Sound Rivers ( 2020 )

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA18-712
Filed: 2 June 2020
Beaufort County, No. 15 CVS 262
Carteret County, No. 16 CVS 1272
SOUND RIVERS, INC. and NORTH CAROLINA COASTAL FEDERATION, INC.,
Petitioners,
v.
N.C. DEPARTMENT OF ENVIRONMENTAL QUALITY, DIVISION OF WATER
RESOURCES, Respondent, MARTIN MARIETTA MATERIALS, INC., Respondent-
Intervenor.
Appeal by respondent North Carolina Department of Environmental Quality,
Division of Water Resources, respondent-intervenor Martin Marietta Materials, Inc.,
and cross-appeal by petitioners Sound Rivers, Inc. and North Carolina Coastal
Federation, Inc., from orders entered 13 November 2015 by Judge W. Douglas
Parsons in Superior Court, Beaufort County, 30 October 2017, 4 December 2017, and
20 December 2017 by Judge Joshua W. Willey, Jr in Superior Court, Carteret County.
Heard in the Court of Appeals 22 May 2019.
Southern Environmental Law Center, by Geoffrey R. Gisler, Blakely E.
Hildebrand, and Jean Zhuang, for petitioner-appellees.
Attorney General Joshua H. Stein, by Assistant Attorney General Asher P.
Spiller and Assistant Attorney General Scott A. Conklin, for respondent-
appellant.
Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P., by Matthew B.
Tynan, George W. House, Alexander Elkan and V. Randall Tinsley, for
respondent-intervenor-appellant.
SOUND RIVERS, INC. V. NC DEP’T OF ENVTL. QUALITY
Opinion of the Court
STROUD, Judge.
This case arises from the issuance of a National Pollutant Discharge
Elimination System Permit (“Permit”) by respondent North Carolina Department of
Environmental Quality, Division of Water Resources (“DEQ”) to respondent-
intervenor Martin Marietta Materials, Inc., (“Martin Marietta”) allowing respondent
Martin Marietta to discharge wastewater from Vanceboro Quarry (“quarry”) into
“unnamed tributaries to Blounts Creek[.]” The Administrative Law Judge (“ALJ”) of
the Office of Administrative Hearings (“OAH”) entered a final decision affirming the
issuance of the Permit. Petitioners Sound Rivers, Inc. and North Carolina Coastal
Federation, Inc. (“Petitioners”) filed a petition for judicial review with the superior
court.1 The superior court reversed the ALJ’s final decision based upon a failure to
“ensure reasonable compliance with the biological integrity standard” (“biological
integrity standard”) found in the North Carolina Administrative Code (“Code”) but
concluded that the Permit was in compliance with other water quality standards,
including “swamp waters supplemental classification and the state antidegradation
rule” (“swamp waters”) and pH (“pH standards”).
1 Petitioner Sound Rivers, Inc. was known as the Pamlico-Tar River Foundation when the original
petition for a contested case hearing was filed; it noted its name had changed to Sound Rivers, Inc.
effective 1 April 2015 in its 20 April 2015 petition for judicial review. For simplicity, we will refer to
the petitioner throughout this opinion as Sound Rivers.
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Opinion of the Court
Respondent Martin Marietta and respondent DEQ appeal from the superior
court’s order reversing the ALJ’s order due to its conclusion on biological integrity
standards. Petitioners cross-appeal from the superior court’s order based upon its
conclusion that the Permit reasonably ensured compliance with water quality
standards regarding swamp waters and pH standards. We note at the outset that at
all stages of the proceedings, the parties have filed numerous documents, including
briefs, motions, proposed drafts of orders, responses, and exhibits; in this opinion we
will mention only those documents relevant to the issue on appeal as the documents
are so voluminous, but we have reviewed all of the documents before us and after
review of the briefs, record, and transcripts, we affirm the superior court’s order as to
swamp waters and pH standards and reverse as to the biological integrity standard.
I. Factual and Procedural Background
In September of 2013, Sound Rivers and North Carolina Coastal Federation
filed a petition for a contested case hearing on DEQ’s issuance of the Permit on 24
July 2013 to Martin Marietta. According to the petition, the Permit authorized
Martin Marietta to “the discharge of 12 million gallons of mine wastewater into
tributaries of Blounts Creek each day.” Petitioners alleged the Permit violated
“applicable laws” attached and incorporated into the petition.
The Permit was issued under the provisions of North Carolina General Statute
§ 143-215.1 and “other lawful standards and regulations promulgated and adopted
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Opinion of the Court
by the North Carolina Environmental Management Commission, and the Federal
Water Pollution Control Act, as amended[.]” The Permit was effective on 1 September
2013 and would expire on 31 August 2018.2 The Permit allowed Martin Marietta to
discharge water pumped from its quarry “from two pit clarification ponds” identified
on an attached map into “receiving waters designated as unnamed tributaries to
Blounts Creek in the Tar-Pamlico River Basin in accordance with effluent limitations,
monitoring requirements, and other conditions set forth in Parts I, II, and III” of the
Permit. The supplement to the Permit cover sheet noted that the “unnamed
tributary” into which the wastewater would be discharged was “classified as C-
Swamp NSW waters in the Tar-Pamlico River Basin.” In this opinion, we will refer
to the waters into which wastewater from the quarry would be discharged as “Blounts
Creek.”
In September of 2013, respondent DEQ submitted a prehearing statement
identifying the issues to be resolved as
2 No party has argued this case may be moot based upon the fact that the Permit as issued would have
expired in 2018. “A case is ‘moot’ when a determination is sought on a matter which, when rendered,
cannot have any practical effect on the existing controversy. Thus, the case at bar is moot if an
intervening event had the effect of leaving plaintiff with no available remedy. A moot claim is not
justiciable, and a trial court does not have subject matter jurisdiction over a non-justiciable claim.
Moreover, if the issues before the court become moot at any time during the course of the proceedings,
the usual response is to dismiss the action for lack of subject matter jurisdiction.” Cumberland Cnty.
Hosp. Sys., Inc. v. N.C. Dep’t of Health & Human Servs., 242 N.C. App. 524, 528-29, 776 S.E.2d 329,
333 (2015) (citations, quotation marks, brackets omitted). But an exception to the mootness doctrine
applies to this case because it is “capable of repetition, yet evading review[.]” Id. at 529, 776 S.E.2d at
333-34 (“Two elements are required for the capable of repetition, yet evading review exception to apply:
(1) the challenged action is in its duration too short to be fully litigated prior to its cessation or
expiration, and (2) there is a reasonable expectation that the same complaining party would be
subjected to the same action again.” (citations, quotation marks, and brackets omitted)).
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Opinion of the Court
[(1)] whether Respondent, properly issued the Permit
pursuant to Article 21, Chapter 143 of the North Carolina
General Statutes and the applicable rules promulgated
thereunder, including but not limited to 15A NCAC
2B.0200 et. seq.; and [(2)] whether Respondent, in issuing
the Permit substantially prejudiced Petitioner’s rights and
erred in one or more of the five ways enumerated in N.C.
Gen. Stat. § 150B-23(a).
Martin Marietta, who had intervened, also submitted a prehearing statement
contending the Permit “would not violate water quality standards” and noted that
the Permit had been issued “after years of pre-permitting work, the submission of
engineering, economic, and ecological studies and materials by Martin Marietta, and
extensive review and analysis by DWR [, Division of Water Resources,] and other
state and federal government agencies.” Martin Marietta contended state and federal
regulatory personnel had thoroughly analyzed the proposed permit over about
eighteen months, including “site visits, field work, numerous communications and
meetings, the further submission of materials and studies by Martin Marietta, and
public comment and a public hearing, in which Petitioners and their members and
counsel participated.” Thus, Martin Marietta contended state and federal regulatory
personnel had already considered the “claims asserted by Petitioners in this contested
case” and DEQ “correctly concluded that the proposed discharge allowed by the NPDS
Permit would not violate water quality standards and lawfully and appropriately
issued the NPDES Permit.”
On 6 November 2013, Petitioners filed their prehearing statement contending
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Opinion of the Court
that the Permit did not comply with biological integrity standards, protection of
swamp waters, and pH standards, and identifying the issues as:
1. The Clean Water Act and state laws implementing
it prohibit discharges that violate any water quality
standard. State water quality standards for waters
like Blounts Creek prohibit any discharge that will
make a waterbody unsuitable for native plants and
animals, violating its “biological integrity.” Martin
Marietta’s proposed discharge of 12 million gallons
of mine wastewater per day into Blounts Creek
would displace native fish, macroinvertebrates
(insects, mollusks, crayfish, etc.) and plants. Did
DWR exceed its authority, act erroneously, fail to
use proper procedure, act arbitrarily or capriciously
or fail to act as required by rule or law “err”) by
authorizing the discharge?
2. The Clean Water Act and state laws implementing
it prohibit discharges that violate any water quality
standard. The state water quality standard for pH
is the normal pH for the waterbody receiving a
discharge, which is between 4.0 and 5.5 in Blounts
Creek. Did DWR err by authorizing a discharge that
would raise the pH in the creek to a minimum of 6.3
to 6.9?
3. The Clean Water Act and state laws implementing
it require classification of waters to protect existing
uses. North Carolina has classified Blounts Creek
as swamp waters to protect characteristics unique to
these waters, including low flow and velocity, low
pH, and high tannin levels. Did DWR err by issuing
a permit for a discharge that will cause Blounts
Creek to have higher flow and velocity, near neutral
pH, and low tannin levels, thereby no longer
qualifying as swamp waters?
In November of 2014 Petitioners filed a motion for summary judgment on the
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Opinion of the Court
issues of whether Petitioners were “persons aggrieved” under North Carolina’s
Administrative Procedure Act and whether DWR had exceeded its authority or failed
to act as required by law based upon failure to ensure compliance with the biological
integrity water quality standard, the pH water quality standard, and Blounts Creek’s
swamp waters classification. Petitioners also submitted numerous affidavits to
support their motion. On 25 November 2014, Martin Marietta filed a motion for
summary judgment.
On 23 March 2015, the ALJ entered an order granting summary judgment for
respondents. The order stated at length the undisputed facts and concluded
“Petitioners are not ‘Persons Aggrieved[;]’” “Respondent’s Decision to Issue the
Permit was Not in Violation of N.C. Gen. Stat. § 150B-23(a)[;]” “Respondent Ensured
Compliance with Biological Integrity Standard[;]” “Respondent Ensured Compliance
with pH Water Quality Standards[;]” and “Respondent Protected Existing Uses[.]”
The ALJ also noted the “Re-opener Provision” of the Permit:
The permit issued to the Respondent-Intervenor
allows the Respondent to re-open and modify the permit if
water quality standards are threatened or other monitored
data cause concern. Even if Petitioner provided evidence
of specific and particularized potential violations of water
quality standards, the re-opener provision assures
reasonable compliance with those standards.
In summary, the ALJ concluded,
There is no evidence that Petitioners’ rights have
been substantially prejudiced, or that Respondent
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Opinion of the Court
exceeded its authority or jurisdiction, acted erroneously,
failed to use proper procedure, acted arbitrarily or
capriciously, or failed to act as required by law or rule.
For the reasons discussed herein, there is no genuine
issue as to any material fact. Respondent’s Motion for
Summary Judgment is allowed; Respondent-Intervenor’s
Motion for Summary Judgment is allowed. Petitioners’
Motion for Summary Judgment is denied, and Petitioners
are not entitled to the relief requested in the petition.
On 20 April 2015, Petitioners filed a petition for judicial review of the summary
judgment order contesting the ALJ’s determinations. On 20 May 2015, Martin
Marietta responded to and filed a motion to dismiss petitioners’ petition for judicial
review, arguing the superior court did not have subject matter jurisdiction because
petitioners are not “persons aggrieved” and therefore not entitled to judicial review.
On 13 November 2015, the superior court entered its order denying Martin Marietta’s
motion to dismiss and denying petitioner’s petition on all grounds except for the issue
of “persons aggrieved.” The superior court concluded petitioners were persons
aggrieved and remanded the matter back to OAH for a “full plenary hearing[.]”
After a “hearing on the merits May 31, 2016 through June 9, 2016[,]” on 30
November 2016, the ALJ issued a 62-page final decision. The final decision addressed
four primary issues:
Issue 1: “pH Claim”: Whether Petitioners have met their
burden of proving that Respondent exceeded its authority
or jurisdiction, acted erroneously, failed to use proper
procedure, acted arbitrarily or capriciously, or failed to act
as required by law or rule in determining the NPDES
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Opinion of the Court
Permit reasonably ensures compliance with the pH water
quality standard.
Issue 2: “Swamp Waters Claim”: Whether Petitioners
have met their burden of proving that Respondent
exceeded its authority or jurisdiction, acted erroneously,
failed to use proper procedure, acted arbitrarily or
capriciously, or failed to act as required by law or rule in
determining the NPDES Permit reasonably ensures
compliance with water quality standards and regulations
related to the “Swamp Waters” supplemental
classification.
Issue 3: “Biological Integrity Claim”: Whether
Petitioners have met their burden proving that Respondent
exceeded its authority or jurisdiction, acted erroneously,
failed to use proper procedure, acted arbitrarily or
capriciously, or failed to act as required by law or rule in
determining the NPDES Permit reasonably ensures
compliance with the biological integrity water quality
standard.
Issue 4: Substantial Prejudice: Whether Petitioners
have met have their burden of proving that Respondent
substantially prejudiced Petitioners’ rights in issuing the
NPDES Permit.
The ALJ made 311 findings of fact; we will address some of these findings of
fact below in detail in our discussion of the challenged findings applicable to each
issue. The order ultimately denied Petitioners’ claims based upon two alternative
and independent grounds: First, “Petitioners failed to meet their burden of proving
by a preponderance of evidence that Respondent DWR exceeded its authority or
jurisdiction, acted erroneously, acted arbitrarily and capriciously, used improper
procedure, or failed to act as required by law or rule in issuing the NPDES Permit.”
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Opinion of the Court
Second, as an independent and alternative basis for the ruling, “Petitioners failed to
carry their burden of proof by a preponderance of the evidence that their rights have
been substantially prejudiced by Respondent DWR’s issuance of the NPDES Permit.”
In December of 2016, Petitioners filed a petition in superior court for judicial
review of the ALJ’s final decision. Petitioners alleged the order was in error in that
“The Final Decision Contains Findings of Fact Unsupported by Substantial Evidence,
Findings That Are Arbitrary, Capricious, or an Abuse Of Discretion, and Findings
Affected By Other Errors Of Law[;]” “The ALJ’s Conclusion That Petitioners Are Not
Substantially Prejudiced Is Erroneous[;]” “The ALJ’s Grant of Deference to DWR
Staff And [Martin Marietta] Consultants Is An Error Of Law[;]” “The ALJ’s
Conclusion That DWR Complied with the Biological Integrity Standard Is
Erroneous[;]” “The ALJ’s Conclusion That DWR Complied with the pH Standard Is
Erroneous[;]” “The ALJ’s Conclusions of Law Regarding the Swamp Waters
Classification And Antidegradation Rules Are Erroneous[;]” and “The ALJ’s
Conclusion That the Required Reopener Provision Ensures Compliance With Water
Quality Standards Is Erroneous[.]”
On 30 January 2017, Martin Marietta filed a motion to dismiss the petition
under North Carolina General Statute § 150B-46 and North Carolina Rule of Civil
Procedure 12 because the petition for judicial review was not timely served. On 30
October 2017, the superior court denied Martin Marietta’s motion to dismiss. On 4
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Opinion of the Court
December 2017, the superior court denied Martin Marietta’s motion to dismiss for
failure to state a claim under North Carolina Rule of Civil Procedure 12(b)(6).
On 20 December 2017, the superior court entered its order on petition for
judicial review. The superior court noted these issues:
I. Did the ALJ err in admitting, considering, or
determining the credibility or weight of evidence?
II. Did the ALJ err in upholding DWR’s issuance of the
Permit as reasonably ensuring compliance with:
A. The swamp waters supplemental
classification and antidegradation rule;
B. The water quality standard for pH; and
C. The water quality standard for biological
integrity?
III. Did the ALJ err in holding that the Permit’s
monitoring and reopener provisions further
reasonably ensure compliance with state water
quality standards?
IV. Did the ALJ err in holding that Petitioners failed to
prove their rights were substantially prejudiced?
The superior court entered its order in paragraph form with no numbered findings of
fact and with two conclusions of law. Ultimately, the superior court concluded
Petitioners were “substantially prejudiced by the issuance of the Permit and are
entitled to the relief sought.” On the substantive issues regarding water quality
standards, the superior court concluded that DEQ “did not ensure reasonable
compliance with the biological integrity standard as set forth in 15A N.C.A.C. 02B
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Opinion of the Court
.211(2), 0220(2), and 0202(11)” and therefore reversed the final decision of the ALJ
and vacated the Permit.
Over the course of 10 days, all parties filed written notices of appeal and cross-
appeal, seeking review of the following orders:
1. 13 November 2015 order granting summary judgment to Petitioners regarding
being “persons aggrieved” and denying all other matters;
2. 27 February 2017 ruling from the superior court denying Martin Marietta’s
motion to dismiss and granting Petitioners’ motion for extension of time;
3. 30 October 2017 order memorializing 27 February 2017 ruling that denied
Martin Marietta’s motion to dismiss and granted Petitioners’ motion for
extension of time;
4. 4 December 2017 order denying Martin Marietta’s motion to dismiss, and
5. 20 December 2017 superior court order on the petition for judicial review
vacating the Permit.
II. Preliminary Issues
We begin our analysis by addressing preliminary issues.
A. Martin Marietta’s Motion to Dismiss
On 30 January 2017, Martin Marietta filed a motion to dismiss the petition for
judicial review under North Carolina General Statute § 150B-46 and North Carolina
Rule of Civil Procedure 12 because it was not timely served on Martin Marietta. On
30 October 2017, the superior court denied Martin Marietta’s motion to dismiss.
North Carolina General Statute § 150B-46 (2017) provides, “Within 10 days after the
petition is filed with the court, the party seeking the review shall serve copies of the
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petition by personal service or by certified mail upon all who were parties of record to
the administrative proceedings.” According to the motion, the petition was filed on
28 December 2016, but Martin Marietta was not actually served until 17 January
2017. On 30 October 2017, the superior court denied Martin Marietta’s motion to
dismiss and extended the time for service.
