Winyah Rivers Alliance v. Active Energy Renewable Power, LLC

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF NORTH CAROLINA

SOUTHERN DIVISION

No. 7:21-CV-43-D

WINYAH RIVERS ALLIANCE, )

)

Plaintiff, )

) ORDER

v. )

)

ACTIVE ENERGY RENEWABLE )

POWER, LLC, et al. )

)

Defendants. )

On March 10, 2021, Winyah Rivers Alliance (“Winyah” or “plaintiff’) filed suit against

Active Energy Renewable Power, LLC (“Active Energy”) and Lumberton Energy Holdings, LLC

(“Lumberton Energy”) (collectively, “defendants”) alleging violations of the Clean Water Act, 33

U.S.C. §§ 1251 et seq. [D.E. 1]. On May 3, 2021, defendants moved to dismiss under Federal Rules

of Civil Procedure 12(b)(1) and (b)(6) and filed a memorandum in support [D.E. 11, 12]. On May

24, 2021, Winyah responded in opposition [D.E. 13]. On June 7, 2021, defendants replied [D.E. 14].

On June 14, 2021, Winyah filed a motion to strike and, in the alternative, a motion to file a surreply,

based on new arguments in defendants’ reply brief [D.E. 15, 16]. Defendants oppose Winyah’s

motion to strike [D.E. 17]. As explained below, the court denies Winyah’s motion to strike and

denies defendants’ motion to dismiss.

I.

As for defendant’s motion under Rule 12(b)(1), defendants argue that Winyah lacks standing

and that Winyah’s claims are not ripe. See [D.E. 12] 28-29; [D.E. 14] 5—10.' A motion to dismiss

1 The court denies Winyah’s motion to strike [D.E. 15]. Defendants’ ripeness argument

implicates the court’s subject-matter jurisdiction, and defendants may properly raise that argument.

under Rule 12(b)(1) tests subject-matter jurisdiction; whichis the court’s “statutory orconstitutional

power to adjudicate the case.” Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 89 (1998)

(emphasis omitted). A federal court “must determine that it has subject-matter jurisdiction over [a

claim] before it can pass on the merits of that [claim].” Constantine v. Rectors & Visitors of George

Mason Univ, 411 F.3d 474, 479-80 (4th Cir. 2005). When considering a Rule 12(b)(1) motion, the

“court may consider evidence outside the pleadings without converting the proceeding to one for

summary judgment.” White Tail Park, Inc. v. Stroube, 413 F.3d 451, 459 (4th Cir. 2005) (quotation _

omitted); see Evans v. B.F. Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999). A plaintiff must

establish that this court has subject-matter jurisdiction over his claims. See, ¢.g., Steel Co., 523 U.S.

at 103-04; Evans, 166 F.3d at 647; Richmond, Fredericksburg & Peronne RR. v. United States, 945

F.2d 765, 768 (4th Cir. 1991). However, “when a defendant asserts that the complaint fails to allege

sufficient facts to support subject matter jurisdiction, the trial court must apply a standard patterned

on Rule 12(b)(6) and assume the truthfulness of the facts alleged [in the complaint and any additional

materials].” Kerns v. United States, 585 F.3d 187, 193 (4th Cir. 2009).

A.

Defendants argue Winyah lacks standing. Winyah has standing to sue on behalf of its

members so long as “[1] its members would otherwise have standing to sue in their own right, [2]

the interests at stake are germane to the organization’s purpose, and [3] neither the claim asserted

nor the relief requested requires the participation of individual members in the lawsuit.” Friends of

See, e.g., Kontrick v. Ryan, 540 U.S. 443, 455 (2004); South Carolina v. United States, 912 F.3d

720, 730 (4th Cir. 2019). And even if the “minor modification” argument is new, motions to strike

are disfavored. See Waste Mgmt. Holdings, Inc. v. Gilmore, 252 F.3d 316, 347 (4th Cir. 2001).

Thus, the court denies the motion to strike. Nonetheless, because the court rejects defendants’

arguments, the court denies as moot Winyah’s motion to file a surreply.

the Earth, Inc. v. Laidlaw Env’t Srvs. (TOC), Inc., 528 U.S. 167, 181 (2000); see Hunt v. Wash.

State Apple Advert. Comm’n, 432 U.S. 333, 343 (1977). Winyah is an environmental nonprofit □

organization, and the interests at stake in this lawsuit are germane to its purpose. See Compl. [D.E.

