Baker

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
IN AND FOR SUSSEX COUNTY
W. WAYNE BAKER, : C.A. No. S13C-08-026 THG
CHRISTIAN HUDSON, JAMIN HUDSON,
JOHN F. CLARK, HOLLYVILLE FARMS, LLC, : (consol. with C.A. No. S14C-11-018)
and ROUTE 24 CJ, LLC,
:
Plaintiffs,
:
v.
:
DELAWARE DEPARTMENT OF NATURAL
RESOURCES AND ENVIRONMENTAL :
CONTROL, an agency of the State, and
DAVID S. SMALL, in his capacity as Secretary :
of the Department of Natural Resources and
Environmental Control, :
Defendants. :
AND
W. WAYNE BAKER, CHRISTIAN HUDSON, :
JOHN F. CLARK, HOLLYVILLE FARMS, LLC,
and ROUTE 24 CJ, LLC, :
Plaintiffs, :
v. :
DELAWARE DEPARTMENT OF NATURAL :
RESOURCES AND ENVIRONMENTAL
CONTROL, an agency of the State, and :
DAVID S. SMALL, in his capacity as Secretary
of the Department of Natural Resources and :
Environmental Control,
:
Defendants.
:
MEMORANDUM DECISION ON CROSS-MOTIONS FOR SUMMARY JUDGMENT
JUDGMENT GRANTED IN FAVOR OF PLAINTIFFS
DATE SUBMITTED: July 15, 2015
DATE DECIDED: October 7, 2015
Richard L. Abbott, Esquire, 424 Yorklyn Road, Suite 240, Hockessin, DE 19707, attorney for
Plaintiffs
Ralph K. Durstein, III, Esquire, Department of Justice, 820 N. French Street, Wilmington, DE
19801, attorney for Defendants
Graves, J.
This matter involves the lawfulness of Sediment and Stormwater regulations which
Delaware’s Department of Natural Resources and Environmental Control (“DNREC”) adopted
pursuant to the mandates of the Erosion and Sedimentation (“E&S”) Control Act.1 This is my
decision deeming the regulations unlawful.
PROCEDURAL AND FACTUAL HISTORY
In Chapter 40 of 7 Del. C., the Legislature charged DNREC with protecting Delaware’s water
and land resources from the adverse consequences of erosion and sedimentation pollution resulting
from land development. DNREC developed regulations in the 1990s as a result of this mandate. Over
the years, DNREC and those engaged in land-disturbing activities employed DNREC-developed
technical documents as well as a DNREC-developed handbook in order to comply with the erosion
and sedimentation (“E&S”) regulations.
The process of completely revamping the E&S regulations commenced in April 2005. Public
hearings were held and public comments were made. The relationship between the revised
regulations and the supporting technical documents (hereinafter, referenced as the “Technical
Documents”)2 was covered during the two public hearings and in most of the public presentations
made. Some participants argued during the revamping process that the Technical Documents should
1
7 Del. C., ch. 40.
2
Defendants reference these materials in the singular. However, due to the number of
pages and the expansive subject matter of the material, the Court references the material in the
plural. The Technical Documents include what was formerly known as “the Handbook”. The
Handbook, formerly a stand-alone document, now has been integrated into the Technical
Documents as Article 3.06.1.
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be formally adopted under the Administrative Procedures Act (“APA”).3 The DNREC Secretary4
rejected that argument.
The first set of regulations subject to this lawsuit are those adopted in 2013 (“2013
Regulations”). The Secretary’s July 18, 2013, Order No. 2013-WS-0026, which adopts the 2013
Regulations, addresses the Technical Documents specifically as follows:
... [S]ome of the interested persons requested to meet informally to review the
technical support and the Department met to try and resolve the differences and to
produce an improved proposed regulation. ***
The 2013 proposed regulation improves the stormwater and sediment plan review
process and updates the regulation to reflect current best management practices
(BMP), as recognized by experts in the environmental community and the regulated
industry of land developers and engineers. In addition, [the Division of Watershed
Stewardship (“DWS”)] prepared a Technical Guidance Document (TGD) to support
and explain the regulation. Indeed, the TGD became an issue insofar as it was
challenged as not being promulgated as a regulation. The Department does not intend
to use the TGD as a regulation that has the force and effect of law and which may be
enforced as such. Instead, the TGD is an interpretive or advisory document that the
Department will use to administer the regulation, and which will provide greater
detail and explanation for the public. The TGD considers various types of stormwater
and sediment plans that may be employed under the regulation, and shows how
applicants can obtain approval through the use of an offset and other solutions to
different and difficult stormwater and sediment management scenarios.
The TGD was included in the record to interpret and support the highly technical
aspects of the proposed regulation. The TGD describes how the Department will
administer the regulation to specific types of stormwater and sediment plans. The
Department, in an effort to alleviate some concerns with the TGD, provided a public
notice with the opportunity for public comment on the TGD, but this public comment
procedure was not required under Delaware’s Administrative Procedures Act (APA),
29 Del.C. §10101 et seq. or any other law. The Department included a public
comment procedure for the TGD in the regulation to make this additive procedure
binding on the Department so that the public will have the opportunity to comment
formally on any changes to the TGD. The public comments received on the TGD;
3
29 Del. C., ch. 101.
4
The Secretary at this time was Colin O’Mara. The current Secretary is David Small.
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however, are not in this record and the TGD is not the subject of this Order, which
is to approve a proposed regulation that has satisfied the formal requirement of the
APA. The Department obtained a letter opinion from a Deputy Attorney General that
supports the reliance on the TGD to support the regulation without requiring formal
APA regulatory development treatment of the TGD.
