Penland v. Redwood Sanitary Sewer Service Dist.

• Decision Date: 05 February 1997
• Docket Number: CV-0209
• Citation: 934 P.2d 434,146 Or.App. 225
• Parties: D.E. (Gene) PENLAND, Cathy Penland, Enid Madding, Ray Ritchey, Lucy Ritchey, Ken Goodrich, Leola Goodrich, Richard Vischer, Pam Vischer, Ron Danyluk, Sue Danyluk, William Bushnell, Judy Bushnell, Roger Barklow, Shirley Barklow, Dave Price, Linda Price, Chuck King, Wanda King, Gordon Hewlett and Amelia Hewlett, Respondents, v. REDWOOD SANITARY SEWER SERVICE DISTRICT, a municipal corporation, Appellant. 94-; CA A90247.
• Court: Oregon Court of Appeals

Page 434

934 P.2d 434

146 Or.App. 225

D.E. (Gene) PENLAND, Cathy Penland, Enid Madding, Ray Ritchey, Lucy Ritchey, Ken Goodrich, Leola Goodrich, Richard Vischer, Pam Vischer, Ron Danyluk, Sue Danyluk, William Bushnell, Judy Bushnell, Roger Barklow, Shirley Barklow Dave Price, Linda Price, Chuck King, Wanda King, Gordon Hewlett and Amelia Hewlett, Respondents, v. REDWOOD SANITARY SEWER SERVICE DISTRICT, a municipal corporation, Appellant.

94-CV-0209; CA A90247.

Court of Appeals of Oregon.

Argued and Submitted Oct. 16, 1996.

Decided Feb. 5, 1997.

James H. Boldt, Grants Pass, argued the cause and submitted the briefs for appellant.

John R. Huttl, Medford, argued the cause for respondents. With him on the brief were William V. Deatherage and Frohnmayer, Deatherage, Pratt, Jamieson & Clarke, P.C.

Before DEITS, P.J., and De MUNIZ and HASELTON, JJ.

HASELTON, Judge.

Defendant Redwood Sanitary Sewer Service District (the District), a municipal corporation, appeals from a judgment in an action for nuisance, enjoining the District from continuing to operate a facility that converted human waste sludge into compost. The District argues, in part, that the trial court erred in determining that its actions were not shielded by "discretionary function" immunity under the Oregon Tort Claims Act (OTCA). ORS 30.265(3)(c). On de novo review, ORS 19.125(3), we conclude that the District's actions are entitled to immunity, and reverse.

The District operates sewage-related facilities, including a sewage treatment plant, in rural Josephine County. As part of the sewage treatment process, the District reduces incoming raw sewage to sludge, or biosolids, a bacteria-laden condensed form of sewage, by draining the liquids from the solids. Before 1988, the District trucked the sludge to various sites for land application, which involved spreading the sludge over a large area for agricultural and disposal purposes.

In 1988, the District's manager, Weber, who was charged with day-to-day oversight of its operations, instituted a small-scale pilot composting operation at the treatment plant. In July 1990, the District instituted composting on a permanent basis.

In the initial stages of the composting process, sludge is solidified by being poured into an outdoor levee, or "drying ring," which is exposed to the open air. After about two weeks, the material loses enough moisture to be mixed with organic material for composting. The reduced sludge, or biosolids, is then mixed with organic materials, such as wood, animal bedding, including animal waste, and yard waste, provided by local residents and businesses. The bacteria in the sludge break down the mixture. In order for the bacteria to decompose the sludge, the mixture must be exposed to air. Thus, the mixture is placed in a large pile, approximately nine feet high, 20 feet wide, and 100 hundred feet long, and exposed to the open air. The composted material is first piled over a perforated pipe for aeration. After two to three weeks, the pile is removed from the pipe and is turned every two weeks for aeration. There are normally seven piles at one time, each in a different stage of the composting process. Defendant uses heavy equipment to move the piles as they decompose and to load the finished product.

After approximately 90 days, the material becomes finished compost, which defendant sells to the public as mulch or soil amendment. The product, called Jo-Gro, contains no nutrients for fertilizing but is valuable for retaining moisture in soils.

If the sludge mixture is not aerated, it becomes anaerobic and, as a result, generates hydrogen sulfide. Hydrogen sulfide can cause headaches, nausea, and throat problems, and its odor is akin to that of rotten eggs. Hydrogen sulfide is generally released whenever a compost pile or the sludge pool is disturbed, but some level of hydrogen sulfide is always present as a result of the composting operation.

