Opposition Brief — Simpson Paper (Vermont) Co. v. Department of Environmental Conservation

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ie *Sorome Court, US [| oe

G) FTLE Db 3

No. 92-1012 | FEB 16 1993

In The

Supreme Court of the United States

October Term, 1992

SIMPSON PAPER (VERMONT) COMPANY,

Petitioner,

Vv.

DEPARTMENT OF ENVIRONMENTAL CONSERVATION

and SIERRA CLUB,

Respondents.

On Petition For A Writ Of Certiorari To The

Supreme Court Of The State of Vermont

JOINT RESPONSE OF THE STATE OF VERMONT,

DEPARTMENT OF ENVIRONMENTAL

CONSERVATION AND THE SIERRA CLUB IN

OPPOSITION TO PETITION FOR

WRIT OF CERTIORARI

State of Vermont

Jerrrey L. AmMEsToy

Attorney General

by: Ronatp A. SHEMs

(Attorney of Record for

Respondent VT DEC)

Assistant Attorney General

Pavilion Office Building

109 State Street

Montpelier, VT 05609-1001

(802) 828-3171

Sierra Club

by: Howarp I. Fox, Esa.

(Attorney of Record for

Respondent Sierra Club)

Sierra Club Legal Defense Fund

1531 P Street, N.W.

Suite 200

Washington, D.C. 20005

(202) 667-4500

TABLE OF CONTENTS

Page

pt Fe Bs oc) . re ere ii

SERIE OEE SUE. Sates s 60 os casincaterecncccns 1

REASONS FOR DENYING THE PETITION......... 6

Il.

Ill.

IV.

THE VERMONT SUPREME COURT’S JUDG-

MENT RESTS ON ADEQUATE, ALTERNATIVE

STATE GROUNDS NOT CHALLENGED BY

SUES VG WA 8 iin WUS b's wad be. 62 Ke mEVaE Eee O50 00

A STATE WATER QUALITY STANDARD NEED

NOT BE QUANTITATIVE TO BE AN “APPRO-

RIATE REQUIREMENT OF STATE LAW” .....

THERE IS NO CONFLICT AMONG THE STATE

COURTS CONCERNING THE ENFORCE-

ABILITY OF “DESIGNATED USES” UNDER

a Re RS eee

CLAIMS NOW RAISED BY SIMPSON WERE

NOT ADEQUATELY AND SQUARELY PRE-

SENTED TO THE VERMONT SUPREME

TABLE OF AUTHORITIES

Page

CaAsES

Arkansas v. Oklahoma, ___ U.S. ___, 112 S.Ct. 1046

CPE « &:0 VUEE ORD Kn OE RSA aki eee Rene ceeeekas 13

Arnoid Irrigation District v. Department of Environ-

mental Quality, 717 P.2d 1274 (Or.App. 1986) ...14, 23

Avoyelles Sportsmen's League, Inc. v. Alexander, 511

yb a Oe, ee eee eee 2

Bangor Hydro-Electric Co. v. Board of Environmental

Protection, 595 A.2d 438 (Me. 1991)°............... 16

Banker's Life and Casualty Co. v. Crenshaw, 486 U.S.

FE CRE <a kageve sed b 00a desk bs casket 18, 20

Coleman v. Thompson, __ U.S. __, 111 S.Ct. 2546

NE ai vrei os af cae sccs bie es 7

de Rham v. Diamond, 32 N.Y.2d 34, 295 N.E.2d 763

(SOFA is s5An che cna dnp brabus whak eyes Oedeaseeee has 16

Durley ©. Mage, St UD. Z77 GIGGD ois sh ccewnsccccns 7

First Iowa Hydro-Electric Coop v. Federal Power

COMME TE Bee APs Be TO io a vive kcceesvckenssces 23

Herd v. Pitcairn, S24 U.S. 117 (1945)... 2.0.50. ceeee 7

Lanphere v. Beede, 141 Vt. 126, 446 A.2d 340 (1986) .... 18

Long Lake Energy v. Dept. of Env. Cons., 563

N.¥.9.20 G71: GA.D3 Dept. 1990) 2... cccccecceces 16

Michigan v. Long, 463 U.S. 1032 (1983)............-. 7,9

iii

TABLE OF AUTHORITIES —- Continued

Page

National Wildlife Federation v. Gorsuch, 693 F.2d 156

Ey cakes cheese e606 ssbedesuccscces 19, 20

Pennsylvania Dept. of Environmental Resources v.

: City of Harrisburg, 578 A.2d 563 (Pa.Cmwlth.

ee eis cy Vain cose Virks one. 17

Power Authority v. Williams, 60 N.Y.2d 315 N.E.2d

SECURES Rea eu SWhdDS ete s0 cH bbe necccsvecees 16

Summit Hydropower v. Commissioner of Environmen-

| as Freeectnem, LEXIS 2177, 2S 3. ose cccvcccsccccceses 17

| Vermont v. New Hampshire, 289 U.S. 593 (1933)....... 22

| Webb v. Webb, 451 U.S. 493 (1981)...............000. 18

STATUTES

3 Vt.Stat.Ann. § 2802(a)(5) (1987).............000.00 ee 3

NE 3

10 Vt.Stat.Ann. § 1252(b) (1991)............00..00 eee 4

| 10 Vt.Stat.Ann. § 1253(b) (1987)............0...00eeee 4

! SS SEEN 21

Clean Water Act (“CWA”), 33 U.S.C. § 1251-2623

(1988)

EE OE 0 0) ee 2

§ 102(b)(6), 33 U.S.C. § 1252(b)(6)................. 21

, ee 9908 5072s ain cs eo 4, 11, 15

§ 303(c)(2)(A), 33 U.S.C. § 1313(c)(2)(A) ........ 11, 12

| § 401(a)(1), 33 U.S.C. § 1341(a)(1)............. passim

TABLE OF AUTHORITIES - Continued

Page

§ 401(a)(2), 33 U.S.C. § 1341(a)(2)................. 13

ge RR toe Se ere re passim

S SURG), SS UGC. & TRGRIIG). «occ ccccccssccencs 19

Re RR el Gg, a ee 19

S Fee ae ees Oh LP i as ieee eel 13, 21, 22

Federal Power Act, 16 U.S.C. §§ 791-828 (1988)

A ee es Te EE 5 06a 60AR Ses nwaaine.cme nic 21

Fi ae SE UU ASS ec dic nacodsspbesse cizagar 3

REGULATIONS

sepenee Sout Rake 160.1)... .. 2... 2. ccc ccecsvens 18

we rn ee 3, 20

re aia hs kpc bisa vce ccaneteuce 11

ee 12

Vermont Water Quality Standards

VERS Oe PUD CEFSED voce cc cc cnccccccencce 4

Ve Pe CRUD oo cb eee ckesccerenene ee Oe

MIscELLANEOUS

2A Singer, Sutherland Statutory Construction,

es ENS sc bwcbitees chs cy eik en dda Cadeedatcee> 20

H.Rep.No. 92-911, 92nd Cong. 2d Sess. 76-77

ES ae ia Noni OE AS SCE SA 2

No. 92-1012

In The

Supreme Court of the United States

October Term, 1992

SIMPSON PAPER (VERMONT) COMPANY,

Petitioner,

DEPARTMENT OF ENVIRONMENTAL CONSERVATION

and SIERRA CLUB,

Respondents.

‘

On Petition For A Writ Of Certiorari To The

Supreme Court Of The State of Vermont

JOINT RESPONSE OF THE STATE OF VERMONT,

DEPARTMENT OF ENVIRONMENTAL

CONSERVATION AND THE SIERRA CLUB IN

OPPOSITION TO PETITION FOR

WRIT OF CERTIORARI

STATEMENT OF THE CASE

The Connecticut River is New England’s grandest

and most important river. Rising in Northern New

Hampshire, it flows the length of Vermont and New

Hampshire and continues south through Massachusetts

and Connecticut, where it finally meets the Atlantic.

The Connecticut is also a working river. It has been

extensively developed to serve New England’s industrial,

waste disposal and electrical needs. The enactment of the

Clean Water Act, however, has obligated those who dis-

charge into the River to share in the restoration and

maintenance of its “chemical, physical and biological

integrity.” 33 U.S.C. § 1251(a).!

The Georgia-Pacific Corporation and its successor,

the Simpson Paper Company (hereinafter referred to as

“Simpson”), however, continue to strenuously avoid their

obligations under the Clean Water Act. Simpson owns

and operates the Gilman Dam in Lunenburg, Vermont

which, together with its impoundment, were built in the

early 1900s. Pet. App. 6a, 19a. It is operated as a hydro-

electric generating facility; electricity produced by the

dam powers Simpson’s adjacent paper mill. Pet. at 11.

The dam severely harms the Connecticut River’s chemi-

cal, physical and biological characteristics by flooding

several miles of the River and altering its natural flow.

Pet. App. 7a-12a, 21a-26a. All water that was oxygenated

as it flowed over the dam site’s natural drop in elevation

is now impounded and diverted under the dam and

through its turbines and deprived of the natural aeration

process. Pet. App. 20a-21a. What was once highly oxy-

genated, fast flowing white water is now flat water. What

was once a riverine ecosystem is now a lake-like ecosys-

tem.

1 The report of the House committee on Public Works

which accompanied the House bill from which the Clean Water

Act arose states that “the word ‘integrity’ as used is intended to

convey a concept that refers to a condition in which the natural

structure and function of the ecosystem is maintained.”

H.Rep.No. 92-911, 92nd Cong. 2d Sess. 76-77 (1972), reprinted in

1 Leg. Hist. 753, 763-64. See also Avoyelles Sportsmen's League, Inc.

v. Alexander, 511 F.Supp. 278, 286 (W.D. La. 1981).

RSTn ted ete see ey irked aie 47S

icons he Na Re Nid nace

The dam’s operation is governed by a license issued

by the Federal Power Commissior™~(now the Federal

Energy Regulatory Commission) in 1965 with an effective

date retroactive to January 1, 1941 and an expiration date

of December 31, 1990.2 Pet. at 11. That license adopted

operating standards developed in the 1930s when the

dam was first converted to a hydroelectric facility.

Because it was issued well before the 1972 enactment of

the Clean Water Act (CWA), the 1941 license does not

contain any provisions to protect the Connecticut River’s

water quality.

In September of 1988, Simpson applied to the FERC

for relicensure of the dam and simply proposed to con-

tinue operating the dam under the conditions of its 1941

license. Pet. App. 23a.

On August 3, 1988, as part of its application for

relicensure, Simpson requested a water quality certificate

from the Vermont Department of Environmental Conser-

vation. See 33 U.S.C. § 1341(a)(1); 18 C.F.R. § 4.38(c)(2)

(1988); 10 Vt.Stat.Ann. § 1004 (1987)°. Again, Simpson

asked to continue operating the dam under the same

terms as set forth in its 1941 license. Pet. App. 15a-16a.

Simpson made no proposals to comply with the Clean

2 On January 17, 1991, the FERC issued an annual license

allowing Simpson to continue operating the Gilman Dam under

the terms of the 1941 license. See 16 U.S.C. § 808. The FERC is

apparently awaiting the outcome of this matter before issuing

Simpson’s new license.

3 The Department of Environmental Conservation is within

the Vermont Agency of Natural Resources (VANR). 3

Vt.Stat.Ann. § 2802(a)(5) (1987). r

Water Act or to otherwise address the dam’s impact on

water quality. Id.

The portions of the Connecticut River relevant to this

matter are Class B waters. Pet. App. 3a, 1la, 20a-21a.

Class B waters must be managed to assure compliance

with water quality criteria established by Vermont’s

Water Quality Standards. The one criterion at issue in this

matter is for dissolved oxygen (DO); the criterion

requires that DO levels never fall below 6.0 mg/1 or 75%

saturation. Vermont Water Quality Standard (Vt. WQS)

3-01(B)(1)(a) (1987).

The Water Quality Standards also establish beneficial

values and uses for which the River must be managed.®

Class B waters must be managed so that they consistently

* Contrary to Simpson’s claims, Pet. 13-14, and despite the

DEC’s repeated and timely entreaties, Simpson made no effort

whatsoever to address the DEC’s concerns over dissolved oxy-

gen levels until well after Vermont had issued Simpson’s Water

Quality Certificate. Indeed, the Superior Court found that “the

record before the DEC is bare of any formal presentation by

plaintiffs of their proposed management plan despite knowl-

edge as early as 1983 that DO deficits existed downstream of the

dam.” Pet. App. 15a-16a.

5 A limited segment of the Connecticut downstream of the

Gilman Dam was a Class C water because of the discharge of

Simpson’s mill wastes. Vermont has since eliminated Class C

waters, 10 Vt.Stat.Ann. § 1253(b) (1987); this limited segment of

the river is now considered a “waste management zone.” 10

Vt.Stat.Ann. § 1252(d) (1991). The dam itself and the reach of the

River affected by the DO deficits are, and at all times relevant to

this matter have been, Class B waters.

6 The Vermont Water Quality Standards refer to designated

uses, 33 U.S.C. § 1313, as “beneficial values and uses.”

EN An SW ALE, inc NN lath I pAb Shs atti hs

—~

exhibit good aesthetic value, provide high quality habitat

for aquatic biota, fish and wildlife, and may be used for

swimming and recreation. Vt. WQS § 3-03(A).

Vermont issued Simpson’s water quality certificate

on July 28, 1989. Pet. App. 28a. The certificate requires

Simpson to spill 210 cubic feet of water per second (cfs)

over the crest of the dam from June 1 through October 15

of each year for the express purpose of meeting Ver-

mont’s DO criterion. Pet. App. 23a-24a. In addition to the

numerous findings relating to compliance with the DO

criterion, Vermont found that spillage “will also serve to

restore to a degree the aesthetics of this river reach. This

is particularly important during the high public recre-

ational use period.” Pet. App. 26a.

Simpson, maintaining that it should be allowed to

continue its “historical mode” of operation of the dam,

petitioned the Vermont Superior Court for review of its

water quality certificate. Record, Second Amended Com-

plaint for Review (1/4/91) at 7. Simpson’s exclusive

claim, as framed by its Second Amended Complaint,

related to compliance with Vermont’s DO criterion. Id.

The Superior Court affirmed the water quality certifi-

cate. Pet. App. 17a. It made numerous, detailed findings

supporting the DEC’s conclusion that DO deficits caused

by the dam necessitated the 210 cfs spillage requirement.

Pet. App. 6a-12a. The Superior Court also held that “[t]he

aesthetic determination forms a strong independent basis

upon which to uphold the 210 cfs continuous spill

requirement.” Pet. App. 14a.

Simpson appealed to the Vermont Supreme Court.

Simpson’s primary claim was that there was insufficient

evidence in the record demonstrating that spillage was

necessary to alleviate violations of Vermont’s DO crite-

rion. Resp. App. 18a-25a, 44a-58a. The Vermont Supreme

Court affirmed.

REASONS FOR DENYING THE PETITION

Certiorari should be denied because, contrary to peti-

tioner’s assertions:

1. The Vermont Supreme Court’s judgment rests on

adequate, independent state grounds not challenged by

Simpson.

2. The Vermont Supreme Court affirmed a proper

exercise of state authority under § 401 of the Clean Water

Act.

3. There is no division among any courts concerning

the aesthetics and recreation issue addressed by the Ver-

mont Supreme Court.

4. Arguments raised by Simpson were not raised

before the Vermont Supreme Court, and in any event are

groundless.

I. THE VERMONT SUPREME COURT’S JUDGMENT

RESTS ON ADEQUATE, ALTERNATIVE STATE

GROUNDS NOT CHALLENGED BY SIMPSON

Although the Vermont Supreme Court’s Entry Order

rests upon two independent, substantive grounds, Simp-

son’s petition seeks review of only one of these grounds.

Simpson does not dispute the Vermont Supreme Court’s

primary conclusion that “[t]he spillage requirement was

amply supported by the evidence” —- evidence that details

the need to continuously spill 210 cfs to comply with the

dissolved oxygen criterion established by Vermont's

Water Quality Standards.

This Court, “from the time of its foundation has

adhered to the principle that it will not review judgments

of state courts that rest on adequate and independent

state grounds.” Herb v. Pitcairn, 324 U.S. 117, 125 (1945).

This principle rests on “the jurisdictional concern [that

the Court] not ‘render an advisory opinion, and if the

same judgment would be rendered by the state court after

we corrected its views of federal laws, our review could

amount to nothing more than an advisory opinion.’ ”

Michigan v. Long, 463 U.S. 1032, 1042 (1983) (quoting Herb,

324 U.S. at 126). The Court’s power pursuant to a writ of

certiorari “is to correct wrong judgments, not to revise

opinions.” Herb, 324 U.S. at 126; Coleman v. Thompson, __

U.S. __, 111 S.Ct. 2546, 2554 (1991).

Simpson bears the burden of establishing that the

Vermont Supreme Court’s judgment does not rest on

independent state grounds. Michigan v. Long, 463 U.S. at

1042, n. 8; Durley v. Mayo, 351 U.S. 277, 285 (1956). Simp-

son cannot meet that burden, because the Vermont

Supreme Court's decision provides a concise and “plain”

statement of the independent state grounds upon which

it rests. See Michigan v. Long, 463 U.S. at 1044.

