9VAC5-210 Regulation for Dispute Resolution (Rev. B14)

REGULATIONS

Vol. 31 Iss. 21 - June 15, 2015

TITLE 9. ENVIRONMENT

STATE AIR POLLUTION CONTROL BOARD

Chapter 210

Fast-Track Regulation

Title of Regulation: 9VAC5-210. Regulation for Dispute Resolution (Rev. B14) (amending 9VAC5-210-20 through 9VAC5-210-80, 9VAC5-210-100, 9VAC5-210-110, 9VAC5-210-130 through 9VAC5-210-160).

Statutory Authority: § 10.1-1186.3 of the Code of Virginia.

Public Hearing Information: No public hearings are scheduled.

Public Comment Deadline: July 15, 2015.

Effective Date: July 30, 2015.

Agency Contact: Debra A. Harris, Department of Environmental Quality, 629 East Main Street, P.O. Box 1105, Richmond, VA 23218, telephone [phone], FAX [phone], or email [e-mail].

Basis: This regulation is promulgated under the authority of § 10.1-1186.3 D of the Code of Virginia, which requires the State Air Pollution Control Board to adopt regulations for the conduct of mediation and dispute resolution in accordance with the provisions of § 10.1-1186.3. There is no discretion. Additionally, the board's overall authority is provided in § 10.1-1308 of the Virginia Air Pollution Control Law, which authorizes the board to promulgate regulations abating, controlling, and prohibiting air pollution in order to protect public health and welfare.

Purpose: This regulation enhances the public health and welfare by expediting the resolution of environmental disputes in a manner that is less adversarial and less costly. Statutory provisions cited in the authorizing provisions of § 10.1-1186.3 of the Code of Virginia were revised after the effective date of this regulation. Therefore, 9VAC5-210 is amended as necessary for the changes made to the statutory requirements for dispute resolution and mediation in Title 8.01 of the Code of Virginia.

Rationale for Using Fast-Track Process: These amendments are not expected to be controversial as it is necessary to revise the regulation due to (i) changes to statutory provisions, (ii) revised regulatory citations, and (iii) an update of the mediation standards (document incorporated by reference).

Substance: The changes to the regulations include revised and additional requirements for dispute resolution and mediation under Title 8.01 of the Code of Virginia and an update of the document incorporated by reference.

Issues: The advantage of the amendments to the agency and the public is the elimination of any confusion that may arise from regulatory text that differs from the statute. There are no disadvantages to the public or the Commonwealth associated with this regulatory action.

Small Business Impact Report of Findings: This regulatory action serves as the report of findings of the regulatory review pursuant to § 2.2-4007.1 of the Code of Virginia.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to the Regulation. The State Air Pollution Control Board (Board) proposes to amend its dispute resolution regulation to harmonize it with Code of Virginia changes that have occurred since the regulation was promulgated in 2001.

Result of Analysis. Benefits likely outweigh costs for these proposed regulatory changes.

Estimated Economic Impact. Pursuant to § 10.1-1186.3 D of the Code of Virginia (COV), the Board promulgated a dispute resolution regulation in 2001. The Board now proposes to update this regulation to reflect Code changes since 2001. The Board proposes to insert definitions for "dispute resolution services" and "orientation session" as well as change all references to neutral facilitator to just neutral since that is how the COV refers to such individuals. The Board also proposes to update obsolete Code references and add language from the COV that deals with exceptions to nondisclosure requirements (threats of bodily injury toward another person, for instance, would be subject to disclosure and would not enjoy the protection of confidential materials nondisclosure).

No affected entity is likely to incur any costs on account of these proposed regulatory changes. Because these changes harmonize the regulation to COV requirements and remove potentially confusing obsolete language, affected entities are likely to benefit from the increased clarity that amending this regulation brings.

Businesses and Entities Affected. All individuals, businesses or other entities that have a significant disagreement with the Board over a regulation development or permit issuance are subject to this regulation. The regulation was first promulgated in 2001 and thus far the mediation and alternative dispute resolution proceedings of this chapter have not been utilized. There are currently approximately 520 active major permits through the Board's programs.

