Rhoades Salvage/ABC Metals v. Town of Milton Selectboard

Skoglund, J.,

¶ 22. dissenting. It was a shouting match. Apparently there were local scores to settle. Audience members questioned one another, talked over evidence, and interrupted the selectboard members. Doors were slammed and petty grievances were aired. No “witness” was sworn in. There was no real opportunity to challenge the relevance of testimony or the competence or expertise or bias of any “witness.” This is the proceeding the majority equates with a formal agency adjudication. The seleetboard’s conclusion was something, but it was certainly not in the same league as a decision by an agency created to govern disputes at an administrative level. The interests of due process demand that an appeal of such a determination be conducted de novo in a court of law. Because the majority chooses to ignore this morass under the guise of “separation-of-powers principles,” I dissent. Ante, ¶ 10.

¶23. The majority’s recitation of the law — and the trial court’s as well — is flawless, but inapplicable. Our jurisprudence is replete with examples of agency deference and recognition of the unique position such bodies hold within our government. See, e.g., Town of Victory v. State, 2004 VT 110, ¶ 17, 177 Vt. 383, 865 A.2d 373 (upholding on-the-record review of agency determination based on “separation of powers between the judicial and executive branches” and the recognition *636that “this case involves an area in which the agency . . . has special expertise”); Town of Killington v. Dep’t of Taxes, 2003 VT 88, ¶ 5, 176 Vt. 70, 838 A.2d 91 (noting “the substantial deference that courts have traditionally accorded administrative agencies, particularly where ... a decision involves highly complicated . . . methodologies within the agency’s area of expertise”). It is the combination of specific technical expertise, statutory delegation, and executive policy-making that demand that courts refrain from replacing an agency’s policy determination with a judge’s own. See Town of Victory, 2004 VT 110, ¶ 17; Dep’t of Taxes v. Tri-State Indus. Laundries, Inc., 138 Vt. 292, 296, 415 A.2d 216, 219 (1980); see also Vt. Yankee Nuclear Power Corp. v. Natural Res. Defense Council, Inc., 435 U.S. 519, 524-25 (1978). But that is not what was at issue here. Here, the trial court was not presented with an agency action, as we have generally understood that term, nor did the underlying proceedings bear' the hallmarks of an administrative adjudication to which we afford deferential review.

¶ 24. The traditional deference we extend to administrative decisions stems, in part, from the fact that their decision-making process involves complex topics falling specifically within an agency’s unique area of competency. See Town of Killington, 2003 VT 88, ¶ 5 (“Absent a clear and convincing showing to the contrary, decisions made within the expertise of agencies are presumed correct, valid and reasonable.” (quotation and alterations omitted)). Here, the selectboard does not possess the type of specialized expertise that would entitle its determination to this heightened level of deference. As part of a two-step process to obtain permission to operate a junkyard, a landowner must first seek a certificate of approved location from the municipal legislative body where it intends to operate the facility. 24 VS.A. § 2251. This body must consider the appropriateness of the proposed location, weighing, among others things, the nature of the surrounding area, the site’s proximity to certain public services and highways, the feasibility of preventing the facility from harming health, safety or morals, and general aesthetics. 24 V.S.A. §§ 2253-2254. The trial court and majority — under a new legal theory best described as “too subjective to review” — equate the selectboard’s decision with an agency determination because some of the factors inherent in granting a certificate of approved location are purely subjective. That standard seems a far cry from the highly complicated and technical expertise we require of an agency and fails in the context of this case for two reasons.

¶ 25. First, apart from the general aesthetic considerations, many of the factors the selectboard must consider, including the determination of whether the proposed location can reasonably be prevented from harming public health or safety, clearly involve a more specialized knowledge the selectboard members should not be presumed to possess. Cf. Devers-Scott v. Office of Prof'l Regulation, 2007 VT 4, ¶ 9, 181 Vt. 248, 918 A.2d 230 (holding, in review of decision to strip midwife of license, that administrative law judge’s conclusions and application of law were not entitled to deference because AL J lacked expertise in midwifery). Here, the selectboard’s decision to deny the certificate of approved location relied, in large part, on precisely those health and safety considerations that would appear to lie outside the selectboard’s general area of expertise. Of the four findings the trial court upheld as having some rational basis, two deal with pollution and water quality, a third with the flammabil*637ity of tires, and the fourth with noise. 3 All of these areas have necessarily technical components and should, in any context, be considered “specialized areas ordinarily reserved for [an] agency,” GP Burlington S., LLC v. Dep't of Taxes, 2010 VT 23, ¶ 16, 187 Vt. 421, 996 A.2d 180, but there is no rational argument for considering such expertise to lie within the ken of the selectboard. Nor was there competent evidence introduced at the hearing to support any decision on those issues; the selectboard’s ambiguous findings — several of which hinged on the “extent of contamination . . . [which] has yet to be determined” and the lack of details regarding water quality — admit as much.4 Because the selectboard does not possess any technical expertise on the alleged pollution, health impacts, or potential hazards, its findings regarding them are not entitled to the deference of an on-the-record review.

