IN THE SUPREME COURT OF NORTH CAROLINA
No. 306A20
Filed 1 September 2023
SOUND RIVERS, INC. and NORTH CAROLINA COASTAL FEDERATION, INC.
v.
N.C. DEPARTMENT OF ENVIRONMENTAL QUALITY, DIVISION OF WATER
RESOURCES, MARTIN MARIETTA MATERIALS, INC.
Appeal pursuant to N.C.G.S. § 7A-30(2) from the decision of a divided panel of
the Court of Appeals, 271 N.C. App. 674 (2020), affirming in part and reversing in
part orders entered on 13 November 2015 by Judge W. Douglas Parsons in Superior
Court, Beaufort County, and on 30 October 2017, 4 December 2017, and
20 December 2017 by Judge Joshua W. Willey, Jr. in Superior Court, Carteret
County. Heard in the Supreme Court on 27 April 2023.
Southern Environmental Law Center, by Geoffrey R. Gisler, Blakely E.
Hildebrand, and Jean Y. Zhuang, for petitioner-appellees.
Joshua H. Stein, Attorney General, by Asher P. Spiller, Assistant Attorney
General and Scott A. Conklin, Assistant Attorney General, for respondent-
appellant.
Daniel F. E. Smith, Matthew B. Tynan, George W. House, Alexander Elkan,
and V. Randall Tinsley, for intervenor-appellant.
BARRINGER, Justice.
I. Background
On 24 July 2013, the North Carolina Department of Environmental Quality,
Division of Water Resources (Division) issued a National Pollutant Discharge
SOUND RIVERS, INC. V. N.C. DEP’T OF ENV’T QUALITY
Opinion of the Court
Elimination System Permit (Permit) to Martin Marietta Materials, Inc. (Martin
Marietta). This Permit allowed Martin Marietta to discharge 12 million gallons of
mining wastewater per day from Vanceboro Quarry into “tributaries of Blounts
Creek.” On 30 November 2016, an administrative law judge (ALJ) from the Office of
Administrative Hearings affirmed the issuance of the Permit. The ALJ made
voluminous findings of fact. See Sound Rivers, Inc. v. N.C. Dep’t of Env’t Quality, Div.
of Water Res., 271 N.C. App. 674, 682 (2020). Sound Rivers, Inc. and North Carolina
Coastal Federation, Inc. filed a petition for judicial review with the superior court.
The superior court reversed the ALJ’s decision because the Division failed to “ensure
reasonable compliance with the biological integrity standard.” On 2 June 2020, the
Court of Appeals reversed the superior court, holding that “the ALJ correctly
determined the Permit was properly and validly issued in accord with applicable
regulations.” Sound Rivers, Inc., 271 N.C. App. at 743. None of the ALJ’s findings of
fact were challenged on appeal to this Court.1
Given the unchallenged, binding findings of fact, the due regard the ALJ gave
the factual matters within the Division’s demonstrated knowledge and expertise, and
the ALJ’s plain language analysis of the biological integrity standard, we affirm.
1 Although several of the ALJ’s findings of fact were challenged on appeal to the
superior court and Court of Appeals, all findings of fact went unchallenged on appeal to this
Court. Thus, we as a reviewing Court, are bound by those findings. See State v. Biber,
365 N.C. 162, 168 (2011) (citing State v. Baker, 312 N.C. 34, 37 (1984)).
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II. Standard of Review
This Court reviews questions of law de novo. Walker v. Bd. of Trustees of the
N. Carolina Local, Governmental Employees’ Ret. Sys., 348 N.C. 63, 65 (1998). Under
de novo review, this Court’s responsibility in this case is to review the statutory
scheme and determine whether the ALJ and Court of Appeals correctly applied the
law. See id. We agree with our learned colleague Justice Morgan’s concurrence
analyzing the missteps of the dissent regarding de novo review. As aptly noted in our
concurring colleague’s opinion, “ ‘a reviewing court is not free to weigh the evidence
presented to an administrative agency and substitute its evaluation of the evidence
for that of the agency.’ In re Appeal of McElwee, 304 N.C. 68, 75 (1981) (citing Appeal
of AMP Inc., 287 N.C. 547, 562 (1975)).” “[W]hen, as here, . . . findings of fact are not
challenged on appeal, they are deemed to be supported by competent evidence and
are binding on appeal.” State v. Biber, 365 N.C. 162, 168 (2011) (citing State v. Baker,
312 N.C. 34, 37 (1984)).
III. Analysis
Subsection (a) of N.C.G.S. § 150B-34 provides:
In each contested case the administrative law judge
shall make a final decision or order that contains findings
of fact and conclusions of law. The administrative law
judge shall decide the case based upon the preponderance
of the evidence, giving due regard to the demonstrated
knowledge and expertise of the agency with respect to facts
and inferences within the specialized knowledge of the
agency.
N.C.G.S. § 150B-34(a) (2021) (emphasis added).
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In this matter, “giving due regard to the demonstrated knowledge and
expertise of the agency,” the ALJ found that the biological integrity standard is within
the “demonstrated knowledge and expertise” of the Division, administered by the
Division, and within the Division’s specialized knowledge “with respect to facts and
inferences.”2 N.C.G.S. § 150B-34(a). Petitioners have not challenged these
determinations or other related findings setting forth the experience and conduct of
the Division’s employees.
The ALJ decided this case based on the preponderance of the evidence and set
forth its findings of fact and conclusions of law in a written order. The factual
determinations by the ALJ are numerous, unchallenged, and binding. Thus, this
Court cannot disturb them on review. See State v. Biber, 365 N.C. at 168.3
Specifically, the ALJ found, inter alia, that:
52. The preponderance of the evidence shows that, in
evaluating and determining whether the [ ] Permit
reasonably ensures compliance with the biological
integrity standard, [the Division] (through its staff) applied
its knowledge and expertise, and:
a. identified the Blounts Creek system, meaning
Blounts Creek and its tributaries, as the appropriate
“aquatic ecosystem”;
b. determined that the appropriate “reference
2 The concurrence correctly focuses on section 150B-34(a)’s direction to give the
agency’s “facts and inferences” due regard.
3 Our dissenting colleague has delved into the record, reweighed the unchallenged
facts of the case, which included determining the credibility of expert testimony. This review
is improper. In re Appeal of McElwee, 304 N.C. 68, 75 (1981) (citing Appeal of AMP Inc., 287
N.C. 547, 562 (1975)).
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conditions” were the existing conditions of the
Blounts Creek system before the proposed
discharge;
c. studied and assessed the existing, pre-
discharge ecological resources of the Blounts Creek
system;
d. determined the degree and geographic scope
of potential physical and chemical impacts of the
proposed discharge;
e. determined the predicted changes to the
ecosystem and ecological resources from the
proposed discharge to be limited; and
f. concluded that the effects predicted to occur
as a result of the permitted discharge would not
violate the standard, and, in fact, a violation would
not occur unless the impacts to the Blounts Creek
aquatic ecosystem were much greater in degree and
geographic scope than those predicted to occur.
In reviewing whether the Division “failed to conduct a biological integrity analysis by
inadequately sampling for ‘species composition, diversity, population densities and
functional organization’ throughout the Blounts Creek aquatic ecosystem,” the ALJ
further found that:
60. The determination and application of ‘reference
conditions’ in a specific context is complex and requires
significant expertise and judgment, and should be accorded
deference.
