Opinion
No. COA01-1329
Filed 19 November 2002
Environmental Law — stormwater discharges — general permit — exclusion of new or expanding wood chip mills — aggrieved party
The N.C. Forestry Association (NCFA) is not an "aggrieved party" and thus lacks standing to bring a contested case proceeding for review of a final agency decision of the Environmental Management Commission that the Division of Water Quality acted within its authority in excluding new or expanding wood chip mills from coverage under a general timber products industry NPDES permit for stormwater discharges because (1) NCFA is not entitled to a general permit under N.C.G.S. § 143-215.1(b)(3) and (b)(4), and (2) NCFA does not claim that it or any of its members has been denied a permit since the individualized permitting process went into effect.
Judge TYSON dissenting.
Appeal by petitioner from order entered 27 March 2001 by Judge Howard E. Manning, Jr. in Wake County Superior Court. Heard in the Court of Appeals 15 August 2002.
Hunton Williams, by Charles D. Case, Craig A. Bromby, Jeff F. Cherry, and Julie Beddingfield, for petitioner-appellant. Attorney General Roy Cooper, by Assistant Attorney General Jill B. Hickey, for respondent-appellee Department of Environment and Natural Resources, Division of Water Quality, the Environmental Management Commission, and its NPDES Committee. Southern Environmental Law Center, by Donnell Van Noppen, III, for respondent-intervenors-appellees The Sierra Club and Dogwood Alliance.
The North Carolina Forestry Association (NCFA), petitioner, appeals the trial court's order affirming in part and reversing in part a final agency decision of the North Carolina Environmental Management Commission (EMC).
The trial court upheld EMC's conclusion that the Department of Environment and Natural Resources, through the Division of WaterQuality, acted within its authority in excluding new or expanding wood chip mills from coverage under a general timber products industry permit. The trial court also found EMC's decision to be timely, and a contrary Recommended Decision of an Administrative Law Judge not to be the final agency decision.
The trial court, however, did reverse the part of EMC's decision finding NCFA lacked standing to even bring the action. Respondents and respondent-intervenors cross-assign that reversal as error. For the reasons herein, we agree with respondents and respondent-intervenors. NCFA is not an aggrieved party and, therefore, lacks standing.
NCFA is a private organization whose members are in forest management and timber products industries, including wood chip mills.
Respondents include: (1) the North Carolina Department of Environment and Natural Resources, Division of Water Quality (DWQ); (2) EMC, which adopts rules that the Department of Environment and Natural Resources is responsible for enforcing; and (3) the National Pollutant Discharge Elimination System Committee (NPDES Committee), a committee of EMC which hears appeals of DWQ's permitting decisions. Respondent-intervenors are The Sierra Club and Dogwood Alliance.
Under the Federal Water and Pollution Control Act, industrial facilities must obtain National Pollutant Discharge Elimination System Permits (NPDES permits) for stormwater discharges. The federal act authorizes individual states to administer the NPDE Spermit system. 33 U.S.C. § 1342 (2001). In North Carolina, DWQ issues NPDES permits. Permits may be "general," prescribing conditions to be applied to a group or category of discharges, or "individual," tailored to the particular discharge and location. N.C. Gen. Stat. § 143-215.1 (2001).
In 1992, DWQ issued a general NPDES permit, NCG040000. The permit was valid for a period of five years and encompassed some segments of the timber products industry, including wood chip mills. It specifically excluded the logging, wood preserving, and cabinet-making segments of the industry, which had to apply for individual permits.
The 1992 general permit expired in August 1997. DWQ then issued general permit NCG210000 in April 1998. In addition to the logging, wood preserving, and cabinet-making segments of the timber products industry, wood chip mills were excluded from general permit NCG210000. As part of this decision, DWQ allowed wood chip mills that had applied for and obtained coverage under general permit NCG040000 before it expired to remain covered. Only new or expanding wood chip mills were required to apply for individual permits.
On 1 June 1998, NCFA filed a Petition for a Contested Case Hearing seeking administrative review of the decision, claiming its members "who decide to locate and permit new chip mills in North Carolina will be subject to, among other things, burdensome application procedures and additional monitoring and reporting requirements." The North Carolina Department of Environment and Natural Resources, and the Sierra Club and Dogwood Alliance, filed a joint motion to dismiss.
