KOR-KO LTD. AND JOHN E. ROTHAMEL
MARYLAND DEPARTMENT OF THE ENVIRONMENT
Argued: November 4, 2016
Court for Anne Arundel County Case No. 02-C-13-180980
Barbera, C.J. Greene McDonald Watts Hotten Getty Harrell,
Glenn T., Jr., (Senior Judge, Specially Assigned), JJ.
are is dust in the wind.
lyrics of "Dust in the Wind" on Kansas's
"Point of Know Return" album (1977).
Kansas's song have made it to No. 6 on the
"Billboard Hot 100" and achieved Gold Record sales
status in 1978 had listeners understood that the dust in the
wind may have contained arsenic, hexavalent chromium,
hydrogen chloride, dioxins, and mercury, as we learn from the
controversy before us, a case involving the emissions to the
air from the operation of a crematorium? Kor-Ko, Ltd.
(Kor-Ko), the principal Petitioner in the present case,
seeks to overturn the Maryland Department of the
Environment's (MDE) grant of a construction permit to
Maryland Crematory, LLC (MC), to operate a crematorium in the
same commercial/industrial park building in Millersville,
Maryland, containing Kor-Ko's business operations.
AND PROCEDURAL BACKGROUND
submitted in 2011 a permit application to the MDE for the
construction of a human remains crematory incinerator at 408
Headquarters Drive, Suite 10, Millersville, Maryland 21108.
The air emissions from the incineration of human remains may
produce a panoply of toxic pollutants, including, among other
contaminants, arsenic, chromium, dioxins, and mercury. On 27
October 2011, the MDE notified MC that its original
application submission failed to quantify the crematory's
future toxic output or show that the emissions "will not
unreasonably endanger public health, " pursuant to Code
of Maryland Regulations (COMAR) 26.11.15.04 and 26.11.15.06.
The MDE allowed MC 90 days to supplement its application.
submitted a Toxic Air Pollutant Analysis on 7 December 2011,
but the MDE found the supplemented application deficient, as
memorialized in a letter to MC dated 27 December 2011. MC
re-supplemented its application in January and February of
2012 with additional information, but, again, the MDE
notified MC that its application remained lacking. On 21
March 2012, however, the MDE pivoted somewhat. In a letter to
MC, the MDE concluded that MC "provided an overall
sufficient toxics analysis within the 90 day
requirement. The 90 day clock is stopped[, ]" but
that some details of the application "still need[ed] to
be addressed[.]" In a follow-up document, the MDE
explained that, despite MC's application remaining
"inadequate with regards to dioxin and furan emissions,
" the MDE "was ultimately able to resolve this . .
. inadequacy of the compliance demonstration" by
performing its own calculations as to the quantitative and
qualitative models for these toxins.
reached and published a Tentative Determination, on 9 August
2012, to issue the permit because the agency expected the
crematory would meet the relevant air quality requirements.
Following an advertised legislative-style public hearing held
by the MDE on 6 September 2012, opponents of the proposed
issuance of the permit (including Petitioners) submitted, on
13 November 2012, supplemental written
hypothetical toxin dispersion and concentration data with
information from an EPA database about the specific
contaminants emitted by human remains incinerators, the MDE
compared (in a modeling exercise) the maximum concentrations
of MC's anticipated pollutants with screening levels
determined safe for human exposure. The MDE's screening
process found that the predicted pollutant concentrations,
modeled at ground level at the boundary of the commercial
park in which MC proposed to locate its business, would not
endanger unreasonably human health. URS Corp., a consultant
hired by opponents of the proposed permit action, calculated
independently that the anticipated pollutants' dispersal
and concentration levels, measured at the rooftop air
handlers height of MC's building (in which Kor-Ko was an
existing tenant) within the commercial park, several
pollutants, particularly arsenic and mercury, would reach
concentrations that exceed the MDE's threshold levels for
safety for human health.
