Sound Rivers, Inc. v. N.C. Dep't of Envtl. Quality

• Decision Date: 02 June 2020
• Docket Number: No. COA18-712,COA18-712
• Parties: SOUND RIVERS, INC. and North Carolina Coastal Federation, Inc., Petitioners, v. N.C. DEPARTMENT OF ENVIRONMENTAL QUALITY, DIVISION OF WATER RESOURCES, Respondent, Martin Marietta Materials, Inc., Respondent-Intervenor.
• Court: North Carolina Court of Appeals

271 N.C.App. 674

845 S.E.2d 802

SOUND RIVERS, INC. and North Carolina Coastal Federation, Inc., Petitioners,

v.N.C. DEPARTMENT OF ENVIRONMENTAL QUALITY, DIVISION OF WATER RESOURCES, Respondent,Martin Marietta Materials, Inc., Respondent-Intervenor.

No. COA18-712

Court of Appeals of North Carolina.

Filed: June 2, 2020

Southern Environmental Law Center, by Geoffrey R. Gisler, Blakely E. Hildebrand, and Jean Zhuang, for petitioner-appellees.

Attorney General Joshua H. Stein, by Assistant Attorney General Asher P. Spiller and Assistant Attorney General Scott A. Conklin, for respondent-appellant.

Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P., Greensboro, by Matthew B. Tynan, George W. House, Alexander Elkan and V. Randall Tinsley, for respondent-intervenor-appellant.

STROUD, Judge.

This case arises from the issuance of a National Pollutant Discharge Elimination System Permit ("Permit") by respondent North Carolina Department of Environmental Quality, Division of Water Resources ("DEQ") to respondent-intervenor Martin Marietta Materials, Inc., ("Martin Marietta") allowing respondent Martin Marietta to discharge wastewater from Vanceboro Quarry ("quarry") into "unnamed tributaries to Blounts Creek[.]" The Administrative Law Judge ("ALJ") of the Office of Administrative Hearings ("OAH") entered a final decision affirming the issuance of the Permit. Petitioners Sound Rivers, Inc. and North Carolina Coastal Federation, Inc. ("Petitioners") filed a petition for judicial review with the superior court.¹ The superior court reversed the ALJ's final decision based upon a failure to "ensure reasonable compliance with the biological integrity standard" ("biological integrity standard") found in the North Carolina Administrative Code ("Code") but concluded that the Permit was in compliance with other water quality standards, including "swamp waters supplemental classification and the state antidegradation rule" ("swamp waters") and pH ("pH standards").

Respondent Martin Marietta and respondent DEQ appeal from the superior court's order reversing the ALJ's order due to its conclusion on biological integrity standards. Petitioners cross-appeal from the superior court's order based upon its conclusion that the Permit reasonably ensured compliance with water quality standards regarding swamp waters and pH standards. We note at the outset that at all stages of the proceedings, the parties have filed numerous documents, including briefs, motions, proposed drafts of orders, responses, and exhibits; in this opinion we will mention only those documents relevant to the issue on appeal as the documents are so voluminous, but we have reviewed all of the documents before us and after review of the briefs, record, and transcripts, we affirm the superior court's order as to swamp waters and pH standards and reverse as to the biological integrity standard.

I. Factual and Procedural Background

In September of 2013, Sound Rivers and North Carolina Coastal Federation filed a petition for a contested case hearing on DEQ's issuance of the Permit on 24 July 2013 to Martin Marietta. According to the petition, the Permit authorized Martin Marietta to "the discharge of 12 million gallons of mine wastewater into tributaries of Blounts Creek each day." Petitioners alleged the Permit violated "applicable laws" attached and incorporated into the petition.

The Permit was issued under the provisions of North Carolina General Statute § 143-215.1 and "other lawful standards and regulations promulgated and adopted by the North Carolina Environmental Management Commission, and the Federal Water Pollution Control Act, as amended[.]" The Permit was effective on 1 September 2013 and would expire on 31 August 2018.² The Permit allowed Martin Marietta to discharge water pumped from its quarry "from two pit clarification ponds" identified on an attached map into "receiving waters designated as unnamed tributaries to Blounts Creek in the Tar-Pamlico River Basin in accordance with effluent limitations, monitoring requirements, and other conditions set forth in Parts I, II, and III" of the Permit. The supplement to the Permit cover sheet noted that the "unnamed tributary" into which the wastewater would be discharged was "classified as C-Swamp NSW waters in the Tar-Pamlico River Basin." In this opinion, we will refer to the waters into which wastewater from the quarry would be discharged as "Blounts Creek."

