State high court hears arguments over EDS lawsuit

The North Dakota Supreme Court heard arguments last week in Bismarck in a lawsuit that pitted a local company and two state organizations against Dunn County over a proposal for a waste-recycling facility in Dunn County.
Dunn County appealed to the state supreme court a lower-court ruling that favored Environmental Driven Solutions of Killdeer, the North Dakota Industrial Commission and the state’s Attorney General.
The crux of the matter is who has jurisdiction in determining where Environmental Driven Solutions can do recycle oilfield waste. Environmental Driven Solutions is a Minnesota-based oil-waste processing company that is seeking to operate a facility in Dunn County.
After the Dunn County Commission denied the application for the facility in 2013, saying it violated the local zoning code and therefore, needed a conditional-use permit.
Prior to the meeting with the commission, the North Dakota Industrial Commission granted the company a permit to operate. Environmental Driven Solutions sued the county in state court, claiming the county it did not have authority to do so.
In 2015, the NDIC and the North Dakota Attorney General joined EDS in the suit. On Feb. 17, 2016, the district court issued its opinion supporting the plaintiff’s position . The issue was “pre-emption,” i.e., the Century Code – North Dakota’s statuary code, trumped the county’s zoning ordinance.
In short order, the other oil-producing counties filed objections to the plaintiff’s suit and joined Dunn County.
At last week’s oral arguments, Assistant State’s Attorney Ari Johnson, Dunn County’s Planning and Zoning Advocate, argued that EDS really didn’t dispose of anything at their proposed site but, rather, recycled it to produce oil and other valuable assets. Therefore, the Century Code did not pre-empt the county.
He also pointed out that, historically, counties had been given concurrent authority to regulate traffic, housing, aesthetics and public safety because state law also required compliance with local law.
However, Zach Pelham, attorney for EDS, disagreed, saying that local government subdivisions have no authority over any aspect of oil/gas extraction/disposal including any ancillary matters.
Justice Vande Walle questioned the NDIC’s authority, asking if the NDIC could allow a site to be constructed in the middle of town if it wanted to.
“Technically, yes,” Pelham said.
NDIC attorney Hope Olsen agreed, saying the commission has authority on “everything about waste disposal from womb to tomb.”
Other justices expressed frustration with the lack of a definition of “disposal” and “processed” in the Century Code and the state Legislature’s lack of guidance. Justice Sandstrom asked if the proper thing would for the Legislature to fix the problem.
Johnson said that by ruling against EDS, that is exactly what the Legislature would have to do but, if the county was cut our of the review process, the Legislature would be circumvented.
The justices also raised concerns about local planning and zoning being too restrictive; all appearing to agree with Vande Walle’s assessment that a county could not outright ban an oil waste disposal facility simply because local citizens say, “Not in my back yard.”
Justice Crothers said “not in my county” equates with a de facto veto of a NDIC permit and could spell trouble for future attempts to ban “special waste” landfills in the county.

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