New Legislation Reforms South Carolina’s Automatic Stay Proceedings

Geoff Osborn

On Thursday, March 15th, 2018, South Carolina Governor Henry McMaster signed legislation (S. 105) that imposes new burdens on groups challenging government-issued environmental permits and accelerates the timeline for resolution of such challenges.  The bill represents a radical change to the automatic stay system that developers and manufacturers argued placed an undue burden on new projects through costly, lengthy and unnecessary delays.  The automatic stay is an Administrative Procedures Act feature that prevents construction activities when a permit is challenged.  The automatic stay allows the ALC to assess the facts and law and determine whether the permit was properly authorized by the governmental agency.

The legislation implements a new timeline for challenges to government permitting decisions, which are adjudicated by the Administrative Law Court (“ALC”).  First, ninety (90) days after a challenge to the permit is initiated before the ALC, a party may move the ALC to lift the automatic stay.  Second, a hearing on a motion to lift an automatic stay must be held within thirty (30) days after a party files and serves the motion.  Third, the ALC judge must issue an order no later than fifteen (15) business days after the hearing is concluded.  Fourth, the ALC must file a final decision on the merits of the challenge no later than twelve (12) months after the case is filed with the Clerk of the ALC, unless all parties consent to an extension or the ALC finds substantial cause otherwise.

The bill also places the burden of proof on the those challenging permits, as such parties must prove:

(1) the likelihood of irreparable harm if the stay is lifted

(2) the substantial likelihood that the party requesting the contested case and stay will succeed on the merits of the case

(3) the balance of equities weigh in favor of continuing the stay, and

(4) continuing the stay serves the public interest.

Finally, the bill allows the ALC to impose sanctions if the judge determines the challenge was frivolous or filed solely for the purpose of delay.   The sanctions may include reasonable costs and attorney’s fees of the prevailing party, a reasonable fine to the court, or a directive or injunction designed to deter future frivolous action by the party.

The bill’s passage was widely praised by the business advocacy groups including the South Carolina Chamber of Commerce and the South Carolina Manufacturers Alliance; however, the bill has been heavily criticized by environmental protection groups such as the South Carolina Environmental Law Project.