Introduction

This decision clarifies a foundational question in North Carolina administrative law: when do conditions embedded in an agency’s general permits cross the line from license terms to “rules” that must be adopted through the North Carolina Administrative Procedure Act’s (APA) notice‑and‑comment process? The Supreme Court holds that when such conditions operate as generally applicable regulations implementing or interpreting legislative enactments, they are “rules” under N.C.G.S. § 150B‑2(8a) and must be adopted through APA rulemaking before they can be enforced.

The dispute arises from three new conditions included by the Department of Environmental Quality’s Division of Water Resources (DEQ/DWR) in 2019 general permits for animal waste management systems on swine, poultry, and cattle operations. Those conditions required: (1) monitoring wells for waste structures in the 100‑year floodplain; (2) use of the Phosphorous Loss Assessment Tool (PLAT) and related mitigation for high‑phosphorous fields; and (3) annual operational reporting. The North Carolina Farm Bureau Federation challenged these conditions as unlawfully adopted “rules” that had not gone through APA procedures. The North Carolina Environmental Justice Network (NCEJN) and the North Carolina State Conference of the NAACP supported DEQ as intervenors and by certiorari.

The Court affirms the Court of Appeals and reinstates the Office of Administrative Hearings’ (OAH) conclusion: these conditions are invalid until adopted through APA rulemaking. The majority’s holding foregrounds the APA’s public participation safeguards and limits agencies’ ability to impose broadly applicable regulatory obligations through permit conditions alone. The dissent warns that the decision unsettles many permitting regimes and misconceives the APA’s technical definitions and the organic permitting statute’s design.

Procedural History at a Glance

• 2014: DEQ renews animal waste general permits; environmental groups file a Title VI complaint with EPA OCR alleging discrimination in permitting.
• May 3, 2018: DEQ settles with complainants; includes a draft general permit to be taken through a stakeholder process.
• April 12, 2019: DWR issues renewed general permits for swine, poultry, and cattle including three new conditions (monitoring wells in floodplains; PLAT with mitigation; annual reports).
• May 10, 2019: Farm Bureau files consolidated contested cases at OAH challenging the three conditions as APA “rules” improperly adopted; also raises a process challenge to the settlement‑draft handling.
• Feb. 9, 2021: ALJ grants summary judgment to Farm Bureau on the APA issue; voids the three conditions; rules for DEQ on the settlement process claim.
• June 20, 2022: Superior Court reverses; reinstates the conditions; holds they are not “rules.”
• Nov. 7, 2023: Court of Appeals reverses; holds conditions are “rules” of general applicability and invalid until adopted through rulemaking.
• Oct. 17, 2025: Supreme Court affirms the Court of Appeals; conditions are “rules,” invalid until adopted via APA rulemaking. The Court does not reach the settlement‑process issue.

Summary of the Opinion

Holding

• The three 2019 general permit conditions (floodplain monitoring wells, PLAT with mitigation, and annual reports) are “agency regulation[s] … of general applicability that implement[ ] or interpret[ ] an enactment of the General Assembly,” and thus are “rules” within N.C.G.S. § 150B‑2(8a).
• “Regulation” in the APA’s definition of “rule” must itself be generally applicable to trigger APA rulemaking; the Court rejects a reading that would treat every permit condition—even in a single individual permit—as a “rule.”
• Because DEQ did not substantially comply with the APA’s notice‑and‑comment rulemaking requirements, the conditions are invalid until adopted through rulemaking.
• The Court emphasizes that it is the conditions—not the permits themselves—that must be promulgated as rules when they function as generally applicable regulations.
• The Court does not reach Farm Bureau’s separate challenge regarding public input on the 2018 settlement draft (not preserved for this review).

Key Rationale

• General applicability: By statute, the General Assembly intends that “most animal waste management systems be permitted under a general permit,” and DEQ acknowledged most eligible operations opt for general permits. Thus, conditions embedded in such general permits operate as generally applicable requirements.
• APA safeguards: Absent an explicit or implicit exemption, broadly applicable regulations must be adopted through APA rulemaking to ensure public notice and comment and to prevent arbitrary exercises of regulatory power.
• Text and canons: The Court rejects a strict last‑antecedent reading that would limit “general applicability” only to “statement” (and not “regulation” or “standard”), because that would yield absurd results—sweeping nearly all individual permit conditions into the “rule” category. Instead, the Court reads “general applicability” to modify “regulation,” “standard,” and “statement.”
• Statutory terminology: The Court rejects DEQ’s reliance on “issue” versus “adopt” wording and special CRC statutes, explaining it is not converting general permits into rules; it is requiring APA rulemaking for the generally applicable regulations embedded as conditions.

