Preservation Society v. SCDHEC ( 2020 )

THE STATE OF SOUTH CAROLINA
In The Supreme Court
Preservation Society of Charleston, Historic Charleston
Foundation, Historic Ansonborough Neighborhood
Association, South Carolina Coastal Conservation
League, Charlestowne Neighborhood Association,
Charleston Chapter of the Surfrider Foundation, and
Charleston Communities for Cruise Control, Petitioners,
v.
South Carolina Department of Health and Environmental
Control and South Carolina State Ports Authority,
Respondents.
Appellate Case No. 2018-000137
ON WRIT OF CERTIORARI TO THE COURT OF APPEALS
Appeal from the Administrative Law Court
Ralph King Anderson III, Administrative Law Judge
Opinion No. 27949
Heard June 11, 2019 – Filed February 19, 2020
REVERSED AND REMANDED
J. Blanding Holman IV, of Southern Environmental Law
Center, of Charleston; Amy E. Armstrong and Jessie A.
White, both of South Carolina Environmental Law
Project, of Pawleys Island; and Jefferson Leath Jr., of
Leath, Bouch & Seekings, LLP, of Charleston, for
Petitioners.
Bradley D. Churdar, of South Carolina Department of
Health and Environmental Control, of North Charleston;
Randolph R. Lowell, of Willoughby & Hoefer, PA, of
Charleston; and Tracey C. Green and Chad N. Johnston,
both of Willoughby & Hoefer, PA, of Columbia, for
Respondents.
JUSTICE JAMES: Petitioners seek a contested case hearing in the administrative
law court (ALC) to challenge the propriety of state environmental authorizations
issued by the South Carolina Department of Health and Environmental Control
(DHEC) for a project relocating and expanding the passenger cruise facility at the
Union Pier Terminal (the Terminal) in downtown Charleston. Petitioners maintain
they have standing to seek this hearing as "affected persons" under section 44-1-
60(G) of the South Carolina Code (2018). The ALC concluded Petitioners did not
have standing and granted summary judgment to Respondents. The ALC terminated
discovery and also sanctioned Petitioners for requesting a remand to the DHEC
Board. The court of appeals affirmed. Pres. Soc'y of Charleston v. S.C. Dep't of
Health & Envtl. Control, Op. No. 2017-UP-403 (S.C. Ct. App. filed Oct. 18, 2017).
This Court granted a petition for a writ of certiorari. Because we find Petitioners
have standing, we reverse the grant of summary judgment and remand the matter to
the ALC for a contested case hearing. We instruct the ALC to establish a reasonable
schedule for the completion of discovery. We also reverse the sanction imposed by
the ALC.
I. FACTUAL AND PROCEDURAL BACKGROUND
Petitioners, consisting of several citizens groups and neighborhood
associations, filed a request for a contested case hearing in the ALC in February
2013 against Respondents—DHEC and the South Carolina State Ports Authority
(the Ports Authority). Petitioners seek to challenge DHEC's issuance of a Critical
Area Permit and Coastal Zone Consistency Certification in December 2012 allowing
the Ports Authority to construct a new cruise ship facility at the Terminal by
renovating Building 322, a vacant warehouse. DHEC authorized structural changes
to the building; the construction of two covered staging areas to handle passengers,
luggage, and shipping supplies; and the installation of five clusters of concrete
pilings to support adding three elevators and two escalators.
The Terminal is owned and operated by the Ports Authority and sits on a 63-
acre property on the eastern side of the Charleston peninsula along the Cooper River.
The site is near the Charleston Historic District, which has been designated a
National Historic Landmark on the National Register of Historic Places. Because
the project is planned for a statutorily defined critical area of South Carolina's coastal
zone, the Ports Authority is required to obtain a permit from DHEC prior to taking
any action in the critical area. In addition to the state permit, the Ports Authority is
required to obtain a federal permit from the United States Army Corps of Engineers
(the Army Corps). The Army Corps issued a federal permit, but, as noted below,
the issuance of that permit was successfully challenged before the United States
District Court for the District of South Carolina.
Petitioners are community organizations dedicated to preserving and
protecting historic districts and neighborhoods and to maintaining historic resources
that affect the quality of life. These organizations have members who are property
owners in the neighborhoods very close to the proposed project. Petitioners contest
both DHEC's permitting decision and its application of the critical area statutes and
regulations. Petitioners contend they have standing as "affected persons" to obtain
a contested case hearing in the ALC pursuant to section 44-1-60(G) of the South
Carolina Code (2018), which provides "[a]n applicant, permittee, licensee, or
affected person may file a request with the [ALC] for a contested case hearing"
within a specified time frame. Determining whether Petitioners are "affected
persons" pursuant to section 44-1-60(G) is the key to resolving the issue of standing.
Petitioners assert the new passenger facility would be several times larger than
the existing facility and would be engineered to sustain larger cruise ships. The ships
would also be located much closer to the properties of Petitioners' members, as the
planned project relocates the passenger facility from one part of the Terminal to what
is currently a "storage shed." Petitioners contend relocation and expansion of the
facility would generate substantial increases in traffic, hazardous diesel soot
emissions, and water pollution that would directly and adversely affect their nearby
members. For example, Petitioners note in their request for a contested case hearing
that the fuel burned by cruise ships was then "667 times dirtier than diesel fuel
burned by 18-wheel trucks" (although new emission standards were being
introduced). Petitioners also submitted affidavits from some of their individual
members. The affiants state they have soot covering their homes that has to be
cleaned regularly and they are forced to retreat indoors because of breathing
problems caused by cruise ships utilizing the existing facility. The affiants also
claim these problems would increase with a closer, significantly expanded facility.