Martin Marietta relies upon In re State ex rel. Employment Security
Commission, 234 N.C. 651, 68 S.E.2d 311 (1951), arguing Petitioner’s appeal must be
dismissed due to late service of the notice:
There is no inherent or inalienable right of appeal from an
inferior court to a Superior Court or from a Superior Court
to the Supreme Court.
A fortiori, no appeal lies from an order or decision of
an administrative agency of the State or from the
judgments of special statutory tribunals whose proceedings
are not according to the course of the common law, unless
the right is granted by statute. If the right exists, it is
brought into being, and is a right granted, by legislative
enactment.
There can be no appeal from the decision of an
administrative agency except pursuant to specific
statutory provision therefor.
Obviously then, the appeal must conform to the
statute granting the right and regulating the procedure.
The statutory requirements are mandatory and not
directory. They are conditions precedent to obtaining a
review by the courts and must be observed. Noncompliance
therewith requires dismissal.
....
This statement of the grounds of the appeal must be
filed within the time allowed for appeal. Its purpose is to
give notice to the Commission and adverse parties of the
alleged errors committed by the Commission and limit the
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scope of the hearing in the Superior Court to the specific
questions of law raised by the errors assigned. Clearly it
was intended, and must be construed, as a condition
precedent to the right of appeal. Noncompliance therewith
is fatal.
Id. at 653-54, 68 S.E.2d at 312 (emphasis added). Although the petition for judicial
review was timely filed, Martin Marietta contends because Petitioners failed to serve
the notice of appeal upon Martin Marietta within 10 days under North Carolina
General Statute § 150B-46, the superior court never obtained subject matter
jurisdiction. The superior court thus had no jurisdiction to extend the time for
service, so Martin Marietta’s motion to dismiss should have been allowed for lack of
subject matter jurisdiction.
We review a motion to dismiss for lack of subject matter jurisdiction de novo.
See Hardy ex rel. Hardy v. Beaufort Cty. Bd. of Educ., 200 N.C. App. 403, 408, 683
S.E.2d 774, 778 (2009) (“Subject matter jurisdiction is a prerequisite for the exercise
of judicial authority over any case or controversy. The standard of review on a motion
to dismiss under Rule 12(b)(1) for lack of subject matter jurisdiction is de novo.
(citation omitted)). While the file stamp is not legible on the petition for judicial
review, Martin Marietta concedes that the petition was filed with the superior court
on 28 December 2016, and thus within the time period established by North Carolina
General Statute § 150B-45 to invoke jurisdiction from the final decision entered on
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30 November 2016. See N.C. Gen. Stat. § 150B-45 (2017)3 (“To obtain judicial review
of a final decision under this Article, the person seeking review must file a petition
within 30 days after the person is served with a written copy of the decision.”). In NC
Department of Public Safety v. Owens, this Court held “that the superior court has
the authority to grant an extension in time, for good cause shown, to a party to serve
the petition beyond the ten days provided for under G.S. 150B–46.” 245 N.C. App.
230, 234, 782 S.E.2d 337, 340 (2016). Under Owens, the superior court had subject
matter jurisdiction and properly extended the time for service and thus denied the
motion to dismiss. See id. Because Martin Marietta raises only the issue of subject
matter jurisdiction in its brief, and not the substance of the good cause shown, we end
our analysis here. This argument is overruled.
B. Standing of Petitioners as “Persons Aggrieved”
Martin Marietta next contends that the superior court erred in determining
that petitioners were substantially prejudiced by DEQ’s issuance of the Permit.
At the outset, we must determine our standard of
review. That standard of review will depend upon the
nature of the error alleged in the petition for judicial
review. If errors of law are alleged, our review is de novo.
If the alleged error is that the final agency decision is not
supported by the evidence, we employ the whole record
test.
Curtis v. N.C. Dep’t of Transp., 140 N.C. App. 475, 478, 537 S.E.2d 498, 501 (2000)
3 North Carolina General Statute § 150B-45 was amended in 2018; the amendment does not affect this
case. See N.C. Gen. Stat. § 150B-45 (2018).
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(citations and quotation marks omitted).
North Carolina General Statute § 150B-23 provides,
(a) A contested case shall be commenced by
paying a fee in an amount established in G.S. 150B-23.2
and by filing a petition with the Office of Administrative
Hearings and, except as provided in Article 3A of this
Chapter, shall be conducted by that Office. The party who
files the petition shall serve a copy of the petition on all
other parties and, if the dispute concerns a license, the
person who holds the license. A party who files a petition
shall file a certificate of service together with the petition.
A petition shall be signed by a party, an attorney
representing a party, or other representative of the party
as may specifically be authorized by law, and, if filed by a
party other than an agency, shall state facts tending to
establish that the agency named as the respondent has
deprived the petitioner of property, has ordered the
petitioner to pay a fine or civil penalty, or has otherwise
substantially prejudiced the petitioner’s rights and that the
agency:
(1) Exceeded its authority or jurisdiction;
(2) Acted erroneously;
(3) Failed to use proper procedure;
(4) Acted arbitrarily or capriciously; or
(5) Failed to act as required by law or rule.
The parties in a contested case shall be given an
opportunity for a hearing without undue delay. Any person
aggrieved may commence a contested case hereunder.
N.C. Gen. Stat. § 150B-23(a) (2013) (emphasis added).4 Petitioners have not alleged
they were deprived of property or were ordered to pay a fine or civil penalty, and thus
they must show substantial prejudice. See id. North Carolina General Statute §
4 Subsection(f) was amended in 2018. See N.C. Gen. Stat. § 150B-23 (2018).
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150B-29 provides, “The party with the burden of proof in a contested case must
establish the facts required by G.S. 150B-23(a) by a preponderance of the evidence.”
N.C. Gen. Stat. § 150B-29 (2013). Thus, in this case, petitioners had to establish
substantial prejudice by a preponderance of the evidence. See N.C. Gen. Stat. §§
150B-23, -29.
In Empire Power Co. v. North Carolina Department of Environmental Health
and Natural Resources, our Supreme Court discussed the meaning of the term
“person aggrieved” in a case with a similar context, arising from issuance of a draft
air quality permit for a proposed turbine electric generating station. 337 N.C. 569,
572, 447 S.E.2d 768, 770 (1994). As explained in Empire Power Co.,
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. N.C.G.S. § 150B–23(a). “‘Person
aggrieved’ means any person or group of persons of
common interest directly or indirectly affected
substantially in his or its person, property, or employment,
by an administrative decision.” N.C.G.S. § 150B–2(6).
Under the predecessor judicial review statute, which did
not define the term, the Court gave it an expansive
interpretation:
The expression “person aggrieved” has
no technical meaning. What it means depends
on the circumstances involved. It has been
variously defined: “Adversely or injuriously
affected; damnified, having a grievance,
having suffered a loss or injury, or injured;
also having cause for complaint. More
specifically the word(s) may be employed
meaning adversely affected in respect of legal
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rights, or suffering from an infringement or
denial of legal rights.”
In re Assessment of Sales Tax, 259 N.C. at 595, 131 S.E.2d
at 446 (quoting 3 C.J.S. Aggrieved, at 509 (1973)). For the
following reasons, we conclude that Clark is a “person
aggrieved” as defined by the NCAPA within the meaning
of the organic statute.
Clark alleged that DEHNR issued the permit
allowing construction and operation of air emission sources
at the LCTS in violation of its statutory and regulatory
duties: to act on all permit applications “so as to effectuate
the [legislative] purpose . . . by reducing existing air
pollution and preventing, so far as reasonably possible, any
increased pollution of the air from any additional or
enlarged sources,” N.C.G.S. § 143–215.108(b); to reduce
levels of ozone pollution in the Mecklenburg County area;
to assess fully the impact of emissions of air pollutants
from the LCTS on levels of ozone pollution in Mecklenburg
County; to assess fully the impact of sulfur dioxide
emissions from the LCTS; to require air pollution control
technology adequate to control the emission of potentially
harmful pollutants from the LCTS; and to require Duke
Power to cause air quality offsets. Clark also alleged that
DEHNR issued the permit in violation of its statutory duty
to adequately address comments filed by Clark and other
members of the public during the public comment period.
Clark further alleged that, as the owner of property
immediately adjacent to and downwind of the site of the
proposed LCTS—which will emit tons of harmful air
pollutants if constructed and operated in accordance with
its air quality permit—he and his family will suffer injury
to their health, the value of their property, and the quality
of life in their home and their community.
In enacting the air pollution control provisions, the
General Assembly, as noted above, declared its intent
to achieve and to maintain for the citizens of
the State a total environment of superior
quality. Recognizing that the water and air
resources of the State belong to the people, the
General Assembly affirm[ed] the State’s
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ultimate responsibility for the preservation
and development of these resources in the
best interest of all its citizens and declare[d]
the prudent utilization of these resources to
be essential to the general welfare.
N.C.G.S. § 143-211. To further that intent, the General
Assembly mandated that standards of water and air purity
be designed, and programs implemented to achieve those
standards,
to protect human health, to prevent injury to
plant and animal life, to prevent damage to
public and private property, to insure the
continued enjoyment of the natural
attractions of the State, to encourage the
expansion of employment opportunities, to
provide a permanent foundation for healthy
industrial development and to secure for the
people of North Carolina, now and in the
future, the beneficial uses of these great
natural resources.
Id. (emphasis added).
Clearly, Clark alleged sufficient injury in fact to
interests within the zone of those to be protected and
regulated by the statute, and rules and standards
promulgated pursuant thereto, the substantive and
procedural requirements of which he asserts the agency
violated when it issued the permit. As an adjacent property
owner downwind of the LCTS, Clark may be expected to
suffer from whatever adverse environmental consequences
the LCTS might have. In addition, a judgment in favor of
Clark would substantially eliminate or redress the injury
likely to be caused by the decision to permit Duke Power to
build the LCTS. Clark therefore is a “person aggrieved”
within the meaning and intent of the air pollution control
act. See Orange County v. Dept. of Transportation, 46 N.C.
App. 350, 360–62, 265 S.E.2d 890, 898–99, disc. rev. denied,
301 N.C. 94 (1980) (plaintiffs were all “aggrieved,” within
the meaning of the NCAPA provision, by a decision of the
State Board of Transportation on the location of an
interstate highway where the individual plaintiffs were
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Opinion of the Court
property owners within the proposed corridor of the
highway, the members of plaintiff non-profit corporation
were citizens and taxpayers who lived in or near the
proposed highway corridor, plaintiff county’s tax base and
planning jurisdiction would be affected, and individual
plaintiffs would be affected as taxpayers; further, the
“procedural injury” implicit in the failure of an agency to
prepare an environmental impact statement was itself a
sufficient “injury in fact” to support standing as an
“aggrieved party” under former N.C.G.S. § 150A–43, as
long as such injury was alleged by a plaintiff having
sufficient geographical nexus to the site of the challenged
project that he might be expected to suffer whatever
environmental consequences the project might have); State
of Tennessee v. Environmental Management Comm., 78
N.C. App. 763, 766–67, 338 S.E.2d 781, 783 (1986) (a
consent special order issued by respondent agency to a
corporation allowing it to discharge effluents into a river
was issued without a hearing and by its own terms
purported to take precedence over the terms of a proposed
National Pollutant Discharge Elimination System permit
to the corporation, so that the right of petitioner to be heard
was impaired; petitioner therefore qualified as an
“aggrieved person” for purposes of judicial review; further,
petitioner alleged that its property rights in the river were
affected, and these allegations also established petitioner's
“aggrieved person” status); see generally 2 Am. Jur. 2d
Administrative Law §§ 443–50 (1994) (“Persons Adversely
Affected or Aggrieved”).
Id. at 588-90, 447 S.E.2d at 779-81 (alterations in original) (emphasis added).
Here, similar to Empire Power Co. and the cases quoted within Empire,
Petitioners alleged substantial prejudice in that the Permit was issued without
compliance with applicable regulations in that Martin Marietta’s “proposed discharge
of 12 million gallons of mine wastewater per day into Blounts Creek would displace
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Opinion of the Court
native fish, macroinvertebrates (insects, mollusks, crayfish, etc.) and plants[,]” and
the wastewater would cause “higher flow and velocity, near neutral pH, and low
tannin levels” meaning Blounts Creek would no longer qualify as swamp waters. See
generally id.More specifically, one of the individuals who filed an affidavit in support of
Petitioners, Mr. Jimmy Daniels, averred that he was a member of the Pamlico-Tar
River Foundation and both his “home and business, [“Cotton Patch Landing, a boat
ramp and marina,”] are right on the banks of Blounts Creek.” Mr. Daniels described
in detail the biodiversity in Blounts Creek and how it draws people “from all across
the state[.]” Mr. Daniels averred that he boated “a couple of times a week” and
enjoyed the wildlife diversity; through Cotton Patch Landing, he sells fishing
supplies, stores and maintains boats, and engages in commercial activities involving
his boat ramp. Mr. Daniels also noted the hundreds of thousands of dollars he has
invested into his business and stated that based on his experience with Blounts
Creek, he believed Martin Marietta’s wastewater being dumped “into the
headwaters” “will change the way the whole system works.” Mr. Daniels explained
specifically why and how the wastewater would affect his business and personal
interests and noted “word of mouth concerning the discharge” had already had a
negative effect on Cotton Patch Landing when a fishing tournament previously held
at Cotton Patch Landing was moved due to fears over how the wastewater would
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Opinion of the Court
impact fishing for the tournament. Mr. Daniels noted Cotton Patch Landing lost
approximately $5,000 from the tournament move. Again, Mr. Daniels is but one of
many affiants noting similar issues with the wastewater being dumped into Blounts
Creek. We view the interests of Mr. Daniels and other affiants about wastewater in
Blounts Creek to be similar to the complainant in Empire Power Co., who alleged,
as the owner of property immediately adjacent to and
downwind of the site of the proposed LCTS—which will
emit tons of harmful air pollutants if constructed and
operated in accordance with its air quality permit—he and
his family will suffer injury to their health, the value of
their property, and the quality of life in their home and
their community.
Id. at 589, 447 S.E.2d at 780.
While Martin Marietta contends that Petitioner’s alleged prejudice amounts
only to speculation as to the effects of the discharge of water allowed by the Permit,
allegations as to potential prejudice here are no different from the allegations of
potential air pollution in Empire Power Co., as the actual effects cannot be known for
certain until the discharge occurs. See generally id., 337 N.C. 569, 447 S.E.2d 768.
In addition, this Court has clarified that in a challenge based upon an alleged failure
of an agency or department of the State to follow its own guidelines, the prejudice
standard differs from that in other types of civil cases. See, e.g., N.C. Forestry Ass’n
v. N.C. Dep’t of Env’t & Natural Res., Div. of Water Quality, 357 N.C. 640, 644, 588
S.E.2d 880, 882–83 (2003) (“In general, individuals adversely affected by a
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Opinion of the Court
discretionary agency decision generally have standing to complain that the agency
based its decision upon an improper legal ground.” (citation and quotation marks
omitted)). Otherwise the burden of showing substantial prejudice would be “nearly
impossible”:
Because the substance of those policies required the
Department to consider a number of discretionary factors,
however, we pointed out that a showing of prejudice would
be “nearly impossible” for the petitioner to achieve.
Specifically, we observed that
to show prejudice from failure to follow policy,
the petitioner would have to show, not only
how he stood in relation to other employees in
the same class as to type of appointment,
length of service, and work performance, but
he would have to show the weight which the
Department would attribute to each of those
factors. The Commission and the reviewing
court would be relegated to speculating how
the Department would weigh each factor.
Therefore, we held that it was sufficient to show prejudice
for the petitioner to establish that the Department failed
to follow the mandatory policies of the Commission, which
had been promulgated pursuant to statutory authority. A
separate showing of prejudice was unnecessary in that
circumstance.
Surgical Care Affiliates, LLC v. N.C. Dep’t of Health & Human Servs., 235 N.C. App.
620, 627, 762 S.E.2d 468, 473 (2014) (citations and brackets omitted).
Here, Petitioners alleged that the Division of Water Resources violated its own
applicable regulations by issuing the Permit to Martin Marietta which authorized
“the discharge of 12 million gallons of mine wastewater into tributaries of Blounts
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Opinion of the Court
Creek each day.” Petitioners have alleged DEQ failed to follow its own policies in
issuing the Permit and that the discharge of wastewater into Blounts Creek, if done
in a manner not in compliance with the applicable regulations, would damage the
water quality, the fish and other biota in Blounts Creek, and the personal and
commercial benefits derived from Blounts Creek. Petitioners are “within the zone of
those to be protected and regulated by the statute, and rules and standards
promulgated pursuant thereto, the substantive and procedural requirements of
which he asserts the agency violated when it issued the permit.” Empire Power Co.,
337 N.C. at 589, 447 S.E.2d at 780. The superior court did not err in concluding
Petitioners demonstrated their rights were substantially prejudiced and thus they
are “person[s] aggrieved[.]” Id. at 590, 447 S.E.2d at 780. This argument is
overruled.5
5 Implicit in this holding is also a rejection of Martin Marietta’s argument that “North Carolina courts
have held that only the state, and not individual plaintiffs, can enforce public trust rights” such as
interests in fishing, boating, and recreation. As DEQ acknowledges, the cases Martin Marietta cites
for this proposition are inapposite. This is not a claim under public trust doctrine or any other common
law action, see Town of Nags Head v. Cherry, Inc., 219 N.C. App. 66, 723 S.E.2d 156 (2012); Fish House,
Inc. v. Clarke, 204 N.C. App. 130 (2010), but instead a request for review of an agency action pursuant
to the North Carolina Administrative Procedure Act. In such an action, the organic statute at issue
defines the rights, duties, and privileges that provide the grounds for the administrative hearing.
Empire Power Co., 337 N.C. at 583, 447 S.E.2d at 583. North Carolina’s water quality statutes and
associated rules specifically protect water quality for recreational uses. See, e.g., N.C. Gen. Stat. §
143-214.1(3) (year) (directing adoption of water quality standards and classifications that consider the
use and value of waters of the state for “recreation”); 15A NCAC 02b.0101(c)(1) (stating Class C are
freshwaters protected for “secondary recreation” and “fishing”). Petitioners “interests in the waters
affected” by the discharge at issue “are discrete and particular to [its] certain members who live near,
or who visit, fish, or shellfish in the affected waters, and are not merely a generalized public interest.”
Holly Ridge Assoc., LLC v. N.C. Dept’ of Env’t & Natural Resources, 176 N.C. App. 594, 603, 627 S.E.2d
326, 333 (2006), rev’d on other grounds, 361 N.C. 531, 648 S.E.2d 830 (2007).
