Pena-Kues v. Smith's Food & Drug Centers, Inc., 32,790

This is an unpublished memorandum opinion from the New Mexico Court of Appeals addressing challenges to an air quality permit modification for Smith’s gas station in Albuquerque.
Smith’s initially received an authority-to-construct permit in 2009 limiting annual fuel throughput to 3,369,925 gallons; the station opened in June 2010.
By 2011, the station exceeded the throughput limit; the Division issued Notices of Violation, penalties, and required a permit modification application.
Smith’s sought to increase the annual throughput to 4,500,000 gallons and the Division granted the modification after notices and a public hearing.
Petitioners appealed to the Albuquerque-Bernalillo County Air Quality Control Board, which held a hearing, adopted the hearing officer’s findings, but ultimately denied the permit modification, relying on a mandate to protect public health and welfare and to address quality-of-life concerns.
The Board’s decision was appealed, and the court reversed, holding that the Board failed to make findings to support its denial and that its reasoning was arbitrary and capricious.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Board’s denial was arbitrary and capricious given its lack of supporting findings.	Smith’s and the City contend the Board adopted findings that do not support denial.	Board asserted a health and welfare mandate and quality-of-life concerns justify denial.	Yes; the Board’s decision was arbitrary and capricious.
Whether the Board had a nexus to consider quality-of-life concerns under its regulatory mandate.	Board may consider quality-of-life impacts related to air quality.	Board is authorized to consider such concerns in preventing or abating air pollution.	The Board failed to provide express findings showing a proper nexus.
Whether the Board’s adoption of most findings while reversing the permit modification created inconsistency requiring reversal.	Findings supported a grant; denial cannot be sustained with inconsistent reasoning.	Board’s conclusions were within its discretion to reverse despite adopting findings.	Yes; the incongruity rendered the decision arbitrary and capricious.

Atlixco Coalition v. Maggiore, 125 N.M. 786 (1998) (agency action must show rational connection between facts and choices)
Colonias Dev. Council v. Rhino Envtl. Serv., Inc., 138 N.M. 133 (2005) (nexus requirement for quality-of-life considerations under Rhino rule)
Rhino Envtl. Serv., Inc. v. Colonias Dev. Council, 117 P.3d 939 (2005) (Rhino rule; require explicit regulatory nexus for quality-of-life claims)