Simpson’s claim that the Vermont Supreme Court

affirmed Simpson’s water quality certificate “on the sole

ground that aesthetics and recreation were an appropri-

ate basis for the spill condition,” Pet. 16, is without

foundation. Simpson framed the two substantive issues to

which the Court responded: “Plaintiffs lastly contend that

the spillage requirement was not supported by the evi-

dence and that it was beyond the DEC’s authority under

federal law to consider aesthetic and recreational factors

as grounds for a spillage requirement.” Yet. App. 3a

(emphasis added).

The Court ruled that the spillage requirement “was

amply supported by the evidence.” Pet. App. 3a. The

evidence with which Simpson took issue related exclu-

sively to compliance with Vermont’s dissolved oxygen

criterion. Resp. App. 18a-25a, 44a-58a. The Vermont

Supreme Court thus concluded that compliance with the

DO criterion warranted the spillage requirement.

The Court then held that “[nJot only were aesthetics

and recreation considered relevant, ease of administra-

tion and monitoring were fostered by the requirement.”

Pet. App. 3a. The reference to ease of administration and

monitoring was in direct response to Simpson’s claim

that its scheme to monitor and manage DO levels in the

Connecticut River was arbitrarily rejected by the DEC.

Resp. App. 16a, 23a-25a, 37a-44a. Indeed, the Superior

Court’s finding upon which the Vermont Supreme

Court’s reference is based states that:

the [210 cfs spill flow] proposed by the VANR

[Vermont Agency of Natural Resources] uses

spill flow at the dam, an easily gaged [sic] and

monitored parameter, to meet specific future DO

goals downstream of the project. The applicant's

proposed water quality management plan, which

depends on an unproven predictive water quality

model, would be difficult to monitor and enforce for

compliance with the goal of maintaining DO at the

sag point.

Pet. App. at 17a (emphasis added by the Superior Court).

Thus, even in addressing aesthetics and recreation,

the Vermont Supreme Court made it clear that its holding

on this issue was independent of compliance with the DO

criterion. Furthermore, the words, “not only” plainly

demonstrate that the Court did “not only” consider aes-

thetics and recreation as a basis for the spillage condition.

Simpson, despite having framed each of the issues to

which the Vermont Supreme Court responded, claims to

be “without explanation” for the Court’s reference to

“ease cf administration and monitoring.” Pet. 16 n. 35.

Nor does Simpson offer an explanation for the Court’s

conclusion that spillage is amply supported by the evi-

dence. The explanation is plain and simple - the Vermont

Supreme Court based its judgment on compliance with

Vermont’s DO criterion as well as aesthetics and recre-

ation. Simpson’s petition should therefore be denied. See

Michigan v. Long, 463 U.S. at 1042.

Il. A STATE WATER QUALITY STANDARD NEED

NOT BE QUANTITATIVE TO BE AN “APPROPRI-

ATE REQUIREMENT OF STATE LAW.”

Even if the Vermont Supreme Court’s clear ruling

concerning the quantitative dissolved oxygen criterion

could be ignored, the challenged certification must still

be upheld as a valid application of Vermont’s power to

apply its non-quantitative water quality standards - spec-

ifically, that portion of the standards that requires “water

of a quality which consistently exhibits good aesthetic

value . . . and recreation.” Vermont Water Quality Stan-

dards § 3-03, quoted at Pet. App. 3a.

Simpson’s entire argument concerning aesthetics and

recreation rests on a misrepresentation of what was actu-

ally decided below. According to Simpson, “[i]t is evident

that the only concern of the Vermont tribunals regarding

aesthetics and recreation was for the scenic vista which

supposedly would be presented by water spilling over

the Project crest gate to recreating tourists.” Pet. 23-24. To

the contrary, the DEC certificate clearly states:

Spillage of 210 cfs for protection of down-

stream water quality during the period June 1

through October 15 will also serve to restore to a

degree the aesthetics of this river reach. This is

particularly important during the high public

recreational use period.

Pet. App. 26a (emphasis added). It is this finding — not

Simpson’s imaginary finding concerning the aesthetics of

cascading water — that was affirmed by the Vermont

courts.

Once the clear water quality basis for the spillage

condition is recognized, Simpson is left with the far nar-

rower assertion that only quantitative water quality stan-

dards can form a proper basis for a § 401(d) condition on

a certificate. Pet. 22 (“Management goals such as promo-

tion of aesthetic ‘values’ and recreational ‘uses’ are to be

achieved through implementation of specific, quantifiable

‘criteria.’ ”). But § 401(d) authorizes conditions to ensure

compliance with “any other appropriate requirement of

State law,” not “any other appropriate quantitative

requirement of State law.”

Indeed, not just designated uses, but criteria also,

may be non-quantitative. 40 C.E.R. § 131.3(b) (1991) (crite-

ria may be “expressed as constituent concentrations,

levels, or narrative statements representing a quality of

water that supports a particular use”) (emphasis added).

Simpson’s insistence on quantitative rules would thus

mean that some water quality criteria could be neither

implemented nor enforced.

Moreover, excluding the non-quantitative portions of

a state’s water quality standards from § 401(d) would

produce results opposite to those desired by Simpson.

Under § 401(a)(1), a state must deny certification outright

if the proposed activity does not comply with § 303 of the

Act.7 Section 303, in turn, expressly provides that a state

water quality standard “shall consist of the designated

uses of the navigable waters involved and the water qual-

ity criteria for such waters based upon such uses.” 33

U.S.C. § 1313(c)(2)(A) (emphasis added).

Thus, if an applicant’s discharge would violate either

the non-quantitative designated uses or the quantitative

criteria, the state must deny certification. If, as suggested

by Simpson, Vermont was precluded from imposing con-

ditions to assure compliance with its Standards, Vermont

would have no choice but to deny certification under

§ 401(a)(1) and thereby preclude the FERC from issuing a

7 Simpson does not contend that Vermont’s consideration

of aesthetics and recreation stems from any state law other than

Vermont's Water Quality Standards. Simpson concedes that Ver-

mont’s Standards were approved by the E.P.A. pursuant to § 303

of the Act and conform to the format imposed by EPA’s regula-

tions. Petition at 24.

license.8 Surely a license with conditions serves Simp-

son’s interest better than no license at all.

Simpson argues that, as a matter of law, compliance

with the numerical criteria constitutes full compliance

with any non-quantitative designated uses. Again, Simp-

son’s argument finds no support in the Clean Water Act,

which indicates merely that criteria are “based upon”

designated uses, 33 U.S.C. § 1313(c)(2)(A), not that com-

pliance with the criteria necessarily guarantees compli-

ance with those uses. Indeed, EPA’s regulations

specifically require that dams be operated to attain desig-

nated uses, 40 C.F.R. § 131.10(g)(4) (1991), and provide

that “[w]hen criteria are met, water quality will generally

protect the designated use,” 40 C.F.R. § 131.3(b)

(emphasis added). The EPA thus recognizes that there

will be instances where the use remains unprotected not-

withstanding compliance with the criteria.

Simpson’s argument thus boils down to the assertion

that the present case is not one of those instances - i.e.,

that the challenged spillage condition is not necessary to

ensure compliance with Vermont’s designated uses. Pet.

25 (“The DEC never proved or even claimed that DO

levels affect aesthetics or recreation.”) This contention

raises no federal issue, but rather concerns only Ver-

mont’s interpretation and application of its own Water

Quality Standards.?

8 § 401(a)(1) (“No license or permit shall be granted if

certification has been denied by the State, interstate agency, or

the Administrator, as the case may be.”)

9 Because the CWA expressly preserves the states’ right to

adopt more stringent requirements than those imposed by

This Court’s opinion in Arkansas v. Oklahoma, __ U.S.

__, 112 S.Ct. 1046 (1992), cited in Pet. 22-23, is of no

assistance to Simpson. In that case Oklahoma challenged

a permit for a discharge in Arkansas. Under § 401(a)(1), a

state has the right to issue a water quality certificate only

if it is the state “in which the discharge originates or will

originate.” Because the discharge originated in Arkansas,

Oklahoma was relegated to § 401(a)(2), which did not

require Oklahoma’s certification as a prerequisite to per-

mit issuance, but rather required EPA to make the appli-

cable decisions about compliance with Oklahoma’s water

quality standards.'° These circumstances provide the con-

text for the Court’s observation that “at least insofar as

they affect the issuance of a permit in another State, the

Oklahoma standards have a federal character.” Arkansas

v. Oklahoma, 112 S.Ct. at 1059 (emphasis added).

In this case, by contrast, the discharge originates in

Vermont,!! so that section 401(a)(1) applies rather than

§ 401(a)(2). Under 401(a)(1), the Vermont DEC, not EPA,

is charged with the duty of interpreting and applying

Vermont’s Water Quality Standards. Whether Vermont

federal law, § 510, there is no basis for this Court to hold that

Vermont's standards - either on their face or as interpreted and

applied by Vermont - are too stringent.

10 CWA § 401(a)(2) (“the licensing or permitting agen-

cy... shall condition such license or permit in such manner as

may be necessary to insure compliance with applicable water

quality requirements.”) (emphasis added). In Arkansas v. Okla-

homa, the “licensing or permitting agency” was EPA itself.

11 Specifically, the penstock (through which water from

above the dam is discharged into the river below the dam) is

located in Vermont.

has correctly interpreted its Standards poses no federal

issue.

Ill. THERE IS NO CONFLICT AMONG THE STATE

COURTS CONCERNING THE ENFORCEABILITY

OF “DESIGNATED USES” UNDER CWA § 401(d).

Simpson asserts that state courts are “divided;” while

some have “properly interpreted § 401 to preclude impo-

sition of conditions, or outright denial of a certification,

on non-water quality related grounds[,] . . . [t]he Vermont

Supreme Court has ruled to the contrary.” Pet. 19 (foot-

note omitted). The Vermont Supreme Court did no such

thing. Rather, it upheld application of the aesthetics and

recreation provisions of Vermont’s Water Quality Stan-

dards. Pet. 3a.

On the true issue posed by Simpson’s petition, none

of the cases Simpson cites (nor any others of which

respondents are aware) creates a conflict: none rules that

§ 401(d) conditions must be based only on the quantita-

tive or numerical portion of a state’s water quality stan-

dards.

Indeed, one of Simpson’s cited cases actually under-

cuts its position. In Arnold Irrigation District v. Department

of Environmental Quality, 717 P.2d 1274 (Or.App. 1986), the

Court held that § 401(d) conditions must go beyond water

quality standards and include water-quality-related por-

tions of county land use regulations:

Many uses of land may affect water quality,

even if they do not immediately result in direct

discharges to the state’s waters . . . If [the

state] .. . grants petitioners’ request for a certifi-

cate, it must require, as a condition of that certif-

icate, that petitioners comply with the water-

related portions of the Deschutes County land

use regulations.

717 P.2d at 1279.'2

And in a case not cited by Simpson, Maine’s highest

court rejected the narrow interpretation of “designated

uses” advanced by Simpson here:

Bangor Hydro contends that there is an irrebut-

table presumption that waters are “suitable for”

their designated uses if they meet the numerical

criteria of section 465(4)(B) [of the Maine water

quality standards) and that the Board has no

charter to inquire whether the designated uses

actually exist, or can exist, in a river. We dis-

agree.

_. . We cannot conclude that the designated uses

included in section 465 are mere surplusage. The

level of detail bespeaks a considered determina-

tion of the public interest. This legislative deter-

mination would be rendered a nullity if the

agency responsible for reviewing compliance

could consider only the numerical criteria and

12 The court also rejected a claim by conservationists that

because hydroelectric development was not specifically

included in the state’s § 303 designated uses, the state was

barred from granting a certificate to a hydroelectric project. 1d.

at 1279-80. The court did not hold or suggest, however, that the

state was barred from including § 401(d) conditions designed to

protect those designated uses. Certainly if non-quantitative

land use regulations are properly within the scope of § 401(d),

non-quantitative water quality standards must be as well.

not whether the designated uses actually were

achieved in a particular river.

Bangor Hydro-Electric Co. v. Board of Environmental Protec-

tion, 595 A.2d 438, 442 (Me. 1991) (footnote omitted).

Accord, id. at 442 n.4 (“The statutory statement of purpose

suggests the intent to include the narrative criteria as an

integral part of the water quality standards that the Board

must consider in its review.” )'

Likewise, none of the other cases cited by Simpson

hold or even suggest that non-quantitative water quality

standards do not constitute a valid basis for a § 401(d)

condition. The two New York cases hold that § 401 does

not empower the states to consider matters “unrelated to

their water quality standards,” but do not hold that non-

quantitative portions of state standards are unenforce-

able. Power Authority v. Williams, 60 N.Y.2d 315, 457

N.E.2d 726, 730 (1983); de Rham v. Diamond, 32 N.Y.2d 34,

295 N.E.2d 763, 768 (1973). Indeed, in a case not cited by

Simpson, Long Lake Energy v. Dept. of Env. Cons., 563

N.Y.S.2d 871 (A.D.3 Dept. 1990), a New York court relying

on Williams and de Rham held that enhancement of a

fishery and associated aquatic resources is within the

purview of the § 401 process.

The Connecticut case (which is currently on appeal)

overturned an outright denial of a § 401 certificate, where

13 Because the case before the Maine Court involved only a

state request for information, the Court did not rule on whether

the State could ultimately base a § 401(d) condition on the

designated uses. 595 A.2d at 443. Nonetheless, the Court’s rea-

soning strongly suggests that such a condition would be

upheld.

the denial was based on aesthetic concerns relating to the

quantity of water in the river. Summit Hydropower v. Com-

missioner of Environmental Protection, LEXIS 2177, *23,

(Conn. Super. July 20, 1992) (“The Commissioner con-

cluded .. . that the viewing of Cargill Falls is a recre-

ational use and that the project would have a detrimental

effect on the aesthetic quality of viewing the falls by

reducing the water level of the natural river flow.”). The

court specifically noted that “(t]he Commissioner does

not claim that the project will in any way affect the

aesthetics of the water itself, namely, how the water

looks.” Id. Accord, id. at *27 (“nor does the Commissioner

claim that the proposed project will affect the water qual-

ity of the Quinebaug River in any way’).

Finally, the Pennsylvania case held that § 401 does

not encompass “the impact of physical changes in the

river on aquatic resources and the effect of the project on

wetlands and fish migration.” Pennsylvania Dept. of Envi-

ronmental Resources v. City of Harrisburg, 578 A.2d 563, 567

(Pa.Cmwlth. 1990). The court did not address aesthetics,

and certainly did not hold that only numerical water

quality criteria are enforceable under § 401(d)."

4 The Pennsylvania and Connecticut courts suggested that

§ 401 only applies to a “discharge of a pollutant.” Summit, LEXIS

2177 at °27; Pennsylvania DER, 578 A.2d at 567. As indicated

below, this issue is not properly before this court, see pp- 19-20,

infra, so any conflicts among the state courts concerning it have

no bearing on the advisability of certiorari here.

IV. CLAIMS NOW RAISED BY SIMPSON WERE NOT

ADEQUATELY AND SQUARELY PRESENTED TO

THE VERMONT SUPREME COURT

The other arguments raised by Simpson in support of

its Petition were not raised before the Vermont Supreme

Court. This Court has made it clear that it will only

entertain issues that were both raised and adequately and

squarely presented before the state courts. Banker's Life

and Casualty Co. v. Crenshaw, 486 U.S. 71, 76-80 (1988);

Webb v. Webb, 451 U.S. 493 (1981). “At the mini-

mum... there should be no doubt from the record that a

claim under a federal statute . . . was presented in the state

courts and that those courts were apprised of the nature

or substance of the federal claim at the time and in the

manner required by state law.”15 Webb, 451 U.S. at 501

(emphasis in original). Vermont law, in turn, requires that

an issue be raised and “fairly presented” to be preserved

for appellate review. Lanphere v. Beede, 141 Vt. 126, 129,

446 A.2d 340, 341 (1986). The respondents enumerate

each of these claims and, though each is precluded, offer

a brief substantive response to each.

15 Rule 14.1 (h) requires a petitioner to “specify the stage in

the proceedings, both in the court of the first instance and in the

appellate courts, at which the federal questions sought to be

reviewed were raised; the method or manner of raising

them . .. and such pertinent quotations of specific portions of

the record or summary thereof, with specific reference to the

places in the record where the matter appears.” Simpson utterly

failed to comply with its obligations under this rule insofar as

the claims addressed in this section are concerned.

A. THE CLEAN WATER ACT

Relying on the statutory definition of the term “dis-

charge” (the key term in § 401(a)(1) that triggers the

applicability of the state certification requirement), Simp-

son suggests that state jurisdiction under § 401(a)(1) is

lacking because reduced dissolved oxygen levels attribu-

table to a dam do not constitute a “discharge of a pollu-

tant or pollutants.” Pet. 21-23, n. 51, quoting CWA § 502

(16). Simpson, however, affirmatively stated to the Ver-

mont courts that it “no longer contend{s] that the State of

Vermont has no authority at all to regulate the Gilman

Dam through the § 401 process, because the Dam and its

‘run-of-river’ operation is not a ‘discharge’ for purposes

of state and federal law.”** Motion to Amend Complaint

16 Simpson contended defore the Vermont Supreme Court

that the provisions enumerated in section 401(a)(1) “plainly

relate to objective water quality criteria and elimination of water

pollution.” Resp. App. 59a (emphasis added). “The term ‘pollu-

tion’ means the man-made or man-induced alteration of the

chemical, physical, biological, and radiological integrity of

water.” 33 U.S.C. § 1362(19). A dam is unquestionably a

man-made alteration of the physical, chemical (e.g. DO) and

biological integrity of water, and thus causes “pollution”.

