City of Va. Beach v. Va. Marine Res. Comm'n

70 Va.App. 68

824 S.E.2d 506

CITY OF VIRGINIA BEACH

v.VIRGINIA MARINE RESOURCES COMMISSION

Record No. 1232-18-1

Court of Appeals of Virginia, Williamsburg.

MARCH 19, 2019

Gerald L. Harris, Associate City Attorney (Mark D. Stiles, City Attorney; Christopher S. Boynton, Deputy City Attorney; Joseph M. Kurt, Assistant City Attorney, on briefs), for appellant.

Kelci A. Block, Assistant Attorney General (Mark R. Herring, Attorney General; Stephen A. Cobb, Deputy Attorney General; Donald D. Anderson, Senior Assistant Attorney General & Section Chief, on brief), for appellee.

Present: Judges Petty, Chafin and O'Brien

OPINION BY JUDGE MARY GRACE O'BRIEN

The City of Virginia Beach ("the City") appeals a circuit court order affirming a decision by the Virginia Marine Resources Commission ("VMRC") rejecting the City's application to receive a transfer of an oyster-planting ground lease under Code § 28.2-625. The City contends that the court misinterpreted the statute because "Virginia law plainly authorizes the City to occupy and hold oyster-planting ground leases by transfer or assignment." It also asserts that the court erred in relying on the principle of expressio unius est exclusio alterius to conclude that the General Assembly intended to make municipalities ineligible to receive these leases by transfer. For the following reasons, we reverse the court's decision.

BACKGROUND

In January 2015, the City enacted an ordinance establishing a Neighborhood Dredging Special Service District ("NDSSD") for Hurd's Cove, a branch of the Lynnhaven River. See Municipal Code 35.3-13(a). See also Code § 15.2-2403 (authorizing governing bodies to create service districts for the "dredging of creeks and rivers to maintain existing uses").

The path for the Hurd's Cove NDSSD extends through an oyster-planting ground lease held by the Zipperer family ("Zipperer Lease"). After the NDSSD took effect, Philip Hightower, a waterfront property owner who opposed the dredging project, applied to VMRC for an oyster-planting riparian lease pursuant to Code § 28.2-600 ("Hightower Lease"). The proposed Hightower Lease abutted the Zipperer Lease and would be within the path of the dredging project.

The City objected to the application, arguing that Hightower only sought the lease to prevent the dredging project.¹ VMRC granted the application, and the circuit court affirmed its decision. Upon appeal, this Court also affirmed. City of Virginia Beach v. Va. Marine Res. Comm'n and Philip G. Hightower, No. 1648-17-1, 2018 WL 3977505 (Va. Ct. App. Aug. 21, 2018).²

While litigating the Hightower Lease, the City also pursued non-judicial means to advance the dredging project. It negotiated an agreement to acquire a portion of the Zipperer Lease pursuant to Code § 28.2-625. The transfer would enable the City to dredge slightly outside the Hightower Lease. After the City and Zipperer leaseholders signed the agreement, the City submitted it to VMRC with an "Application for Transfer of Oyster Planting Ground" requesting transfer of two areas within the Zipperer Lease.

VMRC rejected the transfer application. In its refusal letter, VMRC stated:

Pursuant to [ Code § 28.2-625 ], oyster planting grounds can only be transferred "to a resident of the Commonwealth, or a firm or corporation authorized by Virginia laws to occupy and hold oyster planting ground[ ]." We do not believe the City of Virginia Beach qualifies for a transfer pursuant to this Code section.

The City appealed to circuit court. The parties agreed that the facts were undisputed and the only issue was statutory interpretation, which the court reviewed de novo. The City argued that municipalities are corporations authorized to hold or occupy oyster-planting ground leases under Code § 28.2-604 and therefore are eligible to receive lease transfers under Code § 28.2-625. VMRC responded that because the General Assembly included the term "municipality" in Code § 28.2-604 but omitted it from Code § 28.2-625, the City was not eligible to receive the transfer.

The court affirmed VMRC's denial and held,

The City's argument ... runs contrary to the plain language of [ Code §] 28.2-625 and the statutory scheme. The fact that the General Assembly expressly excluded municipalities for transfers and expressly included them [in Code § 28.2-604 ] governing applications, we have to assume that they knew what they were doing[,] so the VMRC's decision is affirmed.

The court entered an order ruling "that the City is not eligible to receive an oyster lease transfer and that [VMRC] acted in accordance with the law." This appeal followed.

ANALYSIS

A. Standard of Review

An appeal from a VMRC decision is governed by the Virginia Administrative Process Act, Code §§ 2.2-4000 to -4031 ("VAPA"). Under Code § 2.2-4027, "the circuit court reviews an agency's action in a manner ‘equivalent to an appellate court's role in an appeal from a trial court.’ " Commonwealth ex rel. Va. State Water Control Bd. v. Blue Ridge Envtl. Def. League, Inc., 56 Va. App. 469, 479-80, 694 S.E.2d 290 (2010) (quoting J.P. v. Carter, 24 Va. App. 707, 721, 485 S.E.2d 162 (1997) ), aff'd, 283 Va. 1, 720 S.E.2d 138 (2012).

