VT Agency Natural Resources v. Duranleau

 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, 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.


                                 No. 91-350


 Vermont Agency of                            Supreme Court
   Natural Resources
                                              On Appeal from
      v.                                      Environmental Law Division

 Carroll Duranleau and                        May Term, 1992
   Duranleau Construction, Inc.


 Merideth Wright, J.

 Jack Long, Waterbury, for plaintiff-appellee

 Joseph P. Palmisano and Samuel C. Palmisano (On the Brief) of Joseph C.
   Palmisano Associates, Barre, for defendants-appellants



 PRESENT:  Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.



      GIBSON, J.   Defendants Duranleau Construction, Inc., and Carroll
 Duranleau, its president, appeal an Environmental Law Division (ELD) order
 denying their motion to dismiss and assessing a $10,101 penalty for
 violation of 10 V.S.A. { 6081.  The Vermont Agency of Natural Resources
 cross-appeals the ELD order.  We affirm.
                                     I.
      In the summer of 1990, heavy flooding damaged several roads in the Town
 of Washington.  The town applied to the Federal Emergency Management Agency
 (FEMA) for grants to repair the damaged roads.  Defendant, Carroll
 Duranleau, in his capacity as town selectman, inspected the roads with a
 representative of FEMA, another selectman and the town road commissioner.
 The town received the grants in September 1990.
     Defendants had planned to blast an area at their 2.3-acre business site
 in the Town of Washington to create extra parking and storage facilities.
 They offered to supply the town with "plant mix" from rock to be blasted at
 the site.  Clearing and excavation of the site began on October 5, 1990, and
 on October 16, the board of selectmen voted to purchase plant mix from
 defendant.  On October 25, the district coordinator of the District Five
 Environmental Commission notified defendants that the work occurring at the
 site might require an Act 250 permit.  On October 31, the coordinator wrote
 a letter to defendants stating his preliminary conclusion that the activity
 at the site was a commercial project subject to Act 250 and that he would be
 issuing a formal advisory opinion.  He requested a response by November 9.
 Defendants did not respond, and the coordinator issued a formal opinion on
 November 28 concluding that the activities required an Act 250 permit.  On
 November 30, the ELD entered an emergency order halting work at the site.
      On February 12, 1991, the agency issued an administrative order which
 required defendants to pay $7,250 for alleged violations.  Defendants re-
 quested a hearing before the ELD, and moved to dismiss the action, in effect
 requesting reversal of the administrative order as a matter of law.  The ELD
 denied the motion, and after a hearing on the merits, concluded that
 defendants had violated 10 V.S.A. { 6081(a) and ordered them to pay a
 penalty of $10,101.
      Defendants argue that (1) the administrative order should have been
 dismissed because state law is preempted by the federal Disaster Relief
 Act; (2) the work at the site was not done for a commercial purpose and thus
 did not require an Act 250 permit; and (3) the ELD abused its discretion in
 imposing a larger penalty than was initially ordered by the agency.
      On cross-appeal, the agency contends that the ELD abused its discretion
 (1) by not imposing separate penalties for deterrence, and for potential and
 actual impact on the environment, public welfare and safety, and (2) by
 improperly mitigating the penalty.
                                     II.
      Defendants argue that the administrative order should have been
 dismissed under the Supremacy Clause of the United States Constitution.
 U.S. Const. art. VI, { 2.  Relying on the federal preference for local
 procurement in carrying out disaster relief activities, 42 U.S.C. { 5150,
 defendants claim that the work could be done without an Act 250 permit
 because it was necessary to accomplish a project administered by FEMA.
      State law may run afoul of the Supremacy Clause in two ways: the law
 may regulate the federal government directly or discriminate against it, or
 the law may conflict with an affirmative command of Congress.  North Dakota
 v. United States, 110 S. Ct. 1986, 1994 (1990).  There is no claim in this
 case that Vermont attempted to regulate the federal government directly;
 rather, the state imposed permit requirements upon a local supplier of
 crushed stone.  Nor do the requirements of Act 250 discriminate against the
 federal government, or those with whom it deals, because they apply to all
 suppliers of crushed stone in Vermont.  Finally, there is no conflict with
 federal law, as the language of the Disaster Relief Act expressly encourages
 the states to develop land use and construction regulations. 42 U.S.C. {
 5121(b)(5).  Thus, there was no preemption of state law by the federal
 Disaster Relief Act.
                                    III.
      Defendants contend that they did not violate Act 250 because they had
 not "commenced development" without a permit.  Act 250 defines "development"
 as "the construction of improvements for commercial or industrial purposes
 on more than one acre of land within a municipality which has not adopted
 permanent zoning and subdivision bylaws."  10 V.S.A. { 6001(3).
      Corporate defendant quarried rock and enlarged its business area on a
 2.3-acre site in the Town of Washington, which has not adopted permanent
 subdivision bylaws.  Defendants argue, however, that their activities were
 not undertaken for a commercial purpose but were undertaken for the benefit
 of the municipality and therefore did not fall within the jurisdiction of
 Act 250.  In support of their argument, defendants cite Environmental Board
 Rule 2(L), which defines "commercial purpose" as "the provision of
 facilities, goods or services by a person other than for a municipal or
 state purpose to others in exchange for payment of a purchase price, fee,
 contribution, donation or other object having value."  Additionally, Rule
 2(E) defines "municipal purpose" as "projects which are undertaken by or for
 the . . . municipality and which are to be used by the . . . municipality,
 or members of the general public."
      Environmental Board interpretations of Act 250 and of its own rules are
