Judge sanctions Mountaire in Delaware wastewater lawsuit

DOVER, Del. (AP) — A Superior Court judge has ordered an Arkansas poultry processing company and two Delaware subsidiaries to pay more than $28,000 in sanctions for repeatedly refusing to provide information to plaintiffs suing the company over wastewater violations in southern Delaware.

The judge this week ordered Mountaire Corp. and the subsidiaries to pay $18,000 in attorneys fees to the plaintiffs and more than $10,300 for the plaintiffs’ share of billings from a special master appointed by the court to help manage the case.

Judge Craig Karsnitz noted that he had repeatedly warned attorneys on both sides about “the lack of civility which permeated the case.”

“My urging to civility has fallen on deaf ears,” Karsnitz wrote.

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The ruling came in a lawsuit filed by Millsboro-area residents against Mountaire Corp., Mountaire Farms Inc. and Mountaire Farms of Delaware Inc.

The plaintiffs claim they have suffered both property damage and personal injury from wastewater discharges at Mountaire facilities in Sussex County.

The plaintiffs also have intervened in a federal lawsuit involving a proposed consent decree between Mountaire and Delaware’s Department of Natural Resources and Environmental Control. The consent decree is aimed at resolving spray irrigation and land application permit violations cited by DNREC in 2017 involving Mountaire’s Millsboro facility.

Area residents argue that the consent decree is not fair, reasonable or consistent with federal environmental laws. They are seeking permission from a federal judge to obtain information about the settlement negotiations between DNREC and Mountaire.

Meanwhile, Mountaire agreed in December to pay a $420,000 penalty and upgrade its wastewater system as part of the proposed consent decree. The company also agreed to pay a $230,000 administrative penalty regarding violations at its Selbyville facility and other violations in Millsboro that are not related to the 2017 wastewater treatment system failure.

In his sanctions ruling, Karsnitz pointed to a February 2019 court decision that allowed limited information sharing in the state lawsuit to determine whether his court had jurisdiction over Mountaire Corp., and whether the plaintiffs had met the requirements for a class-action proceeding.

The two sides could not agree, however, on what information the plaintiffs were entitled to receive, including minutes of Mountaire Corp. board meetings and shareholder meetings. The special master subsequently ordered Mountaire to produce minutes from such meetings that involve the formation and operations of its facilities in Delaware.

The plaintiffs later complained of “extensive redactions” by Mountaire in documents it had provided. Mountaire was then ordered to produce unredacted copies of several documents, including meeting minutes. After seeing the unredacted documents, the plaintiffs asked for sanctions.

Karsnitz noted that “even a cursory examination” of the documents shows that they contained information that “clearly and obviously” covered relevant issues and had direct bearing on the jurisdictional issue.

“The redactions were intentional, and … without any legal basis,” Karsnitz wrote, noting that five separate orders required Mountaire to produce the documents requested.

A spokeswoman for Mountaire Farms Inc. declined to comment on the ruling, citing a gag order that has been issued in the case.

The sanctions decision is the second ruling by Karsnitz in recent months involving a lack of information sharing in the lawsuit.

In April, the judge scolded state environmental regulators for withholding information subpoenaed by the plaintiffs’ attorneys. He rejected arguments by the Department of Natural Resources and Environmental Control that the information being sought could be withheld under Delaware’s Freedom of Information Act as “investigatory files.”

DNREC also had argued that the information was subject to attorney-client privilege and was protected because it was part of settlement discussions, and that having to provide it would unduly burden the agency.

“A statutory obligation cannot be an undue burden,” the judge noted.

The information sought from DNREC included documents gathered in its investigation of Mountaire’s environmental violations and information from settlement discussions between DNREC and Mountaire.

Karsnitz noted that DNREC had an obligation under Delaware law to provide the public with information about environmental inspections, violations and enforcement actions.

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