                          NOTICE: NOT FOR PUBLICATION.
   UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION DOES NOT CREATE
          LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.




                                    IN THE
             ARIZONA COURT OF APPEALS
                                DIVISION ONE


  STATE OF ARIZONA ex rel. HENRY R. DARWIN, Director, Arizona
       Department of Environmental Quality, Plaintiff/Appellee,

                                        v.

      FISHER SAND & GRAVEL CO., a North Dakota corporation,
                      Defendant/Appellant.

                             No. 1 CA-CV 13-0608
                               FILED 3-3-2015


           Appeal from the Superior Court in Maricopa County
                          No. CV2011-007962
             The Honorable Sally Schneider Duncan, Judge

                                  AFFIRMED


                                   COUNSEL

Arizona Attorney General’s Office, Phoenix
By James T. Skardon
Counsel for Plaintiff/Appellee

Ryley Carlock & Applewhite, PA, Phoenix
By John C. Lemaster, Albert H. Acken, Samuel L. Lofland
Counsel for Defendant/Appellant
                            STATE v. FISHER
                           Decision of the Court



                      MEMORANDUM DECISION

Judge Kenton D. Jones delivered the decision of the Court, in which
Presiding Judge Peter B. Swann joined. Judge Michael J. Brown specially
concurred in part and dissented in part.


J O N E S, Judge:

¶1           Fisher Sand & Gravel Company (Fisher) appeals from a
judgment awarding the Arizona Department of Environmental Quality
(ADEQ) stipulated monetary penalties after finding Fisher violated a
consent judgment previously entered into with ADEQ prohibiting further
violation of air pollution statutes and regulations. For the following
reasons, we affirm.

                FACTS AND PROCEDURAL HISTORY

¶2             Fisher, a North Dakota corporation, produces road-building
materials at its hot mix asphalt and crushing and screening plants located
in Gila Bend, Glendale, and Peoria, Arizona.

¶3           In April 2011, ADEQ filed suit against Fisher pursuant to
Arizona Revised Statutes (A.R.S.) sections 49-262,1 -462, and -463, alleging
numerous violations of state air and water pollution statutes and
regulations. The litigation resolved with a settlement and entry of a
Consent Judgment requiring Fisher to pay $125,000 in civil penalties. The
Consent Judgment also provided:

      If [Fisher], or any entity owned, controlled or managed by
      [Fisher], commits civil violations of A.R.S. Title 49, Chapter 3,
      Article 2 [A.R.S. §§ 49-421 to -467], rules adopted thereunder,
      or air quality permits issued thereunder at any time during
      the next two (2) years, commencing on [April 25, 2011],
      [ADEQ] in its sole discretion, shall have the option of either
      collecting stipulated penalties pursuant to this section, or
      pursuing statutory penalties.



1     Absent material revisions from the relevant date, we cite to the
current version of a statute or regulation unless otherwise indicated.


                                     2
                             STATE v. FISHER
                            Decision of the Court

The Consent Judgment further afforded ADEQ the ability to “enter any
property of [Fisher] at any location” for the purpose of ensuring
compliance, as well as the “right to take enforcement action for any and all
violations of [the] Consent Judgment . . . and pursue all legal and equitable
remedies.”

¶4             Just before the expiration of the two-year period, ADEQ
obtained an order to show cause for Fisher’s alleged failure to comply with
the Consent Judgment and moved for the assessment of additional
penalties against Fisher following inspections of its portable crushing and
screening plants and hot mix asphalt plants. ADEQ alleged Fisher had
committed three violations of Arizona’s air quality and permitting laws by:
(1) operating two pieces of equipment for one day without an appropriate
permit at its Peoria plant, in violation of A.R.S. § 49-426(A)(2) and Arizona
Administrative Code (A.A.C.) R18-2-302(A); (2) creating a new, single
stationary source by co-locating an ADEQ permitted portable source with
a Maricopa County permitted stationary source, and operating this new
source for 355 days without obtaining a new permit; and (3) failing to
conduct required pollution tests.2 Although these violations could have
resulted in stipulated damages pursuant to the Consent Judgment totaling
$2,409,000, ADEQ sought recovery of only $500,000.

¶5           After briefing and oral argument, the trial court found in
favor of ADEQ on each claim and imposed the requested $500,000 penalty.
Fisher timely appealed. We have jurisdiction pursuant to A.R.S. § 12-
2101(A)(1).