Despite the Secretary’s statement that the Technical Documents were merely advisory, the
2013 Regulations included mandatory language requiring compliance with the Technical
Documents.5
On August 23, 2013, plaintiffs filed the complaint in Baker, et al. v. Department of Natural
Resources and Environmental Control, et al., C.A. No. S13C-08-026 THG.6 Plaintiffs contend that
the 2013 Regulations are invalid because they require compliance with the Technical Documents
which were not adopted pursuant to the APA; because the 2013 Regulations instruct that
amendments to the Technical Documents shall be adopted in compliance with 7 Del. C. § 6004,
rather than in compliance with the APA; and because the 2013 Regulations, when reviewed on their
own and without reference to the Technical Documents, fail to establish criteria and standards as
5
Attached hereto as Exhibit A is a copy of the revised regulations which shows the
changes from the 2013 Regulations. Thus, it is possible to determine what both sets of
regulations provided by reviewing Exhibit A. The following provisions of the 2013 Regulations
contained mandatory language requiring compliance with the Technical Documents: Sections
1.5.3; 1.7.3; 1.14 (appearing in Exhibit A as 1.15); 3.11.2; 4.1; 4.5.2; 4.5.3; 5.1; and 6.1.2.
6
Plaintiffs invoked 29 Del. C. § 10141 as authority for a review. That statute provides in
pertinent part as follows:
(a) Any person aggrieved by and claiming the unlawfulness of any regulation
may bring an action in the Court for declaratory relief.
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required by the E&S Control Act.7 Plaintiffs request the Court enter a declaratory judgment
invalidating the 2013 Regulations in their entirety. Plaintiffs also seek the issuance of a writ of
mandamus pursuant to 29 Del. C. § 101438 commanding defendants to adopt criteria and standards
as a part of the E&S regulations. However, plaintiffs are not entitled to the issuance of a writ of
mandamus because DNREC is not a named agency subject to 29 Del. C. § 10143.9 Finally, plaintiffs
seek an award of attorneys’ fees, litigation costs, and court costs.
In connection with cross-motions for summary judgment, the Court sent a letter dated July
7, 2014, wherein it sought further input from the parties. In that letter, the Court referenced the
mandatory language contained in the 2013 Regulations regarding compliance with the Technical
Documents.
DNREC took the position that the 2013 Regulations were “ambiguous” and needed
clarification; thus, it “fixed” the 2013 Regulations to remove the mandatory language. I refer to these
regulations “fixing” the 2013 Regulations as the “2014 Regulations”. The Secretary adopted the
2014 Regulations by Order No. 2014-WS-0022, which was issued on October 15, 2014,10 and made
7
Pursuant to the provisions of 7 Del. C. § 4006( c)(7), DNREC is obligated to formally
adopt regulations, and these regulations may include “[s]pecific design criteria and minimum
standards and specifications” regarding erosion and sediment control (“criteria and standards”).
8
29 Del. C. § 10143 provides:
Any person aggrieved by the failure of an agency to take action required of it, by
law, may bring an action in the Court for an appropriate writ of mandamus.
9
29 Del. C. § 10161(b) (“All agencies which are not listed in subsection (a) of this section
shall only be subject to subchapters I and II of this chapter and §§ 10141, 10144 and 10145 of
this title.”)
10
The order actually is dated 2015, but that cannot be correct.
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the Regulations effective November 11, 2014.11 This Order provides in pertinent part as follows:
Background
The Department’s Division of Watershed Stewardship (Division), through experts
in its Sediment and Stormwater Program, prepared a proposed amendment to
Regulation 5101, which the Department had published in the September 1, 2014
issue of the Delaware Register of Regulations. Legal notices also were published in
the News Journal and Delaware State News. The notices also provided the
opportunity for public comment, including at a September 25, 2014 public hearing.
The time period for written public comment ended on October 10, 2014. In an
October 13, 2014, Hearing Officer’s Report, the Department’s presiding hearing
officer reviewed the record and recommended approval of the proposed amendment.
Discussion
The Department proposed amendment to Regulation 5101 is made to clarify and
remove any ambiguity that may be in Regulation 5101 concerning the role of the
Technical Documents (TD). As stated by the Department’s counsel, the amendment
is curative. Indeed, the Department’s counsel currently is defending Regulation 5101
and Secretary’s Order No. 2013-WS-0026 issued July 18, 2013 (2013 Order), which
approved the currently effective Regulation 5101 in Superior Court in Baker v.
DNREC, CA No. S13C-08-026 THG (Appeal).
This appeal of the 2013 Order is based upon a misunderstanding of the role of TD.
This amendment seeks to clarify and cure any misunderstanding of the role of the
TD. The amendments approved by this Order are curative in that Regulation 5101,
as approved by the 2013 Order, will not change nor will the Department’s
implementation of Regulation 5101. Instead, the language changes are to clarify and
remove any ambiguity that may exist in Regulation 5101 about the role of the TD in
the administration of Regulation 5101.
This Order relies on the October 20, 2014 letter from the Department’s counsel in
the Appeal because the change is prompted by the Appeal, which the Department
believes may have been filed based upon a misunderstanding of Regulation 5101 or
admittedly less than clear language. It is the language that refers to the TD that this
amendment clarifies and/or corrects so as to remove any misunderstanding or
confusion. The Department of Justice letter includes an analysis of the procedural
issues raised on appeal and in the public comments, and concludes that the
amendment is curative and could have been promulgated as exceptions to the
Administrative Procedures Act. 29 Del. C. 10101 et seq. (APA). Instead, the
Department promulgated this amendment under the APA’s full public hearing
process as opposed to the abbreviated process allowed for curative changes such as
proposed by this amendment.
The changes reinforce the Department’s stated intent that the TD was not to be a
11
Again, the order incorrectly lists the year as 2015.
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regulation. Instead, the TD was provided and cited in Regulation 5101 in order to
provide the regulated community with assistance in understanding and implementing
Regulation 5101, particularly in the new provision whereby Sediment & Stormwater
Plans may be approved using methods not contained in the TD if they provide
“functional equivalency” to achieve the necessary environmental protection from
urban stormwater runoff, which also poses a significant risk to public health and
safety. Regulation 5101, as approved in the 2013 Order, was a comprehensive change
to the sediment and stormwater regulation in Delaware after years of meetings and
discussions with all interested participants.
