Louisiana Environmental Action Network v. Louisiana Department of Environmental Quality

STATE OF LOUISIANA

FIRST CIRCUIT

NO. 2019 CA 1551

LOUISIANA ENVIRONMENTAL ACTION NETWORK, INC.

VERSUS

LOUISIANA DEPARTMENT OF ENVIRONMENTAL QUALITY

Judgment Rendered: 'S~· 2 a 2Dza·

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Appealed from the
19th Judicial District Court
In and for the Parish of East Baton Rouge
State of Louisiana
Case No. C679626

The Honorable Trudy M. White, Judge Presiding

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Clay Garside Counsel for Plaintiff/Appellant
New Orleans, Louisiana Louisiana Environmental Action
Network, Inc.

Herman Robinson Counsel for Defendant/Appellee
Courtney J. Burdette Louisiana Department of Environmental
Jill R. Carter Quality
Baton Rouge, Louisiana

Lawrence R. Demarcay, III Counsel for Defendant/Appellee
Beverly Klundt Baudouin TD*X Associates, L.P.
New Orleans, Louisiana

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BEFORE: McDONALD, THERIOT, AND CHUTZ, JJ.

THERIOT,J.

In this suit ansmg from a decision of the Louisiana Department of

Environmental Quality ("LDEQ"), the plaintiff has appealed the district court's

dismissal of its petition for judicial review for lack of subject matter jurisdiction

and failure to state a cause of action. For the reasons set forth herein, we affirm.

LOUISIANA HAZARDOUS WASTE RULES AND REGULATIONS

The LDEQ, under the authority granted by the Louisiana Hazardous Waste

Control Law, La. R.S. 30:2171 et seq., has adopted rules and regulations regarding

hazardous waste and hazardous materials in order to: (1) protect the health and

well-being of the people of the state of Louisiana and prevent damage to property

or to the environment by the improper management of hazardous waste; (2)

provide incentives for the maximum recovery and reuse of substances in hazardous

waste streams that are possible through the use of the most advanced technology;

(3) carefully consider the impact of the program on the economic vitality of the

state and achieve a proper balance that protects the health of the citizens and the

environment of the state while meeting the needs of industry; and (4) establish

minimum state standards that define the acceptable management of hazardous

waste. LAC 33:V.103. The scope of these rules and regulations, which are

contained in Title 33, Part V of the Louisiana Administrative Code, is set forth in

LAC 33:V.105, which states in pertinent part:

These rules and regulations apply to owners and operators of all
facilities that generate, transport, treat, store, or dispose of hazardous
waste, except as specifically provided otherwise herein. . . .
Definitions appropriate to these rules and regulations, including solid
waste and hazardous waste, appear in LAC 33:V.109. Wastes that are
excluded from regulation are found in this Section.

Thus, in order to be subject to the rules and regulations of Title 33, Part V, a

material must be classified as a hazardous waste. Section 109 defines a hazardous

waste as a solid waste (as defined therein) that meets certain criteria. Solid waste

2

1s defined in § 109 as "any discarded material that is not excluded by LAC

33:V.105.D.1 or that is not excluded by a variance or non-waste determination

granted under LAC 33:V.105.K or O."

Subsection 105.D.1 contains a list of materials that are excluded from

regulation because they are not solid waste. One such exclusion, added to the

regulations by amendment on June 20, 2017, is §105.D.1.y, which provides that

hazardous secondary material 1 that is generated and then transferred to a verified

reclamation facility ("VRF") for the purpose of reclamation is not a solid waste if

certain conditions are satisfied. One condition that must be satisfied in order for

this exclusion to apply is that the hazardous secondary material generator must

arrange for the transport of the hazardous secondary materials to a VRF.

According to this provision, a VRF is either (1) a facility that has been granted a

variance under LAC 33:V.105.0.2.d2 or (2) a reclamation facility where the

1
"Hazardous Secondary Material" is "a secondary material (e.g., spent material, by-product, or sludge) that, when
discarded, would be identified as hazardous waste under LAC 33:V.Subpart I." LAC 33:V.109.