¶26. Second, to the degree that the selectboard’s decision properly rested on aesthetic considerations within its purview, the application of those subjective factors as part of the grant or denial of a certificate of approved location is akin to other location decisions committed to the discretion of local municipal bodies. See, e.g., 24 V.S.A. § 4460(e) (outlining zoning review functions of appropriate municipal panel). Unlike an agency’s decision about a policy matter, the selectboard’s up-or-down vote on the location certificate was an adjudication of a landowner’s ability to use its property made by applying statutory factors. Like decisions made in the zoning context, which can involve subjective criteria and informal proceedings, this decision should likewise be reviewed de novo to avoid the possibility that interpersonal grievances or long-standing grudges play too great a role in the grant or denial of the certificate.5 See Chioffi v. Winooski Zoning Bd., 151 Vt. 9, 11, 556 A.2d 103, 105 (1989) (recognizing constitutionality of de novo review of zoning decisions); see also In re JLD Props.-Wal Mart St. Albans, No. 132-7-05 Vtec, slip op. at 7 (Vt. Envtl. Ct. Sept. 5, 2006), http://vermontjudiciary.org/GTC/Environ mental/Opinions.aspx (“While sitting as a member of the DRB and deciding on the merits of the application, [the boardmember] was required to set aside the actual hat that he was entitled to wear as a private citizen [advocating permit approval], and to put on instead the metaphorical ‘hat’ of a disinterested and impartial public decisionmaker.”); In re Dunn, No. 2-1-98 Vtec (Vt. Envtl. Ct. Mar. 8, 1999) (“Zoning boards are eom*638posed of laypeople, ‘carrying out a proceeding intended to offer redress without insistence on technical procedural rules.’ This very informality is the reason why the appeal before [the Environmental] Court is de novo ....” (citation omitted)).

¶27. In rejecting landowner’s argument for de novo review, the trial court bluntly stated that “[z]oning statutes [were] not applicable or analogous” to the proceeding at hand without providing any citation or rationale to support its conclusion. Contrary to this assertion, the selectboard’s decision to deny landowner a certificate of approved location is fundamentally a land-use-regulation decision. One prerequisite for an application for approved location is a certificate from the municipal zoning body confirming that the junkyard’s “proposed location is not within an established district restricted against such uses or otherwise contrary to the prohibitions of such zoning ordinance.” 24 V.S.A. §2251. Thus, zoning is an essential part of the application process, and the grant or denial of a certificate of approved location cannot logically be divorced from this precept.

V 28. Further evidence for the conclusion that the selectboard’s decision should be reviewed de novo can be found in the broader context of the licensing statute. The ultimate approval for a junkyard operation requires that, following receipt of a certificate of approved location, landowners apply for a license to operate a junkyard from the state agency of transportation, 24 V.S.A. §§ 2261-2262, a process which is subject to de novo review on appeal. Id. § 2283. In considering a junkyard owner’s application, the agency must weigh many of the same factors necessarily contemplated by the select-board in granting or denying a certificate of approved location.6 Regardless of the selectboard’s determination, the agency must independently find that the applicant can comply with all the provisions of the subchapter and that the operation will not adversely affect public health, welfare or safety. Id. § 2262(l)-(3). Under our existing precedent, the agency could properly be considered more technically qualified to conduct this similar analysis than the selectboard. Nevertheless, the Legislature specifically mandated that any appeal of the agency’s determination be conducted de novo. Id. § 2283. It defies logic to conclude that the Legislature intended for the selectboard to be entitled to a higher level of deference than a more specialized state agency when considering precisely the same technical issues. Cf. Town of Victory, 2004 VT 110, ¶ 20 (noting greater statutory deference to state agency appraisal than local town assessment because of agency expertise). To the extent that the majority has created a too-subjective-to-review standard for the aesthetic considerations uniquely within the selectboard’s competence, this logic better supports detached review by a neutral body.