The Charleston Historic District and the Port of Charleston have been
designated "Geographic Areas of Particular Concern" under DHEC's Coastal
Management Program (CMP). State law requires that DHEC give areas with this
designation heightened consideration when DHEC reviews activities for consistency
with the CMP. Additionally, the National Trust for Historic Preservation has
formally recognized the endangerment to Charleston's historic resources by placing
Charleston on "Watch Status" on the National Trust's list of America's Most
Endangered Places, and the World Monuments Fund has listed Charleston as a
"Watch Site."
The United States District Court for the District of South Carolina issued an
order ruling the federal permit for the project was void because the Army Corps
failed to follow prescribed procedures in issuing the permit. 1 Petitioners then filed
a motion in the ALC to vacate the state Critical Area Permit and Coastal Zone
Consistency Certification issued to the Ports Authority by DHEC. In a December
20, 2013 order, the ALC denied Petitioners' motion to vacate the state permit and
certification. The ALC found this case involved joint permitting applications filed
with both state and federal regulatory bodies; however, the ALC further found
jurisdiction of the permitting agencies was distinct and the federal district court's
ruling did "not negate the [state] critical area permit and CZC Certification at issue
in this case." The ALC stated, "At this stage of the litigation, there is not sufficient
evidence for [the ALC] to determine the extent of DHEC's review or the procedures
that were followed in issuing the permit."
The Ports Authority quickly moved for summary judgment, maintaining
discovery had ended some seven months prior and contending Petitioners lacked
standing to challenge the state permit and certification. In examining the issue of
standing, the ALC observed the South Carolina General Assembly did not define the
term "affected person" as used in section 44-1-60 and found that, "where a clear,
1
See Pres. Soc'y of Charleston v. U.S. Army Corps of Eng'rs, No. 2:12CV2942-
RMG, 2013 WL 6488282 (D.S.C. Sept. 18, 2013). District Court Judge Richard
Gergel determined the challengers had constitutional standing under Article III to
contest the federal permit, and he further ruled the federal permit was void because
it was improperly issued by the Army Corps. In relevant part, Judge Gergel found
the Army Corps did not properly consider the scope of the project, which he found
involved more than just the five clusters of concrete pilings to be installed in the
protected zone. Judge Gergel found this unduly limited view of the scope of the
project affected the Army Corps' analysis of the procedures to be applied in
reviewing the propriety of the federal permit.
specific definition of 'affected person' is not available," the principles of
constitutional standing set forth in Lujan v. Defenders of Wildlife, 504 U.S. 555
(1992), should be applied. Using the Lujan framework for its analysis, the ALC
concluded Petitioners lacked standing to seek a contested case hearing.
Consequently, on April 11, 2014, the ALC granted summary judgment to
Respondents.
In a footnote to the summary judgment order, the ALC also ruled on
Petitioners' motion seeking reconsideration of a discovery order filed March 3, 2014.
The March 3 order denied Petitioners' motion to expand discovery on several
grounds. The ALC vacated that order and denied the motion to expand discovery as
moot in light of the grant of summary judgment.
In a separate order, the ALC granted the Ports Authority's motion for a
sanction against Petitioners under SCALC Rule 72. The ALC found a sanction was
warranted for what it deemed Petitioners' "frivolous" pursuit of a motion to remand
the matter to the DHEC Board, and it required Petitioners to pay Respondents'
attorney's fees ($9,300) as a sanction.
Petitioners appealed the ALC's rulings. The court of appeals affirmed.
II. DISCUSSION
A. STANDING
As noted above, the ALC granted summary judgment against Petitioners on
the ground Petitioners lack standing to seek a contested case hearing, and the court
of appeals affirmed. Petitioners contend this was error, and we agree. We will
review the general concepts of standing before we examine the test for associational
standing that applies to organizations pursuing actions on behalf of their members.
(1) Overview of Standing Principles
"Standing has been called one of 'the most amorphous [concepts] in the entire
domain of public law.'" Flast v. Cohen, 392 U.S. 83, 99 (1968) (alteration in
original) (citation omitted). Standing in environmental cases has always been
particularly problematic, and observers have noted that the results, even from the
Supreme Court of the United States, have been variable. See Cassandra Barnum,
Injury in Fact, Then and Now (and Never Again): Summers v. Earth Island Institute
and the Need for Change in Environmental Standing Law, 17 Mo. Envtl. L. & Pol'y
Rev. 1, 7-8 (2009) (noting statutory standing and constitutional standing have
become confused in our jurisprudence, especially in the realm of environmental
law); Erwin Chemerinsky, Constitutional Law Principles and Policies 59 (4th ed.
2011) ("Standing frequently has been identified by both Justices and commentators
as one of the most confused areas of the law."). The growth of administrative
agencies since the last century has also complicated the standing analysis. See
William A. Fletcher, The Structure of Standing, 98 Yale L.J. 221, 226 (1988) (noting
standing in the administrative context could refer to who may participate in agency
rule-making or adjudicatory proceedings, who may bring original proceedings to
challenge an agency's actions, or who may appeal from an agency's adjudicatory
proceedings).
In its most basic sense, "[s]tanding refers to a party's right to make a legal
claim or seek judicial enforcement of a duty or right." S.C. Dep't of Soc. Servs. v.
