LAIDLAW ENVIRONMENTAL SERVICES)
OF NASHVILLE, INC.,            )
                               )
     Plaintiff/Appellant,      )
                               )         Davidson Chancery
                               )         No. 94-2747-III
VS.                            )
                               )         Appeal No.
                               )         01-A-01-9507-CH-00310
METROPOLITAN BOARD OF HEALTH )
FOR NASHVILLE AND DAVIDSON     )
COUNTY,                        )

and
                               )
                               )
                                             FILED
                               )
ROBERT ORR/SYSCO FOOD SERVICES )               March 13, 1996
COMPANY,                       )
                               )             Cecil W. Crowson
and                            )            Appellate Court Clerk
                               )
BRING URBAN RECYCLING TO       )
NASHVILLE TODAY,               )
                               )
     Defendants/Appellees.     )

                    IN THE COURT OF APPEALS OF TENNESSEE
                         MIDDLE SECTION AT NASHVILLE

         APPEAL FROM THE CHANCERY COURT OF DAVIDSON COUNTY
                       AT NASHVILLE, TENNESSEE

                 HONORABLE ROBERT S. BRANDT, CHANCELLOR



Thomas V. White
TUNE, ENTREKIN & WHITE
First American Center, 21st Floor
Nashville, Tennessee 37238

JOHN P. WILLIAMS
1900 Cedar Lane
Nashville, Tennessee 37212
ATTORNEYS FOR PLAINTIFF/APPELLANT

James L. Murphy, III
Director of Law
John L. Kennedy
Metropolitan Attorney
Liz Foster
Metropolitan Attorney
DEPARTMENT OF LAW
METROPOLITAN GOVERNMENT OF NASHVILLE
204 Metropolitan Courthouse
Nashville, Tennessee 37201
FOR DEFENDANT/APPELLEE
METROPOLITAN BOARD OF HEALTH FOR
NASHVILLE AND DAVIDSON COUNTY
GARY A. DAVIS
Post Office Box 2346
Knoxville, Tennessee 37901

Frank M. Fly
BULLOCK, FLY & McFARLAND
Post Office Box 398
Murfreesboro, Tennessee 37133-0398
ATTORNEYS FOR DEFENDANT/APPELLEE
ROBERT ORR/SYSCO FOOD SERVICES COMPANY


DAVID BORDENKIRCHER
3221 Nolensville Road, Suite 207
Nashville, Tennessee 37211
ATTORNEY FOR DEFENDANT/APPELLEE
BRING URBAN RECYCLING TO NASHVILLE TODAY


REVERSED AND REMANDED


                             HENRY F. TODD
                             PRESIDING JUDGE, MIDDLE SECTION


SAMUEL L. LEWIS, JUDGE, CONCURS;
AND WILLIAM C. KOCH, JR., JUDGE, FILES
SEPARATE CONCURRING OPINION.




                                   -2-
LAIDLAW ENVIRONMENTAL SERVICES)
OF NASHVILLE, INC.,            )
                               )
     Plaintiff/Appellant,      )
                               )                     Davidson Chancery
                               )                     No. 94-2747-III
VS.                            )
                               )                     Appeal No.
                               )                     01-A-01-9507-CH-00310
METROPOLITAN BOARD OF HEALTH )
FOR NASHVILLE AND DAVIDSON     )
COUNTY,                        )
                               )
and                            )
                               )
ROBERT ORR/SYSCO FOOD SERVICES )
COMPANY,                       )
                               )
and                            )
                               )
BRING URBAN RECYCLING TO       )
NASHVILLE TODAY,               )
                               )
     Defendants/Appellees.     )


                                         OPINION


       The captioned plaintiff has appealed from the judgment of the Trial Court affirming

the administrative action of the captioned Board reversing the previous action of the Director

of the Metropolitan Department of Health in renewing six permits previously issued for

operation of a waste disposal plant. The other captioned parties initiated and prosecuted the

administrative proceedings before the Board to reverse the renewal of the permits and

actively defended the action of the Board in the Trial Court and this Court.



       The issues presented by the parties require a thorough review of the background of the

present controversy.



       The subject plant was constructed in 1990 by Osco Treatment Systems, Inc. In June,

1991, the Director of Health issued six annual permits for operating the plant and the plant

began operations consisting of converting hazardous wastewater. Copies of said permits are

not found in the record, but it appears from the renewal licenses that various activities were

                                              -3-
authorized to neutralize and to separate metals, oils and other toxic wastes and ship them to

other disposal sites. The remaining wastewater was to be rendered non-hazardous in

biological treatment tanks and discharged into the public sewer system. Annual permits for

this operation were renewed in June, 1992, by the Director of Health; and Osco Treatment

Systems, Inc. continued the operation.



         On December 23, 1992, Osco Treatment Systems, Inc., became a subsidiary of

plaintiff, Laidlaw Environmental Services of Nashville, Inc.



         On February 26, 1993, the Director of the Health Department issued the following

order:

              THE METROPOLITAN GOVERNMENT OF NASHVILLE AND
                       DAVIDSON COUNTY, TENNESSEE

                                   Acting By and Through

                       THE METROPOLITAN BOARD OF HEALTH

                IN THE MATTER OF
                THE METROPOLITAN DEPARTMENT OF
                HEALTH, FREDIA S. WADLEY, M.D.,
                DIRECTOR OF HEALTH,
                      Complainant,
                vs.                        Case No. A-93-001

                OSCO TREATMENT SYSTEMS, INC.,
                     Respondent.