1] 17-18. Moreover, the claims asserted and relief requested do not require the participation of

Winyah’s individual members. See id. at 27. Thus, Winyah has standing if its members: (1) “have

suffered an injury in fact—an invasion of a legally-protected interest which is (a) concrete and

particularized and (b) actual or imminent, not conjectural or hypothetical”; (2) show “a causal

connection between the injury and the conduct complained of—the injury has to be fairly traceable

to the challenged action of the defendant, and not the result of the independent action of some third

party not before the court”; and (3) show that it is “likely, as opposed to merely speculative, that the

injury will be redressed by a favorable decision” from the court. Chambers Med. Techs. of S.C., Inc.

v. Bryant, 52 F.3d 1252, 1265 (4th Cir. 1995) (alterations omitted) (quoting Lujan v. Def. of

Wildlife, 504 U.S. 555, 560-61 (1992)); see TransUnion LLC v. Ramirez, 141 S. Ct. 2190, 2203

(2021); Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016); Laidlaw, 528 U.S. at 180-8; Sierra Club

v. U.S. Dep’t of Interior, 899 F.3d 260, 282-83 (4th Cir. 2018).

In environmental litigation, “the standing requirements are not onerous.” Am. Canoe Ass’n

v. Murphy Farms, Inc., 326 F.3d 505, 517 (4th Cir. 2003); see Beck v. McDonald, 848 F.3d 262, 274

n.5 (4th Cir. 2017). Plaintiffs allege an “injury in fact when they aver that they use the affected area

and are persons for whom the aesthetic and recreational values of ‘the area will be lessened by the

challenged activity.” Sierra Club, 899 F.3d at 283 (quotation omitted); see Laidlaw, 528 U.S. at 183;

Sierra Club v. Morton, 405 U.S. 727, 734-35 (1972); Am. Canoe Ass’n, 326 F.3d at 517. Plaintiffs

demonstrate traceability by showing the challenged actions are partly responsible for their alleged

injury in fact. See Sierra Club, 899 F.3d at 283; Libertarian Party of Va. v. Judd, 718 F.3d 308, 3 16

(4th Cir. 2013) (stating the challenged action must be “at least in part responsible” for the injury).

The challenged action need not be “the sole or even immediate cause of” the injury. Sierra Club, 899

F.3d at 284; see Md. Shall Issue, Inc. v. Hogan, 971 F.3d 199, 212 (4th Cir. 2020); Libertarian Party

of Va., 718 F.3d at 515-16, And plaintiffs show redressability by demonstrating a favorable judicial

decision will likely redress their injury. See Laidlaw, 528 U.S. at 181; Sierra Club, 899 F.3d at 284.

Plaintiffs “need not show that a favorable decision will relieve their every injury. Instead, [they]

need only show that they personally would benefit in a tangible way from the court’s intervention.”

Sierra Club, 899 F.3d at 284 (cleaned up); see Larson a Valente, 456 U.S. 228, 242-44, 243 n.15

(1982); Friends of the Earth, Inc. v. Gaston Copper Recycling Corp., 204 F.3d 149, 162 (4th Cir.

2000) (en banc).

Winyah has standing. As for injury-in-fact, Winyah submitted the affidavits of the

organization’s members describing how defendants’ alleged discharges of pollutants negatively

affect the Lumber River’s and Jacob Branch’s aesthetic, recreational, and economic value to them,

particularly for fishing (i.e., availability of fish to catch and health concerns of eating fish from a

polluted river), boating, and swimming. See [D.E. 13-2 through 13-6]. Winyah also plausibly

alleges that defendants’ NPDES permit required it to file a renewal application after acquiring the

site and before resuming any discharges from the site into the Lumber River and Jacob Branch. See

[D.E. 1] (4-10, 100-12; Cf. Spokeo, 578 U.S. at 341-42; Dreher v. Experian Info. Sols., Inc., 856

F.3d 337, 345—46 (4th Cir. 2017). Assuming without deciding Winyah is correct, Winyah’s

"members could have used the public information from the renewal application and the subsequent

"review process to make more informed choices about whether and how to swim, fish, and boat on

the Lumber River and Jacob Branch. See, ¢.g., [D.E. 13-3] 21-24; [D.E. 13-4] ff 11-15; [D.E.

13-5] { 8; cf. Am. Canoe Ass’n, Inc. v. City of Louisa Water & Sewer Comm’n, 389 F.3d 536, 542

(6th Cir. 2004). Accordingly, Winyah has demonstrated injury in fact.

