.E.2d 899, 904 (Ct. App. 2008), rev’d on other grounds, 390 S.C. 418,
702 S.E.2d 246 (2010). An appellate court "may reverse the decision of the ALC
where it is in violation of a statutory provision or it is affected by an error of law."
Kiawah Dev. Partners, II v. S.C. Dep't of Health & Envtl. Control, 411 S.C. 16, 28,
766 S.E.2d 707, 715 (2014). The question of subject matter jurisdiction is a
question of law for the court. Capital City Ins. Co. v. BP Staff, Inc., 382 S.C. 92,
99, 674 S.E.2d 524, 528 (Ct. App. 2009).

Law and Analysis

I. Notice
The County argues the ALC erred in dismissing its challenge to the DHEC
permitting decision as untimely prior to resolving whether DHEC had complied
with the statutory and regulatory notice procedures applicable to its decision. We
agree.

The ALC found the County failed to timely comply with the filing requirements set
forth in section 44-1-60 of the South Carolina Code, which sets out the procedure
through which DHEC staff decisions may be appealed through DHEC and to the
ALC in the form of a contested case. The notice and filing provisions applicable to
the County's appeal include:

            The staff decision becomes the final agency decision
            fifteen calendar days after notice of the staff decision has
            been mailed to the applicant, unless a written request for
            final review accompanied by a filing fee is filed with the
            department by the applicant, permittee, licensee, or
            affected person.

S.C. Code Ann. § 44-1-60(E)(2).

            No later than sixty calendar days after the date of receipt
            of a request for final review, a final review conference
            must be conducted by the board, its designee, or a
            committee of three members of the board appointed by
            the chair. If the board declines in writing to schedule a
            final review conference or if a final review conference is
            not conducted within sixty calendar days, the staff
            decision becomes the final agency decision, and an
            applicant, permittee, licensee, or affected person requests
            pursuant to subsection (G) a contested case hearing
            before the [ALC]. The department shall set the place,
            date, and time for the conference; give the applicant and
            affected persons at least ten calendar days' written notice
            of the conference; and advise the applicant that evidence
            may be presented at the conference.

S.C. Code Ann. § 44-1-60(F).

            An applicant, permittee, licensee, or affected person may
            file a request with the [ALC] for a contested case hearing
             within thirty calendar days after: (1) notice is mailed to
             the applicant, permittee, licensee, and affected persons
             that the board declined to hold a final review conference;
             or (2) the sixty calendar day deadline to hold the final
             review conference lapses and no conference has been
             held; or (3) the final agency decision resulting from the
             final review conference is received by the parties.

S.C. Code Ann. § 44-1-60(G).

The ALC concluded the County's appeal was untimely because it did not appeal
the DHEC staff decision on the "minor" permit modification to the DHEC Board
within fifteen days, as required by § 44-1-60. Thus, according to the ALC, the
County failed to exhaust its administrative remedies, necessitating dismissal. On
cursory review, this rationale may seem logical; however, it is problematic here
because the ALC failed to undertake the prerequisite analysis of whether these
time restraints apply at all here due to DHEC's misclassification of the permit
modification as "minor." In so classifying the modification, DHEC has effectively
permitted a Class III landfill without the required statutory notices by simply
labeling the action as a "minor" modification of a "Class II" permit—despite the
proposed landfill's actual design characteristics and the wastes its operators intend
to accept.

As previously stated, the public notice requirements for major modifications differ
substantially from those for minor modifications of an existing permit. See S.C.
Code Ann. Regs. 61-107.19, Part IV, 1.2; Part I, D.2.c. (stating a major permit
modification requires public review and comment while a minor permit
modification does not). The pertinent regulatory language addressing DHEC's
notice obligations provides:

             (1) Notice of all applications submitted to the
             Department for the initial construction and major
             modifications of Class Two and Class Three landfills
             shall be published by the applicant once in a newspaper
             of general circulation in the area of the proposed landfill
             project. Notice for Class Two landfill application shall
             be published as provided in Part IV, Section H.3. Notice
             for new Class Three landfills that accept municipal solid
             waste shall be published as provided in S.C. Code
             Section 44-96-470 and Part V, Subpart H.3.a. of this
            regulation within 15 days of filing the permit application.
            Notice for all other new Class Three landfills shall be
            published as provided in Part V, Subpart H.3.b.

            (2) All notices shall contain the following:

                  (a) Name and address of the applicant;

                  (b) The location of the proposed activity to include
                  the county, roads and crossroads. (Class Three
                  landfills shall provide a location map of the
                  proposed site);

                  (c) The nature of the proposed activity;

                  (d) A description of the proposed site or a
                  description of the proposed major modification;

                  (e) An explanation of the type(s) of waste that will
                  be accepted;

                  (f) Department locations (Central Office and
                  appropriate Regional Office) where a copy of the
                  permit application or draft permit, as appropriate,
                  can be viewed during normal working hours;

                  (g) The Department's address and contact name for
                  submittal of comments and inquires;

                  (h) The approximate tonnage/year expected for
                  disposal at the landfill; and,

                  (i) The proposed life of the landfill.

            (3) The Department will send a notice of receipt of the
            permit application by regular mail to all adjoining
            landowners of the proposed landfill.

