Minnesota Environmental Science and Economic Review Board v. Minnesota Pollution Control Agency , 870 N.W.2d 97 ( 2015 )

STATE OF MINNESOTA
IN COURT OF APPEALS
A14-1694
Minnesota Environmental Science and Economic Review Board, et al.,
Petitioners,
vs.
Minnesota Pollution Control Agency,
Respondent.
Filed August 10, 2015
Rules declared valid
Stauber, Judge
Minnesota Pollution Control Agency
File No. 60-2200-30791
Steven Nyhus, Flaherty & Hood, P.A., St. Paul, Minnesota; and
John C. Hall (pro hac vice), Hall & Associates, Washington, D.C. (for petitioners)
Lori Swanson, Attorney General, Max Kieley, Assistant Attorney General, St. Paul,
Minnesota (for respondent)
Loyd W. Grooms, LWG, P.A., St. Paul, Minnesota (for amicus curiae Minnesota
Chamber of Commerce)
Paige Stradley, Michael Erbele, Merchant & Gould, P.C., Minneapolis, Minnesota (for
amicus curiae Minnesota Center of Environmental Advocacy, et al.)
Considered and decided by Stauber, Presiding Judge; Schellhas, Judge; and
Bjorkman, Judge.
SYLLABUS
As part of the rulemaking process, an agency must respond to public comments by
explaining its decision and how the evidence rationally supports its action; a reviewing
court will not substitute its judgment if an agency can demonstrate that it has complied
with rulemaking procedures and made a considered and rational decision.
OPINION
STAUBER, Judge
In this declaratory-judgment action, petitioners challenge the validity of certain
water-quality standard rules promulgated by respondent Minnesota Pollution Control
Agency (the MPCA), arguing that the agency failed to comply with statutory rulemaking
procedures. We declare the rules valid.
FACTS
This is a declaratory-judgment action brought under Minn. Stat. § 14.44 (2014).
The petitioners include Minnesota Environmental Science and Economic Review Board
(MESERB), Coalition of Greater Minnesota Cities (CGMC), League of Minnesota Cities
(League), and Minnesota Soybean Growers Association (MSGA). Petitioners
collectively represent municipalities, public-utilities commissions, sanitary sewer
districts, and farmers who potentially are affected by changes in clean-water rules. The
Minnesota Chamber of Commerce filed an amicus brief in support of petitioners’
position. A number of environmental organizations filed an amicus brief in support of
the position of the MPCA.
The MPCA is the state agency charged with enforcing the federal Clean Water Act
(CWA), 33 U.S.C. §§ 1251-1387 (2012). See Minn. Stat. § 115.03 (2014). The MPCA
has the authority to “establish and alter such reasonable pollution standards for any water
of the state in relation to the public use to which they are or may be put as it shall deem
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necessary.” Minn. Stat. § 115.03, subd. 1(c). As a state agency, the MPCA must follow
the provisions of the Minnesota Administrative Procedure Act (MAPA) when it engages
in rulemaking. See Minn. Stat. §§ 14.001-.69 (2014). MAPA defines a “rule” as “every
agency statement of general applicability and future effect, including amendments,
suspensions, and repeals of rules, adopted to implement or make specific the law
enforced or administered by that agency or to govern its organization or procedure.”
Minn. Stat. § 14.02, subd. 4.
Under the CWA, each state agency charged with administering the federal law
must review the applicable water quality standards (WQS) at least once every three years.
33 U.S.C. § 1313(c)(1). In 2008, during a triennial review, the MPCA determined that it
was necessary to address eutrophication standards for lakes.1 In 2011, as part of another
triennial review, the MPCA determined that it was necessary to address eutrophication
standards for rivers and streams.
The MPCA has enacted WQS that are set forth in Minn. R. 7050.0110-0470
(2013). A WQS can be either narrative or numeric. A narrative WQS is a descriptive
standard that describes impairment; for example, waters “shall not be degraded in any
material manner” or show “undesirable slime growths or aquatic plants” or “harmful
pesticide or other residues.” Minn. R. 7050.0150, subp. 3. A numeric WQS is
quantitative rather than descriptive, and it measures “the concentration of a pollutant in
water, associated with a beneficial use and [the] narrative standards based on protecting
1
Eutrophication refers to the over-enrichment of waters with nutrients, which stimulates
excessive growth of aquatic plants.
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that use.” The numeric WQS are specific to each pollutant. Numeric standards are
favored under the CWA. See 33 U.S.C. § 1313(c)(2)(B). The rulemaking challenged
here involved the development of numeric WQS to limit eutrophication of rivers and
streams. See Minn. R. 7050.150, .0220, .0222 (Supp. 2014).
