2006-703, APPEAL OF REGENESIS CORPORATION

Sheehan Phinney Bass & Green, P.A.

(New Hampshire Department of Environmental Services

No. 2006-703

Department of Environmental Services

Anderson & Kreiger, LLP THE SUPREME COURT OF NEW HAMPSHIRE Resident’s Environmental Action Committee for Health, Inc. Kelly A. Ayotte Michael J. Tierney on the brief, and Mr. Tierney orally), for intervenor

intervenor Citizens for a Future New Hampshire. Wilkins and Jeffrey L. Roelofs on the brief, and Mr. Wilkins orally), for

attorney general, on the brief and orally), for the State.

and Robert P. Cheney on the brief, and Mr. Haffer orally), for the petitioner.

http://www.courts.state.nh.us/supreme.

release. The direct address of the court's home page is: Opinions are available on the Internet by 9:00 a.m. on the morning of their may be reported by E-mail at the following address: reporter@courts.state.nh.us. order that corrections may be made before the opinion goes to press. Errors Charles Doe Drive, Concord, New Hampshire 03301, of any editorial errors in are requested to notify the Reporter, Supreme Court of New Hampshire, One as formal revision before publication in the New Hampshire Reports. Readers NOTICE: This opinion is subject to motions for rehearing under Rule 22 as well permit. Regenesis appealed to the waste management council (council). See

p. 2 that Regenesis officials did not lack integrity and reliability; and (2) in arguing that the council erred: (1) in adopting the hearing officer’s decision connection with the solid waste permit applications. REACH cross-appeals, and (2) Bio Energy/Regenesis did not provide proper public notice in officials lack sufficient reliability and integrity to operate a solid waste facility; the permit should have been revoked on the additional ground that Regenesis’ existing officers, directors or partners. CFNH cross-appeals, arguing that: (1) erred in finding that the certification language in RSA 149-M:9 is limited to rulings should be vacated. The State cross-appeals, arguing that the council unnecessary to the determination of the alleged violations, those findings and officer issued a ninety-two-page decision revoking Regenesis’ solid waste (3) to the extent that the decision makes findings and rulings that were testified and all five parties were represented by counsel, the DES hearing the sanction imposed is unconstitutionally excessive and disproportionate; and hearing officer’s revocation decision, which was unreasonable and unlawful; (2) Regenesis appeals, arguing that: (1) the council erred in affirming the

Following a three-day evidentiary hearing at which seven witnesses

council denied all parties’ motions. rehearing or clarification. In a written decision issued in September 2006, the revocation of the permit. Regenesis, DES, CFNH and REACH all filed for intervened. After a non-evidentiary hearing, the council affirmed the RSA 21-O:9, V, :14 (2000). CFNH and REACH also filed appeals and the Town

omissions on the part of Regenesis. contained additional allegations regarding false and misleading statements and DES issued an amended notice of proposed license action (ANPLA), which Hopkinton (Town) all intervened in the revocation proceeding. In March 2005, Environmental Action Committee for Health, Inc. (REACH) and the Town of solid waste facility. Citizens for a Future New Hampshire (CFNH), Resident’s into question whether Regenesis had the reliability and integrity to operate a misleading statements to DES during the course of permit proceedings, calling facility in Hopkinton. The NPLA alleged that Regenesis officials made false or store and use wood fuel derived from construction and demolition debris at a revoke the solid waste facility permit held by Regenesis that authorized it to Services (DES) issued a notice of proposed license action (NPLA) seeking to In November 2004, the New Hampshire Department of Environmental

revoking the petitioner’s solid waste permit. We affirm. Services Waste Management Council upholding a hearing officer’s decision appeals from a decision of the New Hampshire Department of Environmental BRODERICK, C.J. The petitioner, Regenesis Corporation (Regenesis), percent have been convicted of a felony within the prior five years. See p. 3 proposed permit holders that no officers, directors, or owners of more than ten application, which required certification on behalf of both the existing and waste permit required DES approval through a type IV permit modification officer, director and shareholder of more than ten percent. Transfer of the solid its assets to a new company, Bio Energy, LLC, in which DiNapoli was an Corporation’s principals were preparing to dissolve the company and transfer realized that DiNapoli’s conviction was a “problem” for Bio Energy. Bio Energy Dell’Orfano learned of DiNapoli’s conviction in June 2002. Dell’Orfano