Localities Particularly Affected. No locality will be particularly affected by this proposed regulatory action.

Projected Impact on Employment. This proposed regulation is unlikely to affect employment in the Commonwealth.

Effects on the Use and Value of Private Property. This proposed regulation is unlikely to affect the use or value of private property in the Commonwealth.

Small Businesses: Costs and Other Effects. No small business is likely to incur any costs on account of the proposed regulation.

Small Businesses: Alternative Method that Minimizes Adverse Impact. No small business is likely to incur any costs on account of the proposed regulation.

Real Estate Development Costs. This proposed regulation is unlikely to affect real estate development costs.

Legal Mandate. General: The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Code of Virginia and Executive Order Number 17 (2014). Section 2.2-4007.04 requires that such economic impact analyses determine the public benefits and costs of the proposed amendments. Further the report should include but not be limited to:

• the projected number of businesses or other entities to whom the proposed regulation would apply,

• the identity of any localities and types of businesses or other entities particularly affected,

• the projected number of persons and employment positions to be affected,

• the projected costs to affected businesses or entities to implement or comply with the regulation, and

• the impact on the use and value of private property.

Small Businesses: If the proposed regulation will have an adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include:

• an identification and estimate of the number of small businesses subject to the proposed regulation,

• the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the proposed regulation, including the type of professional skills necessary for preparing required reports and other documents,

• a statement of the probable effect of the proposed regulation on affected small businesses, and

• a description of any less intrusive or less costly alternative methods of achieving the purpose of the proposed regulation.

Additionally, pursuant to § 2.2-4007.1, if there is a finding that a proposed regulation may have an adverse impact on small business, the Joint Commission on Administrative Rules is notified at the time the proposed regulation is submitted to the Virginia Register of Regulations for publication. This analysis shall represent DPB's best estimate for the purposes of public review and comment on the proposed regulation.

Agency's Response to Economic Impact Analysis: The Department of Environmental Quality has reviewed the economic impact analysis prepared by the Department of Planning and Budget and has no comment.

Summary:

The amendments (i) conform the regulation to changes in Chapters 20.2 (§ 8.01-576.4 et seq.) and 21.2 (§ 8.01-581.21 et seq.) of Title 8.01 of the Code of Virginia; (ii) update the incorporated mediation standards to reflect the edition effective July 1, 2011; and (iii) update terminology and citations.

9VAC5-210-20. Terms defined.

"Board" means the State Air Pollution Control Board.

"Conciliation" means a process in which a neutral facilitator facilitates settlement by clarifying issues and serving as an intermediary for negotiations in a manner that is generally more informal and less structured than mediation.

"Department" means the Department of Environmental Quality.

"Director" means the Director of the Department of Environmental Quality or his designee.

"Dispute resolution," "dispute resolution procedure," or "dispute resolution proceeding," or "dispute resolution service" means any structured process in which a neutral facilitator assists disputants in reaching a voluntary settlement by means of dispute resolution techniques such as mediation, conciliation, early neutral evaluation, nonjudicial settlement conferences, or any other proceeding leading to a voluntary settlement conducted consistent with the requirements of this chapter. The term includes the evaluation orientation session.

"Dispute resolution program" means a program that offers dispute resolution services to the public that is run by the Commonwealth or any private for-profit or not-for-profit (including nonprofit) organization, political subdivision, or public corporation, or a combination of these.

"Dispute resolution services" includes screening and intake of disputants, conducting dispute resolution proceedings, drafting agreements, and providing information or referral services.

"Evaluation session" means a preliminary meeting during which the parties and the neutral facilitator assess the case and decide whether to continue with a dispute resolution proceeding or with adjudication.

