City of Brundidge v. Alabama Department of Environmental Management

Citation: 218 So. 3d 798Docket: 2140325 and 2140342

Court: Court of Civil Appeals of Alabama; February 4, 2016; Alabama; State Appellate Court

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Two appeals have been made regarding the ownership, operation, and licensing of a landfill in Brundidge, Alabama. The City of Brundidge and the City of Brundidge Solid Waste Authority (COBSWA) are appealing a trial court's denial of their complaint for declaratory relief against the Coffee County Commission, alleging it unlawfully 'took over' the landfill through Brundidge Acquisitions, LLC (BA). Additionally, Brundidge contests the trial court's refusal to overturn a decision by the Alabama Environmental Management Commission (AEMC) that allowed the Alabama Department of Environmental Management (ADEM) to transfer the landfill's operating permit to BA without Brundidge's consent.

The landfill, established in 1991 and authorized by ADEM in 1992, has seen ownership changes three times from 1992 to 2007, with Brundidge not objecting to any permit transfers during that period. In 2007, TransLoad America, Inc. (TLA) acquired the landfill, and COBSWA entered into an agreement with Brundidge Landfill, LLC, a TLA subsidiary, allowing it to operate the landfill and enabling Brundidge to collect fees from its operations.

Following TLA's bankruptcy in 2012 and cessation of operations by Brundidge Landfill, LLC, both Brundidge and the Coffee County Commission attempted to buy the landfill, but no sale was finalized. In October 2012, BA was created, and the Coffee County Commission authorized the issuance of up to $6 million in debt to purchase the landfill, asserting that this expenditure served a valid public purpose under Alabama law.

The trial court's judgments have been affirmed, indicating that the Coffee County Commission's actions do not violate current law.

In December 2012, BA acquired the Brundidge landfill for $4 million from the bankruptcy trustee, with the sale approved by the bankruptcy court in February 2013, which also authorized the rejection of the host-government agreement between Brundidge and Brundidge Landfill, LLC. Following this, ADEM approved BA’s request to transfer Permit No. 55-07 in March 2013. On January 21, 2013, Brundidge and COBSWA filed a declaratory-judgment action, challenging the Coffee County Commission's authority to fund the landfill's acquisition and claiming BA could not operate the landfill without a new host-government agreement, alleging violations of the Alabama Limited Self-Governance Act and the Alabama Constitution.

On March 29, 2013, Brundidge initiated an administrative proceeding to contest ADEM's transfer of the permit without Brundidge's approval. BA intervened in this matter, and the AEMC denied Brundidge's request to stay the permit transfer. An administrative-law judge held a hearing on June 6, 2013, receiving witness testimony and evidence. The ALJ ruled on September 24, 2013, that while the transfer of Permit 55-07 lacked the City of Brundidge's approval, it did not violate state law. The ruling stated that local government approval does not need to be revisited with permit transfers unless a new or modified permit is issued. 

The ALJ noted that the rejection of the host-government agreement was a result of bankruptcy court actions, and ADEM's transfer of the permit did not cause Brundidge to lose its previous contractual benefits. Consequently, Brundidge would experience diminished control and benefits due to the bankruptcy court's decisions, akin to other creditors losing rights during bankruptcy proceedings. ADEM found no misleading aspects in the transfer application process. On October 18, 2013, AEMC adopted the ALJ’s findings, affirming that the permit transfer complied with ADEM rules and Alabama law.

On November 19, 2013, Brundidge appealed AEMC’s ruling to the trial court, which consolidated the appeal with a declaratory-judgment action but held separate hearings and rendered separate judgments. In the declaratory-judgment action, Brundidge and COBSWA sought summary judgment, asserting that BA was merely a 'shell' entity controlled by Coffee County Commission employees. They claimed that the Commission aimed to minimize the Brundidge landfill's operation to divert waste to a more profitable Coffee County landfill, which had generated $280,791.50 in revenue from 2007 to 2011, with $18,843.89 allocated for local industrial development. They also noted lost revenue from leachate treatment. Brundidge and COBSWA contended that the Coffee County Commission lacked authority under Alabama law to authorize a loan to BA and accused the Commission of forming BA to circumvent legal provisions and eliminate competition for the Coffee County landfill, which reportedly gained an additional $100,000 monthly since Brundidge Landfill, LLC ceased operations. 

