City of St. Cloud Wastewater Treatment Facility Request to Adopt the Summary Disposition Granted by the Administrative Law Judge and to Issue the National Pollutant Discharge Elimination System Permit St. Cloud, Minnesota.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2002).

 

 

STATE OF MINNESOTA

IN COURT OF APPEALS

C3-03-75

 

 

City of St. Cloud Wastewater Treatment Facility Request

 to Adopt the Summary Disposition Granted by

the Administrative Law Judge and to Issue the National Pollutant

Discharge Elimination System Permit St. Cloud, Minnesota.

 

 

Filed September 12, 2003

Affirmed in part, reversed in part, and remanded

Robert H. Schumacher, Judge

 

Minnesota Pollution Control Agency

File No. 7-2200-14439-2

 

 

Janette K. Brimmer, Environmental Advocacy, 26 East Exchange Street, Suite 206, St. Paul, MN 55101 (for relator Minnesota Center for Environmental Advocacy)

 

Mike Hatch, Attorney General, Robert B. Roche, Assistant Attorney General, 445 Minnesota Street, Suite 900, St. Paul, MN 55101 (for respondent Minnesota Pollution Control Agency)

 

John C.  Hall, Hall & Associates, 1101 Fifteenth Street Northwest, Suite 203, Washington, D.C. 20005 (pro hac vice for respondent City of St. Cloud)

 

Christopher M. Hood, Steven W. Nyhus, Flaherty & Hood, P.A., 444 Cedar Street, Suite 1200, St. Paul, MN 55101 (for respondent City of St. Cloud)

 

 

            Considered and decided by Schumacher, Presiding Judge, Randall, Judge, and Kalitowski, Judge.

U N P U B L I S H E D   O P I N I O N

ROBERT H. SCHUMACHER, Judge

Relator Minnesota Center for Environmental Advocacy (MCEA) challenges the decision of the Minnesota Pollution Control Agency's Citizens' Board to adopt a proposed administrative order granting summary disposition to respondent City of St. Cloud and authorizing reissuance of St. Cloud's wastewater discharge permit.  MCEA argues the grant of summary disposition was (1) procedurally inappropriate in the context of a contested-case hearing; (2) not supported by the record, which contains disputed issues of material fact; and (3) erroneously based solely on the record before the administrative law judge (ALJ) who issued the proposed order.  We affirm in part, reverse in part, and remand.

FACTS

            St. Cloud owns and operates a domestic wastewater treatment facility that discharges effluent into the Mississippi River.  To operate the treatment facility, St. Cloud is required to obtain a National Pollutant Discharge Elimination System/State Disposal System permit from respondent Minnesota Pollution Control Agency (MPCA) every five years.  The permit establishes the terms and conditions for the treatment facility's effluent quality and, among other things, addresses strategies for reducing the level of effluent phosphorus, which causes increases in chlorophyll-a concentration and related adverse responses, including nuisance algae blooms and reduced water transparency. 

In March 2000, the MPCA promulgated a "Strategy for addressing phosphorus in [National Pollutant Discharge Elimination System/State Disposal System] permitting" (phosphorus strategy).  The phosphorus strategy authorizes the MPCA to require that municipalities applying for these permits comply with Minn. R. 7050.0211, subp. 1a. (2001) (the phosphorus rule), which provides:  "Where the discharge of effluent is directly to or affects a lake or reservoir, phosphorus removal to 1 milligram per liter shall be required."  Alternately, the MPCA may require municipalities to develop a "phosphorus management plan," which requires the municipality to monitor influent and effluent phosphorus concentrations and describe efforts to reduce effluent phosphorus, but does not limit the amount of effluent phosphorus.  The parties generally agree the St. Cloud treatment facility discharges effluent containing 1.7 milligrams of phosphorus per liter of water directly into the Mississippi River.    

When St. Cloud applied for reissuance of the permit, the MPCA issued a proposed draft permit and invited public comment on the application.  The proposed draft permit did not impose the phosphorus effluent limit established by the phosphorus rule but did require that St. Cloud develop a phosphorus management plan. 