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Opinion of the Court
III. Substantive Issues regarding Permit
We now turn to the substantive issues regarding issuance of the Permit.
A. Standard of Review
Petitioners raised three arguments regarding DEQ’s failure to ensure
compliance with applicable water quality standards. The superior court determined
that the ALJ’s order was in error only as to the findings and conclusion regarding
that DEQ ensured “reasonable compliance with the biological integrity standard as
set forth in 15A N.C.A.C. 02B .211(2), 0220(2), and 0202(11)[,]” and DEQ and Martin
Marietta appeal this determination. The superior court affirmed the ALJ’s findings
and conclusions regarding the other standards – swamp waters and pH standards–
and Petitioners cross-appealed these determinations. We will therefore address the
arguments as to each substantive issue in the order as addressed by the superior
court.
The North Carolina Administrative Procedure Act
(APA), codified at Chapter 150B of the General Statutes,
governs trial and appellate court review of administrative
agency decisions. The APA provides a party aggrieved by
a final decision in a contested case a right to judicial review
by the superior court. N.C. Gen. Stat. §§ 150B–43 and –50
(2017). A party to the review proceeding in superior court
may then appeal from the superior court’s final judgment
to the appellate division. N.C. Gen. Stat. § 150B–52 (2017).
The APA sets forth the scope and standard of review for
each court.
EnvironmentaLEE v. Dept of Environment, 258 N.C. App. 590, 595, 813 S.E.2d 673,
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Opinion of the Court
677 (2018).
When a superior court exercises judicial review over
an agency’s final decision, it acts in the capacity of an
appellate court. The APA limits the scope of the superior
court’s judicial review as follows:
(b) The court reviewing a final decision may
affirm the decision or remand the case for further
proceedings. It may also reverse or modify the
decision if the substantial rights of the petitioners
may have been prejudiced because the findings,
inferences, conclusions, or decisions are:
(1) In violation of constitutional
provisions;
(2) In excess of the statutory authority or
jurisdiction of the agency or administrative
law judge;
(3) Made upon unlawful procedure;
(4) Affected by other error of law;
(5) Unsupported by substantial evidence
admissible under G.S. 150B-29(a), 150B-30,
or 150B-31 in view of the entire record as
submitted; or
(6) Arbitrary, capricious, or an abuse of
discretion.
N.C. Gen. Stat. § 150B-51 (2017). The superior court’s
standard of review is dictated by the nature of the errors
asserted. The APA sets forth the standard of review to be
applied by the superior court as follows.
(c) In reviewing a final decision in a contested
case, the court shall determine whether the
petitioner is entitled to the relief sought in the
petition based upon its review of the final decision
and the official record. With regard to asserted
errors pursuant to subdivisions (1) through (4) of
subsection (b) of this section, the court shall conduct
its review of the final decision using the de novo
standard of review. With regard to asserted errors
pursuant to subdivisions (5) and (6) of subsection (b)
of this section, the court shall conduct its review of
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Opinion of the Court
the final decision using the whole record standard of
review.
N.C. Gen. Stat. § 150B–51(c).
Id. at 595-96, 813 S.E.2d at 677–78 (citations, quotation marks, and brackets
omitted).
Our Supreme Court has observed that the first four
grounds enumerated under this section may be
characterized as law-based inquiries, whereas the final two
grounds may be characterized as fact-based inquiries.
Moreover, it is well settled that in cases appealed from
administrative tribunals, questions of law receive de novo
review, whereas fact-intensive issues such as the
sufficiency of the evidence to support an ALJ’s decision are
reviewed under the whole record test.
Under the de novo standard of review, the Court
considers the matter anew and freely substitutes its own
judgment. However, our Supreme Court has made clear
that even under our de novo standard, a court reviewing a
question of law in a contested case is without authority to
make new findings of fact. Under the whole record test,
the reviewing court may not substitute its judgment for the
ALJ’s as between two conflicting views, even though it
could reasonably have reached a different result had it
reviewed the matter de novo. Instead, we must examine
all the record evidence—that which detracts from the ALJ’s
findings and conclusions as well as that which tends to
support them—to determine whether there is substantial
evidence to justify the ALJ’s decision. Substantial
evidence is relevant evidence a reasonable mind might
accept as adequate to support a conclusion. We undertake
this review with a high degree of deference because it is
well established that
in an administrative proceeding, it is the
prerogative and duty of the ALJ, once all the
evidence has been presented and considered,
to determine the weight and sufficiency of the
evidence and the credibility of the witnesses,
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Opinion of the Court
to draw inferences from the facts, and to
appraise conflicting and circumstantial
evidence. The credibility of witnesses and the
probative value of particular testimony are for
the ALJ to determine, and the ALJ may
accept or reject in whole or part the testimony
of any witness.
N. Carolina Dep’t of Pub. Safety v. Ledford, 247 N.C. App. 266, 286–87, 786 S.E.2d
50, 63–64 (2016) (citations, quotation marks, and brackets omitted).
This Court reviews the superior court’s order to determine if the superior court
applied the correct standard of review based upon the “grounds for reversal or
modification” argued before the superior court. EnvironmentaLEE, 258 N.C. App. at
598, 813 S.E.2d at 678-79.
[I]n reviewing a superior court order examining an agency
decision, an appellate court must determine whether the
agency decision (1) violated constitutional provisions; (2)
was in excess of the statutory authority or jurisdiction of
the agency; (3) was made upon unlawful procedure; (4) was
affected by other error of law; (5) was unsupported by
substantial admissible evidence in view of the entire
record; or (6) was arbitrary, capricious, or an abuse of
discretion. N.C. Gen. Stat. § 150B–51 (2001). In
performing this task, the appellate court need only
consider those grounds for reversal or modification raised
by the petitioner before the superior court and properly
assigned as error and argued on appeal to this Court.
Id.
B. Applicable Regulations and Definitions
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Opinion of the Court
North Carolina General Statute § 143-214.1 directs the North Carolina
Environmental Management Commission to classify all bodies of water6 in the state
and to adopt standards for each classification. See N.C. Gen. Stat. § 143-214.1 (2013),
see also N.C. Gen. Stat. § 143-212 (2013). One body of water may include areas with
different primary classifications and supplemental classifications, depending upon
“the existing or contemplated best usage of the various streams and segments of
streams in the basin, as determined through studies and evaluations and the holding
of public hearings for consideration of the classifications proposed.” 15A N.C.A.C.
2B.0301 (2013). The water quality standards applicable to a body of water are
determined by the classification. See generally 15A N.C.A.C. 2B.0301 (2013). The
primary classification of the portion of Blounts Creek at issue is Class C along with
supplemental classifications of Sw (“swamp waters”) and NSW (“nutrient sensitive
waters”). See generally 15A N.C.A.C. 2B.0101, .0301 (2013).
Class C classification is appropriate for “freshwaters protected for secondary
recreation, fishing, aquatic life including propagation and survival, and wildlife. All
freshwaters shall be classified to protect these uses at a minimum.” 15A N.C.A.C.
2B.0101 (2013). Sw classification applies to “waters which have low velocities and
6 “(6) ‘Waters’ means any stream, river, brook, swamp, lake, sound, tidal estuary, bay, creek, reservoir,
waterway, or other body or accumulation of water, whether surface or underground, public or private,
or natural or artificial, that is contained in, flows through, or borders upon any portion of this State,
including any portion of the Atlantic Ocean over which the State has jurisdiction.” N.C. Gen. Stat. §
143-212(6) (2013).
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Opinion of the Court
other natural characteristics which are different from adjacent streams.” Id. NSW
classification applies to “waters subject to growths of microscopic or macroscopic
vegetation required limitations on nutrient inputs.” Id. More specifically, as to
supplemental classifications, Sw is defined to “mean those waters which are classified
by the Environmental Management Commission and which are topographically
located so as to generally have very low velocities and other characteristics which are
different from adjacent streams draining steeper topography.” 15A N.C.A.C.
2B.0202. Nsw is defined to “mean those waters which are so designated in the
classification schedule in order to limit the discharge of nutrients (usually nitrogen
and phosphorus).” Id.As for the broader classification of Class C, those water quality standards are
provided in 15A N.C.A.C. 2B.0211, entitled “FRESH SURFACE WATER QUALITY
STANDARDS FOR CLASS C WATERS[.]” See 15A N.C.A.C. 2B.0211. For Class C
waters, pH “shall be normal for the waters in the area, which range between 6.0 and
9.0 except that swamp waters may have a pH as low as 4.3 if it is the result of natural
conditions[.]” Id. The “Best Usage” of Class C waters is “aquatic life propagation and
maintenance of biological integrity (including fishing and fish), wildlife, secondary
recreation, agriculture, and any other usage except for primary recreation or as a
source of water supply for drinking, culinary, or food processing purposes[.]” Id.“Conditions Related to Best Usage” note “the waters shall be suitable for aquatic life
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Opinion of the Court
propagation and maintenance of biological integrity, wildlife, secondary recreation,
and agriculture. Sources of water pollution which preclude any of these uses on either
a short-term or long-term basis shall be considered to be violating a water quality
standard.” Id.C. Biological Integrity
The trial court reversed the portion of the ALJ’s final decision regarding DEQ’s
compliance with the biological integrity standards. Martin Marietta contends the
superior court “Failed To Defer to DWR, Misinterpreted the Biological Integrity
Standard, and Improperly Found Facts[.]” In other words, respondents argue the
trial court made an error of law by misinterpreting the requirements of the applicable
regulations as to “biological integrity;” misunderstood the science behind the
applicable regulations; and failed to use the proper standard of review in addressing
the issues before it. Martin Marietta specifically contends,
The Superior Court failed to defer to DWR as it is
required to do, misunderstood the permitting rules and
what DWR did, and reversed the ALJ’s holding on
biological integrity under the following erroneous analysis:
(1) “DWR must protect the indigenous community”; (2) the
“plain language” of the standard establishes “base line
metrics” that must be “determined” or “measured” to apply
the standard properly; and (3) without “determining the
base line metrics,” DWR “could not ensure reasonable
compliance” [sic] with the standard.
(Ellipses omitted.)
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Opinion of the Court
Petitioners argue the superior court correctly interpreted the biological
integrity standard:
The issue before the Court is one of law: does the
biological integrity standard require DWR to measure the
terms in the rule and to protect the indigenous community
of fish, insects, and other animals that live in Blounts
Creek? The Superior Court recognized that under the
lawful interpretation of the rule, DWR must measure the
terms in the standard and establish specific reference
conditions before issuing a permit.
As the interpretation of the biological integrity standard applied by the superior court
is an issue of law, we review this determination de novo. N. Carolina Dep’t of Pub.
Safety, 247 N.C. App. at 286, 786 S.E.2d at 63.
This issue requires consideration of how DEQ measures and evaluates
“biological integrity” as part of its general duties in protecting water quality and in
the context of issuance of a Permit. The ALJ made extensive findings of fact and
conclusions of law on this issue,7 many of which Petitioners challenge:
44. Petitioners claim that, in issuing the NPDES
Permit, DWR failed to reasonably ensure compliance with
the biological integrity standard.
7 In Petitioners’ brief to the superior court Petitioners challenge the findings of fact and conclusions of
law in such a manner that it is difficult to keep track of what actually is at issue before the court. For
instance, in paragraph 81 of Petitioners’ brief they challenge findings of fact “19, 23-25,” and then in
paragraph 82 they challenge findings of fact “17-20, 22-25[,]” the latter which obviously encompasses
the former and broadens it; this is but one of many such examples. Petitioners have divided their
challenges based upon the topic they deem to be at issue, but for this Court’s purposes we simply note
that Petitioners challenged many of the ALJ’s substantive findings of fact and conclusions of law as to
biological integrity, but the challenges were so extensive we have not listed all of them, although we
have considered all.
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45. Under applicable North Carolina rules, one of the
existing uses of all classified surface waters is
“maintenance of biological integrity.” See 15A NCAC 02B
.0211(1) (2013) (freshwater), and 02B .0220(1) (2013)
(saltwater).
46. The term “biological integrity” is defined in 15A
NCAC 02B .0202(11) as follows: “the ability of an aquatic
ecosystem to support and maintain a balanced and
indigenous community of organisms having species
composition, diversity, population densities and functional
organization similar to that of reference conditions.”
47. The biological integrity standards applicable to
upper and lower Blounts Creek state:
the waters shall be suitable for aquatic life
propagation and maintenance of biological
integrity . . . . Sources of water pollution
which preclude any of these uses on either a
short-term or long-term basis shall be
considered to be violating a water quality
standard . . . .
15A NCAC 02B .0211(2) (2013) (freshwater standard). See
also 15A NCAC 02B .0220(2) (2013) (same standard for
saltwater).
48. DWR interprets the applicable rules and definitions
to mean that an NPDES permit complies with the
biological integrity standard if the permit’s terms and
conditions reasonably ensure that the permitted discharge
will not preclude maintenance of the ability of an aquatic
ecosystem to support and maintain a balanced and
indigenous community of organisms having species
composition, diversity, population densities and functional
organization similar to that of reference conditions.
49. The biological integrity standard is administered by
DWR and relates to a highly technical and scientific subject
area within DWR’s expertise.
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Opinion of the Court
50. As required by North Carolina case law and the
APA, the undersigned accords deference and gives due
regard to DWR’s interpretation of its own rules.
51. Even if the undersigned were not required to defer
to DWR’s interpretation of the biological integrity standard
rules, the undersigned finds that DWR’s interpretation is
longstanding, is reasonable, and is consistent with and
supported by the plain language of the rules, and therefore
the undersigned will decide Petitioners’ biological integrity
claim based on DWR’s interpretation of the rules.
52. The preponderance of the evidence shows that, in
evaluating and determining whether the NPDES Permit
reasonably ensures compliance with the biological
integrity standard, DWR (through its staff) applied its
knowledge and expertise, and:
a. identified the Blounts Creek system, meaning
Blounts Creek and its tributaries, as the appropriate
“aquatic ecosystem”;
b. determined that the appropriate “reference
conditions” were the existing conditions of the
Blounts Creek system before the proposed
discharge;
c. studied and assessed the existing, pre-
discharge ecological resources of the Blounts Creek
system;
d. determined the degree and geographic scope
of potential physical and chemical impacts of the
proposed discharge;
e. determined the predicted changes to the
ecosystem and ecological resources from the
proposed discharge to be limited; and
f. concluded that the effects predicted to occur
as a result of the permitted discharge would not
violate the standard, and, in fact, a violation would
not occur unless the impacts to the Blounts Creek
aquatic ecosystem were much greater in degree and
geographic scope than those predicted to occur.
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Opinion of the Court
53. Petitioners’ arguments that DWR misinterpreted
and misapplied key aspects of the biological integrity
standard and understated the effects of the permitted
discharge present questions of law and fact, and mixed
questions of law and fact. Petitioners’ arguments have
been thoroughly considered and rejected by the
undersigned as unpersuasive and unsupported by the
preponderance of evidence.
“Aquatic Ecosystem”
54. Petitioners have asserted that the relevant “aquatic
ecosystem” should be defined more narrowly and that DWR
must use a single stream segment as the ecosystem unit for
assessing compliance. See Petition at 3.
55. The term “aquatic ecosystem” is not defined by
North Carolina statute or rule.
56. The determination and application of “aquatic
ecosystem” in a specific context is complex and requires
significant scientific expertise and judgment, and should be
accorded deference. See County of Durham v. N.C. Dept.
of Environment and Natural Resources, 131 N.C. App. at
396-97, 507 S.E.2d at 311 (1998), disc. rev. denied, 350 N.C.
92, 528 S.E.2d 361 (1999).
57. DWR’s interpretation and application of this term
are reasonable, rational, and in accordance with the
language and purpose of the biological integrity standard.
58. To the extent DWR’s selection of an appropriate
aquatic ecosystem is considered a factual determination, it
is one which falls directly within the agency’s expertise and
is therefore entitled to “due regard” pursuant to the APA.
“Reference Conditions”
59. Petitioners have asserted that DWR failed to
conduct a biological integrity analysis by inadequately
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Opinion of the Court
sampling for “species composition, diversity, population
densities and functional organization” throughout the
Blounts Creek aquatic ecosystem.
60. The determination and application of “reference
conditions” in a specific context is complex and requires
significant scientific expertise and judgment, and should be
accorded deference.
61. DWR’s interpretation and application of this term
are reasonable, rational, and in accordance with the
language and purpose of the biological integrity standard.
62. To the extent DWR’s selection of appropriate
“reference conditions” is considered a factual
determination, it is one which falls directly within the
agency’s expertise and is therefore entitled to “due regard”
pursuant to the APA.
63. The preponderance of the evidence shows that
Blounts Creek aquatic ecosystem’s existing conditions
(“reference conditions”) are dynamic, vary over time and
geographic location, and can be affected by many
environmental factors.
64. The preponderance of the evidence shows that DWR
had sufficient information such that the biological
sampling efforts Petitioners sought were unnecessary.
65. Before issuing the Permit, DWR determined that:
(a) the proposed discharge likely would not cause
significant erosion or sedimentation; (b) pH likely would
not exceed 6.9 in the upper Blounts Creek and was unlikely
to change significantly in lower Blounts Creek; (c) relative
salinity impacts would likely be on the order of 1 ppt and
salinities would remain within the variability of the
system; (d) shifts in macrobenthic invertebrates would
likely be toward an increase in diversity and would be
geographically limited to the upper reaches of Blounts
Creek; and (e) the proposed discharge is not likely to
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Opinion of the Court
adversely impact fish communities of the Blounts Creek
aquatic ecosystem. These determinations by DWR are
reasonable and supported by the preponderance of the
evidence.
66. DWR determined that the likely effects of the
permitted discharge are limited in degree, limited in
geographic scope, and not deleterious.
67. The preponderance of the evidence supports DWR’s
conclusion and shows that the permitted discharge will not
have any significant detrimental effect on the Blounts
Creek aquatic ecosystem, including the many miles of C
and Sw stream segments of other tributaries of Blounts
Creek.
Impacts of the Proposed Discharge
68. Petitioners argued that DWR underestimated or
understated the effects the proposed discharge will likely
have on the Blounts Creek aquatic ecosystem, including
effects on flow, pH, salinity, benthos, fish, and the existing
biological community of Blounts Creek.