Plaintiffs are landowners and homeowners who live in rural Josephine County near the plant and composting operation. Many lived in the neighborhood before the District instituted the permanent composting operation. The closest plaintiffs, the Penlands, live about 180 feet from the property where the composting activities take place. Plaintiffs and other neighbors began to notice odor, noise, and dust, which they associated with the composting operation, in October 1991. Beginning in February 1992, plaintiffs and others complained to the District that, because of the odor and noise they ascribed to the plant, they were unable to enjoy outdoor activities, such as gardening, sitting on their porches, and barbequing. In response to those complaints, the District undertook several measures, including placing sound deflection panels on the electric wood grinder. Plaintiffs apparently found those measures to be ineffective and their complaints continued.

In early 1994, the District's board of directors, which consists of three members of the Josephine County Board of Commissioners, appointed a nine-member ad hoc citizen's committee to recommend mitigation measures. The committee, which included three of the present plaintiffs, submitted its report to the board, identifying a range of potential measures, with their respective costs and benefits. The ad hoc committee's recommendations included using sound absorbing equipment mufflers to reduce noise, applying a commercial deodorizer to reduce odors, adding spray misters to reduce dust, and relocating the composting operation to eliminate all negative impacts to the neighbors.

Before acting on the ad hoc committee's report, the board asked Weber, the District's manager, to review and comment on those recommendations. Weber did so, submitting a detailed report, which recommended that the operation be continued at its present site but that various mitigation measures be implemented. On June 17, 1994, a majority of the board (one member dissented) adopted Weber's recommendation to continue the composting operation at the sewage plant while implementing 21 of the ad hoc committee's recommended mitigation measures. Those measures included using a quieter loader, constructing vegetation screens, adding sound mufflers to equipment, eliminating construction lumber demolition, applying a commercial deodorizer, mixing the sludge more rapidly and efficiently, using fly bait, and adding dust-reducing spray misters.

In August 1994, plaintiffs filed this action, seeking to enjoin the continuation of the composting operation. Plaintiffs alleged that that operation created a nuisance in that it created excessive odor, noise, and dust and interfered with the reasonable use of their properties. ¹ The District denied the allegations of nuisance and argued that, in all events, the balance of equities militated against the issuance of an injunction. The District also raised various affirmative defenses, including laches, conformity with regulatory law, and "coming to the nuisance." Of particular relevance to our review, the District asserted a defense of "discretionary function" immunity under the Oregon Tort Claims Act, ORS 30.265(3)(c).

ORS 30.265(3)(c) provides:

"Every public body and its officers, employees and agents acting within the scope of their employment or duties * * * are immune from liability for:

" * * * * *

"(c) Any claim based upon the performance of or the failure to exercise or perform a discretionary function or duty, whether or not the discretion is abused."

Before the trial court, plaintiffs argued that discretionary function immunity did not bar their claims for two reasons. First, because pre-OTCA decisions uniformly recognized that municipal corporations could be liable for nuisance, the OTCA, including discretionary function immunity, was inapplicable. Second, even if the OTCA did apply, the District had failed to prove the requisites of such immunity. The trial court implicitly rejected the first argument but adopted the second. In particular, the court remarked:

"[The directors] were clear that all major policy decisions are to be made by the Board of Directors. But it was apparent to me that [the directors] had not done that; that basically what they had done was allow Mr. Webber and Mr. Funk to make those decisions, despite the fact that it is their responsibility to make those decisions. * * * I think you're not meeting your responsibility if all you do is rubber stamp what decisions are made by staff. And in essence, that was the impression I have as to what was done here is that basically the Board of Directors has allowed the staff and the manager to make the decisions that are their responsibility to make by law."

The court subsequently rendered the following findings:

"(3) The Board of Directors never made an independent decision with respect to the commencement of the composting of sludge on the premises of the sewage treatment facility plant, but rather allowed Mr. Weber and his staff to make this decision; however, there was no evidence that the Board of Directors actually delegated this authority to Mr. Weber. To the contrary, the evidence established that the Board of Directors, as well as Mr. Weber, all viewed this decision to be a decision to be made by the Board of Directors.

"(4) In making their decision of June 17, 1994, to authorize the continuation of the composting operations, the defendant's Board of Directors did not consider costs involved in possibly relocating the composting operations; did not consider what percentage of materials being collected were not being used in the composting operation; did not consider any financial information concerning the costs or income from the composting operation; and did not consider the report of an acoustical engineer hired by the District who had determined that the noise levels at the site had exceeded DEQ limits. Rather, the Board merely adopted Mr. Weber's recommendations, even though they had not...