                                            ORDER
                       Pursuant to the authority of Tennessee Code Annotated
                Sections 68-25-101, et seq. and the Code of Laws of The
                Metropolitan Government of Nashville and Davidson County
                Chapter 10.56, the Metropolitan Department of Health
                (“Department”) has issued the following Order:

                                     FINDINGS OF FACT
                       1. OSCO Treatment Systems, Inc., (“Respondent”) is
                the owner and/or operator of a wastewater treatment facility
                located at 7230 Centennial Place, Nashville, Tennessee. The
                Respondent is a “person” within the meaning of Section
                10.56.010 of the Metropolitan Code of Laws “Code” and is
                thereby subject to the provisions of Section 10.56.170 of the
                Code.




                                              -4-
                      2. On September 16, 1992, the Department received a
              complaint regarding odor in the Centennial Boulevard area.
              Upon investigation, the Department determined that the odor in
              question was a sulfide type and was emanating from a sodium
              hydrosulfide (NaHS) delivery system on Respondent’s
              premises. According to the Respondent, the NaHS tank was
              filled with a substantial excess of free sulfide which had been
              introduced into the tank by employees of the Respondent. The
              ensuing chemical reaction released excess sulfide at a rate
              exceeding the capacity of the thermal oxidizer odor control
              system.

               3. On numerous occasions during September and October,
              1992, the Department received complaints of, and did, in fact,
              detect, odors in the Centennial Boulevard area. Upon
              investigation, the Department determined such odors were
              being generated by bio-sludge stored in various roll-off boxes
              located on Respondent’s premises. Such fact was confirmed by
              employees of the Respondent.

                4. The Respondent was acquired by Laidlaw Environmental
               Services, Inc. on December 23, 1992. On the date of
               acquisition there were approximately ninety roll-off containers
               which held odiferous bio-sludge material on site.


       The order also contains the following:

                                 CONCLUSION OF LAW
                       1. Respondent has violated Section 10.56.170
                      of the Code on repeated occasions.

                                           ORDER
               IT IS ORDERED that the Respondent is hereby assessed a
              civil penalty in the amount of One Hundred Fifty Thousand and
              No/100 Dollars ($150,000.00) for violation of Section
              10.56.170 of the Metropolitan Code of Laws. Said penalty
              shall be paid by certified check, payable to the order of the
              Metropolitan Department of Health, within thirty (30) days of
              the executed date of this CONSENT AGREEMENT and shall
              be mailed or delivered to: . . . .


       On April 2, 1993, the Director issued an “Amendment” to the February 26, 1993,

order containing the following:


               AMENDMENT TO ORDER ASSESSING CIVIL PENALTY
               Comes the Director of Health to amend the Order issued on
              February 26, 1993, assessing a civil penalty in the above-styled
              matter, by deleting paragraph 3 of said Order and in its place
              substituting the following paragraph 3.

                      3. In addition to the incident referenced above,
                      the Department received numerous complaints

                                             -5-
                      of, and staff members did in fact, detect, odors
                      in the Centennial Boulevard area on the
                      following dates in October, 1992; December,
                      1992; January, 1993; February, 1993; and
                      March, 1993:

                      October 5, 1992
                      October 8, 1992 (two occasions)
                      October 9, 1992
                      October 13, 1992 (two occasions)
                      October 15, 1992
                      December 1, 1992 (two occasions)
                      December 2, 1992
                      December 15, 1992
                      December 17, 1992
                      January 21, 1993
                      February 12, 1993
                      February 16, 1993

               Upon investigation, staff members of the Health Department
               determined that the odors originated in bio-sludge stored in
               various roll-off boxes located on Respondent’s premises. The
               origin of the odors detected in October, 1992, was confirmed
               by employees of the Respondent.

            THE METROPOLITAN GOVERNMENT OF NASHVILLE AND
       DAVIDSON COUNTY DEPARTMENT OF HEALTH

                      /s/_______________________________________
                             FREDIA S. WADLEY, M.D.
                             Director of Health

               Dated: April 2, 1993


       On April 28, 1993, plaintiff applied for renewal of the six permits for operation of the

plant. On June 28, 1993, after inspection of the plant, the Director of Health renewed the

permits.



       Each of the six permits describes a specific “Emission Source” and specific

“Emission Points” with specified conditions of operation. A copy of Permit No. 6-1, is

attached to this opinion as “Exhibit A.”



       On July 26, 1993, and July 28, 1993, the second and third captioned appellees

appealed to the Board to reverse the renewal of the permits. The Board adopted the contested




                                             -6-
case provisions of the Uniform Procedures Act, T.C.A. Section 7-7-105, and requested an

Administrative Law Judge (ALJ) to preside over the proceedings.



       On November 8, 1993, prior to the administrative hearing, a “consent agreement” was

approved by the Board. The agreement was signed by the Director of Health and the

president of Osco Treatment Systems, Inc. It contains the following caption and “Factual

Background:”

               IN THE MATTER OF
               THE METROPOLITAN DEPARTMENT OF
               HEALTH, FREDIA S. WADLEY, M.D.,
               DIRECTOR OF HEALTH,

                      Complainant,

               V.

               OSCO TREATMENT SYSTEMS, INC.,

                      Respondent.

               ....
                              FACTUAL BACKGROUND
                      1. Respondent became a subsidiary of Laidlaw
               Environmental Services, Inc., effective December 23, 1992.

                       2. Operational control of Respondent was assumed by
               its current management in early 1993.

                      3. Respondent’s current management has taken a
               number of steps to minimize the potential emission of odors
               from the facility. These steps have included the following:

                     A. Respondent has undertaken an ongoing
               comprehensive review of the facility and its operations.

                       B. Approximately 90 rolloff boxes containing
               biosludge, which were on the premises when Respondent’s
               current management assumed control, were removed by
               Respondent. The removal was completed three weeks in
               advance of the date promised to the Department by current
               management. Biosludge is a potential source of odors. This
               accelerated removal cost about $51,000.00 in addition to the
               normal removal expense.

