State of Delaware DNREC v. McGinnis Auto & Mobile Home Salvage, LLC

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
STATE OF DELAWARE, :
DEPARTMENT OF NATURAL :
RESOURCES AND :
ENVIRONMENTAL CONTROL, :
:
Appellant, : K17A-09-001 JJC
: In and for Kent County
:
v. :
:
MCGINNIS AUTO & MOBILE :
HOME SALVAGE, LLC, :
:
Appellee. :
OPINION
Submitted: February 8, 2019
Decided: February 21, 2019
Ralph K. Durstein, III, Deputy Attorney General, Department of Justice, Dover,
Delaware, Attorney for the Appellant.
John W. Paradee, Esquire, Daniel F. McAllister, Esquire, & Stephen A. Spence,
Esquire, Baird, Mandalas, Brockstedt, LLC, Dover, Delaware, Attorneys for the
Appellee.
Clark, J.
Appellant Department of Natural Resources and Environmental Control
(hereinafter “DNREC”) appeals an Environmental Appeals Board (hereinafter “the
Board” or “the EAB”) decision in favor of McGinnis Auto & Mobile Home Salvage,
LLC (hereinafter “McGinnis”). DNREC had cited McGinnis for a series of alleged
environmental violations. It then issued an order on August 2, 2016, pursuant to its
cease and desist authority found in 7 Del. C. § 6018 (hereinafter “Section 6018”).
The cease and desist order contained both prohibitive and affirmative orders. In
addition to requiring McGinnis to cease all alleged violations, it directed McGinnis
to remediate its site within thirty days and account for solid waste at its facility.
McGinnis challenged the legality of the order and appealed it to the EAB. In its
EAB appeal, McGinnis argued that the Secretary exceeded his cease and desist
authority by ordering McGinnis to take affirmative corrective action. DNREC
countered that it has authority to issue mandatory injunctions based upon its statutory
authority to issue cease and desist orders.
The EAB agreed with McGinnis and found that the Secretary’s cease and
desist power permits him to prohibit conduct but not to mandate corrective action.
This case presents an issue of first impression regarding the scope of this agency’s
“cease and desist” power. For the reasons that follow, the provision in DNREC’s
enabling statute authorizing its Secretary to issue cease and desist orders does not
authorize it to mandate that a party pursue affirmative corrective action.
Accordingly, the EAB’s decision in this matter is AFFIRMED.
I. PROCEDURAL BACKGROUND
McGinnis owns and operates a business in Kent County, Delaware, that
among other things, dismantles and salvages dilapidated mobile homes. On
February 25, 2015, staff from DNREC conducted a site inspection of its premises.
2
After the inspection, DNREC cited it for improperly storing solid waste and
operating a materials recovery facility without a permit. In DNREC’s notice of
violation, it demanded that McGinnis submit a detailed plan to remove the waste.
DNREC also imposed a ninety-day deadline for McGinnis to submit an application
for a resource recovery permit. McGinnis submitted a timely solid waste disposal
plan to remove the solid waste by July 2016, but did not apply for a permit.
DNREC inspected the site again on March 30, 2016, and documented the
same violations as the year before. It gave McGinnis a new deadline in July 2016,
to remove the waste pile. Thereafter, McGinnis allegedly did not comply. The
DNREC Secretary then issued Secretary’s Order No. 2016-WH-0031 on August 2,
2016. The order provided:
IT IS HEREBY ORDERED, based on the foregoing findings and
pursuant to the authority vested in the Secretary by 7 Del. C. §6018 that
Respondent shall:
1) Upon receipt of this Order, immediately cease and desist receiving
and dismantling mobile homes and construction and demolition
waste.
2) Within 30 days of receipt of this Order, remove all solid wastes
including, but not limited to, discarded mobile homes and piles of
construction and demolition waste on land and in containers.
However, in accordance with the approval issued by Kent County in
1995, Respondent may store no more than two mobile homes.
3) Complete the above-referenced requirements in compliance with all
applicable laws and regulations, and only utilize transportation
companies, disposal facilities, and contractors holding valid
permits.
4) Within 30 days of receipt of this Order, provide written
documentation to the Department confirming the proper disposal or
recycling of the solid wastes. Documentation shall include, but not
be limited to, identification of the hauler used to transport the solid
wastes as well as weigh tickets or other valid documentation
representing authorized disposal or recycling.
5) Within 30 days of receipt of this Order, provide to the Department a
list of all mobile homes received by McGinnis since 2001,
3
including, but not limited to, the date each mobile home was
received by McGinnis, the vehicle identification number for each
mobile home, and date of manufacture of each mobile home.