                               DISCUSSION

I.     Standard of Review

¶6             We review the trial court’s interpretation of regulations and
statutes, and its application of the law to the facts, de novo. Sedona Grand,
L.L.C. v. City of Sedona, 229 Ariz. 37, 40, ¶ 8, 270 P.3d 864, 867 (App. 2012).
We apply the same principles of construction when interpreting regulations
as we do when construing statutes. DaimlerChrysler Servs. N. Am., L.L.C. v.
Ariz. Dep’t of Revenue, 210 Ariz. 297, 301, ¶ 12, 110 P.3d 1031, 1035 (App.
2005). Because neither party requested findings of fact or conclusions of
law pursuant to Arizona Rule of Civil Procedure 52(a), we “‘presume the
trial court found every fact necessary to support its judgment and will

2      Fisher does not challenge $11,000 in penalties awarded to ADEQ for
testing violations.


                                      3
                             STATE v. FISHER
                            Decision of the Court

affirm if any reasonable construction of the evidence justifies it.’” Canyon
Ambulatory Surgery Ctr. v. SCF Ariz., 225 Ariz. 414, 422, ¶ 28, 239 P.3d 733,
741 (App. 2010) (quoting Garden Lakes Cmty. Ass’n, Inc. v. Madigan, 204 Ariz.
238, 240, ¶ 9, 62 P.3d 983, 985 (App. 2003)).

II.    The Statutory and Regulatory Framework

¶7               Arizona’s statutory scheme addressing air pollution is aimed
at “control[ling] present and future sources of emission of air
contaminants” by regulating “every type” of air polluting activity in an
effort to “insure[] the health, safety and general welfare of all the citizens of
the state . . . protect[] property values and protect[] plant and animal life.”
A.R.S. § 49-401(A). To effectuate this purpose, the legislature placed
“primary responsibility for air pollution control and abatement in [ADQ]”
and reserved to the individual counties “the right to control local air
pollution problems as specifically provided [by statute].” Id.

¶8            As pertinent here, both stationary and portable pollution
sources are subject to that scheme. A stationary source is “any facility,
building, equipment, device or machine that operates at a fixed location and
that emits or generates air contaminants.” A.R.S. § 49-401.01(36). A
portable source is “any stationary source that is capable of being
transported and operated in more than one county of this state.” A.R.S.
§ 49-401.01(30).

¶9            ADEQ has original jurisdiction over sources, permits, and
violations relating to, among other activities, “[a]ir pollution by portable
sources.” A.R.S. § 49-402(A)(6). For all other sources not listed within § 49-
402(A), “the review, issuance, administration and enforcement of permits
issued under [A.R.S. Title 49, Chapter 3] shall be by the county or multi-
county air quality control region” unless ADEQ specifically asserts
jurisdiction over a source through written notice to the county. A.R.S. § 49-
402(B).

¶10            Under this statutory arrangement, and with limited
exception, in order for an emission source to be constructed or operated, the
operator must first apply for and obtain a permit from either ADEQ or the
appropriate county agency. See A.R.S. § 49-426(A)(2) (state permit
requirement); A.R.S. § 49-480(C) (county permit requirement). An operator
may obtain either an individual permit for each source, or, if appropriate,
an Authorization to Operate (ATO) pursuant to a general permit
promulgated by ADEQ or the county. A.R.S. § 49-426(A)(2), (H); A.R.S. §
49-480(C), (J); A.A.C. R18-2-503(A).


                                       4
                            STATE v. FISHER
                           Decision of the Court

III.   Co-Location of Fisher’s Portable Source with Its County Permitted
       Stationary Source Created a New, Unpermitted Stationary Source.

       A.     Background of Alleged Violation

¶11           In May 2010, in accordance with a 2010 Hot Mix Asphalt Plant
General Permit, Fisher obtained, from ADEQ, an ATO for its portable hot
mix asphalt plant (the portable source). Pursuant to the ATO, Fisher was
able to operate the portable source in any county in Arizona. Fisher
originally operated the portable source in Gila Bend, Arizona.

¶12            In April 2011, Fisher filed a Notice of Equipment Transfer
(Notice) with ADEQ as required by A.A.C. R18-2-324(D), stating its intent
to relocate the portable source to an address in El Mirage, Arizona and
identifying the equipment permitted under the ATO. Fisher did not
volunteer that the new location was adjacent to an existent hot mix asphalt
plant (the Maricopa source), which Fisher operated pursuant to a separate
county issued air quality permit. Fisher thereafter relocated the portable
source to its El Mirage facility and operated both sources at this location.

¶13          In its petition for order to show cause, ADEQ alleged the co-
located portable and Maricopa sources created a single new “stationary
source” under A.A.C. R18-2-101(139), which provides in relevant part:

       “Stationary source” means any building, structure, facility or
       installation subject to regulation pursuant to A.R.S. § 49-
       426(A) which emits or may emit any air pollutant.
       “Building,” “structure,” “facility,” or “installation” means all
       of the pollutant-emitting activities which belong to the same
       industrial grouping, are located on one or more contiguous or
       adjacent properties, and are under the control of the same
       person or persons under common control.

ADEQ argued the information provided to obtain the previous ATO was
not germane to the newly constructed El Mirage facility’s operation, and
Fisher violated A.R.S. § 49-426(A)(2) by operating the new stationary source
without obtaining a new permit. ADEQ acknowledged that had Fisher
obtained such a permit, it could have legally operated the co-located plant.

