stephanie durman, assistant general counsel july 13, 2018 · stephanie durman, assistant general...

Stephanie Durman, Assistant General Counsel July 13, 2018

• Browning Development Solutions proposed a new retail development in Cookeville located on Interstate Drive. The development was strongly supported by local government and business leaders as an important economic development project.

TDEC exists to enhance the quality of life for citizens of Tennessee and to be stewards of our

natural environment.

• An ETW wetland was located in the middle of the lot, and could not be avoided. Browning proposed ETW mitigation in an adjacent HUC-12 (same HUC-8), and later added a mitigation site in the same HUC-12 (14:1 mitigation).



• The Sierra Club objected to the project on numerous grounds, including antidegradation, and filed three separate appeals spanning three years. All three appeals were eventually dismissed, and the development has been completed.



– October 23, 2015 - Faulty public notices issued.

– November 18, 2015 – Petition for Declaratory Order (PDO) 1 filed.

– December 11, 2015 – Public notices rescinded.

– March 29, 2016 – PDO 1 involuntarily dismissed.

– July 29, 2016 - Permit issued.

– September 2, 2016 – PDO and Petition for Statutory Appeal (PSA) received by TDEC. Separated by APD into two cases, with separate ALJs.

– January 31, 2017 – Initial Order of Dismissal of PDO 2.

– March 24, 2017 – Appeal of Dismissal of PDO 2 filed in Chancery Court.

– April 27-28, 2017 – Contested Case Hearing on PSA.

– August 29, 2017 – Initial Order of Dismissal of PSA.

– September 26, 2017 – Appeal of Dismissal of PSA to Board.

– February 21, 2018 – Voluntary Dismissal of PDO 2 Chancery Appeal.

– February 22, 2018 – Interlocutory Appeal re: PSA scope to Chancery Court.

– June 11, 2018 – Agreed Order of Remand of PSA to the Board.

– October 17, 2018 – Oral Argument to the Board.

– October 31, 2018 – Final Order of Dismissal of PSA.



• Importance of correct public notice.

• Application of de minimis degradation to ETWs.

• Correct appeal mechanism – PSA vs. PDO.

• Scope of appeal to the Board.

• Board appeal process.

• Impact on permit applicants/permittees.



• It is always critical for the Department to follow the correct procedures for public notice. Here, the erroneous notices delayed the permitting process by five months.

• Tennessee’s Antidegradation Statement is complicated, especially for ETWs. – 2018 rule updates are intended to further clarify the public notice

process – not yet in effect.

• OGC has reviewed Division of Water Resources templates for public notices to ensure they comply with the rules, and will do so again once the new rules go into effect. OGC often reviews draft public notices for high-profile permits, or where there may be a procedural question.

TDEC exists to enhance the quality of life for

citizens of Tennessee and to be stewards of our natural environment.

• The Board confirmed that proposals for activities resulting in only de minimis degradation do not require antidegradation review and are not entitled to pre-permit PDO for ETWs.

• For habitat alterations, de minimis degradation can be achieved in two ways: – Impact minimization – see general permit thresholds

– In-system compensatory mitigation

• The 2018 amendments to WQS define “in-system” for the first time - generally, same HUC-8.



• Pickard established that a statutory permit appeal is the only means by which to challenge the validity of a permit pursuant to Tennessee Code Annotated section 69-3-105(i):

….Notwithstanding § 4-5-223 or § 69-3-118(a), or any other law to the contrary, this subsection (i) and the established procedures of Tennessee’s antidegradation statement, found in the rules promulgated by the department, shall be the exclusive means for obtaining administrative review of the commissioner’s issuance or denial of a permit….



• Pickard established that a statutory permit appeal is the only means by which to challenge the validity of a permit pursuant to Tennessee Code Annotated section 69-3-105(i):

….Notwithstanding § 4-5-223 or § 69-3-118(a), or any other law to the contrary, this subsection (i) and the established procedures of Tennessee’s antidegradation statement, found in the rules promulgated by the department, shall be the exclusive means for obtaining administrative review of the commissioner’s issuance or denial of a permit….

