Superior Court Decision Could Have Broader Impacts at Sites with Groundwater Contamination

The following is a article written by Sean Sullivan of Troutman Sanders providing an opinion on the possible broader implications of the recent decision concerning Duke Energy’s Ash Ponds.

Decision on Duke Energy’s NC Ash Ponds has Broader Implications

March 10, 2013

The effects of last week’s decision by Wake County Superior Court Judge Ridgeway will go far beyond requiring Duke Energy to take immediate action regarding some of its ash ponds in North Carolina, Cape Fear River Watch v. NC Envt’l Mgmt Comm’n, No. 13 CVS 00093, slip op. (Sup. Ct. Wake Cty.  Mar. 6, 2014). The sweeping language of the opinion will force a large number of parties to abate sources of groundwater contamination completely – as soon as those sources are identified – regardless of the human health or environmental risk the contamination presents.  The decision reverses a declaratory ruling issued by North Carolina’s Environmental Management Commission in late 2012 and it upends a policy that the Department of Environment and Natural Resources (DENR) has followed for more than 20 years. 

Many Permitted Facilities are “Unpermitted” under the 2L Rules and Affected by the Decision

At sites where groundwater contamination is the result of “unpermitted” activities, North Carolina’s rules for groundwater cleanups require a responsible party to “take immediate action to eliminate the source or sources of contamination,”15A N.C.A.C. 02L.0106(c)(2) (emphasis added). Any activity that was first permitted prior to December 30, 1983 is considered to be “unpermitted,” along with all truly unpermitted activities,15A N.C.A.C. 02L.0106(e)(2).  Thus, a great number of older facilities that hold permits to operate wastewater treatment lagoons or apply wastewater to the land will be affected by this decision. 

Decision Eliminates DENR’s Discretion to Make Risk-Based Decisions on Source Abatement

Historically, DENR has interpreted the requirement to immediately eliminate sources of contamination at “unpermitted” facilities as being tempered by another provision of the 2L Rules.  Section 0106(f) provides that a responsible party must abate, contain or control primary pollution sources (such as buried drums, waste products or free products in soil).  Because this second provision allows containment or control of primary pollution sources, in addition to abating them completely, DENR’s view has been that it can make a risk-based judgment as to whether control or containment of ongoing releases is sufficient to satisfy the requirement to “eliminate” a source of contamination.  The decision ends this practice at “unpermitted” sites.

Now, “unpermitted” facilities must undertake immediate abatement of source areas, regardless of whether those sources (or the related contamination) pose a threat to anyone or anything.  Sooner or later, someone will argue that “unpermitted” wastewater lagoons and land application units must be closed immediately if they are contributing to groundwater contamination – just as they have done regarding Duke Energy’s ash ponds.

Need for Action by the Regulated Community

The decision – though plausible on first reading – reflects a lack of familiarity with how groundwater cleanups, and environmental decision-making in general, should proceed.  It also highlights the need for interested parties to offer the judges on the Court of Appeals and the North Carolina Supreme Court additional background and perspective on the function of the 2L Rules, the broader implications of the case and the importance of deference to the agencies charged with implementing complex regulatory programs.

Author – Sean Sullivan, Troutman Sanders

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