Water Keeper Allianc, et al v. Smithfield Foods, et al

Filing 144

ORDER granting 133 Motion to Enforce Judgment and granting 140 Motion for Leave to File Reply: Plaintiffs' Renewed Motion to Enforce the Consent Decree, [DE #133], is GRANTED, and defendants are directed to issue written notice to proceed to the consultant in accordance with the Phase II Scope of Work. Plaintiffs' Motion for Leave to File a Reply Memorandum [DE #140], is GRANTED. Signed by Senior Judge Malcolm J. Howard on 12/4/2017. (Lee, L.)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
EASTERN DIVISION
No. 4:01-CV-27-H
WATERKEEPER ALLIANCE, INC.,
et al.,
Plaintiffs,

v.

ORDER

SMITHFIELD FOODS, INC.,
et al.,
Defendants.
This matter is before the court on plaintiffs' Renewed Motion
to Enforce

the

Consent

response in opposition,

Decree

[DE #139].

for leave to file a reply
motion

is .GRANTED

and

[DE

the

Defendants 1 filed a

#133] .

Plaintiffs also filed a motion

[DE #140] .
court

For good cause shown,

considers

the

reply

in

the
its

adjudication of this motion.
Procedural History

This Court entered a Consent Decree in this matter on March
24,

2006,

defendants

[DE

#93]

filed

("Consent
a

Notice

Decree") . 2
of

Invocation

Resolution Pursuant to Consent Decree.

1

On

December
of

Formal

'[DE #10 1] .

4,

2013,
Dispute

This Notice

After the filing of this action on February 28, 2001, and prior to the entry
of the Consent D~cree on March 24, 2006, Murphy-Brown, LLC ("Murphy-Brown"),
was incorporated as a wholly-owned subsidiary of Smithfield, assuming
ownership of and responsibility for Smithfield's hog production operations.
Murphy-Brown is a named defendant in this court's Consent Decree, [DE #93].
2 This Court's continuing jurisdiction is provided in§ XX of the Consent
Decree, [DE #93].

was filed after defendants had already provided a Notice of Dispute
to plaintiffs on October 31, 2013, pursuant to paragraph 43 of the
Consent Decree, providing for a period of thirty calendar days for
the

parties

to

resolve

the

dispute

The

informally.

parties

participated in a mediated settlement conference on January 27,
2014, and on several dates by telephone until May 22, 2014, with
Mediator Thomas R. West, all resulting in an impasse.

[DE #110].

On October 14, 2015, plaintiffs filed a Motion to Enforce the
Consent

Decree,

and in the Alternative,

Consent Decree Dispute.

[DE #114].

to Resolve Defendants'

Defendants filed a response,

[DE #117], and plaintiffs filed a reply.
2016,

[DE #119] .

On July 5,

this Court ordered the parties to participate in a court[DE #120].

hosted settlement conference to resolve the dispute.

United States Magistrate Judge Robert B. Jones, Jr., conducted two
settlement conferences.

[DE #123 and #132].

The first settlement

conference on September 7, 2016, resulted in a tentative settlement
with

an

order

for

parties

to

otherwise file a status report.

consummate

their

settlement

[DE #123 and #124].

or

On September

13, 2016, this court issued an order dismissing without prejudice
plaintiffs'

Motion

to

Enforce

the

Consent

Decree,

and

in

Alternative, to Resolve Defendants' Consent Decree Dispute.
#125].

On October 2 4,

2 016,

the parties filed a

report requesting a telephonic conference.
telephonic

conference

on

November
2

1,

the

[DE

joint status

[DE #128].

2016,

the

After a

parties

had

differing interpretations of the terms of settlement.

[DE #130].

On

Robert

December

Jones,

Jr.,

8,

2016,

United States Magistrate

B.

conducted a second in-person settlement conference,

which resulted in an impasse.

[DE #132]

plaintiffs

Motion

Decree,

Judge

filed

their

Renewed

Decree Dispute.

