Water for Flathead v. DEQ

2023 MT 86
Montana Supreme Court·Decided May 16, 2023·No. DA 22-0113·Published·Cited by 6 cases

Opinion

05/16/2023

DA 22-0112

IN THE SUPREME COURT OF THE STATE OF MONTANA 2023 MT 86

WATER FOR FLATHEAD’S FUTURE, INC., AMY WALLER, STEVEN MOORE, and CYNTHIA EDSTROM,

Plaintiffs and Appellees, v.

MONTANA DEPARTMENT OF ENVIRONMENTAL QUALITY, Defendant and Appellant,

and MONTANA ARTESIAN WATER COMPANY, Intervenor-Defendant and Appellant.

APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV-2017-1109(A)

Honorable Amy Eddy, Presiding Judge

COUNSEL OF RECORD:

For Appellants:

Kirsten H. Bowers, Montana Department of Environmental Quality, Helena, Montana

Victoria A. Marquis, Crowley Fleck PLLP, Billings, Montana (for Montana Artesian Water Company)

For Appellees:

Roger M. Sullivan, McGarvey Law, Kalispell, Montana Robert M. Gentry, Gentry Law, PLLC, Missoula, Montana

David K. W. Wilson, Jr., Morrison, Sherwood, Wilson & Deola, PLLP, Helena, Montana

Submitted on Briefs: October 26, 2022 Decided: May 16, 2023

Filed:

V,„ 6A•-if

Clerk

Justice Jim Rice delivered the Opinion of the Court.

¶1 Defendants Montana Department of Environmental Quality (DEQ) and Montana Artesian Water Company (Artesian) appeal from the order of the Eleventh Judicial District Court, Flathead County, granting summary judgment to Appellees Water for Flathead’s Future (WFF) and vacating the Montana Pollutant Discharge Elimination System (MPDES) permit issued by DEQ to Artesian. We address the following issues:

1. Has this matter been mooted?

2. Did the District Court err by concluding that DEQ, in issuing a MPDES permit to Artesian, failed to take the requisite “hard look” at concerns raised by the EPA and USFWS?

3. Did the District Court err by holding DEQ improperly considered only the volume of water that would be discharged under Artesian’s MPDES permit, rather than the full volume of water authorized for use under the DNRC’s water use permit?

¶2 We conclude the matter has not been mooted, and reverse.

FACTUAL AND PROCEDURAL BACKGROUND

¶3 Artesian is a for-profit corporation endeavoring to operate a water bottling facility on land it owns in the Creston area of Flathead County. To supply water for the facility, Artesian applied in June 2015 for, and was eventually issued, a Beneficial Water Use Permit from the Department of Natural Resources and Conservation (DNRC).1 Artesian’s water right authorizes it to use up to 450 gallons per minute (gpm), sufficient to fill about

1 Artesian’s Beneficial Use Permit is not before the Court in this appeal, but is the subject of the appeal in Flathead Lakers v. DNRC, DA 21-0535, the Opinion in which is being issued contemporaneously with this Opinion.

140,000 bottles of water per hour or 1.2 billion bottles per year. As part of the application process for the water use permit, in compliance with the Montana Environmental Policy Act (MEPA), DNRC conducted an Environmental Assessment (EA) of the impacts arising from Artesian’s full use of its requested water right. The EA concluded that Artesian’s use of the groundwater would not “have any negative impacts on the water quality of the Flathead River or Flathead Lake.” The EA further concluded that Artesian’s water use would have no significant impact on threatened or endangered species in the area, including bull trout.

¶4 Prior to filling each bottle with water from the onsite well, Artesian washes each plastic bottle. The rinse water is then discharged into a nearby unnamed tributary (UT) to the Flathead River. The rinse water is not exposed to any contamination in the process; the only anticipated pollutant is suspended solids from dust and other debris that may be contained in the bottles. Additionally, Artesian uses non-contact geothermically heated water to heat the facility. This water is not exposed to contaminants, and is therefore discharged untreated at a rate not to exceed 60 gpm at a temperature of 43 to 45 degrees Fahrenheit.

¶5 In October 2015, pursuant to the Montana Water Quality Act, Artesian applied with DEQ for a discharge permit authorizing its wastewater discharge. Because Artesian was in a start-up phase, it requested a permit for discharge of only 1.8 gpm, a small fraction of Artesian’s projected full-capacity discharge during bottling operations with maximal usage

of its water right.2 Such discharge permits extend for five years, meaning that, upon its expiration, Artesian would be required to re-apply for whatever quantity of water expected to be discharged during the following five-year period. Additionally, the flow rate of the Permit cannot be increased while in effect without a major modification, which would require an application, a new MPDES permit, an EA, and a public comment period.

¶6 DEQ reviewed Artesian’s permit application, prepared an EA, a draft Permit, and a fact sheet. In its EA, DEQ referenced DNRC’s earlier EA to note the expected impacts of Artesian’s maximal usage of the 450-gpm water right, but provided an original analysis that was confined to the impacts of Artesian’s 1.8-gpm discharge. In June 2016, DEQ issued public notice of its initial determination to issue Artesian’s requested permit, and invited public comment. During the public comment period, DEQ received comments from the public, Artesian, the Environmental Protection Agency (EPA) and the United States Fish and Wildlife Service (USFWS) regarding the draft Permit.

¶7 EPA expressed concerns about the limited quantity of data used to reach conclusions for the Permit,3 the means of measuring potential pollutants in the effluent, the impact of the increased seasonal waterflow into the UT, and the permit’s lack of required monitoring and reporting. In response to these comments, DEQ collected an additional well sample,

2 Artesian’s 1.8 gpm MPDES discharge permit will hereinafter be referred to as “the Permit.”

3 Specifically, because the two water samples testing the quality of the source well were taken in February and March, the EPA expressed concerns about the need for additional testing to account for potential seasonal variation.

imposed additional monitoring and reporting requirements regarding suspended solids in the effluent, and provided an explanation that stream flow levels were expected to be relatively constant outside of snow melt influxes and that any change is unlikely to be impactful because of the character of the UT.4

¶8 USFWS’s comments discussed some of the same issues addressed by the EPA, and added concerns about potential impacts to downstream aquatic species such as bull trout and the absence of preventative measures to avoid accidental spills of hazardous materials. DEQ responded by adding a permitting requirement that Artesian implement and maintain “best management practices” to minimize the risk of accidental releases of pollutants. DEQ also explained that other beneficial uses of state waters, such as propagation of fish, would be fully preserved under the Permit’s existing mandatory effluent limits and monitoring requirements. According to DEQ, the nature of the recipient UT, in conjunction with the Permit’s effluent limits, meant that no significant adverse impacts to bull trout would occur. Neither federal agency submitted any further comments following DEQ’s responses.

¶9 On November 1, 2017, the Permit took effect, after which WFF initiated this proceeding in the District Court, claiming DEQ’s issuance of the Permit violated MEPA. The lengthy proceedings included the joining of Artesian as a party, a brief stay following a separate district court decision regarding Artesian’s water right, cross-motions for

4 Artesian’s discharge was expected to cause only an eight percent increase to the UT’s mean monthly flow.

summary judgment, and over a year of briefing. During the entire period, Artesian operated pursuant to the Permit, as no injunction had been sought.

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