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The Wyoming Department of Environmental Quality v. Wyoming Outdoor Council

October 19, 2012

THE WYOMING DEPARTMENT OF ENVIRONMENTAL QUALITY, APPELLANT (RESPONDENT), AND YATES PETROLEUM CORPORATION AND MARATHON OIL COMPANY, APPELLANTS (PETITIONERS),
v.
WYOMING OUTDOOR COUNCIL, APPELLEE (CROSS-PETITIONER). YATES PETROLEUM CORPORATION AND MARATHON OIL COMPANY, APPELLANTS (PETITIONERS),
v.
WYOMING OUTDOOR COUNCIL, APPELLEE (CROSS-PETITIONER) AND THE WYOMING DEPARTMENT OF ENVIRONMENTAL QUALITY, APPELLEE (RESPONDENT).



Appeal from the District Court of Laramie County The Honorable Thomas T.C. Campbell, Judge

The opinion of the court was delivered by: Burke, Justice.

Before KITE, C.J., and GOLDEN,*fn1 HILL, VOIGT, and BURKE, JJ.

[¶1] This appeal involves the issuance by the Wyoming Department of Environmental Quality (DEQ) of two general permits for the discharge of produced water from coal bed methane operations in northeastern Wyoming. Yates Petroleum Corporation and Marathon Oil Company (Yates and Marathon) appealed the DEQ's decision to the Environmental Quality Council (EQC), challenging certain conditions of the two general permits. The Wyoming Outdoor Council (WOC) also sought EQC review of the DEQ's decision to issue the general permits.

[¶2] WOC claimed that general permits were rules, and had to be promulgated through the rulemaking procedures set forth in the Wyoming Administrative Procedure Act. The EQC rejected WOC's claim, and WOC sought judicial review of that decision. The district court reversed the EQC, determining that DEQ was required to promulgate the general permits as rules. Because DEQ had not followed the statutory rulemaking procedures, the district court ruled that the general permits were void. We will reverse the district court's decision on this issue.

[¶3] The district court also rejected the argument by Yates and Marathon that WOC was not entitled to seek EQC review of the DEQ's decision to issue the general permits, but was limited to judicial review. The district court ruled that the Wyoming Environmental Quality Act did allow WOC to seek administrative review by the EQC. Yates and Marathon appealed. We will affirm the district court's decision on this issue.

ISSUES

[¶4] The parties present a variety of statements of the issues on appeal. We think the issues are appropriately stated as follows:

1. Whether DEQ must employ the statutory rulemaking procedures for the issuance of general permits.

2. Whether WOC was entitled to administrative review by the EQC of DEQ's decision to issue the general permits.

FACTS

[¶5] The pertinent facts are relatively simple and not in dispute. In 2006, DEQ issued two general permits governing the discharge of produced water from coal bed methane operations, one permit for discharges into the Pumpkin Creek watershed and one for discharges into the Willow Creek watershed. Both creeks are ephemeral tributaries to the Powder River in northeastern Wyoming. Yates and Marathon filed a notice of appeal challenging certain conditions set forth in these general permits, and seeking a hearing before the EQC. WOC also filed a petition for review of the DEQ's decision to issue the general permits. The EQC and the parties engaged in various hearings and other proceedings with regard to the general permits, but only two issues are raised in this appeal.

[¶6] First, WOC filed a motion for summary judgment claiming that DEQ lacked statutory authority to issue the general permits. WOC claimed further that, even if the agency had such authority, general permits were rules of general applicability that could be promulgated only pursuant to the rulemaking procedures set forth in the Wyoming Administrative Procedure Act. The EQC denied WOC's summary judgment motion, and proceeded to a hearing on the parties' appeals. WOC appealed to the district court, claiming that the EQC had erred in ruling that general permits need not be promulgated as administrative rules. The district court agreed with WOC, ruling that general permits must be promulgated as rules, and because DEQ had not followed the statutory rulemaking procedures in issuing the Pumpkin Creek and Willow Creek general permits, the permits were void. DEQ appealed the district court's decision, and Yates and Marathon joined in that appeal, which is before this Court under Docket No. S-12-0002.

[¶7] Second, Yates and Marathon asserted before the district court that, under the provisions of the Wyoming Environmental Quality Act, WOC was not entitled to seek review of the general permits before the EQC. Yates and Marathon contended that WOC was required to take its appeal directly to the district court. The district court ruled against Yates and Marathon on this issue, and they appealed. This issue is before us under Docket No. S-12-0003. The two cases have been consolidated for purposes of oral argument and decision.

STANDARD OF REVIEW

[¶8] Judicial review of administrative agency decisions is governed by Wyo. Stat. Ann. § 16-3-114(c) (LexisNexis 2011). However, the issues now before us involve only interpretation of the relevant statutes. Accordingly, the only question under this statute is whether DEQ's actions were "[i]n excess of statutory jurisdiction, authority or limitations or lacking statutory right." Id., § 16-3-114(c)(ii)(C). Statutory interpretation raises questions of law, which we review de novo. Sinclair Oil Corp. v. Wyo. Dep't of Revenue, 2010 WY 122, ¶ 7, 238 P.3d 568, 570 (Wyo. 2010).

DISCUSSION

[¶9] The Wyoming Environmental Quality Act prohibits "the discharge of any pollution or wastes into the waters of the state," unless such discharge is "authorized by a permit issued pursuant to the provisions of this act." Wyo. Stat. Ann. § 35-11-301(a)(i). The act directs the agency to establish "[s]tandards for the issuance of permits." Wyo. Stat. Ann. § 35-11-302(a)(v). Those standards were established and, in 1975, were approved by the federal Environmental Protection Agency (EPA). 40 Fed. Reg. 13026 (March 24, 1975).

[¶10] After the Wyoming program was approved, DEQ began issuing individual permits for discharges into the waters of the state. An individual permit, in simplified terms, is one applied for by a person, corporation, or other entity who proposes to make a specific discharge of pollutants into a designated body of water. DEQ reviews the application and issues the permit if the proposed discharge complies with established water quality standards. An individual permit, when issued, authorizes the named permit holder to make the specified discharge into the designated waters.

[ΒΆ11] In 1977, the EPA promulgated regulations allowing for the issuance of general permits as an alternative to individual permits. 42 Fed. Reg. 6841, 6846-53 (Feb. 4, 1977). As later explained by the federal EPA, general permits are meant to cover "discharges of wastewater which result from substantially similar operations, are of the same type wastes, require similar monitoring, and are more appropriately controlled under a general permit rather than by individual permits." 56 Fed. Reg. 52030 (Oct. 17, 1991). General permits were conceived as a "means of coping" with the ...


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