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NORTH CAROLINA FORESTRY ASSOCIATION, Petitioner
v.
NORTH CAROLINA DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES,
DIVISION OF WATER QUALITY, and the NORTH CAROLINA ENVIRONMENTAL
MANAGEMENT COMMISSION and its NPDES COMMITTEE, Respondents
and
THE SIERRA CLUB and DOGWOOD ALLIANCE
Appeal pursuant to N.C.G.S. § 7A-30(2) from the
decision of a divided panel of the Court of Appeals, 154 N.C.
App. 18, 571 S.E.2d 602 (2002), reversing an order entered 27
March 2001 by Judge Howard E. Manning, Jr., in Superior Court,
Wake County. Heard in the Supreme Court 15 October 2003.
Hunton & Williams, by Charles D. Case, Craig A. Bromby,
Jeff F. Cherry, and Julie Beddingfield, for petitioner-
appellant.
Roy Cooper, Attorney General, by Jill B. Hickey,
Special Deputy Attorney General, for respondent-
appellees.
Southern Environmental Law Center, by Donnell Van
Noppen III, and Sierra Weaver, for intervenor-
appellees.
WAINWRIGHT, Justice.
Petitioner-appellant North Carolina Forestry
Association (NCFA) is a non-profit trade association whose
members engage in forest management and timber products
industries, including wood chip mills. Wood chip mills take cut
logs and other large pieces of wood and process them into smallerchips that are used in the production of paper and plywood
products.
Respondent-appellees are state agencies responsible for
regulating water quality in North Carolina. These agencies have
authority to issue permits pursuant to the National Pollutant
Discharge Elimination System (NPDES) required by the federal
Clean Water Act. 33 U.S.C. § 1342 (2000). The Clean Water Act,
along with Chapter 143 of our General Statutes, and the rules of
the North Carolina Environmental Management Commission, require
facilities to obtain NPDES permits for stormwater discharges
associated with their industrial activities. See 33 U.S.C. §
1342 (2000); N.C.G.S. § 143-215.1 (2001); 15A NCAC 2B, 2H (2003).
The present case arises from the decision of the North
Carolina Department of Environment and Natural Resources,
Division of Water Quality (DWQ), to exclude new and expanding
wood chip mills from a generally available stormwater permitting
system and to instead subject the wood chip industry to a more
rigorous individual permitting process.
In 1992, DWQ issued thirteen NPDES stormwater general
permits. One of these permits, NPDES Stormwater General Permit
No. NCG040000 (NCG04), authorized the discharge of stormwater
runoff associated with the industrial activities of certainsegments of the timber products industry, including wood chip
mills. The NCG04 general permit expired on 31 August 1997.
On 1 April 1998, DWQ issued NPDES Stormwater General
Permit No. NCG210000 (NCG21). Unlike NCG04, the NCG21 permit
excluded wood chip mills. As a result, DWQ began requiring new
and expanding wood chip mills to obtain more detailed and time-
consuming individual NPDES stormwater permits.
In June 1998, NCFA, acting on behalf of its timber
industry members, challenged DWQ's exclusion of wood chip mills
from the NCG21 general permit. NCFA petitioned for a contested
case hearing for administrative review under the North Carolina
Administrative Procedure Act. NCFA argued that:
NCFA and its members are persons aggrieved
as defined in N.C.G.S. § 150B-2(6) because
NCFA and its members are persons directly and
indirectly affected substantially in the
persons and property by the administrative
decision to exclude wood chip mills from
coverage under the General Permit. NCFA's
members who decide to locate and permit new
chip mills in North Carolina will be subject
to, among other things, burdensome
application procedures and additional
monitoring and reporting requirements.
On 19 March 1999, an administrative law judge filed a
recommended decision in the case, concluding, among other things,
that the NCG21 general permit should be reissued without the
exclusion of wood chip mills. The administrative law judge alsofound that NCFA was a person aggrieved and thus had standing to
bring the claim at issue. The administrative law judge further
noted that the final agency decision in this case would be
rendered by the Environmental Management Commission of the
Department of Environment and Natural Resources.
On 5 November 1999, the Environmental Management
Commission issued its Final Agency Decision, rejecting the
administrative law judge's recommendation and instead concluding
that NCFA lacked standing to challenge the issuance of NCG21.
NCFA thereafter sought judicial review of the agency decision.