"Mediation" means a process by which a mediator assists and facilitates two or more parties to a controversy in reaching a mutually acceptable resolution of the controversy and includes all contacts between the mediator and any party or parties, until such time as a resolution is agreed to by the parties or the parties discharge the mediator in which a mediator facilitates communication between the parties and, without deciding the issues or imposing a solution on the parties, enables them to understand and to reach a mutually agreeable resolution to their dispute.

"Mediator" means a neutral facilitator who is an impartial third party selected by agreement of the parties to a controversy to assist them in mediation. As used in this chapter, this word may refer to a single person or to two or more people.

"Neutral facilitator" means a person who is trained or experienced in conducting dispute resolution proceedings and in providing dispute resolution services. As used in this chapter, this word may refer to a single person or to two or more people.

"Orientation session" means a preliminary meeting during which the dispute resolution proceeding is explained to the parties and the parties and the neutral assess the case and decide whether to continue with a dispute resolution proceeding or adjudication.

"Party" means an interested person who has chosen to be and who is eligible to be a disputant in a dispute resolution proceeding. An interested person is eligible if he (i) has attended a public meeting or public hearing on the permit or regulation in dispute and is therefore named in the public record, (ii) is the applicant for the permit in dispute, or (iii) is the department.

"Person" means an individual, a corporation, a partnership, an association, a government body, a municipal corporation, or any other legal entity.

"Virginia Air Pollution Control Law" means Chapter 13 (§ 10.1-1300 et seq.) of Title 10.1 of the Code of Virginia.

Part II
General Provisions

9VAC5-210-30. Applicability.

A. The provisions of this chapter, unless specified otherwise, shall apply throughout the Commonwealth of Virginia.

B. The provisions of this chapter, unless specified otherwise, shall apply in the administration of all regulations of the board to the extent not covered by a specific regulation of the board. In cases where the provisions of this chapter conflict with another regulation of the board, the provisions of the other regulation shall apply.

C. No provision of this chapter shall limit the power of the board to take appropriate action as necessary to carry out its duties under the Virginia Air Pollution Control Law.

D. By the adoption of this chapter, the board confers upon the director the administrative, enforcement, and decision-making authority articulated in this chapter.

E. Nothing in this chapter shall create or alter any right, action, or cause of action, or be interpreted or applied in a manner inconsistent with the Administrative Process Act (§ 9-6.14:1 et seq.) (§ 2.2-4000 et seq. of the Code of Virginia), with applicable federal law, or with any applicable requirement for the Commonwealth to obtain or maintain federal delegation or approval of any regulatory program.

F. For a permit in dispute, dispute resolution may not be initiated after the final permit is issued. For a regulation in dispute, dispute resolution may not be initiated after the final regulation is adopted.

9VAC5-210-40. Purpose and scope.

A. This chapter shall be construed to encourage the fair, expeditious, voluntary, consensual resolution of disputes. It shall not be construed to preclude collaborative community problem solving.

B. Dispute resolution shall be used to resolve only those disputes that reveal significant issues of disagreement among parties and may be used unless the board decides that it is not in the public interest to do so.

C. The decision to employ dispute resolution is in the board's sole discretion and is not subject to judicial review.

D. The outcome of any dispute resolution procedure shall not be binding upon the board but may be considered by the board in issuing a permit or promulgating a regulation.

E. Dispute resolution may be used to resolve a dispute relating to the promulgation, amendment, or repeal of a regulation that is subject to the public participation process prescribed in Article 2 (§ 9-6.14:7.1 et seq.) (§ 2.2-4006 et seq. of the Code of Virginia) of the Administrative Process Act.

F. Dispute resolution may be used to resolve a dispute involving any process relating to the issuance of a permit. Dispute resolution may be used in this case only with the consent and participation of the permit applicant and may be terminated at any time at the request of the permit applicant.

G. The board shall consider not using dispute resolution in the circumstances listed in § 10.1-1186.3 A of the Code of Virginia.

9VAC5-210-50. Costs.

A. Compensation of the neutral facilitator and any other associated common costs, such as rental fees, shall be the responsibility of the parties. Compensation of each party's counsel and other individual costs shall be the responsibility of that party alone, unless the parties agree otherwise.

