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City of Virginia Beach v. Virginia Marine Resources Commission

Court of Appeals of Virginia

March 19, 2019

CITY OF VIRGINIA BEACH
v.
VIRGINIA MARINE RESOURCES COMMISSION

          FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH A. Bonwill Shockley, Judge

          Gerald L. Harris, Associate City Attorney (Mark D. Stiles, City Attorney; Christopher S. Boynton, Deputy City Attorney; Joseph M. Kurt, Assistant City Attorney, on briefs), for appellant.

          Kelci A. Block, Assistant Attorney General (Mark R. Herring, Attorney General; Stephen A. Cobb, Deputy Attorney General; Donald D. Anderson, Senior Assistant Attorney General & Section Chief, on brief), for appellee.

          Present: Judges Petty, Chafin and O'Brien Argued at Williamsburg, Virginia

          OPINION

          MARY GRACE O'BRIEN, JUDGE

         The City of Virginia Beach ("the City") appeals a circuit court order affirming a decision by the Virginia Marine Resources Commission ("VMRC") rejecting the City's application to receive a transfer of an oyster-planting ground lease under Code § 28.2-625. The City contends that the court misinterpreted the statute because "Virginia law plainly authorizes the City to occupy and hold oyster-planting ground leases by transfer or assignment." It also asserts that the court erred in relying on the principle of expressio unius est exclusio alterius to conclude that the General Assembly intended to make municipalities ineligible to receive these leases by transfer. For the following reasons, we reverse the court's decision.

         BACKGROUND

         In January 2015, the City enacted an ordinance establishing a Neighborhood Dredging Special Service District ("NDSSD") for Hurd's Cove, a branch of the Lynnhaven River. See Municipal Code 35.3-13(a). See also Code § 15.2-2403 (authorizing governing bodies to create service districts for the "dredging of creeks and rivers to maintain existing uses").

         The path for the Hurd's Cove NDSSD extends through an oyster-planting ground lease held by the Zipperer family ("Zipperer Lease"). After the NDSSD took effect, Philip Hightower, a waterfront property owner who opposed the dredging project, applied to VMRC for an oyster-planting riparian lease pursuant to Code § 28.2-600 ("Hightower Lease"). The proposed Hightower Lease abutted the Zipperer Lease and would be within the path of the dredging project.

         The City objected to the application, arguing that Hightower only sought the lease to prevent the dredging project.[1] VMRC granted the application, and the circuit court affirmed its decision. Upon appeal, this Court also affirmed. City of Virginia Beach v. Va. Marine Res. Comm'n and Philip G. Hightower, No. 1648-17-1 (Va. Ct. App. Aug. 21, 2018).[2]

         While litigating the Hightower Lease, the City also pursued non-judicial means to advance the dredging project. It negotiated an agreement to acquire a portion of the Zipperer Lease pursuant to Code § 28.2-625. The transfer would enable the City to dredge slightly outside the Hightower Lease. After the City and Zipperer leaseholders signed the agreement, the City submitted it to VMRC with an "Application for Transfer of Oyster Planting Ground" requesting transfer of two areas within the Zipperer Lease.

         VMRC rejected the transfer application. In its refusal letter, VMRC stated:

Pursuant to [Code § 28.2-625], oyster planting grounds can only be transferred "to a resident of the Commonwealth, or a firm or corporation authorized by Virginia laws to occupy and hold oyster planting ground[]." We do not believe the City of Virginia Beach qualifies for a transfer pursuant to this Code section.

         The City appealed to circuit court. The parties agreed that the facts were undisputed and the only issue was statutory interpretation, which the court reviewed de novo. The City argued that municipalities are corporations authorized to hold or occupy oyster-planting ground leases under Code § 28.2-604 and therefore are eligible to receive lease transfers under Code § 28.2-625. VMRC responded that because the General Assembly included the term "municipality" in Code § 28.2-604 but omitted it from Code § 28.2-625, the City was not eligible to receive the transfer.

         The court affirmed VMRC's denial and held,

The City's argument . . . runs contrary to the plain language of [Code §] 28.2-625 and the statutory scheme. The fact that the General Assembly expressly excluded municipalities for transfers and expressly included them [in Code § 28.2-604] governing applications, we have to assume that ...

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