State of N.C. v. The Chemours Co. FC

IN THE COURT OF APPEALS OF NORTH CAROLINA
2022-NCCOA-413
No. COA21-225
Filed 21 June 2022
Bladen County, No. 17 CVS 580
STATE OF NORTH CAROLINA, ex rel. ELIZABETH S. BISER, SECRETARY,1
NORTH CAROLINA DEPARTMENT OF ENVIRONMENTAL QUALITY, Plaintiff,
CAPE FEAR RIVER WATCH, Plaintiff-Intervenor,
v.
THE CHEMOURS COMPANY FC, LLC, Defendant.
Appeal by Proposed Intervenor Cape Fear Public Utility Authority from order
entered 30 November 2020 by Judge Douglas B. Sasser in Bladen County Superior
Court. Heard in the Court of Appeals 15 December 2021.
Attorney General Joshua H. Stein, by Special Deputy Attorney General
Francisco J. Benzoni and Assistant Attorney General Asher P. Spiller, for
Plaintiff-Appellee State of North Carolina.
Southern Environmental Law Center, by Geoffrey R. Gisler, Jean Y. Zhuang,
and Kelly Moser, for Plaintiff-Intervenor-Appellee Cape Fear River Watch.
Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P., by Joseph A. Ponzi,
George W. House, and V. Randall Tinsley, for Proposed Plaintiff-Intervenor-
Appellant Cape Fear Public Utility Authority.
1 Elizabeth S. Biser, who became Secretary of the North Carolina Department of
Environmental Quality in June 2021, has been substituted for Michael S. Regan. N.C. R.
App. P. 38(c) (“When a person is a party to an appeal in an official or representative capacity
and during its pendency dies, resigns, or otherwise ceases to hold office, the action does not
abate and the person’s successor is automatically substituted as a party.”).
STATE V. THE CHEMOURS COMPANY FC, LLC
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Opinion of the Court
Robinson, Bradshaw & Hinson, P.A., by R. Steven DeGeorge, and Wachtell,
Lipton, Rosen & Katz, by John F. Savarese, for Defendant-Appellee The
Chemours Company FC, LLC.
COLLINS, Judge.
¶1 Proposed Intervenor Cape Fear Public Utility Authority (“CFPUA”) appeals
from the trial court’s order denying its 8 September 2020 motion to intervene in this
environmental action brought in 2017 by the State of North Carolina against
Defendant, The Chemours Company FC, LLC. CFPUA argues that the trial court
erred by denying its motion to intervene as untimely, erred by denying intervention
as of right, and abused its discretion by denying permissive intervention. Because
the trial court did not abuse its discretion by denying CFPUA’s motion as untimely,
we affirm.
I. Background
¶2 Chemours owns the Fayetteville Works facility (“Facility”), a chemical
manufacturing plant adjacent to the Cape Fear River in Bladen County, North
Carolina. Chemours produces certain per- and polyfluoroalkyl substances (“PFAS”),
including a chemical commercially known as GenX, at the Facility. The Facility
discharges water into the Cape Fear River through multiple avenues. CFPUA, a
public utility authority which provides potable water to residents of New Hanover
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2022-NCCOA-413
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County and the City of Wilmington, owns and operates a raw water intake on the
Cape Fear River downstream of the Facility.
¶3 On 7 September 2017, the State, through the Department of Environmental
Quality (“DEQ”), filed a Verified Complaint, Motion for Temporary Restraining
Order, and Motion for Preliminary Injunctive Relief against Chemours alleging
violations of multiple water quality laws and regulations based on discharges of PFAS
from the Facility into groundwater and the Cape Fear River. The State sought a
temporary restraining order requiring Chemours to “immediately cease discharging”
certain substances “from its manufacturing process into surface waters” and to
“continue to prevent the discharge of process wastewater containing GenX into
waters of the State.” The State also sought preliminary and permanent injunctive
relief. The following day, the trial court entered a Partial Consent Order requiring
Chemours to continue existing measures to “prevent the discharge of process
wastewater containing GenX . . . into waters of the State,” immediately prevent the
discharge of certain compounds identified in the complaint, and provide certain
information to DEQ and the Environmental Protection Agency.
¶4 On 16 October 2017, CFPUA sued Chemours in the United States District
Court for the Eastern District of North Carolina (“Federal Suit”). See Complaint,
Cape Fear Public Utility Authority v. The Chemours Co. FC, LLC, No. 7:17-cv-195,
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(E.D.N.C. 2017), E.C.F. No. 1.2 In the Federal Suit, CFPUA and other regional water
suppliers and governmental entities assert claims for public nuisance, private
nuisance, trespass to real property, trespass to chattels, negligence, negligence per
se, failure to warn, and negligent manufacture against Chemours. Along with the
other plaintiffs, CFPUA seeks compensatory damages, punitive damages, and
injunctive relief. See Amended Master Complaint of Public Water Suppliers at 6-7,
45-54, Cape Fear Public Utility Authority v. The Chemours Co. FC, LLC, No.
