Delaware Solid Waste Authority v. Delaware Department of Natural Resources and Environmental Control ( 2021 )

IN THE SUPREME COURT OF THE STATE OF DELAWARE
DELAWARE SOLID WASTE §
AUTHORITY; GREGGO & §
FERRARA, INC.; and § Nos. 81, 2020 and 88, 2020
CONTRACTORS HAULING, LLC, §
§ CONSOLIDATED
Appellees Below, §
Appellants/Cross-Appellees § Court Below – Superior Court
§ of the State of Delaware
v. §
§ C.A. No. K19A-05-002
DELAWARE DEPARTMENT OF §
NATURAL RESOURCES AND §
ENVIRONMENTAL CONTROL, §
§
Appellant Below, §
Appellee/Cross-Appellant. §
Submitted: January 13, 2021
Decided: April 9, 2021
Before SEITZ, Chief Justice; VALIHURA, VAUGHN, TRAYNOR, and
MONTGOMERY-REEVES, Justices, constituting the Court en Banc.
Upon appeal from the Superior Court. AFFIRMED IN PART, REVERSED IN
PART, and REMANDED.
Michael W. Teichman, Esquire (argued), Elio Battista, Jr., Esquire, Kyle F. Dunkle,
Esquire, PARKOWSKI, GUERKE & SWAYZE, P.A., Wilmington, Delaware; for
Appellant/Cross-Appellee Delaware Solid Waste Authority.
Jeffery M. Weiner, Esquire (argued), Wilmington, Delaware; for Appellants/Cross-
Appellees Greggo & Ferrara Inc., and Contractors Hauling, LLC.
William J. Kassab, Esquire (argued), DEPARTMENT OF JUSTICE, New Castle,
Delaware; for Appellee/Cross-Appellant Delaware Department of Natural
Resources and Environmental Control.
MONTGOMERY-REEVES, Justice:
On July 25, 2018, an enforcement officer working for the Department of Natural
Resources and Environmental Control (“DNREC” or the “Department”) pulled over a truck
hauling municipal solid waste from the Pine Tree Corners Transfer Station (the “Pine Tree
Station”). The truck’s owner and operator, Contractors Hauling, LLC (“Contractors
Hauling”), did not have a valid permit to transport solid waste, violating Delaware law. The
Department subsequently determined that on numerous occasions between September 2017
and July 2018, vehicles belonging to Contractors Hauling transported solid waste from the
Pine Tree Station without a valid permit.
The Delaware Solid Waste Authority (“DSWA” or the “Authority”) operates the Pine
Tree Station subject to a Department-issued permit. In 2017, the Authority transferred
operations of the station to a subcontractor, Greggo & Ferrera, Inc. (“G&F”). Later that
year—and apparently without the Authority’s knowledge—G&F began using vehicles
owned and operated by its affiliate entity, Contractors Hauling, to transport waste from the
transfer station to waste disposal facilities.
The Department determined that each of the three entities—the Authority, G&F, and
Contractors Hauling—violated various requirements related to solid waste, and the
Department assessed civil penalties and costs. The Department faulted the Authority for
failing to ensure that all transporters had valid permits and for failing to provide a complete
2
list of transporters; G&F for subcontracting with an entity that did not have a valid transporter
permit; and Contractors Hauling for transporting waste without a valid permit.
Each entity filed a timely appeal with the Environmental Appeals Board (the
“Board”). The Board reversed the Department’s assessments of fines and penalties.
Regarding the Authority, the Board held that the Department could not impose a permit
condition requiring that the Authority ensure all transporters have valid permits and that the
Authority could not be held liable for failing to disclose information of which it was unaware.
Regarding G&F and Contractors Hauling, the Board agreed that the entities committed
violations but found no penalty was appropriate because those violations were not culpable
and did not harm the environment.
The Department appealed to the Superior Court. The court held: (i) the Department
had the authority to impose the permit condition, but it was unconstitutionally vague; (ii) the
Authority was strictly liable for failing to provide a complete list of transporters; (iii) the
Board erred by setting aside the penalties assessed against G&F and Contractors Hauling;
and (iv) the Secretary’s cost assessments were not before the Board.
Each of the parties appeals the Superior Court’s decision. The Department argues
that the permit condition is not void for vagueness and that the Board applied the wrong
standard of review to the Department’s determinations regarding violations and penalties.
The Authority argues that the permit condition was unlawful and that the Authority cannot
be held strictly liable for failing to report information it did not know. G&F and Contractors
3
Hauling argue that the Superior Court should not have reversed the Board’s determination
setting aside the penalties that the Department assessed.
Having reviewed the parties’ briefs and record on appeal, and after oral argument, this
Court holds: (i) the Superior Court and the Board erred by holding that the permit condition
is unlawful; (ii) the Superior Court properly held that the Authority is strictly liable for failing
to provide a complete list of transporters; (iii) the Superior Court erred by overturning the
Board’s determination that no penalty should be assessed against G&F and Contractors
Hauling; and (iv) the Superior Court properly held that the Secretary’s ability to recover costs
was not before the Board. Accordingly, this Court affirms-in-part, reverses-in-part, and
remands-in-part the Superior Court’s January 29, 2020 decision. On remand, the Superior
Court shall remand this appeal to the Board to determine whether the record supports the
penalty that the Department assessed against the Authority.
I. RELEVANT FACTS AND PROCEDURAL BACKGROUND
A. The Parties and Relevant Non-Parties
Appellant and Cross-Appellee the Delaware Solid Waste Authority is a quasi-
governmental entity established under 7 Del. C. § 6403. Among other things, the Authority
operates the Pine Tree Corners Transfer Station (the “Pine Tree Station”) and the Central
Waste Management Center, a landfill near Sandtown, Delaware (the “Sandtown Landfill”).1
1
Del. Dep’t of Nat. Res. & Envtl. Control v. Del. Solid Waste Auth., 2020 WL 495210, at *1 (Del.
Super. Ct. Jan. 29, 2020).
4
Michael D. Parkowski is the Authority’s Chief of Business and Governmental
Services.2
Justin Wagner is the Authority’s Facility Manager for the Pine Tree Station and
Sandtown Landfill.3
Fred Oehler is the Authority’s Supervisor of Compliance.4
Appellant and Cross-Appellee Greggo & Ferrera, Inc. is a contractor that the
Authority hired to operate and maintain the Pine Tree Station.5
Charles Howarth is the G&F Supervisor of the Pine Tree Station.6
Appellant and Cross-Appellee Contractors Hauling LLC is an affiliate entity owned
and operated by the same family that owns and operates G&F.7 When referring to G&F and
Contractors Hauling collectively, this opinion uses the term “G&F Group.”
Appellee and Cross-Appellant the Delaware Department of Natural Resources and
Environmental Control is the administrative agency tasked with enforcing Delaware’s
environmental laws and regulations, including those governing solid waste.8 The
2
App. to DSWA Opening Br. 69 (hereafter “A_”).
3
A88-89.
4
A78-79.
5
See A75-76.
6
A152.
7
See A167; App. to DNREC Answering Br. 136 (hereafter “B_”).
8
See, e.g., 7 Del. C. § 6003.
5
authorizing statutes put the Department’s Secretary (the “Secretary”) in charge of
enforcement.9
B. The Pine Tree Station and Sandtown Landfill
The Authority operates three waste transfer stations in Delaware, including the Pine
Tree Station.10 Transfer stations provide a local destination for solid waste, removing the
need for customers to travel to a centralized facility, such as a landfill, for proper waste
disposal.11 Solid waste can remain at a transfer station for a maximum of 72 hours, unless
the Department makes a written exception.12 Arranging to timely haul solid waste to a
disposal facility is therefore an integral part of operating a transfer station. Delaware law
requires that all three links in this chain—transfer stations, transporters, and disposal
facilities—obtain permits issued by the Department.13
The Authority operates the Pine Tree Station subject to Permit SW-06/04 (the “Pine
Tree Station Permit”).14 The Pine Tree Station Permit has two provisions relevant to this
appeal. First, Condition II.I.2 of the Pine Tree Station Permit imposes four requirements
related to transporter permits:
All vehicles transporting waste from the Transfer Station
shall have a valid solid waste transporters permit issued by the
9
See, e.g., Del. Dep’t of Nat. Res. & Envtl. Control v. McGinnis Auto & Mobile Home Salvage,
LLC, 225 A.3d 1251, 1254 (Del. 2020) (“DNREC’s Secretary is responsible for enforcing the
provisions of the Act.” (citing 7 Del. C. §§ 6001(c)(3), 6005(a))).
