Medical Waste Associates, Inc. v. Maryland Waste Coalition, Inc.

ELDRIDGE, Judge. The dispute in this case arises from the decisions of the Maryland Department of the Environment to issue two permits which allowed Medical Waste Associates, Inc., to ⁵⁹⁹ construct a medical waste incinerator in Baltimore City. Maryland Waste Coalition is an incorporated volunteer environmental organization whose corporate purpose is protecting Maryland’s environment. The central question in this case relates to whether and how the Coalition can challenge the issuance of these permits in light of the standing requirements of Maryland law.

I. Medical Waste Associates sought approval from various regulatory bodies to construct a medical waste incinerator in the Hawkins Point area of Baltimore City. Eleven public hearings were held on a variety of permits. The Coalition testified or submitted written material at most of these hearings, including those held by the Department of the Environment on an air quality control permit to construct and a refuse disposal permit. On September 8, 1989, the Department of the Environment issued the refuse disposal permit and the air quality control permit authorizing Medical Waste Associates to construct the medical waste incinerator.

The Coalition filed two separate actions designed to challenge the issuance of these permits. On September 18, 1989, the Coalition filed in the Circuit Court for Baltimore City a complaint seeking judicial review of the agency’s decisions under Code (1982, 1987 Repl.Vol., 1991 Cum. Supp.), § 9-263 of the Environment Article, and requesting that the refuse disposal permit and the air quality control permit be vacated and set aside. 1 Pursuant to § 9-263, the ⁶⁰⁰ complaint alleged that the issuance of the permits was unreasonable and not necessary for the protection of the public health or comfort. On October 5, 1989, the Department of the Environment and Medical Waste Associates filed motions to dismiss the § 9-263 complaint.

In these motions, they argued that the complaint should be dismissed for lack of subject matter jurisdiction because § 9-263 does not provide for judicial review of a permit but only for review of an order, rule or regulation. 2 They also argued that the complaint should be dismissed because the Coalition had no organizational property interest separate and distinct from its individual members and therefore did not have standing to maintain the action. On October 6,1989, the Coalition filed in the Circuit Court for Baltimore City a petition under Maryland Rule B2 for judicial review of the Department of the Environment’s decisions to issue the refuse disposal and air quality control permits. Contending that the issuance of the permits was subject to review under the Administrative Procedure Act (APA), Code (1984), § 10-201 et seq. of the State Government Article, the petition alleged that the decisions to issue the permits by the Department of the Environment constituted “an abuse of discretion, [was] clearly erroneous, and lacked substantial evidence____” Medical Waste Associates filed a motion to intervene in the action for judicial review under the APA as well as a motion for consolidation of the two judicial review actions. It also moved to dismiss the action for judicial review under the APA.

The Department of the Environment likewise ⁶⁰¹ filed a motion to dismiss the petition for judicial review under the APA. In these motions to dismiss, Medical Waste Associates and the Department argued that the administrative proceedings leading to the issuance of the permits were legislative in nature and were not “contested cases” under the APA. Therefore, for each of these reasons, according to the petitioners, the Coalition could not obtain judicial review under the APA. They also argued that the Coalition lacked standing to request judicial review because the Coalition was not an “aggrieved party” under the APA as it had no property interest separate and distinct from that of its members.

The circuit court dismissed both cases. The trial court held that the Coalition could not challenge, under § 9-263 of the Environment Article, the Department’s decision to issue a refuse disposal permit because the issuance of a permit was not an “order.” The court further decided that the Department’s decisions to issue the permits were not subject to judicial review under the APA because the administrative proceedings were not contested cases under the APA. The trial judge also stated that these administrative proceedings were legislative in nature and thus not reviewable. Alternatively, the trial court held that the Coalition lacked standing to request judicial review under either the APA or § 9-263 of the Environment Article.

