STATE OF NORTH CAROLINA, ex. rel., MICHAEL S. REGAN, SECRETARY, NORTH CAROLINA DEPARTMENT OF ENVIRONMENTAL QUALITY, DIVISION OF WASTE MANAGEMENT, Plaintiff,
WASCO, LLC, Defendant.
in the Court of Appeals 30 October 2019.
by Defendant from orders denying Defendant's motion to
dismiss, entering summary judgment for Plaintiff, and
permanently enjoining Defendant entered 27 November 2018 by
Judge R. Gregory Horne in Buncombe County, No.
Attorney General Joshua H. Stein, by Assistant Attorney
General Michael Bulleri, for the State.
Troutman Sanders LLP, by Christopher G. Browning, Jr., Sean
M. Sullivan, and Lisa Zak, for the Defendant.
LLC, ("Defendant") appeals from trial court orders
denying Defendant's motion to dismiss, entering summary
judgment for the North Carolina Department of Environmental
Quality, Division of Waste Management
("Plaintiff"), and permanently enjoining Defendant.
Because this Court has previously held that Defendant is
liable for submitting a Part B post-closure permit as the
operator of a facility under the Resource Conservation and
Recovery Act ("RCRA") in WASCO LLC v. N.C.
Dep't of Env't & Nat. Res., 253 N.C.App.
222, 799 S.E.2d 405 (2017) ("WASCO I"), we
pertinent factual background is fully laid out in WASCO
I, and we repeat only the facts necessary to decide the
facility at issue is a former textile manufacturing facility
located in Swannanoa, North Carolina ("the
Facility"). WASCO I, 253 N.C.App. at 225, 799
S.E.2d at 408. Prior to Defendant's purchase of the
Facility, underground tanks were used to store virgin and
waste perchloroethylene ("PCE"), a dry-cleaning
solvent. Id. PCE leaked from the tanks and
contaminated the soil. Id. The tanks were removed,
and the resulting pits were filled with the contaminated
1990, the then-operator of the facility, Asheville Dyeing
& Finishing ("AD&F"), a division of Winston
Mills, Inc., entered into an Administrative Order on Consent
with Plaintiff that set forth a plan to close the Facility.
Id. The Facility was certified closed in 1993.
Id. In 1995, Winston Mills and its parent
corporation, McGregor Corporation, sold the site to Anvil
Knitwear, Inc. and provided Anvil Knitwear indemnification
rights for "environmental requirements."
Id. Culligan International Company
("Culligan") co-guaranteed Winston Mills's
performance of indemnification for environmental liabilities.
1998, Defendant's predecessor in interest, United States
Filter Corporation, acquired stock of Culligan Water
Technologies, Inc., which owned Culligan. Id.
Defendant then provided Plaintiff with a trust fund to the
benefit of Plaintiff as financial assurance on behalf of
Culligan, as well as an irrevocable standby letter of credit
for the account of AD&F. Id. In 2004, Defendant
sold Culligan and agreed to indemnify the buyer as to
identified environmental issues at the Facility. Id.
at 225-26, 799 S.E.2d at 408. From that point forward, Part A
permit applications signed by Defendant's director of
environmental affairs identified Defendant as the operator of
the facility. Id. at 226, 799 S.E.2d at 408.
2007, Defendant received a letter from Plaintiff indicating
that the Facility required corrective action to develop a
groundwater assessment plan to address the migration of
hazardous waste in the groundwater. Id. Defendant,
its hired consultant, and Plaintiff continued to develop a
groundwater assessment plan. Id. The following year,
in 2008, Anvil Knitwear sold the property to Dyna-Diggr,
LLC.Id. At that point, both Defendant
and Anvil disclaimed responsibility for post-closure actions
at the Facility. Id.
resulting from the disagreement regarding responsibility for
post-closure actions resulted in the decision reached by this
Court in WASCO I.
WASCO I, this Court held that Defendant was liable
for securing a post-closure permit as an operator of the
Facility. WASCO I, 253 N.C.App. at 237, 799 S.E.2d
at 415. After this Court's unanimous decision in
WASCO I, Defendant filed a Petition for
Discretionary Review under N.C. Gen. Stat § 7A-31 in the
North Carolina Supreme Court. WASCO LLC v. N.C. Dep't
of Env't & Nat. Res., Div. of Waste Mgmt., 370
N.C. 276, 805 S.E.2d 684, 685 (2017). The Supreme Court
denied review. Id.
the decision of this Court, Defendant did not seek a
post-closure permit as required by 40 C.F.R. § 270.10(b)
and 40 C.F.R. § 270.1, incorporated by reference in 15A
NCAC 13A.0113. Instead, Defendant filed a Petition for Rule
Making before the Environmental Management Commission
("EMC"), seeking to change the definition of the
term "operator" in the North Carolina
Administrative Code. EMC denied Defendant's petition on 8
March 2018. Defendant then filed a Petition for Declaratory
Ruling before the EMC on 8 December 2017, requesting a ruling
that Plaintiff "lacks the authority to require WASCO to
obtain a post-closure permit or a post-closure order for the
Facility pursuant to 15A NCAC [13A].0113(a) (adopting 40
C.F.R. § 270.1(c))." Defendant amended this
petition on 27 February 2018 seeking the same ruling. On 3
March 2018, Defendant filed a new Petition for Declaratory
Ruling before the EMC, seeking the same ruling. Defendant
withdrew the first amended Petition for Declaratory Ruling,
and the new Petition was scheduled for hearing at the time
Plaintiff commenced this action.