Analysis

A. Precedents and Authorities Cited

• N.C.G.S. § 150B‑2(8a) (APA definition of “rule”): The centerpiece. The Court focuses on the phrase “[a]ny agency regulation, standard, or statement of general applicability that implements or interprets an enactment.”
• N.C.G.S. § 150B‑18: Rules are not valid unless adopted in substantial compliance with APA rulemaking. The Court invokes the presumption that APA rulemaking applies absent an exemption (see Cabarrus Cnty. Bd. of Educ. v. Dep’t of State Treasurer, 374 N.C. 3 (2020)).
• N.C.G.S. § 143‑215.10C(a): Organic statute for animal waste permits. The General Assembly intends “most” systems be under general permits, empowering DEQ/EMC to require an individual permit to protect water, health, or environment.
• Wal‑Mart Stores East, Inc. v. Hinton, 197 N.C. App. 30 (2009): Guides the reading that “general applicability” modifies “regulation” and “standard,” not just “statement.” The Court of Appeals relied on Wal‑Mart; the Supreme Court tracks that approach.
• N.C. Dep’t of Env’t & Natural Res. v. Carroll, 358 N.C. 649 (2004), and ACT‑UP Triangle v. Comm’n for Health Servs., 345 N.C. 699 (1997): Standards of review and the two‑tier appellate framework for agency decisions.
• State v. Barksdale, 181 N.C. 621 (1921): Absurdity canon—the Court steers away from a literal reading that would lead to unreasonable outcomes (i.e., every permit term is a “rule”).
• Town of Midland v. Harrell, 385 N.C. 365 (2023): Canons are guides, not absolutes; legislative intent governs.
• N.C. Dep’t of Revenue v. Philip Morris USA, Inc. (N.C. Aug. 22, 2025): Agencies are creatures of statute and have only powers granted expressly or by necessary implication—used here to emphasize DEQ’s obligation to conform to the legislature’s “most under general permits” mandate.
• Brown v. Kindred Nursing Ctrs. E., L.L.C., 364 N.C. 76 (2010): Legislative acquiescence doctrine. The superior court invoked it; the Supreme Court’s analysis effectively declines to infer acquiescence sufficient to override APA requirements.
• Cabarrus County Board of Education, 374 N.C. 3 (2020): Presumption that APA rulemaking provisions apply absent an explicit or implicit exemption.

B. The Court’s Legal Reasoning

1. Start with statutory text and purpose. The APA is designed to check agency power through public notice and comment. The animal waste statute declares a legislative intent that general permits will be the default mechanism for “most” operations, creating a backdrop against which general permit conditions often function as widespread regulatory norms.
2. What is a “regulation” under § 150B‑2(8a)? Because “regulation” is undefined in the APA, the Court applies its common meaning—an authoritative rule dealing with details or procedure—while insisting that, to be a “rule,” a “regulation” must also be generally applicable.
3. General applicability requirement. The Court reads “general applicability” to modify “regulation,” “standard,” and “statement,” rejecting a last‑antecedent reading that would limit it only to “statement.” This avoids an untenable world where every individualized permit term would demand rulemaking.
4. Why these conditions are generally applicable. The statutory design and the record show that most animal waste operations run under general permits; embedding uniform conditions into those general permits makes them broadly applicable directives implementing statutory policy. The fact that an operator could pursue an individual permit does not undermine the generally applicable nature of the default conditions governing “most.”
5. Not converting permits into rules. The Court is careful: it is not requiring that the general permits themselves be adopted as rules. Rather, when the agency uses the general permits to impose generally applicable regulatory requirements, those conditions must first be adopted as rules through the APA.
6. Rejecting contrary statutory‑terminology arguments. DEQ’s reliance on the APA’s use of “adopt” for rules and “issue” for permits, and on special CRC statutes that expressly require general permits “as rules,” fails because the Court’s holding concerns the conditions, not the permit instrument. The APA applies by default absent exemption; the legislature did not exempt DEQ’s generally applicable conditions from rulemaking.
7. Scope limited to issues preserved. The Court does not reach the separate claim related to public input on the 2018 settlement draft permit, as it was not properly before the Court.