The Appeal seeks to reverse the 2013 Order and its approval of Regulation 5101.
The Appeal is based upon the alleged failure to include the TD as part of the
Regulation’s APA procedure. Instead, the 2013 Order discussed the issue, but
Regulation 5101 included language that could cause ambiguity in the role of the TD.
This amendment is promulgated as a curative change in order to resolve any
uncertainty that may exist.
The letter from the Department’s counsel in the litigation before Superior Court in
Baker v. DNREC, CA No. S13C-08-026 THG is the Department’s legal position that
the proposed amendment seeks to implement in language changes to Regulation 5101
to remove any ambiguity and satisfy the appeal, if possible, through such changes.
In conclusion, the following findings and conclusions are entered:
1. The Department, acting through this Order of the Secretary, adopts as a final
regulation the amendment to Regulation 5101 as set forth in the Appendix A;
2. The approved amendment to Regulation 5101 is based upon the version
published in the September 1, 2014 Delaware Register of Regulations; ....
Plaintiffs reject defendants’ position that the revised regulations merely were amended,
arguing the “fixed” regulations constitute completely new regulations which should have been
adopted pursuant to more vigorous provisions of the APA. Furthermore, plaintiffs do not agree that
the removal of the mandatory language cured the 2013 Regulations’ ills. Plaintiffs maintain that both
the 2013 and 2014 Regulations require compliance with the Technical Documents, and both
Regulations are unlawful because the Technical Documents were not subject to the rigors of the
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APA.12 Consequently, plaintiffs filed a second suit13 seeking a declaratory judgment regarding the
“fixed” regulations as well as requesting the Court consider the effectiveness of the original
regulations in light of 29 Del. C. § 605.14
This Court thereafter consolidated the cases.15
DISCUSSION
The Court must address two issues. The first is whether plaintiffs have standing to pursue
12
Again, as noted earlier, attached hereto as Exhibit A is a copy of the revised regulations
which shows the content of both sets of regulations.
13
Baker, et al. v. Delaware Department of Natural Resources and Environmental
Control, et al., C.A. No. S14C-11-018 (THG).
14
In 29 Del. C. § 605, it is provided:
(a) No rule or regulation promulgated by any state agency shall become effective
until the Attorney General has reviewed the rule or regulation and has informed
the issuing agency in writing as to the potential of the rule or regulation to result
in a taking of private property.
(b) Judicial review of actions taken pursuant to this section shall be limited to
whether the Attorney General has reviewed the rule or regulation and has
informed the issuing agency in writing.
( c) The term “taking of private property” as used under this section shall mean
an activity wherein private property is taken such that compensation to the owner
of that property is required by the Fifth and Fourteenth Amendments to the
Constitution of the United States or any other similar or applicable law of this
State.
(d) Nothing in this section shall affect any otherwise available judicial review of
agency action. 68 Del. Laws, c. 191, sec. 1.
Section 2 of 68 Del. Laws, c. 191 provides:
This Act shall apply to all Rules and Regulations promulgated after the effective
date of the Act, excluding those Rules and Regulations which do not purport to
restrict the uses to which property could be put. [Emphasis added.].
15
Baker, et al. v. Delaware Department of Natural Resources and Environmental Control,
et al., C.A. No. S13C-08-026 (THG) (Jan. 13, 2015) (ORDER).
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these suits. The second is whether the 2013 Regulations and/or the 2014 Regulations are valid.
1) Plaintiffs’ Standing
This Court ruled during an office conference that all plaintiffs, except for Jack Peterman,
have standing to pursue this action.16 Contained herein is the analysis leading to that conclusion.
The original plaintiffs regarding the 2013 Regulations were W. Wayne Baker, Jack Peterman,
Christian Hudson, Jamin Hudson, John F. Clark, Hollyville Farms, LLC, and Route 24 CJ, LLC.
Since the start of this litigation, defendants have objected to these plaintiffs’ standing to bring this
action. The Court previously refused to dismiss the action on this ground without giving plaintiffs
the opportunity to develop the standing issue.17 The burden of establishing standing is on plaintiffs.18
Christian Hudson, W. Wayne Baker, and John F. Clark submitted affidavits in connection
with Plaintiffs’ Answering Brief in Opposition to Defendants’ Motion for Summary Judgment and
Reply Brief in Support of their Motion for Summary Judgment. I review the pertinent portions of
those affidavits.
The affidavit of Christian Hudson provides as follows:
3.MybrotherJaminandIownRoute24CJ,LLC,whichownsapproximately7acresofcommerciallyzonedlandthatissubdividedinto5parcelsfor
commercial development purposes. [This land is in Sussex County, Delaware.] We are actively
marketing the parcels for development, including build-to-suit construction for a buyer or lessee.
4. I have previously developed parcels of land in Sussex County through various
limited liability companies. Construction has included residential and commercial
projects. I will be conducting similar construction in the future.
5. Hudson Family Construction, LLC are residential construction companies owned
16
Order dated January 13, 2015; Transcript of January 13, 2015 Proceedings at 2.
17
Transcript of November 1, 2013 Proceedings on defendant’s motion to dismiss. A
similar ruling was made during the motion for judgment on the pleading on December 20, 2013.
18
Nichols v. State Coastal Zone Industrial Control Board, 2013 WL 1092205, *3 (Del.
Super. March 14, 2013), aff’d, 74 A.3d 636 (Del. 2013).
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by a Trust which I am Trustee and Co-Manager of with my brother Jamin. We
regularly purchase building lots and build spec houses on them.
6. Colonial Oaks Hotel, LLC is currently developing a 94 room Hotel on State Route
1 at Old Landing Road near Rehoboth. My brother and I, along with the Trust, are the
co-owners of the LLC.
