1. John C. Evans Assistant Attorney General NCDOJ
DENR Case Update
John C. Evans
Assistant Attorney General
NCDOJ

2. Air Quality United States v. Duke Energy 411 F.3d 539 (4th Cir. 2005)
Changes made to coal-fired utility boilers
Link to nuclear…
The issue was whether those changes subjected the boilers to New Source Review
State-of-the-art air pollution controls
BACT or LAER
Predict Impacts from the source

3. Air Quality NSR Applicability Requires an “emissions increase”
Regulation had historically measured the increase in “annual” emissions
NC Federal Middle Dist. Court reads the regulations to require an initial hourly increase
Regulations
Early Policy

4. Air Quality 4th Cir. (includes NC)
Upheld the NC Middle Dist. Court Decision
Rational was different
Clean Air Act definition of “modification” was the same for NSR as for NSPS program
Appeal to US Supreme Court by environmental groups US did not appeal.

5. Air Quality
Take Home
Hourly test for all major sources in NC (and other 4th Cir. States)
Still use the annual test as well.
All other states use just an annual test.
Policy [Check your policies before taking enforcement and be sure to distinguish]
Early policy – Agency was inconsistent with early policy.

6. NSR Regulatory Changes
NSR Applicability Rule
12/31/02 (Final)
NSR Equipment Replacement Rule
10/27/03 (Final)
Utility Hourly Test
Proposed

7. NSR Applicability Rule
Actual Emissions Increase Using Projections
Plantwide Applicability Limit
Clean Unit Exemptions
Pollution Control Project Exemptions

8. NSR Applicability New York v. EPA Challenged the new rule
2005 Court upheld most of the reform package but did strike down Clean Units and Pollution Control Projects

9. NSR Applicability What is the impact of New York v. EPA?
Limited because EMC approved the rule changes but…
Non-Attainment Rules went into effect
Attainment Rules (PSD) have not gone into effect

10. Equipment Replacement Rule
EPA proposed the Equipment Replacement Rule to help provide clarity (i.e. a “bright line test”) on the issue of what changes trigger NSR
Exempt if the change meets 3 conditions
Replacing component (not the whole thing)
Less than 20% of the replacement cost
Does not change the basic design

11. Equipment Replacement Rule
DC Cir. Court stayed the rule
Oral Arguments heard on 8 February 06
Not in effect in NC
Still using the multi-factor test to determine routine maintenance.
No current plans to adopt yet

12. M&W Clearing
614 S.E.2d 568 (2005)
Open burning --- however the size and scope was unusual
Nine large piles less than 1000 ft from building
Notice of Violation
Civil Penalty Assessment of $36,000
What about the $10,000 per day?

13. M&W Clearing State prevailed at OAH State prevailed in Superior Ct
State prevailed in NC Court of Appeals
BUT – the decision was 2:1
Appeal to NC Supreme Court

14. M&W Clearing Issues Factual Question Procedural Issue Nine Piles
One Violation?
Nine Violations?
Procedural Issue
Notice of Violation stated one violation
Past Practice provided that scattered piles was one violation

15. M&W Clearing Take Home Notice of Violation must be carefully drafted
Multiple violations – continuing violations
Re-issue the NOV if necessary to correct clarified issues
Procedures (written)
Past Action
Policy Memos – DAQ has an “enforcement tree”
Follow them, Update Them
Note in your assessment if it is not covered

16. Public Records Why Do You Care? Communication
Enforcement Cases Appealed
Attorney asks you to prepare a document – a statement – a report
Communication
Written
Oral

17. Attorney Privilege McCormick (2004) Work Product
Held that there was not an attorney work product privilege for city attorneys
Work Product
Thoughts and impressions of attorney
Work prepared by the agency at the direction of the attorney

18. Attorney Privilege Legislative Response - Public Records Law Amended
Provides protection for “Trial Preparation Material”
Applies to administrative proceedings
Applies to issues where there is a threat of litigation
Lessons
Identify covered documents
Notify Attorney if threatened litigation

19. Attorney Privilege Attorney Client Communications
Different than work product
Protected …. Not totally
Communications From Attorney
Communications To Attorney?
Oral Communications

20. Inspections Getting Into a Site While Staying Out of Trouble Issues:
DENR Enforcement Training, June 2005
Issues:
Warrant
Consent
Plain View

21. Luxury Wheels Colorado case – Not NC but instructive Facts
Chrome plating company
Company discharged to city sewer
Permits
Allowed to “enter the premises”
Permit included on on-property sampling box

22. Luxury Wheels City regulators took samples
During the day (open)
At night (covert)
Samples at night were higher?
Sampling taken over the course of about a year revealed numerous violations of their permit limits.

