In re Diverging Diamond Interchange SW Permit, Diverging Diamond Interchange A250 (R.L. Vallee, Inc. and Timberlake Associates, LLP, Appellants)

NOTICE: This opinion is subject to motions for reargument under V.R.A.P. 40 as well as formal
revision before publication in the Vermont Reports. Readers are requested to notify the Reporter
of Decisions by email at: JUD.Reporter@vermont.gov or by mail at: Vermont Supreme Court, 109
State Street, Montpelier, Vermont 05609-0801, of any errors in order that corrections may be made
before this opinion goes to press.
2019 VT 57No. 2018-232
In re Diverging Diamond Interchange SW Permit, Supreme Court
Diverging Diamond Interchange A250
(R.L. Vallee, Inc. and Timberlake Associates, LLP, On Appeal from
Appellants) Superior Court,
Environmental Division
April Term, 2019
Thomas G. Walsh, J.
Jon T. Anderson of Primmer Piper Eggleston & Cramer, and Alexander J. LaRosa of MSK
Attorneys, Burlington, for Appellant R.L. Vallee, Inc.
David L. Grayck of Law Office of David L. Grayck, Montpelier, for Appellant Timberlake
Associates, LLP.
Thomas J. Donovan, Jr., Attorney General, and Justin Kolber and Jenny E. Ronis, Assistant
Attorneys General, Montpelier, for Appellees State of Vermont, Agency of Transportation,
Agency of Natural Resources and Natural Resources Board.
PRESENT: Reiber, C.J., Skoglund, Robinson, Eaton and Carroll, JJ.
¶ 1. SKOGLUND, J. Plaintiffs R.L. Vallee, Inc. (Vallee) and Timberlake Associates,
LLP (Timberlake) appeal various aspects of three decisions that culminated in the environmental
division granting the Vermont Agency of Transportation (VTrans) Act 250 and stormwater
discharge permits for a highway project involving the reconfiguration of an interstate exit.1 We
conclude that the environmental division erred in dismissing Vallee’s questions regarding
1
Vallee leases land and runs a commercial business near the proposed project. Timberlake
owns land and runs a commercial business near the proposed project.
Criterion 1 of Act 250; in all other respects, we reject Vallee’s claims of error. Accordingly, we
uphold issuance of the stormwater permit, reverse issuance of the Act 250 permit, and remand the
matter for the environmental division to consider Vallee’s questions concerning Criterion 1.
¶ 2. The subject project involves constructing a diverging diamond interchange2 at Exit
16 of I-89 in Colchester and making related improvements to U.S. Route 2/7 in the immediate
vicinity of Exit 16. The project is in the Sunnyside Brook watershed and requires an individual
stormwater permit. VTrans initially filed a stormwater permit application with the Agency of
Natural Resources (ANR) in February 2013 and then filed revised applications in October 2014
and January 2015. Further revisions to the application were made in March 2015, June 2015, and
October 2015. In May 2016, ANR approved the stormwater permit application. Vallee appealed
to the environmental division.
¶ 3. In November 2013, VTrans applied for an amended Act 250 permit based on its
assumption that the project would involve only 9.82 acres of land, which would not trigger Act
250’s ten-acre jurisdictional threshold for requiring a new permit. By April 2014, revisions to the
project’s footprint increased the affected acreage to just over ten acres, causing VTrans to revise
its application to request a separate Act 250 permit for the project. In early June 2014, upon request
by the District #4 Environmental Commission, VTrans provided a revised adjacent-landowners
list. The Commission granted VTrans an Act 250 permit and permit amendments in November
2016. Both Vallee and Timberlake appealed to the environmental division for de novo review of
the permit applications.
¶ 4. In a March 2017 decision concerning VTrans’s Act 250 permit application, the
environmental division denied Vallee party status as a landowner, see 10 V.S.A. § 6085(c)(1)(B),
but granted Vallee party status as having a “particularized interest” under Act 250 that might be
2
A diverging diamond interchange is a freeway interchange pattern in which the arterial
highway crosses to the left side of the road under the freeway to eliminate left turns across traffic.
2
affected by a decision on the permit request, see id. § 6085(c)(1)(E). With regard to Act 250’s
Criterion 1, the court concluded that Vallee failed to show any potential impact to its groundwater
but that its assertions were “sufficient to establish a reasonable possibility that Vallee’s
particularized interest in keeping its property free from pollution may be adversely affected by
water pollution from the [Diverging Diamond Interchange] project.” With regard to Act 250’s
Subcriterion 1(B), the court concluded that “Vallee has demonstrated a reasonable possibility that
the . . . project was not designed in compliance with stormwater regulations, and that wastewater
in the form of stormwater runoff may enter its property and affect its interest in keeping the
property free from pollution.”
¶ 5. Then, in three later decisions, the environmental division addressed both dockets,
one concerning the stormwater discharge permit and the other concerning the Act 250 permit. In
the first decision issued in October 2017, the court granted ANR’s and VTrans’s motions for
summary judgment on thirteen of the sixteen amended questions Vallee raised with respect to the
stormwater permit and denied ANR’s and Vallee’s cross-motions for summary judgment on three
questions Vallee and Timberlake raised with respect to the Act 250 permit. Relevant to the instant
appeal, the court determined that VTrans’s stormwater application was administratively complete
in October 2014 and therefore vested in the then-current laws and regulations, which at that time
did not include chloride or phosphorus standards for waterways.
¶ 6. In the second decision issued in February 2018, the environmental division granted
in part and denied in part ANR’s and VTrans’s motions to dismiss several of the Act 250 questions
raised by Vallee and Timberlake. Relevant to this appeal, the court ruled that Vallee could not
challenge chloride or phosphorus levels under Act 250’s Criterion 1 concerning water pollution
from stormwater runoff because water quality standards had not been adopted for those chemicals
at the time VTrans submitted applications for Act 250 and stormwater permits.