7. In order to develop land in Sussex County, the Regulations require that a permit
be obtained from the Sussex Conservation District, which has been delegated the
responsibility for implementing the Regulations.
8. In order to receive the necessary permits, erosion and sediment control and
stormwater management plans must be prepared, submitted, and approved (“Plans”).
9. I will be directly impacted by the requirements contained in the non-regulation
Handbook and Technical Documents since they contain the design details required
to be included in the Plans.
10. Impacts caused to me by the Regulations include additional costs arising from:
1) compliance with the standards and criteria contained in the Handbook and
Technical Documents; 2) engineering fees necessary to prepare Plans and permit
applications in order to obtain the approvals consistent with the Handbook and
Technical Documents; and 3) construction of items required by the non-regulation
Handbook and Technical Documents.
Although Jamin Hudson did not submit an affidavit, the Court accepts that his interest is
identical to that of Christian Hudson. The Court further accepts that the interest of Route 24CJ, LLC
is that which Christian Hudson and Jamin Hudson have.
Wayne Baker submitted an affidavit on his behalf and on behalf of Hollyville Farms, LLC,
in support of his petition. Therein, he stated:
3. I own a 125 acre parcel of land in Sussex County, which is the subject of a
recorded 178 lot residential development plat.
4. I have previously developed parcels of land in Sussex County, including the
offices and gas stations for Wilson Baker, Inc. (“WBI”), which I am part owner of.
WBI is in the petroleum distribution business.
5. I am part owner of parcels of land in Laurel and Greenwood, Delaware which WBI
plans to develop with gas stations in the future. I also am part owner of lands located
in Lewes, Rehoboth, Georgetown, Ellendale, and Seaford, Delaware which I would
like to redevelop.
6. I am part owner of Hollyville Farms, LLC, which owns 1300 acres of land in the
Millsboro-Lewes-Georgetown vicinity. It is my intent to sell the lands off over time
for development. The value of the property will be directly affected by the costs
added by having to comply with the Regulations.
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7. In order to develop land in Sussex County, the Regulations require that a permit
be obtained from the Sussex Conservation District, which has been delegated the
responsibility for implementing the Regulations.
8. In order to receive the necessary permit, erosion and sediment control and
stormwater management plans must be prepared, submitted, and approved (“Plans”).
9. I will be directly impacted by the requirements contained in the non-regulation
Handbook and Technical Documents since they contain the design details required
to be included in the Plans.
10. Impacts caused to me by the Regulations include additional costs arising from:
1) compliance with the standards and criteria contained in the Handbook and
Technical Documents; 2) engineering fees necessary to prepare Plans and permit
applications in order to obtain the approvals consistent with the Handbook and
Technical Documents; and 3) construction of items required by the non-regulation
Handbook and Technical Documents.
John F. Clark was the final plaintiff to submit an affidavit. His affidavit provides:
3. I am the owner of Clark’s General Contractors, Inc., which performs site
development work and regularly makes improvements to land in order to prepare it
for development with residential and commercial buildings and associated
improvements. My business is required to comply with the Regulations on a regular
basis during the course of construction and site improvement work on projects it
performs.
4. I have previously developed parcels of land in Sussex County.
5. In order to develop land in Sussex County, the Regulations require that a permit
be obtained from the Sussex Conservation District, which has been delegated the
responsibility for implementing the Regulations.
6. I order to receive the necessary permit, erosion and sediment control plans must
be prepared, submitted, and approved (“E&S Plans”).
7. Impacts caused to me by the Regulations include: 1) the need to comply with the
standards and criteria contained in the Handbook and Technical Documents; and 2)
additional construction and installation requirements of the non-regulation Handbook
and Technical Documents.
The only plaintiff not to submit an affidavit addressing standing is Jack Peterman. In the
complaint, he asserts that he “is a Kent County, Delaware resident, currently living ... in Milford,
Delaware, and currently serves as a member of the Delaware State House of Representatives,
representing the 33rd District.”
An aggrieved party who claims the unlawfulness of any regulation is required to bring an
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action for declaratory relief in this Court within 30 days of the day the agency order with respect to
the regulation was published in the Register of Regulations.19
I review two cases for guidance in determining whether plaintiffs are “aggrieved” parties who
have standing to pursue this matter. I ignore the case of Nichols v. State Coastal Zone Industrial
Board, 20 the case to which defendants cite on this issue. Nichols addressed an “aggrieved” party in
a case decision scenario involving the Coastal Zone Act. That decision does not apply to the current
situation where plaintiffs seek review of regulations.
The first case I examine on the standing issue is American Automobile Manufacturers
Association v. Public Service Commission of the State of Delaware.21 In that case, the American
Automobile Manufacturers Association sought review of regulations of the Public Service
Commission. As the Superior Court noted, unless a regulation is challenged within 30 days pursuant
to 29 Del. C. § 10141, “any challenge to the lawfulness of a regulation is deferred until an
enforcement action is brought in ... [Superior] Court.”22 The Court goes on to explain the following
policy regarding the review of regulations before they are enforced:
It is well established that there is a strong policy in favor of review on the merits.
FN 1. There are advantages in pre-enforcement review of challenged regulations not
19
29 Del. C. § 10141(d) provides:
(d) Except as provided in subsection ( c) of this section, no judicial review of a
regulation is available unless a complaint therefor is filed in the Court within 30
days of the day the agency order with respect to the regulation was published in
the Register of Regulations.
20
74 A.3d 636 (Del. 2013) (“Nichols”).
21
1997 WL 718656 (Del. Super. July 23, 1997).
22
Id. at *1.
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only to those who will be subject to them, but also to the Commission itself. When
the validity of a regulation is in issue, those subject to it must choose between
making changes to comply with the regulation they believe to be invalid or take the
risk that sanctions will be imposed. “Uncertainty often imposes large costs on many
individuals and institutions, including the agency itself.” FN 2 Pre-enforcement
review benefits the Commission because if a regulation is determined to be invalid
and if it may be lawfully revised, the Commission may quickly do so. Further, “[i]f
the rule is upheld, its enforcement thereafter can be swift, efficient and inexpensive.”
