P.O. Box 581, Riverside, MI 49084
| PRESERVE THE DUNES, INC.,
|
Hon. Scott Schofield File No. 98-3789-CE-S |
| vs. MICHIGAN DEPARTMENT OF
|
| THOMAS R. FETTE (P13396) Attorney for Plaintiff Taglia, Fette, Dumke, Passaro & Kahne, P.C. 720 State St., P.O. Box 890 St. Joseph, Michigan 49085 1-616-983-0755 |
JAMES R. PIGGUSH (P29221) S. PETER MANNING (P45719) Attorneys for Defendant MDEQ Assistant Attorney General Natural Resources Division 300 S. Washington Sq., Ste 530 Lansing, Michigan 48913 1-517-335-1488 |
| JAMES H. GEARY (P13892) SUSAN E. PADLEY(P42526) Attorneys for Defendant TechniSand Howard & Howard Attorneys, P.C. 100 Portage Street, Suite 200 Kalamazoo, Michigan 49007 1-616-382-1483 |
LINK | |||
| INTRODUCTION | 3 | ||
| 1. | Nature of Motion | 3 | |
| 2. | Legislative Framework For Sand Dune Protection | 4 | |
| A. | Part 17-The MEPA | 5 | |
| B. | Part 353-Sand Dunes Protection and Management | 6 | |
| C. | Part 637-Sand Dune Mining | 7 | |
| STATEMENT OF FACTS | 9 | ||
| ARGUMENT | 12 | ||
| I. | PROPERLY CONSTRUED, THE EXEMPTIONS CONTAINED IN MCLA 24.637029(b)(1) WERE NOT INTENDED TO ALLOW A SAND DUNE MINING OPERATOR TO EXTEND MINING FROM A NON-CRITICAL DUNE AREA TO AN ADJACENT CRITICAL DUNE AREA | 12 | |
| II. | STATUTES GRANTING EXCEPTIONS OR EXEMPTIONS FROM THEIR GENERAL OPERATION MUST BE NARROWLY INTERPRETED, AND ANY DOUBT MUST BE STRICTLY CONSTRUED AGAINST THE PARTY ASSERTING A RIGHT TO BE EXEMPT FROM WHAT THE STATUTE OTHERWISE PROHIBITS | 14 | |
| III. | A SPECIAL STATUTORY EXEMPTION OR PRIVILEGE DOES NOT ACCOMPANY THE PROPERTY IN ITS TRANSFER TO A PURCHASER, IN THE ABSENCE OF AN EXPRESS DIRECTION TO THAT EFFECT IN THE STATUTE. THUS, EVEN IF THE ENTITY FROM WHOM TECHNISAND PURCHASED THE PROPERTY WAS EXEMPT FROM THE PROHIBITION AGAINST MINING CRITICAL DUNES, THE EXEMPTION DID NOT PASS TO TECHNISAND UPON ITS ACQUISITION OF THE LAND SUBSEQUENT TO JULY 5, 1989 | 17 | |
| IV. | THE ISSUANCE OF AN INVALID SAND DUNE MINING PERMIT CONSTITUTES A BASIS FOR INJUNCTIVE RELIEF UNDER THE MEPA | 21 | |
| CONCLUSION | 22 | ||
The Plaintiff has filed suit under the Michigan Environmental Protection Act (MCLA 324.1701 et seq) seeking both declaratory and injunctive relief in order to protect a critical sand dune area in Berrien County from threatened destruction. In its Amended Complaint the Plaintiff asserts:
(1) That Defendant TechniSand's proposed mining of a critical dune area pursuant to a permit issued by the Defendant DEQ will destroy a unique, fragile and irreplaceable natural resource in violation of the MEPA (Plaintiff's Complaint Paragraph 18);
(2) That the Defendant DEQ has violated the MEPA by issuing an amended sand mining permit to TechniSand which allows TechniSand to mine and destroy a unique, irreplaceable and fragile resource (Plaintiff's Complaint Paragraph 19); and
(3) That the Defendant DEQ was without legal authority to issue an amended mining permit to TechniSand because TechniSand did not qualify for an exemption from a statutory prohibition against mining critical dunes, and that by issuing an invalid permit the DEQ committed an act which threatens the destruction of a unique, irreplaceable and fragile natural resource in violation of the MEPA (Plaintiff's Complaint Paragraph 20).