69. DWR’s findings and inferences regarding the
predicted effects of the proposed discharge fall within
“specialized knowledge of the agency.” As such, the
undersigned is required to give such facts and inferences
“due regard” pursuant to the APA. N.C. Gen. Stat. § 150B-
34(a).
70. The preponderance of the evidence demonstrates
that DWR applied its knowledge and expertise in its
collection and review of the data and reports obtained
during the permitting process, and drew reasonable
inferences and conclusions based on those data and
reports.
71. The preponderance of the evidence demonstrates
that DWR reasonably evaluated and adopted the findings
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Opinion of the Court
of the Kimley Horn reports (Exs. R13, R15) and the CZR
report (Ex. R16) after satisfying itself of the reliability of
these studies.
72. The preponderance of the evidence demonstrates
that: (a) DWR applied its discretion and expertise in its
review of the comments it received from the public
(including Petitioners[]), EPA, and other state agencies
during the permitting process; and (b) the substantive
comments were considered and accounted for by DWR
based on DWR’s expertise, judgment, and rational
evaluation of the comments and other evidence.
73. To the extent Petitioners contend that DWR acted
arbitrarily and capriciously in its evaluation of the
evidence, its gathering and evaluation of relevant data and
information, its interpretation and application of the
biological integrity standard, and its conclusion that the
NPDES Permit reasonably ensures compliance with the
biological integrity standard, Petitioners failed to present
any evidence that DWR acted “whimsically” or in “bad
faith.”
74. The undersigned finds that DWR’s evaluation of the
NPDES permit application, reports and data submitted
during the permit process, the data independently collected
by DWR, and the comments received from the public, state
agencies and EPA was reasonable, rational, thorough,
supported by a preponderance of the evidence in the record,
and undertaken in good faith.
75. The undersigned finds the evidence and expert
opinion testimony as well as the lay opinion testimony,
even if admitted, presented by Petitioners, does not
overcome DWR’s determinations, with respect to the likely
impacts and effects of the permitted discharge, which were
thoroughly evaluated based on DWR’s knowledge,
expertise, and judgment, and well-supported by a
preponderance of the evidence.
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Opinion of the Court
76. The undersigned has considered all of the evidence
of potential impacts presented by Petitioners and their
experts, and finds, based on a preponderance of the
evidence, that Petitioners’ evidence either does not
contradict DWR’s determinations or is not persuasive and
not sufficient to overcome the data, studies, and other
information reasonably considered and relied on by DWR
in evaluating compliance with the biological integrity
standard.
77. Petitioners failed to present evidence sufficient to
overcome the presumption that DWR acted appropriately
in determining the NPDES Permit reasonably ensures
compliance with the biological integrity standard.
78. The preponderance of the evidence demonstrates
that DWR:
a. reasonably interpreted the biological
integrity standard;
b. reasonably and rationally applied the
biological integrity standard to the relevant
information and facts regarding the proposed
discharge;
c. reasonably determined that, although certain
changes are predicted to occur as a result of the
proposed discharge, the predicted effects would not
preclude the ability of the relevant aquatic
ecosystem to support and maintain a balanced and
indigenous community of organisms having species
composition, diversity, population densities and
functional organization similar to that of reference
conditions; and
d. reasonably and rationally determined that
the NPDES Permit reasonably ensures compliance
with the biological integrity standard.
79. Petitioners failed to meet their burden of proving by
a preponderance of the evidence that DWR exceeded its
authority or jurisdiction, acted erroneously, failed to use
proper procedure, acted arbitrarily or capriciously, or failed
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Opinion of the Court
to act as required by law or rule in determining the NPDES
Permit reasonably ensures compliance with the biological
integrity water quality standard. See 15A NCAC 02B.
0202(11), 15A NCAC 02B .0211(2) (2013), and 15A NCAC
02B .0220(2) (2013).
80. DWR’s decision that the NPDES Permit reasonably
ensures compliance with the biological integrity water
quality standard is affirmed.
The superior court did not determine that any of the findings of fact made by
the ALJ were unsupported by the record, but instead determined on de novo review
that DWR’s interpretation of the “biological integrity standard rules and related
definitions” was not reasonable and was “contrary to the language of the standard
and definitions.” The superior court rejected both DEQ’s and the ALJ’s interpretation
of the biological integrity standard, and Martin Marietta and DEQ challenge this
conclusion on appeal as reflected in their arguments that the superior court “Failed
To Defer to DWR, Misinterpreted the Biological Integrity Standard, and Improperly
Found Facts[:]8”
Class C waters must be “suitable for aquatic life
propagation and maintenance of biological integrity”
among other uses. 15A NCAC 02B.0211(2) The term
“Biological Integrity” is defined by 15A NCAC 02B.202(11)
as “the ability of an aquatic ecosystem to support and
maintain a balanced and indigenous community of
organisms having species composition, diversity,
population densities and functional organization similar to
that of reference conditions”.
The rules do not define the terms “species
8 The following quote from the superior court order arguably includes some findings of fact, but the
superior court stated its decision as based upon de novo review of a legal issue.
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Opinion of the Court
composition”, “diversity”, “population densities” or
“functional organization”. Dr. Overton was offered and
accepted by the AU as an expert in the field of fisheries
ecology, larval fish ecology, fisheries management, and fish
sampling methods and analysis. He testified that species
composition counts the number of species in a system.
Species diversity counts the number species present and
the relative abundance of each species. Population density
describes how many individuals are in a defined area and
functional organization describes the organization of
biological community.
Tom Reeder with DWR testified that he did not
know if there was such a thing as a biological integrity
analysis; that he had never really heard of such a thing.
He further testified that no statutes or rules set forth
numeric standards or explicit methods or metrics by which
DWR must make a determination that a NPDES permit
reasonably ensures compliance with the biological
integrity standard. Rather, the standard requires DWR to
exercise its discretion, expertise and professional judgment
to determine whether the anticipated impacts of a proposed
discharge are such that the discharge will preclude the
ability of an “aquatic ecosystem” to support and maintain
a balanced and indigenous community of organisms having
species composition, diversity, population densities, and
functional organization “similar” to that of “reference
conditions”. DWR staff conceded that the agency did not
evaluate species composition, diversity, population
density, or functional organization in Blounts Creek. Mr.
Reeder justified the failure to evaluate these metrics by
saying that he considered the impact of the permitted
discharge to be de minimus. In essence the agency reached
the ultimate conclusion that the impact of the permitted
discharge was de minimus first, without evaluating species
composition, diversity, population density, and functional
organization, and then used the ultimate conclusion to
conclude that evaluation of the metrics was unnecessary.
With respect to questions of law, the reviewing court
employs a de novo review. When applying de novo review,
the Court may freely substitute its judgment for that of the
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agency. In re Appeal of N. C. Sav. & Loan League, 302 N.
C. 458 (1981) Incorrect statutory interpretation is an error
of law which allows the court to apply a de novo review.
Brooks v. Rebarco, 91 N.C. App. 459 (1988) However even
when reviewing a case de novo courts recognize the
longstanding tradition of according deference to an
agency’s interpretation of its rules. A reviewing Court
should defer to agency’s interpretation of a statutes or
rules it administers so long as the agency interpretation is
reasonable and based upon a permissible construction of
the statute or rule. County of Durham v. N.C. Dep’t of Env’t
and Natural Res., 131 N.C. App. 395 (1998).
Interpretations that conflict with the clear intent and
purpose of the law are entitled to no deference. Burgess v.
Your House of Raleigh, Inc., 326 N.C. 205 (1990) An
agency’s interpretation of its own regulations will be in
enforced unless clearly erroneous or inconsistent with the
regulation’s plain language. WASCO LLC. V. N.C. Dep’t of
Env’t & Natural Res., 799 S.E. 2nd 405 (2017)
The terms “species composition, diversity,
populations densities, and functional organization” used in
the biological integrity standard must be given meaning.
Kyle v. Holston Group, 188 N.C. App. 686 (2008) The
standard requires DWR to maintain the indigenous
biological community by insuring that the post discharge
“species composition, diversity, population densities, and
functional organization are similar to that of reference
conditions” determined before the discharge is permitted.
The rule is clear that referenced conditions must be
evaluated on the basis of and as defined in those terms. Yet
the DWR staff conceded that they did not measure any of
the biological integrity metrics in Blounts Creek when
evaluating the permit’s compliance with the standard.
Thus, DWR failed to determine the base line metrics
required by 15A NCAC 02B.0202(11) and could not,
therefore, ensure reasonable compliance with the biological
integrity standard.
The Biological integrity standard is clear; DWR
must protect the indigenous community by determining
reference conditions in terms of an evaluated impacts on
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Opinion of the Court
the community’s species composition, diversity, population
density and functional organization. Reference conditions
must be specific enough to allow the agency to apply the
biological integrity standard properly. DWR failed to apply
the plain language of the biological integrity standard.
Therefore DWR did not “reasonably ensure compliance
with” the biological integrity standard. Consequently the
agency exceeded its authority and erred as a matter of law
when issuing the permit. Based upon a de novo review of
the biological integrity standard rules and related
definitions the Court concludes that DWR’s interpretation
of the rule is not reasonable and is contrary to the language
of the standard and definitions.
Conclusions of law 51 through 53, 61, 62, 64 through
67,70, 75, 77 through 80, 110 through 112 are reversed. 9
Ultimately, the superior court determined, contrary to the ALJ’s conclusion,
that DEQ’s interpretation of the biological integrity standard was not reasonable and
was contrary to the language of the standard and definitions. The superior court did
not determine that the ALJ’s findings of fact were unsupported by substantial
evidence but instead found legal error as to the meaning and application of the
biological integrity standard. The primary difference between the ALJ’s order and
the superior court’s order is its determination of the “clear” meaning of the biological
integrity standard and its resulting determination not to defer to agency expertise.
Again, the superior court concluded that
[t]he Biological integrity standard is clear; DWR
must protect the indigenous community by determining
reference conditions in terms of an evaluated impacts on
the community’s species composition, diversity, population
9 This section is quoted as it was in the record before us, including spacing and punctuation.
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Opinion of the Court
density and functional organization. Reference conditions
must be specific enough to allow the agency to apply the
biological integrity standard properly. DWR failed to apply
the plain language of the biological integrity standard.
But as the superior court notes, many of the operative words in the applicable
regulations are not defined. Despite the superior court’s conclusion that “the
Biological integrity standard is clear[,]” it could be clear only to the extent the
operative terms in the standard are defined. However, the superior court applied
“clear” definitions where the regulations simply do not provide definitions. The
superior court defined the biological integrity standard to mean that “DWR must
protect the indigenous community by determining reference conditions in terms of an
evaluated impacts on the community’s species composition, diversity, population
density and functional organization.” But this is not the standard as defined by the
applicable regulations. Again, classification is determined by “the existing or
contemplated best usage of the various streams and segments of streams in the basin,
as determined through studies and evaluations and the holding of public hearings for
consideration of the classifications proposed.” 15A N.C.A.C. 2B.0301 (2013)
(emphasis added). The North Carolina Administrative Code (“Code”) contemplates
the existing state of the water or its possible best usage. See id. The “Best Usage” of
Class C waters is “aquatic life propagation and maintenance of biological integrity
(including fishing and fish), wildlife, secondary recreation, agriculture, and any other
usage except for primary recreation or as a source of water supply for drinking,
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culinary, or food processing purposes[.]” 15A N.C.A.C. 2B.0211. “Conditions Related
to Best Usage” note “the waters shall be suitable for aquatic life propagation and
maintenance of biological integrity, wildlife, secondary recreation, and agriculture.
Sources of water pollution which preclude any of these uses on either a short-term or
long-term basis shall be considered to be violating a water quality standard.” Id.(emphasis added).
The Code does not require the biological integrity of an aquatic ecosystem to
remain exactly or even substantially the same as it had once been, for example, prior
to discharge. See generally 15A N.C.A.C. 2B.0301. To violate a water quality
standard, the discharge of water must “preclude any of these uses on either a short-
term or long-term basis[.]” 15A N.C.A.C. 2B.0211. “Preclude” is not defined in the
statute, but its ordinary meaning is to “close” and “to make impossible by necessary
consequence: rule out in advance[.]” Merriam-Webster’s Collegiate Dictionary 977
(11th ed. 2003). In other words, to violate a water quality standard the discharge of
water must make “aquatic life propagation and maintenance of biological integrity,
wildlife, secondary recreation, and agriculture” nearly impossible. 15A N.C.A.C.
2B.0211; see generally Merriam-Webster’s Collegiate Dictionary 977.
Further, the superior court did not reverse the ALJ’s findings of fact as to
DEQ’s expertise applying the regulations which ultimately led to the contested
conclusion by the ALJ that DEQ had complied with the biological integrity standard:
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Opinion of the Court
131. Mr. Reeder testified that with the assistance of DWR
staff, he used his best professional judgment, experience
and expertise to determine that the appropriate “aquatic
ecosystem” was the watershed system of Blounts Creek
and its tributaries. (Reeder, Tr. Vol. 7 pp. 1149-1150)
132. Mr. Reeder considered “reference conditions” to be
the existing conditions in the Blounts Creek aquatic
ecosystem without the proposed discharge. (Reeder, Tr.
Vol. 7 pp. 1142-1144, 1149-1150; Reeder, Tr. Vol. 4 pp. 662-
663; Fleek, Tr. Vol. 6 pp. 992-993)
....
136. Mr. Reeder took into consideration and weighed Mr.
Fleek’s opinions regarding the effects of the proposed
discharge on benthos in the upper reaches immediately
downstream of the proposed discharge outfalls. (Reeder,
Tr. Vol. 4 pp. 660-661)
137. Mr. Reeder understood Mr. Fleek’s professional
opinion to be that benthic macroinvertebrates would likely
become more diverse near the discharge outfalls and that
farther downstream any such impacts would lessen or
dissipate. (Reeder, Tr. Vol. 4 pp. 660-661)
138. Mr. Reeder also understood that the many other
tributaries of the Blounts Creek aquatic ecosystem, and the
biota inhabiting those areas, would be unaffected by the
permitted discharge. (Reeder, Tr. Vol. 7 pp. 1142-1151,
1162-1165, 1172; Reeder, Tr. Vol. 4 pp. 658-671; Ex. R23;
Ex. R1; Ex. R16)
Despite these findings of fact, Petitioners argued, and the Superior Court found, that
DEQ’s interpretation of the regulations and process for evaluation of the impact of
the proposed discharge were not “reasonable” and thus not subject to deference.
One of respondents’ main contentions before this Court is that the superior
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Opinion of the Court
court failed to apply the correct legal standard in deferring to DEQ as to the
interpretation and application of the biological integrity standards. The superior
court determined “DWR failed to determine the base line metrics required by 15A
NCAC 02B.0202(11) and could not, therefore, ensure reasonable compliance with the
biological integrity standard,” but, according to Mr. Reeder, “no statutes or rules set
forth numeric standards or explicit methods or metrics by which DWR must make a
determination that a NPDES permit reasonably ensures compliance with the
biological integrity standard.” As DEQ explains,
the Superior Court’s “plain language” interpretation is not
based on the plain language of applicable regulations at all.
By stepping outside the plain language of the regulations
and dictating what information the agency’s biologists and
engineers must consider when evaluating compliance with
a technical environmental standard, the Superior Court
improperly substituted its judgment for that of the agency
. . . [, and]
....
As a pure question of regulatory interpretation, the
Superior Court’s “plain language” reading is flatly
incorrect. The “plain language” of the standard says
nothing about what process the agency must go through or
what information the agency must collect to reasonably
ensure compliance with the standard. Rather, the
regulations leave this determination to the “reasonabl[e]”
discretion of DWR’s environmental scientists to be
evaluated on a case-by-case basis. 15A NCAC 2H.0112(c).
The superior court considered a few lines of testimony of Mr. Reeder, “Tom
Reeder with DWR testified that he did not know if there was such a thing as a
biological integrity analysis; that he had never really heard of such a thing.” But this
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Opinion of the Court
interpretation takes the testimony out of context and is not supported by the whole
record as noted by the next sentence in the order noting he further testified accurately
“that no statutes or rules set forth numeric standards or explicit methods or metrics
by which DWR must make a determination that a NPDES permit reasonably ensures
compliance with the biological integrity standard.” In fact, the superior court did not
determine that the ALJ’s findings regarding DEQ’s investigation of the expected
effects of the water discharge on biological integrity were not supported by the whole
record, but relied upon this statement by Mr. Reeder along with an erroneous
definition of “biological integrity” to conclude that
DWR staff conceded that the agency did not evaluate
species composition, diversity, population density, or
functional organization in Blounts Creek. Mr. Reeder
justified the failure to evaluate these metrics by saying
that he considered the impact of the permitted discharge to
be de minimus. In essence the agency reached the ultimate
conclusion that the impact of the permitted discharge was
de minimus first, without evaluating species composition,
diversity, population density, and functional organization,
and then used the ultimate conclusion to conclude that
evaluation of the metrics was unnecessary.
But DEQ certainly did not “concede[]” that it “did not evaluate specifies
composition, diversity, population density, or functional organization[]” despite the
portions of Mr. Reeder’s testimony the superior court and Petitioners take out of
context. DEQ simply did not perform evaluations to Petitioners’ desired
specifications, but this is vastly different from failing to evaluate at all. The question
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Opinion of the Court
for the superior court, and for this Court, is not whether DEQ could have done more
or different testing or analysis or whether the ALJ could have found different facts.
The questions before us are whether the ALJ’s findings of fact are supported by the
whole record; N. Carolina Dep’t of Pub. Safety, 247 N.C. App. at 286, 786 S.E.2d at
64; whether DEQ evaluated the Permit application in accord with the applicable
regulations; and whether DEQ’s interpretation of those regulations was reasonable.
See Hilliard v. N.C. Dep’t of Corr., 173 N.C. App. 594, 598, 620 S.E.2d 14, 17 (2005)
(“On judicial review, an agency’s interpretation of its own regulations will be enforced
unless clearly erroneous or inconsistent with the regulation’s plain language.”); see
generally N. Carolina Dep’t of Pub. Safety v. Ledford, 247 N.C. App. 266, 286–87, 786
S.E.2d 50, 63–64 (2016) (“[O]ur Supreme Court has made clear that even under our
de novo standard, a court reviewing a question of law in a contested case is without
authority to make new findings of fact. Under the whole record test, the reviewing
court may not substitute its judgment for the ALJ’s as between two conflicting views,
even though it could reasonably have reached a different result had it reviewed the
matter de novo. Instead, we must examine all the record evidence—that which
detracts from the ALJ’s findings and conclusions as well as that which tends to
support them—to determine whether there is substantial evidence to justify the
ALJ’s decision. Substantial evidence is relevant evidence a reasonable mind might
accept as adequate to support a conclusion. We undertake this review with a high
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Opinion of the Court
degree of deference because it is well established that in an administrative proceeding,
it is the prerogative and duty of the ALJ, once all the evidence has been presented
and considered, to determine the weight and sufficiency of the evidence and the
credibility of the witnesses, to draw inferences from the facts, and to appraise
conflicting and circumstantial evidence. The credibility of witnesses and the probative
value of particular testimony are for the ALJ to determine, and the ALJ may accept or
reject in whole or part the testimony of any witness.” (emphasis added)).
