Pacific Bio Products v. Environ. Quality Comm.

42 September 16, 2026 No. 868 IN THE COURT OF APPEALS OF THE STATE OF OREGON PACIFIC BIO PRODUCTS - WARRENTON, LLC, fka Bio-Oregon Protein, Inc., Petitioner, v. OREGON ENVIRONMENTAL QUALITY COMMISSION, Respondent. Environmental Quality Commission WQ/I-NWR-2022-031; A186173 Argued and submitted August 13, 2026. Misha Isaak argued the cause for petitioner. Also on the briefs were Alex T. Van Rysselberghe, Nick Bottcher, and Stoel Rives LLP. Carson L. Whitehead, Assistant Attorney General, argued the cause for respondent. Also on the brief were Dan Rayfield, Attorney General, and Benjamin Gutman, Solicitor General. Before Tookey, Presiding Judge, Kamins, Judge, and Jacquot, Judge. KAMINS, J. Motion to clarify granted. Reversed and remanded for development of technology-based effluent limitations con- sistent with the required case-by-case analysis; otherwise affirmed. Cite as 353 Or App 42 (2026) 43 44 Pacific Bio Products v. Environ. Quality Comm. KAMINS, J. Petitioner, Bio-Oregon Protein, Inc., seeks judicial review of a final order following a contested case hearing of the Environmental Quality Commission (EQC) affirming a Clean Water Act National Pollutant Discharge Elimination System (NPDES) permit issued by the Oregon Department of Environmental Quality (DEQ) to petitioner. Petitioner raises three assignments of error related to the permit’s technology-based effluent limitations (TBELs) and water quality-based effluent limitations (WQBELs). We reverse the final order on petitioner’s first assignment of error, otherwise affirm, and remand to EQC. We also address EQC’s motion for clarification regarding the scope of the stay applied to the permit pending appeal. Petitioner operates a facility at the mouth of the Columbia River that processes fish carcasses, crab shells, and shrimp shells into a fish meal with concentrated pro- tein. The facility operates under a NPDES permit that allows for the discharge of process wastewater into the Columbia River. In 2012, petitioner submitted a renewal application for its NPDES permit. After the review pro- cess and comment period, DEQ issued the permit impos- ing new limitations with an effective date of April 1, 2022. Petitioner filed a request for a contested case hearing to challenge some of the effluent limitations. A contested case hearing was held, and a final order affirming the permit was issued. We review an agency’s legal conclusions for errors of law and substantial reason. Hettle v. Construction Contractors Board, 260 Or App 135, 137, 316 P3d 344 (2013), rev den, 355 Or 380 (2014); Murphy v. Board of Parole, 241 Or App 177, 193, 250 P3d 13, rev den, 350 Or 571 (2011) (“Where there is only one legally correct outcome, * * * our review of an agency or court decision is one for errors of law.”). We review its factual determinations for substantial evidence. Hettle, 260 Or App at 137; ORS 183.482(8). “Substantial evidence exists to support a finding of fact when the record, viewed as a whole, would permit a reasonable person to make that finding.” ORS 183.482(8)(c). Cite as 353 Or App 42 (2026) 45 FIRST ASSIGNMENT OF ERROR In petitioner’s first assignment of error, it contends that EQC erred in affirming and adopting TBELs derived from inapplicable fish meal processing effluent limitation guidelines (ELGs) and developed without adequate case- by-case analysis. Under that assignment of error, petitioner makes three arguments: (1) that DEQ failed to conduct a case-by-case analysis for petitioner’s fish processing; (2) that DEQ failed to consider appropriate and available technol- ogy in setting the TBELs because barging1 wastewater, the main control technology, is impossible to implement; and (3) that in DEQ’s case-by-case analysis of petitioner’s shrimp and crab shell processing, it failed to consider “unique fac- tors relating to the applicant.” Under the Clean Water Act, NPDES permit writers consider the “best practicable control technology currently available” (BPT) to set effluent limitations for point sources, referred to as TBELs. 33 USC § 1311. Federal regulations provide that permit writers, like DEQ, may impose those TBELs through three methods: (1) application of existing EPA-promulgated effluent limitations, (2) on a case-by-case basis “to the extent that EPA-promulgated effluent limita- tions are inapplicable,” or (3) through a combination of those two methods where EPA-promulgated ELGs only apply to certain aspects of the discharger’s operation or to certain pollutants. 