The Administrative Law Judge denied the motion to dismiss, with both NCFA and respondents moving for summary judgment. The Administrative Law Judge recommended that summary judgment be entered in favor of NCFA and concluded that DWQ lacked statutory authority to consider secondary water quality impacts of wood chip mills, such as sedimentation and erosion, when it decided to exclude them from general permit NCG210000. The order stated that the final agency decision "shall be rendered by the NPDES Committee of the Environmental Management Commission."
On 13 October 1999, a hearing was held before the NPDES Committee. It did not take new evidence after receiving the recommended decision from the Administrative Law Judge. The NPDES Committee held NCFA lacked standing to bring the action and therefore summary judgment should be granted in favor of respondents. Moreover, it ruled in the alternative that if NCFA did have standing, then DWQ "did not exceed its authority or jurisdiction, act erroneously, fail to act as required by law or rule, fail to use proper procedure, or act arbitrarily or capriciously in its decision to exclude wood chip mills from coverage under NPDES Stormwater General Permit No. NCG210000." NCFA then sought judicial review of the final agency decision.
The trial court's order includes the following: (1) NCFA is a "person aggrieved" and is therefore entitled to commence a contested case proceeding to challenge the decision not to renew a general stormwater permit to the wood chip mill industry; (2) the Director of the DWQ, acting under a delegation of authority from EMC, has the absolute power to issue or not to issue a general permit for any class of activities; and (3) EMC's final agency decision was timely. Accordingly, the trial court reversed that portion of EMC's decision dismissing NCFA's petition for a contested case hearing. It affirmed that portion of EMC's decision upholding DWQ's determination not to include wood chip mills in general stormwater permit NCG210000.
NCFA appeals, contending the trial court: (1) erred in finding the final agency decision to be timely; (2) applied the incorrect standard of review in determining respondent had "absolute power to issue or not issue a general permit" under N.C. Gen. Stat. § 143-215.1; (3) failed to apply standard rules of statutory construction in determining DWQ's statutory authority under N.C. Gen. Stat. § 143-215.1; (4) failed to find the final agency decision was affected by errors of law; (5) failed to find the final agency decision was arbitrary and capricious and without substantial evidence; and (6) erred in not ruling on motions to correct and supplement the record.
Respondent and respondent-intervenors' sole cross-assignment of error is that the trial court erred in concluding NCFA is a "person aggrieved" under the North Carolina Administrative Procedure Act (NCAPA) and therefore has standing to commence a contested case proceeding. On review of a trial court's order regarding a final agency decision, we examine for error by determining whether the trial court: (1) exercised the proper scope of review; and (2) correctly applied this scope of review. Dillingham v. N.C. Dep't. of Human Res., 132 N.C. App. 704, 708, 513 S.E.2d 823, 826 (1999).
In the instant case, we proceed with de novo review of whether the NCAPA confers standing on NCFA, a question of law. See id. (after determining the actual nature of the contended error the appellate court then proceeds utilizing the proper standard of review). De novo review requires the court to "consider a question anew, as if not considered or decided by the agency previously" and to "make its own findings of fact and conclusions of law" rather than relying upon those made by the agency. Jordan v. Civil Serv. Bd. of Charlotte, 137 N.C. App. 575, 577, 528 S.E.2d 927, 929 (2000) (citation omitted).
The NCAPA provides that "[a]ny person aggrieved may commence a contested case hearing hereunder." N.C. Gen. Stat. § 150B-23(a) (2001). The contested case hearing provisions of the NCAPA apply to all agencies and all proceedings except those expressly exempted therefrom, and specifies the extent of each such exemption. N.C. Gen. Stat. § 150B-1 (2001); see also Empire Power Co. v. N.C. Dept. of E.H.N.R., 337 N.C. 569, 447 S.E.2d 768, reh'g denied, 338 N.C. 314, 451 S.E.2d 634 (1994). The General Assembly has not expressly exempted DENR from a contested case hearing in administering the stormwater permitting process. Thus, NCFA is entitled to a contested case hearing if it is a "person aggrieved." Empire, 337N.C. at 588, 447 S.E.2d at 779.
