Pena-Kues v. Smith's Food & Drug Centers, Inc.

Opinion

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1 IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

2 IN THE MATTER OF THE TWO PETITIONS 3 FOR A HEARING ON THE MERITS REGARDING 4 AIR QUALITY PERMIT NO. 2037-M1 ISSUED TO 5 SMITH’S FOOD & DRUG CENTERS, INC.,

6 GEORGIANNA E. PENA-KUES, ANDY 7 CARRASCO, JAMES A. NELSON and SUMMIT 8 PARK NEIGHBORHOOD ASSOCIATION,

9 Petitioners-Appellees, 10 v. No. 32,790

11 SMITH’S FOOD & DRUG CENTERS, INC. 12 and THE CITY OF ALBUQUERQUE,

13 Respondents-Appellants.

14 APPEAL FROM THE ALBUQUERQUE/BERNALILLO COUNTY AIR 15 QUALITY CONTROL BOARD 16 Felicia L. Orth, Hearing Officer

17 Georgianna E. Pena-Kues 18 Albuquerque, NM

19 James A. Nelson 20 Albuquerque, NM

21 Judy Jennings 22 Albuquerque, NM

23 Pro Se Appellees

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1 Domenici Law Firm, P.C. 2 Pete V. Domenici, Jr. 3 Lorraine Hollingsworth 4 Albuquerque, NM

5 for Appellee Andy Carrasco

6 Sutin, Thayer & Browne, P.C. 7 Frank C. Salazar 8 Timothy J. Atler 9 Albuquerque, NM

10 for Appellant Smith’s Food & Drug Centers, Inc.

11 City of Albuquerque 12 David Tourek, City Attorney 13 Carol M. Parker, Assistant City Attorney 14 Donna J. Griffin, Assistant City Attorney 15 Albuquerque, NM

16 for Appellant City of Albuquerque 17 MEMORANDUM OPINION 18 FRY, Judge. 19 {1} In this appeal, the City of Albuquerque and Smith’s Food and Drug Centers, 20 Inc. (collectively, Respondents) appeal the decision of the Albuquerque-Bernalillo 21 County Air Quality Control Board denying Smith’s application to increase the amount 22 of fuel it is permitted to annually dispense at its gas station located at the intersection 23 of Carlisle and Constitution in Albuquerque (the Station). Respondents raise a 24 number of issues regarding the Board’s decision. Because we agree with Respondents

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1 that the Board made no findings of fact that support its decision to deny the permit, 2 we conclude that the Board’s decision was arbitrary and capricious. Accordingly, we 3 reverse. 4 BACKGROUND 5 {2} Smith’s first sought and received an authority-to-construct permit from the 6 Albuquerque Air Quality Division (Division) in 2009 to dispense fuel at the Station. 7 The permit limited the Station to an annual throughput (the amount of fuel dispensed) 8 of 3,369,925 gallons. This limit was requested by Smith’s as the maximum amount 9 of fuel it estimated it would dispense in a given year. No challenge was lodged 10 against the initial permit allowing Smith’s to open the Station. The Station opened for 11 business in June 2010 after receiving its permit. 12 {3} By 2011, the Station was exceeding its permitted throughput limit. The 13 Division issued Smith’s two “Notices of Violation” and imposed monetary penalties. 14 The Division also ordered Smith’s to take corrective action, which included 15 submission of a permit modification application. Smith’s subsequently applied for a 16 modification that would allow it to increase its annual throughput to 4,500,000 17 gallons. 18 {4} The Division published notice of the requested permit modification in the 19 Albuquerque Journal and also notified local neighborhood associations. In response,

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1 the Division received numerous requests to hold a public information hearing. The 2 nearby residents who attended the hearing raised concerns about the Station. After the 3 hearing, the Division determined that, notwithstanding the public’s concerns, the 4 requested permit modification complied with the provisions under the New Mexico 5 Air Quality Control Act, the federal Clean Air Act, and all other relevant regulations. 6 The Division, therefore, issued the requested permit modification to increase the 7 Station’s throughput to 4,500,000 gallons. 8 {5} After receiving notice that the Division issued the permit, Petitioners initiated 9 an appeal before the Board to challenge the permit modification. The Board approved 10 their requests to hold a public hearing and appointed a hearing officer. The hearing 11 was held over three days and included opportunities for Petitioners to provide 12 comment and testimony. After the hearing, the hearing officer submitted 13 recommended findings of fact and conclusions of law to the Board. The hearing 14 officer recommended affirming the Division’s issuance of the permit modification 15 because the requested modification was in compliance with all requirements of New 16 Mexico and federal law, it would not cause or contribute to air contaminant levels in 17 excess of state, local, or federal standards, and the modification would not violate any 18 other provision of New Mexico or federal air quality laws. NMSA 1978, § 74-2- 19 7(C)(1)(a)-(c) (2003) (providing that a permit may be denied if it “(a) will not meet

