# VIRGINIA: In the Court of Appe als of Virginia on Tuesday 

### the 8th 

### day of November, 2011

. The Historic Green Springs, Inc., Reginald Murphy and Jane Murphy, Appellants, against Record No. 2082-10-2 Circuit Court No. CL09-20 Virginia Department of Environmental Quality

ex rel. Virginia State Wa ter Control Board, David K. Paylor, Director and Executive Secretary, and Louisa County ex rel. Louisa County Water Authority, Appellees.

Upon a Panel Rehearing Chief Judge Felton, Judge Elder and Senior Judge Clements David S. Bailey (Tammy L. Belin sky; The Environmental Law Group, PLLC, on brief), for appellants. J. Tracy Walker, IV; Elizabeth A. Andrews, Senior Assistant Attorney General and Chief (Kenneth T. Cuccinelli, II , Attorney General; David C. Grandis, Assistant Attorney General; David E. Evans; Darin Waylett; McGuire Woods LLP, on brief), for appellees.

This matter comes before a panel of this Cour t on a petition for rehearing from an unpublished panel decision of August 2, 2011. See Historic Green Springs, Inc. v. Va. Dep’t of Envtl. Quality ex rel. Va. State Water Control Bd., No. 2082-10-2 (Va. Ct. App. Aug. 2, 2011). Upon review of appellees’ petition for rehearing, appellants’ brief in response, a nd consideration of oral argument from the parties, we lift the stay of the August 2, 2011 mandate and reinstate the panel’ s opinion affirming the judgment of the trial court in part, re versing in part, and remanding.

This order shall be certified to the trial court. A Copy, Teste: original order signed by the Clerk of the Court of Appeals of Virginia at the direction of the Court Clerk

# VIRGINIA: In the Court of Appe als of Virginia on Tuesday 

### the 20th 

### day of September, 2011

.

The Historic Green Springs, Inc., Reginald Murphy and Jane Stuart Murphy, Appellants, against Record No. 2082-10-2 Circuit Court No. CL09-20 Virginia Department of Environmental Quality

ex rel. Virginia State Water Control Board, David K. Paylor, Director and Executive Secretary, and Louisa County ex rel. Louisa County Water Authority, Appellees

Upon a Petition for Rehearing Before Chief Judge Felton, Judge Elder and Senior Judge Clements

On August 16, 2011 came the appellees, by counsel, and filed a petition pr aying that the Court set aside the judgment rendered herein on A ugust 2, 2011, and grant a rehearing thereof. On consideration whereof, the petition for rehe aring is granted, the mandate entered herein on August 2, 2011 is stayed pending the decision of the Cour t, and the appeal is reinstated on the docket of

this Court. Pursuant to Rule 5A:35(a), the respondent may file an answering brief within 21 days of the date of entry of this order.

A Copy,

Teste: Cynthia L. McCoy, Clerk original order signed by a deputy clerk of the By: Court of Appeals of Virginia at the direction of the Court Deputy ClerkCOURT OF APPEALS OF VIRGINIA

Present: Chief Judge Felton, Judge McClanahan  and Senior Judge Clements Argued at Richmond, Virginia

THE HISTORIC GREEN SPRINGS, INC., REGINALD MURPHY AND JANE STUART MURPHY MEMORANDUM OPINION  BY v. Record No. 2082-10-2 CHIEF JUDGE WALTER S. FELTON, JR. AUGUST 2, 2011 VIRGINIA DEPARTMENT OF ENVIRONMENTAL QUALITY

ex rel. VIRGINIA STATE WATER CONTROL BOARD, DAVID K. PAYLOR, DIRECT OR AND EXECUT IVE SECRETARY, AND LOUISA COUNTY ex rel. LOUISA COUNTY WATER AUTHORITY

FROM THE CIRCUIT C OURT OF LOUISA COUNTY Timothy K. Sanner, Judge David S. Bailey (Tammy L. Belinsky; The Environmental Law Group, PLLC, on brief), for appellants. J. Tracy Walker, IV (Kenneth T. Cuccinelli, II, Attorney General; David C. Grandis, Assistant Attorney General; David E. Evans; Darin K. Waylett; Richard H. Sedgley; McGuireWoods, LLP; AquaLaw, P.C., on brief), for appellees.

