                                STATE OF VERMONT

                             ENVIRONMENTAL COURT



                                                }
In re: Unified Buddhist Church, Inc.,           }
        Indirect Discharge Permit               }     Docket No. 253-10-06 Vtec
        (Appeal of Lull’s Brook Watershed       }
        Association, et al.)                    }

                       Decision and Order on Motion in Limine

      Appellants Lull’s Brook Watershed Association, John Zelig, Amy Zelig, Peter

Gordon, Sterling R. Monk, Marion Monk, and Heidi Luquer (Appellants) appealed from

a decision of the Agency of Natural Resources to grant renewal Indirect Discharge Permit

ID-9-0271 (20061) to Appellee-Applicant Unified Buddhist Church, Inc. (Unified Buddhist).

Appellants are represented by David Grayck, Esq.; Appellee-Applicant is represented by

Hans Huessy, Esq.; the Vermont Agency of Natural Resources (ANR) is represented by

Catherine Gjessing, Esq.; and amicus curiae2 Vermont Natural Resources Council (VNRC)

is represented by Jon Groveman, Esq.



Procedural History

      The proposed disposal system and the procedural history of the prior permits is



      1
        Because the renewal permits carry the same number as the original permits,
without any distinguishing factor such as the –1, –2 series of suffix numbers used for
permit amendments, this decision will use the year of issuance to distinguish them. The
renewal permit that is the subject of this appeal was issued on October 4, 2006.
      2
          VNRC has filed a motion to alter or amend the Court’s May 11, 2007 decision
conferring amicus status on VNRC, asserting additional grounds for intervenor party
status; that motion will be addressed in a separate decision.

                                            1
discussed extensively in a decision of the Supreme Court relating to an earlier permit

amendment: In re Unified Buddhist Church, Inc., 2006 VT 50, ¶3-9.

       In 2001, the ANR issued the original Indirect Discharge Permit ID-9-0271 (the 2001

Permit) to Unified Buddhist, effective until June 30, 2006, approving a discharge from the

Green Mountain Dharma Center of 15,000 gallons per day, from a sewage treatment

system, with an indirect discharge into Lull’s Brook, a tributary of the Connecticut River.

No appeal was taken from the initial Indirect Discharge Permit; the system authorized by

that permit was not constructed.

       In 2003, the ANR issued amended Indirect Discharge Permit ID-9-0271-1, approving

the indirect discharge of 9,500 gallons per day from a sewage treatment system. No appeal

was taken from the first amended permit; the system authorized by that permit

amendment was not constructed. In late 2004, the ANR issued second amended Indirect

Discharge Permit ID-9-0271-2, also approving an indirect discharge of 9,500 gallons per

day. The Vermont Supreme Court affirmed the Water Resources Board’s dismissal of the

appeal of this permit. In re Unified Buddhist Church, Inc., 2006 VT 50, ¶1. The system

authorized by that permit was not constructed.

       In late 2006, after the public notice and public hearing required by the statute and

rules applicable to its Indirect Discharge program, the ANR issued a renewal permit, which

we will refer to as Indirect Discharge Permit ID-9-0271 (2006) or “the renewal permit,”

effective until June 30, 2011. This is the permit on appeal in the present case, Docket No.

253-10-06 Vtec. This permit approved the indirect discharge of 9,500 gallons per day from

a new proposed sewage treatment system, including septic tankage, pump stations and

leach field. The leach field consists of a trench absorption design of sixteen three-trench

cells for 100% dual alternation. No construction has begun on the sewage treatment

system.



                                            2
Motion in Limine re Scope of Appeal

       Appellee-Applicant Unified Buddhist has moved in limine to exclude, from the

present appeal of the renewal permit, all issues that were addressed during the issuance

of its original Indirect Discharge Permit No. ID-9-0271 (2001), or in the first or second

amendments to that permit in 2003 and 2004. Unified Buddhist argues that Appellants

should be precluded from litigating any issues that were, or could have been, litigated in

any of the prior proceedings, based on the doctrine of res judicata.3

       Res judicata, or claim preclusion, is “founded upon the judicial economy and

fairness of litigating and disposing of all issues involved in a legal dispute where the

parties, subject matter and causes of action are identical or substantially identical.” Cupola

Golf Course, Inc. v. Dooley, 2006 VT 25, ¶10, 179 Vt. 427, 430 (citing Lamb v. Geovjian, 165

Vt. 375, 379-80 (1996)). “The doctrine of claim preclusion advances the efficient and fair

administration of justice because it serves ‘(1) to conserve the resources of courts and

litigants by protecting them against piecemeal or repetitive litigation; (2) to prevent

vexatious litigation; (3) to promote the finality of judgments and encourage reliance on

judicial decisions; and (4) to decrease the chances of inconsistent adjudication.’” Faulkner

v. Caledonia County Fair Ass’n, 2004 VT 123, ¶9, 178 Vt. 51, 54-55 (quoting In re Cent. Vt.

