Leatherbury v. Gaylord Fuel Corp.

Eldridge, J., delivered the opinion of the Court. These appeals involve two separate actions by the same landowners seeking (1) to overturn under the Administrative Procedure Act the issuance by the Department of Health and Mental Hygiene of a permit for the installation of limestone processing equipment on adjacent land, and (2) to obtain an anticipatory injunction to restrain the proposed operation of a limestone quarry on the neighboring property on the ground that the quarry will constitute a nuisance. Robert and Phyllis Leatherbury are the owners of an 80 acre farm in Garrett County. In November 1973 the Gaylord Fuel Corporation, a Virginia corporation doing business as Gaylord Stone Company, purchased a 33 acre tract of land adjacent to the Leatherburys’ farm.

In order to construct a limestone quarry on its property, Gaylord obtained a grading permit from Garrett County on November 16, 1973, to remove soil for open face mining. On Friday, November 30, 1973, Gaylord applied for a permit from the Maryland Department of Health and Mental Hygiene, Bureau of Air Quality Control, to install limestone crushing and air pollution control equipment. The requisite permit was issued on Monday, December 3, 1973. 1 After the Leatherburys became aware of the issuance of the permit for a limestone crushing plant, they brought suit on January 2, 1974, in the Circuit Court for Garrett County (Hamill, J.), against the Gaylord Fuel Corporation and the Maryland Department of Health and Mental Hygiene, seeking to have the administrative grant of the permit reversed. The Leatherburys alleged that no public notice was ³⁷⁰ given of the Department’s action, and that Gaylord’s permit application did not contain the information required by the Department in order for the Department to determine whether the permit should be granted.

The Department of Health and Mental Hygiene filed a demurrer, contending that, on several grounds, the Leatherburys had no standing to maintain the action. The trial court sustained the demurrer, and the Leatherburys have taken this appeal. 2 In addition to challenging the issuance of the permit, the Leatherburys filed a separate action against Gaylord in the Circuit Court for Garrett County (Hamill, J.), seeking to have the proposed quarry declared a nuisance, and requesting a temporary and a permanent injunction against its operation. 3 The bill of complaint alleged that the Leatherburys used their property for farming and grazing horses. It further alleged that the proposed activities of Gaylord would result in air, noise and water pollution and would adversely affect their property. Specifically, the Leatherburys alleged that the limestone dust would be carried by natural air currents to their land, destroying vegetation and killing fish in the streams and ponds; that the dust would mar the appearance and utility of their property; that their health would be adversely affected by inhalation of limestone dust particles; and that there would be excessive noise from the blasting and operation of the machinery.

After a trial, the chancellor found that, in light of the testimony, the Leatherburys’ action was premature, stating that “the mere anticipation or possibility of any injury is no basis for the granting of an injunction.” The chancellor therefore ordered that the bill of complaint be dismissed. ³⁷¹ On appeal to the Court of Special Appeals from the chancellor’s refusal to grant an injunction, the Leatherburys argued that the chancellor erred in applying the law of nuisance to the facts of this case. They also relied upon their asserted “right to retain a pollution free environment” under the Maryland Environmental Policy Act, Code (1974), § 1-302 of the Natural Resources Article. The Court of Special Appeals, in an opinion by Judge Menchine, affirmed, holding that, under the standards for granting anticipatory injunctions, the chancellor’s finding of prematurity was not clearly erroneous. Leatherbury v. Peters, 24 Md. App. 410 , 332 A. 2d 41 (1975).

Additionally, the Court of Special Appeals held that the Leatherburys derived no special rights to contest Gaylord’s activities by virtue of the Maryland Environmental Policy Act. Because of the pendency before this Court of the Leatherburys’ appeal in the permit action, and as both cases had a common object of stopping the future operation of the proposed limestone quarry, we granted the Leatherburys’ petition for a writ of certiorari to review the Court of Special Appeals’ affirmance of the chancellor’s decision in the nuisance action. (1) The Issuance of the Permit (No. 189, September Term, 197k) The Leatherburys advance two broad contentions in support cf their right to challenge the administrative grant of the permit. They argue that they are “entitled to participate in the proceedings involving the issuance of a permit” by virtue of the Federal Clean Air Act, 42 U.S.C. 1857 et seq., which, together with regulations enacted pursuant to it, require that a state’s air quality control implementation plan provide an opportunity for public comment on pending applications. 4 Additionally, the ³⁷² Leatherburys contend that they are “aggrieved” by the action of the Department of Health and Mental Hygiene and thus have standing to contest it.

They argue that, as owners of adjacent land, they are directly affected by the quarry. They also rely upon the principles with respect to standing set forth in Sierra Club v. Morton, 405 U. S. 727 , 92 S. Ct. 1361 , 31 L.Ed.2d 636 (1972). Finally, they rely on the declaration of policy in the Maryland Environmental Policy Act, Code (1974), § 1-302 of the Natural Resources Article.* 2** 5 In addition' to disputing the Leatherburys’ other contentions, the Department of Health and Mental Hygiene argues that the Leatherburys may not appeal the Department’s action since they were not parties to the application proceedings. As the Leatherburys were not parties at the administrative level, the Department argues that they cannot be “parties aggrieved” within the meaning of the judicial review section of the Administrative Procedure Act, Code (1957, 1971 Repl.