National Wildlife Federation v. Gorsuch, 693 F.2d 156, 165 (D.C.

Cir. 1982) (EPA concedes that dams cause “ pollution”). Indeed,

Simpson conceded that “Vermont has duly enacted applicable

water quality standards and there is no dispute that those stan- —

dards and the [Clean Water] Act generally are applicable to the

Gilman Dam.” Resp. App. 60a. By conceding not only the appli-

cability of § 401 to “pollution,” but the applicability of Ver-

mont’s Water Quality Standards and the Clean Water Act to the

Gilman Dam, Resp. App. 59a-60a, Simpson further waived its

ability to presently claim otherwise.

(1/4/91) (granted, Jan. 16, 1991). Simpson cannot now

raise this issue.

In any event, Simpson’s quotation leaves out a key

word of the definition: “The term ‘discharge’ when used

without qualification includes a discharge of a pollutant,

and a discharge of pollutants.” § 502(16) (emphasis

added). See 2A Singer, Sutherland Statutory Construction

§ 47.07, at 152 (1992) (“It has been said ‘the word

“includes” is usually a term of enlargement, and not of

limitation. . . . It, therefore, conveys the conclusion that

there are other items includable, though not specifically

enumerated ... .’”) (citation omitted).!”

Simpson also neglects to mention that the FERC’s

regulations expressly require compliance with the

§ 401(a)(1) state certification requirement as a prerequi-

site to issuance of an FERC hydroelectric license. 18

C.F.R. § 4.38(c)(2) (1988).

B. THE FEDERAL POWER ACT

Simpson’s petition also claims, for the first time, that

“Vermont's broad reading of § 401 as applied to hydro-

electric projects amounts to a partial repeal of the Federal

Power Act (FPA) by implication.” Pet. 26-27. Simpson

never even cited the Federal Power Act to the Vermont

Supreme Court. See Bankers Life and Casualty, 486 U.S. at

17 National Wildlife Federation v. Gorsuch, cited in Pet. 23 n.51,

is of no assistance to Simpson because it construes § 402(a)(1)

(which applies to “the discharge of any pollutant”) (emphasis

added), not § 401(a)(1) (which applies to “any discharge into the

navigable waters”).

78. Simpson certainly never asserted that Vermont's

Water Quality Standards or the water quality certificate

were “repugnant” to the Federal Power Act. 28 U.S.C.

§ 1257(a). Simpson cannot now, for the first time, raise

such issues. Id; Webb, 451 U.S. at 496.

In any event, this claim has no merit. There is noth-

ing “implif[ed]” about the requirement for a state water

quality certification, the state’s power to attach condi-

tions to that certification, or the state’s power to adopt

and apply water quality requirements stricter than fed-

eral law: all are explicit on the face of §§ 401 and 510. It is

Simpson who would repeal a congressional enactment, by

reading into the Clean Water Act limitations that Con-

gress did not create. Indeed, Simpson’s argument would

contravene not only the letter of the CWA, but also its

underlying intent to “recognize, preserve, and protect the

primary responsibilities and rights of States to prevent,

reduce, and eliminate pollution.” 33 U.S.C. § 1251(b).’®

18 None of the Federal Power Act cases cited by Simpson

(Pet. 27-28) construe the Clean Water Act, and certainly none

provides any basis for disregarding the clear terms of CWA

§§ 401 and 510.

Equally misplaced is Simpson’s argument (Pet. 28) that FPA

§ 10(j) limits state authority to impose fish and wildlife condi-

tions. Simpson decided not to challenge the certificate’s fish

passage condition in the Vermont courts (Pet. 14 n. 31), and, as

stated above, never cited any provision of the Federal Power

Act to the Vermont Supreme Court. Accordingly, Simpson may

not raise that challenge here.

Finally, Simpson erroneously suggests that CWA § 102(b)(6)

limits Vermont’s authority to include spillage requirements ina

§ 401(d) certification. Pet. 26 & n. 53. Again, Simpson never

cited this provision before the Vermont Court. In any event,

§ 102(b)(6) applies only to “storage for regulation of

Second, Simpson argues that “[s]tate aesthetic or rec-

reational conditions unrelated to water quality could

frustrate FERC’s role as the exclusive forum for compre-

hensive licensing of hydroelectric uses of navigable

waterways.” Pet. 25. But as respondents have shown

above, the 210 cfs condition is related to water quality.

Finally, noting that Vermont and New Hampshire

reached different conclusions concerning the necessity of

a spillage condition,!9 Simpson also argues that “[iJn the

FPA, Congress vested exclusive licensing authority in a

single federal agency in order to avoid such inconsisten-

cies.” Pet. 26. This is a non-sequitur. Application of

§ 401(a)(1) in the boundary waters situation always raises

the possibility that one state will be stricter than another.

This possibility is just as real when both states base their

certifications on purely quantitative water quality stan-

dards (which Simpson concedes they may do) as when

one of them applies a non-quantitative standard. In either

streamflow.” (Emphasis added.) The challenged condition of

the DEC certificate requires spillage, not storage.

19 Simpson’s characterization suffers from several inac-

curacies. First, Vermont's spill condition is not “directly con-

trary to New Hampshire’s § 401 certification that the project is

in full compliance with that state’s water quality standards.”

Pet. 25. The Vermont condition was based on Vermont's stan-

dards, and therefore is in no way contrary to New Hampshire’s

conclusion that its own standards were met.

Moreover, Simpson’s assertion that the Gilman Dam is

located entirely in New Hampshire waters (Pet. 26) ignores two

other key facts: the “discharge” that gives rise to § 401(a)(1)

jurisdiction occurs in Vermont (see p. 13, supra), and the waters

above and below the dam are partly in Verraont. Vermont v. New

Hampshire, 289 U.S. 593 (1933).

case, the result is clearly dictated by §§ 401(a)(1) and 510:

the stricter condition controls. See Arnold, 717 P.2d at 1278

n.4 (court distinguishes First lowa Hydro-Electric Coop. v.

Federal Power Comm’n, 328 U.S. 152 (1946), stating: “In the

CWA, Congress has created an independent state role in

all federal actions involving discharges into navigable

waters; the question is not Congressional preemption but

what criteria Congress intended the states to consider in

deciding whether to issue certificates of compliance with

the act.”).

Vv. CONCLUSION

Simpson’s petition for a writ of certiorari should be

denied.

Dated: February 16, 1993

State of Vermont

Jerrrey L. Amestoy

Attorney General

by: Ronatp A. SHEMs

(Attorney of Record for

Respondent VT DEC)

Assistant Attorney General

Pavilion Office Building

109 State Street

Montpelier, VT 05609-1001

(802) 828-3171

Sierra Club

by: Howarp I. Fox, Eso.

(Attorney of Record for

Respondent Sierra Club)

Sierra Club Legal Defense Fund

1531 P Street, N.W.

Suite 200

Washington, D.C. 20005

(202) 667-4500

- Me Tokorepeere

Li aks Se ioag eee, :

za saieaa <j

ee weve ree: :

Mp) Sag? Sete hd St

SUPREME COURT

OF THE

STATE OF VERMONT

No. 91-530

GEORGIA-PACIFIC CORPORATION

and SIMPSON PAPER (VERMONT) CO., INC.,

Plaintiffs / Appellants

Vv.

DEPARTMENT OF ENVIRONMENTAL

CONSERVATION and SIERRA CLUB,

Defendants / Appellees

On Appeal From The Washington Superior Court

No. $473-89 WnC

APPELLANTS’ BRIEF

GRAVEL AND SHEA

Attorneys for Appellants

76 St. Paul Street

P.O. Box 369

Burlington, VT 05402

802-658-0220

TABLE OF CONTENTS

TABLE OF AUTHORITIES ................ iii-vii [3a-7a]

SUMMARY DESCRIPTION OF THE CASE AND

PROCEEDINGS BELOW ...............-sseeee- 1 [8a]

STATEMENT OF ISSUES............222---eeeee- 3 [10a]

STATEMENT OF FACTS ...........--eeceeeeeees 4 [lla]

SPECIFIC FACTUAL DETERMINATIONG....... 10 [18a]

(A) The 1989 Computer Modeling........... 10 [18a]

(B) Frequency Of Necessary High Tempera-

COPED. 00.06 onsek Uns dewe Seek ed dite cease 12 [21a]

PUD vc kvevncicsnansacaundburniode 13 [22a]

(D) Simpson Constantly Attempted To Engage

DEC In Substantive Analysis Of A Workable

Alternative To Continuous Spillage. ..... 14 [23a]

ARGUMENT o's 0s cba cccaleticio ies Hide 16 [25a]

Il. UNDER VERMONT LAW AND PRACTICE

THIS APPEAL SHOULD HAVE BEEN

REMANDED OR ACCORDED DE NOVO

SEV vidcecs onsen cece 16 [25a]

(A) De Novo Review Is Provided By Law

And Praee Praesens cos once 16 [25a]

(B) Alternatively, The Trial Court Should

Have Remanded This Case To The

Agency For Further Proceedings Under

Existing Rule 75 Practice.......... 20 [30a]

Il. DE NOVO REVIEW OR REMAND SHOULD

HAVE BEEN PROVIDED TO REMEDY

CONSTITUTIONAL DEFECTS......... 22 [31a]

(A): dun PR csi 22 [31a]

(B) Equai “7dtection.................. 25 [35a]

III. THE TRIAL COURT ABUSED ITS DISCRE-

TION IN DECLINING TO REMAND THE

CARE War We cncns 0 deene eae 27 [37a]

IV. EVEN ON “THE RECORD” INFORMALLY

CREATED BY DEC, THE CONTINUOUS

SPILLAGE REQUIREMENT IS UNSUP-

PORTED BY SUBSTANTIAL EVIDENCE

AND IS ARBITRARY AND CAPRI-

CIOUS, Co cciccrccvccsesscscscccscrvese 33 [44a]

(A) DEC Was Pre-Disposed To Impose A

Spillage Requirement Based On Funda-

mentally Erroneous Misconceptions

About The River And Simpson’s Facil-

HY. ccc cecceccececccceceecececees 38 [50a]

(B) DEC’s “DOSIM” Model, Even After

Refinement By Simpson’s Consultants,

Does Not Demonstrate A Water Quality

Violation Caused By The Gilman

BRR kc cece cb cscctscceecccccns 41 [54a]

Predict The Need For Or Support

DEC’s Imposition Of A Continuous

Spillage Requirement Of 210 cfs From

June 1 To October 15......-...---- 44 [56a]

V. 401 CERTIFICATIONS ARE LIMITED

SOLELY TO CONSIDERATION OF DEMON-

STRABLE WATER QUALITY VIOLA-

ds Fs 5k 5 Lo Uivseees'veve ee: 46 [58a]

VI. THE TRIAL COURT’S FINDINGS AND

CONCLUSIONS WERE CLEARLY ERRO-

NEOUS IN NUMEROUS MATERIAL

INSTANCES. .........----eeeeeeeeeeeee 49 [62a]

EE ESS ASE TEE POETS 50 [63a]

TABLE OF AUTHORITIES

CASES

Alexander v. Town of Barton, 152 Vt. 148 (1989)....... 26

In Re Ambassador Insurance Co., 153 Vt. 417 (1989) .... 24

Appeal of Stratton Corp., __ Vt. __, 2 Vt. Law

Week 411 (No. 90-278, 10/11/91) ................. 23

Arkansas v. Oklahoma, 60 U.S.L.W. 4176 (Nos.

Ey rick twats oenaath opitepbapetithss es «a% 17, 49

Arnold Irrigation District v. Department of Env.

Quality, 79 Or. App. 136, 717 P.2d 1274 (Or. Ct.

OF ON as B45 SPE AG i Eo ai Gee dane cece 48

Bangor Hydro-Electric Company v. Bd. of Env. Protec-

tion, __ A.2d __ (Me. Supreme Jud. Ct.,

FO REMAE bs hea os bev shades ac hiebeeeet tects cers 48

Bryant v. Town of Essex, 152 Vt. 29 (1989)............ 24

Burlington Firefighters’ Associate v. City of Bur-

CURR, DOE Vie SPURNED ha dnb cht eee dnesviccvores 26

— v. West Windsor Board of School Directors,

TSS Ve. DS CaN ere aire 22, 24, 31

—e— v. West Windsor Board of School Directors,

56K. Ee, Ie RE cde koh b at canescens ccna 20, 27, 31

Caledonian Record v. DET, 151 Vt. 256 (1989)......... 33

In Re Central Maine Power Co., FERC Reports

161,033, at p. 61,172-173 (1990) ................ 48, 49

Chapin Hill Estates, Inc. v. Town of Stowe, 131 Vt. 10

CERO Gea ais cA AS wre SUN Wee S ph iada teeta coe caus 17

Choquette v. Perrault, 153 Vt. 45 (1989)............... 26

Clark v. Weinberger, 389 F. Supp. 1168 (D.Vt. 1974),

afd, Stl Rad 1990 Gd Cie 1975)... 2.2... cnees’ 36

In Re Classification of Airport & Pond Brooks, 142 Vt.

458 (1983)... .ccscececccccccsccccrscssceresceseees 20

Condosta v. Vermont Electric Cooperative, Inc., 400 F.

Supp. 358 (D.Vt. 1975)........eeeeee cere eer erreees 22

Conservation Law Foundation v. Burke, et al., Docket

No. 1709-90 CnC (Chitt. Super. Ct., April 10,

DODEE: , cdks ceccncntssacrasspayecnnsaresarereseetss 27

In Re DeSautels Real Estate, Inc., 142 Vt. 326 (1982) .... 24

In Re Devoid, 130 Vt. 141 (1972)....-----eeeeeeerrees 34

Fourth Branch Associates v. Department of Environ-

mental Conservation, 550 N.Y.S.2d 769, 146 Misc.

2d 334 (N.Y.Sup.Ct., Albany Co., 1989)....------+- 48

Fyles v. Schmidt, 141 Vt. 419 (1982)......- cere cree 17

Gour v. Morse, 652 F. Supp. 1166 (D.Vt. 1987) ....--. 22

In Re Handy, 144 Vt. 610 (1984)....-----.eeererreees 34

Langlois v. Department of Unemployment and Train-

ing, 149 Vt. 498 (1988)...--...eeeeer seer cece etree 24

In Re Maple Tree Place, 2 Vt. Law Week 184 (1991)

oO ee hava e ee se ee Kes Reeees 27, 28, 29, 30, 31

Matter of Long Lake Energy Corp. v. New York State

Department of Env. Cons., 164 A.D.2d 396, 563

N.Y.S.2d 871 (3d Dept., App. Div., 1990)....------ 48

Matter of Niagara Mohawk Power Corp. v. New York

State Dept. of Env. Cons., Index No. 7218-90

(N.Y.Sup.Ct., Albany Co., April 1, a) Soe 48

In Re McShinsky, 153 Vt. 586 (1990) .....--- eee ee eeee 36

Merrow v. Goldberg, 672 F. Supp. 766, 674 F. Supp.

1130 (D.Vt. 1987).......-- cee reee rece ere ecner eee: 22

Molesworth v. University of Vermont, 147 Vt. 4

FR ai one cee h rer cree aaenieet een erns yee ee res 18

Myott v. Myott, 149 Vt. 573 (1988)................... 26

BU ae PO Ee yi css tween ccicsscoves 24

Nollan v. California Coastal Committee, 483 U.S. 825

GPPMR ANA Daa UINIEE SE Sains kD ins decdiestiecidiccese 24

ee ee kl . ee ee ne 36

Paquette v. Paquette, 146 Vt. 83 (1985) ............... 22

Perry v. Department of Employment of Training, 147

Fis Me MR OAS eS wauis cd vaicgkns deeds hance sev. 24

In Re Petition of Burlington Electric Department, 149

ef a rs get See ts ne a ee 35

Petition of Green Mtn. Power Corp., 131 Vt. 284

SPREE Aa ang sheiintat AEE ee ay Rais ke dake eee 25

In Re Potomac Edison Co., 34 F.E.R.C. | 61 (1986) .... 33

Robinson v. Via, 821 F.2d 913 (2d Cir. 1987).......... 22

State Department of Taxes v. Tri-State Ind. Laundries,

EG, TOO VR AER Gi hen kine 0 Se 34, 36

In Re Tariff Filing of Green Mountain Power, 138 Vt.

Sw ee TRE) RT eee TT ee ey te ee 33

The City of Pittsburgh, Order Issuing License, 48

ey OTN BFPO RT RP Peo gee > ERO ine eee 33

Vermont of New Hampshire, 289 U.S. 593 (1933)........ 5

Vincent v. Vermont State Retirement Boar, 148 Vt.

MER NOTES 6 cnt ntancukstunecasnoshenabeccs owas, 18, 25

Whitcomb v. DET, 147 Vt. 525 (1986)................. 33

In Re Williams Point Yacht Club, Docket No.

