- The North Carolina Department of Environmental Quality is asking the state's highest court to reverse a lower court's ruling in a dispute with the North Carolina Farm Bureau.
- The Farm Bureau challenged three conditions DEQ included in general animal waste permits developed in 2019.
- A unanimous state Court of Appeals panel agreed with the Farm Bureau in November 2023 that the targeted conditions were rules that should have proceeded through the Administrative Procedure Act's state rule-making process.
The North Carolina Department of Environmental Quality is urging the state’s highest court to reverse a lower court’s decision in a case pitting the department against the North Carolina Farm Bureau. The dispute involves conditions tied to state animal waste permits.
The state Court of Appeals ruled in November 2023 that the targeted conditions are rules that should have proceeded through the Administrative Procedure Act’s rule-making process. The state Supreme Court agreed in October to hear DEQ’s appeal.
“Largely disregarding the text of the APA, the Court of Appeals determined that an agency action ‘is generally applicable if it applies to most situations,’” lawyers representing DEQ wrote in a court brief Wednesday. “It then erroneously concluded that ‘the conditions within General Permits’ — i.e., all of the conditions — ‘are generally applicable regulations under the NCAPA. They are rules.’”
DEQ distinguished between individual and general permits for animal waste. Farm owners can choose either option. The targeted conditions are tied to the general permits.
“The Court of Appeals’ construction of the statutory phrase ‘general applicability’ is not consistent with the APA,” DEQ argued. “The conditions in the General Permits are not ‘generally applicable.’ To be ‘generally applicable’ the conditions must apply to — i.e., have some direct effect on — entities of their own force. The conditions in these General Permits do not.”
“They apply to no one and are not enforceable against anyone unless and until an owner or operator affirmatively opts into coverage under them. Here, contrary to the Court of Appeals’ assumptions, the record shows that permittees have a right to opt for an individual permit rather than a general one. The General Permits are not generally applicable,” the brief continued.
“The Court of Appeals’ ruling has sweeping consequences. Although the Farm Bureau only challenged three conditions, under the court’s logic, each of the over eighty conditions in the 2019 permits and every previous iteration of these General Permits is a rule and should have gone through rulemaking. In reaching this holding, the Court of Appeals has worked a fundamental reconstruction of this legislatively mandated program and transformed it from a permitting program into simply a suite of rules,” DEQ lawyers wrote.
DEQ also labeled the Appeals Court’s standard “unworkable.” “Under most permitting regimes, permittees can choose whether to opt for a general permit or an individual one. A general permit therefore only ‘applies to most’ if most permittees choose to opt into it after the permit is issued. It makes no sense for a general permit to be considered a ‘rule’ only after the permit is finalized and permittees decide whether to apply for a general or individual permit — and therefore be required to go through APA rulemaking only at that time,” the brief explained.
“The legislature never intended this result,” DEQ argued.
The Appeals Court determined that three challenged provisions in general animal waste permits were rules. DEQ’s Division of Water Resources should have followed North Carolina’s official rule-making process before adopting those conditions, according to appellate judges.
“In a unanimous opinion below, the Court of Appeals barred the Division from enforcing three onerous general permit conditions against approximately 2,000 of the State’s cattle, swine, and wet-waste poultry farms,” Farm Bureau lawyers wrote in a December 2023 court filing. “The panel concluded the three conditions are rules under N.C.G.S. § 150B-2(8a) because they ‘are generally applicable regulations’ and held the agency should have adopted the conditions as rules before including them in three animal waste general permits.”
The Appeals Court decision would force DEQ to route the three challenged permit conditions through a process tied to North Carolina’s Administrative Procedure Act.
“While DEQ contends this case has significant public interest and involves legal principles of major significance to the jurisprudence of the State, its Petition is simply a request to side-step the APA’s rulemaking process,” Farm Bureau lawyers wrote. “DEQ argues that if the Court of Appeals decision stands, it will be required to ‘undergo the cumbersome and time-consuming rulemaking process’ if it wishes to revise the general permits in the future. It also asserts the Court of Appeals misinterpreted one of its cases in reaching its conclusion.”
