FMC Corporation v. New Castle County Special Services Department

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
FMC CORPORATION, )
)
Petitioner, )
)
v. ) C.A. NO.: N16A-10-010 AML
)
NEW CASTLE COUNTY SPECIAL )
SERVICES DEPARTMENT; NEW )
CASTLE COUNTY; and TRACEY )
SURLES in her capacity as ACTING )
GENERAL MANAGER of the )
NEW CASTLE COUNTY SPECIAL )
SERVICES DEPARTMENT, )
)
Respondents. )
Submitted: November 30, 2017
Decided: February 27, 2018
Upon Review of Petitioner FMC Corporation’s Writ of Certiorari:
Granted in part
MEMORANDUM OPINION
Jessica C. Watt, Esquire, and Brendan K. Collins, Esquire (admitted pro hoc vice),
of BALLARD SPAHR, LLP, Wilmington, Delaware, Attorneys for Petitioner.
Max B. Walton, Esquire, and Kyle E. Gay, Esquire, of CONNOLLY
GALLAGHER, LLP, Wilmington, Delaware, and Marlaine A. White, Esquire, of
NEW CASTLE COUNTY OFFICE OF LAW, New Castle, Delaware, Attorneys for
Respondents.
LeGROW, J.
This case considers the scope of the Special Services Department’s General
Manager’s authority, specifically whether the General Manager has the authority to
impose monetary penalties and award injunctive relief after finding a sewer user in
violation of their permit or the County Code. Chapter 38 of the County Code grants
the General Manager enforcement powers, including the power to suspend sewer
services and revoke discharge permits. When the General Manager has cause to
believe an industrial user is violating the County Code, the General Manager may
hold a “show cause” hearing at which the putative violator may show cause why
services should not be suspended.
In this case, however, the General Manager adjudicated the merits of
Petitioner’s alleged violations under the code and issued a final order requiring
Petitioner to pay $7,000 in fines and $139,208 in actual costs, to pay future costs as
assessed, and to submit a preventative plan for which Petitioner would bear the cost
of implementation. I find the General Manager has no authority under the County
Code to impose penalties and injunctive relief. My reasoning follows.
Factual and Procedural Background
The Special Services Department (the “Department”) is a county agency that
manages the New Castle County sewer system. FMC (“Petitioner”) operates a food
and nutrition manufacturing plant in Newark, Delaware. As part of its operations,
Petitioner discharges microcrystalline cellulose, a food additive, into the sewer
1
system under to a county-issued discharge permit. The permit requires Petitioner to
comply with all provisions of Chapter 38 (the “Chapter”) of the County Code.
On January 22, 2016, the Department issued a notice of violation (“NOV”)
informing Petitioner that its discharge was obstructing the sewer system in violation
of Petitioner’s discharge permit. The Department issued several more NOVs to
Petitioner regarding the obstruction. On April 21, 2016, the Department held a
“show cause” hearing (the “hearing”) requiring Petitioner to show cause why its
discharge permit should not be revoked. During the hearing, Department
representatives and Petitioner presented evidence regarding the obstruction to the
Department’s General Manager, who presided over the hearing. At the conclusion
of the hearing, the General Manager requested supplemental evidence and briefing.
After receiving the parties’ supplemental briefs, the General Manager issued
a final order (the “Final Order”) directing Petitioner to pay fines and actual and
future costs, and to submit a plan designed to prevent future obstructions. Petitioner
appealed the Final Order on October 27, 2016. On May 31, 2017, this Court held
Petitioner had no statutory right to appeal, but granted Petitioner leave to file a
petition for writ of certiorari. This Court granted certiorari and the parties briefed
and argued the issue.
2
The Parties’ Contentions
Petitioner argues the General Manager’s Final Order is invalid for four
reasons. First, Petitioner contends the Department exceeded its jurisdiction because
(i) the enabling statute does not authorize the County to “hear and decide” matters
of law, and (ii) the General Manager lacks authority to impose injunctive relief or
monetary penalties. Second, Petitioner maintains that the hearing violated due
process because the General Manager both investigated and adjudicated the
proceedings. Third, Petitioner asserts the General Manager committed errors of law
at the hearing by applying the wrong burden of proof, failing to consider evidence,
and imposing penalties through the Final Order. Finally, Petitioner argues the
General Manager proceeded irregularly by failing to provide an adequate record for
judicial review.