April 2018, Plaintiff filed a Complaint and Motion for
Preliminary and Permanent Injunctive Relief. Plaintiff sought
a mandatory injunction requiring Defendant to, among other
things, "[s]ubmit, within 90 days of issuance of an
Order, a complete application for a RCRA Part B post-closure
permit in accordance with 40 CFR 270.10 addressing all of the
applicable requirements of Chapter 40 of the Code of Federal
Regulations and the State Hazardous Waste Program[.]"
filed a Motion to Dismiss on 9 July 2018, alleging that
Plaintiff had "fail[ed] to join the current owner and
operator of the Facility, Dyna-Diggr, LLC
('Dyna-Diggr') and Brisco, Inc. (an additional
current operator of the Facility), as well as the former
owners and operators of the Facility, as necessary
parties." Plaintiff then filed a Motion for Summary
Judgment, alleging "that there are no disputed issues of
material fact and that Plaintiff is entitled to judgment as a
matter of law" because Defendant failed to comply with
this Court's decision in WASCO I requiring
Defendant to submit a Part B post-closure permit application
hearing on the motions was held before Judge R. Gregory Horne
on 31 October 2018. The trial court determined that Plaintiff
had not failed to join any necessary parties and denied
Defendant's motion to dismiss. The trial court made the
following oral findings of fact and conclusions of law to
support the denial of Defendant's motion to dismiss and
the grant of Plaintiff's motion for summary judgment:
THE COURT: All right, thank you. . . . the Court of Appeals
and the Supreme Court often . . . talk about changing horses
midstream in litigation. And oftentimes . . . they're
talking about a situation in which there was not an issue
raised in the trial courts, so as a result, the trial court
didn't have an opportunity to consider or rule upon the
issue. But prior to  getting to the appellate courts and
prior to hearing,  the parties change horses or change
legal theories, change legal strategies and bring up issues
that were not brought up in trial court. Of course, appellate
cases indicate that that is not allowed to be done.
Now, I must again say that . . . I'm far from an expert
in the area of the EPA . . . . This is an area that clearly
is a specialty, even folks who are specialized in it, I
think, would have frequent updates and interpretations
However, initially, when I looked at it it appeared to me
that the defendant WASCO, the plaintiff in the original case
before the Court of Appeals, was changing horses midstream in
that, although somewhat differently, . . . it was heard first
with an administrative law judge, went through the trial
court, and then went to the Court of Appeals and then not
receiving relief, changed horses and repackaged and attempted
to relitigate. I hear from WASCO that, in fact, they are
looking at some new regulations that have come out that
weren't present at the time.
What this Court does understand is that this Court is bound
by the decision of the North Carolina Appellate Courts, and
the decision as I read it is clear. I had underlined and
underscored a number of cases, the State has quoted some, but
indicated it's WASCO's responsibility to obtain a
postclosure permit for the site that is at issue in the
present case. And there's a quote-additionally, Part A
permit - it's on page six. (As read) Application signed
by WASCO's director of environmental affairs identified
WASCO as the operator, and WASCO continued to pay consultants
and take action at the site.
The [C]ourts in their conclusion indicate, (as read) We hold
WASCO as an operator of a landfill for purposes of the
postclosure permitting requirement at the site.
So it is the Court's belief and, indeed, that . . . upon
petition for discretionary review, the North Carolina Supreme
Court denying that, Court believes it is the law of the case
at this time.
So that brings us to the present action in 18 CVS 1731 in
which the department is seeking a motion for summary
judgment. Court having considered the submissions, having
respectfully considered the arguments of counsel, the Court
would find and conclude that there remains no genuine issue
of material fact, and that Plaintiff, then, the department
and the division are entitled to judgment as a matter of law.
Court therefore grants the summary judgment motion and
requires WASCO to submit to [sic] this Part B postclosure
permit application within 90 days of signing and filing of
the hearing, the trial court entered an order denying
Defendant's motion to dismiss on 12 December 2018 and an
order entering summary judgment for Plaintiff. The order
denying Defendant's motion to dismiss included the
following findings and conclusions:
1. On April 18, 2017, the Court of Appeals issued a unanimous
decision holding that Defendant "WASCO was the party
responsible for and directly involved in the post-closure
activities subject to regulation" at the former
Asheville Dyeing & Finishing Plant located at 850 Warren
Wilson Road, Swannanoa ("the Facility") in Buncombe
County. WASCO LLC v. N.C. Dep't of Env't and
Natural Res., No. COA 16 414 ( N.C. Ct. App. Apr. 18,
2017). The Court of Appeals framed the issue as follows:
"It is WASCO's responsibility to obtain a
post-closure permit for the Site that is at issue in the
present case." Id. at page 5. The Court of
Appeals opinion affirmed the final order and judgment of the
trial court and held that "WASCO is an operator of a
landfill for purposes of the post-closure permitting
requirement at the Site". Id. at page 22.
2. WASCO was the only party to this Court of Appeals'
decision other than the Department of ...