76 Mass. App. Ct. 639

Hercules Chemical Company vs. Department of Environmental Protection.

No. 09-P-655.

Suffolk.

January 19, 2010.

April 23, 2010.

Present: Katzmann, Grainger, & Meade, JJ.

James A. Kosch, of New Jersey, & Matthew M. O’Leary for the plaintiff.

Daniel J. Hammond, Assistant Attorney General, for the defendant.

Meade, J.

The Hercules Chemical Company (Hercules) appeals from a judgment dismissing its complaint challenging the decisions of the Department of Environmental Protection (department) to “delist” its product, Aid-Ox, as an approved septic system additive or restorative.1 On appeal, Hercules claims in *640part that the department’s decisions, made without providing an adjudicatory hearing, must be set aside as contrary to law, arbitrary and capricious, or lacking in evidentiary support. We agree on the first of these grounds and remand to the department for adjudicatory proceedings.

1. Background. On October 18, 1995, the department listed, i.e., approved, Aid-Ox as a septic system additive and restorative under Title 5 of the State environmental code, 310 Code Mass. Regs. §§ 15.000 et seq.2 In so doing, the department determined that Aid-Ox (1) will not harm septic system components (including the biomat3), or adversely affect (2) system function or (3) the environment.4 When Aid-Ox entered the market with the department’s approval, the department had been informed that its active ingredient was sodium percarbonate (also known as sodium carbonate peroxyhydrate), and that *641its intended use included restoring septic systems. Aid-Ox has been available in the Commonwealth, without change in chemical composition, since 1995.

On August 17, 2006, the department advised Hercules that it had concerns that the sodium percarbonate in Aid-Ox may harm septic system components (specifically the biomat) and adversely affect system function and the environment, which put the listing of Aid-Ox as an allowed additive at odds with 310 Code Mass. Regs. § 15.027 (2006).5 The department requested that Hercules respond. Hercules did so, providing the department with, among other things, letters from two proffered experts, both of whom suggested that Aid-Ox, which they indicated is used as a “restorative” for “failing” systems, was completely harmless.

In light of Hercules’s response, the department seemingly abandoned its concerns with Aid-Ox’s safety and instead, without notice to Hercules, shifted its focus to the use of Aid-Ox as a “restorative” for “failing” systems. According to departmental regulations, chemical additives ordinarily may not be used in place of the “upgrade[]” that is the mandated response to a “failing” system6; in the usual case, the only available cure for a failing system is to physically replace the inadequate components with functioning ones. See 310 Code Mass. Regs. §§ 15.002, 15.303, 15.404, 15.405 (2006).7 In light of this, the department advised Hercules on October 13, 2006, that it would remove Aid-Ox from the list of approved additives under 310 Code Mass. Regs. § 15.027,8 and it invited Hercules instead to *642seek approval for the product under the department’s “Innovative/ Alternative System program.”9

In response, Hercules apparently sought approval of Aid-Ox under this alternative designation, but on January 2, 2007, the department rejected the application, once again raising concerns that Aid-Ox “may harm the soil absorption system biomat and/or soil structure.” The department invited Hercules to “pursue approval for the controlled testing of the product under the [department’s] innovative and alternative system program to evaluate the product^]s potential for further consideration.”10 Instead, Hercules claimed adjudicatory hearings on both decisions. A department hearing officer determined that Hercules was not entitled to an adjudicatory hearing as to either decision, and that the challenge to the initial delisting determination was untimely. The department adopted the hearing officer’s decision without discussion. On judicial review, acting on cross motions for judgment on the pleadings, a Superior Court judge dismissed Hercules’s complaint without elaboration. Hercules appealed.

2. Discussion. Although we decide the appeal on the narrow *643basis that animated the hearing officer’s decision, we first note Hercules’s understandable protest that the department’s regulatory actions were arbitrary and capricious in creating a “moving target” against which Hercules had to defend. “A decision is arbitrary and capricious when it lacks any rational explanation that reasonable persons might support.” Cambridge v. Civil Serv. Commn., 43 Mass. App. Ct. 300, 303 (1997). Arbitrary and capricious action is that which is taken “without consideration and in disregard of facts and circumstances.” Long v. Commissioner of Pub. Safety, 26 Mass. App. Ct. 61, 65 (1988). In the eleven years between the department’s decision to list and then to delist Aid-Ox, the product never changed. Instead, what appeared to Hercules to have changed was the department’s own subjective realization as to how Aid-Ox was being used. (But see note 9, supra, regarding certain regulatory changes not discussed by the parties.) No evidence has been introduced to support the department’s originally expressed concern that Aid-Ox is harmful.11 By changing its reasoning for delisting Aid-Ox without warning or thorough explanation, and later returning to the abandoned rationale as a basis for its decision denying “alternative system” designation, the department courts scrutiny under the arbitrary and capricious standard. An agency should strive to act on bases that are uniform and predictable. See Fafard v. Conservation Commn. of Reading, 41 Mass. App. Ct. 565, 568 (1996).

We turn now to the grounds for our decision on appeal. Relying on G. L. c. 21A, § 13, and 310 Code Mass. Regs. § 15.422 (2006), the hearing officer concluded that Hercules was not entitled to a departmental adjudicatory hearing because neither of the decisions fell into appealable categories. However, we agree with Hercules that in the circumstances the department’s combined actions were the equivalent of the revocation of a license under G. L. c. 30A, § 13, which defines license as including “any license, permit, certificate, registration, charter, authority or similar form of permission required by law.” Ibid., inserted by St. 1954, c. 681, § 1. The department’s regulations effectively state that no septic system additive may be recom*644mended for use or used in the Commonwealth without permission from the department. 310 Code Mass. Regs. § 15.027.12 Under G. L. c. 30A, § 13, the revocation of a license entitles the license holder to an adjudicatory hearing in conformity with G. L. c. 30A, §§ 10, 11, and 12.

Nor are we detained long by the hearing officer’s conclusion that Hercules’s challenge to the initial delisting determination was untimely. At oral argument, the department took the sensible position that because the department’s two decisions were consolidated before the hearing officer, and Hercules’s claim for a hearing on the second decision was timely, the entire matter was timely. We agree. Additionally, we note that neither of the letters informing Hercules of the department’s decisions properly notified Hercules of its right to claim an adjudicatory hearing or the time frame for doing so. See G. L. c. 30A, § 10(1); 310 Code Mass. Regs. § 1.01(6)(c) (2004).

Accordingly, we reverse the Superior Court judgment and direct the entry of a new judgment vacating the department’s decisions to remove Aid-Ox from the list of allowed septic system additives and to deny Hercules’s application to allow the use of Aid-Ox as a conditioner/restorative. The matter shall be remanded to the department for an adjudicatory hearing on these decisions, consistent with this opinion.13

So ordered.

Hercules Chemical Co. v. Department of Environmental Protection
76 Mass. App. Ct. 639

Case Details

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Hercules Chemical Co. v. Department of Environmental Protection
Decision Date
Apr 23, 2010
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76 Mass. App. Ct. 639

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Massachusetts

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