61. [The Division]’s interpretation and application of
this term are reasonable, rational, and in accordance with
the language and purpose of the biological integrity
standard.
62. To the extent [the Division]’s selection of
appropriate ‘reference conditions’ is considered a factual
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determination, it is one which falls directly within the
agency’s expertise and is therefore entitled to “due regard”
pursuant to the APA.
63. The preponderance of the evidence shows that
Blounts Creek aquatic ecosystem’s existing conditions
(‘reference conditions’) are dynamic, vary over time and
geographic locations, and can be affected by many
environmental factors.
64. The preponderance of the evidence shows that [the
Division] had sufficient information such that the
biological sampling efforts Petitioners sought were
unnecessary.
65. Before issuing the Permit, [the Division] determined
that: (a) the proposed discharge likely would not cause
significant erosion or sedimentation; (b) pH likely would
not exceed 6.9 in the upper Blounts Creek and was unlikely
to change significantly in lower Blounts Creek; (c) relative
salinity impacts would likely be on the order of 1 ppt and
salinities would remain within the variability of the
system; (d) shifts in macrobenthic invertebrates would
likely be toward an increase in diversity and would be
geographically limited to the upper reaches of Blounts
Creek; and (e) the proposed discharge is not likely to
adversely impact fish communities of the Blounts Creek
aquatic ecosystem. These determinations by [the Division]
are reasonable and supported by the preponderance of the
evidence.
66. [The Division] determined that the likely effects of
the permitted discharge are limited in degree, limited in
geographic scope, and not deleterious.
67. The preponderance of the evidence supports [the
Division]’s conclusion and shows that the permitted
discharge will not have any significant detrimental effect
on the Blounts Creek aquatic ecosystem, including the
many miles of C and Sw stream segments of other
tributaries of Blounts Creek.
Thus, the ALJ acknowledged that, although terms used in the biological integrity
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definition such as “species composition,” “population densities” and “functional
organization” are complex and technical, these terms have a plain meaning in the
environmental regulatory context. The ALJ then found by a preponderance of the
evidence that the Division properly applied its knowledge and expertise to that
regulatory language and determined that it had sufficient information such that the
biological sampling efforts sought by petitioners were unnecessary. The ALJ further
found that the Division thoroughly evaluated compliance with the biological integrity
standard before issuing the Permit.
Given the foregoing and other unchallenged findings of fact supporting these
determinations, this Court should affirm the ALJ’s final decision unless the ALJ’s
determinations were affected by an error of law.
The legislature has provided in N.C.G.S. § 150B-51(c) in relevant part:
In reviewing a final decision in a contested case, the
court shall determine whether the petitioner is entitled to
the relief sought in the petition based upon its review of the
final decision and the official record. With regard to
asserted errors [of law] . . . the court shall conduct its
review of the final decision using the de novo standard of
review.
N.C.G.S. § 150B-51(c) (2021).
Petitioners unsuccessfully attempt to frame their argument as one of legal
error. Petitioners specifically contend that “[t]he Division failed to conduct the
specific analysis required by the biological integrity definition.” Yet, they concede that
the regulations referencing and defining biological integrity do not address the
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specific process for assessing compliance, and they further concede that the
regulations list no procedures for sampling and collecting data to assess compliance.
Indeed, as conceded, a specific procedure for assessing compliance with the
biological integrity standard is not set forth in the regulations. Rather, the
regulations protect surface waters by establishing surface water classifications based
on the best usage of surface waters. One such regulation affecting the surface water
in this matter requires the “maintenance of biological integrity (including fishing and
fish).” 15A N.C. Admin. Code 2B.0211(1) (Supp. Feb. 2023); see also 15A N.C. Admin.
Code 2B.0220(1) (Supp. Feb. 2023).4 Biological integrity “means the ability of an
aquatic ecosystem to support and maintain a balanced and indigenous community of
organisms having species composition, diversity, population densities, and functional
organization similar to that of reference conditions.” 15A N.C. Admin. Code
2B.0202(13) (Supp. Feb. 2023) (previously located at 15A N.C. Admin. Code
4 While these regulations have been amended since the Division assessed and issued
the permit, the relevant parts of these regulations for addressing the arguments on appeal
have not changed. See 15A N.C. Admin. Code 2B.0211(1), (2) (2012) (“(1) Best Usage of
Waters: aquatic life propagation and maintenance of biological integrity (including fishing
and fish), wildlife, secondary recreation, agriculture and any other usage except for primary
recreation or as a source of water supply for drinking, culinary or food processing purposes;
(2) . . . Sources of water pollution which preclude any of these uses on either a short-term or
long-term basis shall be considered to be violating a water quality standard.” (emphases
added)); 15A N.C. Admin. Code 2B.0220(1), (2) (2012) (“(1) Best Usage of Waters: any usage
except primary recreation or shellfishing for market purposes; usages include aquatic life
propagation and maintenance of biological integrity (including fishing, fish and functioning
PNAs), wildlife, and secondary recreation; (2) . . . Any source of water pollution which
precludes any of these uses, including their functioning as PNAs, on either a short-term or
long-term basis shall be considered to be violating a water quality standard.” (emphases
added)).
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2B.0202(11) (2012)). “Sources of water pollution that preclude [biological integrity]
on either a short-term or long-term basis shall be deemed to violate a water quality
standard.” 15A N.C. Admin. Code 2B.0211(2) (Supp. Feb. 2023); see also 15A N.C.
Admin. Code 2B.0220(2) (Supp. Feb. 2023). “No permit may be issued when the
imposition of conditions cannot reasonably ensure compliance with applicable water
quality standards . . . .”5 15A N.C. Admin. Code 2H.0112(c) (2022).
The language in the regulations above demonstrates that the ALJ’s
determinations were not affected by an error of law. Rather, the ALJ performed its
own plain language analysis, which matched the Division’s interpretation.
Specifically, the ALJ properly determined that the Division’s “interpretation [of the
biological integrity rules] is longstanding, is reasonable, and is consistent with and
supported by the plain language of the rules.”
Using its plain language interpretation, the Division determined that a
“permit complies with the biological integrity standard if the permit’s terms and
conditions reasonably ensure that the permitted discharge will not preclude
maintenance of the ability of an aquatic ecosystem to support and maintain a
balanced and indigenous community of organisms having species composition,
diversity, population densities and functional organization similar to that of reference
5 The relevant part of subsection (c) of this regulation currently in effect states: “No
permit may be issued until the applicant provides sufficient evidence to ensure that the
proposed system will comply with all applicable water quality standards and requirements.”
15A N.C. Admin. Code 2H.0112(c) (2022).
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conditions.” The ALJ properly held that the Division complied with its interpretation
of the biological integrity standard given the Division’s expertise with respect to the
facts and its conduct in its review of Martin Marietta’s permit application.6
IV. Conclusion
We affirm the decision of the Court of Appeals. In this case, the ALJ properly
made findings of fact, giving due regard to the demonstrated knowledge and expertise
of the Division with respect to the facts, and then properly applied those facts to a
correct interpretation of the regulatory plain language. Accordingly, we affirm the
final decision by the ALJ as it relates to the biological integrity standard.
Martin Marietta raised several additional issues in their conditional petition
to this Court. As to both issues raised, we hold that discretionary review was
improvidently allowed.
AFFIRMED; DISCRETIONARY REVIEW IMPROVIDENTLY ALLOWED.
