Category Archives: Drinking Water

Environmental Issues in the Courts

October 26, 2014.  Some recent state and federal court decisions dealing with   environmental controversies in North Carolina:

Cape Fear River Watch, et al v. Environmental Management Commission. An earlier post provides background on the issues in the case. In  brief,  several environmental organizations  appealed a 2012 decision by the  N.C.  Environmental Management Commission  (EMC)   interpreting state groundwater rules to give  older, unpermitted waste disposal facilities the same groundwater remediation  options available to  permitted waste disposal facilities. All of the coal ash ponds in N.C would be considered “unpermitted” waste disposal facilities and  Duke Energy intervened in the  Cape Fear River Watch case to support the EMC  decision.

In March, Superior Court Judge Paul Ridgeway reversed part of the  EMC decision. Judge Ridgeway  interpreted groundwater remediation rules to require  facilities permitted before December 30, 1983  to  immediately remove the source of any groundwater contamination.  The decision has significant implications for coal ash ponds and old, unlined landfills where the waste material disposed of in the facility often turns out to be the contamination source. Under Judge Ridgeway’s interpretation of the rules,   waste material causing groundwater contamination would have to be immediately excavated and removed.  Although state rules allow the use of other (potentially less costly) measures to control groundwater contamination,  pre-1984 ash ponds and landfills would not have any option other than removal of the waste.

Duke Energy appealed Judge Ridgeway’s  decision to the N.C. Court of Appeals.  But before the Court of Appeals could take up the case, two things happened to alter the course of the litigation.  First,  the General Assembly enacted legislation  intended to moot the  Ridgeway decision. Section 12 of Session Law 2014-122 (the Coal Ash Management Act of 2014)  amends a groundwater statute to direct the EMC to require remediation of  groundwater contamination at a waste disposal facility without regard to the date  the facility had been permitted.  Legislators acknowledged that the provision was intended to reverse  Judge  Ridgeway’s interpretation of  the groundwater  remediation rules  as applied to facilities permitted before  December 30, 1983. As a practical matter, the new law allows DENR to approve an alternative means of controlling groundwater contamination associated with a  coal ash pond or pre-1984  landfill but does not guarantee approval.

Then,  on October 10, 2014,  the N.C. Supreme Court issued an  order removing  Cape Fear River Watch v. Environmental Management Commission from the Court of Appeals docket  to  the Supreme Court docket.  The Supreme Court removed the case on its own motion, surprising the parties and their lawyers.  (The court  issued similar orders in four other civil cases at around the same time.)  The court’s action  has no recent precedent and little precedent  in the court’s history. The one-paragraph  order offered no explanation for removal of the case to the Supreme Court.  The next step in the Cape Fear River Watch case will now be the filing of briefs in the  N.C. Supreme Court.

City of Asheville v. State of N.C. and Metropolitan Sewerage District of Buncombe County.  In 2013, the General Assembly enacted a law transferring the City of Asheville’s water system to the  Metropolitan Sewerage District of Buncombe County.  Session Law 2013-50,  drafted  to apply only  to the City of Asheville water system,  had the unprecedented effect of transferring the system’s assets  (infrastructure and a 17,000 acre watershed) and debts (over $67 million in water bonds) to a new entity without the city’s consent and without compensation.  Two earlier posts, here and here, provide background on the legislative action and constitutional issues raised by the law.

In June, N.C. Superior Court Judge Howard Manning issued an order concluding that Session Law 2013-50 violated several provisions in the  N.C. Constitution. Among Judge Manning’s findings:

♦ The law violated Article II, Section 24  of the N.C. Constitution which prohibits the General Assembly from adopting  certain types of legislation  to apply in  only one jurisdiction in the state. Judge Manning concluded Session Law 2013-50 violated  constitutional  prohibitions against local acts relating to “health, sanitation or the abatement of nuisances”  and local acts regulating  nonnavigable streams.  Although  Session Law 2013-50 did not mention the City of Asheville or the  Metropolitan Sewerage District of Buncombe County  by name,  it described water systems affected by the law  in a way that only applied to the Asheville system.  As a result, Judge Manning found the law to be an unconstitutional  local act addressing  health and sanitation (operation of a drinking water system) and regulation of nonnavigable streams.

♦  The law violated Article I, Section 19 by transferring the Asheville water system to a different entity without the city’s consent and without any rational basis. Article I, Section 19, known as the “law of the land” clause of the N.C. Constitution, has been interpreted to require both due process and equal protection. Judge Manning found Session Law 2013-50 violated the clause by depriving the City of Asheville of property without any  rational basis, suggesting a due process violation and expressly finding a denial of equal protection.

