ORDERS:
FINAL ORDER AND DECISION
STATEMENT OF THE CASE
This matter comes before the Administrative Law Judge Division (ALJD or Division) pursuant to S.C. Code Ann. §§ 1-23-310 et seq. (1986 & Supp. 2000) and 25 S.C. Code Ann. Regs. 61-72 (Supp. 2000) upon the request of Petitioner Madera
Utilities, Inc. (Madera) for a contested case hearing. Madera holds a National Pollutant Discharge Elimination System
(NPDES) permit which allows it to discharge treated wastewater from the Heatherwood Subdivision into a tributary of
Eighteen Mile Creek in Pickens County. Under the terms of the permit, Madera was required to eliminate the discharge
from its facility by September 1, 2000, by completing specified construction in accordance with a schedule of compliance.
In response to Madera's failure to adhere to this compliance schedule, the South Carolina Department of Health and
Environmental Control (DHEC or Department) issued Administrative Order 01-214-W on September 27, 2001. This order
required Madera to eliminate its discharge under a modified schedule of compliance and pay a $5,000 fine to the
Department. Madera now challenges this Administrative Order, contending that it cannot possibly comply with the terms
of the order.
After timely notice to the parties, a hearing was conducted on December 18, 2001, at the Administrative Law Judge
Division in Columbia, South Carolina. Based upon the following Stipulated Facts, Findings of Fact, and Conclusions of
Law, I find that the Administrative Order issued by DHEC must be sustained.
STIPULATED FACTS
At the hearing of this matter, the parties stipulated to the following facts on the record in open court:
1. In 1998, Madera Utilities, Inc., reapplied for and received a National Pollutant Discharge Elimination System (NPDES)
Permit from the South Carolina Department of Health and Environmental Control allowing Madera to discharge treated
wastewater from its Heatherwood wastewater treatment facility into a tributary of Eighteen Mile Creek in Clemson, South
Carolina.
2. Part I.D. of the permit contains a schedule of compliance for Madera to follow toward the eventual elimination of
discharge from the Heatherwood facility.
3. Because Madera did not comply with this schedule of compliance, the Department issued to Madera an Administrative
Order dated September 27, 2001.
4. Madera timely applied for reissuance of the permit prior to its expiration allowing it legally to continue operations under
the conditions of the prior permit.
5. Madera owns the right to operate the wastewater treatment facility but does not own the underlying real property.
FINDINGS OF FACT
Having considered the testimony, exhibits, and arguments presented at the hearing of this matter, and taking into account
the credibility of the witnesses and the accuracy of the evidence, I make the following Findings of Fact by a preponderance
of the evidence:
1. Madera purchased the right to operate the Heatherwood wastewater treatment facility in 1985 for $15,000. As noted in
the Stipulated Facts, Madera does not own the real property on which the facility is situated.
2. On September 30, 1998, DHEC issued NPDES Permit # SC0029548 ("the permit") to Madera for the operation of the
Heatherwood facility. Part I.D. of that permit, entitled "Schedule of Compliance," required Madera to:
i. Submit an approvable preliminary engineering report for discharge elimination by December 1, 1998.
ii. Submit approvable plans and specifications for discharge elimination by June 1, 1999.
iii. Start construction for discharge elimination by December 1, 1999.
iv. Complete construction for discharge elimination and eliminate discharge by September 1, 2000.
(Resp't Ex. #1.)
3. Madera did not challenge the terms and conditions of the permit at the time of its issuance in 1998.
4. As stipulated, Madera has not, to date, complied with any portion of the Schedule of Compliance under the permit.
5. In response to this noncompliance and after issuing a Notice of Violation to Madera, DHEC issued Administrative Order
01-214-W ("the order") against Madera on September 27, 2001. This order required Madera to complete construction for
elimination of their discharge by December 1, 2002, under a modified schedule of compliance, and ordered Madera to pay a
$5,000 fine to the Department.
6. Madera contends that it cannot comply with this order because its requirements are "beyond the capacity of Madera to
perform and unreasonable." (Pet'r Pet. for Admin. Review at 2.) Specifically, Madera asserts that compliance with the
order is impossible for two reasons: (1) Madera does not have the financial resources to complete the construction required
to eliminate its discharge; and (2) Madera does not own the real property on which the facility is situated and thus cannot
undertake the required construction without the permission of the property's owner, Sara N. Newton.