The Plaintiff bases this Motion for Summary Disposition on its third allegation. This motion asserts that the DEQ lacked legal authority to issue an amended sand dune mining permit which authorized TechniSand to mine sand from a critical dune area because TechniSand was not exempt from a statutory prohibition against mining in critical dunes. More specifically, as will be examined below, MCLA 324.63702(1)(b) prohibits the DEQ from issuing a sand dune mining permit within a critical dune area after July 5, 1989, except where:
"(b) The operator holds a sand dune mining permit issued pursuant to Section 63704 and is seeking to amend the mining permit to include land that is adjacent to property the owner is permitted to mine, and prior to July 5, 1989, the operator owned the land or owned the rights to mine dune sand in the land for which the operator seeks an amended permit."
Inasmuch as TechniSand did not exist as a corporate entity on or before July 5, 1989, and since it did not, prior to July 5, 1989, own the land in question, or the rights to mine dune sand in the land in question, the Plaintiff seeks a declaration that (1) TechniSand did not qualify for the above statutory exception merely by virtue of its later corporate creation and purchase of the land, and (2) that the DEQ was without authority to issue the amended permit.
In 1976 the legislature enacted a law for the study, protection, management and reclamation of Great Lakes sand dunes. The statute was known as the Sand Dune Protection and Mining Act (Act 222 [1] of the Public Acts of 1976). It authorized the DNR's Geological and Survey Division (GSD) to regulate and oversee sand mining activities in order to insure the protection of the State's sand dune formations.
In June of 1989 the statute was amended to expand the regulatory authority of the DNR (now DEQ) to monitor and control all proposed activities within designated sand dune areas. The amendment also identified certain areas within Great Lakes sand dunes areas as "critical dune areas" and provided additional restrictions on the use of or activities within critical dune areas.
In 1994 the legislature compiled and consolidated all of Michigan's environmental laws into a single code called the Natural Resources and Environmental Protection Act (MCLA 324.101 et seq). The Code is divided into a number of non-sequential "parts" relating to such diverse environmental laws as mineral mining, harbors and docks, soil erosion and sediment control, forest and timber management, and the like. This codification split the old Sand Dune Protection and Management Act into two inter-related parts: Part 637-Sand Dune Mining and Part 353-Sand Dune Protection and Management. The 1994 statutory compilation also incorporated the Michigan Environmental Protection Act (MEPA) as Part 17 of the Code. These three parts, and their inter-relationship, are what is presently at issue before the Court.
A. Part 17--The MEPA (MCLA 324.1701 et seq)
The Michigan Environmental Protection Act is derived from Article 4, Section 52, of the Michigan Constitution of 1963, which mandates:
"The conservation and development of the natural resources of this state are hereby declared to be of paramount public concern in the interest of the health, safety and general welfare of the people. The legislature shall provide for the protection of the air, water and other natural resources of this state from pollution, impairment and destruction."
The MEPA was enacted in response to this constitutional directive. MCLA 324.1701(1) of the MEPA provides:
"The Attorney General or any person may maintain an action in the circuit court having jurisdiction where the alleged violation occurred or is likely to occur for declaratory and equitable relief against any person for the protection of the air, water, and other natural resources and the public trust in these resources from pollution, impairment, or destruction."
The Michigan Supreme Court has recognized that the MEPA is a unique and significant piece of legislation. In Eyde v Michigan, 393 Mich 453, 454 (1975) the Court noted:
"The MEPA is significant legislation which gives the private citizen a sizeable share of the initiative for environmental law enforcement. The Act creates an independent cause of action, granting standing to private individuals to maintain actions in the circuit court for declaratory and other equitable relief against anyone for the protection of Michigan's environment."