3
¶ 7. In the third decision—the merits decision issued in June 2018 following a five-day
evidentiary hearing involving the consolidated dockets—the environmental division granted
VTrans’s applications for Act 250 and stormwater permits. Relevant to this appeal, the court
dismissed Vallee’s party status with respect to Act 250’s Subcriteria 1(B) and 1(E) for failure to
demonstrate a particularized interest during the five-day trial3; nevertheless, the court addressed
those criteria based on its treatment of Vallee as a friend of the court, see 10 V.S.A § 6085(c)(5),
and the fact that Timberlake shared Vallee’s position on the criteria. The court then went on to
conclude that VTrans had satisfied both criteria. The court also ruled that Act 250’s Criterion 5(A)
and 5(B) did not apply to the subject project because VTrans’s Act 250 application had already
vested at the time those criteria were enacted.
¶ 8. On appeal to this Court, Vallee, joined by Timberlake,4 argues that the
environmental division erred: (1) in its February 2018 decision by dismissing Vallee’s challenge
to the Act 250 permit application under Criterion 1 based on its improper conflating of Criterions
1 and 1(B); (2) in its October 2017 decision by concluding as a matter of law that VTrans’s
stormwater application was complete in October 2014 and thus vested in regulations predating
chloride and phosphorus standards; and (3) in its June 2018 decision by declining to address Act
250’s Criterion 5(B) based on its determination that VTrans’s Act 250 application vested before
Criterion 5(B) was enacted.
3
The court stated that it gave Vallee an opportunity to address its continued standing in a
post-trial brief, but Vallee’s only argument was that the plans for the project showed the road
sloping towards Vallee’s property, which supported the conclusion that stormwater runoff would
flow onto the property. The court concluded that this was insufficient to show a particularized
interest and noted that Vallee did not introduce any evidence identifying how the runoff would
impact its property or how it might have a particularized interest different from the general public
in the condition of Sunnyside Brook. The court pointed out that Vallee’s sole focus at trial was on
the alleged ineffectiveness of VTrans’s proposed stormwater system.
4
For the sake of simplicity, except as otherwise noted, we refer only to Vallee when citing
arguments made by appellant Vallee and joined by appellant Timberlake. For the same reason,
we refer to the State when citing arguments made by appellees VTrans and ANR.
4
I. The Stormwater Discharge Permit
¶ 9. We first consider Vallee’s argument, with respect to its challenge to the stormwater
permit, that the environmental division erred in its October 2017 decision by granting VTrans
summary judgment on Vallee’s questions addressing chloride management. The environmental
division ruled that VTrans’s stormwater permit application was administratively complete and
vested in then-current laws and regulations when VTrans submitted it on October 3, 2014. The
significance of this ruling is that stormwater discharge permit applications are reviewed for
compliance with the Vermont Water Quality Standards, which did not include any specific
standards for chloride until October 30, 2014.
¶ 10. The environmental division made the following undisputed findings concerning
VTrans’s stormwater permit application. VTrans initially filed a stormwater permit application
for the project on February 13, 2013. A couple of days later, ANR sent VTrans a letter stating that
the application had been received and indicating that the letter did not serve as notice the
application was complete. VTrans filed a revised application on October 3, 2014. That same day,
an ANR employee informed other ANR personnel by email that the application had been received.5
On October 16, 2014, the same ANR employee sent VTrans a letter stating that she had conducted
her initial technical review of the application and that she was requesting additional information.
The letter included requests to update application materials, provide additional information, and
clarify parts of the application that were unclear.
¶ 11. On October 17, 2014, counsel for ANR sent an email to counsel for VTrans stating
that an upcoming hearing on Act 250 Criterion 1(B) concerning waste disposal should be
5
As discussed below, the court noted but did not rely on evidence of a screenshot of ANR
records indicating that the application had been completed on October 6, 2014, as well as an ANR
employee’s affidavit stating that the employee had determined that the application was deemed
complete on October 6, 2014 based on his review of the application materials and ensuing
correspondence.
5
postponed because of the issues outlined in the October 16 letter. The email stated that ANR
would ask VTrans to develop a chloride management plan. Counsel for VTrans agreed to postpone
the Act 250 hearing. In a November 14, 2014 email, counsel for ANR told counsel for VTrans
that providing the information sought in the October 16 letter “might not result in a final complete
application because there may need to be further requests for information and revisions to the
stormwater application after that.”
¶ 12. On January 13, 2015, VTrans sent ANR a revised stormwater permit application
that complied with the requests in ANR’s October 16 letter. Among other things, the revised
application listed landowners from whom land would be required for the project and included a
chloride management plan as an appendix to the application. VTrans submitted further revisions
to the application on March 4, June 15, and October 17 of 2015.
¶ 13. In February 2016, ANR provided public notice of a draft stormwater discharge
permit for the project. On May 11, 2016, ANR approved the stormwater permit application and
issued VTrans a permit.
¶ 14. On appeal to the environmental division, Vallee argued that VTrans’s application
did not vest until after October 30, 2014, when the new water quality standards that included
chloride and phosphorus standards were in place. For their part, ANR and VTrans argued that the
permit application vested when ANR deemed it administratively complete on October 6, 2014.
¶ 15. In addressing the parties’ arguments, the environmental division first considered
ANR’s principles and practices concerning the review and vesting of stormwater applications.
ANR reviews stormwater permit applications in two steps. First, it determines whether the
application is administratively complete. When the application is considered administratively
complete, ANR conducts a technical review of the application on its merits and decides whether it
should be approved, denied, or modified. While acknowledging that ANR does not explicitly
define administrative completeness, the court cited ANR’s policies and guidelines in concluding
6
that a stormwater permit application is administratively complete when it includes all components
normally required in an application such that ANR can review the technical merits of the
application.
¶ 16. The environmental division found that, in this case, VTrans included in its October
3, 2014 application all of the elements required to review the application, as indicated on the
notice-of-intent form submitted by VTrans along with the application. The court further found
that the ANR employee reviewing the application indicated in an email that same day that she was
going to conduct an initial review at her earliest convenience to determine whether the application
was administratively complete. The court also noted an affidavit from another ANR employee
who averred that he had reviewed the permit application materials and deemed the application
complete on October 6, 2014. Further, the court cited an October 16, 2014 letter from the
reviewing ANR employee indicating that she had begun her technical review of the application,
which, according to the court, demonstrated that she must have deemed the application
administratively complete before that date.