• Pickard did not address the scope of this statutory exception.



• The Antidegradation Statement allows pre-permit PDOs for ETWs where the Department has determined that more than de minimis degradation is justified by important economic or social development in the area. Tenn. Comp. R. & Regs. 0400-40-03-.06(4)(d).

• In this case, the first PDO was likely correct. The erroneous public notices stated the Department had determined that more than de minimis degradation was justified.

• But, that PDO became moot when the Department rescinded the erroneous notices.



• However, the Petitioner was not entitled to the second PDO because the Department determined there would be only de minimis degradation and issued the permit. Therefore, it did not fall within the narrow exception in Tennessee Code Annotated section 69-3-105(i). – Recently, in a separate matter, an ALJ dismissed the appeal of

118(a) complaints that concerned permits.



• Pickard established that antidegradation issues are reviewable in a permit appeal.

– In this case, the Department’s factual determination that only de minimis degradation would result was reviewable through the permit appeal.

• But, the Petitioner never challenged the factual determination, and instead collaterally attacked the rule itself. The ALJ and the Board disallowed this approach, and both found de minimis degradation based on the outstanding, in-system mitigation package.

– The Department’s legal interpretation that it could issue the permit without antidegradation review was subject to the permit appeal.

• Both the ALJ and the Board agreed with the Department’s interpretation.

• A permit applicant likely could challenge a determination of more than de minimis degradation as a defense in a PDO.



• This was the subject of the interlocutory appeal to Chancery Court. The ALJ had limited the scope of review to what was expressly stated in the notice of appeal and tried at the contested case hearing.

• AG’s office concluded that everything that had been raised in the permit appeal was subject to review by the Board, even matters that had been dismissed for failure to state a claim.

• Some question about limitations. ALJs decide procedural questions of law – e.g., jurisdiction based on standing, mootness, ripeness or intervention.



• After the Petitioner appealed the Board decision, APD assigned a new ALJ to sit with the Board on the appeal.

• Each party was ordered to file a brief, with the Petitioner filing an opening and reply brief and the Respondents filing a response brief.

• APD prepared the record, in conjunction with OGC and review by other counsel. The Department shared the record with the Board online and brought two copies to the oral argument.

• Time-limited oral arguments presented to the Board.

• All argument was limited to the record – no testimony or new evidence allowed.

TDEC exists to enhance the quality of life for

citizens of Tennessee and to be stewards of our natural environment.

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Impact on Permittee

• Significant delay of project construction

Initial application submitted in 2014

Permit issued July 2016

Construction delayed until after ALJ hearing in August 2017

Grand opening in November 2018

• Greatly increased expenses

Mitigation

Consulting

Legal


What did the Permittee do?

• Communicate and participate with the Department

• Retain the right consultants

• Timely provide all requested information

• Being willing to go beyond what was required –

Request a public hearing

Present alternatives analysis and mitigation at public hearing

Add additional mitigation after public hearing (at the request of the

Sierra Club)

• Weather the delays/setbacks - particularly when the appeal is directed

at the regulations rather than the merits of the project


The Mitigation

The initially proposed wetlands:

• "rare quality"

• one of which has been determined to be "the most floristically diverse wetland in

the state"

• part of a larger, approximately 1460 acre wetland complex in which 86.15 acres

are already protected

The permit writer, Mike Lee, testified:

“The fact that one [of the White County mitigation sites] is the most floristically

diverse wetland in the state of Tennessee is phenomenal. We’re trading ETWs for

ETWs. It’s never happened before. The standard has been set here; way up here.”

After the public hearing, Browning added a 10.5 acre wetland in the City of Cookeville.

14:1 ratio - 45.5 acres of mitigation for 3.26 acres of impacted wetland.

stephanie durman, assistant general counsel july 13, 2018 · stephanie durman, assistant general...

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