The Historic Green Springs, In c. and Reginald and Jane Murphy (collectively “appellants”) appeal from a judg ment of the Circuit Court of Louisa Co unty (“circuit court” ) dismissing their petition for appeal chal lenging the State Water Control Boar d’s (“SWCB”) decisi on to reissue a Virginia Pollution Discharge Elim ination System (“VPDES”) permit to the Louisa County Water Authority (“the Water Authority”).

 Justice McClanahan participated in the hear ing and decision of this case prior to her investiture as a Justice of th e Supreme Court of Virginia.

 Pursuant to Code § 17.1-413, this opin ion is not designa ted for publication.- 2 - Appellants contend the circuit court erred in granting the demurrers of SWCB, the Virginia Department of Environmental Quality (“DEQ” ), Louisa County, and the Water Authority (collectively “appellees”) to appella nts’ petition for appeal, arguing that (1) they were entitled to an evidentiary hearing on the matter of standing, and (2) they pleaded sufficient facts to establish standing to challenge the reissued VPDES permit. For th e following reasons, we affirm in part, reverse in part, and remand for further pr oceedings consistent with this opinion. 1

I. BACKGROUND Reginald and Jane Murphy (“the Murphys”) own approximately 21 8 acres of land in Louisa County known as Aspen Hill Farm. Aspen Hill Farm is the first working farm downstream of the

Zion Crossroads Wastewater Treat ment Plant (“the Plant”). The Plant serves residential and

commercial connections in the Zion Crossroads area of Louisa County. The Murphys’ farm is located approximately 400 yards downstream of a lake impoundment at Camp Creek into which the

treated wastewater from the Plant is dispersed, before being discha rged into Camp Creek itself. Camp Creek itself bisects and runs through Aspen Hill Farm for approximately one quarter of a

mile. The Historic Green Springs, Inc. (“HGS”) is a non-prof it corporation dedicated to environmental conservation in the Green Springs National Historic Landmark District. HGS holds at least two conservation easements on parcels th rough which Camp Creek flows, one of which is located on the Murphy s’ Aspen Hill Farm.

1 On November 30, 2009, appellants filed a co mplaint against the Water Authority in the United States District Court for the Western District of Virginia . On June 30, 2011, the district court issued a memorandum opinion in that case addressing The Hi storic Green Springs, Inc.’s standing to challenge the VPDES permit in the co ntext of a federal cause of action. See The Historic Green Springs, Inc. v. Louisa Count y Water Authority, Civil Action No. 3:09-cv-00079, slip op. (W.D. Va. June 30, 2011) (Moon, J.).- 3 - In 2002, SWCB issued a VPDE S permit to the Wa ter Authority allowing it to discharge

treated wastewater effluent from the Plant first into an existing small lake impoundment formed by a dam across Camp Creek, and then into Camp Creek itself. In 2003, the Water Authority began discharging treated wastewater effluent from the Plant into the lake impoundment and then into Camp Creek. In December 2008 , SWCB reissued the VPDES permit to the Water Authority for the Plant. The reissued VPDES permit imposed, for the first time, limits for total recoverable dissolved copper and zinc in the treated effluent and establ ished a four-year timeframe to comply with those limits. Appellants participated in the public comment period as part of the permit reissuance process and argued against reissu ance of the VPDES pe rmit. SWCB, on the recommendation of DEQ, reissued the VPDES permit to the Water Author ity on December 4, 2008. On January 28, 2009, appellants appealed the decision of SWCB to the Circuit Court of Louisa County. Appellan ts contended that in the five years since SWCB issued the original VPDES permit to the Water Authority, the Water Authority discharged excessive levels of dissolved metals

in the treated effluent from the Plant into the lake im poundment at Camp Creek, and thereafter into

the creek itself. Appellants asserted the rei ssued VPDES permit, which for the first time imposed limits on dissolved zinc and copper in the treated wastewater effluent, faile d to remedy what they