¶ 17. Based on these findings, the environmental division concluded that VTrans’s
application for a stormwater permit vested in the laws and regulations in place at the time the
administratively complete application was filed on October 3, 2014. The court based its
conclusion on this Court’s determination that a permit applicant’s rights vest in the laws that exist
at the time a proper permit application was filed. See Smith v. Winhall Planning Comm’n, 140
Vt. 178, 181-82, 436 A.2d 760, 761 (1981) (adopting minority rule that subdivision permit
applications vest “under the then existing regulations as of the time when proper application is
filed”); In re B & M Realty, LLC, 2016 VT 114, ¶ 22, 203 Vt. 438, 158 A.3d 754 (applying
minority rule). The court also considered that the water-quality-standard regulations in place at
the time VTrans filed its administratively complete stormwater application: (1) defined an
application as “any request for a permit . . . filed with, and deemed complete by, the reviewing
7
authority” and (2) stated that “the Water Quality Standards in effect at the time of the filing [of
any application] shall apply.” 2011 Vermont Water Quality Standards §§ 1-01A.2, 1-01B.4, Code
of Vermont Rules 12 030 025; see In re Hannaford Bros. Co., No. WQ-01-01, slip op. at 9-11 (Vt.
Water Res. Bd. June 29, 2001), https://anrweb.vt.gov/PubDocs/ DEC/Decisions/wrp/2001/wq-01-
01-mod.pdf [https://perma.cc/5AQU-HRQV] (“For purposes of determining the vested rights of a
permit applicant, the Board understands a complete application as follows: the application is such
that the applicant would reasonably believe that the reviewing authority could act upon the
application’s merits.”). Accordingly, the court determined that because VTrans’s application was
administratively complete on October 3, 2014 and vested in regulations without chloride standards,
ANR and VTrans were entitled to summary judgment on Vallee’s amended questions concerning
chloride management.
¶ 18. On appeal, Vallee contends that the environmental division committed reversible
error in granting ANR and VTrans summary judgment on the chloride management questions
because there was a genuine issue of material fact as to when VTrans’s operative stormwater
application was complete. Vallee also argues that the minority approach for vesting of subdivision
permit applications adopted in Smith is inconsistent with the federal Clean Water Act and does not
make sense in the context of stormwater applications.
¶ 19. We review a decision on summary judgment “applying the same standard as the
environmental court”; hence, we will uphold a decision granting summary judgment “if there are
no genuine issues of material fact and the moving party is entitled to judgment as a matter of law.”
In re Champlain Oil Co., 2004 VT 44, ¶ 10, 176 Vt. 458, 852 A.2d 622 (quotation omitted); see
V.R.C.P. 56(a) (“The court shall grant summary judgment if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”).
“In determining whether there is a genuine issue as to any material fact, we will accept as true the
allegations made in opposition to the motion for summary judgment, so long as they are supported
8
by affidavits or other evidentiary material,” and we give the nonmoving party “the benefit of all
reasonable doubts and inferences.” Robertson v. Mylan Labs., Inc., 2004 VT 15, ¶ 15, 176 Vt.
356, 848 A.2d 310. Nevertheless, the nonmoving party “cannot simply rely upon mere allegations
in the pleadings to rebut credible documentary evidence or affidavits, but must respond with
specific facts that would justify submitting [that party’s] claims to a factfinder.” Id. (citation
omitted) (noting that opposing facts contained in affidavits must be based on personal knowledge
and admissible in evidence).
¶ 20. According to Vallee, in granting ANR and VTrans summary judgment, the
environmental division improperly drew inferences against Vallee as the nonmoving party.6 In
making this argument, Vallee cites three comments in the court’s decision.
¶ 21. First, regarding the October 3, 2014 email in which the ANR employee indicated
that the application was not yet administratively complete but that she would look at it at her
earliest convenience, the court stated that the email “suggest[ed] that she was going to conduct an
initial review of the application to determine if it was administratively complete.” Vallee contends
there was no evidence or testimony in the record concerning the employee’s intent.
¶ 22. Second, regarding the October 16, 2014 letter in which the ANR employee
indicated that she had begun her technical review of the application, the court stated that because
applications must be administratively reviewed for completeness before any technical review, the
application must have been administratively complete before October 16. Vallee argues that this
6
Vallee also argues that the State conceded in its filings the existence of a factual dispute
as to whether VTrans’s stormwater permit application was completed before July 2015. We
disagree. ANR argued that: (1) “to the extent” a factual dispute existed as to whether the
application was completed on October 6, 2014, Vallee should be estopped from arguing the
application was not complete until after July 2015; and (2) “to the extent” the environmental
division determined that the application was complete and that VTrans’s rights vested on October
6, 2014, Vallee’s arguments regarding chloride management were irrelevant and must be
dismissed. This is at most an acknowledgement of Vallee’s position and not a concession that
there exists a genuine issue of material fact on this point.
9
key logical assumption was improperly drawn against the nonmoving party at the summary
judgment stage.
¶ 23. Third, noting a screenshot of ANR records indicating that the application had been
completed on October 6, 2014, as well as an ANR employee’s affidavit stating that he had
determined that the application was deemed complete on October 6, 2014 based on his review of
the application materials and ensuing correspondence, the court stated: “If we give weight to any
of these items, it would be to the analyst’s offer that the application was deemed complete on
October 6, 2014.” Vallee contends that this comment constituted an improper weighing of
evidence on summary judgment.
¶ 24. We find these arguments unpersuasive. The environmental division simply
recognized that the ANR employee: (1) acknowledged in an October 3, 2014 email that she had
received VTrans’s application on that day and would be reviewing the application at her earliest
convenience7; and (2) stated in an October 16, 2014 email that she had begun her technical review
of the application, which, pursuant to ANR policy and practices, did not commence until the
application was administratively complete. We discern no improper inferences drawn from the
court’s reasoning as to the import of the emails. Nor did the court improperly weigh evidence.
Vallee has not pointed to any documentation or affidavits it submitted to raise a reasonable doubt
as to when the application was deemed administratively complete. Vallee cannot rely on mere
allegations to rebut credible documentary evidence of when the application was deemed
administratively complete. In short, there is no genuine dispute as to the timeline of review of the
application.
7
ANR’s permit application review procedure states that a review for “administrative
completeness is usually conducted upon receipt of an application package” and “should be
completed within 15 days of application receipt.”
