SC Administrative Law Court Decisions

This matter is before me upon a motion filed by Petitioner Carolina Water Service, Inc. ("CWS") to dismiss under Rule 12(b)(7), SCRCP, or in the alternative, to join additional parties pursuant to Rule 19, SCRCP. CWS seeks to join Georgetown County Water & Sewer District ("District"), the City of Georgetown ("City"), Waccamaw Regional Planning and Development Council ("Waccamaw") and the South Carolina Public Service Commission ("PSC"). Respondent South Carolina Department of Health and Environmental Control ("DHEC") opposes the motion. After notice of the motion and an opportunity to respond, the District, the City, Waccamaw and the PSC submitted returns in opposition to the motion. After notice to all parties and the non-parties CWS seeks to join, a motion hearing was conducted on June 8, 1998. For the reasons set forth below, the motion is denied.

BACKGROUND

This case was transmitted to the Administrative Law Judge Division on October 24, 1994 upon CWS's request for a contested case hearing. The request followed DHEC's September 29, 1994 Administrative Order imposing a $305,500 penalty for failure to comply with a prior Consent Order signed by both parties. The Consent Order, dated October 26, 1993, required CWS to close out its wastewater treatment facility within a certain period of time and to properly operate its facility under the terms of its NPDES permit until connected to the regional sewer system. The Consent Order also required CWS to contract with the District for connection to the regional public sewer system and diversion of effluent to the regional collection system.

On December 12, 1995, this tribunal stayed proceedings in this case pending the outcome of a declaratory judgment action filed by CWS in circuit court. That action was voluntarily dismissed without prejudice and the parties resumed proceedings before this tribunal in May, 1997. On September 26, 1997, CWS filed a motion to dismiss under Rule 12(b)(7), SCRCP, asserting that the District, the City, and Waccamaw are necessary parties and that DHEC's failure to include them requires dismissal of the September 29, 1994 Administrative Order. CWS requested alternative relief by way of joinder pursuant to Rule 19, SCRCP. On March 31, 1998, CWS filed a motion to join the PSC as an additional party.

DISCUSSION

Section 208 of the Federal Clean Water Act authorizes an area-wide management plan for water quality control in problem areas and gives planning authority to designated agencies within each identified area. The area in which CWS's wastewater treatment facility is located is governed by the Waccamaw Regional Planning and Development Council. The Section 208 plan for this region was developed in 1978 and includes the incorporation of CWS's facility into the regional sewer system, which directs the effluent to the City's treatment facility.

DHEC regulations prohibit the issuance of a water pollution control permit for any discharge inconsistent with a Section 208 plan. 24 S.C. Code Ann. Regs. 61-9.122.4(g) (Supp. 1997). Accordingly, in 1988, DHEC included in CWS's NPDES permit the condition that CWS connect to the regional sewer system and cease discharge into receiving waters within 90 days of receiving notice of the regional system's availability for interconnection. In 1990, the regional system, owned by Georgetown County Water & Sewer District,⁽¹⁾ became available for interconnection. After CWS's delay in complying with the 1988 permit conditions, DHEC began an enforcement proceeding resulting in the 1993 Consent Order, requiring a contract with the District for interconnection within a certain time frame.

CWS argues that the District's wholesale rate for interconnection prevents CWS from complying with the 1993 Consent Order. CWS asserts that the District's rate is confiscatory and that the resulting rate CWS would be required to charge its customers would not be affordable. CWS asserts that the customer rate might not be approved by the South Carolina Public Service Commission, which regulates the rates of private utility companies. In that case, CWS would have to absorb the cost of connecting to the regional system.

CWS also contends that it should be allowed to connect directly to the City's treatment facility without going through the regional system. CWS argues that Waccamaw's interpretation of the Section 208 plan, which requires connection to the District's line, is erroneous. For these reasons, CWS argues that the District, the City and Waccamaw are necessary parties to this enforcement action. CWS asserts that the PSC is a necessary party because it must approve any agreement CWS reaches with the District. CWS argues that any disposition of these enforcement proceedings in the absence of the PSC will subject CWS to a risk of inconsistent obligations to two different state agencies. Notably, CWS has not filed any action before the PSC for approval of an agreement with the District.