In response, the Department and General Manager first argue the County has
authority under the home rule doctrine to grant adjudicative powers to the
Department, and the General Manager did not exceed the authority granted under
the County Code. Second, Respondents contend due process is satisfied because the
General Manager had no investigative role in Petitioner’s case. Third, Respondents
assert the General Manager applied the proper burden of proof under the County
Code and considered all the evidence presented. Finally, Respondents argue the
3
General Manager preserved a proper record for judicial review as required by the
County Code.
ANALYSIS
“Petitioners for a writ of certiorari must satisfy two threshold conditions: the
judgment must be final and there can be no other available basis for review.”1 The
reviewing court will consider “whether the tribunal below (1) committed errors of
law, (2) exceeded its jurisdiction, or (3) proceeded irregularly.” 2 “A decision will
be reversed for an error of law committed by the lower tribunal when the record
affirmatively shows that the lower tribunal has proceeded illegally or manifestly
contrary to law.”3
A. The enabling statute and the home rule doctrine allow the County to
establish a process under which the General Manager may hold
hearings and issue administrative orders.
Petitioner first argues the General Manager exceeded his powers under the
enabling statute by holding the hearing and issuing the Final Order. Petitioner avers
the Department’s enabling statute contains no grant of authority to hear and decide
matters of law. This, Petitioner argues, is in contrast to other county departments’
1
Maddrey v. Justice of Peace Court 13, 956 A.2d 1204, 1213 (Del. 2008).
2
Id.3
Christiana Town Center, LLC v. New Castle Cty., 865 A.2d 521 (Table) (Del. 2004) (internal
quotations omitted).
4
enabling statutes, which expressly grant authority to hold hearings and render
decisions.4
Petitioner is correct that the Department’s enabling statute, 9 Del. C. § 1341,
contains no provision expressly granting the General Manager authority to hear
matters or issue written decisions. The analysis, however, cannot end there. 9 Del.
C. § 1521(a) accords the County general jurisdiction “over all matters pertaining to
the County, . . . including the power to act upon all matters pertaining to sewers,
sewerage disposal plants, . . . and sewer systems generally.”5 More broadly, the
County’s home rule authority under 9 Del. C. § 1101 grants the County “all powers
which . . . would be competent for the General Assembly to grant by specific
enumeration, and which are not denied by statute . . . .”6 Those powers include
adjudicatory powers that the General Assembly at times specifically grants to
agencies.
Additionally, under the home rule doctrine, counties and municipalities
“exercise the power of the sovereign except as limited by either the State
Constitution or State Statute.”7 The Court of Chancery reviewed the home rule
4
Pet’r’s Br. 13. See, e.g., 9 Del. C. § 1313(a) (granting the Department of Land Use the authority
to review appeals in zoning matters).
5
9 Del. C. § 1521(a)(1) (emphasis added).
6
9 Del. C. § 1101(a). Petitioner does not argue the General Assembly is incompetent to grant
authority to hear and decide issues involving sewer systems.
7
Schadt v. Latchford, 843 A.2d 689, 691 (Del. 2004) (quoting NAACP v. Wilm. Med. Ctr., 426
F.Supp. 919, 927 (D. Del. 1977)).