Thus, the MEPA empowers each citizen of this State to act as a private attorney general for the protection of the environment. In keeping with the broad protective purpose of the statute, Section 1706 of the Act provides that the Act is to be supplementary to any other existing administrative or regulatory procedures.
B. Part 353--Sand Dunes Protection and Management (MCLA 324.35301 et seq)
This part is intended to provide additional and supplementary protection for "critical dunes" that are located within Great Lakes sand dunes areas. The legislature has determined that these critical dune areas are unique, irreplaceable and fragile resources:
"Section 35302. The legislature finds: (a) The critical dune areas of this State are a unique, irreplaceable, and fragile resource that provides significant recreational, economic, scientific, geological, scenic, botanical, educational, agricultural and ecological benefits to the people of this state and to the people from other states and countries who visit this resource. (b) Local units of government should have the opportunity to exercise the primary role in protecting and managing critical dune areas in accordance with this part. (c) The benefits derived from alteration, industrial, residential, commercial, agricultural, silvicultural, and the recreational use of critical dune areas shall occur only when the protection of the environment and the ecology of the critical dune areas for the benefit of the present and future generations is assured."
Part 353 regulates land use within critical dune areas through zoning ordinances which local units of government must adopt. The zoning ordinances must, at a minimum, be at least as environmentally protective as the state's model zoning plan.
C. Part 637--Sand Dune Mining (MCLA 324.63701 et seq)
Part 637 applies to sand dune areas lying within two miles of the ordinary high water mark of a Great Lake. Section 63704 prohibits operators from engaging in sand dune mining within a Great Lakes sand dune area without first obtaining a mining permit from the DEQ. An operator seeking a permit must submit to the DEQ an environmental impact statement (EIS) and a progressive cell unit mining and reclamation plan (PCUMRP). The statute contains a detailed prescription for what the EIS and PCUMRP must contain in order for the DEQ to consider issuing a permit. However, with but two exceptions, the statute prohibits altogether the DEQ from issuing a sand mining permit for critical dune areas lying within a Great Lakes sand dune. MCLA 324.63702 provides:
"Section 63702. (1) Notwithstanding any other provision of this Part, the Department shall not issue a sand dune mining permit within a critical dune area as defined in Part 353 after July 5, 1989, except under either of the following circumstances: (a) The operator seeks to renew or amend a sand dune mining permit that was issued prior to July 5, 1989, subject to the criterion standards applicable to a renewal or amendatory application. (b) The operator holds a sand dune mining permit issued pursuant to Section 63704 and is seeking to amend the mining permit to include land that is adjacent to property the operator is permitted to mine, and prior to July 5, 1989, the operator owned the land or owned the rights to mine dune sand in the land for which the operator seeks an amended permit." (Emphasis added.)
In addition, Part 637 prohibits the DEQ from issuing a sand mining permit where the proposed sand mining is likely to pollute, impair or destroy a natural resource. Section 63709 states:
"The Department shall deny a sand dune mining permit if, upon review of the environmental impact statement, it determines that the proposed sand dune mining activity is likely to pollute, impair or destroy the air, water or other natural resources or the public trust in those resources, as provided by Part 17."
Part 17 referenced in this provision is the MEPA. Thus, the DEQ is without authority to issue a sand dune mining permit where the mining activity is likely to violate the MEPA. This is an important provision which subordinates sand dune mining permits to the requirements of the MEPA and limits the discretion of the DEQ in issuing such permits.
TechniSand was incorporated in the State of Delaware on July 12, 1991. The company applied to the Michigan Department of Commerce for a certificate of authority to transact business in Michigan on July 22, 1991, and it received such authority on July 26, 1991.
On July 31, 1991, TechniSand purchased from Manley Brothers of Indiana, Inc., property located in Hagar Township, Berrien County, Michigan, commonly referred to as the "Nadeau Site". The Nadeau Site lies within a Great Lakes sand dune area and is subject to the protections and regulations contained in Part 637 and Part 353 of the Natural Resources and Environmental Protection Act (MCLA 324.63701 et seq and MCLA 324.35301 et seq). The western parcel of the Nadeau Site contains critical dune areas, as defined in §35301(b) of Part 353 of the Natural Resources and Environmental Protection Act. The eastern parcel of the Nadeau Site contains non-critical dunes.
