Philip Morris Usa v. Chesaoeaje Bay

Decision Date20 April 2007
Docket NumberRecord No. 060858.
Citation643 S.E.2d 219
PartiesPHILIP MORRIS USA INC. v. The CHESAPEAKE BAY FOUNDATION, INC. Commonwealth of Virginia, ex rel. State Water Control Board, et al. v. The Chesapeake Bay Foundation, Inc.
CourtVirginia Supreme Court

Brooks M. Smith (Andrea W. Wortzel; Hunton & Williams, on briefs), Richmond, for appellant Philip Morris USA Inc.

Stephen R. McCullough, Deputy State Solicitor General (Robert F. McDonnell, Attorney General; William E. Thro, State Solicitor General; William C. Mims, Chief Deputy Attorney General; Richard B. Campbell, Deputy Attorney General; Roger L. Chaffe, Senior Assistant Attorney General, on briefs), for appellants Commonwealth of Virginia, ex rel. State Water Control Board and David K. Paylor.

Jon A. Mueller (The Chesapeake Bay Foundation, Inc., on brief), Washington, DC, for appellee.

Amicus Curiae: W. Tayloe Murphy Jr. (Leon F. Szeptycki, on brief), in support of appellee.

Present: HASSELL, C.J., LACY, KEENAN, KOONTZ, LEMONS, and AGEE, JJ., and RUSSELL, S.J.

OPINION BY Justice LAWRENCE L. KOONTZ, JR.

In these appeals, we consider whether the Court of Appeals of Virginia correctly determined that an environmental conservation organization has standing to appeal the approval of a wastewater discharge permit affecting the James River issued by the State Water Control Board. Specifically, the issue presented in these appeals is whether the organization has representational and individual standing to request judicial review to challenge the issuance of the permit pursuant to the provisions of Code § 62.1-44.29.

BACKGROUND

Philip Morris USA Inc. (Philip Morris), with headquarters in Richmond, Virginia, is the nation's largest cigarette manufacturer. Philip Morris' Park 500 facility in Chester, Virginia is used to produce a reconstituted tobacco product. Since 1972, the Park 500 facility has held a discharge permit allowing the disposal of treated wastewater into the James River at a point below Richmond. On October 28, 2002, Philip Morris filed a permit renewal application under the Virginia Pollution Discharge Elimination System. Code § 62.1-44.15.

The discharge of pollutants into public waterways is regulated by the federal Clean Water Act of 1977, 33 U.S.C § 1251 et seq. (2000 & Supp. IV 2004). The Clean Water Act allows states to administer the issuance of wastewater discharge permits within their territories. The State Water Control Board administers the wastewater discharge permit program in Virginia under the State Water Control Law. Code §§ 62.1-44.2 through 62.1-44.34:28.

The Chesapeake Bay Foundation (the Foundation), a non-profit corporation registered with the Virginia State Corporation Commission and dedicated to protecting the Chesapeake Bay and its tributaries, participated in the public comment process regarding the renewal of the Park 500 facility permit. The Foundation contended that the levels of nitrogen and phosphorus in the wastewater discharged by the Park 500 facility would impair the river's designated uses and kill or injure fish and aquatic plants. Following a public hearing, the State Water Control Board approved the renewal of Philip Morris' Park 500 facility permit.

Thereafter, the Foundation timely filed a petition for appeal in the Circuit Court of Chesterfield County. The petition alleged that the State Water Control Board's decision to issue the permit violated various provisions of the federal Clean Water Act and the State Water Control Law, citing 33 U.S.C. §§ 1311 and 1342 and Code §§ 62.1-44.2, 62.1-44.4, and 62.1-44.15. The Foundation based its assertion of legal standing in an individual capacity to seek judicial review of the board's decision upon fifteen educational, recreational, and Chesapeake Bay restorative programs on the James River that the Foundation operates downstream from the Park 500 facility and that would be harmed by the permitted discharge. The Foundation further asserted that it had representational standing based upon injury to unidentified members of the Foundation who regularly use and enjoy the James River for swimming, boating, kayaking, canoeing, sport fishing, and other aesthetic, educational, and recreational pursuits. The Foundation alleged that, as a result of the unlawful issuance of the discharge permit, it had "suffered and will continue to suffer actual and/or imminent injury" and that it "represents members and citizens of the Commonwealth who have suffered and will continue to suffer actual and imminent injury."

Philip Morris and the Commonwealth, acting on behalf of the State Water Control Board, filed demurrers asserting that the Foundation had failed to plead sufficient facts to establish its standing in an individual capacity. Philip Morris and the Commonwealth further asserted that the Foundation's claims of representational standing were not authorized under any relevant statute.