B. An agreement regarding compensation and other associated costs shall be reached between the neutral facilitator and the parties before the dispute resolution procedure commences and shall be memorialized in writing.

C. In the absence of an agreement to the contrary, all costs shall be paid by the parties in equal shares.

9VAC5-210-60. Date, time, and place.

The dispute resolution procedure shall be conducted in any place within the Commonwealth of Virginia, on any date, and at any time agreeable to the parties and the neutral facilitator.

9VAC5-210-70. Attendance at the dispute resolution procedure.

A. All parties shall attend all sessions of the dispute resolution procedure. Any party who fails to attend any session shall be conclusively deemed to have dropped out of the dispute resolution procedure. A party may satisfy the attendance requirement by sending a representative familiar with the facts of the case. This representative shall have the authority to negotiate and to recommend settlement to the party that he represents.

B. Any party may have the assistance of an attorney or other representative during any session of the dispute resolution procedure.

C. Persons who are not parties or representatives of parties may attend dispute resolution sessions only with the permission of all parties and with the consent of the neutral facilitator.

9VAC5-210-80. Confidentiality.

A. The provisions of § 8.01-576.10 of the Code of Virginia concerning the confidentiality of dispute resolution shall govern all dispute resolution proceedings held pursuant to this chapter except when the board uses or relies on information obtained in the course of such proceeding in issuing a permit or promulgating a regulation. The board shall inform the parties in the order of referral issued under 9VAC5-210-150 what this information is expected to be. If the board later decides that it will need additional information before it can issue the permit or promulgate the regulation, it shall so notify the parties as expeditiously as possible. If any of the information requested by the board would normally be protected by the confidentiality provisions of this section, the parties shall waive that protection when delivering the requested information to the board. Notwithstanding the above, any information qualifying as confidential under the Air Pollution Control Law shall remain confidential.

B. With the exception noted in subsection A of this section, all memoranda, work products, or and other materials contained in the case files of a neutral facilitator or dispute resolution program are confidential. Any communication made during dispute resolution that relates to the controversy or the proceeding, including screening, intake, and scheduling a dispute resolution proceeding, whether made to the neutral facilitator or dispute resolution program staff, to a party, or to any other person, is confidential. Any party's lack of consent to participate in the dispute resolution process, at any point in the process, is confidential.

C. A written settlement agreement shall not be confidential, unless the parties otherwise agree in writing.

D. Confidential materials and communications are not subject to disclosure in discovery or in any judicial or administrative proceeding except:

1. When all parties to the dispute resolution process agree, in writing, to waive the confidentiality;

2. To the extent necessary, in a subsequent action between the neutral facilitator or dispute resolution program and a party to the dispute resolution proceeding for damages arising out of the dispute resolution process; or,

3. Statements, memoranda, materials, and other tangible evidence, otherwise subject to discovery, which were not prepared specifically for use in the dispute resolution procedure;

4. Where a threat to inflict bodily injury is made;

5. Where communications are intentionally used to plan, attempt to commit, or commit a crime or conceal an ongoing crime;

6. Where an ethics complaint is made against the neutral by a party to the dispute resolution proceeding to the extent necessary for the complainant to prove misconduct and the neutral to defend against such complaint;

7. Where communications are sought or offered to prove or disprove a claim or complaint of misconduct or malpractice filed against a party's legal representative based on conduct occurring during a mediation;

8. Where communications are sought or offered to prove or disprove any of the grounds listed in § 8.01-576.12 of the Code of Virginia in a proceeding to vacate a mediated agreement; or

9. As provided by law or rule other than the Virginia Freedom of Information Act (§ 2.2-3700 et seq. of the Code of Virginia).

E. The use of attorney work product in dispute resolution shall not result in a waiver of the attorney work product privilege.

F. Unless otherwise specified by the parties, no dispute resolution procedure shall be electronically or stenographically recorded.