10
¶ 25. Vallee contends, however, that even if the October 2014 application was complete,
it was superseded by VTrans’s January 2015 application. The environmental division rejected this
argument, ruling that VTrans’s revised January 2015 application merely supplied additional
information requested following ANR’s technical review. Vallee contends on appeal that the
January 2015 application was an entirely new application with a new cover sheet and more than
mere piecemeal edits of the original application. We disagree that the revised application created
a new vesting date.
¶ 26. After initiating its technical review in October 2014, ANR requested several
revisions and supplemental information—a normal process entirely consistent with ANR policies
and procedures. See Hannaford Bros., No. WQ-01-01, slip op. at 11 (stating that “agencies
reviewing complex permit applications commonly ask for supplemental information,” which is
why applications are deemed administratively complete for vesting purposes when they
“reasonably address all the factors that the agency is legally required to address in its permit
review”). In response, VTrans modified some stormwater structures and included a list of owners
of impervious surfaces associated with the project. For purposes of determining vesting rights,
these changes did not constitute a new application that superseded the October 2014 application
for the project. This is not a situation where the applicant submitted “a request for a permit based
on partial and insufficient information” that prevented any review of the application. See In re
Ross, 151 Vt. 54, 59, 557 A.2d 490, 493 (1989) (concluding that Act 250 permit applicant did not
have vested right in law at time of initial application on two criteria after commission deferred
ruling on those criteria due to inadequate application submitted to protect against proposed town
plan amendment that would set density limits on developments); see also In re Champlain Oil Co.,
2004 VT 44, ¶¶ 11, 17, 176 Vt. 458, 852 A.2d 622 (concluding that applicant’s “sketch-plan
application could not vest a right to consideration under the then-existing zoning laws for
subsequent final site plan approval or a zoning permit application”); In re Taft Corners Assocs.,
11
171 Vt. 135, 142, 758 A.2d 804, 810 (2000) (concluding that zoning permit application did not
vest right in zoning regulation enacted after landowner applied for subdivision permit but before
he applied for zoning permit).
¶ 27. Permit applications are often complex, and they routinely require revisions and
supplemental information before being finalized. Negating vesting rights based on such changes
and attempting to divine a completeness date would undermine our vesting law, which we adopted
“because we found it more practical to administer, it provided greater certainty, and it avoided
extended litigation.” B & M Realty, 2016 VT 114, ¶ 22.
¶ 28. Vallee argues, however, that the vesting rule we adopted in Smith should not apply
to stormwater permit applications. Noting that this Court has never adopted this vesting rule in
the context of stormwater applications, Vallee argues that doing so would be inconsistent with the
federal Clean Water Act, pursuant to which Vermont’s Water Quality Standards are adopted.
Vallee contends that the policy reasons for adopting the Smith vesting rule are not relevant with
respect to stormwater applications because water quality standards are not subject to retributive
changes in the law aimed at blocking projects and because environmental considerations must
trump a landowner’s reasonable expectations. The State disputes these policy arguments and
points out that the stormwater permit at issue here was granted pursuant to a state permit program.
¶ 29. As we have stated, “[o]ur adoption of the minority rule—vesting rights under
existing regulations and laws as of the time when the proper application is filed—was not without
careful thought and analysis.” In re Times & Seasons, LLC, 2011 VT 76, ¶¶ 13-14, 190 Vt. 163,
27 A.3d 323 (citing “practicality of administration, avoidance of extended litigation and
maneuvering, and certainty in the law and its administration,” and further noting policy of 1 V.S.A.
§ 213, which provides that nonprocedural enactments shall not affect pending suits). In any event,
we decline to consider Vallee’s challenge to the Smith vesting rule because it is raised for the first
time in this appeal. In its opposition to ANR’s and VTrans’s partial motions for summary
12
judgment, Vallee cited Smith as general authority for when a permit application is complete and
did not argue that the Smith vesting rule should not control the vesting date for stormwater
applications. Further, in seeking reconsideration of the environmental division’s October 2017
summary judgment ruling, Vallee argued that the court failed to consider the “pending ordinance
doctrine” as an exception to the Smith vesting rule—an argument that it does not raise here on
appeal—but it did not otherwise suggest that the rule is inapplicable with respect to stormwater
permit applications, as it does here. “Failure to raise a reason why summary judgment should not
be granted at the trial precludes raising it on appeal.” Lane v. Town of Grafton, 166 Vt. 148, 153,
689 A.2d 455, 457 (1997). In short, Vallee has not presented any basis for us to disturb the
environmental division’s decision to grant VTrans a stormwater permit for the proposed project.
II. The Act 250 Permit
A. Criterion 5(B)
¶ 30. Before addressing Vallee’s contention that the environmental division erred by
dismissing Vallee’s Act 250 questions claiming undue pollution from chloride and phosphorus,
we consider, and reject, Vallee’s argument that the court erred in excluding consideration of
Criterion 5(B) based on its determination of when VTrans’s Act 250 application vested.
¶ 31. The parties disputed whether Vallee’s Act 250 application vested before or after
the addition of Criterion 5(B), which requires projects, as appropriate, to “incorporate
transportation demand management strategies and provide safe access and connections to adjacent
lands and facilities and to existing and planned pedestrian, bicycle, and transit networks and
services.” 10 V.S.A. § 6086(a)(5)(B).8 In its June 1, 2018 merits decision, the environmental
division addressed that dispute, ruling that the revisions VTrans made to its initial November 2013
8
Enacted pursuant to 2013, No. 147 (Adj. Sess.), § 2, with effective date of June 1, 2014.
The 2014 amendment created Criteria 5(A) and 5(B) from the former Criterion 5, but 5(A) is not
at issue in this case.
13
Act 250 permit application were not substantial enough to establish a new vesting date for
determining what laws applied to the application.9 We agree.
¶ 32. Vallee does not challenge the environmental division’s findings regarding the
timeline for VTrans’s Act 250 application, which reveal the following facts. VTrans initially
submitted its Act 250 application in November 2013. VTrans had assumed the projected 9.82
acres of involved land would not trigger Act 250’s jurisdictional threshold, and therefore the
agency sought only to amend its existing Act 250 permits that would be affected by the project.
By March 2014, VTrans determined that revisions to the project, including to the stormwater
system, would cause the project to exceed the ten-acre threshold. In April 2014, VTrans submitted
new materials to supplement its November 2013 application, explaining that the project would
remain basically the same as originally proposed but would now exceed the ten-acre threshold.