The Coalition appealed in both cases. In its brief in the Court of Special Appeals, the Coalition argued that it had standing to challenge the issuance of the refuse disposal permit under § 9-263 because it was an institution or person which was dissatisfied with an action of the Secretary of the Department of the Environment and which appealed in a timely manner an order of the Secretary to issue the permit. According to the Coalition, it also had standing under the APA because it was a party at the administrative proceedings and because it was aggrieved by the Department’s decisions to issue these permits. The Coalition also argued that the administrative proceedings ⁶⁰² fell within the APA’s definition of “contested case,” and thus the proceedings were subject to judicial review under the APA.

In addition, the Coalition urged the Court of Special Appeals to adopt the position of the federal courts regarding standing. 3 The Coalition pointed to the declaration of intent and policy set forth in the Maryland Environmental Standing Act (MESA), Code (1974, 1989 Repl.Vol.), § 1-502 of the Natural Resources Article, as an indication of the General Assembly’s intent to allow groups such as the Coalition to have standing in environmental matters. 4 It did not, however, specifically argue that MESA gave it standing to seek judicial review. Finally, the Coalition argued that it met the common law requirements for standing because it brought the suit on behalf of its individual members, rather than to vindicate a group property interest, and that those individual members had an injury which differed from that of the general public. ⁶⁰³ The Court of Special Appeals remanded the case to the circuit court for further proceedings. Maryland Waste v. Department, 84 Md.App. 544 , 581 A.2d 60 (1990). The intermediate appellate court held that the circuit court correctly determined that it lacked subject matter jurisdiction over the § 9-263 complaint because a permit is not an “order” and therefore the issuance of the refuse disposal permit was not subject to judicial review under that section.

Relying on selected general dictionary definitions, the Court of Special Appeals reasoned that an “order is a command of some authority which cannot be ignored,” whereas a “permit is merely a grant of authority to do a specific act. The permittee need not do the specified act but is allowed to do so.” 84 Md.App. at 553-554 , 581 A.2d at 64 . With regard to standing, the Court of Special Appeals refused to adopt the federal law principles urged by Coalition. The intermediate appellate court held that the circuit court correctly decided that the Coalition did not meet the Maryland common law requisites for standing.

The Court of Special Appeals purported not to finally decide whether the Coalition could maintain its action for judicial review under MESA. The Court of Special Appeals, however, strongly indicated its view that the Coalition would “be able to pursue its appeal” from the administrative decisions under MESA. 84 Md.App. at 560 , 581 A.2d at 68 . In fact, as to certain preliminary requirements for filing a MESA action, including the requirement of notice to the State, the intermediate court actually ruled that the Coalition had complied with MESA. Moreover, by remanding these judicial review actions to the circuit court for further proceedings, the Court of Special Appeals seemed to decide implicitly that MESA applied to an action for judicial review challenging the issuance of a permit. 84 Md.App. at 558-561 , 581 A.2d at 66-68 .

Medical Waste Associates and the Department of the Environment sought certiorari review by this Court. They primarily argued that the Court of Special Appeals exceeded its authority, or alternatively abused its discretion, when ⁶⁰⁴ it invoked MESA even though the Act had not been addressed by the parties in the circuit court. They also argued that the administrative proceedings were not contested cases under the APA; they contended that the proceedings were legislative in nature and thus not subject to judicial review. In addition, they argued that the Court of Special Appeals erred by taking the position that MESA could be applicable to0 an action for judicial review of an administrative decision and by remanding the case for a circuit court determination of whether the Coalition’s actions could be maintained under MESA.

The Coalition filed a conditional cross petition for a writ of certiorari, requesting that this Court decide whether an environmental association has standing to challenge the issuance of a refuse disposal permit under § 9-263, and whether an environmental association has a right to challenge the issuance of a refuse disposal permit and an air quality control permit under the APA. The Coalition also urged this Court to adopt the position of the federal courts concerning the standing requisites for an environmental association to bring an action on behalf of its members. This Court granted both the petition and the cross petition.