contended was an excessive level of dissolved metals in the treated effluent. Appellants asserted the new metals limits imposed were insufficient to pr otect water quality and th e beneficial uses of Camp Creek as it flowed through the Murphys’ Aspen Hill Farm, on which appellants “ha[d] a right to rely.” Appellants sp ecifically contende d that SWCB erred in: a) failing to provide notice to downstream riparian owners of receipt of the VPDES permit appli cation, b) finding there was no need to impose a sewage discharge limit for hardne ss, c) calculating effluent limitation s for toxic metals without accounting for the hardness of the su rface waters, d) granting a four-year compliance schedule, and e) conveying defective notice of plan s for increased water suppl y in the area of Louisa- 4 - County served by the Plan t, as well as two water withdrawals upstream of the la ke impoundment at Camp Creek, to the United States Environmental Protection Agency (“EPA”) for its required review and comment. Appellants requested that the circui t court set aside the reis sued VPDES permit as void and without effect, and remand the case to DEQ for further procee dings, if any, in accordance

with law. Appellees demurred to appellants’ petition fo r appeal and filed motions to dismiss. Appellees contended that appellants failed under Code § 62.1 -44.29 to plead sufficient facts to establish standing to challeng e SWCB’s decision to reissue the VPDES permit to the Water Authority. On July 31, 2009, after hearing argum ent on the motions, the circuit court sustained appellees’ demurrers and granted ap pellants leave to amen d the petition for appe al. On the same date, appellants filed the amende d petition for appeal, re-alleg ing the second through fifth assignments of error in thei r original petition for appeal. 2 Appellants Murphy asserted in their amende d petition for appeal that they use Camp Creek and Aspen Hill Farm for various recreational, aesthetic, and agricultural purpose s, including crop and livestock watering . In affidavits filed in support of their amended petition for appeal, the Murphys asserted that they ofte n saw a “brown foamy scum” on the surface of Camp Creek that bisects their property, which scum first appeared after the Water Authorit y commenced discharging

the treated wastewater effluent fr om the Plant in 2003. The Murphy s contended in their affidavits that the water of Camp Creek was not as clear as it had been prior to the commencement of the discharge of treated effluent from the Plant. They asserted that Camp Creek dried up altogether

2 David and Renee O’Leary, homeowners in the Historic Green Springs district, and Rae H. Ely, president of HGS, were included as petiti oners in the original pe tition for appeal. The O’Learys moved to withdraw as petitioners due to a geographical error that incorrectly showed Camp Creek flowing through the O’Learys’ land . The creek flowing through the O’Learys’ property was later determined to be Wheeler Cr eek. On July 31, 2009, the circuit court granted the O’Learys’ motion to withdraw and denied th e motion for leave to amend the petition as to Ely. Consequently, Ely was not included as a petitioner in the amende d petition for appeal.- 5 - during the summer of 2008 to the detriment of As pen Hill Farm’s agricultu ral uses. The Murphys further stated they were concerne d about the impact of the dissolve d metals on aquatic life in Camp Creek. They stated they would hesitate to let their cattle dr ink from Camp Creek if other water

sources were unavailable in the future. Reginald Mu rphy stated in his affida vit that he previously took “cool dips” in Camp Creek, but had not take n a “cool dip” since the Plant began to discharge

treated wastewater effluent . In its affidavit filed in support of the amended petition, HGS stated that it had standing to challenge SWCB’s reissuan ce of the permit because it held conservation easements on multiple prope rties on Camp Creek, in cluding Aspen Hill Farm. Appellees filed demurrers to the amended petition for appeal, as well as motions to dismiss, contending that appellants failed to plead sufficient facts to establish standi ng under Code § 62.1-44.29. The circui t court heard oral argument on the de murrers and motions to dismiss on January 6, 2010. 3 On August 31, 2010, the circuit court entered an order sustaining appellees’ demurrers and dismissed with prej udice appellants’ amended petition for appeal. The circuit court found that appellants failed to meet the standa rd for obtaining judici al review under Code § 62.1-44.29 because appellant s failed to demonstrate that their a lleged injuries were fairly traceable to the reissued VPDES permit, and failed to show that their alleged injuries would be redressed by a

favorable decision of the circuit court. This appeal followed.