Boulware, 422 S.C. 1, 7, 809 S.E.2d 223, 226 (2018) (quoting Michael P. v. Greenville
Cty. Dep't of Soc. Servs., 385 S.C. 407, 415, 684 S.E.2d 211, 215 (Ct. App. 2009)).
"Standing to sue is a fundamental requirement in instituting an action." Joytime
Distribs. & Amusement Co. v. State, 338 S.C. 634, 639, 528 S.E.2d 647, 649 (1999).
Standing may be acquired (1) by statute, (2) under the principle of "constitutional
standing," or (3) via the "public importance" exception to general standing
requirements. Freemantle v. Preston, 398 S.C. 186, 192, 728 S.E.2d 40, 43 (2012).
Petitioners do not assert standing via the public importance exception. The concepts
of statutory and constitutional standing are front and center in this appeal.
"Statutory standing exists, as the name implies, when a statute confers a right
to sue on a party, and determining whether a statute confers standing is an exercise
in statutory interpretation." Youngblood v. S.C. Dep't of Soc. Servs., 402 S.C. 311,
317, 741 S.E.2d 515, 518 (2013). "The traditional concepts of constitutional
standing are inapplicable when standing is conferred by statute." Freemantle, 398
S.C. at 194, 728 S.E.2d at 44; see also ATC S., Inc. v. Charleston Cty., 380 S.C. 191,
195-98, 669 S.E.2d 337, 339-40 (2008) (turning to constitutional standing only after
first considering and rejecting the application of statutory standing); Bevivino v.
Town of Mt. Pleasant Bd. of Zoning Appeals, 402 S.C. 57, 64, 737 S.E.2d 863, 867
(Ct. App. 2013) (holding it is unnecessary to address constitutional standing or the
public importance exception when the basis for the independent concept of statutory
standing exists).
Constitutional standing is based on Article III of the United States
Constitution, which limits the jurisdiction of the federal courts to actual cases or
controversies. See Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547-48 (2016) (stating
"[i]t is settled that Congress cannot erase Article III's standing requirements by
statutorily granting the right to sue to a plaintiff who would not otherwise have
standing" (alteration in original) (citation omitted)). In Lujan, the Supreme Court of
the United States stated "the irreducible constitutional minimum of [Article III]
standing contains three elements": (1) the plaintiff must have suffered an "injury in
fact," i.e., an invasion of a legally protected interest that is concrete and
particularized, and actual or imminent; (2) there must be a causal connection
between the injury and the conduct complained of; and (3) it must be likely that the
injury will be redressed by a favorable decision. 504 U.S. at 560-61.
The concept of Article III standing as applied in the federal courts does not
limit a state's ability to statutorily formulate standing criteria. See Duncan v. FedEx
Office & Print Servs., Inc., 123 N.E.3d 1249, 1256 (Ill. App. Ct. 2019) (noting, for
example, that a state court need not even define an "injury" the same way as in the
federal forum); see also Freemantle, 398 S.C. at 194-95, 728 S.E.2d at 44-45
(observing South Carolina's FOIA statute legislatively grants standing to "any
citizen of the State" to enforce a FOIA request and holding where the appellant
asserted he was a citizen of South Carolina, "[n]othing more" was required for
standing, i.e., the appellant did not have to show that he had a personal stake in the
outcome of the matter). However, this Court has held that "[w]hen no statute confers
standing, the elements of constitutional standing must be met." 2 Youngblood, 402
S.C. at 317, 741 S.E.2d at 518.
Here, Petitioners are community and neighborhood organizations comprised
primarily of members who own property near the proposed passenger cruise facility.
As we will now discuss, an organization has associational standing to bring suit on
behalf of its members when (1) at least one member would otherwise have standing
(statutory, constitutional, or otherwise) to sue in his or her own right, (2) the interests
at stake are germane to the organization's purpose, and (3) neither the claim asserted
nor the relief requested requires the participation of individual members in the
lawsuit. See Beaufort Realty Co. v. Beaufort Cty., 346 S.C. 298, 301, 551 S.E.2d
588, 589 (Ct. App. 2001) (citing the three-part test set forth in Hunt v. Wash. State
Apple Advert. Comm'n, 432 U.S. 333, 343 (1977)).
Associational standing advances some important objectives: it promotes
judicial economy and efficiency by avoiding repetitive and costly independent
actions by individual members, and it allows members who would have standing in
their own right to pool their financial resources and legal expertise to help ensure
complete and vigorous litigation of the issues. Save the Valley, Inc. v. Indiana-
2
"[T]he public importance exception may [alternatively] provide standing where the
elements of constitutional standing are not met . . . ." Youngblood, 402 S.C. at 317
n.5, 741 S.E.2d at 518 n.5. As noted previously, Petitioners do not assert the public
importance exception to this Court.
Kentucky Elec. Corp., 820 N.E.2d 677, 680-81 (Ind. Ct. App. 2005). An additional
advantage noted in some jurisdictions is that organizations are generally less
susceptible than individuals to retaliation by offices responsible for executing the
challenged policies. Id. at 681.
(2) Application of Test for Associational Standing
(a) First Element
To establish associational standing, an organization must first show that at
least one of its members has standing in his or her own right. See Beaufort Realty,
346 S.C. at 301, 551 S.E.2d at 589; see also Sea Pines Ass'n for the Prot. of Wildlife,
Inc. v. S.C. Dep't of Nat. Res., 345 S.C. 594, 600-01, 550 S.E.2d 287, 291 (2001)
(stating a plaintiff that is an organization may possess associational standing if it
alleges that "one or more of its members will suffer an individual injury by virtue of
the contested act"). Here, for any given Petitioner to have standing, at least one of
its members must be an "affected person" as contemplated by section 44-1-60(G);
as noted above, section 44-1-60(G) provides "[a]n applicant, permittee, licensee, or
affected person may file a request with the [ALC] for a contested case hearing."