Respondent shall also identify those mobile homes currently at the
facility.
6) Within 30 days of receipt of this Order, provide a detailed
explanation of McGinnis’ inspection, handling, storage, disposal,
and recycling procedures for all materials removed from, or
contained within, mobile homes.
7) Should Respondent desire to continue receiving, dismantling and
recycling mobile homes or other construction and demolition debris,
Respondent shall provide to the Department a completed Resource
Recovery Facility Permit Application within 30 days of receipt of
this Order. Respondent shall not accept mobile homes or
construction and demolition waste prior to such a permit being
issued by the Department.
McGinnis appealed this order to the EAB. The parties, by stipulation, agreed
that certain facts would be assumed only for purposes of resolving the scope of
DNREC’s authority under Section 6018. In the EAB appeal, McGinnis argued that
the order exceeded the Secretary’s cease and desist power because the mandates
found in paragraphs (2) through (6) were equivalent to mandatory injunctions.
DNREC countered that it had authority to issue all seven mandates pursuant to its
broad statutory and regulatory powers.
The EAB found paragraphs (1) and (7) to fall within the Secretary’s cease and
desist power. The EAB found, however, that the Secretary “did not have adequate
legal authority to impose paragraphs (2) through (6) of the order.” The Board
reasoned that DNREC’s cease and desist power was “not the proper enforcement
mechanism to mandate affirmative injunctive relief” and that “other, more
appropriate, enforcement mechanisms” should have been used.
DNREC then appealed the EAB’s decision to this Court, arguing that
paragraphs (2) through (6) were lawful orders. Since McGinnis did not appeal the
4
Secretary’s authority to issue paragraphs (1) and (7) of the order, only paragraphs
(2) through (6) are at issue in this appeal.
II. Arguments of the Parties
Both parties briefed this matter well but cited little case authority because little
is available. Both concede that there is no Delaware authority addressing the scope
of an agency’s cease and desist authority. Furthermore, DNREC identified no
persuasive authority in federal administrative law or in the administrative law of
other states that support expanding its cease and desist authority to the extent it
advocates. In briefing, the parties focused on DNREC’s enabling statute, the
Delaware Supreme Court’s decision in Formosa Plastics Corp. v. Wilson.,1 and
authority discussing the nature and availability of injunctions in the Court of
Chancery and federal courts.
On balance, DNREC likens its Secretary’s authority to that of the Court of
Chancery. Namely, it argues that in the same way the Court of Chancery exercises
its authority to mandate compliance with the law through injunctive relief, it too has
broad authority to administratively order compliance and to monitor remediation. It
argues that the Secretary’s order properly chose an approach designed to bring
McGinnis into compliance within 30 days without resorting to litigation. It also
argues that the General Assembly intended this cease and desist authority to be an
administrative alternative to seeking a mandatory injunction in the Court of
Chancery.
DNREC further alleges that the EAB’s order “would eviscerate efforts by
DNREC to deal administratively with serious statutory and regulatory violations
presenting imminent risk to the environment and to public health.” DNREC relies
1
Formosa Plastics Corp. v. Wilson, 504 A.2d 1083 (Del. 1986).
5
heavily upon a provision in Chapter 60 of Title 7 (hereinafter “Chapter 60”) that
provides that its powers should be construed liberally in order to preserve the land,
air and water resources of Delaware.2 It argues that the Secretary’s cease and desist
orders are not limited in scope, but only in duration. Accordingly, DNREC argues
that the Secretary, pursuant to Section 6018, has the power to order remediation,
future compliance, and to prevent future violations.
McGinnis counters that cease and desist powers grant the Secretary the
authority to order a violator to cease an environmental violation, but not to mandate
a person to take affirmative action as would a mandatory injunction. It also argues
that injunctive relief falls exclusively within the Court of Chancery’s jurisdiction.
McGinnis further argues that there would be a structural incongruity in permitting
such orders because EAB appeals are to the Superior Court. That, McGinnis argues,
would provide for appellate review of an injunction in a court that cannot issue
injunctions. McGinnis also emphasizes that there is no requirement in Section 6018
for the Secretary to balance the equities before issuing such an order. In contrast,
the Court of Chancery may only issue mandatory injunctions following a full trial
on the merits or a decision on the merits based upon uncontroverted facts. 3
Furthermore, McGinnis emphasizes provisions in Chapter 60, of Title 7,
Delaware Code (hereinafter “Chapter 60”) apart from Section 6018. For instance, it
argues that the General Assembly addressed cease and desist orders separately from
DNREC’s authority to seek temporary restraining orders, preliminary injunctions,
2
See 7 Del. C. § 6020 (stating that “[t]his chapter, being necessary for the welfare of the State and
its inhabitant, shall be liberally construed in order to preserve the land, air and water resources of
the State.”).