6 The dissent mischaracterizes our holding as the Division simply being entitled to
deference. Instead, we reviewed whether the ALJ met the standard found in N.C.G.S. § 150B-
34(a) (“The administrative law judge shall decide the case based upon the preponderance of
the evidence, giving due regard to the demonstrated knowledge and expertise of the agency
with respect to facts and inferences within the specialized knowledge of the agency.”).
Nothing in our opinion should be understood to give the Division deference in its
interpretation of 15A N.C. Admin. Code 2B.0202(11). The dissent engages in pejorative
rhetoric and completely mischaracterizes our opinion before responding. Even a cursory
reading of the dissent exposes its blatant misapprehension of our legal analysis as well as
our application of the appropriate standard of review. On fourteen (14) separate occasions,
the dissent mischaracterizes our analysis as deferring to the agency’s legal interpretation.
We have not. Constrained by our Constitutional duty to apply the rule of law and to comply
with the legal standard of review, we review whether the ALJ’s interpretations are consistent
with the law. In this review, we determined, consistent with N.C.G.S. § 150B-34, that “the
ALJ performed its own plain language analysis, which matched the Division’s
interpretation.”
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Justice BERGER did not participate in the consideration or decision of this
case.
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Morgan, J., concurring
Justice MORGAN concurring.
I agree with my distinguished colleagues in the majority that the Court of
Appeals decision should be affirmed in the lower appellate court’s reversal of the trial
court’s determination that the administrative law judge erred in upholding the North
Carolina Department of Environmental Quality’s issuance of the discharge permit to
Martin Marietta Materials, Inc. based upon the governmental agency’s assessment
that the biological integrity standard at issue was satisfied. I further agree with the
members of the majority, along with my distinguished dissenting colleague, that the
proper standard of review to be employed by the courts in this administrative law
case is de novo review, as the challenge to the permit by Sound Rivers, Inc. and North
Carolina Coastal Federation, Inc. is based upon asserted errors of law such that “the
court shall conduct its review of the final decision [in a contested case] using the de
novo standard of review.” N.C.G.S. § 150B-51(c) (2021). While I agree with the
majority’s outcome that the final decision of the administrative law judge should be
affirmed as to the Department’s compliance with the biological integrity standard in
issuing the permit and as to the “due regard to the demonstrated knowledge and
expertise of the agency with respect to facts and inferences within the specialized
knowledge of the agency” pursuant to N.C.G.S. § 150B-34(a), I write separately in
order to identify, amplify, and emphasize certain aspects of this matter which merit
attention. See N.C.G.S. § 150B-34(a) (2021).
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Morgan, J., concurring
The dissent here has admirably and exhaustively recounted facts,
circumstances, descriptions, models, studies, results, analyses, concerns, evaluations,
assessments, explanations, and opinions which were presented at the hearing,
culminating with the dissent’s view that the Department erred in its interpretation
and application of the biological integrity standard in issuing the discharge permit.
However, “a reviewing court is not free to weigh the evidence presented to an
administrative agency and substitute its evaluation of the evidence for that of the
agency.” In re Appeal of McElwee, 304 N.C. 68, 75 (1981) (citing Appeal of AMP Inc.,
287 N.C. 547, 562 (1975)). The dissent also refers to the existence of “substantial
evidence” in the record that lends support to the dissent’s position that the
Department incorrectly applied the biological integrity standard in the Department’s
decision to issue the permit. While the phrase “substantial evidence” is a term of art
in administrative law which is embodied in N.C.G.S. § 150B-51(b)(5) and is
customarily used when “the whole record standard of review” is employed as
described in N.C.G.S. § 150B-51(c), nonetheless the dissent’s focus on the quantity of
the evidence bearing on the biological integrity standard in the instant case is
noteworthy, even though de novo review governs the outcome. “Substantial evidence
is such relevant evidence as a reasonable mind might accept as adequate to support
a conclusion.” Curlee v. Johnson, 377 N.C. 97, 101 (2021) (quoting Ussery v. Branch
Banking & Tr. Co., 368 N.C. 325, 335 (2015)). In the case of Thompson v. Wake County
Board of Education, this Court opined:
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Morgan, J., concurring
The “whole record” test does not allow the reviewing court
to replace the Board’s judgment as between two reasonably
conflicting views, even though the court could justifiably
have reached a different result had the matter been before
it de novo. On the other hand, the “whole record” rule
requires the court, in determining the substantiality of
evidence supporting the Board’s decision, to take into
account whatever in the record fairly detracts from the
weight of the Board’s evidence. Under the whole evidence
rule, the court may not consider the evidence which in and
of itself justifies the Board’s result, without taking into
account contradictory evidence or evidence from which
conflicting inferences could be drawn.
292 N.C. 406, 410 (1977) (citation omitted). In the present case, to the extent that the
dissent has identified an intersection between de novo review of this case and whole
record review due to a focus on the existence of substantial evidence in the record,
the law is clear that, while a reviewing court could reach a different result based on
the evidence than the result reached by an administrative agency if the reviewing
court was free to do so, nonetheless if there is substantial evidence to support the
agency’s decision, then the court must give deference to the specialized knowledge
and expertise of the agency, including facts and inferences as directed by N.C.G.S. §
150B-34(a), and affirm the agency’s determination. Here, although the dissent
bemoans the majority’s determination to uphold the administrative law judge’s final
decision that the Department properly issued the discharge permit, nonetheless the
majority has correctly implemented the applicable statutory and appellate law, even
in the face of the dissent’s disapproval of the agency’s inferences regarding its
authority to issue the permit in light of the pertinent rules.
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Morgan, J., concurring
Chief Justice NEWBY, Justice BARRINGER and Justice ALLEN join in this
concurring opinion.
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Earls, J., dissenting
Justice EARLS dissenting.
Blounts Creek is a beloved recreational watershed located in Beaufort County.
Spanning about ten miles in length, Blounts Creek is unique in that it provides both
fresh and saltwater habitats for its aquatic life. For approximately five miles, from
its source to Herring Run, which is one of the creek’s main tributaries, Blounts Creek
is classified as fresh and swamp waters. This segment of the creek is known as Upper
Blounts Creek. At Herring Run, Blounts Creek turns into a saltwater estuary and
eventually flows into Blounts Bay. This segment is known as Lower Blounts Creek.
The point at which the fresh and saltwater meet is called a salt wedge.
Precipitation and varying seasonal water flows are some of the primary forces
that affect the position of the creek’s salt wedge and its salinity. During periods of
low precipitation, including during the summer months, the salt wedge moves farther
upstream. During the winter, or after heavy rains, the water table rises, the flow from
upstream is increased, and the salt wedge is pushed farther downstream.
Blounts Creek’s mix of salt and freshwater allows the creek to foster rich and
diverse aquatic life that varies season by season depending on water temperature and
salinity. Over the course of the year, it is home to fish such as bass, bream, catfish,
gar, puppy drum, black drum, spot, croaker, summer flounder, striped bass, speckled
sea trout, raccoon perch, winter flounder, alewife, blueback herring, American and
hickory shad, white perch, black crappie, eel, and red fin. The seasonal changes of
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fish species in Blounts Creek make it a rare and popular fishery both for locals whose
families have been enjoying the water’s abundant resources for generations and for
tourists from hundreds of miles away.
