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M2Green

This August 2010 aerial photograph of the former Smurfit-Stone Container Corp. mill in Frenchtown shows the extensive network of settling ponds that some fear may hold contaminants that must be cleaned up. M2Green now owns the property.

The Missoula City-County Health Board and a group of plaintiffs believe the Montana Department of Environmental Quality violated the Clean Water Act and its own administrative rules when it issued a wastewater discharge permit to the owners of a Frenchtown industrial site.

The health board, joined by the Missoula Valley Water Quality District, the Clark Fork Coalition and the Confederated Salish and Kootenai Tribes, filed a motion for summary judgment against the DEQ in 1st Judicial District Court in Helena last month.

DEQ filed a cross motion in District Court last week, saying the current permit was a “shell” of its former self, and that plaintiffs have misinterpreted state and federal law. The groups filed their initial lawsuit against the state agency last October.

The plaintiffs’ new brief argues the DEQ should not have transferred permits once held by Smurfit-Stone Container Corp. to M2Green, which purchased the property in May 2011 and has since dismantled the mill.

Missoula County views the property as an abandoned industrial site, part of which is being considered for Superfund listing. The lawsuit is asking a judge to void the Montana Pollution Discharge Elimination System permit DEQ granted to M2Green.

“In spite of a lack of any discharge from the site necessitating – or justifying – a permit, DEQ transferred Smurfit-Stone’s (wastewater discharge permit) to M2Green in 2011,” the brief states. “(This) permitted M2Green to discharge phosphorous and nitrogen directly into the Clark Fork River from a vacant site, and at the same levels as a massive pulp and paper mill.”

The 34-page brief alleges DEQ violated the Montana Water Quality Act and the federal Clean Water Act by not terminating the wastewater discharge permit after Smurfit-Stone shuttered the mill in 2010.

The plaintiffs also believe DEQ violated its own administrative rules by transferring the permit to M2Green.

“DEQ knew at the time of transfer that the type of facility for which the permit was issued would never again operate on the site, and that the nature of any new facility was unknown,” the plaintiffs said. “In spite of this undisputed knowledge, DEQ transferred the permit to M2Green without any opportunity for public notice or comment.”

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Peter Nielsen, division supervisor of the Water Quality District, said efforts to improve the quality of the Clark Fork River have been decades in the making, and that all four plaintiffs in the judgment against DEQ have an inherent interest in the river’s health.

In 1998, a voluntary nutrient reduction program formed around the Clark Fork River and the four largest polluters in the river’s upper 200 miles agreed to place numeric limits on their nutrient discharge.

That resulted in the first numeric nutrient standards in Montana. Nielsen said nutrient concentrations in the river below Missoula have decreased ever since.

He said DEQ has jeopardized that progress by granting M2Green the permit once held by Smurfit-Stone.

“This is an opportunity to restore the waters of the Clark Fork and maintain the progress made in cleaning it up,” said Nielsen. “Instead, DEQ chose to allow limits and load allocations that have not been used for many, many years. It’s essentially taking us back decades.”

M2Green acquired the property May 3, 2011. According the brief, the company’s purchase contract prohibits the site from ever being used as a paper mill.

Shortly after taking ownership, M2Green dismantled the buildings and sold off the equipment. But the discharge permit was renewed by DEQ again in 2014. The plaintiffs argue that DEQ transferred to M2Green a permit for “nonexistent discharges from an imaginary facility.”

“Our assertion is that the permits should have been terminated,” Nielsen said. “We believe the party, M2Green, if they had a valid need for a discharge permit – which they haven’t shown – that they would file for the appropriate permit that meets contemporary treatment standards.”

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DEQ filed a cross motion with District Court on Aug. 10, saying it received a request to transfer the permit in 2011, roughly seven days after M2Green purchased the mill.

The request included a permit transfer agreement in which M2Green agreed to assume the responsibility, coverage and liability for the permit and its wastewater treatment system. The system includes unlined wastewater storage ponds occupying 600 acres of the site.

While DEQ transferred Smurfit-Stone’s permit to M2Green, it asked the new owner to supply updated information, stating that the pending renewal application no longer represented activities occurring at the site.

“In their brief, the plaintiffs misapply the facts in the record and misinterpret applicable state and federal laws,” DEQ said. “DEQ’s actions in transferring and renewing the (permit) were both reasonable and lawful, and DEQ considered relevant facts as necessary to support these decisions.”

DEQ also argues that the Clean Water Act didn’t require it to terminate Smurfit-Stone’s permit, even when it announced that it would no longer run the mill and that it planned to sell the property.

According to the agency, non-contact cooling and seepage water discharge continued during the time of the sale. Terminating the permit "would have ignored the obvious fact that permitted discharges were still occurring.”

DEQ also took issue with the plaintiff’s argument that it acted arbitrarily when it renewed M2Green’s permit. It said the renewed permit was not issued for a paper mill.

“The permit DEQ ultimately issued to M2Green is a shell of its former self and authorizes nothing more than a discharge commensurate with a small municipal wastewater treatment plant,” DEQ said. “The issuance of the permit does not authorize M2Green to trade nutrient credits or to trade anything, it merely authorizes a discharge.”

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