10
Del. Dep’t of Nat. Res., 2020 WL 495210, at *1.
11
Id.12
7 Del. Admin. C. § 1301-10-5.2.1.
13
See 7 Del. C. § 6003(a)(4), (b)(5).
14
A320.
6
DNREC. In their contracts with transporters hauling waste
from the Transfer Station, the DSWA shall stipulate that the
contractor maintain a valid solid waste transporter permit issued
by the DNREC. DSWA shall investigate and determine the
current validity of the permit if it has reason to suspect a permit
is not valid. All vehicles transporting waste collected by the
HHW collection program from the Transfer Station shall have a
valid hazardous waste transporters permit issued by the
DNREC.15
Second, Condition III.B.2 of the Pine Tree Station Permit requires that the Authority
submit an annual report to the Department in March of each year describing various aspects
of the station’s operations, including “[a] list of transporters that hauled waste to and from
the facility during the year covered by the report.”16
In addition to the transfer stations, the Authority operates the Sandtown Landfill
subject to Permit SW-10/01 (the “Sandtown Landfill Permit”).17 The Sandtown Landfill
Permit contains a reporting condition that requires the Authority to submit an annual report
in April of each year describing various aspects of landfill’s operations, including “a list of
transporters that hauled waste to or from the facility.”18 The Court refers to the reporting
conditions included in the Pine Tree Station Permit and the Sandtown Landfill Permit
collectively as the “Reporting Conditions.”
15
A324.
16
A328.
17
Del. Dep’t of Nat. Res., 2020 WL 495210, at *1; A333.
18
See A354, at § V.B.3.
7
C. The Authority Learns that Contractors Hauling Trucks Were
Transporting Solid Waste Without Permits
In 2017, the Authority shifted the duties of operating and maintaining the Pine Tree
Station to G&F, a subcontractor.19 G&F’s responsibilities included timely transporting solid
waste from the Pine Tree Station to centralized disposal facilities, such as the Sandtown
Landfill.20 The contract between the Authority and G&F provides, “CONTRACTOR will
ensure that all vehicles transporting waste from [the Pine Tree Station] shall have a valid
solid waste transporter permit issued by DNREC.”21 As part of the vetting process, G&F
submitted a copy of its permit to transport solid waste.22
In June 2018, the Authority’s Chief of Business and Governmental Services,
Michael D. Parkowski, received a tip from a retired Department employee that a truck
appeared to have hauled waste from the Pine Tree Station without a transporter permit
sticker.23 Department regulations require that vehicles transporting solid waste obtain a
permit24 and that vehicles transporting solid waste display a conspicuous sticker providing
information about the vehicle’s permit.25
19
See, e.g., A73, at 53:6-14.
20
See generally A73-74.
21
A374, at § 15.0.
22
A75, at 55:15-18.
23
See, e.g., A78, at 58:10-59-6.
24
7 Del. Admin. C. § 1301-7.1.5 (“Each vehicle used to transport solid waste and required to have a
transporter’s permit must carry a copy of the permit in the vehicle. The permit must be presented
upon request to any law enforcement officer or any representative of the Department.”).
25
See, e.g., id. § 1301-7.2.3.6 (“The Transporters’ permit number shall be prominently displayed on
both sides and the rear of the vehicle in figures at least three inches high and of a color that contrasts
with the color of the vehicle.”).
8
Parkowski thought that G&F may have “forgot[ten] to put the stickers on the truck,”
but he decided to ask the Authority’s Supervisor of Compliance, Fred Oehler, to
investigate.26 Oehler reported back that G&F appeared to be using trucks operating under
the name of Contractors Hauling, an affiliate entity to G&F.27 Oehler also confirmed that
the trucks did not have permit stickers. Perhaps assuming that the Contractors Hauling trucks
were owned by G&F and could operate under G&F’s permit, Parkowski told Oehler “they
better label the trucks with the stickers because they have to display that.”28
One week later, the G&F employee in charge of managing the Pine Tree Station,
Charles Howarth, contacted the Authority’s Facility Manager for the Pine Tree Station and
Sandtown Landfill, Justin Wagner.29 Howarth told Wagner that Contractors Hauling did not
have a permit to transport waste and that G&F had tried and failed to contact the Department
regarding whether Contractors Hauling’s trucks could transport waste under G&F’s permit.30
Howarth also told Wagner that Contractors Hauling had submitted an application for its own
permit to transport solid waste.31 Wagner did not tell Howarth that G&F was not allowed to
use the Contractors Hauling trucks because he thought that restriction was “clearly stated in
the contract” between the Authority and G&F.32
26
A79, at 59:2-6.
27
Id. at 59:9-15.
28
Id. at 59:12-15.
29
A91-92, at 71:24-72:9.
30
Id.
31
Id.
32
A92, at 72:10-15.
9
Despite these red flags, “[n]o one at [the Authority] told G&F or [Contractors
Hauling] to stop transporting waste until they resolved the permitting issue,”33 and the
Contractors Hauling trucks continued to transport waste from the Pine Tree Station.34 The
Authority also failed to update the transporter lists that it had provided the Department earlier
that year as part of its mandatory annual reports, which did not disclose that Contractors
Hauling had transported waste from the Pine Tree Station to the Sandtown Landfill.35
D. The Department Discovers that Contractors Hauling Transported Waste
from the Pine Tree Station Without a Permit and Assesses Penalties
On July 25, 2018, approximately six weeks after the Authority first learned that the
Contractors Hauling trucks were hauling waste from the Pine Tree Station without permits,
a Department officer stopped a truck departing the Pine Tree Station displaying a Contractors
Hauling logo.36 The officer stopped the truck because he could not locate a permit sticker,
which should have been conspicuously displayed on the side and back of the vehicle.37 The
truck’s driver was unable to provide the officer with a copy of the vehicle’s transporter
permit.38 The officer did not observe any other violations related to hauling waste.39
33
A6.
34
See, e.g., A291-92.
35
See, e.g., A291.
36
A7.
37
Id.
38
Id.
39
Id.
10
After learning of the stop, G&F arranged to have a third-party transport waste from
the Pine Tree Station until Contractors Hauling could obtain a valid transporter permit.40 The
Department eventually determined that Contractors Hauling’s trucks transported waste from
the Pine Tree Station on 334 calendar days from September 2017 to July 2018, accounting
for more than 3,000 trips.41 Contractors Hauling’s trucks did not have valid permits to make
any of these trips.
In November 2018, the Department’s Secretary issued three Secretary’s Orders
assessing administrative penalties and costs against the Authority, G&F, and Contractors
Hauling (collectively, the “Secretary’s Orders”).42 The Secretary’s Order issued to the
Authority (Order No. 2018-WH-0066) determined that the Authority violated
Condition II.I.2 of the Pine Tree Station Permit because “DSWA[] fail[ed] over the course
of several months to ensure that all vehicles that transfer waste from its [Pine Tree Station]
possess[ed] a valid Delaware solid waste transporter permit.”43 The order also determined
that the Authority violated the Reporting Conditions by “not not[ing] in its 2017 annual
report that Contractors Hauling, LLC also transported [municipal solid waste] from [the Pine
Tree Station] to [the Sandtown Landfill] at any point in 2017.”44 The order assessed the
40
A166.
41
A290.
42
See A288; A304; A312.
43
A288, A292.
44
A293.
11
Authority with an $18,174.80 penalty under 7 Del. C. § 6005(b)(3) and $1,198.80 in costs
under § 6005(c).45
The Secretary’s Order issued to G&F (Order No. 2018-WH-0067) determined that
G&F violated 7 Del. Admin. C. § 1301-7.1.7 by subcontracting with Contractors Hauling,
which did not have a valid permit, to transport solid waste from September 2017 to
July 25, 2018.46 Under § 1301-7.1.7, “Permitted solid waste transporters shall not use agents
or subcontractors who do not hold permits for transporting solid waste.” The order assessed
G&F with a $14,800.00 penalty under 7 Del. C. § 6005(b)(3) and $2,126.48 in costs pursuant
to § 6005(c).47
The Secretary’s Order issued to Contractors Hauling (Order No. 2018-WH-0068)
determined that Contractors Hauling violated 7 Del. C. § 6003(a)(4) and 7 Del. Admin.
