Recent Wind Farm Decision Highlights Difference in State Processes

Image of wind turbine in field by Chesapeake Bay Program

The article is not a substitute for legal advice. 

            A recent decision by Maryland’s Court of Special Appeals highlights the differences that proposed power generation facilities can bring before the Public Service Commission (PSC). For example, a proposed power generation facility can consider applying for a Certificate of Public Convenience and Necessity (CPCN) or for an exemption from the CPCN process.  The recent decision in Dan’s Mountain WindForce, LLC v. Shaw highlights the differences between these two processes, which will be vital to understand as renewable energy development in the state increases.

Background

            For over a decade, Dan’s Mountain Wind Force, LLC (Wind Force) has been trying to construct 17 wind turbines and a substation on Dan’s Mountain in Allegany County, Maryland.  In 2016, the PSC rejected the Wind Force application for a CPCN for not being in the public interest. In 2020, Wind Force applied to the PSC, seeking an exemption from the CPCN process, which was granted. Concerned neighbors, however, challenged granting this exemption in the circuit court for Baltimore City.  The circuit court reversed the PSC’s decision, denying the CPCN exemption.  Wind Force appealed to the Court of Special Appeals.

CPCN Permit and Exemption

            The court’s opinion highlights the differences between the two processes.  To obtain a CPCN, an applicant must provide a detailed description of the proposed power generation facility, and a statement detailing how the facility will comply with all environmental laws, potential impacts the facility will have on the State’s natural resources, socioeconomic effects of the proposed facility, description of environmental justice issues affected by the facility, explanation of efforts to engage the public and encourage public participation, and any condemnation required.  Condemnation would be a legal process of eminent domain exercised by a governmental entity or a utility to take over the property and the owner paid reasonable compensation for the property. The CPCN process allows the State to approve the construction of a power generating facility.

            If a proposed facility seeks a CPCN exemption, that removes the State from overseeing construction and requires the facility to go through the county for approval.  The CPCN exemption process is simplified for certain facilities, including small wind-powered generating facilities.  The PSC must determine if the proposed CPCN process:

  1. Ensures the safety and reliability of the electric system;
  2. Requires the owners of the facility to notify PSC within two weeks before exporting power; and
  3. Confirms that PSC can conduct the review and approval expeditiously.

If the PSC agrees that the facility meets the exemption requirements, then that transfers the responsibility for regulatory approval to the county the facility will be located.

Court of Special Appeals Decision

            On appeal, the neighbors argued that the CPCN application in 2016 precluded the PSC from granting the 2020 CPCN exemption.  The neighbors argue that either res judicata or collateral estoppel prevents granting the application.  Res judicata prevents the same parties from litigating a second lawsuit on the same claim or any claims arising from the series of transactions lead to the first lawsuit.  It is based on the principle that parties should not relitigate the same issues once a judgment has been issued.  A res judicata defense requires of the parties to show:

  1. The parties to the second action are the same as the parties from the first action,
  2. Both the first and second actions present the same claim or cause of action, and
  3. There was a final judgment rendered on the merits by a court of competent jurisdiction in the first action.

The court, on appeal, has to determine if the 2020 CPCN exemption is the same “claim” as the 2016 CPCN application.

            On appeal, Wind Force argued that the claims are not the same since each follows a different process.  The neighbors argue that the CPCN exemption process is essentially the same but an abbreviated process as the CPCN application process.  To the neighbors, both processes required the same evidence and involved Wind Force’s continued efforts to get the proposed project approved.  As discussed earlier, with the CPCN process, the PSC preempts a local government and regulates the siting and construction of a power-generating facility.  During that process, the PSC will consider siting and additional regulatory decisions needed to construct and complete the project; the PSC is just determining if the project qualifies for the exemption. If approved, the local government takes over siting and other requirements to construct the project.  To the court, these are two separate processes with separate claims, and each process has different requirements. Therefore, the court rules that res judicata does not apply.

            The court next turns to the neighbors’ claims that the exemption should be barred by collateral estoppel.  Collateral estoppel prevents parties from relitigating an issue of fact or law in a different legal action.  Collateral estoppel is a defense requiring the raising party (in this case, the neighbors) to show:

  1. The issue is identical to a previously litigated one,
  2. The prior proceeding determined the issue,
  3. With the issue, the current determination was a critical and necessary part of the prior decision,
  4. The prior decision was a final and valid judgment, and
  5. The party whom estoppel is asserted against had a full and fair opportunity to litigate the issue during the original case.

In this case, the parties are only focused on the first element.

            Wind Force argues that the issues in the CPCN exemption are different from those in the original application. Neighbors argue that PSC found the project would have no public benefit, so the PSC cannot reverse course and grant the CPCN exemption. The issue is that the public benefit is not required in the exemption process.

