Re: Champlain Marble Company, Docket No. CUD-97-06 (Appeal of DEC File CUD #95-466), Memorandum of Decision and Remand Order (May 7, 1998) State of Vermont WATER RESOURCES BOARD Re: Champlain Marble Company Docket No. CUD-97-06 61 Main Street (Appeal of DEC File CUD #95-466) Proctor, VT 05765 MEMORANDUM OF DECISION AND REMAND ORDER This decision pertains to an appeal filed by Champlain Marble Company from the Agency of Natural Resources ("ANR") decision denying Champlain Marble's application for Conditional Use Determination ("CUD") No. 95-466. I. BACKGROUND On September 11, 1997, Water Resources Board ("Board") Chairman, William Boyd Davies, convened a prehearing conference in Isle LaMotte, Vermont. The following persons participated: Champlain Marble Company, by its attorney Paul S. Kulig; ANR, by attorneys Jon Groveman and Andrew Raubvogel; South Shore Associates ("SSA"), by attorney Stephanie J. Kaplan; and Linda Fitch, pro se and on behalf of Violet Fitch. As noted in the Prehearing Conference Report and Order dated September 17, 1998 ("Prehearing Order"), the above persons, as well as adjoining landowner Mary Jane Tiedgen, were granted party standing in the above- captioned matter. In addition to party status rulings, and a statement of the legal issues in the case, certain other preliminary matters were discussed at the September 11 prehearing conference, and summarized in the Prehearing Order. Among these was a concern raised by Linda Fitch that Champlain Marble was allegedly revising its proposed operational plan to satisfy certain permitting requirements and to, essentially, increase the likelihood of a favorable determination on the proposed conditional use. Ms. Fitch indicated that she was prepared to file a Motion to Dismiss should such modifications to the operational plan be proposed. Champlain Marble responded to these concerns stating that it was prepared to proceed with the present appeal using the May 19, 1997 operational plan that had been submitted to DEC. It is the May 19, 1997 operational plan to which the ANR's permit denial pertains. In order to ensure that the evidence submitted in this matter would be germane to the operational plan for which Champlain Marble sought approval, and not some variant of that plan, or a new plan, Chair Davies specifically addressed the consequences of any proposed change to the May 19, 1997 operational plan. The Prehearing Order at page 5 states that, "The Chair indicated that any change to the May 19, 1997 operational plan would be grounds for return of jurisdiction to ANR." The Prehearing Order even set forth October 10, 1997 as a date by which Champlain Marble was required to file "either a notice indicating its intention to proceed to hearing on this appeal or a notice of withdrawal based on its intention to redesign the project and seek approvals from ANR under a new operational plan." Prehearing Order at Section IX, paragraph 2. On October 9, 1997, Paul Kulig, on behalf of the Appellant, submitted a letter responding to Section IX, paragraph 2 of the Prehearing Order in which he advised Board counsel that "[Champlain Marble] is not going to redesign the project and will pursue the appeal on the present design." The Board proceeded with a site visit on November 4, 1997 and began to receive the parties' prefiled testimony shortly thereafter. On or before March 10, 1998, parties filed certain timely objections to the prefiled testimony. A second prehearing conference was scheduled for March 12, 1998 for the purpose of hearing oral argument on the evidentiary objections, to set forth a final agenda for the hearing day, and to address any remaining preliminary issues. Prior to the conference, on March 9, 1998, SSA joined by Linda Fitch and Mary Jane Tiedgen, filed a Motion to Dismiss ("Motion") on the basis that Champlain Marble had introduced changes in the design of the project which became apparent to the moving parties through their review of the prefiled testimony. On March 13, 1998, Champlain Marble submitted a Memorandum of Law in Opposition to the Motion to Dismiss. On March 12, 1998, Chair Davies convened the second prehearing conference at which he heard oral argument concerning the parties' evidentiary objections. After addressing the evidentiary issues, Chair Davies set forth a responsive filing deadline of March 23, 1998 regarding SSA's Motion to Dismiss. Also, parties were informed that the full Board would address any requests for full Board review of the Chair's evidentiary rulings and would deliberate with respect to the Motion at its Board meeting on March 31, 1998. On March 17, 1998, Chair Davies issued rulings with respect to parties' objections to prefiled evidence. Parties were directed to request full Board