¶14           Fisher disputes the imposition of penalties for this alleged
violation, arguing (1) it had valid, albeit separate, permits for each of the
individual hot mix asphalt plants co-located at the El Mirage facility; (2)
Fisher was not required to obtain a new permit from ADEQ for co-locating
its portable and stationary sources; (3) ADEQ lacks permitting and


                                      5
                             STATE v. FISHER
                            Decision of the Court

enforcement authority over the co-located El Mirage facility; (4) ADEQ is
estopped from seeking penalties because it did not object following
notification of the portable source’s relocation to El Mirage; (5) this action
is an unauthorized “collateral attack” on Fisher’s ADEQ permit; and (6) the
imposition of penalties violated Fisher’s right to due process. We address
each argument in turn.

       B.     Fisher Operated the Newly Created Source Without a
              Permit in Violation of State Law.

¶15           Fisher argues the trial court erred in finding it operated the
co-located plants without a permit because, according to Fisher, it “in fact
had a permit for each asphalt plant.” Fisher contends that the combination
of its county permit authorizing operation of the Maricopa source, its ATO
under ADEQ’s general permit authorizing operation of its portable source,
and its Notice regarding relocation of the portable source satisfied any
permitting obligations after co-location. We disagree.

¶16             Fisher’s own permitting expert admitted the co-location of the
two separately permitted plants could be considered creation of a single
stationary source. We interpret this concession to mean the addition of the
portable source to the Maricopa source created a new stationary source, as
contemplated by the regulatory scheme. See A.A.C. R18-2-101(139); see also
Citizens for Clean Air & Water in Pueblo & S. Colo. v. Colo. Dep’t of Pub. Health
& Env’t, 181 P.3d 393, 396-97 (Colo. App. 2008) (affirming agency
determination that an entity’s placement of a new unit next to an original
stationary source created a new single stationary source). Because the co-
location created one new stationary source, Fisher was required to obtain a
permit for this new source. See A.R.S. § 49-426(A)(2) (requiring a permit
before construction or operation of “any source”); A.A.C. R18-2-302(A)
(2011) (“[N]o person shall commence construction of, operate, or make a
modification to any source . . . without obtaining a permit or permit revision
. . . .”). Fisher did not obtain a new permit, nor did it even seek a permit
revision, and thus operated the source in violation of state law.3



3     Fisher also asserts the trial court construed A.A.C. R18-2-101(139)
and R18-2-302(A) in a manner more restrictive than authorized by federal
law. Because Fisher failed to raise this argument at the trial court or in its
Opening Brief, we decline to address it. See Lemons v. Showcase Motors, Inc.,
207 Ariz. 537, 541 n.1, ¶ 17, 88 P.3d 1149, 1153 n.1 (App. 2004) (declining to
reach legal issues and arguments raised for the first time on appeal);



                                       6
                              STATE v. FISHER
                             Decision of the Court

¶17             We find unpersuasive Fisher’s argument that the newly
created source was properly permitted because each of its component
plants was operating under a separate active permit. Under A.A.C. R18-2-
302(A) (2011), a person is prohibited from “commenc[ing] construction of,
operat[ing], or mak[ing] a modification to any source subject to regulation
under this Article, without obtaining a permit or permit revision from
[ADEQ].”4 Fisher argues the statutory and regulatory definition of the
word “commence” demonstrates a source may be operated pursuant to
multiple permits. Fisher relies on the applicable statute and administrative
code defining “commence” as it relates to the construction of a source, to
mean “that the owner or operator has obtained all necessary
preconstruction approval or permits required by federal law and this
chapter . . . .” A.R.S. § 49-401.01(10)(a) (emphasis added); see also A.A.C.
R18-2-101(31) (similarly defining commence).

¶18             We decline to read the use of the plural “permits” as
demonstrating a single, new source may operate based upon the
combination of two separate sources, each remaining reliant upon
individual permits, issued by separate state and county agencies. This
statute does not indicate that a single source may be “permitted” through
the piecemeal permitting of the individual component parts which, in the
aggregate, comprise the single source, with those various permits issued by
different state and county authorities and without regard to the combined
effect of increased emissions from “all of the pollutant-emitting activities
which . . . are located on one or more contiguous or adjacent properties, and
are under the control of the same person.” A.A.C. R18-2-101(139). Rather,
the language of the statute and regulation merely recognizes that there may
be instances in which multiple permits may be required pursuant to federal
and state law for a single source. See Mathews ex rel. Mathews v. Life Care
Ctrs. of Am., Inc., 217 Ariz. 606, 608, ¶ 6, 177 P.3d 867, 869 (App. 2008) (noting
the primary goal of statutory interpretation is to give effect to legislative




Wasserman v. Low, 143 Ariz. 4, 9 n.4, 691 P.2d 716, 721 n.4 (App. 1984) (“An
issue first raised in a reply brief will not be considered on appeal.”)
(citations omitted).

4      The rule was amended in 2012. The current version of A.A.C. R18-
2-302(A) provides: “Except as otherwise provided in this Article, no person
shall begin actual construction of, operate, or make a modification to any
stationary source subject to regulation under this Article, without obtaining
a registration, permit or permit revision from the Director.”