ER We moat ic kee = i NR BS ae eee 27

CONSTITUTIONS, STATUTES, RULES

AND REGULATIONS

United State Constitution, 5th and/or 14th

Amendment ........-eccceeeeeeeeeeeees 3, 22, 25, 26

Vermont Constitution, Chap. I, Arts. 4, 7 and/or 9.... 25

Clean Water Act, Section 401, 33 U.S.C. §1341(a) . .1, 46

Clean Water Act, 33 U.S.C. §1341(d) .....------+++- 48

40 C.F.R. §131.3(b)......-. eee cece eee rece ener eres 48

3 VS.A. §801 et seq .......-- cece cece cere eeeeeeee 18, 34

3 VS.A. $809.20... ccc cece ec cc ere c eer ecebeneveceees 23

3 VS.A. §814(a)...... 002 e reece cece eee e eer er eres 18

B V.S.A. §2201.......-. cece eee r cere rene eeeerenereeee 26

10 V.S.A. §1024(a) ...-...- eee e eee eee ees 2, 20, 25, 26

10 V.S.A. §1099 ........- cece cece reece een eee rereeces 17

10 V.S.A. §1269.......- cece cece eer ee eer cnererencers 17

Rule 52(a), V.R.Civ.P.........0-e cece cree eee e eee recees 50

Rule 60(b), V.R.Civ.P. ......-.0 eee cece ence eee teens 30

Rule 75, V.R.Civ.P. .......-ceccceeeeeeeeeee 2, 16, 26, 50

Vermont Water Quality Standards...........------ 1, 47

Vermont Water Pollution Control Regulations,

ee en, cs che dbaw eueesctsecrvsss heen 17

MISCELLANEOUS

1 Koch, Administrative Law & Practice, §9.4, at 92

(1985 ed.) ..... ce ceeeececee eer ec ener ct eecseceeeees 19

1 Koch, Administrative Law & Practice, §7.23, at

Sea ee eee Pere teed ee ee oe 23

2 Koch, Administrative Law & Practice, §9.2, at 73 &

fn. 13 36

SUMMARY DESCRIPTION OF

THE CASE AND PROCEEDINGS BELOW

This is an appeal from the Department of Environ-

mental Conservation’s (“DEC”) issuance of a “Section 401

Certification” for a dam and hydro-electric facility owned

and operated by Plaintiffs/Appellants on the Connecticut

River at Gilman, Vermont. See Printed Case (hereafter

“PC”) at 8-23. This facility provides electric power for the

use of the adjacent paper mill owned and operated by

Simpson Paper (Vermont) Co. (“Simpson”).! The 401 Cer-

tification is required by federal law in connection with

Simpson’s relicensing proceedings for the Gilman dam

facility, which are still pending before the Federal Energy

regulatory Commission (“FERC”). A 401 Certification

must be obtained from any state agency having jurisdic-

tion over a discharge into waters of that state, certifying

that applicable state water quality standards will not be

violated by the facility.2 A FERC license incorporating the

final 401 Certification is expected to be issued for a

minimum term of 40 years.

The only item still in dispute is the condition

imposed by DEC in the 401 Certification, requiring that

1 Georgia-Pacific Corp. formerly owned the entire mill

complex. It has also contracted to sell the hydro-electric facility

and dam to Simpson, but the transfer has not yet been formally

approved by FERC. G-P remains a nominal party only in this

appeal, and hereafter Appellants will be referred to as Simpson,

including actions taken by G-P prior to the mill’s sale.

2 See §401(a) of the Clean Water Act (“CWA”), 33 U.S.C.

§1341(a). Pertinent excerpts from the Vermont Water Quality

Standards (“WQS”) which were in effect at the time, are

included at PC 81-89.

Simpson continuously spill over the dam, instead of

allow to pass through the turbines and generate electric-

ity, 210 cubic feet per second (“cfs”) of river water from

June 1 to October 15 of every year. PC 20. This condition

would be effective without regard to actual river flows or

water quality levels at any given time. Simpson proposed

but DEC rejected a management plan in place of the

continuous spillage condition, which would require Simp-

son to spill stipulated flows over the dam whenever

necessary to correct any actual or anticipated water qual-

ity violations.

Simpson simultaneously appealed the 401 Certifica-

tion to the Vermont Water Resources Board, and to the

Washington Superior Court under Rule 75, V.R.Civ.P.

DEC contested the Board’s statutory jurisdiction to hear

that appeal; the Board ruled that it did have appellate

jurisdiction. DEC appealed that determination to the

Washington Superior Court, which reversed and held that

the Board did not have jurisdiction over appeals from

DEC’s issuance of 401 Certifications. That judgment was

not appealed. During 1991 the Legislature passed an

amendment to the applicable statute which made it clear

that the Board did have de novo appellate jurisdiction in

such instances.? Simpson is the only 401 Certification

applicant in Vermont who ever has been or will be denied

de novo appellate review before the Board.

Simpson then pursued this action, which was the

alternative appeal under Rule 75. It first moved for a

remand to DEC for additional consideration and to take

3 See 10 V.S.A. §1024(a) (as amended 1991 Leg. session).

10a

additional evidence, and/or reconsideration of the trial

court’s informal ruling that the case would be decided

only on the administrative “record” and would not be

heard de novo by the court. The trial court denied that

motion on May 2, 1991, without written opinion or expla-

nation. The parties then briefed and orally argued the

merits — principally, Simpson’s contention that the contin-

uous spillage requirement was arbitrary and capricious

and not supported by substantial evidence — based only

on the administrative “record”. On October 2, 1991, the

court issued a written Opinion and Order, with findings

and conclusions, sustaining DEC’s 401 Certification in all

respects, particularly the continuous spillage condition.

See PC 24-37. On October 21, 1991, Simpson filed a

Motion to Amend and/or Make Additional Findings,

which was denied by the court, again without written

opinion or explanation, on December 16, 1991. Simpson

filed its Notice of Appeal on November 1, 1991. PC1.

STATEMENT OF THE ISSUES

1. Was a remand of the 401 Certification to DEC to

take additional evidence and/or for reconsideration, or

alternatively a de novo hearing on the merits in the Wash-

ington Superior Court, required under established Ver-

mont law, recognized principles of administrative law,

and/or Rule 75, V.R.Civ.P.?

2. Was a remand of the 401 Certification to DEC for

additional evidence and/or reconsideration, or alter-

natively a de novo hearing in Superior Court, required to

prevent violations of the 5th (“Due Process” clause) and

14th (“Equal Protection” clause) Amendments to the

lla

United States Constitution, and the Vermont Constitu-

tion, Chap. I, Arts 4, 7 and 9 which have occurred in the

absence of such further proceedings?

3. Ifa remand to DEC for additional evidence and/

or further consideration was not required as a matter of

law for the reasons contended in Questions 1 and 2

above, did the court below nonetheless abuse its discre-

tion in not ordering such a remand given all of the facts

and circumstances of the case?

4. Is paragraph 2 of Condition A of the 401 Certi-

fication (the 210 cfs continuous spillage requirement from

June 1 to October 15 each year) unsupported by substan-

tial evidence in the administrative record?

5. Is paragraph 2 of Condition A of the 401 Certi-

fication (the continuous spillage requirement) arbitrary

and capricious?

6. If paragraph 2 of Condition A of the 401 Certi-

fication cannot be sustained as a necessary water quality

restriction, was it beyond DEC’s and the trial court's

authority under applicable federal law to base such a

spillage requirement alternatively on generalized, non-

specific considerations of “aesthetics” and/or “recre-

ation”?

7. Were the trial court’s findings of fact and/or

conclusions of law, sustaining the 401 Certification in all

respects, clearly erroneous?

STATEMENT OF FACTS

The Gilman dam and impoundment on the upper

Connecticut River was originally constructed in 1900, and

12a

has been operated since then as a “run of river” project

which essentially passes on an instantaneous basis the

same volume of water which flows into it. It has been

licensed as a hydro-electric facility since 1965, retroac-

tively to January 1, 1941. Electricity generated is used to

power the adjacent specialty paper mill now owned by

Simpson; that plant produces approximately 70,000 tons

of paper each year and employs approximately 180 peo-

ple in the “upper valley” region of Vermont and New

Hampshire. River flows between 130 and 2,850 cfs are

routed through the hydro-electric facility; flows under or

over those limits are in fact spilled over the dam or

through its crestgate. The State of New Hampshire has

already issued its Section 401 certificate for the facility

which allows Simpson to continue operation of the dam

without any spillage requirement, having found that “run

of river” operation does not violate any New Hampshire

water quality standards.‘

4 The Connecticut River is, of course, located within New

Hampshire up to the low-water mark on the Vermont side. See

Vermont v. New Hampshire, 289 U.S. 593 (1933). The entire dam is

itself located in New Hampshire as is the “crestgate” through

which spillage mandated by Vermont will pass. The “power-

house” is partially in Vermont and partially in New Hampshire.

The New Hampshire Class B standard for DO is actually higher,

or more stringent, than the Vermont water quality standard then

in effect, requiring 75 percent saturation, whereas the Vermont

standard requires only 6 mg/I! of DO or 70 percent saturation.

PC 88; cf. Record on Appeal (hereafter “RA”), State’s Exh. I. At

22°C (71.6°F), the critical water temperature used in the com-

puter modeling relied on by DEC, 75 percent DO saturation

would be 6.56 mg/I.

13a

Upstream of the Gilman dam are numerous “point

sources” of pollution, both municipal and commercial,

which operate pursuant to their own state /federal waste-

water discharge permits, but which still contribute pollu-

tion loading to the river as it enters the Gilman

impoundment; included among these is the discharge

from the Simpson paper plant itself.5 There is also pollu-

tion from indirect sources such as agricultural runoff and

residential wastewater disposal. However, during these

Section 401 proceedings DEC agreed that it would

assume that all Vermont water quality standards are met

above the dam. The most critical of these technical

requirements for purposes of this appeal is the level of

dissolved oxygen (hereafter “DO”); DO is used up not

only by fish and other “aquatic biota” in the river, but

also by other identifiable pollutants, such as “biochemical

oxygen demand” or “BOD.” The Vermont DO standard in

the river segment at issue is 6 mg/I or 70% saturation, PC

88; at 22°C, which is the average high river temperature

during the summer, the stipulated minimum DO stan-

dard is 6.2 mg/l.

River flows exiting the facility’s tailrace, as well as

those at the foot of the dam whenever there is spillage,

were actually measured both before and after the Certi-

fication was issued, and have consistently been in excess

of 6.2 mg/l DO. There is also a measurable increase in

DO levels in the river for the first mile below the dam

5 The plant received a five-year renewal of its “NPDES”

discharge permit from DEC as of March 15, 1989, only 5 months

before the 401 Certification was issued.

l4a

during summer months, when that segment is free-flow-

ing, despite the fact that just below the dam Gilman’s

municipal wastewater — which is treated and subject to its

own direct discharge permit - enters the river. At about

one mile below the dam the river enters what under

typical summer conditions is the uppermost limit of the

Moore Reservoir. PC10, 96. The river becomes more

sedentary and begins to deepen; the Moore Reservoir,

which feeds the Moore hydroelectric facility operated by

New England Power, is one of, if not the largest

impoundment on the river.” It is well beyond that point,

some 2.4 miles downstream, that computer modeling pre-

dicts a slight “sag” or decrease in DO levels during

potentially extreme summertime conditions.®

® During winter months, the head of the Moore Reservoir

ordinarily comes almost to the foot of the Gilman dam. How-

ever, it is agreed that a DO violation is unlikely then, despite the

absence of a free-flowing downstream river segment, because

flows are higher and water temperatures are lower.

7 Moore Reservoir is approximately 11 miles long, 0.6 miles

wide and 30 to 150 feet deep; at “full pool” it has a surface area of

3,490 acres and a reservoir volume of 88.7 billion cubic feet of water.

See RA, Metcalf & Eddy 1983 Report, at B-3-2. In contrast, the

Gilman dam impoundment is approximately 2.9 miles long, 375 feet

wide, and 19 to 26 feet deep; it has a gross storage volume of 705

acre/ feet, or 30.1 million cubic feet of water, but “negligible” usable

storage capacity because the dam is operated as a “run of river”

facility. See RA, State’s Exh. F at A-4. Moore Reservoir is approx-

imately 3,000 times the size of the Gilman impoundment, over five

(5) times as deep, and unlike Gilman, actually stores water rather

than releasing it “instantaneously.”

§ Because of all the complexities involved, most analysis of

water quality is done through computer simulations, although

actual sampling -— such as that conducted for G-P and Simpson

in 1985, 1990 and 1991, respectively — is obviously preferable.

" |

15a

This computer prediction of a small DO “sag” down-

stream of the Gilman dam is dependent on the simul-

taneous concurrence of at least four independent

variables: maximum wastewater discharges from both

the much larger James river paper plant in Groveton,

New Hampshire (which eventually enters the Connecti-

cut river upstream of the Gilman impoundment), and the

Simpson paper plant itself; low river flows at a level

called “7Q10” (the lowest average volume of water which

historically one can expect once every ten years over a

period of seven days), which was calculated to be 373 cfs:

and critically high summertime water temperatures. In

addition to the necessary convergence of those four pri-

mary factors, DEC staff also hypothesized a negative

effect from diurnal “flux caused by algal respiration and

photosynthesis.” PC 15.9 Finally, DEC included in its

° The theory of diurnal fluctuation due to stratification and

algal activity in Moore Reservoir was emphasized by DEC staff late

in the permit application and analysis process, as another justifica-

tion for DEC to increase its proposed spillage requirement from 185

cfs to 210 cfs. This additional or alternative justification for substan-

tial spillage became necessary because (a) the refined computer

model was demonstrating no DO violation of even “sag” in the first

2-plus miles below the dam, and at worst only a smaller decrease in

DO of 04 mg/I in Moore Reservoir, and (b) DEC staff realized its

error in assuming until then that the Gilman mill’s discharge

entered below the dam. It is evident from the “record” that until

June 1989, DEC staff had intended to use spillage over the dam as

additional “compensation” for the pollutant loading which they

erroneously thought Simpson was adding below the dam. See PC 58,

60. That fundamental error was apparently why DEC was originally

willing to agree that all WQS standards were met above the dam

(where the mill discharge actually enters); by June 1989 it was too

late for DEC to retreat from that agreement, so it scrambled to come

up with another justification for substantial spillage.

16a

analysis the effect of substandard DO levels upstream of

and passing through the dam, despite its agreement to

assume that DO levels adove the dam were in compli-

ance. PC 13-14, 15. By melding together these various

elements, DEC staff devised a theoretical “DO violation”

of 1.2 mg/l which Simpson would be required to “cor-

rect” through continuous spillage over 4'/2 months. PC

15, 20.

Because it is so demonstrably unlikely that all the

necessary variables would converge so as to create an

actual downstream DO sag as hypothesized by the com-

puter modeling, Simpson initially proposed instead a

“Water Quality Management Program” which would con-

tinuously evaluate river conditions from July 15 through

September 15 of each year, and automatically spill suffi-

cient water over the dam to prevent any predicted or

likely violation of DO standards below the dam. PC 14,

43-44, 47-52, 65-66. DEC staff repeatedly informed Simp-

son that they were not interested in any such manage-

ment techniques and would insist instead on a simple,

continuous spill requirement. Simpson continued to offer

to revise and expand the plan to meet specific technical

concerns, but was met only with DEC’s “historic resis-

tance” to all such proposals. PC 48. Simpson nonetheless

formally prepared a final revised management plan for

submission to FERC; it was also provided to DEC in

August 1989, just after DEC had issued the Section 401

Certification because of a one-year processing deadline.

IE LET Ee ae | OPTS pm

17a

Although G-P’s formal August 1989 submission is

not part of DEC’s formal “record,”1° Simpson’s proposal

for such a plan was clearly and continuously discussed

with and rejected by DEC. Also not included in the

administrative “record” are (1) a January 1990 “Report on

Additional Water Quality Modeling Study” which was

submitted to refine the June 1989 computer modeling

analysis by (a) determining a more modern and accurate

7Q10 flow volume, at 400 cfs rather than 373 cfs, and (b)

dividing the relevant portion of the River into five pri-

mary study “reaches,” both above and below the dam; (2)

a December 1990 Water Quality Monitoring Study, which

updated and verified the actual sampling data last taken

in 1985, between August 15 and September 19, 1990,"

and (3) a November 1991 letter with “Results of Summer

1991 Water Quality Monitoring” conducted over 48 hours

from July 22 to July 24, 1991.12 PC 77-78. This last effort to

10 The State ostensibly contends that “the record” should

include no materials or information after July 28, 1989, but has

no compunction against relying on such materials when that

suits its purpose. See text infra, at 32-33. In any event the admin-

istrative “record” when the agency proceedings are informal, as

here, cannot be so rigidly controlled. See Point I(A), infra at

18-19.

11 Average flow volume during the period was 1,892 cfs,

well in excess of the critical 7Q10 flow of 373 cfs. At the point 2.4

miles downstream in Moore Reservoir where the computer-

predicted DO “sag” might occur, the lowest actual DO measure-

ment was 7.8 mg/I (90.9 percent saturation) at a temperature of

21,86°C.

12 This sampling occurred when river flows ranged

between 500 and 550 cfs, conditions near the crucial 7Q10 flow

of 373 cfs. At the critical Moore Reservoir sampling point, at

temperatures exceeding 25°C (22°C was the input parameter in

18a

obtain actual DO sampling data at river conditions

approaching (and even exceeding) the critical parameters

used in the 1989 computer projections, could not have

occurred any sooner than July 1991 because the necessary

“low flow” conditions were simply never experienced

throughout the permitting process until July 1991.

