State v. Joint Pipeline Grp.

• Decision Date: 07 October 2010
• Docket Number: No. 09–1093.,09–1093.
• Citation: 72 ERC 1234,373 S.W.3d 292,2010 Ark. 374
• Parties: State of LOUISIANA, et al.; Louisiana Environmental Action Network; Save the Ouachita; and Kent Stegall, Appellants v. JOINT PIPELINE GROUP, et al.; City of El Dorado Waste Utilities; Great Lakes Chemical Company; Arkansas Pollution Control & Ecology Commission; Lion Oil Company, and El Dorado Chemical Company, Appellees.
• Court: Arkansas Supreme Court

2010 Ark. 374

373 S.W.3d 292

72 ERC 1234

State of LOUISIANA, et al.; Louisiana Environmental Action Network; Save the Ouachita; and Kent Stegall, Appellants

v.JOINT PIPELINE GROUP, et al.; City of El Dorado Waste Utilities; Great Lakes Chemical Company; Arkansas Pollution Control & Ecology Commission; Lion Oil Company, and El Dorado Chemical Company, Appellees.

No. 09–1093.

Supreme Court of Arkansas.

Oct. 7, 2010.

T. David Carruth, Clarendon, for appellants Save the Ouachita and Kent Stegall.

Mays & White PLLC, by: Richard H. Mays, Heber Springs, for appellant State of Louisiana.

Adam Babich, New Orleans, LA, and T. David Carruth, Clarendon, for appellant Louisiana Environmental Action Network.

Chisenhall, Nestrud & Julian, P.A., Little Rock, by: Charles R. Nestrud and Heather G. Moody, for appellee Joint Pipeline Group.

Dustin McDaniel, Att'y Gen., by: Charles Moulton, Sr. Ass't Att'y Gen., and Kendra Akin Jones, Ass't Att'y Gen., for appellee Arkansas Pollution Control and Ecology Commission.

ELANA CUNNINGHAM WILLS, Justice.

This is an appeal from an order of the Union County Circuit Court affirming a decision by the Arkansas Pollution Control and Ecology Commission (PC & E or “the Commission”) that approved the issuance of a National Pollution Discharge Elimination System (NPDES) permit by the Arkansas Department of Environmental Quality (ADEQ). The appellants are the State of Louisiana, ¹ the Louisiana Environmental Action Network LEAN), and Save the Ouachita and Kent Stegall (collectively, STO). The appellees, who were awarded the NDPES permit, are the City of El Dorado Waste Utilities (EDWU), El Dorado Chemical Company (EDCC), Lion Oil Company (Lion), and Great Lakes Chemical Company (Great Lakes); collectively, these appellees are called the Joint Pipeline Group (JPG). In addition, PC & E is an appellee.

On November 16, 2004, the JPG submitted an NPDES permit application to ADEQ for the El Dorado Joint Pipeline project. That same day, EDWU submitted an application to build a pipeline to carry its own treated wastewater, along with that of Lion, Great Lakes, and EDCC, to the Ouachita River. Between September 20, 2004 and November 16, 2004, the four individual members of the JPG submitted applications to modify their existing NPDES permits.² ADEQ issued a public notice regarding the draft permits on March 22, 2006, and on May 18, 2006, it held a public hearing to take comments on them. ADEQ subsequently extended the deadline for submitting comments on the proposals until June 21, 2006.

After receiving and responding to the numerous comments that were submitted, ADEQ issued Permit No. AR0050296 on February 27, 2007. The permit, effective April 1, [2010 Ark. 3]2007, allowed JPG to discharge their combined waste, totaling approximately 20 million gallons per day, through a common pipeline into the Ouachita River 1.5 miles downstream of the H.K. Thatcher Dam in Segment 2D of the Ouachita River Basin. ADEQ also issued modifications to each individual permit that allowed the discharge of wastewater to the Ouachita River through the joint pipeline, and it also issued EDWU a construction permit to build the joint pipeline.

On March 26, 2007, STO filed a Third–Party Request for Commission Review and Adjudicatory Hearing with PC & E; this request was assigned Docket No. 07–006–P. JPG filed a Request for Adjudicatory Hearing and Commission Review on March 28, 2007 (Docket No. 07–007–P). Louisiana filed a Request for Commission Review and Adjudicatory Hearing, which became Docket No. 07–008–P, on March 29, 2007. LEAN filed a similar request on March 30, 2007 (Docket No. 07–009–P). Michael O'Malley, PC & E's Administrative Hearing Officer (AHO), entered Order No. 2 on April 25, 2007, consolidating all of these dockets under Docket No. 07–006–P and setting a briefing schedule and dates for oral argument.

After a seven-day hearing, which lasted from October 29, 2007, until November 6, 2007, the AHO issued Order No. 9 on May 8, 2008, in which it affirmed, for the most part, the joint pipeline permits issued by ADEQ.³ Louisiana, LEAN, and STO all sought review of the AHO's decision by the Commission. The Commission, however, entered Minute Order No. 08–23 on June 27, 2008, adopting and affirming, without modification, Order No. 9.