                                        7
                            STATE v. FISHER
                           Decision of the Court

intent, and the “plain language of the statute [i]s the best indicator of that
intent.”) (citations omitted).

¶19            To allow a single source to come into existence through the
aggregation of equipment, previously issued permits, and involvement of
multiple permit-issuing agencies would undermine the intent behind the
air quality regulatory scheme, as expressly stated by the legislature:

       [T]o exercise the police power of this state in a coordinated
       state-wide program to control present and future sources of
       emission of air contaminants to the end that air polluting
       activities of every type shall be regulated in a manner that
       insures the health, safety and general welfare of all the
       citizens of the state; protects property values and protects
       plants and animal life.

A.R.S. § 49-401. Consistent with this purpose, the regulatory scheme
contemplates an ability to reassess a source’s potential for emissions where
changes to a facility are made, even if a new permit is not required. See
A.A.C. R18-2-317(D) (requiring advance notice to ADEQ of changes to a
facility with a Class I permit even if the change would not require a permit
revision); A.A.C. R18-2-317.02(C) (2011) (requiring advance notice be given
to ADEQ if a change to a Class II permitted source will be significant);
A.A.C. R18-2-503(A)(1) (requiring an ATO applicant to provide
“[i]nformation identifying and describing the source, its processes, and
operating conditions in sufficient detail to allow [ADEQ] to determine
qualification for, and to assure compliance with, the [existing] general
permit”). The burden is on the applicant to provide sufficient information
regarding equipment and activities such that the regulatory body can make
an informed decision that the requested activities would not be harmful to
the general welfare of state citizens or the environment. See A.R.S. § 49-
426(C) (requiring a permit application to “contain all the information
necessary to enable [ADEQ] to make the determination to grant or deny
such application”); A.R.S. § 49-427(A) (granting ADEQ authority to deny a
permit or permit revision if the applicant fails to show a source is designed,
controlled or equipped to operate without violating air pollution statutes
and regulations).

¶20            Adopting Fisher’s position would deprive a single permitting
authority the opportunity to make a global assessment of the potential
emissions of a new and larger source, simply because it resulted from the
combination of two separately permitted sources that have been co-located
at the direction of a single operator. It would further permit sophisticated


                                      8
                            STATE v. FISHER
                           Decision of the Court

operators to legally construct a major source through the combination of
separately permitted minor sources while avoiding the conditions and
limitations normally applicable to major sources during these processes.
See A.A.C. R18-2-402. Fisher acknowledges such a result could occur if we
were to accept his position.

¶21            Here, Fisher’s original ATO was issued by ADEQ based upon
the portable source equipment disclosed prior to the co-location; the same
is presumably true for the Maricopa source.5 Therefore, neither the ATO
nor the Maricopa County permit accurately reflected the total pollution
capability of the equipment currently located at the El Mirage facility, and
consequently, we cannot conclude either ADEQ or Maricopa County ever
authorized its operation based upon an accurate assessment of its current
emission potential. It does not matter whether the new source Fisher
created has ever exceeded the emissions limitations of the prior permits or
that the two co-located sources are not alleged to constitute a major source;
by failing to obtain a permit for the new stationary source, or even seek a
permit revision, Fisher deprived ADEQ and Maricopa County of the
information necessary to “control present and future sources of emission of
air contaminants,” and was able to contravene the stated purpose of the
regulatory scheme. See State v. Associated Metals & Minerals Corp., 635
S.W.2d 407, 410 (Tex. 1982) (holding that a change in the method of
operation required a new permit from the state agency, and that agency,
not the courts, should determine whether a given change will result in an
increase in air contaminants).

¶22           We therefore reject Fisher’s interpretation of the relevant
regulations, as to do otherwise would lead to absurd results running
contrary to the purpose of the statutory and regulatory pollution scheme.
Accordingly, although Fisher controlled two properly permitted,
individual plants, once Fisher decided to combine those plants and created
a new source, potentially increasing emissions, a new permit was required.

¶23           We find further support for this conclusion in the statutory
prohibition of permit transfers from one source to another. A.R.S. § 49-
429(A) (“A permit shall not be transferable, whether by operation of law or
otherwise, either from one location to another or from one source to
another.”). Although the statute provides an exception for portable sources
to be transferred from one location to another, it does not contain a similar

5     The Maricopa County permit for the Maricopa source is not in the
appellate record, and in our discretion, we decline to take judicial notice of
it.


                                      9
                             STATE v. FISHER
                            Decision of the Court

exception for transferring permits between sources. A.R.S. § 49-429(B). For
this reason, we reject Fisher’s argument that the Notice to ADEQ of its
intent to relocate the portable plant to the El Mirage facility satisfied the
permitting statutes and regulations. Filing the Notice did not excuse
Fisher’s duty to disclose the existence of a new source or its responsibility
to obtain a new permit based upon that new source’s total emission
potential under A.A.C. R18-2-302(A).