Pub. Serv. Corp., 172 Vt. 14, 20 (2001)).

       The doctrine of res judicata is distinct from the concept of finality of an unappealed


       3
         Appellants had also moved to strike ANR’s memorandum regarding res judicata
or, in the alternative, had requested leave to respond to it. Appellants argued that the
ANR’s memorandum was untimely when it was filed on January 22, 2007, in response to
the motion in limine filed by Unified Buddhist on December 19, 2006. However, at the
telephone conference held on January 12, 2007, the Court ordered that responses to all
then-pending motions be filed by January 22, 2007. The ANR memorandum was timely
based on that order; Appellants’ motion to strike the ANR memorandum is therefore
DENIED. Appellants did file a response to the ANR memorandum on January 26, 2007;
their request for additional time to respond has become moot.

                                              3
permit. Compare Faulkner, 2004 VT 123, ¶9, 178 Vt. at 54-55 with In re Unified Buddhist

Church, Inc., 2006 VT 50, ¶13. The former concerns prior litigation, or prior trial-type

administrative adjudication,4 in which the parties had a full and fair opportunity to litigate

all claims. The latter is implicated when a party fails to appeal a final permit, in particular

if a statute or case law has established the finality of an unappealed permit in the particular

permit program. See, e.g., 24 V.S.A. §4472; Levy v. Town of St. Albans Zoning Bd. of

Adjustment, 152 Vt. 139, 142 (1989) (as to municipal zoning permits); In re Taft Corners

Assocs., Inc., 160 Vt. 583, 593 (1993) (as to Act 250).

       The issue in the present case is the extent to which the doctrine also should be

applied in the context of an application for a so-called “renewal permit” in the Vermont

state indirect discharge permit regulatory system. In a de novo appeal of any ANR

decision, such as the issuance of the renewal indirect discharge permit at issue in the

present case, this Court is required by statute to apply “the substantive standards that were

applicable before the tribunal appealed from.” 10 V.S.A. § 8504(h). The Agency’s own

practices may assist the Court in interpreting and applying the substantive standards, but

the Court’s basic obligation is to apply anew the substantive legal standards to the facts the

Court finds from the evidence presented in the de novo proceedings.

       Indirect discharge permits are governed generally by 10 V.S.A. §1259(e), which

provides that “[e]xcept for on-site disposal of sewage from systems of less than 6,500 gpd



       4
           In this context, we note that the ANR process resulting in the issuance of a
discharge permit is a notice-and-comment type of proceeding, in which public comments
are taken at a hearing held after the issuance of a draft permit by the Agency, rather than
a trial type of proceeding, such as before the District Commissions under Act 250, in which
parties may, for example, cross-examine witnesses and present evidence. Accordingly,
although participation in the proceedings below is now a prerequisite for bringing an
appeal of a municipal or an Act 250 permit, 10 V.S.A. §8504 (b) and (d), there is no such
requirement for appeals from ANR permit decisions.

                                               4
capacity that are either exempt from or comply with the environmental protection rules,

no person shall cause any new or increased indirect discharge of wastes into Class B waters

without a permit under section 1263.” Section 1259(e) further provides that:

       The secretary shall not issue a permit for on-site disposal of sewage that
       discharges into Class B waters, unless the applicant demonstrates by clear
       and convincing evidence, and the secretary finds, that the discharge: (1) will
       not significantly alter the aquatic biota in the receiving waters; (2) will not
       pose more than a negligible risk to public health; (3) will be consistent with
       existing and potential beneficial uses of the waters; and (4) will not cause a
       violation of water quality standards.

The Vermont Indirect Discharge Rules (IDR), §14-601(c), provide that, “[f]or a new indirect

discharge of sewage, an applicant must show by clear and convincing evidence that the

discharge will meet the statutory requirements for obtaining an indirect discharge permit.

The standards and requirements of these rules, when met, provide the evidence necessary

to meet this statutory requirement.”

       Like discharge permits issued pursuant to the National Pollutant Discharge

Elimination System created by the federal Clean Water Act, 33 U.S.C. § 1342, state-issued

indirect discharge5 permits are valid for a term “not to exceed five years,” 10 V.S.A.

§1263(d)(4), may be renewed “from time to time upon application to the secretary,” and

“shall be issued following all determinations and procedures required for initial permit

application.” Id. §1263(e).

       If an indirect discharge permit has been issued, authorizing construction of a sewage

system and setting standards and conditions for the discharge from that system, and that

permit is not appealed, the permit holder has the right to rely on the permit during its five-

year term. If any amendments are sought to the permit during its five-year term, the scope


       5
         Indirect discharges of the type on appeal, from a source other than a publicly
owned treatment works, are not regulated by the federal Clean Water Act. 33 U.S.C. §
1311(b)(1).

