Allen Harim, Artesian engage in legal dispute

Poultry processor Allen Harim and Artesian Wastewater Management are involved in a legal dispute over $1.42 million in payments Artesian says it is owed for providing wastewater services to Allen Harim.

Allen Harim filed the lawsuit in early June in Delaware Court of Chancery, seeking immediate intervention to “avert a cascade of unnecessary, disastrous and irreparable disruptions to Allen Harim’s poultry operations,” according to the company’s complaint.

Artesian is seeking to collect payment of $1.42 million for services rendered between March and December 2020. Attorneys for Allen Harim say Artesian has no legitimate claim to those payments and that Artesian has threatened to hold off plans to dispose of Allen Harim’s wastewater at the Sussex Regional Recharge Facility, a 700-acre network of spray irrigation fields that includes a 90 million-gallon lagoon, which runs along Route 30 between Route 16 and Cedar Creek Road.

Allen Harim has been disposing of its treated wastewater into Beaverdam Creek, a tributary of Delaware Bay located behind its Harbeson plant. In 2016, Allen Harim was cited for numerous environmental violations by the Delaware Department of Natural Resources and Environmental Control related to the content of its wastewater discharge. That same year, Allen Harim began holding discussions with Artesian about disposing of the poultry plant’s wastewater at SRRF, which was built to serve a proposed development called Elizabethtown that never came to fruition. By 2017, Artesian and Allen Harim had made their agreement. 

Complications ensued – Artesian’s permit for SRRF became the subject of a lengthy legal battle with local environmental activists, and Allen Harim was not able to obtain an operations permit from DNREC until May of this year. Under that permit, Allen Harim is mandated to stop disposing of wastewater in Beaverdam Creek within 60 days, as well as make improvements to its wastewater treatment facility and pay fines for past violations. Failure to comply could lead to escalating daily fines and potential revocation of the permit and shutdown of Allen Harim’s facilities.

According to Allen Harim’s legal brief, while Allen Harim was still pursuing its permit, Artesian sent the company a bill for $1.42 million for services rendered. Allen Harim argues that its contractual agreement with Artesian says it is conditioned on both sides obtaining all government permits and approvals, which Harim said it had not during the period Artesian billed for. 

“For the past four years, Allen Harim has poured millions of dollars and countless hours of effort into developing the treatment system necessary for it to be able to utilize the Allen Harim-Artesian wastewater project with the expectation that once the necessary permitting was in place, there would be a seamless transition from stream discharge to discharge via Artesian’s force main without disruption of Allen Harim’s operations,” the complaint says.

However, Allen Harim claims that Artesian is now threatening to withhold services unless Artesian gets its money by Saturday, June 26, when Allen Harim needs to stop dumping in Beaverdam Creek. DNREC has agreed to extend that deadline until Monday, July 26. 

Allen Harim has filed a motion to expedite proceedings, which Artesian has opposed. 

While such legal action could, in theory, hurt the two companies’ working relationship, Virginia Eisenbrey, spokeswoman for Artesian, said, “Allen Harim is, and will continue to be, Artesian’s customer. The site is designed to treat and dispose of wastewater for Artesian’s customers and will continue to be used for that purpose.”