The whole record supports the ALJ’s findings that DEQ evaluated species
composition, diversity, population density, and functional organization in accord with
its established procedures and expertise. Mr. Reeder was “the acting director of the
Division of Water Quality and the director of the Division of Water Resources” when
the Permit was approved; eventually the two divisions were merged. Mr. Reeder
approved the Permit, but he was by no means the only employee of DEQ involved in
the consideration of the Permit. Many employees of DEQ, as well as consultants
including CZR Incorporated (“CZR”) and Kimley-Horn and Associates (“Kimley
Horn”), performed the actual sampling and analysis of water quality, fish, and
benthos in Blounts Creek. Mr. Reeder testified at length regarding DEQ’s
investigation and analysis of “biological integrity” in Blount’s Creek. As a whole, in
context, Mr. Reeder testified “biological integrity” is a narrative standard, not a
numeric standard:
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Well, I mean you can’t go to an [Standard Operating
Procedure]—there’s no [Standard Operating Procedure]
that says biological integrity analysis. Like I couldn’t call
Eric Fleek on the phone and say, “Hey, Eric, go out and do
a biological integrity analysis.”
What you do is you go out and do exactly what Eric
did, is you do a biological assessment and you look at the
technical memorandum, and according to that you make a
decision based upon your best professional judgment and
all the data as to whether you think this narrative
standard for biological integrity will be violated or not.
Mr. Eric Fleek was an environmental supervisor at DEQ. Mr. Fleek testified his
branch, the Biological Assessment Branch, evaluated water quality by “sampling for
fish. We also do sampling for benthic macroinvertebrates. And by assessing a water
body and the biology that lives there, you can use them as proxies to determine what
the water quality is like there.” Mr. Fleek also testified that there were “protocols for
doing that sampling” of Blounts Creek in reference to the Standard Operating
Procedure.
Our record contains one of Petitioners’ exhibits in arguing DEQ failed to
comply with its own standards, DEQ’s “STANDARD OPERATING PROCEDURE
BIOLOGICAL MONITORING[,] STREAM FISH COMMUNITY ASSESSMENT
PROGRAM[,]” (“Standard Operating Procedures”) and
the purpose of this manual [is] to provide details on
standard operating procedures of the Biological
Assessment Unit of the Division of Water Quality (DWQ or
Division) for the collection and analysis of stream fish
community assessment data. Consistency in data
collection and analysis is the cornerstone for evaluating
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Opinion of the Court
biological integrity. The procedures provided are a
synthesis of widely used methods and methods developed
from the experience of personnel within the Unit. These
methods have been shown to provide repeatable and useful
data for water quality evaluation.
....
The Stream Fish Community Assessment Program
was designed as an additional basinwide assessment tool
and has been in existence since 1991. It’s core mission is
to sample a set of fixed sites on lower Strahler order
wadeable creeks, streams, and rivers on a five-year
rotating basis to support the DWQ’s Basinwide
Management Plan Program.
While the Standard Operating Procedures address “biological integrity[,]” they
do not require a particular type of analysis to be done for a Permit application;
instead, the staff of DEQ uses its expertise to determine what types of testing or
sampling need to be done for each application, depending upon its unique
circumstances.
The Standard Operating Procedures also describe the “NORTH CAROLINA
INDEX OF BIOTIC INTEGRITY” which has been in use since the early 1990s:
The Division has been monitoring the biological integrity
of stream fish communities since the early 1990s. The
biological monitoring tool that is used is referred to as the
North Carolina Index of Biological Integrity (NCIBI). The
NCIBI method was developed for assessing a stream’s
biological integrity by examining the structure and health
of its fish community. The North Carolina Administrative
Code defines Biological Integrity as: “. . . the ability of an
aquatic ecosystem to support and maintain a balanced and
indigenous community of organisms having species
composition, diversity, population densities, and functional
organization similar to that of reference conditions” (15A
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NCAC 02B .0200; NCAC 2004). The NCIBI is a
modification of the Index of Biotic Integrity (IBI) initially
proposed by Karr (1981) and Karr, et al. (1986).
The NCIBI incorporates information about species
richness and composition, trophic composition, fish
abundance, and fish condition. The NCIBI summarizes the
effects of all classes of factors influencing aquatic faunal
communities such as water quality, energy source, habitat
quality, flow regime, and biotic interactions. While any
change in a fish community can be caused by many factors,
certain aspects of the community are generally more
responsive to specific influences. Species composition
measurements reflect habitat quality effects. Information
on trophic composition reflects the effect of biotic
interactions and energy supply. Fish abundance and
condition information indicates additional water quality
effects. It should be noted, however, that these responses
may overlap. For example, a change in fish abundance may
be due to decreased energy supply or a decline in habitat
quality, not necessarily a change in water quality.
The scores derived from this index are a measure of the
ecological health of the waterbody and may not directly
correlate to water quality. For example, a stream with
excellent water quality, but with poor or fair fish habitat,
may not be rated excellent with this index. However, a
stream which rated excellent on the NCIBI should be
expected to have excellent water quality.
Further, the NCIBI sets out specific metrics to assess biological integrity:
The NCIBI incorporates information about species
richness and composition, pollution indicator species,
trophic composition, fish abundance, fish condition, and
reproductive function by the cumulative assessment of 12
parameters or metrics (Tables 1-3). Each metric is
designed to contribute unique information to the overall
assessment. The values provided by the metrics are
converted into scores on a 1, 3, and 5 scale. A score of 5
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represents conditions commonly associated with
undisturbed reference streams in the specific river basin or
ecoregion. A score of 1, however, indicates that conditions
deviate greatly from those typically observed in
undisturbed streams of the region. All metrics for each of
the three regions were calibrated using regional reference
sites.
The scores for all metrics are then summed to obtain the
overall NCIBI score, an even number between 12 and 60.
The score is then used to determine the biological integrity
class of the stream (i.e., Poor, Fair, Good-Fair, Good, or
Excellent) (Karr 1981 , Karr, et al. 1986). A fish community
rated Excellent is comparable to the best situations with
minimal human disturbance; all regionally expected
species for the habitat and stream size, including the most
intolerant forms, are present along with a full array of size
classes and a balanced trophic structure. Conversely, a
fish community rated Poor deviates greatly from the
reference condition. The number of fish is fewer than
expected, usually fewer than expected number of species,
an absence of intolerant species, and an altered trophic
structure. Communities rated Good, Good-Fair, or Fair fall
within this disturbance gradient.
Currently, if a fish community is rated Excellent, Good, or
Good-Fair it is deemed to be Fully Supporting its Aquatic
Life Use Support stream classification. If a fish community
is rated Fair or Poor it is deemed to be Not Supporting its
Life Use Support stream classification and the water
quality standard is not being met. Waters that have an
Excellent fish community rating are also eligible for
reclassification to a[n] Outstanding Resource Waters or to
a High Quality Waters supplemental classifications.
The Standard Operating Procedures set forth twelve metrics, grouped into five
categories:
1. Species richness and composition (Metric Nos. 1 and
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Opinion of the Court
3-5)
2. Indicator species (Metric Nos. 6 and 7)
3. Trophic function (Metric Nos. 8-10)
4. Abundance and condition (Metric Nos. 2 and 11)
5. Reproductive function (Metric No. 12)
The particular metrics used may vary depending upon the type of water and region
of the state. For example, the species of fish measured metric number 4 are different
in mountain streams than in and around coastal waters. The Standard Operating
Procedures also set out sampling procedures and instructions for laboratory
processing for samples. To assess the quality of a stream, information obtained from
sampling is compared to reference conditions. “The scores for all 10 or 12 metrics are
then summed to obtain the overall NCIBI score. Finally, the score (an even number
between 12 and 60) is then used to determine the biological integrity class of the
stream from which the sample was collected[.]”
Regarding permits, the Standard Operating Procedures provide, “The location
of permitted dischargers should be reviewed, using the database provided by the
Division’s Basinwide Information Management System” and notes that “[w]atershed-
specific special study sites that are designed to address a specific, short-term question
(e.g., Use Attainability, impacts from a permitted discharger, watershed
modifications, etc.) are usually sampled only once and may be sampled anytime
between March and December.” (Emphasis added.)
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Opinion of the Court
As part of its analysis of the permit application, CZR did sampling and
prepared a report addressing the metrics noted in the Standard Operating
Procedures regarding fish and benthos. This report noted that fish surveying was
done “in accordance with NCDWQ 2006 Standard Operating Procedure, Stream Fish
Community Assessment Program (NCDENR 2006a).” “Benthic invertebrate
sampling occurred on 11 April 2011 following the swamp stream method as described
in NCDWQ 2006 Standard Operating Procedures for collection of benthic
invertebrates in the Level IV Ecoregion Swamp Region B of the coastal plain of North
Carolina NCDENR 2006b.”
DEQ initially reviewed Martin Marietta’s application for the Permit, then
requested additional information to address several questions:
1. Please define a zone of impact (ZOI) and show that
it is not degraded, considering hydraulic, biota, & saline
water impacts as discussed below.
Hydraulic: The point downstream at which the
proposed discharge can be considered insignificant.
Consider the frequency of bank overflow and the
effects of increased water levels, velocity changes,
and erosion. Impacts should be based on a major
rainfall event such as an 80th percentile (two in 10-
year) storm, and a base flow.
Biota: The point at which the proposed discharge is
considered to be insignificant, relative to
anadromous fish (e.g. finfish) changes in velocity,
pH, temperature DO. Evaluate effects during
documented spawning times (as per the NC Wildlife
Resources Commission and the National Marine
Fisheries Service) and during periods of lower
stream flows.
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Opinion of the Court
Saline Water: The point at which the
freshwater impact of the proposed discharge is
considered insignificant. Using the ZOI identified
for the hydraulic component, determine the distance
to a downstream point of saline stability and
evaluate impacts
2. Please provide a process flow diagram for the mine
dewatering and stormwater discharge, including the flow
around the proposed stockpile area. What is the
approximate size and capacity of the settling pond that will
be located next to the mining pit?
3. What is the size and capacity of the closed loop
settling system and the future overburden storage area?
4. Please provide an expanded Engineering
Alternatives Analysis (EAA). This should include the
alternatives of reinjection of pit drainage and the
treatment and conveyance of this discharge for potable or
other reusable purposes. The EAA must be performed
according to the guidelines in the Division’s website. This
includes a 20-year present worth analysis of all feasible
options.
In answer to these questions, Martin Marietta provided a Technical
Memorandum prepared by Kimley Horn summarizing “the results of several analyses
performed to address comments regarding stream stability, potential flooding, and
water quality issues associated with the proposed discharge[,]” including “the
predicted zones of potential impact[;]” a revised NPDES Water Flow Map showing
“the process flow diagram for mine dewatering and stormwater discharge[;] and
“expanded Engineering Alternatives Analysis (EAA) dated September 14, 2012,
prepared by Groundwater Management Associates, Inc. . . . according to the
guidelines in the DWQ website and includ[ing] a 20-year present worth analysis of
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Opinion of the Court
all feasible options.” Further, in October of 2012, CZR also prepared a Technical
Memorandum addressing “potential direct and indirect effects on identified fish
populations from predicted changes in Blounts Creek water quality as identified by”
Kimley Horn’s Technical Memorandum.
In summary, hundreds of pages of the record on appeal and hundreds of pages
of testimony address the analysis of “biological integrity,” as well as salinity, pH, and
many other factors evaluated by DEQ to determine whether the Permit should be
issued. To the extent that the superior court made a finding of fact in noting that
Tom Reeder with DWR testified that he did not
know if there was such a thing as a biological integrity
analysis; that he had never really heard of such a thing.
He further testified that no statutes or rules set forth
numeric standards or explicit methods or metrics by which
DWR must make a determination that a NPDES permit
reasonably ensures compliance with the biological
integrity standard[,]
this finding is technically supported by the record because Mr. Reeder did so testify.
But neither the superior court nor this Court may substitute its findings of fact for
those of the ALJ; we review the ALJ’s findings of fact only to determine if they are
supported by the whole record. See Ledford, 247 N.C. App. at 286–87, 786 S.E.2d at
63–64. The ALJ’s findings are supported by the whole record, as discussed above.
Contrary to the superior court’s conclusions, Mr. Reeder’s testimony indicated the
thorough and extensive evaluation that DEQ undertook to ensure biological integrity,
although this cannot be neatly summed up as one official analysis plainly laid out in
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Opinion of the Court
a specific standard operating procedure. The ALJ’s findings as to the biological
integrity analysis are supported by the whole record. The superior court therefore
erred by essentially substituting its own findings of fact regarding Mr. Reeder’s
testimony and by making legal conclusions as to biological integrity based upon a
misinterpretation of the standard. Therefore, as to DEQ’s and Martin Marietta’s
main contention on appeal we agree that the trial court erred in reversing the ALJ’s
order as to the biological standard, and we now turn to address Petitioners’ issues on
cross-appeal.
D. Swamp Waters Classification
Petitioners cross-appealed from the superior court’s order based upon its
determination that DEQ’s approval of the Permit violated the water quality
standards set forth for swamp water classification. DEQ and Martin Marietta argue
we should affirm the findings and conclusions of the ALJ and superior court regarding
swamp waters. As noted above, a body of water may have a supplemental
classification in addition to its primary classification. See generally 15A N.C. Admin.
Code 2B.0301. The portions of Blounts Creek at issue have a supplemental
classification of “swamp waters” which again is defined as “those waters which are
classified by the Environmental Management Commission and which are
topographically located so as to generally have very low velocities and other
characteristics which are different from adjacent streams draining steeper
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Opinion of the Court
topography.” 15A N.C.A.C. 2B.0202. Swamp water classification applies to “waters
which have low velocities and other natural characteristics which are different from
adjacent streams.” 15A N.C.A.C. 2B.0101.
The ALJ identified the issue regarding swamp waters as follows:
Issue 2: “Swamp Waters Claim”: Whether Petitioners
have met their burden of proving that Respondent
exceeded its authority or jurisdiction, acted erroneously,
failed to use proper procedure, acted arbitrarily or
capriciously, or failed to act as required by law or rule in
determining the NPDES Permit reasonably ensures
compliance with water quality standards and regulations
related to the “Swamp Waters” supplemental
classification.
The ALJ made the following findings regarding the swamp water
classification:
18. Contrary to Petitioners’ assertions, the evidence
demonstrates that the “swamp method” and the term
“swamp stream” in the SOP are unrelated to the “swamp
waters” supplemental classification. (Fleek, Tr. Vol. 7 pp.
1103-1105; Ex. R34, p.6; Fleek, Tr. Vol. 6 pp. 980-981; Ex.
P58; Ex. P59)
19. Mr. Fleek reviewed the CZR Habitat Assessment
and provided input to Mr. Belnick. In Mr. Fleek’s
evaluation, he concluded that there could be an increase in
diversity and population of benthos near the proposed
discharge outfalls because the discharge would lead to less
stressful conditions. (Fleek, Tr. Vol. 7 pp. 1108-1111, 1114-
1116; Ex.R4; Ex. 51)
....
Petitioners’ Swamp Waters Claim
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Opinion of the Court
81. Petitioners claim that the NPDES Permit does not
reasonably ensure compliance with what Petitioners
characterize as a requirement to “protect” swamp waters
“characteristics.” Petition 4-5.
82. “Swamp Waters” are defined as “waters which are
classified by the Environmental Management Commission
and which are topographically located so as to generally
have very low velocities and other characteristics which are
different from adjacent streams draining steeper
topography.” 15A NCAC 02B.0202(62). See also 15A
NCAC 02B.0101(e)(2) and 02B .0301(c).
83. Petitioners claim that DWR has a duty to preserve
swamp waters in their existing condition, and they objected
to the predicted changes in physical and chemical
parameters in upper Blounts Creek, specifically dissolved
oxygen, pH, flow velocity, and tannins. Petitioners have
characterized the predicted changes to these parameters as
unlawfully eliminating swamp waters characteristics and
uses.
84. DWR disagrees with Petitioners in that DWR has a
duty under the applicable rules and laws to preserve
waters with the supplemental classification “swamp
waters” in their existing condition. DWR asserts,
consistent with its longstanding interpretation and past
practices, that the only effect of the Sw supplemental
classification is to modify the water quality standards for
dissolved oxygen and pH by lowering the minimum limits
otherwise required for Class “C” waters. See 15A NCAC
02B .0211(3)(b) and (3)(g) (2013).
85. Petitioners failed to identify any statute or rule that
expressly protects “low tannins”, “low pH”, “low dissolved
oxygen”, or “low velocity” attributes of swamp waters.
86. Petitioners have not cited a law or rule that requires
additional protection or use for waters with the
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Opinion of the Court
supplemental classification “swamp waters.”
87. The swamp waters supplemental classification and
the water quality standards administered by DWR relate
to a highly technical and scientific subject area within
DWR’s expertise.
88. As the agency delegated the responsibility for
NPDES permitting and enforcement of North Carolina’s
water quality standards, DWR’s interpretation and
application of the State’s water quality standards, and its
surface water classifications and supplemental
classifications are entitled to deference. Hilliard v. N.C.
Dept. of Corrections, 173 N.C. App. 594, 598, 620 S.E.2d
14, 17-18 (2005).
89. DWR’s interpretation and application of the highly
technical rules it administers, including the swamp waters
and antidegradation rules, are reasonable, longstanding,
in accord with past DWR practices, and consistent with and
supported by the plain language of the relevant rules.
90. Petitioners have presented no evidence, authority,
or argument that persuades the undersigned to overrule
DWR’s rational interpretation and application of the
State’s swamp waters and antidegradation laws and rules.
91. Some supplemental classifications may trigger
protection or uses in addition to the protections or uses for
Class C waters. For example, the “Outstanding Resource
Waters” supplemental classification states that such
waters “require special protection to maintain existing
uses.” 15A NCAC 02B .0101(e)(4).
