American Recovery Co. v. Department of Health & Mental Hygiene

¹⁵ COLE, Judge. The primary question we shall decide in this case is whether former § 8-1416(d) of the Natural Resources Article 1 requires a showing of actual harm to the environment before a civil penalty may be assessed for a violation of Maryland’s hazardous waste laws. Appellant, American Recovery Company, Inc. (ARC), is a Maryland corporation licensed by appellee, the Department of Health and Mental Hygiene (DHMH), to store and treat certain hazardous wastes at a designated facility in the Curtis Bay area of Baltimore City. On May 5, 1982, the Secretary of Health and Mental Hygiene, acting through the Assistant Secretary for Environmental Programs, issued four civil penalty assessments against ARC, alleging violations of various provisions of Maryland’s hazardous waste laws and regulations.

The four civil penalty assessments are summarized as follows: Assessment C-0-82-190 charged ARC with violations relating to the location and condition of certain hazardous waste drums and tanks. Assessment C-0-82-191 charged that ARC has failed to report and repair a leak in an acid storage tank over a three-month period. Assessment C-0-82-192 charged that ARC had improperly completed hazardous waste manifests and had failed to implement a flood management plan. Assessment C-0-82-193 charged ARC with storing compressed gas cylinders in violation of its facility permit.

Each assessment established a date for an administrative hearing, and contained the following language: In lieu of appearing [at the hearing], American Recovery Company, Inc. may prepay a civil penalty to the Depart ¹⁶ ment of Health and Mental Hygiene in the amount of $10,000. By doing so, American Recovery Company, Inc. waives its right to a hearing and its opportunity to contest the assessment of the penalty. ARC rejected the terms of the above provision and elected to appear at the hearing. A four day hearing was conducted before a DHMH hearing examiner.

The hearing examiner issued Findings of Fact and Conclusions of Law, recommending the following penalties: 00-82-190, $4,500 00-82-191, $1,000 00-82-192, $1,500 00-82-193, $2,000 ARC filed exceptions to the hearing examiner’s recommended decision. The Assistant Attorney General representing DHMH filed a response urging an increase in the monetary penalty recommended by the hearing examiner. Pursuant to the requirements of the Administrative Procedure Act, a second hearing was held before the Assistant Secretary for Environmental Programs. The Assistant Secretary’s final administrative decision increased two of the recommended penalty amounts by $1,000 each, for a total penalty assessment of $11,000.

Other than the increased assessment, the final decision essentially adopted the findings and conclusions of the hearing examiner. In June of 1983, ARC appealed DHMH’s final decision to the Circuit Court for Baltimore City. The circuit court affirmed the agency’s decision, except that the court modified the penalty assessment by reducing the total assessment to $10,000. ARC appealed the circuit court’s decision to the Court of Special Appeals.

Prior to argument of the case in that court, we granted certiorari on our own motion. ARC advances several grounds for reversal: (1) that former § 8-1416(d) prohibits the imposition of a civil penalty by DHMH for the violation of Maryland’s hazardous waste laws, absent a showing of actual harm to the environment; (2) that the civil penalty assessments are invalid in that they completely prejudge the guilt of ARC, ignoring ¹⁷ § 8-1416(d)’s requirement that such a determination be made only after a hearing and after consideration of certain enumerated criteria; (3) that the administrative decision is defective because the hearing officer failed to evaluate the evidence in light of the criteria enumerated in former § 8—1416(d); (4) that DHMH improperly sought to increase the civil penalty assessment that had been recommended by the hearing examiner; and (5) that the commingling of the investigative, prosecutorial, and judicial functions by DHMH denied ARC due process of law. I ARC contends that former § 8-1416(d) requires a showing of actual pollution before a civil penalty may be imposed by DHMH for a violation of the State’s hazardous waste laws. This section provides: In addition to any other remedies available at law or in equity, a civil penalty may be assessed for violation of any provisions of this subtitle, or rules, regulations, orders, or permits issued pursuant thereto____ The civil penalty assessed shall be $500 for each day of violation, not exceeding a total sum of $10,000; consideration shall be given to the willfulness of the violation; to the damage or injury to the waters of the State or the impairment of its uses; to the cost of clean-up; to the nature and degree of injury to or interference with general welfare, health and property; to the suitability of the waste source to the geographic location, including priority of location; to the available technology and economic reasonableness of controlling, reducing or eliminating the waste; and other relevant factors.

