Mississippi Comm’n on Environmental Quality v. Bell Utilities of Mississippi, LLC

Lawrence Elliott owned and operated the Black Creek Water and Wastewater systems in Forrest County from the 1990s until 2005. The systems are a few miles upstream of an area of Black Creek that is designated as a National Wild and Scenic River. The systems suffered numerous violations of environmental regulations, including multiple illegal sewage discharges. Bell Utilities purchased the systems from Elliott in 2005 and vastly improved the situation, expending its own money in an attempt to bring the system into compliance. Bell entered into an Agreed Order with the Mississippi Department of Environmental Quality in which compliance issues were addressed, and in which Bell agreed to put up a financial assurance that would be returned to Bell after two years of adequate compliance. In 2010, Bell sought to sell the Black Creek systems to Utility One, LLC, and to transfer the attendant permits to it. MDEQ refused to transfer Bell’s wastewater permit to Utility One unless Utility One put up a similar financial assurance. Bell appealed the denial of the permit transfer to the chancery court. The chancery court reversed the Permit Board, finding that its actions were arbitrary and capricious because it has not promulgated regulations on how to conduct a regulatory hearing and on when and whether to demand financial assurances prior to permit transfer. It ordered MDEQ and the Permit Board to promulgate such regulations. MDEQ appealed. Because the Supreme Court found that the Permit Board’s demand of the financial assurance from Utility One to transfer the permit was beyond its power, the Court affirmed the portion of the chancery court judgment that reversed the Permit Board. However, because the agencies were not required under the APA to promulgate rules and regulations for formal Permit Board hearings, the Court vacated the portion of the trial court’s judgment that required them to do so.View "Mississippi Comm'n on Environmental Quality v. Bell Utilities of Mississippi, LLC" on Justia Law