Naturaland Trust v. Dakota Fin., LLC

• Decision Date: 31 March 2021
• Docket Number: Civil Action No. 6:20-cv-01299-JD
• Citation: 531 F.Supp.3d 953
• Parties: NATURALAND TRUST, South Carolina Trout Unlimited, and Upstate Forever, Plaintiffs, v. DAKOTA FINANCE, LLC dba Arabella Farm, Ken Smith, Sharon Smith, and Willard R. Lamneck, Jr., Defendants.
• Court: U.S. District Court — District of South Carolina

531 F.Supp.3d 953

NATURALAND TRUST, South Carolina Trout Unlimited, and Upstate Forever, Plaintiffs,

v.DAKOTA FINANCE, LLC dba Arabella Farm, Ken Smith, Sharon Smith, and Willard R. Lamneck, Jr., Defendants.

Civil Action No. 6:20-cv-01299-JD

United States District Court, D. South Carolina, Greenville Division.

Signed March 31, 2021

Michael G. Corley, Michael G. Martinez, SC Environmental Law Project, Greenville, SC, Lauren Megill Milton, Justin O'Toole Lucey Law Firm, Mt. Pleasant, SC, for Plaintiffs.

Elizabeth Bartlett Partlow, Law Offices of Elizabeth B. Partlow LLC, Cayce, SC, Adam B. Lambert, Acker Lambert Hinton PA, Pickens, SC, for Defendants.

ORDER

Joseph Dawson, III, United States District Judge

This matter is before the Court on Dakota Finance, LLC dba Arabella Farm¹ ("Dakota"), Ken Smith, Sharon Smith, and Willard R. Lamneck, Jr.’s ("Lamneck") collectively ("Defendants") motion to dismiss Naturaland Trust ("Naturaland"), South Carolina Trout Unlimited ("SCTU"), and Upstate Forever's ("Upstate") (collectively the "Plaintiffs")² complaint for lack of subject-matter jurisdiction pursuant to Rule 12(b)(1), Fed. R. Civ. P. (DE 9.) Defendants contend this Court lacks subject matter jurisdiction because (1) Plaintiffs’ citizen-suit claim brought pursuant to the Clean Water Act ("CWA") fails to state a claim under the Act, (2) when a permit has been issued, section 505 of the CWA does not authorize citizens’ suits to challenge violations of the 404 permit, and (3) Upstate and SCTU's claims are barred because they failed to comply with the CWA's notice requirements.³ (DE 9, p. 1.) The parties have filed responses and replies to the motion to dismiss. (DE 13, 14.)

For the reasons set forth herein, the Court grants the Defendants’ motion to dismiss for lack of subject matter jurisdiction, pursuant to Rules 12(b)(1), Fed. R. Civ. P.

BACKGROUND

Dakota is a limited liability company that holds land and operates a farm/event center in Pickens County, South Carolina. (DE 9, p. 3.) In 2015, Dakota purchased a 72-acre parcel of land located at 125 Buck Ridge Road, Pickens County, South Carolina ("Arabella Farm"). Defendants Ken Smith and Sharon Smith are members of Dakota. (DE 1, ¶ 18.) Defendant Lamneck owns a 5-acre parcel of land located near Arabella Farm.⁴ (DE 1, ¶ 17.) (DE 9, p. 3.) Arabella Farm is bounded by three bodies of water: Clearwater Branch, Peach Orchard Branch, and an unnamed tributary of the Eastatoe River (the "Unnamed Tributary"). (DE 1, ¶ 38.) Plaintiffs contend each of these waterbodies receives stormwater discharges from Arabella Farm during rain events, but the bulk of those discharges have been into the Unnamed Tributary. (DE 1, ¶ 38.) The Unnamed Tributary crosses from Arabella Farm onto Naturaland's property, then to property owned by the South Carolina Department of Natural Resources, and eventually into the Eastatoe River. (DE 1, ¶ 38.) These water bodies are continuously flowing and navigable waters of the United States, pursuant to the CWA. (DE 1, ¶ 38.)

In 2017, Ken Smith and Sharon Smith formed Arabella to operate the Event Barn and grounds on Arabella Farm. (DE 9, p. 3.) During that time, Ken Smith approached Pickens County with his proposal to construct an event barn and to develop fruit orchards and vineyards. (DE 9, p. 4.) As negotiations with Pickens County progressed, the county informed Dakota that it should have had a land disturbance (stormwater) permit from the county. (DE 9, p. 4.) Dakota hired a registered professional engineer and applied for the permit; however, the county rejected several iterations of the permit application. (DE 9, p. 4.) In April 2019, Dakota and the county entered a Consent Agreement. (DE 9-1, p. 4.) The Consent Agreement required stabilization of disturbed areas of Arabella Farm but did not require Dakota to obtain a stormwater permit. (DE 9-1, p. 4.)

On September 13, 2019, South Carolina Department of Health and Environmental Control ("DHEC") issued Dakota a Notice of Alleged Violation/Notice of Enforcement Conference.⁵ (DE 9-2, p. 5.) Following a period of negotiation, DHEC and Dakota finalized on May 6, 2020, a Consent Order requiring Dakota to take several actions. (DE 9, p. 5.) The Consent Order required Dakota to inter alia : (1) Complete the process of obtaining coverage under the National Pollutant Discharge Elimination System ("NPDES") General Permit for Stormwater Discharges from Construction Activities with the Pickens County Office of Stormwater Management and (2) Pay to the Department a civil penalty. (DE 9, p. 5-6.) As required by the Consent Order, Dakota obtained coverage under the NPDES General Permit for Stormwater Discharges from Construction Activities on May 22, 2020. (DE 9-6, p. 6.)