Part I. General Requirements, SC ADC 61-107.19 Part I (emphasis added).
The filing deadlines of § 44-1-60 are contingent upon DHEC's compliance with the
procedural and notice requirements of its own regulations. See e.g., S.C. Code
Ann. § 44-1-60(B) ("The department staff shall comply with all requirements for
public notice, receipt of public comments and public hearings before making a
department decision. To the maximum extent possible, the department shall use a
uniform system of public notice of permit applications, opportunity for public
comment and public hearings."). Our supreme court reiterated this in South
Carolina Coastal Conservation League v. South Carolina Department of Health &
Environmental Control, 390 S.C. 418, 702 S.E.2d 246 (2010), in which the Coastal
Conservation League sought review of a critical area permitting decision more than
fifteen days after DHEC issued the staff decision. DHEC failed to notify the
Coastal Conservation League as required by statute; thus, the time limitations for
review did not start to run until DHEC corrected its notice error. Id. at 430, 702
S.E.2d at 253. The plain language of § 44-1-60(A) supports this conclusion here as
well: "All department decisions involving the issuance, denial, renewal,
suspension, or revocation of permits . . . shall be made using the procedures set
forth in this section." The procedures in § 44-1-60 particularly emphasize public
notification, as reflected in § 44-1-60(B). Only after DHEC issues a staff decision
in compliance with the procedural and notice dictates of its own regulations and of
§ 44-1-60 subsections (A) through (E), does subsection (E)(1) trigger the fifteen
day deadline for an appeal of the decision to the DHEC Board. See also Leventis
v. S.C. Dep’t of Health & Envtl. Control, 340 S.C. 118, 143 n.14, 530 S.E.2d 643,
657 n.14 (Ct. App. 2000) ("DHEC's failure to provide adequate notice that the
financial assurance regulations were still being considered excused Sierra Club
from requesting a hearing [on those regulations].").

The ALC relied on the fact that the County received actual notice of the permit
modification months after it was issued, yet did not take action on this notice
within the fifteen day period prescribed by § 44-1-60(E)(2). However, nothing
in § 44-1-60 suggests the fifteen day period for appealing a DHEC staff decision
begins to run upon a party's simply learning of a permit action. To the contrary,
the time period begins to run only after DHEC issues a staff decision in
compliance with applicable statutory and regulatory notice safeguards.

DHEC argues it had no obligation to notify the County of the "minor" modification
to the 2008 Permit because the County never requested to be notified as an
"affected person" with respect to any DHEC staff decision regarding the Highway
93 Class Two Landfill. Although the County does not dispute that it never
formally requested to be notified as an affected person, the County argues the
relevant consideration here is whether the Modified Permit involved a major or
minor modification. For a "major modification" request—which the County
asserts has occurred here—DHEC was required to publish notice of the Permit
Modification and mail notice (by regular mail) to adjoining landowners. DHEC's
own representative has admitted the Permit Modification meets the regulatory
definition of a major modification. Thus, we find DHEC's labeling of the Permit
Modification as minor denied contemporaneous notice and participation
opportunities that DHEC's own regulations required be provided to both the public
and the adjacent Neighboring Property Owners. Accordingly, the ALC erred in
dismissing the County's challenge to the DHEC permitting decision as untimely
because DHEC failed to comply with the notice procedures applicable to its
decision to, in reality, permit a Class III landfill. 12

II. Discovery

Next, the County argues the ALC improperly accepted evidence from outside the
pleadings against the County while denying the County the right to undertake
discovery. 13 The County further asserts the ALC erred in resolving conflicting
evidence in Respondents' favor. We agree.

The ALC failed to notify the parties it would consider affidavits and extra-pleading
evidence but accepted such evidence in considering Respondents' Rule 12 motions.
Our appellate courts have held repeatedly that a trial court's failure to "fairly
apprise" a plaintiff that the court would consider material outside the pleadings in
resolving a motion to dismiss is grounds for reversal. See, e.g., Baird, 333 S.C. at
528, 511 S.E.2d at 74 ("The first indication that County's 12(b)(6) motions would
be converted to summary judgment motions was the trial court’s order of
dismissal. Under these facts, the trial court erred in converting County's 12(b)(6)
motions into motions for summary judgment."); Higgins v. MUSC, 326 S.C. 592,
486 S.E.2d 269 (Ct. App. 1997) (holding the plaintiffs had not been "fairly
apprised" that the trial court would consider material outside the pleadings in

 This analysis applies to the ALC's dismissal on exhaustion grounds as well.
12

Until DHEC complies with its own regulatory requirements for the requested
major modification, no exhaustion requirement is triggered.
13
  Although the County served discovery requests and deposition notices prior to
dismissal, MRR moved to stay all discovery during the pendency of the ALC's
consideration of the motions to dismiss. The ALC granted MRR's motion to stay
discovery.
support of the defendant's 12(b)(6) motion). Our ruling on the motions to dismiss
resolves the ALC's need to stay discovery. 14

Conclusion

Based on the foregoing, the ALC's order dismissing the County's challenge to the
permit modification is reversed and this matter is remanded to the Administrative
Law Court for further proceedings.

REVERSED AND REMANDED.

LOCKEMY, C.J. and SHORT, J., concur.

14
  On remand, in addition to lifting the discovery stay, the ALC will also be able to
address the concerns of the Neighboring Property Owners. DHEC's own notice
regulation "for the initial construction and major modifications of Class II and
Class III landfills" mandates "(3) [t]he Department will send a notice of receipt of
the permit application by regular mail to all adjoining landowners of the proposed
landfill."