2
Subsection 105.0.2.d provides that the administrative authority may grant requests for a variance from classifying
as a solid waste those hazardous secondary materials that are transferred for reclamation under LAC 33:V.105.D.1.y
and are managed at a verified reclamation facility or intermediate facility where the management of the hazardous
secondary materials is not addressed under a RCRA part B permit or interim status standards. The criteria to be
considered by the administrative authority when reviewing such a variance request include:

i. the reclamation facility or intermediate facility shall demonstrate that the reclamation
process for the hazardous secondary materials is legitimate pursuant to LAC 33:V.105.R;

ii. the reclamation facility or intermediate facility shall satisfy the financial assurance as
required under subpart Hof 40 CFR part 261, July 2015, which is hereby incorporated by
reference;

111. the reclamation facility or intermediate facility shall not be subject to a formal
enforcement action in the previous three years and not be classified as a significant non-
complier under RCRA subtitle C, or must provide credible evidence that the facility will
manage the hazardous secondary materials properly. Credible evidence may include a
demonstration that the facility has taken remedial steps to address the violations and
prevent future violations, or that the violations are not relevant to the proper management
of the hazardous secondary materials;

1v. the intermediate or reclamation facility shall have the equipment and trained personnel
needed to safely manage the hazardous secondary material and shall meet emergency
preparedness and response requirements under 40 CFR part 261, subpart M, July 1, 2017,
which is hereby incorporated by reference;

v. if residuals are generated from the reclamation of the excluded hazardous secondary
materials, the reclamation facility shall have the permits required (if any) to manage the
residuals, have a contract with an appropriately permitted facility to dispose of the
residuals or present credible evidence that the residuals will be managed in a manner that
is protective of human health and the environment; and

vi. the intermediate or reclamation facility must address the potential for risk to proximate
populations from unpermitted releases of the hazardous secondary material to the

3

management of hazardous secondary materials is addressed under a Resource

Conservation and Recovery Act ("RCRA") part B permit or interim status

standards. LAC 33:V.105.D.l.y.v.(b). Thus, where the generator of hazardous

secondary materials transports the hazardous secondary materials to a facility that

has been granted a variance under LAC 33:V.105.0.2.d for reclamation, the

hazardous secondary material is not solid waste, and as such, not hazardous waste,

and therefore not subject to the rules and regulations applicable to hazardous

waste.

The procedure for obtaining a VRF variance from classification as a solid

waste is set forth in LAC 33:V.105.K.2. Under these provisions, the applicant

must apply to the administrative authority3 for a variance from classification as a

solid waste, addressing the relevant criteria set forth in LAC 33:V.105.0 as

applicable. LAC 33:V.105.K.2.a. Thereafter, the administrative authority will

evaluate the application and issue a draft notice tentatively granting or denying the

application. Notification of this tentative decision will be provided by newspaper

advertisement and/or radio broadcast in the locality where the recycler is located.

The administrative authority will accept comments on the tentative decision for 30

days and may also hold a public hearing upon request or at his discretion. The

administrative authority will issue a final decision after receipt of comments and

after a hearing (if any). LAC 33:V.105.K.2.b.

FACTS AND PROCEDURAL HISTORY

On October 26, 201 7, Thermal dyne, LLC submitted a request to the LDEQ

for a VRF Variance. After considering Thermaldyne's submittal and the

environment (i.e., releases that are not covered by a permit, such as a permit to discharge
to water or air), which may include, but are not limited to, potential releases through
surface transport by precipitation runoff, releases to soil and groundwater, wind-blown
dust, fugitive air emissions, and catastrophic unit failures), and must include
consideration of potential cumulative risks from other nearby potential stressors.

LAC 33:V.105.0.2.d.
3
The administrative authority is the Secretary of the LDEQ or his designee or the appropriate assistant secretary or
his designee. LAC 33:V.109.

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information provided, the LDEQ published its "Draft Decision Document to Grant

Variance from Classification as a Solid Waste for a Verified Reclamation Facility"

on June 21, 2018 and June 25, 2018, which provided a July 30, 2018 deadline for

submitting comments and requests for public hearing or notification of the final

decision to the LDEQ. Comments were received from a number of sources,

including plaintiff/appellant, Louisiana Environmental Action Network ("LEAN"),

a Louisiana nonprofit corporation interested in environmental protection, and

TD*X Associates, LP ("TD*X"), a business competitor of Thermaldyne, and the

LDEQ prepared written responses to the comments. On January 10, 2019, the

LDEQ issued its final decision granting Thermaldyne' s request for a VRF

Conditional Exclusion and Variance from Classification as a Solid Waste

("VRF/Variance"), noting its conclusion that Thermaldyne's proposed facility

meets all criteria required to be granted a variance to operate as a VRF and that

approval of the variance request will encourage the reclamation of oil-bearing

hazardous secondary materials by providing more management options for

petroleum refineries by increasing the availability of reclamation options for oil-

bearing hazardous secondary materials. The VRF N ariance allows Thermal dyne to

reclaim crude oil contained in oil-bearing hazardous secondary materials and

return the recovered oil back to petroleum refining facility production, subject to

certain conditions set forth in the VRF N ariance and the applicable regulations

contained in LAC 33:V.Subpart 1. The VRF/Variance specifically states that it

does not constitute LDEQ approval for any activity or process that may require a

permit.