In September of 2013, respondent DEQ submitted a prehearing statement identifying the issues to be resolved as

[(1)] whether Respondent, properly issued the Permit pursuant to Article 21, Chapter 143 of the North Carolina General Statutes and the applicable rules promulgated thereunder, including but not limited to 15A NCAC 2B.0200 et. seq. ; and [(2)] whether Respondent, in issuing the Permit substantially prejudiced Petitioner's rights and erred in one or more of the five ways enumerated in N.C. Gen. Stat. § 150B-23(a).

Martin Marietta, who had intervened, also submitted a prehearing statement contending the Permit "would not violate water quality standards" and noted that the Permit had been issued "after years of pre-permitting work, the submission of engineering, economic, and ecological studies and materials by Martin Marietta, and extensive review and analysis by DWR [, Division of Water Resources,] and other state and federal government agencies." Martin Marietta contended state and federal regulatory personnel had thoroughly analyzed the proposed permit over about eighteen months, including "site visits, field work, numerous communications and meetings, the further submission of materials and studies by Martin Marietta, and public comment and a public hearing, in which Petitioners and their members and counsel participated." Thus, Martin Marietta contended state and federal regulatory personnel had already considered the "claims asserted by Petitioners in this contested case" and DEQ "correctly concluded that the proposed discharge allowed by the NPDES Permit would not violate water quality standards and lawfully and appropriately issued the NPDES Permit."

On 6 November 2013, Petitioners filed their prehearing statement contending that the Permit did not comply with biological integrity standards, protection of swamp waters, and pH standards, and identifying the issues as:

1. The Clean Water Act and state laws implementing it prohibit discharges that violate any water quality standard. State water quality standards for waters like Blounts Creek prohibit any discharge that will make a waterbody unsuitable for native plants and animals, violating its "biological integrity." Martin Marietta's proposed discharge of 12 million gallons of mine wastewater per day into Blounts Creek would displace native fish, macroinvertebrates (insects, mollusks, crayfish, etc.) and plants. Did DWR exceed its authority, act erroneously, fail to use proper procedure, act arbitrarily or capriciously or fail to act as required by rule or law "err") by authorizing the discharge?

2. The Clean Water Act and state laws implementing it prohibit discharges that violate any water quality standard. The state water quality standard for pH is the normal pH for the waterbody receiving a discharge, which is between 4.0 and 5.5 in Blounts Creek. Did DWR err by authorizing a discharge that would raise the pH in the creek to a minimum of 6.3 to 6.9?

3. The Clean Water Act and state laws implementing it require classification of waters to protect existing uses. North Carolina has classified Blounts Creek as swamp waters to protect characteristics unique to these waters, including low flow and velocity, low pH, and high tannin levels. Did DWR err by issuing a permit for a discharge that will cause Blounts Creek to have higher flow and velocity, near neutral pH, and low tannin levels, thereby no longer qualifying as swamp waters?

In November of 2014 Petitioners filed a motion for summary judgment on the issues of whether Petitioners were "persons aggrieved" under North Carolina's Administrative Procedure Act and whether DWR had exceeded its authority or failed to act as required by law based upon failure to ensure compliance with the biological integrity water quality standard, the pH water quality standard, and Blounts Creek's swamp waters classification. Petitioners also submitted numerous affidavits to support their motion. On 25 November 2014, Martin Marietta filed a motion for summary judgment.

On 23 March 2015, the ALJ entered an order granting summary judgment for respondents. The order stated at length the undisputed facts and concluded "Petitioners are not ‘Persons Aggrieved[;]’ " "Respondent's Decision to Issue the Permit was Not in Violation of N.C. Gen. Stat. § 150B-23(a) [;]" "Respondent Ensured Compliance with Biological Integrity Standard[;]" "Respondent Ensured Compliance with pH Water Quality Standards[;]" and "Respondent Protected Existing Uses[.]" The ALJ also noted the "Re-opener Provision" of the Permit:

The permit issued to the Respondent-Intervenor allows the Respondent to re-open and modify the permit if water quality standards are threatened or other monitored data cause concern. Even if Petitioner provided evidence of specific and particularized potential violations of water quality standards, the re-opener provision assures reasonable compliance with those standards.

In summary, the ALJ concluded,

There is no evidence that Petitioners’ rights have been substantially prejudiced, or that Respondent exceeded its authority or jurisdiction, acted erroneously, failed to use proper procedure, acted arbitrarily or capriciously, or failed to act as required by law or rule.

For the reasons discussed herein, there is no genuine issue as to any material fact. Respondent's Motion for Summary Judgment is allowed; Respondent-Intervenor's Motion for Summary Judgment is allowed. Petitioners’ Motion for Summary Judgment is denied, and Petitioners are not entitled to the relief requested in the

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