Conservation Law Foundation v. Maine Dept. of Environmental Protection (Maine Supreme Judicial Court)

Maine has a permit-by-rule process that permits the construction of docks that meet certain specifications. The only procedural requirement is notification of the Department of Environmental Protection. A landowner built a dock under the authority of the permit-by-rule. A Maine superior court held that the regulation authorizing the permit-by-rule process was void as ultra vires. The court also held that the rule was arbitrary and capricious because it has a purpose in addition to protecting the environment, that of saving agency time and money. The court further held that the permit itself was invalid because it was based on the unlawful rule. NELF argued that the court erred, as a matter of law, in declaring the permit invalid. Both the United States Supreme Court and the Maine Law Court have held that judicial invalidation of a statute or regulation does not automatically invalidate prior action taken under that statute or regulation. Those precedents require that a court consider the rights that may have become vested and the protection of reliance interests. Second, NELF made the policy argument that permit-by-rule provisions are not arbitrary and capricious merely because one purpose behind them is saving money and staff time and streamlining the process for applicants. NELF pointed to well-established federal permit-by-rule processes such as the National Pollution Discharge and Elimination Permit under the Clean Water Act, the Army Corps of Engineers categorical permits, and to analogous programs in other states, and argued that regulatory agencies act appropriate, responsibly, and reasonably when they act to conserve limited agency resources, focus enforcement activity, and streamline the regulatory process through a permit-by-rule. The Maine Supreme Judicial Court upheld the rule, fining that it was neither ultra vires nor arbitrary and capricious. Since the rule and the permit were valid, the SJC did not reach the retroactivity issue.