On February 19, 2019, LEAN filed a "Petition for Judicial Review and

Revocation of Final Permit Decisions," asking the district court to either vacate the

LDEQ's action approving the VRF/Variance as unlawful or remand the matter

back to the LDEQ with an order requiring it to hold a public hearing on the

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vanance, conduct an IT analysis4 that fulfills its public trustee obligations, and

respond fully to the public comments on the VRF/Variance request. LEAN' s

petition also sought judicial review of the LDEQ's decision regarding a minor

source air permit. 5 Thermal dyne intervened in the suit in order to protect its

interests in the VRF N ariance and the minor source air permit. Prior to the filing

of LEAN' s petition, TD*X filed a petition seeking judicial review of the LDEQ' s

approval of Thermaldyne's VRFNariance request. On LEAN's motion, its suit

was transferred to the same division of court where TD*X' s petition on the same

subject was already pending.

The LDEQ filed a declinatory exception of lack of subject matter

jurisdiction and a peremptory exception of no cause of action as to both plaintiffs'

petitions, as well as a peremptory exception of no right of action as to TD*X's

petition. A hearing was held on the exceptions on May 29, 2019, following which

the district court concluded that the VRF/Variance was neither a permit, nor a final

action, and sustained the LDEQ's exceptions of lack of subject matter jurisdiction,

no cause of action, and no right of action. The district court dismissed TD*X' s

petition for judicial review with prejudice and dismissed LEAN' s appeal of the

LDEQ's action in granting the VRFNariance to Thermaldyne with prejudice.

The judgment was certified as a final appealable judgment under La. C.C.P.

art. 1915(B), and LEAN appealed, arguing (1) the district court erred in granting

4
"IT analysis" refers to the IT Corporation, the applicant for a major hazardous waste disposal facility in Save
Ourselves, Inc. v. La. Environmental Control Commission, 452 So.2d 1152 (La. 1984). In Save Ourselves, Inc., the
Louisiana Supreme Court interpreted Article IX, Section 1 of the Louisiana Constitution to impose a "rule of
reasonableness," requiring LDEQ to determine, before granting approval of any proposed action affecting the
environment, that adverse environmental impacts have been minimized or avoided as much as possible, consistent
with the public welfare. The court set forth a number of factors to be considered by LDEQ when conducting an IT
cost-benefit analysis to determine whether to grant or deny a permit, which were later condensed into three
categories: (1) whether the potential and real adverse environmental effects of the proposed project have been
avoided to the maximum extent possible; (2) whether a cost-benefit analysis of the environmental impact costs
balanced against the social and economic benefits of the project demonstrate that the latter outweighs the former;
and (3) whether there are alternative projects or alternative sites or mitigating measures which would offer more
protection to the environment than the proposed project without unduly curtailing non-environmental benefits to the
extent applicable. Louisiana Environmental Action Network v. Louisiana Dept. of Environmental Quality, 09-1244
(La.App. I Cir. 2/8/10), 2010WL43 l 500, *4-5 (unpublished); Matter of Rubicon, Inc., 95-0108, p. 12 (La.App. I
Cir. 2114/96), 670 So.2d 475, 483; Save Ourselves, Inc., 452 So.2d at 1157.
5
The minor source air permit is not an issue in the present appeal.

6

the exception of lack of subject matter jurisdiction because LDEQ's unlawful

decision to issue Thermaldyne a variance in lieu of a typical hazardous waste

permit is reviewable by the courts, and (2) the district court erred in granting

LDEQ's exception of no cause of action because the law affords a remedy for

LDEQ's unlawful decision to issue a variance in lieu of a typical hazardous waste

permit. 6

DISCUSSION

Subject matter jurisdiction is the legal power and authority of a court to hear

and determine a particular class of actions or proceedings, based upon the object of

the demand, the amount in dispute, or the value of the right asserted. La. C.C.P.

art. 2. Subject matter jurisdiction is created by the constitution or by legislative

enactment; the parties cannot confer or waive it. See La. C.C.P. art. 3; Firestone

Polymers, LLC v. Louisiana Department of Environmental Quality, 19-0283, p. 4

(La.App. 1 Cir. 11115/19), 291 So.3d 228, 232, writ denied, 20-00131 (La. 3/9/20),

294 So.3d 482. Generally, a district court shall have original jurisdiction over all

civil and criminal matters and shall have appellate jurisdiction as provided by law.

