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In re Applications of Enbridge Energy, LP

Court of Appeals of Minnesota

June 3, 2019

In re Applications of Enbridge Energy, Limited Partnership, for a Certificate of Need and a Routing Permit for the Proposed Line 3 Replacement Project in Minnesota from the North Dakota Border to the Wisconsin Border.

          Minnesota Public Utilities Commission File Nos. PL-9/CN-14-916; PL-9/PPL-15-137

          Paul C. Blackburn, Honor the Earth, Callaway, Minnesota; and Frank Bibeau, Honor the Earth, Deer River, Minnesota (for relator Honor the Earth)

          David J. Zoll, Charles N. Nauen, Rachel A. Kitze Collins, Arielle S. Wagner, Lockridge Grindal Nauen, P.L.L.P., Minneapolis, Minnesota (for relator Mille Lacs Band of Ojibwe)

          Joseph Plumer, White Earth, Minnesota (for relators White Earth Band of Ojibwe and Red Lake Band of Chippewa Indians)

          Scott R. Strand, Environmental Law & Policy Center, Minneapolis, Minnesota (for relator Friends of the Headwaters)

          Thomas H. Boyd, Eric F. Swanson, Betsy Schmiesing, Kyle R. Kroll, Winthrop & Weinstine, P.A., Minneapolis, Minnesota (for respondent Enbridge Energy, Limited Partnership)

          Keith Ellison, Attorney General, Lisa A. Crum, Assistant Attorney General, St. Paul, Minnesota (for respondent Minnesota Public Utilities Commission)

          Considered and decided by Florey, Presiding Judge; Cleary, Chief Judge; and Connolly, Judge.


         I. In determining the project alternatives to be considered in an environmental-impact statement (EIS) under the Minnesota Environmental Policy Act (MEPA), a responsible governmental unit (RGU) does not err by taking the project proposer's objective into consideration when defining the purpose of and need for the project, or by excluding from consideration alternatives that would not meet that objective.

         II. An RGU acts in a manner that is arbitrary, capricious, and unsupported by substantial evidence when it determines adequate a final EIS that fails to address potentially significant issues raised during scoping and in public comments on the draft EIS.

         III. MEPA does not require completion of a traditional cultural properties (TCP) survey; an EIS may be determined adequate before a federal TCP survey is complete if the discussion of potential impacts to historic and cultural resources is otherwise sufficient.


          FLOREY, JUDGE

         In these consolidated certiorari appeals, relators environmental organizations and tribal bands, challenge a decision by respondent Minnesota Public Utilities Commission (commission) determining adequate a final EIS (FEIS) for the proposed Line 3 pipeline project of respondent Enbridge Energy, Limited Partnership (Enbridge). Although we reject most of relators' assertions of error, we agree that the FEIS is inadequate because it does not address the potential impact of an oil spill into the Lake Superior watershed. Accordingly, we reverse the commission's adequacy determination and remand for further proceedings consistent with this decision.


         In April 2015, Enbridge filed applications for a certificate of need (CN) and routing permit (RP) to allow the installation of 337 miles of 36-inch diameter pipe, and associated facilities, from the North Dakota-Minnesota border to the Minnesota-Wisconsin border. The proposed pipeline would replace the existing Line 3, which is part of Enbridge's Mainline System.

         Existing Line 3 crosses into northwestern Minnesota from North Dakota, connects to a terminal at Clearbrook (the Clearbrook terminal), and continues east across northern Minnesota, through Carlton, and into Wisconsin, where it connects with a terminal in Superior, Wisconsin (the Superior terminal). Existing Line 3 crosses through the Leech Lake and Fond du Lac Reservations pursuant to leases that will expire in 2029. In its CN and RP applications, Enbridge proposed a route for the replacement Line 3 that would follow the existing Line 3 corridor from North Dakota to Clearbrook and Carlton to Superior, but would take a more southerly route between Clearbrook and Carlton, which would avoid crossing the reservations. Figure 2.1-1 from the EIS, reproduced in color below, illustrates the location of the existing mainline corridor (which houses Line 3 and other pipelines) and Enbridge's proposed new route (Applicant's Preferred Route, or APR).[1]

