Ala. Dep't of Envtl. Mgmt. v. Wynlake Dev., LLC

347 So.3d 1235

ALABAMA DEPARTMENT OF ENVIRONMENTAL MANAGEMENT

v.WYNLAKE DEVELOPMENT, LLC

2190999

Court of Civil Appeals of Alabama.

April 9, 2021

Opinion Issued on Denial of Rehearing August 13, 2021

Steve Marshall, att'y gen., and Rebecca E. Patty, asst. att'y gen. and assoc. gen. counsel, Alabama Department of Environmental Management, for appellant.

Christopher Lyle McIlwain, Sr., Tuscaloosa, for appellee.

THOMPSON, Presiding Judge.

Wynlake Development, LLC ("Wynlake"), owns a parcel of property in Alabaster that it has subdivided into 96 lots for a residential subdivision called "Wynlake Subdivision" ("the subdivision"). Wynlake constructed houses on approximately 28 of those lots, and the remaining lots in the subdivision remain undeveloped. It is undisputed that, in developing that property, Wynlake was required to obtain certain permits. One of those permits, required by Alabama Department of Environmental Management ("ADEM") pursuant to certain state and federal laws, was a National Pollutant Discharge Elimination System ("NPDES") permit.¹ The NPDES permit for Wynlake expired in either 2010 or 2012.²

On March 24, 2011, ADEM issued an order finding, among other things, that "[s]ediment and other pollutants in storm water runoff from [the subdivision] have the potential to discharge and/or have discharged to an unnamed tributary to Spring Creek, a water of the State," that Wynlake has failed to implement best management practices ("BMPs") to remedy and prevent further pollution of nearby waters of the State, and that, in spite of a notice of violation ("NOV"), Wynlake has failed to remedy the identified problems.³ Therefore, in the March 24, 2011, order, ADEM, among other things, ordered that Wynlake immediately cease all construction operations at the subdivision except for "BMP implementation/maintenance and sediment removal/remediation."

Six years later, in 2017, ADEM again inspected the subdivision and found additional violations of its regulations. It issued another NOV to Wynlake and requested a response demonstrating that the deficiencies identified by ADEM had been addressed. Wynlake did not respond to that NOV. On May 1, 2018, ADEM entered an order finding that Wynlake had failed to correct deficiencies that it had identified, and it assessed a civil penalty totaling $50,300 for Wynlake's violations of ADEM regulations.⁴ See § 22-22A-5(18) c., Ala. Code 1975 (setting forth the power of ADEM to assess civil penalties). Attached to that May 1, 2018, order was an exhibit summarizing Wynlake's violations and ADEM's assessment of damages for those violations.

Wynlake appealed the May 1, 2018, ADEM order, and an ADEM hearing officer conducted a hearing on Wynlake's appeal. On March 14, 2019, the hearing officer issued a report and a recommendation that set forth the following statement of relevant facts:

"1. Wynlake Development, LLC, was formed in 1990 and has as its members, Mr. John Michael White (hereinafter ‘White’) and Selma Holdings, LLC. Its purpose was to purchase property in Alabaster, Alabama, for development. Property was purchased, and it became known as Wynlake Subdivision.

"2. Approximately ninety acres was purchased and development was begun in phases. Lots were sold and development continued until ‘the recession came’ and everything was ‘shutdown.’ At that time, there were 28 lots of a planned 96 lots that had been developed.

"3. White testified that he did not think the entity made any profit but knows there has been none since 2008. There has been no development in the subdivision and no soil disrupted by the entity since 2008. "4. White testified [Wynlake] had no money to correct the violations charged by ADEM. White also testified he had tried to market this property but that ADEM restrictions and the City of Alabaster moratorium on development have prevented any sale of lots or the entire property.⁵

"5. White has driven and inspected the property and has seen no harm to off site water.

"6. [Wynlake] had a history of registration for NPDES permit coverage for this facility dating back to at least 2005 and continuing in the years following with Notices of Re-registration.

"7. The last permit coverage for this site expired on July 10, 2012.⁶

"8. On March 24, 2011, ADEM issued [Administrative Order] 11-069-WD to [Wynlake] requiring all activity to cease other than BMPs and sediment removal or remediation.

"9. [Wynlake] has not produced any inspection reports required under ADEM Admin. Code R. § 335-6-12-.28(1) showing inspections designed to ensure that BMPs are properly designed, implemented, and maintained.

