1. Administrative Law--agency decision--whole record test
The trial court properly applied the whole record test and its determination that
respondent-Agency's decision to uphold a fine against petitioner for $5,000 for failure to utilize
the required vapor recovery equipment on a tanker truck while unloading fuel was not arbitrary
and capricious based on its consideration of the factors in N.C.G.S. § 143-215.112(d)(1a),
including the degree and extent of harm caused by the violation, the cost of rectifying the damage,
and the amount of money the violator saved by not having made the necessary expenditures to
comply with the appropriate pollution control requirements.
2. Appeal and Error--preservation of issues--failure to cite authority
Although petitioner contends the trial court erred in affirming respondent-Agency's
decision to uphold a fine against petitioner for $5,000 for failure to utilize the required vapor
recovery equipment on a tanker truck while unloading fuel based on an alleged failure to hold an
adequate evidentiary hearing and failure to prepare an adequate record for judicial review,
petitioner has abandoned this assignment of error since it offered no legal authority to substantiate
these contentions, and in any event, the trial court was provided sufficient information to review
the Agency's decision.
3.ministrative Law--agency decision--civil penalty--statutory factors
The trial court did not err in finding that respondent-Agency had discretion under N.C.G.S. §
143-215.112(d)(1a) to levy a civil penalty against petitioner for $5,000 for failure to utilize the
required vapor recovery equipment on a tanker truck while unloading fuel, because: (1) the
Agency was informed as to each of the three statutory factors in making its decision to access the
fine; and (2) although petitioner contends the trial court made insufficient findings, the trial court
need not explain the reasons for affirming the administrative ruling.
Patrick U. Smathers, P.A., by Patrick U. Smathers, for
petitioner-appellant.
Siemens Law Office, P.A., by Jim Siemens, for respondent-
appellee.
McGEE, Judge.
The Western North Carolina Regional Air Pollution ControlAgency (the Agency) is an administrative agency established
pursuant to N.C. Gen. Stat. § 143-215.112 (1999) as a local air
pollution control program. Mike Matthews (Matthews), an inspector
for the Agency, observed David Bylko (Bylko), an employee of Pisgah
Oil Company, Inc. (petitioner), unload fuel from his tanker truck
into two storage tanks at the Bethel Grocery store in Waynesville,
North Carolina on 8 August 1998. Matthews observed that Bylko was
not utilizing required vapor recovery equipment on his tanker truck
while unloading fuel, in violation of the air quality rules and
regulations adopted by the Agency's board. When Matthews
approached Bylko to question him, Bylko admitted that he had not
been using the equipment. However, Bylko had started filling the
second tank only a few minutes before Matthews spoke to him, and
Bylko immediately attached the vapor recovery equipment before
continuing to fill the second tank.
The Agency informed petitioner in a letter dated 14 August
1998 that a fine of $7,500, consisting of $5,000 for the first tank
and $2,500 for the second, had been assessed for the violation.
Petitioner asked Bylko to resign from his position, and he
complied. Petitioner timely appealed the penalty for the reasons
that: this was petitioner's first offense; the financial burden
that such a large sum would place upon petitioner, which is a smallcompany compared to its competitors, was unfair; and petitioner's
management had a "continued commitment to comply with all pertinent
regulations." The Agency removed the $2,500 fine on 26 October
1998 as to the second tank while upholding the $5,000 fine for the
first tank.
Petitioner filed a petition for judicial review in Haywood
County Superior Court on 20 November 1998. The petition refers to
N.C.G.S. § 143-215.112(d)(1a), which provides three factors for
consideration in determining the amount of the penalty. The
petition further states that:
Petitioner excepts to the decision of the
[Agency] determining a fine of $5,000.00 in
that [the Agency] did not consider the
foregoing factors and the decision of [the
Agency] was unsupported by substantial
evidence and/or was arbitrary and capricious,and/or was an unlawful deprivation of
Petitioner's rights to due process pursuant to
both the North Carolina and United States
Constitution[s].
The petition filed by petitioner was heard on 3 May 1999. The
trial court stated that it considered the petition, the response to
the petition, and the record of the proceedings submitted by the
Agency in entering its order on 7 May 1999 affirming the fine of
$5,000. In its order, the trial court found that petitioner had
admitted the violations for which penalties were levied by the
Agency, and the Agency had the discretion to levy civil penalties
for violations pursuant to N.C.G.S. § 143-215.112(d)(1a).
Petitioner filed timely notice of appeal.