SPECIFIC FACTUAL DETERMINATIONS

While the foregoing Statement of Facts provides an

overview of this appeal sufficient for the Court’s review

of Issues 1-3, there are some additional and detailed facts

which are necessary for consideration of Issues 4-7 relat-

ing to the merits of the 401 Certification and whether its

key findings and conclusions are supported by substan-

tial evidence and not arbitrary or capricious.%

(A) The 1989 Computer Modeling

There is no dispute that in June 1989, late in the one-

year review process allowed for 401 Certifications, Simp-

son and DEC finally agreed on a computer model to

stimulate DO conditions below the Gilman dam. It is this

theoretical modeling analysis that is the linchpin of

DEC’s continual spiliage requirement, and while there is

the 1989 computer projection), DO was never less than 7.55 mg/

1, well above the Vermont DO standard.

13 As below, by proceeding to this next level of “on the

record” analysis, Simpson in no way intends to waive its argu-

ments that this type of review in this particular case was and is

inappropriate and a denial of Simpson’s substantive and pro-

cedural rights.

LFS NEM TLR RENCE EL Seta ORR: Herken ws

19a

no real disagreement on what it shows, there is strong

argument on what it means.

The final revised “DOSIM” model runs prepared for

Simpson, with input variables apparently agreeable to

DEC,14 showed that (a) under possible 7Q10 (i.e., 373 cfs)

river flow conditions, (b) at summertime river tempera-

tures of 22°C (71.6°F), and (c) with all upstream point

source discharges at maximum permitted levels, down-

stream of the Gilman dam there could theoretically be a

“sag” or temporary decline in DO levels from 6.3 mg/I to

6.1 mg.; before recovering to 6.4 mg/l, at distances below

the dam of 1.5 to 2.4 to 3.5 miles respectively. PC 69-76. In

other words, if all of those conditions occurred simul-

taneously, the refined “DOSIM” model predicted that for

a stretch of approximately 0.4 of a mile - at a location

more than two miles downstream of the dam - there

could be a de minimis violation of Vermont water quality

14 Simpson’s engineering consultants considered DEC’s

“DOSIM” computer program to be more simplistic and less

reliable than another, newer program available. However,

because DEC coula only run “DOSIM” and was insistent on its

use, Simpson relented. Apart from DEC’s mistaken assumption

about location of the Simpson mill’s direct discharge, see fn. 9,

supra, the consultants also refined the “DOSIM”. model in June

1989 in several other significant ways: the assumed river tem-

perature was changed to 22°C, the number of study reaches

below the Gilman dam was increased from one to three, the

river velocities in each of those stretches was adjusted, and

certain pollutant decay rates were changed to more accurately

reflect “standard engineering practices.” See RA, July 1989 KA

Study, at 7-11.

20a

DO standards (0.1 mg/1 if the standard is 6.2 mg/1).15 Id.

This potential “sag” in DO levels downstream of the

Gilman dam was acknowledged to be no more than 0.4

mg/1 of DO before recovery, PC 67, and any part of this

theoretical DO “sag” which does occur would be well

within the summertime limits of the downstream Moore

Reservoir.'®

There is no predicted violation of the DO standard,

or even “sag” in existing DO levels, at any point in the 1.5

mile “riverine” and “transitional” sections of the River

below the dam, under all adverse conditions as premised

above, and in fact there is a predicted increase in DO of

0.1 mg/l. PC 76. Admitting for the moment that this

computer prediction is an accurate prediction of what

would actually happen in the river under stipulated criti-

cal conditions — a colossally incorrect assumption, as later

sampling data has shown, see Point III infra, at 30-31 — still

one searches in vain throughout “the record,” the 401

15 Actually, the DO standard at 22°C would be 6.12 mg/l,

but because the “DOSIM” model is less accurate, and to be

conservative, Simpson agreed that the standard could be

rounded off to 6.2 mg/l. See RA, July 1989 KA Study, pg. 7, 94.

16 As finally run, the “DOSIM” model (see PC 76) had three

study reaches below the Gilman dam: The first 1.0 mile, which

would be “riverine” in nature and allow for some natural reae-

ration over shallow rapids and/or riffles; a “transitional” reach

of 0.5 mile at the presumed entrance to Moore Reservoir; and

the final 2.0 miles which are well within Moore Reservoir both

in vertical profile and hydraulically. See RA, State’s Exh. 1, fig. 1.

“Run E” (PC 76) must be read in reverse; mile 3.4 under “Dis-

tance” is the base of the dam, while mile 0.0 is 3.5 miles down-

stream in Moore Reservoir. The hypothetical “sag” would be at

miles 1.3-1.1.

21a

Certification itself, or even the trial court’s findings, for

any remotely rational or scientific explanation and anal-

ysis of how this DO “sag” is in Moore Reservoir actually

caused by lack of spillage at the Gilman dam, rather than

the effect of Moore Reservoir on pollutants added

upstream and downstream of the dam.

(B) Frequency Of Necessary High Temperatures

The seven-day average summer high water tempera-

ture in the Connecticut River at the project site, which

was assumed for all the computer modeling runs in June

1989, is 22°C (71.5°F), based on daily temperature read-

ings from January 1979 to April 1989 (except June 1984 to

August 10, 1985). Seven-day average river temperatures

in excess of 21.1°C (70°F) have typically occurred for

approximately a four-week period, from July 10 to

August 6 of each year. Seven-day average river tempera-

tures exceeded 65°F for approximately a seven-week

period, from July 7 to August 27 of each year. The highest

absolute temperature recorded during the period was

26.4°C (79.5°F), from July 30 to August 3, the highest

seven-day average river temperature was 21.9°C (71.4°F)

for July 10 to July 17. See RA, July 1989 KA Report, at 2

and Fig. 1. No violation of Vermont’s DO water quality

standard is likely to occur when river temperatures are

65°F or lower. Id.

It is thus beyond any argument that even “the

record” before DEC showed that, at worst, the high river

temperatures necessary, by definition, to trigger the mod-

eled computer result could only occur during a seven to

eight week period in July and August. Notwithstanding,

22a

DEC imposed a continuous spillage requirement from

June 1 to October 15, 4!/2 months of every year.

River flows of approximately 375 cfs (the 7Q10 flow

was assumed to be 370 cfs for the “DOSIM” model runs;

New Hampshire had actually calculated 7Q10 to be 373

cfs) are exceeded approximately 96-97% of the time over

the entire period of record (1941-1982) at the nearest

USGS gauge. See RA, State’s Exh. F, at A-3 and Fig. A-1.

In other words, the flow conditions needed to produce

the model result will statistically occur only 3-4% of the

time. Put differently, no violation of the Vermont DO

water quality standard is likely to occur, even down-

stream in Moore Reservoir, at flows equal to or exceeding

800 cfs,17 PC 12-13, but during the months of July, August

and September — which encompass the period of highest

river temperatures — flows of 800 cfs are exceeded 80%,

17 At flows of 800 cfs, there is also no actual measured DO

violation in the impoundment behind the Gilman dam. At mea-

surement Station 4, just above the dam crest, the lowest mea-

sured DO level, at a depth of 25 feet, was 6.25 mg/I at 70.7°F. See

RA, Aquatec Date Report (August 12, 1985, 8:45 p.m.). The DO

level at Station 4 at depths down to ten feet ranged from 6.3

mg/l (August 12, 1985, 8:45 p.m.) to 8.6 mg/I at one-half foot

(August 12, 1985, 8:45 p.m.; August 13, 1985, 8:20 p.m.). The

1991 sampling data, see PC 77-78, confirmed there are no DO

violations in the Gilman impoundment even at lower flows of

500-550 cfs. This calls into question DEC’s essential premise -

see PC 59-61 - that DO conditions behind the Gilman dam are

actually substandard (even though it purported to agree DO

standards were met behind the dam).

23a

70% and 70% of the time respectively. Id., Exh. I, at 4 and

Fig. 4-6.

Based on “the record” evidence alone - once the

focus is limited to July and August when high enough

water temperatures might occur — it is again beyond any

genuine dispute that low flow conditions below the

State’s admitted safety threshold (800 cfs) are likely to

occur at worst 30% of the time. Over a 62 day period, that

results in an admittedly mathematical average of 18.6

days in which the modelled result might occur.!® While

Simpson understands the need to be more conservative

than the mathematical average, that hardly justifies an

exponential increase to 138 days of continuous spillage

regardless of actual river conditions.

(D) Simpson Constantly Attempted to Engage DEC

In Substantive Analysis Of A Workable Alterna-

tive To Continuous Spillage

Since late 1986, when required informal discussion

began for this certification process with DEC, Simpson

has proposed some form of water quality monitoring and

intermittent dam spillage to ameliorate any downstream

DO violations which might occur under modeled condi-

tions — even though those effects, if any, occur well into

Moore Reservoir and there is no scientific proof they are

actually caused by the Gilman dam’s traditional “run of

river” operation. See PC 14, 43-44, 47-52, 65-66. Simpson

18 Of course, it is arguable that the real incidence is only

3-4% of 62 days, or a potential 2.5 days, since that is the statisti-

cal occurrence, on this record, of 7Q10 low flows.

24a

was well aware from the outset that DEC had already

determined to impose a spillage requirement to aid in

general re-aeration of the river, if it could come up with

any arguable basis to do so.!9 See PC 40, and Point IV(A),

infra at 38-41. Thus by January 1987 Simpson had pro-

posed to spill 100 cfs of water over the dame at any time

between July 15 and September 15 that (a) flows were 500

cfs or less, and (b) background DO levels were 6.2 mg/1

or less. PC 50-52.

DEC’s response was curt: “Tom [Willard] indicated

that the Department has historically resisted management

of the resource on such a frequent basis.” PC 48. In fact,

almost all direct discharge (i.e., wastewater treatment)

permits have conditions requiring daily measurement

and monthly reporting of various water pollutants; the

required technology is-well-established and familiar to

DEC. Essentially the same proposal was still on the table

in April 1987. Simpson’s monitoring/spillage proposal

was reiterated in substance in May 1989; at that time the

proposal was not limited to any particular combination of

background flows, spillage (although the proposed quan-

tity was in fact increased to 130 cfs) or DO levels, but

simply whatever “spillage may be necessary to maintain

water quality standards for dissolved oxygen.” That

generic proposal was repeated again on July 24, 1989. See

RA, State’s Exh. L. DEC never abandoned its “historic

resistance” to any management and monitoring plan

19 The “record” totally refutes the trial court’s conclusion

that Simpson did not propose an alternative management plan

until it “realized that DEC was serious” in June 1989 about

imposing continuous spillage.

Reh OR 1 Snel dee MED CREE SE hale TUL a MONS Oe ee

25a

regardless of the specific details of the proposal. Simpson

never made the “formal” or “specific” proposal that DEC

and the trial court concluded should have been offered,

because the specific details were wholly irrelevant to

DEC inasmuch as it unilaterally rejected the entire con-

cept.7°

ARGUMENT

I. UNDER VERMONT LAW AND PRACTICE THIS

APPEAL SHOULD HAVE BEEN REMANDED OR

ACCORDED DE NOVO REVIEW

(A) De Novo Review Is Provided By Law And Prior

Practice

Rule 75, V.R.Civ.P., under which this action was

brought, does not itself provide for the type of standard

of review in a particular case; that determination is to be

made in light of all the circumstances in a given action.

The original Reporter’s Notes state: “Rule 75(d) leaves to

specific statute or prior practice the questions whether

review in a given case is de novo. ...” Since there is no

“specific statute” applicable here - in fact it was the

Legislature’s failure to provide for a specific route of

appeal from issuance of a Section 401 Certification,

20 DEC’s final memo on the Certification prior to issuance

noted concerns abut enforceability of any management plan

made a condition to a 401 Certification. PC90. Putting aside the

utter cynicism of such a stance, that logic would apply as well to

the spillage condition it did impose. This concern was and

clearly is make-weight.

26a

thereby requiring resort to Rule 75, that creates the pri-

mary procedural dilemma here — one must look to “prior

practice.”

One element of relevant prior practice is that until

the State raised its jurisdictional objections in the com-

panion case, all appeals of 401 Certifications were heard

de novo by the Water Resources Board. Equally telling is

that every other water quality permit or license issued by

DEC was then and still is subject to de novo review by the

Board. See 10 V.S.A. §§1024, 1099 and 1269. Inasmuch as

issuance of a Section 401 Certification must be limited to

water quality issues,2! see Arkansas v. Oklahoma, 60

U.S.L.W. 4176, 4181 (Nos. 90-1262, 1266) (Feb. 26, 1992)

and Point V, infra at 46-49, relevant Vermont practice

indicates that de novo review is not only appropriate but

necessary.

Chapin Hill Estates, Inc. v. Town of Stowe, 131 Vt. 10

(1972), supports a de novo appeal in this instance. In

Chapin Hill the taxpayer had no specific statutory route of

appeal from a town’s decision denying a request to abate

property taxes, so this Court held that a Rule 75 action

was appropriate. The Court also stated that the town’s

decision was reviewable “in the nature of certiorari,” id. at

13, even though it is unlikely that the town’s determina-

tion was made on anything close to a quasi-judicial basis.

Finally, because the “record” before the trial court was

21 DEC’s own regulations provide from processing of 401

Certifications as if they were applications for a discharge permit

under Chapter 47 of Title 10. See Vermont Water Pollution Con-

trol Regulations, Rule 13.11, 5 Code of Vermont Rules, pg.

12033002.

27a

inadequate and lacked at least one essential fact, the

Court held that “review in the nature of certiorari may not

be limited only to the facts as found in the record. Fur-

thermore, the reviewing court is not precluded from tak-

ing testimony.” Id. See also Pyles v. Schmidt, 141 Vt. 419

(1982) (trial court apparently took evidence and made

findings in Rule 75 appeal).

The decision in Chapin Hill has never been over-

turned or critically distinguished in the ensuing 20 years.

Nonetheless, more recent decisions speak of cases under

Rule 75 as actions “which are in the nature of certiorari

and which do not contemplate de novo review .. . [but

are] confined to addressing substantial questions of law

affecting the merits of the case.” Molesworth v. University

of Vermont, 147 Vt. 4, 6-7 (1986). Chapin Hill is not dis-

cussed or even cited in Molesworth, and there is no men-

tion in the latter case whether there was any deficiency in

the “record” or any disputed questions of fact. The legis-

lature had clearly delegated tuition residency decisions to

the University, and there was no similar practice - unlike

here where de novo appeal was before and is now avail-

able of all other water quality permits, including 401

Certifications - which would compel a different pro-

cedure. Finally, the plaintiff in Molesworth did have an

intermediate right to present evidence and develop an

adequate record at that stage.”

22 Vincent v. Vermont State Retirement Board, 148 Vt. 531

(1987), appears to be uninstructive. There was no material dis-

agreement as to any of the facts; the essential dispute was a

question of law only. In any event the Retirement Board is given

the authority to create administrative rules pursuant to 3 V.S.A.

§801 et. seq., which provide for “contested case” procedures

28a

Moreover, any rational view of orderly administra-

tive procedures must hold that the failure to provide

Simpson a “contested case” type proceeding before

DEC,?3 removes any justification for subsequent appellate

review solely “on the record” and under a “substantial

evidence/arbitrary and capricious” standard. Professor

Koch in his treatise states that this traditional rule of

deference to administrative proceedings typically “exists

when the [agency] decision was made through a formal,

trial-like proceeding.” 1 Koch, Administrative Law & Prac-

tice, 9.4, at 92 (1985 ed.) (fn. omitted). He continues: “the

substantial evidence standard [applies] where an admin-

istrative decision must be made through trial-type pro-

cedures . . . , ie., formal adjudication.” Id.

However, when informal adjudication procedures are

followed by the agency, as here, “the record may not be

sufficient for judicial review” and in these limited circum-

stances the court may take additional evidence to test the

agency’s findings and conclusions.?4 Id., §8.23, at 30 (1990

and thus provide benefit applicants with a fair opportunity to

present evidence and develop a formal record for later review.

23 Appellants are and were clearly entitled to a formal hear-

ing on their application. See 3 V.S.A. §814 (a) and Point II (A),

infra at 22-25. However, Simpson was caught in the catch 22 of

believing that it would get its opportunity for a “contested

case,” if one became necessary, at the Water Resources Board -

just like every other 401 applicant before and after. Thus there

was no need to raise that complaint at the DEC level. Once

relegated to Rule 75 review, Simpson has made this claim at

every opportunity.

24 “Under [de novo] review the administrative record

becomes an object of attack along with the relevant final deci-

sion. The challenger, like any other plaintiff, must show by a

29a

Supp.) (cits omitted); §9.3 (1985 ed. & 1990 Supp.). The

trial court should have done so here, not only because of

the highly probative additional evidence that has become

available, see PC 77-78, and because DEC arbitrarily

refused to consider a management plan alternative to

continuous spillage, but also because the “record” is sim-

ply too informal and too amorphous to support any rea-

soned and objective review of the agency’s final decision.

Past and present practice with regard to appeals of

Section 401 certificates; the established practice of de novo

review of all other water quality permits; any principled

view of fair and orderly administrative procedure; and

the demonstrated deficiencies in the informal “record,”

all argue in favor of de novo review in this instance.

