Interstate Companies, Inc., et al., Appellants, vs. Carol Molnau, Lieutenant Governor, et al., Respondents.

Interstate Companies, Inc., et al., Appellants, vs. Carol Molnau, Lieutenant Governor, et al., Respondents. A05-18, Court of Appeals Unpublished, November 8, 2005.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2004).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A05-18

 

 

Interstate Companies, Inc., et al.,

Appellants,

 

vs.

 

Carol Molnau, Lieutenant Governor, et al.,

Respondents.

 

 

Filed November 8, 2005

Affirmed

Halbrooks, Judge

 

 

Ramsey County District Court

File No. C9-04-9370

 

 

Lee A. Henderson, Hessian & McKasy, P.A., 864 Ford Centre, 420 North 5th Street, Minneapolis, MN 55401; and

 

Thomas E. Harms, Thomas E. Harms, PLLC, 7601 France Avenue South, Suite 275, Edina, MN 55435 (for appellants)

 

Mike Hatch, Attorney General, Kelly S. Kemp, Assistant Attorney General, 1800 Bremer Tower, 445 Minnesota Street, St. Paul, MN  55101 (for respondents)

 

 

 

            Considered and decided by Peterson, Presiding Judge; Halbrooks, Judge; and Wright, Judge.

U N P U B L I S H E D   O P I N I O N

HALBROOKS, Judge

            Appellants challenge the district court's order dismissing their claims for (1) mandamus, (2) illegal rulemaking, and (3) violation of their right to equal protection, on the ground that the dismissal was in error because the district court had jurisdiction over each claim.  Because we conclude that the district court correctly concluded that it lacked jurisdiction over these claims, we affirm.

FACTS

            Appellants Interstate Companies (Interstate), Gordon D. Galerneau, Jr., and Penny Sue Galerneau operate a business at 2501 and 2601 East 80th Street, Bloomington, Minnesota.  Gordon D. Galerneau, Jr. is Interstate's sole owner and the owner of the 2501 building; Penny Sue Galerneau owns the 2601 building.  The buildings are located near the end of the new north-south runway that recently opened at the Minneapolis-St. Paul Airport (MSP).

            The construction of the new north-south runway and the expansion of another compelled a revision of the existing airport zoning ordinance.  Minnesota statutes provide for the formation of a "Joint Airport Zoning Board" (JAZB) and a process by which it may propose and adopt zoning ordinances governing land use near the airport.  Minn. Stat. § 360.065 (2004).  As part of the process, the Commissioner of Transportation of the State of Minnesota must review the JAZB's proposed ordinances for compliance with the commissioner's standards.  Id., subd. 2.  If the commissioner determines that a proposed ordinance does not meet the standards, the JAZB must amend the ordinance unless it demonstrates that strict compliance with the standards is not justified because "the social and economic costs of restricting land uses in accordance with the standards outweigh the benefits of a strict application of the standards."  Id.  The proposed ordinance may not be adopted by the JAZB until approved by the commissioner.  Id.  

            In this matter, a JAZB was formed in 2001, and a proposed ordinance was submitted to the commissioner in late 2003.  In early 2004, the commissioner issued an order conditionally approving the ordinance.  Thereafter, the JAZB submitted its proposed final version of the ordinance to the commissioner, and the commissioner issued an order approving the ordinance on April 22, 2004.  The JAZB adopted the ordinance on April 29, 2004, and the city of Bloomington subsequently adopted it.

            Appellants filed suit, seeking (1) a writ of mandamus compelling respondents to comply with the applicable statutes and regulations; (2) a judgment that the commissioner engaged in illegal rulemaking; and (3) a judgment finding a violation of the equal protection clauses of the Minnesota and federal constitutions.  At the heart of appellants' complaint is the allegation that the commissioner failed to follow the statutory procedure for approval of the JAZB's proposed ordinance as it is set forth in Minn. Stat. § 360.065, subd. 2. 