C. § 1301-7.1.1 by transporting solid waste without a permit.48 Under § 6003(a)(4), “No
person shall, without first having obtained a permit from the Secretary, undertake any activity
. . . which may cause or contribute to the collection, transportation, storage, possessing, or
disposal of solid wastes . . . .”49 Similarly, § 1301-7.1.1 provides, “No person shall transport
solid waste, without first having obtained a permit from the Department . . . .” The order
45
A293-94.
46
A304-06.
47
Id.
48
A312, A314.
49
(emphasis added).
12
assessed Contractors Hauling with a $16,630.00 penalty pursuant to § 6005(b)(3) and
$2,126.48 in costs pursuant to § 6005(c).50
E. The Environmental Appeals Board Reverses the Secretary’s Assessments
of Penalties and Costs
In December 2018, the Authority, G&F, and Contractors Hauling (collectively, the
“Appellants”) each filed a timely notice of appeal with the Board, challenging the Secretary’s
Orders under 7 Del. C. § 6008.51 The Appellants did not request a public hearing with the
Secretary before filing their appeal.
The Board held an evidentiary hearing in February 2019, the first hearing related to
the Secretary’s Orders.52 In May 2019, the Board issued a written decision and final order,
which reversed all of the penalties and costs that the Secretary assessed.53 Regarding the
Authority, the Board held that Condition II.I.2 of the Pine Tree Station Permit was unlawful
because “DSWA has no authority to monitor or enforce DNREC permits and that DNREC
has no authority to impose such a condition.”54 The Board also determined that the Authority
did not violate the Reporting Conditions because the Authority “could not report that G&F
was using vehicles owned by an affiliate in [the Authority’s] Annual Report because [the
Authority] had no knowledge until after the Report was filed.”55 The Board also “reject[ed]
50
A314.
51
A3-4.
52
See A20.
53
A2.
54
A11.
55
Id.
13
DNREC’s contention that [the Board] lack[ed] jurisdiction to address the assessment of cost
recovery in a DNREC enforcement action.”56 Thus, the “Board f[ound] no basis for the
imposition of monetary penalties or cost recovery against [the Authority].”57
Regarding G&F, the Board agreed with the Secretary’s determination that G&F
violated 7 Del. Admin. C. § 1301-7.1.7 by subcontracting with Contractors Hauling to
transport solid waste without the required permits.58 Nonetheless, the Board determined that
“no penalty or cost recovery [was] appropriate” because “such violation was the result of
understandable oversight,” and “no environmental harm or damage occurred.”59
The Board reached a similar conclusion regarding Contractors Hauling. The Board
agreed with the Secretary’s determination that Contractors Hauling violated the applicable
regulatory and statutory requirements by transporting solid waste without the required
permits,60 but the Board “conclude[d] that no penalty or cost recovery [was] appropriate”
because “such violation was the result of an innocent lack of communication between G&F
and [Contractors Hauling],” and “no environment[al] harm or damage occurred.”61
56
A12.
57
Id.
58
Id.
59
Id.
60
A12-13.
61
A13.
14
F. The Superior Court Affirms-in-Part and Reverses-in-Part the Board’s
Decision and Remands
The Department timely appealed the Board’s decision to the Superior Court under
7 Del. C. § 6009.62 In January 2020, the Superior Court issued a memorandum opinion and
order holding:
i. the Secretary’s cost assessments were not properly before the Board because the
Secretary had not submitted a detailed billing of costs and was not formally
seeking costs from the Appellants;
ii. the Secretary had the power to impose Condition II.I.2, but the condition was void
for vagueness;
iii. the Board had authority to review the Secretary’s assessments of penalties;
iv. the Board erred by overturning the Secretary’s determination that the Authority
was liable for violating the Reporting Conditions because they are strict-liability
conditions; and
v. the Board’s determination that the G&F Group should not be assessed penalties
“was not well-considered.”63
Thus, the Superior Court: (i) affirmed the Board’s determination that Condition II.I.2
was invalid; (ii) reversed the Board’s determination that the Authority did not violate the
Reporting Conditions; (iii) reversed the Board’s determination that no administrative
penalties should be assessed against the G&F Group; and (iv) remanded the appeal to the
Board to consider the appropriate penalties.64
62
Del. Dep’t of Nat. Res., 2020 WL 495210, at *3.
63
Id. at *5-11.
64
Id.
15
The Department, the Authority, G&F, and Contractors Hauling have each filed a
timely notice of appeal challenging the Superior Court’s order.
II. STANDARD OF REVIEW
The Court reviews de novo questions of law, including questions of statutory
interpretation and constitutional law.65 When “review[ing] a Superior Court ruling that, in
turn, . . . reviewed the ruling of an administrative agency,” this Court examines the agency’s
decision directly.66 Thus, “[o]ur review of the [Board’s] decision matches that of the
Superior Court—whether the decision is supported by substantial evidence and is free from
legal error.”67 “Substantial evidence is that which a reasonable mind might accept as
adequate to support a conclusion. It is more than a ‘mere scintilla but less than a
preponderance of the evidence.’”68
65
See, e.g., Salzberg v. Sciabacucchi, 227 A.3d 102, 112 (Del. 2020) (“Statutory interpretation is a
question of law, which we review de novo.” (citing Corvel Corp. v. Homeland Ins. Co. of N.Y.,
112 A.3d 863, 868 (Del. 2015))); Cohen v. State ex rel. Stewart, 89 A.3d 65, 86 (Del. 2014) (“This
Court reviews claims of violations of constitutional rights de novo.” (citing Cooke v. State,
977 A.2d 803, 840 (Del. 2009))); Del. Dep’t Nat. Res. & Envt’l Control v. Sussex C’ty,
34 A.3d 1087, 1090 (Del. 2011) (“Questions of law are reviewed de novo. Statutory interpretation
is a question of law.” (citation omitted)).
66
United Parcel Serv. v. Tibbits, 93 A.3d 655, 2014 WL 2711302, at *2 (TABLE) (citing Pub.
Water Supply Co. v. DiPasquale, 735 A.2d 378, 380 (Del. 1999)).
67
Keep Our Wells Clean v. Del. Dep’t Nat. Res. & Envtl. Control, 243 A.3d 441, 445-46 (Del. 2020)
(citing Del. Dep’t of Nat. Res. & Envtl. Control v. McGinnis Auto & Mobile Home Salvage,
225 A.3d 1251, 1254 (Del. 2020)); see also Coastal Barge Corp. v. Coastal Zone Indus. Control
Bd., 492 A.2d 1242, 1244 (Del. 1985) (“[R]eversal of the Board is warranted if it abused its
discretion, committed an error of law, or made findings of fact unsupported by substantial evidence.”
(citing Kreshtool v. Delmarva Power & Light Co., 310 A.2d 649, 652 (Del. 1973))).
68
Keep Our Wells Clean, 243 A.3d at 446 (quoting Prunckun v. Dep’t of Health & Soc. Servs.,
201 A.3d 525, 540 (Del. 2019); Powell v. OTAC, Inc., 223 A.3d 864, 870 (Del. 2019)).
16
III. ANALYSIS
This appeal asks the Court to decide four issues. First, whether Permit
Condition II.I.2 is lawful. Second, whether the Superior Court erred by reversing the Board’s
determination that DSWA complied with the Reporting Conditions. Third, whether the
Superior Court erred by reversing the Board’s determination that the G&F Group should not
be assessed civil fines despite committing violations. Fourth, whether the Superior Court
erred by holding that the Secretary’s cost assessments were not properly before the Board.
The Court addresses each issue in turn.
A. Condition II.I.2 of the Pine Tree Station Permit Is Lawful
The Authority operates the Pine Tree Station subject to the Pine Tree Station Permit.
Condition II.I.2 of the permit states,
All vehicles transporting waste from the Transfer Station
shall have a valid solid waste transporters permit issued by the
DNREC. In their contracts with transporters hauling waste
from the Transfer Station, the DSWA shall stipulate that the
contractor maintain a valid solid waste transporter permit issued
by the DNREC. DSWA shall investigate and determine the
current validity of the permit if it has reason to suspect a permit
is not valid. All vehicles transporting waste collected by the
HHW collection program from the Transfer Station shall have a
valid hazardous waste transporters permit issued by the
DNREC.69
The Authority argues that Condition II.I.2 is unlawful for two primary reasons. First,
the Secretary does not have the power to impose Condition II.I.2 because it imposes
69
A324.
