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In the Circu it Court for W orcester Co unty Case No. 23-C-03-000298

IN THE COURT OF APPEALS OF MARYLAND No. 10 September Term, 2006

EUGENIA M. NEIFERT, ET AL. v. DEPARTMENT OF THE ENVIRONMEN T, ET AL.

Bell, C.J. Raker Wilner Cathell Harrell Battaglia Greene, JJ.

Opinio n by Rak er, J.

Filed: November 14, 2006

Eugenia M. N eife rt, M elvin D. K rolczyk, and Teresa A. Krolczyk, appellants, own four lots in the Cape Isle of Wight subdivision in Worce ster Coun ty. Appellants have been denied sewer service and w etland fill permits and therefore are unable to develop their lots. We must decide whether the Maryland Department of the Environment violated appellants' equal protection rig hts by denying sewer service and whether the denial of sewer and wetland fill permits cons titutes an unconstitutional taking. We shall hold that the denial of sewer service under the 1992 Policy satisfies rational basis review u nder equ al protection a nalysis and tha t appella nts did n ot suff er an un constitu tional tak ing.

I. Appellan ts own four contiguous lo ts within the C ape Isle of W ight subdiv ision in Worcester County. Eugenia M. Neifert owns in fee simple lots 9, 10, and 11 and Melvin D. Kro lczyk and Teresa A. Krolczyk own in fee simple Lot 8. Eu genia Ne ifert acquired her lots by gift from her mother in 1975; her parents acquired title to the lots in 1962. The Krolczyks purchased their lot in 1974. The deed to each lot contains a restriction requiring that any "[s]eptic tanks, sewage disposal systems and drinking water facilities shall co nform to a ll requireme nts established by the Maryland State Department of Health and the Worcester County Maryland Health authorities." Each of appellants' lots also abut Marlowe Road, a dedicated b ut unimpro ved 40-f oot wide s treet. The Cape Isle of Wight subdiv ision was e stablished in th e early 1950's and is comprised of land created by excavating canals in a tidal marsh and sidecasting the excavated

material on both sides to cover the marsh and cre ate upla nds. Cape Isle of Wight contains 625 lots and, as of 1972, approximately 128 homes existed in the subdivision. Each of these homes used a sep tic system that was approved based on percolation tests that could be completed at any time throug hout the year. 1 In the mid-19 70's, a sewa ge disposa l problem d eveloped in the We st Ocean City area of Worcester County, Maryland.2 See Department of Environment v. Showe ll, 316 Md. 259, 558 A.2d 3 91 (19 89). Approximately half of the septic systems actively used in the area failed.3 Id. at 260, 558 A.2d at 391. Untreated sewage leaked into drinking water supplies and created a pu blic health hazard . Id. Worcester County responded to the situation by requiring that lots pass a seasonal p ercolation tes t conducte d during Ja nuary throug h April, the wettest mo nths of the yea r and wh en the wa ter table wa s at its highest. 4 As a resu lt,

A perco lation test is used to determine if the soil will absorb and drain water adequate ly enough to install and use a domestic sewage-disposal system. The testing procedure, generally speaking, involves digging several holes, filling them with water, and measuring the rate at which the water-level decreases. Several cases h ave dis cussed the sep tic system f ailures in West O cean C ity. See Shanty Town Assocs. Ltd. P'ship v. EPA, 843 F.2d 782 (4th Cir. 1988); Department of Environment v. Showell, 316 M d. 259, 558 A.2d 39 1 (1989); Shanty Town Assocs. Ltd. P'ship v. Dep't of En v't, 92 Md. Ap p. 103, 607 A.2d 66 (1992). The diff iculties presen ted by a high g roundw ater table and poorly drained soils were exacerbated by the fact that more people were residing in the area year-round as opposed to just the summer months. Seasonal testing was required under Regulation 10.03.27, Governing the Installation of Private Water Supply and Sew age Disposal Systems a nd Directive Policy GS -6 ("GS-6 Policy"). -24 3 2

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eighty to ninety p erce nt of new applications for s eptic perm its in Wes t Ocean C ity were denied. Id. In the Cape Isle of Wight subdivision, approximately 150 lot owners requested septic tank perm its from 1976-1979 and 148 of those requests w ere denied because th e lots were unable to pass the seasonal percolation testing. Appellants' lots were among those denied on-site septic system permits in 1979 and they did not appeal this decision.5 A central sew age collectio n system wa s propose d for the West Ocean C ity area to allow for the development of new homes and b usinesses. Each of ap pellants' four lots are located in the sewer system district. The considerable expense associated with the project required the County to seek additional funding from the State of Maryland and the U.S. Environmental Protection Agency (EPA). EPA's 1983 Final Environmental Impact

Statement (EIS) concluded that EPA could o nly provide a c onstruction grant if certain restrictions were met. EPA's funds were conditioned on the system not providing sewer service to an y parcel of land within any wetlands, as defined by the U.S. Fish and Wildlife Service, or to any parcel of land within the 100 year floodplain if it was platted as a building lot afte r Ma y 31, 1977.6 EPA also required the Worcester County Sanitary Commission
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The W orcester Co unty Depar tment of P ublic Health informed Melvin Krolcyzk on June 12, 1979 that Lot 8 was not buildable under Regulation 10.03.27, Governing the Installation of Private W ater Supp ly and Sewage Disposal Systems and Directive Policy GS6. The Worcester County Department of Public Health informed Eugenia Neifert on October 25, 1 979 that L ots 9 , 10 a nd 11 we re no t buildab le un der the G S-6 P olicy. Executive Orders require federal agencies to evaluate the effects of their actions on floodplains and w etlands . Exec. O rder N o. 11,99 0, 42 F ed. Re g. 26,96 1 (Ma y 24, 1977); Exec. Order No. 11,988, 42 Fed. Reg. 26,951 (May 24, 1977). The Environmental Protection (contin ued...) -36

("Sanitary Commission") to submit maps that clearly delineated all non-service areas. The Maryland Department of Health and Mental Hygiene (DHMH) and the Sanitary Commission formalized their commitment to these restrictions in a Consent Order on June 28, 1983.7 The total sewer system cost was funded by the EPA (75%), the State of Maryland (12.5%), and Worcester Co unty (12.5%). The Worcester County Sanitary Commission hired the engineering firm of George, Miles & Buhr to create a set of m aps ("1 984 M aps") id entifying non-se rvice ar eas, i.e. those parcels that fell within wetlands as defined by the Fish and Wildlife Service or were located in the 100-year floodplain and were platted after 1977. The 1983 EIS maps were not relied upon because lot lines were not visible. Instead, George, Miles & Buhr created the 1984 Maps by enlarging N ational W etland Inve ntory maps d eveloped by the Fish an d Wildlife Service from large-scale aerial photography and superimposing them onto a map of the sewer service area. The 1984 Maps provided approximate wetland delineations and were used as general guidance in granting sewer service.8

(...continued) Agen cy is requi red to co mply wi th these Execu tive Or ders. 40 C.F.R .

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