Judge: ‘No express statutory requirement that a fertilizer license exempt Denali’
Denali Water Solutions’ request for a temporary restraining order and preliminary injunction against the Missouri Fertilizer Control Board (MoFCB) was denied by Cole County 19th Circuit Court Judge Cotton Walker on Dec. 18, 2023.
According to a court document filed on Dec. 7 by Denali’s attorney, Jennifer Griffin, the intention of the restraining order was to stop the MoFCB from maintaining that Denali’s (and co-petitioner Synagro’s) waste products were exempt from the Missouri Fertilizer Law, based their market value, or lack thereof.
If approved, the restraining order could have compelled the MoFCB to re-issue a fertilizer permit to Denali and Synagro, thus allowing them to continue their operations in Missouri, free from the requirement for land application permits from the Missouri Department of Natural Resources (DNR).
However, Judge Walker stated in his decision that “there is no express statutory requirement that a fertilizer license exempt Denali under either the Fertilizer Control Law or the Clean Water Law.” In April 2023, the MoFCB notified Denali, Synagro and numerous other businesses that land-apply industrial food waste in Missouri that they would not renew fertilizer permits to them after their permits expired on June 30, 2023. The loss of fertilizer permits forced said companies to apply for Missouri Clean Water operating permits from the DNR. Because the application process is time-consuming, the DNR allowed the companies to continue to operate after June 30 under the department’s “enforcement discretion,” which amounts, essentially, to grace issued in place of shutting down the companies’ operations completely.
However, a stipulation was attached to that enforcement discretion. Companies to whom grace was extended, including Denali, could not violate the tenets of the Missouri Clean Water Law. It was a condition that Denali could not meet.
On Oct. 3, 2023, Denali contractors deviated from operational controls at a site near Southwest City in McDonald County, where an alleged over-application of process waste had occurred. When DNR investigators arrived, they observed evidence of over-application of materials on saturated ground, and noted that rain was forecast for that evening.
The incident was the third in a series of violations by Denali contractors recorded by the DNR, dating back to August 2022. The Oct. 3, 2023, incident, however, was Denali’s first recorded violation since the DNR issued its enforcement discretion which began on July 1.
As a consequence, in a letter to Denali dated Nov. 29, the DNR removed Denali’s enforcement discretion and advised the company to immediately discontinue land-applying its products and to begin emptying its storage basins in Newton and McDonald Counties.
Griffin alleges that the notice of violation for Denali’s October 2023 deviation “would never have been cited [by the DNR] under normal circumstances.”
It was not clear what “normal circumstances” Griffin referred to.
According to Griffin’s allegations, “the impact [of the removal of enforcement discretion] on Denali is devastating and threatens to permanently shutter Denali’s Missouri operations as Denali can no longer store its fertilizer products in Missouri lagoons or land apply them, and instead can only truck the fertilizer products out of state, which is exponentially expensive and not sustainable.
“Due to Denali being denied the ability to operate under the same temporary regulatory framework [of] Synagro and other competitors, its customers will have no choice but to shutter their doors or enter into contracts with its competitors. Because these contracts are typically long-term, it will be difficult for Denali to win back these customers such that Denali will sustain a permanent loss of business.”
Griffin alleges that “DNR’s disparate treatment of Denali compared to its competitors also damages its business reputation, making it even harder for Denali to win back lost customers.”
For these reasons, Griffin asserts, “the harm to Denali is both immediate and irreparable.”
Judge Cotton Walker disagrees.
“Denali cannot show that its business will be irreparably harmed if the court denies its motion,” Walker’s decision stated. “Denali saves money because it does not have to pay the [MoFCB]’s fees or submit reports, or label the material or submit it for testing. [Denali] may, indeed, incur costs to obtain operating permits for its storage basins from DNR, [but] the cost of obtaining DNR permits and complying with operational controls required by them is simply the cost of doing business, just as obtaining fertilizer permits is a cost of doing business. Denali has not shown that the costs of complying with the Clean Water Law will drive it out of business.”
According to Walker’s statement, Denali complains that until it obtains operating permits, DNR will not allow the company to land-apply its waste streams in an uncontrolled manner, as it has been doing, but is requiring Denali to pump and haul the wastewater from the storage basins to permitted wastewater treatment systems, in order to protect the waters of the state.
“That [process] may be expensive in the short term, but Denali may have to charge its meat and food processing plant customers more for the service it offers of disposing of their waste until Denali obtains permits with which it will comply,” he said. “The food processors will [then] have to choose whether it would be more cost-effective to pay Denali or [to] arrange disposal with permitted wastewater treatment facilities.
“Allowing Denali to act under the cover of a fertilizer license in a manner that avoids other regulation is clearly not in the public interest.”
Walker further stated that the [MoFCB] has no interest in driving Denali out of Missouri.
“It does not appear that the DNR is trying to do that either,” he said. “As state agencies, they do not presume to drive out businesses that are entitled to operate in Missouri in compliance with the laws the agencies administer. In this case, the DNR and the Board share the interest of ensuring that when Denali conducts business here, the company complies with the environmental laws. Denali does not need a fertilizer license to do that.”
Another hearing in the case is scheduled with Judge Walker for 3:30 p.m. on Jan. 16.
