                               STATE OF VERMONT
                             ENVIRONMENTAL COURT

Secretary, Vermont Agency of Natural Resources,       }
      Plaintiff,                                      }
                                                      }
             v.                                       }     Docket No. 41-2-02 Vtec
                                                      }     (Stage II Vapor Recovery)
Mountain Valley Marketing, Inc.,                      }
     Respondent.                                      }

Secretary, Vermont Agency of Natural Resources,       }
      Plaintiff,                                      }
                                                      }
             v.                                       }     Docket No. 278-12-02 Vtec
                                                      }     (Stage II Vapor Recovery)
Premium Petroleum, Inc.,                              }
      Respondent.                                     }

Secretary, Vermont Agency of Natural Resources,       }
      Plaintiff,                                      }
                                                      }
             v.                                       }     Docket No. 176-8-02 Vtec
                                                      }     (Stage I Vapor Recovery)
Premium Petroleum, Inc., Odessa Corp.,                }
Timberlake Associates, and Wesco, Inc.,               }
      Respondents.                                    }

Secretary, Vermont Agency of Natural Resources,       }
      Plaintiff,                                      }
                                                      }
             v.                                       }     Docket No. 175-8-02 Vtec
                                                      }     (Hazardous Waste
Premium Petroleum, Inc., Odessa Corp.,                      }      Management
Regulations)                                                Timberlake Associates, and
Wesco, Inc.,             }
      Respondents.                                    }

                       Decision and Order on Pending Motions
      In Docket No. 41-2-02 Vtec, the Secretary of the Vermont Agency of Natural
Resources (AANR= or Athe Agency@) issued an administrative order on January 24, 2002,
pursuant to 10 V.S.A. '8008, regarding Respondent Mountain Valley Marketing, Inc., which
timely requested a hearing in Environmental Court. This administrative order alleged
violations of the Air Pollution Control Regulations regarding Stage II Vapor Recovery. In

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Docket No. 278-12-02 Vtec, the Secretary of the Agency issued an administrative order on
November 26, 2002, pursuant to 10 V.S.A. '8008, also alleging violations of the Stage II
Vapor Recovery Regulations regarding Respondent Premium Petroleum, Inc., which also
timely requested a hearing in Environmental Court.
       In Docket No. 176-8-02 Vtec, the Secretary of the Agency issued an administrative
order on July 31, 2002, pursuant to 10 V.S.A. '8008, regarding Respondents Premium
Petroleum, Inc., Odessa Corp., Timberlake Associates, and Wesco, Inc., which timely
requested a hearing in Environmental Court. This administrative order alleged violations of
the Air Pollution Control Regulations regarding Stage I Vapor Recovery.
       In Docket No. 175-8-02 Vtec, the Secretary of the Agency issued an administrative
order on July 31, 2002, pursuant to 10 V.S.A. '8008, regarding Respondents Premium
Petroleum, Inc., Odessa Corp., Timberlake Associates, and Wesco, Inc., which timely
requested a hearing in Environmental Court. This administrative order alleged violations of
the Hazardous Waste Management Regulations regarding exempt and small-quantity
generators of hazardous waste.
       In all the above-captioned cases, Respondents (which are all related corporations or
entities) are represented by Jon Anderson, Esq. and William E. Simendinger, Esq.; and the
Agency of Natural Resources is represented by Mark J. Di Stefano, Esq. and Catherine J.
Gjessing, Esq.
       On July 7, 2003, the Court issued three decisions in the above-captioned cases,
including rulings granting and regulating disclosure of certain information Respondents had
requested from the Agency. Respondents filed a motion seeking sanctions, including
contempt and attorneys= fees, against the Agency for allegedly failing to comply with the July
7, 2003 order regarding discovery, while the Agency filed a motion for reconsideration of
the order.    Other litigation in superior court under Vermont=s Access to Public Records law
resulted in a decision that was appealed to the Vermont Supreme Court in Wesco, Inc. v.
Sorrell, Docket No. 2003-334 and Wesco, Inc. v. Johnstone, Docket No. 2003-337. On
October 8, 2004, the Vermont Supreme Court upheld the superior court=s denial of
appellants= public records requests on the basis that the documents were relevant to
ongoing litigation in district court and in the above-captioned environmental court
administrative order cases. In its decision, 2004 VT 102, &&16, 18, 22 and 23 (October 8,


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2004), the Supreme Court emphasized that courts have inherent power to control discovery
in litigation pending before them, that discovery rulings may be revisited and altered by the
trial court as the litigation unfolds, that the Access to Public Records statute should not be
used to enlarge discovery beyond what would be available in the litigation, and that access
is only delayed until after the termination of the litigation.
       Respondents had sought discovery of information from the ANR Enforcement
Division, in aid of their argument that they have been unconstitutionally singled out for
enforcement. As explained in the July 7, 2003 orders, to succeed in an argument of
selective enforcement, particularly in a civil case, Respondents must satisfy both prongs of
the two-part test described in In re Appeal of Letourneau, 168 Vt. 539, 549 (1998, as
corrected 1999). The first prong is that >the person, compared with others similarly situated,
was selectively treated;= the second is that the >selective treatment was based on
impermissible considerations such as . . . intent to inhibit or punish the exercise of
constitutional rights, or malicious or bad faith intent to injure a person.= Respondents sought
discovery regarding both prongs of this test for selective enforcement: both to obtain
information on the Agency=s treatment of other regulated entities, and to obtain information
going to the motivation of the Agency and its personnel in this particular instance.