CWS cites City of Columbia v. Board of Health and Environmental Control, 292 S.C. 199, 355 S.E.2d 536 (1987), in support of its position that the District and the City are necessary parties. In that case, DHEC issued a Rule to Show Cause directed to Midlands Utility (a private utility), the City of Columbia and Richland County, to show cause why DHEC should not take action to require compliance with the Pollution Control Act, the Federal Clean Water Act, and the section 208/201 plan.⁽²⁾ Pursuant to the Section 208 plan, Midlands Utility was to connect to Columbia's trunk line, which was constructed with EPA grant funds pursuant to the Section 201 plan. Columbia had the option of providing the connection on a wholesale basis or through acquisition of Midlands Utility's treatment facility. Columbia refused to deal with Midlands Utility on a wholesale basis, insisting on acquiring title to Midlands Utility's systems. Columbia also refused to compensate Midlands Utility for the value of its systems. Midlands Utility refused to transfer title without compensation. Under these circumstances, it was necessary for DHEC to take enforcement action against the City of Columbia. The South Carolina Supreme Court held that if Columbia planned to acquire Midlands Utility's systems, it was required to follow the procedures set forth in the Uniform Relocation Assistance and Real Property Acquisition Policies Act. City of Columbia, 355 S.E.2d at 538 (1987). The facts in the instant case are distinguishable from City of Columbia. The District is willing to provide wholesale service to connect CWS to the City's treatment facility. Therefore, it was not necessary for DHEC to bring an enforcement action against the District or the City.

I find and conclude that neither the District, the City, Waccamaw nor the PSC are necessary parties to this proceeding. DHEC initiated enforcement action against CWS upon its noncompliance with a Consent Order to which CWS was a signatory. Neither the District, the City, Waccamaw nor the PSC were signatories to the October 26, 1993 Consent Order. Further, in these enforcement proceedings, this tribunal has no authority to reopen the 1993 Consent Order or the Section 208 plan affecting CWS. Moreover, neither this tribunal nor DHEC has subject matter jurisdiction over utility rates or contract matters. Therefore, this tribunal has no authority to grant any relief against these non-parties. While the witness testimony of these non-parties may be relevant to the reasonableness of DHEC's 1994 Administrative Order, their addition as parties to this enforcement proceeding would be superfluous.

ORDER

IT IS THEREFORE ORDERED that the motion to dismiss or to join additional parties is DENIED.

IT IS FURTHER ORDERED that the each party shall file a Prehearing Statement with the Court that includes the following information:

1. The nature of this proceeding;

2. Statutory provision(s) conferring subject matter jurisdiction to the

agency and other applicable statutes and regulations;

3. The issues presented for determination;

4. The action requested of the Court, if any;

5. A brief summary of the facts to be presented at the hearing;

6. A list of proposed witnesses and exhibits;

7. A statement regarding the necessity for discovery, if any;

8. Estimated length of hearing.

9. List of dates on which you will NOT BE AVAILABLE to participate

in prehearing conferences, hearings, etc.

The Prehearing Statement must be filed with the undersigned Administrative Law Judge and served on all parties on or before July 23, 1998. The parties have a continuing obligation to update the information contained in the Prehearing Statement during the course of the proceeding.

IT IS FURTHER ORDERED that a hearing on the merits of this case will be scheduled within the next ninety (90) days and Notice of Hearing sent to all parties.

AND IT IS SO ORDERED.

____________________________________

STEPHEN P. BATES

ADMINISTRATIVE LAW JUDGE

July 8, 1998

Columbia, South Carolina

1. Formerly known as Georgetown County Water and Sewer Authority.

2. Section 201 of the Federal Clean Water Act authorizes an area-wide plan to identify what wastewater treatment facilities are necessary to efficiently meet the needs of the area. Section 201 also provides for EPA grants for necessary construction.