Untruthfulness on Application Required Denial of Water Discharge Permit

    In August 2011, the New Mexico Court of Appeals clarified any ambiguity that may have existed in the New Mexico Environment Department's ability to deny a discharge permit based on an individual's misrepresentation in a permit application. In Summers v. N.M. Water Quality Control Com'n (In re Final Order in the Alta Vista Subdivision DP #1498 WQCC 07-11(A)), 2011 NMCA 97, the Court of Appeals clearly stated that applicants seeking Water Discharge Permits must be accurate and truthful in their permit requests and must be forthcoming with all information regarding a discharge site.

    The Summers decision reaffirmed the New Mexico Environment Department's decision to deny an application for a septic waste discharge permit. In the case, the applicant had initially filed an application that only provided data from a single well located more than 1,000 feet from the proposed discharge site. Subsequently, it was discovered that the applicant had drilled another well, without a permit, within 100 feet of the location of the proposed discharge site. The applicant had failed to disclose the existence of the well in the initial application and in supplemental information, including a well log.

    Based on the revelation of the undisclosed well, the New Mexico Environment Department denied the application on the basis that there was a "misrepresentation of a material fact in the permit application," in accordance with NMSA § 74-6-5(E)(4)(a). The applicant appealed the denial arguing that there was not enough evidence to support a determination that the applicant had knowingly misrepresented material in the application. The Water Quality Control Commission ("WQCC") granted the appeal and reversed the New Mexico Environment Department's decision, ordering the Department to issue the permit.

    Four individuals intervened in the case and filed an appeal of the WQCC's decision. The Court of Appeals reversed the WQCC's findings. In its discussion, the court first addressed the factual issue of whether there was a knowing misrepresentation. The court then considered a mixed question of law and fact: if there was a knowing misrepresentation of fact, was the misrepresentation material. The court held that there was a knowing misrepresentation of fact since the applicant submitted an application without disclosing a well site that she knew existed since she had already drilled the well when she submitted the application. In finding that the WQCC abused its discretion, the court looked to the fact that the applicant only furnished the information about the previously undisclosed well when the Department specifically requested information about all the wells located on the properties adjacent to the proposed discharge site. Additionally, the court found that even after the Department's specific request, the applicant concealed facts about the date and circumstances surrounding how the well had been drilled and submitted a well log with fabricated information. Finding that the applicant's misrepresentation was a material fact, the court reasoned that the information was material since the information the applicant withheld could affect the outcome of the permitting decision.

    Finally, the court held that the misrepresentation during the application process required denial of the permit. The court rejected the applicant's argument that the language of § 74-6-5(E)(4)(a) should be strictly construed so that the requirement that the misrepresentation occur "within the ten years immediately preceding the date of submission of the permit application" would not include the time during the application process. The court found the misrepresentation occurred when the materials containing the misrepresentation were conveyed to the Department, in this case when the application was submitted. The court rejected the notion that the misrepresentation did not precede the date of submission of the application. In construing legislative intent, the court determined that the language "immediately preceding the date of submission of this application" to apply to all applicants who knowingly misrepresent a material fact in both current and prior applications for discharge permits.

    This case underscores the common sense that truthfulness is always the best policy.

    For more information, please contact Christina C. Sheehan.