¶ 29. Beyond the selectboard’s lack of substantive — as opposed to subjective — expertise, de novo review is necessary in this case because the procedure here fell *639short of that used in an agency adjudication, which provides some measure of protection of a party’s rights. The Town’s lawyer acknowledged that the select-board meeting on landowner’s application for a certificate of approval included “some local scores to be settled.” Indeed, portions of the hearing transcript read more like a schoolyard argument than any sort of respectable deliberative process. It bears none of the hallmarks of an administrative agency proceeding entitled to deferential on-the-record review and was far less formal than the zoning board decisions that the trial court reviews de novo. Cf. 24 V.S.A. § 4471; V.R.E.C.P. 5(g). No one was sworn in. Very few witnesses laid a foundation to support their competency to testify and many gave opinions on technical matters with no mention of their qualifications to do so. Landowner’s counsel had no opportunity to test the credibility or veracity of participants’ assertions through cross-examination. Apart from the seleetboard, the only questioning of witnesses came from other witnesses interrupting testimony with pointed questions of their own. Inaudible portions of the recording, created many times by participants talking over one another, left significant gaps in the transcript. Cf. VR.E.C.P. 5(h) (outlining requirements for on-the-record appeals from zoning decisions). In short, even absent the possible ulterior motives at play, the hearing — which, again, dealt with a property owner’s ability to use its land — failed to satisfy even minimal standards of due process.

¶ 30. In stark contrast to this hearing, the deference we now almost automatically accord to administrative tribunals, and which the majority grants the seleetboard here, flows in part from the procedural formality designed to protect parties’ rights and laid out in the Administrative Procedure Act (APA), 3 V.S.A. § 800. See Tri-State Indus. Laundries, 138 Vt. at 295, 415 A.2d at 219 (“[Wjhere the parties have had an adequate opportunity to develop the facts before the agency, the function of the courts is solely to review the contested case on the record established below, unless the legislature has specified de novo review of the administrative action in question.” (emphasis added)). In TriState, we held that a taxpayer was not entitled to de novo review of its contested case, in part, because the procedures for the administrative hearing provided the taxpayer with just such an opportunity to present the facts of the case, and “[n]o good purpose would be served by allowing the taxpayer to try its case twice,” assuming the dictates of the APA were “properly complied with.” Id,. There, we specifically noted that the Department of Taxes’ procedures under the APA included, among other things, an opportunity to cross-examine witnesses and to respond to all issues involved according to the rules of evidence normally applied in a trial court.7 Id. Here, the seleetboard proceeding lacked many of these key procedural safeguards so important to protecting the parties’ rights, particularly in a matter as fundamental as the use of one’s own land. I would not suggest a local board’s hearing must comport with the formality of a court of law, but the Legislature has created a model for the more informal procedure of an agency adjudication through the APA. Apparently the majority remains confident that “separation-of-powers principles,” ante, ¶ 10, preclude the judiciary from stepping in to ensure a party’s fundamental rights are protected and would prefer to render landowner’s concerns inaudible. I concur *640with the majority’s belief that “local officials are generally more familiar with the interests of their community and are best equipped to make decisions on local matters.” Id. Unlike my colleagues, I recognize that when such “interests” and “local matters” hinge on interpersonal grudges, it is the role of the judiciary to ensure that minimal standards of due process survive.

¶ 31. Absent the technical expertise necessary to receive judicial deference and because the selectboard’s decision was based on an informal and conflict-laden proceeding totally devoid of testimony or evidence as we commonly understand them, I would remand this case to the trial court to conduct a de novo review.

¶ 32. I am authorized to state that Justice Burgess joins in this dissent.

As modified October 21, 2010.

The full text of § 2254, “Aesthetic considerations,” reveals that the true rationale behind their inclusion is protection of the tourist and recreational industries in the state and that an inquiry into the aesthetics is less about possible nuisance issues (e.g. smoke or noise) and more about “the type of road servicing the junkyard or from which the junkyard may be seen, the natural or artificial barriers protecting the junkyard from view, the proximity of the proposed junkyard to established tourist and recreational areas or main access routes.”

The trial court went so far as to suggest that three of the seleetboard’s seven findings were so unfounded as to “present a . . . compelling case for reversal,” and two others “merely state[d] a lack of evidence.”

As the majority recognizes, the Legislature’s recent change in this statutory procedure clarifies the question central to this case. The fact that this specific issue may not arise again, however, does not make the majority’s decision any less rash. Protecting an individual landowner’s right to a fair and impartial hearing before a neutral arbiter is essential, and claims of “never again” cannot properly be considered support for such a legal conclusion.

By statute, to grant a landowner a license to operate a junkyard, the agency must consider whether the junkyard has a certificate of approved location, if it will “adversely affect the public heath, welfare or safety and will not constitute a nuisance at common law,” and that it can comply with “screening requirements which . . . are capable of feasibly and effectively screening the junkyard from view of the main traveled 'way of all highways.” 24 V.S.A. §2262(4); cf. id. §§ 2253-2254 (listing “Location requirements,” including screening and public health impacts, and “Aesthetic considerations,” defined as “the clean, wholesome and attractive environment,” taken into account in granting certificate of approved location).

The APA also anticipates that persons “testifying” will be sworn in, something that did not occur here. See 3 V.S.A. § 810 (mandating use of Rules of Evidence in contested cases before an agency, including Rule 603, which requires oath or affirmation of truthful testimony).