            The neighbors argued that the PSC did not have sufficient evidence to grant the CPCN exemption based on the denying the CPCN application. In reviewing the record, however, the court found that PSC had demonstrated Wind Force’s exemption request met statutory requirements. Therefore, PSC was not required to overcome a prior finding that the CPCN application was not in the public interest. Accordingly, the court reverses the lower court’s decision.

            As mentioned earlier, Wind Force has been working to develop this site as a wind farm for over a decade.  This decision will allow Wind Force to continue to work through the county permitting process to build this facility.

References

Dan’s Mountain WindForce, LLC v. Shaw, No. 1238, 2022 WL 1115005 (Md. Ct. Spec. App. Apr. 14, 2022).

Group Does Not Have Standing to Challenge USDA Loan Guarantee for Poultry Farm

Maryland poultry farm on the lower Eastern Shore by the Chesapeake Bay Program

This is not a substitute for legal advice. 

            Back in 2018, I posted on a federal district court decision involving a challenge to a USDA loan guarantee granted to a new Maryland poultry farm in Caroline County.  Food & Water Watch (FWW) had challenged the environmental assessment required at the time to comply with the National Environmental Policy Act (NEPA); see that information here.  In 2018, the federal district held that FWW had standing to bring the challenge. Still, a federal court of appeals recently reversed this decision. A two-judge panel of the U.S. Court of Appeals, District of Columbia, agreed that FWW did not have standing. 

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Maryland Court Rules Poultry Farm Manager Is Co-Employee of Integrator in Workers’ Compensation Case

Chicken barns rise from a farm in Queen Anne’s County, Md., on June 27, 2016. (Photo by Will Parson/Chesapeake Bay Program with aerial support by LightHawk).

The article is not a substitute for legal advice. 

            The Court of Special Appeals of Maryland, in Uninsured Employers’ Fund v. Tyson Farms, Inc., recently agreed with the Workers’ Compensation Commission that a poultry farm manager’s occupational disease disablement arose out of his co-employment to both the poultry farm owner and the poultry company, Tyson Farms, Inc. Tyson may appeal to the Court of Appeals of Maryland, but growers and companies should consider the possible implications of this decision.

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Recent Nuisance Suits Involving Farms Highlight Why Farms Should Understand How a Right-to-Farm Defense Operates

Cover Crop Agriculture in Frederick County, Md.

Liquid manure being applied by a tractor a field in Maryland.  Photo by Matt Rath/Chesapeake Bay Program

This article should not be considered legal advice.

Over the course of 2018, you have probably seen the stories involving nuisance suits brought by neighboring landowners against hog farms in North Carolina, leading to large verdicts against Smithfield Foods. Similar lawsuits are going on around the country involving neighbors claiming nearby hog farms are nuisances. In many cases, the state’s right-to-farm law should provide a possible defense to the farm, but the farm needs to meet all the requirements in the right-to-farm law to use the defense. Understanding the requirements can assist in maintaining the right-to-farm defense. Continue reading

Maryland Court Upholds the 2014 CAFO Permit For Complying With EPA’s Requirements

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Dairy cattle eating feed.  Image by Stephanie Schupska, Univ. of Georgia, CAES/Extension.

The article is not a substitute for legal advice.

In 2014, the Maryland Department of the Environment (MDE) issued a new general discharge permit for concentrated animal feeding operations (CAFOs) in Maryland. The 2014 permit was to replace a 2009 permit that was set to expire. This 2014 permit required no effluent monitoring only implementation of best management practices to prevent discharge into waters covered by state law and the Clean Water Act (CWA). The 2014 permit is a zero discharge permit. Food & Water Watch and the Assateague Coastal Trust challenged the permit for not requiring enough monitoring to ensure compliance with the CWA. The Maryland Court of Special Appeals recently upheld the 2014 permit based on substantial evidence to demonstrate MDE had complied with the CWA requirements.

Background

In early 2014, MDE began to prepare for the expiration of the 2009 CAFO permit by developing the 2014 permit to take effect when the 2009 permit expired. MDE was in communication with the Environmental Protection Agency (EPA) informally during the development process and dealt with EPA’s comments. At no point during this informal review process, EPA never mentioned that the 2014 permit would need effluent monitoring. EPA approved the proposed 2014 General Discharge Permit, and MDE began the required public comment period.

During the public comment period, Food & Water Watch and Assateague Coastal Trust filed comments highlighting that the CWA requires NPDES permits to include conditions on collecting data and information. In the view of these two groups, MDE should require more than annually analyzing manure for phosphorous and nitrogen content and every three years collecting soil samples to analyze phosphorous and pH from land application fields. The two groups proposed that MDE should require more regular testing of water for nitrogen, phosphorous, and fecal coliform where wastewater flowed off the CAFO via drain ditches and other locations identified by the nutrient management planner.

