Opinion
No. C6-01-888.
Filed February 5, 2002.
Appeal from the Minnesota Pollution Control Agency.
Byron E. Starns, Christopher M. McGlincey, Lisa Pritchard Bayley, (for relators)
Elizabeth H. Schmiesing, Walter H. Rockenstein II, (for respondent Best Buy)
Karen R. Cole, (for respondent City of Richfield)
Mike Hatch, Attorney General, Peter L. Tester, Assistant Attorney General, (for respondent MPCA)
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
Relators, Walser Auto Sales, Inc., et al. (Walser), challenge a decision by respondent Minnesota Pollution Control Agency (MPCA) denying Walser's request for a contested case hearing and issuing an indirect source permit (ISP) under Minn. R. 7023.9000-.9050 (1999). Respondent Best Buy Company (Best Buy) applied for the ISP in connection with its proposal to construct corporate headquarters in respondent City of Richfield, which was identified as a co-permittee by the MPCA. Best Buy acquired 40 acres of property within the city for the project, seven of which were taken from Walser by the city through eminent domain. Because the project involved the construction of over 2,000 parking spaces, Best Buy was required to obtain an ISP to insure that carbon monoxide concentrations will not exceed state air quality limits. See Minn. R. 7023.9010, .9040, subp. B (1999).
Minn. R. 7023.9000-.9050 (1999), which governs the indirect source permitting process and requires a person to obtain a permit prior to the construction of an indirect source, have since been repealed by the Minnesota legislature. See 2001 Minn. Laws First Spec. Sess. ch 2, § 162(b). At special term, this court denied Best Buy's motion to dismiss this appeal as moot, reasoning that Best Buy "continues to operate in accordance with the issued permit and has not established that [Walser's] challenge to the validity of that permit is moot." Best Buy continues to question whether the MPCA retains the authority, following the repeal of these rules, to require Best Buy to obtain an ISP prior to construction. Because of our decision affirming issuance of the ISP, we decline to address this issue further.
In this certiorari appeal challenging the MPCA's issuance of the ISP, Walser argues that the MPCA erred in engaging in unlawful rulemaking, denying its request for a contested case hearing, issuing the permit before litigation over the environmental review was complete, allowing construction to begin before the required mitigation was in place, and determining that the project was exempt from state noise standards. Because the MPCA has given all parties ample opportunity to submit evidence and because the MPCA's decision is supported by substantial evidence in the record, is not arbitrary or capricious, and was not made upon unlawful procedure or affected by other error of law, we affirm.
DECISION
Our standard of review of an agency decision denying a contested case hearing and granting a permit is governed by Minn. Stat. § 14.69(a)-(f) (2000). Under that statute, we may reverse or modify only if the agency's decision is in violation of constitutional provisions, in excess of the agency's statutory authority or jurisdiction, made upon unlawful procedure, affected by other error of law, unsupported by substantial evidence, or arbitrary or capricious. Id.
[D]ecisions of administrative agencies enjoy a presumption of correctness, and deference should be shown by courts to agencies' expertise and their special knowledge in the field of their technical training, education and experience.
City of Moorhead v. Minn. Pub. Utils. Comm'n, 343 N.W.2d 843, 846 (Minn. 1984) (quotation omitted). A reviewing court may not substitute its own judgment for that of an administrative agency when the finding is properly supported by the evidence. Vicker v. Starkey, 265 Minn. 464, 470, 122 N.W.2d 169, 173 (1963).
I.
Walser argues that the MPCA engaged in unlawful rulemaking by extending the response period beyond the public comment period established in the public notice and by requesting additional modeling from Best Buy's consultants. We disagree.
While a petition for a contested case hearing must be received within the public comment period, responses to such a petition may be received pursuant to a schedule established by the commissioner or, if no schedule has been established, at any time prior to the time the matter is considered by the agency. Minn. R. 7000.1800, subp. 3 (1999). Here, because it does not appear that the commissioner established a formal schedule for responses, the MPCA properly accepted additional responses after the public comment period expired. Even if such a schedule was established, Walser also submitted additional responses, which were considered by the MPCA. Thus, Walser cannot argue that it was harmed or prejudiced.
Walser further criticizes the MPCA's actions in requesting additional modeling and data analysis from Best Buy's consultants following Walser's petition for a contested case hearing. Because Best Buy was not required to submit its model run data with its ISP application, Walser's challenges to that data necessitated additional analysis. Following this additional analysis, Walser was given an opportunity to respond. To accept Walser's argument that the MPCA erred by requesting additional modeling would hamper the MPCA's ability to fully evaluate and reach reasoned decisions on petitions for contested case hearings. We therefore conclude that the procedure followed by the MPCA was neither arbitrary nor capricious.
II.
Walser argues that the MPCA erred in denying its request for a contested case hearing. Under its rules, the MPCA
must grant [a party's] petition to hold a contested case hearing * * * if it finds that:
A. there is a material issue of fact in dispute concerning the matter pending before the agency;
B. the agency has the jurisdiction to make a determination on the disputed material issue of fact; and
C. there is a reasonable basis underlying the disputed material issue of fact or facts such that the holding of a contested case hearing would allow the introduction of information that would aid the agency in resolving the disputed facts in making a final decision on the matter.
Minn. R. 7000.1900, subp. 1 (1999). The burden is on Walser, as the party requesting a contested case hearing, to establish these criteria. In re Solid Waste Permit for NSP Red Wing Ash Disposal Facility, 421 N.W.2d 398, 404 (Minn.App. 1988), review denied (Minn. May 18, 1988).