3
See C & J Energy Services, Inc. v. City of Miami General Employees’ and Sanitation Employees’
Retirement Trust, 107 A.3d 1049, 1071 (Del. 2014) (citations omitted) (holding that “[t]o issue a
mandatory injunction requiring a party to take affirmative action . . . the Court of Chancery must
either hold a trial and make findings of fact, or base an injunction solely on undisputed facts.”)
6
and permanent injunctions in the Court of Chancery. This, McGinnis argues,
demonstrates that they are different remedies.
III. STANDARD OF REVIEW
This Court’s appellate review of EAB decisions is limited to determining
whether the Board’s decision was supported by substantial evidence and whether it
is free of legal error.4 The parties stipulated to the facts at issue and appeal only the
EAB’s decision regarding a legal conclusion. 5 This Court’s standard of review for
errors of law is de novo.6
IV. ANALYSIS
The Secretary’s order is entitled: “Secretary’s Order to Cease and Desist,
Issued Pursuant to 7 Del. C. § 6018.” Accordingly, this appeal is limited to a single
issue – whether Section 6018 authorizes the Secretary to mandate affirmative
corrective action similar to a mandatory injunction. The question before the Court
is not whether DNREC should have the authority to issue injunctive-like orders in
the vein of paragraphs (2) through (6). Rather, it is whether the General Assembly
provided the agency the ability to do so in Section 6018. That provision provides:
4
Bullock v. K-Mart Corp., 1995 WL 339025, at *2 (Del. Super. May 5, 1995) (citing General
Motors v. Freeman, 164 A.2d 686, 688 (Del. 1960)).
5
See 7 Del. C. § 6008 (g) (providing that “[a]t any time after the appeal to the Board, the parties
may, but stipulation proceed directly to the Superior Court” (emphasis added)). The limited
stipulation by the parties did not establish a violation by McGinnis. Rather, it focused the issue
upon the limits to the Secretary’s authority in these circumstances. The Court is mindful of
authority applicable to the Unemployment Insurance Appeal Board and the Industrial Accident
Board requiring interlocutory appeals to this Court to be dismissed pursuant to Superior Court
Civil Rule 72(i). However, the enabling statutes for those agencies do not include a provision
similar to 7 Del. C. § 6008(g). In any event, neither party asserted that this matter was
interlocutory. The Court finds that 7 Del. C. § 6008(g) confers jurisdiction upon the Superior
Court to consider this appeal.
6
Hoffecker v. Lexus of Wilmington, 36 A.3d 349, 2012 WL 341714, at *1 (Del. Feb. 1, 2012)
(TABLE).
7
[t]he Secretary shall have the power to issue an order to any person
violating any rule, regulation or order or permit condition or provision
of this chapter to cease and desist from such violation; provided, that
any cease and desist order issued pursuant to this section shall expire
(1) after 30 days of its issuance, or (2) upon withdrawal of said order
by the Secretary, or (3) when the order is suspended by an injunction,
whichever occurs first.7
The General Assembly provides for an agency’s duties in the legislative act
that creates the agency.8 An agency also derives its authority solely from the statutes
that create it. Section 6018 provides the Secretary the authority to issue a cease and
desist order for a violation of “any rule, regulation or order or permit condition or
provision of this Chapter . . ..” Accordingly, Section 6018’s cease and desist
enforcement authority covers all orders and regulatory violations across the broad
spectrum of what DNREC regulates.
At the outset, the Court recognizes that in addition to permissibly issuing
cease and desist orders, the Secretary has other significant general enforcement
powers. As with the authority granted by Section 6018, these other powers apply to
all legal orders of the Secretary and regulatory violations. They include, inter alia,
the Secretary’s authority to assess administrative penalties and to collect those
penalties in the Superior Court, 9 to file civil penalty actions in Superior Court,10 and
to file for temporary restraining orders or permanent injunctions in the Court of
Chancery. 11
The majority of the parties’ briefing focused on their opposing positions
regarding whether paragraphs (2) through (6) of the Secretary’s order exceed his
7
7 Del. C. § 6018 (emphasis added).
8
Delaware State Sportsmen’s Association v. Garvin, 196 A.3d 1254, 1268 (Del. Super. 2018).
