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In re North East Materials Group LLC

Supreme Court of Vermont

August 12, 2016

In re North East Materials Group LLC Act 250 JO #5-21 (Russell Austin, Pamela Austin, Julie Barre, Marc Bernier, et al., Appellants)

         On Appeal from Superior Court, Environmental Division Thomas G. Walsh, J.

          Laura B. Murphy and Douglas A. Ruley, Environmental and Natural Resources Law Clinic, South Royalton, for Appellants.

          Alan P. Biederman of Biederman Law Office, and James P.W. Goss of Facey, Goss & McPhee, P.C., Rutland, for Appellees North East Materials Group and Rock of Ages.

          William H. Sorrell, Attorney General, and Gavin J. Boyles, Assistant Attorney General, Montpelier, for Amicus State of Vermont.

          PRESENT: Dooley, Skoglund, Robinson and Eaton, JJ., and Pineles, Supr. J. (Ret.), Specially Assigned

          DOOLEY, J.

         ¶ 1. This case is here for the second time, following the Environmental Division's decision on remand that a rock-crushing operation by North East Materials Group, LLC, (NEMG) is exempt from Act 250 as a preexisting development. The Environmental Division reached the same conclusion in its first decision, but we reversed and remanded, holding that the court used the wrong legal standard in deciding that the rock-crushing operation did not constitute a cognizable physical change to the preexisting development and that one of the main factual findings in support of the decision was clearly erroneous. In re North East Materials Grp. LLC Act 250 JO #5-21, 2015 VT 79, ___ Vt. ___, 127 A.3d 926 [hereinafter NEMG I]. Appellants, a group of thirteen neighbors (neighbors), appealed, arguing that the Environmental Division erred in applying our instructions on remand. We now conclude that, even assuming that crushing operations were part of the preexisting quarrying development, findings on the location and volume of the crushing operations are too limited to support a conclusion that the present operations do not constitute a cognizable change to the existing development. We reverse.

         ¶ 2. As an overview, the issues in this case are: (1) whether rock crushing was conducted on the tract prior to July 1, 1970, the effective date of Act 250, such that rock crushing is grandfathered-in and accordingly, no Act 250 permit is required; (2) whether the activity was abandoned such that its renewal requires an Act 250 permit; and (3) whether there has been a substantial change in that activity such that an Act 250 permit is required. These issues arise in a special context-the rock crushing before us is conducted on a relatively small part of a large tract of land owned by Rock of Ages (ROA), which is used primarily for granite quarrying. In general, NEMG has argued that activities anywhere on the ROA land count in determining whether rock crushing is grandfathered-in, whether rock crushing has been abandoned and whether there has been a substantial change in the rock-crushing activity; the Environmental Division accepted this position in its first decision. Neighbors, on the other hand, have argued that only activities conducted on the NEMG rock-crushing site should count in determining the three issues. Also in general, our decision accepted NEMG's argument with respect to whether rock crushing activity was grandfathered-in, but accepted the neighbors' argument with respect to substantial change; the second part of the decision caused the partial remand. As detailed below, the Environmental Division again effectively accepted NEMG's arguments, but changed the rationale with respect to substantial change. Neighbors argue here that the new rationale is inconsistent with our first decision and must be reversed. NEMG argues that the new rationale is fully consistent with our first decision and must be affirmed. Thus, the main question we must decide is whether the new rationale, accompanied by some new findings of fact, can support the conclusion that there has been no substantial change.

         ¶ 3. We will not repeat the facts as first found by the Environmental Division. These are contained in our first decision, and the reader is invited to read them there. See NEMG I, ¶¶ 2-9. To the extent that additional findings relate to the issues before us, we consider them with our discussion of these issues.

         ¶ 4. Before we look at NEMG I and the subsequent decision of the Environmental Division, we examine the legal principles that govern that case. As we noted above, development begun before June 1, 1970, the effective date of Act 250, does not require a permit. Id. ¶ 15. This exemption, however, is limited by the caveat that "any substantial change in such excepted subdivision or development" is subject to the ordinary permit requirement. 10 V.S.A. § 6081(b). A "substantial change" is defined as "any change in a preexisting development . . . which may result in a significant adverse impact with respect to any of the [ten Act 250 criteria]." Act 250 Rules, Rule 2(C)(7), Code of Vt. Rules 12 004 060-3, The Environmental Board has established a two-pronged test to determine if a new development constitutes a substantial change, and this Court has repeatedly upheld that test. See In re Vt. RSA Ltd. P'ship, 2007 VT 23, ¶ 10, 181 Vt. 589, 925 A.2d 1006 (mem.). Under the test, we first look to determine if a cognizable change to the existing development will result from the project in question. If so, we go on to determine whether the change has the potential for significant impact under any of the Act 250 criteria in 10 V.S.A. § 6086(a). Id. (citing Sec'y, Vt. Agency of Nat. Res. v. Earth Constr., Inc., 165 Vt. 160, 164, 676 A.2d 769, 772 (1996)). Even a modest change may be considered a cognizable change. NEMG I, 2015 VT 79, ¶ 31 (citing In re Vt. RSA Ltd. P'ship., 2007 VT 23, ¶ 11). A thing is cognizable as long as it is "capable of being known or recognized." Black's Law Dictionary (10th ed. 2014). This indicates that a change should be considered cognizable as long as it is notably distinct from whatever preceded it.