5
doctrine in Salem Church v. New Castle Cty.8 In Salem Church, a developer
challenged the County Planning Board’s authority to hear appeals from the County’s
Department of Land Use.9 The developer argued nothing in the Delaware Code
granted the Planning Board authority to hear administrative appeals under its
enabling statute.10
The Court of Chancery held the Planning Board had authority to hear appeals
from the Department of Land Use under the home rule doctrine,11 reasoning Section
1101 granted the County broad authority to enact procedures the General Assembly
could have granted.12 The Court concluded the County granted the Planning Board
jurisdiction to hear appeals properly because nothing in the Delaware Code or
Constitution prohibited the procedure.13
Here, as in Salem Church, the County has broad authority to enact provisions
that are not contrary to the Delaware Constitution or State statute, including the
power to hear and decide. As discussed below, the County Code grants the General
Manager authority to hear and decide matters related to NOVs. Nothing in the
constitution, Section 1341, or any other statute Petitioner identified prohibits
granting this adjudicatory power to the Department. Accordingly, the General
8
2006 WL 2873745, at *5 (Del. Ch. Oct. 6, 2006).
9
Id. at *4.
10
Id. at *5.
11
Id.
12
Id. n.44.
13
Id.
6
Manager did not exceed the authority under the enabling statute by holding the
hearing.
B. The General Manager exceeded its authority under the County Code
by imposing penalties and granting the Department injunctive relief.
In the Final Order, the General Manager directed Petitioner to: (1) pay $7,000
in fines pursuant to the NOVs; (2) reimburse $139,208 to the Department for actual
costs incurred to monitor, repair, and clean blockages allegedly caused by Petitioner;
(3) provide the Department with a plan to prevent further obstruction of the sewer
system, at sole cost to Petitioner; and (4) pay future costs associated with monitoring,
repairing, and cleaning blockages caused by Petitioner until the plan is approved.
Petitioners argue the General Manager exceeded his authority under the County
Code by granting the Department injunctive relief and monetary penalties.
In Delaware, “a statute or an ordinance is to be interpreted according to its
plain and ordinary meaning.”14 Under settled rules of construction, courts are
obliged to “read the [s]tatute as a whole and to harmonize the parts thereof.”15
“Words in a statute or an ordinance should not be construed as surplusage if there is
a reasonable construction which will give them meaning, and the courts must ascribe
a purpose to the use of statutory language, if reasonably possible.”16
14
New Singular Wireless PCS v. Sussex Cty. Bd. of Adjustment, 65 A.3d 607, 611 (Del. 2013).
15
Murphy v. Bd. of Pension Tr., 442 A.2d 950, 951 (Del. 1982).
16
New Singular Wireless PCS, 65 A.3d at 611 (quoting Oceanport Indus., Inc. v. Wilm.
Stevedores, Inc., 636 A.2d 892, 900 (Del. 1994)).
7
Resolution of Petitioner’s challenge to the General Manager’s authority to
award monetary and injunctive relief turns on the proper interpretation of Article 3
of the Chapter, which contains four sections: (i) Prohibitions;17 (ii) Enforcement;18
(iii) Penalties;19 and (iv) Means of Appeal.20 This case concerns the Enforcement
and Penalties sections. In the Enforcement Section,21 the General Manager is
granted specified enforcement authority22 and “General Manager” is the active
pronoun in the enforcement provisions concerning Right of Entry,23 Notice of
Violation,24 Show cause hearing,25 Administrative order,26 Suspension,27 and
Notification of proposed termination of service.28
17
New Castle Cty. C. § 38.03.001.
18
Id. at § 38.03.002.
19
Id. at § 38.03.003.
20
Id. at § 38.03.004.
21
Id. at § 38.03.002.
22
Id. at § 38.03.002.A (“All rules and regulations described in this chapter and adopted by the
Department in the Environmental Response Plan shall be enforced by the General Manager of
the Department of Special Services or his or her authorized representative.”).
23
Id. at § 38.03.002.B (“The General Manager . . . may go upon any land . . . .”).
24
Id. at § 38.03.002.C (“When the General Manager . . . has reasonable cause to believe that any
person has violated or is violating this Chapter . . . the General Manager . . . may serve upon such
person a written notice of violation.”).
25
Id. at § 38.03.002.D (“The General Manager . . . may order any person who contributes to a
violation of this Chapter . . . to show cause why a proposed enforcement action should not be
taken.”).
26
Id. at § 38.03.002.E (“When the General Manager . . . has reasonable cause to believe that any
person has violated or continues to violate this Chapter . . . he or she may issue an order to the
person responsible for the discharge . . . .”).
