Farm Bureau asks state Supreme Court to avoid animal waste permit dispute

The North Carolina Farm Bureau Federation is urging the state’s highest court to steer clear of a dispute involving conditions tied to state animal waste permits. The Farm Bureau is battling the Department of Environmental Quality in the court case.

DEQ hopes the state Supreme Court will reverse a unanimous decision the Court of Appeals issued in November. Appellate judges sided with the Farm Bureau.

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 court filing Thursday. “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 filed a petition on Dec. 12 with the state Supreme Court.

“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. A three-judge Appeals Court panel reversed the trial court’s decision on Nov. 7.

“The Court of Appeals held that a condition in a general permit is a rule if ‘it applies to most situations.’ It then reasoned that, because the General Assembly has stated its intention that ‘most’ animal waste management systems be permitted under a general permit, the conditions at issue in this case are rules that should have been adopted through the rulemaking process,” DEQ’s lawyers wrote.

“The Court of Appeals’ judgment expressly renders only the three challenged conditions unenforceable, but the logic of its holding applies equally to nearly half the conditions in the three Animal Waste General Permits,” the petition continued. “These permits cover the large majority of animal waste operations at swine, cattle, and liquid-waste poultry animal waste management systems in North Carolina. In total, the permits apply to well over two thousand farms.”

“Despite the fact that the General Assembly explicitly directed that these facilities be governed by a permit system, the Court of Appeals said otherwise and mandated that the facilities be regulated by a system of rules,” DEQ’s lawyers argued. “The Court of Appeals’ opinion puts in jeopardy a longstanding permitting program that governs the vast majority of swine farms in the state, which comprise a significant portion of national swine production.”

“The potentially sweeping nature of its logic threatens to upend the jurisprudential landscape on general permitting programs more broadly,” the petition warned. “For these reasons, the Division asks this Court to grant this Petition for Discretionary Review and correct the Court of Appeals’ erroneous restructuring of this major permitting program.”

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.