La. Const, art. V, § 16. The grant of original jurisdiction refers to judicial

adjudications in the first instance and designates the adjudicative tribunal in which

the initial adjudication is made. Louisiana Environmental Action Network v.

Louisiana Department of Environmental Quality, 11-1935, p. 3 (La.App. 1 Cir.

7/25112), 97 So.3d 1148, 1150, writ denied, 12-1926 (La. 11/9/12), 100 So.3d 842.

Conversely, the grant of appellate jurisdiction is limited, and district courts have

appellate jurisdiction only as expressly provided by the constitution or a statute.

See Id., 11-1935 at p. 3, 97 So.3d at 1151. Further, the existence of a specific

statutory procedure generally implies a legislative intent that the special statutory

procedure be the exclusive means of obtaining judicial review in the situations to

6
The dismissal of TD*X's petition for judicial review was also appealed to this court under a separate docket
number.

7

which it applies. Id.; see also Quatrevingt v. State through Landry, 17-0884, p. 14

(La.App. 1 Cir. 2/8/18), 242 So.3d 625, 636, writ denied, 18-0391 (La. 4/27/18),

239 So.3d 837.

An objection to the lack of subject matter jurisdiction is raised by a

declinatory exception. La. C.C.P. art. 925A(6). At the hearing on the declinatory

exception, evidence may be introduced to support or controvert the objection,

when the grounds thereof do not appear from the petition. See La. C.C.P. art. 930.

Where, as in the present case, no evidence is introduced at the hearing on the

exception, the court must accept the allegations of the petition as true for the

purpose of ruling on the exception. However, this rule applies only to properly-

pled material allegations of fact; the court is not required to accept conclusory

allegations or allegations of law as true for purposes of the exception. Beasley v.

Nezi, LLC, 16-1080, p. 4 (La.App. 1 Cir. 9/8/17), 227 So.3d 308, 311-12. The

district court's determination of whether it has subject matter jurisdiction over a

case is subject to de novo review. In re D.C.M, 13-0085, p. 7 (La.App. 1 Cir.

6/11/13), 170 So.3d 165, 169, writ denied, 13-1669 (La. 7/17/13), 118 So.3d 1102.

LEAN's petition alleges that the district court has subject matter jurisdiction

over its petition for judicial review under La. R.S. 30:2050.21 and La. R.S. 49:964.

Louisiana Revised Statutes 30:2050.21 provides for judicial review of

LDEQ decisions. Under this provision, a person aggrieved by a final permit

action, a final enforcement action, or a declaratory ruling may appeal devolutively

to the Nineteenth Judicial District Court. La. R.S. 30:2050.21(A); City of Baton

Rouge v. Louisiana Department of Environmental Quality, 14-1485, p. 8 (La.App.

1 Cir. 4/28/15), 172 So.3d 13, 18. LEAN argues that the issuance of the

VRF N ariance was a final permit action, and therefore appealable to the district

court under the judicial review provisions of La. R.S 30:2050.21. Although "final

permit action" is not defined in the statute, "permit" is defined for purposes of the

8

hazardous waste rules and regulations as "the permit issued by the state of

Louisiana to a facility to treat, store, and/or dispose of hazardous waste under the

conditions specified in the permit and the conditions required by the [Louisiana

Environmental Quality Act, La. R.S. 30:2001, et seq.] and these regulations."

LAC 33:V.109. No permit to treat, store, and/or dispose of hazardous waste is

required for a party who obtains a VRF /Variance, since the hazardous secondary

material transported to the facility under the VRF /Variance is specifically excluded

from classification as a hazardous waste by the regulations. LAC 33:V.105.

Nevertheless, LEAN argues that even if the VRFNariance is not technically a

"permit," the LDEQ's decision to issue it is still a final permit action because it

exempts Thermaldyne from the requirement to obtain a hazardous waste permit.

We disagree. As noted above, a district court only has appellate jurisdiction as

expressly provided by the constitution or a statute. Louisiana Environmental

Action Network, 11-1935 at p. 3, 97 So.3d at 1151. If the legislature intended to

confer appellate jurisdiction on the district court in instances where no permit is

required, it certainly could have done so by including such language in the statute.

