Peysenske Lake Association, Relator, vs. Minnesota Department of Natural Resources, et al., Respondents, County of Hubbard, et al., Respondents.

Peysenske Lake Association, Relator, vs. Minnesota Department of Natural Resources, et al., Respondents, County of Hubbard, et al., Respondents. A06-101, Court of Appeals Unpublished, January 16, 2007.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2006).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A06-101

 

Peysenske Lake Association,

Relator,

 

vs.

 

Minnesota Department of

Natural Resources, et al.,

Respondents,

 

County of Hubbard, et al.,

Respondents.

 

Filed January 16, 2007

Affirmed
Crippen, Judge*

 

Minnesota Department of Natural Resources

Division of Waters

General Permit No. 97-1166

 

 

James P. Peters, Karna M. Peters, Peters & Peters, P.L.C., 507 North Nokomis Street, #100, Alexandria, MN  56308 (for relator)

 

Lori Swanson, Attorney General, Thomas K. Overton, Assistant Attorney General, 900 Bremer Tower, 445 Minnesota Street, St. Paul, MN  55101 (for respondent Department of Natural Resources)

 

Thomas P. Carlson, Nigel H. Mendez, Carlson & Soldo, P.L.L.P., 1052 Centerville Circle, Vadnais Heights, MN  55127 (for respondent Hubbard County)

 

            Considered and decided by Willis, Presiding Judge, Peterson, Judge, and Crippen, Judge.

U N P U B L I S H E D   O P I N I O N

CRIPPEN, Judge

Relator Peysenske Lake Association challenges the actions of respondent Department of Natural Resources (DNR), arguing that the DNR's decision to modify the replacement culvert's elevation was procedurally and substantively flawed.  Relator argues that the DNR did not follow the proper permitting procedure when it verbally approved a last-minute change to the replacement culvert's elevation without holding a hearing, and that the decision to modify the replacement culvert's elevation was unsupported by the evidence, arbitrary and capricious, and improperly based on private interests.  Because the DNR's permitting procedure involved no identifiable legal irregularity, and because the record shows a substantial basis for the decision, we affirm.

FACTS

In March 2005, respondent Hubbard County's highway department applied for a permit to replace the culvert located under the highway that dissects Peysenske Lake into a west basin and an east basin.  Respondent DNR authorized this project pursuant to the highway department's existing general permit, but it required the highway department to complete the project as consistent with the permit application, which specified that the replacement culvert would be installed at the same elevation as the existing culvert:  1403.96 feet above sea level on the west end and 1404.47 feet above sea level on the east end.

Four days before construction was scheduled to commence, respondent county raised concerns regarding the replacement culvert's elevation.  It noted that the existing culvert had been obstructed by debris for many years, which prevented water from flowing out of the east basin, and that installation of the replacement culvert at the same elevation as the existing culvert would cause the east basin's water level to fall over two feet.  To prevent the drainage of the east basin, the DNR authorized the county to install the replacement culvert at an elevation of 1407.51407.69 feet above sea level on the east end.

The replacement culvert was ultimately installed at an elevation of 1407.21 feet above sea level on the east end and 1404.31 feet above sea level on the west end.  This resulted in strong objections from relator, who was concerned that the replacement culvert would prevent flow of water from the east basin to the west basin, causing low water conditions in the west basin.  To determine whether relator's concerns were founded, respondents began a follow-up investigation.  While this investigation was pending, State Representative Brita Sailer requested that the DNR hold a public hearing regarding the replacement culvert.  The DNR responded that, although the project was under review, it would not hold a public meeting because the culvert's replacement is a project for which the county, not the DNR, is responsible.

The follow-up investigation revealed that if the replacement culvert had been installed at the same elevation as the prior culvert,[1] that installation would have caused the east basin's water level to fall 2.2 feet, destroying significant aquatic habitat in the already shallow basin, and that this change would have caused a rise in the water level of the larger west basin to a maximum of only .12 feet.  It further revealed that the elevation at which the replacement culvert was installed actually had caused the west basin's water level to rise .02 feet and the east basin's water level to fall .42 feet.  Based on this information, the DNR concluded that lowering the culvert to the originally specified elevation "would not be beneficial to the west basin and would negatively impact the east basin significantly."  It further determined that it is unlikely that a permit would be granted to lower the replacement culvert to the elevation originally specified because that elevation would cause a "magnitude of impacts" on the east basin.  The DNR, therefore, authorized the replacement culvert to remain at its present configuration pursuant to the county highway department's general permit.