3 Appellants, relying on this Court’s decision in Clark v. Va. Marine Res. Comm’n, 55 Va. App. 328, 685 S.E.2d 863 (2009), asserted that they were entitled to an evidentiary hearing on the issue of standing. Appellants declined to argue standing at th e January 6, 2010 hearing on the demurrers because of their concern that the argument regarding their right to an evidentiary hearing would thereby be waived on appeal . Appellants instead “rest[ed]” on the pleadings, including the amended petition and attach ed affidavits and conser vation easements. Subseq uent to the filing of appellants’ petition for appeal for re view by this Court, the Supreme Court of Vi rginia reversed this Court’s decision in Clark. Va. Marine Res. Comm ’n v. Clark, 281 Va. 67 9, 709 S.E.2d 150 (2011); see also infra Part II.B.- 6 - II. EVIDENTIARY HEARING Appellants contend that the circuit court erred in failing to conduct an evidentiary hearing to determine whether appellants had standing to chal lenge the reissuance of the VPDES permit to the Water Authority for the Pl ant. Appellants argue that it was e rror for the circuit court to decide standing on the pleadings.

A. Standard of Review The standard of appellate review of a ci rcuit court’s grant of a demurrer is well established. “[I]n reviewing the ju dgment of the circuit court, an appellate court looks solely to the allegations in the pleading to which the demu rrer was sustained.” Philip Morris USA, Inc. v. Chesapeake Bay Found., Inc., 273 Va. 564, 572, 643 S.E.2d 219, 223 (2007) (citations omitted).

“Because our review of a circuit court’s decision sustaining a demurrer addresses that same legal question, we review the circuit court’s judgment de novo .” Chesapeake Bay Found., Inc. & Citizens of Stumpy Lake v. Commonwealth ex rel . State Water Control Bd., 46 Va. App. 104, 111, 616 S.E.2d 39, 42 (2005). A demurrer “admits the truth of the facts alleged in the pleading to which it is addressed, as well as any facts that may be reasonably and fairly implied and inferred from those facts.” Philip Morris, 273 Va. at 572, 643 S.E.2d at 223. B. Analysis Appellants assert the circuit court erred in not conductin g an evidentiary hearing on the matter of standing. We disagree. Code § 62.1-44.29 states in pertinent part: Any owner aggrieved by or any pe rson who has participated, in person or by submitta l of written comments, in the public comment process related to a final decision of the [State Water Control] Board . . . is entitled to judicial review thereof in accordance with the provisions of the Administrative Pr ocess Act . . . if such person meets the standard for obtaining judicial re view of a case or controversy pursuant to Article III of the United States Constitution. A person shall be deemed to meet such standard if (i) such person- 7 - has suffered an actual or imminent in jury which is an invasion of a legally protected intere st and which is concre te and particularized; (ii) such injury is fair ly traceable to the decisi on of the Board and not the result of the independ ent action of some thir d party not before the court; and (iii) such injury will likely be redressed by a favorable decision by the court. Code § 62.1-44.29 explicitly requ ires that a person asserting in jury as a result of a permitting decision of SWCB satisfy Article III standing requi rements. “In order to have Article III . . . standing, the [petitioner] must have pled facts sufficient to meet th e test in Lujan [v. Defenders of Wildlife, 504 U.S. 555 (199 2),] and Code § 62.1-44.29.” Philip Morris, 273 Va. at 581, 643 S.E.2d at 228. “The parties agree that in order for [petitioner] to plead sufficient facts to establish standing . . . [petitioner] must m eet [the] three-part te st [of Code § 62.1-44 .29].” Chesapeake Bay Found., Inc. v. Commonwealth ex rel . State Water Control Bd., 48 Va . App. 35, 46, 62 8 S.E.2d 63, 69 (2006), aff’d, Philip Morris, 27 3 Va. 564, 643 S.E.2d 219. “The standi ng provisions of Code § 62.1-44.29 require persons challenging a final decision by the Board to estab lish that they meet all three enumerated requirem ents of the statute before a court will consider the merits of their challenge to a government al action.” State Water Control Bd. v. Crutchfield, 265 Va. 416, 426-27, 578 S.E.2d 762, 767-68 (2003). Appellants cite th is Court’s decision in Clark v. Va. Marine Res. Comm’n, 55 Va. App. 328, 685 S.E.2d 863 (2 009), to support their conten tion that the circuit court e rred in refusing to conduct an evidentiary hearing to determin e whether they have standing to challenge the reissuance of the VPDES permit. In reversing ou r decision in Clark, the Supr eme Court of Virginia stated: [O]ur cases, including cases cons idering appeals from agency decisions decided on demurrer, ha ve consistently looked to the pleadings to determine whether th e petitioner has pled sufficient facts to establish the petitioner’s right or standing to advance the appeal. The judgment of the Court of App eals directly contradicts these cases and principles. . . . The C ourt of Appeals’ judgment . . .- 8 - allows recovery based on facts not pled which is in direct contradiction to the principles set out above. Va. Marine Res. Comm’n v. Cl ark, 281 Va. 679, 686, 709 S.E .2d 150, 154 (2011) (citation omitted). Accordingly, we conclude that appellan ts’ reliance on this Court’ s decision in Clark is misplaced. Because Code § 62.1-44 .29 clearly requires appellants to allege sufficient facts in the petition to support their st anding to contest the reis suance of the VPDES perm it, the circuit court did not err in refusing to hold an evidentiary hearin g on standing.