[T]he duty of the court with respect to issues of fact shall be to determine whether there was substantial evidence in the agency record to support the agency decision. The duty of the court with respect to the issues of law shall be to review the agency decision de novo .

Code § 2.2-4027. Circuit court judgments in administrative appeals "shall be subject to appeal to or review by higher courts as in other cases." Code § 2.2-4026(A).

On appeal, "the governing standard of review [under VAPA] depends on the nature of the controversy." Citland, Ltd. v. Commonwealth ex rel. Kilgore, 45 Va. App. 268, 274, 610 S.E.2d 321 (2005). When the appeal presents factual issues, this Court "defer[s] to the agency just as we would a jury or a trial court." Id."Similarly, when the appellant challenges a judgment call on a topic on which ‘the agency has been entrusted with wide discretion by the General Assembly,’ we will overturn the decision only if it can be fairly characterized as ‘arbitrary or capricious’ and thus a ‘clear abuse of delegated discretion.’ " Id. at 275, 610 S.E.2d 321 (quoting Vasaio v. Dep't of Motor Vehicles, 42 Va. App. 190, 196-97, 590 S.E.2d 596 (2004) ).

However, an "agency does not possess specialized competence over the interpretation of a statute merely because it addresses topics within the agency's delegable authority." Finnerty v. Thornton Hall, Inc., 42 Va. App. 628, 634, 593 S.E.2d 568 (2004). "Pure statutory construction, a matter within the ‘core competency of the judiciary’ requires de novo review." Citland, 45 Va. App. at 275, 610 S.E.2d 321 (quoting Finnerty, 42 Va. App. at 635, 593 S.E.2d 568 ). Therefore, because this case presents an issue of statutory interpretation, we conduct a de novo review.

B. Statutory Framework

Generally,

[a]ll the beds of the bays, rivers, creeks and the shores of the sea within the jurisdiction of the Commonwealth ... shall remain the property of the Commonwealth and may be used ... by all the people of the Commonwealth for the purpose of fishing, fowling, hunting, and taking and catching oysters and other shellfish.

Code § 28.2-1200. However, publicly held submerged lands are available for lease by way of assignment from VMRC.

Code § 28.2-603. See Working Waterman's Ass'n of Va., Inc. v. Seafood Harvesters, Inc., 227 Va. 101, 104, 314 S.E.2d 159 (1984).

Code § 28.2-603 provides that submerged lands "may be leased by [VMRC] upon the receipt of a proper application." Entities allowed to apply to VMRC for oyster-planting ground leases are identified in Code § 28.2-604 :

Application for assignment of general oyster-planting ground may be made by (i) any resident of the Commonwealth, (ii) any county, municipality , or political subdivision of the Commonwealth, or (iii) any firm, or corporation chartered under the laws of this Commonwealth for the purpose of oyster culture and the oyster business provided that at least sixty percent of the stock of any such corporation is wholly owned by residents of the Commonwealth.

(Emphasis added). Because the City is a municipality, Code § 28.2-604(ii) expressly allows it to apply for oyster-planting ground leases.

Once granted, these leases are also transferable. Code § 28.2-625 identifies the entities allowed to receive transfers or assignments of oyster-planting ground leases:

The transfer or assignment may be made only to a resident of the Commonwealth, or a firm or corporation authorized by Virginia laws to occupy and hold oyster-planting ground.

Code § 28.2-625(1). This transfer statute does not specifically include the term "municipalities." The circuit court found that although Code § 28.2-604(ii) expressly allows municipalities to apply for oyster-planting ground leases, the General Assembly deliberately omitted them from the list of entities eligible to receive lease transfers in Code § 28.2-625(1). For that reason, it affirmed VMRC's rejection of the City's application for transfer of the Zipperer Lease.

C. Statutory Construction

When interpreting a statute, "courts apply the plain meaning ... unless the terms are ambiguous or applying the plain language would lead to an absurd result."

Miller & Rhoads Bldg., LLC v. City of Richmond, 292 Va. 537, 541, 790 S.E.2d 484 (2016) (quoting Baker v. Commonwealth, 284 Va. 572, 576, 733 S.E.2d 642 (2012) ). "Thus, the paramount principle of statutory interpretation is ‘to interpret the statute as written.’ " Id. at 542, 790 S.E.2d 484 (quoting City of Lynchburg v. Suttenfield, 177 Va. 212, 221, 13 S.E.2d 323 (1941) ).

In determining the plain meaning of a statute, appellate courts have "long recognized that ‘statutes are not to be considered as isolated fragments of law, but as a whole, or as parts of a great, connected, homogenous system, or a single and complete statutory arrangement.’ " Id. at 543, 790 S.E.2d 484 (quoting ...