7:17-cv-195 (E.D.N.C. 2019), E.C.F. No. 75.
¶5 The day after filing its Federal Suit, CFPUA moved to intervene in the present
action (“First Motion to Intervene”). CFPUA sought to intervene permissively and as
of right under N.C. Gen. Stat. § 1A-1, Rule 24. CFPUA asserted that it had “an
interest in the injunctive relief granted” in this action “to assure that such relief
adequately protects CFPUA’s interests” and contended that its “ability to obtain relief
may be impaired if the State either fails to prevail (in whole or in part) . . . or if the
State compromises this underlying action in a manner detrimental to CFPUA.”
CFPUA also argued that its interests were “not adequately represented by the State”
because its Federal Suit asserted “interests unique to a public water supply authority
We take judicial notice of CFPUA’s filings in the federal court. See State v. Watson,
2
258 N.C. App. 347, 352, 812 S.E.2d 392, 395 (2018) (“[O]ur courts, both trial and appellate,
may take judicial notice of documents filed in federal courts.”).
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which are not addressed or protected by the relief sought by the State” and the State’s
failure to provide public notice and opportunity to comment prior to entry of the
Partial Consent Order “call[ed] into question whether the State recognize[d]
CFPUA’s rights.”
¶6 CFPUA withdrew its First Motion to Intervene on 15 November 2017 after the
parties stipulated that the State would provide notice and comment procedures “with
respect to any proposed settlement between” the State and Chemours. The parties
also stipulated that the Partial Consent Order was “not a final resolution of any
claims asserted” by the State.
¶7 On 9 April 2018, the State filed an Amended Complaint and Motion for
Preliminary Injunctive Relief containing further allegations based on information
gathered during further investigation and seeking additional injunctive relief.3
¶8 The State published notice of a Proposed Consent Order and commenced a
public comment period on 26 November 2018. In a 17 December 2018 comment,
CFPUA argued that the Proposed Consent Order was “fundamentally flawed in a
number of important respects,” including that certain remedial provisions “effectively
3 The requested injunctive relief included requiring Chemours to address air
emissions of GenX Compounds, address other sources of GenX Compounds “such that they
no longer cause or contribute to any violations of North Carolina’s groundwater rules,” refrain
from discharging process wastewater into the Cape Fear River prior to issuance of a new
permit, account for other discharges, and generally “[c]ease and abate all ongoing violations
of North Carolina’s water and air quality laws.”
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abandon[ed] the downstream users of the Cape Fear River, leaving them to fend for
themselves in private litigation.” CFPUA protested that the Proposed Consent Order
would provide filtration systems for private well owners whose water exceeded a
threshold level of contamination with certain PFAS but would not provide
comparable relief for downstream users whose water presented the same level of
contamination. In an additional comment, CFPUA provided results of “recent PFAS
testing at the CFPUA water intake on the Cape Fear River, and of the treated
‘finished’ water.” According to CFPUA, “out of 51 sampling events” of raw and
finished water, only 4 fell below the threshold for private well filtration under the
Proposed Consent Order.
¶9 CFPUA again moved to intervene on 20 December 2018 (“Second Motion to
Intervene”). CFPUA alleged in its Second Motion to Intervene that it was unaware
the parties were negotiating or had reached a proposed settlement until the Proposed
Consent Order was published. CFPUA contended that the Proposed Consent Order
did not “account for or seek to remedy the ongoing harms inflicted on CFPUA and its
customers.” CFPUA set its Second Motion to Intervene for hearing but removed the
motion from the calendar on 10 January 2019.
¶ 10 The State moved for the entry of the Revised Proposed Consent Order on
20 February 2019. The State, Chemours, and Cape Fear River Watch, another
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proposed plaintiff-intervenor,4 each consented. At a hearing on the Revised Proposed
Consent Order, counsel for CFPUA requested the trial court withhold entering the
order until CFPUA’s Board of Directors considered whether it should withdraw the
Second Motion to Intervene. The trial court declined to do so and entered the Revised
Proposed Consent Order as a Consent Order on 25 February 2019.
