WILMINGTON, N.C. (June 19, 2024)—Shipman & Wright, LLP, a full-service law firm serving small businesses and individuals in North Carolina, was awarded over $109,000 in attorneys’ fees after nearly three years of litigation between our client and the N.C. Department of Environmental Quality.

The suit represents the first time N.C. DEQ has been ordered to pay attorneys’ fees following litigation, according to the Department.

The case LDI Shallotte 179 Holdings LLC v. NCDEQ Division of Energy Mineral and Land Resources—litigated in the N.C. Office of Administrative Hearings—exposed a state agency’s attempt to exceed its statutory authority and overload a developer with bureaucratic red tape.

Our client, a residential developer whose application for a stormwater permit was obstructed by NCDEQ, was represented by Gary Shipman and Tom Harvey of Shipman & Wright. Our attorneys successfully obtained summary judgement on behalf of our client in an unprecedented court order that brought to light N.C. DEQ’s failure to adhere to its own application review policies.

In preparing to develop a residential subdivision in Shallotte, N.C., our client applied for a stormwater permit from N.C. DEQ in July 2021. For the next nine months, N.C. DEQ imposed a labyrinth of contradictory demands. The Department pressured our client to assume responsibility for multiple violations that were linked to a stormwater permit issued in 2001 to the developer of the neighboring subdivision.

Despite our client having no connection whatsoever to this neighboring subdivision, which was built 20 years ago by an unrelated developer, N.C. DEQ refused to process the July 2021 stormwater permit application unless our client agreed to bring the neighboring subdivision into compliance. All the while, the Department was unable to cite legal authority for its demands and continued to arbitrarily move the goal posts for our client.

Shipman & Wright attorneys filed a Petition for a Contested Case Hearing in April 2022. After considering our attorneys’ arguments and motion for summary judgement, Judge Donald R. van der Vaart ruled in our client’s favor in November 2022, writing that the position taken by N.C. DEQ “leads to bureaucratic entanglement.” Following additional litigation, N.C. DEQ paid Shipman & Wright $109,769.20 as reimbursement of attorney’s fees in April 2024.

Judge van der Vaart agreed with our position that NCDEQ overstepped its authority and that the Department deprived our client of a constitutional right to use of property. According to the Judge’s decision, N.C. DEQ acted erroneously and failed to understand how to implement its own rule.

Shipman and Wright attorneys are proud to have concluded this litigation with an optimal outcome for our client. As ordered by the court, our client finally received proper review of their stormwater permit application, two years and two months after submitting the application for the first time.