The MCEA requested a contested-case hearing to determine, among other things, whether the discharge of phosphorus from the St. Cloud treatment facility "affects a lake or reservoir" for the purposes of the phosphorus rule and therefore must be limited to 1 mg./L.  The MCEA alleged the affected waters were (1) the pool behind the Coon Rapids Dam; (2) Lake Pepin, Spring Lake, and other downstream lakes, reservoirs, and backwaters (collectively, Lake Pepin); and (3) the Vadnais Chain of Lakes, to which the city of St. Paul transports water from an intake point located approximately 70 miles downstream from the treatment facility.

The MPCA granted the MCEA's request for a contested-case hearing to determine whether the treatment facility discharge affects a lake or reservoir within the meaning of the phosphorus rule.  St. Cloud and the MPCA then brought a motion for summary disposition, arguing (1) the Coon Rapids Dam pool is not a "lake or reservoir" for the purposes of the phosphorus rule; (2) St. Cloud is not legally responsible for the water transported by the city of St. Paul to the Vadnais Chain of Lakes; and (3) the MCEA did not demonstrate the treatment facility affects Lake Pepin within the meaning of the phosphorus rule.

            While the motion for summary disposition was pending, the parties submitted prefiled testimony, which was not considered by the administrative law judge (ALJ) in reaching a decision on the motion. 

The ALJ, adopting the MPCA interpretation of the phosphorus rule, determined that where, as here, discharge is not directly into a lake or reservoir, the rule applies only if the evidence demonstrates a treatment facility's individual discharge of phosphorus has a significant or measurable impact on the algal growth levels in a downstream lake or reservoir.  The ALJ concluded the MCEA failed to show the St. Cloud treatment facility had such an impact on either Lake Pepin or on the Coon Rapids Dam pool, which the ALJ found was a reservoir for the purposes of the motion.  The ALJ also concluded St. Cloud was not legally responsible for water transported to the Vadnais Chain by the city of St. Paul.  The ALJ issued a recommended order granting summary disposition to St. Cloud and issuing the permit without a phosphorus effluent limit. 

The MPCA's Citizens' Board (MPCA Board) denied the MCEA's request that it consider the prefiled testimony from the contested-case hearing while determining whether to adopt the ALJ's proposed order.  The MPCA Board then voted to adopt the proposed order in its entirety.

By writ of certiorari to this court, the MCEA challenged the MPCA Board's decision.  The MCEA then filed a motion to supplement the record on appeal with the prefiled testimony submitted while the motion for summary disposition was pending.  This court denied the MCEA's motion but accepted the prefiled testimony as an offer of proof as to the issue of whether the MPCA Board erred in refusing to consider the documents. 

D E C I S I O N

An ALJ may "recommend a summary disposition of the case or any part thereof where there is no genuine issue as to any material fact."  Minn. R. 1400.5500 K. (2001).   "Summary disposition is the administrative equivalent of summary judgment."  Tombers v. City of Brooklyn Center, 611 N.W.2d 24, 26 (Minn. App. 2000).  Summary judgment is to be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that either party is entitled to a judgment as a matter of law."   Minn. R. Civ. P. 56.03.

This court reviews summary dispositions de novo to determine whether any genuine issue of material fact exists and whether the adjudicator applied the law correctly.  In re Leisure Hills Health Care Ctr., 518 N.W.2d 71, 75 (Minn. App. 1994), review denied (Minn. Sept. 16, 1994).  The MCEA has the burden of proof when challenging an agency decision in an appeal.  Markwardt v. Water Res. Bd., 254 N.W.2d 371, 374 (Minn. 1977).  Any doubts and factual inferences must be resolved in favor of the nonmoving party.  Grondahl v. Bullock, 318 N.W.2d 240, 242 (Minn. 1982).