[1]In its brief, petitioner first argues the trial court
erred in affirming a fine that was "arbitrary and capricious" where
respondent did not consider the statutory factors of N.C.G.S. §
143-215.112(d)(1a) in determining the amount of the penalty
assessed. The proper standard for the superior court's judicial
review "depends upon the particular issues presented on appeal."
Amanini v. N.C. Dep't of Human Resources, 114 N.C. App. 668, 674,
443 S.E.2d 114, 118 (1994). When the petitioner "questions (1)
whether the agency's decision was supported by the evidence or (2)
whether the decision was arbitrary or capricious, then the
reviewing court must apply the 'whole record' test." In re Appeal
by McCrary, 112 N.C. App. 161, 165, 435 S.E.2d 359, 363 (1993).
See also Associated Mechanical Contractors v. Payne, 342 N.C. 825,
467 S.E.2d 398 (1996) (concluding that the proper standard of
review of agency decisions to determine the sufficiency of theevidence is the "whole record" test). "The 'whole record' test
requires the reviewing court to examine all competent evidence (the
'whole record') in order to determine whether the agency decision
is supported by 'substantial evidence.'" Amanini, 114 N.C. App. at
674, 443 S.E.2d at 118.
As to appellate review of a superior court order regarding an
agency decision, "the appellate court examines the trial court's
order for error of law. The process has been described as a
twofold task: (1) determining whether the trial court exercised the
appropriate scope of review and, if appropriate, (2) deciding
whether the court did so properly." Id. at 675, 443 S.E.2d at
118-19 (citation omitted). "'As distinguished from the "any
competent evidence" test and a de novo review, the "whole record"
test "gives a reviewing court the capability to determine whether
an administrative decision has a rational basis in the evidence."'"
ACT-UP Triangle v. Commission for Health Services, 345 N.C. 699,
706-07, 483 S.E.2d 388, 392 (1997); Bennett v. Bd. of Education, 69
N.C. App. 615, 618, 317 S.E.2d 912, 915, cert. denied, 312 N.C. 81,
321 S.E.2d 893 (1984) (quoting Overton v. Board of Education, 304
N.C. 312, 322, 283 S.E.2d 495, 501 (1981)).
First, it appears from the record that the trial court
exercised the appropriate scope of review in its order. The order
states that the trial court had considered "the Petition filed by
the Petitioner, the Response to the Petition and the Record of
Proceedings submitted by the Agency[.]" Therefore, the trial court
employed the whole record test as it "examine[d] all competentevidence (the 'whole record') in order to determine whether the
agency decision [was] supported by 'substantial evidence.'" See
Amanini, 114 N.C. App. at 674, 443 S.E.2d at 118.
Second, we find the trial court properly applied the whole
record test. There is sufficient evidence in the record to show
the Agency considered the appropriate factors in N.C.G.S. § 143-
215.112(d)(1a) in levying the $5,000 fine against petitioner. The
factors to be considered are "the degree and extent of harm caused
by the violation, the cost of rectifying the damage, and the amount
of money the violator saved by not having made the necessary
expenditures to comply with the appropriate pollution control
requirements." N.C.G.S. § 143-215.112(d)(1a). The Agency may then
assess "a penalty not to exceed ten thousand dollars ($10,000) per
day for so long as the violation continues." Id.
The Agency's reasons for assessing the $5,000 fine were set
forth in the minutes of its 14 September 1998 Agency board meeting:
Mr. Patrick Smathers, a representative of
[petitioner] . . . talked about the history of
Pisgah Oil Company and . . . said the company
did not dispute that the driver did not use
his Stage I Vapor Recovery lines and read a
statement from the driver stating his
negligence. Mr. Smathers said the driver has
since submitted his resignation. Mr. Hampton
[the general manager] explained to the Board
the training process given by the company to
their drivers. Mr. Hampton also said the
company was under the "mercy of the employee"
when something like this happens. Mr. Mike
Matthews . . . explained what he found on
August 7, 1998. . . . Mr. Queen [of the
Board] asked how [petitioner] was going to
handle a situation like this in the future.
Mr. Hampton said he was going to train better
and monitor much closer. Mr. Queen said he
questioned the violation of the second tank of$2,500.00 because Mr. Matthews caught [Bylko]
in the first few minutes of unloading
gasoline.
Clearly "the degree and extent of harm caused by the
violation" was considered when the Agency's board reduced
petitioner's fine by $2,500 on the ground that the violation had
ceased early in the process of filling the second tank. Second,
while obviously the damage in this case could not be rectified
after the vapors escaped into the atmosphere, the cost of
rectifying the situation was addressed when the general manager for
petitioner explained that he would improve training and monitoring
in the future. Finally, "the amount of money the violator saved by
not having made the necessary expenditures to comply with the
appropriate pollution control requirements" was answered when
petitioner explained in its 4 September 1998 letter to the Agency
that its truck was already equipped with the proper vapor recovery
devices; therefore petitioner had not saved any money through non-
compliance.