                   C. Since about February 1993, biosludge has been
       accumulated for a shorter period of time than before, and
                   shipped offsite for final disposal more
                   frequently. Respondent has incurred more than
                   $300,000.00 in additional expense (through July

                                             -7-
              1, 1993) resulting from these more frequent
              shipments.

               D. Respondent installed an air sparger for the equalization tank
       at a cost of more than $13,000.00.

               E. Respondent has added hydrogen peroxide and
       powdered activated carbon to the biological treatment tanks as
       a part of its routine wastewater processing procedures.

              F. Respondent has retained consultants to assist it in
       addressing the potential for emission of odors from the facility.


The agreement also contains the following:

        1. This Consent Agreement constitutes a full and final
       settlement of all complaints alleging violations of Code
       §10.56.170 by Respondent through the date of this Consent
       Agreement.

       ....

        3. The Department has taken the cost to Respondent of past
       and future remedial measures into account in determining an
       appropriate penalty and corrective measures incorporated into
       this Consent Agreement.

        4. Respondent will pay a civil penalty to the Department in
       the amount of eighty thousand dollars ($80,000.00) to settle the
       allegations of the order. . . .

        5. Respondent will purchase, install, and operate a new two-
       stage scrubber for the biological treatment tanks to replace the
       existing scrubber. . . . The estimated project cost of purchasing
       and installing this scrubber is a minimum of $90,000.00. . . .

       ....

         7. Respondent will install a new multi-stage scrubber to serve
       certain tanks known as the T-1, T-14, T-15, T-18, and T-19
       tanks. . . . The estimated project cost of purchasing and
       installing this scrubber is $250,000.00.

        8. . . . As long as Respondent is proceeding in a manner
       which reasonably may be expected to result in completion of
       the agreed actions by the target dates, and otherwise is in
       compliance with this Consent Agreement, Respondent shall be
       deemed to be in compliance with Code §10.56.170. . . .

        9. After the completion of the compliance schedule referred
       to in the preceding paragraph, as long as the equipment
       installed by Respondent pursuant to this Consent Agreement is
       in good working order and is in normal operation, Respondent
       shall not be subject to enforcement action under Code



                                      -8-
              §10.56.170 unless and until Code §10.56.170 is substantially
              amended. . . .


       On April 4, 1994, plaintiff moved the Administrative Judge to dismiss the appeal

from the order of the Director renewing the permits on the grounds of the Consent Order. On

April 5, 1994, the motion was overruled.



       On June 15, 1994, after a hearing on the merits of the appeal, the Board voted 4 - 1 to

reverse the renewal of permits granted by the Director on June 28, 1993. On July 12, 1994,

the Board approved written findings of fact and conclusions of law under the following

caption:


                BEFORE THE METROPOLITAN BOARD OF HEALTH
                   OF THE METROPOLITAN GOVERNMENT OF
                NASHVILLE AND DAVIDSON COUNTY, TENNESSEE


              ROBERT ORR/SYSCO, INC.
              And
              BRING URBAN RECYCLING TO NASHVILLE
              TODAY (BURNT)
                   Petitioners,

              V.                                     No. 43.01-34-0597J

              OSCO TREATMENT SYSTEMS, INC.,
                   Respondent.


       The findings of fact include the following:

              Background

              . . . 12. Under the current zoning regulations activities in
              Industrial Restrictive Districts, such as OSCO, must be
              performed in enclosed buildings. At OSCO, sources of some
              of the offensive odors, the waste storage and treatment tanks,
              are not in enclosed buildings [IV-75-76].

              Impact of OSCO on Neighboring Businesses and Institutions

               13. During the period April 1, 1991, to March 24, 1994, there
              were at least 131 air pollution complaints to the Metropolitan
              Health Department from neighbors of OSCO concerning air
              pollution from the OSCO facility. Of the total of 131
              complaints, 90 (70%) of those complaints were received after



                                             -9-
January 1, 1993, when Laidlaw began operating the OSCO
facility. [II-142; Ex. S-6].

....

 15. Of the 131 documented air pollution complaints received
by the Metropolitan Health Department, the presence of an
odor from OSCO was confirmed by a Metropolitan inspector or
was confirmed by OSCO’s own admission for at least 82 of the
complaints. [Ex. S-5, 6].

....

Objectionable Odors from the OSCO Facility

 20. When the original air pollution permit application was
pending for the OSCO facility, OSCO’s consultant, Resource
Consultants, Inc., assured the Director of the Bureau of
Environmental Health Services of the Metropolitan Health
Department that there would be no odor problems. (VI-144-
147; VII-129-131)

 21. Instead, in the three years that the facility has been
operating, there have been 40-50 emissions of objectionable
odors beyond the property line which were considered to be
violations of Section 10.56.170 of the Air Pollution Code
(Emission of Gases, Vapors, or Objectionable Odors) by the
Metropolitan Health Department. [VI-140].

....

 23. . . . There have been at least nineteen days since January,
1993 when the Metropolitan Health Department found
objectionable odors emitted by OSCO beyond the property line
that met the standard set out in Section 10.56.170. [VI-141].

....

 32. OSCO maintained log sheets of pH measurements of the
scrubbing liquid in the bioscrubber. During the two-year
period from April, 1991, to April, 1993, there were at least 296
readings that were below a pH of 9.0, each of which constituted
a violation of the operating permit. On several days the pH was
permitted to remain well below 9.0 for hours at a time. [II-136-
139; VI-44; VI-164; Ex. S-13]. In addition, in 1993 OSCO
allowed the pH in the bioscrubber to fall below 9.0 more than
two times in January, 1993, once in March, 1993, once in
April, 1993, and once in September, 1993. [VI-27; 44-45]. . . .