FN 323
FN 1 Di’s, Inc. v. McKinney, Del. Supr., 673 A.2d 1199, 1202 (1996).
FN 2 Kenneth Culp Davis et al., Administrative Law Treatise § 15.14
(3d ed. 1994).
FN 3 Id.
The second case I examine is American Insurance Association v. Delaware Department of
Insurance (“AIA”). Numerous decisions were issued in the AIA case, and several of them must be
examined in connection with the pending issue.24 The Delaware Insurance Commissioner sought to
address, by regulation, homeowner insurance practices he considered unfair after the Delaware
Legislature failed to address his concerns. After enactment of this regulation, the American Insurance
Association and the Property and Casualty Insurers Association (“the AIA plaintiffs”) filed a
complaint for declaratory judgment seeking the striking of the regulation on the ground the Delaware
23
Id.
24
The initial decision is American Insurance Association v. Delaware Department of
Insurance, 2006 WL 3457623 (Del. Super. Nov. 29, 2006) (“AIA 1”). The second decision is
American Insurance Association v. Delaware Department of Insurance, Del. Super., C.A. No.
05C-10-309, Del Pesco, J. (Oct. 3, 2007) (ORDER) (“AIA 2”). The third is American Insurance
Association v. Delaware Department of Insurance, C.A. No. S05C-10-309, Del Pesco, J. (Nov.
1, 2007) (ORDER) (“AIA 3"). Fourth is Delaware Department of Insurance v. American
Insurance Association, 937 A.2d 139, 2007 WL 3262136 (Nov. 6, 2007) (“AIA 4"). The final
decision is American Insurance Association v. Delaware Department of Insurance, 2008 WL
44322 (Del. Super. Jan. 2, 2008) (“AIA 5").
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Department of Insurance (“Department”) lacked authority to enact it. The Department moved to
dismiss, arguing that the AIA plaintiffs lacked standing because they failed to identify any grievance
they had suffered as a consequence of the promulgation of the regulation and they failed to establish
that they are “aggrieved” within the meaning of 29 Del. C. § 10141(a). The Department also argued
that the AIA plaintiffs’ claims were not ripe for adjudication.
The Court, in AIA 1, addressed whether discovery on the issues of standing and ripeness
could be had, and stated the following:
This Court has jurisdiction to consider the lawfulness of a regulation promulgated
by an administrative agency when an aggrieved party brings an action for declaratory
relief.FN5 The Court has recognized the value of pre-enforcement review of a
challenged regulation to all parties.FN6 A party that is subjected to regulation
benefits by avoiding the Hobson's choice of complying with a potentially invalid
regulation or violating the regulation in order to challenge it.FN7 The agency also
benefits if the regulation is upheld because, “ ‘its enforcement thereafter can be swift,
efficient and inexpensive.’ “ FN8 By the same token, an invalid regulation can be
revised quickly.FN9
FN5. 29 Del. C. § 10141(a). Pre-enforcement review of a regulation
is available when “a complaint therefor is filed in the Court within 30
days of the day the agency order with respect to the regulation was
published in the Register of Regulations.” § 10141(d).
FN6. American Auto. Mfrs. Ass'n v. Public Service Com'n, 1997 WL
718656, at * 1 (Del.Super.) (quoting Kenneth Culp Davis et al.,
Administrative Law Treatise § 15 .14 (3d ed. 1994)) (“‘Uncertainty
often imposes large costs on many individuals and institutions,
including the agency itself.’ ”).
FN7. Id. (“When the validity of a regulation is in issue, those subject
to it must choose between making changes to comply with the
regulation they believe to be invalid or take the risk that sanctions
will be imposed.”).
FN8. Id.
FN9. Id.
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Although the Court can undertake a pre-enforcement review of a challenged
regulation, Delaware law is clear that the Court will not issue advisory
opinions.FN10 Even in the context of a declaratory judgment action, the issue must
be justiciable.FN11 “While the Declaratory Judgment statute, 10 Del. C., ch. 65, may
be employed as a procedural device to ‘advance the stage at which a matter is
traditionally justiciable,’ the statute ‘is not to be used as a means of eliciting advisory
opinions from the courts.’” FN12 A matter must satisfy the following four
prerequisites to be considered “justiciable” or an “actual controversy:”
FN10. Stroud v. Milliken Enterprises, Inc., 552 A.2d 476, 479
(Del.1989); Anonymous v. State, 2000 WL 739252, at *4 (Del. Ch.)
(quoting Heathergreen Commons Condominium Ass'n v. Paul, 503
A.2d 636, 639 (Del. Ch.1985)) (“[C]ontroversies that are
‘hypothetical ... would result in only an advisory opinion’ and
therefore are ‘not justiciable.’ ”).
FN11. Id.FN12. Id. (quoting Rollins International, Inc. v. International
Hydronics Corp., 303 A.2d 660, 662 (Del.1973); Ackerman v.
Stemerman, 201 A.2d 173, 175 (Del.1964)).
(1) It must be a controversy involving the rights or other legal relations of the party
seeking declaratory relief; (2) it must be a controversy in which the claim of right or
other legal interest is asserted against one who has an interest in contesting the claim;
(3) the controversy must be between parties whose interests are real and adverse; (4)
the issue involved in the controversy must be ripe for judicial determination.FN13
FN13. Id. (quoting Rollins, 303 A.2d at 662-63).
Ripeness of the issue is essential for the matter to be justiciable. FN14 “Unless a
controversy is ‘ripe for judicial determination,’ a court may simply be asked to render
an advisory opinion.” FN15
FN14. Id. at 480; Anonymous v. State, 2000 WL 739252, at *4 (Del.