III. STANDING

A. Standard of Review We review the circuit court’s decision to sustain appellees’ demurrer de novo , and accept as true “the facts alleged in the pleading to which it is addressed, as well as any facts that may be reasonably and fairly implied and inferred from those facts.” Philip Morris, 273 Va. at 572, 643 S.E.2d at 223. The requirements for standing to challenge a perm itting decision by the SWCB are enumerated in Code § 62.1-44.29. The language of Code § 62.1-4 4.29 “reiterates the requirements set out [by the United States Su preme Court] in Lujan.” Stumpy Lake, 46 Va. App. at 115, 616

S.E.2d at 45. B. Analysis Here, the circuit court found that appellants failed to plead suff icient facts to establish that their alleged injuries were fairly traceable to an action to which an error of law was assigned, and failed to establish that such alleged injuries would likely be redressed by a favorable decision of the circuit court. It is true that ap pellants asserted in thei r amended petition for appeal that their injuries arose when SWCB issued the origin al VPDES permit for the Plant in 2003. However, appellants further contended that their actual and ongoing injuries to their legally protect ed interests in Camp Creek had been perpetuated by SWCB’s decision to reissue the Plant’s VPDES permit in 2008.- 9 - These allegations, which we must accept as true in reviewing the circuit cour t’s ruling sustaining the demurrer, succeed in “nudg[ing] [a ppellants’] claims [in support of appellants’ standing] across the line from conceivable to plausible.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007) (ruling on a Fed. R. Civ. P. 12(b)(6) mo tion to dismiss). Thus we co nclude the circuit court here erroneously “‘short-circuited litig ation pretrial and . . . decided the dispute without perm itting the parties to reach a trial on the me rits.’” CaterCorp, Inc. v. Cate ring Concepts, Inc. , 246 Va. 22, 24, 431 S.E.2d 277, 279 (1993) (quo ting Renner v. Stafford, 245 Va. 351, 352, 429 S.E.2d 218, 219 (1993)). In the event that appellants could prove th eir alleged injuries, and prove that those injuries are being caused by the discharge of wa stewater from the Plant into Camp Creek in

violation of state and/or fede ral water quality standards under the reissued VPDES permit in question, it is likely that thos e injuries could be redresse d by the circuit court ordering compliance with those standards. See Philip Morris, 273 Va. at 580, 643 S.E.2d at 227 (applying redressability prong of Lujan test to allegations in petition, and holding that alleged injury was “redressable through a favorable deci sion by the court”). Accordingly, we conclude the trial court erred in sustaining appellees’ demurrer.

IV. CONCLUSION For the reasons stated above, we hold that the circuit court did not e rr when it refused to conduct an evidentiary hearing on the matter of standing. Howeve r, we hold the circuit court erred when it sustained appellees’ demurrer to appellants’ amended petition for appeal. Accordingly, we affirm in part, reverse in pa rt, and remand for further proceedings consistent with this opinion. Affirmed in part, reversed in part, and remanded.