♦ Other sections of  Judge Manning’s  order concluded that Session Law 2013-50 violated Article I, Section 19 and Article 1, Section 35 (a broad reservation of rights) by taking city-owned property and by doing so without providing compensation for the property.

One key to the court’s decision:  operation of a  water system is considered to be a proprietary rather than a governmental function. Proprietary functions don’t involve peculiarly governmental powers and could also be carried out by a nongovernmental entity. Other examples of proprietary functions would be  operation of an electric utility, a recreational facility  or a sports venue.   With respect to proprietary functions,  Judge Manning concluded that  local governments have  the same constitutional protection against  uncompensated taking of property as a nongovernmental entity.

Judge Manning’s order did not address the city’s argument that the law also unconstitutionally interfered with contracts between the city and bondholders.  The state, throughout the Attorney General’s Office, indicated an intent to appeal the decision to the N.C. Court of Appeals. A final decision by the appeals court would not be expected for about a year.

Erica Y. Bryant, et al v. United States, 11th Circuit Court of Appeals, October 14, 2014.  The plaintiffs  had sued the United States government seeking compensation for health problems allegedly caused by exposure to contaminated drinking water at the Camp Lejuene Marine Corps Base near Jacksonville,  North Carolina.  A recent U.S. Supreme Court decision in another North Carolina groundwater contamination case, Waldberger v.  CTS, Inc.,   held that the state’s 10-year statute of repose barred a lawsuit alleging injury and property damage caused by groundwater contamination filed more than 10 years after the  last act contributing to the contamination —  even though the plaintiffs first learned of the contamination much later.  (You can find more on the Waldberger decision in an earlier post. The same post also includes additional background on the contamination problem at Camp Lejuene.)

The N.C. General Assembly responded to the  Waldberger decision  by enacting a law excluding claims for property damage and personal injury related to contaminated groundwater from the 10-year statute of repose. See Session Law 2014-17.  The law was written to apply to both pending cases and cases filed after its enactment. In the Bryant decision, however, the 11th Circuit Court of Appeals ruled that the new law could not retroactively apply to pending cases. The appeals court treated the 10-year statute of repose as a sort of property interest benefitting (in this case) the U.S. government. The court ruled  that the state legislature could not retroactively remove that benefit.  The decision turned, in part, on the court’s conclusion that Session Law 2014-17 changed rather than clarified the state’s prior law.

The 11th Circuit decision seems to leave the Camp Lejeune plaintiffs without any legal remedy for long-term health effects allegedly caused by exposure to the contaminated drinking water.

Ecological Flows: Round 3

June 30, 2014. Last week, the House approved a new  version of  House Bill 1057 (originally a study of interbasin transfer issues).  The House  added a new section requiring the Environmental Management Commission (EMC) to study the method used for establishing minimum stream flows necessary to protect stream ecology  — or “ecological flows”. In the meantime, the bill would prevent the Department of Environment and Natural Resources (DENR) from developing river basin hydrologic models based on the recommendations of an ecological flow study just completed in late 2013 — work the  General Assembly itself directed in 2010 legislation.

The state’s Division of Water Resources (DWR) has been  working on  river basin hydrologic models for more than a  decade. The models turn information like  water volume; seasonal flow;  user demand (such as drinking water intakes); and permitted wastewater discharges  into a tool for predicting how water supply will  respond  to different conditions.  Federal relicensing of North Carolina’s hydropower dams prompted development of some of the earliest hydrologic models;  those models became  the basis for new hydropower license conditions.  DWR has completed models  for most of the state’s major river basins; the piece missing from the models has been a placeholder for  water needed to maintain aquatic ecosystems.

State and federal permit reviews for large water supply projects  (like reservoirs and new drinking water intakes) have long required analysis of impacts on aquatic life as well as downstream water users. The analysis has generally been done by the permit applicant on a project by project basis.   Session Law 2010-143 required DENR to characterize the ecology of the state’s river basins; identify the flow needed to maintain the integrity of those ecosystems;  and incorporate the “ecological flow” into each  river basin hydrologic model.     S.L. 2010-143 did not give the “ecological flow” component any regulatory effect; the law simply set in motion a process for looking more systematically at the impact of stream flows on aquatic ecosystems. Even though the law had no immediate regulatory impact,  it immediately encountered opposition from some municipalities  — led by the City of Raleigh —  out of concern that development of ecological flows would  lead to greater limits on public water supply projects.