Energy Corporation, without knowledge of DiNapoli’s conviction. witness tampering. On May 28, 2002, DES issued a solid waste permit to Bio DES, DiNapoli was convicted in Hillsborough County Superior Court of felony March 25, 2002, while the initial permit application was still pending with results of its Bio Energy Corporation background investigation to DES. On the attorney general’s office, still unaware of the indictment, forwarded the DiNapoli that did not uncover the recently filed charges. On March 20, 2002, November 5, 2001, the attorney general’s office performed a criminal check of later, on October 18, 2001, DiNapoli was indicted for witness tampering. On including a sworn statement that he had no criminal convictions. Three days submitted a personal history disclosure form to the attorney general’s office, application and, as part of that investigation, on October 15, 2001, DiNapoli the environmental protection bureau (EPB) in connection with the initial Energy Corporation. The Division requested a background investigation from time, DiNapoli was an officer, director and fifty percent shareholder of Bio the Division for a permit to construct and operate a solid waste facility. At that On October 9, 2001, Bio Energy Corporation submitted an application to Dell’Orfano persuaded DiNapoli to resign from Bio Energy Corporation and certification on behalf of Bio Energy Corporation or Bio Energy, LLC. Instead, Dell’Orfano concluded that he could not truthfully make the required Upon reviewing the type IV application form and the solid waste rules,

Admin. Rules, Env-Sw 303.14; 315.08.

served as treasurer and secretary and both served as directors. Corporation’s president and, at different times, either Dell’Orfano or DiNapoli percent. Throughout that period, Dell’Orfano served as Bio Energy shareholders were William Dell’Orfano and Anthony DiNapoli, each owning fifty electricity and steam. From 1983 to 2002, Bio Energy Corporation’s sole have operated a wood incinerator facility, burning wood chips to produce Since 1983, Bio Energy Corporation and its successor, Bio Energy, LLC,

100 days prior to the certification. disclosure of a felony conviction for an officer who left the company less than determining that the certification requirements of RSA 149-M:9 did not require operate a solid waste facility. Regenesis objected to the proposed permit p. 4 called into question whether Regenesis had the reliability and integrity to statements and omissions to DES in the course of the permit proceedings application for permit transfer, and that Regenesis officials’ false or misleading directors had been convicted of a felony in the five years prior to the when he certified on December 2, 2002, that none of Bio Energy’s officers or and the ANPLA alleged that Dell’Orfano made a false or misleading statement On March 4, 2005, DES issued the NPLA against Regenesis. The NPLA

The permit transfer was approved on March 28, 2003. and/or incomplete information shall be subject to revocation or suspension.” complete. I understand that any approval granted by DES based on false belief, the information and material submitted herewith is correct and proposed new permittee, Regenesis, that “[t]o the best of my knowledge and statement on behalf of the existing permittee, Bio Energy Corporation, and the but by Bio Energy, LLC. On the transfer application Dell’Orfano signed a environmental permits associated with the facility were not held by Regenesis transfer of the permit to Bio Energy, LLC, nor was DES informed that other application process did Bio Energy Corporation or Regenesis inform DES of the during the five years before the date of the application. At no point during the 4 entity’s officers, directors, partners or managers had been convicted of a felony holding ten percent or more of either entity’s debt or equity, and none of either 2002, on behalf of Bio Energy Corporation and Regenesis, that no individual As part of the transfer application, Dell’Orfano certified on December 2,

the officers and directors of Bio Energy Corporation. exception of DiNapoli, the officers and directors of Regenesis were the same as connection with the previous Bio Energy background investigation. With the complete personal history disclosure forms had already completed the forms in attorney general’s office that the four individuals who would be required to Bio Energy, LLC account. Corporate officials represented to DES and the Bio Energy, LLC and the check accompanying the application was drawn on a Corporation to Regenesis. The corporations gave the same mailing address as Regenesis filed an application with DES to transfer the permit from Bio Energy In early December 2002, Bio Energy Corporation, Bio Energy, LLC and

shareholder of more than ten percent of Bio Energy, LLC. Bio Energy, LLC on June 12, 2002. DiNapoli remained an officer, director and approvals issued or granted by a governmental agency, had been transferred to of the equipment and machinery and all permits, licenses, authorizations and including the Bio Energy facility, the buildings, the underlying property, most dissolved on August 28, 2002, the day before DiNapoli resigned. Its assets, Energy Corporation on August 29, 2002. Bio Energy Corporation had been DiNapoli was not involved. DiNapoli resigned as an officer and director of Bio decided to transfer the solid waste permit to Regenesis, a company with which stated: p. 5 felony conviction. He concluded that the permit should be revoked. As he was an appropriate sanction for the company’s failure to be candid about the The hearing officer also addressed the question of whether revocation

transferable.