            Respondents moved to dismiss for lack of subject-matter jurisdiction and for failure to state a claim upon which relief may be granted pursuant to Minn. R. Civ. P. 12.02(a) and (e).  The district court granted the motion and dismissed the complaint without prejudice, concluding that it lacked jurisdiction to entertain appellants' claims and that the action was premature.  This appeal follows. 

D E C I S I O N

            Subject-matter jurisdiction is a question of law, which this court reviews de novo.  Shaw v. Bd. of Regents of Univ. of Minn., 594 N.W.2d 187, 190 (Minn. App. 1999), review denied (Minn. July 28, 1999).  Motions to dismiss for failure to state a claim upon which relief can be granted are also reviewed de novo.  Leonard v. Nw. Airlines, 605 N.W.2d 425, 428 (Minn. App. 2000).  Complaints dismissed pursuant to Minn. R. Civ. P. 12.02(e) are reviewed to determine "whether the complaint sets forth a legally sufficient claim for relief."  Elzie v. Comm'r of Pub. Safety, 298 N.W.2d 29, 32 (Minn. 1980).  Dismissals under rule 12.02(e) are generally disfavored and should not be upheld "if it is possible on any evidence which might be produced, consistent with the pleader's theory, to grant the relief demanded."  Martens v. Minn. Mining & Mfg. Co., 616 N.W.2d 732, 739-40 (Minn. 2000) (quotation omitted).  This court must accept the allegations contained in the complaint as true.  Elzie, 298 N.W.2d at 32-33.  Whether the plaintiff can prove the alleged facts is immaterial to the present analysis.   

I.          Mandamus

            Subject-matter jurisdiction refers to the court's authority to hear a case.  Hanson v. Woolston, 701 N.W.2d 257, 264 (Minn. App. 2005).  Minnesota district courts are courts of general jurisdiction, authorized to hear cases regarding most subject matters.  State ex rel. Koalska v. Swenson, 241 Minn. 278, 282, 62 N.W.2d 842, 844 (1954).  But judicial review of administrative actions falls within an exception to the district courts' general jurisdiction, as separation-of-powers concerns compel the district courts to "refrain from a de novo review of administrative decisions."  See Dokmo v. Indep. Sch. Dist. No. 11, 459 N.W.2d 671, 674 (Minn. 1990).  Thus, "absent an explicit statutory or appellate rule authorizing review in the district court, judicial review of all administrative quasi-judicial decisions must be invoked only by writ of certiorari to the court of appeals."  Tischer v. Hous. and Redev. Auth. of Cambridge, 675 N.W.2d 361, 363 (Minn. App. 2004) (citing Dietz v. Dodge County, 487 N.W.2d 237, 239 (Minn. 1992)).  And a declaratory-judgment action will not be considered if a certiorari appeal is available.  See Dokmo, 459 N.W.2d at 677.  The district court concluded that the commissioner's decision embodied in the April 2004 order was quasi-judicial in nature, thereby depriving the district court of jurisdiction to hear the matter.  We agree.   

The supreme court has outlined the following test for identifying whether a decision is quasi-legislative or quasi-judicial:  a decision is quasi-judicial when there is "(1) investigation into a disputed claim and weighing of evidentiary facts; (2) application of those facts to a prescribed standard; and (3) a binding decision regarding the disputed claim."  Minn. Ctr. for Envtl. Advocacy v. Metro. Council, 587 N.W.2d 838, 842 (Minn. 1999) (MCEA). 

            To determine whether the commissioner's decision was quasi-judicial, we must first consider whether the commissioner's decision to approve the JAZB's proposed zoning regulations was marked by an investigation into a disputed claim and weighing of evidentiary facts.  Id.  In MCEA, where the first prong was not met, the governing legislation cited by the court did not require a hearing, nor did it mandate that particular parties be given notice or the right to participate in a hearing.  Id. at 840 nn.2-4.  The court clarified the quasi-judicial concept set forth in MCEA in Handicraft Block Ltd. P'ship. v. City of Minneapolis, noting that proceedings need not be conducted as formally as a trial to be considered quasi-judicial in nature.  611 N.W.2d 16, 21 (Minn. 2000).  Here, as in Handicraft, the proceedings leading to the commissioner's decision are more typical of judicial than legislative proceedings.  The governing statute requires a hearing concerning the proposed regulations to be held before the regulations may even be submitted to the commissioner for approval.  Minn. Stat. § 360.065, subd. 1 (2004).  Notice must be provided to affected political subdivisions and people who own property that the JAZB proposes to include in safety zones A or B.  Id. 