Following a hearing on these demurrers, the circuit court issued an opinion letter dated January 4, 2005 in which it concluded that the Foundation had neither individual nor representational standing to pursue an appeal of the decision of the State Water Control Board to issue the renewed permit. In the opinion letter, subsequently incorporated by reference into a final order entered on April 28, 2005, the circuit court found that the Foundation had "suffered no particularized injury in fact and does not have the authority to sue on behalf of a class as required by the legislature."1

The Foundation appealed the judgment of the circuit court to the Court of Appeals. In that appeal, the Foundation asserted that the circuit court incorrectly ruled that Virginia does not recognize representational standing and contended that it had pled sufficient facts to establish both representational and individual standing under Code § 62.1-44.29.

Philip Morris and the Commonwealth contended, based on prior Court of Appeals precedent, that representational standing is not recognized in Virginia unless it is specifically authorized by statute. See Pearsall v. Virginia Racing Commission, 26 Va.App. 376, 381, 494 S.E.2d 879, 882 (1998). They contended that Code § 62.1-44.29 does not expressly authorize representational standing and that such standing may not be implied from the statute. They further asserted that the Foundation's claims of injury were merely allegations of harm to the environment which do not establish a basis for individual standing. See Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 181, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000) (hereinafter "Laidlaw").

On April 4, 2006, the Court of Appeals issued a published opinion reversing the judgment of the circuit court. Chesapeake Bay Foundation, Inc. v. Commonwealth, 48 Va.App. 35, 628 S.E.2d 63 (2006). The Court of Appeals concluded that the Foundation had alleged sufficient facts in the petition filed in the circuit court to establish individual standing. Id. at 57, 628 S.E.2d at 74. Additionally, the Court of Appeals noted that it had already resolved the issue of whether Code § 62.1-44.29 provided for representational standing in a decision announced after the circuit court had entered final judgment in this case. Under nearly identical circumstances, the Court of Appeals had determined that "Virginia recognizes representational standing . . . and that Code § 62.1-44.29 confers this representational standing in cases meeting its requirements." Id. at 53, 628 S.E.2d at 72 (quoting The Chesapeake Bay Foundation, Inc. and Citizens for Stumpy Lake v. Commonwealth, 46 Va.App. 104, 118, 616 S.E.2d 39, 46 (2005) (hereinafter "Stumpy Lake")). Applying that decision, the Court of Appeals held that sufficient facts had been pled in the petition filed in the circuit court to support the Foundation's claim to have representational standing for its members. Id. at 54, 628 S.E.2d at 73. Accordingly, the Court of Appeals reversed the judgment of the circuit court sustaining the respondents' demurrers and remanded the case for further proceedings. Id. at 57, 628 S.E.2d at 74.

Philip Morris and the Commonwealth filed separate petitions for appeal in this Court challenging the judgment of the Court of Appeals. We awarded appeals to both and consolidated the appeals for argument.

DISCUSSION

The principles of appellate review that guide our consideration of a circuit court's judgment granting a demurrer are well-established and do not need repetition at length here. A demurrer admits the truth of the facts alleged in the pleading to which it is addressed, as well as any facts that may be reasonably and fairly implied and inferred from those facts. See, e.g., Mattaponi Indian Tribe v. Commonwealth, 261 Va. 366, 370, 541 S.E.2d 920, 922 (2001); Rosillo v. Winters, 235 Va. 268, 270, 367 S.E.2d 717, 717 (1988). Accordingly, in reviewing the judgment of the circuit court, an appellate court looks solely to the allegations in the pleading to which the demurrer was sustained. Moreover, because the issues in this case present pure questions of law, we do not accord a presumption of correctness to the judgment below, but review the issues de novo. Board of Zoning Appeals v. CaseLin Sys., 256 Va. 206, 211, 501 S.E.2d 397, 400 (1998); see also Crawford v. Haddock, 270 Va. 524, 528, 621 S.E.2d 127, 129 (2005); Ainslie v. Inman, 265 Va. 347, 352, 577 S.E.2d 246, 248 (2003).

Representational Standing

As they did in the circuit court and before the Court of Appeals, Philip Morris and the Commonwealth contend principally that representational standing to seek judicial review is not recognized in Virginia unless expressly granted by statute. With regard to the provisions of Code § 62.1-44.29 entitling "any person" under specific circumstances to judicial review of a State Water Control Board decision, they maintain that the language of the statute tracks the requirements for finding individual standing to challenge an administrative agency's...

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