#28173-r-DG
2017 S.D. 87

                           IN THE SUPREME COURT
                                   OF THE
                          STATE OF SOUTH DAKOTA

                                  ****

CROELL REDI-MIX, INC.,                            Appellee,
an Iowa Corporation,

      v.

PENNINGTON COUNTY BOARD
OF COMMISSIONERS and MARK
DISANTO, LLOYD LACROIX, DEB
HADCOCK, GEORGE FEREBEE and
RON BUSKERUD, in their capacity
as members of the Pennington
County Board of Commissioners,                    Appellants.


                               ****
                  APPEAL FROM THE CIRCUIT COURT OF
                    THE SEVENTH JUDICIAL CIRCUIT
                  PENNINGTON COUNTY, SOUTH DAKOTA
                               ****
                  THE HONORABLE MATTHEW M. BROWN
                               Judge
                               ****


THOMAS E. BRADY of
Lynn, Jackson, Shultz
 & Lebrun, PC
Spearfish, South Dakota                      Attorneys for appellee.

DONALD P. KNUDSEN of
Gunderson, Palmer, Nelson
 & Ashmore, LLP
Rapid City, South Dakota                     Attorneys for appellants.

                                  ****


                                             CONSIDERED ON BRIEFS
                                             ON OCTOBER 2, 2017
                                             OPINION FILED 12/13/17
#28173

GILBERTSON, Chief Justice

[¶1.]         The Pennington County Planning Director approved a construction

permit for Croell Redi-Mix Inc. to continue using and expand an existing mining

operation. The Pennington County Board of Commissioners reversed. The circuit

court reversed the Board’s decision and ordered the Board to reinstate the permit.

The Board appeals, arguing the issuance of the permit violates Pennington County’s

zoning ordinances. We reverse the circuit court’s decision.

                          Facts and Procedural History

[¶2.]         Croell Redi-Mix Inc. owns and operates Perli Quarry, which is a

mining operation that extracts sand, gravel, and construction aggregate in

Pennington County. The process of mining these materials involves drilling,

blasting, excavating, hauling, crushing, and washing aggregate as well as

stockpiling, loading, selling, and hauling finished product to customers. This 40-

acre mining operation is located adjacent to U.S. Highway 16, south of Rapid City.

Perli Quarry has been in operation since the 1970s, but Croell acquired the business

in 2015, intending to expand the operation.

[¶3.]         At the time Perli Quarry began operating in the 1970s, Pennington

County had not yet adopted zoning ordinances. 1 The County first adopted

temporary zoning controls in February 1994. It subsequently adopted a

comprehensive plan and zoning ordinances in January 1996. Those ordinances

have been amended and updated at various times, including in 2001 and 2010.


1.      Pennington County unsuccessfully attempted to pass its first set of zoning
        ordinances in 1970. This Court invalidated those ordinances in Pennington
        County v. Moore, 525 N.W.2d 257, 260 (S.D. 1994).

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Under these ordinances, the area that includes Perli Quarry is designated an “A-1

General Agriculture District,” which is defined in Pennington County Zoning

Ordinance (PCZO) § 205. According to § 205(A), “[t]he intent of the A-1 General

Agriculture District is to provide a district that will support and encourage

agriculture.” Under § 205(B),

             [a]ll agricultural uses shall be allowed in the A-1 General
             Agriculture District, including, but not limited to, the following:
             ....
             13. Temporary quarries.
             ....
             16. Drilling for oil or natural gas or the extraction of sand,
             gravel, or minerals, provided that a Construction Permit is
             obtained in accordance with these Zoning Ordinances.
             17. Mining provided a Construction Permit is obtained in
             accordance with these Zoning Ordinances.

The issuance of a construction permit is governed by § 507(A). Construction

permits are good for one year and may be extended for an additional year.

Alternatively, mining may also be authorized by way of a mining permit under

§ 507(B).

[¶4.]        In November 2015, Croell consulted with staff from the Pennington

County Planning Department regarding Croell’s intent to continue and expand

mining operations at Perli Quarry. The Department advised Croell to obtain a

construction permit pursuant to PCZO § 507(A). Croell submitted an application

for a construction permit to continue and expand its operation. On February 8,

2016, the Planning Department issued a 10-page report recommending that a

construction permit be issued to Croell with 11 conditions. The Pennington County

Planning Commission reviewed the report the same day and approved the

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application. The Pennington County Planning Director issued a memorandum

approving the permit, numbered CP 15-17, subject to the recommended conditions.

[¶5.]        On February 10, 2016, the Pennington County Board of

Commissioners received a letter signed by 37 area residents purporting to appeal

the Planning Director’s approval of CP 15-17. Croell challenged the letter’s authors’

standing to appeal, but the Board of Commissioners held a special meeting to

discuss the issue on March 2, 2016. At the meeting, opponents of CP 15-17

expressed concerns regarding the impact of the quarry’s expansion on dust, traffic,

availability of groundwater, runoff, and depreciation of property values. Planning

Department staff informed the Board of Commissioners that its decision should be

limited to considering only erosion and storm-water-control issues. After several

hours of testimony, the Board of Commissioners continued the hearing until April 5,

2016, when it held a second hearing. At the second hearing, Deputy State’s

Attorney Jay Alderman informed the Board that historically, Pennington County

did not require a mine in operation prior to the 2001 amendment of the PCZO to

obtain a mining permit.