Unfortunately, section 44-1-60 does not define the term "affected person."
Ordinarily, when a term is not defined in a statute, "the Court must interpret the term
in accordance with its usual and customary meaning." Travelscape, LLC v. S.C.
Dep't of Rev., 391 S.C. 89, 99, 705 S.E.2d 28, 33 (2011). "Courts should consider
not merely the language of the particular clause being construed, but the undefined
word and its meaning in conjunction with the whole purpose of the statute and the
policy of the law." Id.
There is no dispute that Petitioners (and their individual members) are
"persons" for the purposes of section 44-1-60(G). That brings us to the usual and
customary meaning of the word "affected." Black's Law Dictionary 70 (11th ed.
2019) defines "affect" as "[m]ost generally, to produce an effect on; to influence in
some way." Black's Law Dictionary 53 (5th ed. 1979) similarly defines "affect" as
"[t]o act upon; influence; change; enlarge or abridge; often used in the sense of acting
injuriously upon persons and things."
Petitioners argue that, instead of simply applying the usual and customary
meaning of the term "affected person" per Travelscape, the ALC and the court of
appeals erroneously evaluated Petitioners' status as statutory "affected persons" by
applying the criteria used to evaluate Article III standing. Petitioners argue the ALC
and the court of appeals compounded this error by finding Petitioners must prove
not only that they are "affected persons" under the statute but also that they meet the
Lujan test for constitutional standing. Petitioners argue the lower courts' approach
renders the statutory term "affected person" meaningless and creates a heightened
standard for statutory standing that could not have been the intent of the General
Assembly.
In analyzing whether Petitioners have standing, the court of appeals
acknowledged that section 44-1-60 does not define "affected persons." Citing
Travelscape, the court of appeals agreed the term should be given its usual and
customary meaning, but then found the Lujan test for constitutional standing should
be applied. This was error. In concluding the Lujan test applies, the court of appeals
relied on statutes and regulations governing judicial review, which set forth
particularized requirements for invoking the jurisdiction of the appellate courts. 3 It
also relied on Smiley v. S.C. Dep't of Health & Envtl. Control, 374 S.C. 326, 649
S.E.2d 31 (2007), a case in which this Court did not specifically rule on the issue of
whether a constitutional standard should be applied to a statute allowing all "affected
persons" to seek administrative review of an agency's permitting decision. See
generally Humane Soc'y of the U.S. v. Hodel, 840 F.2d 45, 59 n.24 (D.C. Cir. 1988)
(noting prior cases cannot serve as binding authority where particular objections as
to a party's standing were never raised). We find these authorities are not controlling
of the definition of "affected persons" in section 44-1-60.
Citing the Lujan test, the court of appeals found Petitioners had shown only
potential injury to the public at large and had not shown that any of their members
had sustained an injury in fact from the proposed Terminal expansion project. The
court of appeals relied on Carnival Corp. v. Historic Ansonborough Neighborhood
Ass'n, 407 S.C. 67, 753 S.E.2d 846 (2014), in which this Court applied Lujan and
found several organizations lacked standing to bring nuisance and zoning claims in
the circuit court. In Carnival Corp., we held the organizations lacked standing
because the allegations of injury in fact advanced by the plaintiffs were insufficient.
3
A contested case hearing in the ALC is distinguishable from judicial review. "[T]he
ALC conducts a de novo hearing in contested cases, complete with the presentation
of evidence and testimony." Engaging & Guarding Laurens Cty.'s Env't ("EAGLE")
v. S.C. Dep't of Health & Envtl. Control, 407 S.C. 334, 344, 755 S.E.2d 444, 449
(2014). "[T]he ALC is authorized to make a final determination—after a final
agency decision and subject to judicial review—as to whether an administrative
agency should have granted or denied a particular permit." Id. The ALC acts as the
fact-finder and is not bound by an agency's factual findings or permitting decision.
Id.
As to the nuisance claim, we cited the absence of allegations that any of the
organizations' members had personally and individually suffered any of the asserted
harms. As to the zoning claim, we found the organizations did not allege that any
of their members were adjacent or neighboring property owners as required by the
statute allowing a private action for violation of a zoning ordinance.
Here, the court of appeals acknowledged Petitioners presented affidavits from
individual members expressing concern over their reduced quality of life arising
from the effects upon them individually, such as pollution and health effects, traffic
congestion, property values, effects on their businesses in the area, and effects on
the historical integrity of the area where they resided. For example, a member of the
Coastal Conservation League stated in her affidavit that smoke emitting from cruise
ships already physically impacted her and required her to retreat indoors when the
ships were in town and that a larger facility, which would be much closer to her
home, would only increase this adverse effect. Others attested to soot on and in their
homes. Nevertheless, the court of appeals, relying on Carnival Corp., agreed with
the ALC that the claims of possible environmental and personal harm were purely
speculative or were merely generalized grievances equally affecting the public as a
whole.