II

We first turn to the contentions by Medical Waste Associates and the Department that the Court of Special Appeals exceeded its authority, or abused its discretion, by considering the applicability of MESA when that issue had not been raised in the circuit court. 5 ⁶⁰⁵ Maryland Rule 8-131(a) provides as follows (emphasis added): “Generally.—The issues of jurisdiction of the trial court over the subject matter and, unless waived under Rule 2-322, over a person may be raised in and decided by the appellate court whether or not raised by the trial court. Ordinarily, the appellate court will not decide any other issue unless it plainly appears by the record to have been raised in or decided by the trial court, but the Court may decide such an issue if necessary to avoid the expense and delay of another appeal.” This Rule employs the term “ordinarily,” and, as we have repeatedly stated, this Court and the Court of Special Appeals have discretion to consider an issue suggested by the record in the case even though the issue was not raised in the trial court. Crown Oil v. Glen, 320 Md. 546, 561 , 578 A.2d 1184, 1191 (1990); Yarema v. Exxon Corp., 305 Md. 219 , 231 n. 9, 503 A.2d 239 , 245 n. 9 (1986); Taub v. State, 296 Md. 439, 441 , 463 A.2d 819, 820 (1983); Squire v. State, 280 Md. 132, 134-135 , 368 A.2d 1019, 1020 (1977); Dempsey v. State, 277 Md. 134, 141-142 , 355 A.2d 455, 458-459 (1976). Moreover, the general issue of standing had been litigated and resolved in the trial court.

MESA was simply another possible basis of support for the Coalition’s claimed standing in this case. See Crown Oil v. Glen, supra, 320 Md. at 560-561 , 578 A.2d at 1190-1191 (1990); O’Leary v. Shipley, 313 Md. 189, 196 , 545 A.2d 17, 20 (1988). Therefore, while the Court of Special Appeals could have decided not to address MESA, we cannot say that its decision to do so was an abuse of discretion. Cf.

Ritchie v. Donnelly, 324 Md. 344, 375 , 597 A.2d 432, 447 (1991). ⁶⁰⁶ III. Medical Waste Associates and the Department argue that the administrative decisions to issue these two permits were not subject to judicial review on any theory. As to the refuse disposal permit, they contend, and the courts below agreed, that an administrative decision to issue a permit is not an “order” and therefore is not subject to judicial review under § 9-263 of the Environment Article. In addition they argue that the Department of Environment administrative proceedings were not contested cases and thus were not subject to judicial review under the APA.

They insist that the administrative proceedings were “legislative” in nature and thus not judicially reviewable on the grounds of arbitrariness, capriciousness, or lack of support by substantial evidence. A. Both the circuit court and the Court of Special Appeals held that the Department’s decision to issue a refuse disposal permit was not an “order” as that term is used in § 9-263 of the Environmental Article and that, therefore, judicial review of this permit is not authorized by this section. As we shall explain in Part III B, infra, the administrative proceeding involving an application for a refuse disposal permit is a contested case under the APA. Consequently, even if the petitioners and the lower courts were correct in their view of an “order,” the issuance of this permit would be subject to judicial review under the APA.

The lower courts, however, incorrectly narrowed the definition of “order” in § 9-263. We disagree with the Court of Special Appeals’ notion that a final administrative decision issuing a permit is not an order because, according to the court, an order commands while a permit merely allows. ⁶⁰⁷ 6 There are in legal proceedings many “orders” under which the prevailing party may decide to forego the benefit. There are also many government issued “permits” under which the subject activity must be carried out. More importantly, however, in the context of adjudicatory proceedings, the word “order” normally means “decision.” Both the APA and the Maryland rules use “order” synonymously with “decision.” See, e.g., § 10-214 of the State Government Article; Maryland Rule 2-602.