Maryland Code (1974, 1981 Cum.Supp.), § 8-1416(d) of the Natural Resources Article. In 1983, the legislature revised the statutory considerations to be applied in assessing civil ¹⁸ penalties. 2 One of the considerations in the revised statute is “the extent to which the location of the violation, including location near waters of this State or areas of human population, creates the potential for harm to the environment or to health or human safety.” Because this statutory amendment inserted the words “potential for harm” into this consideration, ARC argues that the pre-amended civil penalty statute cannot be construed to permit DHMH to consider potential harm in assessing a civil penalty for a hazardous waste law violation. We disagree. Initially, we note our disagreement with ARC’s assertion that the 1983 amendment is “of controlling significance” as to the meaning of the earlier version of the statute.

Our cases make clear that a subsequent amendment or legislative construction of a statute is not controlling as to the meaning of the prior law. Collier v. Connolley, 285 Md. 123, 125-26 , 400 A.2d 1107, 1108 (1979); Director v. Myers, 232 Md. 213, 218 , 192 A.2d 278, 280 (1963); A.G. Crunkleton v. Barkdoll, 227 Md. 364, 369 , 177 A.2d 252, 255 (1962). Thus the 1983 amendment is not determinative of the meaning of former § 8-1416(d). More important, however, we believe that ARC’s argument demonstrates a fundamental misunderstanding of the basis of a civil penalty assessment under former § 8-1416(d).

The assessment is based upon the violation itself, not upon the harm caused by the violation. The first sentence of former § 8-1416(d) authorizes DHMH to assess a civil penalty for violation of any of the State’s hazardous waste laws. Contrary to ARC’s contention, the agency’s authority to assess a penalty under this section is not conditioned upon a finding that the violation caused actual harm to the environment. We do not believe that the legislature intended to require DHMH to sit on its ¹⁹ hands until the violation manifested actual harm to the environment.

Indeed, one of the stated goals of Maryland’s hazardous waste laws is “to provide additional and cumulative remedies to prevent, abate, and control the pollution of the waters of the State.” Section 8-1403 of the Natural Resources Article (emphasis supplied). For a civil penalty assessment to be effective in preventing pollution, the agency cannot wait until the pollution occurs to assess the penalty. The considerations set forth in former § 8-1416(d) serve two purposes: they provide guidance to the administrative agency in exercising its discretion as to the assessment of civil penalties, and they also provide for meaningful judicial review of DHMH’s assessment of such penalties. See County Council v. Investors Funding, 270 Md. 403, 441-2 , 312 A.2d 225, 246 (1973).

We do not believe, however, that these considerations are conditions precedent to the assessment of a civil penalty by DHMH. Therefore, ARC’S argument, which is based upon a subsequent amendment of the statutory considerations, is unavailing. II ARC next argues that DHMH, through the civil penalty assessments, prejudged the existence of the violations and assessed the civil penalties without a hearing. In support of this argument, ARC points to the “unequivocal factual language” used by DHMH in the documents to set forth the alleged violations.

We think, however, that the language in the documents simply advances the underlying facts, gathered by the agency in its investigation, that support the violations with which ARC is charged. For example, one of the documents states “WHEREAS, on February 19, 1982, March 24, 1982, and April 2, 1982, site inspections by representatives of the Office of Environmental Programs (OEP) found deformed, rusting, deteriorated, and leaking containers in storage, said conditions constitut ²⁰ ing violations of COMAR 10.51.05 Regulations .03B and .09B____” This type of factual recitation did not diminish the obligation of DHMH to prove the existence of these facts at the administrative hearing. Indeed, the parties generated over 700 pages of transcript at the hearing in disputing the alleged violations. We agree with the trial court’s conclusion that these documents basically constituted “charging documents].” The language contained therein, although factual in tone, did not serve to adjudicate the subject matter of the documents.

The mere fact that the charging document, entitled “Civil Penalty Assessment,” may not be artfully captioned, as the trial court pointed out, is not enough to sustain ARC’S contention that the agency prejudged the case. As further support of its prejudgment argument, ARC points to the fact that the same agency official signed the “Civil Penalty Assessments” and issued the final administrative decisions. The U.S. Supreme Court, however, expressly rejected this argument in Withrow v. Larkin, 421 U.S. 35 , 95 S.Ct. 1456 , 43 L.Ed.2d 712 (1975). In Withrow , the Court noted that judges often issue arrest warrants or conduct preliminary hearings, and then preside later at the trial of the same matter without a jury.

Likewise, the Court declared, “It is very typical for the members of administrative agencies to receive the results of investigations, to approve the filing of charges or formal complaints instituting enforcement proceedings, and then to participate in the ensuing hearings. This mode of procedure ...