Pier One, Inc. v. Department of Natural Resources

FISCHER, Judge. This appeal by Pier One, Inc. (Pier One) is from a decision of the Circuit Court for Queen Anne’s County affirming a Final Decision of the Department of National Resources (DNR), appellee. On October 22, 1990, DNR issued a Site Complaint alleging that “non-water dependent structures, including a storage shed and gas pumps were constructed, and or placed on a floating pier, adjacent to the marina inlet.” The complaint further alleged that this activity was in violation of Md.Code (1974, 1990 Repl.Vol.), § 9-104(b) 1 of the Natural Resources Article. 2 The complaint was later amended by deleting the reference to the gas pumps and sought only removal of the dockmaster’s office! Section' 9-104(c) reads in pertinent part: ³⁹⁹ (c) Permits—(1) Except as provided in paragraph (2) of this subsection, notwithstanding any other provision of law, the Secretary may not issue a permit under this title for any project involving the construction of a dwelling unit or other non-water dependent structure on a pier located on private wetlands.

(Emphasis supplied.) Pier One operates the Pier One Marina located on Kent Island south of the southeast end of the Chesapeake Bay Bridge, between U.S. Route 50 and the Bay Bridge Commercial Airport. The site consists of approximately 47 acres. Situated near the entrance to the marina is floating pier “A,” which contains three fuel pumps, a sewage pumpout facility, and a 10' by 18' enclosed structure known as the “dockmaster’s office.” That structure is the subject of this appeal. Pier One purchased the marina in 1986 and, during 1986, received final site plan approval from Queen Anne’s County to permit the expansion of the marina basin from nine acres to fifteen acres.

DNR issued a wetlands permit authorizing the expansion. According to appellant, and not disputed by appellee, included with the permit for the project issued by DNR were drawings of pilings, piers, and slips to be constructed within the expanded marina basin. Again, according to appellant, because the placement of pilings, piers, and slips did not constitute a dredge or fill activity within DNR’s regulatory jurisdiction, the permit did not refer to the pilings, piers, and slips. In September 1990, Pier One placed two gas pumps, a pump-out facility, and a dockmaster’s office on the deck of Pier “A.” Activities to be conducted from the dockmaster’s office include monitoring vessel traffic within the marina basin, providing fuel to boaters, sanitary sewage pump-out facility operations, and other marina services.

Because the dock-master services the gas pumps and oversees the pump-out facility, the office is located adjacent to those operations. In addition, the dockmaster’s office houses electrical shut-off switches for the fuel pumps, the emergency master shut-off ⁴⁰⁰ switch for fuel flow from the tanks located on shore, and containment booms and absorbent pads for oil or gas spills. On October 22, 1990, DNR issued a site complaint, which reads: Mr. Bingham found that between April 19, 1990 and the date of this Order, that dredging had occurred without a valid wetland license in tidal wetlands at or adjacent to your property known as Pier One Marina, in Queen Anne’s County, Maryland. This is in violation of Title 9-202(a) of the Annotated Code of Maryland 1990 Replacement Volume.

Between April 19, 1990 and the date of this Order, it was also found that non-water dependent structures, including a storage shed and gas pumps were constructed and or placed on a floating pier, adjacent to the marina inlet. This is in violation of Title 9-104(b) of the Annotated Code of Maryland 1990 Replacement Volume. Initially, at the hearing before the Administrative Law Judge (ALJ), heard on February 28, 1991, the parties stipulated that the wetlands at issue are private wetlands. Mr. Bingham, the inspector who issued the citation, testified before the ALJ, and it is clear that he issued the complaint pursuant to § 9-104(c).

Before the ALJ, the DNR argued that the structure in question was a non-water dependent structure, and that § 9-104 provides the basis for the complaint. Appellant argued that the structure was, in fact, a water dependent structure and, as such, § 9-104 was inapplicable. In addition, appellant pointed out that COMAR Regulation 08.05.07.03(c) permits certain structures to be built without notice to DNR. These structures include walkways, footbridges, duckblinds, docks, boathouses, boat shelters, and other similar structures.

In her decision, rendered on May 16, 1991, the ALJ stated that a telephonic prehearing conference was held on January 31, 1991, at which time the scope of the hearing was narrowed to the dockmaster’s office, the non-water dependent uses having been removed from the premises. In addition, in her ⁴⁰¹ findings of fact, the ALJ found that the drawings associated with the 1991 Wetlands permit show the dockmaster’s office. In her conclusions of law, she noted that § 9-303 was amended in 1989. “Of special significance to the instant case, the General Assembly specifically provided at that time: 3 ‘[T]he exemptions from certain permit requirements provided by this Act may not be construed as applying to the construction of a dwelling unit or structure on a pier, wharf, dock, walkway, bulkhead, breakwater, pile or other similar structure.’ 1989 Md.Laws Ch. 691, Section 2.” The ALJ found that the construction of a structure on a pier is subject to the Department’s permitting requirements and found that, because appellant did not obtain a permit, it violated §§ 9-104 and 9-301 et seq. The ALJ subsequently found that the dockmaster’s office was a water dependent structure and recommended that the site complaint be withdrawn.