9VAC5-210-100. Standards for and authority of neutral facilitator.

A. A neutral facilitator participating in a dispute resolution procedure pursuant to this chapter shall comply with all provisions of this section. A neutral facilitator shall indicate compliance by filing with the director a signed, written statement as follows: "I agree to comply with Virginia's statutes and regulations governing dispute resolution, including § 10.1-1186.3 of the Code of Virginia and 9VAC5-210-10 et seq."

B. A neutral facilitator acting as a mediator shall adhere to the Judicial Council of Virginia's Standards of Ethics and Professional Responsibility for Certified Mediators, effective July 1, 2011, and the standards and duty provisions of § 8.01-581.24 of the Code of Virginia. A neutral conducting a nonmediation dispute resolution proceeding shall adhere to the requirements of § 8.01-576.9 of the Code of Virginia.

C. If a complaint is made to the director that a neutral facilitator has failed to comply with all the provisions of the applicable regulations, laws, and Judicial Council Standards during a dispute resolution proceeding, the director shall notify the neutral facilitator of the complaint and shall give the neutral facilitator 10 business days to respond in writing. If the director deems the response unsatisfactory, or if no response is made by the deadline, the director shall remove the neutral facilitator from the ongoing dispute resolution process. The parties to the terminated dispute resolution procedure shall decide whether to continue in the same dispute resolution procedure with a new neutral facilitator, to begin a new dispute resolution procedure, or to forego further dispute resolution.

D. The recommendation of a neutral facilitator is not a case decision as defined in § 9-6.14:4 § 2.2-4001 of the Administrative Process Act and therefore may not be appealed.

9VAC5-210-110. Resumes of neutral facilitators neutrals and descriptions of dispute resolution programs.

The department may maintain a file containing the resumes of neutral facilitators neutrals and descriptions of dispute resolution programs. The file shall contain a disclaimer stating, "Inclusion of a resume or dispute resolution program description in this file does not constitute an endorsement of a neutral facilitator or a dispute resolution program, nor should negative implications be drawn from the fact that a neutral facilitator's neutral's resume or a dispute resolution program description is not included in this file. Parties are not obligated to choose a neutral facilitator or dispute resolution program from those whose resumes and descriptions are maintained in this file."

9VAC5-210-130. Referral of disputes to dispute resolution.

A. The board, consistent with the provisions of 9VAC5-210-40 G, may refer a dispute to dispute resolution.

B. A party other than the board may request dispute resolution by applying to the director.

1. The application shall contain the following:

a. A request for dispute resolution, specifying mediation or another dispute resolution procedure;

b. The names, postal addresses, telephone numbers, fax numbers, e-mail addresses, or other appropriate communication addresses or numbers of all known parties to the dispute and of their attorneys, if known; and

c. A statement of issues and a summary of the basis for the dispute.

2. Filing an application constitutes consent to referral of the dispute to dispute resolution.

3. Filing an application shall not stay any proceeding and shall have no effect on any procedural or substantive right of any party to the dispute.

4. Under normal circumstances, within 14 business days of the receipt of an application from a party requesting dispute resolution, the director shall review the application to determine if the dispute is suitable for dispute resolution, shall decide which form of dispute resolution is appropriate, and shall notify the parties in writing accordingly.

5. If the director has decided that mediation is appropriate, the provisions of Part III (9VAC5-210-140 et seq.) of this chapter shall apply.

6. If the director has decided that a dispute resolution proceeding other than mediation is appropriate, the director shall specify what that proceeding is. The appointment of the neutral facilitator for this proceeding shall follow the procedure for the appointment of a mediator as specified in 9VAC5-210-140. The parties and the neutral facilitator shall determine the appropriate procedures for conducting this dispute resolution proceeding.

Part III
Mediation Procedures

9VAC5-210-140. Appointment of mediator.

A. If the director has decided that mediation is appropriate, any party may nominate a mediator.

B. If all parties agree with the nomination, the director shall appoint that person the mediator for the case and shall notify the parties accordingly.

