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State v. Champion Int'l Corp.

ELR Citation: 16 ELR 20729
Nos. No. 85-36-1, 709 S.W.2d 569/24 ERC 1371/(Tenn., 04/21/1986)

The court holds that neither the Tennessee Water Quality Control Act nor the Federal Water Pollution Control Act authorizes an adjacent affected state to enforce its water quality standards against a facility discharging effluent into interstate waters pursuant to an FWPCA national pollutant discharge elimination system (NPDES) permit issued by the state in which the facility is located and its discharge originates. The court first rules that the Tennessee Water Quality Control Act does not authorize the imposition of civil penalties against a valid NPDES permit holder in another state. The statute confers authority upon state officials to control discharge of pollutants only within the boundaries of the state; for authority in the interstate context, one must turn to federal statute and case law. The court then rules that the FWPCA preempts the application of state law and federal common law to interstate water pollution, relying primarily on the Supreme Court's decision in Milwaukee v. Illinois, 11 ELR 20406, and the Seventh Circuit's opinion on remand, Illinois v. Milwaukee, 14 ELR 20359. The court holds that the FWPCA required defendant to obtain a discharge permit only from North Carolina, the state in which the effluent originated, and not from Tennessee, into whose waters the effluent subsequently flowed, even though defendant's discharges would have violated Tennessee water quality regulations had they originated within the state and been subject to a Tennessee-issued NPDES permit. The court notes that the permitting state must consider the impact of its action in other states and allow affected states to participate in their permitting process, and that Tennessee was participating in the renewal process for defendant's North Carolina NPDES permit at the time it brought this suit. Moreover, an affected state has additional remedies under the FWPCA, including civil action by the governor of the affected state or other interested parties against permit violators or the EPA Administrator. The court distinguishes the Second Circuit Court of Appeals decision in Ouellette v. International Paper, 16 ELR 20072, which relies upon the broad language of the savings clause in §510 of the FWPCA, adhering instead to the Seventh Circuit's conclusion that literal application of §510 would bring intractable confusion to the NPDES permitting process. The court notes that Tennessee's participation in the FWPCA program requires it to respect the integrity of other states and their permits, at least while out-of-state permit holders comply with the terms of their permits.

A dissent would allow a state to impose stricter standards upon an out-of-state discharger holding a valid NPDES permit from another state on Tenth Amendment grounds. The dissent would hold that the issue is primarily one of in personam jurisdiction, and that Tennessee has jurisdiction over defendant as a result of the latter's contacts with the state. The dissent would also distinguish between a suit against a state or one of its political subdivisions and and one brought against a private party.

Counsel for Plaintiffs
W.J. Michael Cody, Attorney General; Frank J. Scanlon, Deputy Attorney General
450 James Robertson Pkwy., Nashville TN 37219
(615) 741-6474

Counsel for Defendant
Charles H. Warfield
Farris, Warfield & Kanaday
17th Fl., Third Nat'l Bk. Bldg., Nashville TN 37219
(615) 244-5200

BROCK, C.J., and FONES and COOPER, JJ., concur.

DROWOTA, J., files dissent.