24 July 2013, the MDE issued the construction permit,
together with its Final Determination and responses to some
of the previously received public comments, including the URS
report. On 16 August 2013, Kor-Ko and other
parties to the agency proceedings sought judicial review in
the Circuit Court for Anne Arundel County of the MDE's
Final Determination to issue the permit. In an order entered
on 26 September 2014, the court remanded the matter to the
MDE to analyze specifically MC's potential emissions'
toxicity to people in adjacent buildings in the office park
that use rooftop air handlers. On the MDE's direct
appeal, the Court of Special Appeals reversed, in an
unreported opinion, remanding the case to the circuit court
with instructions to affirm the MDE's issuance of the
permit. Kor-Ko filed electronically, on 21 April 2016, its
petition for writ of certiorari. On 23 June 2016, we granted
Kor-Ko's petition to consider potentially the following
questions, as formulated by Kor-Ko:
The overriding question presented in this action for judicial
review is whether MDE erred by issuing a permit to a facility
that will unreasonably endanger human health. See
COMAR § 26.11.15.06. That question has three subparts
that are presented for review:
1. Did MDE err by interpreting the definition of
"premises" to mean the entire commercial park?
2. Did MDE err by concluding that its "air toxics
regulations do not apply" anywhere within the entire
3. Did MDE, having reached an erroneous conclusion on those
two questions, err by not evaluating whether emissions of
toxic air pollutants will unreasonably endanger the health of
the neighboring tenants, including Petitioners?
this or any appellate court reviews the final decision of an
administrative agency . . ., the court looks through the
circuit court's and intermediate appellate court's
decisions, although applying the same standards of review,
and evaluates the decision of the agency."
People's Counsel for Baltimore Cnty. v. Surina,
400 Md. 662, 681, 929 A.2d 899, 910 (2007) (citing
Mastandrea v. North, 361 Md. 107, 133, 760 A.2d 677,
691 (2000)). Our analysis, therefore, focuses squarely on the
MDE's decision to issue the contested construction
permit. Our review is limited generally to the administrative
record. Md. Code, Environment Art. (EN), § 1-601(d)
(2013 Repl. Vol.).
applicable level of judicial scrutiny depends often on the
nature of the agency's process and/or action, e.g.,
quasi-judicial or quasi-legislative. On one hand, this Court
described agency processes or actions as quasi-judicial when:
"(1) the act or decision is reached on individual, as
opposed to general, grounds, and scrutinizes a single
property . . . and (2) there is a deliberative fact-finding
process with testimony and the weighing of evidence."
Normally, that requires a contested case hearing, so that
evidence (as opposed to informal statements of general
beliefs) may be presented, challenged, and analyzed, in order
that reasonable credibility determinations can be made.
Md. Bd. of Pub. Works v. K. Hovnanian's Four Seasons
at Kent Island, LLC, 425 Md. 482, 515, 42 A.3d 40, 59
(2012) (quoting Md. Overpak Corp. v. Mayor and City
Council of Baltimore, 395 Md. 16, 33, 909 A.2d
235, 245 (2006)). On the other hand, an agency process or
action is seen as quasi-legislative when "'the
[action] is one making a new law-an enactment of general
application prescribing a new plan or policy[, as opposed to]
one which merely looks to or facilitates the administration,
execution, or implementation of a law already in force and
effect.'" Hovnanian's Four Seasons, 425
Md. at 514, 42 A.3d at 59 (quoting City of Bowie v. Cnty.
Comm'rs for Prince George's Cnty., 258 Md. 454,
463, 267 A.2d 172, 177 (1970)).
MDE's issuance of the construction permit to MC appears
facially to fall in-between our recognized indicia
distinguishing adjudicative from legislative agency processes
or actions. By issuing the permit, the MDE affected directly
the rights and responsibilities of the applicant, MC, not
crematorium operators at-large. The State environmental
statute, however, forbids contested hearings in this kind of
permit application process,  although the MDE's procedures
did involve, for example, fact-intensive consideration of
scientific information-the computer modeling of the
dispersion and concentration of toxins from the crematory,
the assumptions and conclusions of which could be, and were,
contested via the submission of opposing public comments.