C. If all parties do not agree with the nomination, the following procedure shall apply:

1. By a date specified by the director, each party shall name up to three mediators who would be acceptable to that party. These mediators may or may not have resumes on file with the department.

2. The director shall compile a list of the names submitted and send it to the parties.

3. Upon receipt of the list, each party may strike two names and return the list to the director within 14 business days following the date on which the list was mailed.

4. On the next business day after the 14-day period expires or as soon as practicable thereafter, the director shall appoint a mediator from the remaining list of names and shall notify the parties accordingly.

D. Once the mediator is appointed, the director shall send the mediator an acceptance form to sign and return. The acceptance form shall require the mediator to append his signature to the following statements:

1. That the mediator agrees to abide by the applicable dispute resolution and mediation statutes, regulations, and ethical standards;

2. That the mediator agrees to attempt to complete the mediation within 60 business days from the date of his appointment; and

3. That the mediator foresees no potential conflict of interest in agreeing to mediate the case. A determination of conflict of interest shall be made by the director or board on a case-by-case basis.

9VAC5-210-150. Evaluation Orientation session.

A. Once the mediator has been appointed, the board shall issue a referral to the mediator and the parties. This referral shall include a list of the information that the board, in its preliminary judgment, expects to use in making its final decision regarding the case. This list shall contain the caveat that the board may require other information as yet unspecified at some point in the future. All parties shall attend one evaluation orientation session with the mediator unless excused pursuant to subsection B of this section.

B. The board shall excuse a party from participation in the evaluation orientation session if, within 14 business days after issuance of the order of referral, a statement signed by the party is filed with the board. This statement shall declare that the mediation process has been explained to the party and that the party does not wish to participate in the evaluation orientation session.

C. The evaluation orientation session shall be conducted at any place within the Commonwealth of Virginia, at any time, and on any date convenient to the mediator and the parties.

D. At least seven business days before the evaluation orientation session, each party shall provide the mediator with a statement outlining his perspective on the facts and issues of the case. At the discretion of the mediator, these statements may be mutually exchanged by the parties.

E. During the evaluation orientation session, the parties, assisted by the mediator, shall determine the manner in which the issues in dispute shall be framed and addressed. In the absence of agreement by the parties, the mediator shall make this determination.

9VAC5-210-160. Continuation, termination, and resolution of mediation.

A. Following the evaluation orientation session, mediation shall proceed in any manner agreed on by the parties and the mediator in conformance with the provisions of 9VAC5-210-60 9VAC5-210-50 through 9VAC5-210-80.

B. Mediation may be terminated through written notice by the permit applicant or the director at any time before settlement is reached.

C. Mediation shall continue if a party other than the permit applicant or the director chooses to opt out of mediation following the evaluation orientation session. A party who chooses to opt out of mediation at any time following the evaluation orientation session or who, through nonattendance, is conclusively deemed to have dropped out of the dispute resolution procedure shall not be bound by any written settlement agreement resulting from the mediation but shall be bound by the cost provisions of 9VAC5-210-50 and the confidentiality provisions of 9VAC5-210-80.

D. If the mediation is terminated before settlement is reached, the parties shall resume the same status as before mediation and may proceed with the formal adjudication as if mediation had not taken place. The board shall not refer the case to mediation a second time.

E. If the mediation results in settlement, a written settlement agreement shall be signed and dated by each party or by that party's authorized representative.

DOCUMENTS INCORPORATED BY REFERENCE (9VAC5-210)

Virginia Supreme Court, Judicial Council of Virginia, "Standards of Ethics and Professional Responsibility for Certified Mediators," October 2000

Standards of Ethics and Professional Responsibility for Certified Mediators, Office of the Executive Secretary of the Supreme Court of Virginia, adopted by the Judicial Council of Virginia, effective July 1, 2011

VA.R. Doc. No. R15-3981; Filed May 27, 2015, 11:07 a.m.