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White Bear Lake Restoration Association ex rel. State v. Minnesota Department of Natural Resources

Court of Appeals of Minnesota

April 22, 2019

White Bear Lake Restoration Association, ex rel. State of Minnesota, Respondent,
v.
Minnesota Department of Natural Resources, et al., Appellants and White Bear Lake Homeowners' Association, Inc., ex rel. State of Minnesota, plaintiff intervenor, Respondent, and Town of White Bear, defendant intervenor, Co-Appellant, City of White Bear Lake, defendant intervenor, Co-Appellant.

          Ramsey County District Court File No. 62-CV-13-2414

          Michael V. Ciresi, Katie Crosby Lehmann, Heather M. McElroy, Ciresi Conlin LLP, Minneapolis, Minnesota; and Richard B. Allyn, Robins Kaplan LLP, Minneapolis, Minnesota (for respondent White Bear Lake Restoration Association)

          Byron E. Starns, Daniel L. Scott, Micah J. Revell, Stinson Leonard Street LLP, Minneapolis, Minnesota (for respondent White Bear Lake Homeowners' Association, Inc.)

          Keith Ellison, Attorney General, Oliver J. Larson, Colin P. O'Donovan, Stacey W. Person, Assistant Attorneys General, St. Paul, Minnesota (for appellant Minnesota Department of Natural Resources)

          Chad D. Lemmons, Patrick J. Kelly, Kelly & Lemmons, P.A., St. Paul, Minnesota (for co-appellant Town of White Bear)

          Monte A. Mills, Greene Espel PLLP, Minneapolis, Minnesota (for co-appellant City of White Bear Lake)

          Korine L. Land, David L. Sienko, LeVander, Gillen & Miller P.A., South St. Paul, Minnesota (for amicus curiae City of Stillwater)

          William P. Hefner, Jeremy Greenhouse, The Environmental Law Group, Ltd., Mendota Heights, Minnesota; and Lloyd W. Grooms, St. Paul, Minnesota (for amicus curiae Minnesota Chamber of Commerce)

          David T. Anderson, Sarah J. Sonsalla, Kennedy & Graven, Chartered, Minneapolis, Minnesota (for amicus curiae City of Lake Elmo)

          David K. Snyder, Johnson/Turner Legal, Forest Lake, Minnesota (for amicus curiae City of Hugo)

          Soren M. Mattick, Campbell Knutson Professional Association, Eagan, Minnesota (for amicus curiae North St. Paul)

          Elise L. Larson, Minnesota Center for Environmental Advocacy, St. Paul, Minnesota (for amicus curiae Minnesota Center for Environmental Advocacy)

          Colette Routel, Mehmet K. Konar-Steenberg, St. Paul, Minnesota; and Bradley C. Karkkainen, Minneapolis, Minnesota (attorneys pro se and amici curiae)

          Considered and decided by Rodenberg, Presiding Judge; Reilly, Judge; and Bratvold, Judge.

         SYLLABUS

         1. When a complaint alleging violations of the Minnesota Environmental Rights Act (MERA) relates to conduct undertaken pursuant to a permit issued by the Minnesota Department of Natural Resources, the only available relief is under Minn. Stat. § 116B.10 (2018), and the bar in Minn. Stat. § 116B.03 (2018) applies.

         2. In Minnesota, the common-law public-trust doctrine applies to navigable waters and does not apply to groundwater withdrawals.

          OPINION

          RODENBERG, JUDGE

         Appellants, the Minnesota Department of Natural Resources (DNR)[1] along with its commissioner of natural resources, City of White Bear Lake, and Town of White Bear, [2]appeal from the district court's grant of declaratory and injunctive relief to respondents White Bear Lake Restoration Association[3] and White Bear Lake Homeowners' Association Inc.[4] on respondents' claims that the DNR violated MERA and the common-law public-trust doctrine by making water-appropriation decisions that have lowered the water level of White Bear Lake. Appellants challenge the district court's application of Minn. Stat. § 116B.03 and the public-trust doctrine to respondents' claims, and argue that the district court was without jurisdiction to make orders concerning the DNR's issuance of well permits. They also challenge the district court's findings of fact and the scope of its remedial order as unsupported by the record. We reverse and remand.

