Costco Act 250 Permit Amend JO (4-252) ( 2017 )

STATE OF VERMONT
SUPERIOR COURT ENVIRONMENTAL DIVISION
Environmental Division Unit Docket No. 157-12-16 Vtec
Costco Act 250 Permit Amend JO
Decision on NRB Motion for Summary Judgment
This is the latest of many appeals related to Costco Wholesale Corporation’s (“Costco”)
plans to expand an existing wholesale retail store in Colchester, Vermont. In this matter, R.L.
Vallee, Inc. (“Vallee”) appeals an Act 250 Jurisdictional Opinion issued by the District 4
Environmental Commission Coordinator (“District Coordinator”) which concludes that alterations
to Costco’s stormwater system and associated stormwater permit are not a material change to
the proposed project, and therefore do not require an Act 250 permit amendment.
The pending appeal is predated by a long procedural history. We recite the following
procedural summary to provide context for the current appeal and the legal issues raised by the
pending pre-trial motions.1
In 2007, Costco announced its intention to expand its existing members-only discount
retail store.2 The developed property is located between Hercules Drive and Lower Mountain
View Drive in the Town of Colchester, Vermont. The expansion plans call for Costco to expand
its existing retail facility, add motor vehicle gasoline sales facilities, reconfigure a portion of its
parking lots, especially near its proposed gasoline sales facilities, and realign and expand upon its
stormwater treatment system. The proposed expansion plans require several municipal, state
agency, and Act 250 permits, all of which Costco applied for and nearly all of which were appealed
1
There are four separate pre-trial motions pending in this appeal. This Decision addresses only one of the
pending motions: the request on behalf of the Vermont Natural Resources Board (“NRB”) that the Court enter
summary judgment on the sole legal issue posed by Vallee and affirm the jurisdictional Opinion issued by the District
Coordinator. Each of the three other motions is addressed by three separate Entry Orders, all of which are also
issued today.
2
This Costco property was originally permitted and developed in 1992.
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to this Court. In fact, a total of twelve appeals were initially presented to this Court concerning
Costco’s planned expansion.3 The Court coordinated the pending appeals for pre-trial discovery
and trial. In the course of trial preparations, the parties were able to dispose of seven of the
pending appeals through settlement. The remaining five appeals went to trial before this Court
in June and July of 2014.4
After trial, this Court issued a Merits Decision and Judgment Order that (a) affirmed the
reclassification of the Lot 5 wetland as a Class II wetland; (b) affirmed ANR’s approval of Costco’s
plans to encroach into a portion of the buffer surrounding the Lot 5 wetland that was already
encroached upon by the pre-existing development, conditioned upon Costco’s pledge to improve
upon its stormwater treatment system; and (c) affirmed the municipal and state land use
approvals (including Act 250 approval) for Costco’s proposed expansion plans. See In re Costco
Stormwater Discharge Permit, et. al., Nos. 75-6-12 Vtec, 104-8-12 Vtec, 132-10-13 Vtec, 41-4-13
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(1) In re Costco & Lake Champlain Trans Corp Wetlands Determination, No. 24-2-12 Vtec (concerning an
appeal from an ANR wetland conditional use determination);
(2) In re Costco Preliminary Plat Application, No. 13-1-12 Vtec (concerning an appeal from a Town of
Colchester Development Review Board (“DRB”) preliminary plat determination);
(3) In re Costco Stormwater Construction Permit, No. 181-12-11 Vtec (concerning an appeal from an ANR
stormwater permit determination);
(4) In re Costco Act 250 Land Use Permit, No. 143-7-09 Vtec (concerning an appeal from the District 4
Environmental Commission (“District Commission”) determination on a limited state land use application);
(5) In re Costco Final Plat Application, No. 113-6-09 Vtec (concerning an appeal from a DRB final plat
determination);
(6) In re Costco Stormwater Permit (No. 414-9015.1), No. 60-4-09 Vtec (concerning an appeal from an earlier
ANR stormwater permit determination);
(7) In re Costco PUD/Preliminary Plat Application (Appeal of R.L. Vallee), No. 21-2-09 Vtec (concerning an
appeal from a Colchester DRB PUD determination on an earlier municipal permit application);
(8) In re Costco Stormwater Discharge Permit Application (Permit No. 4114-9015.2), No. 75-6-12 Vtec
(concerning an appeal from an ANR approval of Costco’s planned improvements to its existing stormwater treatment
systems);
(9) In re Costco Final Plat & Site Plan Amendment Application, No. 104-8-12 Vtec (concerning an appeal
from the DRB’s approval of Costco’s revised final plat and site plan application);
(10) In re Wetlands Reclassification Petition, No. 132-10-13 Vtec (concerning Timberlake’s petition to
reclassify a wetland, identified at trial as the “Lot 5 wetland,” from Class III to Class II);
(11) In re Costco Act 250 Land Use Permit Amendment Application, No. 41-4-13 Vtec (concerning an appeal
from District Commission Act 250 Permit, Findings of Fact, and Conclusions of Law (LUP No. 4C0288-19C) on Costco’s
amended state land use application); and
(12) In re Costco Individual Wetlands Permit (Permit No. 2013-189), No. 59-5-14 Vtec (concerning an appeal
from ANR’s determination authorizing Costco’s planned encroachment into a portion of the Lot 5 wetland 50-foot
buffer).