Ch.) (quoting Heathergreen Commons Condominium Ass'n v. Paul,
503 A.2d 636, 639 (Del. Ch.1985)) (“As Vice Chancellor Jacobs has
explained the concept generally, “ ‘[r]ipeness or ‘justiciability’ ...
speaks to whether a given dispute lends itself to adjudication by any
court[,]” with “ ‘ripeness” referring to the concept ‘that a controversy
will not be adjudicated unless it involves truly adverse interests and
actual rights.”).
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FN15. Stroud, 552 A.2d at 480.
There is no bright-line test for justiciability.FN16 Instead, the issue must be
evaluated by assessing whether “given the facts at hand, a sufficient threat of
enforcement exists such that judicial review is warranted.” FN17 The ripeness of the
matter is determined by using practical judgment in balancing whether “‘postponing
review until the question arises in some more concrete and final form, [is]
outweighed by the interests of those who seek relief from the challenged action's
immediate and practical impact upon them.’ “ FN18
FN16. Anonymous, 2000 WL 739252, at *6 (Del. Ch.).
FN17. Id.FN18. Stroud, 552 A.2d at 480 (quoting Continental Air Lines, Inc.
v. C.A.B., 522 F.2d 107, 124-125 (D.C.Cir.1975)).
In this matter, the Department is seeking discovery on the issue of ripeness and,
more specifically, the identification of a grievance Plaintiffs have allegedly suffered
as a result of the Regulation. As the case law indicates, judiciability, of which
ripeness is an essential component, is necessarily fact-driven. For that reason, the
parties should engage in discovery before briefing the issue of ripeness. Accordingly,
the Department's motion for discovery on the fifth and seventh affirmative defenses
is GRANTED.25
The case was reassigned to another Judge of the Superior Court. The new Judge reviewed
the standing matter in the context of a protective order and, in AIA 2, modified the ruling of AIA 1
as follows:
I have reached the conclusion that plaintiff, a trade association, adequately
represents the interests complained of in this action. It has members who write a
substantial amount of homeowner’s insurance coverage in this state. The making of
underwriting decisions and the renewal of policies are activities performed by its
constituent companies, and that activity is affected by the Regulation.... As such,
plaintiff is an aggrieved party which seeks a declaration as to the lawfulness of the
regulations enacted.26
25
AIA 1 at *2.
26
AIA 2.
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In the Superior Court’s order denying the Department of Insurance’s application for
certification of interlocutory appeal, the Court expanded upon its ruling:
The statute conferring a right of appeal [sic] administrative agencies is found in the
Administrative Procedures Act. The State Insurance Commissioner is governed by
the Act. The standing provision states that [any] person aggrieved by and claiming
the unlawfulness of any regulation may bring an action in the [Superior] Court for
declaratory relief.” Contrary to the defendant’s contentions, the statute does not
require the appeal to be limited to a party that can demonstrate injury in fact. That
standard is applicable only when a standing provision requires that the party seeking
relief be substantially affected by the conduct of the agency in question. ...
The law on standing, as governed by the Administrative Procedures Act, was
considered in President Judge, now Justice, Ridgely’s decision in American Auto.
Mfrs. Ass’n v. Public Service Comm’n of State. ***
It is uncontested that the members of plaintiff’s organizations are subject to the
regulations at issue. [Footnotes and citations omitted; emphasis in original.]27
Thus, to summarize, an “aggrieved” person for purposes of contesting regulations must be
a person or entity subject to the regulations. The person or entity need not have suffered an injury
in fact before being able to challenge the regulations.
In this case, it is clear that Jack Peterman has no standing to pursue this matter. He is not
subject to the Regulations and he has no interest subject to the Regulations. Thus, Jack Peterman has
been DISMISSED as a plaintiff in this matter.
In addressing the standing issue as to the remaining plaintiffs, it is necessary to determine to
whom the Regulations apply.
Pursuant to the 2013 and 2014 Regulations, 1.3.1, “unless a particular activity is exempted
by these regulations, a person shall not disturb land without an approved Sediment and Stormwater
Management Plan from the Department or Delegated Agency.” “Land disturbing activity” is defined
27
AIA 3 at 2-3. The Supreme Court also denied the request for an interlocutory appeal in
AIA 4.
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in 2.1 of the 2013 and 2014 Regulations as meaning:
a land change or construction activity for residential, commercial, industrial, and
institutional land development which may result in soil erosion from water or wind,
or the movement of sediments or pollutants into state waters or onto lands in the
State; or which may result in accelerated stormwater runoff, including, but not
limited to, clearing, grading, excavating, transporting and filling of land.
The applicable E&S statute states:
(a) After July 1, 1991, unless exempted, no person shall engage in land disturbing
activities without submitting a sediment and stormwater management plan to the
appropriate plan approval authority and obtaining a permit to proceed.
(b) Projects which do not alter stormwater runoff characteristics may be required
to provide water quality enhancement even if the predevelopment runoff
characteristics are unchanged. Criteria will be detailed in the regulations regarding
level of water quality control and variance procedures.
( c) Each land developer shall certify, on the sediment and stormwater
management plan submitted for approval, that all land clearing, construction,
development, and drainage will be done according to the approved plan. [Emphasis
added.]28
This statute clarifies that land developers are subject to the regulations. In fact, defendants
have conceded that developers and contractors are subject to the regulations.29
W. Wayne Baker, Christian Hudson, Jamin Hudson, Hollyville Farms, LLC and Route 24
CJ, LLC, own property which they plan to develop and which would be controlled by the
regulations. John F. Clark is a contractor who is subject to the regulations when he performs his
work. These remaining plaintiffs have established that they are subject to the regulations.
If the Court ruled that entities in the position of these plaintiffs did not have standing to
28
7 Del. C. § 4003.
29
At page 6 of their Opening Brief in Support of Summary Judgment and Answering Brief
Opposing Plaintiffs’ Summary Judgment Motion, filed on March 18, 2014, defendants stated:
“When a regulated party, typically a developer or contractor, attempts to comply with the
Sediment & Stormwater Regulations, that party may be seen as embarking on a journey.