¶ 11 The Consent Order obligates Chemours to undertake compliance measures to
address air, groundwater, surface water, and drinking water contamination and
imposes monitoring and reporting requirements. In addition, Paragraph 12 of the
Consent Order establishes a process for amending the Consent Order “to reduce
PFAS contamination in the Cape Fear River and in the raw water intakes of
downstream public water utilities on an accelerated basis[.]” Paragraph 12 provides
that,
within six months of entry of this Order, Chemours shall
submit to DEQ and Cape Fear River Watch a plan
demonstrating the maximum reduction in PFAS loading
from the Facility (including loading from contaminated
stormwater, non-process wastewater, and groundwater) to
surface waters . . . that are economically and
technologically feasible, and can be achieved within a two-
year period . . . . The plan shall be supported by interim
benchmarks to ensure continuous progress in reduction of
PFAS loading. If significantly greater reductions can be
Cape Fear River Watch is a Ҥ 501(c)(3) nonprofit public interest organization . . .
4
that engages residents of the Cape Fear watershed through programs to preserve and
safeguard the river.” Cape Fear River Watch filed a motion to intervene on 12 December
2018.
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achieved in a longer implementation period, Chemours
may propose, in addition, an implementation period of up
to five years supported by interim benchmarks to ensure
continuous progress in reduction of PFAS loading. . . .
Chemours shall simultaneously transmit the plan to
downstream public water utilities. DEQ will make DEQ
staff available to meet with downstream public water
utilities to receive input on the plan.
Upon reaching an agreement, the parties were required to file a joint motion to amend
the Consent Order “to incorporate any agreed upon reductions as enforceable
requirements” of the Consent Order. If the parties were unable to reach an
agreement within eight months of entry of the Consent Order, they were permitted
to either jointly stipulate to additional time or to “bring any dispute regarding the
additional reductions before the Court for resolution.”
¶ 12 The Consent Order also released and resolved
civil and administrative claims for injunctive relief and
civil penalties by Plaintiff against Chemours relating to the
release of PFAS from the Facility that have been or could
have been brought based on information known to DEQ
prior to the lodging of the original Proposed Consent Order
on November 28, 2018 for past and continuing violations of
the following statutes and regulations: the Clean Water
Act and regulations promulgated thereunder; the Clean
Air Act and regulations promulgated thereunder; and the
North Carolina statutes and regulations referenced in the
Complaint, the Amended Complaint and the [Notices of
Violation] . . . . Furthermore, DEQ agrees that, based on
information known to DEQ prior to the lodging of the
original Proposed Consent Order on November 28, 2018,
this Consent Order addresses and resolves any violation or
condition at the Facility insofar as it could serve as the
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basis for a claim, proceeding, or action pursuant to Section
13.1(a) or (c) of North Carolina Session Law 2018-5.
The Consent Order did not “release[] Chemours from any liability it may have to any
third parties arising from Chemours’ actions or release[] any claims by any third
party, including the claims in” CFPUA’s Federal Suit.
¶ 13 Chemours submitted a proposed plan under Paragraph 12 to DEQ on
26 August 2019. CFPUA commented on this submission on 27 September 2019 and
met with DEQ to discuss the submission on 30 September 2019. Chemours submitted
a revised proposal on 4 November 2019 which “was made publicly available on DEQ’s
website.” Following negotiations between the parties, the State released a Proposed
Addendum to the Consent Order for public comment on 17 August 2020.
¶ 14 CFPUA filed a Renewed and Amended Motion to Intervene on 8 September
2020 (“Third Motion to Intervene”). CFPUA again alleged that the Consent Order,
and further alleged that the Proposed Addendum, provided disparate standards for
groundwater users near the Facility and surface water users downstream of the
Facility. CFPUA therefore sought a declaration that the Consent Order and Proposed
Addendum were arbitrary and capricious and an abuse of discretion under the North
Carolina Administrative Procedure Act, and denied equal protection in violation of
the state and federal constitutions. CFPUA also sought a declaration that the
violations alleged by the State in its amended complaint have occurred or are
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threatened, and the Consent Order and Proposed Addendum failed to abate these
violations.
¶ 15 The State moved to enter the Proposed Addendum on 6 October 2020 and filed
a corrected motion two days later. The trial court heard CFPUA’s Third Motion to
Intervene and the motion for entry of the Proposed Addendum on 12 October 2020.
The trial court entered the Proposed Addendum as an Addendum to Consent Order
Paragraph 12 (“Addendum”) following the hearing and an order denying CFPUA’s
Third Motion to Intervene on 30 November 2020. The trial court concluded that
CFPUA’s Third Motion to Intervene was untimely and that CFPUA failed to meet
the requirements for either permissive intervention or intervention as of right.
¶ 16 CFPUA appealed the denial of its Third Motion to Intervene to this Court.
II. Discussion
¶ 17 CFPUA first argues that the trial court erred by denying its Third Motion to
Intervene as untimely.
¶ 18 It is well-established that “[w]hether a motion to intervene is timely is a matter
within the sound discretion of the trial court[.]” Hamilton v. Freeman, 147 N.C. App.