27
Id. at § 38.03.002.F (“The General Manager . . . may suspend the sewer service and/or the
permit of a person . . . .”).
28
Id. at § 38.03.002.G (“The General Manager shall not terminate service to a person or revoke a
discharge permit under this Chapter . . . without first delivering to the person written notice of
such proposed termination or revocation.”).
8
In contrast, the Penalties Section describes: (1) penalties and fines that may
be imposed on violators of the Chapter;29 (2) remedies and relief available to the
General Manager in pursuing a claim against violators;30 and (3) requirements for a
valid consent order.31 The penalties and fines provisions are contained in
Subsections A and B. In contrast to the active voice used in the Enforcement
Section, Subsections A and B were written in the passive voice, describing what
fines may be imposed on the violator, without providing who may impose the fines.
Subsection A also specifies that a willful violation of the Chapter constitutes a
criminal misdemeanor.32 Moreover, the remedies and relief specified in Subsections
C and D are written in the passive voice and identify the relief, including injunctive
relief and monetary damages, the General Manager may obtain through a civil
action. In contrast, Subsection E employs the active voice and refers to performance
bonds the General Manager may require a user to post.
Respondents argue Subsections A and B should be read to give the General
Manager unilateral authority to impose fines and penalties. This reading, however,
is untenable for three reasons. First, where the Chapter’s drafters intended to give
the General Manager a particular power, they did so by specifying that power using
29
Id. at § 38.03.003.A-B.
30
Id. at § 38.03.003.C-E.
31
Id. at § 38.03.003.F.
32
Id. at § 38.03.003.A.1.
9
the active voice. In contrast, the Penalties and Fines Subsections do not mention the
General Manager, except to state that he “may recover” attorneys’ fees, costs, and
expenses and may collect them through any available remedy. This difference in the
language presumably was intentional and logically and coherently may be read as
limiting the General Manager to seeking those monetary assessments through a civil
action.
Second, Respondents’ interpretation would render Subsection D of the
Penalties Section surplusage because there would be no need to pursue a civil action
in Court if the General Manager unilaterally could impose penalties. Third, it is
plain, as Respondents concede, that the General Manager may not adjudge a user
guilty of a criminal charge or sentence a user accordingly. Yet Respondents’
interpretation of the County Code as allowing the General Manager to adjudicate
and impose the specified penalties and fines would permit just such a result,
including a possible prison sentence for repeated violations.33
Accordingly, it is more consistent to read the County Code as allowing the
General Manager to pursue a claim for penalties from a court. Importantly, this
interpretation does not eliminate all the General Manager’s enforcement powers. In
addition to the powers enumerated in the Enforcement Section of the Chapter,34 the
33
See id. at §§ 1.01.009, 38.01.003(A)(1).
34
The General Manger may pursue other enforcement activities under the Section, such as
enforcing a right of entry, issuing notice of violation, holding a show cause hearing, issuing an
10
General Manager may maintain a civil action to establish the damages specified in
the Penalties Section, and then may collect those damages through typical collection
methods or by adding the amounts to the user’s sewer service charge.35 The General
Manager may not, however, unilaterally assess and enforce the penalties through a
Final Order. Accordingly, the General Manager exceeded his authority under the
County Code by imposing fines and actual and future costs through the Final Order,
rather than pursuing those damages through a civil action.
Additionally, Petitioner challenges the General Manager’s authority to order
Petitioner to provide the Department with a preventative plan and to implement that
plan at Petitioner’s sole cost. No provision in the County Code grants the General
Manager authority to order violators to submit and pay for a preventative plan in the
context of an administrative order. Rather, violators are required to submit a plan in
Subsection C of the Enforcement Section. Subsection C requires violators to submit
a plan to the General Manager ten days after receipt of an NOV.36 A Subsection C
plan must explain the reason(s) for the Chapter violation and give “a plan for
satisfactory correction and prevention of potential future violations, including
administrative order, and suspending sewer services and discharge permits. Id. at § 38.03.002.B-
G.