 given a high level of deference by this Court,  In re Vitale, 151 Vt. 580,
 582-583, 563 A.2d 613, 615 (1989), and absent compelling indications of
 error, will be sustained on appeal.  In re Capital Investment, Inc., 150 Vt.
 478, 482, 554 A.2d 662, 665 (1988).  Defendants operate a commercial
 business, and they also received revenue from the sale of their crushed
 rock.  Although the crushed rock was eventually used in a municipal road
 repair project, defendants' activities primarily served a separate
 commercial purpose of their own, namely, the enlargement of their business
 site and the realization of revenues for the business.  The municipal
 purpose was collateral to their private commercial purpose.  Inasmuch as
 their activities at the site were for a private commercial purpose,
 defendants were required to obtain Act 250 approval.
                                     IV.
      Defendants also argue that the ELD abused its discretion by allowing
 the agency to seek a higher penalty than the agency itself had imposed, and
 by imposing a larger penalty than had been assessed by the agency.  The
 hearing provided for in 10 V.S.A. { 8012 is a de novo evidentiary hearing
 before the ELD.  See 10 V.S.A. { 8013(a),(b); V.R.C.P. 76(d)(2).  The
 Secretary of the Agency of Natural Resources bears the burden of proof by a
 preponderance of the evidence, id. { 8013(a), and the ELD must issue written
 findings of facts and conclusions of law.  Id. { 8012(c)(1).  V.R.C.P.
 76(d)(2) also provides that "[r]eview shall be de novo."  The ELD must
 determine whether a violation has occurred, and may affirm, modify, remand
 or reverse the Secretary's administrative order.  10 V.S.A. { 8012(b)(1)-
 (3).  In addition, it has authority to "review and determine anew the amount
 of [any] penalty."  Id. { 8012(b)(4) (emphasis added).  Because the ELD may
 "determine anew" the penalty, it was within its discretion to impose a
 larger penalty than initially assessed in the administrative order.
      Defendants contend that, by receiving a larger penalty, they are being
 punished for exercising their right to appeal.  They argue that there is a
 strong public policy against imposing a heavier penalty on one who obtains a
 trial de novo, citing Blackledge v. Perry, 417 U.S. 21 (1974).  Blackledge
 was a criminal case in which the defendant had been charged with and con-
 victed of a misdemeanor in the district court.  The defendant exercised his
 right to appeal, and to have a trial de novo in the superior court.  The
 prosecutor subsequently charged the defendant with a felony and obtained a
 conviction for the higher offense.  The United States Supreme Court held
 that "[a] person convicted of an offense is entitled to pursue his statutory
 right to a trial de novo, without apprehension that the State will retaliate
 by substituting a more serious charge for the original one, thus subjecting
 him to a significantly increased potential period of incarceration."  Id. at
 28.
      Blackledge, however, does not foreclose the possibility that a higher
 penalty may be imposed upon reconviction of the same misdemeanor offense
 after appeal, but only guards against "a realistic likelihood of 'vindic-
 tiveness'" on appeal through the substitution of a more serious charge for
 the original one.  Id. at 27.  In the present case, the agency did not "up
 the ante" by charging defendants with new violations.  Rather, on the basis
 of new information obtained at subsequent hearings concerning defendants'
 application for an Act 250 permit, the agency asked the ELD to consider the
 degree of actual and potential impact on health, safety and welfare in
 determining the amount of the penalty.  Further, the original penalty
 imposed by the Secretary of the agency was calculated ex parte.  There was
 no evidentiary hearing and no opportunity to develop a complete factual
 record.  We conclude, therefore, that, if the Blackledge rule applies in a
 civil case, here, there was no realistic likelihood of vindictiveness and no
 violation of defendants' due process rights.
      In their reply brief, defendants contend that they were entitled to a
 jury trial before the ELD.  This issue was never raised before the ELD nor
 was it argued in defendants' original brief.  Accordingly, it is not prop-
 erly before us for review.  In re D.B., 155 Vt. 580, 584, 587 A.2d 966, 968
 (1991).
                                     V.
      In its cross-appeal, the agency argues that the ELD erred in assessing
 a penalty based solely on the economic benefit gained from the violation.
 According to the agency, the ELD should have imposed additional penalties
 for deterrent purposes and for the creation of actual and potential adverse
 impacts on the environment and on public safety and welfare.
      The ELD is mandated by statute to consider eight factors when assessing
 a penalty.  10 V.S.A. {{ 8012(b)(4), 8010(b).  Section 8010(b), however,
 does not state that separate penalty amounts must be imposed under each
 factor.  Instead, the statute mandates that all eight elements be considered
 when the court determines "the amount of the penalty."  The ELD considered
 the various factors and determined that $10,101 was sufficient to meet the
 statutory goals.  Thus, the ELD met the requirements of the statute.  No
 additional penalties were required.
      The agency further contends that the ELD erred in mitigating the
 penalty.  The statute gives the ELD discretion in determining whether miti-
 gating circumstances exist, and, if found, how they should affect the amount
 of the penalty imposed.  Id. { 8010(b)(2),(3).  In assessing the mitigating
 factors, the court considered that, as this was the first case to have been
 brought under a new statute, defendants may not have known or had reason to
 know they were in violation during some portion of the time that they were
 in violation.  See id. { 8010(b)(3).  This was not an unreasonable
 assessment.  The court's conclusion that the October 31 letter from the
 district coordinator to defendants advising defendants of the violation
 marks the date when defendants clearly knew or had reason to know that a
 violation existed, and the court's use of November 9, the deadline for an
 answer from defendants, to calculate the adjusted penalty were not clearly
 unreasonable.  We find no abuse of discretion by the ELD.
      Affirmed.





                                    FOR THE COURT:



                                    ______________________________
                                     Associate Justice