The MPCA engaged in formal rulemaking procedures under MAPA in setting the
new numeric WQS, including issuance of a statement of need and reasonableness
(SONAR), publication of the proposed changes, public hearings, review by an
administrative law judge (ALJ), post-hearing comments and rebuttal, supplementation of
the record by petitioners, a comment period on the supplementary materials,
recommendations by the ALJ, adoption of the amended rules by the MPCA Citizens’
Board, additional testimony before the board, final adoption of the amendments by the
board, and publication. Petitioners object to the amended WQS and brought this
declaratory-judgment action to challenge adoption of the standards. At oral argument,
petitioners emphasized that they are challenging the rulemaking process, and not the
scientific basis for the rules.
ISSUES
I. Do petitioners have standing to bring this declaratory judgment action?
II. Did the MPCA violate statutory rulemaking procedures by failing to respond
in a meaningful fashion to public comments?
ANALYSIS
Minn. Stat. § 14.44 permits an interested party to challenge the validity of an
agency rule “when it appears that the rule, or its threatened application, interferes with or
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impairs, or threatens to interfere with or impair the legal rights or privileges of the
petitioner.” A party may petition this court to declare a rule invalid if it violates the
constitution, is in excess of statutory authority, or adopted without compliance with
rulemaking procedures. Minn. Stat. § 14.45. In a preenforcement action, this court is
limited to considering these three bases for a challenge. Save Mille Lacs Sportsfishing,
Inc. v. Minn. Dep’t of Natural Res., 859 N.W.2d 845, 850 (Minn. App. 2015). This is a
more restrictive standard of review than an appeal from a contested proceeding “in which
the validity of the rule as applied to a particular party is adjudicated.” Coalition of
Greater Minn. Cities v. Minn. Pollution Control Agency, 765 N.W.2d 159, 164 (Minn.
App. 2009), review denied (Minn. Aug. 11, 2009).
I.
As a preliminary matter, the MPCA argues that petitioners lack standing because
they “fail[ed] to specify any specific rights which are currently affected” and their
“potential harms are too tenuous and rely on too many indeterminate assumptions to
establish standing.” To have standing to bring an action under section 14.44, a petitioner
must show that a rule or its “threatened application” will interfere with or threaten to
interfere with legal rights of the petitioner. Rocco Altobelli, Inc. v. State, Dep’t of
Commerce, 524 N.W.2d 30, 34 (Minn. App. 1994). A petitioner’s interest must be
different in character than the interest of the general citizenry. Id. The MPCA argues
that petitioners are alleging hypothetical scenarios that “may or may not become
actualized,” and that will be harmful only if several contingencies are met.
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In Coalition of Greater Minn. Cities, the petitioner, which represented many
municipalities, challenged the new eutrophication rules for surface waters promulgated
by the MPCA. 765 N.W.2d at 162-63. This court reasoned that the petitioner had
standing to bring a preenforcement declaratory judgment action because of the effect
“that an overbroad application of the rule would have on its municipalities, namely,
requiring them to expend funds to upgrade, operate, and maintain wastewater facilities to
comply with the rule.” Id. at 164. Petitioners here make similar allegations.
In support of its position, the MPCA cites Missouri Soybean Ass’n v. U.S. Envtl.
Prot. Agency, 289 F.3d 509, 511 (8th Cir. 2002), in which a federal court dismissed an
action brought under the federal Administrative Procedures Act to challenge the EPA’s
list of pollution-impaired waters. The court concluded that the suit was not ripe for
adjudication because the petitioner’s claims of potential harm were too remote and,
therefore, the court lacked jurisdiction. Missouri Soybean, 289 F. 3d at 513. After
identifying the pollution-impaired waters, the EPA would have to both develop numeric
standards for pollutants and implement them before the petitioners would be harmed. Id.
at 512. Even then, the potential for harm to a member of petitioner’s group was
uncertain. Id.But here, petitioners are challenging a rule that created numeric standards, not
merely the inclusion of certain rivers on a list that would eventually lead to numeric
standards. Petitioners are among the class of persons who would be affected by a change
in WQS; the petitioning groups represent municipalities, wastewater-treatment facilities,
sanitary sewer districts, and farming operations, all of which have a more particularized
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interest than the general citizenry. On these grounds, we conclude that petitioners have
standing to bring an action for a pre-enforcement declaratory judgment.
II.
Petitioners allege that the MPCA did not comply with statutory rulemaking
procedures because the agency failed to adequately respond to petitioners’ comments
during the rulemaking process. In particular, petitioners argue that the MPCA did not
respond in a meaningful way because the agency relied on outdated studies or failed to
make the studies it relied on part of the public record.
Agency rulemaking is strictly controlled by statute and the statutory procedures
must be followed in order to create a valid rule. White Bear Lake Care Ctr., Inc. v. Minn.
Dep’t of Pub. Welfare, 319 N.W.2d 7, 8-9 (Minn. 1982). After a public hearing on a
proposed rule, the ALJ overseeing the public hearings must allow for a comment period
and must permit an agency to rebut or respond to comments made by the public. Minn.
Stat. § 14.15, subd. 1; Minn. R. 1400.2230 (2013).