         ¶ 5. Any party seeking an exemption from Act 250 jurisdiction on the basis of a pre- existing development commenced before 1970 has the burden of providing evidence sufficient to demonstrate the existence and nature of the pre-existing development. In re Request for Jurisdictional Op. (F-35A Case), 2015 VT 41, ¶ 26 n.7, 198 Vt. 510 117 A.3d 457 (citing In re Vt. RSA Ltd. P'ship, 2007 VT 23, ¶ 10). Once a development has been established as exempt from Act 250 jurisdiction, any party seeking to subsequently impose jurisdiction has the burden of showing that there has been a substantial change to the preexisting development. Id. However, the burden is still on the holder of the exemption to provide sufficient information on pre- and post-1970 operations to allow the finder of fact to ascertain if a substantial change has occurred. In re Thomas Howrigan Gravel Extraction, Declaratory Ruling No. 358, slip. op. at 14 (Vt. Envtl. Bd. Aug 30, 1999), (finding party invoking exemption must "produce information concerning the scope of pre-1970 operation and the post-1970 operation sufficient for the Environmental Board to determine whether a substantial change has occurred" (citation omitted)). This is because the owner or operator of the development is far more likely to have historic knowledge of the site, and it is far more practicable for them to produce this evidence than a plaintiff with no personal knowledge of their operations. To place the burden of providing historic economic evidence wholly on the party seeking jurisdiction would prevent many parties from bringing suit, effectively shutting out local interests that Act 250 was designed to enfranchise. In re Barefoot Act 250, No-46-4-12, Vtec, at 5 (Vt. Envtl. Ct. April 5, 2013), (recognizing "long-standing principles of encouraging public participation in state and local land-use deliberations"); In re Lathrop Ltd. P'ship I, No. 122-7-04 Vtec, at 2 2014 WL 860823, at *1 (Vt. Envtl. Ct. Feb. 11, 2014), (stating public participation is "woven into" Act 250).

         ¶ 6. Moreover, the absence of either historic or current evidence does not relieve the party seeking an exemption of their burden of production either in demonstrating the existence of a preexisting development or defending against imposition of jurisdiction based on substantial change. See In re Orzel, 145 Vt. 355, 359, 491 A.2d 1013, 1015 (1985) ("The Board cannot determine whether some activity constitutes a substantial change to a pre-existing operation unless it is made aware of what that activity is."); In re John Gross Sand & Gravel, Declaratory Ruling No. 280, slip op. at 11 (Vt. Envtl. Bd. July 28, 1993), ("[T]his situation does not excuse the Petitioner from meeting its burden of production.").

         ¶ 7. On remand, the lower court is bound by the scope of our remand instructions, and may only reopen issues that are within that scope. In re Twenty-Four Vt. Utils., 159 Vt. 363, 367, 618 A.2d 1309, 1311 (1992). Furthermore, the lower court is bound to follow the specific instructions given by this Court, interpreted in the light of the opinion. Coty v. Ramsey Assocs., 154 Vt. 168, 171, 573 A.2d 694, 695 (1990) (citing Halpern v. Kantor, 139 Vt. 365, 367, 428 A.2d 1132, 1134 (1981)). It is error for the lower court to pursue and rely on findings or reasoning that this court has already struck down. Cleverly v. Cleverly, 151 Vt. 351, 354, 561 A.2d 99, 100 (1989) (citing Isabelle v. Proctor Hosp., 132 Vt. 243, 245, 315 A.2d 241, 243 (1974)). The purpose of the mandate is to ensure closure-if parties are allowed to reintroduce rejected arguments, and courts are allowed to reapply rejected logic, then "there would be no end to the litigation until the ability of the parties or the ingenuity of their counsel were exhausted." Coty, 154 Vt. at 171 (quotation and citation omitted).

         ¶ 8. NEMG I started its analysis by noting that the Environmental Division had rested its decision on the view that the entire ROA tract was an "undifferentiated whole" for purposes of determining whether there was a preexisting development, as well as for determining whether there had been substantial change, so that rock-crushing activity anywhere on the ROA tract is relevant to show both preexisting development and the absence of substantial change. We held that "we do not take issue with the Environmental Division's broad approach to defining preexisting development." NEMG I, 2015 VT 79, ¶ 24. For a number of reasons, however, we disagreed with the "undifferentiated whole" approach in determining whether there has been a substantial change. We held that

[O]ur conclusion [is] that some level of granuality (rather than a uniform 'tract-wide' approach) is required in assessing substantial change in connection with quarrying operations … [such that] [p]re-1970 crushing operations on one or more parts of a large tract cannot simply be imputed to all parts of the tract for purposes of the substantial change analysis, without regard to ...

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