"10. An inspection was made of the Wynlake property, by ADEM on September 5, 2017, [by ADEM] employee Olivia Johnson. That inspection and subsequent report established that no re-registration or application for a new permit coverage had occurred. This is a violation of ADEM Admin. Code R. § 335-6-12-.05(1) and § 335-6-12-.11(1). Further, this inspection and report showed that BMPs had not been implemented and maintained, which is a violation of ADEM Admin. Code R. § 335-6-12-.21(11), and it established that accumulations of sediment from discharge were observed, in violation of ADEM Admin. Code R. § 335-6-12-.35(10).

"11. An NOV was issued by ADEM to [Wynlake] on September 15, 2017, with various deficiencies listed and requirements stated, including a required written report due in 10 days.

"12. [Wynlake] failed to respond to ADEM's September 15, 2017, NOV, which notified [Wynlake] of the deficiencies and required a response. This failure to respond is a violation of Code of Alabama 1975 § 22-22-9(e).

"13. ADEM attempted graduated enforcement by means of a draft Consent Order and conference with [Wynlake's] representative, but the parties were unable to reach an agreement.

"14. Subsequent inspections by Mr. Derick Houston, chief of the facility unit in the Birmingham branch and an environmental scientist for ADEM, on August 29, 2018, showed that deficiencies continued, including continued discharges and a failure of [Wynlake] to use BMPs.

"15. The [administrative order] dated May 1, 2018, was entered by ADEM, which noted all deficiencies and ordered [Wynlake] to pay a civil penalty in the amount of $50,300 for violations. It also required [Wynlake] to take specific action in regards to the Wynlake construction site."

In his order, the hearing officer concluded that Wynlake had not met its burden of proof of establishing that ADEM's action against it should be disapproved or modified. However, the hearing officer found the civil penalty to be "excessive," and he recommended that the it be reduced to $30,000.

ADEM filed objections to the hearing officer's March 14, 2019, report, and the matter was considered by the Alabama Environmental Management Commission ("the AEMC"). On April 12, 2019, the AEMC issued an order confirming in part and rejecting in part the hearing officer's report. The AEMC adopted the hearing officer's March 14, 2019, report and recommendation except for that part that reduced the civil penalty; the AEMC stated that it approved ADEM's administrative action set forth in the May 1, 2018, order.

Wynlake filed a timely notice of appeal to the Jefferson Circuit Court ("the trial court") pursuant to the Alabama Administrative Procedure Act ("the AAPA"), § 41-22-1 et seq., Ala. Code 1975.⁷ See § 41-22-27(f), Ala. Code 1975. The matter was submitted to the trial court on the briefs of the parties. The trial court entered a June 15, 2020, judgment in which it noted that Wynlake contended that the errors in the ADEM and the AEMC orders were errors of law. With regard to that argument, the trial court concluded:

"As alluded to above, this Court's review of ADEM's Administrative Order 18-57-LD is limited to a review of [certain] standards set forth on appeal. Those standards are [set forth in § 41-22-20(k), Ala. Code 1975, of the AAPA and provide]:

" ‘(k) Except where judicial review is by trial de novo, the agency order shall be taken as prima facie just and reasonable and the court shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact, except where otherwise authorized by statute. The court may affirm the agency action or remand the case to the agency for taking additional testimony and evidence or for further proceedings. The court may reverse or modify the decision or grant other appropriate relief from the agency action, equitable or legal, including declaratory relief, if the court finds that the agency action is due to be set aside or modified under standards set forth in appeal or review statutes applicable to that agency or if substantial rights of the petitioner have been prejudiced because the agency action is any one or more of the following:

" ‘(1) In violation of constitutional or statutory provisions;

" ‘(2) In excess of the statutory authority of the agency;

" ‘(3) In violation of any pertinent agency rule;

" ‘(4) Made upon unlawful procedure;

" ‘(5) Affected by other error of law;

" ‘(6) Clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or

" ‘(7) Unreasonable, arbitrary, or capricious, or characterized by an abuse of discretion or a clearly unwarranted exercise of discretion.’

"Upon perusal of the ADEM decision at bar, the Court finds that such decision does not offend the first six standards set forth [in § 41-22-20(k) ], viz., the decision was not in violation of constitutional or statutory provisions; was not in excess of the statutory authority of the agency; was not in violation of any pertinent agency rule; was not made upon unlawful procedure; was not affected by other error of law; and, was not clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record. The Court now turns its attention to whether the instant decision was unreasonable, arbitrary, or capricious, or characterized by an abuse of discretion or a clearly unwarranted

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