         FACTS

         White Bear Lake (the lake) is a large lake lying within Ramsey and Washington Counties. It has a surface area of between 2, 100 and 3, 100 acres, depending on its water level. It is a closed-basin lake, meaning that it has no major natural surface water inlets or outlets, such as rivers or streams. The lake depends on groundwater and precipitation for water. Because of this, and its relatively small watershed area, significant water-level fluctuations occur. Since 1924, water levels in the lake have ranged from 919.33 to 926.69 feet above sea level.

         Closed-basin lakes depend primarily on underlying groundwater levels for lake water. Two bedrock aquifers, commonly referenced together as the Prairie du Chien-Jordan aquifer (the aquifer), are located below the lake. The lake and the aquifer are hydrologically[5] connected, and the lake's water levels are affected by groundwater pumping, among other factors.

         The aquifer is a main source of drinking water for the Minneapolis-St. Paul metropolitan area. While the cities of Minneapolis and St. Paul are able to use surface water from the Mississippi River for their domestic water supply, most of the rest of the metropolitan area relies on groundwater pumped from municipal and private wells. Multiple high-capacity groundwater wells surround White Bear Lake, providing domestic water supply to area communities.

         Cities and municipalities must first obtain a water-use permit from the DNR before extracting groundwater for municipal use. The DNR has authorized the pumping of groundwater from the aquifer through groundwater-appropriation permits. The DNR is responsible for issuing and amending groundwater-appropriation permits, ensuring that permittees comply with those permits, and taking action as needed when groundwater permits negatively impact a natural resource.

         Respondent White Bear Lake Restoration Association (the restoration association) initiated this action in April 2013, seeking declaratory and injunctive relief related to groundwater-appropriation permits issued by the DNR. The only defendants named in the summons and complaint were the DNR and then-Commissioner Thomas J. Landwehr. The complaint alleged that increased groundwater withdrawals under the DNR's groundwater-appropriation permits from high-capacity wells in the area of the lake had created and accelerated declines in lake-water elevations due to the DNR's failure to review and amend permits. The restoration association alleged that the DNR had allowed the lake's water levels to drop, and had violated MERA, Minn. Stat. §§ 116B.01-.13 (2018). The restoration association alleged that the resulting low water levels had diminished the lake's value as a recreational, historical, cultural, and aesthetic asset. The restoration association further claimed that, due to the lake's low water levels, noxious plant and animal species had increased, businesses had experienced significant losses, a beach had closed due to a dangerous drop-off created by the lower lake level, and homeowners needed to extend docks hundreds of feet to access the lake.

         Respondent White Bear Lake Homeowners' Association (the homeowners' association) intervened as a plaintiff, alleging that the DNR had violated MERA and the common-law public-trust doctrine. Its complaint alleged that the increased groundwater appropriations authorized by the DNR have materially and adversely affected the environment and that White Bear Lake and the aquifer have been materially and adversely impacted. Like the restoration association, the homeowners' association claimed that the declining water levels harmed native aquatic plants, exposed lakebeds, reduced recreational boating activity, impaired swimming and fishing, reduced access to the water for lakefront homeowners, and negatively impacted the economy around the lake.

         In their pleadings, respondents suggested that a potential solution to increase the water level of White Bear Lake would be to order the DNR to amend groundwater-appropriation permits it had issued to municipalities. That remedy would impact groundwater-appropriation permits held by cities and municipalities who rely on the permits to supply water to their residents. Appellants City of White Bear Lake and Town of White Bear intervened as defendants. The DNR challenged respondents' claims, arguing, among other things, that those claims are not properly asserted under either Minn. Stat. § 116B.03 or the common-law public-trust doctrine. The DNR asserted that, instead, the available MERA relief was under Minn. Stat. § 116B.10.