D E C I S I O N

When reviewing administrative agency decisions, we adhere to the fundamental concept that those decisions enjoy a presumption of correctness.  In re Excess Surplus Status of Blue Cross & Blue Shield of Minn., 624 N.W.2d 264, 278 (Minn. 2001).  We defer to administrative agencies' expertise and special knowledge in the field of their technical training, education, and experience.  Id.  Even if we would have reached a different conclusion than that reached by the administrative agency, we will not substitute our judgment for that of the agency when its conclusion is properly supported by the evidence.  Vicker v. Starkey, 265 Minn. 464, 470, 122 N.W.2d 169, 173 (1963).  Rather, we reverse an administrative agency's decision only when that decision represents an error of law or when the administrative agency's findings are unsupported by the evidence or are arbitrary and capricious.  Crookston Cattle Co. v. Minn. Dep't of Natural Res., 300 N.W.2d 769, 777 (Minn. 1980).

1.

            Relator argues that the DNR violated the permitting procedures mandated by Minnesota's statutes and rules because (a) the DNR impermissibly verbally approved a last-minute change to the replacement culvert's east-end elevation; (b) that change does not comply with the factors listed in Minn. Stat. § 103G.245, subd. 10 (2004); and (c) the DNR did not conduct a public hearing even though a public hearing was requested.

            A permit is required for the construction, reconstruction, repair, or relocation of any structure on or in public waters, Minn. R. 6115.0210, subp. 5 (2005), including culverts, Minn. R. 6115.0170, subp. 37 (2005) (defining "structure" to include "culverts").  The DNR commissioner may, but need not, direct a hearing to be held on such an application.  Minn. Stat. §§ 103G.305, subd. 1(b) (2004) (stating that DNR commissioner must either direct a hearing to be held on the application or make an order issuing or denying a permit); .311, subd. 4 (2004) (stating that commissioner "may waive a hearing on an application and order the permit to be issued or deny the permit").  The commissioner also has the authority to issue to municipalities general permits that allow municipalities to undertake certain activities that have a minimal impact on public waters.  Minn. Stat. § 103G.245, subd. 3 (2004); Minn. R. 6115.0250, subp. 4 (2005). 

Here, the DNR authorized the culvert's replacement pursuant to the county's general permit, but required the  county to complete the replacement project according to the specifications contained in the permit application.  It follows that the county acted outside its scope of authority when it installed the replacement culvert at a higher elevation than was specified in the permit application.

But it was the DNR itself that authorized the county to install the replacement culvert at a higher elevation than was specified in the permit application.  This action is consistent with the DNR's authority to authorize a project pursuant to a municipality's general permit, Minn. Stat. § 103G.245, subd. 3, or to grant a permit subject to certain conditions, Minn. Stat. § 103G.315, subd. 1 (2004).  Moreover, the county's general permit authorizes the county to make changes to the dimensions, capacity, or location of projects authorized under the general permit so long as the county obtains permission for the change.[2]  Therefore, the DNR did not act outside the scope of the authority granted to it by Minnesota's statutes and rules when it verbally authorized the county's installation of the replacement culvert at a higher east-end elevation than was specified in the permit application.

Relator also argues that the DNR's decision to modify the replacement culvert's east-end elevation does not comply with Minn. Stat. § 103G.245, subd. 10 (requiring DNR to make findings that listed factors are satisfied before it may issue a permit for project that will change the level of public waters), because the DNR did not determine whether the factors listed in that section had been satisfied.  But the replacement culvert project was not intended to change the water level of the east or west basin.  Rather, the DNR authorized the county to install the replacement culvert at a higher east-end elevation than was specified in the county's permit application in order to preserve the existing water levels on both basins.  Because the culvert replacement project was not intended to change the level of public waters, and because it did not substantially do so, the DNR was not required to determine whether the factors listed in Minn. Stat. § 103G.245, subd. 10, were satisfied before it authorized the culvert replacement project pursuant to the county highway department's general permit.

Relator also argues that the DNR violated proper permitting procedures when it declined to hold a public hearing regarding the replacement culvert's elevation even though Representative Sailer requested such a hearing.  But neither Representative Sailer nor relator have the statutory authority to demand a hearing.  See Minn. Stat. § 103G.311, subd. 5(a) (2004) (stating that, within 30 days after receiving notice that permit application was granted or denied, applicant, managers of watershed district, board of supervisors of soil and water conservation district, or municipality's mayor may demand a hearing on the application); Minn. R. 6115.0250, subp. 3 (2005) (same); see also Minn. Stat. § 103G.311, subd. 4 (allowing DNR commissioner to waive hearings on permit applications).  Therefore, regardless of whether a public hearing was properly requested, a public hearing was not required.

2.

Relator challenges the substance of the DNR's decision regarding the replacement culvert's elevation, arguing that it is (a) unsupported by substantial evidence; (b) arbitrary and capricious; and (c) improperly based on private interests.  As the challenger, relator has the burden of proving that this decision was improperly reached.  See M.T. Props., Inc. v. Alexander, 433 N.W.2d 886, 893 (Minn. App. 1988) (noting that party challenging administrative agency's decision has burden to prove that decision was improper), review denied (Minn. Feb. 22, 1989).