....

  34. OSCO has agreed to replace the ineffective bioscrubber
with a new thermal oxidizer. This thermal oxidizer, however,
will not solve all of the odor problems from the biological
treatment units, since there would not be an effective backup
control device for the times when the thermal oxidizer

                              -10-
malfunctions or is out of service for maintenance. The
biological treatment units cannot be simply turned off when
this occurs because of the necessity to keep the bacteria alive,
and odors would continue to be generated. [II-148; IV-134].

....

 36. The only backup planned for the proposed new thermal
oxidizer is a scrubber. As with the existing bioscrubber, such a
backup scrubber would not be very effective at removing
odors. [IV-135].

....

 38. There was no testimony by any expert witness that the
proposed thermal oxidizer would eliminate all objectionable
odors emitted from the OSCO facility. . . .

 39. OSCO has not demonstrated the ability to properly
operate the relatively simple air pollution control equipment
that it currently has at the plant. It is likely that operational
problems will increase with the more technically sophisticated
and difficult-to-operate equipment that OSCO is planning to
install. [III-49-50].

 40. Another source of odor from the OSCO plant is the filter
press area, which filters odorous sludge from the biological
units and is in an open building without any air pollution
control devices. [IV-120].

 41. The storage of rolloff boxes containing sludge from the
biological units is also a potential source of odor, which is
somewhat mitiated when they are covered. [IV-121]. These
rolloff boxes have been the source of odor complaints in the
past. (Ex. S-5)

 42. Another source of odors is overflow of foam and liquid
from the biological treatment units, which have frequently
overflowed through foaming into the dike around the tanks
producing a biological sewer odor that would not be routed
through the new thermal oxidizer. [III-88].

 43. The odor problems with the OSCO facility have not been
solved by Laidlaw Environmental Services since it acquired
OSCO. [VI-142]. It is likely that there will be objectionable
odors from the OSCO facility in the future, even with the
installation of a new thermal oxidizer. [II-149]. The thermal
oxidizer to be installed on the biological treatment units will
not address odors from the filter press area or the roll-off boxes
or any other fugitive emissions from the facility. [IV-131].

 44. OSCO has accepted numerous shipments of hazardous
waste with very strong odors as determined by OSCO
laboratory personnel. [VI-33-40]. Hazardous waste codes
D001 and D002 were those that were most frequently
designated as having very strong odors. [VII-263]. These


                               -11-
include shipments accepted for treatment in parts of the plant
without air pollution controls. Many of these shipments with
very strong odors are from other Laidlaw facilities. [VI-33-40].

 45. Toxic waste disposal plants like OSCO cannot operate
anywhere without potentially creating odors, and OSCO
therefore needs a more remote site with a buffer zone to reduce
the impact on neighboring businesses. [III-54]. The lack of a
buffer zone contributes to OSCO’s odor violations. [IV-154].

 46. OSCO’s own consultant, Resource Consultants, Inc.,
which confidently predicted that there would be no odor
problems before the facility began operation, is unable to state,
even with the proposed addition of new odor controls, that
odors from OSCO will not be a problem in the future. [VII-
148].

Emissions of Volatile Organic Compounds

 47. The OSCO facility accepts hazardous and other industrial
waste with volatile organic compounds (VOCs), some with
over 4-5% volatile organic compounds, and some of which
have thousands of parts per million of benzene, which is a
carcinogen. OSCO also accepts hazardous waste with volatile
organic compounds that are chlorinated solvents, many of
which are carcinogens. [VII-115; II-152].

 48. Odors from the OSCO facility are related to VOCs
emissions, since odor-causing compounds are for the most part
VOCs. [III-23].

 49. OSCO has a thermal oxidizer in place for the control of
VOCs emissions from certain storage and treatment tanks at the
facility, but not all of the VOCs emissions from the OSCO
facility are routed to the thermal oxidizer. VOCs emissions
from the biological system are routed to the bioscrubber, as
discussed in the section above, and there are several sources of
fugitive emissions not controlled by any air pollution control
device. [II-135].

  50. The drum storage and drum decant building, where drums
are stored and unloaded into tanks, does not have any air
pollution controls. Also, in the same building is the chemical
fixation system, where certain liquids and sludges are mixed
with cement material for solidification. Volatile organic
compounds emitted from these operations are not controlled
and are released to the atmosphere. [II-125-128].

....

 55. The OSCO 1993 operating permits at issue in the hearing
control volatile organic compound emissions only through a
calculation of emissions based upon the amount of VOCs in
waste processed at the facility. There is no direct measurement
of VOCs emitted, and the calculations are done once per year
by OSCO’s consultants, in spite of the fact that the operating

                              -12-
permits have daily and hourly limits on VOC emissions. [II-
149]. OSCO does not report to Metro on compliance with
daily VOC throughput limits, only annual. [VII-112-113].

 56. No VOCs monitoring from emission points or in ambient
air is required by the permits. [VI-147]. The permits do not
specifically regulate the emissions of any toxic chemicals,
including benzene. [VI-147].

 57. The permit requirement for analyzing VOCs in incoming
waste is unclear and has not always been followed by OSCO.
[V-33; Ex. S-20]. Waste shipments have been unloaded prior
to determining the pounds of VOCs contained in them for
determination of compliance with daily throughput limits. [VI-
45-46; Ex. S-30].

....

 59. The 1993 operating permits do not adequately control
emissions of volatile organic compounds and particularly do
not adequately control emissions of volatile organic
compounds that are carcinogenic. [II-160-161].