Our approach in Carnival Corp. is not applicable here because Carnival Corp.
involved nuisance and zoning claims initiated in the circuit court, not the statutory
grant of administrative review in the ALC that is at issue here. Further, the plaintiffs
in Carnival Corp. did not submit affidavits regarding individualized harm. We find
Petitioners' allegations of potential harm to members in nearby neighborhoods,
through affidavits and other filings, are not speculative.
The courts below essentially, and erroneously, required Petitioners to prove
the existence of an environmental impact on their members and the surrounding
neighborhoods as part of establishing standing. The ALC and the court of appeals
failed to consider that the purpose of Petitioners' action is to seek administrative
review of whether DHEC engaged in a proper environmental analysis in the first
instance, including complying with all statutory and regulatory requirements, before
issuing the permit for the Terminal project. 4 Cf. City of Davis v. Coleman, 521 F.2d
4
Petitioners note these considerations include the extent to which all feasible
safeguards were taken to avoid adverse environmental impacts, the project's effect
on the value and enjoyment of surrounding landowners, the extent to which the
development could affect irreplaceable historic and archeological sites in South
Carolina's coastal zone, air and water quality impacts, and whether certain permit
661, 670-71 (9th Cir. 1975) ("Were we to agree with the district court that a NEPA
plaintiff's standing depends on 'proof' that the challenged federal project will have
particular environmental effects, we would in essence be requiring that the plaintiff
conduct the same environmental investigation that he seeks in his suit to compel the
agency to undertake." (footnote omitted)); Palm Beach Cty. Envtl. Coal. v. Fla. Dep't
of Envtl. Prot., 14 So. 3d 1076, 1078 (Fla. Dist. Ct. App. 2009) ("The ALJ's standing
analysis essentially boils down to a finding that the petitioners lacked standing
because the petitioners failed to prevail on the merits, i.e., they had failed to establish
that the injected wastewater would migrate and impact water quality. This analysis
'confuse[s] standing and the merits such that a party would always be required to
prevail on the merits to have had standing' . . . ." (alteration in original) (citation
omitted)); United Copper Indus., Inc. v. Grissom, 17 S.W.3d 797, 803 (Tex. App.
2000) ("United Copper confuses the preliminary question of whether an individual
has standing as an affected person to request a contested-case hearing with the
ultimate question of whether that person will prevail in a contested-case hearing on
the merits. In essence, United Copper suggests that Grissom should be required to
prove that he will prevail in a contested-case hearing just to show that he has
the standing necessary to request such a hearing. We reject this argument . . . .").
The underlying action here is an administrative proceeding in which
Petitioners seek a contested case hearing in the ALC to determine whether the proper
procedures were followed by DHEC in issuing an environmental permit. The
General Assembly surely intended DHEC to receive input from all persons affected
by a project with potentially harmful environmental impacts. Such input, which
continues until the administrative review process concludes with a contested case
hearing, allows the agency's permit review process to fully assess the project's
impact.
The purpose of this administrative process is to discover and evaluate harm to
the surrounding environment and to persons who would be affected by the proposed
project. Those living near the project are most likely to be impacted in ways that are
distinguishable from the impacts generally falling upon the public at large, and some
jurisdictions have emphasized the significance of this geographic proximity in cases
involving the assessment of a project's environmental consequences. Cf. City of
Davis, 521 F.2d at 671 ("The procedural injury implicit in agency failure to prepare
an EIS[—]the creation of a risk that serious environmental impacts will be
conditions should be imposed to lessen the effects of the project on the homes and
health of nearby homeowners.
overlooked[—]is itself a sufficient 'injury in fact' to support standing, provided this
injury is alleged by a plaintiff having a sufficient geographical nexus to the site of
the challenged project that he may be expected to suffer whatever environmental
consequences the project may have. This is a broad test, but because the nature and
scope of environmental consequences are often highly uncertain before study we
think it an appropriate test."). While geographic proximity may not be a
determinative factor in every case, it is highly relevant to our analysis in this case.
Here, members would suffer the environmental consequences Petitioners allege the
project will create, such as breathing problems and other adverse health effects;
increases in hazardous diesel soot; and increases in noise, traffic, and water
pollution. Therefore, the members fall within the scope of any reasonable, ordinary
definition of "affected persons." Accordingly, we hold Petitioners have established
the first element of associational standing.
(b) Second and Third Elements
We find Petitioners have also established the second and third elements of
associational standing. As for the second element (the interests at stake are germane
to the organization's purpose), numerous jurisdictions have emphasized "that the
germaneness requirement is undemanding." See St. Louis Ass'n of Realtors v. City
of Ferguson, 354 S.W.3d 620, 625 (Mo. 2011) (en banc) ("Requiring otherwise
would undermine the primary rationale of associational standing, which is that
organizations are often more effective at vindicating their members' shared interests
than would be any individual member."). Here, the interests Petitioners seek to
protect through the review process—impacts on noise and soot pollution, traffic,
human health, and the historic neighborhoods in which their members reside—
clearly are germane to the purposes of these organizations. Cf. White Plains
Downtown Dist. Mgmt. Ass'n v. Spano, 833 N.Y.S.2d 868, 874 (Sup. Ct. 2007)
(holding "[t]he interests BID seeks to protect—existing patterns of population
concentration, distribution or growth, existing community or neighborhood
character, human health and economic interests—are germane to its purpose").
The third element requires Petitioners to establish that neither the claim
asserted nor the relief requested requires the participation of Petitioners' individual
members. Petitioners do not seek monetary damages on behalf of their members for
specific instances of environmental harm; rather, Petitioners seek administrative
review of the agency's permitting process. Although affidavits of individual
members have been submitted in support of Petitioners' request for administrative
review, administrative review of DHEC's permitting process does not require the
individual members' substantial participation. See generally Winnebago Cty.