On June 4, 2014, VTrans submitted a revised Schedule E to the application updating its list of
abutting landowners.
¶ 33. Vallee argues that the changes in the application from November 2013 to June 2014
were substantial enough to extinguish any vesting rights until June 4, 2014, after Criterion 5(B)
was enacted.10 We disagree. As the environmental division found, nothing in the record suggests
9
The environmental division also ruled that even if rights vested anew with revisions
putting the project over ten acres, those revisions were presented to the district coordinator in April
2014 before the June 1, 2014 amendment splitting Criterion 5 into two parts, and that, in any event,
the connectivity issue Vallee raised with respect to Criterion 5(B) was considered by the court in
its analysis of Criterion 5. Vallee does not address the former point at all on appeal, and only
addresses the latter point in its reply brief in response to the State’s argument that any error on the
part of the environmental division was harmless.
10
Vallee also briefly makes two related arguments. Vallee asserts that there is an
inconsistency between the environmental division’s reliance on a November 2013 vesting date for
Criterion 5 and its reliance on the 2014 Colchester town plan in considering Criterion 10. The
court considered the 2014 town plan based on its finding that it was undisputed that the 2014 plan
applied to the project. Vallee has waived consideration of that argument here, given it did not
dispute application of the 2014 town plan in the court’s October 2017 decision, including in its
motion to reconsider that decision, and it did not raise the alleged inconsistency in its post-hearing
memorandum in which it argued that November 2013 should not be the vesting date for Criterion
14
that VTrans’s Act 250 application was incomplete in the sense that it failed to address all applicable
Act 250 criteria. See Ross, 151 Vt. at 57-58, 557 A.2d at 492-93 (holding that Smith vesting rule
requires filing of complete application addressing all relevant criteria). Nor is there any suggestion
of bad faith on VTrans’s part with respect to the revisions it made to its application. See id.(disallowing vested rights in situation where “the orderly processes of town government [would
be] frustrated when a landowner [could] easily avoid regulatory requirements by submitting a
request for a permit based on partial and insufficient information”). VTrans’s revisions to its
application—including amending its Schedule E to add abutting landowners and seeking a separate
permit instead of an amended permit for the project area because the revisions tipped the acreage
over ten acres—did not fundamentally or substantially alter the project so as to cause VTrans to
forfeit its vested right to the laws in place at the time it submitted its original application. The
record supports the environmental division’s finding that “the Project remained basically the same
as initially proposed,” with its nature, scope, and location remaining essentially the same.11
5. See Ball v. Barre Elec. Supply Co., 146 Vt. 245, 246, 499 A.2d 786, 787 (1985) (per curiam)
(stating that issue was not preserved for appeal where no objection was made that gave trial court
opportunity to consider and correct any error). Vallee also briefly argues that VTrans indicated in
September 2014 that it had no objection to the application of Criterion 5(B). Any such
acquiescence on the part of the State, however, did not preclude the environmental division from
making a legal ruling on the appropriate vesting date of VTrans’s application. See In re Handy,
171 Vt. 336, 351, 764 A.2d 1226, 1239 (2000) (issues surrounding vesting date are legal issues to
be decided by “rule of law” rather than through “broad grant of discretion”).
11
The cases that Vallee relies on in support of its argument that VTrans’s revisions created
a new vesting date are easily distinguishable. In Taft Corners, we concluded that filing a
subdivision permit application did not establish vested rights in then-current laws with respect to
a subsequent zoning permit application. 171 Vt. at 142, 758 A.2d at 810. In Champlain Oil, we
concluded that no rights to existing law vested under a preliminary sketch plan application for a
zoning permit. 2004 VT 44, ¶ 17. Finally, in In re Application of Lathrop Ltd. Partnership I, we
considered a different issue—“whether the environmental court was required to remand the Act
250 application to the district commission to consider project changes,” including a changed access
point to the project. 2015 VT 49, ¶ 99, 199 Vt. 19, 121 A.3d 630. To the extent that Lathrop is
relevant to the issue presented here, it is distinguishable in that the changes to the Act 250 permit
application—including construction of a completely new access point in a new location—could
involve Act 250 criteria not relevant to the original application. Id. ¶¶ 106-107. None of these
15
B. Criterion 1
¶ 34. Vallee argues that the environmental division also erred in its February 2018
decision by dismissing Vallee’s two questions under Criterion 1, which alleged, respectively, that
chloride and phosphorus discharges from the project would cause undue pollution to Sunnyside
Brook and Lake Champlain. According to Vallee, in dismissing those questions, the court
improperly conflated Criterion 1 with Subcriterion 1(B), which provides that a permit shall be
granted if it complies with state regulations regarding the disposal of wastes. 10 V.S.A.
§ 6086(a)(1)(B). Vallee asserts that Criterion 1 operates independently of its various subcriteria
to prevent undue pollution even if the applicant has satisfied state regulations concerning the
subcriteria. The State responds that these arguments are unavailing because Vallee has no standing
under Criterion 1 or Subcriteria 1(B) or 1(E), the court properly applied Subcriterion 1(B), and
there is alternative evidence to support a finding of no undue water pollution.
¶ 35. Before addressing these arguments and counterarguments, we detail the procedural
history and rulings that form the basis for Vallee’s claim of error and the State’s responses. In its
decision, the District Commission denied Vallee party status—the equivalent of standing—under
Criterion 1 and its subcriteria. Vallee appealed that decision to the environmental division and
requested party status under Criteria 1, 1(B), and 1(E). Criterion 1 conditions the grant of an Act
250 permit on a development not resulting “in undue water or air pollution” and sets forth several
factors for consideration, one of which is “applicable Health and Environmental Conservation
Department regulations.” 10 V.S.A. § 6086(a)(1). Criterion 1 also has seven subcriteria. Id.
§ 6086(a)(1)(A)-(G). Subcriterion 1(B) concerns waste disposal and provides that a permit “will
be granted” when the applicant demonstrates “that, in addition to other applicable criteria, the
development . . . will meet any applicable Health and Environmental Conservation Department
cases give us pause in concluding that VTrans’s application vested in November 2013 when it was
originally filed.
