State ex rel. Biser v. Chemours Co.

• Decision Date: 21 June 2022
• Docket Number: COA21-225
• Citation: 875 S.E.2d 20
• Parties: STATE of North Carolina, EX REL. Elizabeth S. BISER, Secretary, North Carolina Department of Environmental Quality, Plaintiff, Cape Fear River Watch, Plaintiff-Intervenor, v. The CHEMOURS COMPANY FC, LLC, Defendant.
• Court: North Carolina Court of Appeals

875 S.E.2d 20

STATE of North Carolina, EX REL. Elizabeth S. BISER, Secretary,¹ North Carolina Department of Environmental Quality, Plaintiff,Cape Fear River Watch, Plaintiff-Intervenor,

v.The CHEMOURS COMPANY FC, LLC, Defendant.

No. COA21-225

Court of Appeals of North Carolina.

Filed June 21, 2022

Attorney General Joshua H. Stein, by Special Deputy Attorney General Francisco J. Benzoni and Assistant Attorney General Asher P. Spiller, for Plaintiff-Appellee State of North Carolina.

Southern Environmental Law Center, by Geoffrey R. Gisler, Jean Y. Zhuang, and Kelly Moser, for Plaintiff-Intervenor-Appellee Cape Fear River Watch.

Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P., Greensboro, by Joseph A. Ponzi, George W. House, and V. Randall Tinsley, for Proposed Plaintiff-Intervenor-Appellant Cape Fear Public Utility Authority.

Robinson, Bradshaw & Hinson, P.A., Charlotte, by R. Steven DeGeorge, and Wachtell, Lipton, Rosen & Katz, by John F. Savarese, for Defendant-Appellee The Chemours Company

COLLINS, Judge.

¶ 1 Proposed Intervenor Cape Fear Public Utility Authority ("CFPUA") appeals from the trial court's order denying its 8 September 2020 motion to intervene in this environmental action brought in 2017 by the State of North Carolina against Defendant, The Chemours Company FC, LLC. CFPUA argues that the trial court erred by denying its motion to intervene as untimely, erred by denying intervention as of right, and abused its discretion by denying permissive intervention. Because the trial court did not abuse its discretion by denying CFPUA's motion as untimely, we affirm.

I. Background

¶ 2 Chemours owns the Fayetteville Works facility ("Facility"), a chemical manufacturing plant adjacent to the Cape Fear River in Bladen County, North Carolina. Chemours produces certain per- and polyfluoroalkyl substances ("PFAS"), including a chemical commercially known as GenX, at the Facility. The Facility discharges water into the Cape Fear River through multiple avenues. CFPUA, a public utility authority which provides potable water to residents of New Hanover County and the City of Wilmington, owns and operates a raw water intake on the Cape Fear River downstream of the Facility.

¶ 3 On 7 September 2017, the State, through the Department of Environmental Quality ("DEQ"), filed a Verified Complaint, Motion for Temporary Restraining Order, and Motion for Preliminary Injunctive Relief against Chemours alleging violations of multiple water quality laws and regulations based on discharges of PFAS from the Facility into groundwater and the Cape Fear River. The State sought a temporary restraining order requiring Chemours to "immediately cease discharging" certain substances "from its manufacturing process into surface waters" and to "continue to prevent the discharge of process wastewater containing GenX into waters of the State." The State also sought preliminary and permanent injunctive relief. The following day, the trial court entered a Partial Consent Order requiring Chemours to continue existing measures to "prevent the discharge of process wastewater containing GenX ... into waters of the State," immediately prevent the discharge of certain compounds identified in the complaint, and provide certain information to DEQ and the Environmental Protection Agency.

¶ 4 On 16 October 2017, CFPUA sued Chemours in the United States District Court for the Eastern District of North Carolina ("Federal Suit"). See Complaint, Cape Fear Public Utility Authority v. The Chemours Co. FC, LLC , No. 7:17-cv-195, (E.D.N.C. 2017), E.C.F. No. 1.² In the Federal Suit, CFPUA and other regional water suppliers and governmental entities assert claims for public nuisance, private nuisance, trespass to real property, trespass to chattels, negligence, negligence per se, failure to warn, and negligent manufacture against Chemours. Along with the other plaintiffs, CFPUA seeks compensatory damages, punitive damages, and injunctive relief. See Amended Master Complaint of Public Water Suppliers at 6-7, 45-54, Cape Fear Public Utility Authority v. The Chemours Co. FC, LLC , No. 7:17-cv-195 (E.D.N.C. 2019), E.C.F. No. 75.

