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Riverbend Utilities, Inc. v. Mississippi Environmental Quality Permit Bd.

Supreme Court of Mississippi

January 30, 2014

RIVERBEND UTILITIES, INC.
v.
MISSISSIPPI ENVIRONMENTAL QUALITY PERMIT BOARD and Harrison County Utility Authority.

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[Copyrighted Material Omitted]

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Harry R. Allen, Margaret P. McArthur, attorneys for appellant.

Lisa Thompson Ouzts, Roy Furrh, Jackson, Theodore D. Lampton, III, James C. Simpson, Jr., Gulfport, attorneys for appellees.

Before WALLER, C.J., LAMAR and PIERCE, JJ.

LAMAR, Justice.

¶ 1. Riverbend Utilities, Inc., challenges the Mississippi Department of Environmental Quality Permit Board's decision to grant two groundwater withdrawal permits to the Harrison County Utility Authority. Finding no error, we affirm the Permit Board's decision.

FACTS AND PROCEDURAL HISTORY

¶ 2. Although the issues before this Court are limited, we find that a factual and historical background is helpful in understanding the issues presented for resolution. Following Hurricane Katrina, Governor Haley Barbour " directed that the Mississippi Department of Environmental Quality (MDEQ) develop a regional utility plan to recommend short-and long-term improvements for water, wastewater and stormwater infrastructure development" in the Counties of George, Hancock, Harrison, Jackson, Pearl River, and Stone (the Gulf Region). As a result, MDEQ contracted with the Mississippi Engineering Group, Inc. (MEG) in April 2006 to develop the Mississippi Gulf Region Water and Wastewater Plan (the Plan). On April 18, 2006, the Mississippi Gulf Coast Region Utility Act (the Act) was signed into law with the purpose of consolidating " water, wastewater and stormwater services in order to reduce costs, promote resilience in the event of a disaster, improve the quality of the natural environment, and improve the planning and delivery of quality water, wastewater and stormwater services" within the Gulf Region. Miss.Code Ann. § 49-17-703 (Rev.2012); see Miss Code Ann. §§ 49-17-701 to-775 (Rev.2012). To facilitate its purposes, the Act created the George, Hancock, Harrison,[1] Jackson, Pearl River, and Stone County Utility Authorities.[2]

¶ 3. In developing the Plan, MDEQ and MEG worked with stakeholders in the local communities including the " county utility authorities, public officials, ... leadership from the private sector, and state and regional agencies" in order to identify and prioritize the Gulf Region's " most critical water, wastewater, and stormwater infrastructure needs." " [O]ver 300 projects were identified that addressed the perceived infrastructure needs throughout the Gulf Region," including projects W-13 and W-15 in Harrison County. W-13 was to create a " water supply system to serve the area north of I-10, the DeLisle Community, and the cities of Pass Christian and Long Beach." W-15 was to create a " water supply system from Lorraine-Cowan Road area in North Gulfport to Lyman Community." The Harrison County Utility Authority (HCUA) received local engineering input for W-13's conceptual design from Brown and Mitchell Engineering, Inc., and for W-15's conceptual design from Knesal Engineering Services (KES).

¶ 4. After a draft of the Plan was published in November 2006, " a twenty-day

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public comment period was provided, during which time three public meetings were conducted in the Gulf Region [and i]nput from this public comment process subsequently was integrated into the Plan." The Plan ultimately was adopted by the United States Department of Housing and Urban Development in 2007 and its adoption was not legally challenged.[3]

¶ 5. The approved designs for W-13 and W-15 cover parts of Riverbend Utilities, Inc.'s (Riverbend) certificated service area.[4] Riverbend is a privately owned, public utility company that has the exclusive right " to provide water services and wastewater treatment within an approximate twenty-three square mile area generally centered at the intersection of County Farm Road and Highway 53 in Harrison County, Mississippi," pursuant to a certificate of public necessity and convenience from the Mississippi Public Service Commission.[5],[6]

¶ 6. HCUA wanted to place two wells on land that it owned which was located in Riverbend's certificated area as a means of providing water to the infrastructure created by projects W-13 and W-15. HCUA was required to get permits for the wells from the Mississippi Department of Environmental Quality Office of Land and Water Resources (MDEQ-OLWR).[7] HCUA submitted the required applications, which Riverbend then protested.

¶ 7. Groundwater withdrawal permits are issued by a Permit Board created by Section 49-17-28 of the Mississippi Code.[8],[9] A hearing was held before the

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Permit Board on October 13, 2009, following which the Permit Board granted HCUA's permit applications. Permit MS-GW-16614 (Permit 14) authorized a well that would provide water to W-13's infrastructure while Permit MS-GW-16631 (Permit 31) authorized a well that would provide water to W-15's infrastructure. Riverbend asked the Permit Board to reconsider its decision and requested a full evidentiary hearing. On December 11, 2009, the Permit Board notified the parties that a full evidentiary hearing was set for March 9, 2010.

¶ 8. MDEQ, HCUA, and Riverbend all submitted prefiled testimony through affidavits. MDEQ submitted testimony from Jamie Crawford,[10] the assistant director of MDEQ-OLWR. HCUA presented testimony from William T. Oakley, a consulting hydrologist for HCUA,[11] and Marlin Ladner, the vice president of HCUA. Riverbend presented testimony from Steven Day, the president and co-owner of Riverbend, and James " Jim" Elliot, a consulting civil engineer for Riverbend.[12] William " Bill" Knesal, a consulting civil engineer for Knesal Engineering Services, Inc.,[13] and Trudy Fisher, MDEQ's executive director, were also called as witnesses by Riverbend. [14]

¶ 9. Knesal testified that he proposed an alternative design for W-15 that would not have placed wells in Riverbend's certificated area. Knesal claimed the original conceptual design was accepted instead of his alternative design so that a federal funding deadline could be met. To the contrary, Fisher testified that the conceptual design was selected for engineering reasons and that the federal funding deadline played no role in W-15's design selection. MDEQ and HCUA repeatedly objected to Knesal's and Fisher's testimony regarding the selection of W-15's design on the ground of relevance. The hearing officer allowed Riverbend to pursue its theory but ultimately found that the approval of the Plan and the selection of W-15's design were

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irrelevant to the appropriateness of the issuance of the groundwater withdrawal permits to HCUA.

¶ 10. At the hearing's conclusion, the Permit Board affirmed its decision to issue the permits to HCUA and later detailed its reasoning in a ten-page Findings of Fact and Conclusions of Law decision. Riverbend appealed the Permit Board's decision to the Harrison County Chancery Court. After hearing oral arguments, the chancery court affirmed the Permit Board's decision. Following the denial of its motion for reconsideration, Riverbend appealed to this Court and raised the following issues, which have been restated for purposes of clarity:

I. Whether the Permit Board's decision to grant the Harrison County Utility Authority two groundwater withdrawal permits is sustainable.
II. Whether the permits granted to the Harrison County Utility Authority violate Riverbend's certificate of public necessity and convenience from the Mississippi Public Service Commission.
III Whether the Permit Board erroneously excluded documents and testimony from the March 9, ...

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