195, 201, 554 S.E.2d 856, 859 (2001); see also Malloy v. Cooper, 195 N.C. App. 747,
750, 673 S.E.2d 783, 786 (2009); Home Builders Ass’n of Fayetteville N.C. Inc. v. City
of Fayetteville, 170 N.C. App. 625, 630-31, 613 S.E.2d 521, 525 (2005). An abuse of
discretion occurs only where the trial court’s ruling is “manifestly unsupported by
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reason” or is “so arbitrary that it could not have been the result of a reasoned
decision.” White v. White, 312 N.C. 770, 777, 324 S.E.2d 829, 833 (1985).
¶ 19 Both intervention of right and permissive intervention are governed by N.C.
Gen. Stat. § 1A-1, Rule 24, which provides:
(a) Intervention of right.--Upon timely application anyone
shall be permitted to intervene in an action:
(1) When a statute confers an unconditional right
to intervene; or
(2) When the applicant claims an interest relating
to the property or transaction which is the
subject of the action and he is so situated that
the disposition of the action may as a practical
matter impair or impede his ability to protect
that interest, unless the applicant’s interest is
adequately represented by existing parties.
(b) Permissive intervention.--Upon timely application
anyone may be permitted to intervene in an action[:]
(1) When a statute confers a conditional right to
intervene; or
(2) When an applicant’s claim or defense and the
main action have a question of law or fact in
common. When a party to an action relies for
ground of claim or defense upon any statute or
executive order administered by a federal or
State governmental officer or agency or upon
any regulation, order, requirement, or
agreement issued or made pursuant to the
statute or executive order, such officer or
agency upon timely application may be
permitted to intervene in the action. In
exercising its discretion the court shall
consider whether the intervention will unduly
delay or prejudice the adjudication of the
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rights of the original parties.
N.C. Gen. Stat. § 1A-1, Rule 24 (2020).
¶ 20 A motion to intervene, whether of right or permissively, must be timely. See
id.; State ex rel. Easley v. Philip Morris Inc., 144 N.C. App. 329, 332, 548 S.E.2d 781,
783 (2001) (citing N.C. Gen. Stat. § 1A-1, Rule 24). “Timeliness is the threshold
question to be considered in any motion for intervention.” State Employees Credit
Union, Inc. v. Gentry, 75 N.C. App. 260, 264, 330 S.E.2d 645, 648 (1985) (citation
omitted). In determining the timeliness of a motion to intervene, the trial court must
consider “(1) the status of the case, (2) the possibility of unfairness or prejudice to the
existing parties, (3) the reason for the delay in moving for intervention, (4) the
resulting prejudice to the applicant if the motion is denied, and (5) any unusual
circumstances.” Procter v. City of Raleigh Bd. of Adjustment, 133 N.C. App. 181, 183,
514 S.E.2d 745, 746 (1999) (citing Gentry, 75 N.C. App. at 264, 330 S.E.2d at 648).
“In situations where a judgment has been entered, motions to intervene are granted
only upon a finding of ‘extraordinary and unusual circumstances’ or a ‘strong showing
of entitlement and justification.’” Id. (citing Gentry, 75 N.C. App. at 264, 330 S.E.2d
at 648).
1. Status of the Case
¶ 21 CFPUA argues that the trial court failed to appropriately assess the first factor
bearing on timeliness, the status of the case. CFPUA specifically contends that the
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trial court erred because the Consent Order “is not a final judgment, and does not
constitute a judgment for purposes of the intervention analysis.” We disagree.
¶ 22 The trial court addressed this factor as follows:
This Court entered judgment in this case in the form of a
Consent Order on February 25, 2019, over eighteen months
ago. CFPUA’s delay must be measured from entrance of
this Consent Order. CFPUA was fully aware of the
Consent Order. In fact, CFPUA was present in Court on
the day it was entered. There are no extraordinary or
unusual circumstances that justify CFPUA’s long delay.
Therefore, this factor weighs heavily against CFPUA and
is itself a sufficient basis for denial of CFPUA’s Third
Motion to Intervene.
(Citations omitted).
¶ 23 The Consent Order contains a comprehensive release of
civil and administrative claims for injunctive relief and
civil penalties by Plaintiff against Chemours relating to the
release of PFAS from the Facility that have been or could
have been brought based on information known to DEQ
prior to the lodging of the original Proposed Consent Order
on November 28, 2018 for past and continuing violations of
the following statutes and regulations: the Clean Water
Act and regulations promulgated thereunder; the Clean
Air Act and regulations promulgated thereunder; and the
North Carolina statutes and regulations referenced in the
Complaint, the Amended Complaint and the [Notices of
Violation] . . . . Furthermore, DEQ agrees that, based on
information known to DEQ prior to the lodging of the
original Proposed Consent Order on November 28, 2018,
this Consent Order addresses and resolves any violation or
condition at the Facility insofar as it could serve as the
basis for a claim, proceeding, or action pursuant to Section
13.1(a) or (c) of North Carolina Session Law 2018-5.