17
compliance requirements that lack a basis in duly promulgated regulations.70 Second,
Condition II.I.2 is unconstitutionally vague because it fails to provide reasonable notice of
the applicable standard of conduct.71
1. The Secretary had the power to impose Condition II.I.2
Under 7 Del. C. § 6003(c), the Secretary has the power to “grant or deny a permit” to
collect, transport, store, or process solid waste “in accordance with duly promulgated
regulations.” Relying on this Court’s opinion in Formosa Plastics Corp. v. Wilson, the
Superior Court held that § 6003 grants the Secretary the power to impose “reasonable permit
conditions . . . even if they do not have explicit antecedents in the applicable regulations.”72
Accordingly, the Court held that Condition II.I.2 could be lawful even if it lacked an explicit
regulatory antecedent.73
The Authority argues that the Superior Court erred because the Secretary has no
power to impose a permit condition, reasonable or unreasonable, unless the Department
previously enacted a regulation containing “specific provisions” authorizing that “kind” of
permit condition.74 Relying on this statutory construction, the Authority argues that
Condition II.I.2 is invalid because it contains two permit conditions that lack regulatory
70
DSWA Opening Br. 14-19.
71
Id. at 20-23.
72
Del. Dep’t of Nat. Res., 2020 WL 495210, at *6 (citing Formosa Plastics Corp. v. Wilson,
504 A.2d 1083, 1088-89 (Del. 1986)).
73
Id.74
DSWA Reply Br. 24.
18
antecedents. First, Condition II.I.2 requires that “[a]ll vehicles transporting waste from the
Transfer Station . . . have a valid solid waste transporters permit . . . ” (the “Ensure
Condition”).75 According to the Authority, the Ensure Condition is unlawful because the
Department has not enacted regulations “that require a transfer station operator to ‘ensure’
that a third-party waste transporter has a valid transporter’s permit.”76 Instead, existing
regulations only hold transporters responsible for obtaining permits to haul solid waste.77
Second, Condition II.I.2 requires that “DSWA . . . investigate and determine the
current validity of a permit if [DSWA] has reason to suspect a permit is not valid” (the
“Investigate and Determine Condition”).78 According to the Authority, the Investigate and
Determine Condition is unlawful because “[n]o current regulation allows DNREC to require
permittees to ‘investigate and determine’ the validity of permits DNREC issues to other
parties,” or “allows DNREC to subdelegate its . . . investigatory and enforcement powers.”79
The Delaware General Assembly enacted the Environmental Control Act to ensure
“proper ‘solid waste storage, collection, transportation and disposal.’”80 The Secretary is
responsible for enforcing the provisions of the Act, including the requirement that transfer
stations, transporters, and disposal facilities obtain permits to collect, transport, store, and
75
A324.
76
DSWA Reply Br. 22 (citing 7 Del. Admin. C. § 1301-10.0).
77
Id.
78
A324.
79
DSWA Opening Br. 15.
80
Del. Dep’t Nat. Res. & Envtl. Control v. McGinnis Auto & Mobile Home Salvage, LLC,
225 A.3d 1251, 1254 (Del. 2020) (quoting 7 Del. C. § 6001(c)(6)).
19
dispose of solid waste.81 The statute specifically instructs courts to adopt a liberal
construction, providing that “[t]his chapter, being necessary for the welfare of the State and
its inhabitants, shall be liberally construed in order to preserve the land, air and water
resources of the State.”82
Central to this statutory scheme is the prohibition that “[n]o person shall, without first
having obtained a permit from the Secretary, undertake any activity . . . [i]n a way which
may cause or contribute to the collection, transportation, storage, processing, or disposal of
solid wastes . . . .”83 The Department has promulgated numerous regulatory requirements
implementing this statutory scheme,84 including the requirements that:
i. “no person shall transport solid waste, without first having obtained a permit from
the Department”;85
ii. “[e]ach transporter that picks up and/or deposits solid waste in Delaware shall
submit an annual report . . . summarizing information from the preceding calendar
year,” including the “amounts of solid waste . . . delivered to each destination”;86
iii. vehicles transporting solid waste must “prominently display[]” the transporter’s
“name” and “permit number”;87
81
Id. (citing 7 Del. C. § 6005(a)).
82
7 Del. C. § 6020.
83
Id. § 6003(a)(4) (emphasis added).
84
See generally 7 Del. Admin. C. § 1301-7 (collecting certain regulatory requirements applicable to
transporters); id. § 1301-10 (collecting certain regulatory requirements applicable to transfer
stations).
85
Id. § 1301-7.1.1.
86
Id. § 1301-7.2.7.1.2.
87
Id. § 1301-7.2.3.5 to 7.2.3.6.
20
iv. “[s]olid waste shall not remain at [a] transfer station for more than 72 hours
without the written approval of the Department”;88
v. “[a]ll solid waste accepted at the transfer station must, upon leaving the transfer
station, be delivered to a processing or disposal facility authorized by the
Department . . . to accept that type of waste”;89
vi. transfer station owners and operators must keep “[a] record of the solid waste
commercial haulers . . . using the facility and the type and weight or volume of
solid waste delivered by each hauler to the transfer station each day,” along with
the “[d]estination of the solid waste;”90 and
vii. transfer station “permitee[s] shall submit to the Department on an annual basis a
report summarizing the facility operations for the preceding calendar year” that
includes “[a] complete list of commercial haulers that hauled waste to or from the
facility during the year covered by the report.”91
The above requirements work together to create a closed system for disposing of solid
waste brought to transfer stations. Transfer stations must obtain a permit to operate,92 arrange
to transport solid waste to a Department-approved disposal facility within 72 hours of
receipt,93 and provide the Department with a “complete list” of transporters that hauled waste
from the station.94 Transporters must obtain permits to transport waste,95 prominently
display that permit information on vehicles,96 and provide the Department with information
88
Id. § 1301-10.5.2.1.
89
Id. § 1301-10.5.2.2.
90
Id. § 1301-10.5.3.1, 10.5.3.6.
91
Id. § 1301-10.5.4.1.2.
92
7 Del. C. § 6003(a).
93
7 Del. Admin. C. § 1301-10.5.2.1 to 10.5.2.2.
94
Id. § 1301-10.5.4.1.2.
95
Id. § 1301-7.1.1.
96
Id. § 1301-7.2.3.5 to 7.2.3.6.
21
regarding the waste’s final destination.97 Each link in the solid waste disposal chain must
obtain a permit from the Department and provide the Department with information regarding
how the solid waste was disposed.
According to the Authority, this closed system has a loophole: nothing requires
transfer station operators to confirm that transporters have valid permits to haul solid waste
from the transfer station.98 Thus, the Ensure Condition and the Investigate and Determine
Condition do not accord with regulations that the Department duly promulgated.99
As a threshold matter, the Court need not address the Investigate and Determine
Condition to resolve this aspect of the Authority’s appeal. The Secretary found that the
Authority violated the Ensure Condition, not the Investigate and Determine Condition.100
Thus, the Investigate and Determine Condition has no bearing on the conduct that the
Secretary found violated Condition II.I.2, and whether the Investigate and Determine
Condition is lawful poses an academic question that the Court need not address.
The question remains, however, whether the Secretary had the power to include the
Ensure Condition in the Pine Tree Station Permit. 7 Del. C. § 6003(c) tasks the Secretary
with granting or denying solid waste permits “in accordance with duly promulgated
regulations.” The leading case addressing the Secretary’s permitting power is this Court’s
97
Id. § 1301-7.2.7.1.2.
98
See, e.g., DSWA Reply Br. 22.
99
See id.; DSWA Opening Br. 15.
100
A292-93 (the Secretary’s Order); A324 (the Pine Tree Station Permit).
22
Formosa opinion. In Formosa, the Court held that the Secretary has the implied power to
revoke permits even though § 6003(c) does not expressly grant the power of revocation.101
In reaching that conclusion, the Court noted that “the authority to grant a license [generally]
includes the power of revocation” and held that because “the terms of this statute are broad
and plenary,” the Court will “construe . . . the imposition of an emphatic duty” to confer “all
necessary concomitant powers to give full force and effect to the clear legislative mandate
of the Act.”102 The Court also found support in the Act’s enforcement provisions, such as
the Secretary’s power under § 6005(b) to “impose an administrative penalty” upon
“[w]hoever violates . . . any condition of a permit issued pursuant to § 6003 of this title.”103
The Court stated that these enforcement provisions evidence the Secretary’s “unquestioned
power to impose reasonable conditions upon issuance” of permits.104
Applying the reasoning in Formosa, the question before the Court is whether the
Secretary’s duty to issue permits “in accordance with duly promulgated regulations” implies
the power to impose reasonable permit conditions that lack identical regulatory antecedents.
