• Judge Orders ADEM to Increase Penalties against Developer
  • March 31, 2010
  • Law Firm: Balch & Bingham LLP - Birmingham Office
  • Last Wednesday, Montgomery County Circuit Court Judge Charles Price issued an Order finding that the Alabama Department of Environmental Management (ADEM) had failed to assess the statutory minimum penalty in an Administrative Order it issued to a developer for alleged stormwater violations. A copy of Judge Price’s Order is here. Although the amount of penalties assessed by ADEM in Administrative Orders is frequently challenged, this is the first time a court has ordered ADEM to increase the amount assessed—in this case, from $20,000 to $120,500.

    The challenged Administrative Order was issued by ADEM to SDW, Inc., the developer of the Williamsburg subdivision in Tuscaloosa County, Alabama and assessed a penalty of $20,000 for violations the Court found continued for 1,205 days. A citizen’s group, Friends of Hurricane Creek (FoHC), challenged the Administrative Order and requested a hearing before the Alabama Environmental Management Commission, contending that the penalty was too low because it was not assessed at the $100 per day minimum amount provided in the Alabama Environmental Management Act. Without deciding on the merits of the challenge, the Commission found that FoHC was not an “aggrieved” party and issued an order dismissing the request for hearing for lack of jurisdictional standing.

    FoHC appealed the Commission’s dismissal to the Montgomery County Circuit Court and moved for summary judgment, arguing that the Commission’s conclusion that they were not aggrieved was erroneous and asking the court to remand the matter to the Commission to enter an order on the merits. While the only issue on appeal appeared to be whether the Commission correctly dismissed the request for hearing for lack of standing, the court's order bypassed that issue and went straight to the question of whether the penalty was adequate. Noting that pursuant to Alabama Code § 22-22A-5(18) (c), “any civil penalty assessed . . . shall not be less than $100.00 or exceed $25,000.00 for each violation, provided however, that the total penalty assessed in an order issued by the department . . .shall not exceed $250,000.00. Each day such violation continues shall constitute a separate violation for purposes of this subdivision,” Judge Price found ADEM’s assessment of $20,000 for alleged violations “is a violation of the statutory minimum, which must be imposed at $100 per violation and $100 per day for each day of continued violation,” and ordered ADEM to “assess a civil penalty in the amount demanded by the statute for the violations cited” in the Administrative Order.

    This decision is questionable considering the court failed to address the threshold question of whether FoHC had standing as an "aggrieved party" to request a hearing before the Commission. ADEM is considering an appeal of the ruling, but has not yet decided if it will do so. Any appeal would have to be filed with the Alabama Court of Civil Appeals.