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

• Docket Number: 306A20
• Decision Date: 01 September 2023
• Parties: SOUND RIVERS, INC. and NORTH CAROLINA COASTAL FEDERATION, INC. v. N.C. DEPARTMENT OF ENVIRONMENTAL QUALITY, DIVISION OF WATER RESOURCES, MARTIN MARIETTA MATERIALS, INC.
• Court: North Carolina Supreme Court

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SOUND RIVERS, INC. and NORTH CAROLINA COASTAL FEDERATION, INC. v. N.C. DEPARTMENT OF ENVIRONMENTAL QUALITY, DIVISION OF WATER RESOURCES, MARTIN MARIETTA MATERIALS, INC.

No. 306A20

Supreme Court of North Carolina

September 1, 2023

Heard in the Supreme Court on 27 April 2023.

Appeal pursuant to N.C. G.S. § 7A-30(2) from the decision of a divided panel of the Court of Appeals, 271 N.C.App. 674 (2020), affirming in part and reversing in part orders entered on 13 November 2015 by Judge W. Douglas Parsons in Superior Court, Beaufort County, and on 30 October 2017, 4 December 2017, and 20 December 2017 by Judge Joshua W Willey, Jr. in Superior Court, Carteret County.

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

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

Daniel F. E. Smith, Matthew B. Tynan, George W. House, Alexander Elkan, and V. Randall Tinsley, for intervenor-appellant.

BARRINGER, JUSTICE.

I. Background

On 24 July 2013, the North Carolina Department of Environmental Quality, Division of Water Resources (Division) issued a National Pollutant Discharge Elimination System Permit (Permit) to Martin Marietta Materials, Inc. (Martin Marietta). This Permit allowed Martin Marietta to discharge 12 million gallons of mining wastewater per day from Vanceboro Quarry into "tributaries of Blounts Creek." On 30 November 2016, an administrative law judge (ALJ) from the Office of Administrative Hearings affirmed the issuance of the Permit. The ALJ made voluminous findings of fact. See Sound Rivers, Inc. v. N.C. Dep't of Env't Quality, Div. of Water Res., 271 N.C.App. 674, 682 (2020). Sound Rivers, Inc. and North Carolina Coastal Federation, Inc. filed a petition for judicial review with the superior court. The superior court reversed the ALJ's decision because the Division failed to "ensure reasonable compliance with the biological integrity standard." On 2 June 2020, the Court of Appeals reversed the superior court, holding that "the ALJ correctly determined the Permit was properly and validly issued in accord with applicable regulations." Sound Rivers, Inc., 271 N.C.App. at 743. None of the ALJ's findings of fact were challenged on appeal to this Court.^[1]

Given the unchallenged, binding findings of fact, the due regard the ALJ gave the factual matters within the Division's demonstrated knowledge and expertise, and the ALJ's plain language analysis of the biological integrity standard, we affirm.

II. Standard of Review

This Court reviews questions of law de novo. Walker v. Bd. of Trustees of the N. Carolina Local, Governmental Employees' Ret. Sys., 348 N.C. 63, 65 (1998). Under de novo review, this Court's responsibility in this case is to review the statutory scheme and determine whether the ALJ and Court of Appeals correctly applied the law. See id. We agree with our learned colleague Justice Morgan's concurrence analyzing the missteps of the dissent regarding de novo review. As aptly noted in our concurring colleague's opinion," 'a reviewing court is not free to weigh the evidence presented to an administrative agency and substitute its evaluation of the evidence for that of the agency.' In re Appeal of McElwee, 304 N.C. 68, 75 (1981) (citing Appeal of AMP Inc., 287 N.C. 547, 562 (1975))." "[W]hen, as here, . . . findings of fact are not challenged on appeal, they are deemed to be supported by competent evidence and are binding on appeal." State v. Biber, 365 N.C. 162, 168 (2011) (citing State v. Baker, 312 N.C. 34, 37 (1984)).

III. Analysis

Subsection (a) of N.C. G.S. § 150B-34 provides:

In each contested case the administrative law judge shall make a final decision or order that contains findings of fact and conclusions of law. The administrative law judge shall decide the case based upon the preponderance of the evidence, giving due regard to the demonstrated knowledge and expertise of the agency with respect to facts and inferences within the specialized knowledge of the agency.

N.C. G.S. § 150B-34(a) (2021) (emphasis added).