         (Image Omitted)

         After initially setting the CN and RP applications for separate contested-case proceedings and initiating environmental review in the RP docket, the commission combined the CN and RP dockets and ordered that a joint EIS be prepared. The commission, as the RGU, authorized the Minnesota Department of Commerce's Energy Environmental Review and Analysis division (DOC-EERA) to prepare the EIS, and the Minnesota Department of Natural Resources (DNR) and Minnesota Pollution Control Agency (MPCA) were brought in as assisting agencies.

         The project proceeded through scoping, a process that determines the range of issues to be addressed in an EIS. A final scoping decision document was issued on December 5, 2016, and a draft EIS (DEIS) was released on May 15, 2017. Following a public-comment period, during which DOC-EERA received approximately 2, 860 public comments, an FEIS was released on August 17, 2017.

         After receiving the FEIS, the commission issued an order extending the statutory deadline for determining the adequacy of the FEIS and referring the matter to the Office of Administrative Hearings (OAH) for development of the record and a recommendation on the adequacy of the FEIS. On November 1, 2017, an administrative-law judge (ALJ) issued proposed findings and conclusions and a recommendation that the commission determine the FEIS adequate.

         On December 14, 2017, the commission issued an order determining the FEIS inadequate and identifying four deficiencies to be remedied before the FEIS could be determined adequate. On February 12, 2018, DOC-EERA issued a revised FEIS, [2] which the commission met to discuss on March 15, 2018. On May 1, 2018, the commission issued an order adopting the ALJ report as revised and determining the FEIS adequate. The commission issued an order denying reconsideration on July 3, 2018.

         Relators Friends of the Headwaters (FOH), Honor the Earth (HTE), and Mille Lacs Band of Ojibwe, Red Lake Band of Chippewa Indians, and White Earth Band of Ojibwe (the Bands), filed three certiorari appeals, which this court consolidated for consideration.[3]


         Is the commission's decision determining the FEIS adequate based on errors of law, unsupported by substantial evidence, or arbitrary or capricious?


         Minnesota Environmental Review

         Environmental review in Minnesota is governed by the Minnesota Environmental Policy Act (MEPA), Minn. Stat. §§ 116D.01-.11 (2018). MEPA is patterned on the National Environmental Policy Act (NEPA), 42 U.S.C. §§ 4321-4370m-12 (2012 & Supp. 2017), and Minnesota courts have in appropriate circumstances relied on federal caselaw applying NEPA. See No Power Line, Inc. v. Minn. Envtl. Quality Council, 262 N.W.2d 312, 323 n.28 (Minn. 1977) (noting that court had used federal caselaw to interpret MEPA); In re N.D. Pipeline Co. LLC, 869 N.W.2d 693, 698 (Minn.App. 2015) (noting that court may look to federal courts' application of NEPA for guidance), review denied (Minn. Dec. 15, 2015); see also Citizens Advocating Responsible Dev. v. Kandiyohi Cty. Bd. of Comm'rs, 713 N.W.2d 817, 826 (Minn. 2006) (CARD) (declining to apply language in NEPA regulations that is not present in MEPA regulations). As directed by MEPA, the Minnesota Environmental Quality Board (EQB) has promulgated administrative rules governing environmental review under the act. See Minn. Stat. § 116D.04, subd. 5a (directing promulgation of rules); Minn. R. 4410.0200-.9910 (2017) (EQB rules).

         Preparation of an EIS is mandatory under MEPA in relation to both CN and RP proceedings, and the commission is the RGU tasked with completing the EIS. See Minn. Stat. § 116D.04, subd. 2a(a) (requiring EIS when "there is potential for significant environmental effects resulting from any major governmental action"); Minn. R. 4410.4400, subp. 24 (designating commission as RGU for "routing of a pipeline subject to the full route selection procedures under [Minn. Stat. §] 216G.02"); see also In re N.D. Pipeline Co., 869 N.W.2d at 698 (interpreting MEPA to require commission to complete EIS before issuing CN).

