Springer v. Joseph Schlitz Brewing Co.

• Court: U.S. Court of Appeals — Fourth Circuit
• Writing for the Court: Before WINTER, BUTZNER and WIDENER; BUTZNER; WIDENER
• Citation: Springer v. Joseph Schlitz Brewing Co., 510 F.2d 468 (4th Cir. 1975)
• Decision Date: 14 January 1975
• Docket Number: No. 73--2360,73--2360
• Parties: David SPRINGER et al., Appellants, v. JOSEPH SCHLITZ BREWING COMPANY, Appellee.

Page 468

510 F.2d 468

7 ERC 1516

David SPRINGER et al., Appellants, v. JOSEPH SCHLITZ BREWING COMPANY, Appellee.

No. 73--2360.

United States Court of Appeals Fourth Circuit.

Argued June 4, 1974.

Decided Jan. 14, 1975.

Jonathan R. Harkavy, Greensboro, N.C. (Norman B. Smith, Smith, Carrington, Patterson, Follin & Curtis, Greensboro, N.C., on brief), for appellants.

W. P. Sandridge, Winston-Salem, N.C. (Charles F. Vance, Jr., Winston-Salem, N.C., on brief), for appellee.

Before WINTER, BUTZNER and WIDENER, Circuit Judges.

BUTZNER, Circuit Judge:

This North Carolina diversity case raises the question of the liability of an industry to downstream riparian owners when its wastes overload a city's treatment facilities and cause water pollution. The plaintiffs, David and Diana Springer, own an interest in a large farm on the Yadkin River. Seeking an injunction and compensatory and punitive damages, they contend that, beginning in late 1969, wastes from a new brewery owned by Joseph B. Schlitz Brewing Company in Winston-Salem, North Carolina, overloaded the city's sewage treatment plant, causing it to pollute the Yadkin and interfere with their riparian rights. The Springers introduced evidence, which, viewed in the light most favorable to them, showed that Schlitz knew, or in the exercise of reasonable care should have known, that the city sewage plant lacked the capacity to treat the brewery's waste; that in discussions with the city, Schlitz underestimated the quantity and harmfulness of the waste; and that the company violated the city sewage ordinance. The evidence also established that in the spring and summer of 1970, after Schlitz reached full production, inadequately treated sewage from the overloaded plant caused six unprecedented fish kills and otherwise impaired the quality of the Yadkin River.

At the close of the Springers' case, the court directed a verdict for Schlitz on the ground that North Carolina absolves the user of a municipal sewer system of liability for the city's failure to adequately treat its sewage. We reverse because we believe the case is controlled by exceptions to North Carolina's rule of immunity.

I

In North Carolina, a riparian landowner has a right to the agricultural, recreational, and scenic use and enjoyment of the stream bordering his land, subject, however, to the rights of upstream riparian owners to make reasonable use of the water without excessively diminishing its quality. Though he does not own the fish in the stream, the riparian owner's rights include the opportunity to catch them. Interference with riparian rights is an actionable tort, and a riparian owner may join several polluters as joint tort-feasors. See generally, Aycock, Introduction to Water Use Law in North Carolina, 46 N.C.L.Rev. 1, 11--13 (1967).

Nevertheless, an industry that uses a municipal sewage system to dispose of its waste is not liable to a riparian landowner for the pollution caused by the city's failure to provide adequate treatment. Quoting from 43 C.J. 1158, the North Carolina Supreme Court stated in Hampton v. Spindale,210 N.C. 546, 548, 187 S.E. 775, 776 (1936):

'(T)he inhabitants of a city who invoke its power to construct and control a sewer, and who use the sewer . . . for the purpose and in the way prescribed by law, are not liable jointly with the city for the damages which result to third persons from the negligence of the city in the construction, management, or operation of the sewer.'

In the only other North Carolina case to consider the point, the court justified the rule by emphasizing the inability of a private sewer user to control a city's treatment of its wastes after they entered the system. Clinard v. Town of Kernersville, 215 N.C. 745, 748, 3 S.E.2d 267, 270 (1939). The district court considered itself bound by these decisions to enter a directed verdict for Schlitz.