“But DEQ’s Petition fails to explain how being required to follow the APA’s well-established and longstanding rulemaking process will result in ‘hugely disruptive consequences.’ And its critique of the panel’s well-reasoned and carefully written opinion asks this Court to engage in simple error correction, which is not this Court’s primary role in our Judicial Branch,” the Farm Bureau court filing added.
DEQ’s Supreme Court petition explained why the state agency believes the high court should reverse appellate judges.
“For over twenty years, Petitioner Division of Water Resources of the Department of Environmental Quality has periodically issued three general permits — one each for animal waste management systems at certain swine, cattle and liquid-waste poultry farms,” wrote state government lawyers representing DEQ. “Each time it has issued these permits, it has done so under the procedures set forth for issuing general permits, and has not adopted these permits as rules.”
“Dissatisfied with three of the new conditions included in the most recent re-issuance, Respondent N.C. Farm Bureau Federation, Inc. contested the permits in the Office of Administrative Hearings,” the DEQ petition continued. “Instead of challenging the substantive bases for those conditions, the Farm Bureau asserted that these three conditions were rules under the Administrative Procedure Act and should have been adopted through rulemaking.”
An administrative law judge agreed with the Farm Bureau, but a Superior Court judge reversed that decision. Then a three-judge Appeals Court panel reversed the trial court’s decision last November.
Appellate judges agreed with the Farm Bureau that three challenged conditions tied to general animal-waste permits adopted in 2019 were state rules. None of the three conditions proceeded through the state’s official rule-making process in the Administrative Procedure Act. All of those conditions are invalid, according to the Appeals Court opinion.
Each of the 2,000 affected hog, cattle, and poultry farms across North Carolina uses a “lagoon-and-spray-field system” to address animal waste.
“Farm Bureau specifically challenged three General Permit conditions: (1) farmers with waste structures within the 100-year floodplain must install monitoring wells; (2) certain farmers must conduct a Phosphorus Loss Assessment Tool (“PLAT”) analysis; and (3) all permitted farmers must submit an annual report summarizing the system’s operations,” wrote Judge Jeff Carpenter for the unanimous appellate panel.
Each of the challenged conditions had been tied to a settlement agreement DEQ reached with the North Carolina Environmental Justice Network and other groups after a federal civil rights complaint.
“Here, any farmer who uses certain animal-waste management systems must obtain a permit and comply with its conditions,” Carpenter wrote. “These conditions are authoritative, as the [Division of Water Resources] has the authority to grant permits, which are required to operate the animal-waste systems. Further, the Secretary of Environmental Quality has the authority to assess civil penalties for thousands of dollars if a farmer fails to comply with these conditions.”
“Therefore, the General Permit conditions are regulations under the NCAPA because they are ‘authoritative rule[s] dealing with details’ of animal-waste management systems,” Carpenter wrote.
“The DEQ argues that General Permits are not generally applicable because farmers can obtain Individual Permits instead,” Carpenter added. “First, we question the DEQ’s premise that Individual Permits are guaranteed. Allotting Individual Permits under section 143-215.10C is within the DEQ’s ‘discretion.’ Thus, contrary to the DEQ’s suggestion, Individual Permits are not automatic.”
“Second, if farmers can avoid the challenged General Permit conditions simply by seeking an Individual Permit, all farmers would likely do so,” he added. “Following the DEQ’s reasoning would render General Permits worthless and fly in face of section 143- 215.10C: Our General Assembly expressly stated that General Permits are to be used for ‘most animal waste management systems.’”
“Therefore, the conditions within General Permits are generally applicable regulations under the NCAPA,” Carpenter wrote. “They are rules, and the superior court erred when it held to the contrary.”
“The challenged conditions are invalid until they are adopted through the rulemaking process,” Carpenter concluded.
A split 2-1 Court of Appeals panel issued an order in October 2022 blocking the rules from taking effect.