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In consideration of this release, Chemours agreed to be bound by the obligations
detailed in the Consent Order. The parties thus resolved the State’s claims by
agreeing to implement the Consent Order, and the trial court retained jurisdiction
only “for the duration of the performance of the terms and provisions of [the] Consent
Order to effectuate or enforce compliance with the terms of [the] Consent Order[.]”
¶ 24 Citing to the Consent Order’s requirement that the parties develop and
implement a plan for toxicity studies of certain PFAS, a provision permitting
Chemours to request less frequent sampling for certain wastewater and stormwater
sampling after two years, and Paragraph 12, CFPUA argues that the Consent Order
is not a final judgment. Though these provisions envision approval and enforcement
by the trial court, they do not obviate the Consent Order’s resolution of the State’s
claims and therefore do not diminish the Consent Order’s effect as a final judgment.
Under the release of claims in the Consent Order, there is to be no further
adjudication of the merits of the State’s claims. See Duncan v. Duncan, 366 N.C. 544,
545, 742 S.E.2d 799, 801 (2013) (“A final judgment generally is one which ends the
litigation on the merits.” (quotation marks and citation omitted)).
¶ 25 The Consent Order in this case is analogous to the consent decree this Court
treated as a final judgment when analyzing the timeliness of a motion to intervene
in State ex rel. Easley v. Philip Morris Inc. The Philip Morris consent decree provided
for “the creation of a non-profit corporation to control fifty percent of all monies”
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received under a settlement agreement, “subject to the North Carolina General
Assembly’s approval of the creation of the non-profit corporation prior to 15 March
1999.” 144 N.C. App. at 330, 548 S.E.2d at 782. Pursuant to the consent decree, the
trial court entered a consent order “to create a private trust to benefit tobacco growers
and quota owners in North Carolina and other states” and “retained jurisdiction to
interpret, implement, administer and enforce the trust agreement.” Id. at 331, 548
S.E.2d at 782. Approximately ten months after entry of the consent decree and two
and a half months after entry of the consent order, the proposed intervenors sought
to intervene “on behalf of all North Carolina taxpayers” and filed a proposed
complaint in intervention “alleging numerous constitutional and statutory violations
in the implementation” of the consent decree and consent order. Id. This Court
treated the consent decree as a final judgment although it required further action,
including the creation and approval of a non-profit; the trial court retained
jurisdiction over future proceedings; and payments were to continue for
approximately 25 years. Id. at 333-34, 548 S.E.2d at 784.
¶ 26 In the present case, the trial court did not err by treating the Consent Order
as a final judgment when assessing the timeliness of CFPUA’s Third Motion to
Intervene. The trial court therefore did not fail to appropriately assess the status of
the case and properly required CFPUA to demonstrate “extraordinary and unusual
circumstances” or a “strong showing of entitlement and justification” for intervention.
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See Gentry, 75 N.C. App. at 264, 330 S.E.2d at 648.
2. Possible Unfairness or Prejudice to Existing Parties
¶ 27 CFPUA also argues that the trial court abused its discretion by concluding that
the risk of unfairness or prejudice to the existing parties weighed against the
timeliness of CFPUA’s Third Motion to Intervene. The trial court addressed this
factor as follows:
CFPUA asserts that “there is no risk of unfairness or
prejudice to the existing parties.” The Court disagrees.
The Court finds that CFPUA’s intervention would be
highly prejudicial to the existing parties especially given
the extraordinary relief that CFPUA seeks—specifically, a
trial and a judgment declaring the Consent Order and the
proposed Addendum arbitrary and capricious and
unconstitutional. Intervention would set back and
significantly delay, or even derail, the parties’ extensive
efforts to reach settlement and address PFAS
contamination from the Facility. Indeed, the Court finds
that CFPUA’s intervention could delay relief for CFPUA’s
own customers as well as for the many thousands of North
Carolinians who stand to benefit from the numerous PFAS
reduction measures required in the Consent Order and
Addendum. This factor, even taken alone, is sufficient for
this Court to deny CFPUA’s Third Motion to Intervene.
(Citations omitted).
¶ 28 In its proposed complaint in intervention, CFPUA sought a trial and
declaratory judgment that the Consent Order and subsequent Addendum were
arbitrary and capricious, unconstitutional, and in violation of DEQ’s statutory
mandate. Despite the Consent Order’s detailed release of the State’s claims, CFPUA
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also sought a declaration that “the statutory and regulatory violations alleged by the
State in this action have occurred or are threatened.”