Since at least 1983 TechniSand's predecessor, Manley Brothers of Indiana, Inc., possessed a permit issued by the DNR (now DEQ) to mine sand from approximately 26.5 acres of non-critical dunes located in the eastern parcel of the Nadeau Site. In 1992 the permit (No. TS-NS-107) was transferred to TechniSand, as the current owner of the Nadeau Site. The permit allows the company to mine non-critical dunes in the eastern parcel of the Nadeau Site and will expire on December 31, 2000 (see Exhibit 1).
In 1994 TechniSand applied to the DNR for an amendment of its Nadeau Site sand mining permit. The application requested permission to mine approximately 126.5 acres located in the western parcel of the Nadeau Site. The proposal (known variously as the "Taube Road Expansion" or the "Nadeau Site Expansion") was to extend mining from a non-critical sand dune area into a critical dune area, to remove 7,000,000 tons of sand from surface operations and 950,000 tons of sand from sub-surface operations on 70.45 acres of the 126.5 acre site. The company also proposed to create two lakes of 9.8 and 13.7 acres respectively and to relocate threatened species of flora (see Exhibit 2).
Although mining of critical dunes had been statutorily prohibited for some five (5) years prior to TechniSand's application for an amended permit, the application was premised on an assumption that TechniSand was exempt under §63702(1)(b) from the prohibition against critical dune minings since it was a permit holder seeking to expand mining operations into adjacent property.
On April 20, 1995, the DNR denied TechniSand's application for an amended permit. The reason cited in the DNR's denial was that TechniSand, having acquired the property after July 5, 1989, was not "eligible to the exception under §2(B) of Act 222" from the statutory prohibition against critical sand dune mining(see Exhibit 3).
On October 1, 1995, the Governor issued Executive Order 1995-18 which created the Department of Environmental Quality and which transferred environmental regulatory authority from the DNR to the DEQ. On April 1, 1996, the DEQ sent TechniSand a letter indicating that "since April of 1995 there have been many changes in State government and the DNR/DEQ in particular. Some of these changes coupled with additional information that TechniSand has apparently supplied to the Michigan Attorney General's office are instrumental in the GSD's ability to proceed with the review of your amendment requests". The letter went on to request that TechniSand submit modifications to its environmental impact statement and progressive cell unit mining and reclamation plan in order to "expedite" the processing of the amended mining permit application (see Exhibit 4).
The amended documents were submitted by TechniSand to the DEQ on May 20, 1996. The environmental impact statement as submitted by TechniSand contained a statement of "unavoidable adverse impacts" that acknowledged that the proposed mining operation would significantly impair the environment in the Taube Road expansion and permanently destroy a critical dune (see Exhibit 5). Nevertheless, on November 25, 1996, the DEQ issued to TechniSand an amended mining permit allowing the company to mine and remove sand from within the critical dune area at the Nadeau Site.
| I. | PROPERLY CONSTRUED, THE EXEMPTIONS CONTAINED IN MCLA 24.63702(b)(1) WERE NOT INTENDED TO ALLOW A SAND DUNE MINING OPERATOR TO EXTEND MINING FROM A NON-CRITICAL DUNE AREA TO AN ADJACENT CRITICAL DUNE AREA. |
The Nadeau Site is composed of both critical and non-critical dune areas. The eastern portion contains non-critical dunes and the western portion, known as the "Taube Road Expansion" contains critical dunes. Prior to its issuance of the amended mining permit to TechniSand in 1996 the DEQ had never included within any permit permission for the mining of critical dunes at the Nadeau Site. TechniSand's predecessor, Manley Brothers, held a permit to mine only the eastern non-critical dune area of its property. No critical dune area mining had ever occurred at the Nadeau Site prior to the enactment of the critical dunes legislation in July of 1989, or in fact, even to this day.
