State v. Furnas County Farms, S-01-1313.

• Citation: 266 Neb. 558,667 N.W.2d 512
• Decision Date: 08 August 2003
• Docket Number: No. S-01-1313.,S-01-1313.
• Parties: STATE of Nebraska ex rel. CITY OF ALMA, a Nebraska municipal corporation, Appellee, v. FURNAS COUNTY FARMS, a general partnership, et al., Appellants.
• Court: Supreme Court of Nebraska

667 N.W.2d 512
266 Neb. 558

STATE of Nebraska ex rel. CITY OF ALMA, a Nebraska municipal corporation, Appellee,
v.
FURNAS COUNTY FARMS, a general partnership, et al., Appellants

No. S-01-1313.

Supreme Court of Nebraska.

August 8, 2003.

667 N.W.2d 516

David A. Jarecke, of Crosby Guenzel, L.L.P., Lincoln, for appellant

Maren Lynn Chaloupka, of Chaloupka, Holyoke, Hofmeister, Snyder & Chaloupka, Scottsbluff, and Douglas R. Walker, Alma City Attorney, Alma, for appellee City of Alma.

Stephen D. Mossman, of Mattson, Ricketts, Davies, Stewart & Calkins, Lincoln, and Julie M. Karavas, of Nebraska Cattlemen, Inc., for amicus curiae Nebraska Cattlemen, Inc.

Arend R. Baack, of Leininger, Smith, Johnson, Baack, Placzek, Steele & Allen, Grand Island, for amicus curiae League of Nebraska Municipalities.

HENDRY, C.J., WRIGHT, CONNOLLY, GERRARD, STEPHAN, McCORMACK, and MILLER-LERMAN, JJ.

HENDRY, C.J.

I. INTRODUCTION

In this action, the City of Alma (City), a city of the second class, sought a declaratory judgment with respect to the validity and applicability of certain ordinances pertaining to the construction of livestock confinement facilities utilizing solid and liquid waste storage lagoons. The City further sought an injunction requiring several defendants to comply with the ordinances. Furnas County Farms (FCF), a named defendant in the action, filed a cross-claim seeking a declaration that the ordinances are special class legislation, are arbitrary and unreasonable, and are preempted by state law. The district court for Harlan County declared that the ordinances are not arbitrary or unreasonable, are not preempted by state law, and are valid and binding on FCF. The district court further granted the City's request for injunctive relief. This appeal followed.

II. FACTUAL BACKGROUND

In early 1997, the City learned that FCF and Sand Livestock Systems (SLS) planned to build a large hog confinement facility approximately 8 miles northwest of the Alma city limits in Harlan County,

667 N.W.2d 517

Nebraska. The hog confinement facility was to consist of, inter alia, three solid and liquid waste lagoons. The City hired an environmental engineer to prepare a report on the potential impact of such facility on the City's water supply. On the basis of such report, the City adopted ordinances Nos. 10-217-1, 10-217-3, and 11-047-1 through 11-047-3. In its operative petition, the City alleged it adopted the ordinances pursuant to the authority conferred upon it by Neb.Rev.Stat. §§ 17-536 and 17-537 (Reissue 1997). Section 17-536 provides that "[t]he jurisdiction of such city or village, to prevent any pollution or injury to the stream or source of water for the supply of such waterworks, shall extend fifteen miles beyond its corporate limits." Section 17-537 provides

The council or board of trustees of such cities and villages shall have power to make and enforce all needful rules and regulations in the construction, use, and management of such waterworks, mains, portion or extension of any system of waterworks or water supply and for the use of the water therefrom.

Other than within the framework of its preemption analysis, FCF does not challenge the authority of the City to adopt the ordinances pursuant to §§ 17-536 and 17-537. We similarly confine our analysis of the City's authority within that context.

The ordinances detail the process which an entity seeking to build a livestock facility within 15 miles of the City must follow in order to obtain a permit from the City for such purpose. Ordinance No. 10-217-1 provides that a permit must be obtained from the City prior to constructing "[a]ll manufacturing, livestock or other facilities which create liquid or solid waste within fifteen miles of the corporate limits of the City of Alma." Two categories of livestock facilities are exempted from the permit requirement: livestock facilities which were in existence at the time of the "final passage" of ordinance No. 10-217-1 and livestock facilities having a capacity of not more than 2,500 head.

Ordinance No. 10-217-3 provides, in relevant part, that a permit granted by the City may be revoked in the event the livestock facility "is not constructed or operated according to the plan submitted for approval," or in the event approval of the permit was obtained by fraud.