Although no Minnesota case discusses the extent of an agency’s duty to respond to
comments, petitioners rely on federal caselaw under the federal Administrative
Procedures Act to argue that an agency’s response to comments must be “meaningful.”
See W. Watersheds Project v. Kraayenbrink, 632 F.3d 472, 492-93 (9th Cir. 2010)
(stating that “agency renders the procedural requirement [of comments] meaningless”
when it fails to offer a “meaningful response to serious and considered comments by
experts”); see also Int’l Fabricare Inst. v. U.S. Envtl. Prot. Agency, 972 F.2d 384, 389
(D.C. Cir. 1992) (stating that court will overturn rulemaking as arbitrary and capricious if
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agency fails to respond to specific challenges involving issues central to its decision). An
agency must respond in a manner that states the main reasons for its decision and
explains why the agency reached the decision it did. Pub. Citizen, Inc. v. Fed. Aviation
Admin., 988 F.2d 186, 197 (D.C. Cir. 1993). We consider this standard to be implicit in
the provisions of MAPA, which permits the public to submit comments to test a proposed
rule. Minn. Stat. § 14.14, subd. 2a. An agency must respond to questioning “in order to
explain the purpose or intended operation of a proposed rule, or a suggested modification,
or for other purpose if material to the evaluation or formulation of the proposed rule.” Id.The MPCA responded to all of the written comments received after each public
hearing. Each response includes a summary of the comment and a response with
citations to the documents or sources that provide a basis for the response. The
environmental groups that filed an amicus brief in support of the MPCA’s position
pointed out that they also had made comments during the rulemaking process and had
disagreed with the MPCA’s responses, but they nevertheless concluded that the MPCA
had “considered and responded to [their] and Petitioner’s concerns.”
In addition to their assertion that the MPCA did not respond to their comments,
petitioners argue that the MPCA failed to respond in a meaningful way about its choice
of WQS on two of the disputed issues: the failure to distinguish between small streams
and large rivers, and the basis for “using DO flux and BOD as nutrient response
variables.”2 Petitioners argue that, in order to respond in a meaningful way, the MPCA
2
“Daily dissolved oxygen variation” or “DO flux,” is “the difference between the
maximum daily dissolved oxygen concentration and the minimum daily dissolved oxygen
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had a duty to provide a “scientific basis for its position on these issues,” and that instead
it relied on outdated or “secret” peer reviews of its studies.
We will not second-guess the MPCA’s use of or reliance on its chosen scientific or
technical sources. An agency decision, including rulemaking, enjoys “a presumption of
correctness” and a court “should defer to an agency’s expertise and special knowledge.”
Peterson v. Minn. Dep’t of Labor & Indus., 591 N.W.2d 76, 79 (Minn. App. 1999),
review denied (Minn. May 18, 1999). An agency must “explain on what evidence it is
relying and how that evidence connects rationally with the agency’s choice of action.”
Id. (quotation omitted). Agencies must at times “make judgments and draw conclusions
from suspected, but not completely substantiated, relationships between facts, from
trends among facts, from theoretical projections from imperfect data, from probative
preliminary data not yet certifiable as fact, and the like.” Manufactured Hous. Inst. v.
Pettersen, 347 N.W.2d 238, 244 (Minn. 1984) (quotation omitted).
In Pettersen, the supreme court concluded that the agency had not demonstrated a
rational relationship between the record evidence and the proposed standard for ambient
formaldehyde in housing. Id. at 246. In that agency record, the hearing examiner noted
that “nothing in the record . . . justif[ies] the selection of [a lesser rather than a higher
standard] other than the fact that the lesser concentration that exists, the less chance there
is that any effects may be felt. Even that assumption is questionable, however, based
upon the wide disparity of study results.” Id. at 245 n.5. In contrast, here, the MPCA
concentration.” “Five-day biochemical oxygen demand” or “BOD5,” is “the amount of
dissolved oxygen needed by aerobic biological organisms to break down organic material
present in a given water sample at a certain temperature over a five-day period.”
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cited a number of scientific studies that supported the disputed WQS standards, including
an EPA review, DNR studies, and the opinion of an agronomist from the Water
Resources Center at the University of Minnesota. The MPCA provided scientific studies
to rebut the specific challenges to the failure to distinguish small streams from large
rivers and to the use of BOD5 and DO flux.
This record is extensive and includes scientific evidence to support the rules
adopted by the MPCA. While the petitioners may not agree with the rules adopted, the
MPCA explained the reasons for adoption and provided supporting documentation. This
is a sufficient and meaningful response to the public comments in opposition to the
proposed rules.
DECISION
The MPCA responded to public comments in a meaningful way by describing its
decision to adopt WQS for rivers and streams and how it reached that decision. By doing
so, the MPCA followed the proper rulemaking procedures under MAPA, and the
amendments to Minn. R. 7050.0150, .0220, and .0222 are valid.
Rules declared valid.
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