Com. ex rel. State Water Control Bd. v. County Utilities Corp.

• Decision Date: 30 April 1982
• Docket Number: No. 791336,791336
• Citation: 290 S.E.2d 867,223 Va. 534
• Court: Virginia Supreme Court
• Parties: , 19 ERC 2199, 12 Envtl. L. Rep. 20,892 COMM. of Virginia, ex rel. STATE WATER CONTROL BOARD v. COUNTY UTILITIES CORPORATION and Kempsville Utilities Corporation. Record

Page 867

290 S.E.2d 867

223 Va. 534, 19 ERC 2199, 12 Envtl. L. Rep. 20,892

COMM. of Virginia, ex rel. STATE WATER CONTROL BOARD v. COUNTY UTILITIES CORPORATION and Kempsville Utilities Corporation.

Record No. 791336.

Supreme Court of Virginia.

April 30, 1982.

John R. Butcher, Timothy G. Hayes, Asst. Attys. Gen. (Marshall Coleman, Atty. Gen., on briefs), for appellant.

Robert R. MacMillan, Norfolk (E. Leslie Cox; Breeden, Howard & MacMillan, Norfolk, on brief), for appellees.

Before CARRICO, C. J., and COCHRAN, POFF, COMPTON, THOMPSON, STEPHENSON and RUSSELL, JJ.

RUSSELL, Justice.

The State Water Control Board (Board) appeals from decrees entered by the circuit court which found certain actions by the Board, purporting to control the discharge of treated domestic sewage in the City of Virginia Beach, to be unenforceable and void.

County Utilities Corporation (County) is a privately owned utility which collects sewage from the Birchwood Gardens subdivision and discharges the treated effluent into Buchanan Creek, a tributary of the Lynnhaven River. Kempsville Utilities Corporation (Kempsville) is a privately owned utility which collects sewage from the Carolanne Farms subdivision and discharges the treated effluent into the Eastern branch of the Elizabeth River. The utilities have been in operation since 1956 and 1959, respectively.

Although the Board has never complained that the utilities were inefficient, or poorly operated, or that they were producing an effluent which degraded the receiving waters, it became concerned during the early 1960's with growths or "blooms" of algae in the receiving waters. The Board determined that the "blooms" were caused by nitrogen and phosphorus, which acted as nutrients for plant growth. The nutrients were being discharged into the watersheds by some 30 discharges of sewage and other wastes. All of the dischargers, except the appellee utilities, have now ceased to discharge nutrients. The other dischargers have either "internalized" their operations or connected to the lines of the publicly owned utility in the area, Hampton Roads Sanitation District (HRSD). ¹ The evidence shows, however, that the greatest sources of nutrients in the receiving waters are those over which the Board has no control. Among these are agricultural drainage, waterfowl and other wild life, and especially the runoff from the city's storm drains in times of heavy precipitation.

In an effort to reduce the nutrient content of these particular receiving waters, the Board in 1967 adopted "Special Standards 'j' and 'k'." Special Standard "j" was labelled "Objective for Nutrients." It provided that effluents could not contain more than 0.5 milligrams per liter of nitrogen nor more than 1 milligram per liter of phosphorus at any time. Special Standard "k" required that "all existing discharges in accordance with 'j' " were to substantially remove the nutrients in their effluents or connect to HRSD.

The Board concedes that the requirement of "j" with respect to nitrogen is now and has always been unattainable by any known technology. The evidence, in fact, shows that it requires a lower nitrogen content than that contained in natural rain. Nevertheless, the Board contends that it has the authority to impose standards which are admittedly unattainable, in the interest of improving the quality of the waters, as long as the dischargers are left with the alternative of connecting to HRSD. The utilities argue that such action is arbitrary and unreasonable. As we see it, this question frames the dispositive issue in the case.

The powers and duties of the Board are to be found in the State Water Control Law, c. 3.1 of Title 62.1 of the Code, (§ 62.1-44.2 et seq.). The Board's declared purposes are to reduce existing pollution, prevent increased pollution, and safeguard the clean waters of the State from pollution. § 62.1-44.2. It is required to make appropriate studies of water quality and, after due notice and hearing, to establish and enforce standards of water quality. § 62.1-44.15. The discharge of wastes into the State waters is to be limited by certificates issued by the Board, and subject to the conditions contained therein. Such certificates may be modified, amended, or revoked by the Board from time to time, after due notice and hearing. § 62.1-44.5 and § 62.1-44.15(5). Sewage treatment is regulated by Article 4 (§ 62.1-44.18 et seq.), which provides that such treatment plants shall be under the joint supervision of the Board and the State Department of Health. The Board has the power to amend, revoke, and modify discharge certificates to assure compliance with its established water control standards. § 62.1-44.19. Any owner aggrieved by a final decision of the Board in this respect may have judicial review in an appropriate circuit court pursuant to § 62.1-44.29 which sets forth a detailed procedure for such cases.