Hazardous Waste Accepted by OSCO

 60. OSCO accepts both drums of hazardous waste and bulk
shipments. Drums of hazardous waste come to OSCO by
truck. Bulk hazardous waste comes to the OSCO facility by
rail tanker and by truck tanker. [II-123; 125-126; 130-132; Ex.
S-12]. Although the hazardous waste permit for the OSCO
facility allows only two rail cars to be present on the OSCO
facility at any given time, several more are stored at any time
on the rail siding immediately adjacent to the OSCO facility.
[I-146; II-130-132; Ex. S-12; Ex. S-1].

 61. Under its hazardous waste permit OSCO is permitted to
accept virtually every type of hazardous waste from any
location. . . .

....

 76. The August 25, 1993, nitrogen dioxide release from tank
T-1 created a large orange cloud that extended far above the
OSCO facility and migrated off the plant site. [Ex. S-2, 16].
The small scrubber on tank T-1 was overwhelmed by the gas,
and much of the gas exited from the top of the tank instead of
the scrubber. [III-139; V-110; Ex. S-16].

....

 90. In order to prevent sudden releases of toxic chemicals,
such as those that have occurred at OSCO, it is normal practice
in the chemical industry and in the hazardous waste industry to
have a formalized preventative maintenance program, which
OSCO does not have. [III-158]. Although OSCO may have
commenced the development of a preventative maintenance

                             -13-
program since the beginning of the hearing of this appeal, it is
not yet fully documented. [V-26].

....

 94. The OSCO facility as it is currently operated is not a safe
operation. There are many potential accidents that can occur
that would release toxic chemicals. [III-159-160].

....

Monitoring for Compliance

 104. Monitoring of emissions for compliance with permit
limits for the OSCO facility is technically and economically
feasible and is the trend under the federal Clean Air Act
Amendments of 1991. It is required in some permits now in
the State of Tennessee. [VII-252-254; 271-272].

 105. Continuous stack monitoring was available in June
1993. [III-25-27]. Continuous monitoring devices are
sufficiently sensitive to monitor for odor causing compounds.
[III-63].

 106. Other air pollution permits in the State of Tennessee
include odor restrictions and specific limits on and monitoring
requirements for odor causing compounds. [VII-256-257].

 107. Continuous fenceline monitoring, where a monitoring
device detects low levels of chemicals in the ambient air at a
facility property boundary, is technically and economically
feasible for OSCO. [VII-252; VII-265-266].

 108. None of these conditions in a permit for a waste
management facility would be a new precedent. [VII-281].

Conclusions of Law

....

5. Section 10.56.170 of the Air Pollution Chapter states:

       No person shall cause, suffer, allow or permit
       any emission of gases, vapors, or objectionable
       odors beyond the property line from any source
       whatsoever which causes injury, detriment,
       nuisance or annoyance to any considerable
       number of persons or to the public, or which
       causes or has a natural tendency to cause injury
       or damage to business or property.

6. Odor falls within the definition of air pollution in the
Tennessee Air Pollution Control Act, and it is within the
Board’s authority to regulate odor emissions. Tenn. AG. Op.
No. 83-299.



                              -14-
       The conclusions of law include the following:

               7. Section 10.56.170 is valid without the promulgation of
               regulations for its implementation and is not unconstitutionally
               vague or overbroad. It is within the experience and expertise of
               the Metropolitan Health Department to enforce this provision
               through consideration of complaints from the public and
               verification by Metropolitan inspectors of the source, nature,
               and intensity of emissions.

                   ....

               12. By allowing the pH of the bioscrubber to fall below 9.0,
               OSCO has violated Operating Permit Number 6-4 over 300
               times in its three years of operations.

               13. Under the air operating permits reissued to OSCO on June
               28, 1993, compliance with the requirements of Section
               10.56.170 of the Air Pollution Chapter is specifically required
               in the permits. By violating Sections 10.56.170 OSCO has also
               failed to comply with the provisions of its operating permits.

               14. Based upon the design, constructions, and operation of the
               OSCO facility, and the types of hazardous waste that OSCO
               accepts and is permitted to accept, it is likely that OSCO will
               operate in violation of the Air Pollution Control Chapter in the
               future.


       The decision of the Board reads as follows:

                WHEREFORE, the Metropolitan Nashville and Davidson
               County Board of Health hereby reverses the decision of the
               Metropolitan Health Department approving the OSCO
               Treatment Systems, Inc., application for Operating Permits
               Number 6-1 through 6.5. These operating permits are
               considered void and of no effect as of the effective date of this
               Order.


       On the same date, plaintiff filed a motion for stay supported by an affidavit that

plaintiff had spent or obligated itself for payment of $2,679,302 in good faith compliance

with the “Consent Agreement” approved by the Board on November 8, 1993. The Board

denied the stay.



       Upon filing of petition for judicial review, plaintiff again applied for stay supported

by affidavit of the Director of Health that:

                Since the installation of the new air pollution control
               equipment at the Laidlaw facility, it is my opinion that the

                                               -15-
               facility will pose no risk to human health which is greater than
               that posed by several other facilities in Cockrill Bend. It is also
               my opinion that the likelihood of odors has been reduced
               substantially by the addition of this new equipment.


       Stay was granted and continued during this appeal.



       As stated above, the Trial Court affirmed the action of the Board. On appeal, plaintiff

presents the following issues:

               1. Whether the Trial Court erred by holding that it was not
               arbitrary and capricious for the Metropolitan Board of Health to
               revoke Laidlaw's permits even though the Board had ordered
               Laidlaw to install expensive new air pollution control
               equipment just eight months earlier.

               2. Whether the Trial Court erred by holding that the applicable
               section of the air pollution control ordinance for Nashville and
               Davidson County is not unconstitutionally vague.