Much of Blounts Creek’s aquatic life is highly dependent on the maintenance
of the creek’s salt and freshwater balance and existing water quality. But through a
National Pollutant Discharge Elimination System (NPDES) Permit (the permit), the
North Carolina Department of Environmental Quality, Division of Water Resources
(the Division) has allowed Martin Marietta to discharge twelve million gallons of
wastewater into this fragile ecosystem each day, threatening to transform Blounts
Creek into a type of stream system that is “not normally found in North Carolina’s
coastal plain.”
I. Legal Background
The Clean Water Act prohibits the release of pollutants into our waterways
without the issuance of an NPDES permit. 33 U.S.C. § 1311(a). States can receive
authorization to administer the NPDES permit program, and North Carolina has
therefore assumed responsibility for issuing NPDES permits through the Division
since 1975. Prior to issuing an NPDES permit, the Division must conclude that the
permit will “reasonably ensure compliance with applicable water quality standards
and regulations.” 15A N.C. Admin. Code 2H.0112(c) (2012). As relevant here, surface
waters in the state are safeguarded by regulations that classify various bodies of
water based on their “best uses” and define certain conditions that must be
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maintained to protect those best uses. See, e.g., 15A N.C. Admin. Code 2B.0211(1)
(2012).1 As a freshwater segment, upper Blounts Creek from its source to Herring
Run is assigned a Class C classification.2 The regulation that sets forth water quality
standards for Class C waters lists “maintenance of biological integrity (including
fishing and fish)” as one of the best uses of such waters. Id. The regulation further
provides that Class C waters
shall be suitable for aquatic life propagation and
maintenance of biological integrity, wildlife, secondary
recreation, and agriculture. Sources of water pollution
which preclude any of these uses on either a short-term or
long-term basis shall be considered to be violating a water
quality standard.
15A N.C. Admin. Code 2B.0211(2) (2012) (emphasis added); see also 15A N.C. Admin.
Code 2B.220(2) (2012) (incorporating this standard for Class SB waters, which is
applicable to lower Blounts Creek from Herring Run to Blounts Bay). Key to this
appeal, the regulation requires that the “biological integrity” of Blounts Creek be
maintained.
Biological integrity means “the ability of an aquatic ecosystem to support and
maintain a balanced and indigenous community of organisms having species
composition, diversity, population densities and functional organization similar to
that of reference conditions.” 15A N.C. Admin. Code 2B.0202(11) (2012). The majority
1 These citations use the 2012 version of the administrative code that was in effect
when the Division issued the permit.
2 Upper Blounts Creek has supplemental classifications of Swamp Water and
Nutrient Sensitive Water.
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appears to reason that because “a specific procedure for assessing compliance with
the biological integrity standard is not set forth in the regulations” themselves, the
analysis undertaken by the Division here was sufficient to satisfy the biological
integrity standard.
There is an insurmountable, tautological flaw in the majority’s reasoning, as I
understand it. In effect, it appears to me that the majority reasons that because the
Division decided that the permit complied with the biological integrity standard, then
the biological integrity standard must have been satisfied. But the Division’s ultimate
conclusion regarding the permit’s compliance with the biological integrity standard
is not in and of itself a valid basis from which to determine that the standard was
applied. Though the terms set forth in the biological integrity standard are not
specifically defined by regulation, they indisputably have meaning. It is this Court’s
duty to ensure that the Division indeed gave meaning to both the terms of the
regulation and the regulation itself. It is not proper to simply take the Division at its
word that the biological integrity standard has been met without any analysis or
evaluation of the Division’s legal interpretation.
II. Standard of Review
The Division’s interpretation of the biological integrity standard is a question
of law. We thus review it de novo. De novo review does not blind us to context or
demand unquestioned deference to an agency’s views. Though an agency’s reading of
a regulation merits “some deference,” it is “not binding.” In re North Carolina Savings
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& Loan League, 276 S.E.2d 404, 410 (N.C. 1981). This Court instead weighs the
“thoroughness evident in [the agency’s] consideration, the validity of its reasoning,
its consistency with earlier and later pronouncements, and all those factors which
give it power to persuade, if lacking power to control.” Id. (quoting Skidmore v. Swift
& Co., 323 U.S. 134,140 (1944)). And most relevant here, an agency’s interpretation
receives no deference if it is “plainly erroneous or inconsistent with the regulation.”
Morrell v. Flaherty, 338 N.C. 230, 238 (1994).
The majority and the concurrence alike fault this opinion for consulting
evidence and “delv[ing] into the record.” In my view, their approach to the proper
scope of review is sparse to the point of being meaningless. If the Division says that
the biological integrity standard means X, the majority seems to argue, our job is
done. Any evidence elucidating that reading and the process by which the Division
adopted it is, per the majority, beside the point. I disagree for at least four reasons.
First, “[f]acts found under a misapprehension of the law” do not bind a
reviewing court. Matter of Skinner, 370 N.C. 126, 139, 804 S.E.2d 449, 458 (2017); see
also Helms v. Rea, 282 N.C. 610, 620, 194 S.E.2d 1, 8 (1973) (“[F]acts found under
misapprehension of the law will be set aside on the theory that the evidence should
be considered in its true legal light.”). So if the ALJ’s factual findings sprang from a
misreading of the biological integrity standard, this Court must assess them
appropriately.
Second, in reviewing an agency’s regulatory interpretation, we consider the
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“thoroughness evident in its consideration” and the “validity of its reasoning.” In re
North Carolina Savings & Loan League, 276 S.E.2d at 410. If there were to be a fly-
by-the-seat-of-the-pants reading by the agency—divorced from data and
deliberation—it would bear less weight than a well-reasoned, evidence-backed
interpretation. See, e.g., N.C. Acupuncture Licensing Bd. v. N.C. Bd. of Physical
Therapy Exam'rs, 371 N.C. 697, 703 (N.C. 2018) (deferring to an agency’s statutory
interpretation in large part because it based its reading on an “extensive review” of
“substantial studies and other evidence,” including “scientific articles, reports, and
books”). Despite the concurrence’s view, that analysis does not “substitute” our
“evaluation of the evidence for that of the agency.” Instead, we weigh the agency’s
legal interpretation in light of the data it consulted and the procedures it employed.
Our review is like that of an engineer examining an architect’s plans. Rather
than opine on how she would design the building herself, the engineer probes the
architect’s work to ensure its soundness and reliability. If the math checks out and
the structure is stable, the engineer should leave the blueprints undisturbed. But
suppose that the architect’s plans ignore the applicable building code, treating it as a
suggestion rather than a command. Because the architect deviated from those rules—
rules designed to create sound and safe buildings—his plans carry much less weight.
In that case, the engineer—much like a reviewing court—can question the architect’s
judgment, not because she would have done things differently herself, but because
his failure to follow the code imperils the building’s safety and soundness.
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The same principle holds true here. The Division’s reading of the biological
integrity standard renders it hollow in meaning and toothless in practice. By
disclaiming any need to measure an ecosystem’s “reference conditions” before
granting a permit, the Division—much like the hypothetical architect—treats the
standard like a suggestion rather than a command. In effect, the Division ignores the
standard’s mandate by reading it to impose no mandate at all. And so this Court—
much like the hypothetical engineer—can probe the soundness of that judgment, not
because we would have made a different choice, but because the Division sidestepped
the law and the values it protects.