Enforce

2017,

the

Consent

to Resolve Defendants'

and in the Alternative,

to

On March 14,

Consent

[DE #133].
Statement of the Facts

This Consent Decree,
the amended complaint,
the Clean Water Act

[DE # 93] ,

[DE #54],

("CWAu),

resolved the claims pled in

filed May 29, 2002, pursuant to

section 505,

33 U.S.C.

§

pursuant to the Resource Conservation and Recovery Act,
section 7002,

42 U.S.C.

§

6972.

1365,

and

("RCRAu),

The Consent Decree included an

agreement by defendants to remediate groundwater pollution at its
Murphy-Brown hog production facilities in Eastern North Carolina.
Central to the Consent Decree is the Ground Water Risk Ranking
("GWRRu) Program in Section IX and Ex. E.
6 Ex.

E]

mitigate

[DE #93 at 25; DE #93-

Plaintiffs allege the goal of the GWRR Program is to
existing

groundwater

contamination

facilities in North Carolina by

( 1)

at

Murphy-Brown

evaluating these facilities

for the potential of receptor 3 exposure to swine waste constituents

3 "Receptor" is defined by the Consent
Decree as "human and aquatic fauna,
including benthic species." "Exposure" in the context of the Consent Decree is
"the presentation of a swine waste constituent of concern at concentrations
equal to or greater than the regulatory standards to a receptor via
groundwater." "Swine waste constituents" are "selected constituents associated

3

via groundwater using site-specific data collection programs and
(2) developing technically sound corrective action plans

[DE #93-6 Ex. E

to mitigate potential groundwater contamination.
at 2 §§ 1.1, 1.2].

Plaintiffs allege the parties agreed that S&ME,

the mutually agreed upon independent consultant
would

have

expertise

substantial
and

("CAPS")

discretion

professional

to

judgment

("consultant") ,

exercise

in

order

its
to

technical

conduct

the

facility evaluations needed to achieve the GWRR program's goal of
reducing the risk of groundwater contamination under the Consent
Decree.
The Consent Decree outlined three progressive phases under
the GWRR program.

Phase I included the development and use of the

Risk Ranking System
and facilities.

("RRS")

to evaluate approximately 260 farms

Farms would be evaluated and ranked into one of

three categories:

cut-off score exceeding 3 60;

default trigger;

and gap in data.

Phase II involved the evaluation of the farms

that were not previously eliminated from review under Phase I.
Phase

III

("CAPS")

involved

the

development

of

corrective

action

plans

for the remaining facilities.

Phase I was completed on October 14,

2011.

found that eleven facilities advanced to Phase II.

The consultant
4

Of the eleven

with swine wastes, to include nitrate, nitrite, ammonia, phosphorous, fecal
coliform, cadmium, copper, lead, manganese, nickel, and zinc." Consent Decree,
DE #93, Ex. E § 6.0.
4 There were actually twelve facilities that advanced to Phase II, but one of
the facilities is no longer owned or controlled by defendants.
4

facilities, seven were advanced to Phase II on the basis of lagoon
leakage at the facilities, thereby activating a Default Trigger to
Phase II.

The remaining four facilities were advanced to Phase II

on the basis of elevated nitrogen concentration in the facilities'
production wells,
contamination.

activating the Default Trigger for groundwater
[DE

#115-2;

#117-7

Scope

of Work

§§

5.2-5.3].

Plaintiffs allege the consultant prepared a draft Scope of Work
detailing data to be collected for the development of technically
sound CAPS.
2, 2013.

The Final Phase II Scope of Work was issued on October

The Final Scope of Work identified data needed to develop

technically sound CAPs during Phase III and detailed methods for
the collection of this data.
Plaintiffs allege that over the last three years defendant
Murphy-Brown has blocked the consultant from evaluating the eleven
facilities that advanced to Phase II, resulting in continued threat
to groundwater quality.
The Final Phase II Scope of Work provides "[t]he functional
outcome of the Phase I

evaluation was that a failure of either

Cut-Off Score performance or Automatic Trigger performance was the
conclusion that the potential of receptor exposure to swine waste
constituents via groundwater, as embraced by the GWRRS, had been
demonstrated."

