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Bitterrooters for Planning, Inc. v. Montana Department of Environmental Quality

Supreme Court of Montana

September 5, 2017

MONTANA DEPARTMENT OF ENVIRONMENTAL QUALITY, an agency of the State of Montana, Defendant and Appellant, STEPHEN WANDERER and GEORGIA FILCHER, Defendants, Intervenors and Appellants.

          Argued and Submitted: March 29, 2017

         APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. ADV 15-32 Honorable Mike Menahan, Presiding Judge

          For Appellant: Alan F. McCormick (argued), Stephen R. Brown, Garlington, Lohn, Robinson, Missoula, Montana Edward Hayes (argued), Kirsten H. Bowers, Special Assistant Attorneys General, Helena, Montana

          For Appellees: Jack R. Tuholske (argued), Tuholske Law Office, P.C., Missoula, Montana David K. W. Wilson, Jr., Morrison, Sherwood, Wilson, & Deola, Helena, Montana

          For Amicus: Derf L. Johnson, Montana Environmental Information Center, Helena, Montana



         ¶1 The Montana Department of Environmental Quality (DEQ) appeals from an order of the Montana First Judicial District Court granting summary judgment to Bitterrooters for Planning, Inc., and Bitterroot River Protective Association, Inc., (collectively Bitterrooters) that DEQ violated the Montana Environmental Policy Act[1] (MEPA) by issuing a wastewater discharge permit for an unnamed "big box" retail merchandise store near Hamilton, Montana, without considering environmental impacts of the construction and operation of the facility other than water quality impacts and impacts of the construction of the required wastewater treatment system. Intervenors and current owners of the site, Stephen Wanderer and Georgia Filcher (Landowners), join that appeal and further appeal the District Court's related summary judgment that MEPA requires DEQ to identify the owner or operator of the contemplated retail store. We reverse, in part, and affirm, in part.


         1. Does MEPA require DEQ to consider non-water quality related environmental impacts of the construction and operation of a retail store facility as secondary impacts of the issuance of a Montana Water Quality Act (MWQA) permit to discharge facility wastewater into the ground from an onsite wastewater treatment system?

         2. Does MEPA require DEQ to identify the actual owner or operator of a wastewater treatment facility prior to issuing a MWQA groundwater discharge permit?


         ¶2 On April 3, 2014, DEQ received an application for a Montana groundwater pollution control system (MGWPCS) permit[2] to discharge Level 2 wastewater[3] into Class 1 groundwater on the site of a contemplated commercial development at the intersection of U.S. Highway 93 and Blood Lane near Hamilton, Montana. The contemplated discharge would occur via a proposed onsite wastewater treatment facility and drainfield designed to treat sanitary and floor drain discharges from a 156, 529 square-foot retail store facility to be constructed on the site. The groundwater discharge would eventually migrate down-gradient to the nearby Bitterroot River in Ravalli County.

         ¶3 DEQ received the application under submittal letter, dated March 31, 2014, from CT Consultants, an engineering firm in Columbus, Ohio. The letter bore the signature of John D. Zaleha, E.I., "Project Engineer." The application consisted of DEQ standard Forms 1 and GW-1 with referenced attachments. As supplemented at DEQ's request, the application identified the type and nature of the contemplated facility or operation by reference to a Standard Industrial Code (SIC 5311) indicating a retail merchandise and grocery facility. An included project site map indicated a large retail facility and parking lot that would together cover approximately half of the 16.54 acre site. The application listed the various types of contemplated effluents with their respective characteristics. As proposed, the treatment system would on average handle 5, 100 gallons of effluent from sanitary wastes (95%) and floor drains (5%). As supplemented, except for identification of the contemplated facility name and the actual contemplated owner or operator, the application included all standard information typically required by DEQ for issuance of a MGWPCS permit.

         ¶4 The certification and signature sections of both DEQ application forms listed Ravalli County real estate broker Lee Foss (Foss) as the permit applicant. Section C of Form 1 also listed Foss as the "Facility Contact." The "Facility Information" sections of both forms listed the property's state property tax identification number (Parcel #698800) as the "Facility Name." Section F of Form 1 listed Foss as the "Applicant (Operator)" of the contemplated facility and that the listed "Operator" was not the property owner.

         ¶5 By correspondence to Foss dated April 21, 2014, DEQ identified and requested additional information regarding various application "deficiencies" including, inter alia, clarification of the name of the facility and the name of the permitee who would be "the responsible entity" to insure compliance with permit conditions for the authorized discharge. By subsequent correspondence, CT Consultants, through Project Engineer Zaleha, reiterated that the facility name was Parcel #698800 and that Foss would be the permitee, as originally listed. DEQ's Supplemental Responses to Plaintiffs' First Discovery Requests indicated that the agency's Director specifically "asked Mr. Foss to disclose the identity of the developer of the property" but "Mr. Foss declined to do so."