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1 applicable standards, rules or requirements of the Air Quality Control Act or the 2 federal act; (b) will cause or contribute to air contaminant levels in excess of a 3 national or state standard or, within the boundaries of a local authority, applicable 4 local ambient air quality standards; or (c) will violate any other provision of the Air 5 Quality Control Act or the federal act[.]” ). 6 {6} The Board considered the hearing officer’s recommendation at its next 7 scheduled meeting. Contrary to the hearing officer’s recommendation, the Board 8 decided to reverse the issuance of the permit modification. The Board stated that it 9 is “required to protect public health and welfare. Increases in throughput increase 10 risks to public health. The quality-of-life concerns raised by the community could be 11 indirectly related to air quality.” Despite its decision, the Board voted to adopt all of 12 the hearing officer’s recommended findings of fact and most of her recommended 13 conclusions of law, although with some modifications to the conclusions of law in 14 order to align them with the Board’s decision to reverse the issuance of the permit. 15 These modifications included the Board’s conclusion that the Petitioners met their 16 burden of proving that the permit would “contribute indirectly to increased air 17 pollution, in violation of the Air Act’s mandate to the Board to prevent or abate air 18 pollution [pursuant to NMSA 1978, § 74-2-5(A) (2007).]” The Board determined that 19 its mandate to prevent or abate air pollution allows it to “consider quality of life

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1 concerns that are directly or indirectly related to air quality.” Respondents now appeal 2 the Board’s decision. 3 DISCUSSION 4 Standard of Review 5 {7} We will only set aside the Board’s decision if it is found to be “(1) arbitrary, 6 capricious or an abuse of discretion; (2) not supported by substantial evidence . . .; or 7 (3) otherwise not in accordance with law.” NMSA 1978, § 74-2-9(C) (1992). 8 The Board Found No Facts Supporting Its Decision 9 {8} Both the City and Smith’s argue that the Board’s decision was arbitrary and 10 capricious because none of the hearing officer’s recommended findings of fact, which 11 the Board adopted in their entirety, support its decision to reverse the Division’s grant 12 of the permit modification. We agree. The parties also devote significant arguments 13 to whether the Board had the authority to base its decision on its general statutory 14 mandate to prevent and abate air pollution. Even if we assume—without 15 deciding—that the Board had such authority, we nonetheless reverse the Board’s 16 decision because the Board made no findings that would support its decision. 17 {9} The Board’s findings do not dispute that the permit modification complied with 18 all applicable federal regulations and technical specifications. The crux of the Board’s 19 conclusions, however, was that “[i]ncreases in throughput increase risks to publish

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1 (sic) health” and the Board is mandated to “protect public health and welfare.” The 2 Board decided that the “quality of life concerns raised by the community could be 3 indirectly related to air quality” and that its statutory mandate to “prevent or abate air 4 pollution permits the Board to consider quality of life concerns that are directly or 5 indirectly related to air quality.” The Board’s reasons are summed up in conclusion 6 of law No. 52, which states, “[P]etitioners demonstrated by a preponderance of the 7 evidence that the increase in throughput allowed by the modification would contribute 8 indirectly to increased air pollution, in violation of the Air Act’s mandate to the Board 9 to prevent or abate air pollution.” 10 {10} “[A]n agency’s action is arbitrary and capricious if it provides no rational 11 connection between the facts found and the choices made.” Atlixco Coalition v. 12 Maggiore, 1998-NMCA-134, ¶ 24, 125 N.M. 786, 965 P.2d 370. Our review of the 13 findings of fact reveals no instance where the Board identified the “quality of life” 14 concerns it was taking into account. The closest the findings come to discussing the 15 Petitioners’ concerns is the section entitled “Smith’s Efforts to Address Neighborhood 16 Concerns.” This section discusses the actions Smith’s took to address the residents’ 17 concerns such as creating a visual barrier between the gas station and the 18 neighborhood, lowering the volume of the gas station attendant’s intercom, 19 encouraging idling vehicles to turn off their engines, posting signs to make drivers