40 CFR § 125.3(c). Here, DEQ applied EPA-promulgated ELGs for “fish meal processing” to the fish processing part of petition- er’s operation, after determining that they were applicable to petitioner based on review of EPA’s development docu- ments for the fish meal processing ELGs. 40 CFR § 408.152. For petitioner’s shrimp and crab shell processing, DEQ con- ducted a case-by-case analysis. Petitioner first argues that DEQ improperly applied the fish meal processing ELGs to its fish processing and, thus, failed to conduct a case-by-case analysis. At issue is whether, under the regulation, DEQ correctly applied the 1 “Barging” refers to barging the wastewater to sea or to another facility with a solubles plant. 46 Pacific Bio Products v. Environ. Quality Comm. fish meal processing ELGs or was instead required to con- duct a case-by-case analysis. “When construing a federal regulation, we follow the methodology prescribed by federal courts,” first looking to the plain meaning of the regulation. Klamath Tribute Center, LLC v. Mortuary and Cemetery Bd., 291 Or App 195, 199, 419 P3d 787 (2018) (internal quotation marks omitted). Only if the wording is ambiguous do we look to administrative interpretation of the regulation. Id. at 200. Whether a permit writer is required to impose TBELs based on a case-by-case analysis depends on whether “EPA-promulgated effluent limitations are inapplicable” to the operation or pollutant. 40 CFR § 125.3(c). Here, if the fish meal processing ELGs are inapplicable to petitioner’s fish processing, DEQ was required to conduct a case-by-case analysis of the fish processing.2 As addressed in the regulation, the fish meal pro- cessing ELGs “are applicable to discharges resulting from the processing of menhaden on the Gulf and Atlantic Coasts and the processing of anchovy on the West Coast into fish meal, oil and solubles.” 40 CFR § 408.150. In addition, prior to listing the ELGs, the regulation specifies that “any men- haden or anchovy fish meal reduction facility” must meet the limitations. 40 CFR § 408.152. Although EPA has pro- mulgated ELGs for petitioner’s industry—fish meal pro- cessing—petitioner’s operation does not trigger applicability because it does not process menhaden or anchovy, and the regulation unambiguously limits its applicability to those fish. Thus, DEQ erred in not completing a case-by-case analysis for petitioner’s fish processing operation. DEQ contends, however, that it did not need to con- duct a case-by-case analysis because it examined the dif- ferences between petitioner’s fish processing operation and the menhaden and anchovy facilities evaluated by EPA in developing the ELGs and determined that those differences 2 To the extent that the plain meaning of whether an ELG is “inapplica- ble” is ambiguous, EPA’s NPDES Permit Writers’ Manual clarifies that EPA- promulgated ELGs are inapplicable “[w]hen effluent guidelines are available for the industry category but are not applicable to the NPDES permit applicant (e.g., facilities that do not perform the industrial operation triggering applicability of the effluent guidelines * * *.” EPA NPDES Permit Writers’ Manual 5-45 (2010). Such is the situation here. Cite as 353 Or App 42 (2026) 47 were insignificant to the concentration and type of pollut- ants in the effluent. Although there may be some duplication of EPA’s work, DEQ still must conduct the required case- by-case analysis, even if nothing precludes it from incor- porating EPA’s data into that analysis. DEQ also argues that EPA’s development documents indicate that the fish meal processing ELGs were not limited to menhaden and anchovy facilities but instead were focused on the process itself. As discussed above, the plain language of the regu- lation addressing applicability of the fish meal processing ELGs limits its application to “the processing of menha- den on the Gulf and Atlantic Coasts and the processing of anchovy on the West Coast.” 40 CFR § 408.150. Because that plain meaning is unambiguous, we cannot consider the development documents. Klamath Tribute Center, 291 Or App at 199-200. Petitioner’s second and third arguments under its first assignment of error address DEQ’s case-by-case analysis of its shrimp and crab shell processing. In conducting a case-by-case analysis, a permit writer must “apply the appropriate factors listed in § 125.3(d) and shall consider: (i) the appropriate technology for the cat- egory or class of point sources of which the applicant is a member, based upon all available information; and (ii) any unique factors relating to the applicant.” 