On May 30, 1991, both Pier One and DNR filed exceptions to the Recommended Decision. The matter was then reviewed by the Director of the Water Resources Administration. 4 The Director’s Final Decision rejected the ALJ’s ⁴⁰² recommendations and found that the site complaint was properly issued pursuant to §§ 9-104 and 9-306. 5 The Director found that § 9-104 “subjected structures on docks to regulatory review under the Natural Resources Article Title 9 which became effective July 1,1989.” The Director concurred with the ALJ in finding that § 9-104 subjected construction of the dockmaster’s office to regulatory review, but disagreed with her recommendation that the complaint be dismissed. The Director found that the question of water dependency should be addressed on a case by case basis, and, therefore, appellant could only come into compliance by obtaining a permit or removing the structure. The Director’s order is as follows: Pier One shall either: a) within 30 days from the date of this Decision and Order, apply for a permit under Natural Resources Article, § 9-306, for authorization to leave the dockmaster’s office on the dock, which authorization will be granted only if the Tidal Wetlands Division of this Administration determines that the dockmaster’s office is a water dependent structure; or b) if no application is made within 30 days, remove the dockmaster’s office within 45 days of the date of this Decision and Order.

The matter proceeded on appeal to the circuit court, and, after a full presentation of legal arguments on December 16, 1992, the circuit court held, in an oral opinion issued the same day, that the issue was very narrow: “that issue being simply whether or not the Director was correct when she concluded that she had jurisdiction with respect to what was on the piers.” In this regard the court stated: I cannot read 9-306(a) in any other manner than saying that any person proposing to conduct on any wetland an activity not authorized by the regulations, and those regulations ⁴⁰³ relate to dredging, filling, removing or otherwise altering or polluting private wetlands, under the provisions of 9-302, shall apply for a permit with the Secretary. Now, the appellant reads 9-302 as very sweeping and setting the authority, the entire scope of the authority of the Department. I simply don’t read it that way. Those are regulations which relate to one aspect of what might take place on State wetlands—one, and one only.

Well, they are related. Actually, there’s one, two, three—three specific— dredging, filling and removing, and then, or otherwise altering or polluting private wetlands. After that, if you want to do any other activity, then you have to get a permit. It could be that those regulations would say that you could put out a pier, for which you would need no permit.

Those regulations could just as easily say you can put out a pier that has no structure on it without a permit, but you cannot put a pier out with a structure on it unless you do get a permit. There are myriad possibilities, and I simply don’t think that the State, by any stretch of the imagination, did not give to the Secretary the authority to regulate anything conducted on any wetland. And, on, there, is used in its most expansive sense, meaning on, over, above or whatever. I think this intention of the General Assembly is made clear by its adoption of Section 9-104, which says the Secretary may not issue a permit for any project involving the construction of a dwelling unit or other non-water dependent structure on a pier located on a private wetland.

Now, if the authority of the Department or the Secretary was nonexistent in that regard before, it certainly was strange in the extreme to prohibit the Secretary from issuing a permit under this Title for any project involving the construction of certain types of units, and that’s all that that Section purports to do. And therefore, so far as the conclusion of the Secretary or the Director here with regard to her authority, I have no trouble with that, whatsoever, that the authority to regulate anything on a wetland includes what was on a pier on a wetland, or whatever. ⁴⁰⁴ It is clear that the trial judge found jurisdiction in the DNR and that jurisdiction was based upon his reading of § 9-306(a) which reads, in pertinent part: Any person proposing to conduct on any wetland an activity not authorized by the regulations adopted under the provisions of § 9-302 of this subtitle shall apply for a permit with the Secretary, on the form the Secretary prescribes. The trial judge found that § 9-104 did not confer jurisdiction on the DNR saying that it “prohibit[s] the Secretary from issuing a permit under this Title for any project involving the construction of certain types of units, and that’s all that Section purports to do.” He did find that the enactment of § 9-104 evidenced the fact that the General Assembly believed construction on private wetlands required a permit prior to the enactment of § 9-104. Before the ALJ, DNR took the position that Pier One was in violation of § 9-104(c) because the dockmaster’s office was a non-water dependent structure and was not permitted pursuant to the clear mandate of § 9-104(c).

The primary issue argued before the ALJ was whether the