¶24           The parties agree the co-location of the portable and Maricopa
sources created a new stationary source. Fisher did not obtain a new permit
for the new source as required, and was therefore in violation of the
Consent Judgment.

       C.     ADEQ Did Not Implicitly Authorize Co-Location through
              Fisher’s General Permit.

¶25           Fisher next argues that even if a new permit is required for
the co-located facility, failure to obtain a separate permit was not a violation
of state law because the ADEQ general permit for the portable source did
not contain an express prohibition of the co-location of multiple hot mix
asphalt plants. To support this position, Fisher relies on the “General
Permit Shield,” which states:

       Each general permit issued . . . shall specifically identify all
       federal, state, and local air pollution control requirements
       applicable to the source at the time the permit is issued. . . .
       [C]ompliance with the conditions of the permit shall be
       deemed compliance with any applicable requirement in effect
       on the date of permit issuance.

A.A.C. R18-2-508. Seizing upon this language, Fisher argues its compliance
with the express terms of the general permit, under which it obtained an
ATO for the portable source, shielded it from liability for any violation not
expressly contained within the general permit. Fisher’s argument,
however, is unpersuasive.

¶26           ADEQ does not argue that co-location, in and of itself, is a
violation of state law and disallowed. Nor does ADEQ assert the co-
location here caused Fisher to violate the ATO it obtained under ADEQ’s
general permit. Rather, ADEQ asserts, and Fisher concedes, the co-location
of the sources created a new source, separate and apart from the portable
source operated under the general permit. Therefore, the “general permit
shield” for the portable source did not protect the newly created source
from non-compliance with applicable permitting requirements.


                                      10
                             STATE v. FISHER
                            Decision of the Court

       D.     ADEQ Had Authority to Enforce the Portable Source Permit
              Until Fisher Obtained a New Permit.

¶27            Fisher next argues that even if it operated the new source
without a permit, ADEQ lacked authority to bring an enforcement action.
Specifically, Fisher asserts Maricopa County has exclusive permitting and
enforcement authority over the new source because “it would have been
. . . a portable source that would have operated exclusively in Maricopa
County for the life of such a permit.” We disagree.

¶28            ADEQ has original jurisdiction over sources, permits and
violations that pertain to “air pollution by portable sources.” A.R.S. § 49-
402(A)(6). Where a “portable source . . . will operate for the duration of its
permit solely in one county,” its operator shall obtain a permit from that
particular county. A.A.C. R18-2-324(A). However, Fisher never obtained a
permit for the portable source from Maricopa County; a fortiori, ADEQ was
entitled to bring an enforcement action until a county permit was obtained.

       E.     Estoppel Does Not Apply.

¶29           Fisher further argues ADEQ is estopped from enforcing the
Consent Judgment based upon operation of the new source without a
permit because, it alleges, ADEQ advised Fisher that only a “Notice to
Move” pursuant to A.A.C. R18-2-324(D) was needed in order to co-locate
the portable source.6 Fisher claims it relied upon this representation, filing
its Notice and taking no further action prior to the co-location.

¶30            To prevail on a claim for estoppel requires: “‘(1) the party to
be estopped commits acts inconsistent with a position it later adopts; (2)
reliance by the other party; and (3) injury to the latter resulting from the
former’s repudiation of its prior conduct.’” Gorman v. Pima Cnty., 230 Ariz.
506, 510-11, ¶ 21, 287 P.3d 800, 804-05 (App. 2012) (quoting Valencia Energy
Co. v. Ariz. Dep’t of Revenue, 191 Ariz. 565, 576-77, ¶ 35, 959 P.2d 1256, 1267-
68 (1998)). Additionally, “[w]hen applied to a government actor, the actions
relied upon must bear some ‘considerable degree of formalism.’” Id. at 511,
¶ 21, 287 P.3d at 805 (quoting Valencia Energy, 191 Ariz. at 577, ¶ 36, 959
P.2d at 1268). Unwritten agreements and casual acts or advice generally do
not suffice. Id. Moreover, estoppel applies only to authorized acts of
government officials when necessary to prevent injustice — not when its


6      Fisher further claims, without evidentiary support, that Maricopa
County also confirmed that no additional permits were required for the co-
location.


                                      11
                             STATE v. FISHER
                            Decision of the Court

application would be detrimental to the public interest.         Id. (citations
omitted).

¶31           Here, the formalism component is lacking. Fisher offers no
written representation from ADEQ authorizing co-location of its sources
without additional permitting, and relies solely on self-serving statements
from its manager claiming an ADEQ permit engineer advised it need only
file a move notice before relocating its portable source adjacent to the
Maricopa source. Notably, the identified ADEQ permit engineer averred he
was never informed by Fisher that it was co-locating sources, and further
stated he was not capable of authorizing any such co-location. On this
record, we find no merit in Fisher’s estoppel argument.