40 CFR § 125.3(c) (2). As relevant here, § 125.3(d) requires the permit writer to consider the BPT factors: • “The total cost of application of technology in relation to the effluent reduction benefits to be achieved from such application; • “The age of equipment and facilities involved; • “The process employed; • “The engineering aspects of the application of various types of control techniques; • “Process changes; and • “Non-water quality environmental impact (including energy requirements).” 48 Pacific Bio Products v. Environ. Quality Comm. 40 CFR § 125.3(d)(1). In other words, in conducting the case-by-case analysis of petitioner’s shrimp and crab shell processing, DEQ was required to apply those factors in considering the appropriate technology for petitioner’s cat- egory of sources—shrimp and crab shell processing—and any unique factors relating to petitioner. Petitioner argues: (1) that DEQ did not correctly identify an appropriate best practicable control technology currently available as a basis for its TBELs and (2) that DEQ did not consider “unique fac- tors relating to the applicant” in its consideration of several of the BPT factors contained in 40 CFR § 125.3(d)(1). Addressing the first argument, in determining the appropriate BPT, DEQ reviewed EPA’s analysis of several control technologies for several types of fish processing facil- ities. EPA’s analysis determined that the best practicable technologies for fish meal processing facilities were “good housekeeping,” for facilities with a solubles unit,3 and “barg- ing,” for facilities without a solubles unit. “Good housekeep- ing” requires “educating the plant personnel to use good water conservation and solids handling practices.” “Barging” requires the facility to barge wastewater “to sea, or prefera- bly to another fish meal operation with [a] solubles plant for by-product recovery.” In its review, DEQ interpreted EPA’s data to conclude that “good housekeeping” would result in a significant reduction in relevant pollutants for petitioner. However, in EPA’s analysis, facilities without a solubles unit—like petitioner’s—only saw a small reduction with good housekeeping, instead requiring barging out to sea or barging or trucking to a facility with a solubles unit to ade- quately reduce pollutants to meet the fish meal processing ELGs. Therefore, DEQ’s application of good housekeeping as a best practicable technology is not supported by substantial evidence. To the extent DEQ’s analysis focuses only on good housekeeping rather than barging, without consideration of unique factors relating to barging, the TBELs are not sup- ported by substantial reason. Because petitioner does not have a solubles unit, EPA’s analysis renders barging the only available BPT. 3 A solubles unit refers to equipment used to remove solids from the waste- water of the fish meal processing facility. Cite as 353 Or App 42 (2026) 49 As to the second argument, petitioner contends that DEQ failed to consider “unique factors relating to the appli- cant,” as required by 40 CFR § 125.3(c)(2) in conducting the case-by-case analysis. Petitioner argues that DEQ borrowed EPA’s 1970s analysis from menhaden and anchovy fish meal processing rather than conducting a true case-by-case analysis as to several factors: “total cost of application of technology in relation to the effluent reduction benefits to be achieved from such application,” “engineering aspects of the application of various types of control techniques,” “process changes,” and “non-water quality environmental impact.” As to the first factor—“total cost of application of technology in relation to the effluent reduction benefits to be achieved from such application,” DEQ focused its initial eco- nomic analysis on good housekeeping. As discussed above, the application of good housekeeping as a BPT in petition- er’s case is not supported by substantial reason. As to barg- ing, DEQ did not consider the cost of barging in relation to any unique factors relevant to petitioner’s facility. Further, while EQC considered the cost of alternate methods of reduc- ing relevant pollutants, including barging, in the final order that analysis too did not include “unique factors” influencing the cost of applying those technologies to petitioner’s facility. As to the second factor petitioner identi- fies—“non-water quality environmental impact”—DEQ similarly centered on good housekeeping. Thus, despite considering unique factors for good housekeeping, it