Stated differently, is the power to impose reasonable permit conditions lacking identical
regulatory antecedents a “necessary and concomitant power[] to give full force and effect to
the clear legislative mandate of the Act”?105
101
504 A.2d at 1088-89.
102
Id. at 1088 (citations omitted).
103
Id. at 1089.
104
Id.105
Id. at 1088.
23
The Court holds that the answer to these questions is “yes.” The Secretary’s duty to
issue permits “in accordance with duly promulgated regulations” implies and requires the
power to impose reasonable permit conditions that are consistent with existing regulations
but lack identical regulatory antecedents. Denying this power would frustrate the Secretary’s
ability to develop an effective permitting program, as the Department would be forced to go
through the formal rulemaking process each time it wanted to issue or amend a solid waste
permit. This would make it difficult to develop a flexible permitting program reflecting
permittee-specific risks and needs. It would also invite permittees to search for loopholes
where formal regulations failed to expressly include all conditions necessary to implement
the Department’s duly promulgated regulations. Such a strict construction contradicts the
Environmental Control Act’s mandate that “[t]his chapter, being necessary for the welfare of
the State and its inhabitants, shall be liberally construed”106 and will not be adopted.
Applying the framework provided above, the next question is whether the Ensure
Condition is consistent with the existing regulations that the Department has duly
promulgated. The answer to this question too is “yes.” As detailed above, the legislature
tasked the Department with establishing a closed system requiring that each link in the solid
waste disposal chain obtain permits from the Department.107 The Department has enacted
numerous regulations designed to establish this closed system,108 including the requirements
106
7 Del. C. § 6020.
107
See § 6003(a)(4).
108
7 Del. Admin. C. §§ 1301-7, 1301-10.
24
that transfer station operators arrange to transport solid waste to a Department-approved
disposal facility within 72 hours of receipt109 and that transfer station operators provide the
Department with a “complete list” of transporters that hauled solid waste from the station.110
A permit condition requiring that a transfer station’s operator ensure that “[a]ll
vehicles transporting waste from the Transfer Station . . . have a valid solid waste transporters
permit” is consistent with this scheme.111 The purpose of this requirement is to ensure, as
the statute and regulations require,112 that all transporters hauling waste from the transfer
station have valid permits to transport solid waste. This requirement is also consistent with
a transfer station’s duty to provide the Department with a “complete list” of transporters, 113
a requirement with the clear purpose of confirming that all of the transporters hauling waste
from a transfer facility have valid transporter permits. Thus, the Court holds that the Ensure
Condition accords with duly promulgated regulations and is therefore lawful.
2. Condition II.I.2 is not unconstitutionally vague
The Superior Court held that Condition II.I.2 was void for vagueness because the
requirement that “DSWA ensure that all valid transporters have valid permits” was
inconsistent with the requirement that “DSWA . . . ‘investigate and determine’ the validity of
109
Id. § 1301-10.5.2.1 to 10.5.2.2.
110
Id. § 1301-10.5.4.1.2.
111
See A324.
112
See 7 Del. C. § 6003(a)(4); 7 Del. Admin. C. § 1301-7.1.1.
113
See 7 Del. Admin. C. § 1301-10.5.4.1.2.
25
a permit only if it has reason to suspect that the permit is invalid.”114 The Court opined that
“if DSWA bore responsibility for permit invalidity regardless of any suspicions it might or
might not have,” “[i]t would make no sense to require DSWA to investigate only if it
suspected permit invalidity.”115 The court held that this inconsistency rendered
Condition II.I.2 unconstitutionally vague because a reasonable person might conclude that
the Authority would only be liable if it had reason to suspect that a transporter did not have
a valid permit.116 Thus, Condition II.I.2 failed to provide adequate notice that the
Department could hold the Authority strictly liable for failing to ensure that all transporters
had valid permits.117 For the same reason, the court concluded that the inconsistency
between these two permit conditions created a risk of arbitrary or erratic enforcement.118
In addition to the points the Superior Court’s opinion raised, the Authority argues that
Condition II.I.2 is unconstitutionally vague because existing regulations do not provide any
“meaningful standards apprising DSWA of how it must discharge its ‘investigate and
determine’ obligation.”119 Thus, the Authority reasons that the Department has failed to
promulgate regulations providing notice of the standard to which the Authority will be held.
The Authority also complains that the Department’s interpretation of Condition II.I.2 has
114
Del. Dep’t of Nat. Res., 2020 WL 495210, at *7.
115
Id.116
Id. at *7-8.
117
Id.
118
Id.
119
DSWA Reply Br. 25-26.
26
purportedly changed during the course of this litigation, from requiring that DSWA
“investigate and determine” the validity of transporter permits to holding the Authority
strictly liable for ensuring that all transporters had valid permits to haul solid waste.120
Under Delaware law, a statute or regulation can be void for vagueness in two different
ways. First, “[a] statute is void for vagueness if ‘it fails to give a person of ordinary
intelligence fair notice that his contemplated behavior is forbidden by the statute . . . .”121 To
prevail on a lack-of-notice vagueness claim, the claimant must show that the statute or rule
“either forbids or requires the doing of an act in terms so vague that men of common
intelligence must necessarily guess at its meaning and differ as to its application.”122 Second,
a statute or regulation can be void for vagueness if “it encourages arbitrary or erratic
enforcement.”123 For example, “where the legislature fails to provide minimal guidance [for
government law enforcement], a criminal statute may permit a ‘standardless sweep that
allows policeman, prosecutors, and juries to pursue their personal predilections.’”124
The Authority has brought an as-applied vagueness challenge to Condition II.I.2,
which requires a showing that the permit condition is unconstitutionally vague as applied to
120
See id. at 26.
121
Wien v. State, 882 A.2d 183, 187 (Del. 2005) (quoting State v. Baker, 720 A.2d 1139, 1147-48
(Del. 1998)).
122
Crissman v. Del. Harness Racing Comm’n, 791 A.2d 745, 747 (Del. 2002) (quoting Globe
Liquor Co. v. Four Roses Distillers Co., 281 A.2d 19, 22 (Del. 1971)).
123
Wein, 882 A.2d at 187 (quotation omitted).
124
Robinson v. State, 600 A.2d 356, 365 (Del. 1991) (alteration in original) (citations omitted)
(quoting Kolender v. Lawson, 461 U.S. 352, 357 (1983)).
27
the Authority’s conduct. When evaluating a vagueness claim, the pertinent question is
whether the rule being challenged is so vague that a reasonable person cannot determine
what conduct the rule prohibits.125 Thus, the question before the Court is whether
Condition II.I.2 is so vague that a reasonable person would be unable to recognize that the
Authority could be held strictly liable if a transporter hauled waste without a valid permit.
Condition II.I.2 is not unconstitutionally vague as applied to the Authority’s conduct.
As noted above, the Secretary found that the Authority violated the Ensure Condition, which
requires that all transporters hauling waste from the Pine Tree Station have valid permits.126
Given the numerous statutory and regulatory provisions designed to confirm that all links in
the solid waste disposal chain, including transporters, obtain permits from the Department,127
a reasonable person in the Authority’s position would understand what the Ensure Condition
plainly requires: that the Authority ensure “[a]ll vehicles transporting waste from the
Transfer Station shall have a valid solid waste transporters permit issued by the
[Department].”128
To find ambiguity in this clear language, the Authority would need to infer that the
Department would either tolerate the transportation of solid waste without a valid permit, or
125
See, e.g., Wein, 882 A.2d at 187.
126
A292-93.
127
See supra, Part III.A.1 (describing various regulations applicable to transfer stations); 7 Del.
Admin. C. §§ 1301-7, 1301-10 (collecting certain regulatory requirements applicable to transporters
and transfer stations, respectively).
128
A324.
