Minnesota Pollution Control Agency File No. 7-2200-14439-2.
1. Under Minnesota's nondegradation policy for protection of specially-designated high quality state waters, the Minnesota Pollution Control Agency (MPCA) may require a city to analyze whether downsizing a proposed new wastewater treatment plant and using decentralized wastewater treatment to meet anticipated additional population growth is a prudent and feasible alternative that would greatly reduce the resulting new discharge of wastewater into a river designated as an Outstanding Resource Value Water-Restricted (ORVW-R). Without that analysis, a decision by the MPCA that there is no prudent and feasible alternative to the proposed discharge of wastewater into an ORVW-R is not supported by substantial evidence in the record.
2. MPCA's position that it lacks authority to impose more than minimally required water quality standards necessary to protect the scenic and recreational aspects, rather than the high-water quality, of an ORVW-R from a proposed new discharge of wastewater is an error of law, causing MPCA's issuance of a permit for a proposed discharge without requiring affordable, available technology that would reduce the amount of pollutants from a proposed discharge into an ORVW-R to be affected by an error of law.
3. MPCA's failure to define and appropriately describe the high quality of the water in an ORVW-R makes the discharge limits set by the MPCA in a permit for a new wastewater treatment plant arbitrary and capricious and unsupported by substantial evidence in the record.
4. "Existing high quality" of water in a river into which no discharge of pollutants has previously been permitted means the quality of the water prior to the issuance of any permit to discharge pollutants into the water.
The opinion of the court was delivered by: Stoneburner, Judge
Considered and decided by Willis, Presiding Judge; Stoneburner, Judge; and Crippen, Judge.*fn1
Relator Minnesota Center for Environmental Advocacy (MCEA) challenges respondent Minnesota Pollution Control Agency's (MPCA) grant of a permit to the City of Princeton allowing the city to triple the capacity of its current wastewater treatment facility by constructing a wastewater treatment plant (WWTP) that will discharge 1,905,000 gallons of waste per day into an outstanding resource value water, the Rum River. MCEA argues that (1) the finding that there are no prudent and feasible alternatives to the proposed discharge is not supported by substantial evidence in the record because Princeton failed to analyze the alternative of downsizing plus decentralized treatment to reduce the amount of discharge into the Rum River and (2) MPCA's failure to require available, affordable technology to reduce pollutants in the discharge permitted is contrary to the law requiring protection of the existing high quality of the water in the Rum River, not supported by substantial evidence in the record, and arbitrary and capricious. MCEA argues in the alternative that it raised factual disputes on these issues requiring a contested-case hearing.
Princeton, whose existing wastewater treatment facility is close to capacity and near the end of its useful life span, applied to MPCA for a National Pollutant Discharge Elimination System/State Disposal System permit (NPDES/SDS permit) allowing it to construct a new wastewater treatment plant (WWTP) that will triple the capacity of the current wastewater treatment method and discharge 1,905,000 gallons of wastewater per day directly into the Rum River.*fn2
The affected portion of the Rum River has been classified as Outstanding Resource Value Water-Restricted (ORVW-R) since 1984. Minn. R. 7050.0180, subps. 6 (D), 6a (G) (2003). An ORVW is a body of water that has "high water quality, wilderness characteristics, unique scientific or ecological significance, exceptional recreational value, or other special qualities which warrant stringent protection from pollution." Minn. R. 7050.0180, subp. 2(A). It is undisputed that the Rum River's classification is due to its scenic characteristics, recreational value, and high water quality. MPCA's nondegradation-of-ORVW policy explains that high water quality and recreational value go hand-in-hand: "the maintenance of existing high quality in some waters of outstanding resource value to the state is essential to their function as exceptional recreational, cultural, aesthetic, or scientific resources." Minn. R. 7050.0180, subp. 1. The applicable restriction on discharges to ORVWs provides in relevant part that "[n]o person may cause or allow a new or expanded discharge of any sewage . . .[into an ORVW] unless there is not a prudent and feasible alternative to the discharge," and if a new discharge is permitted, the MPCA "shall restrict the discharge to the extent necessary to preserve the existing high quality, or to preserve the wilderness, scientific, recreational, or other special characteristics that make the water an [ORVW]." Minn. R. 7050.0180, subp. 6.
As part of the permit application, the city was required to perform a nondegradation study that included an analysis of various alternatives to determine whether any of the alternatives provided a prudent and feasible alternative to the city's proposal. One of the alternatives that the city was required to study was "[d]ownsizing the project and/or implementing water conservation practices so that a land disposal method might be used." The city rejected all of the alternatives it was required to analyze as not prudent or feasible. Downsizing was rejected as inconsistent with Princeton's planned growth over the next twenty years. Evidence in the record indicates that Princeton's population could possibly expand from its current 4,200 to 12,500 by 2024.
After reviewing Princeton's application, including its study of alternatives, plus some additional information requested by MPCA, MPCA staff recommended approval of a permit for Princeton's proposed WWTP. MPCA staff drafted and circulated for public comment an Environmental Assessment Worksheet (EAW). MCEA voiced concerns about the proposal, asserting that the alternative of downsizing had not been sufficiently analyzed as a feasible and prudent alternative, MPCA's recommended restrictions on the proposed discharge were only designed to preserve minimal water quality standards, and MPCA failed to require available, affordable technology necessary to protect the higher quality of this river. The Department of Natural Resources also requested that MPCA consider requiring additional, technological upgrades, such as sand filters, to control mercury and CBOD.*fn3 Neither MCEA nor the DNR requested an Environmental Impact Statement (EIS).