The Springers claim that their proof is sufficient to invoke exceptions to the general rule of immunity. Specifically, they contend that Schlitz should be held liable if it violated the city sewage ordinance, or if Schlitz knew, or should have known, of the inability of the city to adequately treat the brewery's wastes. Since no North Carolina court has considered these exceptions, we must determine the common law of the state by examining the rationale for the established rule, developments on this point in other states, and analogous areas of the state's common law. See Bernhardt v. Polygraphic Company of America, Inc., 350 U.S. 198, 208, 76 S.Ct. 273, 100 L.Ed. 199 (1956) (Frankfurter, J., concurring); Corbin, The Laws of the Several States, 50 Yale L.J. 762, 770 (1941). We will treat the exceptions on which the Springers rely in Parts II and III of this opinion. ¹

II

In February 1970 the City of Winston-Salem enacted a comprehensive sewage ordinance to take effect in May. The ordinance requires every user of industrial sewers to have a discharge permit. ² Users may discharge only wastes containing 2500 ppm BOD or less, ³ and they are forbidden to release sewage containing a wide variety of dangerous or difficult-to-treat substances. ⁴ The ordinance imposes surcharges for BOD pound loadings caused by a concentration above 300 ppm. ⁵ Originally, it allowed the city to furnish advice and technical assistance, but it did not provide for variances or exemptions. ⁶ By state law, its violation is a misdemeanor. ⁷

Schlitz's effluent contained more than 2500 ppm BOD until April 1971. Beginning in May 1970, the city billed, and Schlitz paid, all BOD surcharges. The brewery and other industries, however, were allowed to operate in violation of the ordinance and without permits as long as they submitted schedules for compliance and conformed to them. It received its permit, one of the first issued to any industry, in May 1971.

The violation of a municipal sewage ordinance which is intended to protect downstream riparian owners can subject an industrial sewage source to private civil liability. Hampton v. Spindale, 210 N.C. 546, 548, 187 S.E. 775, 776 (1936), expressly restricts freedom from liability to those persons who use the sewers 'in the way prescribed by law.' ⁸ Although this is dictum, it is consistent with the rationale for the private user's immunity. When an industry turns over the control of its sewage to the city, it can reasonably expect that the city will safeguard riparian property by effective treatment. ⁹ But it is not reasonable for an industry to expect a city to safely treat prohibited sewage. Consequently, the reason for granting immunity does not then apply.

This reading of Hampton conforms to North Carolina's general law regarding the effect of regulatory legislation on civil liability. The state is firmly committed to the proposition that the 'violation of a statute designed to protect persons or property is a negligent act, and if such negligence proximately causes injury, the violator is liable.' Murray v. Bensen Aircraft Corp., 259 N.C. 638, 131 S.E.2d 367 (1963) (federal aircraft safety statute); accord, Bell v. Page, 271 N.C. 396, 156 S.E.2d 711 (1967) (town ordinance regulating private swimming pools). The statute or ordinance, serving as a legislative declaration of a standard of care, creates a private right not to be harmed by its violation. Bell v. Page, supra; King v. Pope, 202 N.C. 554, 163 S.E. 447 (1932).

Schlitz's failure to obtain a permit until May 1971 does not afford the Springers a ground for recovery. The permit does not protect riparian owners. It is only an instrument of the city's enforcement program, and its absence does not pollute the stream. Moreover, the ordinance does not explicitly forbid the discharge of wastes containing more than 2500 ppm BOD. The ordinance is a criminal statute which must be construed in the defendant's favor in civil proceedings as well as in criminal ones. Hinson v. Dawson,241 N.C. 714, 86 S.E.2d 585 (1955). Since the discharge of more than 2500 ppm BOD is not a crime, it does not constitute negligence per se.

In contrast, the discharge of sewage prohibited by Section 23--2(2) is a crime, and under North Carolina law it is actionable if it proximately causes damage to riparian property. Section 23--2(2) states in part:

'(2) Except as hereinafter provided, it shall be unlawful for any person to discharge or cause to be discharged any of the following described materials, waters, liquids, or wastes into any public sanitary sewer:

'(g) Liquid wastes containing any toxic or poisonous substances in sufficient quantities to (i) interfere with the biological processes used in a sewage treatment plant, or (ii) which, in combination with other liquid wastes, upon passing through a sewage treatment plant will be harmful to persons, livestock, or aquatic life utilizing the receiving streams into which water from a sewage treatment plant is discharged.'

In order to establish that Schlitz's violation of the ordinance was negligence, the Springers would have to prove that the brewery wastes had the characteristics forbidden by Section 23--2(2). Viewed in the light most favorable to them, the evidence showed that the brewery's wastes had a toxic or poisonous effect on bacteria that are essential to the sewage treatment process. The evidence also showed that after passing through the plant the wastes were harmful to aquatic life in the receiving stream. ¹⁰ The jury should therefore be allowed to determine whether or not the discharge violated the ordinance. If it did, this was negligence, and the jury should then decide whether it proximately caused damage to the Springers' property.

Schlitz argues that its discharge of brewery wastes is not actionable because the city's officials did not require compliance with the ordinance until May 1971, except for the payment of surcharges. This contention lacks merit. Section 23--4(d) of the ordinance authorized the water and sewer officials to:

'consult with and furnish technical assistance...