Louisiana, LEAN, and STO then appealed the Commission's decision to the Union County Circuit Court. After a hearing on October 31, 2008, the circuit court entered a judgment on March 31, 2009, affirming the decision of the Commission. The three appellants all filed timely notices of appeal and have now filed separate briefs with this court.

I. Standard of Review

Before addressing the merits of the arguments raised in this appeal, it is crucial to discuss our standard of review for cases arising from decisions of the Commission. Generally, when reviewing administrative decisions, we uphold such decisions if they are supported by substantial evidence and are not arbitrary, capricious, or characterized by an abuse of discretion.Pine Bluff for Safe Disposal v. Ark. Pollution Control & Ecology Comm'n, 354 Ark. 563, 572, 127 S.W.3d 509, 515–16 (2003); Hamilton v. Ark. Pollution Control & Ecology Comm'n, 333 Ark. 370, 969 S.W.2d 653 (1998). The appellate court's review is directed, not toward the circuit court, but toward the decision of the agency, because administrative agencies are better equipped by specialization, insight through experience, and more flexible procedures than courts, to determine and analyze legal issues affecting their agencies. Pine Bluff for Safe Disposal, supra.

In determining whether a decision is supported by substantial evidence, we review the record to ascertain if the decision is supported by relevant evidence that a reasonable mind might accept as adequate to support a conclusion. Id. In doing so, we give the evidence its strongest probative force in favor of the administrative agency. Id. The question is not whether the testimony would have supported a contrary finding, but whether it supports the finding that was made. Id.;Ark. Bd. of Exam'rs v. Carlson, 334 Ark. 614, 976 S.W.2d 934 (1998). Expert testimony qualifies as substantial evidence unless it is shown that the expert opinion is without a reasonable basis. Ark. State Plant Bd. v. Bullock, 345 Ark. 373, 48 S.W.3d 516 (2001). As is true for any other fact-finder, it is the prerogative of the agency to believe or disbelieve any witness and to decide what weight to accord the evidence. Pine Bluff for Safe Disposal, supra;Carlson, 334 Ark. 614, 976 S.W.2d 934.

Appeals from the decisions of the Arkansas Pollution Control and Ecology Commission, however, are not governed by the procedures established in the Arkansas Administrative Procedure Act. SeeArkansas Code Annotated section 25–15–202(2)(C) (Supp.2009) ⁴; Pine Bluff for Safe Disposal, 354 Ark. at 573, 127 S.W.3d at 516. Rather, specific procedures are set forth in Arkansas Code Annotated sections 8–4–223 to –229 (Repl.2007). See Tri–County Solid Waste Dist. v. Ark. Pollution Control & Ecology Comm'n, 365 Ark. 368, 374–75, 230 S.W.3d 545, 550 (2006). Section 8–4–229(a) provides that in any appeal involving a decision by the Commission, “the action of the commission shall be prima facie evidence reasonable and valid, and it shall be presumed that all requirements of the law pertaining to the taking thereof have been complied with.” Section 8–4–229(b) provides that “[a]ll findings of fact made by the Commission shall be prima facie evidence of the matters stated therein.” Further, under section 8–4–229(c), “[t]he burden of proving the contrary rests upon the party challenging the Commission's action.” Thus, to reverse an action of the Commission, it is the appellant's burden to rebut the presumption that the Commission's decision is reasonable and valid and has complied with all the requirements of the law. Tri–County Solid Waste Dist., 365 Ark. at 375, 230 S.W.3d at 550;Pine Bluff for Safe Disposal, 354 Ark. at 573, 127 S.W.3d at 516.

II. Arguments of Appellant State of Louisiana

Louisiana raises three primary arguments on appeal, contending that 1) the permit issued to the JPG was not based on generally accepted scientific knowledge or in accordance with sound engineering practices; 2) ADEQ and the Commission failed to provide Louisiana with sufficient opportunity to review the data upon which the permit was based and to comment upon such data; and 3) ADEQ and the Commission failed to ensure that the discharges under the challenged permits would not compromise Louisiana's water quality.

A. Generally Accepted Scientific Knowledge and Engineering Practices

In its first argument on appeal, Louisiana asserts that the permit issued by ADEQ and affirmed by the Commission was not based on generally accepted scientific knowledge and engineering practices. This language is found in Arkansas Code Annotated section 8–4–203(d)(2)(B)(i) (Repl.2007), which provides as follows:

In the case of any discharge limit, emission limit, environmental standard, analytical method, or monitoring requirements, the record of the proposed action and the response shall include a written explanation of the rationale for the proposal, demonstrating that any technical requirements or standards are based upon generally accepted scientific knowledge and engineering practices.

Louisiana urges that the record in this case demonstrates that the permit was based not on generally accepted scientific knowledge and engineering practices, but upon a flawed computer model utilized by the environmental consulting firm employed by JPG to assess the Ouachita River.

JPG hired the consulting firm of GBMc & Associates (GBMc) to evaluate the water-quality impacts of the pipeline's discharge on the Ouachita River and in the Felsenthal National Wildlife Refuge. Roland McDaniel of GBMc testified before the AHO that he conducted a series of toxicity, or biomonitoring, tests to determine whether the permit...