MPCA does not dispute that the use of treatment upgrades such as sand filters and the addition of alum would reduce phosphorus, CBOD, and total suspended solids (TSS) in the discharge, but rejected these upgrades based on its determination that the benefit would be so minimal in comparison to the cost that this alternative is not necessary to protect the quality of the water. MPCA and the city, without considering downsizing in conjunction with decentralized treatment to meet some of Princeton's projected growth, rejected downsizing on the basis that it would not allow the city to grow at the rate it anticipated.
Concluding that an EIS was not required, MPCA drafted a NPDES/SDS permit for the project that includes a limit on the discharge of phosphorus and a more-stringent-than-minimal limit on TSS, but does not require use of sand filters or alum as proposed by MCEA to further reduce these pollutants as well as CBOD. MPCA circulated the proposed permit for public comment. MCEA requested a contested-case hearing, reiterating its concerns that (1) Princeton failed to adequately consider downsizing in conjunction with decentralized treatment as a feasible and prudent alternative and (2) MPCA failed to require the effluent restrictions necessary to protect existing high water quality.
In a hearing before the MPCA Citizen's Board, MPCA staff and MCEA representatives presented the proposed permit and MCEA raised its objections to the permit and requested a contested-case hearing. The board denied MCEA's request for a contested-case hearing and granted the NPDES/SDS permit with the restrictions proposed by MPCA staff. MCEA appeals the grant of the permit by writ of certiorari, arguing that MPCA's decision to reject downsizing as a feasible and prudent alternative is arbitrary, capricious, and unsupported by substantial evidence, and MPCA's failure to require the use of sand filters and alum is contrary to law, unsupported by substantial evidence, and arbitrary and capricious. In the alternative, MCEA argues that MPCA erred by denying a contested-case hearing.
1. Should the city have been required to analyze whether the alternative of downsizing its proposed WWTP and using decentralized treatment methods to accommodate additional anticipated population growth is a prudent and feasible alternative to its proposed discharge of 1,905,000 gallons of wastewater per day into a river classified as ORVW-R?
2. Did MPCA misapply the law when it focused on preservation of the scenic and recreational value of the river rather than on the high water quality of the river to determine necessary restrictions on a permitted discharge?
3. Given MPCA's mandate to restrict any permitted discharge into an ORVW "to the extent necessary to preserve the existing high quality" of the water, were MPCA's restrictions in Princeton's permit arbitrary and capricious and unsupported by substantial evidence in the record because MPCA did not identify or define the existing quality of the water prior to setting the restrictions?
Our review of MPCA's decision to grant a permit for Princeton's proposed WWTP is governed by the Administrative Procedure Act, Minn. Stat. §§ 14.63-.69 (2004); In re Univ. of Minn., 566 N.W.2d 98, 103 (Minn. App. 1997). The statute provides in relevant part that this court can affirm, or remand for further proceedings, or reverse, or modify any of the agency's findings, inferences, conclusions, or decisions if they are affected by error of law, unsupported by substantial evidence in view of the entire record as submitted, or are arbitrary and capricious. Minn. Stat. § 14.69 (d)-(f). The party challenging the decision of the agency has the burden of proof on appeal. Minn. Ctr. For Envtl. Advocacy v. Minn. Pollution Control Agency, 660 N.W.2d 427, 433 (Minn. App. 2003). The agency enjoys 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." Id. (quoting Reserve Mining Co. v. Herbst, 256 N.W.2d 808, 824 (Minn. 1977)).
Deference is also given to the agency's interpretation of its own rules when the language subject to construction is so technical in nature that only a specialized agency has the experience and expertise needed to understand it, when the language is ambiguous or when the agency interpretation is one of long standing.
Id. (quoting Resident v. Noot, 305 N.W.2d 311, 312 (Minn. 1981)). However, this court will not defer to the agency interpretation "if the language of the regulation is clear and capable of understanding." Id. (quoting In re St. Otto's Home v. Minn. Dep't of Human Servs., 437 N.W.2d 35, 40 (Minn. 1989)).
The parties disagree as to the level of deference to be afforded to the agency in this case. MPCA argues that this is a highly technical matter, with "onerous issues," resulting in great deference given to the agency. See e.g., Resident, 305 N.W.2d at 312 (explaining the general rule that this court should defer to an agency for interpretation of its rules on matters so technical that only the agency has the experience and expertise to understand it). MCEA argues that deference is unnecessary if the agency's decision is arbitrary, inconsistent, or unreasonable. See generally St. Otto's Home, 437 N.W.2d at 40-41 (finding agency's decision unreasonable); In re City of Owatonna's NPDES/SDS Proposed Permit Reissuance for the Discharge of Treated Water, 672 N.W.2d 921, 926 (Minn. App. 2004) (noting that "where there is a combination of danger signals which suggest the agency has not taken a hard look at the salient problems and has not genuinely engaged in reasoned decision making," this court will intervene).
The federal Environmental Protection Agency, under authority of the Clean Water Act, 33 U.S.C. §§ 1251-1387, requires each state to develop a nondegradation policy that meets minimum standards. 40 C.F.R. § 131.12(a). At a minimum, the state policy must protect the level of water quality necessary to protect existing water uses, and, [w]here the quality of the waters exceed levels necessary to support propagation of fish, shellfish, and wildlife and recreation in and on the water, that quality shall be maintained and protected unless the State finds . . . that allowing lower water quality is necessary to accommodate important economic or social development in the area in which the waters are located. In allowing such degradation . . . the State shall assure water ...