C. The Dissent’s Framework and Concerns

• Read the APA with the organic statute first. The dissent argues the analysis should begin with the enabling “flexible” permitting statute, which purposefully contemplates adaptable permit conditions, quick approvals, innovation, and reliance on adjudicative APA safeguards (contested cases), not rulemaking.
• Licenses vs. rules. A permit is a “license” under the APA. Permit conditions bind individual permittees and are typically addressed through contested cases (Article 3), not Article 2A rulemaking, unless the agency is issuing generally binding pronouncements divorced from specific licensing decisions.
• Technical, not dictionary, definitions. The dissent criticizes reliance on ordinary dictionary meanings of “regulation,” urging fidelity to the APA’s technical vocabulary and administrative‑law distinctions.
• Empirical misfit. Two of the three challenged conditions (floodplain monitoring and PLAT thresholds) may in practice apply to only a small percentage of permittees; hence, calling them “generally applicable” because they appear in a “general” permit is, in the dissent’s view, a categorical overreach.
• Broader ripple effects. The dissent warns that the majority’s logic jeopardizes many other general permitting programs of substantial economic importance (e.g., industrial stormwater categories), without providing a workable standard distinguishing which conditions must be rules.
• Legislative signals. The dissent highlights the 2003 legislature’s express reference to DEQ’s stakeholder draft‑permit process (a procedure distinct from APA rulemaking) as an indication that the General Assembly contemplated permit drafting outside Article 2A rulemaking.

D. Impact and Implications

1) Immediate consequences for DEQ and the EMC

• Invalidation of the three 2019 conditions until adopted through APA rulemaking. DEQ cannot enforce these conditions as currently embedded in general permits.
• Path forward: DEQ/EMC can initiate temporary and/or permanent rulemaking to adopt these conditions as rules. Once adopted through APA procedures, including public notice and comment, the conditions can be incorporated into general permits without APA infirmity.
• Broader audit: Agencies should inventory existing general permit conditions to determine which are “generally applicable” regulatory requirements implementing or interpreting a statute. Those likely require rulemaking if not already codified as rules.

2) For regulated animal operations

• Compliance posture: The three invalidated conditions cannot be enforced unless and until adopted via rulemaking. Other permit conditions remain in effect.
• Participation opportunity: Operators gain APA participation rights (comment, hearing requests, fiscal notes review) in any rulemaking to adopt these or similar conditions.
• Individual permits: The EMC/DEQ retains authority to require individual permits where necessary to protect water quality, public health, or the environment; conditions imposed uniquely in individual permits are not necessarily “rules.”

3) For environmental and community stakeholders

• Enhanced engagement: Rulemaking offers a structured forum for broader, transparent participation—including EJ communities—to shape the content, feasibility, and equity of statewide requirements.
• Durability and clarity: Rules, once adopted, provide clearer, more uniform enforceability and may weather judicial scrutiny better than conditions invented at permitting.

4) Across North Carolina agencies and permit programs

• Generalizable principle: When an agency uses a general permit to impose generally applicable regulatory requirements that implement or interpret a statute, those conditions are “rules” and must go through the APA rulemaking process.
• Not everything is a rule: The Court expressly avoided the extreme where every permit term would be a “rule.” Agency counsel will need to distinguish case‑specific, adjudicative conditions from generalized, class‑wide mandates.
• Industrial general permits and beyond: Programs with “general” or default permits should examine whether embedded conditions function as broadly applicable regulations; if so, rulemaking is indicated.

E. Reading “General Applicability” After This Case

The majority’s approach suggests two converging markers of “general applicability” in this context:

• Program structure: The organic statute’s directive that “most” facilities operate under a general permit.
• Uniform condition placement: The agency places the same condition in the general permits for the regulated class (swine, poultry, cattle), making the condition the default rule of conduct, even if its operational trigger fires only for a subset of permittees (e.g., those in floodplains).

In short, a condition may be “generally applicable” because it uniformly governs the class by default, not because it factually applies to a numerical majority in every instance. That nuance responds, in part, to the dissent’s percentage‑of‑facilities critique.

