Animal Waste: Court Rules General Permits Are Not Exempt From NC Administrative Procedures Act
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Last week the North Carolina Farm Bureau Federation prevailed in halting the implementation of the three most recent Animal Waste General Permits issued by the North Carolina Department of Environmental Quality (“DEQ”). In a ruling by Administrative Law Judge Donald W. Overby, the NC Administrative Law Court granted NC Farm Bureau’s motion for summary judgement on the issue of whether the Animal Waste General Permits are a rulemaking exercise that require NC DEQ to comply with North Carolina’s Administrative Procedures Act (NCAPA) (N.C. Gen. Stat. § 150B et. seq.) Specifically, the Court found that the NC General Assembly did not intend that the permit be exempt from rulemaking in regards to three specific permit requirements: Phosphorus Loss Assessment Tests (PLAT evaluations), ground-water monitoring, and annual reporting.
Since 1996, North Carolina has permitted most confined animal operations under a general permit addressing waste management practices common to most confined animal facilities. (A combined animal operation requiring permitting is defined as an “agricultural feedlot activity involving 250 or more swine, 100 or more confined cattle, 75 or more horses, 1,000 or more sheep, or 30,000 or more confined poultry with a liquid animal waste management system, or any agricultural feedlot activity with a liquid animal waste management system that discharges to the surface waters of the State.” [N.C. Gen. Stat. § 143-215.10A]). The three general permits at issue in the case – the Swine General Permit, Cattle General Permit, and West Waste Poultry General Permit – were issued by DEQ on April 12, 2019, with language – including the three items noted above – mandated by a settlement agreement resulting from a federal Title VI complaint against NC DEQ to the federal Environmental Protection Agency (EPA).
NC Administrative Procedure Act – modeled on the federal Administrative Procedure Act (5 U.S.C. §§551 et seq.) – requires “a uniform system of administrative rule making and adjudicatory procedures for agencies.” (N.C. Gen. Stat. § 150B-1[a]) A key component of the rule-making system is procedural input and challenge by those impacted by proposed rules. Though the NC APA specifically exempts certain state agencies from its rule-making requirements, NC DEQ is not listed as an exempt agency.
Though NC DEQ has rules in place to govern the promulgation of animal waste permits , including notice and public hearings, the court found that NC DEQ procedures were inadequate to promulgate the general permits as written to require PLAT evaluations, ground-water monitoring, and annual reporting, given the financial impact of these requirements. Relying on recent NC Supreme Court precedent  and emphasizing the potential financial impact of the new 2019 general permit requirements, the Court declined to find an implied exemption from NC APA for NC DEQ in the general permit matter.
Summarizing his analysis, Judge Overby wrote, “The process used by Respondent in issuing the General Permits with these special conditions does not suffice to provide those who may be affected with the substantive and procedural protections that are inherent in APA-compliant rulemaking proceedings.”
From here, NC DEQ has the option to appeal the Administrative Law Court’s decision to (presumably) Wake County Superior Court 30 days from the ruling, or to go back and initiate the NC APA rule-making process as to the general permits. In light of the settlement agreement, it would not appear NC DEQ has the discretion to simply remove the three items from the newly proposed general permits.
 DEQ issued subsequent permits in 2004, 2009, and 2014. Operations may alternatively receive special permits.
 The complaint, filed under the Civil Rights Act of 1964, 42 U.S.C. §§ 2000d et seq. by the North Carolina Environmental Justice Network, the Waterkeeper Alliance, Inc., and the Rural Empowerment Association for Community Help, generally alleged the NC DEQ failed to account for the racial and ethnic impact of its permitting actions. The settlement agreement resulted from mediation between EPA and NC DEQ.
 See 15A NCAC 02T .0101 et. seq. (“Waste Not Discharged to Surface Waters”)
 Cabarrus Cty. Bd. of Educ. v. Bd of Trustees Teachers and State Employees’ Ret. Sys., No. 371PA18, 2020 WL 1650903 (N.C., Apr. 3, 2020)