Summary of a Recent
Judicial
Development in
Environmental Law
Permit Allowing Expanded Egg
Production Invalidated
E. John Edwards IIINational AgLaw Center Graduate Fellow
The Ohio Court of Appeals has ruled that permits granted by the director of the Ohio Environmental Protection Agency ("OEPA") to an egg producer to expand operations and install an egg processing wastewater system were invalid because the director failed to conduct an on-site evaluation prior to issuing the permits. Concerned Citizens of Cent. Ohio v. Schregardus, 771 N.E.2d 898, 900-01 (Ohio Ct. App. 2002). The court also ruled that the permits could not be validated by a de novo review of the director's decision by the state Environmental Review Appeals Commission ("Commission"). See id. at 901.
In April 1998, Buckeye Egg Farm, L.P. ("Buckeye Egg"), applied to the OEPA for two permits, one to expand the number of chickens in its operation from 2.5 million to 3.5 million, and another to construct "an egg-processing wastewater treatment, storage and disposal system at the expanded facility." Id. at 899. Both permits were approved in October 1998. See id.
An environmental interest group known as the Concerned Citizens of Ohio ("Concerned Citizens") appealed the director's decision to the Commission. See id. Concerned Citizens argued that "the director had erroneously determined that the facility's air emissions were exempt from regulations without first conducting a site-specific evaluation, as required by law." Id. The director admitted "that he had not conducted a site-specific review of the facility prior to issuing the permits[,]" but insisted that he had made a complete review subsequent to issuance of the permits and made the determination "that the facility was entitled to the agricultural exemption contained in [Ohio Rev. Code Ann. §] 3704.01(B)." Id.
The Commission ruled that the OEPA director had reasonably concluded that the emissions from the facility satisfied the criteria for the agricultural exemption. See id. at 899-900. The Commission further ruled that it was legal for the OEPA director to complete his site-specific evaluation of the facility for purposes of establishing its entitlement to the exemption contained in Ohio Rev. Code Ann. § 3704.01(B) after issuing the permits. See id. at 900. The Commission reasoned that "'since such a determination was made shortly after the issuance of the permits, and since the Commission agrees with the determination which the Director ultimately reached, we find it would be senseless to remand the permits at this juncture with an order that the Director perform an act which he has already completed to our satisfaction.'" Id.
Concerned Citizens appealed the Commission's decision to the Ohio Court of Appeals. See id. Concerned Citizens argued "that [the Commission] erred in concluding that the permits were lawful and valid notwithstanding the OEPA director's failure to timely conduct a site-specific evaluation." Id. Concerned Citizens also argued that '"[the Commission] erred in finding the subject facility exempt pursuant to [Ohio Rev. Code Ann. §] 3704.01(B) from the requirement to obtain an air pollution control permit where there were prior, adjacent nonagricultural activities disqualifying the facility from such exemption.'" Id. Agreeing with the first argument, the court reversed the Commission's decision. See id.
The court stated that under Ohio Adm. Code § 3745-31-05(A)(2) "the OEPA director [was authorized] to issue a permit if he determines, among other things, that the action will not violate air pollution laws, including emissions standards adopted by the OEPA. The director is required to consider compliance with all applicable laws prior to issuing a permit." Id. (italics in original). Noting that it was undisputed that the director failed to conduct a site-specific review to determine the applicability of the agricultural exemption before issuance of the permits, the court determined that the "issuance of the permits was not lawful." Id. at 901.
The court further ruled that the Commission did not have the legal authority to retroactively "validate the permits based on its de novo review." Id. According to the court, the Commission "could affirm action by the OEPA director only if it found 'that the action appealed from was lawful and reasonable.'" Id. (quoting Ohio Rev. Code Ann. § 3745.05). Due to the director's failure to undertake the statutorily required actions prior to issuance of the permits, the court concluded that "his action in issuing the permits was not lawful." Id.
The court also rejected the appellants' contention "that the director's failure to conduct the exemption evaluation before he issued the permits amounts to harmless error because the director eventually undertook the evaluation." Id. The court stated, "[w]e decline to rule that the director's failure to make an initial determination prior to issuing permits, as expressly required by Ohio Adm.Code [§] 3745-31-05(A)(2), amounts to harmless error." Id.
Having ruled for the appellants on their first point, the court dismissed their second point as moot. See id. However, the court recommended that the Commission consider rule-making on the issue of how "to evaluate whether the agricultural production activities at issue were established prior to adjacent nonagricultural activities." Id. According to the court, "[r]ather than attempt to apply uniform standards in the instant matter, however, it appears that the OEPA director and [the Commission] selected 1939 as the year by which to evaluate for adjacent nonagricultural activities for the arbitrary reason that aerial photographs were taken in that year." Id. at 902.
The case was decided on March 14, 2002; this summary was prepared in December, 2002.