In response, the Coffee County Commission and BA filed their own motions for summary judgment, arguing that Brundidge and COBSWA lacked standing to challenge the expenditures, that the Alabama Limited Self-Governance Act did not apply since Coffee County had not ratified it, and that their actions served a legitimate public purpose. They further claimed that Brundidge's action was an improper collateral attack on a bankruptcy court order regarding the landfill's sale to BA. Testimony indicated that BA's acquisition would help manage construction and demolition waste and alleviate capacity issues at the Coffee County landfill, particularly in light of increased waste from tornado cleanup in March 2007. 

After hearing arguments on November 20, 2014, the trial court ruled on January 9, 2015, granting summary judgment in favor of the Coffee County Commission and BA, declaring that Brundidge and COBSWA lacked standing as they were not Coffee County taxpayers and their claimed injuries were not directly traceable to either defendant's actions.

The trial court determined that the Plaintiffs lacked standing to challenge an expenditure by Coffee County because they are not taxpayers and have no responsibility for replenishing county funds. Their claimed injuries were attributed to the bankruptcy of the previous owner of the Brundidge Landfill and the New Jersey Bankruptcy Court, rather than the defendants' actions. Additionally, the court found that claims under the Alabama Limited Self-Governance Act were invalid since Coffee County had not invoked it, and it did not prohibit the Coffee County Commission's actions. The court confirmed that the Coffee County Commission had complied with constitutional requirements, demonstrating that its actions were for a public purpose and aimed at promoting economic development, with proper public notice provided. Brundidge and COBSWA did not present sufficient evidence to counter the Commission's claims. The trial court affirmed AEMC’s decision supporting ADEM’s transfer of the landfill permit, stating that local approval was not needed for the operator change when no local approval aspects had changed. Both Brundidge and COBSWA filed timely appeals, which were consolidated, and oral arguments were heard on October 22, 2015. The summary judgment standard requires no genuine issue of material fact and entitlement to judgment as a matter of law, with the moving party bearing the burden of proof. To overcome a summary judgment, the nonmoving party must present substantial evidence indicating a genuine issue of material fact. Legal questions are reviewed de novo, and the review of administrative decisions follows an established standard.

The agency order is presumed to be just and reasonable unless judicial review is conducted by trial de novo. The circuit court cannot replace the agency's judgment on factual evidence weight unless a statute permits it, with options to affirm, remand for further evidence, or modify the agency's decision. The court may provide equitable or legal relief if the agency action violates constitutional or statutory provisions, exceeds statutory authority, breaches agency rules, follows unlawful procedures, contains legal errors, is clearly erroneous based on substantial evidence, or is arbitrary and capricious.

A presumption of correctness is given to administrative agency decisions due to their expertise. The court applies the same review standard as the trial court in reviewing decisions from the Alabama Environmental Management Commission (AEMC). Recent appeals involve determining whether the Coffee County Commission acted unlawfully by funding a landfill in Brundidge without municipal approval and whether ADEM rightly interpreted relevant regulations regarding local approval for landfill permits.

The matter of standing is crucial and subject to review at any litigation stage. Brundidge and COBSWA contend that the trial court erred in ruling they lacked standing. The court utilizes the Lujan v. Defenders of Wildlife standard for standing, which focuses on the injury claimed by the aggrieved party, having adopted a more specific rule in 2003 based on this test.

Standing to challenge a legal issue requires a party to demonstrate: (1) an actual, concrete 'injury in fact' that affects a legally protected interest; (2) a causal link between the injury and the contested action; and (3) a likelihood that the injury can be remedied by a favorable decision. This standard, established by the United States Supreme Court in Lujan and reiterated by Alabama courts, was referenced in cases such as Alabama Alcoholic Beverage Control Bd. v. Henri-Duval Winery and others. Furthermore, Alabama courts have recognized that taxpayers have standing if they can show a liability to replenish public funds.

In the case at hand, the Coffee County Commission and BA argued that Brundidge and COBSWA lacked standing to challenge a $4 million expenditure intended to assist BA with landfill acquisition, claiming that Brundidge could not demonstrate a responsibility to replenish Coffee County's funds. However, Brundidge and COBSWA contended that their injury stemmed not from a financial liability but from an alleged violation of their statutory authority under Alabama law, specifically 22-27-48(a), which grants Brundidge the right to manage solid waste generated within its city limits. This statute enables municipalities to submit their own solid waste management plans and potentially exclude themselves from a county's plan. Brundidge asserted that it has both the responsibility and authority to implement its solid waste management plan, as outlined in 22-27-48(a), which also allows for territory assignment and disposal site approval within its jurisdiction.

