Bitterrooters for Planning, Inc. v. Mont. Dept. of Envtl. Quality

Bitterrooters for Planning, Inc. v. Mont. Dept. of Envtl. Quality, 2017 MT 222 (Sept. 5, 2017) (Sandefur, J.) (7-0, aff’d & rev’d)

Issue: (1) Whether MEPA requires DEQ to consider non-water-quality-related environmental impacts of the construction and operation of a retail store as secondary impacts of a groundwater discharge permit for an onsite wastewater treatment system; and (2) whether MEPA requires DEQ to identify the actual owner or operator of a wastewater treatment facility prior to issuing a groundwater discharge permit.

Short Answer: (1) No, and (2) yes.

Affirmed and reversed

Facts: In April 2014, DEQ received an application for a Montana groundwater pollution control system permit to discharge wastewater into groundwater on the site of a contemplated commercial development near Hamilton. The proposed discharge would occur through a wastewater treatment facility and drainfield from a 156,529-square-foot retail facility to be constructed on site. The groundwater discharge would eventually migrate to the Bitterroot River.

The application came from an engineering firm in Columbus, Ohio. It did not identify the contemplated facility name or the actual contemplated owner or operator, but named Lee Foss, a Ravalli County real estate broker, as the applicant, facility contact, and operator. It otherwise included all information typically required by DEQ in issuing a groundwater discharge permit. DEQ asked Foss to disclose the identity of the developer but he refused to do so. It is undisputed that Foss had no intention of owning or operating the facility. He applied for the permit to facilitate the sale of the property, and intended to transfer the permit upon sale.

After a draft EA and public comments, DEQ issued a final EA, which concluded MEPA did not require an EIS “because the project lacks significant adverse effects to the human or physical environment.” It cited DEQ’s limited authority to regulate groundwater discharges and concluded that DEQ complied with all applicable MEPA requirements.

Bitterrooters for Planning (BFP) sought judicial review, arguing that DEQ’s wastewater discharge permitting process violates the Montana Water Quality Act and the public’s constitutional right to participate in governmental deliberations.

Procedural Posture & Holding: The district court dismissed the right-to-participate claim as time-barred, and granted summary judgment to BFP on DEQ’s violation of MQWA and MEPA, and on ARM 17.4.609(3)’s requirement that DEQ must identify the facility operator if the identity has the potential to impact “vegetation, aesthetics, human health and safety, industrial and commercial activities, employment, tax revenues, demand for government services, or other environmental resources.” DEQ and the landowners appeal the ruling that DEQ violated MEPA , and Landowners appeal the ruling that ARM 17.4.609(3)(d) requires disclosure of the identity of the actual contemplated owner or operator of the retail facility. The Supreme Court affirms in part and reverses in part.

Reasoning: (1) MEPA requires an agency to produce a formal EIS if an agency action will significantly affect the quality of the human environment. An EA serves as both the initial tool for determining whether a more intensive EIS is necessary and as the mechanism for required environmental review of agency actions that will likely impact the environment but not sufficiently to require an EIS. MEPA does not specify the required contents or scope of a preliminary EA. The legislature has directed the Montana Board of Environmental Review to promulgate rules specifying the general MEPA requirements for DEQ actions. For purposes of MEPA, “secondary impact” means “a further impact to the human environment that may be stimulated or induced by or otherwise result from a direct impact of the action.” Admin. R. M. 17.4.603(18).

In concluding that ARM 17.4.609(3)(d) and (e) required DEQ to consider impacts of the construction and operation of the facility beyond those merely related to water quality or the construction of the required wastewater system, the district court essentially concluded that those were secondary impacts of the issuance of the permit rather than of the permitted activity. In other words, the construction and operation of the retail store would not occur “but for” the issuance of the wastewater permit. This “expansive tail-wagging-the-dog reasoning is backwards as a matter of fact and erroneous as a matter of law.” ¶ 25.

The Court holds that MEPA, like NEPA, requires a reasonably close causal relationship between the triggering state action and the subject environmental effect. “[F]or purposes of MEPA, an agency action is a legal cause of an environmental effect only if the agency can prevent the effect through the lawful exercise of its independent authority.” ¶ 33.

(2) The district court essentially ruled that MEPA requires DEQ to identify the contemplated facility operator if the facility operator, in conjunction with the nature of the operation, is predisposed to operate the facility in a manner that has the potential to impact any of the evaluation criteria referenced in ARM 17.4.609(3)(d) and (e).

DEQ Form 1 (Ver. 1.2–Rev. 5/12), and ARM 17.30.1023(3) and .1024(1), require DEQ to identify the actual owner or operator of the contemplated facility for which an applicant seeks the subject wastewater discharge permit. On that basis, the Court affirms summary judgment against DEQ based on DEQ’s failure to identify and disclose the actual contemplated owner or operator of the facility for which the applicant seeks the subject wastewater discharge permit.