Citizens for Controlled Growth v. Cty. of Winnebago, 891 N.E.2d 448, 457-58 (Ill.
App. Ct. 2008) (observing an association's standing to sue on behalf of its members
"depends in substantial measure on the nature of the relief sought" and finding while
individual testimony might be taken from nearby property owners to establish some
facts in the case, this did not establish a substantial need for the individual members'
participation and did not bar associational standing, particularly in light of the fact
that the only relief sought by the associations did not involve monetary damages
(citation omitted)); White Plains Downtown Dist. Mgmt. Ass'n, 833 N.Y.S.2d at 874
(holding the organization did not seek compensatory damages on behalf of its
members, so the action did not require the individual participation of its members
for the relief sought).
To conclude our discussion of Petitioners' status as "affected persons," we
note section 44-1-60 provides for the participation of "affected persons" during other
stages of the agency's permitting process; for example, an "affected person" is
entitled to receive notice of the staff decision pursuant to section 44-1-60(E) and is
entitled to request a final review conference pursuant to section 44-1-60(F). See S.C.
Code Ann. § 44-1-60(E), (F) (2018). There is no dispute that Petitioners were
considered "affected persons" with regard to these other stages of the permitting
process. The dispute over their status arose only when Petitioners requested a
contested case hearing. See, e.g., S.C. Coastal Conservation League v. S.C. Dep't of
Health & Envtl. Control, 390 S.C. 418, 431, 702 S.E.2d 246, 253 (2010) (holding
"the [South Carolina Coastal Conservation] League was an affected person who
asked to be notified" of the permitting decision under section 44-1-60).
If nearby property owners who have made individualized assertions of real,
anticipated harm cannot satisfy the statutory standard in section 44-1-60 to acquire
"affected person" status, it does not appear that anyone in this state could qualify to
seek review of permits for the Terminal expansion project. This could not have been
the intent of the General Assembly. We find at least one of Petitioners' members
would have standing to sue in his own right, the interests the action seeks to protect
are germane to the purposes of Petitioners' organizations, and neither the claim
asserted nor the relief requested requires the participation of Petitioners' individual
members in the action. Consequently, we hold Petitioners have established
associational standing. We reverse the grant of summary judgment and remand the
matter to the ALC for a contested case hearing.5 However, we emphasize that our
5
Because we find Petitioners have statutory standing, we need not address
Petitioners' argument that the Ports Authority was collaterally estopped from
disputing Petitioners' standing to challenge the state permit based on the fact that
Judge Gergel previously found some of Petitioners' organizations had Article III
decision as to standing should in no way be construed as a signal of our view of the
merits of the issues to be examined in either the contested case hearing or any other
part of the permitting process.
B. TERMINATION OF DISCOVERY
Petitioners next argue the court of appeals erred in upholding the ALC's ruling
denying their motion to expand discovery and imposing a retroactive date for its
termination. Petitioners assert the issue of discovery is not moot if summary
judgment is reversed. We agree.
SCALC Rule 21(A) provides that in ALC matters, discovery shall generally
be completed within 90 days of the date of the Notice of Assignment. However,
discovery may be expanded or curtailed upon either (1) a motion for good cause
shown, or (2) sua sponte by the ALC. Id.
The ALC denied Petitioners' motion to expand discovery pursuant to SCALC
Rule 21(A) on the basis the motion was untimely (having been made after the 90-
day default period) and because Petitioners had not shown additional discovery was
warranted. Petitioners filed a motion for reconsideration. At that time, the Ports
Authority's motion for summary judgment was still pending. The ALC issued an
order granting summary judgment based on Petitioners' lack of standing. In a
footnote included in the summary judgment order, the ALC vacated its original order
regarding discovery and stated Petitioners' motion to expand discovery was denied
as moot in light of the grant of summary judgment.
On appeal, the court of appeals stated it did not dispute Petitioners' assertion
that there was correspondence among counsel of record, as well as communications
with the ALC, that suggested the ALC and all parties proceeded as if discovery
would continue after the 90-day period following the Notice of Assignment.
However, the court of appeals ultimately upheld the ALC's determination, citing,
inter alia, Petitioners' failure to move earlier for an extension under SCALC Rule
21(A). The court of appeals did not address the issue of mootness, although it also
upheld the grant of summary judgment.
standing to challenge the federal permit. See Futch v. McAllister Towing of
Georgetown, Inc., 335 S.C. 598, 613, 518 S.E.2d 591, 598 (1999) (explaining an
appellate court need not address any issues remaining if another issue is dispositive).
Petitioners contend the court of appeals erred in upholding the ALC's
discovery determination, and they maintain Respondents have fabricated procedural
arguments on appeal in an effort to insulate the discovery issue from review. We
reject Respondents' assertions that none of the discovery rulings are reviewable.
Although the ALC held the discovery issue was moot after it granted summary
judgment, common sense dictates that the issue of discovery is no longer moot if
summary judgment is reversed. In addition, Petitioners did not waive the ability to
challenge the discovery issue by stating they sought expanded discovery for the
contested case hearing, not summary judgment. Petitioners were simply stating
expanded discovery was not a critical component in evaluating Petitioners' standing
to seek a contested case hearing, which was the sole subject of the summary
judgment motion.