            In addition, the commissioner's decision was not the result of a mere gathering and considering of information, a course eschewed as decidedly not quasi-judicial in MCEA.  587 N.W.2d at 843.  Here, the process by which the department concluded, and the JAZB proved, that the social and economic costs outweigh strict application of the standards was much more intensive and earnest than mere gathering of information.    

            In the order approving the proposed regulations, the commissioner noted that the JAZB's first submission draft did not conform to the commissioner's standards, and the commissioner accordingly directed an agency review to determine "whether the JAZB analysis successfully demonstrates that the social and economic costs of restricting land uses in accordance with the Commissioner's prescribed standards outweigh the benefits of a strict application of the standards."  The commissioner further noted that a "comprehensive review" took place, where a number of factors from a variety of sources were considered.  The order finds that the agency considered the "location of the airport, existing land uses and character of the neighborhood, uses planned and adaptable," statutory public-safety references, extent of runway use, and the type of aircraft.  The analysis also comprised "a critical review of the JAZB recommendation and supporting analysis and documentation by the Department's Office of Aeronautics."  The commissioner's order clearly reflects the department's extensive investigation and scrutiny of the proposed regulations and the litany of factors and circumstances weighed in determining whether strict application of the standards was warranted in light of the resulting social and economic costs.  We therefore conclude that the first prong of the test is met here.

            Second, the court must consider whether respondents applied the facts gleaned from their investigation to a prescribed standard when deciding to approve the proposed zoning regulations.  MCEA, 587 N.W.2d at 842.  Minnesota law clearly dictates the standard the commissioner must apply under these circumstances:

[T]he municipality, county, or joint airport zoning board which is to adopt the regulations shall submit its proposed regulations to the commissioner in order that the commissioner may determine whether it conforms to the standards prescribed by the commissioner.  The commissioner shall immediately examine the proposed regulations and report to the municipality, county, or joint airport zoning board the commissioner's approval, or objections, if any.  If objections are made by the commissioner on the ground that the regulations do not conform to the standards prescribed by the commissioner for the class of airport involved, the municipality, county, or joint zoning board shall make amendments as are necessary to meet the objections unless it demonstrates that the social and economic costs of restricting land uses in accordance with the standards outweigh the benefits of a strict application of the standards.

 

Minn. Stat. § 360.065, subd. 2 (2004) (emphasis added).  The commissioner's airport zoning standards are authorized in Minn. Stat. §§ 360.0154, .066 (2004), and are set forth in Minn. R. 8800.2400-.2500 (2005).

            The commissioner's April 2004 order outlines the agency's extensive examination, correctly identifies the statutory standard to be applied, and specifically states that the agency reviewed the proposed ordinance according to that statutory mandate.  We therefore conclude that the second prong of the quasi-judicial test is met.

            Finally, the court must consider whether the April 2004 order amounts to a binding decision regarding the disputed claim.  MCEA, 587 N.W.2d at 842.  The commissioner's decision is a binding one because the commissioner's approval is a necessary precursor to the adoption of the ordinance and because the ordinance was actually adopted as a final decision.  We conclude that the third prong is met. 

Where certiorari provides an adequate remedy, a district court lacks jurisdiction to issue a writ of mandamus.  Silver Bay Area Citizens Concerned for Quality Educ. v. Lake Superior Sch. Dist. No. 381, 448 N.W.2d 92, 95-96 (Minn. App. 1989), review denied (Minn. 1990).  Because the commissioner's decision was quasi-judicial and because a writ for certiorari was therefore the appropriate means for appellants to challenge the April 2004 order, the district court was correct in concluding that it lacked jurisdiction to issue a writ of mandamus.