7. The only asset of Madera Utilities is the right to operate the Heatherwood treatment facility. Pursuant to an agreement
with Madera, the City of Clemson collects the sewer charges for the 114 taps served by Madera, at $17.50 per month per
tap. After payment of a service charge to the City, Madera receives approximately $3,600 every two months as its sole
source of income. At present, Madera has approximately $1,800 in cash on hand.
CONCLUSIONS OF LAW AND DISCUSSION
The issue presented by this case is not whether Madera has violated the terms of its NPDES permit-it concedes that it
has-but rather, whether DHEC can enforce the terms of the permit against Madera. However, the nature of Madera's
violation must be set forth, at least in brief, in order to provide a context for DHEC's actions.
Madera has stipulated that it has not complied with the Schedule of Compliance found in Part I.D. of its NPDES permit.
This failure to comply with the conditions of the permit is a violation of both the permit and state and federal
environmental law, and, as such, is grounds for enforcement action by DHEC. See 24 S.C. Code Ann. Regs. 61-9.122.41(a) (Supp. 2000) ("The permittee must comply with all conditions of the permit. Any permit noncompliance
constitutes a violation of the Clean Water Act and the Pollution Control Act and is grounds for enforcement action."); 24
S.C. Code Ann. Regs. 61-9.122.41(a)(3) (Supp. 2000) ("A person who violates any provision of this regulation, a term,
condition or schedule of compliance contained within a valid NPDES permit, or the State law is subject to the actions
defined in the State law."); see also 24 S.C. Code Ann. Regs. 61-9.122.47(e) (Supp. 2000) ("A discharger who fails or
refuses to comply with an interim or final date of compliance specified in an NPDES permit, may be deemed by the
Department to be in violation of the permit and may be subject to enforcement action prescribed in the State law or this
regulation."); Resp't Ex. #1, at Part II.A.1. (specifically incorporating this strict duty of compliance to permit terms and
conditions into Madera's permit). Among the enforcement options available to DHEC in response to Madera's violation is
the assessment of a civil penalty of up to $10,000 per day of violation. S.C. Code Ann. § 48-1-330 (1987); see also S.C.
Code Ann. § 48-1-50 (1987) (listing the powers of the Department in administering the Pollution Control Act). In the case
at hand, the Department has assessed a $5,000 fine against Madera for being in violation of its permit for over two years.
(Resp't Ex. #2, at 3.)
While Madera admits that it has not complied with its permit, it nevertheless challenges the Department's Administrative
Order enforcing the terms of the permit. Specifically, Madera contends that it is incapable of completing the construction
necessary to eliminate its discharge as required under the permit's Schedule of Compliance. This contention can be
understood in one of two ways: (1) as the assertion of an "impossibility defense" to liability under the permit analogous to
that recognized under contract law; or (2) as a direct challenge to the validity of the conditions of the permit as issued in
1998. These two contentions will be addressed in turn.
Madera's basic defense to DHEC's efforts to enforce the NPDES permit is that "Madera has very limited resources and
without the assistance of [other parties] would find it impossible to make the changes desired by DHEC." (Pet'r Pet. for
Admin. Review at 2) (emphasis added). This allegation sounds of the "impossibility defense" recognized in the law of
contracts, under which a party does not dispute the validity of the contract or its failure to perform under the contract, but
nonetheless claims that, due to the impossibility of performance, it should not be held liable for its failure to perform. See,
e.g., Hawkins v. Greenwood Dev. Corp., 328 S.C. 585, 493 S.E.2d 875 (Ct. App. 1997). However, courts have consistently
held that impossibility is not a defense to liability for violations of the Clean Water Act or NPDES permits issued under the
Act. See United States v. City of Hoboken, 675 F. Supp. 189, 198 (D.N.J. 1987) ("[I]mpossibility is not, as a matter of
law, a valid defense to Clean Water Act liability. . . . Thus, it is simply the case that if a party is a permit holder, the Act
makes that party liable whenever the party discharges effluent that violates its permit. Excuses are irrelevant[.]"); United
States v. CPS Chem. Co., 779 F. Supp. 437, 453 (E.D. Ark. 1991) (same); Friends of the Earth, Inc. v. Laidlaw Envtl.
Servs. (TOC), Inc., 890 F. Supp. 470, 496 (D.S.C. 1995) ("[A] violation of an NPDES permit is a strict liability offense.