The obvious question is whether the legislature, by enacting the exceptions to the prohibition against critical dune mining contained in Section 63702(b)(1) intended to allow an operator to expand existing mining operations from a non-critical dune area to an adjacent critical dune area.
As will be examined more extensively in Part B below, the prohibition against mining within a critical dune area must be given the broadest possible interpretation, and the exception allowing expansion of mining to an adjacent property must be narrowly and restrictively construed. The Plaintiff therefore contends that the legislature did not intend to open up virgin critical dunes for commercial development by a non-critical dune miner.
This interpretation is reinforced by the legislative findings contained in MCLA 324.35302 where the legislature determined that critical dune areas are a "unique, irreplaceable and fragile" natural resource which should be developed only when the protection of the environment and ecology of critical dunes is assured "for present and future generations". To construe the exception in a manner as to allow a miner of non-critical dunes, for the first time, to expand mining into critical dunes after the prohibition against such mining was enacted is obviously contrary to the legislative intent as expressed in the legislative findings.
Equally important, the exceptions contained in Section 63702(1)(b) can rightfully be viewed as doing nothing more than preserving the status quo for operators who were doing what was permitted prior to the enactment of the critical dune mining prohibition. Since TechniSand's predecessor, Manley Brothers, had never been permitted to mine a critical dune area prior to the critical dunes legislation, the prohibitions contained in that legislation deprived it of nothing it had previously done or had been permitted to do. Thus, even Manley Brothers could not have qualified for an exemption allowing it to mine critical dunes. Its successor, TechniSand, cannot succeed to a right not possessed by its predecessor.
| II. | STATUTES GRANTING EXCEPTIONS OR EXEMPTIONS FROM THEIR GENERAL OPERATION MUST BE NARROWLY INTERPRETED, AND ANY DOUBT MUST BE STRICTLY CONSTRUED AGAINST THE PARTY ASSERTING A RIGHT TO BE EXEMPT FROM WHAT THE STATUTE OTHERWISE PROHIBITS. |
Even if it is assumed for the sake of argument that TechniSand's predecessor, Manley Brothers, could have qualified for an exemption allowing it to mine within a critical dune area, it does not follow that TechniSand obtained that same exemption when it purchased the land in 1993. In fact, the express words of the statutory exemption, along with principles of statutory construction, established the opposite.
As a general proposition, exemptions in a statute are to be carefully scrutinized and are not to be extended beyond their plain meaning. See Motor Coach Co. v Public Service Commission, 323 Mich 624, 634 (1949). In construing a statutory exception, Courts must strictly interpret the exception and the person or entity seeking to be excluded from the operation of the statute bears the burden of establishing entitlement to exclusion from the statutory regulations or prohibitions. Thus in Salenius v Employment Security Commission, 33 Mich App 228, 237 (1971) the Michigan Court of Appeals held:
"It is a general rule of statutory construction that the burden of proving justification or exemption under a special exception to the prohibitions of a statute generally rests on one who claims its benefits."
See also 73 Am Jur 2d Statutes, §313, where it is observed:
"While there are some cases in which exceptions are liberally construed, particularly with statutes subject to strict construction, ordinarily a strict or narrow construction is applied to statutory exceptions to the operation of laws. Thus, in the resolution of ambiguities, courts favor a general proposition over an exception, and one seeking to be excluded from the operation of the statute must establish that the exception embraces him. These rules are particularly applicable where the statute promotes the public welfare, or where, in general, the law itself is entitled to a liberal construction. In addition, a grandfather clause exception must be construed strictly against the party who invokes it."
These principles of statutory construction are significant in determining the scope and applicability of the exception to the prohibition against sand dune mining within a critical dune area contained in MCLA 324.63702(1)(b).