       F.     ADEQ’s Position is Not a Collateral Attack on Fisher’s
              Permits.

¶32           Fisher alternatively argues ADEQ’s action is a collateral
attack on its permits. This argument rests upon a mischaracterization of
this case.

¶33             ADEQ is not challenging the validity of any permit issued to
an individual source operated by Fisher. Instead, ADEQ alleges a violation
of state law based upon the lack of any permit for the new source created
through the co-location of the portable source and Maricopa source. The
combined source operated for almost a year without a permit. For this
reason, Fisher’s reliance upon federal cases interpreting Federal Clean Air
Act permits and the EPA’s effort to penalize operators for violations of
construction permits is misplaced, and does not provide basis for reversal.
See, e.g., United States v. EME Homer City Generation, L.P., 727 F.3d 274, 283-
87 (3d Cir. 2013).7




7      Equally unavailing is Fisher’s argument that ADEQ should have
moved to revoke its permit if it believed it issued Fisher an incorrect permit.
ADEQ has never maintained that it issued an incorrect permit to Fisher.
Rather, the issue is whether Fisher’s co-location and operation of the two
individually permitted sources, in the absence of a new permit for the
combined operations, violated state law. Effectively, each of the sources
operated legally under their original permitting, but the new source could
not be operated legally under either of the prior permits or under those
permits jointly.


                                      12
                            STATE v. FISHER
                           Decision of the Court

       G.     Fisher Received Due Process.

¶34          We further reject Fisher’s argument that ADEQ violated
Fisher’s due process rights under the Arizona and U.S. Constitutions by
pursuing penalties without providing notice that its failure to secure a new
permit was prohibited. Specifically, it argues no statute or regulation
expressly prohibited the co-location of two permitted sources without
obtaining a new permit. We disagree.

¶35           Due process guarantees notice of a claimed violation and the
opportunity to defend against it. In re Brady, 186 Ariz. 370, 373, 923 P.2d
836, 839 (1996). It does not require “perfect notice, absolute precision, or
impossible standards.” Berenter v. Gallinger, 173 Ariz. 75, 81, 839 P.2d 1120,
1126 (App. 1992).

¶36            Fisher concedes the co-location of the two individually
permitted plants created a new, larger source. At the time of the co-
location, the law required any stationary source, such as the one created at
Fisher’s El Mirage facility, to obtain a permit before commencing
construction, operation, or modification of that stationary source. A.A.C.
R18-2-302(A) (2011). As a sophisticated air pollutant source operator, who
had previously entered into a Consent Judgment with ADEQ for prior
violations of air pollution statutes and who had permitting experience,
Fisher was aware of this requirement, as set forth in the applicable statutes
and regulations.

¶37            Fisher contends that subsequent amendments to A.A.C. R18-
2-513 demonstrate it did not have notice of restrictions on co-locating
individually permitted sources. Although ADEQ amended A.A.C. R18-2-
513 to “[c]larify obligations of portable sources subject to general permit”
in 2012, see 18 A.A.R. 1554 (July 6, 2012), the amendment did not alter the
circumstances under which a permit is required.8 Id. at 1638-39. Instead,
the amendment simply clarified the regulation by delineating specific




8      The amended rule provides that when moving a portable source
covered by a general permit, the owner must provide all information
previously identified within the regulation, as well as: “6. A complete
equipment list of all equipment that will be located at the new location; and
7. Revised emissions calculations demonstrating that the equipment at the
new location continues to qualify for the general permit under which the
source has coverage.” A.A.C. R18-2-513.


                                     13
                             STATE v. FISHER
                            Decision of the Court

additional information that must be provided prior to the relocation or co-
location of a portable source.

¶38            Fisher is and was bound by the requirement that the new
stationary source it created by co-locating two existing sources required a
new permit to operate. See City of Mesa v. Killingsworth, 96 Ariz. 290, 297,
394 P.2d 410, 414 (1964) (“An amendment which, in effect, construes and
clarifies a prior statute will be accepted as the legislative declaration of the
original act.”). The mere fact that the prior version of A.A.C. R18-2-513 was
not as detailed does not give rise to a constitutional violation or excuse
Fisher’s failure to obtain the relevant permit. See 3613 Ltd. v. Dep’t of Liquor
Licenses & Control, 194 Ariz. 178, 184, ¶ 24, 978 P.2d 1282, 1288 (App. 1999)
(explaining general language in regulation is appropriate to “cover a
variety of factual situations” without “unduly limit[ing its] application”);
People v. Lapcheske, 86 Cal. Rptr. 2d 565, 568 (Ct. App. 1999) (explaining that
the fact that legislature “clarified existing law by adding language that
expressly prohibited the type of conduct defendant committed” did not
mean that the conduct was not prohibited by the previous statute).

