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Duke Energy Progress, LLC v. Roanoke River Basis Association

United States District Court, W.D. Virginia, Danville Division

August 3, 2017

Duke Energy Progress, LLC, Plaintiff,
Roanoke River Basis Association, Defendant.


          Norman K. Moon Judge.

         Plaintiff Duke Energy Progress LLC (“Duke Energy”) has brought a suit seeking declaratory judgment on a number of issues related to the compliance of one of its power generating stations, the Roxboro Steam Electric Station (“Roxboro Station”), with the Clean Water Act. Duke Energy brings suit against the Roanoke River Basin Association (“RRBA”), which had sent Duke a Notice of Intent to Sue pursuant to 33 U.S.C. § 1365, alleging various Clean Water Act violations at the Roxboro Station. Defendant RRBA has moved to dismiss Duke Energy's complaint on the grounds that: (1) the Court lacks subject matter jurisdiction, (2) the suit has been brought in the wrong forum, and (3) the Court should exercise its discretion under the Declaratory Judgment Act to decline to hear this suit.

         The Court holds that subject matter jurisdiction exists for Plaintiff Duke Energy's claims because RRBA, the declaratory defendant, could have affirmatively asserted such claims in federal court under the Clean Water Act. However, the statutory section under which this controversy arises, 33 U.S.C. § 1365, only permits suit in the venue in which the alleged violations are occurring - in this case, the Middle District of North Carolina where the Roxboro Station is located. Thus, venue is improper in the Western District of Virginia and the Court will dismiss the suit pursuant to 28 U.S.C. § 1406. Additionally, Duke Energy is impermissibly using the Declaratory Judgment Act, 28 U.S.C. §§ 2201-02, to engage in forum shopping and skirt the explicit terms of the Clean Water Act. Under the Court's discretionary authority to not grant declaratory relief, the Court would thus dismiss Duke Energy's claims, even if they were otherwise procedurally proper.

         I. Legal Background

         The Clean Water Act, 33 U.S.C. § 1251 et seq. (“CWA”), regulates the discharge of pollutants into waters of the United States. Citizens may bring suit against parties alleged to be in violation of the CWA. 33 U.S.C. § 1365. Citizen-plaintiffs must give notice of the alleged violation to the potential defendant and government regulators sixty days prior to initiating such a “citizen suit.” 33 U.S.C. § 1365(b)(1)(A). Citizen suits may only be brought in the district in which the violation is alleged to be occurring. 33 U.S.C. § 1365(c)(1).

         II. Procedural Background

         The first action related to this suit occurred when RRBA successfully intervened in a state enforcement case regarding violations at the Roxboro Station. (See dkts. 1-6, 1-7). On February 13, 2017, RRBA's motion for summary judgment in that state case was denied. (Dkt. 19-9). RRBA then issued a Notice of Intent to Sue (the “Notice”) under 33 U.S.C. § 1365 on March 13, 2017, which would have permitted it to bring suit in federal court for violations of the CWA after sixty days. (Dkt. 1-1). On March 21, 2017, the North Carolina court adjudicating the state enforcement case issued a stay on litigation activities until April 27, 2017. (Dkt. 19-10). Duke Energy filed the present suit on May 11, 2016 - two days before RRBA could have filed a federal suit under § 1365 - seeking declaratory judgment on issues related to RRBA's Notice. On May 16, 2017, RRBA filed a CWA citizen suit pursuant to the Notice in the Middle District of North Carolina. (Dkt. 19-12).

         RRBA alleges that Duke Energy is engaging in forum shopping because the Middle District of North Carolina, where the Roxboro Station is located, had made several rulings unfavorable to Duke Energy in cases closely related to the present one. In Roanoke River Basin Ass'n v. Duke Energy Progress, LLC, No. 1:16-cv-07 (M.D. N.C. Apr. 26, 2017) the court dismissed some, but not all, of the RRBA's claims against Duke Energy under a “diligent prosecution” theory, which is the same as Duke Energy's Count 8 here.[1] (Dkt. 15-1). This case involved allegations similar to the ones here involving the Mayo Station - a coal generating station located only a few miles from the Roxboro Station. In Yadkin Riverkeeper, Inc. v. Duke Energy Carolinas, LLC, 141 F.Supp.3d 428, 434 (M.D. N.C. 2015), motion to certify appeal denied, No. 1:14-CV-753, 2016 WL 6783918 (M.D. N.C. Jan. 29, 2016), the Middle District of North Carolina denied a motion to dismiss by Duke Energy in a case involving a different coal plant that contained many of the same issues addressed here. Eventually, the case was settled with Duke Energy agreeing to remove coal ash from its existing basins - the same relief sought by RRBA in its recent lawsuit related to the Roxboro Station. (Dkts. 15-2; 19-12 at 11).

         III. Factual Background

         Plaintiff Duke Energy operates the Roxboro Station, a coal-fired power plant on a 600-acre site in Person County, North Carolina. (Dkt. 1 at 4). The Roxboro Station produces various wastewaters which are treated before being permitted to enter waters of the United States, pursuant to the CWA. (Id. at 7). The Roxboro Plant impounds its wastewater in a series of lagoons and causeways on the property. (See dkt. 1). Ultimately, treated water from these wastewater impoundments flows into Hyco Reservoir through a point source permitted under the CWA. (Id. at 22). In its Notice of Intent to Sue, RRBA alleged the following violations occurring at the Roxboro Station: (1) that certain lagoons and canals of the Roxboro wastewater system were waters of the United States themselves, thus making discharges of wastewater into them unpermitted discharges under the CWA; (2) that Duke Energy is in violation of its National Pollutant Discharge Elimination System (“NPDES”) permit by failing to prevent removed substance pollutants from its wastewaters from entering waters of the United States; and (3) that Duke Energy was making unpermitted discharges into waters of the United States via groundwater hydrological connections. (Id. at 27-29).

         IV. Standards of Review

         RRBA brings a facial challenge to the Court's subject matter jurisdiction over this suit under Federal Rule of Civil Procedure 12(b)(6). A facial challenge is one which argues that “the complaint simply fails to allege facts upon which subject matter jurisdiction can be based.” Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982). For facial challenges, “all the facts alleged in the complaint are assumed to be true and the plaintiff, in effect, is afforded the same procedural protection as he would receive under a Rule 12(b)(6) consideration.” Id.

         RRBA's venue challenge is governed by Federal Rule of Civil Procedure 12(b)(3). Under Rule 12(b)(3), “the plaintiff bears the burden of establishing that venue is proper.” Jones v. Koons Automotive, Inc., 752 F.Supp.2d 670, 679 (D. Md. 2010). In deciding the motion, “all inferences must be drawn in favor of the plaintiff, and the facts must be viewed as the plaintiff most strongly can plead them. Id. at 680 (internal quotation marks omitted).

         When evaluating a Rule 12(b)(6) motion to dismiss for failure to state a claim, the Court must accept as true all well-pleaded allegations. See Vitol, S.A. v. Primerose Shipping Co., 708 F.3d 527, 539 (4th Cir. 2013); see also Erickson v. Pardus, 551 U.S. 89, 94 (2007). “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations and quotation marks omitted). Stated differently, in order to survive a motion to dismiss, “a complaint must ...

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