[Emphasis added.]”
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challenge the regulations, then it would, in effect, be ruling that no one could challenge the
regulations until they suffered an actual injury, and consequently, could attack the regulations only
in defense of an enforcement action. Such a position would prohibit the pre-enforcement review of
any regulations as few persons or entities could show an injury in fact within 30 days of the
publishing of a regulation, the time period when a declaratory judgment must be filed.30
The Court, employing the applicable case law, concludes that W. Wayne Baker, Christian
Hudson, Jamin Hudson, Hollyville Farms, LLC and Route 24 CJ, LLC, have standing to pursue this
action as to the 2013 Regulations.
I now review the standing of the plaintiffs seeking review of the 2014 Regulations. The
plaintiffs in the second action are W. Wayne Baker, Christian Hudson, John F. Clark, Hollyville
Farms. LLC, and Route 24 CJ, LLC. W. Wayne Baker and Christian Hudson submitted as Exhibit
B to the Verified Complaint the affidavits submitted in the 2013 action which are detailed above.
Additionally, in their verified complaint regarding the 2014 Regulations, plaintiffs assert as follows:
40. The DNREC Start Action Notice for the 2014 Proposed Regs expressly admits
that the “LIKELY AFFECTED PUBLIC” includes “Land developers, contractors,
builders, engineers, landscape architects, land surveyors, architects....” Baker,
Hudson, and Clark are therefore admitted by DNREC to be impacted by the 2014 ...
[Regulations] based on their business and entrepreneurial undertakings.
I follow the reasoning set forth above with regard to the plaintiffs’ standing to contest the
2013 Regulations and conclude that each plaintiff attacking the 2014 Regulations is subject to the
those regulations. Thus, each plaintiff has standing to bring the action regarding the 2014
Regulations.
2) The Validity of the 2013 and 2014 Regulations
30
29 Del. C. § 10141(d).
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DNREC, as an agency, is subject to subchapter I (Policy and Definitions, consisting of §§
10101 and 10102 of Title 29) and subchapter II (Agency Regulations, consisting of §§ 10111-19 of
Title 29) of the APA as well as § 10141 (review of regulations), § 10144 (stay pending review) and
§ 10145 (commencement of review).31 If DNREC promulgates regulations, those regulations must
comply with the APA.32
The standard of review of regulations is set forth in 29 Del. C. § 10141(e), where it is
provided:
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 and that the complainant suffered prejudice
thereby, or that the regulation, where required was adopted without a reasonable basis
on the record or is otherwise unlawful. The Court, when factual determinations are
at issue, shall take due account of the experience and specialized competence of the
agency and of the purposes of the basic law under which the agency acted. [Emphasis
added.]
Plaintiffs argue that both the 2013 and the 2014 Regulations are unlawful because they failed
to include specific standards and design criteria in them and because these specific standards and
design criteria are, instead, included in the Technical Documents, which were not subject to the
APA.
“Regulation” is defined in § 10102 as follows:
(7) “Regulation” means any statement of law, procedure, policy, right,
requirement or prohibition formulated and promulgated by an agency as a rule
or standard, or as a guide for the decision of cases thereafter by it or by any other
agency, authority or court. Such statements do not include locally operative highway
signs or markers, or an agency’s explanation of or reasons for its decision of a case,
advisory ruling or opinion given upon a hypothetical or other stated fact situation or
31
29 Del. C. § 10161(b).
32
Id.
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terms of an injunctive order or license. [Emphasis added.]
An agency may operate outside the scope of the APA “when it implements a specific detailed
statutory directive”.33 In the situation at hand, no specific detailed statutory directive exists which
would authorize the directives, criteria and standards contained in the Technical Documents. Thus,
DNREC may not cite to Free-Flow as authority for the Technical Documents not being subject to
the APA.
Certain “regulations” are exempt from the APA. Those exempt regulations are:
1) Descriptions of agency organization, operations and procedures for obtaining
information;
2) Rules of practice and procedure used by the agency;
3) Delegations of authority to subordinates;
4) Nonsubstantive changes in existing regulations to alter style or form or to
correct technical errors;
5) Amendments to existing regulations to make them consistent with changes in
basic law but which do not otherwise alter the substance of the regulations; and
6) Codifications of existing agency or judicial principles of decision derived from
previous decisions and rulings.34
Although there are some rules of procedure contained in the Technical Documents which fall
within the exceptions above, the concern here is with non-exempt regulations: specifications,
standards and criteria as well as requirements which determine whether a covered entity is complying
with the E&S statutes. Specifications, standards and criteria are subject to the APA because they fall
within the definition of “regulations.” Standards, specifications and criteria must be subject to the
rigors of the APA whether they are located in documents captioned “Regulations” or whether they
are contained in some other document, such as the Technical Documents in this case.
33
Free-Flow Packaging International, Inc. v. Secretary of the Dept. of Nat. Resources and
Environmental Control, 861 A.2d 1233, 1236 (Del. 2004) (“Free-Flow”).
34
29 Del. C. § 10113.
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The Legislature has set forth a non-exhaustive list of what subjects any E&S Regulations may
address:
(1) Criteria for the delegation of program elements;
(2) Types of activities that require a sediment and stormwater management
permit;
(3) Waivers, exemptions and variances;
(4) Sediment and stormwater plan approval fees and performance bonds;
(5) Criteria for distribution of funds collectible by sediment and stormwater
plan approval fees;
(6) Criteria for implementation of a stormwater runoff utility;
(7) Specific design criteria and minimum standards and specifications;
(8) Permit application and approval requirements;
(9) Criteria for approval of designated watersheds;
(10) Criteria regarding attendance and completion of departmental sponsored
or approved training courses in sediment and stormwater control that will be required
of certified construction reviewers and responsible personnel;
(11) Construction review; and
(12) Maintenance requirements for sediment control during construction and
stormwater management structures after construction is completed.35
DNREC argues that the regulations contain standards and criteria while the Technical
Documents provide a method for achieving those standards and criteria. A review of the regulations
and Technical Documents disproves that argument.36
I first review “standard” plans. Covered projects require the submission of either a “standard
plan” or a “detailed plan”.37 A covered entity cannot determine what a “standard” plan is or how to
35
7 Del. C. § 4006( c).
36
This Court is not attempting to review each and every part of the regulations and
Technical Documents. Instead, it is setting forth a couple of examples which support the Court’s
conclusion that the Technical Documents contain standards and criteria necessary for compliance
with the E&S statutes and regulations.