¶ 29 The trial court reasoned that CFPUA’s intervention for these purposes would
subject the numerous remedial matters addressed in the Consent Order and
Addendum, which the trial court found were “the product of years of negotiation as
well as time-intensive analysis and investigation involving numerous experts across
multiple fields of specialty,” to relitigation. The trial court did not abuse its discretion
by concluding that CFPUA’s intervention “would be highly prejudicial to the existing
parties” and this factor weighed against the timeliness of CFPUA’s intervention. See
Home Builder’s Ass’n of Fayetteville, 170 N.C. App. at 631, 613 S.E.2d at 525(concluding that intervention “would prejudice the [existing parties] by destroying
their settlement”); see also Charles Schwab & Co. v. McEntee, 225 N.C. App. 666,
675-76, 739 S.E.2d 863, 869 (2013) (concluding that the trial court did not abuse its
discretion by denying permissive intervention where intervention in the estate
dispute “might have eradicated the [settlement agreement] and delayed adjudication
of the rights of the Named Parties, potentially to the detriment of the creditors and
other beneficiaries of the Estate”).
¶ 30 CFPUA challenges the trial court’s consideration of “how CFPUA’s
intervention might interfere with the existing parties’ settlement negotiations and
decisions” as “untethered to any prejudice which was caused by CFPUA’s delay.”
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CFPUA argues that instead, the trial court should only have considered prejudice to
the parties arising from the period between “the date CFPUA learned DEQ would not
protect its interests” and the filing of its Third Motion to Intervene, a period CFPUA
contends was just 26 days.
¶ 31 CFPUA now asserts that it was unaware DEQ would not protect its interests
until DEQ published the Proposed Addendum on 17 August 2020. However, CFPUA
alleged that DEQ had failed to adequately represent its interests on multiple
instances prior to 17 August 2020. In its First Motion to Intervene, filed 17 October
2017, CFPUA alleged that the State had failed to provide notice and an opportunity
for comment prior to filing the original complaint or proposing the Consent Order.
CFPUA also alleged that the relief sought would not adequately represent “interests
unique to a public water supply authority” such as CFPUA. In an April 2018
memorandum in opposition to a motion to dismiss its Federal Suit, CFPUA argued
that DEQ’s amended complaint did not seek “relief for third-parties who have
suffered injury as a result of the contamination.” In its Second Motion to Intervene,
filed 20 December 2018, CFPUA declared that it was “clear now that CFPUA’s
interests are not adequately represented by the State in this action.” CFPUA further
argued that DEQ had “given little attention to CFPUA’s interests in pursuing this
enforcement action or to advocating or negotiating relief for the harms caused by the
pollutant discharges that are adversely impacting downstream users[.]”
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Additionally, as the trial court determined, the entry of the Consent Order on
25 February 2019 placed CFPUA “on notice regarding the requirements for the
Addendum.” The trial court found—and CFPUA does not contest—that (1) CFPUA
commented on Chemours’ initial proposal under Paragraph 12 on 27 September 2019;
(2) CFPUA met with DEQ three days later, in part to discuss the proposal;
(3) Chemours published a revised proposal for compliance with Paragraph 12 on its
website on 4 November 2019; and (4) CFPUA again met with DEQ on 17 July 2020.
CFPUA’s 27 September 2019 comment criticized the proposed addendum as
“fundamentally flawed in a number of important respects.”
¶ 32 CFPUA’s argument that the trial court considered too broad a period in
assessing prejudice to the existing parties because CFPUA did not “learn[] DEQ
would not protect its interests” until 17 August 2020, and therefore delayed just 26
days before filing its Third Motion to Intervene, is without merit. See Philip Morris,
144 N.C. App. at 333, 584 S.E.2d at 783 (noting that while proposed intervenors
contended the plaintiff had “failed to represent their interests throughout the
process,” “information about the underlying case ha[d] been widely available” in the
ten-month period between entry of judgment and the motion to intervene).
3. Reason for Delay in Moving for Intervention
¶ 33 CFPUA also argues that the trial court abused its discretion because it “made
no effort to address CFPUA’s evidence and argument on the changed circumstances”
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that led to its Third Motion to Intervene. To the contrary, the trial court rejected
CFPUA’s explanation that changed circumstances accounted for its delay in seeking
to intervene. In its Third Motion to Intervene, CFPUA argued that the Consent
Order was “based on a flawed premise” that “its implementation would result in the
continued reduction of PFAS levels in the Cape Fear River.” CFPUA contended that
data collected after the entry of the Consent Order revealed that “PFAS levels in the
Cape Fear River have been variable—not decreasing—and are largely dependent on
river flows.” Presented with these arguments, the trial court determined that
CFPUA had “articulated no legitimate reason for its delay in seeking intervention.”