¶ 5 The day after filing its Federal Suit, CFPUA moved to intervene in the present action ("First Motion to Intervene"). CFPUA sought to intervene permissively and as of right under N.C. Gen. Stat. § 1A-1, Rule 24. CFPUA asserted that it had "an interest in the injunctive relief granted" in this action "to assure that such relief adequately protects CFPUA's interests" and contended that its "ability to obtain relief may be impaired if the State either fails to prevail (in whole or in part) ... or if the State compromises this underlying action in a manner detrimental to CFPUA." CFPUA also argued that its interests were "not adequately represented by the State" because its Federal Suit asserted "interests unique to a public water supply authority which are not addressed or protected by the relief sought by the State" and the State's failure to provide public notice and opportunity to comment prior to entry of the Partial Consent Order "call[ed] into question whether the State recognize[d] CFPUA's rights."

¶ 6 CFPUA withdrew its First Motion to Intervene on 15 November 2017 after the parties stipulated that the State would provide notice and comment procedures "with respect to any proposed settlement between" the State and Chemours. The parties also stipulated that the Partial Consent Order was "not a final resolution of any claims asserted" by the State.

¶ 7 On 9 April 2018, the State filed an Amended Complaint and Motion for Preliminary Injunctive Relief containing further allegations based on information gathered during further investigation and seeking additional injunctive relief.³

¶ 8 The State published notice of a Proposed Consent Order and commenced a public comment period on 26 November 2018. In a 17 December 2018 comment, CFPUA argued that the Proposed Consent Order was "fundamentally flawed in a number of important respects," including that certain remedial provisions "effectively abandon[ed] the downstream users of the Cape Fear River, leaving them to fend for themselves in private litigation." CFPUA protested that the Proposed Consent Order would provide filtration systems for private well owners whose water exceeded a threshold level of contamination with certain PFAS but would not provide comparable relief for downstream users whose water presented the same level of contamination. In an additional comment, CFPUA provided results of "recent PFAS testing at the CFPUA water intake on the Cape Fear River, and of the treated ‘finished’ water." According to CFPUA, "out of 51 sampling events" of raw and finished water, only 4 fell below the threshold for private well filtration under the Proposed Consent Order.

¶ 9 CFPUA again moved to intervene on 20 December 2018 ("Second Motion to Intervene"). CFPUA alleged in its Second Motion to Intervene that it was unaware the parties were negotiating or had reached a proposed settlement until the Proposed Consent Order was published. CFPUA contended that the Proposed Consent Order did not "account for or seek to remedy the ongoing harms inflicted on CFPUA and its customers." CFPUA set its Second Motion to Intervene for hearing but removed the motion from the calendar on 10 January 2019.

¶ 10 The State moved for the entry of the Revised Proposed Consent Order on 20 February 2019. The State, Chemours, and Cape Fear River Watch, another proposed plaintiff-intervenor,⁴ each consented. At a hearing on the Revised Proposed Consent Order, counsel for CFPUA requested the trial court withhold entering the order until CFPUA's Board of Directors considered whether it should withdraw the Second Motion to Intervene. The trial court declined to do so and entered the Revised Proposed Consent Order as a Consent Order on 25 February 2019.

¶ 11 The Consent Order obligates Chemours to undertake compliance measures to address air, groundwater, surface water, and drinking water contamination and imposes monitoring and reporting requirements. In addition, Paragraph 12 of the Consent Order establishes a process for amending the Consent Order "to reduce PFAS contamination in the Cape Fear River and in the raw water intakes of downstream public water utilities on an accelerated basis[.]" Paragraph 12 provides that,

within six months of entry of this Order, Chemours shall submit to DEQ and Cape Fear River Watch a plan demonstrating the maximum reduction in PFAS loading from the Facility (including loading from contaminated stormwater, non-process wastewater, and groundwater) to surface waters ... that are economically and technologically feasible, and can be achieved within a two-year period .... The plan shall be supported by interim benchmarks to ensure continuous progress in reduction of PFAS loading. If significantly greater reductions can be achieved in a longer implementation period, Chemours may propose, in addition, an implementation period of up to five years supported by interim benchmarks to ensure continuous progress in reduction of PFAS loading. ... Chemours shall simultaneously transmit the plan to downstream public water utilities. DEQ will make DEQ staff available to meet with downstream public water utilities to receive input on the plan.

Upon reaching an agreement, the parties were required to file a joint motion to amend the Consent Order "to incorporate any agreed upon reductions as enforceable requirements" of the Consent Order. If the parties were unable to reach an agreement within eight months of entry of the Consent Order, they were permitted to either jointly stipulate to additional time or to "bring any dispute regarding the additional reductions before the Court for resolution."

¶ 12 The Consent Order also released and resolved

civil and administrative claims for injunctive relief and civil penalties by Plaintiff against Chemours relating to the release of PFAS from the Facility that have been or

...