In issuing the final permit, MDE rejected these arguments and highlighted its discretion. The CWA provides MDE with the discretion to require monitoring when MDE reasonably determines that monitoring equipment would help carry out the objectives of the CWA.   MDE also maintains authority in the 2014 permit to require additional best management practices when MDE determines additional practices are needed.

Food & Water Watch along with the Assateague Coastal Trust filed a suit against MDE claiming that the 2014 General Discharge Permit for CAFOs did not include chemical, biological, and physical monitoring requirements or effluent monitoring requirements. The circuit court affirmed MDE’s 2014 permit and the two groups filed an appeal with the Court of Special Appeals of Maryland.

Court’s Reasoning

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Image of poultry in house.  Image by Mark Risse, University of Georgia from Livestock and Poultry Environmental Learning Center.

Since this is an appeal involving an administrative agency’s decision, the court will typically defer to the agency’s decision if the agency supported the record with competent and substantial evidence. If the agency did not support a decision with competent and substantial evidence or where the agency draws impermissible or unreasonable inferences and conclusions from the evidence, then a court will remand to the agency for further development.

On appeal, the court rejects the first case Assateague Coastal Trust and Food & Water Watch relies on. In Maryland Dep’t of Env’t v. Anacostia Riverkeeper, the Court of Appeals of Maryland found the stormwater management permit included sufficient biological and physical monitoring. The two groups argue that the 2014 permit failed to included any monitoring of locations where pollutants from CAFOs could be entering bodies of water. This prior decision is focused on stormwater discharges and not a zero discharge permit. For this reason, not being on point, the court rejects this argument and moves on to two federal court decisions involving including monitoring in CWA permits.

Looking at the other decisions the two groups rely on, MDE had approved a zero discharge permit with the 2014 CAFO permit. The first decision, Natural Resource Defense Council, Inc. v. Cnty of Los Angles, the two groups argued stood for the idea that the NPDES permit must require effectively monitored discharges to show permit compliance to be lawful. MDE’s 2014 permit involved no discharges, and if a discharge does happen, the CAFO operator must have implemented the required nutrient management plan and other plans or violate the permit.

The next case, Natural Resource Defense Council, Inc. v. U.S. EPA, the groups argued demonstrated that MDE’s reporting requirements and usage of best management practices were inadequate under the terms of the CWA. The court disagreed with the two groups. This case cited by the two groups demonstrated that best management practices could be used in certain situations to comply with the CWA. The prior case cited CAFOs as one area where best management practices would be appropriate.

When it came to requiring monitoring of discharges by the CAFO operator, the court agreed with the arguments made by MDE. To the court, the 2014 permit was a zero discharge permit and monitoring was not necessary and that implementing best management practices helps ensure zero discharge of waste. When making land applications of manure, the CAFO operator must include the land application in a log book that must be maintained for five years and be made available to MDE for inspection.

The court concludes that based on the administrative record there is substantial evidence to support that MDE’s 2014 permit complied with EPA’s regulations and upheld the circuit court’s ruling.

Why Care?

The 2009 general permit for CAFOs issued by MDE was also upheld by the Court of

Bobby Morgan Poultry Farm

Concentrated Animal Feeding Operation example, a poultry house.  Image by Bob Nichols via USDA.

Special Appeals of Maryland with many of the same groups challenging that permit as challenged the 2014 permit. The 2014 permit will expire at the end of November 2019. MDE will work on the guidelines for issuing a new general CAFO permit to replace the 2014 permit once it expires.

This recent decision, along with the decision in the 2009 permit challenge, highlights that as long as MDE has substantial evidence to document why MDE made the choices it did with the permit, a court will typically uphold the permit. From this case, MDE worked informally with EPA to develop the 2014 permit to ensure that the permit met requirements in the CWA. Hypothetically, if the 2019 permit is challenged (after developing and issuing), then we might expect a similar outcome if MDE continues to work informally with EPA to ensure the next general CAFO permit meets the CWA requirements.

References

Food & Water Watch v. M.D. Dep’t of Envtl., No. 2602, 2018 WL 2203175 (Md. Ct. Spec. App. May 14, 2018).

USDA Releases 2017 Cash Rent Averages for Maryland and Delaware

 

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Photo of barn at Friendship Farm Park in Charles County MD by Scrawl Design

 

USDA’s National Agricultural Statistic Service (NASS) updated data on cash rent paid by farmers in 2017. NASS collects this data from 240,000 farms across the United States annually through the Cash Rent Survey – data used by other agencies throughout USDA. The survey results can also give us an idea of what other tenants in the area may be paying per acre for farmland. Continue reading