16
regulations regarding the disposal of wastes and will not” inject waste materials or toxic substances
into groundwater. Id. § 6086(a)(1)(B). Subcriterion 1(E) concerns streams and provides that a
permit “will be granted” when the applicant demonstrates “that, in addition to all other applicable
criteria, the development will, whenever feasible, maintain the natural condition of [an adjacent]
stream, and will not endanger the health, safety, or welfare of the public or of adjoining
landowners.” Id. § 6086(a)(1)(E).
¶ 36. In a March 17, 2017 order, in response to Vallee’s prehearing request for party
status under Criterion 1 and Subcriteria 1(B) and 1(E), the environmental division denied Vallee
party status as a landowner, see 10 V.S.A. § 6085(c)(1)(B), but granted Vallee party status as an
“adjoining property owner or other person who has a particularized interest” that is protected by
Act 250 and that “may be affected” by a decision under that law, id. § 6085(c)(1)(E). In concluding
that Vallee had party status under the latter provision, the court determined, with respect to
Criterion 1, that Vallee had made a sufficient showing that stormwater would carry pollutants onto
its property. The court stated that Vallee’s assertions regarding stormwater were “sufficient to
establish a reasonable possibility that Vallee’s particularized interest in keeping its property free
from pollution may be adversely affected by water pollution from the [Diverging Diamond]
project.” Regarding Subcriterion 1(B), the court determined that Vallee “demonstrated a
reasonable possibility that the [Diverging Diamond] project was not designed in compliance with
stormwater regulations, and that wastewater in the form of stormwater runoff may enter its
property and affect its interest in keeping the property free from pollution.”
¶ 37. In December 2017, VTrans, joined by ANR, moved to dismiss several of Vallee’s
Act 250 questions, including its questions asking whether the project would cause undue water
pollution due to an increase in chloride discharges into Sunnyside Brook and phosphorus
discharges into Lake Champlain. In asking the environmental division to dismiss these questions,
VTrans argued that the impacts Vallee was alleging from chloride and phosphorus were from
17
stormwater runoff, which is addressed in Act 250 under Subcriterion 1(B) concerning the disposal
of wastewater and waste material.12 Citing the environmental division’s October 2017 decision
not to allow Vallee to challenge the stormwater permit based on the presence of chloride and
phosphorus, VTrans argued that stormwater should be reviewed consistently in both permit
appeals, and that reviewing chloride and phosphorus separately from stormwater runoff would run
counter to managing stormwater runoff without independently reviewing its constituent pollutants.
In VTrans’s view, because chloride and phosphorus were contained entirely in stormwater runoff,
which is governed by Subcriterion 1(B), and because under the law of this case there were no
applicable water quality standards for those elements, there was no basis to review those chemicals
pursuant to Criterion 1 to determine whether their presence resulted in undue pollution.
¶ 38. In opposing the dismissal of these questions, Vallee argued that Criterion 1 and
Subcriterion 1(B) are independently operating provisions and that the purpose of Criterion 1 is to
assess water pollution issues apart from the stormwater permitting process. Vallee contended that
because the applicable regulations considered under Subcriterion 1(B) did not protect water quality
with respect to pollution from chloride, it was appropriate for the environmental division to
determine under Criterion 1 whether undue water pollution would result from the increase of
chloride from the project. Vallee further contended that review under Criterion 1 was required to
address the impervious surfaces within the project area not covered by VTrans’s stormwater
permit. In Vallee’s view, even assuming that the more recent water quality standards dealing with
chloride did not apply to its Act 250 permit application, factors set forth in Criterion 1 and
Department of Environmental Conservation (DEC) regulations provided a basis to determine if
chloride pollution from the project was undue. Vallee asserted that levels of chloride in Sunnyside
12
VTrans argued that Vallee had not claimed chloride and phosphorus were being applied
directly as chemical agents into the waterways and that, to the extent Vallee was alleging undue
pollution from the “bounce and scatter” of applying road salt on impervious surfaces, then Vallee
had to narrow its chloride questions to that allegation, which VTrans could address at trial.
18
Brook already exceeded the levels established by the Environmental Protection Agency (EPA) at
which aquatic life is harmed, that the project would increase chloride levels in the stream, and that
practicable measures existed to prevent this.
¶ 39. In its February 2018 decision addressing VTrans’s motion to dismiss several of
Vallee’s questions, the environmental division concluded that because VTrans’s Act 250 permit
application vested when the comprehensive regulatory scheme for stormwater runoff left chloride
and phosphorus unregulated, no relief could be granted with respect to Vallee’s questions
addressing Criterion 1 and Subcriterion 1(B). The court reasoned that allowing Vallee to allege
excessive chloride and phosphorus in stormwater runoff in the context of the Act 250 review would
negate Vermont’s vested rights doctrine by permitting Vallee to replace the stormwater regulatory
regime in effect at the time of VTrans’s Act 250 application with a subsequently enacted or
alternative regime that regulated chloride and phosphorus. The court also opined that allowing the
questions would lead to absurd results because, under Vallee’s reasoning, the area of the project
that did not even require a stormwater permit might be subject to more stringent controls with
respect to stormwater runoff than the area that required a stormwater permit.
¶ 40. On appeal, Vallee repeats its argument that Criterion 1 operates separately from
Subcriterion 1(B) and that its purpose is to determine whether the subject project will result in
undue water pollution outside the context of the stormwater permitting process. According to
Vallee, the environmental division’s decision effectively makes Criterion 1 superfluous. Vallee
notes that Criterion 1, as well as the Natural Resources Board Training Manual, lists factors for
determining whether water pollution is undue that are not limited to complying with environmental
regulations. See 10 V.S.A. § 6086(a)(1) (setting forth several nonexclusive factors to be
considered in determining whether development will result in undue water or air pollution); NRB
Training Manual, https://nrb.vermont.gov/sites/nrb/files/documents/1%28water%29final.pdf
[https://perma.cc/4ZR4-HTE7]. Vallee points out that long ago this Court noted the breadth of
19
Act 250 in rejecting the position that compliance with DEC regulations prevented Act 250 review
under Criterion 1. See In re Hawk Mt. Corp, 149 Vt. 179, 184, 542 A.2d 261, 264 (1988) (stating
that, in considering whether there was undue water pollution pursuant to Act 250’s Criterion 1,
Environmental Board was not limited to considering factors listed in that provision, including
compliance with health and environmental regulations).13 Vallee also argues that the court’s
decision effectively prevents it from rebutting the presumption of compliance resulting from the
issuance of a stormwater permit. Finally, Vallee argues that the environmental division violated
this Court’s limitation on the vested rights doctrine by applying a vested right concerning a
stormwater permit to an Act 250 application. Cf. Tafts Corners, 171 Vt. at 139-40, 758 A.2d at
809 (concluding that applicant who obtained subdivision permit before adverse regulatory change
had no vested right in separate zoning permit which applicant sought after regulatory change).