               3. Whether the Trial Court erred by holding that the Board's
               choice of remedies was not arbitrary, capricious, or abusive of
               its discretion.

               4. Whether the Trial Court erred by holding that the Board
               correctly applied §10.56.040(A) of Nashville's air pollution
               control ordinance to the facts of this case.

               5. Whether the Trial Court erred by holding that the Board's
               decision was not made upon unlawful procedure even though
               the Director of the Metropolitan Department of Health made no
               effort, during the proceedings before the Board, to defend her
               decision to issue the permits to Laidlaw.

               6. Whether the Trial Court erred by holding that the Board's
               reliance upon the location of the Laidlaw facility as a basis for
               its decision was not arbitrary, capricious, or illegal.


       The Board presents and plaintiff discusses the issue of whether this judicial review is

governed by the Administrative Procedure Act, T.C.A. §4-5-322, or certiorari as provided by

T.C.A. §27-8-101. The question was presented to the Trial Judge who ruled:

                It is unclear whether judicial review of the Board’s decision is
               governed by the UAPA, T.C.A. § 4-5-322, or by the common
               law writ of certiorari, T.C.A. § 27-8-101. By its own terms, the
               UAPA applies only to judicial review of state agency decisions.
               But in 1994, the Tennessee General Assembly passed a law that
               permits Metropolitan Government boards and commissions to
               conduct contested case hearings “substantially in accordance

                                              -16-
              with the contested case provisions” of the UAPA. The
              legislature did not, however, specify whether the UAPA’s
              judicial review standards or the common law certiorari
              standards should apply to appeals from Metropolitan
              Government’s UAPA-conducted contested case decisions.

               There is a difference between the standards. Under the
              UAPA, the agency decision must be supported by “substantial”
              evidence. T.C.A. § 4-5-322(h). Under common law certiorari,
              the agency decision need only be supported by “any” evidence.
              Tennessee Cartage Co. v. Pharr, 199 S.W.2d 119, 120-21
              (Tenn. 1947). The difference between the two standards,
              though subtle, can be important when there is a dispute over
              the sufficiency of the evidence.

                In this case though, the distinction between the two standards
              is not important. Laidlaw attacks the Board of Health’s
              decision not to renew its permits on a number of grounds, but
              sufficiency of the evidence is not one of them. In its brief,
              Laidlaw does not raise the issue. Therefore, this court does not
              need to decide whether the UAPA’s “substantial” evidence
              standard or certiorari’s “any” evidence standard applies. In
              other respects, the standard of review under both types of
              review is the same.


       T.C.A. Section 7-7-105, provides as follows:

               (a) In lieu of appointing a hearing officer as authorized
              hereinabove, any county having a metropolitan form of
              government and a population of over four hundred fifty
              thousand (450,000) according to the 1990 census or any
              subsequent federal census is empowered to contract with the
              secretary of state for use of administrative law judges, duly
              appointed pursuant to § 4-5-102(1), on a case-by-case basis to
              conduct hearings on any matters appealed to boards and
              commissions of the county.

                (b) Any appeal conducted by an administrative law judge
               under this section shall be conducted substantially in
               accordance with the contested case provisions of the Uniform
               Administrative Procedures Act compiled in title 4, ch. 5, part 3.
               The board or commission that considers such appeals shall
               promulgate rules which specify the provisions of the Uniform
               Administrative Procedures Act compiled in title 4, ch. 5, part 3
               applicable to such appeals.


       Nothing is found in the quoted statue to authorize the judicial review of

administrative actions under T.C.A. Section 4-5-322, which is applicable only to state

agencies. T.C.A. § 4-5-102(2).




                                             -17-
       Accordingly this judicial review of the decision of a municipal agency is by certiorari

as provided by T.C.A. § §27-8-101, et seq, and or §§ 27-9-101, et seq. McCallen v. City of

Memphis, 1990, 786 S.W.2d 633; Wheeler v. Memphis, Tenn. App. 1984, 685 S.W.2d 4. The

Board’s action may be invalidated when it is “illegal, arbitrary or capricious,” McCallen v.

City of Memphis, supra. The reviewing court is required to determine whether there is any

material evidence that supports the action of the administrative agency. Lansden v. Tucker,

204 Tenn. 388, 321 S.W.2d 795 (1959).



       Plaintiff’s first and third issues, above, assert that the decision of the Board to

“revoke” the plaintiff’s permits was arbitrary and capricious. The Board did not “revoke”

plaintiff’s permits. It reversed the renewal of the permits as granted by the Director on June

28, 1993.



       Some consideration must be given to the change of ownership of the plant on

December 23, 1992. Even though the change in ownership resulted in the continuation of

existence of Osco Treatment Systems, Inc., as a subsidiary of plaintiff, the record shows

convincingly that, upon the assumption of ownership by plaintiff, changes and improvements

were begun. Shortly after the transfer, plaintiff removed an accumulation of “roll-off

boxes” of waste, sent them to another state, and reduced the number of roll-off boxes

permitted on the premises to three. The Director of air pollution control of the Health

Department testified without contradiction and the Board found that the accumulation of roll-

off boxes was the principal cause of the odor complaints. Plaintiff undertook other corrective

measures which were effective but inadequate to satisfy the Board.



       It is not denied that employees of neighboring industries suffered ill effects from the

discharge of gases from the subject plant. It is not asserted that the plant is without fault in

design or operation. However, it is clear and uncontroverted that on November 8, 1993, the




                                               -18-
Board approved, (i.e. joined in) a settlement agreement which bound plaintiff to make

expensive improvements in the plant and agreed that:

                As long as respondent is proceeding in a manner which may
               reasonably be expected to result in completion of the agreed
               actions by the target dates, and otherwise is in compliance with
               this Consent Agreement, respondent shall be deemed to be in
               compliance with Code § 10.56.170.