37
Section 3.7 of both the 2013 and 2014 Regulations. This provision in both sets of
Regulations states:
3.7 Standard Plans
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submit such a plan which complies with the E&S statutes and regulations merely by reviewing the
regulations. Instead, the covered entity must turn to Article 3.01, and, in particular, Article 3.01.1,
et seq. (Standard Plan Criteria) of the Technical Documents to obtain this information. Thus, Article
3.01 of the Technical Documents contains the requirements formulated and promulgated as a rule
or standard, or as a guide for a decision on any application regarding a “standard plan”. This
constitutes a regulation38 which is subject to the APA.
Next, I consider the repair, restoration and maintenance requirements of defective stormwater
management systems. An Owner is required to ensure the stormwater management system functions
“in accordance with the approved engineering design, within the tolerances of the accepted post
construction verification documents and in compliance with these regulations.”39 The owner is
3.7.1 The Department may develop criteria for standard plans when a detailed
plan is deemed not necessary. Project types that may qualify for a standard plan
include, but are not limited to, individual parcel construction or improvements,
tax ditch maintenance, minor linear disturbances, stormwater facility maintenance,
agricultural structure construction, or other activities approved by the Department.
3.7.2 All standard plans shall contain standard conditions for construction site
stormwater management and may contain standard conditions for post
construction stormwater management.
3.7.3 The inclusion of an activity into the standard plan classification does not
exclude that activity from the necessity of a detailed plan review for a qualifying
project.
3.7.4 Failure to implement control practices pursuant to conditions included in
the standard plan may necessitate appropriate enforcement action as provided in 7
Del. C. Ch. 40 and these regulations.
3.7.5 A detailed plan may be required for a site that would otherwise meet
standard plan criteria as deemed appropriate by the Department or Delegated
Agency on a case-by-case basis.
38
29 Del. C. § 10102(7).
39
2013 and 2014 Regulations, 7.2.2.
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required to repair and restore any defective systems.40 Any “repairs, restoration or maintenance shall
be conducted in accordance with the ... Standard Guidelines for Operation and Maintenance of
Stormwater Management Systems.... [Emphasis added.]”41 These Standard Guidelines for Operation
and Maintenance of Stormwater Management Systems are contained in Article 5.01 of the Technical
Documents. Thus, the criteria and standards for repairing, restoring or maintaining a stormwater
management system are contained in the Technical Documents, not in the 2013 and 2014
Regulations.
Finally, I note that the Technical Documents mandate procedures which must be followed.
For example, in Article 3.02.2-2, it is stated: “Computations shall be included supporting the
adequacy of proposed runoff reduction practices intended to comply with the requirements for the
Resource Protection Event.” It also is stated in that article: “All projects required or opting to use
the performance-based approach to comply with the requirements for the Conveyance Event and
Flooding Event shall submit hydrologic and/or hydraulic computations in accordance with
Department guidance....” Another example appears in Article 3.02.2.2-.1, where it is provided:
“[The Hydrologic and Hydraulic] analysis will be required for all projects using the performance-
based option and /or where a sump condition exists.”
A covered entity cannot obtain approval of a plan or otherwise comply with the E&S statutes
merely by following the 2013 or 2014 Regulations. Insufficient information is contained in those
regulations to allow for such compliance. As a practical matter, a party cannot draft a plan for
dealing with sediment and stormwater without any reference to the Technical Documents and expect
40
Id.
41
2013 and 2014 Regulations, 7.2.2.1.
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to obtain approval thereof.
In order to rebut the obvious conclusion that DNREC has formulated and promulgated
standards and criteria within the Technical Documents, DNREC argues that a covered entity does
not have to comply with those criteria and standards set forth in the Technical Documents. It argues
that, instead, an entity may employ alternative measures so long as those measures constitute the
“functional equivalency”42 of measures contained in the Technical Documents.43
DNREC’s argument that a party does not have to comply with the Technical Documents so
long as that party meets the minimum requirements of the Technical Documents is illogical. The
functional equivalency requirement means that the Technical Documents’ requirements, standards
and criteria are the baseline for a determination as to whether the alternative measures comply with
the E&S regulations and statutes. If a covered party submits a plan containing alternative measures,
the agency will not approve that plan unless those alternative measures are, at a minimum, consistent
with the requirements, standards and criteria contained in the Technical Documents.
Thus, with regard to both the 2013 and 2014 Regulations, DNREC has set forth
requirements, standards and criteria in the Technical Documents which govern its decision-making
process. DNREC’s actions were unlawful when it promulgated in the Technical Documents
regulations which were not subject to the APA.44
42
“‘Functional Equivalency’ means alternative measures that are consistent with the
policies, procedures, technical specifications, and advisory provisions found in the Technical
Documents, and which satisfy these Regulations.” 2014 Regulations 2.1.
43
2014 Regulations, 4.1; 4.5.3; 5.1; 6.1.2.
44
29 Del. C. § 10102(7).
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In conclusion, the 2013 and 2014 Regulations are unlawful for the reasons set forth above.45
Each party is to bear the expense of their respective litigation costs.
IT IS SO ORDERED.
/s/ T. Henley Graves
45
In light of this conclusion, the Court need not address other issues plaintiffs have raised
regarding the regulations’ validity.
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