review of any of the Chair's evidentiary rulings no later than March 23, 1998. At the March 31, 1998 hearing, Chair Davies explained to the parties that the Board would first seek to resolve the issues concerning the Motion to Dismiss and would deliberate on the Motion immediately after hearing oral argument from the parties. Parties were informed that the Board would only proceed with the requests for full Board review of evidentiary objections if SSA did not prevail on its Motion. SSA, Champlain Marble, and the ANR were each represented by counsel, and each presented arguments to the full Board. II. DISCUSSION As described in the Motion, it is evident from Champlain Marble's pre-filed testimony that certain revisions were made to the pond design. Among the changes are modifications to the direction of outflow from the project, as well as a new location for the discharge. Champlain Marble has argued that the Board has discretion to admit additional evidence and to consider the proposed modifications because in the context of this de novo proceeding, the Board, rather than ANR, is the trier of fact, and the Board must formulate necessary conditions which may not be supported by the evidence admitted below. In support of this proposition, Champlain Marble cites Board of Medical Practice v. Perry-Hooker, 139 Vt. 264 (1981). In addition, Champlain Marble has argued that the so-called "futility doctrine" should, as a matter of fairness, compel the Board to retain jurisdiction in this matter, hear the evidence relating to the proposed modifications, and act on the CUD application. Champlain Marble claims that a remand to ANR will merely protract the process and will essentially require Champlain Marble to do a futile act. Because of the alleged futility of a presentation of evidence in support of the proposed modifications to ANR on remand, Champlain Marble requests the Board to consider the changes in the context of this de novo proceeding. A brief exchange from the March 31, 1998 oral argument during which Board Member, Gerry Gossens questioned counsel for Champlain Marble is illustrative; the exchange is repeated below: * * * Member Gossens: ". . .I hear you saying that you feel that the supplemental actions [i.e. the proposed modifications] . . . [Champlain Marble] ha[s] offered here, if they were to go back to ANR would have no effect on changing ANR's mind; so my question to you is: why do you offer them?'" Attorney Kulig: "You people are the trier of fact, not ANR, you make the decision, that's why we offer them." Member Gossens: "And my understanding is, you are offering them to us to make it more palatable to us." Attorney Kulig: "That's right." * * * While the Board favors, as a policy matter, refinements to a project proposal that have the effect of mitigating environmental impacts, the appropriate time for such modifications or refinements is when the permit or conditional use applicant is preparing its application. It would be improper to allow the appeal to proceed where Champlain Marble, in response to the Prehearing Order, represented by a letter dated October 9, 1997 that it was not going to redesign the project but pursue the appeal based on the present design and where SSA, ANR, and the other parties prepared their testimony in reliance on this design. The ANR conducts the initial review of a CUD application and the Board's role is to conduct a de novo review of Champlain Marble's application. While the law may allow the Board to consider new evidence and proposed monitoring requirements that were not reviewed by ANR, the Board's fundamental obligation is to review the merits of the same application that was reviewed by ANR. As noted in this Discussion, and particularly from the above-cited excerpt from the March 31, 1998 oral argument, the operational plan has been modified even though Champlain Marble filed a letter stating that the design would not be modified. Moreover, by Champlain Marble's own admission, the modifications to the proposal have the potential to affect the analysis of compliance with three of the five criteria on appeal. In light of the Chair's admonition to parties that any change to the May 19, 1997 operational plan would be grounds for return of jurisdiction to ANR, the Board concludes that the matter should be remanded to the ANR for further proceedings which will address the modifications to Champlain Marble's proposed operational plan. A Prehearing Order, once entered, "shall control the subsequent course of the proceeding, unless modified at the hearing to prevent manifest injustice." Water Resources Board Rule of Procedure 24(B). The Prehearing Order's prohibition on changes to the operational plan was very clear and its terms were neither objected to