9
7 Del. C. § 6005(b)(1).
10
7 Del. C. § 6005(b)(3).
11
7 Del. C. § 6005(b)(2).
8
authority because they constitute mandatory injunctive orders.12 McGinnis argues
that these six orders exceed DNREC’s authority because a Section 6018 cease and
desist order is the equivalent of a prohibitory injunction. 13 McGinnis maintains that
the actions ordered in paragraphs (2) through (6) seek affirmative corrective action
and are the equivalent of mandatory injunctions. 14
Since agencies powers are granted by statute, the Court must look to
DNREC’s enabling statute to determine the scope of its authority. Under Delaware
law, the goal of statutory construction is to determine and give effect to legislative
intent.15 If the statute as a whole is unambiguous and there is no reasonable doubt
as to the meaning of the words used, a court’s role is limited to an application of the
literal meaning of the words. 16 Accordingly, the starting point for the interpretation
of a statute is its language.17
The plain meaning rule of statutory construction refers to instances when the
legislature’s intent is so apparent from the face of the statute that there can be no
question as to its meaning. 18 Courts interpret the statute literally and consider
statutory text to be the best evidence of legislative intent or will. 19 Title 7 of the
Delaware Code, including its Section 6018, does not define “cease and desist.” Nor
do the parties cite case law, mandatory or persuasive, defining the scope of such an
order. Black’s Law Dictionary defines a cease and desist order as: “[a] court's or
12
See Black’s Law Dictionary (10th ed. 2014) (defining a mandatory injunction as “[a]n injunction
that orders an affirmative act or mandates a specified course of conduct. — Also termed affirmative
injunction”)
13
See Black’s Law Dictionary (10th ed. 2014) (defining a prohibitory injunction as “[a]n injunction
that forbids or restrains an act”).
14
See Black’s Law Dictionary (10th ed. 2014) (defining a mandatory injunction, in part, as one that
“commands the defendant to do some positive act or particular thing”).
15
Progressive Northern Ins. Co. v. Mohr, 47 A.3s 492, 495 (Del. 2012).
16
In re Adoption of Swanson, 623 A.2d 1095, 1096-07 (Del. 1993).
17
State v. Barnes, 116 A.3d 883, 888 (Del. 2015).
18
2A Sutherland Statutory Construction § 46:1 (7th ed. 2018).
19
2A Sutherland Statutory Construction § 46:3 (7th ed. 2018).
9
agency's order prohibiting a person from continuing a particular course of conduct. 20
The common, ordinary meanings of both the words “cease” and “desist” mean to
stop. Accordingly, at the outset, the common ordinary usage of the language used
by the General Assembly in Section 6018 does not support DNREC’s argument that
Section 6018 authorizes DNREC to compel affirmative corrective action.
To the extent their remains uncertainty, when construing a statute using the
rules of statutory construction, the statute must be viewed as a whole.21 Because the
General Assembly passes a statute as a whole, and not in parts or sections, statutes
generally serve one general purpose and intent. 22 Consequently, each part or section
of a statue should be construed in connection with every other part or section to
produce a harmonious whole; it is not proper to confine interpretation to the one
section to be construed.23 When examining Section 6018 in the context of (1) the
other sections in Chapter 60 and (2) Title 7 of the Delaware Code as a whole, the
General Assembly demonstrated its intent to limit DNREC’s authority under Section
6018 to prohibiting conduct.
First, in Chapter 60, Section 6018 limits the duration of DNREC’s cease and
desist power to a thirty-day period. Separately within Chapter 60, 7 Del. C.
§6002(b)(2) enumerates the Secretary’s power to seek an injunction or temporary
restraining order from the Court of Chancery regarding continuing violations.
Accordingly, within the same Chapter but apart from Section 6018, the General
Assembly authorized DNREC to seek court injunctions to address violators.
Elsewhere in Chapter 60 but apart from Section 6018, the General Assembly
authorized the Secretary to order affirmative corrective action. It did so in only one
20
See Black’s Law Dictionary (10th ed. 2014) (emphasis added).
21
Spielberg v. State, 558 A.2d 291, 293 (Del. 1989).
22
2A Sutherland Statutory Construction § 46:5 (7th ed. 2018).
23
Id.
10
location in Chapter 60 -- where it empowers the Secretary to order such action when
opting to proceed with conciliation. 24 In that limited context, the statute authorizes
the Secretary to order “corrective action” which apart from an order to cease and
desist, enables the Secretary to require a violator of an order to remediate
something. 25 The General Assembly’s decision to include the phrase “corrective
action” in Section 6005(b)(2) but to omit it from Section 6018 is presumed to be
intentional.