         ¶6 It is undisputed on the record that real estate broker Lee Foss had no intention of actually owning or operating the contemplated facility. He requested the MGWPCS permit to facilitate the sale of the property to a particular third-party known to Foss and Landowners. Upon sale of the property, Foss would transfer the permit to the intended owner or operator who would construct and operate the retail store.[4]

         ¶7 In May 2014, DEQ issued a Draft Checklist Environmental Assessment (draft EA), a draft wastewater discharge permit, and a permit fact sheet. The draft EA identified the proposed agency action as the issuance of a permit authorizing "discharge of treated domestic water via a subsurface drainfield [pursuant to] the Montana Groundwater Pollution Control System (MGWPCS) permit program" established by Admin. R. M. Title 17, chapter 30, part 10. The draft EA stated that the limited purpose of the permit was:

to regulate the discharges of pollutants to state waters from the regulated facility. Issuance of an individual permit will require the applicant to implement, monitor and manage practices to prevent pollution and the degradation of ground water.

         The draft permit specified allowable discharge limits for total nitrogen and total phosphorus and specified ongoing water quality monitoring and reporting measures required by DEQ. The permit fact sheet described the wastewater treatment system, point of discharge effluent limits, site hydrogeology, and vicinity groundwater quality issues.

         The fact sheet further explained DEQ's rationale for the proposed terms and conditions of the permit.

         ¶8 The draft EA concluded that, as treated and discharged beyond the "approved mixing zone" on the property, the contemplated wastewater discharge would not exceed applicable water quality standards and thus would have no "significant adverse effects [on] the human and physical environment." The draft EA referenced a similar lack of significant impact on various standard physical environment checklist factors. Inter alia, the draft EA included a statement that "construction of the facility will alter" the existing undeveloped use of the land but not impact any "listed vegetative species." Though finding no significant adverse impact on various standard human environment checklist factors, the draft EA concluded that the construction and operation of "the facility" would have the potential to increase commercial activity in the area, increase traffic in the area, create temporary jobs during construction, create permanent jobs post-construction, and increase local tax revenue.

         ¶9 DEQ received written comments from approximately 160 individuals and members of local organizations. More than 80 people attended a public hearing on September 18, 2014. Due to the high level of public interest and technical difficulties with its electronic public comment submission system, DEQ extended the public comment period until October 15, 2014. On November 17, 2014, DEQ released a final EA and associated fact sheet and concurrently issued the requested wastewater discharge permit to Foss as originally recommended in the draft EA.

         ¶10 With a few exceptions, the final EA mirrored the draft EA. Based on new information provided by commenters regarding the existence of a down-gradient natural spring near the project area, the final EA noted that DEQ lowered the permissible level of phosphorous discharge from the proposed wastewater treatment facility. Inter alia, the document concluded that the treatment system and expected wastewater discharges to groundwater would result in "no potential adverse impact to elk winter range."

         ¶11 DEQ organized public comments by topic and prepared 106 formal responses to address public concerns. The agency noted that most issues raised by commenters were "beyond the scope" of the agency's EA analysis, and declined to address various stated public concerns about non-water quality related impacts of the construction and operation of the larger retail facility, including the potential spread of noxious weeds, "light pollution, " noise pollution, air pollution, soil pollution, permanent traffic increases, traffic safety, building aesthetics, scenic degradation, the risk of decreases in nearby residential property values, and the effect of marketplace competition on other local businesses and employees. The final EA further stated that DEQ had no authority to require the developer to build at an alternative site in Hamilton to allow connection to the city sewage treatment system and thereby eliminate the need for the contemplated groundwater discharge. The final EA did address questions regarding the adequacy of self-monitoring of the treatment facility by the owner or operator and public perception of a need for additional down-gradient water quality monitoring.

         ¶12 The final EA referenced various secondary impacts identified in the draft EA, but this time more narrowly characterized them as impacts resulting from the construction of the subject wastewater treatment system rather than impacts of the larger construction and operation of the retail facility. The final EA ultimately concluded that MEPA did not require a formal environmental impact statement (EIS) "because the project lacks significant adverse effects to the human or physical environment." With reference to DEQ's limited authority to regulate groundwater discharges "to ensure the protection of the beneficial uses of state waters and compliance with the applicable water quality standards, " the EA concluded that DEQ complied with all applicable MEPA requirements.

         ¶13 On January 14, 2015, Bitterrooters petitioned the Montana First Judicial District Court for judicial review on the asserted grounds that DEQ's wastewater discharge permitting process violated the Montana Water Quality Act (MWQA), MEPA, and the public's right to participate in governmental deliberations under Article II, Section 8 of the Montana Constitution and § 2-3-101, MCA, et seq. Bitterrooters alleged that the issuance of the wastewater discharge permit violated MWQA by failing to adequately consider the impact of the contemplated wastewater discharge on the water quality of the nearby Bitterroot River and tributaries. They alleged that the permit violated both MWQA and MEPA by failing to adequately consider the cumulative water quality impacts of wastewater discharges from the contemplated retail facility in conjunction with previously permitted discharges from the nearby Grantsdale subdivision. Bitterrooters asserted that the process further violated MEPA by failing to adequately consider the secondary impacts of the larger construction and operation of the retail facility unrelated to water quality. On May 16, 2016, on consideration of the parties' respective motions to dismiss and for summary judgment pursuant to M. R. Civ. P. 12(b)(6) and 56, the District Court:

(1) dismissed Bitterrooters' right-to-participate claim as time-barred by the applicable statute of limitations, ...

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