The record demonstrates the Agency was informed as to each of
the statutory factors in making its decision to assess petitioner's
$5,000 fine, and the amount was one-half of a maximum daily
assessment for ongoing violations under the statute. N.C.G.S. §
143-215.112(d)(1a). Moreover, our Court may not weigh the evidence
that was presented to the Agency and substitute our evaluation of
the evidence for that of the Agency. See In re Appeal of AMP,
Inc., 287 N.C. 547, 562, 215 S.E.2d 752, 761 (1975); In re Appeal
of Phillip Morris, 130 N.C. App. 529, 539, ___ S.E.2d ___, ___(1998). We therefore reject petitioner's first argument that the
trial court erred in affirming the $5,000 fine in that the fine was
not the product of an "arbitrary and capricious" decision by the
Agency.
[2]Petitioner's second argument is that the trial court erred
in affirming respondent's decision "because the respondent did not
hold an adequate evidentiary hearing, make the necessary findings
and conclusions[,] nor prepare an adequate record for judicial
review." For support, petitioner provides the single quotation
from Taborn v. Hammonds, 83 N.C. App. 461, 466, 350 S.E.2d 880, 883
(1986), rev'd, 324 N.C. 546, 556, 380 S.E.2d 513, 519 (1989), that
"a reviewing court must be able to determine what factors were used
to reach an administrative decision as well as whether said
decision was arbitrary, capricious, an abuse of discretion, or not
in accordance with law." However, our Supreme Court in the same
case held that simply stating a basis for a decision sufficed as an
adequate explanation by a school board such that its decision had
a "rational basis," and that requiring more extensive consideration
would cause appellate courts to interfere with the discretion of
local boards of education. Taborn v. Hammonds, 324 N.C. 546, 557-
58, 380 S.E.2d 513, 519-20 (1989). Petitioner also contends that
the hearing at which the Agency decided to reduce petitioner's fine
was "not a formal evidentiary hearing in which examination and
cross-examination of witnesses['] sworn testimony took place[,]"
and that the record of the hearing was not complete because the
minutes were "not verbatim." Petitioner offers no legal authorityto substantiate these contentions within its argument, and
therefore we reject the argument. See Byrne v. Bordeaux, 85 N.C.
App. 262, 354 S.E.2d 277 (1987) (where plaintiff failed to cite
authority in support of assignment of error, such assignment is
deemed abandoned).
In any event, we believe the trial court was provided
sufficient information to review the decision of the Agency. As
previously stated, the trial court's order states that the trial
court had considered "the Petition filed by the Petitioner, the
Response to the Petition and the Record of Proceedings submitted by
the Agency[.]" We have already determined the Agency's decision
was supported by substantial evidence. The facts in this matter
were not contested and we have determined the $5,000 fine was not
the result of an arbitrary or capricious decision by the Agency.
We fail to see how petitioner was prejudiced by the Agency not
preparing what petitioner contends is an "adequate record for
judicial review."
[3]In its third argument, petitioner contends the trial court
erred "in finding [solely] that the respondent had discretion
pursuant to N.C.G.S. § 143-215.112(d)(1a) to levy the civil
penalty." Petitioner sets out the procedure for judicial review of
the Agency decision, and then states that the trial court "cannot
merely contend that the Respondent has discretion to levy civil
penalties without further findings of fact." Petitioner
acknowledges that the Agency "does have some discretion to decide
certain aspects, such as, what weight to give each factor, how todecide to calculate each factor and how those decisions will
translate into a dollar amount for a penalty." However, according
to petitioner "there is no discretion in whether or not to use the
three factors in determining the amount of civil penalties." We
have already determined that the Agency was informed as to each of
the three statutory factors in making its decision to assess
petitioner's $5,000 fine. Insofar as petitioner argues the trial
court made insufficient findings, we disagree. See Area Mental
Health Authority v. Speed, 69 N.C. App. 247, 250, 317 S.E.2d 22,
cert. denied, 312 N.C. 81, 321 S.E.2d 893 (1984) (stating the trial
court need not explain the reasons for affirming the administrative
ruling). The trial court did not err in affirming the fine
assessed by the Agency against petitioner.
Affirmed.
Judges WALKER and HUNTER concur.
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