28
that the Department chose not to require the Authority to determine whether the transporters
hauling waste from its own facility had valid permits. Neither inference is reasonable. The
first inference contradicts the Ensure Condition’s plain language. The second inference
assumes that the Department would not ask the party in the best position to monitor the Pine
Tree Station’s operations, the Authority, to determine whether the transporters invited to the
station had valid permits to transport solid waste. And both inferences are inconsistent with
the underlying statutory and regulatory scheme, which relies on a universal permitting
process to monitor and control solid waste disposal. Thus, the Court holds that the Ensure
Condition provides adequate notice that the Authority was strictly liable for ensuring that all
transporters hauling solid waste from the Pine Tree Station had valid transporter permits.
The Superior Court’s opinion focused heavily on the interplay between the Ensure
Condition and the Investigate and Determine Condition.129 This Court agrees with the
Superior Court’s assessment that Condition II.I.2 is poorly written and could cause a person
to infer that the Authority would only be liable where it had some reason to suspect that a
transporter’s permit was invalid. Nonetheless, given the broader statutory and regulatory
scheme applicable to solid waste, a reasonable person would understand that the Ensure
Condition holds the Authority strictly liable for ensuring that all transporters hauling waste
from the Pine Tree Station have valid permits.
129
See Del. Dep’t of Nat. Res., 2020 WL 495210, at *7-8.
29
Stated differently, the Court disagrees with the Superior Court’s holding that the
Ensure Condition is precatory, merely “mak[ing] a statement that appears consistent with the
regulatory scheme” without imposing any compliance requirement upon the Authority.130
Rather, the Ensure Condition describes one of the core standards of conduct to which an
operator of a transfer station, like the Authority, will be held: the duty to ensure that all
transporters hauling waste from the station have valid permits to transfer solid waste. This
requirement is integral to the broader statutory and regulatory scheme governing solid waste,
which focuses on requiring that all links in the waste disposal chain obtain permits.131
Furthermore, the Ensure Condition does not necessarily make the Investigate and
Determine Condition redundant. Rather, these conditions can be reasonably interpreted to
impose two separate duties that do not perfectly overlap. The Investigate and Determine
Condition requires that the Authority “investigate and determine the current validity of [a
transporter’s] permit if [the Authority] has reason to suspect a permit is not valid.”132 The
Authority could have a reason to suspect that a transporter did not have a valid permit even
if that suspicion was incorrect because the transporter had a valid permit.
Finally, the Court disagrees with the Authority’s suggestion that the Department has
shifted its position on what Condition II.I.2 requires and how the Authority failed to live up
130
Id. at *7.
131
See generally 7 Del. C. § 6003(a)(4), (b)(5).
132
A324.
30
to that standard of conduct.133 From the inception of this litigation, the Department has
insisted that the Authority violated the first sentence of Condition II.I.2 (i.e., the Ensure
Condition) by failing to ensure that all transporters have valid permits to transport solid
waste.134 This was true before the Board,135 before the Superior Court,136 and on appeal.137
Accordingly, the Court reverses the Superior Court’s holding that Condition II.I.2 is
void for vagueness. Although perhaps not a model of clarity, a reasonable person in the
Authority’s position would recognize that the Authority had a strict liability obligation to
ensure that all transporters had valid permits to transport solid waste.138
3. The Board must determine whether the record supports the
penalty that the Secretary assessed the Authority
For the reasons provided above, the Court holds that the Superior Court and the Board
erred by determining that Condition II.I.2 was unlawful. The Secretary had the authority to
impose Condition II.I.2, and the condition is not void for vagueness.
Further, the record before the Board establishes that the Authority violated
Condition II.I.2. There is no dispute that Contractors Hauling trucks transported solid waste
133
See DSWA Answering Br. 22-23.
134
See A292-93.
135
See A4.
136
B664 (arguing that the fact that Contractors Hauling transported waste from the Pine Tree Station
without valid permits was sufficient to “establish that DSWA violated Condition II.I.2.”).
137
See, e.g., DNREC Sur-Reply Br. 13.
138
In addition to the points discussed above, the Authority argues that the Investigate and Determine
Condition provides an unconstitutional delegation of enforcement authority. DSWA Opening
Br. 28-31. The Secretary found that the Authority violated the Ensure Condition, not the Investigate
and Determine Condition. A292-94. Accordingly, the Court does not address whether the
Investigate and Determine Condition unconstitutionally delegates enforcement authority.
31
from the Pine Tree Station without valid permits,139 violating the requirement under
Condition II.I.2 that “[a]ll vehicles transporting waste from the Transfer Station shall have a
valid solid waste transporters permit issued by the DNREC.”140
The record before the Board therefore supports the Secretary’s determination that the
Authority violated Condition II.I.2 of the Pine Tree Station Permit by “fail[ing] over the
course of several months to ensure that all vehicles that transfer waste from its [Pine Tree
Station] possess a valid Delaware solid waste transporter permit.”141 Given this evidence, it
would be a reversible error for the Board to overturn the Secretary’s determination that the
Authority was liable for violating the Ensure Condition of Condition II.I.2.
Unlike the penalties assessed against the G&F Group, the Board did not clearly rule
that the Authority should not be penalized even if it violated Condition II.I.2. Instead, the
Board seemed to rule that no penalty was appropriate because the Authority did not violate
its permits.142 Accordingly, the Court remands this appeal to the Superior Court. On remand,
the Superior Court shall remand this appeal to the Board to determine whether the record
supports the Secretary’s penalty assessment. The Board shall carry out this review consistent
with the standard of review and principles stated in Section III.B.1 of this opinion.
139
See A6-10.
140
A324.
141
A292.
142
See A10-11.
32
B. The Superior Court Correctly Held that the Authority Was Strictly
Liable for Violating the Reporting Conditions
The Reporting Conditions require that the Authority submit an annual report to the
Department detailing various aspects of operating the Pine Tree Station and Sandtown
Landfill, including a list of transporters that hauled waste between the facilities.143 The
Secretary determined that the Authority violated the Reporting Conditions by submitting an
incomplete list of transporters that failed to disclose that Contractors Hauling’s trucks had
transported waste from the Pine Tree Station to the Sandtown Landfill.144
Throughout this litigation, the Authority has insisted that it did not violate the
Reporting Conditions because it did not have knowledge, contemporaneous with submitting
the annual reports, that Contractors Hauling transported waste from the Pine Tree Station.145
The Board agreed with this argument, holding that the Authority did not violate the
Reporting Conditions because it did not know that Contractors Hauling transported waste.146
The Superior Court reversed the Board’s determination, holding that the Authority’s
knowledge was irrelevant because the Reporting Conditions are strict-liability conditions.147
In reaching that conclusion, the court also defined the standard of review that the Board
applies to the Secretary’s final decisions regarding enforcement.148
143
A328; A354.
144
A292-93.
145
See, e.g., A5.
146
A11-12.
147
Del. Dep’t of Nat. Res., 2020 WL 495210, at *8-9.
148
Id. at *8.
33
The Department and the Authority have both appealed the Superior Court’s decision.
The Department argues that the Superior Court articulated an incorrect standard of review149
but properly reversed the Board’s holding that the Authority did not violate the Reporting
Conditions.150 The Authority argues that the Superior Court articulated the correct standard
of review151 but erroneously reversed the Board’s holding that the Authority did not violate
the Reporting Conditions.152
1. Under 7 Del. C. § 6008, the Board reviews the Secretary’s Orders
to determine whether they are supported by the evidence, free of
legal error, and do not abuse discretion
Appellants challenged the Secretary’s Orders under 7 Del. C. § 6008(a), which allows
“[a]ny person whose interest is substantially affected by any action of the Secretary” to file
an administrative appeal with the Board. Relying on Tulou v. Raytheon Services Co.,153 the
Superior Court held that because “the initial adversarial hearing was before the Board, . . .
the Board was not required to provide ‘explicit deference to the Secretary’s expertise’” and
therefore “did not commit an error of law in reviewing the Secretary’s decision that DSWA
had violated [the Reporting Conditions].”154 The parties dispute the applicable standard of
review the Board must apply when analyzing the Secretary’s conclusions.
149
DNREC Answering Br. 17-21.
150
Id. at 54-58.
151
DSWA Reply Br. 5-9.
152
DSWA Opening Br. 32-36.
153
659 A.2d 796, 804-06 (Del. Super. Ct. 1995).
154
Del. Dep’t of Nat. Res., 2020 WL 495210, at *8.