Second, other Title 7 provisions demonstrate the language the General
Assembly uses when it intends to permit the Secretary to mandate affirmative
corrective action. For instance, provisions in Chapter 63 of Title 7, expressly permit
the Secretary to order corrective action if he or she finds an imminent hazard caused
by releases of hazardous waste. There, the General Assembly authorizes the
Secretary, when “hazardous waste may present an imminent and substantial hazard
to the health of persons or the environment [to issue an order directing a polluter] to
take such steps as are necessary to prevent or eliminate the hazard.”26 There, with a
thirty-day notice, the Secretary has express authority to order violators to “take
corrective action within the time specified in the order.” 27 Provisions in other
chapters in Title 7 also authorize the Secretary to order affirmative corrective action
in limited areas.28 The General Assembly’s choice to include language permitting
the Secretary to order affirmative corrective action elsewhere in Title 7 but to not
include it in Section 6018 further demonstrates the limits of Section 6018.
24
See 7 Del. C. § 6005(b)(2) (providing that after the Secretary initiates the conciliation process,
“[i]f no hearing is requested, . . . the Secretary may order that the correction be fully implemented
by the proposed date . . ..”).
25
Id.
26
7 Del. C. § 6308(1) & (2).
27
7 Del. C. 6309 (a)(1) & (2).
28
See e.g. 7 Del. C. § 7411(a)(authorizing the Department, with thirty-day notice, “to order
compliance” with any requirement of Chapter 74 (which addresses underground storage tanks) to
include affirmative corrective action).
11
DNREC cites one case decision supporting its argument that Section 6018’s
cease and desist power should be interpreted broadly enough to equate to a
mandatory injunction. Namely, DNREC relies solely upon the Delaware Supreme
Court’s decision in Formosa.29 In Formosa, the Supreme Court interpreted the
Secretary’s express authority to issue permits broadly enough to include the implied
authority to revoke the same permits.30 The Delaware Supreme Court found that
while there is “no express statutory right to revoke these permits, the Secretary
nevertheless has substantial enforcement responsibilities supporting his ultimate
power of revocation.”31 In so holding, the Supreme Court recognized that the terms
of DNREC’s enabling statute “are broad and plenary.” 32
DNREC places particular emphasis on the portion of the Formosa decision
providing that the statute provides DNREC “all necessary concomitant powers to
give full force and effect to the clear legislative mandate of the Act.” 33 For this
reason, DNREC argues that the Supreme Court’s logic in Formosa compels a broad
reading of the Secretary’s authority under Section 6018. Namely, it argues that
because the Secretary may issue a cease and desist order and enforce it, he must have
concomitant power to compel respondents to take affirmative corrective action, to
account for their actions to date, and to report on their progress. These expanded
powers, DNREC argues, are necessary to support its cease and desist authority.
Formosa does not provide for so broad a premise as DNREC advocates.
Section 6018’s clear language, when further considered in the context of DNREC’s
enabling statute as a whole, does not permit such an expansion. The Court
recognizes that the Formosa decision recognized a broad implied authority for the
29
504 A.2d 1083 (Del. 1986).
30
Formosa, 504 A.2d at 1088.
31
Id.
32
Id.
33
Id.
12
Secretary to revoke a permit that he had issued. It did so, however, based upon a
number of statutory provisions that provide remedies for permit violations.34 In
contrast to this list of concomitant authority to DNREC’s permitting authority, there
are no like concomitant powers of the Secretary relevant to cease and desist orders.
Section 6018 merely provides one of Chapter 60’s many remedies. There are no
other provisions in Title 7 that reference Section 6018 and expand upon it as do the
multiple permit-related provisions identified in the Formosa decision.
Finally, DNREC argues that it is counterintuitive to recognize DNREC’s
authority to revoke one violator’s permit while prohibiting it from ordering
corrective action against another violator who flouts his or her responsibility to
operate with a permit. DNREC’s argument is logical but leaves an issue for the
General Assembly to consider, if it so chooses. In the case at hand, DNREC
advocates expanding Section 6018’s plain meaning beyond that which (1) its express
language and (2) its reading in context with other Title 7 provisions can reasonably
support.
V. CONCLUSION
For the reasons discussed, the Environmental Appeals Board’s decision is
AFFIRMED. Because two of the seven paragraphs in the Secretary’s August 2016
Order were not challenged in this appeal, and in light of the fact that Board made no
binding evidentiary findings below, the matter is REMANDED to the Board to take
action consistent with its discretion and in accordance with its orderly processes.
34
Id. at 1089 (citing five separate provisions in Chapter 60, including Section 6018, that provide
the Secretary broad enforcement authority regarding permit violations).
13