As for traceability, Winyah’s members describe concerns contributing to their injuries in fact

particularized not only to the rivers in which defendants are allegedly discharging but also to specific

parts of those rivers close to where defendants allegedly discharge pollutants. See, ¢.g., [D.E. 13-2]

q 11; [D.E. 13-3] { 20; Compl. 116-37; see also Am. Canoe Ass’n, 326 F.3d at 520 (“In order to

satisfy the traceability requirement, ‘[r]ather than pinpointing the origins of particular molecules, a

plaintiff must merely show that a defendant discharges a pollutant that causes or contributes to the

kinds of injuries alleged’ in the specific geographic area of concern.” (alteration in original)

(quotation omitted)); Gaston Copper, 204 F.3d at 161; NRDC v. Watkins, 954 F.2d 974, 980 (4th

Cir. 1992); N.C. Coastal Fisheries Reform Grp. v. Capt. Gaston LLC, No. 4:20-CV-151-FL, 2021

WL 4254856, at *7 (E.D.N.C. Sept. 17, 2021), appeal docketed, No. 21-2184 (4th Cir. Oct. 20,

2021 ). As for the informational injury, that injury is directly traceable to defendants’ alleged failure

properly to file a renewal application for its NPDES permit. Thus, Winyah has demonstrated

traceability, even if defendants ertivitice are not the sole cause of Winyah’s members’ injuries. See

Sierra Club, 899 F.3d at 283-84. □

Alternatively, to the extent Winyah does not clearly satisfy traceability, it is because the

causation question involves some of the factual disputes between the parties. Where, as here, “the

jurisdictional facts are inextricably intertwined with those central to the merits, the court should

resolve the relevant factual disputes only after appropriate discovery, unless the jurisdictional

allegations are clearly immaterial or wholly unsubstantial and frivolous.” Kerns, 585 F.3d at 193.

Moreover, Winyah’s jurisdictional allegations are not clearly immaterial, wholly unsubstantial, or

frivolous. Winyah has shown sufficient causation at this stage to demonstrate standing.

As for redressability, Winyah has shown that an order from this court granting all or part of

the relief Winyah seeks would help protect, and possibly restore, their members’ aesthetic,

recreational, and economic interests in the Lumber River and Jacob Branch and their informational

interests in the permitting process. Winyah primarily seeks injunctive and declaratory relief. See

Compl. at 27. As for injunctive relief, Winyah has shown redressability because it plausibly alleged

“a continuing violation or the imminence of a future violation of the” Clean Water Act. Steel Co.,

523 U.S. at 108. As for declaratory relief, Winyah has shown redressability because a declaratory

judgment would settle the propriety of defendants’ alleged unlawful discharges that contribute to

Winyah’s members’ injuries. See Hewitt v. Helms, 482 U.S. 755, 761 (1987); see, e.g., Capt. Gaston

LLC, 2021 WL 4254856, at *7 . Winyah also seeks civil penalties under the Clean Water Act for

defendants’ alleged violations. See 33 USC. § 1365(a); Compl. at 27. A civil sanction that stops

defendants’ alleged unlawful conduct effectively redresses an injury. See Laidlaw, 528 U.S. at

185-86. Thus, Winyah has shown its members “personally would benefit in a tangible way from

the court’s intervention.” Sierra Club, 899 F.3d at 284 (quotation omitted); Gaston Copper, 204 F.3d

at 162. Even if the relief Winyah seeks would only give it partial redress for its members’ injuries,

partial redress suffices for standing. See Uzuegbunam v. Preczewski, 141 S. Ct. 792, 801 (2021)

(“[T]he ability to effectuate a partial remedy satisfies the redressability requirement.” (quotation

omitted)). In short, Winyah has standing to sue on behalf of its members. Accordingly, the court

denies defendants’ motion to dismiss under Rule 12(b)(1) for lack of standing.

B.

Alternatively, defendants argue Winyah’s claims are not ripe. “The doctrine of ripeness

prevents judicial consideration of issues until a controversy is presented in ‘clean-cut and concrete

form.”” Miller v. Brown, 462 F.3d 312, 318-19 (4th Cir. 2006) (quoting Rescue Army v. Mun. Ct.