Approval or disapproval of services in the local plan is required before obtaining additional regulatory approvals for service provision, facility development, or permit modifications. In the case of Alabama Disposal Solutions-Landfill, L.L.C. v. Town of Lowndesboro, the Lowndes County Commission approved a landfill project, which included land within Lowndesboro's police jurisdiction. However, Lowndesboro later enacted Ordinance 98-1, banning landfills in its corporate limits, leading to a legal conflict over solid-waste management authority between the County and Lowndesboro. The court determined that the County, which had an established solid-waste plan and a contract with ADS, retained the right to manage waste disposal, despite Lowndesboro's ordinance creating uncertainty regarding these rights.

Legal adjudication regarding host-government approval can occur even if all necessary permits are not yet secured. In Fitzjarrald v. City of Huntsville, the court reversed a lower court's decision that deemed a case moot due to the absence of a permit from ADEM, stating that a justiciable controversy existed separate from ADEM's permitting process. The court affirmed that ADS and the County presented a justiciable controversy ripe for review, allowing for potential equitable relief if claims were substantiated. In the current situation, Brundidge and COBSWA have authority under the solid waste management plan to manage waste within their jurisdiction, leading to a conflict with Coffee County Commission's resolutions supporting a landfill acquisition by BA.

Brundidge claims that the Coffee County Commission and BA have disrupted its statutory duties, asserting that BA's acquisition of the landfill will lead to a loss of tipping fees and leachate treatment revenue. Brundidge and COBSWA are seeking a declaratory judgment to prevent BA from operating the landfill without a host-government agreement with Brundidge and to annul resolutions passed by the Coffee County Commission. The court finds that their complaint constitutes a justiciable controversy, confirming that they have standing under Ala. Code 22-27-48(a) for declaratory relief. The court also notes it can uphold a correct judgment for any reason, regardless of the trial court's rationale.

Brundidge and COBSWA assert that the Coffee County Commission and BA's actions violate Alabama law by failing to obtain Brundidge's approval before acquiring and operating the landfill, as mandated by the Solid Wastes and Recyclable Materials Management Act. The court must interpret various statutes within this act, adhering to principles of statutory construction that prioritize the plain language of the law, engaging in judicial interpretation only when the language is ambiguous. The court emphasizes that legislative intent should be derived from the entirety of the statute and its context, rather than isolated provisions.

A court must interpret statutes in their entirety, considering the context and presuming that the Legislature understood the meanings of the words used. If ambiguity arises, the court may analyze potential outcomes of different interpretations. Specifically, Section 22-27-3(a)(4) prohibits a county commission from providing solid waste services within a municipality without its consent, and vice versa. Brundidge and COBSWA argue that the Coffee County Commission operated a landfill within Brundidge without consent; however, this is not supported by evidence showing the Commission's direct involvement in solid waste services. BA, which operates the landfill, received initial funding from the Commission but is an independent entity. The statute's wording requires local approval for both solid waste collection and disposal services, and the conjunctive "and" indicates that both services must be consented to. Although courts may interpret "and" and "or" interchangeably in certain contexts, such a substitution should not occur unless it is clear that the legislative intent would be undermined. Substituting "or" for "and" would substantially alter the statute's meaning.

No evidence indicates that BA or the Coffee County Commission is providing solid-waste collection services within the Brundidge city limits, leading to the conclusion that they have not violated § 22-27-3(a)(4). Brundidge and COBSWA argue that the absence of an agreement between the Coffee County Commission and Brundidge renders the landfill operation a violation of § 22-27-5(a). This section allows the county commission or municipality to set fees and collect funds for solid waste management, and permits them to enter into agreements with other governing bodies. However, the statute does not require cooperation between them, as indicated by the word "may," which denotes discretion rather than obligation. Therefore, Brundidge and COBSWA's claims do not provide grounds to invalidate the Coffee County’s resolutions or the trial court’s judgment.

Additionally, Brundidge cites § 22-27-47 and § 22-27-48(a) to argue that they have not consented to BA’s operation of the landfill, and thus Coffee County and BA lack the authority to provide solid-waste disposal services within Brundidge. Section 22-27-48(a) emphasizes the governing body's responsibility for managing solid waste within its jurisdiction and allows for the assignment of territories and approval of disposal sites according to its management plan. Brundidge’s plan specifies that solid waste generated within its city limits should be deposited at the Brundidge landfill. Brundidge and COBSWA contend that the Coffee County Commission and BA have hindered Brundidge's ability to enforce its solid-waste management plan since the waste generated in the city cannot be disposed of at the landfill due to BA’s minimal operational activity.