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The five appeals that remained for the Court to address at trial are items 8 through 12, above.
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Vtec, and 59-5-14 Vtec (Vt. Super. Ct. Envtl. Div. Aug. 26, 2015) (Durkin, J.) (hereinafter referred
to as the “Merits Decision”). Those determinations were affirmed by the Vermont Supreme
Court. See In re Costco, 2016 VT 86 (August 5, 2016).
The Merits Decision addresses the stormwater appeal (Permit No. 4114-9015.2, docketed
in this Court at 75-6-12 Vtec) by finding that Costco’s planned improvements to its stormwater
treatment system called for stormwater to receive improved treatment by the time it flows into
several treatment ponds, including what were identified as Wet Pond #1 and Wet Pond #2.
Merits Decision at 22. The portion of Costco’s new stormwater treatment system that concerns
the currently pending appeal would collect stormwater from various sources and allow that
stormwater to go through several treatment systems before being further treated and collected
in Wet Pond #1. Id. The treated stormwater would then flow from Wet Pond #1 into an identified
water of the state: Sunnyside Brook. Id. At our 2014 trial, Costco proposed that some of the
treated stormwater would flow from Wet Pond #1 via an 8” underground pipe. Id. The
underground pipe would then discharge the treated stormwater through an outlet structure and
into Sunnyside Brook. Id. Both the outlet structure and a portion of the underground pipe would
be within fifty feet of the Lot 5 wetland, although neither would encroach into the wetland itself.
Id.These proposed structures did not violate the applicable wetland rules when the Lot 5
wetland was classified as an unprotected Class III wetland. However, when the Lot 5 wetland
was reclassified as a protected Class II wetland, such structures could only encroach into the
protected wetland buffer if ANR issued an encroachment permit.
To minimize the impacts that this underground pipe would have on the now-protected
wetland buffer, Costco proposed to install the pipe via directional underground drilling, rather
than surface excavation. Id. This construction proposal, together with the fact that Costco’s new
treatment system would now eliminate the flow of untreated stormwater directly into the now-
protected Lot 5 wetland, led to our conclusion that the proposed pipe and outlet structure would
have no more than minor adverse impacts upon the wetland, its buffer, and its important
functions and values. Id. at 34–35. In fact, we concluded that Costco’s treatment plans would
have a “beneficial” impact on the quality of water that flowed into the nearby streams. Id. at 32.
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Stormwater that collects in Wet Pond #1 would receive improved treatment and be
retained in that Pond for a longer period of time under the improved stormwater treatment plan.
Further, the regular flow of treated stormwater out of Wet Pond #1 would be restricted by a
smaller, 3” outlet from the Pond. Id. at 22.
The purpose of the additional 8” outlet pipe was to release treated stormwater once the
level of the water in the Pond is heightened by regular, significant rain storms, often classified as
“one-year storm events.” Id. at 20. The 8” pipe would be above the regular 3” pond outlet; the
treated stormwater, travelling through the 8” underground pipe by gravity, would then be
discharged into Sunnyside Brook. Id. at 22.