On 14 March 2001, the Wake County Superior Court heard
NCFA's Petition for Judicial Review. The superior court
concluded, among other things, that NCFA had standing to bring
the contested case as a person aggrieved.
NCFA appealed to the Court of Appeals and respondent
state agencies cross-assigned error as to the trial court's
conclusion that NCFA had standing. On 19 November 2002, a
divided panel of the Court of Appeals reversed the trial court,
holding that NCFA was not a person aggrieved and thus lacked
standing. North Carolina Forestry Ass'n v. Dep't of Env't and
Natural Res., 154 N.C. App. 18, 24, 571 S.E.2d 602, 606 (2002).
The dissent, however, concluded that NCFA had standing on twoindependent grounds: (1) because NCFA was a person aggrieved,
and (2) because the relevant action involved a licensing as
defined in N.C.G.S. § 150B-2. Id. at 25-28, 571 S.E.2d at 606-
08; see also N.C.G.S. § 150B-2(2) (2001) (defining contested
case to include disputes over licensing); N.C.G.S. § 150B-2(3)
(defining license as any certificate, permit or other
evidence, by whatever name called, of a right or privilege to
engage in any activity (emphasis added)).
On 27 December 2002, NCFA filed a Notice of Appeal and
Petition for Discretionary Review in this Court. On 12 June
2003, this Court denied NCFA's Petition for Discretionary Review.
Accordingly, our review is focused solely on the issue that
formed the basis of the dissent: whether NCFA is a person
aggrieved under the North Carolina Administrative Procedure Act
and therefore has standing to commence a contested case
proceeding to challenge DWQ's denial of a stormwater general
permit for the wood chip industry. Having thoroughly reviewed
the applicable statutory authorities and this Court's precedents,
we conclude NCFA is a person aggrieved and therefore has
standing to bring the contested case.
In general, individuals adversely affected by a
discretionary agency decision generally have standing to complainthat the agency based its decision upon an improper legal
ground. FEC v. Akins, 524 U.S. 11, 25, 141 L. Ed. 2d 10, 23
(1998). In North Carolina, disputes between a state government
agency and another person may be formally resolved with the
filing of an administrative proceeding referred to as a
contested case. N.C.G.S. § 150B-22 (2001). A contested case
is intended to determine the person's rights, duties, or
privileges. Id. Any person aggrieved may commence a contested
case [proceeding]. N.C.G.S. § 150B-23(a); see also Empire Power
Co. v. North Carolina Dep't of Env't, Health and Nat. Resources,
337 N.C. 569, 588, 447 S.E.2d 768, 779 (1994).
A person aggrieved is any person or group of persons
of common interest directly or indirectly affected substantially
in his or its person, property, or employment by an
administrative decision. N.C.G.S. § 150B-2(6) (2001); Empire
Power, 337 N.C. at 588, 447 S.E.2d at 779. This Court has stated
that whether a party is a person aggrieved must be determined
based on the circumstances of each individual case. Empire
Power, 337 N.C. at 588, 447 S.E.2d at 779.
In the present case, NCFA is adversely affected by the
exclusion of new and expanding wood chip mills from the NCG21
general permit. Prior to this exclusion, the operation of a newor expanding wood chip mill was a generally permitted activity
that required minimal administrative process. As a result of
their present exclusion from the NCG21 permit, new and expanding
wood chip mills are forced to undergo the lengthy and detailed
process of seeking individual permits. Accordingly, because the
issuance of the NCG21 general permit adversely affected NCFA and
its members, we conclude NCFA is a person aggrieved under the
facts of the present case and thus has standing to bring a
contested case hearing.
Additionally, the present case clearly involves the
licensing of wood chip mills to operate in our state. The
North Carolina Administrative Procedure Act states that any
action involving licensing is by definition a contested case.
N.C.G.S. § 150B-2(2). The North Carolina Administrative
Procedure Act defines a license as any certificate, permit or
other evidence, by whatever name called, of a right or privilege
to engage in any activity. N.C.G.S. § 150B-2(3) (emphasis
added). Because we conclude that the NCG21 permit fits within
this definition, we further conclude that the present case
involves a licensing. This provides a distinct basis to conclude
that NCFA has standing.
In sum, we hold that NCFA has standing to bring acontested case hearing and the Court of Appeals' decision was
thus in error. As to any and all issues not herein addressed, we
expressly decline to make any conclusions. Accordingly, we
reverse the decision of the Court of Appeals and remand this case
to that court for further proceedings not inconsistent with this
opinion.
REVERSED.
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