First, the environmental regulations contained in the Sand Dune Protection and Management Act (Part 353) and the Sand Dune Mining Act (Part 637) and the environmental enforcement provisions of the MEPA (Part 17) are designed to promote public welfare and thus are entitled to a liberal construction favoring environmental protection over private commercial use of the environment. Indeed, the framers of the Michigan Constitution declared:
"The conservation and development of the natural resources of this state are hereby declared to be of paramount public concern in the interest of the health, safety and general welfare of the people. The legislature shall provide for the protection of the air, water and other natural resources of this state from pollution, impairment and destruction." 1963 Mich. Const. Art. 4 §52
The prohibition contained in Section 63702 against mining within critical dune areas was enacted in furtherance of this "paramount public concern". In fact, the legislature has determined that "the critical dunes areas of this state are a unique, irreplaceable and fragile resource that provides significant recreational, economic, scientific, geologic, scenic, botanical, educational, agricultural and ecological benefits to the people of this state and to the people of other states and country who visit this resource". See MCLA 324.35302(a). It has also determined that "the benefits derived from alteration, industrial, residential, commercial, agricultural, silviculture, and the recreational use of critical dune areas shall occur only when the protection of the environment and the ecology of critical dune areas for the benefit of the present and future generations is assured". See MCLA 35302(c). Clearly, the legislative prohibition against mining in critical dune areas is entitled to the broadest construction possible.
Second, the exception to the prohibition against critical dune mining contained in Section 63702(1)(b) is clearly and unmistakably a "grandfather clause" exception. It requires as a prerequisite for entitlement to the exception that prior to July 5, 1989, "the operator owned the land or owned the rights to mine dune sand in the land for which the operator seeks an amended permit." This language unequivocally excludes from exempt status operators who neither owned the land or rights to mine the land prior to July 5, 1989. To construe this provision otherwise, so as to include in the class of exempt operators entities which subsequent to July 5, 1989, acquired the land or the right to mine the land would not only be contrary to the express and unambiguous language of the statute itself, it would impermissibly expand the meaning of the statutory exception by giving it a broad or liberal construction rather than a narrow or strict construction.
Because TechniSand neither owned the land nor owned rights to mine sand in the land prior to July 5, 1989, it is not within the class of "grandfathers" exempt from the prohibitions against mining critical dune areas.
| III. | A SPECIAL STATUTORY EXEMPTION OR PRIVILEGE DOES NOT ACCOMPANY THE PROPERTY IN ITS TRANSFER TO A PURCHASER, IN THE ABSENCE OF AN EXPRESS DIRECTION TO THAT EFFECT IN THE STATUTE. THUS, EVEN IF THE ENTITY FROM WHOM TECHNISAND PURCHASED THE PROPERTY WAS EXEMPT FROM THE PROHIBITION AGAINST MINING CRITICAL DUNES, THE EXEMPTION DID NOT PASS TO TECHNISAND UPON ITS ACQUISITION OF THE LAND SUBSEQUENT TO JULY 5, 1989. |
More than one century ago the United States Supreme Court ruled that a statutory exemption or privilege does not pass to the purchaser upon sale or transfer of the property by an owner who enjoys an exemption from the operation of the statute. In St. Louis & S.F. Ry. Co. v Gill, 158 US 667, 29 LEd 567, 15 S.Ct. 484 (1895) a railroad was incorporated under a law which exempted it from having its passenger rates affected by future legislation. Subsequent to its incorporation the legislature enacted rate regulations from which the railroad was exempt. It thereafter sold its business to another entity, who claimed an entitlement to the exemption from rate regulation possessed by its predecessor. The Supreme Court ruled, however, that the exemption expired upon sale. It held:
"It has frequently been decided by this Court that a special statutory exemption or privilege, such as immunity from taxation or a right to fix and determine rates of fare, does not accompany the property in question in its transfer to a purchaser, in the absence of express direction to that affect in the statute." 156 US 649 at 656.
This general rule of law has been applied through the years by numerous courts to a variety of factual circumstances. It appears as a fixed feature of American jurisprudence. [2] Michigan follows this rule. In Smith v Lakeshore & Michigan Southern Ry Co., 114 Mich 460, 469 (1897) the Michigan Supreme Court specifically adopted the holding of the Untied States Supreme Court in Gill, supra. The Court held that a railroad corporation that possessed a special exemption from laws regulating fares lost the exemption when it merged and consolidated with another railroad company thereby creating a new corporate entity. Thus, under Michigan law, not only does the entitlement to a statutory exemption expire upon sale of the business or property which is otherwise subject to statutory regulation, it expires upon the consolidation or merger of the business entitled to the exemption with another not so entitled.