circumstance that made the permit voidable, rather than

History Disclosure Form that was no longer accurate), a conviction (he, too, having failed to amend or withdraw a Personal issued to Bio Energy on May 28, 2002, after Mr. DiNapoli’s eligible to hold it or transfer it. The original permit had been 2003 without knowledge that Bio Energy Corporation might not be DES approved the transfer of the permit to Regenesis on March 28, accurate information about Mr. DiNapoli’s criminal background, Because it was false, it was also misleading. Lacking

was not complete, it was less than candid, and it was literally false. having Mr. DiNapoli resign from the corporation. The certification

application date was not rendered true by the mere device of

director had been convicted of a felony within five years of the 5 2002. Mr. Dell’Orfano’s certification that no corporate officer or corporation, and he had been convicted of a felony on March 25,

December 6, 2002. Mr. DiNapoli had been an officer in the Bio Energy Corporation. The application was submitted to DES on The “existing permittee” in the 2002 transfer application was

Dell’Orfano’s certification was truthful. He stated: and rules to this effect. The hearing officer rejected Regenesis’ contention that felons from obtaining solid waste permits” and the provisions in the statute Legislature ascribed to preventing organizations associated with convicted to a different entity. The hearing officer noted “[t]he importance that the Corporation and the transfer of its assets, including its environmental permits, Energy, LLC, and by failing to inform DES of the dissolution of Bio Energy Corporation, or of his continued involvement with the facility through Bio DES of DiNapoli’s felony conviction or of his resignation from Bio Energy Regenesis’ officials acted in a false or misleading manner by failing to inform permit. The hearing officer’s decision contains numerous findings that Following a hearing, the hearing officer issued a decision revoking the

certification. Corporation before the December 2002 transfer application that contained the certification was true because DiNapoli sold his interest in Bio Energy waste statutes and rules. Specifically, Regenesis asserted that Dell’Orfano’s conviction or that it had in any way violated or failed to comply with the solid revocation and denied that it had wrongfully withheld information about the unreasonable.” Id p. 6 clear preponderance of the evidence before it, that such order is unjust or set aside or vacated except for errors of law, unless the court is satisfied, by a deemed to be prima facie lawful and reasonable” and the decision “shall not be unlawful.” RSA 541:13 (2007). The hearing officer’s findings of fact “shall be decision and the council’s order affirming it were “clearly unreasonable or To prevail on appeal, Regenesis must show that the hearing officer’s

revoke the permit.” the certification language finding, are sufficient to support the decision to and conclusions reached by the hearing officer and “that these, even absent Nevertheless, the council affirmed, stating that it agreed with all other findings existing officers, directors or partners not past officers, directors or partners.” ruled that the certification language contained in RSA 149-M:9 “is limited to Regenesis appealed the permit revocation to the council. The council

permit transfer proceedings and 2003 permit modification proceedings. He also concluded that the company properly notified abutters in the 2002 Regenesis lacked the reliability and integrity to operate a solid waste facility. The hearing officer declined to revoke the permit on the alternative ground that

years of the transfer application is good cause to revoke the permit. no corporate principal has been convicted of a felony within five Dell’Orfano’s provision of the false and misleading certification that

regulatory criterion for holding a solid waste permit. Mr. whether the existing permittee met an important statutory and Energy Corporation and Regenesis, misled DES with respect to certification by Mr. Dell’Orfano in his role as agent for both Bio

of a felony within the relevant five year period. The false by Mr. Dell’Orfano that no corporate principals had been convicted 6

District v. Water Pollution Comm’n, 103 N.H. 169, 173-74 (1961). saw fit and his conclusions are entitled to great weight. See Plymouth Fire hearing officer was at liberty to accept or reject the testimony before him as he See Appeal of Basani, 149 N.H. 259, 261-62 (2003). As a fact-finder, the showing that there was no evidence from which he could conclude as he did. are deemed prima Regenesis based, in part, on the false and misleading certification facie lawful and reasonable may be overcome only by a

. The presumption that the hearing officer’s findings of fact

Energy Corporation solid waste permit was transferred to

DES proved by a preponderance of the evidence that the Bio your trustworthiness being questioned. p. 7 information from this form, even unintentionally, may result in untrustworthiness, and result in disqualification. Omitting such but attempting to conceal the conviction may lead to a finding of criminal conviction probably would not disqualify the applicant, impression that you are trying to hide it. For example, a minor careful not to leave out information in a way that might create an

