Vermont Supreme Court Reverses Environmental Division and Holds that North East Materials Group is Required to Apply for an Act 250 Permit

In In re North East Materials Group LLC Act 250 JO #5-21 (Russell Austin, Pamela Austin, Julie Barre, Marc Bernier, et al., Appellants), 2016 VT 87 (Aug. 12, 2016), the Vermont Supreme Court reversed the Environmental Division’s holding that North East Materials Group’s (NEMG) current rock-crushing operation did not constitute a cognizable change to the existing quarry development.

Issue: In its initial decision, the Environmental Division held that the rock-crushing operation was exempt from Act 250 as a preexisting development. In 2015, the Vermont Supreme Court reversed and remanded, finding that the lower court used the wrong legal standard when it determined that the rock-crushing operation was not a “cognizable physical change to the preexisting development.” At issue in this case was whether rock crushing occurred in the preexisting quarrying development before July 1, 1970, whether the activity was abandoned to the point where renewal would require an Act 250 permit, and whether there was such a substantial change in the rock-crushing activity that an Act 250 permit would be required. The rock-crushing at issue in this case occurs on a small part of a larger tract of quarrying land owned by Rock of Ages. NEMG argued that activity anywhere on the tract of land owned by Rock of Ages counts in answering the three questions at issue. The appellants, a group of neighbors, argued that only activity conducted on the NEMG portion of the quarry should count in answering the three questions.

Holding: The Supreme Court reversed the Environmental Division’s determination that the rock-crushing did not constitute a cognizable change to the existing quarrying development. The Environmental Board and the Supreme Court use a two-part test to determine whether a new development constitutes a substantial change in the context of Act 250 permit requirements. The test requires courts to determine whether the new project will lead to a “cognizable change to the existing development.” If it will, then the court must decide whether the change has the potential for “significant impact” under any of the Act 250 criteria found in 10 V.S.A. §6086(a). When the case was initially remanded, the Environmental Division was asked to look at the findings regarding several issues. On appeal, the Court focused specifically on whether the project led to a substantial change to the pre-1970 development, holding that the Environmental Division’s decision that the location of the rock crushing was not determinative was inconsistent with the Court’s analysis of substantial change when the case was first appealed. The Court found that the location of the rock crushing led to a cognizable change to the existing development and that the change had the potential for significant impact, noting that the effect of the noise and clouds of rock dust were significant to reach the potential impact as a matter of law. Because the project failed the two-part test, the Court determined that the rock-crushing operation was subject to Act 250 jurisdiction.

Dissent: Justice Eaton dissented, arguing that the majority’s decision collapsed the two-part test and put the burden on NEMG to prove that the rock-crushing project was not a substantial change to the preexisting development. He noted that when the case was first remanded, the Court asked the Environmental Division to use a “more granular approach,” and argued that the lower court did just that – it revisited its findings, added several new ones regarding the location of past rock-crushing projects, and took a more granular approach to determine whether there was a cognizable change. He also noted that the majority never made clear exactly what a more granular approach entailed and that this opinion suggests that NEMG and other companies like it working in the Rock of Ages complex would have to obtain a new Act 250 permit every time they moved their rock-crushing projects within the quarry, even though there is evidence that rock crushing has occurred at the quarrying site for over a century.