The recent case of Alabama Power Co. v TVA, 948 F Supp 1010, 1024 (ND Ala 1996) is illustrative of this principle. There, Congress had passed legislation limiting the geographic area in which the TVA could make surplus power sales. It also included in the legislation a grandfather clause exempting from the prohibition power generating organizations with whom the TVA had arrangements on the effective date of the legislation. Thereafter, subsequent to this enactment, several new corporations were formed which became subsidiaries of a holding company which also included exempt subsidiary companies. The new companies sought the exemption enjoyed by the other subsidiaries. In passing on the issue, the District Court observed:
"Where there is an express exception, it comprises the only limitation on the operation of the statute and no other exceptions will be implied...One who claims the benefits of an exception from the prohibition has the burden of proving its claim comes within the exception." Id at 1024. [3]
The Court acknowledged the settled rule of law that a special statutory exemption does not pass to a new corporation succeeding others by purchase or consolidation. It thus ruled that "grandfather clauses do not extend to separate allied corporations resulting from various corporate ownerships". Id at 1024.3
In Central Mortgage Co. v Commonwealth, 514 A2d 956 (PA 1986) the Pennsylvania legislature passed a statute prohibiting lending institutions from selling insurance. The legislation contained a grandfather clause exempting from that prohibition any institution licensed as an insurance agency "on or before the effective date of this Act". An insurance agency whose license predated the legislation was thereafter purchased by a bank, who claimed entitlement to the exemption. The Pennsylvania Commonwealth Court ruled otherwise. It held:
"We acknowledge that the grandfather clause operates to freeze the status quo of those companies which were validly in the insurance business prior to the effective date of Section 641(b). But we decline to read it as expanding those rights so as to advantage an acquiring corporation by permitting it now for the first time to engage in the insurance business to the possible detriment...of independent insurance agencies." Id at 958.
This rule of law demonstrates that grandfather exceptions to statutory regulations or prohibitions are, in effect, "sunset" provisions. They extend protection only to those entities that were lawfully doing something prior to its become prohibited. The exception cannot be sold, transferred, merged or otherwise devised. Rather, the exception expires when the entity entitled to it ceases existence or ceases its use.
The exception to the prohibition against critical dune mining contained in Section 63702(1)(b) here is just such a provision. To qualify for it, the holder must have owned the land or the right to mine the land before the effective date of the prohibition. No subsequent purchaser may succeed to it. Because TechniSand did not exist when the Critical Dune Mining Act was passed, and because it did not own the land or mining rights to the land on the enactment date, and because it could not subsequently purchase the exemption from its predecessor, it is not exempt from the prohibition against critical dune mining. Accordingly, TechniSand is not entitled to an amended mining permit allowing it to mine critical dune areas as a matter of law, and the DEQ is without legal authority to issue such a permit.
| IV. | THE ISSUANCE OF AN INVALID SAND DUNE MINING PERMIT CONSTITUTES A BASIS FOR INJUNCTIVE RELIEF UNDER THE MEPA. |
As a matter of law, the permit issued by the DEQ allowing TechniSand to mine within a critical dune area is invalid because TechniSand is not exempt from the statute prohibiting critical dune area mining. Therefore, the DEQ possessed no legal authority to issue the amended permit. The permit allows TechniSand to impair or destroy a fragile and unique natural resource and thus violates MCLA 324.63709. Accordingly, the Plaintiff requests the Court to (1) declare the amended permit invalid, (2) enter a mandatory injunction ordering the DEQ to rescind the amended permit, and (3) enjoin TechniSand from mining or removing sand within the critical dune area at the Nadeau Site.
| Dated: | TAGLIA, FETTE, DUMKE, PASSARO & KAHNE, P.C. |
March 19, 1999 |
By: THOMAS R. FETTE Attorney for Plaintiff |