When reviewing an agency decision, this court determines whether the agency violated the constitution, exceeded its authority, engaged in unlawful procedure, erred as a matter of law, issued a decision unsupported by substantial evidence, or acted arbitrarily or capriciously.  Minn. Stat. § 14.69 (2002).  Appellate courts defer to an agency's expertise in finding facts and will affirm the agency's decision so long as it is lawful and reasonable.  In re Intra-LATA Equal Access and Presubscription, 532 N.W.2d 583, 588 (Minn. App. 1995), review denied (Minn. Aug. 30, 1995).  "[D]ecisions of administrative agencies enjoy a presumption of correctness, and deference should be shown by courts to the agencies' expertise and their special knowledge in the field of their technical training, education, and experience."  Minnesota Center for Envtl. Advocacy v. Minnesota Pollution Control Agency, 644 N.W.2d 457, 463 (Minn. 2002) (quoting Reserve Mining Co. v. Herbst, 256 N.W.2d 808, 824 (Minn. 1977)); see also Resident v. Noot, 305 N.W.2d 311, 312 (Minn. 1981) (stating deference to agency's interpretation appropriate where "language subject to construction is so technical in nature that only a specialized agency has the experience and expertise needed to understand it.").

1.            The MCEA argues the ALJ's recommended grant of summary disposition was inconsistent with the MPCA's earlier determination that the MCEA had shown sufficient issues of material fact to warrant a contested-case hearing.  We disagree.  Minn. R. 1400.5500 K. expressly authorizes an ALJ to recommend summary disposition in a contested-case hearing.

2.            The MCEA next argues the grant of summary disposition was erroneous because there were genuine issues of disputed material fact concerning whether the St. Cloud treatment facility's phosphorus discharge into the Mississippi River "affects a lake or reservoir" the Coon Rapids Dam Pool, Lake Pepin, and the Vadnais Chain of Lakes within the meaning of the phosphorus rule, requiring application of the 1mg/L phosphorus limit.  The MPCA and St. Cloud argue the only dispute concerns the MPCA's interpretation of the phosphorus rule, which is a legal question properly resolved by summary disposition.  See Highland Chateau, Inc. v. Minnesota Dept. of Public Welfare, 356 N.W.2d 804, 808 (Minn. App. 1984) (stating legal disputes over agency's interpretation of statute "do not preclude the award of summary judgment"), review denied (Minn. Feb. 6, 1985).   

            "When a decision turns on the meaning of words in a statute or regulation, a legal question is presented."  St. Otto's Home v. State, Dep't of Human Servs., 437 N.W.2d 35, 39 (Minn. 1989).  Generally, reviewing courts are not bound by the decision of an agency and need not defer to agency expertise when considering questions of law.  Id. at 39-40.  But "[w]hen the agency's construction of its own regulation is at issue, . . . considerable deference is given to the agency interpretation, especially when the relevant language is unclear or susceptible to different interpretations.  If a regulation is ambiguous, agency interpretation will generally be upheld if it is reasonable."  Id. at 40 (citations omitted); see also In re University of Minnesota, 566 N.W.2d 98, 103 (Minn. App. 1997) (stating it is "not the role of this court" to overrule a reasonable agency interpretation of a statute). 

            Here, the ALJ's conclusion that the St. Cloud treatment facility does not "affect" the Coon Rapids Dam Pool and Lake Pepin within the meaning of the phosphorus rule was exclusively and explicitly based upon the MPCA's interpretation of the rule.  The MPCA, relying on the text of the rule, the phosphorus strategy, and the rule's administrative history, interprets the rule to mean the phosphorus effluent limit cannot be triggered if a given discharge acts in conjunction with other sources contributing to cumulative phosphorus effects in a lake or reservoir.  Put differently, the MPCA argues the phosphorus limit is only applicable when the individual discharge in question is the only measurable source of phosphorus.  At oral argument, the MPCA distinguished between effects-based rules rules that can only be triggered by the effect of an individual discharge and load-based rules rules applicable where a given discharge contributes to a cumlative effect.  The MPCA contended because the phosphorus rule is effects-based, it cannot apply to the St. Cloud treatment facility, which is alleged by the MCEA to be one of several sources discharging to the Coon Rapids Dam Pool, and Lake Pepin. 