92. The specificity of additional protections and uses
explicitly applicable by rule to some supplemental
classifications is further evidence that, if the “swamp
waters” supplemental classification was intended to
provide additional protections, the rules would have
specifically provided for such protections. See, e.g.,
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Opinion of the Court
Mangum v. Raleigh Bd. Of Adjustment, 196 N.C. App. 249,
255, 674 S.E.2d 742, 747 (2009) (“One of the longstanding
rules of interpretation and construction in this state is
expressio unius est exclusio alterius, the expression of one
thing is the exclusion of another.”) (citations omitted).
93. The term “swamp waters” is a regulatory term that
guides the assignment of the Sw supplemental
classification to particular stream segments; and once the
assignment is made by rule, the only regulatory effect of
the assignment of the swamp waters supplemental
classification is to lower the acceptable minimum values
for pH and dissolved oxygen. See 15A NCAC 02B
.0211(3)(b) and (3)(g) (2013). Upper Blounts Creek, for
example, has been assigned the “Sw” supplemental
classification by formal rulemaking. 15A NCAC 02B
.0316(a) (Index Number 29-9-1-(1)).
94. Petitioners’ arguments that DWR misinterpreted
and misapplied the swamp waters supplemental
classification present questions of law and fact, and mixed
questions of law and fact. Petitioners’ arguments have
been thoroughly considered and rejected by the
undersigned as unpersuasive and unsupported by the
preponderance of evidence.
95. Petitioners rely on a sentence from the State’s
antidegradation policy: “Existing uses, as defined by Rule
.0202 of this Section, and the water quality to protect such
uses shall be protected by properly classifying surface
waters and having standards sufficient to protect these
uses.” 15A NCAC 02B .0201(b). See Petition at 4-5.
96. According to its plain language, this provision is
implemented by formal rulemaking that establishes
classifications, uses and water quality standards, and that
assign classifications, uses and standards to individual
surface water segments. See, e.g., 15A NCAC 02B .0211
(2013) (uses and standards for Class C waters, including
waters with the supplemental “Sw” classification), 15A
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Opinion of the Court
NCAC 02B .0316(a) (Index Number 29-9-1-(1) (assignment
of classifications to upper Blounts Creek).
97. There are antidegradation permitting procedures
that did apply to DWR’s evaluation and issuance of the
NPDES Permit, but Petitioners have not argued that these
applicable procedures were not followed.
98. The preponderance of the evidence demonstrates
that DWR reasonably interpreted the laws and rules
governing swamp waters and the state’s antidegradation
policy, and reasonably applied those laws and rules to the
data, studies, and other information submitted or obtained
during the course of DWR’s NPDES permitting review and
decision.
99. Petitioners failed to present evidence sufficient to
overcome the presumption that DWR acted appropriately
in determining the NPDES Permit reasonably ensures
compliance with water quality standards or regulations
related to the “Swamp Waters” supplemental
classification.
100. Petitioners failed to meet their burden of proving by
a preponderance of the evidence that DWR exceeded its
authority or jurisdiction, acted erroneously, failed to use
proper procedure, acted arbitrarily or capriciously, or failed
to act as required by law or rule in determining that the
laws and rules do not require protection of the existing
conditions or characteristics of surface waters with the
supplemental classification “swamp waters” and that the
NPDES Permit reasonably ensures compliance with water
quality standards and rules related to the “Swamp Waters”
supplemental classification.
101. DWR’s decision that the NPDES Permit reasonably
ensures compliance with all applicable water quality
standards and rules, including those relating to the swamp
waters supplemental classification, is affirmed.
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Opinion of the Court
....
110. Petitioners failed to present evidence sufficient to
overcome the presumption that DWR acted appropriately
in issuing the Permit.
111. Petitioners failed to meet their burden of proving
Respondent DWR exceeded its authority or jurisdiction,
acted erroneously, acted arbitrarily and capriciously, used
improper procedure, or failed to act as required by law or
rule in issuing the NPDES Permit.
112. DWR’s issuance of the NPDES Permit is affirmed in
all respects.
....
119. Petitioners contend that the NPDES Permit is
unlawful because the Permit does not reasonably ensure
compliance with what Petitioners characterize as a
requirement to “protect” swamp waters “characteristics,”
which they contend include “low velocity,” “low dissolved
oxygen,” “low pH,” and “high tannins.” (Petition 4-5)
120. “Swamp Waters” are defined as “waters which are
classified by the Environmental Management Commission
and which are topographically located so as to generally
have very low velocities and other characteristics which are
different from adjacent streams draining steeper
topography.” 15A NCAC 2B.0202(62). See also 15A NCAC
2B .0101(e)(2) and 2B .0301(c).
121. The “swamp waters” supplemental classification
modifies the water quality standards for dissolved oxygen
and pH in the upper Blounts Creek segment by lowering
the minimum pH and dissolved oxygen values otherwise
required for Class “C” waters:
(b) Dissolved oxygen: . . . for non-trout waters, not
less than a daily average of 5.0 mg/1 with a
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Opinion of the Court
minimum instantaneous value of not less than 4.0
mg/1; swamp waters, lake coves or backwaters, and
lake bottom waters may have lower values if caused
by natural conditions;
....
(g) pH: shall be normal for the waters in the
area, which generally shall range between 6.0 and
9.0 except that swamp waters may have a pH as low
as 4.3 if it is the result of natural conditions[.]
15A NCAC 2B .0211(3)(b), (g) (2013)
122. Under DWR’s longstanding interpretation of the
statutes and rules that it administers, the supplemental
classification of swamp waters does not provide any
additional protections to water bodies to which it is
assigned; and low flow and velocity, low pH, low dissolved
oxygen, and high tannins are not uses, standards,
characteristics, or parameters of swamp waters that are
required to be maintained or protected. (Reeder, Tr. Vol. 7
pp. 1154-1157; Reeder, Tr. Vol. 4 pp. 653-657; Belnick, Tr.
Vol. 4 pp. 523-524, 557-558; Reeder, Tr. Vol. 4 pp. 653-657;
Belnick, Tr. Vol. 6 pp. 1059-1060)
123. The CZR report states that with the proposed
discharge, upper Blounts Creek may no longer exhibit
intermittent flow, low dissolved oxygen concentrations,
and high tannins. (Ex. R16 p. 10)
124. The report also states that, with the proposed
discharge, the use of the swamp stream sampling method
may no longer be appropriate to evaluate benthic
macroinvertebrates. (Ex. R16 p. 10)
125. The report does not state that the swamp waters
supplemental classification requires the preservation or
maintenance of low dissolved oxygen, high tannins, low
velocities, and low pH as contended by Petitioners. (Ex.
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R16 p. 10)
126. Based on the evidence before it, DWR concluded that
the Permit reasonably ensures compliance with all
applicable water quality standards, including those
applicable to upper Blounts Creek, which has a C primary
classification and a Sw supplemental classification.
(Alterations in original.)
The superior court affirmed the ALJ’s final decision as to the swamp water
classification issue. The superior court stated the issue as follows
II. Did the ALJ err in upholding DWR’s issuance of the
Permit as reasonably ensuring compliance with:
A. The swamp waters supplemental
classification and antidegradation rule[.]
The superior court addressed Petitioners’ swamp water claim as follows:
North Carolina’s water quality regulations protect
North Carolina’s surface waters by: (1) establishing
surface water classifications based primarily on the “best
uses” of surface waters, see 15A NCAC 02B .0101; N.C.
Gen. Stat. § 143-214.1(b); (2) establishing water quality
standards that protect assigned uses of “primary
classifications,” see, e.g., 15A NCAC 02B .0211 (water
quality standards for Class C waters); and (3) assigning
classifications to individual segments of surface waters
throughout the State, see 15A NCAC 02B .0201 et seq.
Some segments are also assigned “supplemental
classifications,” which may alter water quality standards
otherwise applicable. See 15 NCAC 02B .0101(e). The
state antidegradation rule provides that “[e]xisting uses . .
. and the water quality to protect such uses shall be
protected by properly classifying surface waters and
having standards sufficient to protect these uses.” 15A
NCAC 02B .0201(b).
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Opinion of the Court
The Permit authorizes Martin Marietta to discharge
commingled stormwater and groundwater from two
settling basins at its proposed quarry into the upper
reaches of Blounts Creek. The parties do not dispute the
primary classification and supplemental classifications
assigned to Blounts Creek. Blounts Creek from its source
to Herring Run (referred to by the parties as “upper
Blounts Creek”) is assigned the primary classification of
Class C and the supplemental classifications of Swamp
Waters (“Sw”) and Nutrient Sensitive Waters (“NSW”).
Petitioners argue that assignment of the swamp
waters supplemental classification to upper Blounts Creek
affixed “swamp water habitat” as a “special use” of that
portion of the Creek; in turn, Petitioners argue, the
antidegradation rule requires DWR to protect certain
“natural characteristics” of swamp waters such as “low
flow,” “low velocity,” and “dark color.”
The ALJ rejected Petitioners’ argument, concluding
that the swamp waters supplemental classification does
not provide any additional protections to swamp waters
beyond the water quality standards for protecting the uses
of Class C waters. The ALJ concluded the only effect of the
swamp waters supplemental classification is to make the
water quality standards for pH and dissolved oxygen less
stringent than otherwise required for Class C waters.
Final Decision Conclusion of Law (“COL”) ¶ 93.
The Court reviews the ALJ’s conclusions of law and
statutory and regulatory interpretations de novo and
findings of fact under the whole record test.
“Swamp waters” are defined as “those waters which
are classified by the Environmental Management
Commission and which are topographically located so as to
generally have very low velocities and other characteristics
which are different from adjacent streams draining steeper
topography,” 15A NCAC 02B .0202(62), or “waters which
have low velocities and other natural characteristics which
are different from adjacent streams.” 15A NCAC 02B
.0101(e)(2). DWR interprets state water quality rules to
require no additional protection for water segments
assigned the swamp waters supplemental classification
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Opinion of the Court
(beyond the protections required by the standards for the
primary water quality classification, which in this case is
Class C), an interpretation the ALJ considered de novo and
upheld as reasonable and consistent with the plain
language of North Carolina’s water quality standards.
Final Decision COL ¶¶88-90, 98.
The Court reviews this regulatory interpretation
issue de novo and affirms the ALJ conclusion.
Interpretation of administrative regulations
“properly begins with the plain words” of the regulation.
Cole v. N.C. Dep’t of Pub. Safety, 800 S.E.2d 708, 714 (N.C.
Ct. App.), disc. rev. denied, 803 S.E.2d 156 (2017). The
Court’s de novo review of the antidegradation rule and
rules governing the swamp waters supplemental
classification shows that no “plain words” identify or
protect a swamp waters “use” or identify or protect swamp
waters “characteristics.” 15A NCAC 02B .0202(62),
.0101(e)(2), .0211(6), .0211(14), .0220(5), .0220(12),
.0301(c).
The Court’s de novo review of the water quality rules
as a whole indicates that if the North Carolina
Environmental Management Commission (“EMC”) intends
to protect a particular attribute or condition or use of
surface waters, it does so in the text of its rules. With
respect to uses of a surface water, the rules explicitly
identify the uses associated with primary surface water
classifications and, in some cases, supplemental
classifications, and state narrative and numeric water
quality standards to protect such uses. See, e.g., 15A
NCAC 02B .0101(c)-(e), .0211(1), .0212(1), .0214(1), .216(1),
.0218(1), .0219(1), .0220(1), .0221(1), .0222(1), .0231(a).
There is no such identification of uses for the swamp
waters supplemental classification and no effect on
applicable water quality standards except to make less
stringent the standards for pH and dissolved oxygen that
would otherwise apply. The plain language and structure
of the water quality rules indicates there is no intent to
protect any alleged “use” particular to the swamp waters
supplemental classification. See, e.g., Mangum v. Raleigh
Bd. of Adjustment, 196 N.C. App. 249, 255, 674 S.E.2d 742,
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747 (2009) (“One of the long-standing rules of
interpretation and construction in this state is expressio
unius est exclusio alterius, the expression of one thing is
the exclusion of another.”).
Similarly, with respect to characteristics of a water
body, the rules show that the EMC knows how to protect a
specific characteristic if it so desires. For example, the
water quality rules establish explicit flow requirements for
high quality waters. 15A NCAC 02B .0224(1)(v) (setting
maximum volume of wastewater discharge into high
quality waters). There is no text in the swamp waters
supplemental classification rules (or elsewhere in the
water quality rules) requiring protection of particular
“swamp water characteristics.” With the exception of “low
velocity,” the characteristics cited by Petitioners —
“periods of low or no flow, low velocity, low pH, low
dissolved oxygen, and high tannin levels” — do not appear
in any water quality rule. References in the rules to “low
velocity” pertain only to a quality that swamp waters
“generally have,” 15A NCAC 02B .0202(62), not to a quality
those waters must have. Significantly no rules protect or
assure that waters with the swamp waters supplemental
classification will have low velocity, periods of low or no
flow, or high tannin levels. The Court is not vested with
rule making authority. The water quality standards for pH
and dissolved oxygen applicable to Class C waters are
made less stringent for water bodies with the swamp
waters supplemental classification, and this appears to the
Court to be the only effect of that supplemental
classification. 15A NCAC 02B .0211(3)(b), (g) (2013).
Even if Petitioners’ interpretation of the swamp
waters and antidegradation rules could be characterized as
reasonable, DWR’s interpretation nonetheless is
reasonable and is affirmed. The Court notes that, as found
by the ALJ, and supported by substantial evidence in the
record as a whole, DWR’s interpretation is longstanding
and consistent with the plain language and the structure
of the water quality rules. The Court gives deference to
DWR’s interpretation that the water quality rules do not
create special protections for characteristics such as “low
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Opinion of the Court
flow, low velocity, and dark color,” or otherwise.
The Court also notes that the state’s water quality
rules provide a means by which the EMC may classify
waters as High Quality Waters or classify unique and
special surface waters of the state as Outstanding Resource
Waters, and thereby provide a means of protecting certain
characteristics of those waters that are not otherwise
protected by water quality standards. 15A NCAC 02B
.0225(a)(2). The record evidence does not show that
Petitioners have sought such regulatory protections for
Blounts Creek. 15A NCAC 02B .0225.
The Court is not persuaded that PUD No. 1 v.
Washington Department of Ecology, 511 U.S. 700 (1994),
supports Petitioners’ Swamp Waters Claim. Petitioners
have not shown that there is any designated use associated
with the “swamp waters” supplemental classification that
is required to be maintained or protected under North
Carolina’s water quality rules or otherwise.
The Court has reviewed the Final Decision findings
in relation to Petitioners’ Swamp Waters Claim, see, e.g,
Final Decision FOF ¶¶119-126, 158-202, and based on its
review of the whole record, the Court concludes that
substantial evidence supports these findings. These
findings support the ALJ’s conclusion that Petitioners
failed to carry their burden before OAH to prove DWR
acted erroneously or arbitrarily or otherwise unlawfully in
determining that the Permit reasonably ensures
compliance with all applicable water quality standards,
including the swamp waters supplemental classification
and the state antidegradation rule.
The Final Decision findings of fact and conclusions
of law and holding that Petitioners failed to carry their
burden and that the Permit reasonably ensures compliance
with the swamp waters supplemental classification and the
state antidegradation rule are affirmed and upheld.
Petitioners do not challenge the facts as found by the ALJ or discussed by the
superior court regarding swamp waters but rather argue “[t]he issue before the Court
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Opinion of the Court
is one of law: does Blounts Creek’s classification as swamp waters protect the creek’s
use as a unique habitat?” Petitioners contend that DEQ and the superior court
interpreted the swamp water secondary classification as serving only “to weaken the
creek’s protections, to allow for more pollution in Blounts Creek,” and if the
classification were interpreted properly, the swamp waters classification “is like all
other water classifications in North Carolina--it protects our creeks and rivers.”
Petitioners further contend the swamp waters classification actually gives
“additional protection for waterways that have special characteristics found in
swamp waters and, as a result provides habitat for the fish, insects, and other
animals that are well suited to that environment.” Thus, Petitioners argue that the
secondary classification of swamp waters requires that the natural characteristics of
swamp water to remain essentially unchanged and that DEQ’s “extreme
interpretation” of the swamp waters classification as accepted by the ALJ and
superior court, “does not provide any protection at all” and “only weakens . . .
standards to allow for more pollution in Blounts Creek.”
Martin Marietta contends that neither North Carolina law nor the Clean
Water Act (“CWA”) require “‘natural’ conditions or characteristics” of a body of water
to remain unchanged. Martin Marietta contends both state and federal law recognize
the need to balance many interests and needs related to use of water and water
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Opinion of the Court
quality, including public health, fish and wildlife, recreation, industry, and
agriculture:
The CWA requires each State to adopt and
implement water quality standards, which “consist of the
designated uses of the navigable waters involved and the
water quality criteria for such waters based upon such
uses.” 33 U.S.C.A. § 1313(c)(2)(A).
Such standards shall be such as to protect the
public health or welfare, enhance the quality
of water and serve the purposes of this
chapter. Such standards shall be established
taking into consideration their use and value
for public water supplies, propagation of fish
and wildlife, recreational purposes, and
agricultural, industrial, and other purposes,
and also taking into consideration their use
and value for navigation.
33 U.S.C. § 1313(c)(2)(A) (emphasis added); see PUD
No. 1, 511 U.S. at 704.
Martin Marietta argues that
[t]he very existence of the NPDES program refutes
the theory that the CWA requires “natural” conditions or
characteristics to remain unchanged. The program
provides for the issuance of permits that authorize
discharge of wastewater into waters of the U.S. 33 U.S.C.
§ 1342. By introducing wastewater into a water body, the
quality and quantity of the water in the receiving water
body necessarily changes.
Petitioners counter that DEQ has previously taken a position contrary to its
position in this case as it “enforced against a polluter for not adequately protecting
swamp waters” in the case of House of Raeford Farms, Inc. v. North Carolina
Department of Environmental and Natural Resources, 242 N.C. App. 294, 774 S.E.2d
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911 (2015). Petitioners, quoting House of Raeford, contend that DEQ’s previous
interpretation of the swamp waters classification was “that ‘the designated uses for
the swamp waters . . . were deemed to be impaired.’” But House of Raeford does not
contradict DEQ’s action in this case.