       H.      Fisher Consented To Daily Sanctions for Violations of State
               Law.

¶39           Fisher alternatively contests the trial court’s imposition of
daily sanctions for a continuing violation of state law, rather than imposing
sanctions for a single violation, based upon its failure to obtain a new
permit for the newly created stationary source. As previously detailed,
Fisher committed conduct sanctionable under the Consent Judgment by
creating a new source and operating it without a permit. Paragraph IX(B)
of the Consent Judgment states:

       If the State elects to collect stipulated penalties, the Defendant
       agrees to pay a penalty as follows:

       1. For violation of any provision of any applicable air quality
          permit issued by ADEQ that limits the quantity or
          concentration of air emissions, or beginning actual
          construction of, or operation of, equipment without a
          permit:

            Days of Violation              Stipulated Penalty

            Day 1 – 30                     $5,000 per day, per violation




                                      14
                             STATE v. FISHER
                            Decision of the Court

           Day 31 – 60                      $6,000 per day, per violation

           Day 61+                          $7,000 per day, per violation

¶40             The Consent Judgment clearly and unambiguously provides
that Fisher is subject to daily sanctions for violations of state law. See Emp’rs
Mut. Cas. Co. v. McKeon, 170 Ariz. 75, 79, 821 P.2d 766, 770 (App. 1991) (“A
settlement agreement should be construed as an ordinary contract.”)
(citation omitted); Isaak v. Mass. Indem. Life Ins. Co., 127 Ariz. 581, 584, 623
P.2d 11, 14 (1981) (holding a clear and unambiguous contract must be
interpreted according to its terms “even if its enforcement is harsh”) (citing
Goodman v. Newzona Inv. Co., 101 Ariz. 470, 473-74, 421 P.2d 318, 321-22
(1966)).

¶41            If Fisher sought an alternative penalty structure, it could have
negotiated the point prior to settlement and entry of the Consent Judgment.
However, because Fisher agreed to pay these penalties, it is bound by the
terms it accepted unless and until the underlying judgment itself is
overturned, an issue not before this Court. Lamb v. Superior Court, 127 Ariz.
400, 403, 621 P.2d 906, 909 (1980) (“[A] judgment or order is still an effective
and valid judgment or order unless and until it is set aside . . . or its
enforcement enjoined in an independent action.”). We therefore reject
Fisher’s argument.9

IV.    Fisher Operated Crushers Omitted from its General Permit
       Application.

¶42            During an April 2014 inspection, ADEQ discovered two
pieces of crushing machinery operating at Fisher’s Peoria plant that were
not listed in its Crushing and Screening General Permit. ADEQ charged
that operation of the crushers violated A.R.S. § 49-426(A)(2) and A.A.C.
R18-2-302(A). Fisher does not dispute it operated the crushers without a


9       Fisher also argues it is fundamentally unfair to allow ADEQ to wait
a year after receiving notice of the relocation of the portable source before
conducting a site inspection and then claim a continuing violation. We are
unpersuaded by this argument. There is nothing in the record indicating
the site inspection was delayed in bad faith; nor is there anything to suggest
the timing of the site inspection ran afoul of ADEQ’s protocols. Moreover,
while ADEQ alleged, without objection, that the new source operated for
355 days without a permit, it only sought damages for approximately 82
days of operation. Therefore, on this record, we cannot say the award was
fundamentally unfair.


                                       15
                                STATE v. FISHER
                               Decision of the Court

permit, but rather contends, pursuant to A.A.C. R18-2-503(C), it had
submitted an application for an ATO (the day of the inspection), and
therefore was entitled to “operate under the terms of its application” while
it was pending.

¶43          However, in order for the protection of A.A.C. R18-2-503(C)
to apply, the application must be “complete,” A.A.C. R18-2-503(A),
meaning that it “contains all the information necessary for processing.”
A.A.C. R18-2-301(5) (defining complete). Fisher’s application was not
complete because it lacked required emissions calculations and the
signature of the primary responsible official. See A.A.C. R18-2-503(A)
(requiring compliance plan in accordance with A.A.C. R18-2-309 and
adopting standard application form contained in Appendix 1).

¶44            Because Fisher’s incomplete permit application did not
comport with A.A.C. R18-2-503, it did not constitute an application, per se.
See A.R.S. § 49-426(K) (“If an applicant has submitted a timely and complete
application for a permit required under this section, but final action has not
been taken on that application, failure to obtain a permit shall not be a
violation of this chapter unless the delay in final action is due to the failure of the
applicant to submit information required or requested to process the application.”)
(emphasis added). Therefore, there was no “application period,” and
Fisher was not entitled to operate in the absence of a permit. Accordingly,
we uphold Fisher’s liability for operation of the crushers.

                                  CONCLUSION

¶45           We affirm the trial court’s rulings in favor of ADEQ. Both
parties requested attorneys’ fees on appeal. In our discretion, we deny both
requests. As the prevailing party, ADEQ is entitled to its costs on appeal
contingent upon its compliance with Arizona Rule of Civil Appellate
Procedure 21.



