Mont. Envtl. Info. Ctr. v. Mont. Dep't of Envtl. Quality

• Decision Date: 17 November 2020
• Docket Number: DA 19-0553
• Citation: 476 P.3d 32,402 Mont. 128,2020 MT 288
• Parties: MONTANA ENVIRONMENTAL INFORMATION CENTER, Save Our Cabinets, and Earthworks, Plaintiffs, Appellees, and Cross-Appellants, v. MONTANA DEPARTMENT OF ENVIRONMENTAL QUALITY and Montanore Minerals Corp., Defendants, Appellants, and Cross-Appellees.
• Court: Montana Supreme Court

402 Mont. 128

476 P.3d 32

2020 MT 288

MONTANA ENVIRONMENTAL INFORMATION CENTER, Save Our Cabinets, and Earthworks, Plaintiffs, Appellees, and Cross-Appellants,

v.MONTANA DEPARTMENT OF ENVIRONMENTAL QUALITY and Montanore Minerals Corp., Defendants, Appellants, and Cross-Appellees.

DA 19-0553

Supreme Court of Montana.

Submitted on Briefs: July 22, 2020

Decided: November 17, 2020

For Defendants, Appellants, and Cross-Appellees: William W. Mercer, Kyle Anne Gray, Brianne C. McClafferty, Victoria A. Marquis, Holland & Hart LLP, Billings, Montana (for Montanore Minerals Corp.) Kurt R. Moser, Special Assistant Attorney General, Helena, Montana (for Montana Department of Environmental Quality)

For Plaintiffs, Appellees, and Cross-Appellants: Katherine O'Brien, Timothy J. Preso, Jenny K. Harbine, Earthjustice Northern Rockies Office, Bozeman, Montana

For Amicus Montana Chamber of Commerce: Steven T. Wade, M. Christy S. McCann, Browning, Kaleczyc, Berry & Hoven, P.C., Helena, Montana

Justice Ingrid Gustafson delivered the Opinion of the Court.

¶1 Defendants, Appellants, and Cross-Appellees Montana Department of Environmental Quality (DEQ) and Montanore Minerals Corp. (MMC) appeal the Order on Cross-Motions for Summary Judgment issued by the First Judicial District Court, Lewis and Clark County, on July 24, 2019, which denied DEQ's and MMC's cross-motions for summary judgment and vacated DEQ's 2017 issuance of Montana Pollution Discharge Elimination System (MPDES) Permit No. MT0030279 (2017 Permit) to MMC. Plaintiffs, Appellees, and Cross-Appellants Montana Environmental Information Center (MEIC), Save Our Cabinets, and Earthworks cross-appeal the District Court's partial denial of their motion for summary judgment.

¶2 We address the following dispositive issue on appeal:

Whether DEQ unlawfully relied upon a 1992 Order of the Board of Health and Environmental Sciences when issuing the 2017 Permit.

¶3 We affirm the District Court's vacatur of the 2017 Permit and remand to DEQ for further proceedings.

FACTUAL AND PROCEDURAL BACKGROUND

¶4 This case arises out of the Montanore Project, a proposed copper

and silver mine located in the Cabinet Mountains of northwestern Montana. Silver deposits were discovered at the site of the proposed project in the early 1980s, and the permitting process for the Montanore Project began later that decade. In 1989, the Noranda Minerals Corporation (Noranda) obtained an exploration license from the Montana Department of State Lands for the construction of an exploration adit in upper Libby Creek.¹ Libby Creek is a critical habitat for bull trout. Noranda also applied for an operating permit to authorize mining.

¶5 On December 13, 1989, Noranda filed a Petition for Change in Quality of Ambient Waters with the Montana Board of Health and Environmental Sciences (BHES), seeking authorization to lower the ambient surface and ground water quality for discharges from the proposed Montanore Project in Sanders and Lincoln Counties. Pursuant to the nondegradation policy in effect at that time, BHES was allowed to authorize lower water quality if a showing was made that degradation was justified "as a result of necessary economic or social development[.]" Section 75-5-303(1), MCA (1989).

¶6 In 1991, after constructing around 14,000 feet of the Libby Creek adit, Noranda ceased construction of the adit due to elevated nitrate concentration in the surface water and low metal prices. Though Noranda ceased construction of the adit in 1991, the permitting process continued. On November 20, 1992, BHES issued its Final Decision and Statement of Reasons (BHES Order) on Noranda's petition to lower the ambient water quality, finding that degradation of the subject waters was justified due to the beneficial economic and social impacts that would come with the mine. The BHES Order set specific numeric limitations on certain contaminants, applicable to the surface and ground water that would be affected by the Montanore Project. The provisions of the BHES Order were to "remain in effect during the operational life of this mine and for so long thereafter as necessary."

¶7 In June 1992, the State of Montana Department of Health and Environmental Sciences (DHES) filed a Complaint and Application for Injunction against Noranda, alleging Noranda violated Montana's Water Quality Act (WQA) at the Libby Creek site. DHES filed its complaint after being notified by the United States Environmental Protection Agency (EPA) that it believed Noranda had violated the Clean Water Act (CWA) at the Libby Creek site.² On May 12, 1993, the Montana Nineteenth Judicial District Court, Lincoln County, issued its Findings of Fact, Conclusions of Law, Judgment and Consent Decree, which, in relevant part, required Noranda to pay fines and apply for an MPDES permit.