- of L.A., 331 U.S. 549, 584 (1947)); see Scoggins v. Lee’s Crossing Homeowners Ass’n, 718 F.3d

269-70 (4th Cir. 2013); Lansdowne on the Potomac Homeowners Ass’n v. OpenBand at

Lansdowne, LLC, 713 F.3d 187, 198 (4th Cir. 2013). The ripeness doctrine requires “courts to avoid

taking premature judicial action, thereby preventing them from becoming entangled in abstract

disagreements.” Scoggins, 718 F.3d at 270 (quotation omitted). In considering whether a claim is

ripe, courts balance “the fitness of the issues for judicial decision with the hardship to the parties of

withholding court consideration.” Miller, 462 F.3d at 319 (quotation omitted). “A claim is not ripe

for adjudication if it rests upon contingent future events that may not occur as anticipated, or indeed

may not occur at all.” Texas v. United States, 523 US. 296, 300 (1998) (quotations omitted); see

Scoggins, 718 F.3d at 270; Miller, 462 F.3d at 319. “The hardship prong is measured by the

immediacy of the threat and the burden imposed on the plaintiff.” Lansdowne, 713 F.3d at 199

(quotation and alteration omitted). “Where an injury is contingent upon a decision to be made by

a third party that has not yet acted, it is not ripe as the subject of decision in a federal court.” Doe

v. Va. Dep’t of State Police, 713 F.3d 745, 758 (4th Cir. 2013); see, e.g., Franks v. Ross, 313 F.3d ..

184, 195 (4th Cir. 2002).

Winyah’s claim is ripe. Winyah’s claims are not contingent upon future events but rather

allege ongoing violations of the Clean Water Act. The claims involve the interpretation and

application of an NPDES permit that defendants already have. Winyah’s claims are not contingent

upon defendants eecine a future permit.? Courts interpret NPDES permits according to the

ordinary principles of contract interpretation. See Ohio Valley Env’t Coal. v. Fola Coal Co., 845

2 Defendants respond that Winyah’s claims are not ripe until the North Carolina Department

of Environmental Quality processes Almac American Knits’ s renewal application, which defendants

assumed when they acquired the site. But Winyah’s claims are not premised on the status of the

renewal application. Rather, Winyah relies on the terms of the modified NPDES permit that

. defendants cite to justify their alleged discharges. Defendants received that modified permit after

Almac American Knits submitted the renewal application. Compare [D.E. 1-3] with [D.E. 12-2].

F.3d 133, 138-39 (4th Cir. 2017); Piney Run Pres. Ass’n v. Cnty. Com’rs, 268 F.3d 255, 269 (4th □

Cir. 2001). Thus, the issues are fit for judicial decision, and the court finds the issues are presented

in concrete and clean-cut form. Furthermore, withholding judicial consideration in the case would

not remedy (and might prolong) the injuries Winyah has alleged on behalf of its members.

Moreover, defendants have not cited any particular undue hardship they would suffer should this

case go forward. Accordingly, Winyah’s claims are ripe, and the court denies defendants’ motion __

to dismiss under Rule 12(b)(1).

. Il.

As for defendants’ motion to dismiss under Rule 12(b)(6), the court has reviewed the record

and the parties’ arguments under the governing standard. See Ashcroft v. Iqbal, 556 U.S. 662,

677-80 (2009); Bell Atl Corp. v. Twombly, 550 U.S. 544, 554-63 (2007); Goines v. Valley Cmty.

Servs. Bd., 822 F.3d 159, 165-66 (4th Cir. 2016); E.I. du Pont de Nemours & Co. v. Kolon Indus..,

Inc., 637 F.3d 435, 448 (4th Cir. 2011); Coleman v. Md. Court of Appeals, 626 F.3d 187, 190 (4th

Cir. 2010), aff'd, 566 U.S. 30 (2012); Giarrantano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008).

In considering the motion, the court construes the facts and reasonable inferences “in the light most

favorable to [the nonmoving party].” Massey v. Ojaniit, 759 F.3d 343, 352 (4th Cir. 2014)

(quotation omitted). Taking the allegations in Winyah’s complaint and all reasonable inferences

drawn therefrom as true, Winyah has “nudged [its] claims across the line from conceivable to

plausible.” Twombly, 550 U.S. at570.? Accordingly, the court denies defendants’ motion to dismiss

under Rule 12(b)(6). Whether the claims will survive defendants’ inevitable motion for summary

judgment is an issue for another day.

3 Because the court concludes that Winyah states a claim, the court rejects defendants’

argument that Winyah’s notice of intent to sue is deficient. See [D.E. 12] 29-30.

In opposition, defendants argue that even if Winyah has alleged plausible claims under the

Clean Water Act, numerous defenses preclude Winyah’s lawsuit as a matter of law. The court

rejects defendants’ arguments. As for defendants’ argument that the “permit shield” defense in 33

U.S.C. § 1342(k) bars Winyah’s suit, see [D.E. 12] 22-24, the permit shield defense only applies if

defendants are in compliance with the express terms of a valid NPDES permit. See Ohio Valley

Eny’t Coalition, 845 F.3d at 142-43; Piney Run, 268 F.3d at 259. Taking Winyah’s allegations and

the reasonable inferences drawn therefrom as true, defendants are not in compliance with their .