¶ 34 As the trial court noted, the Consent Order put CFPUA on notice of the
requirements to which the Addendum had to conform. Paragraph 12 specified that
the parties were required to formulate “a plan demonstrating the maximum
reductions in PFAS loading from the Facility (including loading from contaminated
stormwater, non-process wastewater, and groundwater) to surface waters . . . that
are economically and technologically feasible, and can be achieved within a two-year
period[.]”
¶ 35 Contrary to CFPUA’s argument that changed circumstances justified its delay,
the record indicates that CFPUA had a longstanding concern that implementation of
the Consent Order would not reduce PFAS levels in the Cape Fear River to its
satisfaction. In its Second Motion to Intervene, CFPUA alleged that “even if the
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Opinion of the Court
[Facility] immediately ceases all emissions and discharges of PFAS pollutants into
the Cape Fear River, those pollutants will continue to contaminate the surface water
in the Cape Fear River for decades to come (since pollution in the vegetation, soils,
and groundwater in a large and unknown radius around the [Facility] and in river
sediments will continue to migrate into the river water through groundwater flow
and surface run-off)[.]” Similarly, in its Federal Suit, CFPUA alleged that
contaminants originating from the Facility would be “re-introduced into the waters
of the Cape Fear River and be subject to being transported to CFPUA’s water intake
and introduced into CFPUA’s public water supply system” when “disturbed by the
natural processes of the river ecosystem, including the normal use of the river by
people and water-craft.” See Complaint at 22, Cape Fear Public Utility Authority v.
The Chemours Co. FC, LLC, No. 7:17-cv-195 (E.D.N.C. 2017), E.C.F. No. 1.
¶ 36 The trial court therefore did not abuse its discretion by rejecting CFPUA’s
changed circumstances theory, determining that CFPUA did not offer a legitimate
reason for its delay, and concluding that CFPUA’s delay therefore weighed heavily
against the timeliness of its Third Motion to Intervene.
4. Prejudice to the Party Seeking to Intervene
¶ 37 CFPUA also challenges the trial court’s conclusion that the potential prejudice
to CFPUA of denying intervention weighed heavily against the timeliness of CFPUA’s
intervention.
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¶ 38 The trial court addressed this factor as follows:
First, CFPUA has its own pending litigation against
Chemours. As CFPUA acknowledges, the Consent Order
and Addendum do not in any way impair CFPUA’s efforts
to vindicate its interests in its separate federal litigation.
To the contrary, the Consent Order expressly provides that
Chemours is not released from any liability it may have to
any third parties arising from Chemours’ actions. Second,
with respect to the Consent Order, counsel for CFPUA
stated in open court that the Consent Order “address[es]
many of the concerns, if not most of the concerns, [CFPUA]
initially raised . . . .” Counsel for CFPUA also
acknowledged that “the requirements of the order are
beneficial to the public.” With respect to the Addendum,
Chemours is required to achieve maximum feasible
reductions of PFAS contributions from residual sources at
the Facility to the Cape Fear River on an expedited basis.
Downstream communities, including CFPUA and its
customers, will be the primary beneficiaries of this
accelerated remediation.
(Citations omitted).
¶ 39 CFPUA argues that the trial court’s analysis of the potential prejudice to
CFPUA “fails to consider the changed circumstances” that it contends led to its Third
Motion to Intervene. However, as discussed above, the trial court did not abuse its
discretion by rejecting CFPUA’s changed circumstances theory.
¶ 40 CFPUA also contends that its Federal Suit will not provide the same relief as
direct involvement in this action and is “an inferior means to protect [CFPUA’s]
interests in prompt and effective remediation of the contamination.” The trial court’s
analysis, however, did not assume that the Federal Suit would provide the same relief
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as CFPUA’s intervention. Instead, the trial court reasoned that CFPUA would
remain able to pursue its Federal Suit absent intervention and the implementation
of the Consent Order and Addendum would benefit downstream users, including
CFPUA. CFPUA does not challenge the trial court’s findings that the Consent Order
“contains numerous provisions to substantially reduce PFAS discharges and
emissions to the environment from ongoing operations at the Facility,” the Addendum
“requires measures to substantially reduce PFAS loading to surface water from
historic sources including contaminated groundwater and contaminated soils,” and
such sources are “currently the most significant source[s] of PFAS loading to the Cape
Fear River.”