In addition to the foregoing statutory framework, the Congress enacted extensive amendments to the Federal Water Pollution Control Act in 1972, reenacted as part of the Clean Water Act of 1977, P.L. 95-217, 91 Stat. 1566, 33 U.S.C. 1251 et seq. These laws were aimed at the elimination of the discharge of pollutants into waters of the United States by 1985 (§ 1251(a)(1)) and they preserved the rights and responsibilities of the States to eliminate pollution (id. § 1251(b)). They also established the National Pollutant Discharge Elimination System (NPDES) which prohibits the discharge of pollutants without a valid "NPDES permit." The permit is to be issued by competent authority to each discharger, conditioned to conform to established water control standards. Section 1311(b) requires that by July 1, 1977 every discharger meet an effluent quality attainable by the application of the best practicable control technology currently available or meet any more stringent standard set by the State. The administrator of the Environmental Protection Agency reviewed Virginia's standards pursuant to § 1313(a) and, on March 31, 1974, authorized Virginia to administer the NPDES program within the State, pursuant to § 1342(b). The Board thereupon began to issue NPDES permits pursuant to the federal law which also incorporated the requirements of the discharge certificates mandated by State law.

In November, 1975, after receiving a staff report pointing out the impracticability of "Special Standard 'j' ", the Board sent the appellee utilities drafts of proposed NPDES permits which would have established an interim limitation of 2.0 mg/1 of ammonia nitrogen, a final limitation of 1.0 mg/1 of phosphorous and a future final limitation of 0.5 mg/1 of total nitrogen "as soon as possible on a time frame consistent with demonstrated technology." In September 1976 the Board issued an actual NPDES permit to Kempsville containing these provisions. However, in November, 1976 the Board, without notice, issued an NPDES permit to County lacking the above limitations and in effect directing County to abandon the treatment of sewage and to connect its lines to HRSD by July 1, 1977. County and Kempsville have officers and directors in common. When the President of County (Vice-President of Kempsville) informed the Board of his intention to appeal County's case to the circuit court, he was told that if he did so, Kempsville's more permissive NPDES permit would be withdrawn and it, too, would be required to connect to HRSD by July 1, 1977. When County noted its appeal to the court, the Board did just that. The utilities now stand upon the same footing.

After disposing of pre-trial motions, the court tried the cases together for four days in February, 1979. The court entered final decrees on June 8, 1979, incorporating a memorandum opinion, vacating the actions of the Board as "unreasonable, arbitrary, capricious, confiscatory, unconstitutional and void." The decrees modified the NPDES permits in accordance with the court's opinion and extended them to June 30, 1982. The Board's appeal raises a number of issues, not all of which require discussion.

The Board argues that the utilities' appeal to the circuit court should have been dismissed because they failed to file a petition for appeal within 30 days after notice of appeal, pursuant to this court's Rule 2A:4. Part 2A of the Rules was adopted, as Rule 2A:1 states, pursuant to § 9-6.14:16 of the Code, part of the Administrative Process Act. That section provides:

Any party ... aggrieved by and claiming unlawfulness of a case decision, as ... defined in 9-6.14:4 of this chapter ... shall have a right to the direct review thereof either (i) by proceeding pursuant to the express provisions therefor in the basic law under which the agency acted or (ii) in the absence, inapplicability or inadequacy of such special statutory form of court review proceeding, by an appropriate and timely court action ... in the manner provided by the rules of the Supreme Court of Virginia.

The actions of the Board in question here were "case decisions" as defined by Code § 9-6.14:4. See Va. ABC Comm. v. York St. Inn, 220 Va. 310, 257 S.E.2d 851 (1979). The "basic law under which the agency acted" was the State Water Control Law, Code § 62.1-44.2 et seq. This contains a detailed procedural scheme for judicial review of actions by the Board, set forth primarily at § 62.1-44.29. Thus its procedures apply and those of Part 2A of the Rules do not. The statutory procedure requires only a notice of appeal within 30 days after the case decision, and transmission of the record thereafter. No petition for appeal is required. Thus the trial court properly overruled the Board's motion to dismiss.

The trial court ruled that the Board's action was confiscatory, i.e., a "taking" of the utilities' property without compensation in violation of art. I, § 11 of the Virginia Constitution and Code § 56-8, which specifically prohibits the taking of the property of a utility without just compensation....