The existence of a district court's appellate jurisdiction must be expressly provided,

and La. R.S. 30:2050.21 does not provide such. See Firestone, 19-0283 at p. 8,

291 So.3d 235.

LEAN next argues that the district court has appellate jurisdiction under the

Administrative Procedure Act. Louisiana Revised Statutes 49:964 provides for

judicial review by a district court of an agency's final decision or order in an

adjudication proceeding. However, the Administrative Procedure Act's judicial

review provisions are not intended to supersede specific provisions of other

administrative acts, or to supersede the rights and remedies created under those

acts. When the agency statute upon which a litigant relies establishes a specific

procedure for judicial review of the agency's action, a litigant may invoke the

9

rev1ewmg court's jurisdiction only by following the statutorily-prescribed

procedure, unless there can be found within the act a genuine legislative intent to

authorize judicial review by other means. Metro Riverboat Assocs., Inc. v.

Louisiana Gaming Control Bd., 1999-0863 (La. App. 1 Cir. 12/20/00), 774 So. 2d

1193, 1198 (on rehearing en bane), vacated in part, 01-0185 (La. 10/16/01), 797

So.2d 656; see also Corbello v. Sutton, 446 So.2d 301, 303 (La. 1984).

Furthermore, La. R.S. 49:964 provides for judicial review of a final decision or

order in an adjudicatory proceeding. "Adjudication" is defined as the agency

process for the formulation of a decision or order. La. R.S. 49:951 (1 ). "Decision"

or "order" means the whole or any part of the final disposition (whether

affirmative, negative, injunctive, or declaratory in form) of any agency, in any

matter other than rulemaking, required by constitution or statute to be determined

on the record after notice and opportunity for an agency hearing, and including

non-revenue licensing, when the grant, denial, or renewal of a license is required

by constitution or statute to be preceded by notice and opportunity for hearing. La.

R.S. 49:951(3). An adjudication for purposes of La. R.S. 49:964 means an agency

proceeding that results in a disposition that is required by constitution or statute to

be made after notice is given and a hearing is held. Unless the constitution or a

statute requires a hearing and notice, an agency action is not an adjudication for

purposes of judicial review under La. R.S. 49:964. Tomorrow's Investors, LLC ex

rel. Jones v. State ex rel. Louisiana Gaming Control Bd., 11-1616 (La.App. 1 Cir.

3/23/12), 92 So.3d 364, 368, writ denied, 12-0886 (La. 6/1/12), 90 So.3d 444;

Delta Bank & Trust v. Lassiter, 383 So.2d 330, 333 (La. 1980). In this case, the

regulations concerning the granting of a VRF variance do not require a hearing;

they say that a hearing may be held at the agency's discretion. LAC

33:V.105.K.2.b. Thus, there has not been a final decision or order issued in an

10

adjudicatory proceeding, and judicial review under La. R.S. 49:964 is not

available. 7

Having found that the district court did not err in concluding that the LDEQ

decision to issue the VRF N ariance to Thermal dyne was not a final permit action

or a final decision or order in an adjudicatory proceeding, we agree that the district

court lacked jurisdiction under either La. R.S. 30:2050.21 or La. R.S. 49:964 over

this matter. Further, because we find that no subject matter jurisdiction existed,

and having found that the trial court did not err in dismissing LEAN' s appeal of the

VRF N ariance on that ground, LEAN' s assignment of error regarding the

exception of no cause of action is moot.

CONCLUSION

The judgment of the district court dismissing LEAN' s petition for judicial

review of the VRF N ariance is affirmed. Costs of this appeal are assessed to

plaintiff/appellant, Louisiana Environmental Action Network, Inc.

AFFIRMED.

7
LEAN further argues that jurisdiction should nevertheless exist for judicial review under the
Administrative Procedure Act because the LDEQ promulgated the regulations that make a
hearing discretionary and therefore prevent this process from being an adjudicatory proceeding.
However, an objection to the regulations promulgated by the LDEQ does not confer jurisdiction
where none exists. The interpretation or application of the LDEQ regulations may be challenged
by a petition for rulemaking (LAC 33:1.901 et seq.) or a petition for declaratory ruling (La. R.S.
30:2050.10 & LAC 30:1.1101 et seq.). Any interested person may petition the administrative
authority in writing to issue, amend, or rescind any regulation. LAC 33:1.907.A. Further, a
person with a real and actual interest in a matter may request a declaratory ruling from the LDEQ
as to the validity of a rule or the applicability of any rule, order, or statute to any person,
property, or existing state of facts or facts certain to arise. La. R.S. 30:2050.10; LAC 33:1.1103.
A declaratory ruling is a final agency action subject to judicial review under La. R.S. 30:2050.21.
La. R.S. 30:2050.10.

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