Simpson should be provided the opportunity - which it

has never had - to demonstrate at a “fair hearing” with

all available evidence, that its proposed method of opera-

tion of the dam (including Simpson’s proposed summer-

time water quality management program) entitles it to an

unrestricted 401 Certification. At such a hearing Simpson

would bear the ultimate burdens of proof and persuasion

that continued “run of river” operation (as modified) of

the Gilman facility, does not and will not result in any

degradation of existing water quality or violate any water

quality standards. The trial court’s order should be

reversed and the case remanded for that purpose.

preponderance of the evidence in the judicial record that the

agency decision is wrong. In doing so, the challenger may intro-

duce into the judicial record other evidence or request new or

different inferences from the administrative record.” Id. §9.3, at

88 (1985 ed.) (fn. omitted).

si eT eT eee eT ee ee ea eee

30a

(B) Alternatively, The Trial Should Have Remanded

This Case To The Agency For Further Proceed-

ings?® Under Existing Rule 75 Practice

Burroughs v. West Windson Board of School Directors,

141 Vt. 234, 237 (1982), establishes that even though a

court under Rule 75 may have “jurisdiction in the nature

of an appellate court only,” id., if in the case there are

“factual issues requiring a hearing” then the court must

remand the case to the originating governmental entity to

hold such a hearing or at least resolve the factual dis-

putes. Id.26 Simpson has identified several substantial

areas where there is a dispute over material facts: Is the

theoretical DO “sag” problem in Moore Reservoir actu-

ally caused by the Gilman dam and hydro-electric works?

Has the State in fact acted on the erroneous assumption

that the Gilman paper plant’s wastewater discharge

enters the river below rather than above the dam? See PC

13-14, 15. Did DEC in its actual analysis renege on its

agreement to assume that all water quality standards

were met at the dam, and base its continuous spill condi-

tion at least in part on a contrary finding? Id. Does the

25 The scope of those further proceedings has changed dur-

ing the time this case was pending below. In Simpson’s view, the

1991 changes to 10 V.S.A. §1024 (a), providing that any action of

the agency with respect to 401 Certifications is appealable de

novo to the Board, makes it no longer necessary to hold a “con-

tested case” hearing before DEC because the proper remedy is

now provided by the statutory right of appeal.

26 See also In Re Classification of Airport & Pond Brooks, 142

Vt. 458 (1983) (remand for correction of signature errors); In Re

Williams Point Yacht Club, Docket No. $213-89 CnC (April 18,

1990) (remand for reconsideration of public trust issues).

3la

additional water sampling data obtained in 1990 and 1991

support the computer model's theoretical DO “sag” pre-

diction? What exactly are the necessary “details” of the

water quality management program which Simpson pro-

posed as an alternative to continuous spillage for 4'/2

months, which DEC has asserted were lacking? None of

these questions can even be addressed, let alone resolved

on any objective basis, on the administrative “record”

presently offered by the State.

Remand of this case to DEC for further consideration

of these issues and supplementation of the record, will

serve the ends of justice by assuring that the matter can

be determined on all the best evidence available. These

proceedings may well be Simpson’s only opportunity to

adjudicate substantially restrictive permit conditions

which will be imposed in connection with a FERC license

lasting at least 40 years. Moreover, the evidence excluded

from the informal administrative “record” indicates that

there is no reasonable likelihood of water quality degra-

dation from “run of river” operation even without contin-

uous summertime spillage, and thus there is no real

danger of prejudice if such a remand is granted.

Il. DE NOVO REVIEW OR REMAND SHOULD HAVE

BEEN PROVIDED TO REMEDY CONSTITUTIONAL

DEFECTS

(A) Due Process

Simpson has a substantial property right in the pre-

sent mode of operation of the dam and hydro-electric

works as a “run of river” facility without imposition of a

summertime (actually 4'/2 months) continuous spill

32a

requirement. It has been operated as such for the past 50

years, and Simpson has invested significant funds in the

facility. But for the intervention of Section 401 and its

requirement that a state water quality certificate be

obtained, Simpson would have the right, as a riparian

user under common law, to continue the present opera-

tion of the dam subject only to FERC relicensing. Cf. Gour

v. Morse, 652 F.Supp. 1166 (D.Vt. 1987) (day care opera-

tor’s fundamental property right in continued opera-

tion).27

Moreover, imposition of the State’s continuous spill

condition increases significantly the cost of operation for

the adjacent paper mill, which must then purchase com-

mercial power to replace the hydro-electric power unnec-

essarily lost because of the arbitrary spillage requirement.

The re-issued FERC license now sought will last at least

40 years, hence it is imperative that the 401 Certification,

which imposes conditions more restrictive than necessary

27 See also Burroughs v. West Windsor Board of School Direc-

tors, 138 Vt. 575, 578 (1980). The existence of a protected prop-

erty right in flexible and may depend on established

relationships, prior practice and existing understandings. State

law determines whether a property or other fundamental right

exists, while federal law provides the procedural protections

which must be made available under the due process clause of

the 14th Amendment to the U.S. Constitution. See Robinson v.

Via, 821 F.2d 913 (2d Cir. 1987). Other property or fundamental

rights which have been recognized include electric service. Con-

dosta v. Vermont Electric Cooperative, Inc., 400 F.Supp. 358, 365

(D.Vt. 1975); parental custody, Paquette v. Paquette, 146 Vt. 83

(1985); and entitlement to educational credits or degrees already

earned, Merrow v. Goldberg, 672 F.Supp. 766 (1986), 674 F.Supp.

1130 (D.Vt. 1987).

ai aiacaaiieta abeaineiieaaasieiieaiiai

33a

to protect water quality, be given the closest scrutiny.

Vermont law is clear that, at some stage, Simpson should

have been and must be provided with a trial-type, formal

adjudicative hearing which would include at the very

least “an effective opportunity to defend by confronting

any adverse witnesses” or evidence, and to rebut any

other information relied on by the agency,?® a complete

and formal record of the proceedings adequate for subse-

quent review or appeal; an impartial decision-maker,”?

and a clearly-stated effective right to further administra-

tive and/or judicial review. 1 Koch, Administrative Law &

Practice, §7.23, at 575-76 (fns. omitted). Simpson has

enjoyed none of those basic procedural safeguards. See 3

V.S.A. §809; Appeal of Stratton Corp., ___ Vt. __, 2 Vt. Law

Week 411, 412-413 (No. 90-278, 10/11/91) (“an adjudica-

tion based on the particular facts concerning specific

28 Only after-the-fact, in preparing for the case below and

reviewing the materials designated by the State as “the record,”

did Simpson discover that DEC had obtained and apparently

relied on a mass of Connecticut River data unilaterally retrieved

from an EPA “Storet” computer. See RA, Cueto Aff., 44

(3/18/91). Simpson never received any notice of this data

retrieval or any notice of what use DEC intended to make of it,

and thus no opportunity at all to rebut it or any inferences

drawn by DEC staff. This episode is simply illustrative of the

procedural infirmities which infected this informal permitting

process, in violation of Simpson’s substantial rights.

29 While it may be acceptable for a “contested case” type

proceeding to be presided over by an agency employee who has

been designated by the agency as an “independent” hearing

officer, even that fiction was not followed here. The 401 Certi-

fication was clearly prepared by the DEC staff which was acting

as witness, judge and jury simultaneously; the Commissioner’s

signature was nothing more than a rubber stamp. See PC 90.

34a

parties . . . triggers procedural due process concerns

[and] more formal, trial-type procedures”).

Instead, Simpson has been relegated to an informal,

ad hoc procedure - solely because of the then-uncorrected

oversight of the Vermont Legislature in designating DEC

as the State’s section 401 agent but not providing any

route of review, unlike all other water quality permits -

which does not even remotely provide even minimal due

process, fair hearing and appellate review rights. In stark

contrast the State does provide procedural safeguards,

the right to a full hearing, and specific appellate review

for everything from unemployment compensation bene-

fits, see Langlois v. Department of Unemployment and Train-

ing, 149 Vt. 498 (1988), to inmate disciplinary hearings, see

In Re Nash, 151 Vt. 1 (1988); from regulation of insurance

company assets, see In Re Ambassador Insurance Co., 153

Vt. 417, 423 (1989), to termination or non-renewal of

teacher contracts, see Burroughs, supra fn. 26; from a real

estate agent’s license, see In Re DeSautels Real Estate, Inc.,

142 Vt. 326 (1982), to all manner of land use and environ-

mental permits, see 10 V.S.A. §§ 6085, 6089(a) (Act 250

permits) and 24 V.S.A. §§ 4471, 4475 (local zoning or

planning permits).

Before Simpson’s property rights in the present mode

of operation of the dam can be abridged or circumscribed

as the State seeks, Simpson must be provided at least one

effective and procedurally adequate opportunity to make

its case. Denial of such an opportunity to marshall its

evidence and fully explain and support its proposals

violates its rights to procedural and substantive due pro-

cess, and may even result in an unconstitutional taking of

Simpson’s property for public regulatory purposes. Cf.

35a

Nollan v. California Coastal Comm., 483 U.S. 825 (1987);

Bryant v. Town of Essex, 152 Vt. 29, 38 (1989); Perry v.

Department of Employment and Training, 147 Vt. 621, 623-24

(1987); Petition of Green Mtn. Power Corp., 131 Vt. 284, 293

(1973). Accordingly, construing Rule 75 in this apparently

unique circumstance to provide for de novo review, or

alternatively for a remand to DEC, not only appears to be

consistent with Vermont law and prior practice, it is the

only means available to avoid what would otherwise be a

substantial violation under both the United States and

Vermont Constitutions. See e.g., Vincent v. Vi. State Ret.

Bd., supra, 148 Vt. at 534 fn. 2 (Chap. I, Art. 4 of Vermont

Constitution construed to provide judicial review of

administrative decisions).

(B) Equal Protection

With the passage during the 1991 legislative session

of H.353,5° de novo review of all 401 Certifications by the

Water Resources Board, with all necessary APA trappings

- including a trial-type hearing, the right to confront

witnesses, and an impartial and detached decision-maker

~ has been confirmed. Simpson has thus become the only

Section 401 applicant in Vermont history - past, present

or future - who will have been denied the right of and

opportunity for review of a 401 Certification with a full

and fair hearing under minimal evidentiary and pro-

cedural safeguards. While it may be that this system of

informal DEC review followed by de novo review of 401

30 See 10 V.S.A. § 1024(a) (as amended).

36a

Certifications need not have been provided,! the Legisla-

ture has in fact done so for everyone but Simpson. Such

clearly disparate treatment has no rational basis and can-

not be sustained under either the Vermont Constitution,

Chap. I, Arts. 4, 7 and 9, or the 14th Amendment to the

United State’s Constitution. See, e.g., Alexander v. Town of

Barton, 152 Vt. 148 (1989). The legislative scheme as now

enacted for Section 401 appeals “ensnares” one individ-

ual entity, without any identifiable public good or benefit,

and without furthering any legitimate public purpose. See

Choquette v. Perrault, 153 Vt. 45 (1989).52

Rule 75, V.R.Civ.P., does not deny Simpson a de novo

hearing, but leaves that determination to be made under

31 However, for the reasons just stated, some kind of “con-

tested case” license proceeding is required at some stage

because of due process concerns.

32 The State will likely argue that the Legislature was pro-

hibited from allowing retroactive application of its 1991 curative

amendment to 10 V.S.A. § 1024(a). First and foremost, it was the

Legislature’s initial failure to provide a clear administrative

adjudicative system in this instance, that created the problem.

Second, legislation can in fact be retroactive if the Legislature so

states. See Burlington Firefighters’ Assoc. v. City of Burlington, 149

Vt. 293, 296 (1988). Third, the pending litigation over the Certi-

fication was no reason to deny relief; this was a procedural issue

only, and remedial legislation would not have affected the merits

of whether Simpson is entitled to a 401 Certification without

continuous spillage. See Myott v. Myott, 149 Vt. 573 (1988). More-

over, the Legislature has acted when the effect is potentially to

help one litigant over another in pending litigation. See, e.g., 8

V.S.A. § 2201 (as amended 1991). Fourth, this would not have

been “special litigation” designed to treat Simpson differently;

it would have simply insured that Simpson was treated just like

all other Section 401 applicants.

cial

37a

other existing law. Nor does Rule 75 prevent a remand to

DEC, for the reasons stated. Given all of the circum-

stances, de novo proceedings in this case, or alternatively

a remand to DEC, were required to eliminate an other-

wise unequal and unconstitutional burden placed on Sim-

pson alone. The judgment below should be reversed and

the case sent back to the trial court in accordance with

that principle.

III. THE TRIAL COURT ABUSED ITS DISCRETION IN

DECLINING TO REMAND THE CASE TO DEC

This case should alternatively have been remanded to

DEC, as a matter of the trial court’s inherent discretion, to

cure evidentiary defects and for DEC to reconsider the

entire application. Remands to administrative agencies or

tribunals for reconsideration have been granted in a

number of cases involving land use and other environ-

mental issues. See, ¢.g., In Re Maple Tree Place, 2 Vt. Law

Week 184 (May 17, 1991); Conservation Law Foundation v.

Burke, et al., Docket No. 1709-90 CnC (Chitt. Super. Ct.,

April 10, 1991) (Katz, J.); In Re Williams Point Yacht Club,

Docket No. $213-89 CnC, (Chitt. Super. Ct., April 18,

1990) (Martin, J.).

As argued previously, the matter can be remanded to

DEC, consistent with Rule 75, when it appears there are

essential issues that have not been initially decided by the

agency, or that “the record” needs to be supplemented

with additional evidence to make it complete and provide

a thorough basis for the agency’s decision. See In Re Maple

Tree Place, supra; Burroughs v. West Windsor Bd. of School

Dirs., supra., 141 Vt. at 237. Maple Tree Place squarely

38a

holds that “trial courts reviewing administrative deci-

sions have the inherent or implied authority to remand

the matter to the administrative agency in the interests of

justice.” 2 Vt. Law Week at 186 (cits omitted). The Court

then approvingly quoted the following rationale from the

Washington Supreme Court:

The provision for such a remand would seem to

be intended as a safety valve, permitting the

reviewing court to require a second look at situ-

ations and conditions which might not warrant

a reversal, but which, to the court reviewing the

record, would indicate to it that the . . . Com-

mission may have acted on incomplete or inade-

quate information; or may have failed to give

adequate consideration to an alternative route; or

may have weighted its evaluation of the matter

under consideration with the theory of the com-

plete infallibility of its own engineers.

Id. (cit. omitted) (emphasis added).

Those very concerns are evident here. In Maple Tree

Place the permit applicant wanted the administrative

body to reconsider its plan for phasing of a proposed

development; here Simpson contends DEC should at the

very least reconsider its arbitrary rejection of the pro-

posed spillage management plan, particularly in light of

the additional and previously unavailable 1991 evidence

of actual water sampling showing no DO violations

under critical conditions. This Court found that the per-

mit applicant should be given the opportunity to make

39a

that request of the administrative body, and so affirmed

the remand order. Id. 186-187.%°

Most crucially, there has been no objective, substan-

tive consideration by DEC of Simpson’s proposed mon-

itoring and management plan, and whether it would in

fact reasonably address any legitimate water quality

objectives. Cf. In Re Maple Tree Place. Also, there is lacking

in “the record” and DEC’s explanation and findings any

rational analysis of or support for either the magnitude or

time-duration of required spillage. Finally, there would

be no “prejudice” to the people of Vermont from such a

remand, in light of recent actual sampling data. PC 77-78.

The trial court misunderstood Simpson’s reliance on

Maple Tree Place in stating that a remand depends on a

party being “misled” at the administrative level. PC 35.

Simpson has never contended that it was “misled” about

DEC staff’s “historic resistance” to any type of manage-

ment plan; in fact, the complaint is just the opposite -

DEC’s open hostility to the entire concept made any

consideration of any specific or detailed proposal a use-

less gesture. Thus Simpson was in that sense effectively

“prevented from proposing [its] plan” in any meaningful

way or with any hope of truly constructive dialogue,

because DEC was always intent on spillage no matter

33 It is ironic that in Maple Tree Place, the major countervail-

ing consideration against a remand was the argument that statu-

tory de novo review of planning commission decisions prohibits

a remand for reconsideration. The Court found it does not. Of

course, no such consideration is present here - it is the failure to

provide de novo review (or some type of “contested case” pro-

ceeding) at any stage that is the problem.

40a

what the actual water quality ramifications.>4 Similarly,

Simpson made no “deliberate litigation choice” not to

propose a detailed management plan; its initial attempt to

do so, as early as January 1987, was rebuffed with the

¢lear message that any further efforts would be a waste of

time. Nonetheless, Simpson did continue to offer its pro-

posal and to prepare a more detailed plan, without DEC

input, resulting in the formal August 1989 draft.

The trial court’s analysis under the standards set out

in Maple Tree Place appears not to address some of the

important factors discussed by this Court. Although the

use of remand to an administrative agency as a “safety

valve” is briefly mentioned, no extended discussion was

provided of Simpson’s contention that this case is pre-

cisely one of those where the agency “may have failed to

give adequate consideration to an alternative route; or may

have weighted its evaluation . . . with the theory of the

complete infallibility of its own engineers.” 2 Vt. Law

Week at 186 (cit. omitted) (emphasis added).

At bottom the justification for remand under Maple

Tree Place is the “interests of justice,” id., which includes

* DEC staff’s assertion that an expensive, time-consuming

“intensive assimilative capacity analysis” — generally required

only for new sources of actual pollution discharges - was

required, PC 54, was simply DEC’s way of providing some

cover for its arbitrary decision not to consider any management

plan and instead to require maximum spillage. Id. The issues of

what magnitude and frequency of spillage is necessary to

address actual DO concerns, and what basic monitoring and

operational equipment is necessary to accomplish that result,

are not rocket science and no complex analysis was or is neces-

sary.