again failed to consider unique factors related to barging as the correct applicable control technology based on DEQ’s review of EPA’s data. Finally, as to the final two factors identified by peti- tioner—“engineering aspects” and “process changes,” DEQ considered barging as well as good housekeeping practices. In that consideration of barging, DEQ’s analysis indicated that it considered petitioner’s unique characteristics, deter- mining that “the engineering aspects of applying the con- trol techniques do[ ] not constitute an undue burden on the permittee” and that, in implementing good housekeeping and barging, “the process changes to [petitioner] will be minimal.” Thus, because DEQ properly considered unique 50 Pacific Bio Products v. Environ. Quality Comm. characteristics related to barging as to those two factors, EQC did not err as to those factors. Ultimately, because DEQ failed to consider char- acteristics unique to petitioner for some of the BPT factors as to the BPT supported by DEQ’s analysis (barging), the TBELs for petitioner’s shrimp and crab shell processing are not supported by substantial reason. SECOND ASSIGNMENT OF ERROR In its second assignment of error, petitioner argues that EQC erred in affirming and adopting the final order issued by an administrative law judge (ALJ) who did not preside over the contested case hearing. Petitioner con- tends that the same ALJ that conducted the contested case proceeding should have issued the order and that petitioner did not have adequate notice of the appointment of a new ALJ. Thus, according to petitioner, the appoint- ment impaired the fairness of the proceedings. See ORS 183.482(7) (requiring that we remand for further agency action if the fairness of the proceedings may have been impaired by a material error in procedure or a failure to follow prescribed procedures). Contrary to petitioner’s argument, there is no requirement for the same ALJ to conduct the contested case proceeding and issue the final order. Petitioner points to the use of a definite article (“the”) preceding “ALJ” in statutes describing the contested case process. See, e.g., ORS 183.650 (“In any contested case hearing conducted by an [ALJ] assigned from the Office of Administrative Hearings, the [ALJ] shall prepare and serve on the agency and all parties to the hearing a form of order, including recommended find- ings of fact and conclusions of law. The [ALJ] shall also pre- pare and serve a proposed order * * *.” (Emphases added.)). As petitioner contends, use of the definite article “the” “indi- cates that the legislature was referring to a specific, previ- ously mentioned” subject. Carroll and Murphy, 186 Or App 59, 68, 61 P3d 964 (2003). However, it does not follow that referring to the same subject while explaining the process limits the ability of the Office of Administrative Hearings to assign a new ALJ during the process. Cite as 353 Or App 42 (2026) 51 Petitioner next argues that it lacked adequate notice of the appointment of the new ALJ. Petitioner con- tends that the lack of notice deprived it of the opportunity to request a newly assigned ALJ as it was entitled. OAR 471- 060-0005(3) (“Every party and agency in a contested case is entitled to request a change of administrative law judge.”) Because petitioner only received notice of the change in ALJ after the final order had been issued, petitioner contends it did not have an opportunity to meaningfully request a new ALJ. DEQ contends that petitioner could have still requested a change in ALJ upon notice of the appointment, as a party has 10 days from when the party “has actual notice of the assignment” to request a new ALJ. OAR 471-060-0005(4)(b). A party may request a new ALJ, and that request will be automatically granted so long as it is filed within 10 business days after the ALJ is assigned to the case. OAR 471-060-0005(4). The 10-day deadline may be extended by excusable mistake or surprise, in which case the party then has 10 business days “after the circumstances that prevented a timely filing have come to an end.” OAR 471-060-0005(4) (b). Under OAR 471-060-0005(2)(a), an ALJ is “ ‘assigned to the case’ when a written notice is sent to a party or agency naming the administrative law judge to preside over a con- tested case, or the date a party or agency has actual notice of the assignment, whichever is earlier.” Here, petitioner had actual notice and written notice upon issuance of the final order. Had petitioner raised the issue within 10 days of that notice, EQC may have