The Department’s decision to issue the refuse disposal permit was an adjudication of the rights and responsibilities of the parties to that administrative proceeding. Therefore, to the extent that § 9-263 applies to “orders” of the Secretary, the final administrative decision to issue a permit is an “order” under that section. 7 ⁶⁰⁸ B. The defendants contend that the administrative proceedings prior to the issuance of the air quality control permit and the refuse disposal permit were not contested cases under the APA and were legislative in nature. Therefore, according to the petitioners, the Department’s decisions to issue these permits were not subject to judicial review. The APA provides, in § 10-215 of the State Government Article, that “[a] party who is aggrieved by a final decision in a contested case is entitled to judicial review of the decision____” The Department of the Environment is a State agency to which the contested case and judicial review provisions of the APA are fully applicable.

See §§ 10-201(b) and 10-202 of the State Government Article; Sugarloaf v. Waste Disposal, 323 Md. 641, 653 , 594 A.2d 1115, 1120-1121 (1991). Consequently, if the administrative proceedings before the Department of the Environment were contested cases, a party before the agency, who has standing to maintain an action for judicial review, is entitled under the APA to judicial review of the Department’s decisions. A “contested case” is defined in the APA, § 10-201(c) of the State Government Article, as follows: “Contested case.—‘Contested case’ means a proceeding before an agency to determine: (1) A right, duty, statutory entitlement, or privilege of a person that is required by law to be determined only after an opportunity for an agency hearing; or (2) the grant, denial, renewal, revocation, suspension, or amendment of a license that is required by law to be determined only after an opportunity for an agency hearing.” ⁶⁰⁹ A “license” is defined in the APA as including, inter alia, “an approval” or “a permit.” See § 10-201(d)(3) of the State Government Article. Therefore, under the plain language of the APA, an administrative proceeding involving the grant or denial of a permit is a contested case if some other law grants the opportunity of a hearing prior to the administrative determination.

Section 2-404(b) of the Environment Article requires that the Department “[p]rovide an opportunity for a public hearing” before issuing an air quality control permit to construct. Thus, the air quality control permit administrative proceeding was a contested case within the meaning of the APA. Moreover, in Sugarloaf v. Waste Disposal, supra, this Court took the position that the air quality control permit statutory scheme contemplated a contested case administrative proceeding before the issuance of an air quality control construction permit. We stated that “the State has chosen the construction permit approval stage as the point at which a hearing is required by law, thus meeting the definition of a contested case.” Sugarloaf v. Waste Disposal, supra, 323 Md. at 656-657 , 594 A.2d at 1122 .

Because the administrative proceeding is a contested case, a party at the construction permit hearing held before the agency, who is “aggrieved” by the agency’s decision, is entitled to judicial review under the APA. The statutory scheme for the issuance of a refuse disposal permit is found in § 9-201 et seq. of the Environment Article. Section 9-204(d) of the Environment Article requires a permit to be issued by the Secretary before a refuse disposal system can be constructed. 8 Before this ⁶¹⁰ permit can be issued the Secretary is required to hold a hearing. Section 9-209(a) states: “Hearing required.—Before the Secretary issues a permit to an applicant under § 9-204 of this subtitle to install, materially alter, or materially extend a landfill system, or an incinerator for public use to burn solid waste, the Department shall hold a public hearing on the application.” At this hearing the parties may “offer evidence and present arguments for or against the application.” § 9-209(e).

Nothing in these sections, either expressly or by clear implication, indicates that the hearing is not to be a contested case hearing. See Sugarloaf v. Waste Disposal, supra, 323 Md. at 666 , 594 A.2d at 1127 . Since the administrative proceeding involves the grant of a permit, and since the opportunity for an agency hearing is required by law, the application of the “contested case” definition in the APA leads to the conclusion that the administrative proceeding prior to the issuance of a refuse disposal permit is also a contested case for purposes of judicial review under the APA. Contrary to the petitioners’ repeated assertions in this case, the instant administrative proceedings were not “legislative” in nature.