Third, and similarly, we review an agency’s regulatory reading with an eye
toward its practical consequences. That approach sounds in deep-seated principles of
statutory interpretation and separation of powers. Cf. FDA v. Brown & Williamson
Tobacco Corp., 529 U.S. 120, 133, 143, 147 (2000) (analyzing the consequences of the
FDA’s statutory interpretation in deciding whether that reading cohered with the
statute’s purpose and Congress’ intent). More basically, it calls us to apply our
“common sense.” See id. at 133. When an agency’s legal interpretation heralds far-
reaching consequences—consequences that undercut the very purpose of the law it
purports to interpret—a court may justifiably harbor doubts about that reading. See
In re Appeal of N.C. Sav. & Loan League, 302 N.C. at 467-68 (rejecting agency’s
interpretation of the common bond requirement because adopting it would expand
the “scope of eligible membership” to “no bounds,” thereby subverting the legislature’s
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intent to craft a limitation).
We applied that principle most recently in Werthington. See Wetherington v.
N.C. Dep't of Pub. Safety, 368 N.C. 583 (N.C. 2015). In that case, a State Trooper gave
contradictory statements about how he lost his uniform hat. See id. at 586. His boss—
Colonel Glover—fired the Trooper for violating the Patrol’s truthfulness policy. See
id. at 590. And as here, an ALJ upheld that decision, finding that Colonel Glover
correctly interpreted and applied the law governing the discipline of State employees.
Id. The problem: The Colonel misread the law and misunderstood when and why he
could fire the Trooper. Id. In Colonel Glover’s view, “any violation of the Patrol’s
truthfulness policy must result in dismissal.” Id. at 593-94. On appeal, the
Department of Public Safety defended his interpretation. See id. at 585. But this
Court rejected the agency’s reading. Id. Properly interpreted, the law obliged the
Colonel “to exercise discretion” when disciplining employees. Id. at 594. And because
Colonel Glover misapprehended his “discretion to consider the full range of potential
discipline,” his decision “was affected by an error of law.” Id. at 591 (cleaned up).
That conclusion sprang from statutory language, our precedent, and—most
relevant here—the implications of a per se dismissal rule. See id. at 594-96. An
“inflexible standard deprives management of discretion,” we noted. Id. at 596. And
because the Patrol’s truthfulness policy swept broadly—covering all potentially
misleading statements on all potential topics—the Department’s categorical reading
of the law on employee dismissal entailed a “potentially expansive scope.” Id. at 595.
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All told, the Department’s interpretation—and its real-world implications—clashed
with the “flexible and equitable” disciplinary standard enshrined in the law,
providing reason to question the agency’s reading and the ALJ’s affirmance of it. Id.
at 595-96.
The same is true in this case. As Werthington made clear, the consequences of
adopting an agency’s legal interpretation bear on the deference we accord it. To that
end, we can—and should—consult evidence about real-world effects. Here, much like
the disciplinary policy in Werthington, the Division’s regulatory reading carries
“potentially expansive” consequences. See id. If the Division need not measure a
biome’s “reference conditions” before granting a permit, then the biological integrity
standard is nothing but a husk. Judge Hampson made that very point in the decision
below, recognizing that the Division’s interpretation of the regulation gives it carte
blanche to “functionally ignore” it. See Sound Rivers, Inc. v. N.C. Dep't of Envtl.
Quality, Div. of Water Res., 271 N.C. App. 674, 748 (2020) (HAMPSON, J., concurring
in part and dissenting in part). And if the Division can so easily sidestep the water
quality standards it is tasked with administering, the consequences for North
Carolina’s waterways could be apocalyptic.
For that reason, this Court should consider the sprawling implications of the
Division’s legal interpretation before endorsing it as a correct statement of the law.
Consulting the facts is essential to that inquiry. If the Division properly interpreted
the biological integrity standard in granting a permit to Martin Marietta—despite
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evidence showing that the influx of wastewater will upend Blounts Creek and the
habitats it shelters—then this State’s water-quality regulations are little more than
paper tigers. Before accepting that breathtaking read, this Court should confront the
facts and grapple with their implications.
Finally, cases involving a State’s environmental resources merit special care
because of their far-reaching and irreversible consequences. See, e.g., Massachusetts
v. EPA, 549 U.S. 497, 521-23 (2007) (relaxing the standing analysis when a State
challenges federal environmental regulations in light of the danger posed by climate
change to a State’s land, natural ecosystems, and territorial integrity); In re Maui
Elec. Co., 150 Haw. 528, 538 n.15 (2022) (interpreting the State constitutional right
to a “clean and healthful environment” to entail “a right to a life-sustaining climate
system,” and analyzing an agency’s statutory authority in view of that right); In re
Hawai'i Elec. Light Co., 152 Haw. 352, 359 (2023) (examining an agency’s statutory
obligations in light of the irreversible risk posed by climate change to the State’s
resources and environment); Held v. Montana, No. CDV-2020-307, *35-46 (Mont. Dis.
Ct. 2023) (documenting impact of climate change on Montana’s natural resources and
detailing the long-term harms to the State and its citizens).
Blounts Creek is a public waterway—it belongs to the People. See N.C.G.S. §
143-211 (“Recognizing that the water and air resources of the State belong to the
people, the General Assembly affirms the State's ultimate responsibility for the
preservation and development of these resources in the best interest of all its citizens
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and declares the prudent utilization of these resources to be essential to the general
welfare.”); see also N.C. Const. art. XIV, § 5 (“It shall be the policy of this State to
conserve and protect its lands and waters for the benefit of all its citizenry, and to
this end it shall be a proper function of the State of North Carolina and its political
subdivisions… to control and limit the pollution of our air and water….”).
When pollution threatens the viability of a public waterway like the Creek, it
threatens the People’s stake in it, too. See State ex rel. Rohrer v. Credle, 322 N.C. 522,
527 (1988) (affirming that North Carolina’s “[n]avigable waters” are “held in trust by
the State for the benefit of the public”). That is especially true for fragile ecosystems
like Blounts Creek’s. As the Division’s own environmental analyst made clear, even
slight shifts in the Creek’s salinity and water flow could overhaul its waters and
stamp out the species that occupy them. And the impact of Martin Marietta’s
approved discharge–again, twelve million gallons of wastewater every day—is
projected to be anything but slight.
That is especially concerning because environmental destruction is often
irreversible. Poisoned waters are not easily healed. And even worse, the harms of
pollution ripple across time and space, implicating the interests of current North
Carolinians as well as future generations. While those alive today may have enjoyed
the Creek’s offerings, their children may not—and likely will not—have the same
opportunity. Given the stakes involved—and the far-reaching consequences of our
ruling—I would hesitate before adopting the Division’s conclusory reading of law.
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Before greenlighting the pollution of our waters, we should carefully consider the
wisdom and legality of that course. Evidence supplies critical context to the Division’s
decision and its legal soundness—context we can and should consult when gambling
with the People’s resources.
III. Application
A cursory review of the record reveals that the Division adopted an erroneous
interpretation of the biological integrity standard, and thus failed to appropriately
apply the standard before approving the permit. Several studies factored into the
Division’s conclusion that “the proposed discharge will have no likely significant
adverse effects to aquatic life,” which was the basis for its determination that the
permit would comply with the biological integrity standard. These studies included
its consultant CZR Incorporated’s (CZR) Aquatic Habitat Assessment of the Upper
Headwaters of Blounts Creek, a technical memorandum authored by another
consultant, Kimley-Horn and Associates (Kimley-Horn), which was revised later and
split into two separate reports, known as the water quality analysis technical
memorandum and the flood and stability technical memorandum, and a final
technical memorandum prepared by CZR that conducted a literature review
assessing aquatic life likely to appear in Blounts Creek.