¶ 41 The trial court’s assessment that the potential prejudice to CFPUA weighed
against intervention is not “manifestly unsupported by reason” or “so arbitrary that
it could not have been the result of a reasoned decision.” See White, 312 N.C. at 777,
324 S.E.2d at 833.
5. Unusual Circumstances
¶ 42 CFPUA argues that the trial court abused its discretion in concluding that
there are “unusual circumstances that warrant denying CFPUA’s [Third Motion to
Intervene] as untimely.” The trial court addressed this factor as follows:
[T]he “unusual circumstances” that [CFPUA] lists are
unrelated to its long delay and are irrelevant to its failure
to timely move for intervention. While extraordinary or
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Opinion of the Court
unusual circumstances are generally analyzed to support a
late motion to intervene, the Court finds that, here, there
are unusual circumstances that warrant denying CFPUA’s
motion to intervene as untimely. Unlike most settlements,
both the Consent Order and the Addendum were publicly
noticed, allowing CFPUA and other members of the public
a chance to be heard on both documents prior to entry by
the Court. CFPUA availed itself of this opportunity and
commented on both the Consent Order and the Addendum
as well as on Chemours’ submission describing how it
proposed to comply with the requirements of Paragraph 12
of the Consent Order. Moreover, the Consent Order was
unusual in that it expressly provided downstream utilities,
including CFPUA, with a unique role in the process that
led to development of the Addendum. Specifically, the
Consent Order required Chemours to share its plan under
Paragraph 12 with CFPUA and other utilities and required
DEQ to make relevant staff available to meet with
downstream utilities, including CFPUA, to discuss their
comments on Chemours’ plan. Finally, the nature of this
Addendum also constitutes an unusual circumstance
favoring the denial of the motion to intervene. The
Addendum addresses an issue of paramount importance to
the citizens of North Carolina—the requirement of
significant reductions of PFAS loading to surface waters
from residual sources at the Facility. Intervention at this
stage could delay or derail implementation of measures
necessary to achieve these reduction[s]. These unusual
circumstances weigh against the timeliness of CFPUA’s
Third Motion to Intervene.
(Citations omitted).
¶ 43 CFPUA does not challenge the trial court’s determination that the notice and
comment procedures, CFPUA’s involvement under Paragraph 12, and the public
benefit of prompt implementation of the Consent Order and Addendum were unusual
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circumstances weighing against CFPUA’s intervention. Instead CFPUA argues, as
it did in its Third Motion to Intervene, that “unusual circumstances” existed in DEQ’s
“consistent, carefully considered unwillingness to confer with CFPUA about the
remediation measures that DEQ is considering and that directly impact [CFPUA’s]
customers.” CFPUA suggests that this amounts to “conduct by an existing party that
makes it more difficult for potential intervenors to apprehend the need to
intervene[.]”
¶ 44 In support of this argument, CFPUA cites Stallworth v. Monsanto Co., 558
F.2d 257 (1977), but Stallworth is distinguishable from the present case. There, the
plaintiff-employees opposed the defendant-employer’s request to notify non-party
employees of the suit and “give them a reasonable opportunity to intervene, or be
joined as defendants[.]” Id. at 260-61. The trial court denied the request to notify
the non-party employees and subsequently entered a consent order partially settling
the case. Id. at 261. The non-party employees “first felt the impact” of the consent
order ten days later and filed their motion to intervene “just under one month after
the entry of” the order. Id. at 261-62. The trial court denied the motion to intervene
as untimely, but the Fifth Circuit reversed. Id. at 260. The Fifth Circuit reasoned
that “[s]ince the plaintiffs urged the district court to make it more difficult for the
[non-party employees] to acquire information about the suit early on,” the plaintiffs
should not “be heard to complain that [the non-party employees] should have known
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about it or appreciated its significance sooner.” Id. at 267. The refusal to permit
notification of non-party employees of the pendency and potential impact of the
lawsuit “constitute[d] an unusual circumstance which tilt[ed] the scales toward a
finding that the” motion to intervene was timely. Id.
¶ 45 Here, by contrast, the trial court’s unchallenged findings of fact demonstrate
that CFPUA has long been aware of this litigation, made comments on multiple
instances, and conferred with DEQ on several occasions. Additionally, CFPUA’s
argument that the State’s conduct impeded its ability to apprehend the need to
intervene is undercut by CFPUA’s repeated assertions, beginning early in the
proceedings, that the State failed to adequately protect CFPUA’s interests.
¶ 46 The trial court did not abuse its discretion in concluding that the unusual
circumstances cited by CFPUA are “unrelated to its long delay and are irrelevant to
its failure to timely move for intervention,” and to the contrary, “there are unusual
circumstances that warrant denying CFPUA’s” Third Motion to Intervene as
untimely.
III. Conclusion
¶ 47 The trial court did not abuse its discretion in determining that CFPUA’s Third
Motion to Intervene was untimely. Because “[t]imeliness is the threshold question to
be considered in any motion for intervention,” Gentry, 75 N.C. App. at 264, 330 S.E.2d
at 648, we affirm the trial court’s order denying CFPUA’s Third Motion to Intervene
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without reaching CFPUA’s arguments that the trial court erred by denying
intervention as of right and abused its discretion by denying permissive intervention
under Rule 24(a) and (b).
AFFIRMED.
Judges DIETZ and ARROWOOD concur.