Prior to BA's acquisition of the Brundidge landfill from the bankruptcy trustee, Brundidge was unable to implement its solid-waste plan, and waste generated within the city was not being deposited at the landfill due to its closure and bankruptcy. BA argues that its landfill operations have been impeded by ongoing litigation with Brundidge and COB-SWA, which has prevented it from securing contracts for solid waste disposal. Under § 22-27-48(a), a governing body is empowered to assign territories and approve disposal sites in accordance with its solid-waste management plan, which Brundidge has approved for the landfill location. Consequently, the judgment from the declaratory-judgment action cannot be reversed based on this issue.

Brundidge and COB-SWA assert that they have not approved BA’s services related to the landfill, but the statutory language does not necessitate local approval for all solid-waste services within Brundidge. The term "such" in the statute refers back to prior sentences, indicating that local approval pertains to Brundidge’s management responsibilities under its solid waste management plan, rather than granting total control over all solid-waste activities within its jurisdiction. Furthermore, the statute clarifies that local approvals are in addition to those required by other regulatory bodies, such as ADEM, which had already issued a permit for the landfill.

Brundidge and COB-SWA reference the Alabama Disposal Solutions case, arguing that the Solid Wastes and Recyclable Materials Management Act restricts counties and municipalities to their own boundaries. However, the evidence does not demonstrate that the Coffee County Commission is regulating solid waste at the Brundidge landfill; instead, it facilitated BA's acquisition of the landfill to ensure its continued operation for waste disposal.

The Coffee County Commission provided substantial evidence that funding to BA for acquiring and reopening the Brundidge landfill served a valid public purpose under Alabama law. Brundidge and COBSWA argue that Coffee County cannot achieve through acquisition what it is statutorily prohibited from doing, claiming that BA is a "sham" entity controlled by the Commission. They assert injury due to not receiving fees from BA's operation of the landfill and argue that the Commission violated Brundidge’s statutory right to approve solid waste disposal services within its city limits. However, it was determined that neither the Commission nor BA violated Alabama law regarding the landfill acquisition, which was lawful under the state constitution.

Brundidge and COBSWA also contend that ADEM’s transfer of Permit No. 55-07 to BA without local approval contravenes section 22-27-48(a), which they interpret as requiring local government consent prior to permit modifications. ADEM counters that local approval is not required for permit transfers without operational modifications. Section 22-27-48(a) requires local government approval for new or modified permits, emphasizing that such approval must occur before other regulatory approvals and should involve public meetings with notice and opportunities for public comment.

The statute does not provide specific guidelines for the transfer of permits between entities but focuses on the approval of services, activities, and modifications of permits for facilities. The Alabama Administrative Code clarifies that a permit transfer is distinct from a permit modification. Under Rule 335-13-5-.06, ADEM can modify permits upon receiving a compliant application. Major modifications include changes in the permitted service area, conversions between landfill types, and significant design changes, which may require public notice or hearings. Minor modifications encompass various operational changes, such as adding waste streams or monitoring wells.

Rule 335-13-5-.07 states that permits are not transferable without prior approval from ADEM, requiring a 30-day notification. In the case of Permit No. 55-07 for the Brundidge Landfill, the transfer from a bankruptcy trustee to BA did not invoke a modification of the permit but merely changed the entity’s name. ADEM's long-standing practice has treated permit transfers and modifications differently, historically not requiring local government approval for transfers. This interpretation aligns with ADEM’s established practices over the past two decades.

Interpretations of statutes by the administrative agency responsible for enforcement are afforded significant weight by reviewing courts, though they are not binding. An agency's interpretation of its own regulations is upheld if it is reasonable, even if alternative interpretations exist. However, an agency cannot overstep its legislative authority or contradict a statute. In this case, the court found no conflict between the relevant statute and regulations, affirmed that the agency’s interpretation aligned with legislative intent, and deemed the agency’s approach to permit transfers without local government approval valid, particularly where a host-government agreement had been nullified by bankruptcy. The trial court's judgments were affirmed. Additionally, for justiciability, plaintiffs must demonstrate standing to seek judicial intervention. The Coffee County Commission and BA argued that Brundidge and COBSWA did not raise claims regarding the Solid Wastes and Recyclable Materials Management Act in the trial court. Despite Brundidge and COBSWA predominantly arguing violations of the Alabama Limited Self-Governance Act, they did not abandon their claims related to the Solid Wastes and Recyclable Materials Management Act, which were adequately presented in the trial court.