4la

but is not limited to the same considerations which

would justify a granting of relief from judgment under

Rule 60(b), V.R.Civ.P., see id. at 187. One of the well-

known grounds for relief in such instances is “newly

discovered evidence which by due diligence could not

have been discovered ...” Rule 60(b)(2). Subsequent

actual sampling above and below the Gilman dam has

confirmed that even at low flow conditions near the

critical 7Q10 level, and at temperatures which exceed the

critical 22°C level assumed in the predictive model, there

is still no DO violation at any relevant sampling point,

including the crucial Moore Reservoir, and indeed all

readings, except those at the mouth of the Johns River

upstream, are well above the DO standard of 6.2 mg/l.

See PC 77-78.

This actual sampling data was simply unavailable

during the period the Certification application was pend-

ing before DEC, and no amount of diligence on Simpson’s

part could have gotten it any sooner because river flow

levels are entirely beyond their control and during the

past several years have not even approached the critical

7Q10 level until the relative “drought” conditions of the

summer of 1991. If nothing else, this data casts consider-

able doubt on the efficacy of the computer model all

parties have relied on until now,°5 as wel! as DEC’s basic

35 At flow levels of 525 cfs on July 22, 1991 at 12 noon, and

temperatures above 25°C, DO readings ranged from 8.5 mg/l

just below the dam, to 8.6 mg/l further downstream at the

Gilman Bridge, to 8.1 mg/l at the relevant Moore Reservoir

sampling station; at 8:00 p.m., the DO readings there were 9.2,

9.1 and 9.2, respectively. PC 77-78. Defendants are certain to

complain that Simpson cannot be heard now to discount the

42a

operating premise that this reach of the Connecticut River

is already subject to “severe,” “critical” or “substandard”

DO conditions. A remand to DEC for reconsideration and

re-evaluation is entirely appropriate if not mandated by

the essential teachings of Maple Tree Place and Burroughs v.

West Windsor Board of School Dirs.

Finally, the trial court’s application of Maple Tree Place

apparently requires Simpson to prove in advance that a

remand to DEC “would serve [some] useful purpose.”

This requirement does not appear in either In Re Maple

Tree Place or Burroughs. The fact that DEC has not yet been

persuaded of the efficacy of Simpson’s proposals during

“informal discussions” during initial permit processing

or while this action has been pending (see PC 79-80), is

neither surprising nor conclusive. DEC has always had

one objective: to require continuous spillage for 4'/2

months for generalized aesthetic and recreational rea-

sons, and because it mistakenly believed until the last

minute that the mill’s direct discharge entered below the

dam. If, however, a remand were required by this Court

because Condition A as it stands is arbitrary and unrea-

sonable, or because such reconsideration is required in

very computer modeling it prepared and submitted during the

application process. The real point is that computer models are a

poor but sometimes necessary substitute for actual field data,

and that adequate sampling data simply was not available then

but is now. Summary rejection of clearly relevant evidence that

simply was not available before, begs the inevitable question

whether this process is ultimately a search for the truth and an

honest effort to address any water quality problems that actu-

ally exist below the Gilman dam, or is it something else entirely?

43a

the name of fairness and due process, such reconsidera-

tion is required in the name of fairness and due process,

DEC’s willingness to consider a management proposal

seriously, and pay it more than lip service, would

undoubtedly be greatly enhanced.

Secondly, the trial court’s reliance in this regard on

FERC’s preliminary Environmental Assessment in this mat-

ter — which the State submitted below —- only complicates

the issues. See PC 35-36. FERC’s analysis is ostensibly

independent and separate from DEC’s determination

under Section 401, and obviously occurred well after the

“record” in this case is asserted to have closed; it is

certainly nothing that DEC relied on in continually reject-

ing Plaintiffs’ voluntary spillage proposals from January

1987 on. To suggest that DEC staff would not give the

issue a full and fair reconsideration on remand because

FERC staff had purportedly come to its own conclusions,

would fly in the fact of ordinary presumptions that mat-

ters are not prejudged, even by administrative agencies,

until all the evidence is heard. Additionally, as noted

below, Simpson has strongly objected to the EA issued by

FERC staff and it has yet to be adopted by the Commis-

sion itself.

On the other hand, if such emphasis is given to

FERC’s preliminary comments regarding Simpson’s pro-

posed management plan, then FERC’s approach to such

issues generally becomes fair game. In fact FERC does not

generally consider such management plans to be

“unworkable” or “flawed,” and only recently has indi-

cated it will accept, if not impose a quite similar DO

monitoring and “as necessary” spillage requirement on

44a

the Central Vermont Public Service hydroelectric project

on the Lamoille River at Clarks Falls.56 See RA, Attach-

ment B to Appellants’ October 21, 1991 Motion to Amend.

It is thus questionable whether the EA prepared by FERC

staff in this case is really an independent analysis of the

water quality issues, or simply FERC stan's adoption of

Vermont DEC’s flawed analysis.

IV. EVEN ON “THE RECORD” INFORMALLY CRE-

ATED BY DEC, THE CONTINUOUS SPILLAGE

REQUIREMENT IS UNSUPPORTED BY SUBSTAN-

TIAL EVIDENCE AND IS ARBITRARY AND

CAPRICIOUS

Simpson disputes that the traditional rule of defer-

ence paid to administrative agency determinations, is

applicable here because no formal trial-type or “contested

case” proceedings were held below. Indeed that defect

contaminates the whole case and requires reversal and

remand to the trial court to hold de novo proceedings, or

36 The Lamoille Project’s monitoring requirements and “as

necessary” spillage condition is not FERC’s first or only

approval of such management plans. In 1989 FERC licensed 14

separate projects in the Upper Ohio River basin, each with their

own similarly crafted monitoring and operational plan

“whereby project operation could be rapidly altered to ensure

maintenance of a minimum DO concentration” in downstream

segments. See The City of Pittsburgh, Order Issuing License, 48

FERC 61, 362 at pg. 62, 302 (Sept. 27, 1989). See also In Re

Potomac Edison Co., 34 FERC 461,085 (1986), and Order on

Rehearing (June 7, 1991) (licensee simply required to maintain

minimum DO level of 5.0 mg/I, through monitoring and what-

ever means chosen by licensee).

45a

to DEC for further review and reconsideration. See Points

I-III, supra.

The cases generally cited by the State for the contrary

proposition — Caledonian Record v. DET, 151 Vt. 256 (1989);

In Re Tariff Filing of Green Mountain Power, 138 Vt. 213

(1980); Whitcomb v. DET, 147 Vt. 525 (1986) — all involved

appeals on a record created before an independent quasi-

judicial board or tribunal (e.g., the Employment Security

Board, or the Public Service Board), with established

evidentiary and procedural rules and an opportunity to

be heard in a careful and deliberate manner. If one traces

through the chain of citations found in the Vermont deci-

sions discussing the “scope of review” in administrative

appeals, ultimately every single one depends on the basic

principle of deferential review and presumptive validity

established in cases where there was a hearing before and

record created by a quasi-judicial board, or at least a

“contested case” type proceeding within the agency

under the Administrative Procedure Act, 3 V.S.A. §801 et

seq. (“APA”). See, e.g., In Re Handy, 144 Vt. 610 (1984); In

Re Devoid, 130 Vt. 141 (1972).

State Dept. of Taxes v. Tri-State Ind. Laudries, Inc., 138

Vt. 292 (1980), is an earlier administrative review case

that is often cited as the source of the judicial deference /

presumptive validity standard. Tri-State involved an

appeal of a withholding tax deficiency assessment; the

appeal to Superior Court followed a “contested case”

hearing in the Department of Taxes under the APA. Id. at

293, 295. This Court was careful to premise its holding on

that fact:

46a

[W]here the parties have had an 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 . . . These

[APA] procedures include, inter alia, notice of

the hearing; opportunity for all parties to pre-

sent evidence, cross-examine witnesses, and

respond on all issues involved according to the

rules of evidence normally applied in superior

court; and maintenance of a full record of all

pleadings, rulings, evidence, exhibits, matters

officially noticed, offers of proof, and findings

and decisions.

Id. at 295 (cit. omitted). Indeed an actual “transcript” of

testimony was produced in Tri-State, as is the case in

almost all appeals from “contested case” proceedings.

This Court has more recently affirmed that where

this fundamental premise for the presumptive validity /

judicial deference standard does not exist, the administra-

tive decision is not treated as a Delphic oracle and will be

reversed. See In Re Petition of Burlington Electric Dept., 149

Vt. 300, 303 (1988). In that case the Court unequivocally

stated that:

this tenet [the presumptive deference standard]

only holds true where the administrative pro-

ceedings have provided notice and an oppor-

tunity to be heard .. . ‘the parties [are] given an

adequate opportunity to prepare and respond’

to the controlling issues ... the find-

ings . . . [are] ‘based exclusively on the evidence

and on matters officially noticed .. . ’ [and]

there [is] ‘full disclosure of the criteria under-

lying’ the order.

Id. at 303 (cits. omitted).

47a

The proceedings below lack all of the essential attrib-

utes noted in both Tri-State and BED. There was no real

and meaningful opportunity to be heard and create a

formal record for review, especially since the “controlling

issues” and “underlying criteria” were constantly shift-

ing, particularly late in the process when the Certification

was about to be issued in final form. As even DEC’s

“record” demonstrates, at the literal eleventh hour ~ after

Simpson’s consultants had reworked and refined DEC’s

“DOSIM” model with reasonably accurate input vari-

ables, which then showed no downstream DO violations

immediately below (i.e., for 1.5 miles) or attributable to

the dam, and at worst a D.O. “sag” of only 0.4 mg/I of

unknown cause 2.4 miles into Moore Reservoir — “diurnal

flux” suddenly became the issue.” Simpson attempted to

respond informally in the little time left; DEC’s response

was that it “understood the concept” of why “diurnal

flux” should not matter from a regulatory standpoint, but

simply “wouldn’t accept the argument.” See RA, July 1989

KA Report, at 13-14 & App. B Tel. Notes (7/19/89).

While Simpson disputes, for all of these reasons,

application here of the judicial deference /presumptive

validity standard, there can be distilled from some of the

37 The State’s essential premise on “diurnal flux” is sim-

ilarly unsupported by any evidence or objective analysis in “the

record” or the Certification itself. DEC staff simply “assumes

predicted DO analysis would be in the middle of this range [i-e.,

the computer model results}.” RA, July 1989 KA Report, at App.

B Tel. Notes (6/21/89). In this way an additional 0.8 mg/l of DO

was required to be compensated for, which constitutes 2/3 of

the purported “violation.” See PC 67.

48a

same cases a “standard of review” that is more appropri-

ate to this case if Simpson is, as a last resort, relegated to

that type of appellate review. In that event Simpson car-

ries the burden of demonstrating that DEC’s Condition A

is unsupported by the evidence or is arbitrary or capri-

cious. That burden will have been met by showing that

based upon the entire “record,” with the weight of

detracting evidence factored in as well, see 2 Koch, supra,

§9.2, at 73 & fn. 13 (1990 Supp.), there is no fair and

reasonable basis for DEC’s findings and conclusions on

this issue. Tri-State, supra, 138 Vt. at 294; In Re Orzel, 145

Vt. 355 (1985); Clark v. Weinberger, 389 F.Supp. 1168 (D.Vt.

1974), aff'd, 511 F.2d 1390 (2d Cir. 1975). In other words,

Simpson can show that DEC’s Condition A is not sup-

ported by “substantial evidence” if it demonstrates con-

tinuous spillage for 4'/2 months is based on evidence

which no reasonable person would accept as adequate to

support DEC’s conclusion. In Re McShinsky, 153 Vt. 586,

589 (1990).

When the uncontested evidence in this “Record” is

that the theoretical “sag” of 0.4 mg/I in DO levels more

than two miles downstream of the Gilman dam is

unlikely to occur 70% of the time or better and only in

July and August, if at all,38 and when the evidence is

clear that Simpson for more than three years proposed to

implement any reasonable monitoring and spillage plan

that would correct any actual or anticipated DO defi-

ciency in Moore Reservoir (even though the Gilman dam

38 It is conceded by DEC that at flows of 800 cfs or greater,

which do occur 70% or more of the time, no DO violation will

occur. PC 12-73.

49a

has not been shown to be the cause of that “sag”), imposi-

tion of Condition A requiring continuous spillage of 210

cfs every minute for 4'/2 months is arbitrary, unreason-

able, and unsupported by any relevant evidence which a

rational, unbiased person would find adequate. As the

Certification itself admits: “No-attempt was made to

determine the mixed [DO] concentrations necessary at

different river discharges in order to assure that the

downstream [DO] sag remains above standards.” PC 13.

Even if the impact of “diurnal flux” is included, it is

still evident that, irrespective of the necessary amount of

spillage (and that is all that “diurnal flux” adds to the

debate; whether a violation could occur at all is still

dependent entirely on the “DOSIM” computer predic-

tion), the “continuous” and “June 1 to October 15”

aspects of Condition A are wholly irrational, overbroad

and lack any fair and reasonable basis in “the record.” It

is clearly unnecessary in both magnitude of spillage and

time of duration to address any predicted DO “sag” in

Moore Reservoir — even assuming, which Simpson does

not concede, that the theoretical DO “sag” in Moore

Reservoir can be traced back to its doorstep at all.

Thus, while the punishment here does not even fit

the crime, the “record” fails to demonstrate that a crime

has actually occurred or that Simpson is the guilty party.

The most telling deficiencies, both analytically and/or

factually, are as follows:

50a

(A) DEC Was Pre-Disposed To Impose A Spillage

Requirement Based On Fundamentally Erro-

neous Misconceptions About The River And

Simpson’s Facility

In 1985 DEC issued to G-P a previous Section 401

Certification in connection with G-P’s replacement of one

of the four turbine/generator units at the project. In that

1985 Certification DEC stated, in part:

Due to pollutant loading and reduced re-aera-

tion caused by impounded waters and diversion

of flow at dams, there is a critical dissolved

oxygen problem in the Connecticut River.

. the Department will investigate oppor-

tunities to increase re-aeration at this site during

the relicensing process.

PC 40. As of April 1985, however, the only water quality

study actually conducted of the upper Connecticut River

indicated only that “model predictions show that Class B

standards may be violated in a substantial portion of the

study area during critical low flow conditions.” See RA,

1983 Metcalf & Eddy (“M&E”) Modeling Study, at 3-1

(emphasis added). Moreover, the same engineers clarified

their computer model predictions and conclusions in a

subsequent report prepared for these licensing proceed-

ings:

Modeling results indicated probable water qual-

ity standard violations under critical low flow

conditions for a substantial portion of the study

area. ... the large DO [dissolved oxygen] sag

from about river mile 324 to 312% is caused by

39 The Gilman dam is downstream, at about river mile 300.

5la

BOD [biochemical oxygen demand] exertion

from the James River discharge and by sediment

oxygen demand through this region.

See RA, 1985 M&E Study, at 2-4 (emphasis added). Clearly

it was the reach well above the Gilman dam that was the

focus of concern.

The James River Corporation paper plant in Grove-

ton, New Hampshire on the Upper Amonoosue River,

which empties into the Connecticut River upstream of the

Gilman project, has always been known and acknowl-

edged by DEC to be the largest single cause of dissolved

oxygen deficiencies in the upper Connecticut River:

The major affector of water quality in this reach

was the James River Corporation paper plant in

Groveton, New Hampshire. . . . the dissolved

oxygen levels incoming to any given project

along this reach are very dependent upon the

magnitude of the James River discharge.

PC 45-46. M&E 1983 concluded, however, that actual

“dissolved oxygen measurements taken above and below

the Georgia-Pacific Dam indicate a decrease [in DO

levels] averaging 0.1 mg/l.” Id., at 2-22. These measure-

ments were taken with the project in a normal operating

mode - i.e., passing all or most flows through the tur-

bines - and demonstrate that any DO deficit actually

caused by the Gilman project in 1983 was “negligible” (an

average of only 0.1 mg/l) and certainly not “critical.”

Intensive actual DO measurements over 48 hours in

August 1985, above and below the Gilman Dam, further

proved that at flows of approximately 800 cfs, there is no

52a

DO deficit caused by the project itself, and certainly not a

“critical” one.

The “record” relied on by DEC thus has never sup-

ported DEC’s 1985 premise that in this specific segment

of the Connecticut River applicable to the Gilman project,

there is a “critical dissolved oxygen problem” due to

“reduced re-aeration caused by impounded waters and

diversion of flow at dams.” PC 40. That incorrect and

unsupported premise has never been abandoned by DEC,

and from 1985 to the present has compelled DEC to

“investigate opportunities to increase re-aeration at this

site” — i.e., seek to condition this Section 401 Certification

with a continuous spillage requirement - without regard

to objective evidence of the Gilman project’s actual effect,

or lack thereof, on water quality standards. From the

outset DEC knew its stance was flawed and accordingly

this Certification would be “a major battle” (PC 58) and

that Simpson “disputed our findings and may appeal”

(PC 90).

Thus, in April 1987, before Simpson had formally

submitted its application for 401 Certification, and before

either DEC or Simpson’s consultants had performed any

of the more current computer model analyses of the

Gilman project’s actual effect on water quality, DEC again

confirmed its intention to impose a continuous spillage

requirement. PC 54. A year later, which was still before

any formal application, a continuous spillage requirement

*# Actual DO readings below the dam in 1985 ranged froma

low of 6.5 mg/l to a high of 8.05 mg/I at the bridge about 1,800

feet downstream of the dam, and from 7.1 mg/I to 9.45 mg/!

even further downstream. See RA, State’s Exh. I, App. C.