B R O W N, Judge, specially concurring in part, dissenting in part:

¶46         I agree with the majority’s conclusion that Fisher violated
A.A.C. R18-2-503 by failing to list two crushers in its Crushing and
Screening General Permit for the Peoria plant. I disagree, however, that
Arizona law prohibited Fisher from co-locating its hot mix asphalt plant (a
properly permitted portable source) together with a different hot mix plant




                                          16
                            STATE v. FISHER
       Brown, J. Specially Concurring in part and Dissenting in part

and other equipment located at the El Mirage facility (a properly permitted
stationary source) without first obtaining a new permit.

¶47          The 2011 consent judgment between Fisher and ADEQ
provided for stipulated penalties for any “civil violations of A.R.S. Title 49,
Chapter 3, Article 2, rules adopted thereunder, or air quality permits issued
thereunder” committed by Fisher in the two years following the judgment.
ADEQ argues that because Fisher placed two hot mix plants on the same
property, it was required to obtain a single new permit covering both
plants. ADEQ, however, does not cite compelling legal authority for its
conclusion that Fisher’s co-location of the two plants is allowed only under
a single permit.

¶48           The term “co-location” does not appear in A.R.S. Title 49,
Chapter 3, Article 2, or the corresponding regulations. Thus, neither the
legislature nor ADEQ has adopted any provision of law stating that co-
location of multiple permitted sources is prohibited. More specifically,
nothing in the statutes or regulations relied on by ADEQ states that a
company cannot move a portable source to a location where a stationary
source exists. Instead, the applicable regulation specifically allows a
portable source to “be transferred from one location to another provided
that the owner or operator of such equipment notifies the Director and any
control officer who has jurisdiction over the geographic area that includes
the new location[.]” A.A.C. R18-2-324(D).10


10     The transfer notification must include:

       1. A description of the equipment to be transferred including
       the permit number for such equipment;

       2. A description of the present location;

       3. A description of the location to which the equipment is to
       be transferred, including the availability of all utilities, such
       as water and electricity, necessary for the proper operation of
       all control equipment;

       4. The date on which the equipment is to be moved; and

       5. The date on which operation of the equipment will begin
       at the new location.

A.A.C. R18-2-324(D)(1) – (5).


                                      17
                            STATE v. FISHER
       Brown, J. Specially Concurring in part and Dissenting in part

¶49           Moreover, ADEQ has not cited, nor has my research revealed,
any statute or regulation stating that a particular source, including a
stationary source, may operate only under a single permit. Nor is there any
language prohibiting the operation of a source under two or more permits.
The relevant statute provides that a permit shall "[b]e required for . . . any
person beginning actual construction of or operating any source[.]” A.R.S.
§ 49-426(A)(2). At the time of Fisher’s alleged violation, the regulation
requiring a source to be permitted provided: “No person shall commence
construction of, operate, or make a modification to any source subject to
regulation under this Article, without obtaining a permit or permit revision
from the Director.” A.A.C. R18-2-302(A) (2011).

¶50            Fisher properly applied for and obtained a permit for its hot
mix plant, a portable source, which allowed Fisher to operate the source in
Maricopa County, as well as any other county in Arizona. ADEQ does not
dispute that Fisher also properly obtained a permit from Maricopa County
to operate a stationary source at its El Mirage facility. The record indicates
further that Fisher complied with the equipment transfer procedure
outlined in A.A.C. R18-2-324(D) that was in effect at the time Fisher
relocated its portable source. Thus, after relocation, Fisher had two permits
in effect: one for the portable source (hot mix plant transferred from Gila
Bend), and the other for the stationary source (El Mirage facility).

¶51           Furthermore, neither of those permits was extinguished or
otherwise became invalid. See A.A.C. R18-2-510 (“Terminations of General
Permits and Revocations of Authority to Operate Under a General Permit”).
Instead, the regulations suggest just the opposite. If a company complies
with the transfer notice, then a reasonable assumption is that the permit for
a portable source remains valid, even if the proposed location is the site of
a stationary source. Otherwise, requiring a transfer notice would serve no
meaningful purpose when a company proposes moving a portable source
to a location where a stationary source exists because an entirely new
permit would be required to continue to operate the sources. Under the
authority granted to it by the legislature, ADEQ may regulate co-location
as it deems appropriate; however, the regulations in effect at the time Fisher
moved its hot mix plant from Gila Bend to the El Mirage facility did not
prohibit the relocation. If ADEQ desires to require a new permit whenever
a portable source is co-located with a stationary source, then it may do so
by adopting language in its regulations to that effect.

¶52          Given Fisher’s compliance with the notice of transfer
provision, and because no other law required Fisher to obtain a new permit



                                     18
                           STATE v. FISHER
      Brown, J. Specially Concurring in part and Dissenting in part

after relocating a portable source adjacent to a stationary source permitted
by Maricopa County, Fisher did not operate its hot mix asphalt plants in
violation of Arizona law at the El Mirage facility. I therefore respectfully
dissent from that portion of the majority opinion. I would vacate the trial
court’s order imposing the $500,000 penalty against Fisher, and remand for
entry of an amended order reflecting imposition of the $10,000 penalty
relating to the two crushers.




                                  :ama




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