Walser argues that its petition for a contested case hearing presented numerous material issues of fact regarding whether the project would comply with ambient air quality standards and environmental justice concerns. Walser included several affidavits from two experts who questioned the parameters and methodology used by Best Buy. In particular, Walser's experts claimed: (1) the MPCA's use of background carbon monoxide concentrations from a nearby elementary school, rather than from the Mall of America expansion project, failed to accurately represent the project location; (2) the worst-case intersection was not modeled; and (3) the traffic projections used by Best Buy were underestimated. On each, the MPCA issued detailed findings examining Walser's criticisms and either rejecting the basis for the criticism or explaining why it would not change the MPCA's final decision in the matter. We will not substitute our judgment for these findings, which are supported by substantial evidence. Vicker, 265 Minn. at 470, 122 N.W.2d at 173.
Walser further argues that the MPCA inappropriately weighed evidence and resolved disputed facts. Walser seeks to convince this court that it need not defer to the MPCA's decision and that we should apply a standard similar to that applied in summary judgment cases. At oral argument before this court, Walser also argued that this court should apply a Frye-Mack standard to evaluate the admissibility of novel scientific evidence and that an agency cannot make those types of decisions without holding a contested case hearing on the matter. See Goeb v. Tharaldson, 615 N.W.2d 800, 814 (Minn. 2000) (reaffirming adherence to Frye-Mack standard in civil litigation). We do not believe that either of these standards necessarily apply to certiorari review of decisions of an administrative agency.
Rather, review of an agency's refusal to hold a contested case hearing on a permit application requires us to give the agency wide discretion to determine whether the permit challenger has met its burden to show that a contested case hearing is warranted. See, e.g., In re N. States Power Co. Wilmarth Indust. Solid Waste Incinerator, Ash Storage Facility, 459 N.W.2d 922, 923 (Minn. 1990); In re Amendment No. 4 to Air Emission Facility Permit, 454 N.W.2d 427, 429-30 (Minn. 1990). In N. States Power, 459 N.W.2d at 923, the supreme court concluded that the record did not demonstrate entitlement to a contested case hearing in a permit proceeding, where the record was "extensive" and was "developed during the course of multiple proceedings" in which the challenger to the permit was "actively involved" and raised "concerns about each aspect of the permitting process and its results." In so holding, the supreme court reversed this court's decision, in which we determined that a contested case hearing was necessary because "relators have raised genuine issues of material fact" by providing the MPCA "with experts' names, findings and specific new facts [that] experts might testify to at a contested case hearing." Id., C6-89-1892 (Minn.App. May 1, 1990). Similarly, even though Walser provided affidavits of experts who disagreed with Best Buy's consultants and the MPCA's decision to issue the ISP, the record supporting that decision is extensive, was developed over the course of multiple proceedings, and shows that Walser was actively involved in the permitting process. The MPCA thus did not err in denying Walser's request for a contested case hearing.
III.
Walser argues that the MPCA erred when it issued the ISP while litigation was still pending on the environmental impact statement (EIS). See Walser Auto Sales, Inc. v. City of Richfield, M.C. 01-00369, AP 01-003232 (Minn. 4th Jud. Dist. July 3, 2001) (remanding to city to supplement its final EIS to address proposed temporary closure of highway 62). We disagree. By statute, a project may not be started and a "final governmental decision may not be made to grant a permit" until a required EIS "has been determined adequate." Minn. Stat. § 116D.04, subd. 2b (2000); see also Minn. R. 4410.2900 (requiring final decisions on permits be made within 90 days after determination of adequacy of final EIS), 4410.0400, subp. 4 (1999) (providing that decision by responsible governmental unit on adequacy of EIS are final decisions). Here, the city determined that the final EIS was adequate on December 11, 2000, and the MPCA did not issue the ISP until May 23, 2001. Thus, the MPCA did not err in issuing the ISP merely because litigation challenging the adequacy of the EIS was still pending in district court.
IV.
Walser argues that the MPCA erred by allowing construction to proceed before the mitigation measures required by the ISP were in place. Those measures included the completion of certain road improvements before the city could issue a certificate of occupancy to Best Buy. Walser insists that there is no certainty that these mitigation measures will be satisfied because the MPCA does not have the ability to require other state departments to either fund or complete these road projects.
However, these mitigation measures are more than mere vague statements of good intention and require satisfaction before Best Buy can occupy its headquarters. Until the road projects are completed, no additional traffic and no additional carbon monoxide emissions will be present at the Best Buy location. The mitigation measures required by the MPCA thus appear reasonable. See Iron Rangers for Responsible Ridge Action v. Iron Range Res., 531 N.W.2d 874, 881 (Minn.App. 1995), review denied (Minn. July 28, 1995).
V.
Walser argues that the MPCA erred in concluding that the project is exempt from state noise standards. The MPCA has authority to develop standards "describing the maximum levels of noise * * * which may occur in the outdoor atmosphere." Minn. Stat. § 116.07, subd. 2 (2000); see Minn. R. 7030.0010-.1060 (1999) (setting out "Noise Pollution Control" standards). The rules governing the ISP program only require compliance with carbon monoxide standards, not noise standards, and the MPCA must issue an ISP if an indirect source does not violate carbon monoxide standards. Minn. R. 7023.9040 (1999). Thus, the MPCA did not err by failing to address noise standards in this ISP context. See McGuire v. County of Scott, 525 N.W.2d 583, 586 (Minn.App. 1995) (noting that indirect source permits apply to air emissions not noise standards), review denied (Minn. Mar. 14, 1995).