Before turning to the Division’s flawed application of the biological integrity
standard, it is worth noting that there was substantial evidence presented at trial
that the methods employed by all of these studies and the conclusions drawn from
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them are dubious. Among the studies that the Division relied on was the water
quality analysis prepared by Martin Marietta consultant Kimley-Horn, which
evaluated both salinity and pH in Blounts Creek. Though the evidence presented at
trial pointed out potential errors with respect to both the salinity and pH analyses,
concerns with respect to the salinity analysis are particularly glaring.
In conducting its salinity analysis, Kimley-Horn ran a model in which it
evaluated the creek’s salinity on a single day—April 13, 2012—by “add[ing] . . .
discharge to the flow that they estimated on [that day].” Kimley-Horn itself explained
that the model “only represents a snapshot in time,” and it anticipated conducting
additional testing to confirm their results, but it never did so. In any case, the
Division relied on this analysis to conclude that the effect of the discharge from the
quarry “would be a less than 1 part per thousand change in salinity.”
Concerningly, however, the Wildlife Resources Commission—one of the
Division’s sister agencies with expertise in fisheries—conducted its own sampling and
recorded salinity at 5.1 ppt. The Commission explained that “[t]hese data differences
show the high variability of salinity that can occur in this system and demonstrate
the importance of designing a baseline monitoring plan that captures the variability
of critical water quality parameters such as pH and salinity annually as well as
seasonally or during weather events.” Similarly, the Division of Marine Fisheries—
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another sister agency3—commented on Kimley-Horn’s salinity analysis, explaining
that the sampling did not “accurately describe yearly or monthly conditions. These
sampling events should have been performed throughout the year over several years
to adequately understand the effects of the discharge.” Despite the counsel of its sister
agencies with relevant expertise, the Division failed to ask Martin Marietta or
Kimley-Horn to conduct this additional salinity sampling. No witness testified at trial
regarding the nature of Kimley-Horn’s model or the adequacy of the methods
employed.
Before the permit was issued, Eric Fleek, the Division’s own environmental
supervisor in its biological assessment branch, raised concerns about the Kimley-
Horn salinity analysis. Mr. Fleek warned that:
Since they are linking all of those non-biological impacts on
the salinity, I ASSUME there are good requirements in the
permit which require them to carefully monitor changes in
salinity. I have no clue what’s in the permit, but I sure hope
that requirement is in there because if the predicted
salinity changes are greater than the estimates provided
by Martin[ ]Marietta’s consultants, then there could indeed
be deleterious effects to estuarine biota. Salinity needs to
be rigorously monitored for if it is not already.
In other words, Mr. Fleek was concerned that because the salinity analysis hinges
entirely on a single day of sampling, if the results were inaccurate or
unrepresentative, there could be significant consequences for Blounts Creek’s aquatic
3 Both the Wildlife Resources Commission and the Division of Marine Fisheries have
statutory and regulatory authority over fisheries and marine fish, respectively, in the state.
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life. But those tasked with formulating the permit did not follow up with Mr. Fleek
or the biological assessment team about what this rigorous monitoring protocol would
entail. Consequently, the permit only requires salinity to be monitored in the
freshwater portion of the creek, even though Kimley-Horn’s modeling analysis
measured salinity in the creek’s saltwater segment—an entirely different part of
Blounts Creek. Further, Mr. Fleek testified that the rigorous monitoring
requirements he was referring to included monitoring sites in the saltwater portion
of the creek.
Officials from the Division who played a key role in the permit’s issuance had
little understanding of Kimley-Horn’s model and its potential flaws. Tom Belnick,
who formulated the final permit as the supervisor of the NPDES Complex Permitting
Unit at the Division, testified that he did not know the error rate of the model
employed by Kimley-Horn and admitted that the model was later revealed to be
flawed. He also testified that Kimley-Horn’s analysis cannot predict what the effect
of the discharge would be on salinity levels during any other season or any other day
of the year.
Tom Reeder, the director of the Division at the time the permit was issued, was
responsible for approving the permit. Mr. Reeder testified that salinity “was the thing
that [he] was really interested in,” and that he relied on the Kimley-Horn analysis to
inform his understanding of how the quarry discharge would affect the creek’s
salinity levels. But Mr. Reeder testified that, at the time he approved the permit, he
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was not aware that the Kimley-Horn analysis was based on only one day of sampling
or whether there was any follow-up testing performed to confirm the accuracy of
Kimley-Horn’s conclusion, and that he “[has] no idea what the model is based on.” He
did not know what time of the year Kimley-Horn collected samples nor did he know
the range of salinity that Kimley-Horn observed. He did not even know that one of
the samples that Kimley-Horn took generated an inaccurate salinity value.
The Kimley-Horn water quality analysis was not the only study upon which
the Division relied in issuing the permit, of course. The Division also relied on two
reports prepared by another Martin Marietta consultant, CZR. The first report CZR
prepared, which was included in an appendix to Martin Marietta’s permit
application, is the Aquatic Habitat Assessment of the Upper Headwaters of Blounts
Creek. The assessment sampled four locations in the headwaters of Blounts Creek
over the course of a single day and “attempt[ed] to measure biotic integrity” with
respect to species richness, total fish abundance, and percent tolerant individuals.4
CZR also spent a single day sampling the benthic macroinvertebrate population as
part of this assessment.
Like the Kimley-Horn Report, various weaknesses in CZR’s assessment are
worth noting. For example, the report did not conduct any aquatic habitat assessment
in the saltwater portion of Blounts Creek, even though the aquatic life that requires
4 The study did not attempt to evaluate species composition, diversity, functional
organization, or population composition.
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a saltwater habitat is thought to be particularly at risk from the twelve million
gallons of water that may be discharged into the creek every day under the permit.
In addition, CZR’s sampling of the stream’s macroinvertebrate population
conflicted with an analysis conducted by the Division’s own biologists who analyzed
the creek’s benthic macroinvertebrates. In this internal report, Mr. Fleek explained
that “there [was] a wide discrepancy in diversity between all of [CZR’s] collections
and [the Division’s].” This conclusion was particularly concerning given that CZR
took its samples during a time of year when “more favorable physical-chemical
conditions” should have yielded a “more diverse pool of taxa.” That CZR’s analysis
presented a potentially unduly narrow view of the diversity present in Blounts Creek
is problematic because the purpose of the assessment was to predict the effect of the
discharge on a representative range of aquatic life. But not only did CZR fail to
conduct its analysis in the saltwater segment of the creek to determine the effect of
the discharge on biota in that particular habitat, Mr. Fleek explained that CZR’s
sampling was not even representative of the biota present in the freshwater segment
of the creek. What is more, the Division did not raise these discrepancies with Martin
Marietta prior to the issuance of the permit, so these issues were never addressed.
And Mr. Belnick, who, to repeat, was responsible for drawing up the final permit,
never followed up with Mr. Fleek regarding his findings.