                                              5
of the amendment decision, and the scope of the appeal of any amendment decision, is

limited to the changes proposed by the amendment. Buddhist, 2006 VT 50, ¶10,¶20.

       At least after an applicant has constructed6 the system authorized by a final original

permit, it is the ANR’s practice to apply principles of issue preclusion or vested rights so

as not to revisit design and construction issues in a renewal permit, but rather to assess the

system’s operation and compliance with the permit’s conditions and performance

standards. Regardless of whether this practice has been adopted as a formal procedure,

3 V.S.A. §§801(7), 801(8), 831(b), 835; or whether it forms part of the “substantive

standards” applicable before the Agency, this approach is a sensible one. However, the

Court declines to apply it in a situation in which construction of the project authorized by

the original permit has not commenced prior to the expiration of that permit.

       The fact that the ANR does not require an applicant to provide as much information

to the agency in a renewal application as in the original application does not change this

result. Regardless of the filing requirements, an applicant has the burden of making the

same showing of compliance with the statute and rules in a renewal application as in an

original application. As well as the statutory requirement, §14-602 of the Indirect Discharge

Rules provides that previously-permitted indirect discharges “must comply with the

current Water Quality Standards in effect at the time of permit renewal, including [with]

any revisions [to the WQS] which have occurred since the permit was issued.” In the

present case, it is not possible to review the compliance of the facility with its existing

permit, in the context of determining whether to issue a renewal permit, as it is not in

operation.   See IDR § 14-406(e).     All that is available to review is its design and

construction. See also IDR § 14-201(a) (noting that each permit is valid for five years,


       6
         The question of how much construction or preparation may be sufficient to trigger
this practice is beyond the scope of the present motion, as no argument has been made that
construction has commenced.

                                              6
despite intervening regulatory changes, but that each renewal application is viewed in light

of regulatory changes since last five-year permit was issued).

       In the context of a renewal permit appeal, the statute requires the Court to consider

“all determinations and procedures required for initial permit application” in deciding

whether a renewal permit should be issued, if those issues are properly appealed, 10 V.S.A.

§1263(e), regardless of whether the same issues were considered in issuing the original

permit and intervening amendments. Thus, in an appeal of a renewal permit, as opposed

to that of an amendment of an unappealed permit, the Court may consider anew any issues

authorized by §1263(e) or the Indirect Discharge Rules, including issues that may have been

addressed in the context of prior permitting decisions. See Re: City of South Burlington

(Bartlett Bay Wastewater Treatment Facility), No. WQ-01-04 Second Prehearing Conf.

Report and Order, pp. 5-6 (Water Res. Bd.7, Apr. 18, 2002)

       Neither the statutory and regulatory mandates, nor the doctrine of res judicata, bars

Appellants from introducing evidence or legal arguments related to issues that were, or

could have been, previously litigated in prior permit proceedings. This result is the same

whether it is reached under the statutory scheme or by applying the common law res

judicata principles. Both the statute and the rules contemplate a necessary review of

previously-litigated issues. See §1263(e); IDR §14-602.

       Even the logic of limiting indirect discharge permits to a term of “no more than five

years” must allow the analysis of any issues related to the previously-issued permit, the

facility’s compliance with it, any changes in the facility’s operation, and how those affect

water quality. §1263(e); IDR § 14-406(e). Otherwise the five-year term of indirect discharge

permits would be mere surplusage. DeBartolo v. Underwriters at Lloyd’s of London, 2007



       7
       Pursuant to 10 V.S.A. § 8504(m), decisions of the Water Resources Board are given
the same weight as those of this Court.

                                             7
VT 31, ¶16 (citing Vt. State Colls. Staff Fed’n v. Vt. State Colls., 157 Vt. 645, 646 (1991)

(statutory constructions that render provisions surplusage should be avoided). Similarly,

if parties were barred from revisiting issues raised in prior permit proceedings, there would

be no difference between a permit amendment proceeding and a renewal permit

proceeding, which would render the provisions specifically governing renewal as

surplusage. DeBartolo, 2007 VT 31, ¶16 (citing Vt. State Colls. Staff Fed’n, 157 Vt. at 646.

       Because this comprehensive review is expressly contemplated by the statutory and

regulatory structure, an appeal of a renewal permit is far from the type of “vexatious”

litigation which the doctrine of res judicata is designed to prohibit. See Faulkner, 2004 VT

123, ¶9. As construction of the system approved in the expired 2001 Permit has not

commenced, issues related to the design of the system, as well as operating issues, may be

raised in the renewal permit proceedings.



       Accordingly, based on the foregoing, it is hereby ORDERED and ADJUDGED that

Unified Buddhist’s Motion in Limine is DENIED.


       Done at Berlin, Vermont, this 31st day of July, 2007.



                            _________________________________________________
                                  Merideth Wright
                                  Environmental Judge




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