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1 aware of potential traffic hazards, installation of a public restroom, changes to fuel 2 delivery times to increase traffic safety, and providing money for the construction of 3 a gate on a nearby property. This section also addresses Smith’s relocation of its 4 underground storage tank’s vent following complaints by a neighbor. The findings 5 state that Smith’s passed air quality tests performed by the New Mexico Occupational 6 Health and Safety Bureau and the Division after the vent was relocated. Despite 7 indicating what some of the nearby residents’ concerns were, these findings provide 8 no definitive statement or inference that the public concerns and remedial actions that 9 were addressed by Smith’s also constitute findings identifying the “quality of life” 10 concerns that formed the basis for the Board’s decision. 11 {11} Furthermore, some findings of fact actually contradict the Board’s decision. 12 For instance, the findings state that the purpose of the throughput requirements is to 13 “allow[ the Division] to determine the annual emission fee” and “keep inventories of 14 [volatile organic compounds] emissions from [gas stations].” The Board found that 15 “[n]o evidence was presented that the annual throughput limit is intended to reduce 16 or control air emissions. Rather, [the Division’s] primary means of reducing or 17 controlling air emissions is its requirement, based on local and federal regulations, that 18 [gas stations] use Stage I vapor recovery systems.” The findings noted that Smith’s 19 uses a Stage I vapor recovery system and that the Division determined that the station

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1 “employed vapor control technology sufficient to meet the standards of the New 2 Mexico Air Quality Control Act and the federal Clean Air Act.” 3 {12} In sum, without findings of fact regarding the quality of life concerns that the 4 Board relied on, this Court cannot properly review whether the Board’s reliance on 5 those facts was sufficiently connected to its mandate to prevent and abate air pollution 6 and the regulations passed pursuant thereto.1 See Colonias Dev. Council v. Rhino 7 Envtl. Serv., Inc., 2005-NMSC-024, ¶ 29, 138 N.M. 133, 117 P.3d 939 (stating that 8 while the environmental department must allow testimony regarding quality of life 9 concerns when review of a permit application under the Solid Waste Act, its authority 10 to address those concerns “requires a nexus to a regulation”). We are aware of the 11 general concerns Petitioners raised about the Station at the multiple public hearings. 12 Some of the concerns are unrelated to air quality, while others, as the Board noted in 13 its statement of reasons, “could be indirectly related to air quality.” But we will not 14 search the record to supply evidence to support the Board’s decision where the Board

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15 We emphasize that because the Board did not make findings in support of its 16 decision, we are not reviewing whether the Board’s general mandate to prevent and 17 abate air pollution provides a sufficient basis to deny permit applications. Similarly, 18 we are also not reviewing whether the Board’s mandate to prevent or abate air 19 pollution allows it to consider quality of life concerns that are “indirectly” related to 18 air quality. The rule, as stated in Rhino, is that there must be a nexus between the 19 quality of life concerns and an applicable regulation, regardless of whether the Board 20 considered those concerns to be directly or indirectly related to air quality. 2005- 21 NMSC-024, ¶ 29.

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1 made no such express findings. See Atlixco, 1998-NMCA-134, ¶ 21 (stating that an 2 agency’s decision “cannot be sustained on a ground appearing in the record to which 3 the [agency] made no reference; to the contrary, the [agency]’s decision stands or falls 4 on its express findings and reasoning” (internal quotation marks and citation 5 omitted)). 6 {13} Additionally, we cannot discern how the Board’s adoption of findings that air 7 pollution is not controlled by throughput limits can be squared with its conclusion that 8 an increase in throughput would increase air pollution and present a risk to public 9 health and welfare that necessitated the denial of the permit. Atlicxo,1998-NMCA- 10 134, ¶ 24. The findings indicate that emissions are controlled by Stage I vapor 11 recovery systems, not limitations on throughput. That is not to say that it cannot be 12 inferred that an increase in the throughput limitation would also increase the amount 13 of fuel dispensed. Any additional connection between the amount of fuel dispensed 14 and any “quality of life” concerns that are related to air quality/pollution was the 15 responsibility of the Board when it issued its findings. But with findings indicating 16 that throughput limitations are not a means of controlling emissions, it is contradictory 17 for the Board to make those findings and also to conclude that denying the permit 18 would prevent or abate air pollution. Accordingly, we conclude that the Board’s

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1 decision was arbitrary and capricious because it lacked support from the findings that 2 were made. 3 CONCLUSION 4 {14} For the foregoing reasons, we reverse the Board’s decision and remand for 5 proceedings consistent with this Opinion. 6 {15} IT IS SO ORDERED.

7 8 CYNTHIA A. FRY, Judge

9 WE CONCUR:

10 11 JAMES J. WECHSLER, Judge

12 13 TIMOTHY L. GARCIA, Judge