            Despite the deference we must accord the MPCA's interpretation of the phosphorus rule, our careful analysis of the record leads us to conclude the MPCA's interpretation of the rule particularly as it relies upon the distinction between effects-based rules and load-based rules cannot reasonably be reconciled with the text of the rule, the phosphorus strategy, the rule's administrative history, or the record.  Because the MPCA Board's grant of summary disposition concerning the Coon Rapids Dam Pool and Lake Pepin was based solely upon the MPCA's interpretation of the phosphorus rule, we believe this matter must be remanded to the MPCA for a contested-case hearing.

            The phosphorus rule provides,  "Where the discharge of effluent is directly to or affects a lake or reservoir, phosphorus removal to one milligram per liter shall be required."  Minn. R. 7050.0211, subp. 1a. (2001) (emphasis added).  The MPCA argues the term "discharge" is "singular" and therefore precludes application of the rule where there is more than one source of discharge phosphorus.  Because we perceive no such limitation in the plain meaning the word "discharge," and because the rule is otherwise silent as to whether a given discharge must be the only source of phosphorus, we disagree that the rule's use of the word conclusively supports the MPCA's interpretation.  See St. Otto's Home, 437 N.W.2d at 40 (stating "[n]o deference is given to the agency interpretation if the language of the regulation is clear and capable of understanding").

We also disagree with the MPCA's contention that the phosphorus strategy supports its interpretation of the phosphorus rule.  The strategy provides a discharge "affects" a lake or reservoir if it has a "measurable impact" on "adverse responses to phosphorus" in a lake or reservoir.  The strategy provides:  "'Measurable impact' is the individual contribution of the discharge in causing any [such] adverse changes . . . ."  (Emphasis added.)  The MPCA argues the use of the word "individual" here precludes application of the phosphorus rule where there is more than one discharge source.  But the plain meaning of "to contribute" is "to give or supply in common with others."  The American Heritage College Dictionary 303 (3d ed. 1993) (emphasis added).  We therefore conclude the term "measurable impact," defined by the strategy as an "individual contribution," does not require that there be only one discharge source for the phosphorus rule to apply.

We also disagree with the MPCA's argument that the strategy's legislative history supports its interpretation of the phosphorus rule.  The MPCA's argument relies upon a Statement of Need and Reasonableness it prepared in support of the 1999 proposed amendments to Rule 7050.  An agency's Statement of Need and Reasonableness may be used for guidance in interpreting a rule.  See Boedingheimer v. Lake Country Transp., 485 N.W.2d 917, 919  (Minn. 1992).  The Rule 7050 Statement of Need and Reasonableness provides:  "If the [application of the phosphorus] limit is based on the discharge's impact on a downstream lake or reservoir, generally local data or modeling is used to determine that the nutrient loading from the facility has a measurable impact on the quality of the downstream resource."

We agree with the MPCA's arguments that the Statement of Need and Reasonableness requires a measurement of individual impact prior to application of the phosphorus rule and the phosphorus rule cannot be triggered merely by measuring the cumulative impact of several discharge sources upon a lake or reservoir or by presuming a source that discharges phosphorus has a measurable effect on a lake or reservoir. 

We disagree, however, with the MPCA's interpretation of the Statement of Need and Reasonableness, and by extension the phosphorus rule, according to which a discharge source's individual impact can only be measurable if there are no other contributing sources.  On this point, we note the record includes a "BATHTUB" modeling analysis performed by the MPCA on Pleasant Lake, in the Vadnais Chain of Lakes, to determine whether the St. Cloud treatment facility has a measurable impact on that lake requiring application of the phosphorus rule.  The BATHTUB model isolates the St. Cloud treatment facility's individual contribution to the phosphorus in Pleasant Lake by predicting whether reducing the amount of phosphorus effluent from the St. Cloud treatment facility to 1mg/L would have a measurable effect on Pleasant Lake's algal levels.  Although the MPCA's BATHTUB analysis of Pleasant Lake concluded the St. Cloud treatment facility had no measurable impact, the BATHTUB analytic method measuring the amount of algal growth attributable to an individual discharge source is inconsistent with the MPCA's argument the phosphorus rule cannot be triggered where there is more than one phosphorus contributor. 