35
See id. at § 38.03.003.B.
36
Id. at § 38.03.002.C (“Within ten (10) working days of receipt of this notice, the person shall
submit to the General Manager of the Department of Special Services an explanation of the
violation and a plan for satisfactory correction and prevention of potential future violations,
including specific required actions. Submission of this plan shall not relieve the person of
liability for any violation occurring before or after the receipt of the notice of violation.”).
11
specific required actions.”37 This plan submission occurs after the General Manager
issues an NOV, not after a for cause hearing and administrative order, such as the
one that occurred in this case. Moreover, the plan seems contingent upon a violator
conceding the violation, rather than a remedy that may be ordered where the
violation is disputed.38 In other words, Subsection C of the Enforcement Section
does not confer broad injunctive powers on the General Manager.
Alternatively, if a party continues to violate the Chapter, refuses to submit a
plan, or disputes the violation, Subsection C of the Penalties Section allows the
General Manager to (i) suspend service, and/or (ii) petition a court of competent
jurisdiction to grant an injunction to constrain or compel the actions of the violator.39
In Delaware, the Court of Chancery has exclusive jurisdiction to grant injunctive
relief.40 Again, if the General Manager had authority to order injunctive relief,
Subsection C of the Penalties Section would be superfluous.
37
Id.
38
Read in context, it would make little sense to require a user who disputed either the cause or
extent of a violation to submit a corrective plan ten days after receiving the NOV and before a
show cause hearing even occurred.
39
Id. at § 38.03.003.C (“Whenever a person has violated or continues to violate this Chapter or a
permit, the General Manager of the Department of Special Services, through counsel, may
petition a court of competent jurisdiction for the issuance of a temporary or permanent injunction
or both to restrain or compel the actions of the person.”).
40
10 Del. C. § 341; Nat’l Indus. Grp. v. Carlyle Inv. Mgmt., LLC, 67 A.3d 373, 382 (Del. 2013)
(“. . . the Court of Chancery is the Delaware court that is constitutionally and statutorily
empowered to grant injunctions and to order specific performance.”).
12
Here, the General Manager exceeded his authority under the County Code by
ordering unilaterally Petitioner to submit and implement a preventative plan at
Petitioner’s cost. Such an order is injunctive relief in violation of the County Code
and the Court of Chancery’s jurisdiction.
C. Due process was satisfied because the for cause hearing is an
investigative, not adjudicative, proceeding under the County Code
and requires fewer procedural safeguards.
Petitioner asserts both facial and as-applied due process claims, that is, that
the County Code violates due process both on its face and in the manner applied by
the General Manager.41 Because the Court concludes the General Manager exceeded
its jurisdiction by ordering the relief challenged, Petitioner’s as-applied due process
violations are moot. As to the facial challenge, Petitioner argues the hearing violated
its due process rights by combining in the General Manager investigative and
adjudicative powers.
The U.S. and Delaware constitutions guarantee due process of law.42
Administrative hearings must adhere to due process because they are quasi-judicial
in nature.43 Under Slawick v. State,44 Delaware courts apply the three Eldrige factors
when considering an alleged due process violation:
41
At oral argument, the Respondents argued, for the first time, that FMC waived its due process
argument by failing to raise it before the General Manager. Because neither parties’ briefs raised
waiver, the Court will address FMC’s due process argument.
42
U.S. Const. amend. XIV, § 1; Del. Const. art. I, § 9.
43
Off. of Mgmt. & Budget v. Pub. Emp’t Rel. Bd., 2011 WL 1205248, at *2 (Del. Super. Mar. 29,
2011).
44
480 A.2d 636 (Del. 1984).
13
[F]irst, the private interest that will be affected; second,
the risk of an erroneous deprivation of such interest and
the probable value, if any, of additional or substitute
procedural safeguards; and finally, the State interest,
including the function involved, and the fiscal and
administrative burdens that the additional or substitute
procedural requirements would entail.45
Delaware courts have recognized several elements that safeguard due process:
(1) notice of the basis of the governmental action; (2) a neutral arbiter; (3) an
opportunity to make an oral presentation; (4) a means of presenting evidence; (5) an
opportunity to cross-examine witnesses or respond to written evidence; (6) the right
to be represented by counsel; and (7) a decision based on the record with a statement
of reasons for the result.46 Any and all these elements may be required to safeguard
due process in a given situation.