by any party nor modified at the hearing. As an additional rationale for the Board's decision to remand this matter, the Board concludes that the ANR, rather than the Board, is the proper forum in which to propose a CUD application or changes to a previously submitted application. The Board is guided, in this regard, by Supreme Court precedent which discusses the limitations on the role of an appellate tribunal where the project on appeal has been modified by an applicant. In In re Juster Associates, 136 Vt. 577 (1978), the Court vacated and set aside a Vermont Environmental Board order in which the Environmental Board reviewed, in the context of an appellate proceeding, a modified application for a development that affected different parcels of land than the initial application before the District Commission. In the Act 250 context, the legislative scheme does not contemplate initial review by the Environmental Board, but rather, by the District Commission. In its decision, the Court raised concerns about the potential to exclude interested persons from a permit review process by allowing amendments or changes in the context of an ongoing appellate proceeding. The Court's reasoning in Juster can be extended to this case wherein the Board's role vis-a-vis the ANR is akin to the Environmental Board's relationship to the District Commission. Accordingly, the Board concludes that consideration of the proposed modifications would be most appropriately reviewed by the ANR, with additional public notice as required by law. To proceed with the appeal, especially where additional lands may be implicated, could be found to violate due process rights of interested persons affected by the modifications but not involved in the present appeal or who did not receive notice as required by law. Even without potential impacts to additional lands, the Court's decision In re Maple Tree Place, 156 Vt. 495, 501-502 (1991) suggests that there may be a need to re-notice subsequent ANR hearings due to the potential for impacts resulting from the modified Project, but not associated with the present design. In Maple Tree Place, the Court reviewed the appropriateness of Chittenden County Superior Court's remand of a Williston Planning Commission. The superior court allowed the remand to provide Maple Tree Place with an opportunity to have its application reviewed based on a phasing design. Therein, the Court noted that, "[i]t is beyond its role as an appellate tribunal, even under a de novo review standard, to start addressing new issues never presented to the planning commission and on which interested persons have not spoken in the local process. Use of the remand authority in such cases is consistent with the court's role." In this case, were the Board to proceed with a consideration of Champlain Marble's proposed changes, such review would be inconsistent with the Board's role as an appellate tribunal and it would render meaningless the explicit instructions of the Prehearing Order. Those instructions provided that any changes to the project would result in a return of jurisdiction to ANR. The Board has made no findings with regard to the implications of Champlain Marble's operational modifications and, accordingly, leaves the issue of additional notice in the proceedings on remand, to the discretion of the ANR. Remand of this matter will allow the ANR to address the proposed changes and provide notice as required by law. To avoid a re-litigation of all issues that have been presented in this case, however, the ANR is directed to consider the proposed changes as supplemental information to the considerable amount of evidence which has been prepared with respect to CUD Application #95-466. In a recent case involving the Board's review of a CUD, the Board remanded a CUD application to the ANR for further proceedings but noted that, "once jurisdiction . . . is restored to ANR, ANR can reconsider the Proposal as altered . . .without requiring [the applicant] to initiate the entire CUD process anew." In re: Jamie Badger, Docket #CUD-96-07, Memorandum of Decision and Order of Remand (June 4, 1997) at p.3. Such an approach seems equally appropriate in this case. The Board declines to address the so-called "futility doctrine" as the Board has no basis upon which to predict the ANR's action on remand. III. ORDER Jurisdiction is hereby returned to the ANR so that the proposed modifications to Champlain Marble's project may be considered. Notice of subsequent action on this matter by ANR shall be provided in a manner not inconsistent with this decision. Dated at Montpelier, Vermont on this 7th day of May, 1998. WATER RESOURCES BOARD /s/ William Boyd Davies Concurring: Gail Osherenko Ruth Einstein Jane Potvin Gerry Gossens