ANSWER COMPLETELY AND TRUTHFULLY. . . . Be especially

current designation. We note that the solid waste rules have been redesignated from Env-Wm to Env-Sw and we utilize the 1

it is complete and accurate and instructs the applicant to personal history disclosure form. This form requires an affidavit affirming that execute under oath in connection with the background investigation is a convictions. RSA 149-M:9, III. One of the EPB’s forms that applicants must a solid waste permit application in order to assist in discovering criminal to conduct background investigations of individuals and entities affiliated with The Division is authorized to ask the EPB of the attorney general’s office

of the application. N.H. Admin. Rules managers have been convicted of a felony during the five years before the date applicant’s debt or equity, and none of the officers, directors, partners or transfer, must certify that no individual holding ten percent or more of the applicant for a solid waste permit, whether through initial application or permit the permit application.” RSA 149-M:9, IX(c). Under the solid waste rules, an . . . a felony in any state or federal court during the 5 years before the date of holding 10 percent or more of its equity or debt liability has been convicted of officers, directors, partners, key employees or persons or business entities make this certification. Id DES may deny a corporation’s solid waste permit application if “any of its. 315.03, 315.08. transfer, both the proposed permit holder and the existing permit holder must

waste. management division (Division) regulates the management and disposal of solid Admin. Rules, Env-Sw 100 et seq. (solid waste rules). Within DES, the waste 1 DES has adopted administrative rules to implement the permit system. N.H. approval from DES. RSA 149-M:9, I, XII. Under the Act, the commissioner of facility, or transfer a solid waste permit to any other person, without prior chapter 149-M (2005 & Supp. 2007) (Act), no person may operate a solid waste Pursuant to the New Hampshire Solid Waste Management Act, RSA

p. 8 shareholder of Bio Energy, LLC after he resigned from Bio Energy Corporation, hearing officer’s findings that DiNapoli remained an officer, director and concerning DiNapoli’s involvement. In addition, the record supports the failed to disclose DiNapoli’s conviction despite a direct inquiry by DES were held by a different company with which DiNapoli was still involved,and for Bio Energy Corporation, failed to inform DES that the other facility permits impression that the officers and key employees for Regenesis were the same as relevant facts from its permit transfer application, gave the misleading The record supports the hearing officer’s findings that Regenesis omitted

course of conduct during the permitting process was sufficiently false or

conviction while still a half-owner of Bio Energy Corporation. The central issue before the hearing officer was whether Regenesis’ applications was intended to prevent DES from learning of DiNapoli’s felony

conduct engaged in by Regenesis officials in submitting the relevant issued based upon false or misleading information. The overall course of Regenesis did review of the record reveals support for his conclusion that the DES permit was solid waste permit . . . [and] the incontrovertible documentary proof is that 306.05. Despite Regenesis’ literal parsing of the hearing officer’s decision, our issue, “only the dissolution issue remains as the basis for revocation of [its] would have had grounds for denying the permit. N.H. Admin. Rules, Env-Sw Regenesis and the Council rejected his ruling against Regenesis on the third holder violated the Act, RSA chapter 149-M, or its underlying rules; or if DES Regenesis, because the hearing officer resolved the first two issues in favor of the permit was issued based upon false or misleading information; if the permit and integrity, notice to abutters, certification, and dissolution. According to DES solid waste rules, “good cause” for revoking a solid waste permit exists if argues that the hearing officer designated four issues for hearing: reliability misleading to justify revoking the company’s solid waste permit. Under the affirming the hearing officer’s revocation of its solid waste permit. Regenesis

reading of the hearing officer’s decision and the issues before him.

disclose that dissolution.” We disagree with this constrained

The first issue raised by Regenesis is whether the council erred in

does not review the permit application materials filed with DES. which issues a report to DES at the conclusion of the investigation. The EPB investigation, the applicant forwards the required forms directly to the EPB, is separate from the DES permit proceeding. During the background and directors of the prospective permit holder. This background investigation The EPB conducts a criminal record check of the individuals listed as officers review an agency’s interpretation of a statute de p. 9 RSA 149-M:9 applies only to existing officers, directors and partners. We unlawful for the council to rule that the certification language contained in The State has cross-appealed, arguing that it was unreasonable and

to be unnecessary and we decline to do so. no authority requiring us to vacate findings and rulings deemed by Regenesis alleged’” be vacated and have no precedential or binding effect. Regenesis cites hearing officer that were “unnecessary to the determination of the ‘violations Finally, Regenesis proposes that any findings and rulings made by the

Lodge of Elks, 151 N.H. 565, 567 (2004).