granted the request and reassigned a new ALJ to issue a new final order. Because petitioner was not denied that opportunity, the lack of earlier notice was not a material error that may have impacted the fairness of the proceedings. Cf. Pulito v. Board of Nursing, 366 Or 612, 627, 468 P3d 401 (2020) (denial of request for new ALJ based on procedural error stemming from the application of an invalid rule may have impaired the fairness of the proceeding). THIRD ASSIGNMENT OF ERROR In its third assignment of error, petitioner con- tends that EQC erred in affirming the WQBELs for heavy 52 Pacific Bio Products v. Environ. Quality Comm. metals, thermal load, and enterococcus bacteria contained in the permit. In petitioner’s brief, it summarily references its arguments during the contested case hearing. See JGB Enterprises, LLC v. OLCC, 325 Or App 326, 340, 529 P3d 262 (2023) (rejecting minimally developed arguments incor- porating argument below by reference). Because petitioner has not sufficiently developed that argument in its brief on appeal, we do not address it. See Johnson v. Mullen, 331 Or App 112, 118, 545 P3d 1261, rev den, 372 Or 361 (2024) (rejecting an argument that was raised but not sufficiently developed in the appellant’s brief); see also Beall Transport Equipment Co. v. Southern Pacific, 186 Or App 696, 700 n 2, 64 P3d 1193, adh’d to as clarified on recons, 187 Or App 472, 68 P3d 269 (2003) (rejecting a party’s “conclusory” argument because it is not “our proper function to make or develop a party’s argument when that party has not endeavored to do so itself”). MOTION TO CLARIFY STAY PENDING APPEAL Finally, we address DEQ’s motion to clarify the scope of the stay of the final order pending appeal. During the contested case proceeding, uncontested conditions of the NPDES permit went into effect. Following the contested case hearing and proposed order, EQC issued a final order and allowed the full NPDES permit with contested condi- tions to go into effect. Petitioner appealed seeking judicial review and filed a motion to stay the permit and final order pending our review. The Appellate Commissioner granted that motion, determining that “[t]he mere fact that, if a stay is granted, the limits set forth in the permit will not be enforced, does not show substantial public harm” and con- cluding “the EQC’s final order is stayed pending completion of judicial review.” Stay Order 4-5. Because the scope of the stay will determine whether or not petitioner has violated uncontested terms of the permit, we consider DEQ’s motion to clarify despite reversing the final order. Prior to EQC’s final order, during the contested case hearing, uncontested conditions of the permit remained in effect. See OAR 340-045-0035(9)(b) (during a contested case hearing for an existing facility, “only the contested permit condition and the conditions that Cite as 353 Or App 42 (2026) 53 cannot be implemented separately from the contested con- ditions are stayed until the hearing process is complete”). Petitioner contends that, because the final order adopted the permit in full, “the Court’s stay of the Final Order stayed all limits in the Permit.” However, the final order only addressed the limits at issue in the contested case hearing. As acknowledged by petitioner in its request for a contested case hearing, “[p]ermit conditions to which [petitioner] has not objected will take effect April 1, 2022.” Petitioner set the scope of those challenged conditions in its initial request for a contested case hearing. The final order only resolved the conditions that petitioner objected to, and therefore, those conditions were stayed by the stay of the final order. To the extent petitioner contends that the uncertainty of complying with uncontested limits places an unmanageable burden, it had the opportunity to raise that argument in that initial request. Instead, petitioner quoted OAR 340-015-0035(9)(b), staying “conditions that cannot be implemented separately from the contested conditions,” and stated it understood unobjected-to conditions would take effect April 1, 2022. At that point, petitioner set the scope of its challenges to the permit and therefore, the scope of its appeal, and accord- ingly, the reach of any stay order. We see no reason why the stay on appeal would be broader than the scope of the under- lying proceeding. Motion to clarify granted. Reversed and remanded for development of technology-based effluent limitations consistent with the required case-by-case analysis; other- wise affirmed.