Ordinance No. 11-047-1 details the necessary contents of an application for permit to build a livestock facility. Pursuant to the ordinance, such permit application "shall consist of all written materials required by the Department of Environmental Quality or its successor agency of the State of Nebraska for the operation of such facility." The ordinance further provides for a grievance procedure should the permit application be denied.

Ordinance No. 11-047-2 provides that the City shall issue a permit "if the applicant's proposed facility meets all of the requirements of the Nebraska Department of Environmental Quality," as well as the supplemental requirements imposed by ordinance No. 11-047-3.

Finally, ordinance No. 11-047-3 requires an applicant to comply with certain enumerated requirements in addition to any requirements imposed by the Nebraska Department of Environmental Quality. Such requirements include, inter alia: soil analysis of the proposed site of any waste lagoon, to be gathered by drilling a series of test holes "at least ten feet below the bottom elevation of the lagoon"; any waste lagoon must use "a synthetic, impermeable liner of at least 60 mil thickness placed over at least one foot thickness of compacted soil with provisions for leachate recovery and leak detection"; the applicant is prohibited from applying any solid or liquid waste to land with a

667 N.W.2d 518

slope greater than 10 percent or in an amount that exceeds "the infiltration capacity of the soil or the nutrient requirements of the crop"; the applicant must install ground water monitoring wells to be used to annually monitor ground water for nitrate and chloride content; and the applicant is required to "submit an acceptable bond or financial guarantee to [en]sure that waste containment facilities are closed in accordance with applicable laws and regulations of the state."

After the ordinances were adopted, the City sent a letter to FCF's attorney informing him that pursuant to the recently enacted ordinances, FCF was required to obtain a permit from the City before building its proposed hog confinement facility. The letter included copies of the ordinances. In response, FCF informed the City by letter that it was "proceeding to build our facility as planned" based on its belief that the ordinances "are of no force and effect." Thereafter, concrete was poured for a number of buildings at the hog confinement facility.

On November 5, 1997, the City filed suit against FCF, a general partnership; SLS, a corporation; Charles W. Sand, Jr.; and Timothy A. Cumberland (collectively defendants). Sand and Cumberland were alleged to be general partners of FCF as well as corporate officers of SLS. In its lawsuit, the City sought a writ of mandamus requiring defendants to comply with the ordinances, as well as a declaratory judgment with respect to the validity and applicability of the ordinances. Construction of the facility ceased at the time the suit was filed.

FCF filed an "Answer and Cross-Petition," denying the allegations in the City's petition. FCF also asserted several affirmative defenses, including, inter alia, that (1) the City's ordinances constitute unconstitutional special legislation; (2) " § 8[1]-1504(11)" of the Nebraska Revised Statutes "takes precedence over § 17-536 [and t]hat if the Nebraska Department of Environmental Quality issues a permit to Furnas County Farms allowing the erection of its swine facility, the City has no authority to prohibit same through its own regulations"; and (3) the City's ordinances are unreasonable because they "are not reasonably necessary to prevent any pollution or injury to the stream or source of water of the City of Alma, but are rather calculated to make it unreasonably expensive and burdensome for Furnas County Farms to erect its facility."

The district court issued a peremptory writ of mandamus commanding defendants to comply with the requirements of the ordinances. On appeal, this court reversed and vacated the peremptory writ and remanded the cause for further proceedings with respect to the City's request for declaratory relief. State ex rel. City of Alma v. Furnas Cty. Farms, 257 Neb. 189, 595 N.W.2d 551 (1999).

After remand, the City filed an amended petition seeking, inter alia, a judgment pursuant to Neb.Rev.Stat. § 25-21,150 (Reissue 1995), declaring the City's ordinances to be valid and binding upon defendants, as well as a temporary and permanent injunction requiring defendants to comply with the ordinances before resuming construction of the hog confinement facility.

FCF filed an "Amended Cross Petition" seeking damages in the amount of $1,600,000 allegedly incurred as the result of the delay in building the proposed hog confinement facility. FCF further sought a declaratory judgment pursuant to Neb. Rev.Stat. §§ 25-21,149 to 25-21,164 (Cum. Supp.2000) that the ordinances violate both federal and state Constitutions in the following particulars: (1) the ordinances constitute local or special laws in violation of

667 N.W.2d 519

Neb. Const. art. Ill, § 18; (2) the ordinances are preempted by Neb.Rev.Stat. § 81-1504(11) (Reissue 1999) "as set forth in [FCF]'s Answer"; and (3) the ordinances are an unreasonable, unlawful, and improper exercise of the police power delegated to the City by the federal and state Constitutions

The City filed a motion for summary judgment with respect to FCF's cause of action for damages. The district court granted the motion, determining that the City, as a political subdivision, was immune from such a suit pursuant to Neb. Rev.Stat. § 13-901 et seq. (Reissue 1997).

...