A federal judge has blocked loan guarantees for a commercial hog operation upstream of the Buffalo River until thorough environmental reviews are conducted./State of Arkansas

Federal loan guarantees needed to ensure financing for a commercial hog operation upstream of the Buffalo National River in Arkansas were inappropriately approved by federal agencies that failed to adequately review the project's potential environmental impacts, a judge has ruled.

While the ruling (attached below) handed down Tuesday by U.S. District Judge D. P. Marshall, Jr., won't shut down C&H Hog Farms, it does require the Small Business Administration and the Farm Service Agency to go to the farm and "take the hard look at C&H's environmental consequences that they should have in the beginning. And if that hard look requires the Agencies to put conditions on their guaranties, then it's likely that C&H will comply with those conditions. Otherwise, the farm will risk its relationship with the lender."

The ruling was hailed by a handful of environmental and conservation groups that fear wastes from the farm, which began operations in 2013 and now has roughly 6,500 pigs on the property that are thought to generate approximately 1.8 million gallons of wastes annually, will escape from containment ponds and treatment facilities and contaminate the watershed that feeds into the Buffalo River, the nation's first national river.

'œThis is a big win, this is a really big win for us. What it means is basically what we'™ve been saying all along, that those agencies didn'™t follow the law when they guaranteed the loans," Hannah Chang, an attorney with Earthjustice, which represented the groups, said Tuesday evening in a phone call from New York.

It's possible, she said, that the hog operation wouldn't have received the funding it needed had the two agencies followed the National Environmental Policy Act and carefully evaluated the environmental risks, as they should have, before guaranteeing the $3.6 million in loans the farm obtained from Farm Credit Services of Western Arkansas.

Judge Marshall said as much in his ruling, noting that "the legal premise of each guaranty was that C&H couldn't otherwise obtain financing on reasonable terms. C&H had to, and did, borrow $3.6 million to start this farm. These statutes, coupled with the necessity of the large loans, make it substantially unlikely that C&H would have come into being absent the guaranties. Without the guaranties, there would've been no loans. Without the loans, no farm."

The Buffalo River travels through the heart of the Ozark Mountains in northwestern Arkansas, and runs beneath magnificent cliffs that in places rise nearly 700 feet above the river's clear, quiet pools and rushing rapids. One hundred thirty-five miles of the Buffalo comprise the national river, which attracts more than one million visitors each year who float the crystal waters, camp on the gravel bars, and hike the trails '“ generating $38 million toward the local economy.

The C&H facility is located on the banks of Big Creek in Mount Judea, Arkansas. Under a contract with Cargill, Inc., an international agricultural and food conglomerate, C&H confines approximately 6,500 pigs at a time making the operation the first of its size and scale in the Buffalo River watershed. According to the plaintiffs in the case, the pigs' manure and the farm's wastewater is collected in open-air storage ponds on site and spread onto approximately 630 acres of land surrounding the farm and adjacent to the banks of Big Creek. These manure application fields are less than six miles upstream from Big Creek'™s confluence with the Buffalo National River.

The hog farm is located in a region of karst geology, which is is composed of easily dissolved rocks, such as limestone and dolomite. Via sinkholes and underground caves in the geology, groundwater can flow miles very quickly. In the National Park System, karst geology is perhaps mostly visibly connected to Mammoth Cave National Park in Kentucky, but it can also be found along the Buffalo National River and at Ozark National Scenic Riverways in Missouri.

When the groups -- the Arkansas Canoe Club, Buffalo River Watershed Alliance, National Parks Conservation Association, and The Ozark Society - brought their lawsuit last year, they argued that the loan guarantees to the hog facility hinged on a flawed environmental review process that violated the law and did not follow the U.S. Department of Agriculture's own regulations.

Judge Marshall agreed.

"The Farm Service Agency and the Small Business Administration have each interpreted the NEPA to cover its guaranty to C&H," he wrote in the 17-page ruling. "But neither Agency took the required hard look into C&H's environmental impact. While the legal analysis for each Agency is a bit different, the conclusion is the same: the federal Agencies arbitrarily and capriciously guaranteed C&H's loans."

The judge gave the agencies one year to conduct the requisite studies; until they are completed, they cannot guarantee the outstanding loans if the hog farm were to default on them. 

"Injunctive relief is proper here. The Endangered Species Act provides for it," Judge Marshall wrote, noting the presence of the Gray Bat, an endangered species, in the area. "The Court has considered the relevant factors and finds that an injunction is the proper remedy for the National Environmental Policy Act violations, too. Plaintiffs have succeeded on the merits. Their interest in addressing C&H's effects on the environment will be irreparably harmed absent an injunction. On balance, the interest in getting the environmental assessment right outweighs any harm that enjoining the guaranties will cause the federal Agencies.

"And the public interest is best-served by ensuring that federal tax dollars aren't backing a farm that could be harming natural resources and endangered species."