NPDES permit. Thus, the permit shield does not bar Winyah’s suit at this stage. Should discovery

show that defendants are immune from liability under 33 U.S.C. § 1342(k), defendants may again

raise the permit shield defense. _

Next, defendants argue they have immunity under their brownfields agreement. See [D.E.

12] 24-25. Under North Carolina law, a party under a brownfields agreement is not liable for

additional remediation of a site beyond what the agreement specifies so long as, among other

requirements, that party “is complying with the brownfields agreement.” N.C. Gen. Stat. § 130A-

310.33(a). Defendants’ brownfields agreement specifies that it “does not waive any applicable

requirement to obtain a permit, license or certification, or to comply with any and all other applicable

law.” [D.E. 1-1] 204-05. Taking Winyah’s factual allegations and the reasonable inferences drawn

therefrom as true, defendants’ brownfields agreement does not shield them from liability for the

same reasons the permit shield defense does not apply. If discovery shows the agreement makes

defendants immune to some portion of the relief Winyah seeks, defendants may again raise this

agreement as a defense to liability.

Defendants contend the primary jurisdiction doctrine precludes this lawsuit. See [D.E. □□□□

25-28. The doctrine of primary jurisdiction allows a court to dismiss without prejudice or stay

9 .

proceedings so that parties can seek review from an administrative agency when a case “contain[s]

some issue within the special competence of an administrative agency.” Reiter v. Cooper, 507 U.S.

258, 268 (1993); see Smith v. Clark/Smoot/Russell, 796 F.3d 424, 431 (4th Cir. 2015). The

doctrine’s purpose is to “tak[e] advantage of agency expertise and refer[] issues of fact not within

the conventional experience of judges or cases which require the exercise of administrative

discretion.” Smith, 796 F.3d at 431. It applies when “federal litigation raises a difficult, technical

question that falls within the expertise of a particular agency.” Piney Run, 268 F.3d at 262, n.7.

Whether to refer a decision to an administrative agency is discretionary. See Envt?! Tech. Council

v. Sierra Club, 98 F.3d 774, 789 n.24 (4th Cir. 1996); Yadkin Riverkeeper, Inc. v. Duke Energy |

Carolinas, LLC, 141 F. Supp. 3d 428, 449 (M.D.N.C. 2015). '

The primary issues in this case revolve around the interpretation and application of an

NPDES permit. See, e.g., [D.E. 12] 27. Courts interpret NPDES permits according to ordinary

principles of contract interpretation. See Ohio Valley, 845 F.3d at 138-139; Piney Run, 268 F.3d

at 269. Applying the principles of contract interpretation to a legal document and then resolving

remedial questions based on the rights and obligations in that legal document are not issues within

the special competence of an administrative agency. Thus, the primary jurisdiction doctrine does

not apply. See, e.g., Yadkin Riverkeeper, 141 F. Supp. 3d at 449-51,

Finally, defendants contend that the addition of Condition A(7) to their NPDES permit was

of a “minor modification” that otherwise did not affect the permit’s terms. The court is not

required to accept that legal conclusion. See, e.g., Giarratano, 521 F.3d at 302. Change in

‘ownership may be a minor modification when, inter alia, “the Director determines that no other

change in the permit is necessary.” 40 C.F.R. § 122.63(d); see 40 C.F.R. § 122.61; 1ISAN.C. ADMIN.

2H.0143(31). Taking the allegations in the complaint and all reasonable inferences drawn

10

therefrom as true, Winyah plausibly alleges that the North Carolina Department of Environmental

Quality added Condition A(7) precisely because it thought changes to the permit might be necessary

based on the new owners’ use of the site. At this stage of the case, the court need not decide whether

the change in ownership is a “minor modification,” and if it is, what effect that conclusion has on

Winyah’s claims. Accordingly, the court denies defendants’ motion to dismiss under Rule 12(b)(6).

Il.

Insum, the court DENIES WITHOUT PREJUDICE defendants’ motion to dismiss [D.E. 11],

DENIES plaintiffs motion to strike [D.E. 15], and DENIES as moot plaintiff's motion to file a

surreply [D.E. 15]. The parties SHALL confer and file a discovery plan pursuant to Federal Rule

of Civil Procedure 26.

SO ORDERED. This to day of January, 2022. □

An. . D JAN

J S C. DEVER II

. United States District Judge

ul