Substantial evidence is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, or more than a scintilla of evidence."  Id.  The substantial evidence test requires us to evaluate the evidence relied on by the agency in view of the entire record as submitted.  Id. 

After reviewing the evidence relied on by the DNR in light of the entire record, we conclude that its decision regarding the replacement culvert's elevation is supported by substantial evidence.  The DNR's decision to adjust the planned elevation was based on its determination that the planned elevation would cause the east basin's existing water level to fall substantially.  Its decision to allow the replacement culvert to remain as is was supported by a thorough follow-up investigation.  The investigation revealed that the planned elevation would have caused the west basin to rise only .12 feet and the east basin to fall 2.2 feet, thus destroying the east basin's aquatic habitat[3] and violating the east-basin property owners' riparian rights, and that the replacement culvert's elevation had caused the water level in the west basin to rise .02 feet and the east basin to fall .42 feet.  Because reasonable minds would accept this evidence as adequate to support the DNR's decision regarding the replacement culvert's elevation, we conclude that the decision was supported by substantial evidence.

An agency's decision is arbitrary and capricious if it is an exercise of the agency's will rather than its judgment, or if it is based on a whim or devoid of articulated reason.  Bloomquist v. Comm'r of Natural Res., 704 N.W.2d 184, 190 (Minn. App. 2005).  An agency's conclusions are not arbitrary or capricious "as long as a rational connection exists between the facts found and the choice made."  Id.

The substantial evidence that supports the DNR's decision shows that the decision was based on its judgment after considering this evidence, not its whim or will.  This evidence also shows that a rational connection exists between the facts found by the DNR and its decision to authorize the county to increase the replacement culvert's elevation.  We, therefore, hold that the DNR's decision regarding the replacement culvert's elevation was neither arbitrary nor capricious.

            Minn. R. 6115.0220, subp. 3 (2005), prohibits the "reconstruction of water level control facilities" when the reconstruction is "intended to manipulate water levels solely to satisfy private interests."  Relator argues that the DNR violated this rule by changing the culvert replacement project into a fixed-crest-dam project solely to benefit the property owners on the east basin.  In support of this argument, relator cites a statement in a DNR office memorandum that "[t]here are only two property owners on the east side of the highway that would be affected by this culvert, and one of them has expressed concern to the County that he didn't want the east side of the lake lowered by the culvert replacement." 

Without reaching the issue of whether the replacement culvert is a "water level control facility," we conclude that the evidence relator cites does not support the conclusion that the DNR was solely motivated by the east-basin property owners' interests when it authorized the county to increase the replacement culvert's east-end elevation.  Rather, substantial evidence on the record demonstrates that the DNR was motivated by its goal of maintaining the existing water levels.  Therefore, relator's argument that the DNR's decision violates Minn. R. 6115.0220, subp. 3, fails.

Because the DNR did not violate Minnesota's statutes and rules regarding proper permitting procedures, and because its decision to authorize the county to install the replacement culverts at a higher elevation than was specified in the permit application was supported by the evidence and was not arbitrary, capricious, or based solely on private interests, we affirm.[4]

Affirmed.

* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.

[1] This investigation also revealed that the prior culvert was improperly installed 3.23 feet lower than it should have been, according to a 1978 application for the prior culvert.

[2] Although the general permit requires this permission to be in writing from the commissioner, this requirement was created by the DNR and, as such, it may be waived by it.  See Larson v. Hill's Heating & Refrigeration of Bemidji, Inc., 400 N.W.2d 777, 781 (Minn. App. 1987) (holding that, even when a contract expressly requires modifications to be in writing, an oral modification is effective if the parties assent to the modification), review denied (Minn. Apr. 17, 1987).

[3] Relator argues that the replacement culvert's elevation adversely affects fish movement in violation of Minn. R. 6115.0231, subp. 2B (2005) (stating that reconstructed culverts must provide for game fish movement).  But the Minnesota rules also state that culverts may not be placed in such a way that they will be detrimental to significant fish and wildlife habitat.  Minn. R 6115.0210, subp. 3B (2005).  Where these rules conflict, we will defer to the DNR's expertise and special knowledge in balancing these rules.  See In re Excess Surplus Status of Blue Cross & Blue Shield of Minn., 624 N.W.2d at 278 (requiring courts to defer to agencies' expertise and special knowledge in the field of their technical training, education, and experience).  We, therefore, defer to the DNR's determination that installation of the replacement culvert at a higher east-end elevation was necessary to preserve the aquatic habitat on the east basin.

[4] In its brief, the DNR asks this court to strike certain materials submitted by relator, arguing that those materials were not part of the agency record.  Because those documents do not alter our analysis of the record, we decline to address the request.