Complex Concepts Simplified

• APA “rule” vs. license/permit: A “rule” is a generally applicable pronouncement implementing or interpreting a statute. A “license” (including a permit) is an authorization to engage in an activity, often with conditions. Rulemaking (Article 2A) involves public notice and comment. Licensing disputes go through contested cases (Article 3), which are adjudicative.
• General vs. individual permits: A general permit sets standard conditions for a category of facilities and is meant to streamline compliance for “most” operations. An individual permit is customized for a particular facility and may include unique conditions when necessary.
• “General applicability”: A rule is generally applicable if it applies to most situations or governs an entire class by default, rather than being tailored to an individual party’s facts.
• “Substantial compliance” with APA rulemaking: Agencies must materially satisfy APA notice‑and‑comment steps; failure to do so invalidates rules (and, after this decision, generally applicable conditions functioning as rules).
• Last‑antecedent canon: A grammar canon suggesting a modifier applies to the immediately preceding term. The Court declined to apply it mechanistically here, favoring a reading that reflects legislative intent and avoids absurd results.
• Legislative acquiescence: When the legislature does not amend a statute after a judicial interpretation, courts sometimes infer acceptance of that interpretation. The Court declined to infer acquiescence sufficient to override APA requirements here.
• PLAT and floodplain monitoring: The Phosphorous Loss Assessment Tool estimates phosphorus loss risk from fields, guiding mitigation. Floodplain monitoring wells track potential groundwater impacts near waste storage structures situated in the 100‑year floodplain.

Practical Guidance and Next Steps

For DEQ/EMC and Other Agencies

• Identify general permit conditions that function as broadly applicable regulatory requirements; plan APA rulemaking for those not already codified.
• Consider temporary or emergency rules if public health or environmental protection requires rapid action pending permanent rulemaking.
• Document statutory authority and the factual basis for each condition in the rulemaking record, including cost‑benefit and fiscal analyses.
• Maintain robust stakeholder processes, but treat them as supplements—not substitutes—for APA rulemaking when “rules” are at issue.
• Train permitting staff and counsel on the distinction between individualized permit terms and generally applicable conditions.

For Regulated Entities

• Map current compliance obligations; segregate invalidated conditions from still‑effective permit terms.
• Engage in upcoming rulemaking—submit data, propose alternatives, and seek clarity on triggers, safe harbors, and implementation timelines.
• Monitor whether DEQ converts certain conditions into individual‑permit determinations where justified by site‑specific risks.

For Community and Environmental Stakeholders

• Prepare to participate meaningfully in APA rulemaking: develop evidence on environmental and public health impacts, environmental justice concerns, and technical feasibility.
• Advocate for clear statewide standards where uniformity benefits compliance, enforcement, and equity.

Open Questions After the Decision

• How precisely should agencies measure “general applicability” beyond programs where statutes say “most” must be under general permits? Is uniform placement in a general permit sufficient?
• Do condition‑specific triggers that reach only a small subset of permittees (e.g., floodplain siting) remain “generally applicable” if imposed uniformly across the class? The majority leans yes; future cases may refine this boundary.
• What transition tools (e.g., temporary rules) will agencies deploy to avoid regulatory gaps while rulemaking proceeds?
• Will the legislature clarify or tailor APA applicability for certain permitting programs, as it has for the Coastal Resources Commission?

Conclusion

This decision cements a clear and consequential principle in North Carolina administrative law: an agency may not sidestep the APA’s public‑participation safeguards by embedding generally applicable regulatory requirements into general permits. When a condition functions as a broadly applicable regulation implementing a statute—especially in a program the legislature directs to operate primarily through general permits—it is a “rule” under N.C.G.S. § 150B‑2(8a) and must be adopted through APA rulemaking.

The Court’s approach preserves a vital check on agency power and promotes transparency, durability, and legitimacy in statewide environmental standards, while still recognizing the agency’s ability to tailor and enforce individualized permit conditions where warranted. The dissent cautions that the ruling may unsettle long‑standing permitting regimes and urges a methodology more closely tethered to the organic statute’s flexible, adjudicatory design. Those concerns will shape how agencies and courts draw lines between individualized licensing terms and generally applicable rules in future cases.

Key takeaway: Conditions of general applicability embedded in general permits are invalid unless and until they are adopted through the APA’s rulemaking process. Agencies should audit their permitting frameworks now, plan rulemakings where needed, and leverage the APA’s robust public processes to produce clear, enforceable, and equitable statewide standards.