Costco’s proposed stormwater treatment system also called for a third outlet for treated
stormwater from Wet Pond #1, above the previously described 3” outlet and 8” pipe outlet. This
third outlet would allow for treated stormwater to be discharged when the level of treated water
in Wet Pond #1 rises even further, due to more significant “ten-year storm events.” In such
events, Wet Pond #1 would contain such stormwater for treatment, then allow for the flow of
treated stormwater via a channel and into a pre-existing, man-made drainage ditch, alongside
Mountain View Drive. That pre-existing drainage ditch is within the delineation of the reclassified
Class II wetland on Lot 5, but the ditch has banks above the wetland surface level which restrict
the treated stormwater from entering the wetland, including during significant storm events,
such that the treated stormwater flows through the drainage ditch. In fact, this ditch has
operated to transport stormwater into Sunnyside Brook for decades; there was no evidence
presented at our prior trials that the ditch allows the stormwater it has transported to enter into
the wetland.
Costco’s proposed stormwater treatment system included a variety of new components
to treat stormwater, including cleaned and deepened treatment ponds, dry swales, trench drains,
catch basins, multiple underground storage tanks that serve as oil and grit separators, and
floating separators called “snouts” and “oil hoods” that remove grit, floating items, and oil from
the stormwater. Id at 21. All of this treatment would be completed before the stormwater
reached the outlet pipes and man-made drainage ditch.
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Based on these factual findings, we affirmed ANR’s issuance of a stormwater permit in
Docket No. 75-6-12 Vtec. Id. at 51.
In its appeal of our Merits Decision to the Vermont Supreme Court, Vallee asserted that
it was improper for this Court to approve the encroachment of the outlet structure and
underground pipe into the Lot 5 wetland buffer, and that the Supreme Court must direct that
Costco’s Wetlands Permit No. 2013-189 (our Docket No. 59-5-14 Vtec) be remanded to ANR for
independent review. In re Costco, 2016 VT 86, ¶¶ 18–21. The Supreme Court rejected Vallee’s
arguments and upheld our determination that “a remand to ANR was unnecessary because the
evidence showed that the impacts from the pipe and outlet structure to the wetlands and
surrounding buffer would be minimal, and would not affect any parties not [already] before the
court.” In re Costco, 2016 VT 86, ¶ 24. Costco subsequently applied for an amendment to
Stormwater Permit No. 4114–9015.2.5
Under the amendment, Costco proposed to forego the 8” underground pipe and outlet
structure that encroached into the Lot 5 wetland buffer, and instead have all treated stormwater,
including that from one-year and ten-year storm events, flow into the pre-existing man-made
drainage ditch along Mountain View Drive and into Sunnyside Brook. Because of the
improvements to Costco’s stormwater treatment systems previously approved by ANR, this
Court, and the Vermont Supreme Court, the pre-existing man-made drainage ditch would now
transport stormwater that has received improved treatment, such that it complies with the
current Vermont stormwater treatment standards. In re Costco, 2016 VT 86, ¶ 43–45. Since the
previous design called for the lower flow, one-year storm discharge pipe to be below the
elevation of the higher flow, ten-year storm discharge, Costco’s revised plan calls for a pump, to
be located within Wet Pond #1, to pump the low flow discharges up to the higher discharge point,
where all treated stormwater, from both one-year and ten-year storm events, would be
transported by the man-made drainage ditch alongside Mountain View Drive, to Sunnyside
Brook. In 2015, Costco applied for an administrative amendment to Permit No. 4114-9015.2 that
5
There is some suggestion in the affidavits presented in the current appeal that ANR rejected Costco’s
subsequent stormwater permit amendment application concerning the construction of the outlet structure within
the buffer for the Lot 5 wetland. Whatever contributed to Costco’s decision to amend its outlet structure plans does
not appear to be relevant to our consideration of the pending motions.
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would authorize these changes. When ANR issued its administrative amendment, labeled
Stormwater Permit No. 4114-9015.2A, Vallee appealed that determination to this Court; that
appeal became the thirteenth appeal of a determination associated with the proposed Costco
expansion plans and was assigned Docket No. 84-7-15 Vtec.