34
The plain language of § 6008(b) puts this standard-of-review dispute to rest. Where
the appellant challenges “a final decision of the Secretary concerning . . . any permit or
enforcement action,” the statute provides that “[t]he burden of proof is upon the appellant to
show that the Secretary’s decision is not supported by the evidence on the record before the
Board.” 155 The record before the Board consists of the “entire record” that was before the
Secretary and any other “competent evidence” that the parties produce during the appeal.156
Thus, the Board reviews the Secretary’s enforcement decision to determine whether it is
supported “by the evidence before the Board.” If the appellant fails to carry this burden, the
Secretary’s final decision stands.
Appellants argue that the above analysis is wrong because § 6008(b) does not instruct
the Board to defer to the Secretary when considering appeals of enforcement decisions. This
argument ignores the statement in § 6008 that “[t]he burden of proof is on the appellant to
show that the Secretary’s decision is not supported by the evidence,” a clear instruction that
the Board must defer to the Secretary’s decision unless the record before the Board—which
can include evidence not before the Secretary—does not support that decision.157
The statute’s use of the term “burden of proof” does not alter this analysis. Providing
that the appellant bears the burden of proving that the evidence does not support the
Secretary’s decision is equivalent to providing that the Board reviews the Secretary’s
155
See 7 Del. C. § 6008(b).
156
Id.
157
Id.
35
decision to determine whether it is supported by the evidence. Under either framing, the
Board must not overturn the Secretary’s decision unless the evidence before the Board does
not support that decision.
The statutory language of § 6008(c) reinforces the Court’s analysis. Under § 6008(c),
“Regulations will be presumed valid, and the burden will be upon the appellant to show that
the regulations are arbitrary and capricious, or adopted without a reasonable basis in the
record.” Although referring to the appellant’s “burden,” this provision clearly articulates the
Board’s standard of review, providing that the Board reviews regulations to determine, inter
alia, whether those regulations are “arbitrary and capricious, or adopted without a reasonable
basis in the record.”158 This language mirrors the standard of review that Delaware courts
apply to challenges to regulations.159 Thus, § 6008(c) suggests that the Assembly used the
word “burden” to refer to the Board’s standard of review.
The language of § 6008(g) further strengthens this analysis. Under § 6008(g), parties
can agree to a stipulation circumventing the Board and proceeding directly to the Superior
Court. In such cases, the statute provides “[t]he standard of review for such an appeal shall
158
Id.
159
See 29 Del. C. § 10141(e) (“Upon review of regulatory action, the agency action shall be
presumed to be valid and the complaining party shall have the burden of proving either that the action
was taken in a substantially unlawful manner . . . or that the regulation, where required, was adopted
without a reasonable basis on the record or is otherwise unlawful.”); Del. Dep’t Nat. Res. & Envtl.
Control v. Sussex C’ty, 34 A.3d 1087, 1089 (Del. 2011) (relying on § 10141(e) for the standard of
review when assessing a challenge to the Department’s duly promulgated regulations).
36
be governed by subsections (b) and (c) of this section.”160 This language implies that
§ 6008(b) and (c) each contain a standard of review that the Superior Court can apply. The
only language in § 6008(b) that could function as a standard of review is the statement that
the “burden of proof is on the appellant to show that the Secretary’s decision is not supported
by the evidence.” Thus, § 6008(g) reinforces the Court’s conclusion that § 6008(b) instructs
the Board to apply a “supported by the evidence” standard of review to the Secretary’s
enforcement decisions.
Appellants and the court below rely on the Superior Court’s opinion in Tulou, which
opined that it would be an “absurd result” to apply the same standard of review to the
Secretary’s decision regardless of whether the Secretary or the Board held the initial
adversarial hearing.161 The Tulou opinion is distinguishable because it addresses whether
the Board should apply more deference where the Secretary holds the initial evidentiary
hearing.162 This does not squarely address whether the Board should apply less deference
when the Board holds the initial evidentiary hearing, as was the case here.
Nonetheless, to the extent Tulou holds the Board owes the Secretary less deference
when the Board conducts the initial evidentiary hearing, the Court disagrees and reverses
that holding. It may be logical to construct such a statutory scheme, but the statute the
legislature passed does not include any language drawing a distinction between one- and
160
See 7 Del. C. § 6008(g).
161
659 A.2d at 805.
162
See id.37
two-hearing appeals.163 Thus, the statute’s plain language does not support applying less
deference to the Secretary’s enforcement decisions where the Board holds the initial
evidentiary hearing.
2. The Authority is strictly liable for violating the Reporting
Conditions
The Reporting Conditions require that the Authority submit an annual report
providing “[a] list of transporters that hauled waste to and from the facility during the year
covered by the report.”164 The Secretary’s Order determined that the Authority violated the
Reporting Conditions by failing to disclose that Contractors Hauling transported waste from
the Pine Tree Station to the Sandtown Landfill.165 The Board reversed the Secretary’s
conclusion on the basis that the Authority “could not report that G&F was using vehicles
owned by an affiliate in its Annual Report because it had no knowledge until after the Report
was filed.”166 The Superior Court reversed the Board’s determination, holding that the
Authority’s lack of knowledge was irrelevant because the Reporting Conditions make the
Authority strictly liable for compiling a complete list of transporters.167 Thus, we must
determine whether the Reporting Conditions hold the Authority strictly liable for reporting
163
See § 6008(b).
164
A328; see A354.
165
A293.
166
A11.
167
Del. Dep’t of Nat. Res., 2020 WL 495210, at *8-9.
38
all of the transporters that hauled waste from the Pine Tree Station to the Sandtown Landfill
or whether the Reporting Conditions only require a list of known transporters.
The Reporting Conditions exist to ensure that the Authority generates, and provides
to the Department, pertinent information about its operations, including “[a] list of
commercial haulers that hauled waste to and from the facility during the year covered by the
report.”168 The conditions do not include any language describing the Authority’s state of
mind,169 and the absence of such language makes sense. Grafting a knowledge requirement
could create an incentive for the Authority to remain ignorant, undermining the Department’s
efforts to obtain information about the Authority’s operations. It would also reward the
Authority for failing to do what the Reporting Conditions require: generating information
about the transporters hauling waste to and from the Authority’s facilities. Thus, the Court
holds that the Reporting Conditions make the Authority strictly liable for providing the
Department with a complete list of transporters.
The Court also agrees with the Superior Court’s determination that Dover Products
Co. v. Olney is inapposite.170 The issue in Dover Products was whether the regulated party
caused the violation, not whether the regulated party could be held liable for a violation of
168
A328 (the Pine Tree Station Permit’s reporting condition). The Sandtown Landfill Permit’s
reporting requirement is nearly identical, requiring “[a] list of transporters that hauled waste to or
from the facility.” A354.
169
See A328; A354.
170
428 A.2d 18 (Del. 1981).
39
which it was unaware.171 In this case, there is no question that the Authority violated the
Reporting Conditions by submitting an incomplete list of solid waste transporters.172
Therefore, the Authority cannot establish a lack-of-causation defense, and the Dover
Products opinion is inapposite. Accordingly, the Court affirms the Superior Court’s holding
reversing the Board’s determination. The record before the Board supports the Secretary’s
determination that the Authority violated the Reporting Conditions.
Finally, the Authority raises two sub-issues that the Court must briefly address. First,
the Authority has repeatedly claimed that holding it liable for reporting information it did not
know penalizes the Authority for “failing to do what is factually impossible: to report
information not within DSWA’s knowledge.”173 This argument ignores the steps leading up
to submitting the report that could have—and perhaps should have—allowed the Authority
to learn that Contractors Hauling was transporting waste from the Pine Tree Station. It was
only factually impossible for the Authority to report that Contractors Hauling transported
waste because the Authority failed to take the steps necessary to comply with the Reporting
Conditions. Had the Authority properly looked for this information, it could have been
found. Accordingly, the Court rejects the Authority’s impossibility argument.
Second, the Authority suggests that the Board’s determination that the Authority did
not violate the Reporting Conditions is a factual conclusion to which the Superior Court, and
171
Id. at 18-19.
172
See A11.
173
DSWA Opening Br. 35.
40
this Court, must defer.174 The Court disagrees with the Authority’s analysis. No one disputes
whether the Authority possessed knowledge that Contractors Hauling transported waste
during the relevant reporting period. This is because the Authority’s knowledge was
irrelevant to the question of whether the Authority violated the strict liability Reporting
Conditions. The Board’s conclusion that knowledge was relevant was an error of law, not
an erroneous factual conclusion.