23. Luxury Wheels
4th Amendment - unreasonable search and seizure if there is an expectation of privacy
Wastewater flowing into manhole – no expectation of privacy
Trash on the side of the road
The manhole wasn’t accessible to general public – however once the wastewater gets into the pipe without any possibility of retrieval – no expectation of privacy.
WARNING – These decisions are fact specific. If you have ANY doubt STOP

24. Luxury Wheels CONSENT Warrantless search OK if consent if granted.
Government argued that the source consented to the search by accepting the permit with the sampling box permit condition
Company says they were forced to accept the condition
Court – “Close Call”
Company had choice of installing more expensive monitoring equipment.

25. Luxury Wheels Closely Regulated
Another exemption to the warrant requirement
Gas Stations in Wyoming
Vehicle Dismantlers in New York
Fishing in North Carolina
What about environmental regulation?

26. Luxury Wheels
“I am unaware of any precedent for declaring that a business is subject to warrantless searches as “closely regulated” solely because it is subject to general purpose environmental laws.

27. Luxury Wheels Open Fields
Another exception to the warrant requirement … however
Does not apply to removing objects such as samples
Particularly in this case were the waste water was not visible.

28. Luxury Wheels Take Home
Training (review manual, ask for agency specific training, etc…)
CAUTION b/c exemptions (open fields, expectation of privacy, closely regulated) are very fact specific
Consent is the best - if you ask and don’t get consent DO NOT ENTER
Lost evidence
Personal Liability (Trespass, Constitutional Claims)

29. Supplemental Environmental Projects
NC School Board v. Moore (2005)
Supplemental Environmental Projects (SEPS) are subject to the NC Constitutional requirement that penalties paid to NC agencies go to school boards
SEPS are not voluntary payments
Feds not bounds by this requirement so sometimes it may be advantageous to work with the Feds on enforcement.

30. Water Resources Two Supreme Court Cases No decisions Argued this term
North Dakota v. US Corps of Engineers
U.S. v. Rapanos
No decisions
Argued this term
Far-reaching impacts

31. North Dakota v. US Corps of Engineers
N.D. designated a reservoir as a fishery and set Clean Water Act standards under CWA Section 303
Corps wanted to release water from the reservoir to manage “navigable waters”
Release would lower the water levels would adversely impact the fishery
State filed action to prevent the release

32. N.D. v. US Corps of Engineers
Corps said that they did not have meet the CWA standard and they claimed sovereign immunity.
Despite the fact there were other options available to the Corps to manage downstream navigation
Broad discretion to control navigable waters overrides States environmental laws
This case is set to argued this spring and the results will have a significant impact on enforcing CWA standards against the US Corps.

33. US v. Rapanos
Rapanos asked the state to inspect his property to see if he needed a permit prior to filling the property for a shopping center
The state said it was probably a wetland and he should hire a consultant
The consultant confirmed his belief that the parcel was a “wetland”
Rapanos disagreed and proceeded with the project

34. US v. Rapanos Criminal and civil charges were brought against Rapanos
Criminal Charges
Prison Time? (See Judge’s thoughts on this)
Ultimately, after several appeals and delays Rapanos was found criminally liable

35. US v. Rapanos Issue: Extent of “navigable water”
Are non-navigable waters not physically adjacent to a traditional navigable water subject to regulation?
US Supreme Court has attempted to clarify this issue twice in the past

36. US v. Rapanos Riverside Bayview SWANNC 1985 2002
To protect pollution “at its source” the CWA was to be read broadly
Wetlands adjacent to lakes, rivers, streams may function as integral parts of the whole
Adjacent wetland can be subject to regulation
SWANNC
2002
Limited “broad” holding in Riverside
Must have “significant nexus” between wetlands and navigable water

37. Rapanos Majority Including 4th Cir (NC) No direct abutment requirement
Hydrological connection is enough
Minority
5th Cir.
Requires that non-navigable water directly abut the navigable water to be subject to CWA

38. Rapanos
Another Supreme Court interpretation of the extent to which the federal CWA has jurisdiction
Note: NC has an isolated wetland program that was developed in response to the SCANNC decision of 2001.

39. Beach Access Case Fabrikant et. al., v. Currituck County
1998 case just ended
Property owners were claiming title to the area between the wet sand and the dunes
Keep the public off the beach
Court dismissed this claim

40. This presentation has not been reviewed by and does not represent the official position of the NC DOJ. The summaries and commentary expressed herein are solely those of the author.

41. Assistant Attorney General
John C. Evans
Assistant Attorney General
NCDOJ
(919)