Once the parties completed the limited discovery necessary to prepare for trial, and the
Court addressed the parties’ pre-trial motions, the matter was set for trial on July 26, 2016. When
all parties were afforded an opportunity to present all relevant and admissible evidence,
including expert reports and testimony, the Court took a brief recess, conducted its research and
deliberations, and reconvened the merits hearing to announce its determinations on the record.
Specifically, the Court determined that the credible evidence presented supported an affirmation
of ANR’s determinations, which included the following:
(1) The proposed project changes do not reduce the quality of the stormwater
discharge;
(2) The proposed project changes do not substantially increase the quantity of the
stormwater discharge or change the stormwater discharge location so as to
adversely affect instream hydrology or geomorphology; and
(3) There is not a significant change in the type or nature of proposed treatment.
See State Stormwater Discharge Permit 4114-9015.2 amendment determination, dated June 21,
2015 and admitted as Vallee Exhibit 8 at the July 26, 2016 trial in Docket No. 84-7-15 Vtec.
This Court thereafter issued a Judgment Order to accompany its on-the-record
determinations. See Costco Stormwater Permit Amendment Appeal, No. 84-7-15 Vtec (Vt. Super.
Ct. Envtl. Div. Jul. 29, 2016) (Durkin, J.). No party to those proceedings appealed that Judgment
Order. We therefore regard the ANR and Court determinations made in that Docket as final and
binding upon the parties.
In the current appeal, Vallee asks whether Costco should be required to apply for and
obtain an amendment to its Act 250 Permit No. 4C0288–19C “in order [to] modify the stormwater
system previously approved by the District Commission,” this Court and the Vermont Supreme
Court. See Appellant Vallee’s Statement of Questions, filed December 30, 2016, at 1. Appellant
appears to assert that the proposed changes to the stormwater system and permit are somehow
material enough to change the project’s impact under the applicable Act 250 criteria, even in
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light of this Court’s previous affirmation of the ANR determination that the proposed revisions
to the low-flow outlet discharge of treated stormwater: (1) will not reduce the quality of the
treated stormwater; (2) will not substantially increase the quantity of treated stormwater
discharge nor adversely affect instream hydrology or geomorphology of the receiving stream;
and (3) will not significantly change the type or nature of proposed treatment.
Thankfully, when called upon to address an application to amend an Act 250 permit, or
to address whether an amendment is necessary, we are not required to again review all Act 250
criteria which may have been impacted by the original project. Rather, we are directed to
determine whether the changes proposed to a project constitute a “material change”; to the
extent that they do, a project developer is required to apply for and receive an amendment to its
Act 250 permit, pursuant to Act 250 Rule 34(A).
Our Supreme Court has recently provided the following guidance on how to determine
whether a material change is proposed for an already permitted project:
The analysis for determining if there is a material change is similar to that used for
a substantial change--there must be a cognizable change that will have a
significant impact on a finding or condition or may result in significant adverse
impact on any of the [applicable] Act 250 criteria. See NRB Rule 2(C)(6) (defining
material change as "any change to a permitted development or subdivision which
has a significant impact on any finding, conclusion, term or condition of the
project’s permit or which may result in a significant adverse impact with respect
to any of the criteria . . .”).
In re Request for Jurisdictional Op. re: Changes in Physical Structures & Use at Burlington Int’l
Airport for F-35A, 2015 VT 41, ¶ 25, 198 Vt. 510 (quoting what is now codified as Act 250 Rule
2(C)(6)).
Our prior determinations in the last stormwater permit amendment application appeal
appear to guide our determinations here, since we have already concluded that the proposed
change in how treated stormwater outflows are transported to Sunnyside Brook will not change
the quality or quantity of stormwater discharged and will not have any significant effect on
discharge rate. See Costco Stormwater Permit Amendment Appeal, No. 84-7-15 Vtec at 2 (Jul.