In House of Raeford, DEQ investigated pollution in a creek, ultimately tracing
the source to House of Raeford’s chicken processing facility. See id. DEQ
representatives found that
“the creek was just full of sludge from bank to bank and as
far as the eye could see. It was an unbelievable site.”
She testified the sludge was fresh because it was a
light tan color: “It starts out looking like a milkshake and
then as it decomposes, it gets darker because of the
septicity.” The sludge adhered to the shorelines and was so
thick on the surface of the water that it had formed ridges.
The sludge was darker and thinner downstream from the
House of Raeford.
Id. at 297, 774 S.E.2d at 914 (brackets omitted). “[F]ecal samples from Cabin Branch
Creek, directly behind the House of Raeford facility . . . confirmed a fecal coliform
density greater than 60,000 colonies per 100 milliliters” and based upon this
contamination, “the designated uses for the swamp waters below the House of
Raeford facility were deemed to be impaired.” Id. at 297-98, 774 S.E.2d at 914.
Contrary to Petitioner’s argument, House of Raeford demonstrates that swamp
waters do have protection, but that protection is consistent with the water quality
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Opinion of the Court
standards established for Class C waters. See id. at 300, 774 S.E.2d at 916. In House
of Raeford, DEQ
assessed civil penalties against House of Raeford as
follows:
$25,000 for violation of N.C. Gen. Stat. § 143–
215.1(a)(6); causing or permitting waste to be
discharged to or in any manner intermixed
with the waters of the State in violation of the
water quality standards applicable to the
assigned classifications or in violation of any
effluent standards or limitations established
for any point source, unless allowed as a
condition of any permit, special order or other
appropriate instrument issued or entered into
by the Commission under the provisions of
the Article.
$25,000 for violation of 15A N.C.A.C.
2B.0211(3)(b); violating the dissolved oxygen
water quality standard for Class C–Sw waters
of the State.
$25,000 for violation of 15A N.C.A.C.
2B.0211(3)(c); by allowing settleable solids
and sludge in excess of the water quality
standard for Class C–Sw waters of the State.
Id. at 308, 774 S.E.2d at 920. Thereafter,
The ALJ found the imposition of civil penalties
under 15A N.C.A.C. 2B.0211(3)(b) and 15A N.C.A.C.
2B.0211(3)(c) were erroneous, but upheld the imposition of
the $25,000.00 fine under N.C. Gen. Stat. § 143–
215.1(a)(6). The [Environmental Management
Commission] imposed a total maximum civil penalty of
$50,000.00 against House of Raeford for violation of N.C.
Gen. Stat. § 143–215.1(a)(6) and 15A N.C.A.C.
2B.0211(3)(c).
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The superior court assessed a civil penalty of
$25,000.00 for violation of N.C. Gen. Stat § 143–215.1(a)(6)
for causing or permitting waste to be discharged into or
intermixed with the waters of the State in violation of the
water quality standard set forth in 15A N.C.A.C.
2B.0211(3)(c).
Id. at 308, 774 S.E.2d at 920–21.
House of Raeford addressed penalties for discharge of waste in violation of
water quality standards in a manner not allowed by a permit and as such was an
enforcement action for a water quality violation and not a proceeding for a permit
application as presented by this case. See id., 242 N.C. App. 294, 774 S.E.2d 911.
North Carolina General Statute 143-215.1 recognizes that some discharges of waste
which may otherwise not be allowed under applicable water quality standards may
be allowed as provided by a permit:
(a) Activities for Which Permits Required. -- Except as
provided in subsection (a6) of this section, no person shall
do any of the following things or carry out any of the
following activities unless that person has received a permit
from the Commission and has complied with all conditions
set forth in the permit:
....
(6) Cause or permit any waste, directly or
indirectly, to be discharged to or in any
manner intermixed with the waters of the
State in violation of the water quality
standards applicable to the assigned
classifications or in violation of any effluent
standards or limitations established for any
point source, unless allowed as a condition of
any permit, special order or other appropriate
instrument issued or entered into by the
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Commission under the provisions of this
Article.
N.C. Gen. Stat. § 143-215.1 (2013) (emphasis added).
We agree with Martin Marietta’s and DEQ’s interpretation of the law in that
protection does not require that Blounts Creek remain entirely the same. Further,
as the ALJ determined and the superior court affirmed, “DWR concluded that the
Permit reasonably ensures compliance with all applicable water quality standards,
including those applicable to upper Blounts Creek, which has a C primary
classification and a Sw supplemental classification.” The findings of fact establish
that the discharge of water into Blounts Creek may change some areas of the aquatic
ecosystem and the changes will vary based upon distance from the outfall. For
example, “there could be an increase in diversity and population of benthos near the
proposed discharge outfalls because the discharge would lead to less stressful
conditions.” The superior court acknowledges the discharge of water will change
Blounts Creek, but keeping that change within acceptable limits is the purpose of the
Permit. The Permit allows changes to the waters of Blounts Creek in accord with the
limitations and provisions of the Permit, and those limitations are in accord with
water quality standards applicable to Class C waters. On de novo review of
Petitioners’ issue “of law[,]” the ALJ and superior Court correctly concluded that
DEQ’s issuance of the Permit did not violate water quality standards as applicable to
“swamp waters” of Blounts Creek.
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E. pH Water Quality Standards
Much like the previous argument, Petitioners’ argument as to pH is based in
large part on the characteristics of the secondary classification of swamp waters.
Petitioners argue that the ALJ and superior court erred in approving the Permit
because the wastewater will increase the pH in Blounts Creek to “to levels that do
not occur naturally and are not characteristic of swamp waters.” Essentially,
Petitioners argue that the water quality standards for pH mandate that the swamp
waters retain all of their characteristics, including low pH. Petitioners contend that
[l]ow pH is a defining characteristic of swamp waters
and is essential to maintaining habitat that is protected by
the swamp waters classification. The permit allows Martin
Marietta to increase pH in Blounts Creek to levels that do
not occur naturally and are not characteristic of swamp
waters. Under existing conditions, pH in Blounts Creek is
as low as 4.37 and is almost always below 6.0. (T2 p 342:15-
17, 357:8-358:15 [App. 24, 25-26]); (see also R p 1199). The
permit allows Martin Marietta to increase pH to 8.5. (See
R p 1589-1615).
The issue before the Court is one of law: does the pH
standard protect the normal, natural pH of Blounts Creek?
Martin Marietta contends that if the regulations were interpreted and applied
as Petitioners argue
it would: (1) transform a straightforward water quality
standard for pH into a byzantine and costly regulatory
maze consisting of thousands of different sets of mandatory
pH values or ranges; (2) force DWR to implement an
expensive, time-consuming, and essentially unworkable
site-by-site regulatory scheme to establish separate
“normal” pH for each stream segment; and (3) create a new
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Opinion of the Court
source of regulatory uncertainty, cause delay in permitting
and enforcement, and impose the expense of sampling and
analysis anytime there is a need to know the pH standard
applicable to a water body segment. Such an exorbitantly
resource-intensive agency activity is not feasible, not
necessary, and not dictated by the language of the pH
standard.
The ALJ made the following findings regarding pH:
106. The water quality standard governing pH for upper
Blounts Creek requires that pH “shall be normal for the
waters in the area, which generally shall range between 6.0
and 9.0 except that swamp waters may have a pH as low
as 4.3 if it is the result of natural conditions.” 15A NCAC
2B .0211(3)(g) (2013).
107. DWR’s longstanding interpretation of the pH
standard for Class C water bodies is that the pH must be
6.0 to 9.0; but if the water body has a supplemental
classification of swamp waters (Sw), the lower range of pH
can be extended down to 4.3 (if the low pH is caused by
natural conditions). Thus, the pH standard for a C, Sw
water body would be 4.3 to 9.0. (Belnick, Tr. Vol. 4 pp. 524,
632; Reeder, Tr. Vol. 4 pp. 653-657)
108. No evidence was presented that DWR has ever
interpreted the pH standard differently.
109. No evidence was presented that DWR has ever
interpreted or applied the pH standard to require that low
pH must be maintained in Sw waters. (Belnick, Tr. Vol. 4
pp. 524, 631-632; Reeder, Tr. Vol. 4 pp. 653-657)
110. DWR does not interpret the standard to require site-
specific sampling and analysis. (Belnick, Tr. Vol. 4 p. 562)
111. Rather the standard itself defines “normal” pH to be
6.0 to 9.0 in Class C waters, with permissible lower values
(down to 4.3) in Sw waters if the lower values are caused
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by natural conditions. (Reeder, Tr. Vol. 4 pp.653-657)
112. DWR’s longstanding interpretation is also reflected
in NPDES permits issued across the State and in DWR’s
assessment of waters for impairment. (Reeder, Tr. Vol. 4
pp. 653-657)
113. Available data indicate that the existing pH in upper
Blounts Creek ranges from approximately 4.5 downstream
from the outfalls to approximately 5.3 to 6.5 at Dr. Bean’s
upstream sampling site. (Ex. P12; Ex. P23)
114. The expected pH of the discharge effluent is
approximately 6.9; and the pH in upper Blounts Creek with
the permitted discharge is expected to range from
approximately 6.3to 6.9. (Ex. R1 p.4; Ex. P21)
115. Dr. Bean agreed with the Kimley Horn report
prediction that the pH of upper Blounts Creek would not
exceed 6.94 at full discharge.10 (Ex. P12 p. 36)
116. The Permit requires that the pH of the permitted
discharge be within the range of 5.5 to 8.5. Thus, the pH
of upper Blounts Creek with the permitted discharge is
predicted and required to remain within the range of 4.3 to
9.0. (Ex. R29)
117. Petitioners’ attorneys conceded that the pH of
neither the discharge nor the effluent would be in excess of
9 or below 4.3. (Tr. Vol. 4 p. 657)
118. Based on the evidence before it, DWR concluded that
the Permit reasonably ensures compliance with the pH
water quality standard.
10 Dr. Eban Bean was a witness for Petitioners.
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Opinion of the Court
The superior court affirmed the ALJ’s findings and conclusions as to pH, as
follows:
At the time the Permit was issued, the pH standard
for Class C waters applicable to upper Blounts Creek read
as follows:
pH: shall be normal for the waters in the
area, which generally shall range between 6.0
and 9.0 except that swamp waters may have
a pH as low as 4.3 if it is the result of natural
conditions.
15A NCAC 02B .0211(3)(g) (2013).
In their pH Claim, Petitioners argue that the rule
required DWR to undertake site-specific sampling to
determine what “normal” pH is for the receiving waters in
the area of the proposed discharge, which, in turn, must be
maintained. Petitioners argue that: DWR did not
determine “normal” pH for upper Blounts Creek; the
Permit pH limit of 5.5 to 8.5 allows the permitted discharge
to cause upper Blounts Creek to exceed its “normal” pH;
and the Permit therefore fails to reasonably ensure
compliance with the pH standard.
DWR interprets the pH standard as setting a
maximum allowable pH of 9.0 and a minimum allowable
pH of 6.0, except that the lower limit may be as low as 4.3
in swamp waters, if pH below 6.0 is the result of natural
conditions. DWR interprets the rule as not requiring site-
specific sampling or testing. Based on its interpretation of
the pH rule, DWR established a Permit limit for pH of the
discharge effluent of 5.5 to 8.5.
The ALJ concluded that DWR’s interpretation is
reasonable and consistent with the plain language of the
rule, and rejected Petitioners’ pH claim because the
Permit’s pH limits reasonably ensure compliance with the
pH standard.
The Court reviews the ALJ’s factual determinations
under the whole record test and asserted legal errors and
interpretation of rules de novo.
The Court is not persuaded that the pH rule creates
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Opinion of the Court
or requires a site-specific standard for pH in receiving
waters. First, the interpretation of administrative
regulations “properly begins with the plain words” of the
regulation. Cole, 800 S.E.2d at 714. The “plain words” of
the pH rule do not require a site-specific standard or site-
specific sampling to determine a site-specific standard.
The rule states that pH “shall be normal for the waters in
the area,” and then provides that: (a) “normal for the
waters in the area” “generally shall range between 6.0 and
9.0,” and (b) a lower pH may be allowed (to a minimum of
4.3) “if it is the result of natural conditions.” DWR
interprets the rule itself to define what “normal” pH is for
a stream segment that has been assigned the
classifications Class C-Sw: 6.0 to 9.0, or 4.3 to 9.0 if the
lower pH results from natural conditions.
Second, as noted in the Final Decision, this
interpretation is supported by the EMC’s 2014 technical
amendment, which deleted the words “generally shall”
from the pH standard. 15A NCAC 02B .0211(14) (2015).
This technical amendment further clarifies that “normal
for waters in the area” is defined by the numerical range
set forth in the text of the rule. Moreover, the current text
of the pH rule is consistent with the language of other
water quality standards that explicitly state the numeric
limits required. See, e.g., 15A NCAC 02B .0211(3), (5), (6),
(9), (11). The only exception to the applicable pH range is
in swamp waters, where the lower limit may be decreased
— made less stringent — if low pH is the result of natural
conditions.
Third, the state’s water quality standards make
clear that site-specific standards are the exception, not the
norm, and are explicitly set forth where they exist. E.g.,
15A NCAC 02B .0110 (requiring site-specific strategies for
waters providing habitat for federally listed threatened
and endangered species), .0211(11) (allowing creation of
site-specific standard for metals), .0226 (providing that
“site-specific water quality standards may be granted by
the Commission on a case-by- case basis”). No site-specific
standards for pH are described or required in the water
quality rules applicable here.
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Fourth, even if Petitioners’ proposed interpretation
of the pH standard were reasonable, in reviewing agency
regulatory interpretations, the Court agrees with the ALJ’s
determination that DWR’s interpretation is reasonable and
consistent with the plain language of the regulation. The
Court accords deference to that interpretation.
Based on the Court’s de novo interpretation of the
pH rule, the Court upholds DWR’s interpretation of the pH
rule and declines to accept Petitioners’ claim that the rule
requires site-specific assessment.
The Court has reviewed the Final Decision findings
in relation to Petitioners’ pH Claim, see, e.g., FOF ¶¶90,
104-118, 145-151, 164-170, and based on its review of the
whole record, the Court concludes that substantial
evidence supports these findings, and that Petitioners
failed to carry their burden before OAH to prove DWR
acted erroneously or arbitrarily or otherwise unlawfully in
determining that the Permit reasonably ensures
compliance with the pH standard.
The Final Decision findings of fact and conclusions
of law and holding that Petitioners failed to carry their
burden and that the Permit reasonably ensures compliance
with the pH standard are affirmed and upheld.
The Superior Court correctly addressed each of the Petitioners’ arguments. As
the ALJ and Superior Court determined, the DEQ’s interpretation of the pH rules is
reasonable and consistent with the regulations. The regulations do not require that
the pH of swamp waters stay the same as they currently are and that no new
discharges be allowed if the discharge would change the pH. Again, the law requires
the balancing of many interests and expertise in analyzing the conditions of the
waters affected by each permit application. On de novo review of Petitioners’ issue
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Opinion of the Court
“of law[,]” the ALJ and superior court correctly concluded that DEQ’s issuance of the
Permit did not violate pH water quality standards of Blounts Creek.
F. Reopener Provision
Petitioners last argue that the “required reopener provision does not authorize
DWR to issue a permit expected to violate water quality standards.” (Original in all
caps.) Petitioner notes that
[f]or unexpected water quality standard violations
that occur after a permit is issued, DWR has the authority
to reopen and modify a permit—a condition that is
memorialized in standard conditions for all discharge
permits. See 15A N.C. Admin. Code 02H .0114(a) [App.
140]; 40 C.F.R. §§ 122.41(a) and 122.41(f) [App. 105-6] (R
p 1603). This standard condition has been referred to as a
“reopener provision.”
(Emphasis added.) Petitioners contend the superior court erred by determining that
the reopener provision “can absolve the agency of its obligation to deny a permit
without ensuring compliance with either the swamp waters classification or the pH
water quality standard.”
Martin Marietta argues that the premise of Petitioner’s argument is erroneous
because “the Permit reasonably ensures compliance with and does not violate any
water quality standards, and Petitioners failed to carry their burden of proof to show
otherwise.” As already noted, we agree. Neither the ALJ nor superior court
determined that a reopener provision can “absolve” DEQ of compliance with water
quality standards. Instead, the ALJ determined the Permit reasonably ensures
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compliance with the water quality standards, and the superior court determined the
Permit reasonably ensured compliance with all water quality standards except
“biological integrity,” but we have reversed that conclusion.
The Permit was issued based upon predictions of the expected impact of the
discharge of wastewater into Blounts Creek, but if those predictions prove to be
wrong, DEQ has authority to modify or revoke the Permit. To ensure compliance
with water quality standards, the ALJ found the Permit requires monitoring of
Blounts Creek after discharge of water from the quarry begins:
145. On July 24, 2013, DWR issued the final NPDES
Permit in the same form as it had been presented to the
EPA. (Belnick, Tr. Vol. 6 pp. 1053-1054; Ex. R29; Ex. R27).
146. The Permit terms include discharge controls,
effluent and instream monitoring, and benthic biological
monitoring requirements. (Ex. R29)
147. Effluent monitoring requirements include flow, total
suspended solids, total iron, turbidity, settleable solids,
total nitrogen, total phosphorus, temperature, and pH.
(Ex. R29 pp.3-4)
148. The Permit also requires instream monitoring at two
downstream stations (D1 and D2) for pH, salinity,
temperature, and turbidity. (Ex. R29)
149. The Permit requires benthic sampling at four
locations, the results of which must be submitted at least
six months prior to the expiration of the permit (which
expires every five years). (Belnick, Tr. Vol. 6 pp. 1054-
1055; Fleek, Tr. Vol. 7 pp. 1123-1128; Ex. R29)
150. The benthic monitoring provision requires
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submission of a sampling plan to DWR for approval prior
to sampling, and requires compliance with DWR sampling
protocols. (Fleek, Tr. Vol. 7 pp. 1123-1128; Ex. R29)
In addition, the Permit requires Martin Marietta “to obtain other state authorizations
for its proposed quarry” which also address “potential impacts on water quality,”
including “a certification under Section 401 of the Clean Water Act and a consistency
concurrence from the North Carolina Division of Coastal Management (“DCM”).” The
ALJ order also found:
153. On May 15, 2013, DWR issued Water Quality
Certification DWQ #11-1013 (“401 Certification”) to
Respondent-Intervenor. (Ex. MMM46)
154. The 401 Certification requires, among other things:
(a) that construction activities must follow best
management practices “so that no violations of state water
quality standards, statutes, or rules occur”; (b) a
monitoring plan for some of the same concerns raised and
addressed in the NPDES permit process, including:
“measures to monitor physical and chemical stability of
headwater streams to ensure that the project does not
result in violation of water quality standards,” and an
annual report summarizing the monitoring results; and (c)
that Martin Marietta conduct the authorized activities
“consistent with State water quality standards.” (Ex.