Having reversed the order granting summary judgment in Part A of this
opinion, we find the issue of discovery is no longer moot. We further find
Petitioners' motion to expand discovery was not untimely, as the parties informed
the ALC of their need for expanded discovery, and the parties continued discovery
well after the 90-day period, all with the ALC's knowledge and tacit approval. Under
SCALC Rule 21(A), the ALC can sua sponte grant expanded discovery, which is
effectively what occurred here. In addition, Petitioners' explanations as to why the
parties delayed taking depositions until most of the discovery documents had been
received and their need for additional time to take depositions in this complex case
satisfied the good cause standard. Consequently, we reverse the rulings regarding
discovery and instruct the ALC to issue a reasonable scheduling order for concluding
discovery.
C. SANCTION FOR FILING REMAND MOTION
Petitioners contend the court of appeals erred in upholding the ALC's
imposition of a sanction under SCALC Rule 72 after the ALC found Petitioners'
motion to remand the case to the DHEC Board for a final review conference was
frivolous. We agree and reverse the imposition of a sanction.
"If the presiding administrative law judge determines that a contested case,
appeal, motion, or defense is frivolous or taken solely for purposes of delay, the
judge may impose such sanctions as the circumstances of the case and
discouragement of like conduct in the future may require." SCALC Rule 72. "In
determining whether a case or defense is frivolous, the administrative law judge may
refer to S.C. Code Ann. § 15-36-10, the Frivolous Civil Proceedings Sanctions Act
[FCPSA]." 2014 Revised Notes to SCALC Rule 72. "The amount and type of
sanction to be imposed is within the discretion of the presiding administrative law
judge." Id.
The ALC indeed referred extensively to the FCPSA in reaching its decision
to impose a sanction on Petitioners. While the Revised Notes to SCALC Rule 72
recognize that the "amount and type of sanction to be imposed" are matters for the
sound discretion of the administrative law judge, a judge's threshold decision to
apply sanctions under the FCPSA sounds in equity rather than at law. See Holmes
v. E. Cooper Cmty. Hosp., Inc., 408 S.C. 138, 167, 758 S.E.2d 483, 499 (2014).
Therefore, we review the ALC's findings of fact with respect to its threshold decision
to grant sanctions under the FCPSA by taking our own view of the preponderance
of the evidence. See id.
The FCPSA provides an attorney or a pro se litigant in a civil or administrative
action may be sanctioned for filing a frivolous motion or document if "a reasonable
attorney presented with the same circumstances would believe the [item filed] is
frivolous, interposed for merely delay, or merely brought for any purpose other than
. . . adjudication of the claim or defense . . . ." S.C. Code Ann. § 15-36-
10(A)(4)(a)(iv) (Supp. 2019). A sanction may also be imposed for "making
frivolous arguments that a reasonable attorney would believe were not warranted
under the existing law or if there is no good faith argument that exists for the
extension, modification, or reversal of existing law." § 15-36-10(A)(4)(c). While
subsection (A)(4) speaks only in terms of an attorney or pro se litigant being subject
to sanctions under this act, subsections 15-36-10(C) and (E) extend the specter of a
sanction to a party to the action. In determining whether to impose a sanction, a
court must consider such factors as the explanation offered for the filing, the
complexity of the case, any prior violations, and such other factors the court deems
appropriate. § 15-36-10(E).
Here, DHEC issued a staff decision granting a Critical Area Permit and
Coastal Zone Consistency Certification to the Ports Authority on December 18,
2012. Petitioners requested a final review conference from DHEC, asserting DHEC
staff did not engage in a full analysis of the proper considerations in evaluating the
permit application. After DHEC notified the parties that it had decided not to
conduct a final review conference, Petitioners submitted a request for a contested
case hearing with the ALC.
Petitioners thereafter filed a motion with the ALC requesting a remand to the
DHEC Board for a final review conference. Petitioners argued the DHEC Board's
failure to conduct a final review conference violated the mandatory language in
section 44-1-60 imposing a duty on DHEC to conduct a review of the staff decision
upon timely request by an "affected person" to ensure the decision was consistent
with agency policy and supported by the administrative record. See S.C. Code Ann.
§ 44-1-60(F) (2018) ("No later than sixty calendar days after the date of receipt of a
request for final review, a final review conference must be conducted by the board,
its designee, or a committee of three members of the board appointed by the chair."
(emphasis added)). Petitioners asserted a final review conference would enable
additional information to be supplied, if needed, and allow DHEC to apply its
statutorily recognized "'specialized knowledge' in an evidence-based setting" so that
"the agency's rationale (as opposed to [the] staff's rationale)" would be reviewed by
the ALC.
The ALC found that although the word "must" initially could lead to the
conclusion that whenever a request is made, the DHEC Board is required to conduct
a conference, other language in the statute clarified that the DHEC Board has the
discretion to "decline" to hold a final review conference. See id. ("If the board
declines in writing to schedule a final review conference or if a final review
conference is not conducted within sixty calendar days, the staff decision becomes
the final agency decision, and an applicant, permittee, licensee, or affected person
[may request] pursuant to subsection (G) a contested case hearing before the
[ALC]."). The ALC found the use of the word "must" in section 44-1-60(F) means
that in instances in which the DHEC Board actually elects to hold a conference, it
must do so within the statutorily prescribed time. The ALC noted this meaning is
further recognized in section 44-1-60(G)(1) of the South Carolina Code (2018). The
ALC analyzed the statutes referring to DHEC's "specialized knowledge"6 cited by
Petitioners and found they applied to evidence presented by DHEC in the ALC
hearing and did not impact the procedure for requesting a final review conference.