       This record contains no evidence that plaintiff has not “proceeded in such a manner

which may reasonably be expected to result in completion of the agreed actions by the target

dates” or is not “otherwise in compliance with the Consent Agreement.” Therefore, for

purposes of this action, plaintiff must be “deemed to be in compliance with Code §10-56-

170,” which is the applicable air pollution ordinance.



       Moreover, the issue before the Board was not whether the six permits should be

revoked, but whether to reverse the June 28, 1993 renewal of existing permits. The criteria

for issuance and renewal of permits is set out in pertinent parts of §10.56.040 of the

“Nashville Air Pollution Control Ordinance” as follows:

               Operating permit.

                 A. After the construction permit has been issued and it is
               demonstrated to the satisfaction of the director that the fuel-
               burning equipment, incinerator, process equipment, control
               device or any equipment pertaining thereto can be operated in
               compliance with this chapter, an application for an operating
               permit shall be filed in duplicate in the office of the director on
               forms adopted by the director and supplied by the metropolitan
               health department. If the director determines that the source
               does or will operate in violation of this chapter, or if the source
               will operate so as to prevent attainment or maintenance of any
               lawful national ambient air quality standard, he shall either
               impose conditions on the face of the operating permit that, in
               his opinion, will promote compliance with this chapter, or he
               shall deny the application for an operating permit. . . .

                B. The operating permit shall be issued for a one-year period
               or for such longer period as the director may designate but not
               to exceed five years. Applications for renewal of the operating
               permit shall be made in writing upon forms furnished by the
               metropolitan health department and shall be made not less than
               sixty days prior to expiration of the certificate for which
               renewal is sought. Disclosures of information, tests and other
               prerequisites to the issue of a construction permit, temporary

                                              -19-
               operating permit, or operating permit may be required by the
               director prior to the renewal of an operating permit.
               (Emphasis supplied.)


       Presumably, when the Director renewed the permits on June 28, 1993, she determined

that the “source does or will not operate in violation of this chapter.” In order to reverse the

action of the Director, it would be necessary for the Board to find that “the source” did, on

June 28, 1993, or would thereafter “operate in violation of this chapter.” During the

pendency of this proceeding, and prior to its decision, the Board joined in a Consent

Agreement establishing compliance with this chapter by compliance with the terms of the

Consent Agreement. For this reason, the Board acted arbitrarily, capriciously, without factual

justification illegally in reversing the renewal of the permits.



       This conclusion is based upon justice and fair dealing. Even though the Board acted

out of a zealous care for the comfort and safety of individuals in the vicinity, the effect of its

action was so inconsistent with fairness and justice as to be unconscionable and irrational.

To enter into a solemn compact promising amnesty in exchange for $2.5 million worth of

plant improvements, and to abrogate the terms of that compact before it can be carried out

under its terms is not within the bounds of decency and justice.



        This is not to say that the public or the Board is without means of relief from

violations of the air pollution ordinance.



        The Board improperly dealt with six permits as if they were one permit. Each permit

allowed the use of a particular outlet for gases into the atmosphere.



       Under the provisions of the Air Pollution Control Ordinance, quoted above, it was the

duty of the Director and, upon appeal, of the Board to evaluate the facts relating to each

permit separately and to make separate determinations of whether the equipment authorized

by that permit “can be operated in compliance with this Chapter.” Following such

                                               -20-
determination, a separate conclusion was required as to whether to renew the particular

permit, to impose additional conditions of operation, or to refuse renewal of the particular

permit for stated reasons.



       The record does not reflect whether this process was followed by the Director, but the

record plainly reflects that this process was not followed by the Board. Instead, the Board

chose to determine generally that the operation of the plant should be terminated by refusing

renewal of all permits.



       Moreover, reasonable procedure would require that the operators of the plant be

placed on notice of deficiencies and allowed reasonable time to correct deficiencies before

refusal to renew a permit. The Board had the inherent right and duty to monitor and regulate

the operation of the processes and equipment producing the gases discharged through each

permitted outlet. The record indicates that this duty was not performed, but that the principal

means of monitoring was complaints from the public of offensive odor.



       The record indicates and the Board found that a major cause of pollution was the

“P.H.” (acid-alkali balance) of the liquid in various processing tanks was not adequately

monitored or maintained. This factor was remediable by the addition of a condition to the

appropriate permits to require responsible monitoring and control of PH by an employee of

the Board at the expense of plaintiff.



       Other objectionable emanations were shown to be amenable to monitoring and

control by an employee of the Board at the expense of the plaintiff.



       “Conditions on the face of the permit” could have required that the permittee bear the

expense of necessary monitoring for the daily information of the Board. Any unacceptable

level of discharge of dangerous product would justify the suspension of operations producing



                                             -21-
the excessive discharge until the cause was corrected. This action would affect only the

permit of the involved outlet and not the operation under the other five permits.



        It has been well said that it is seldom necessary to burn a barn to get rid of its rats.



        It is true that the administrative proceeding in which the “Consent Agreement” was

made was not, technically, the proceeding under review in this appeal. However, the two

proceedings were contemporaneous, related to the same subject matter, the same parties and

the same purposes, and, for the most part, the same improper discharges from the plant.

Furthermore, by its express terms, the “Consent Agreement” in one case stipulated facts

which were determinative of the other.



        The disposition of this appeal is without prejudice to reasonable measures by the

Board and its staff to discover, correct and prevent the illegal discharge of pollutants by

plaintiff.



        The foregoing discussion of the first and third issues is dispositive of this appeal and

the remaining issues are therefore pretermitted.