29, 2016). We further held that having one discharge point instead of two, and using a pump
instead of a gravity system, would have no negative impact on relevant water quality criteria, but
may possibly have a beneficial effect. Id. We further emphasized that all of the proposed
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changes are to the post-treatment part of the system, and that there was no proposed change
to the approved treatment methods. Id.However, in an abundance of caution, we continue our analysis of the additional issues
Appellant raises in this appeal. In particular, we note that while the legal analysis in both appeals
is similar, and may appear identical, we are called upon in this current appeal to determine
whether the proposed changes “will have a significant impact on a finding or condition or may
result in significant adverse impact on any of the [applicable] Act 250 criteria.” Burlington
Airport, 2015 VT 41, ¶ 25.
Appellant appears to focus its allegations upon possible impacts to the Lot 5 wetland. In
particular, Appellant implies that the proposed changes will cause approximately one million
gallons of additional stormwater to flow into the Lot 5 wetland, thereby causing severe adverse
impacts to that wetland and causing it to become a receiving water of the stormwater. If true,
this latter assertion has importance in our analysis because the applicable wetland and
stormwater rules could require treated stormwater to be retained in Wet Pond #1 for a longer
period of time.
Appellant presents these assertions though expert witnesses that have been previously
employed by Appellant in some of the thirteen prior appeals concerning the Costco expansion
plans. Appellant offers affidavits from its experts that suggest that “over one million gallons of
runoff annually (precipitation for every rain event) will be discharged into the wetlands ditch.”
Affidavit of Andres Torizzo dated June 14, 2017, filed in support of Appellant’s summary
judgment motion (emphasis added).6 Appellant also filed a second affidavit from a wetlands
expert, Dori Barton, who states the general proposition that such a volume of water into a
wetland can have “impacts” and that the “impact of stormwater discharged to the Wetland were
not considered” by Costco, the District Commission, or this Court. Affidavit of Dori Barton, dated
June 14, 2017, at 2.
These expert representations remind the Court of the often-repeated adage that courts
“should not be buffaloed by unreasoned expert opinions.” Mid-State Fertilizer v. Exchange Nat’l
6
Mr. Torizzo was presented as an expert “stormwater sampling, analysis, modeling, and design projects.”
Id. at 1. He does not present himself as an expert in wetlands and possible impacts upon wetland. We understand
that that is why Appellant supplemented his affidavit with that of Ms. Barton.
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Bank, 877 F.2d 1333, 1340 (7th Cir. 1989) (citing Paul Meier, Damned Liars and Expert Witnesses,
81 J. Am. Statistical Ass’n 269 (1986)).
Expert testimony can provide substantial guidance to a trial court, but only when the
expert provides an explanation of the factual foundation for the opinions that they offer. When
the factual foundation is absent, the opinion testimony becomes untenable. In fact, our Supreme
Court, and courts from other jurisdictions have held that “mere conclusory allegations without
facts to support them” are insufficient to survive review during a summary judgment analysis.
White v. Quechee Lakes Landowners’ Ass’n, 170 Vt. 25, 28 (1989) (quoting Central Hudson G. &
E. Corp. v. Hatzel & Beuhler, Inc., 202 N.Y.S.2d 818, 822 (N.Y. Sup. Ct. 1956), aff’d, 11 A.D.2d 707(1960)).
When an “expert presents ‘nothing but conclusions [but] no facts, no hint of an inferential
process, no discussion of hypotheses considered and rejected,’ such testimony will be insufficient
to defeat a motion for summary judgment.” Cobb v. Gibson, No. 2001-338, slip op. at 2 (Vt. June
1, 2002) (unpub. mem.), available at https://www.vermontjudiciary.org/sites/default/files
/documents/eo01338.pdf (quoting in part Morais v. Yee, 162 Vt. 366, 371–2 (1994)).
The experts presented by Vallee here present opinion testimony that appears
informative, but that quality evaporates when we view the actual facts presented, or rather the
absence of facts presented. Without a factual foundation presented, their opinion testimony
provides no relevance to the legal issues we must address. Specifically, neither Appellant nor its
experts represent that stormwater, treated or untreated, will enter the identified wetland.7
Rather, as Mr. Torizzo admits, the treated stormwater flows into the ditch near and within the
wetland boundaries. He makes no representation that the treated stormwater will or is likely to
flow into the wetland; he merely offers the opinion of adverse impacts if stormwater was to flow
into the wetland.