¶8 Pursuant to the CWA, Congress established a permitting system known as the National Pollution Discharge Elimination System (NPDES), which is administered by the EPA. The CWA allows for states to administer their own permits, however, and in 1974 the State of Montana and EPA signed a Memorandum of Agreement (MOA), which transferred the responsibility of issuing NPDES permits within Montana to DEQ.³ Pursuant to this arrangement, DEQ is responsible for issuing MPDES permits. Though the responsibility of issuing MPDES permits has been transferred to DEQ, EPA continues to review, comment on, and/or make recommendations to DEQ regarding proposed MPDES permits. Under the MOA, if EPA does not object to a proposed permit, its non-objection "shall be considered as concurrence" in the issuing of the permit.

¶9 Noranda ultimately obtained its MPDES permit for the Montanore Project in 1997. The permit allowed discharges from the Libby adit to Libby Creek and nearby groundwater. The 1997 permit allowed three outfalls: Outfall 001 for a percolation pond discharging to groundwater; Outfall 002 for a drainfield with three infiltration zones discharging to groundwater; and Outfall 003 for a pipeline outlet to Libby Creek. In 2001, Noranda applied to renew the MPDES permit. DEQ administratively extended the MPDES permit past its February 28, 2002 expiration date while it considered Noranda's September 17, 2001 permit renewal application. In September 2002, Noranda informed DEQ and the Kootenai National Forest (KNF) that it was relinquishing its approval to operate and construct the Montanore Project. Noranda requested termination of its MPDES permit in March 2003, but DEQ denied the request, noting "that it may be necessary to maintain the MPDES permit until reclamation work was completed." Noranda had previously closed the adit and started reclamation work, which was not fully completed by the time it requested termination of the MPDES permit in 2003. Noranda's other permits for the proposed mine, outside of the MPDES permit and DEQ-issued Hard Rock permit #00150, either expired or were terminated by 2002. See Mines Mgmt., Inc. v. Fus , 2019 MT 276, ¶ 8 n.6, 398 Mont. 15, 453 P.3d 371.

¶10 In 2004, after DEQ denied Noranda's request to terminate the MPDES permit, Mines Management, Inc. (MMI)—MMC's parent company—submitted a proposed plan of operations for the Montanore Project to the KNF.⁴ Ultimately, DEQ renewed Noranda's MPDES permit on March 21, 2006. The renewed permit went into effect on April 1, 2006, and again permitted three outfalls. DEQ's environmental assessment produced during that renewal noted that the "adit has been closed and the facility is in its final reclamation stages." It further noted that no discharge had been reported since 1998.

¶11 In May 2006, Newhi, Inc., a wholly owned subsidiary of MMI, acquired all issued and outstanding shares of Noranda and changed Noranda's name to MMC.⁵ MMC reversed course from Noranda's previous reclamation of the adit and "began using the adit for access purposes, engaging in dewatering and rehabilitation activities in preparation for actual mining operations." Mines Mgmt. , ¶ 9. DEQ modified the 2006 Renewed Permit on May 23, 2008, to reflect the name change from Noranda to MMC. The permit's expiration date remained March 31, 2011.

¶12 In August 2010, MMC applied to renew the MPDES permit. In its renewal application, MMC requested five new stormwater-only outfalls—two of which would discharge into Libby Creek, one of which would discharge into Ramsey Creek, and two of which would discharge into Poorman Creek. In February 2011, DEQ administratively extended the 2006 Renewed Permit pending issuance of a renewed permit based on MMC's 2010 application. DEQ issued a draft permit, fact sheet, and public notice in 2015, and a revised draft permit, fact sheet, and public notice in 2016. On December 15, 2015, KNF and DEQ issued a Joint Final Environmental Impact Statement (EIS) for the proposed Montanore Project. The Final EIS noted MMC's proposed Montanore plan was "considered as a new proposed Plan of Operations by the KNF because [Noranda] relinquished the federal approval to construct and operate the Montanore Project in 2002."

¶13 DEQ approved MMC's application on January 17, 2017. Pursuant to the Montana Administrative Procedure Act (MAPA), MMC appealed certain provisions of the 2017 permit in February 2017. The 2017 MPDES permit went into effect, except for those provisions stayed by DEQ in response to the MAPA action, on March 1, 2017. The 2017 MPDES permit added MMC's five new requested stormwater outfalls, which allowed discharges directly into both Ramsey Creek and Poorman Creek. MEIC, Save Our Cabinets, and Earthworks (collectively MEIC) filed a Complaint for Declaratory Relief in the Montana First Judicial District Court, Lewis and Clark County, on August 15, 2017, seeking a judicial declaration that DEQ's 2017 issuance of the MPDES permit to MMC was unlawful and must be vacated.

¶14 On May 29, 2018, MEIC moved for summary judgment, arguing DEQ failed to establish mandatory technology-based effluent limitations; that DEQ failed to conduct a valid...