         The district court denied appellants' pretrial motions to dismiss and for summary judgment, allowing respondents' claims to proceed under Minn. Stat. § 116B.03 and the public-trust doctrine. It rejected appellants' argument that the only viable MERA claim in this circumstance would be under Minn. Stat. § 116B.10, providing that persons may initiate a civil action in district court for declaratory or equitable relief "against the state or any agency or instrumentality thereof where the nature of the action is a challenge to . . .[a] permit promulgated or issued by the state or any agency or instrumentality thereof for which the applicable statutory appeal period has elapsed." Minn. Stat. § 116B.10, subd. 1.

         From December 2014 to August 2016, the parties agreed to stay the district-court case while they jointly supported a request to the legislature to fund construction of systems to convert the domestic water supply in certain communities in the northeast metropolitan area from groundwater to surface-water sources. The district court lifted the stay after the legislature declined to fund the surface-water conversion.

         The case was tried to the district court. Multiple experts testified for the associations and opined that the DNR's groundwater-appropriation permits negatively impacted the lake's water levels. Contrary evidence was produced by appellants. The district court ultimately concluded that the DNR did not properly manage its permitting process in light of its knowledge that groundwater pumping affected the lake's water levels. The district court determined that the DNR knew, as early as 1998, that the groundwater-appropriation permits it issued could have significant effects on groundwater levels and ultimately on the water levels of the lake. The district court found that the DNR had failed to consider "regional or cumulative impact" when reviewing permit requests and instead issued and reviewed permits on a case-by-case basis.

         The district court concluded that respondents had properly asserted their claims under Minn. Stat. § 116B.03, that the lake and the aquifer are natural resources subject to MERA protections, and that the lake and the aquifer have been and will likely continue to be impaired by the DNR's permitting conduct. The district court declared that the DNR, through its actions and inaction in relation to groundwater-appropriation permits in the vicinity of the lake, had violated MERA, multiple provisions of the state's water law, and the common-law public-trust doctrine.

         The district court ordered injunctive relief that included requiring the DNR to review and amend all groundwater-appropriation permits within a five-mile radius of the lake, require permittees to submit contingency plans for conversion to surface-water supply, and impose a residential irrigation ban when the water level of the lake is below 923.5 feet (and continuing until the lake reaches 924 feet). The district court's order prohibited the DNR from issuing any new groundwater-well permits and from increasing appropriation amounts in existing groundwater-appropriation permits within a five-mile radius of the lake until it had fully complied with statutory requirements. The order also enjoined the DNR from issuing any groundwater-appropriation permits within that radius unless and until it had sufficient data to understand the impact of those appropriations on the lake and the aquifer. These injunctions affect the groundwater permits not only of the intervenors, but also of municipalities that are not parties to this litigation.[6]

         Following the district court's order and judgment, the DNR moved for an amended judgment, a new trial, and a stay of the district court's order pending appeal. The district court rejected the stay motion. Appellants appealed and sought review of the stay order by this court. We remanded, and the district court stayed parts of its order.

         ISSUES

         I. Did the district court err by determining that Minn. Stat. § 116B.03, subd. 1, applies to claims relating to DNR-issued groundwater-appropriation permits?

         II. Did the district court err by concluding that the common-law public-trust doctrine applies to groundwater in Minnesota?

         ANALYSIS

         Together, appellants make nine arguments. They argue that the district court erred by (1) allowing the action to proceed under Minn. Stat. § 116B.03 instead of Minn. Stat. § 116B.10, (2) misapplying the public-trust doctrine, (3) denying summary judgment on the ground that respondents failed to exhaust administrative remedies, (4) refusing to require joinder of affected permit holders not parties to the case, (5) interpreting MERA to require the DNR to reopen and amend permits, (6) failing to give deference to the DNR's permitting decisions, (7) violating separation-of-powers principles, (8) requiring the DNR to amend existing permits without holding administrative hearings, and (9) making clearly erroneous factual findings.[7] Because our resolution of the first two arguments is dispositive, we do not reach the remaining arguments.

