Environmental — Civil Practice – Subject Matter Jurisdiction – NPDES Permit – Egg Farm

Rose Acre Farms, Inc. v. North Carolina Department of Environment & Natural Resources (Lawyers Weekly No. 15-02-0777, 18 pp.) (James Dever III, C.J.) 5:14-cv-00147; E.D.N.C.

Holding: Since Congress chose state courts to be the means by which parties may challenge state permitting decisions under the Clean Water Act, this court lacks subject matter jurisdiction to decide plaintiff’s action, which seeks a declaratory judgment that certain discharges of pollutants from its egg farm are exempt from federal permitting requirements and that the respondent-agency does not have authority under the CWA to require plaintiff to obtain a National Pollutant Discharge Elimination System permit.

The court grants defendants’ motion to dismiss for lack of subject matter jurisdiction.

Where defendants are a state agency and its employees in their official capacities, defendants are not “citizens” for purposes of 28 U.S.C. § 1332. Therefore, the court does not have diversity jurisdiction.

The court has federal question jurisdiction over state-law claims that implicate significant federal issues.

G.S. § 143-215.10C states in part, “No person shall … operate an animal waste management system for a dry litter poultry facility that is required to be permitted under 40 [C.F.R. §] 122 … without first obtaining an individual permit or a general permit under this Article.” Thus, the North Carolina statute that determines whether persons must obtain a National Pollutant Discharge Elimination System (NPDES) permit explicitly relies on federal regulations.

In addition, the parties actually dispute the federal issue in this case. Plaintiff claims federal law does not obligate it to obtain an NPDES permit because any discharge that might occur falls under the CWA’s agricultural stormwater exception.

Furthermore, this case presents a nearly pure issue of law as to whether the agricultural stormwater discharge exception in the CWA covers the possible precipitation-related discharge of litter and manure into plaintiff’s detention pond. Resolution of this legal issue would affect the behavior of the parties moving forward. An ultimate interpretation of the CWA’s agricultural discharge exception would be controlling in similar cases involving other concentrated animal feeding operations.

However, viewing holistically the cooperative federal-state structure that the CWA created, it follows that Congress chose state courts to be the means by which parties may challenge state permitting decisions. This court’s exercise of jurisdiction over the defendant-agency’s decision to require plaintiff to obtain an NPDES permit, particularly in light of ongoing state-court litigation, would upset the congressionally determined balance between federal and state courts and would potentially open the doors to any party, aggrieved by a state agency’s permitting decision under state law, to file a federal challenge.

Accordingly, the court may not review the merits of this action without disturbing the congressionally approved balance of federal and state judicial responsibilities.

Alternatively, the court exercises its discretion under the Declaratory Judgment Act to decline to hear plaintiff’s claim.

Dismissed.