MMM46 pp. 4-6)
155. DWR is authorized to modify the 401 Certification,
if needed, to ensure compliance. (Belnick, Tr. Vol. 6 pp.
1064-1068; Ex. MMM46 p. 6)
156. In February 2014, DCM issued Coastal
Management Program Consistency Concurrence DCM
#20120010 (“Coastal Consistency Concurrence”) that
requires Respondent-Intervenor to, among other things: (a)
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coordinate with DCM to develop fisheries monitoring that
will assess impacts of the proposed project on fish species
and habitat in the Blounts Creek system; (b) coordinate
with DCM to develop a monitoring protocol that will assess
potential impacts of the proposed project on stream bank
stability within the Blounts Creek system; (c) comply with
the NPDES Permit and provide a copy of all benthic
monitoring reports to DCM; and (d) comply with the 401
Certification and provide a copy of all wetland hydrology
monitoring reports to DCM. (Belnick, Tr. Vol. 6 pp. 1057-
1059; Ex. R32 p. 2)
157. DWR may revisit the NPDES Permit and modify or
revoke it at any time based on information from the
monitoring and reporting requirements of the Permit as
well as information collected pursuant to the Coastal
Consistency Concurrence and the 401 Certification.
(Reeder, Tr. Vol. 7 pp. 1151-1153; Ex. R32; Belnick, Tr. Vol.
6 pp. 1059; Ex. R32; Ex. R29)
This Court addressed a similar argument regarding potential future water
quality violations in Deep River Citizens’ Coalition v. North Carolina Department of
Environment and Natural Resources, 165 N.C. App. 206, 598 S.E.2d 565 (2004). The
Petitioner argued the Environmental Management Commission (“EMC”) and trial
court erred by determining the Randleman Dam and Reservoir project “would not
violate certain water quality standards[,] specifically “water quality standards for
chlorophyll a.” Id. at 209, 598 S.E.2d at 567. Petitioners contended the computer
models used by EMC to predict the effects of the project on chlorophyll a level were
“flawed and unreliable.” Id. at 212, 598 S.E.2d at 569. Although some models
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predicted chlorophyll levels within the applicable standard, other computer models
predicted levels in excess. See id. This Court noted that when
the Director of the Division of Water Quality issued the 401
Certification, he was aware of the potential for water
quality standard violations and “specifically considered the
existing Randleman Lake Water Supply Watershed
Nutrient Management Strategy and the opportunity that
the State would have to impose additional restrictions on
nutrient sources in the event of actual or threatened water
quality standard violations after the reservoir is
constructed.” We agree with respondents that “no one will
know precisely whether or to what extent exceedances . . .
of the Standard will occur until construction of the dam and
impoundment of the lake have been completed” but that
mere “knowledge of the potential for exceedances . . . of the
chlorophyll a standard was not sufficient to preclude
DENR from issuing the 401 Certification.” The trial court
therefore had before it substantial and competent evidence
that, in the event water quality standards were actually
threatened, the State could impose additional restrictions
to avoid chlorophyll a violations. We conclude the trial
court did not err in concluding that DENR provided
reasonable assurance that the State’s water quality
standards would not be violated by the proposed project.
Id. at 213, 598 S.E.2d at 569 (brackets omitted).
Just as in Deep River, “no one will know precisely whether or to what extent”
violations of various water quality standards, including standards not addressed in
this opinion, may occur until after discharge of wastewater begins. Id. The ALJ and
superior court determined that the Permit reasonably ensures compliance with water
quality standards, but the Permit requires specific monitoring and reports, and if a
violation does occur, DEQ can modify or revoke the Permit to prevent further
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SOUND RIVERS, INC. V. NC DEP’T OF ENVTL. QUALITY
Opinion of the Court
violations of water quality standards. The reopener provision in no way allows DEQ
“to issue a permit expected to violate water quality standards” as Petitioner contends.
This argument is without merit.
IV. Conclusion
Ultimately, we affirm the superior court’s order as to the ALJ’s conclusions on
compliance with pH standards and swamp water and reverse the superior court’s
order as to the ALJ’s findings and conclusions on compliance with the biological
integrity standards. As a practical matter, this means the ALJ correctly determined
the Permit was properly and validly issued in accord with applicable regulations.
AFFIRMED in part; REVERSED in part.
Judge BROOK concurs in part and concurs in the result in part with separate
opinion.
Judge HAMPSON concurs in part and dissents in part with separate opinion.
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No. COA18-712 – Sound Rivers, Inc. v. N.C. Dep’t of Envtl. Quality
BROOK, Judge, concurring in part and concurring in the result in part.
I agree with the lead opinion’s rejection of Martin Marietta’s motion to dismiss.
I further agree with the lead opinion’s conclusion that Petitioners demonstrated their
rights were substantially prejudiced and are thus “person[s] aggrieved” within the
meaning of Section 150B-23(a). And I agree with the lead opinion’s rejection of
Petitioners’ argument pertaining to the reopener provision. Accordingly, I join these
portions of the opinion in full.
I also agree with the lead opinion that we must affirm the superior court’s order
as to DEQ’s compliance with the swamp waters supplemental classification and the
pH water quality standards. I further agree that we must reverse the superior court’s
order as to the ALJ’s findings and conclusions regarding compliance with the
biological integrity standard. I concur only in the result as to these issues, however,
because I would decide them strictly on the basis of the deference owed DEQ’s
interpretation of these regulations and the ALJ’s assessment of the record.
As the lead opinion notes, the crux of the dispute is whether DEQ
misinterpreted the biological integrity, swamp water, and pH regulations and, as a
result, failed to engage in a sufficiently rigorous process.
The scope of our review as to these issues is limited. “[U]nless clearly
erroneous or inconsistent with the regulation’s plain language[,]” we defer to “an
SOUND RIVERS, INC. V. N.C. DEP’T OF ENVTL. QUALITY
Brook, J., concurring in part and concurring in the result in part.
agency’s interpretation of its own regulations[.]” Hilliard v. N.C. Dep’t of Corr., 173
N.C. App. 594, 598, 620 S.E.2d 14, 17 (2005). And, in assessing whether the factual
record evinces compliance with the agency’s interpretation of its regulations, we are
similarly constrained:
[O]ur Supreme Court has made clear that even under our
de novo standard, a court reviewing a question of law in a
contested case is without authority to make new findings
of fact. Under the whole record test, the reviewing court
may not substitute its judgment for the ALJ’s as between
two conflicting views, even though it could reasonably have
reached a different result had it reviewed the matter de
novo. Instead, we must examine all the record evidence—
that which detracts from the ALJ’s findings and
conclusions as well as that which tends to support them—
to determine whether there is substantial evidence to
justify the ALJ’s decision. Substantial evidence is relevant
evidence a reasonable mind might accept as adequate to
support a conclusion. We undertake this review with a high
degree of deference because it is well established that ‘[i]n
an administrative proceeding, it is the prerogative and
duty of the ALJ, once all the evidence has been presented
and considered, to determine the weight and sufficiency of
the evidence and the credibility of the witnesses, to draw
inferences from the facts, and to appraise conflicting and
circumstantial evidence. The credibility of witnesses and
the probative value of particular testimony are for the ALJ
to determine, and the ALJ may accept or reject in whole or
part the testimony of any witness.’
N.C. Dep’t of Pub. Safety v. Ledford, 247 N.C. App. 266, 286-87, 786 S.E.2d 50, 63-64
(2016) (internal citations and marks omitted) (quoting City of Rockingham v. N.C.
Dep’t of Envt. & Natural Res., Div. of Water Quality, 224 N.C. App. 228, 239, 736
S.E.2d 764, 771 (2012)).
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SOUND RIVERS, INC. V. N.C. DEP’T OF ENVTL. QUALITY
Brook, J., concurring in part and concurring in the result in part.
These standards compel us to affirm the ALJ here. As discussed by the lead
opinion, the agency’s interpretations of its own regulations in question are not clearly
erroneous. Further, and again as chronicled by the lead opinion, there is evidence
(much of it unchallenged by Petitioners and thus binding on our Court) a reasonable
mind might accept as adequate to support the ALJ’s conclusions that DEQ complied
with its long-standing regulatory interpretations in issuing this permit.
I write separately because, pursuant to the controlling case law and standard
of review, I would stop there. Whatever the merits of agency deference, it governs
our deliberation and, coupled with the deference owed to the ALJ, decides this case.
I respectfully concur in part and concur in the result in part.
3
No. COA18-712 – Sound Rivers, Inc. v. N.C. Dep’t of Envtl. Quality
HAMPSON, Judge, concurring in part and dissenting in part.
I agree with the majority opinion’s conclusion Petitioners demonstrated their
rights were substantially prejudiced and are “person[s] aggrieved” within the
meaning of Section 150B-23(a). I also concur in the majority opinion’s conclusions
the trial court should be affirmed as to the ALJ’s conclusions on compliance with pH
standards and swamp water. I dissent, however, from the majority opinion’s
conclusion the trial court erred by failing to give DWR’s interpretation of the
“biological integrity standard” appropriate deference. Rather, I would affirm the trial
court’s conclusion DWR did not demonstrate compliance with the biological integrity
standard. As such, I would affirm the trial court’s Order in full including, specifically,
the determination the ALJ’s Final Decision should be reversed and the Permit be
revoked.
The role of an appellate court in reviewing a trial court’s order
affirming a decision by an administrative agency is two-fold. We
must: (1) determine the appropriate standard of review and, when
applicable, (2) determine whether the trial court properly applied
this standard. De novo review is applied where an error of law is
alleged.
York Oil Co. v. N.C. Dep’t of Env’t, Health, & Natural Res., 164 N.C. App. 550, 554,
596 S.E.2d 270, 273 (2004) (citations and quotation marks omitted). As the majority
opinion notes, the issue before this Court is a question of law reviewed de novo. See
N.C. Dep’t of Pub. Safety v. Ledford, 247 N.C. App. 266, 286, 786 S.E.2d 50, 63 (2016).
SOUND RIVERS, INC. V. N.C. DEP’T OF ENVTL. QUALITY
Hampson, J., concurring in part and dissenting in part.
“ ‘When the issue on appeal is whether a state agency erred in interpreting a
regulatory term, an appellate court may freely substitute its judgment for that of the
agency and employ de novo review.’ ” York Oil Co., 164 N.C. App. at 554, 596 S.E.2d
at 273 (citing Britt v. N.C. Sheriffs’ Educ. and Training Stds. Comm’n, 348 N.C. 573,
576, 501 S.E.2d 75, 77 (1998)). “[A]n administrative agency’s interpretation of its
own regulation should be accorded due deference unless it is plainly erroneous or
inconsistent with the regulation.” Id. at 554-55, 596 S.E.2d at 273 (citation and
quotation marks omitted). Consequently, “[a]lthough the interpretation of a statute
by an agency created to administer that statute is traditionally accorded some
deference by appellate courts, those interpretations are not binding.” WASCO LLC
v. N.C. Dep’t of Env’t & Nat. Res., 253 N.C. App. 222, 228, 799 S.E.2d 405, 410-11
(2017) (citing Savings & Loan League v. Credit Union Comm., 302 N.C. 458, 465-66,
276 S.E.2d 404, 410 (1981) (quotation marks omitted)).
“It is the public policy of the State to maintain, protect, and enhance water
quality within North Carolina.” N.C. Gen. Stat. § 143-211(b) (2019). Accordingly, the
North Carolina Environmental Management Commission is required to adopt water
quality standards for bodies of water throughout North Carolina. See N.C. Gen. Stat.
§§ 143-214.1, -212. As the majority opinion detailed, Blounts Creek is classified as a
Class C body of water with additional portions classified as Sw and NSW. Bodies of
water that fall under Class C classification are subject to the water quality standards
set forth in 15A N.C.A.C. 2B.0211. Notably, the best usage of Class C waters includes
2
SOUND RIVERS, INC. V. N.C. DEP’T OF ENVTL. QUALITY
Hampson, J., concurring in part and dissenting in part.
“aquatic life propagation and maintenance of biological integrity (including fishing
and fish), wildlife, secondary recreation, agriculture[.]” 15A N.C.A.C. 2B.0211(1)
(2018) (emphasis added).
“Biological integrity” is defined as “the ability of an aquatic ecosystem to
support and maintain a balanced and indigenous community of organisms having
species composition, diversity, population densities and functional organization
similar to that of reference conditions.” 15A N.C.A.C. 2B.0202(11) (2018). Therefore,
as a Class C body of water, emissions into Blounts Creek must not impair the
biological integrity of the water body. See 15A N.C.A.C. 2B.0211(2) (“Sources of water
pollution that preclude any of these uses on either a short-term or long-term basis
shall be considered to be violating a water quality standard[.]”).
I would affirm the trial court’s conclusion DWR “did not ensure reasonable
compliance with the biological integrity standard set forth in 15A N.C.A.C
02B.0211(2), 0220(2) and 0202(11).” I recognize this Court affords deference to an
agency’s interpretation of its own regulations; however, that necessarily means the
agency actually has an interpretation of the regulation. In the present case, the
Record does not indicate DWR had any interpretation for the “biological integrity
standard” that it employed when evaluating the water quality standards prior to
issuing the NPDES permit at issue to which deference is due. Instead—as the
majority opinion notes and the ALJ found—final decision maker and Director of DWR
3
SOUND RIVERS, INC. V. N.C. DEP’T OF ENVTL. QUALITY
Hampson, J., concurring in part and dissenting in part.
Mr. Reeder testified that he ‘[did not] know if there is such a thing’
as a biological integrity analysis, and he ‘never really heard of
such a thing’ in that there are no statutes or rules setting out
numeric standards or explicit methods or metrics by which DWR
must make a determination that an NPDES permit reasonably
ensures compliance with the biological integrity standard.
Further, “Mr. Fleek provided review, input, and opinions as to potential biological
effects, Mr. Fleek was not asked to provide, nor did he provide, an opinion as to
whether proposed discharge would comply with the biological integrity standard.”
The majority opinion here relies on the fact that there “are no statutes or rules
setting out numeric standards or explicit methods or metrics by which DWR must
make a determination” in concluding that DWR was entitled to our deference in its
interpretation of the biological integrity standard. Indeed, after the fact, DWR now
contends it complied with the biological integrity standard because the “Standard
Operating Procedure” encompasses the parameters defined in 15A N.C.A.C.
2B.0202(11) as supporting biological integrity. However, this ignores the
requirement that the parameters supporting biological integrity be considered
together and before the issuance of the NPDES permit.
In this regard, unlike the majority, I see no conflict between the ALJ’s findings
of fact and the trial court’s findings and legal conclusions. The ALJ documented the
actions taken by DWR in reviewing the Permit Application but yet accepts that none
of those actions were taken in the context of a specific analysis of biological integrity.
This is not in tension with the trial court’s decision. To the contrary, the trial court
4
SOUND RIVERS, INC. V. N.C. DEP’T OF ENVTL. QUALITY
Hampson, J., concurring in part and dissenting in part.
determined, notwithstanding DWR’s efforts to retroactively justify its decision, the
regulation is clear: in reviewing a Permit Application, DWR is required to undertake
sufficient analysis to ensure the biological integrity standard (as that term is defined)
is met.11 It is just as clear on this Record, DWR did not undertake that analysis in
reviewing the application.12 Thus, as the trial court concluded, DWR was not entitled
to any deference in how it interpreted or analyzed a biological integrity standard that
it failed to interpret or analyze. Put another way: interpreting the regulation
requiring DWR to reasonably ensure any discharge would not preclude the protected
use of Blounts Creek to maintain its biological integrity in a manner that allows DWR
to functionally ignore that very requirement during the permitting process would be
11 I do not read the trial court’s decision as declaring every aspect of the biological integrity
standard, its component parts, or the specific measurements required to be clear and unambiguous
and not subject to any deference in its interpretation and application. Rather, I read the trial court’s
decision as concluding simply that the regulation expressly and clearly requires DWR, in reviewing
an application, to specifically undertake steps to ensure compliance with the biological integrity
standard, including analysis of the definitional components of that standard. It is no stretch to further
conclude that in order to ascertain whether or not a proposed application would preclude “the ability
of an aquatic ecosystem to support and maintain a balanced and indigenous community of organisms
having species composition, diversity, population densities and functional organization similar to that
of reference conditions[,]” 15A N.C.A.C. 2B.0202(11) (2018), an affirmative determination of the
“reference conditions” is necessarily required.
12 Indeed, on this Record, there is reason to believe had DWR contemporaneously conducted
any type of analysis envisioned by the regulation, it may well have reached a different conclusion. For
example, the Record reflects email correspondence in which Mr. Fleek notes:
The biota presently found in the Blounts Creek system is adapted to
intermittent flow, low pH, and low dissolved oxygen. The proposed discharge
will alter the natural physcio-chemcial [sic] parameters of this system . . . . As
such, many of the taxa currently found in this system which are adapted to the
natural condition will be replaced by taxa that are adapted to more permanent
flows, higher pH, and higher dissolved oxygen levels. The taxa that are
naturally occurring to this type of stream system will be replaced with taxa
that are not typical to this type of system. . . . These types of streams, and the
taxa which inhabit them, are not normally found in North Carolina’s coastal
plain.
5
SOUND RIVERS, INC. V. N.C. DEP’T OF ENVTL. QUALITY
Hampson, J., concurring in part and dissenting in part.
plainly inconsistent with the plain language of the regulation and, thus, DWR is not
entitled to any deference in such an interpretation. Pamlico Marine Co., Inc. v. N. C.
Dep’t of Natural Resources, 80 N.C. App. 201, 206, 341 S.E.2d 108, 112 (1986)
(“Ordinarily, an administrative agency’s interpretation of its own regulation is to be
given due deference by the courts unless it is plainly erroneous or inconsistent with
the regulation.”(citation omitted)).
I therefore disagree with the majority opinion and would affirm the trial court’s
conclusion DWR did not reasonably demonstrate compliance with the biological
integrity standard. Accordingly, I would also affirm the trial court’s Order requiring
the Permit be revoked.
6