As discussed in the Sugarloaf case, 323 Md. at 670 , 594 A.2d at 1126 , even if an administrative proceeding involving the grant or denial of an air quality control permit, for a specific person or entity to construct a particular facility, were not subject to the APA, the administrative proceeding would still be “adjudicative” or “quasi judicial”, and not “legislative” in nature. Consequently such an administrative proceeding, even if not subject to judicial review under the APA, would be subject to judicial review, of essentially the same scope, in an action for mandamus, certiorari, injunction or declaratory judgment. See, e.g., Criminal Inj. Comp.

Bd. v. Gould, 273 Md. 486, 500-506 , 331 A.2d 55, 64-67 (1975), and cases there cited; Heaps v. Cobb, 185 Md. 372, 378-381 , 45 A.2d 73, 76-77 (1945). See also Dep’t of Nat. Res. v. Linchester, supra, ⁶¹¹ 274 Md. at 224-225, 334 A.2d at 523-524, and cases there cited; Report of the Commission To Revise the Administrative Procedure Act 32 (Initial Report, September 1, 1992).

IV

We have determined that the administrative proceedings held in this case were contested cases under the APA. In order to be entitled to judicial review in a contested case, one must both be a “party” to the administrative proceedings and be “aggrieved” by the final decision of the agency. 9 See § 10-215 of the State Government Article. The Coalition was a “party” at the administrative level. This Court held in Morris v. Howard Res. & Dev.

Corp., 278 Md. 417, 423 , 365 A.2d 34, 37 (1976), as follows: “Bearing in mind that the format for proceedings before administrative agencies is intentionally designed to be informal so as to encourage citizen participation, we think that absent a reasonable agency or other regulation providing for a more formal method of becoming a party, anyone clearly identifying himself to the agency for the record as having an interest in the outcome of a matter being considered by the agency, thereby becomes a party to the proceedings.” ⁶¹² In Morris , we determined that, because Morris was present at the hearing and testified as a witness, he had established himself as a party before the administrative agency. See also, Baxter v. Montgomery County, 248 Md. 111, 113 , 235 A.2d 536 (1967) (submitting name in writing as a protestant is sufficient); Bryniarski v. Montgomery County, 247 Md. 137, 143 , 230 A.2d 289, 293-294 (1967) (testifying before the agency is sufficient); Hertelendy v. Montgomery County, 245 Md. 554, 567 , 226 A.2d 672, 680 (1967) (submitting into evidence a letter of protest is sufficient); DuBay v. Crane, 240 Md. 180, 184 , 213 A.2d 487, 489 (1965) (identifying self on agency record as a party is sufficient). As stated in Part I of this opinion, the Coalition was present at the administrative proceedings conducted prior to the issuance of these permits, and offered both written and oral testimony opposing the medical waste incinerator. It follows, therefore, that the Coalition was a party to the administrative proceedings.

As a party at the administrative level, the Coalition “remains a party to the proceedings [including judicial review] until [it] either abandons this status ... or is dismissed as a party by order ... generated by a motion to accomplish this result filed by an adverse party ...,” Morris v. Howard Res. & Dev. Corp., supra, 278 Md. at 423 , 365 A.2d at 37-38 . See also State Farm Mut. v. Ins. Comm’r, 283 Md. 663, 668 , 392 A.2d 1114, 1116-1117 (1978).

The Department and Medical Waste Associates did file a motion to dismiss the Coalition’s actions for judicial review for lack of standing, arguing that the Coalition was not “aggrieved” by the Department’s decision to issue the permits. The circuit court agreed, dismissing the Coalition’s judicial review actions on the ground, inter alia, that the Coalition lacked standing. Under Maryland common law principles, for an organization to have standing to bring a judicial action, it must ordinarily have a “property interest of its own—separate and distinct from that of its individual members.” Citizens ⁶¹³ Planning and Housing Ass’n v. County Executive, 273 Md. 333, 345 , 329 A.2d 681, 687-688 (1974). See Stocksdale v. Barnard, 239 Md. 541 , 212 A.2d 282 (1965); Bar Ass’n v. District Title Ins.