Plaintiffs bring this action based on alleged violations of the CWA pursuant to the Act's citizen suit provision, as well as several common-law claims for damage to property interests. (DE 13, p. 1.) Plaintiffs seek damages and injunctive relief as a result of actions taken by Defendants. Plaintiffs contend "even with the intervention of these [sic] agencies, major unresolved damage persists in the waterbodies surrounding the Defendants’ properties." (DE 13, p. 4.) On the other hand, Defendants argue Plaintiffs are barred from bringing a citizens’ action due to statutory limitations of the CWA and because Defendants have already entered into consent agreements with Pickens County and DHEC. (DE 9, p. 6, 10.)

LEGAL STANDARD

Federal district courts are courts of limited subject matter jurisdiction. "They possess only the jurisdiction authorized them by the United States Constitution and by federal statute." United States v. ex rel. Vuyyuru v. Jadhav, 555 F.3d 337, 347 (4th Cir. 2009). As such, "there is no presumption that the court has jurisdiction." Pinkley, Inc. v. City of Frederick, 191 F.3d 394, 399 (4th Cir. 1999) (citing Lehigh Mining & Mfg. Co. v. Kelly, 160 U.S. 327, 327, 16 S. Ct. 307, 40 L. Ed. 444 (1895) ). Indeed, when the existence of subject matter jurisdiction over a claim is challenged under Fed. R. Civ. P. 12(b)(1), "[t]he plaintiff has the burden of proving that subject matter jurisdiction exists." Evans v. B.F. Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999) ; see also Richmond, Fredericksburg & Potomac R.R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991). If subject matter jurisdiction is lacking, the claim must be dismissed. See Arbaugh v. Y & H Corp., 546 U.S. 500, 506, 126 S. Ct. 1235, 163 L. Ed. 2d 1097 (2006).

To determine whether jurisdiction exists, the district court is to regard the pleadings’ allegations as mere evidence on the issue and may consider evidence outside the pleadings without converting the proceeding to one for summary judgment. Richmond, Fredericksburg & Potomac R. Co. v. U.S., 945 F.2d 765, 768 (4th Cir.1991). The court may dismiss a case for lack of subject matter jurisdiction for any of the following bases: (1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts. Cosby v. S.C. Prob. Parole & Pardon Servs., 2020 WL 1878193, 2020 U.S. Dist. LEXIS 67026 (D.S.C. 2020) (citations omitted).

DISCUSSION

In this action, Plaintiffs present claims inter alia under Section 402 of the CWA, 33 USC § 1342 alleging unpermitted discharges from a construction site and claims under Section 404 of the CWA, 33 U.S.C. § 1344(c) alleging placement of fill material without a valid permit and in violation of a permit.⁶ (DE 1, p. 16-19.) The CWA "prohibits ‘the discharge of any pollutant by any person’ unless done in compliance with some provision of the Act." S. Fla. Water Mgmt. Dist. v. Miccosukee Tribe of Indians, 541 U.S. 95, 102, 124 S. Ct. 1537, 158 L. Ed. 2d 264 (2004) (quoting 33 U.S.C. § 1311(a) ). One such provision, codified at 33 U.S.C. § 1342, "established a National Pollution Discharge Elimination System ... that is designed to prevent harmful discharges into the Nation's waters." Nat'l Ass'n of Home Builders v. Defenders of Wildlife, 551 U.S. 644, 127 S. Ct. 2518, 2525, 168 L. Ed. 2d 467 (2007). "Generally speaking, the NPDES requires dischargers to obtain permits that place limits on the type and quantity of pollutants that can be released into the Nation's waters." The Piney Run Pres. Ass'n v. The Cty. Comm'rs Of Carroll Cty., MD, 523 F.3d 453, 455-456 (4th Cir. 2008). "[A] NPDES permit ‘defines, and facilitates compliance with, and enforcement of, a preponderance of a discharger's obligations under the [Act]." Id. Initially, "[t]he Environmental Protection Agency (EPA) ... administers the NPDES permitting system for each State, but a State may apply for a transfer of permitting authority to state officials. If authority is transferred, then state officials ... have the primary responsibility for reviewing and approving NPDES discharge permits, albeit with continuing EPA oversight." Id. The EPA has delegated CWA enforcement to South Carolina. 40 Fed. Reg. 28130 (July 3, 1975) ( NPDES program); 57 Fed. Reg. 43733 (Sept. 22, 1992) (general permits program).⁷

"Although the primary responsibility for enforcement rests with the state and federal governments, private citizens provide a second level of enforcement and can serve as a check to ensure the state and federal governments are diligent in prosecuting Clean Water Act violations." Sierra Club v. Hamilton Cty. Bd. of Cty. Comm'rs, 504 F.3d 634, 637 (6th Cir. 2007). Specifically, § 505(a) of the CWA, 33 U.S.C. § 1365(a), authorizes citizens "to bring suit against any NPDES permit holder who has allegedly violated its permit." Friends of the Earth, Inc. v. Gaston Copper Recycling Corp., 204 F.3d 149, 152 (4th Cir. 2000) (en banc). The Fourth Circuit has recognized that citizen suits are critical to the enforcement of the CWA, as it allows citizens "to abate pollution when the government cannot or will not command...