7
Vallee notes that during the 2016 stormwater permit appeal trial, Janna Calvi, and ANR expert, admitted
that some of the treated stormwater might “infiltrate” into the wetland. We recall and understood this testimony
to refer to the leaching process, whereby water at the surface will leach through soils and become groundwater.
We do not regard this testimony, nor Vallee’s reference to it in this appeal, to contradict Costco’s representations
concerning the ditch. In any event, we concluded in the trial of the Costco Stormwater Permit Amendment Appeal,
No. 84-7-15 Vtec, that Sunnyside Brook, and not the Lot 5 wetland, was the “state waters” that received the treated
stormwater from the Costco site.
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Appellant offers no credible factual representation to contest Costco’s representations
that the man-made drainage ditch has sufficient depth to segregate from the wetland the treated
stormwater it carries to Sunnyside Brook. In fact, Costco’s expert represents that the peak flow
rate, flow depth, and velocity within the drainage ditch after the improved stormwater treatment
system is constructed will have similar rates to the current flows, depth, and velocity in that same
ditch before these improvements are constructed. Costco’s experts calculate that this drainage
ditch is of sufficient depth and isolation from the wetland to provide sufficient transport of
treated stormwater from an extreme, 100-year storm event, without allowing the water to
overcome the banks of the ditch and invade the wetland.
Appellant offers no facts to contradict these factual representations presented by
Costco’s experts. We must therefore regard the Costco representations as true, for the purpose
of our summary judgment analysis. V.R.C.P. 56(e)(2) and (3); see also Gallipo v. City of Rutland,
2005 VT 83, ¶ 33, 178 Vt. 244.
Lastly, we address Appellant’s assertion that there are material and significant impacts,
not previously considered by the Court, in regard to the impacts upon wetlands. This argument
is intertwined with the arguments we have just addressed and rejected as not having a factual
foundation presented by Appellants. The additional assertion by Appellant is that, assuming that
over one million gallons of additional treated stormwater is being deposited annually into the
wetlands, we should now regard the wetlands, and not Sunnyside Brook, as the “receiving
waters” for purposes of the stormwater and wetlands regulations. We need not commit much
additional analysis to this assertion since, as we have previously stated, Appellants have not
presented any factual representation as to how the treated stormwater will overflow the pre-
existing banks of the man-made ditch, a ditch that has isolated and carried stormwater for
decades.
With all due respect to the sincere efforts Appellant may have for highlighting the impacts
that the Costco expansion may have upon it and others, it truly appears that Appellant may be
taking advantage of the confusion that has arisen because of where this man-made ditch is
located. Back when the Lot 5 wetland was regarded as an unprotected Class III wetland, not
much attention was paid to the ditch that ran through it. Since our 2014 trial, we must respect
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the protected status of the Class II Lot 5 wetland. However, both at our 2016 trial, and in the
uncontested facts presented in the pending appeal by Costco’s expert affidavit, we are presented
with undisputed representations that the pre-existing man-made ditch (1) segregates the treated
stormwater from the wetland that the ditch transverses; and (2) has sufficient capacity to
segregate treated stormwater, even when Wet Pond #1 receives stormwater from an extreme,
100-year storm event.
For all these reasons, we conclude that the undisputed material facts show that Costco’s
planned revisions to how treated stormwater will be transmitted from its site to the receiving
waters of Sunnyside Brook does not evidence any material change that would cause a significant
impact upon a finding or condition contained in Costco’s existing Act 250 Permit No. 4C0288–
19C, nor may the proposed outflow changes result in a significant adverse impact on any of the
Act 250 criteria that are applicable to this project. We therefore GRANT summary judgment on
the NRB’s motion on Appellants sole legal Question and do hereby AFFIRM the November 4,
2016, Jurisdictional Opinion No. 4-252 (Corrected) issued by the District 4 Coordinator,
concluding that Costco should not be required to apply for and receive an amendment to its Act
250 Permit.
These determinations complete the current proceedings in this appeal before this Court.
Separate Entry Orders are issued contemporaneously with this Decision to address the three
remaining motions. A Judgment Order accompanies this Decision.
Electronically signed on December 8, 2017 at Newfane, Vermont, pursuant to V.R.E.F. 7(d).
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Thomas S. Durkin, Superior Judge
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