Co., 224 Md. 474 , 168 A.2d 395 (1961); Southland Hills Improvement Ass’n v. Raine, 220 Md. 213, 217 , 151 A.2d 734, 736 (1959); Norwood Heights Imp. Ass’n v. Mayor & City Council of Baltimore, 195 Md. 1 , 72 A.2d 1 (1950); Windsor Hills Imp. Ass’n v. Mayor and City Council of Baltimore, 195 Md. 383 , 73 A.2d 531 (1950); Md. Naturopathic Ass’n v. Kloman, 191 Md. 626, 630-631 , 62 A.2d 538, 539-540 (1948). Moreover, if an individual or organization is seeking to redress a public wrong, our prior cases have held that an individual or an organization “has no standing in court unless he has also suffered some kind of special damage from such wrong differing in character and kind from that suffered by the general public.” Rogers v. Maryland-National Capital Park and Planning Comm’n, 253 Md. 687, 691 , 253 A.2d 713, 715 (1969), quoting Weinberg v. Kracke, 189 Md. 275, 280 , 55 A.2d 797, 799 (1947).

See also Kerpelman v. Bd. of Public Works of Maryland, 261 Md. 436, 443-445 , 276 A.2d 56, 60 , cert. denied, 404 U.S. 858 , 92 S.Ct. 109 , 30 L.Ed.2d 100 (1971); Citizens Committee of Anne Arundel Co. v. County Commissioners, 233 Md. 398, 400-402 , 197 A.2d 108, 109-110 (1964); Glen Burnie Imp. Ass’n v. State Appeal Bd., 213 Md. 407, 413 , 132 A.2d 451, 454 (1957); Ruark v. Engineers’ Union, 157 Md. 576, 588-589 , 146 A. 797, 802 (1929); Bauernschmidt v. Standard Oil Co., 153 Md. 647, 651 , 139 A. 531, 533 (1927); Turner v. King, 117 Md. 403, 408 , 83 A. 649, 650-651 (1912); Houck v. Wachter, 34 Md. 265, 269-273 (1871). 10 ⁶¹⁴ In light of the foregoing principles, the circuit court correctly held that the Association did not have standing to remain a party in the judicial review actions. The Court of Special Appeals in this case, while agreeing with the circuit court that the Coalition lacked standing to obtain judicial review under common law principles, remanded the case for a determination of whether the Coalition had standing in light of the enactment of the Maryland Environmental Standing Act. The Court of Special Appeals’ remand order necessarily raises the question of whether the Environmental Standing Act applies to an action for judicial review of an administrative decision.

By Ch. 838 of the Acts of 1978, presently codified as Code (1974, 1989 Repl.Vol., 1991 Cum.Supp.), §§ 1-501 to 1-508 of the Natural Resources Article, the General Assembly enacted the Maryland Environmental Standing Act (MESA), which changed the Maryland common law requirements for standing in certain environmental judicial proceedings specified in the act. Prior to the present case, neither this Court nor the Court of Special Appeals has had an occasion to consider the impact of MESA. 11 When it enacted MESA, the General Assembly found that “the natural resources and the scenic beauty of the State of Maryland are in danger of irreparable harm occasioned by ⁶¹⁵ the use and exploitation of the physical environment,” that “improper use and exploitation constitute an invasion of the right of every resident of Maryland to an environment free from pollution,” that “the courts of the State of Maryland are an appropriate forum for seeking the protection of the environment,” and that “an unreasonably strict procedural definition of ‘standing to sue’ in environmental matters is not in the public interest,” § 1-502. The General Assembly declared that “[a]ny ... person, regardless of whether he possesses a special interest different from that possessed generally by the residents of Maryland, or whether substantial personal or property damages to him is threatened,” has “standing to bring and maintain an action provided for in this section.” §