Here, Petitioner argues the General Manager failed to be a neutral arbiter
during the hearing. As discussed above, Subsection C of the Enforcement Section
intends the hearing to provide a forum for the putative violator to show cause why
an enforcement action—such as service/permit suspension—should not be taken.
The additional relief awarded in the Final Order was invalid and Petitioner’s due
process arguments relating thereto are moot.
For a valid hearing under the County Code, however, nothing indicates the
General Manager must be a neutral arbiter. Rather, the County Code provides for a
45
Id. at 645.
46
Goldberg v. City of Rehoboth Beach, 565 A.2d 936, 942 (Del. Super. 1989).
14
show cause hearing at which the General Manager may interview the putative
violator after issuing an NOV. The hearing is, in a sense, an investigative proceeding
designed to help the General Manager determine what enforcement action, if any,
the Department should take. Therefore, the General Manager does not act in an
adjudicative role and need not be entirely neutral. The opportunity for a neutral
arbiter is afforded in the event the General Manager pursues a civil action.
Even though the hearing is designed to be an investigative proceeding, the
record shows the Department afforded Petitioner several procedural protections.
Petitioner, represented by counsel, was given notice, an opportunity to present
evidence and make oral presentations, and a decision stating the reasons for the
result. Accordingly, the proceedings satisfied Petitioner’s due process rights.
D. The General Manager committed errors of law by imposing penalties
through the Final Order, but applied the correct burden of proof.
Petitioner argues the General Manager committed errors of law during the
show cause hearing by (1) applying the wrong burden of proof, (2) ignoring
uncontroverted evidence, (3) basing the Final Order on evidence not in the record,
and (4) imposing penalties through the Final Order. As previously discussed, the
General Manager erred by imposing penalties through the Final Order. The County
Code is silent as to what evidence the General Manager must consider during the
hearing. The Court therefore cannot find the General Manager committed errors of
law by failing to review all the evidence.
15
As to the burden of proof, Subsection D of the Enforcement Section states
“any person who contributes to [a] violation of this Chapter or permit or order issued
under this Chapter [may be ordered to] show cause why a proposed enforcement
action should not be taken.”47 Accordingly, Subsection D puts the burden on the
putative violator to show cause why an enforcement action should not be taken. The
General Manager, therefore, committed no error of law by requiring Petitioner to
show such cause why its discharge permit should not be revoked.
E. The General Manager proceeded regularly by preserving an adequate
record below insofar as the Final Order stated the reasons for
potentially revoking Petitioner’s permit and sewer service.
Petitioner argues the General Manager proceeded irregularly by failing to
preserve an adequate record for judicial review. Subsection G of the Enforcement
Section provides that a notice of proposed termination of service or revocation of
discharge permit “shall state the reasons of such termination or revocation.” 48
The portions of the Final Order not held invalid by the balance of this opinion
do little more than serve as notice of a potential future termination of service. That
is, the Final Order did not revoke the discharge permit or suspend sewer services,
but reserved the right to pursue those actions. The Final Order summarized the
evidence that informed the General Manager’s decision, specifically, the General
Manager’s findings that the blockage material was present exclusively in Petitioner’s
47
New Castle Cty. C. § 38.03.002.D.
48
Id. at § 38.03.002.G.1.
16
discharge and that the Department’s flow map demonstrated Petitioner obstructed
the flow of the sewer system. The General Manager therefore proceeded regularly
by explaining the reasons for potentially revoking Petitioner’s discharge permit and
suspending sewer service. That Petitioner disagrees with that conclusion or contends
the weight of the evidence showed otherwise is not an argument this Court may
consider on certiorari review.
CONCLUSION
For the foregoing reasons, the Final Order is VACATED.
17