Vol.), Art. 41, § 255 (a). vVe need not, and do not, rule upon any of the Leatherburys’ contentions as to why they were entitled to seek judicial review of the administrative action granting the permit. Similarly, we do not reach most of the Department’s arguments against the Leatherburys’ entitlement to judicial review. While we do not agree with the Department’s broad contention that the Leatherburys ³⁷³ may not seek judicial review because of their failure to appear at the permit proceeding before the Bureau of Air Quality Control, nevertheless we do hold that the Leatherburys cannot maintain this appeal because they failed to challenge the Bureau’s action before the Board of Review of the Department of Health and Mental Hygiene. Assuming arguendo that the Leatherburys are aggrieved by the administrative action and have standing to obtain judicial review of it under the Administrative Procedure Act or any other provision of law, their action was properly dismissed because of their failure to exhaust their administrative remedies.

Generally, where an administrative remedy is provided by statute, that remedy must be exhausted before the litigant may resort to the Courts. Chertkof Trust v. Department, 265 Md. 291 , 289 A. 2d 314 (1972); Gingell v. County Commissioners, 249 Md. 374, 376-377 , 239 A. 2d 903 (1968); Gager v. Kasdon, 234 Md. 7, 9-10 , 197 A. 2d 837 (1964); Shpak v. Mytych, 231 Md. 414, 417 , 190 A. 2d 777 (1963); Poolesville v. County Council, 24 Md. App. 347, 352-354 , 330 A. 2d 711 (1975). While there are exceptions to the general rule, none is applicable to this case. See Nottingham Village v. Balto.

Co., 266 Md. 339, 357 , 292 A. 2d 680 (1972); Poe v. Baltimore City, 241 Md. 303, 308-309 , 216 A. 2d 707 (1966); Poolesville v. County Council, supra, 24 Md. App. at 350. By Code (1957, 1971 Repl. Vol., 1975 Cum. Supp.), Art. 41, § 206A, the Legislature created the Board of Review of the Department of Health and Mental Hygiene to, inter alia, “hear and determine appeals from those decisions of the Secretary or any departments or other agencies within the Department of Health and Mental Hygiene which are subject to judicial review under § 255 of this article or under any other provisions of the law.” (§ 206A (c), emphasis supplied.) Appeals may be taken to the Board under § 206B of Art. 41 by “[a]ny person aggrieved by any decision or action or failure to act on the part of the Secretary or any ³⁷⁴ department or other agency within the Department of Health and Mental Hygiene for which an appeal to the Board of Review of the Department of Health and Mental Hygiene is provided by § 206A of this article . ..

Art. 41, § 206B, further provides that prior to commencing an action before the Board of Review the persons aggrieved by the initial agency decision must first “make known the basis of the complaint to the person or persons responsible for the decision or the conduct of the action . .. together with a request that it be reviewed.” The person or persons who made the initial decision are then given thirty days to review the matter. If a “satisfactory resolution has not occurred” within thirty days, the complainant may under § 206B (1) and (2) seek further review from the head or governing body of the agency involved and then take an appeal to the Board of Review of the Department of Health and Mental Hygiene. 6 Section 206B (2), after providing for the procedures before the Board of Review, specifies that: “The decision of the board shall be the final agency decision for purposes of judicial review under § 255 of this article or for purposes of any other provisions of law permitting appeals to the courts from decisions of agencies included within the Department of Health and Mental Hygiene.” The judicial review section of the Administrative Procedure Act, Code (1957, 1971 Repl. Vol.), Art. 41, § 255, provides for judicial review only of “a final decision.” Thus, as the statutory scheme makes clear, a decision by the Board of Review is a prerequisite for judicial review under the Administrative Procedure Act. 7 ³⁷⁵ Assuming, without deciding, that the Leatherburys would be entitled to judicial review under the Administrative Procedure Act of the action granting the permit, as they contend, they failed to exhaust their remedy before the Board of Review. As stated by this Court in Gingell v. County Commissioners, supra, 249 Md. at 376 -377: “The reasons for requiring the exhaustion of administrative remedies before resorting to the courts are that it is within the expertise of the administrative agency involved to hear and consider the evidence brought before it and make findings as to the propriety of the action requested; courts would be performing the function that the legislature specified be done by the administrative agency; courts might be called on to decide issues that would never arise if the prescribed administrative remedies were followed; and where a statute provides a specific form of remedy in a specific case then this remedy must be followed.” A case very much in point is Chertkof Trust v. Department, supra, 265 Md. 291 .

In that case, the plaintiff attempted to challenge in the circuit court the proposed action by the State to build a storm drainage system. The State would have been required to obtain a permit from the Department of Natural Resources before proceeding with the action. The Court held that “should Chertkof care to object to the issuing of the permit” his remedy would be an appeal to the Board of Review of the Department of Natural Resources, as provided by Code (1957, 1971 Cum. Supp.), Art. 96A, § 54.

Since he had not done so, the Court held that his action was properly dismissed since he had failed to ³⁷⁶ exhaust his remedies. Similarly, in Poolesville v. County Council, supra, 24 Md. App. 347 , the Commissioners of Poolesville sought to attack in circuit court a sewage and water plan adopted by Montgomery County which did not include Poolesville. The Court of Special Appeals held that the Commissioners’ complaint was properly dismissed because they had failed to exhaust their administrative remedies by appealing the county’s action to the Board of Review of the Department of Health and Mental Hygiene, as provided by § 206B of Art. 41. See also Shpak v. Mytych, supra, 231 Md. 414 .

Also pertinent is our recent decision in Mont. Co. v. One Park North, 275 Md. 193 , 338 A. 2d 892 (1975), holding that where one has an opportunity to become a party to administrative proceedings, yet has failed to do so, normally he may not seek judicial review of the administrative action. In that case, Montgomery County appealed to the circuit court an action of the Board of Review of the Department of Health and Mental Hygiene which purported to reverse an earlier decision by the Secretary of Health and Mental Hygiene. We held that since Montgomery County was neither a party nor an intervenor in the proceedings before the Board of