As required under S.L. 2010-143,  DENR  convened a science advisory board to  recommend a  method for identifying the minimum stream flow necessary to maintain ecosystem integrity in each of the state’s river basins.  The science advisory board included representatives of agriculture, local government, electric utilities, conservation organizations and both state and federal regulatory agencies. The advisory board’s 2013 report titled “Recommendations for Estimating Flows to Maintain Ecological Integrity in Streams and Rivers in North Carolina” just became available in November 2013. The report recommends a   minimum “flow-by” (the percentage of  flow that remains in a stream after allowing for withdrawals ) of 80-90%.  Based on the recommendation, DENR intends  to use 85% flow-by as a planning tool, but will not  change  existing permitted flows or individually determined flow regimes.  DENR  has also indicated  that  more data will be needed before implementing other recommendations in the report. You can find a DWR presentation on use of the science advisory board’s report here .

House Bill 1057  appears to reject outright the work done by the science advisory board and requires the  EMC to do a new review of methods used to establish ecological flows — again based on the provisions of  S.L. 2010-143. The bill also allows the EMC to  create another scientific advisory panel. It isn’t clear what would be accomplished other than a further delay in consideration of ecological needs in river basin wear supply modeling.

In some ways, the ecological flows controversy parallels the earlier (successful) effort to limit use of sea level rise projections in state planning.  Opposition to possible policy changes no longer waits for the actual policy discussion — instead, the opposition has organized to limit use of the  underlying scientific or technical information.

Recycling Wastewater for Drinking Water — Without a Permit

June 19, 2014. In one of many quick changes over the last few legislative days, Senate Bill 163 (“Protect Landowner’s Water Rights”)  entered the telephone booth of the House Environment Committee yesterday and emerged as an entirely different bill entitled “Reclaimed Water as Source Water”.  The House adopted the new version of S 163 today,  making a significant change to state water quality  and drinking water laws with little debate.

The bill endorses the use of highly treated wastewater, classified under  state water quality rules as “reclaimed” water, to supplement drinking water supplies.  The policy makes sense  under the right conditions.  Treated wastewater  already indirectly supplements  drinking  water supplies; many wastewater treatment plants discharge to streams and rivers that also serve as  water supply sources for downstream communities. State reclaimed water rules also allow direct  use of reclaimed water for many non-potable purposes, including  landscape irrigation, easing demand on the drinking water supply.

Senate Bill 163,  as adopted by the House, goes further and  for the first time allows reclaimed wastewater to be used to directly supplement a drinking water supply. The problem — the bill appears to allow a water system to add reclaimed wastewater to a drinking water reservoir without a water quality permit.  If that is the  effect of the bill, it represents a significant change in the way the state protects the quality of drinking water supplies and  likely conflicts with the federal Clean Water Act.

Under the bill,   “notwithstanding any other provision of law, a local water supply system may combine reclaimed water with source water treated to provide potable water supply”  in an impoundment controlled by  the  water system.  The bill does not define “impoundment”,   but under state drinking water rules an “impoundment” means a reservoir.  That interpretation would also be consistent with  other  Senate Bill 163 language describing the addition of reclaimed water  as occurring before the water goes to the water treatment plant.

An impoundment used as a  public water supply source  would  usually be considered a “water of the state” under water quality laws. Most impoundments  have  been created by damming a river or stream segment to store water for  water supply and continue to release water through the dam to maintain downstream flows.  Wastewater  (even treated wastewater) can only be discharged to a water of the state under a  permit that  insures the discharge  will not result in violation of a water quality standards.  Under G.S. 143-215.1, it is unlawful to:

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 classification.

An impoundment used as a drinking water source has specific water quality standards (adopted in state rules) to protect its  use as a water supply. Discharge of treated wastewater to a water supply source can be allowed,  but only  under permitted limits.  Unfortunately, the “notwithstanding” language in Senate Bill 163  seems to sweep away both the requirements of state  water quality permitting laws and the N.C.  Drinking Water Act.  Nothing in the bill itself requires the addition of reclaimed wastewater to be done under a water quality permit  or in compliance with water quality standards for public water supplies. Instead, the conditions in the bill read like a self-contained set of standards that rely on a 20% limit on the proportion of reclaimed water to total water produced by the impoundment  and a minimum  5-day holding time in the impoundment as a substitute for meeting water quality standards.

If — as it appears — the bill allows discharge of reclaimed water to a “water of the state” without a permit, it also  conflicts with federal  law. Many impoundments that are  “waters of the state”  would also be considered “waters of the United States” under the federal Clean Water Act.  Federal law  makes it unlawful to discharge a pollutant into waters of the United States without a Clean Water Act permit — a requirement that state law cannot waive.

Senate Bill 163 will now go back to the Senate for approval or disapproval of the new  House version of the bill.  If the Senate rejects the House rewrite, the bill will have to go to a conference committee to work out the differences between the two chambers.

If the House did not intend to allow the discharge of treated wastewater to a water supply reservoir without meeting state and federal water quality laws, it would be  helpful to clarify  the bill  before final adoption.