The MPCA's interpretation of the rule further strikes us as unreasonably inflexible.  There is undisputed evidence in the record that the St. Cloud treatment facility has been responsible for between 15% and 51% of the phosphorus entering the Coon Rapids Dam Pool.  Yet under the MPCA's interpretation, this contribution would not be considered a measurable "effect" warranting application of the phosphorus effluent limit unless the St. Cloud treatment facility were the sole contributor.  We believe this result is inconsistent with the goal of the phosphorus strategy to provide a workable framework for the way phosphorus concerns will be considered in the permitting process. 

On the record before us, therefore, we cannot conclude the MPCA's interpretation of the phosphorus rule is reasonable as applied by the MPCA Board in granting summary disposition concerning whether the St. Cloud treatment facility discharges phosphorus in amounts that "affect" Lake Pepin and the Coon Rapids Dam Pool within the meaning of the phosphorus rule.  We therefore remand the matter to the MPCA for a contested-case hearing on these issues. 

We also conclude this matter must be remanded for a contested-case hearing to determine whether the Coon Rapids Dam Pool is a reservoir for the purposes of applying the phosphorus rule.  The ALJ determined the pool was a reservoir solely for the purposes of summary disposition, without considering the parties' arguments on the merits.  The MCEA observes the Minnesota Department of Natural Resources has defined the Coon Rapids Dam Pool as a reservoir.  St. Cloud argues the DNR definitions are not binding on the MPCA, which defines the Coon Rapids Pool as a reservoir because the "residence time," or amount of time water stays in the pool, is less than 14 days.  We conclude the definition of the pool presents material issues of fact that must be resolved to determine whether the phosphorus rule can be applied.  We therefore remand this issue for resolution in a contested-case hearing.

            The MCEA argues the St. Cloud treatment facility discharge "affects" the Vadnais Chain of Lakes within the meaning of the phosphorus rule.  We disagree, and conclude the city of St. Paul, which pumps water out of the Mississippi River approximately 70 miles downstream from St. Cloud, treats the water to remove phosphorus, and transfers the water to the Vadnais Chain via an aqueduct, is legally responsible for the water entering the Vadnais Chain. 

The parties agree federal caselaw applying the Clean Water Act provides guidance in analyzing this issue.  It is undisputed the Vadnais Chain is not naturally connected to the Mississippi River, and that the St. Cloud treatment facility effluent would not reach the Vadnais Chain but for the action of St. Paul. 

When a point source changes the natural flow of a body of water which contains pollutants and causes that water to flow into another distinct body of navigable water into which it would not have otherwise flowed, that point source is the cause-in-fact of the discharge of pollutants.  And, because the pollutants would not have entered the second body of water but for the change in flow caused by the point source, an addition of pollutants from a point source occurs.

 

Miccosukee Tribe of Indians of Florida v. South Florida Water Management Dist., 280 F.3d 1364, 1368 (11th Cir. 2002) (emphasis omitted).  We conclude St. Paul, and not the St. Cloud treatment facility, is legally responsible for any pollution entering the Vadnais Chain via the aqueduct.  The MPCA Board did not err by granting the MPCA summary disposition on this issue.

3.            Because we are remanding this matter for a contested-case hearing on the issue of whether the St. Cloud treatment facility discharge affects a lake or reservoir within the meaning of the phosphorus rule, we do not address here the issue of whether the MPCA Board erred as a matter of law by restricting its review of the ALJ's recommended order to the materials contained in the ALJ's motion.  

Affirmed in part, reversed in part and remanded.