            We also note that appellants erroneously argue that this court's order in an earlier, related lawsuit provided guidance that the present claim is jurisdictional in the district court.  In the first appeal, appellants petitioned this court for review of the threatened application of the proposed zoning ordinance before the commissioner approved it and before the JAZB adopted it.  Interstate Cos. v. Wold-Chamberlain Field Joint Airport Zoning Bd., No. C5-02-1542 (Minn. App. Nov. 12, 2002).  This court questioned its jurisdiction on the basis that the case challenged a proposed zoning ordinance and did not involve a formally promulgated administrative rule.  Id.  We also questioned whether the district court would be the appropriate forum for challenging a promulgated ordinance.  Id.  This court did not intimate any jurisdictional advice about where jurisdiction might lie for a challenge to the commissioner's intermediate order approving a proposed ordinance.  Id. 

II.       Improper Rulemaking

            "‘Rule' means every agency statement of general applicability and future effect . . . adopted to implement or make specific the law enforced or administered by that agency . . . ."  Minn. Stat. § 14.02, subd. 4 (2004).  Rules must be adopted according to the procedures set forth in the Minnesota Administrative Procedure Act.  Minn. Stat. § 14.05, subd. 1 (2004).  "[T]he failure to comply with necessary procedures results in invalidity of the rule."  White Bear Lake Care Ctr., Inc. v. Minn. Dep't of Pub. Welfare, 319 N.W.2d 7, 9 (Minn. 1982).  The court of appeals has original jurisdiction over all challenges to the validity of a rule.  Minn. Stat. § 14.44 (2004).  Assuming, without deciding, that the commissioner's order constitutes rulemaking, the district court was correct to dismiss the claim that the rulemaking was improper and void because the district court does not have jurisdiction over a challenge to the validity of a rule.

III.       Equal Protection

The supreme court has held that declaratory judgment is an appropriate remedy for a controversy concerning legal rights requiring judicial interpretation.  Connor v. Twp. of Chanhassen, 249 Minn. 205, 209, 81 N.W.2d 789, 794 (1957).  A constitutional challenge of a statute or ordinance is a controversy that requires judicial interpretation.  Nw. Airlines, Inc. v. Metro. Airports Comm'n, 672 N.W.2d 379, 383 (Minn. App. 2003), review denied (Minn. Feb. 25, 2004).  Here, however, instead of challenging the constitutionality of an adopted final ordinance, appellants challenge the constitutionality of the commissioner's interim order approving a proposed ordinance.

A justiciable controversy must exist before Minnesota courts have jurisdiction to issue a declaratory judgment regarding the constitutionality of a statute.  St. Paul Area Chamber of Commerce v. Marzitelli, 258 N.W.2d 585, 587 (Minn. 1977); Connor, 249 Minn. at 208, 81 N.W.2d at 793 (stating that the first issue in a similar case is whether there is a justiciable controversy between the parties that permits the initiation of a declaratory judgment action).  To establish a justiciable controversy, appellants "must show a direct and imminent injury which results from the alleged unconstitutional provision."  State v. Colsch, 284 N.W.2d 839, 841 (Minn. 1979).  Merely possible or hypothetical injuries are not enough to satisfy this standard.  Kennedy v. Carlson, 544 N.W.2d 1, 6 (Minn. 1996). 

Appellants allege injuries that may only possibly come to fruition upon adoption and implementation of a zoning ordinance by the JAZB and the city of Bloomington.  The respondents' order could not result in the alleged injuries, as that order effectuated nothing, standing on its own.  Injury could only possibly commence once the ordinance was adopted by the JAZB and Bloomington. 

Because the commissioner's order has not resulted in a direct and imminent injury to appellants, there is no justiciable controversy here.  Because there is no justiciable controversy, the district court lacks jurisdiction to issue a declaratory judgment concerning the constitutionality of the commissioner's April 2004 order, and the district court did not err in dismissing the claim without prejudice.

            Affirmed.