[DE #117-7 at 3

§

1.0].

The consultant found the

presence of Default Triggers demonstrated a potential of receptor
exposure

to

swine

waste

constituents
5

via

groundwater,

and

therefore required a CAP to mitigate the conditions.

[DE #115-2;

#117-7].

The consultant has further stated in the Final Phase II

Scope

Work

of

defendants

that

the

provided

have been considered,

reports

of

Geo

and the

eleven

Solutions 5 by
farms

are not

eligible for re-scoring.
Defendants argue the Phase II Scope of Work,

[DE #117-7], is

inconsistent with the Consent Decree in two critical respects.
First,

defendants

contend

the

final

Phase

II

Scope

of

Work

concludes that the "potential of receptor exposure to swine waste
constituents via groundwater

had been demonstrated" based

solely on the default triggers, thereby merging Phase II with Phase
III.

Second,

additional

the

data

Final

Phase

collection

II

at

Scope
all

of

Work provides

eleven

farms

based

for
on

"conceptual" Scope of Work plans that call for the collection of
data

needed

"to

develop

a

technically

sound

CAP

which,

upon

implementation, would lead to removal of the Automatic Trigger."

5

The data for Phase I had been supplied to S&ME, the agreed-upon consultant by
the defendants, pursuant to the Consent Decree, [DE #134-1 Phase I Scoring Final
Report at 3-4; DE #93-6 Ex. E at § 1.4].
After approving the advancement of
eleven farms from Phase I to Phase II and prior to the consultant's issuance of
the draft Phase II Scope of Work, Murphy-Brown retained another consulting firm,
Geo Solutions Limited, Inc. ("Geo Solutions") to collect additional data related
to the potential of receptor exposure to swine waste constituents via
groundwater at these farms.
Geo Solutions conducted site visits at each farm
including electromagnetic profiling, visual inspection, water level monitoring
(lagoon and. water table), and geochemical analysis according to accepted
protocols. In separate reports issued for the seven farms with reported lagoon
leakage and four farms with elevated nitrogen concentrations, Geo Solutions
found no evidence the lagoons were leaking and concluded the sources of elevated
nitrogen concentrations was not groundwater contamination. While the hiring of
a separate consultant was not contemplated by the Consent Decree, the agreedupon consultant still agreed to consider the data.
6

[DE #117-7 at § 4.0].

Defendants argue the Final Scope of Work

should not merge Phase II and Phase III by proceeding to CAPS for
the eleven farms advanced to Phase II by a Default Trigger.
COURT'S DISCUSSION

The

scope

of

a

consent

decree

should

application of rules of contract construction.

be

determined

by

Anita's New Mexico

Style Mexican Food, Inc., v. Anita's Mexican Foods Corp., 201 F.3d
314, 319 (4th Cir. 2000) (citing United States v. Armour
U.S.

673,

681-82

(1972); United States v.

Co., 420 U.S. 223 (1975)).

&

Co., 402

ITT Continental Baking

"[T]he scope of a consent decree must

be discerned within its four corners and not by reference to what
might satisfy the purposes of one of the parties to it."
&

Co.,

402 U.S.

at 682

Armour

When a contract between parties

(1972).

confers discretion on one party that will affect the rights of
another, such discretion must be "exercised in a reasonable manner
based upon good faith and fair play."
N.C. App. 11, 200 S.E.2d 410, 414
689 (1974).

Mezzanotte v. Freeland, 20

(1973), cert denied, 201 S.E.2d

Plaintiffs request the court to order Murphy-Brown to

fulfill its obligations under the Consent Decree, specifically to
provide written notice

to

consultant

to proceed with the

GWRR

Program Phase II Data Needs Assessment and Scope of Work, developed
by consultant.