Mr. Fleek re-raised his concerns about CZR’s macroinvertebrate sampling with
Mr. Belnick a few months later, explaining that CZR “[had] real issues with the
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collection and identification of invertebrates,” meaning that CZR “consistently, and
drastically, under report[ed] what was present (even though they had better physical-
chemical sampling conditions).” Mr. Fleek went on to express that “in [his] opinion,
if [the Division is] requiring ongoing biological monitoring, [it] need[s] to require that
Martin Marietta retain a certified biological lab because what CZR collected is
nowhere close to what [Mr. Fleek] found and their samples would fail [the Division’s]
standards of field and lab” quality control. Again, Mr. Belnick neither followed up
with Mr. Fleek about this concern nor alerted Martin Marietta that the sampling was
deficient. In a third email, Mr. Fleek wrote that CZR “will have to get certified to do
[macroinvertebrates] or [Martin Marietta] will have to hire someone who knows what
they are doing because, frankly, CZR is not up to it currently.” Despite Mr. Fleek’s
repeated warnings that CZR’s macroinvertebrate sampling was deficient, the
Division forged ahead with issuing the draft permit without addressing these
problems.
The Wildlife Resources Commission raised similar concerns about CZR’s fish
sampling—concerns with which the Division’s biologists agreed. The Commission
explained that Martin Marietta, through CZR’s aquatic habitat assessment,
submitted data from a single fish sampling event and
determined that there would be no impacts to aquatic
species with the project as proposed. We do not believe a
one day backpack shocking and fyke net event can describe
the ecology of this system. Important species such as
striped bass and American eel, a federal species of concern,
have recently been sampled in the system by others.
Blueback herring may also be present, but due to low
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population numbers are difficult to find. Our concerns
regarding the spawning of anadromous species cannot be
addressed with the submitted sampling event due to the
absence of egg, larvae, and juvenile sampling. In order to
understand the impacts this proposed project may have on
wildlife resources, we need multi-stage aquatic resource
data from the site to better represent the extent of existing
habitats and how they are utilized.
In short, the Commission called for additional fish sampling data, and biologists with
the Division agreed with the recommendation.5
Similarly, at trial, Dr. Anthony Overton—an expert on fisheries management,
fisheries ecology, larval fish ecology, and fish sampling methods and analysis—
testified that a single day of sampling is insufficient to assess the makeup of the
creek’s aquatic life. He explained, for example, that “[j]ust one day of sampling,” as
CZR conducted here, “will not capture species composition or diversity” because
“[they are] variable. You have species moving in and species moving out with respect
to season.” Dr. Overton also echoed the concern that CZR’s methodology was
inadequate to evaluate the biota of Blounts Creek because it was inordinately
restricted in area.
As with the macroinvertebrate sampling, the Division never asked Martin
Marietta to commission, nor did it ask CZR to conduct, additional fish sampling.
5 The Division of Water Quality raised similar concerns, cautioning that “1-day of
sampling does not provide sufficient information on downstream impacts” and that “sampling
for young of year was conducted too early and should have been conducted in June or July.”
The Division of Marine Fisheries, which recommended that the permit application be entirely
denied, also raised these concerns.
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CZR’s aquatic habitat assessment therefore represents the only fish sampling
conducted prior to the issuance of the permit.6
To “make up for the inadequate sampling in the CZR report,” Mr. Belnick
testified that the permit added salinity monitoring at the two permitted water
discharge points in the creek known as D1 and D2. But the information provided by
these monitoring sites offers little insight into whether the biological integrity of the
creek is being maintained. For example, CZR did not take any fish samples at the D2
monitoring point in compiling the report. This means that there is no way to know
how changes in salinity are affecting the biological integrity of that area because
there is no baseline to which subsequent population samples may be compared.
Moreover, both salinity monitoring sites are located in the freshwater segment of
Blounts Creek. So not only were no biological samples taken from the estuarine
segment of the creek as discussed previously, but there will be no salinity monitoring
at the part of the creek where saltwater life depends on the maintenance of a fragile
saltwater habitat.
This is particularly concerning given Mr. Fleek’s warning regarding the need
for rigorous salinity monitoring requirements as quoted earlier. To repeat, Mr. Fleek
wrote that he “ASSUME[S] there are good monitoring requirements in the permit
which require [Martin Marietta] to carefully monitor changes in salinity . . . because
6 The biological sampling that the Division’s biologists conducted focused exclusively
on benthic macroinvertebrates.
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if the predicted salinity changes are greater than the estimates provided by
Martin[ ]Marietta’s consultants, then there could indeed be deleterious effects to
estuarine biota.” Yet the permit does not provide for salinity monitoring in the
saltwater segment of the creek despite Mr. Fleek’s insistence that such a monitoring
site was highly important. There is no contrary evidence suggesting that limiting
monitoring to the D1 and D2 sites is sufficient.
Following the aquatic habitat assessment, CZR prepared a technical
memorandum on Martin Marietta’s behalf. CZR did not conduct additional sampling
in preparing this memo. Rather, it composed a literature review that “discusses what
fish are out there and . . . provides tolerance ranges for fish that are likely to inhabit
[the] area.” The literature review did not provide tolerance ranges for specific
saltwater fish that live in Blounts Creek, and no one testified at trial regarding the
preparation of the literature review or the process for selecting the various studies it
relied on. Dr. Overton testified that an appropriate literature review in this context
should rely on studies that have sampled the body of water at issue. But CZR’s review
did not rely on any studies about Blounts Creek’s aquatic life. Instead, it cited studies
conducted in places such as California, Pennsylvania, New Hampshire, and Canada.
Further, as discussed in more depth later, it is impossible to measure species
composition, species diversity, functional organization, and population density
without habitat-specific sampling. A literature review that hypothesizes which fish
may be present in Blounts Creek is not a replacement for a study that determines
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which fish are actually present.
After the second CZR report was submitted, the Wildlife Resources
Commission notified the Division that it did “not feel” that its “concerns expressed in
[its] previous correspondence [had] been adequately addressed.” The Commission
explained that, through its own sampling efforts, it recorded the “highest [catch per
unit effort] of River Herring in years from the Tar-Pamlico system, . . .
demonstrat[ing] the importance of Blounts Creek as potential spawning habitat.” But
the Division did not follow up on the concerns raised by the Commission, nor did it
request to see the data the Commission collected. Moreover, Mr. Belnick did not
receive feedback on the Commission’s comments from Mr. Fleek or anyone else in the
biological assessment branch.
On top of all of the issues raised with the studies that the Division relied on,
Mr. Fleek provided Mr. Belnick with a final opinion regarding the permit’s likely
effects on Blounts Creek. Mr. Fleek explained,
The biota presently found in the Blounts Creek system is
adapted to intermittent flow, low pH, and low dissolved
oxygen. The proposed discharge will alter the natural
physcio-chemical [sic] parameters of this system by
changing the flow regime from intermittent to permanent,
and by increasing the pH and dissolved oxygen from low to
high. As such, many of the taxa currently found in this
system which are adapted to the natural condition will be
replaced by taxa that are adapted to more permanent
flows, higher pH, and higher dissolved oxygen levels. The
taxa that are naturally occurring to this type of stream
system will be replaced with taxa that are not typical to
this type of system. The discharge will promote the
presence of taxa that are more indicative of streams which
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have permanent flows, higher pH, and higher dissolved
oxygen. These types of streams, and the taxa which inhabit
them, are not normally found in North Carolina’s coastal
plain.