         An EIS is an "analytical rather than an encyclopedic document which describes the proposed action in detail, analyzes its significant environmental impacts, discusses appropriate alternatives to the proposed action and their impacts, and explores methods by which adverse environmental impacts of an action could be mitigated." Minn. Stat. § 116D.04, subd. 2a(a). "The [EIS] shall also analyze those economic, employment, and sociological effects that cannot be avoided should the action be implemented." Id.

         "The purpose of an EIS is to provide information for governmental units, the proposer of the project, and other persons to evaluate proposed projects which have the potential for significant environmental effects, to consider alternatives to the proposed projects, and to explore methods for reducing adverse environmental effects." Minn. R. 4410.2000, subp. 1. "The agency's role in the preparation of an EIS is not to serve as an arbiter between two opposing parties, as a judge is expected to do in the adversary process." No Power Line, 262 N.W.2d at 327. "Instead, it is expected to be a source of independent expertise whose scientific investigation can uncover the data necessary to make an informed environmental decision." Id.

         As an investigative tool, the EIS does not authorize or preclude an action and does not take the place of permit or other proceedings governing a particular project. See, e.g., Iron Rangers for Responsible Ridge Action v. Iron Range Res., 531 N.W.2d 874, 880 (Minn.App. 1995) ("MEPA's purpose is to force agencies to make their own impartial evaluation of environmental considerations before reaching their decisions." (quotation omitted)), review denied (Minn. July 28, 1995). When an EIS is required, however, no permits may be issued until an EIS has been determined adequate. Minn. Stat. § 116D.04, subd. 2b(3). And, "[t]o ensure its use in the decision-making process, the [EIS] shall be prepared as early as practical in the formulation of an action." Minn. Stat. § 116D.04, subd. 2a.

         The EIS process begins with "scoping" to determine the appropriate limits of the EIS in terms of "form, content, and level of detail" and to determine "the alternatives [to the project] that are appropriate for consideration in the [EIS]." Id., subd. 2a(h); see also Minn. R. 4410.2100 (governing scoping process). For projects for which an EIS is mandatory, an environmental-assessment worksheet is used as a scoping document. Minn. R. 4410.2100, subp. 2. And the RGU must prepare a draft scoping-decision document that is released for public comment and hold at least one scoping meeting before a final scoping-decision document is completed. See Minn. R. 4410.2100, subps. 2-3.

         Following scoping, an RGU must complete and make available for public comment a DEIS and hold an informational meeting in the county where the project is proposed. Minn. R. 4410.2600, subp. 2. The RGU must then respond to timely substantive comments received on the DEIS and prepare the FEIS. Id., subp. 10.

         After an FEIS is released and distributed, see Minn. R. 4410.2700, subps. 3-5, the RGU must make a determination on the adequacy of the FEIS, see Minn. R. 4410.2800 (2017). An FEIS shall be deemed adequate if it

A. addresses the potentially significant issues and alternatives raised in scoping so that all significant issues for which information can be reasonably obtained have been analyzed in conformance with [Minn. R.] 4410.2300, items G and H;
B. provides responses to the substantive comments received during the [DEIS] review concerning issues raised in scoping; and
C. was prepared in compliance with the procedures of the act and [Minn. R.] 4410.0200 to 4410.6500.

         Minn. R. 4410.2800, subp. 4. "An [EIS] shall be prepared and its adequacy determined within 280 days after notice of its preparation unless the time is extended by consent of the parties or by the governor for good cause." Minn. Stat. § 116D.04, subd. 2a(j). If the RGU determines the FEIS inadequate, the RGU has 60 days to prepare an adequate EIS. Minn. R. 4410.2800, subp. 5.

