Sunday, January 7, 2018

Location, Location, Location

What's goin' on in that spot? 
In re North East Materials Group LLC, 2016 VT 87

By Andrew Delaney

Sometimes it takes us a little while to get around to cases here at SCOV Law. This is a late-2016 decision, and for some reason it’s never been picked up by any of our writers. But it’s 2018 now, so we need to get 2016 wrapped up.

Location matters. That’s the two-word version of this case. 

This is the second round, but we haven’t gotten to the first one yet either, so we’re starting from scratch here. Briefly, in the first round, a group of neighbors appealed and SCOV reversed because the environmental division has used the wrong legal standard in determining that North East Materials Group LLC (NEMG)’s rock-crushing operation didn’t “constitute a cognizable physical change to the preexisting development.” SCOV also concluded that one of the factual findings in support of the environmental division’s conclusion was “totally whack.” So, the case went back to the environmental division, which on remand again concluded that the rock-crushing operation was exempt from Act 250 as a preexisting development. The neighbors appeal again and the majority goes with the neighbors. Here we go again.

There are three issues: (1) whether the rock-crushing is grandfathered because it was being done before Act 250; (2) whether the activity was abandoned and a permit is required for resumption; and (3) whether there’s been a substantial change requiring an Act 250 permit.

The rock-crushing activity is happening on a relatively small portion of land—part of a larger property that previously had rock crushing going on. So NEMG is arguing that any rock-crushing activity on the whole tract counts for grandfatherin’ purposes. The neighbors don’t buy that and they argue a permit is required.

SCOV invites readers to read the first opinion for more-detailed facts. Here’s a link. Basically, there’s over 1000 acres between Barre and Williamstown with a history of Rock of Ages quarrying and rock-crushing activities dating back to the early 1900s. It’s on part of this land that NEMG is doing its rock crushing.

SCOV notes the legal principles in play. Development begun before June 1970 (Act 250’s effective date) is exempt and no permit is required. Any substantial change, however, requires a permit. Whether a change is substantial is determined by asking first whether there’s a cognizable change resulting from the project, and if so, whether there’s a potential for significant impact under any of the Act 250 criteria.

The party seeking the preexisting-use exemption has the burden. Once the pre-existing use exemption is established, a party challenging it has the burden of showing a substantial change. Nonetheless, the exemption-seeking party still has to offer enough evidence as to pre- and post-1970 operations to allow the factfinder to make the substantial-change determination.

Absence of evidence is not evidence in this context. In other words, the exemption-seeking party doesn’t get a pass on the substantial-change piece just because there’s no historic- or current-use evidence.

On remand, the lower court has to do what SCOV says to do. If it doesn’t—or if it goes outside the scope—that’s a problem.

In the first decision, the environmental division had used an “undifferentiated whole” approach, meaning that any activity anywhere on the 1000+ acres counts for preexisting-use purposes. While the majority isn’t going to get too bent out of shape about that broad interpretation, it doesn’t agree with that analysis for the substantial-change analysis—that, the majority notes, requires a more granular approach.

And so, on remand, the environmental division was s’posed to revisit its findings on whether NEMG’s rock-crushing ops fit within the general scope of the existing pre-1970s development; whether those activities, if they fit, were abandoned. Then, if within the scope and not abandoned, determine whether NEMG’s operations give rise to a substantial change.

This decision is limited to the substantial-change issue only. So, for this decision, the majority assumes that there was preexisting un-abandoned activity and the environmental court so found.

On remand, the environmental division found—based on a 1988 contract between Rock of Ages (owner of the land) and a paving company for removal of stone and off-site crushing—that it’s common practice in the granite industry to conduct crushing without formal contracts. The majority isn’t particularly impressed with this new finding. It reasons that this wasn’t even part of the remand and so it was just a reconsideration without a request. No bueno, mis amigos.

The environmental division reasoned that rock-crushing operations naturally expand and therefore, there was no cognizable change. On the second prong, it reasoned that there was no new impact, just new neighbors.

The majority reasons that this is pretty much the same rationale the environmental division gave the first time. And it’s still inconsistent with a proper substantial-change analysis. Just because rock-crushing moves around doesn’t mean it’s always the same thing. If that were the case, then the only reason NEMG couldn’t move its operations wherever it felt like on the 1000+ acres is if there had never been any rock-crushing operations on the land or nearby. In other words, the environmental division’s determination is that the location is largely irrelevant and the majority will not let that stand.

As to the location-and-impact part, the majority reasons that location really does matter. The environmental division’s no-new-issues-only-new-neighbors conclusion doesn’t hold up.

So the majority doesn’t even kick it back to the environmental division. Here, the majority reverses and requires NEMG “to submit an Act 250 application and obtain an Act 250 permit to continue its rock-crushing activities.”

Justice Eaton, joined by Justice Skoglund, dissents. In the dissent’s view, the environmental division’s decision did follow SCOV’s remand instructions and the majority’s decision collapses the two-part substantial-change test and flips the burden onto NEMG to disprove substantial change.

First, the dissent points out that requiring the environmental division to “revisit” its findings isn’t the same thing as requiring significant new findings. The majority seems to suggest that a whole buncha new findings were required.

The “broad approach”—based on considering activities over time on the entire complex—wasn’t necessarily bad before; it was simply that the whole tract couldn’t be the basis of the analysis. In other words, “any development anywhere” wasn’t an acceptable standard. A little more “granularity” was required. But SCOV did not previously require a permit on the facts before it.

In the dissent’s view, the environmental division’s reasoning on remand was correct and supported that “the challenged rock-crushing operations were not a cognizable change from past use.”

The dissent points to the specific findings showing that there had been stone-crushing activities both on and fairly close (within 1-2 miles) to the challenged site.

The dissent reasons that the majority “effectively imposes upon NEMG the burden of proving no substantial change, while at the same time acknowledging that our law places that burden of proof on the party claiming a substantial change to a preexisting development.”

There was no new evidence on remand and the environmental division did what it was supposed to do, so the dissent would affirm.

We’ve kinda started in the middle here. Stay tuned for what came before and what’s happened since.


  1. The story continues. See Findings for 5W0966-7.

  2. The permit was denied by the Commission, and then more activity commenced without the benefit of a permit. Here's the most recent Jurisdictional Opinion from District Coordinator Baird.