Free-Flow Packaging International, Inc. v. Secretary of the Department of Natural Resources & Environmental Control
Free-Flow Packaging International, Inc. v. Secretary of the Department of Natural Resources & Environmental Control
Opinion of the Court
In this appeal, we consider whether the Department of Natural Resources and Environmental Control (“DNREC”) lawfully determined the base fee to be paid by a company that emits air contaminants. Free-Flow Packaging International, Inc. contends that DNREC’s assessment was invalid either because it was the result of a process that should have been codified in a regulation, or because it was an arbitrary and capricious case decision. We agree with the Superior Court’s conclusion that the assessment was neither a regulation nor a case decision. Rather, DNREC implemented a statutory directive by categorizing all air polluters based on the estimated hours DNREC spent performing stated types of activities. Since the record supports DNREC’s determination that Free-Flow is a “complex” polluter, we affirm.
Factual and Procedural Background
The 1990 amendments to the federal Clean Air Act require sources of certain air pollutants to obtain a Title V operating permit.
Free-Flow disputed the fee, and paid only $9,500, representing the $2,000 user fee and the $7,500 “routine” source base fee that it believes is appropriate. DNREC issued a Notice of Violation charging Free-Flow with violating a condition of its operating permit by failing to pay the full amount of the permit fee. Free-Flow appealed the Notice of Violation to the Environmental Appeals Board (“Board”). After a hearing, the Board upheld DNREC’s finding of a violation. On appeal, the Superior Court affirmed the Board’s decision. This appeal followed.
Discussion
The statute governing the base fee provides, in relevant part:
(d) The base fee relates to services that are common to all sources subject to the Program. These services include activities such as permit issuance and renewals; stationary source regulation development; ambient monitoring; emission inventory; control strategy development; and development, administration and implementation of 2 additional programs: the SBTCP and a portion of the accidental release prevention program. The Department will place each subject source into 1 of the following 4 categories, either as a voluntarily requested synthetic minor or as determined from estimated hours spent performing services:
(1) Synthetic minor: $3,000;
(2) Routine, up to 400 hours spent: $7,500;
(3) Complex, from 401 to 625 hours spent: $18,000; and
(4) Very complex, over 625 hours spent; $39,500.
Beginning January 1, 2000, the Department will track the actual hours spent processing Title V permits and performing other related services under the Title V Program. This information may be used in evaluation of the Title V Program associated with the expiration of this statute....3
Free-Flow contends that DNREC could not lawfully determine each source’s base fee category without adopting a regulation or other written guideline specifying its methodology. The company argues that, as in Butler v. Insurance Com’r;
The trial court concluded that Butler is inapposite, and we agree. In Butler, the Insurance Commissioner required a suspended insurance agent to complete three ethics courses as a condition to reinstatement. Although the Insurance Department had been imposing this course work requirement for several years, it was not “a written policy, law, rule, order or regulation ....”
DNREC did not adopt any unwritten policy. The governing statute instructed DNREC to place each polluting source into one of four specified categories. That determination was to be made from DNREC’s estimation of the number of hours spent performing services, such as permit issuance, ambient monitoring, and emission inventory.
Alternatively, Free-Flow argues that DNREC’s determination of sources’ base fee categories is a regulation that was not properly promulgated. The APA defines “agency action” as “either an agency’s regulation or case decision... ,”
We disagree with the premise that all of what an agency does must culminate in a regulation or a case decision. The purpose of the APA is to “standardize the procedures and methods whereby certain state agencies exercise their statutory powers and to specify the manner and extent to which action by such agencies may be subject to public comment and judicial review.”
In this case, we are satisfied from the process by which § 6097 was considered prior to enactment, and the level of specificity in the statute, that DNREC was authorized to implement the base fee cate
In short, before § 6097 was amended, the categorization process had been reviewed by the Advisory Committee and the General Assembly. Given this history, the 1999 amendment was in the nature of a legislative ratification of the methods DNREC had used to develop the categories and to assign the 147 sources. Moreover, the statute must be renewed every three years, and the Advisory Committee must submit a new report before that time with “recommendations to remedy or improve any deficiencies or elements of the [Title V Operating Permit] Program.”
Finally, Free-Flow contends that DNREC’s assignment of base fee categories was arbitrary and capricious. Free-Flow says that DNREC did not comply with the statute because: (i) it did not estimate the number of hours that would be spent on base fee activities that relate to Free-Flow, and (ii) it did not repeat its categorization process after the statute was amended. The record supports the Board’s conclusion that DNREC did estimate the amount of time it would spend on Free-Flow. Ali Mirzakhalili, a DNREC employee with 17 years of experience, explained that he, and two other experienced employees, reviewed the files, spoke with engineers, and estimated how many hours it would take to process a permit for each facility. They also considered other aspects of the facility’s operation, such as the amount of time spent reviewing a request for an alternative reasonable available control technology (RACT).
FreeFlow is correct that DNREC did not categorize sources a second time after § 6097 was amended. It performed that task as part of the Advisory Committee’s overall evaluation of the permit fee structure and DNREC’s costs. The amended statute adopted the two part fee structure and the category breakdown that had been developed by DNREC. Free-Flow offers no reason why DNREC should be required to go through the same process a second time after the amended statute was enacted. As noted above, the General Assembly essentially ratified DNREC’s categorizations and there is nothing in this record to suggest that Free-Flow was mis
Conclusion
Based on the foregoing, the judgment of the Superior Court affirming the decision of the Environmental Appeals Board is AFFIRMED.
. See: 29 U.S.C. § 655 note, 42 U.S.C. §§ 6921 note, 7171 note, 7401 et seq. generally, and 7601 et seq. generally.
. 7 Del.C. § 6097(d).
. 686 A.2d 1017 (Del. 1997).
. 29 Del. C. § 10101 et seq.
. 686 A.2dat 1022.
. 7 Del C. § 6097(d).
. 7 Del. C. § 6097(c).
. 29 Del. C. § 10102(2).
. 29 Del. C. § 10102(3).
. 29 Del. C. § 10102(7).
. 29 Del. C. § 10101.
. DNREC, however, is not subject to the APA provisions governing case decisions. 29 Del. C. § 10161(b).
. See: Julian v. Department of Transportation and Department of Labor, 1991 WL 224575 (Del.Ch.).
. The Committee, established pursuant to 7 Del. C. § 6099, includes, among others, the Secretary of DNREC, the Director of Air and Waste Management, two representatives of polluting sources, a member of the Delaware state Chamber of Commerce, and the Chairs of the House and Senate Natural Resources Committees.
. 7 Del C. § 6099.
Reference
- Full Case Name
- FREE-FLOW PACKAGING INTERNATIONAL, INC., Below v. SECRETARY OF the DEPARTMENT OF NATURAL RESOURCES AND ENVIRONMENTAL CONTROL OF the STATE of Delaware, Below
- Cited By
- 4 cases
- Status
- Published