C. The Superior Court Erred by Reversing the Board’s Determination that
G&F Group Should Not Be Assessed Penalties
The Secretary determined that G&F violated 7 Del. Admin. C. § 1301-7.1.7 by
allowing Contractors Hauling, which did not have valid permits, to transport solid waste
from the Pine Tree Station and assessed a $14,800.00 penalty pursuant to 7 Del. C.
§ 6005(b)(3).175 Similarly, the Secretary determined that Contractors Hauling violated
7 Del. C. § 6003(a)(4) and 7 Del. Admin. C. § 1301-7.1.1 by transporting solid waste without
a valid permit.176
The Board affirmed the Secretary’s determinations that the G&F Group violated
applicable regulatory and statutory requirements.177 Nonetheless, the Board reversed the
Secretary’s assessment of penalties, finding that penalties were inappropriate because the
violations were the result of “understandable oversight” or an “innocent lack of
174
Id. at 33.
175
A305-06.
176
A314.
177
A12-13.
41
communication” and did not harm the environment.178 The Superior Court reversed the
Board, holding that because the G&F Group was strictly liable for violating the applicable
regulatory and statutory requirements, the Board’s conclusion that penalties were
inappropriate was “not well-considered.”179 Thus, the court “remand[ed] the matter of the
appropriate administrative penalties to be assessed against G&F and [Contractors Hauling]
to the Board.”180
The G&F Group argues that the Superior Court erred by conflating strict liability for
violations under 7 Del. C. § 6005(b) with the permissive administrative penalties under the
same provision.181 The Department answers that the Board erred by setting aside the
penalties that the Secretary assessed against the G&F Group.182 The Department’s core
argument is that the Board erred by failing to apply any deference to the Secretary’s
determinations regarding the appropriate penalties.183
Under § 6005, the Secretary has the discretion to impose penalties for violations after
considering various discretionary factors, including culpability:
In his or her discretion, the Secretary may impose an
administrative penalty of not more than $10,000 for each day of
violation . . . . Assessment of an administrative penalty shall be
determined by the nature, circumstances, extent and gravity of
the violation, or violations, ability of violator to pay, any prior
178
A13.
179
Del. Dep’t of Nat. Res., 2020 WL 495210, at *10.
180
Id.181
G&F Group Opening Br. 20-25.
182
DNREC Answering Br. 22-25.
183
Id. at 23-24.
42
history of such violations, the degree of culpability, economic
benefit or savings (if any) resulting from the violation and such
other matters as justice may require.184
This authorizing statute expressly instructs the Secretary—and, by extension, the
Board—to consider a host of factors when determining the appropriate penalty.185 The
Secretary’s Orders, however, did not provide any analysis of why the penalties assessed
against the G&F Group were appropriate in light of the discretionary factors listed in
§ 6005(b)(3).186 Rather, the orders appear to rely on the assertion that the penalties assessed
were appropriate because the G&F Group committed violations.187 Thus, the Secretary did
not provide the Board with a final decision to which it could defer regarding why the penalties
assessed were appropriate.
Faced with this bare record, the Board reviewed for the first time whether penalties
were appropriate in light of the discretionary factors that § 6005(b)(3) lists, including “the
degree of culpability” and the “nature, circumstances, extent and gravity of the violation.”
Applying these factors, the Board concluded that the record did not support a penalty because
the violations were not culpable and did not harm the environment.188
184
7 Del. C. § 6005(b)(3).
185
Id.
186
See A304-10 (the Secretary’s Order issued to G&F); A312-18 (the Secretary’s Order issued to
Contractors Hauling).
187
See A305-06 (failing to explain why the penalty assessed against G&F was appropriate); A314
(failing to explain why the penalty assessed against Contractors Hauling was appropriate).
188
A12-13.
43
Further, the statute allows the Board to overturn the Secretary’s assessment of
penalties and does not create a special standard for reviewing penalty assessments. Under
§ 6005(b)(3), a party assessed a violation can request a public hearing and appeal before the
Board, which “shall be conducted pursuant to §§ 6006-6009 of this title.” In addition to
establishing the “supported by the evidence” standard of review discussed above,189
§ 6008(b) provides that “[t]he Board may affirm, reverse or remand . . . any appeal of a case
decision of the Secretary.”190 Thus, the Board had clear statutory authority to reverse the
Secretary’s determinations, including the assessment of administrative penalties.
The Superior Court may have been correct in its observation that the Board’s decision
to overturn the penalties assessed against the G&F Group was “not well-considered.”191
Nonetheless, the question before the court was whether substantial evidence supported the
Board’s decision,192 not whether that decision was correct. For the reasons provided above,
the Court holds that substantial evidence supported the Board’s determination that the G&F
Group should not be penalized. Accordingly, the Court reverses the Superior Court’s
holding, which reversed the Board’s determination that the record did not support the
penalties the Secretary assessed against the G&F Group.
189
See supra, Part III.B.1.
190
(emphasis added).
191
Del. Dep’t of Nat. Res., 2020 WL 495210, at *10.
192
Coastal Barge Corp. v. Coastal Zone Indus. Control Bd., 492 A.2d 1242, 1244 (Del. 1985).
44
D. The Superior Court Properly Held that the Department’s Ability to
Recover Costs Was Not Before the Board
The Secretary’s Orders assessed costs against the Appellants pursuant to 7 Del. C.
§ 6005 for failing to ensure that all transporters had valid permits,193 providing the
Department with an incomplete list of transporters,194 subcontracting with a transporter that
did not have a valid permit,195 and transporting solid waste without a permit.196 Under
§ 6005(c)(1), the Secretary has the power to hold any person that violated a permit condition
or environmental regulation liable for “all expenses incurred by the Department,” including
the costs of abating and investigating the violation. To properly assess costs, the Secretary
must “submit a detailed billing of expenses to the liable person.”197
The Board held that the Department could not recover costs for the same reasons that
administrative penalties were inappropriate: the Authority did not violate its permits and the
G&F Group’s violations were not sufficiently culpable to justify the assessment of costs.198
The Superior Court reversed the Board’s determination, holding that “the Secretary’s cost
recovery decisions were not properly before the Board on appeal, and [therefore] the Board
did not have authority to review them.”199 The court reasoned that the Secretary’s ability to
recover costs was not before the Board because the Secretary had not submitted a “detailed
193
A291-93 (the Secretary’s Order addressing the Authority).
194
A292-93.
195
A305-06 (the Secretary’s Order addressing G&F).
196
A314 (the Secretary’s Order addressing Contractors Hauling).
197
Id.
198
A11-13.
199
Del. Dep’t of Nat. Res., 2020 WL 495210, at *5.
45
billing of expenses,” and the Department represented that it was “not formally seeking cost
recovery from [the Appellants].”200
The parties agree that the Department’s ability to recover costs was not properly
before the Board, and therefore the Superior Court properly overturned the Board’s decision
with respect to costs.201 Nonetheless, the parties advance various arguments regarding the
Secretary’s ability to assess costs that could be relevant if the Secretary ultimately decides to
submit a detailed bill and hold the Appellants liable for costs.202 The Court declines to issue
an advisory opinion regarding the parties’ arguments and, therefore, does not address the
other legal issues that the parties raise concerning the Secretary’s ability to assess costs.
IV. CONCLUSION
For the reasons provided above, the Court AFFIRMS-in-PART, REVERSES-in-
PART, and REMANDS-in-PART the Superior Court’s January 29, 2020 decision. On
remand, the Superior Court shall remand this appeal to the Board to determine whether the
record supports the penalty that the Department assessed against the Authority.
200
Id. (citation omitted).
201
DNREC Answering Br. 26 (“As an initial matter, the Department maintains that the Superior
Court correctly held that ‘the Secretary’s cost recovery decisions were not properly before the Board
on appeal, and the Board did not have authority to review them . . . .”); DSWA Reply Br. 15
(“DNREC asks this Court to rule on two issues: whether DNREC may make a second attempt at
cost recovery, and if so, whether the Board has jurisdiction to review that second cost assessment
attempt. These issues are unripe.”); G&F Group Reply Br. 18-19 (“DNREC waived its right to
recover costs at a later time by failing to brief or argue this point before the Superior Court.”).
202
See DNREC Answering Br. 26-30; DSWA Reply Br. 14-17; G&F Group Reply Br. 16-18.
46