        The action taken by the Board is not the only relief available to the neighboring

property owners and/or those individuals endangered or injured by the wrongful discharge of

pollutants into the atmosphere. The disposition of this appeal will not prejudice the rights of

any injured party to recourse by an action for injunction and/or damages.



        Plaintiff’s second issue asserts that Metropolitan Code §10.56.170 is

unconstitutionally vague. Said Section reads as follows:

                 Emission of gases, vapors or objectionable odors.

                 No person shall cause, suffer, allow or permit any emission of
                gases, vapors or objectionable odors beyond the property line

                                                -22-
               from any source whatsoever which causes injury, detriment,
               nuisance or annoyance to any considerable number of persons
               or to the public, or which causes or has a natural tendency to
               cause injury or damage to business or property. (Prior code §
               4-1-10)


       Plaintiff asserts that the general term, “objectionable,” without definition renders the

section vague. The text of the section supplies adequate definition of the word,

“objectionable.”



       Plaintiff cites authority for the obscurity of the words “detriment,” and “annoyance”

but this Court is satisfied that the words include the qualifying adjective, “unreasonable,” so

as to pass constitutional muster.



       Plaintiff’s fourth issue challenges the application of Metropolitan Code §

10.56.040(A) (quoted above) to the facts of this case.



       If the Director (and on appeal, the Board) determines that “the source” does or will

operate in violation of the ordinance, the Director (or Board) is required to impose suitable

conditions on the face of the permit or deny it entirely. Subsection B of the quoted section

provides for renewal upon the “prerequisites to the issue of a construction, temporary

operating or operating permit.” The present appeal relates to applications for renewal which,

according to subsection (B), are subject to the same conditions as prescribed in Subsection A

for the issuance or denial of an original permit.



       Plaintiff argues that the ordinance does not require absolute guarantee against any

accidental discharge of odors. The ordinance must be interpreted and applied reasonably.

Thus, the words “does or will operate in violation of this chapter” refers to reasonable

apprehension of present or future violations; and “impose conditions . . . or . . . deny”

authorize such actions in reasonable conformity with the facts and circumstances, which




                                              -23-
include the “Consent Agreement,” which stipulated certain extensive improvements on

agreed conditions.



       Plaintiff’s fifth issue asserts that the procedure of the Board was unlawful because the

Director failed to defend her decision to renew plaintiff’s permits. Even though it may be the

general practice of subordinate administrators to defend their actions upon appeal to higher

administrative authority, no rule of law is cited or known to this Court which would require

such practice or grant any relief for the failure to follow such practice. Moreover, it does not

appear that plaintiff raised the issue before the Board. See In Re: Billing and Collection,

Tariffs of South Central Bell, Tenn. App. 1989, 779 S.W.2d 375.



       Plaintiff’s sixth and last issue asserts that the Board improperly acted on the ground

that plaintiff’s plant was improperly located in spite of its location in a zone in which such

plants are permitted and in spite of the approval of the location by the Tennessee Department

of Environment and Conservation.



       The “Findings of Fact and Conclusions of Law” by the Board contains a section

entitled “Reasons for Decision” which in turn contains the following:

               . . . 2. Section 10.56.100 of the Air Pollution Chapter directs
               the Board to consider in the exercise of its powers such
               pertinent facts and circumstances, including but not limited to:

                       A. The character and degree of injury to, or
                       interference with, the protection of the health,
                       general welfare and physical property of the
                       residents of the Metropolitan Government area;

                       B. The social and economic value of the air
                       pollutant source;

                       C. The degree of detrimental effect of the air
                       pollutants upon the achievement of the national
                       ambient air quality standard for such pollutant;

                       D. The technical practicability and economic
                       reasonableness of reducing or eliminating the
                       emission of such air pollutants;



                                              -24-
                       E. The suitability or unsuitability of the air
                       pollution source to the area in which it is
                       located; and

                       F. The economic benefit gained by the air
                       pollutants source through any failure to comply
                       with the provisions of this Chapter and
                       regulations adopted pursuant to this Chapter.

                3.       The Board has considered its responsibilities and the
                factors listed above and notes that paragraphs A and E are
                particular reasons for its decision. It is obvious that the OSCO
                facility cannot operate in its location without unreasonably
                interfering with the other businesses and institutions in Cockrill
                Bend.


       The quoted portions of the ordinance are prefaced by the following:

                In the exercise of its powers to prevent, abate and control air
                pollution, the Board shall give due consideration to such
                pertinent facts and circumstances including, but not limited to:


       The Board is clearly authorized to consider the location and surrounding area of the

source of pollution “in exercising its powers,” but the exercise of its powers must be

reasonable. This Court has determined that the reversal of renewal of all permits for

operation was not a reasonable exercise of the powers of the Board under the circumstances.

The “consideration” of the location and surroundings of the plant was not unreasonable, but

severity and unfairness under the circumstances rendered the decision of the Board

unreasonable.



       For the foregoing reasons, the judgment of the Chancellor affirming the action of the

Board is reversed and vacated. The action of the Board in reversing the renewal of plaintiff’s

six operating permits is reversed and vacated without prejudice to other remedial actions

which the Director or the Board may see fit to assure plaintiff’s lawful operation under its

permits. All costs, including costs of this appeal, are assessed to the Board. The cause is

remanded to the Trial Court for entry and enforcement of a judgment in conformity herewith.




                                              -25-
     Reversed and Remanded.



                                     _______________________________________
                                     HENRY F. TODD
                                     PRESIDING JUDGE, MIDDLE SECTION




_____________________________________
SAMUEL L. LEWIS, JUDGE, CONCURS



WILLIAM C. KOCH, JR., JUDGE, FILES
SEPARATE CONCURRING OPINION.




                                     -26-