2016, this Court applied the standards of appellate review
for quasi-judicial decisions to a permit decision by the MDE
in a scenario governed by the same permitting statute
involved in the present case: "[a]lthough this statute
does not set forth a standard of review, the substantial
evidence and arbitrary and capricious standards apply where
an 'organic statute' authorizes judicial review
without a contested case hearing and does not set forth a
standard of review." Md. Dep't of Env't v.
Anacostia Riverkeeper, 447 Md. 88, 118, 134 A.3d 892,
910 (2016), reconsideration denied (May 20, 2016)
(citing Supervisor of Assessments of Carroll Cnty. v.
Peter & John Radio Fellowship, Inc., 274 Md. 353,
355, 335 A.2d 93, 94 (1975) and Med. Waste Assocs., Inc.
v. Md. Waste Coal., Inc., 327 Md. 596, 621, 612
A.2d 241, 253 (1992)).
shall review, therefore, the MDE's Final Determination to
issue the permit to MC as follows:
Whether by statute or by common law, courts look for three
things when reviewing a quasi-judicial decision: (1)
were the findings of fact made by the agency supported by
substantial evidence in the record made before the agency;
(2) did the agency commit any substantial error of procedural
or substantive law in the proceeding or in formulating its
decision; and (3) did the agency act arbitrarily or
capriciously in applying the law to the facts- in essence,
whether a reasoning mind could reasonably reach the
conclusion reached by the agency from the facts in the
record. With respect to the findings of fact, judicial review
is highly deferential. With respect to determining legal
error, it is much less so.
Hovnanian's Four Seasons, 425 Md. at 514, 42
A.3d at 58 n.15 (citations omitted).
standard requires our review to be "narrow and highly
deferential" with respect to administrative
fact-finding. Trinity Assembly of God of Baltimore City,
Inc. v. People's Counsel for Baltimore
Cnty., 407 Md. 53, 78, 962 A.2d 404, 418 (2008).
"An agency decision based on regulatory and statutory
interpretation is a conclusion of law. Even when reviewing an
agency's legal conclusions, an appellate court must
respect the agency's expertise in its field. When an
agency interprets its own regulations or the statute the
agency was created to administer, we are especially mindful
of that agency's expertise in its field." Carven
v. State Ret. & Pension Sys. of Md., 416 Md. 389,
406, 7 A.3d 38, 49 (2010) (citations and quotation marks
omitted). Compared with a question of statutory
interpretation, "[w]hen the construction of an
administrative regulation rather than a statute is in issue,
deference is even more clearly in order." Md.
Transp. Auth. v. King, 369 Md. 274, 288, 799
A.2d 1246, 1254 (2002) (citations and quotation marks
omitted). We grant such deference to an agency's
interpretation of its regulations because
agency rules are designed to serve the specific needs of the
agency, are promulgated by the agency, and are utilized on a
day-to-day basis by the agency. A question concerning the
interpretation of an agency's rule is as central to its
operation as an interpretation of the agency's governing
statute. Because an agency is best able to discern its intent
in promulgating a regulation, the agency's expertise is
more pertinent to the interpretation of an agency's rule
than to the interpretation of its governing statute.
King, 369 Md. at 289, 799 A.2d at 1254 (citations
and quotation marks omitted). Put another way, the courts do
not play the role of an über administrative agency in
reviewing the actions of state or local administrative
bodies, but, rather we exercise discipline in our review so
as not to cross the separation of powers boundary.
to building a human remains incinerator or other
similarly-regulated source of air pollution, an applicant
must obtain a construction permit from the MDE. COMAR
26.11.02.02B. Pursuant to COMAR 26.11.15 and 26.11.16, the
MDE regulates Toxic Air Pollutants (TAPs) and provides
related procedural requirements to prevent unreasonable
danger to human health, among other objectives. COMAR
26.11.15.06, Ambient Impact Requirement, subsection A(1),
reads as follows:
A. Requirements for New Installations, Sources, or Premises.
(1) Except as provided in §A(2) of this regulation, a
person may not construct, modify, or operate, or cause to be
constructed, modified, or operated, any new installation or
source without first demonstrating to the satisfaction of the
Department using procedures established in this chapter that
total allowable emissions from the premises of each toxic air