         Certiorari Review

         An RGU's decision on the adequacy of an EIS is appealable to this court by petition for a writ of certiorari. Minn. Stat. § 116D.04, subd. 10. This court reviews the decision under the Minnesota Administrative Procedure Act (MAPA), Minn. Stat. §§ 14.001-.69 (2018) to determine whether

the substantial rights of the [relators] may have been prejudiced because the administrative finding, inferences, conclusion, or decisions are:
(a) in violation of constitutional provisions; or
(b) in excess of the statutory authority or jurisdiction of the agency; or
(c) made upon unlawful procedure; or
(d) affected by other error of law; or
(e) unsupported by substantial evidence in view of the entire record as submitted; or
(f) arbitrary or capricious.

         Minn. Stat. § 14.69; see Minn. Stat. § 116D.04, subd. 10 (directing review under MAPA). "Substantial evidence consists of: 1) such relevant evidence as a reasonable mind might accept as adequate to support a conclusion; 2) more than a scintilla of evidence; 3) more than 'some evidence'; 4) more than 'any evidence'; and 5) evidence considered in its entirety." CARD, 713 N.W.2d at 832 (quotation omitted). And

an agency ruling is arbitrary and capricious if the agency (a) relied on factors not intended by the legislature; (b) entirely failed to consider an important aspect of the problem; (c) offered an explanation that runs counter to the evidence; or (d) the decision is so implausible that it could not be explained as a difference in view or the result of the agency's expertise.


         Appellate courts "accord substantial deference to the agency's decision." Id. at 833. The burden is on relators to demonstrate agency error. Id. "[This court's] role when reviewing agency action is to determine whether the agency has taken a 'hard look' at the problems involved, and whether it has 'genuinely engaged in reasoned decision-making.'" Id. at 832 (quoting Reserve Mining Co. v. Herbst, 256 N.W.2d 808, 825 (Minn. 1977)).

         With all of these principles in mind, we turn to relators' arguments for reversing the commission's decision determining the FEIS adequate. We address the numerous arguments in the following sections covering (1) the identification of alternatives in the FEIS; (2) the analysis of environmental impacts in the FEIS; and (3) alleged "danger signals" indicating that the commission failed to take a "hard look" at the adequacy question.

         I. The FEIS sufficiently identifies alternatives to the project, including a "no action" alternative.

         An EIS must address "appropriate alternatives to the proposed action and their impacts." Minn. Stat. § 116D.04, subd. 2a(a). With respect to alternatives, the EQB rules provide:

[T]he EIS shall compare the potentially significant impacts of the proposal with those of other reasonable alternatives to the proposed project. The EIS must address one or more alternatives of each of the following types of alternatives or provide a concise explanation of why no alternative of a particular type is included in the EIS: alternative sites, alternative technologies, modified designs or layouts, modified scale or magnitude, and alternatives incorporating reasonable mitigation measures identified through comments received during the comment periods for EIS scoping or for the draft EIS. An alternative may be excluded from analysis in the EIS if it would not meet the underlying need for or purpose of the project, it would likely not have any significant environmental benefit compared to the project as proposed, or another alternative, of any type, that will be analyzed in the EIS would likely have similar environmental benefits but substantially less adverse economic, employment, or sociological impacts. Alternatives included in the scope of the EIS . . . that were considered but eliminated based on information developed through the EIS analysis shall be discussed briefly and the reasons for their elimination shall be stated. The alternative of no action shall be addressed.

         Minn. R. 4410.2300(G).

In this case, the FEIS examines the potential environmental impacts of Enbridge's proposed project and separately analyzes potential impacts of alternatives for the CN decision (system alternatives) and RP decision (route alternatives and route-segment alternatives). For the CN decision, the FEIS identifies and analyzes the alternatives of no action, continued use of existing Line 3, use of other pipelines, system alternative SA-04, [4] transportation by rail, transportation by truck, existing Line 3 supplemented by rail, and existing Line 3 supplemented by truck. For the RP decision, the FEIS identifies and analyzes impacts for four route alternatives (RA-03AM, RA-06, RA-07, ...

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