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West McDonald Lake Association v. Minnesota Department of Natural Resources

Court of Appeals of Minnesota

June 19, 2017

West McDonald Lake Association, Relator,
v.
Minnesota Department of Natural Resources, Respondent.

         Department of Natural Resources Permit No. 2016-0462

          William P. Hefner, Jeremy Greenhouse, The Environmental Law Group, Ltd., Mendota Heights, Minnesota (for relator)

          Lori Swanson, Attorney General, Christina M.B. Herriges, Assistant Attorney General, St. Paul, Minnesota (for respondent)

          Considered and decided by Halbrooks, Presiding Judge; Worke, Judge; and Kirk, Judge.

         SYLLABUS

         The federal water-transfer rule, 40 C.F.R. § 122.3(i) (2015), is not an exemption incorporated by reference in Minnesota's National Pollutant Discharge Elimination System (NPDES) program, pursuant to Minn. R. 7001.1030 (2015). Therefore, the federal water-transfer rule does not apply in Minnesota.

          OPINION

          HALBROOKS, Judge.

         In this certiorari appeal, relator challenges the issuance of a public-waters work permit to lower the runout elevation between Hoffman Lake and West McDonald Lake, arguing that respondent (1) failed to satisfy the criteria for granting the permit, (2) granted the permit solely for private interests, and (3) violated both the Clean Water Act and state regulations by failing to obtain an NPDES permit. Because we conclude that respondent failed to satisfy certain criteria to issue a public-waters work permit and because we hold that Minnesota requires respondent to obtain an NPDES permit prior to water transfers that add pollutants to the waters of Minnesota, we reverse respondent's approval of the permit.

         FACTS

         Hoffman Lake and West McDonald Lake are located in Otter Tail County. The two lakes are adjacent to each other, separated by a narrow strip of land that acts as an outlet when the water level in Hoffman Lake exceeds the runout elevation.[1] Currently, the outflow is about four feet wide. West McDonald Lake is the larger of the two lakes, with a surface area of 597 acres and a maximum depth of 62 feet. Hoffman Lake has a surface area of 157 acres and a maximum depth of 20 feet. Respondent Minnesota Department of Natural Resources (DNR) began recording water-level data on Hoffman Lake and West McDonald Lake as early as the 1970s.

         Over the past several decades, the DNR has conducted multiple surveys on the runout elevation at both lakes. The runout elevation of Hoffman Lake was 1, 353.3 feet in 1976 and 1, 355.1 feet in 1999. In 2015, the Hoffman Lake runout elevation was around 1, 354.8 feet. Accordingly, the runout elevation of Hoffman Lake is approximately 1.5 feet higher than it was in 1976. The runout elevation of West McDonald Lake was 1, 353.7 feet in 1976; 1, 353.4 feet in 1999; and 1, 352.7 feet in 2014.

         Following an evaluation of the water quality of Hoffman Lake and West McDonald Lake in 2013, a water-quality report was published. This report demonstrated that while the water quality of both lakes satisfied state water-quality standards, the water quality of West McDonald Lake was generally much higher than Hoffman Lake. The 2013 report identified the following water-quality characteristics for each lake:

Hoffman Lake
West McDonald Lake

Total Phosphorus Mean

27 ug/L

11 ug/L

Chlorophyll a Mean

8.6 ug/L

3.5 ug/L

Secchi Depth Mean

9.1 ft

16 ft

         The total phosphorus mean measures the amount of nutrients in the lake, and chlorophyll a identifies algae concentration. The Secchi depth mean is a measure of a lake's transparency, or "how easily light can pass through a substance." Decreasing Secchi depth readings typically equate to decreases in the recreational suitability of a lake.

         Since the 1970s, the DNR has acknowledged that the outflow from Hoffman Lake to West McDonald Lake "has been a source of concern and disagreement." On October 15, 2015, the Hoffman Lake Association (HLA), which represents the residents of Hoffman Lake, petitioned the DNR to lower the runout elevation on Hoffman Lake's outflow by two feet. HLA provided no hydrologic data to support its petition.

         Following the petition, the DNR obtained lake-level and runoff-elevation data on Hoffman Lake and conducted a calculation and hydrologic analysis to identify a reasonable runout elevation. Based on this calculation and analysis, the DNR informed HLA that it would seek "a permit to lower the runout elevation in response to the petition from Hoffman Lake residents." Relator West McDonald Lake Association (WMLA), which is composed of residents of West McDonald Lake, opposed the permit and any reduction of the runout elevation at Hoffman Lake's outflow.

         The DNR applied to its ecological and water resources division for a permit on March 1, 2016, as the landowner of the property where Hoffman Lake's outflow is located. See Minn. R. 6115.0240, subps. 1-2 (2015) (stating that "the riparian owner of the land on which a project is proposed" may apply for a permit by submitting an application to the DNR's regional office "for the area where the majority of the proposed project is located"). It stated the following purpose in its permit application: "Reduce high water conditions on Hoffman Lake. Hoffman Lake residents have petitioned for lower water run out elevation to reduce flooding."

         In its permit application, the DNR included two aerial photographs of the area, taken in 1939 and 1963; a map identifying the outflow from each lake; runout elevation data for West McDonald Lake and Hoffman Lake; and two graphs that illustrate the change in surface elevations of both lakes since 1976. It did not reference the findings in the 2013 report in its permit application or responses to comments.

         The DNR sought comments from several private organizations, as well as local, state, and federal agencies. The Minnesota Pollution Control Agency (MPCA), WMLA, and HLA provided comments on the permit application. No comments were received from the U.S. Army Corps of Engineers, Otter Tail County Land and Resource Division, DNR Wildlife Division, DNR Fisheries Division, DNR Regional Environmental Assessment Ecologist, DNR Regional Nongame Specialists, the Board of Water and Soil Resources, or the Soil and Water Conservation District. The DNR recommended approval of its permit application.

         On August 18, 2016, the DNR issued itself Public Waters Work Permit 2016-0462 to "[l]ower the runout elevation of Hoffman Lake to elevation 1354.1 (NGVD 29) at the existing outlet. The outlet channel bottom shall be approximately 4 feet wide." After petitioning this court for a writ of certiorari on September 15, 2016, WMLA requested a voluntary stay of the permit, pending the conclusion of this appeal. The DNR agreed to the voluntary stay. This appeal follows.

         ISSUES

         I. Is the DNR's determination that it satisfied the requirements in Minn. R. 6115.0220 (2015) unsupported by substantial evidence in the record or arbitrary and capricious?

         II. Did the DNR violate state regulations by not obtaining an NPDES permit?

         ANALYSIS

         Any person aggrieved by a state agency's final decision is entitled to judicial review by this court. Minn. Stat. ...


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