[DE #93-6 Ex. E and DE #115-2].

Defendants object

to the consultant's Final Phase II Scope of Work.

7

The

court

finds

the

bases

for

defendants'

objections

unfounded in light of the terms of the Consent Decree.

are

Defendants

argue the Final Scope of Work should not merge Phase II and Phase
III by proceeding to develop CAPS for the eleven farms advanced to
Phase II by a Default Trigger, generated by conditions including
lagoon

leakage

defendants

and

contend

elevated
Phase

II

nitrogen
should

concentrations.

include

further

The

evaluation

before all eleven farms are advanced to Phase III, requiring data
collection for development of CAPS.
Under the Consent Decree, a Default Trigger is "[a]
or

fact

that,

automatically
evaluation,
#93-6 Ex.

in

the

[c]onsultant[']s

categorizes

a

professional

Farm/Facility

into

regardless of the Farm/Facility's RRS
E

§

6.0 at 18].

According to this

a

finding
opinion,

Phase

score."

definition,

consultant has wide latitude to define a Default Trigger.

II
[DE
the
The

parties have already agreed to the eleven farms being advanced to
Phase II on the basis of Default Triggers,
cannot

contest

this

at

this

time.

and thus the parties

Further,

the

consultant

considered the reports of Geo Solutions submitted by defendants
and found there was no potential for re-scoring the eleven farms.
The consultant has found in the Phase II Scope of Work that
the presence of Default Triggers indicates a potential of receptor
exposure to swine waste constituents via groundwater,
CAPS to mitigate the conditions.

[DE #115-2; #117-7].
8

requiring

The Consent

Decree

provides,

"[f[arms/[f]acilities

remaining

for

Phase

III

consideration will be those [f]arms/[f]acilities identified by the
RRS that pose an identified potential of receptor exposure to swine
waste constituents via groundwater on the basis of the cut-off
score."

[DE #93-6 Ex.

E at

§

1. 4 at

3].

The farms were not

"·

advanced on the basis of a cut-off score, but rather because the
consultant found the presence of Default Triggers,

which in its

professional judgment, indicates a potential of receptor exposure
to swine waste constituents via groundwater.

Thus, advancing the

eleven farms to Phase III for data collection and development of
CAPS is in accordance with the Consent Decree.
Further, the Consent Decree provides that a corrective action
is "[s]pecific to Phase III herein,

[a]

effective

theoretically

method

or

methods

that

generally accepted cost
result

in

a

[f]arm/[f]acility being re-ranked below the cut-off score and/or
mitigate the conditions that generate a Default Phase II Trigger."
[DE #93-6 Ex. E

§

6.0 at 18].

Thus, mitigation of conditions that

generated a default trigger is the purpose of a corrective action
or CAP.

Id.

Considering that each of the farms were advanced to

Phase II for a Default Trigger, generated by conditions including
lagoon

leakage

and

elevated

nitrogen

concentrations,

the

corrective action is necessary to mitigate such conditions.
Therefore, the consultant's proposed Phase II Scope of Work
providing for

further data collection to develop a
I

9

technically

sound CAP for each farm is in accordance with the Consent Decree,
and the defendants are directed to issue written notice to proceed
to the consultant in accordance with the Phase II Scope of Work,
[DE #115-2 and #117-7].
CONCLUSION

For

the

plaintiffs'
#133],

foregoing

reasons

Renewed Motion

is GRANTED,

to

and

for

Enforce

the

good
Consent

cause

shown,

Decree,

[DE

and defendants are directed to issue written

notice to proceed to the consultant in accordance with the Phase
II Scope of Work.

Plaintiffs' Motion for Leave to File a Reply

Memorandum [DE #140], is GRANTED.
SO ORDERED this

4 ¢ of December 2017.
day

~

Malcolm
Howard
Senior United State
At Greenville, NC
#35

10

District Judge