         I. When a complaint alleges violations of MERA based on conduct undertaken pursuant to a permit issued by the DNR, MERA relief is available only under Minn. Stat. § 116.10 and the bar in Minn. Stat. § 116B.03 applies.

         Appellants argue that the district court erred by allowing respondents to pursue claims under Minn. Stat. § 116B.03. They argue that respondents' claims challenge the adequacy and propriety of DNR-issued permits and were therefore required to be brought under Minn. Stat. § 116B.10. Respondents argue that the statute does not require them to bring their claims under section 116B.10, because their challenge is to the DNR's overall permitting process and the cumulative impact of the water-use permits.

         Whether the district court properly applied Minn. Stat. § 116B.03 to respondents' claims presents a question of statutory interpretation, and we review such questions de novo. Caldas v. Affordable Granite & Stone, Inc., 820 N.W.2d 826, 836 (Minn. 2012). The object of statutory interpretation is to ascertain and effectuate the intention of the legislative body. Minn. Stat. § 645.16 (2018). "If the legislature's intent is clear from the unambiguous language of the statute, [appellate courts] apply the statute according to its plain meaning." Staab v. Diocese of St. Cloud, 853 N.W.2d 713, 716-17 (Minn. 2014).

         In interpreting a statute, we must construe statutory words and phrases according to the rules of grammar and according to their common and approved usage. Minn. Stat. § 645.08(1) (2018). A court may turn to dictionaries to assess the plain and ordinary meaning of a term. State v. Thonesavanh, 904 N.W.2d 432, 436 (Minn. 2017).

         MERA provides "any person" residing within Minnesota a private right of action for declaratory or equitable relief to protect natural resources from "pollution, impairment, or destruction." Minn. Stat. § 116B.03, subd. 1. MERA broadly defines "person" as "any natural person, any state, municipality or other governmental or political subdivision or other public agency or instrumentality . . . or other organization . . . and any other entity, except a family farm, a family farm corporation or a bona fide farmer corporation." Minn. Stat. § 116B.02, subd. 2. Both respondents and appellants concede-and we agree-that the associations and the DNR are "persons" as defined by the statute. Likewise, the municipalities withdrawing groundwater are "persons" under MERA because they are governmental or political subdivisions.

         To maintain an action in district court under section 116B.03, a plaintiff must make "a prima facie showing that the conduct of the defendant has, or is likely to cause the pollution, impairment, or destruction of the air, water, land or other natural resources located within the state." Minn. Stat. § 116B.04(b); State by Archbal v. County of Hennepin, 495 N.W.2d 416, 421 (Minn. 1993). The scope of the private right of action under section 116B.03, however, is limited: "[N]o action shall be allowable under this section for conduct taken by a person pursuant to any environmental quality standard, limitation, rule, order, license, stipulation agreement or permit issued by the Pollution Control Agency, Department of Natural Resources, Department of Health or Department of Agriculture." Minn. Stat. § 116B.03, subd. 1.

         A separate provision of MERA, section 116B.10 (captioned "Civil Action Against State"), authorizes a suit in district court challenging the adequacy of "an environmental quality standard, limitation, rule, order, license, stipulation agreement, or permit promulgated or issued by the state or any agency or instrumentality thereof." Minn. Stat. § 116B.10, subd. 1 (emphasis added). Under section 116B.10, a plaintiff must produce "material evidence" showing that the challenged standard or permit is "inadequate to protect" the state's natural resources. Id., subd. 2.

         Respondents' action is plainly one against a state agency, and it challenges the adequacy of the groundwater-extraction permits to protect the lake. The lake, in ...


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