standard. See remedial sanction to impose under the unsustainable exercise of discretion right.” On the issue of remedy, we review an agency’s decision regarding the denial of substantive due process, and an unconstitutional taking of a property disclose that an existing permittee was in dissolution” is an “unconstitutional department determines . . . that [g]ood cause . . . exists.” N.H. Admin. Rules Regenesis argues that “[t]o have one’s permit revoked for allegedly failing to The regulatory scheme provides that a permit “shall be revoked if the revocation of the permit, is unconstitutionally excessive and disproportionate. determination that Regenesis officials acted in a false or misleading manner. Corporation was in dissolution. We have affirmed the hearing officer’s based solely upon the failure of Regenesis to disclose that Bio Energy unsustainable exercise of discretion. As discussed above, we do not read the hearings officer’s decision as hearing officer’s decision to impose this statutorily authorized sanction was an result in an unconstitutionally excessive penalty and we cannot say that the legislature’s decision to authorize revocation in such circumstances does not the permit was based on false or misleading information.” Id. 306.05(b). The Env-Sw 306.04(1). “Good cause” to revoke a permit exists where “[i]ssuance of

The second issue raised by Regenesis is whether the sanction imposed,

Appeal of Verizon New England, 153 N.H. 50, 66 (2005).

extensive evidence submitted and were neither unjust nor unreasonable. misleading information during the permitting process, were supported by the order affirming his decision, that Regenesis provided DES with false or by Regenesis. We hold that the hearing officer’s conclusions and the council’s operation of the solid waste facility for purposes of the solid waste permit held of the DES air permit held by Bio Energy, LLC is essentially identical to convictions), and that operation of the electric generation facility for purposes permit (the only permit whose application required disclosure of felony rules or application forms. p. 10 on words (“existing” or “current”) that do not appear in the statute,

interpretation of the wording argued by Regenesis, which is based

the wording of the certification itself, in contrast to the

convicted of or plead [sic (1) No individual or entity listed in (a) above has been statements are true: (b) The applicant shall certify that each of the following

former holders of those positions. This requirement derives from

the activity(s) for which approval is being sought . . . .

N.H. Admin. Rules

officers, directors and partners necessarily includes present and permittee’s officers, directors and partners. “All” of an applicant’s the scope of the certification is defined as “all” of the existing 10

responsibility for the management of facility operations or

of the application . . . .

the existing permittee, as Regenesis now argues. To the contrary, but it is not limited to “existing” officers, directors or partners of The certification language refers to the “existing” permittee,

The hearing officer determined:

supervisory or substantial decision-making authority and, Env-Sw 303.14. (6) All individuals and entities having managerial or (5) All of the applicant’s officers, directors, and partners; any state or federal court during the 5 years before the date

applicant’s debt or equity; (4) All individuals and entities holding 10% or more of the (3) The facility operator; (2) The owner; (1) The applicant; entities: in (b) below are true for each of the following individuals and (a) The applicant shall certify that each of the statements listed

waste rule requiring the filing of a compliance certification provides in part: court during the 5 years before the date of the permit application.” The solid convicted of, or pled guilty or no contest to, a felony in any state or federal entities holding 10 percent or more of its equity or debt liability has been of its officers, directors, partners, key employees or persons or business . . . to a person if . . . [i]n the case of a corporation or business entity, . . . any RSA 149-M:9, IX(c) provides that DES “may deny a permit application p. 11 Affirmed

our holding, we need not address the issues raised by the intervenors. permit was supported by the evidence and was not unreasonable. Because of We hold that the hearing officer’s decision revoking the solid waste

read such language into the statute. plainly cover those persons who “have held” stock in the past and we will not the application for a solid waste permit. The statutory language does not for example, have to disclose a felony conviction that occurred six years prior to DALIANIS, DUGGAN, GALWAY and HICKS, JJ., concurred. person currently holding ten percent of the company’s debt liability would not, or pled guilty or no contest to, a felony in order to mandate disclosure. A limitation applies to the length of time within which a person was convicted of, who are intended to fall within the statute’s requirements. The five-year time indicates that persons currently involved in the company’s affairs are those within the enumerated categories. The statute’s use of the word “holding,” intended to cover those individuals who, at the time of the application, fall We agree with the council’s interpretation that the statutory provision is

ascribe the plain and ordinary meanings to words used.” Green Meadows whole. We look first to the statutory language itself, and where possible, we. intent of the legislature as expressed in the words of a statute considered as a “In matters of statutory interpretation, we are the final arbiter of the

(citation omitted). Mobile Homes v. City of Concord, 156 N.H. ___, ___ (decided October 31, 2007)

partners.” limited to existing officers, directors or partners not past officers, directors or On appeal, the council modified this finding, concluding that “RSA 149-M:9 is