Thus, the reasonableness or bona fides of an alleged violator's efforts to comply with its permit is not relevant in
determining whether a violator is liable under the [Clean Water] Act.") (citations omitted). (1) Noncompliance with an
NPDES permit is a matter of strict liability, more akin to the law of torts than the law of contracts, and, as such, a claim of
impossibility of compliance is no defense to liability for a violation of the permit. Accordingly, Madera's assertion that its
financial difficulties should relieve it of its duty to comply with its NPDES permit and the DHEC Administrative Order
enforcing that permit must fail.
As a second ground for avoiding liability under its NPDES permit, Madera seems to suggest that the terms of the permit's
schedule of compliance, particularly those that require construction on real property not owned by Madera, are invalid. See Pet'r Prehearing Statement ¶ 4 (defining the issue to be presented in this case as "whether DHEC can require Madera to
close the Heatherwood lagoon, construct a lift station or sewer line . . . and rebuild the existing system; all on property it
does not own and can't encumber to obtain financing"). This contention that DHEC cannot order Madera to comply with
the terms and conditions of its permit is, in essence, a challenge to the validity of the permit itself. However, as noted
above, Madera had the opportunity to challenge the terms of its NPDES permit at the time of its issuance in 1998, see 24
S.C. Code Ann. Regs. 61-9.124.15 (Supp. 2000), and chose not to bring such a challenge. And, courts have routinely held,
on both state and federal law grounds, that a permittee's failure to seek review of the terms of its NPDES permit at the time
of issuance precludes that permittee from subsequently contesting the validity of the permit in an enforcement proceeding. See Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 956 F. Supp. 588, 597 (D.S.C. 1997) ("[I]t is well-settled that a NPDES permit holder may not challenge the validity of the permit in an enforcement proceeding."), vacated
on other grounds by 149 F.3d 303 (4th Cir. 1998), rev'd, 528 U.S. 167 (2000); United States v. CPS Chem. Co., 779 F.
Supp. 437, 453-54 (E.D. Ark. 1991) ("Having failed to timely appeal its 1984 limits, CPS cannot now challenge in this
enforcement action the merits of the limitations and conditions imposed in the 1984 permit on the ground that it was
impossible to comply with those limits."); Conn. Fund for the Env't v. Job Plating Co., 623 F. Supp. 207, 216 (D.C. Conn.
1985) ("By failing to challenge the NPDES permit under state law at a time when its purported legal deficiency should have
been as apparent to the defendant as it is now, the defendant is precluded from doing so in this action."); A.H. Smith
Assocs. Ltd. P'ship v. Md. Dep't of the Env't, 695 A.2d 1252, 1254 (Md. Ct. Spec. App. 1997) ("Once a final
determination on a permit application has been made, the permittee has fifteen days within which to file a challenge to any
term or condition contained in the permit. After that time, 'the obligations and limitations of NPDES permits are binding .
. . and may not be reexamined in an enforcement proceeding.") (omission in original) (citations omitted). The appropriate
time to raise a challenge to the terms of an NPDES permit is on direct appeal of the permit at the time of its issuance, not in
defense of a subsequent enforcement action. (2) Thus, Madera's failure to seek review of the terms of its permit at the time
of its issuance in 1998 precludes it from attempting to contest those terms in this enforcement proceeding.
As Madera has no valid defense to DHEC's attempts to remedy Madera's conceded violations of its NPDES permit,
DHEC's Administrative Order 01-214-W must be sustained.
ORDER
Based upon the above Stipulated Facts, Findings of Fact, and Conclusions of Law,
IT IS ORDERED that Administrative Order 01-214-W issued by DHEC against Madera Utilities, Inc. on September 27,
2001 is SUSTAINED.
AND IT IS SO ORDERED.
______________________________
JOHN D. GEATHERS
Administrative Law Judge
Post Office Box 11667
Columbia, South Carolina 29211-1667
January 15, 2002
Columbia, South Carolina
1. While irrelevant in determining whether a violation of an NPDES permit and environmental law has occurred,
impossibility of compliance with the permit is, however, an appropriate consideration when fashioning a remedy for such a
violation. See Friends of the Earth, 890 F. Supp. at 496 n.22; Profitt v. Lower Bucks County Joint Mun. Auth., No. 86-7220, 1987 WL 16674, at *4 (E.D. Pa. Sept. 1, 1987).
2. See, e.g., Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 890 F. Supp. 470, 496 (D.S.C. 1995) ("The
Defendant's attack on its permit's mercury limit should be, or should have been, raised in a direct appeal of the permit or in
a request for a site-specific variance from the permit; it should not be raised in this [enforcement] action."). |