¶ 41. We conclude that Criterion 1 and Subcriterion 1(B) are independent criteria with
different standards and that the environmental division erred by dismissing Vallee’s Act 250
questions concerning Criterion 1 based solely on the vested rights doctrine and the fact that no
chloride or phosphorus standards existed under the stormwater regulations applicable in this case.14
13
We note that in Hawk Mountain, the Act 250 permit applicants contended that the Water
Resources Board’s water quality standards were not environmental regulations within the meaning
of Act 250’s Criterion 1. We concluded that even if the water quality standards could not be
considered environmental regulations under Criterion 1, “the Environmental Board could still
properly consider them when determining whether a land use permit should be granted” because
“the Board is not limited to the considerations listed in Title 10.” Hawk Mt. Corp., 149 Vt. at 184,
542 A.2d at 264.
14
We find unavailing the State’s argument that Vallee has no standing to challenge the
dismissal of its Act 250 questions concerning Criterion 1. In its June 1, 2018 decision granting
VTrans’s stormwater and Act 250 permits, the environmental division concluded that Vallee could
not retain party status—i.e., standing—under Subcriteria 1(B) or 1(E) because it had failed to
identify during the five-day merits hearing how the project’s stormwater system might impact its
particularized interest. In its March 2017 decision granting Vallee standing on water quality
criteria, the court had not indicated that its standing decision was preliminary in nature.
Nonetheless, it denied Vallee standing on Subcriteria 1(B) and 1(E) at the close of evidence in the
merits hearing by relying on provisions in Act 250 that: (1) require the District Commission to
consider before the close of hearings “the extent to which parties continue to qualify for party
20
¶ 42. In dismissing Vallee’s Criterion 1 questions, the environmental division essentially
reasoned that because there were no water quality standards for chloride and phosphorus in place
when Vallee’s permit applications vested, Vallee was foreclosed from making any argument under
Act 250’s Criterion 1 that the presence of chloride and phosphorus in stormwater runoff would
result in undue water pollution. In the court’s view, allowing Vallee to claim undue water pollution
from chloride or phosphorus would negate our vested rights doctrine.
status,” 10 V.S.A. § 6085(c)(6), and (2) make applicable in a de novo hearing before the
environmental division “the substantive standards that were applicable before the tribunal appealed
from,” id. § 8504(h). The court noted that at the close of evidence it had expressed concern
regarding Vallee’s continuing party status under Subcriteria 1(B) and 1(E) because Vallee had not
presented any evidence during the hearing that stormwater might enter or affect its property. The
court stated that, despite having had ample opportunity during the hearing to do so, Vallee failed
to show that the project’s stormwater system would impact its interests or to “introduce any
evidence to connect stormwater runoff from the Project in any way at all to Vallee’s property.”
The court further noted that it had given Vallee an opportunity to submit a posttrial brief that could
point to evidence demonstrating it had a particularized interest regarding those subcriteria, but
Vallee failed to make such a showing. Nevertheless, the court also concluded that it would treat
Vallee as a “friend of the Court” and consider evidence it offered on these subcriteria through
cross-examination and its own witnesses, in part to avoid prejudicing other parties, Timberlake
and the Conservation Law Foundation, both of which shared Vallee’s position and wished to rely
on Vallee’s evidence. The court then rejected Vallee’s sole argument under Subcriterion 1(B) that
the stormwater discharge permit should not have been issued, as well as Vallee’s argument that
under Subcriterion 1(E) the chloride discharges from the project would impact the natural
condition of Sunnyside Brook.
We conclude that the State’s lack-of-standing argument is unavailing in this case because,
even assuming the court could eliminate Vallee’s party status following the close of evidence
without giving Vallee an opportunity to present additional evidence on that issue, the court denied
Vallee party status only on Subcriteria 1(B) and 1(E). The court did not remove Vallee’s party
status on Criterion 1 because it had previously dismissed Vallee’s questions concerning that
criterion. Moreover, we see no point in remanding the matter for the environmental division to
consider Vallee’s ongoing party status under Criterion 1 because: (1) Timberlake was a party to
the proceedings before the environmental division with respect to all criteria based on its
landowner status; (2) Timberlake, along with the Conservation Law Foundation, joined in Vallee’s
Criterion 1 and subcriteria questions, and the environmental division addressed the merits of
Vallee’s questions concerning Subcriteria 1(B) and 1(E) despite its removal of Vallee’s party status
on those subcriteria because, in addition to considering Vallee a “friend of the Court,” it did not
want to prejudice Timberlake; and (3) Timberlake has joined Vallee’s arguments in this appeal.
Thus, we must address whether the environmental division improperly dismissed Vallee’s
questions under Criterion 1.
21
¶ 43. The law does not support this reasoning. Criterion 1 and its subcriteria, including
Subcriteria 1(B), are closely related, but they are not the same; rather, they involve distinct factors
and standards. If all other applicable criteria have been met, an Act 250 permit will be granted
pursuant to Subcriterion 1(B), in relevant part, whenever the applicant demonstrates that the
proposed project “will meet any applicable Health and Environmental Conservation Department
regulations regarding the disposal of wastes.” 10 V.S.A. § 6086(a)(1)(B). Under Act 250, Rule
19, a stormwater permit creates a rebuttable presumption that the subject project meets relevant
Act 250 criteria, including Criterion 1. In re Woodstock Cmty. T. & Hous. Vt. PRD, 2012 VT 87,
¶ 26, 192 Vt. 474, 60 A.3d 686; see 10 V.S.A. § 6086(d) (providing for promulgation of rules
whereby acceptance of “permits shall create a presumption that the application is not detrimental
to the public health and welfare with respect to the specific requirement for which it is accepted”).