"Under the NCAPA, any `person aggrieved' within the meaning of the organic statute is entitled to an administrative hearing to determine the person's rights, duties, or privileges." Id. "The organic statute . . . defines those rights, duties, or privileges, abrogation of which provides the grounds for an administrative hearing pursuant to the NCAPA." Id. at 583; 447 S.E.2d at 776-77. Here, the organic statute is N.C. Gen. Stat. § 143-215.1. It authorizes EMC to issue permits in order to control sources of water pollution. Accordingly, NCFA is a "person aggrieved" if section 143-215.1 defines a right of NCFA's that has been abrogated.
Subsection (b) of N.C. Gen. Stat. § 143-215.1 gives EMC authority to issue general permits:
(3) General permits may be issued under rules adopted pursuant to Chapter 150B of the General Statutes. Such rules may provide that minor activities may occur under a general permit issued in accordance with conditions set out in such rules. All persons covered under general permits shall be subject to all enforcement procedures and remedies applicable under this Article.
(4) The Commission shall have the power:
. . .
(d) To designate certain classes of minor activities for which a general permit may be issued, after considering: 1. The environmental impact of the activities; 2. How often the activities are carried out; 3. The need for individual permit oversight; and 4. The need for public review and comment on individual permits.
N.C. Gen. Stat. § 143-215.1(b)(3) and (b)(4) (2001). Significantly, this statute does not require EMC to make general permits available. Availability of general permits depends on, inter alia, the "need for individual permit oversight" and the "need for public review and comment on individual permits." N.C. Gen. Stat. § 143-215.1(b)(4).
Further, North Carolina's regulations of water resources are modeled after the Federal Water Pollution Control Act. General permits under the federal act were created after the United States Environmental Protection Agency attempted to exempt entire classes of source points from the NPDES permit requirement because "the tremendous number of sources within the exempted categories would make the permit program unworkable." NRDC v. Train, 396 F. Supp. 1393, 1395 (D.D.C. 1975), aff'd, NRDC v. Costle, 568 F.2d 1369 (D.C. Cir. 1977). In NRDC v. Train, the Court held that the EPA had no authority to exempt entire classes of source points, but recognized that it could use "administrative devices, such as area [or general] permits, to make EPA's workload manageable." Id. at 1402. North Carolina received EPA authorization to issue general permits in 1991. See 1989 N.C. Sess. Laws ch. 453, § 1.
Review of N.C. Gen. Stat. § 143-215.1(b) and the history of general permits reveals their primary purpose is to alleviate EMC's administrative burden. Accordingly, the statute does not define a right to a general permit, "abrogation of which provides the grounds for an administrative hearing pursuant to the NCAPA." Empire, 337 N.C. 583, 447 S.E.2d at 776-77. Wood chip mills have no more right to general permitting than do the logging, wood preserving, and cabinet-making segments of the timber industry which had been earlier, and still remain, excluded.
Moreover, NCFA does not claim it or any of its members has been denied a permit as a result of the change in the permitting process. In essence, NCFA's claim for standing is that it prefers one type of permitting process over another to be utilized some time in the future. Section 143-215.1(e) allows contested case review to a " permit applicant or permittee who is dissatisfied with a decision of the Commission[.]" N.C. Gen. Stat. § 143-215.1(e) (2001) (emphasis added).
Accordingly, we hold NCFA is not a "person aggrieved" on two grounds, either of which is sufficient for dismissal. First, NCFA is not entitled to a general permit. Second, NCFA has not been denied a permit. In fact, when the trial court rendered its decision none of its members had even attempted to file an application for a permit since the individual permitting process went into effect. Thus, there is no abrogation of any right.
The Office of Administrative Hearings, therefore, did not have subject matter jurisdiction. The order of the trial court reversing EMC's decision to dismiss NCFA's petition based on lack of standing is reversed.
REVERSED.
JUDGE MARTIN concur.
JUDGE TYSON dissents.