In this matter, "giving due regard to the demonstrated knowledge and expertise of the agency," the ALJ found that the biological integrity standard is within the "demonstrated knowledge and expertise" of the Division, administered by the Division, and within the Division's specialized knowledge "with respect to facts and inferences."^[2] N.C. G.S. § 150B-34(a). Petitioners have not challenged these determinations or other related findings setting forth the experience and conduct of the Division's employees.

The ALJ decided this case based on the preponderance of the evidence and set forth its findings of fact and conclusions of law in a written order. The factual determinations by the ALJ are numerous, unchallenged, and binding. Thus, this Court cannot disturb them on review. See State v. Biber, 365 N.C. at 168.^[3]

Specifically, the ALJ found, inter alia, that:

52. The preponderance of the evidence shows that, in evaluating and determining whether the [ ] Permit reasonably ensures compliance with the biological integrity standard, [the Division] (through its staff) applied its knowledge and expertise, and:

a. identified the Blounts Creek system, meaning Blounts Creek and its tributaries, as the appropriate "aquatic ecosystem";

b. determined that the appropriate "reference conditions" were the existing conditions of the Blounts Creek system before the proposed discharge;

c. studied and assessed the existing, pre discharge ecological resources of the Blounts Creek system;

d. determined the degree and geographic scope of potential physical and chemical impacts of the proposed discharge;

e. determined the predicted changes to the ecosystem and ecological resources from the proposed discharge to be limited; and

f. concluded that the effects predicted to occur as a result of the permitted discharge would not violate the standard, and, in fact, a violation would not occur unless the impacts to the Blounts Creek aquatic ecosystem were much greater in degree and geographic scope than those predicted to occur.

In reviewing whether the Division "failed to conduct a biological integrity analysis by inadequately sampling for 'species composition, diversity, population densities and functional organization' throughout the Blounts Creek aquatic ecosystem," the ALJ further found that:

60. The determination and application of 'reference conditions' in a specific context is complex and requires significant expertise and judgment, and should be accorded deference.

61. [The Division]'s interpretation and application of this term are reasonable, rational, and in accordance with the language and purpose of the biological integrity standard.

62. To the extent [the Division]'s selection of appropriate 'reference conditions' is considered a factual determination, it is one which falls directly within the agency's expertise and is therefore entitled to "due regard" pursuant to the APA.

63. The preponderance of the evidence shows that Blounts Creek aquatic ecosystem's existing conditions ('reference conditions') are dynamic, vary over time and geographic locations, and can be affected by many environmental factors.

64. The preponderance of the evidence shows that [the Division] had sufficient information such that the biological sampling efforts Petitioners sought were unnecessary.

65. Before issuing the Permit, [the Division] determined that: (a) the proposed discharge likely would not cause significant erosion or sedimentation; (b) pH likely would not exceed 6.9 in the upper Blounts Creek and was unlikely to change significantly in lower Blounts Creek; (c) relative salinity impacts would likely be on the order of 1 ppt and salinities would remain within the variability of the system; (d) shifts in macrobenthic invertebrates would likely be toward an increase in diversity and would be geographically limited to the upper reaches of Blounts Creek; and (e) the proposed discharge is not likely to adversely impact fish communities of the Blounts Creek aquatic ecosystem. These determinations by [the Division] are reasonable and supported by the preponderance of the evidence.

66. [The Division] determined that the likely effects of the permitted discharge are limited in degree, limited in geographic scope, and not deleterious.

67. The preponderance of the evidence supports [the Division]'s conclusion and shows that the permitted discharge will not have any significant detrimental effect on the Blounts Creek aquatic ecosystem, including the many miles of C and Sw stream segments of other tributaries of Blounts Creek.

Thus, the ALJ acknowledged that, although terms used in the biological integrity definition such as "species composition," "population densities" and "functional organization" are complex and technical, these terms have a plain meaning in the environmental regulatory context. The ALJ then found by a preponderance of the evidence that the Division properly applied its knowledge and expertise to that regulatory language and determined that it had sufficient information such that the biological sampling efforts sought by petitioners were unnecessary. The ALJ further found that the Division thoroughly evaluated compliance with the biological integrity standard before issuing the Permit.

Given the foregoing and other unchallenged findings of fact supporting these determinations, this Court should affirm the ALJ's final decision unless the ALJ's determinations were affected by an error of law.

The legislature has provided in N.C. G.S. § 150B-51(c) in relevant part:

In reviewing a final decision

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