Environmental — Administrative – Wastewater Discharge – Circumstantial Evidence – Single Violation

House of Raeford Farms, Inc. v. North Carolina Department of Environment & Natural Resources (Lawyers Weekly No. 15-07-0725, 26 pp.) (John Tyson, J.) Appealed from Duplin County Superior Court (John Nobles Jr., J.) N.C. App.

Holding: Even though respondent showed that petitioner violated G.S. § 143-215.1(a)(6) by discharging material into a creek, the single discharge did not also support a finding of a separate violation of 15A N.C.A.C. 2B.0211(3)(c), which sets forth water quality standards for Class C waters.

We affirm the superior court’s finding of a violation and its upholding of only one penalty. However, we remand for further findings as to respondent’s consideration of the G.S. § 143B-282.1(b) factors in setting the amount of the penalty.

The superior court required petitioner to “show that Respondent substantially prejudiced its rights and 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.” The superior court did not err in its allocation of the burden of proof.

Respondent’s circumstantial evidence showed that petitioner caused or permitted waste to be discharged into Cabin Branch Creek without an applicable permit and in violation of G.S. § 143-215.1(a)(6). Respondent showed that (1) the creek directly behind the facility contained a large volume of sludge; (2) the material in the creek was visually similar to the material in petitioner’s primary wastewater lagoon; (3) the sludge in the creek appeared to be fresh; (4) the creek was clear upstream from petitioner’s facility; (5) petitioner paid $20,000 to pump the sludge from the creek into its lagoon, and it is “unheard of” for a company to accept unknown contaminants into its wastewater system; (6) petitioner lowered the level of its primary lagoon to accommodate repairs within a week of the discovery of the sludge in the creek; and (7) respondent’s investigation ruled out other possible upstream sources for the sludge.

Respondent imposed the maximum $25,000 penalty permitted under G.S. § 143-215.6A(a), but respondent failed to show that it adequately considered the factors set out in G.S. § 143B-282.1(b). We remand for further findings as to this issue.

Respondent penalized petitioner for violating § 143-215.1(a)(6) by causing or permitting a 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. Respondent also penalized petitioner for violating 15A N.C.A.C. 2B.0211(3)(c), which merely sets forth the water quality standards for Class C waters.

G.S. § 143-215.1(a)(6) allows for a penalty for violating the water quality standards set forth in 15A N.C.A.C. 2B.0211(3)(c). While under other circumstances there may be grounds to impose separate penalties associated with a single discharge, a violation of § 143-215.1(a)(6) does not exist without a violation of the water quality standard. The superior court properly determined the two penalties were duplicative and impermissible.

Affirmed in part and remanded in part.