By Michael Howell
On September 5, the Montana Supreme Court issued a unanimous opinion in the case of a disputed DEQ wastewater discharge permit for a large retail store south of Hamilton, reversing in part and affirming in part the lower court’s ruling. The high court reversed the lower court’s order requiring DEQ to conduct an environmental impact analysis of any impact from the retail stores construction and operation on the environment under the Montana Environmental Policy Act (MEPA), but upheld the lower court’s order requiring that the true name of the intended owner and operator of the discharge system (Wal-mart) be revealed on the application.
The permit was issued in November 2014 to local realtor Lee Foss and permitted the installation of a septic treatment system for a 156,529 square foot retail store named Parcel covering about half of the 16.54 acre site.
Two local non-profit organizations, sued DEQ over the wastewater discharge permit when it was issued, claiming that DEQ had violated the Montana Water Quality Act by failing to adequately consider the effect of the contemplated discharge of nitrate-contaminated groundwater on the quality of nearby surface waters including the Bitterroot River and failing to consider the cumulative water quality effects of wastewater discharges from the contemplated retail facility and the nearby Grantsdale subdivision.
The District Court decided in favor of the non-profit groups on this issue and voided the permit on those grounds. The applicants will have to make a renewed application for a wastewater discharge permit if they want to proceed with the project.
These violations of the Water Quality Act and the subsequent voiding of the permit on those grounds were not challenged on appeal and the permits remain void.
What was appealed was the District Court’s decision that, under MEPA, DEQ would also be required to do an environmental analysis of the impacts of the retail store facility on the environment and not just installation and operation of the septic treatment system. The landowners joined DEQ on that appeal and added one of their own, appealing the requirement for the owner/operators name on the application.
DEQ argued that the building and operation of the retail store was not in its jurisdiction. They argued that it would be unfair and impracticable to require them to enforce standards, laws, or regulations that it had no authority to enforce. The Supreme Court agreed with the agency and reversed the district court order. The High Court noted that the authority to regulate the construction and operation of the retail store was, in state law, specifically granted to the local government and not the state.
The Bitterrooters argued that the agency had the obligation to consider it because, especially without any further regulatory review, the issuance of the wastewater discharge permit effectively permits those “secondary” impacts as well.
The Supreme Court rejected what it called the “but for” argument, that “but for” the issuance of this permit these impacts would not occur. The Court takes the position that the permit to install the septic system does not “cause” those impacts related to construction of the retail store. DEQ needs to consider the impacts to water under its jurisdiction and look at the impacts of the discharge system. The impacts of the retail store are under the jurisdiction of local government and that is where the impacts of the store are considered. The Court states:
“Contrary to the assertions of the dissent in Montana Wilderness and Bitterrooters here, our holdings in these cases do not gut MEPA. In accordance with its express language, MEPA still requires state agencies to adequately consider, “to the fullest extent possible” within the scope of their independent authority, all direct and secondary environmental impacts that will likely result from the specific activity conducted or permitted by the agency. The problem for Bitterrooters is that the broader environmental impacts of the larger construction and operation of the retail store are not subject to MEPA review because the Legislature has not placed general land use control in the hands of a state agency. As recognized in Montana Wilderness over 40 years ago, the Legislature has, with limited exceptions, placed general land use control beyond the reach of MEPA in the hands of local governments.”
The Court goes on to state:
“Regardless of MEPA’s manifest beneficial purpose and Bitterrooters’ otherwise compelling public policy arguments, we simply cannot properly stretch MEPA beyond the limits of its language and stated purpose to fill an environmental review gap created by the Legislature and remaining within its domain to remedy if so inclined.”
On the issue of the applicants identify, however, the high court sided with the non-profits and the District Court, although not for the same reasons, and affirmed the requirement that the actual owner and operator of the point source being permitted must sign on as the applicant. In this case, the court notes, the applicant Lee Foss was expressly identified in the court proceedings as not ever intending to be the true owner/operator, but only a pass-through intermediary.