53a

was still uppermost on DEC’s agenda. PC 56. The initial

draft Certification prepared by DEC in January 1989, well

before any of the June 1989 computer modeling analyses

(upon which DEC now purports to base the permit) had

been performed, sought to impose a continuous spillage

requirement of 185 cfs. See RA. State’s Exh. L.

There is no “record” evidence that DEC indepen-

dently conducted more than one run of its own “DOSIM”

computer model analysis of predicted water quality

impacts caused by the Gilman dam project, in November

1988. PC 59-64. The only additional computer modeling

analysis, which was done in June 1989, was actually per-

formed by Simpson’s consultants, using modified input

parameters dictated by DEC. See RA, July 1989 KA Mod-

eling Study, at 7-11, 15-16, and Appendix B. Yet before

that final analysis was even undertaken, let alone com-

pleted, DEC in January and in May 1989 had already

decided to impose a continuous spillage requirement of

185 cfs, see RA, State’s Exh. L.*1 The compelling conclu-

sion is that since at least 1985 DEC has had the unswerv-

ing intention to require significant, continuous spillage at

the Gilman dam, come hell or high water.

‘1 The purported “sag” was 1.0 mg/I in the only DOSIM

run of record prepared by DEC (11/88) (PC 63), compared to 0.4

mg/l in “Run E” (6/89) (PC 76). Meanwhile, the spillage

requirement increased inversely, trom 100 cfs to 185 cfs in May

1989, to 210 cfs. in June 1989.

54a

(B) DEC’s “DOSIM” Model, Even After Refinement

By Simpson’s Consultants, Does Not Demon-

strate A Water Quality Violation Caused By The

Gilman Dam

“Run E” of the “DOSIM” model prepared by

Kleinschmidt Associates predicted a theoretical “sag” in

DO levels more than two miles downstream of the dam in

Moore Reservoir, of approximately 0.4 mg/I, under mod-

eled assumptions for critical low flows, high summer

temperatures, and maximum upstream wastewater dis-

charge levels. Nothing more, nothing less. The model

simply does not and cannot identify the “cause” of this

temporary “sag” in DO levels well into Moore Reser-

voir,#2 and there is no real analysis in “the record” or

discussion in the Certification to the contrary.

The Gilman dam and hydro-electric facility, and its

usual “no spill” mode of operation at river flows between

130 cfs and 2,850 cfs when all water passes through the

turbines, passes all river flows “instantaneously” and

«2 The “DOSIM” model also cannot calculate or account for

the effect of “diurnal flux” which DEC latched onto late in the

permitting process. Nowhere in “the record” is there any men-

tion of “diurnal flux” as a basis for spillage until June 1989. That

DEC staff may have latched on to data earlier submitted to

buttress their argument, does not show that the State’s early

DOSIM modeling “accounted for diurnal flux,” because the

model itself cannot. See PC 67. Finally, the State itself has been

inconsistent on this point. First it said the Ja-uary 1989 draft

certification included “diurnal flux,” when it clearly did not;

then it admitted the issue resulted from the discussions and

further modeling in June 1989 (which is precisely what Simpson

has said all along).

55a

does not have any significant storage capacity.“ The only

actual measurements of DO levels in this segment of the

river presently in “the record” — on August 12-14, 1985, at

flows of 800 cfs - demonstrate that DO levels for flows

downstream of the Gilman dam, before entering Moore

Reservoir, generally equal or exceed corresponding DO

levels for incoming flows upstream at the head of the

Gilman impoundment. Even with “diurnal flux” factored

in there is no actual or measured violation of the DO

standard downstream of the dam at any point before the

river enters Moore Reservoir.

Moreover, the hydro-electric facility does not add or

“load” any pollutants whose effect may be delayed or not

become fully apparent until later - unlike, for example,

the James River paper mill discharge which is acknowl-

edged to be the “major affector of water quality” over

this entire segment of the river. Therefore, any predicted

“sag” in D.O. some two-plus miles downstream in the

Moore Reservoir cannot be caused by the Gilman dam

itself, but must be due to (a) the influence of Moore

3 There is in fact spillage at the Gilman dam from time to

time even under present operating conditions. The turbine

capacity is 2,850 cfs, and any river flows in excess of that — the

average mean flow is 2,915 cfs, see RA, State’s Exh. F, at A-3 — are

spilled. Moreover, river flows exceed 2,850 cfs almost 30% of the

time during the relevant summertime period. Id. at A-12.

“ The State has hopefully given up its attempt to premise

its “liability” finding on the Gilman dam’s “destruction” of the

“natural re-aeration potential” of the river as if there were no

dam. Since the dam was built in 1900, there is obviously no

objective evidence which could ever be obtained or developed

to support such an analysis, and the Certification contains no

such justification. (DEC has tried to argue that “the record”

56a

Reservoir, (b) the influence of pollution added by

upstream sources, (c) both of those factors, and/or (d)

some additional scientific mechanism(s) or variable(s)

never identified or discussed by DEC or shown to be

Simpson’s responsibility.*®

The Need For Or Support DEC’s Imposition Of

A Continuous Spillage Requirement Of 210 cfs

From June 1, To October 15

“Run E” of the State’s model simply predicts a theo-

retical “sag” in dissolved oxygen levels of 0.4 mg/1

under certain assumed adverse conditions, which occurs

(if at all) 2.4 miles into Moore Reservoir. Period. More-

over, that modeled result exists only when all of the input

conditions actually occur, but the model cannot and does

not predict the time-frame when those variables might

actually occur simultaneously (as they must). There is no

evidence in “the record” or any discussion in the Certi-

fication itself which explains, supports or justifies how

and why DEC concluded that spillage must occur every

minute for a period of 4% months. Similarly, the amount of

spillage selected by DEC - 210 cfs — is not and cannot be

predicted by the “DOSIM” model. Rather, that aspect of

“5 Simpson and its consultants never agreed the Gilman

project causes any DO violation, and they certainly never under-

took any modeling efforts with the “assumption” that there was

a downstream violation for which Simpson is responsible. The

State’s predictable assertion in that regard, and the trial court’s

literally incredible finding to that effect, is clearly contradicted

by the “record” and every single submittal made by Simpson

below.

57a

Condition A is an amalgamation by DEC of (a) the “Run

E” model result, (b) DEC’s contentions regarding “diur-

nal flux,” and (c) DEC’s use of a “re-aeration curve”

produced in a 1985 study whose author cautioned was

not reliable under all conditions. PC 67.

In formulating its requirement for continuous spill-

age over the dam of 210 cfs from June 1 to October 15

each year, DEC appears to have relied heavily on “re-

aeration curves” contained in the M&E 1985 study. PC 62.

Actual re-aeration potential over the Gilman dam, how-

ever, would be subject to several variables not considered

by M&E in producing the Figure 9 curves, which are

actually based on only two observed measurements and

are otherwise wholly theoretical:

These curves are mainly based on theory, sup-

ported by limited data. . . . It should be noted

that a separate curve such as those shown in Fig.

9 is required for each condition of background river

flow and dissolved oxygen concentration.

See RA, M&E 1985 at 18 (emphasis added). The “re-

aeration curve” upon which the State so prominently

relies for its final determination of the amount of neces-

sary spillage, was clearly never intended to bear the

weight the State attaches to it.

Moreover, DEC staff appears to have merely “eye-

balled” the Fig. 9 chart, and to have committed a signifi-

cant mathematical error in the process. In a telephone

discussion with Simpson’s consultants, DEC staff said it

had done a “mass balance” analysis to derive the neces-

sary amount of spillage (see PC 68). There is no evidence

in “the record,” nor any discussion in the Certification

58a

itself, of any such “mass balance” analysis performed by

DEC to support Condition A. Also, despite DEC staff’s

statement that the required DO concentration at the base

of the dam would have to be 7.4 mg/1 (the 1.2 mg/1

“deficit” (actually, a 0.4 mg/1 DO “sag” plus 0.8 mg/1

“diurnal fluctuation”) plus the minimum DO standard of

6.2 mg/1), see id., the final spillage condition was then

calculated on the basis of requiring “8.4 mg/1 at the toe

of the dam.” See PC 67. Consequently, DEC’s usage of the

Fig. 9 re-aeration curve — itself unsupported by sufficient

fact or reason — was doubly infected by the wrong input

variable — i.e., 8.4 mg/1 of DO instead of 7.4 mg/1.

These are but the most egregious examples of how

this 401 Certification, and particularly its continuous

spillage requirement, is wholly unsupported even by “the

record” informally created by DEC. Any one of these

instances of inadequate factual support is fatal to the

Certification and Condition A. Of course, overreaching

everything is the utter unreasonableness and arbitrari-

ness of a 4-1/2 month continuous spillage requirement,

given the demonstrably infrequent occurrence of the nec-

essary conditions for the modelled DO “sag,” even if all

other findings and conclusions of DEC were to be sus-

tained.

V. 401 CERTIFICATIONS ARE LIMITED SOLELY TO

CONSIDERATION OF DEMONSTRABLE WATER

QUALITY VIOLATIONS

Section 401 of the Clean Water Act, 33 U.S.C. §1341, is

relatively concise in its requirements: Any applicant for a

federal license or permit which involves a discharge into

59a

any navigable waters, must obtain from the state regula-

tory body where the discharge occurs a “certification”

that the discharge will not cause any violation of water

quality limitations and standards developed in accor-

dance with the Act. Id., §1341 (a) (1). The only substantive

provisions of the Act that are expressly referenced, are

sections 1311 (“Effluent limitations” and “discharge of

any pollutant”), 1312 (“Water quality related effluent lim-

itations”), 1313 (“Water quality standards and implemen-

tation plans”), 1316 (“National standards of

performance” for the “greatest degree of effluent reduc-

tion .. . achievable through . . . the best available demon-

strated control technology”), and 1317 (“Toxic and

pretreatment effluent standards”). All of these substan-

tive provisions plainly relate to objective water quality

issues and elimination of water pollution. Under

§ 1341(d), any such

certification . . . shall set forth any effluent lim-

itations and other limitations, and monitoring

requirements* necessary to assure that any appli-

cant . . . will comply with any applicable afflu-

ent limitations and other limitations [imposed

by states pursuant to §§1311-1317 of the Act]

4 DEC’s “historic resistance” to monitoring and manage-

ment of water quality based on that monitoring, is clearly incon-

sistent even with the plain language of §401. Any §401 condition

which includes a monitoring and management plan would be

just as effective and just as enforceable as any other §401 condi-

tion related to water quality. Moreover, DEC’s over-zealous

concern with enforcement of and compliance with such a condi-

tion, see PC 90, exhibits a highly cynical and unreasonable view

of the world in general and Simpson in particular.

60a

and with any other appropriate requirement of

State law set forth in such certification.

Id. (emphasis added). Vermont has duly enacted applica-

ble water quality standards. PC 81-89, and there is no

dispute that those standards and the Act generally are

applicable to the Gilman dam.

The sole issue is whether the Gilman dam during

normal operation causes any violation of Vermont water

quality standards, and the only such standard that has

every been put in contention is the DO standard. The

Standard requires that DO levels in the river be main-

tained at all times at a minimum of 6.2 mg/1 (70% satura-

tion at 22°C), or — if existing water quality in the relevant

river segment exceeds the minimum - that that existing

higher level not be adversely affected by the facility

under the so-called “anti-degradation” provisions. See Vt.

WQS §§1-03, 3-01, PC 86-88. Once the water quality stan-

dards are set, the only question is whether a particular

project complies with those standards or not; as the

United States E.P.A. and even the State acknowledges.

“[w]hen [water quality] criteria are met, water quality

will generally protect the designated use.” See 40 C.F.R.

§131.3(b).

The State’s extensive discussion of such things as the

Clean Water Act’s preamble, the declared Congressional

intent, the “remedial” nature of the Act, and “beneficial

uses” and “beneficial values,” serves no purpose other

than to distract the Court from the real issue at hand,

which is compliance with the technical DO standard.

Courts around the Northeast and elsewhere have now

consistently rejected other states’ attempts to go beyond

6la

the clear and unambiguous focus of §401 on water quality

issues alone. See e.g., Fourth Branch Associates v. Depart-

ment of Environmental Conservation, 550 N.Y.S.2d 769, 146

Misc.2d 334 (N.Y.Sup.Ct., Albany Co., 1989),47 Matter of

Long Lake Energy Corp. v. New York State Dept. of Env.

Cons., 164 A.D.2d 396, 563 N.Y.S.2d 871 (3d Dept., App.

Div., 1990); Matter of Niagara Mohawk Power Corp. v. New

York State Dept. of Env. Cons., Index No. 7218-90

(N.Y.Sup.Ct., Albany Co., April 1, 1991); Commonwealth of

Pennsylvania v. City of Harrisburg, 133 Pa. Cmwlth. 577,

578 A.2d 563 (Pa. Commonwealth Ct., 1990); Arnold Irri-

gation Dist. v. Dept. of Env. Quality, 79 Or. App. 136, 717

P.2d 1274, 1279 (Or. Ct. of Appeals, 1986); but cf. Bangor

Hydro-Electric Company v. Bd. of Env. Protection, __ A.2d

___ (Me. Supreme Jud. Ct., 7/30/91). This development

has been noted approvingly by FERC. See In Re Central

Main Power Co., FERC Reports $61,033, at p. 61, 172-173

(1990). Most importantly, the focus on “primary measures

of water quality” in the form of the technical WQS limits,

and “an actually detectable or measurable” change in

water quality instead of “some theoretical impact” down-

stream, has been recently confirmed to be the touchstone

of Section 401 analysis. See Arkansas v. Oklahoma, supra, 60

U.S.L.W. at 4181 (cits. omitted).

47 The Court in Fourth Branch Associates also specifically

held that the reference in §1341(d) to “other appropriate

requirements of state laws” merely refers to other water quality

standards, separate from those established under the Clean

Water Act, which may in fact be stricter. Here Defendants have

pointed to no such separate standards, but rely only on the

Vermont WQS standard of 6mg/1 D.O. or 70% of saturation.

62a

Accordingly, to the extent both DEC and the court

below have alternatively attempted to justify Condition A

of the Certification by vague, non-specific references to

“aesthetics” and/or “recreation” — see PC at 18, 33 —- such

efforts are inadequate as a matter of law. Moreover, the

complete lack of any specific discussion of these charac-

teristics, and how they would or would not be affected by

spillage or lack thereof, makes it clear these issues were

an after-thought and purely make-weight. For example,

when “aesthetics” is an appropriate concern, it is an

analysis within the technical standards themselves of the

physical attributes of the water itself, see Arkansas v.

Oklahoma, supra, not some ad hoc and subjective consider-

ation of how a cascading dam might look nice to hikers,

canoeists, or other tourists.

VI. THE TRIAL COURT’S FINDINGS AND CONCLU-

SIONS WERE CLEARLY ERRONEOUS IN

NUMEROUS MATERIAL INSTANCES

Inasmuch as the trial court did not hold a de novo trial

or other evidentiary proceeding below, and since the

arguably applicable standard of appellate review focuses

on whether the agency’s decision is supported by substan-

tial evidence or is arbitrary and capricious, in a very

practical sense the trial court’s decision is of little

moment and need not be accorded the traditional “clearly

errs meous” deference required by Rule 52(a), V.R.Civ.P.

inaeed, such a procedure, at least as applied here, would

48 Simpson repeats its overriding objection to the applica-

tion of that principle here, for the reasons previously stated.

63a

only compound the substantial defects which already

infect this case. How could any appellant in these circum-

stances possibly meet the double burden of showing that

the trial court’s findings and conclusions are “clearly

erroneous” if the court below only has to find that the

agency’s decision is not arbitrary and supported by

“some evidence” in the record? The better approach

would seem to be that this Court sits just as the trial court

did, and using the same standard of review directly

examines the agency decision. This Court’s administra-

tive review decisions do not suggest otherwise, see cases

cited supra at 33-36, even when the vehicle for review is

Rule 75, V.R.Civ.P.

Nonetheless, Simpson has previously set forth some

eleven (11) of the most telling areas in which the trial

court’s findings and conclusions are clearly erroneous

and not supported by the administrative “record,” or are

even flatly inconsistent with themselves. See Plaintiff’s

Motion to Amend and/or Make Additional Findings and

Conclusions, dated October 21, 1991, in the Record on

Appeal. For the sake of brevity those errors and omis-

sions will not be repeated here.

CONCLUSION

For all of the reasons and on any one or more of the

grounds stated herein, the judgment below should be

reversed and this case remanded to the trial court, either

for a de novo hearing or for further remand to DEC for

reconsideration and further review of the Certification

and Condition A. Any such proceedings below must

include Simpson’s ability to marshall all of the relevant

64a

evidence, including that obtained since 1989, and to fairly

present its management plan. Alternatively, Condition A

requiring continuous spillage should simply be vacated \

as wholly lacking in evidentiary support, and as arbitrary

and capricious, and the Certification otherwise affirmed.

DATED: Burlington, Vermont

March 26, 1992 :

GRAVEL AND SHEA es

Attorneys for Appellants

By: /s/ Dennis R. Pearson |

Dennis R. Pearson, Esq. | i

John R. Ponsetto, Esq.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.