(emphasis added). Put simply, the discharge is predicted to replace much of the
creek’s current aquatic life with life that is adapted to live under post-discharge
conditions—life that is “not normally found in North Carolina’s coastal plain.” The
consequences of Mr. Fleek’s prediction are plain; if the current taxa of the creek are
replaced by taxa that are not normally found in North Carolina’s coastal plain, then
the discharge has eliminated the ability of Blounts Creek “to support and maintain a
balanced and indigenous community of organisms having species composition,
diversity, population densities and functional organization similar to that of reference
conditions[,]” or the creek’s biological integrity. 15A N.C. Admin. Code 2B.0202(11).
Mr. Belnick testified that he trusted Mr. Fleek’s analysis on this point. But Mr.
Belnick did not provide this analysis to Mr. Reeder as part of the materials that Mr.
Reeder considered in applying the biological integrity standard and approving the
permit.
Despite all of the issues and warnings summarized above, which represent only
a few examples of the concerns raised about the methodologies employed and the
conclusions reached by the CZR and Kimley-Horn reports, the Division issued the
permit without requiring additional sampling that would allow it to confirm whether
the permit’s predicted consequences have been realized. But more importantly to this
appeal, none of the testing that the Division relied on answers whether Blounts
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Creek’s biological integrity, as that term has been defined by 15A N.C. Admin. Code
2B.0202(11), will be maintained under the permit.
As explained previously, 15A N.C. Admin. Code 2B.0211 designates
“maintenance of biological integrity” as a best usage that must be protected for Class
C waters like Blounts Creek. 15A N.C. Admin. Code 2B.0211(1). And “[b]iological
integrity means the ability of an aquatic ecosystem to support and maintain a
balanced and indigenous community of organisms having species composition,
diversity, population densities and functional organization similar to that of reference
conditions.” 15A N.C. Admin. Code 2B.0202(11). The only way to determine whether
the issuance of a permit maintains “the ability of an aquatic ecosystem” to support
and maintain certain biological characteristics “similar to that of reference
conditions” is to have some understanding of what those specific reference conditions
are.
Despite the clear language of the regulation, no one from the Division defined,
measured, provided recommendations on, or otherwise specified the reference
conditions of Blounts Creek in terms of its species composition, diversity, population
densities, and functional organization, or any other ecological metric, including Mr.
Reeder who was responsible for applying the biological integrity standard, Mr.
Belnick, the permit’s drafter, or Mr. Fleek, the head of the Division’s biological
assessment branch. In fact, Mr. Reeder testified that he did not “know if there is such
a thing” as the biological integrity standard. More troubling still, Mr. Reeder testified
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that he did not document any reference conditions that he supposedly relied on in
determining whether the permit complied with the biological integrity standard. 7 In
short, the Division failed to analyze or determine the creek’s reference conditions such
that the Division will be able to monitor whether those reference conditions are
maintained in compliance with the biological integrity standard.
The Division’s failure to evaluate biological integrity before issuing the permit
is supported by Mr. Fleek’s warning discussed previously that “the taxa which [will]
inhabit [the new Blounts Creek system] are not normally found in North Carolina’s
coastal plain.” Again, Mr. Reeder was never informed of this conclusion. Additionally,
Mr. Fleek was asked to identify “a stream that is currently what Blounts Creek will
look like after the discharge[,]” but he could not find one, including in the Division’s
own database, which provides data from 150-200 sites per year dating back to 1978.
This means that the discharge is predicted to create an entirely different creek
that neither resembles Blounts Creek’s current composition nor exists anywhere else
in this State’s coastal plain. But as the State itself recognizes, “[t]he biological
integrity standard safeguards our State’s biological resources by prohibiting any
discharge that would ‘preclude’ the ‘ability’ of an ecosystem to support biological
conditions that are ‘similar’ to ‘reference conditions.’ ” Thus, the result predicted by
7 This is particularly problematic because Mr. Reeder is no longer the director of the
Division. Thus, when the time comes to reopen the permit, there will be no documented
reference conditions to use in order to determine the permit’s impacts on Blounts Creek’s
biological integrity.
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Mr. Fleek would be a plain violation of the Division’s own interpretation of the
biological integrity standard and the requirement that Blounts Creek’s biological
integrity be maintained according to its current reference conditions—reference
conditions that the Division failed to establish. As a result, the permitted discharge
risks deleterious effects on Blounts Creek’s current aquatic life as predicted by the
Division’s biologists, and there will be no way to assess whether this change complies
with 15A N.C. Admin. Code 2B.0211 because the Division has refused to collect the
data that would show that the creek’s biology has been fundamentally altered or
eliminated.
In sum, despite the opposition of many of its sister agencies with expertise in
the area and warnings from its own scientists, the Division issued the permit based
on questionable and insufficient research, ignored counsel that the permitted
discharge is expected to fundamentally alter the biological makeup of the creek, failed
to communicate that risk to the individual responsible for applying the biological
integrity standard, and blinded itself from discovering this consequence in the future.
Though the Division should be afforded deference in determining how to
appropriately quantify Blounts Creek’s reference conditions according to the metrics
set forth in 15A N.C. Admin. Code 2B.0202(11), the regulation and its terms must be
given some reasonable meaning. Indeed, though “the interpretation of a statute by
an agency created to administer that statute is traditionally accorded some deference
by appellate courts, those interpretations are not binding. ‘The weight of such [an
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interpretation] in a particular case will depend upon the thoroughness evident in its
consideration, the validity of its reasoning[,] . . . and all those factors which give it
power to persuade, if lacking power to control.’ ” In re North Carolina Savings & Loan
League, 276 S.E.2d at 410 (quoting Skidmore, 323 U.S. at 140). Here, however, the
record demonstrates that the Division either entirely ignored the biological integrity
standard or applied it in a way that conflicts with any logical interpretation of the
standard, including its own.
The majority holds that the Division is entitled to deference in its
interpretation of 15A N.C. Admin. Code 2B.0202(11) “[g]iven the Division’s expertise
and conduct in its review of Martin Marietta’s permit application.” But because the
record shows that the Division failed to employ any standard as it was drafting and
approving the permit, there is no interpretation to which this Court can afford the
Division deference. Even if the Division did attempt to interpret and apply the
standard, as the discussion above shows, the attempt would be wholly inadequate as
a legal matter. An agency is entitled to deference when it has “demonstrated
knowledge and expertise . . . with respect to facts and inferences within the
specialized knowledge of the agency.” N.C.G.S. § 150B-34(a) (2021). Deference is not
warranted when an agency’s interpretation is “plainly erroneous or inconsistent with
the regulation.” Morrell, 338 N.C. at 238. Ignoring a regulation or applying such a
butchered and legally unsound interpretation that the regulation’s protections are
rendered impotent, as here, is not a demonstration of agency knowledge and
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expertise. It is a demonstration of the dereliction of duty and constitutes plainly
erroneous agency conduct.
IV. Conclusion
Because the Division’s application of the biological integrity standard, or lack
thereof, was plainly erroneous, the ALJ’s conclusion otherwise constitutes an error of
law, which the Superior Court correctly reversed, applying de novo review. N.C.G.S.
§ 150B-51(b), (c) (2021). I therefore dissent from the majority’s conclusion that the
ALJ was correct in concluding that the Division properly interpreted the biological
integrity standard in issuing the permit.
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Sound Rivers, Inc. v. N.C. Dep't of Env't Quality
Combined Opinion