Vermont Supreme Court Affirms Costco’s Permits to Expand Its Retail Store and Add a Gas Station

In In re Costco Stormwater Discharge Permit, Costco Final Plat & Site Plan, Costco Act 250 Land Use Permit, Wetlands Reclassification, et al. (R.L. Vallee, Inc. and Timberlake Associates LLP, Appellants), 2016 VT 86 (Aug. 5, 2016), the Vermont Supreme Court affirmed the environmental division’s decision affirming the permits issued to Costco to expand its retail store and add a gasoline station in Colchester.

Issue: R.L. Vallee Inc. and Timberlake Associates LLP, both owners of retail gasoline-service facilities near the planned Costco expansion, appealed the grant of the permits. Vallee argued that the trial court erred in finding that Costco’s proposed traffic-mitigation measures were sufficient to issue an Act 250 permit; that the trial court erred in making findings concerning the impact of an underground stormwater outlet pipe that had not been addressed previously; that the trial court erred in finding that the project would not adversely affect a Class 2 wetland; and that the court erred in excluding testimony prepared by Vallee’s wetlands consultant. Timberlake argued that the trial court erred in relying on a presumption regarding the project’s impact on water pollution and waste disposal under Act 250.

Holding: The Court affirmed the trial court’s decision that affirmed the permits. With regard to Vallee’s traffic argument, the Court found that the evidence on the record was sufficient to support the trial court’s conclusions regarding Costco’s traffic mitigation proposals. The trial court found that Costco’s traffic expert presented the most credible explanation and examination of the traffic issues, and the Supreme Court held that the trial court’s judgment regarding the credibility of witnesses was well within its discretion. With regard to Vallee’s underground pipe argument, the Court found that the trial court was not required to remand the project to ANR for further review since the pipe would have minimal impact on the wetlands and would not affect anyone who wasn’t already before the court. The Court further found that the trial court did not improperly prevent Vallee from presenting evidence regarding the pipe; given the record, there was no foundation for there to be any questions about the underground stormwater outlet pipe. With regard to Vallee’s argument on the Class 2 wetland, the Court found that the record supported the trial court’s finding that the expansion project would have an adverse impact on the wetland’s “ability to serve its core functions.” With regard to Vallee’s final argument, the Court found that the evidence supported the trial court’s concerns about one of Vallee’s expert’s exhibits. The Court also noted that the expert was allowed to present testimony and supporting exhibits, so even if the trial court’s exclusion of one of the expert’s exhibits was erroneous, it was not substantially prejudicial to Vallee’s case. With regard to Timberlake’s water pollution and waste disposal argument, the Court found that Timberlake did not effectively rebut the presumption that arises from the stormwater permit. Instead of rebutting the presumption, Timberlake simply presented evidence that the “expected performance impact” of ANR’s design standards had not yet been validated. This evidence was not enough to shift the burden of proof back to Costco.