The Ports Authority subsequently sought the imposition of a sanction against
Petitioners pursuant to SCALC Rule 72, including dismissal of the action, on the
ground Petitioners' motion for a remand to the DHEC Board was a frivolous filing
that was unsupported by any reasonable legal theory and interposed solely for
purposes of delay. After a hearing, the ALC issued an order sanctioning Petitioners
for making the remand motion and directing Petitioners to pay $9,300 to the Ports
Authority for attorney's fees incurred in opposing the motion. The ALC found the
motion was frivolous because Petitioners erroneously relied upon a single word
("must") in section 44-1-60(F) while ignoring other language in the statute and
administrative rulings and appellate cases recognizing the DHEC Board's discretion.
6
See S.C. Code Ann. § 44-1-60(F)(2) (2018); see also S.C. Code Ann. § 1-23-330(4)
(2005).
The court of appeals affirmed the ALC, finding Petitioners disregarded a settled rule
of statutory construction by failing to consider the statute as a whole.
The Ports Authority contends Petitioners have not preserved this issue for
review because Petitioners did not appeal the ALC's order denying Petitioners'
motion for remand. We disagree. The ALC's order denying the remand motion
analyzed the statutory language and ruled solely on the issue of a remand to the
DHEC Board for a final review conference. Petitioners did not appeal the remand
order but did appeal the ALC's subsequent order finding their motion frivolous and
imposing a sanction. While the remand order interpreting the statute is the law of
the case, Petitioners' failure to appeal the remand order does not preclude them from
appealing the order finding their motion frivolous and imposing a sanction.
Petitioners argue they did not disregard the additional language in the statute
indicating ALC review is available if the DHEC Board "declines" to hold a
conference. Rather, they read the provisions together (1) to mean the DHEC Board
"must," in fact, hold a review conference, and (2) to provide an avenue for redress
in the ALC if the Board fails to fulfill this statutory obligation. Petitioners
acknowledge there are cases referring to the DHEC Board's discretionary authority
to hold a conference; however, Petitioners assert they are not conclusive because the
statements in those cases were made in general recitations about the facts or the
permitting process, and the mandatory-versus-discretionary nature of a final review
conference was not disputed. See Ex parte Goodyear Tire & Rubber Co., 248 S.C.
412, 418, 150 S.E.2d 525, 527 (1966) ("It is a maxim, not to be disregarded, that
general expressions, in every opinion, are to be taken in connection with the case in
which those expressions are used. If they go beyond the case, they may be respected,
but ought not to control the judgment in a subsequent suit, when the very point is
presented for decision." (quoting Cohens v. Virginia, 19 U.S. 264, 399 (1821))).
Petitioners argue they have a duty to diligently advance their members' interests, and
courts have routinely rejected sanctions for far more aggressive advocacy.
Petitioners maintain the imposition of a sanction in these circumstances suppresses
the vigorous representation that is needed to protect the public interest.
In upholding the sanction, the court of appeals cited no cases directly on point
and relied instead on general authority holding a statute shall not be construed by
concentrating on an isolated phrase. We agree with Petitioners that the cases cited
by the ALC are not controlling because they did not involve a dispute over the
particular point pertaining to a remand advanced by Petitioners. While Petitioners
were incorrect on the law, our review of the preponderance of the evidence leads us
to conclude their filing of the remand motion was not frivolous; we therefore reverse
the ALC's imposition of a sanction.
III. CONCLUSION
Because we find Petitioners have standing, we reverse the grant of summary
judgment and remand the matter to the ALC for a contested case hearing, at which
time the ALC shall establish a reasonable schedule for the completion of discovery.
In addition, we reverse the order imposing a sanction on Petitioners.
REVERSED AND REMANDED.
BEATTY, C.J., KITTREDGE and HEARN, JJ., concur. FEW, J., dissenting
in a separate opinion.
JUSTICE FEW: The majority finds Petitioners have "associational" standing
because at least one member of each Petitioner has "statutory" standing under
subsection 44-1-60(G) of the South Carolina Code (2018). The finding of statutory
standing depends on whether the person is "affected." To understand what the
Legislature meant by "affected," it is necessary to consider context. No person
positively affected by government action would sue to challenge the action. A
person will sue only when negatively affected. Being negatively affected is the
same as being injured as we define constitutional standing. Therefore, the ALC
and the court of appeals correctly understood the subsection 44-1-60(G)
requirement of "affected person" to be the equivalent of having suffered an "injury
in fact" under constitutional standing.
Constitutional standing requires a party challenging government action to allege an
injury different in character—not merely by degree—from the manner in which the
action will "affect" the general public. The majority appears to agree Petitioners
do not have constitutional standing. Even under subsection 44-1-60(G), Petitioners
are no more "affected" than I am, and thus do not have standing. The effects
alleged by Petitioners are of the same character members of the general public will
see from the DHEC permit. As a recent resident of Greenville County and a
current resident of Berkeley County, I too will experience increased noise and
traffic, air pollution, and water pollution when I visit the City of Charleston
peninsula. In addition, if there are soot and breathing concerns—a very serious
scientific question Petitioners should be required to answer with scientific proof—
when I park my truck to walk the streets of the City, I too will find soot on my
truck when I return, and I will suffer breathing issues while I walk. The manner in
which the issuance of DHEC's permit will affect me is different only by degree
from the manner in which it will affect the South of Broad residents driving this
challenge.
I respectfully dissent.