       In its July 7, 2003 discovery order, this Court granted Respondents= motion to compel
only in part, regulating discovery in stages to minimize its imposition on the work of the
Agency and its enforcement division. The Court ruled that Respondents are entitled to
discovery on the first prong of the selective enforcement test, allowing discovery of the
subset of Amaterials generated in connection with orders, assurances of discontinuance, or
court proceedings under 10 V.S.A. Chapter 201 as of or after November 2, 1990@ that fall
within the classification of public records and would be available under Vermont=s Access to
Public Records law absent the pendency of this litigation. This Court reasoned that, under 4
V.S.A. ' 1004(a), the requested information relating to the first prong was Anecessary to a
full and fair determination of these proceedings@ in connection with Respondents= effort to
defend against the administrative order proceedings by asserting a selective enforcement
defense.
       In that order, this Court postponed Respondents= motion to compel the disclosure of

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information going to the second prong of the selective enforcement test, relating to the
motivation of the Agency and its personnel, until and unless Respondents have reviewed
the information relating to the first prong and are able to make out a prima facie case to the
Court that there were other entities that both were similarly situated and were treated
differently. In an August 11, 2003 order on the Agency=s first motion for reconsideration, the
Court reiterated that the July 7, 2003 discovery order had only Agranted in part the requested
information about the Agency=s treatment of other regulated entities, to enable Respondents
to determine under the first prong of the test for selective enforcement whether others are
similarly situated,@ and that it had not ordered the production of settlement discussions or
privileged investigative material.
       It is especially important to note that this Court has not yet ruled on whether
Respondents are able to meet either prong of the two-part test for selective enforcement.
All that the July 7, 2003 discovery order (as clarified by the August 11, 2003 order)
accomplishes is to allow Respondents to obtain, with respect to the first prong only, the
otherwise-public information they need to determine whether they are able to make a
threshold showing under the first prong of the two-part selective enforcement test.
       The Agency is correct that discovery should be limited if it is determined that the
discovery sought is obtainable from some source that is more convenient, less burdensome,
or less expensive, see V.R.C.P. 26(b)(1)(i). As Respondents can obtain most of the
information sought from the Court=s records, they must first examine the Court=s records for
materials generated in connection with administrative orders, assurances of discontinuance,
or court proceedings under 10 V.S.A. ' Chapter 201 as of or after November 2, 1990. That
first stage of the allowed discovery does not burden the Agency at all; nor is it unduly
burdensome to Respondents (although some of the older material is located at the Public
Records storage facility). Rather, Respondents can obtain the docket sheets for all these
cases from the Court, can look through the files at both locations, and can determine
whether they involve >similarly situated= entities by whatever test of similarity Respondents
wish to employ. The Court has made no ruling on what categories of similarity are
appropriate, and Respondents have suggested none other than >similarly situated gas
station operators.=
       Only those administrative orders for which no request for hearing was filed will be

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unavailable through that method. The Agency should provide Respondents on request with
a list of final administrative orders for which no Environmental Court hearing has been
requested; this information should be available in information underlying the annual reports
required to be filed by the Agency under 10 V.S.A. '8017.
       Respondents argue that the information available in the Court=s files is inadequate for
them to establish the first prong of their selective enforcement argument. We cannot find
that it is inadequate on its face. Rather, the process established by the Court to regulate
discovery in this case is a process that must take place in stages. Respondents must
extract all the useful information from the Court=s files before the Court will conduct any in
camera review to rule on any specific requests for Agency file material. There must be a
finite number of gasoline stations in Vermont, some subset of which is neither owned nor
operated by Respondents. Once that subset is identified, the determination of whether they
are similarly situated and how enforcement matters regarding them have been handled by
the Agency will be a much narrower task than it may be at present.
       This does not mean that Respondents necessarily will be denied access to
information in the ANR Enforcement Division=s files. Rather, after obtaining and reviewing
the information available in the Court=s files, Respondents may seek additional discovery for
any additional information (on the first prong only) they need to determine if they can make
out a prima facie case that there were other entities that were similarly situated and were
treated differently. The Court does not now require any discovery directly from the Agency
even on the first prong (other than the list of final administrative orders not brought into
court); it is simply premature to do so. Consequently, Respondents= motions for sanctions
are also premature.
       Once Respondents have examined all the information relating to the first prong, if
they decide to proceed with more discovery on selective enforcement rather than simply
proceeding with the administrative order cases1, they will then have to make the threshold


   1
      We remind the parties that the issue of whether there was a violation and, if so,
what is an appropriate penalty, is de novo before the Court. The Court may impose a
different penalty amount from the amount imposed by the Agency in its initial
administrative order or the amount sought by the Agency in the court proceedings. If
Respondents= selective enforcement argument is simply that the amount sought is
inappropriately high, they may wish to make that argument in the context of the 10

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showing that others were >similarly situated= yet treated differently, before they may even
seek discovery on the second prong, related to motivation of the Agency=s personnel.


      Accordingly, based on the foregoing, it is hereby ORDERED and ADJUDGED that
the Agency of Natural Resources= Second Motion for Reconsideration is DENIED.
Respondents= Motion for Sanctions, including for contempt and for attorneys= fees, are also
DENIED as premature.
                                       th
      Done at Barre, Vermont, this 12 day of October, 2004.

                                                ____________________________
                                                Merideth Wright
                                                Environmental Judge




V.S.A. '8010(b) factors to be considered by the Court.


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