“The presumption disappears when credible evidence is introduced fairly and reasonably
indicating that the real fact is not as presumed.” Hawk Mt. Corp., 149 Vt. at 186, 542 A.2d at 265.
Notably, in legislative proceedings concerning a 2004 amendment to § 6086, the Legislature
ultimately rejected proposed language in the original House Bill that would have amended
§ 6086(d) to provide that ANR determinations in the context of permits concerning the first five
criteria of Act 250 “shall be dispositive for any issue addressed in the agency permits or approvals
under the relevant criteria of subsection (a)” of the Act. H.175, 2004 Legislative Session,
http://www.leg.state.vt.us/docs/legdoc.cfm?URL=/docs/2004/bills/house/H-175.HTM&Session=
2004 [https://perma.cc/C4RH-SDPG]. Instead, the amendment maintained § 6086(d)’s language
regarding the presumption created by the existence of relevant permits. See 2013, No. 115 (Adj.
Sess.), § 56.
¶ 44. On the other hand, for an applicant to satisfy Criterion 1, the District Commission
(or environmental division on appeal) must find that the proposed project “[w]ill not result in
undue water or air pollution.” 10 V.S.A. § 6086(a)(1). As frequently recognized by the
22
environmental division and the former Environmental Board, whether “undue” pollution will
result from a proposed project is a highly fact-specific inquiry that depends on a wide variety of
factors, only one of which is compliance with applicable regulations. In re N. E. Materials Grp.,
LLC, 2019 VT 55, ¶ 28, ___ Vt. ___, ___ A.3d ___; see, e.g., In re N. E. Materials Group Amended
A250 Permit, No. 35-3-13 Vtec, 2016 WL 2839328, at *8 (Vt. Sup. Ct. Envl. Div. April 18, 2016),
http://www.vermontjudiciary.org/sites/default/files/documents/N.E.%20Materials%20Grp%2035
-3-13%20Vtec%20Merits%20Altered.pdf [https://perma.cc/2PJ9-9XGZ] (stating that there is no
clear definition of what constitutes undue pollution, and that determination of whether project
creates undue pollution is highly fact-specific inquiry); In re John J. Flynn Estate, No. 831, 2004
WL 1038110, slip op. at 11 (Vt. Envl. Bd. May 4, 2004), https://nrb.vermont.gov/sites/nrb/files/
documents/4c0790-2-fco.pdf [https://perma.cc/TM4Q-PS54] (noting absence of any “clear
definition of what constitutes ‘undue’ pollution,” as demonstrated by fact-specific decisions that
“are often more instructive about what is not ‘undue,’ than what is”).
¶ 45. Nevertheless, Criterion 1 requires “at least” consideration of the following factors:
the elevation of land above sea level; and in relation to the flood
plains, the nature of soils and subsoils and their ability to adequately
support waste disposal; the slope of the land and its effect on
effluents; the availability of streams for disposal of effluents; and
the applicable Health and Environmental Conservation Department
regulations.
10 V.S.A. § 6086(a)(1). As noted, the environmental division is not limited to these factors, but
may consider any factors relevant to a determination of whether a proposed project will cause
undue pollution. Hawk Mt. Corp., 149 Vt. at 184, 542 A.2d at 264; see NRB Training Manual,
supra (stating that whether pollution is undue pursuant to Criterion 1 depends on factors “such as
the nature and amount of pollution, character of the surrounding area, whether the activity complies
with environmental regulations or recommended levels, whether the pollutant will cause adverse
health effects, and whether effective measures will be taken to reduce the pollution”).
23
¶ 46. Dismissing Vallee’s questions concerning Criterion 1 based on the fact that water
quality standards for chlorine and phosphorus did not exist at the time of Vallee’s permit
applications effectively negates Criterion 1’s general independent inquiry as to whether a project
will create undue water pollution, even though compliance with applicable regulations is only one
factor for consideration under that criterion. Further, obtaining a stormwater permit creates only
a rebuttable presumption that Criterion 1 is satisfied. For these reasons, the environmental division
erred in dismissing the questions.
¶ 47. Moreover, the record does not support the State’s argument that the environmental
division acted within its discretion in dismissing Vallee’s Criterion 1 questions because Vallee’s
only argument from the beginning of these proceedings was that the later 2014 water quality
standards that included chlorine and phosphorus standards should apply to VTrans’s proposed
project. To be sure, Vallee has consistently argued both before the environmental division and
here on appeal that the later water quality standards should apply. But, as noted above, Vallee also
argued that Criterion 1 and Subcriterion 1(B) are independently operating provisions and that, even
if the later water quality standards did not apply, undue water pollution would result from chloride
and phosphorus discharges from the project. In making the latter argument, Vallee alleged that
the project would increase the chloride levels in Sunnyside Brook, which already allegedly
exceeded federally established levels concerning harm to aquatic life, and that mitigation measures
could be put in place to reduce the pollution.
¶ 48. Finally, we reject the State’s alternative argument that, even assuming the
environmental division should have reviewed the chloride and phosphorus discharges separately
under Criterion 1, this Court can still affirm the environmental division’s decision because the
record supports the conclusion that the proposed project complies with Criterion 1. We recognize
that Vallee has the burden of demonstrating that the proposed project does not satisfy Criterion 1.
See 10 V.S.A. § 6088(a). We also recognize that the District #4 Environmental Commission in
24
this case rejected Vallee’s arguments under Criterion 1, concluding that Vallee had failed to
demonstrate that any increase in chloride or phosphorus resulting from the project was significant
in either amount or impact. Further, the District Commission was unpersuaded that any additional
reasonable chloride mitigation treatment could be implemented. Nevertheless, the environmental
division’s review of the Act 250 permit application is de novo, see id. §§ 6089, 8504(h), and the
environmental division’s dismissal of Vallee’s Criterion 1 questions prevented Vallee from
presenting any evidence on whether chloride or phosphorus discharges from the proposed project
would result in undue pollution. Accordingly, the matter must be remanded for the environmental
division to address the merits of those questions.
The environmental division’s issuance of the stormwater permit is affirmed. The
environmental division’s issuance of the Act 250 permit is reversed, and the matter is remanded
for the environmental division to consider appellant’s amended questions 1.a. and 1.b. concerning
Criterion 1 of Act 250.
FOR THE COURT:
Associate Justice
25