[¶6.]        By a four-to-one vote, the Board of Commissioners reversed the

Planning Director’s approval of CP 15-17. Pursuant to SDCL chapter 7-8, Croell

filed an appeal with the circuit court. On appeal, the court concluded the area

residents who sent the appeal letter did not have standing to appeal the Director’s

decision. The court also disagreed with the Board’s interpretation of PCZO §§ 205

and 507. Finally, the court held that the Board’s decision was arbitrary. On

December 27, 2016, the court issued a one-page memorandum opinion that reversed


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the Board’s decision and remanded the matter back to the Board with instructions

to affirm the Director’s issuance of CP 15-17. The court issued findings of fact and

conclusions of law on February 15, 2017.

[¶7.]         The Board of Commissioners appeals, raising the following issues:

              1.     Whether the Board should have entertained the appeal
                     from the Planning Commission.
              2.     Whether Croell’s proposed use of land in an A-1 General
                     Agriculture District could be authorized under a
                     construction permit.
              3.     Whether the Board’s decision was arbitrary.

                               Analysis and Decision

[¶8.]         1.     Whether the Board should have entertained the
                     appeal from the Planning Commission.

[¶9.]         The parties first disagree on whether the Board of Commissioners

should have entertained the appeal from the Planning Commission in the first

place. Croell contends, as the circuit court concluded, that the individuals who

appealed the Planning Commission’s decision did not have standing to appeal under

PCZO § 507(A)(7)(f), which states: “Any action taken by the Planning Director in

administering or enforcing Section 507(A) may be reviewed by the Pennington

County Board of Commissioners upon the request of any person affected by such

action.” 2 Like the court, Croell reasons that because § 507(A) addresses “Erosion




2.      Croell also contends the Board has not appealed the circuit court’s conclusion
        that “Croell’s Construction Permit was not subject to appeal[.]” But as the
        Board points out, Croell’s claim is based on a single sentence in the court’s
        one-page memorandum opinion that immediately precedes the conclusion
        that there was no standing to appeal the Planning Commission’s decision.
        After reviewing the court’s findings of fact and conclusions of law, it appears
        the court’s statement that there was no standing is the premise for
                                                              (continued . . . )
                                            -4-
#28173

and Storm Water Control,” § 507(A)(7)(f) permits an appeal only by those affected in

some way by erosion and storm water. The Board responds that § 507(A)(7)(f) does

not govern the right to appeal in this case and that judicial standing requirements

are generally inapplicable.

[¶10.]       The plain language of PCZO § 507(A)(7)(f) indicates that it does apply

in this case. As indicated above, § 507(A)(7)(f) applies to “[a]ny action taken . . . in

administering or enforcing Section 507(A)[.]” (Emphasis added.) In this context,

the word administer means “[t]o give or apply in a formal way[.]” The American

Heritage College Dictionary 17 (3d ed. 1997). Thus, § 507(A)(7)(f) applies whenever

the Planning Director acts under § 507(A). The construction permit at issue in this

case resulted from the Planning Director’s application of § 507(A)—specifically,

§ 507(A)(3). Therefore, this case involves an action taken in administering § 507(A),

and § 507(A)(7)(f) governs the appeal.

[¶11.]       For the same reasons, however, Croell’s contention that there was no

standing to challenge the Planning Director’s decision is incorrect. While PCZO

§ 507(A) is titled “Erosion and Storm Water Control,” the right to appeal under

§ 507(A)(7)(f) extends to anyone “affected” by “any action taken by the Planning

Director in administering . . . Section 507(A)[.]” (Emphasis added.) Noticeably

absent from § 507(A)(7)(f) is any language limiting the right to appeal to matters

involving erosion and storm-water control. Thus, § 507(A)(7)(f) provides a right to

appeal any action taken by the Planning Director under § 507(A). In this case, the

____________________
(. . . continued)
         concluding the issuance of the permit was not subject to appeal. Therefore,
         these issues are one and the same.

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#28173

action challenged is the Director’s issuance of a construction permit—i.e., the

Director’s administering of § 507(A)(3).

[¶12.]         The question, then, is whether the individuals who appealed to the

Board were “affected” by the Planning Director’s decision to issue the construction

permit. The word affect broadly means “[t]o have an influence on or effect a change

in[.]” The American Heritage College Dictionary 22 (3d ed. 1997). The Board heard

testimony and viewed presentations offered by numerous opponents of the permit.

These opponents included neighboring landowners who claim the existing mining

operations already negatively impact the enjoyment of their properties. According

to testimony, the mining operations contaminate local wells, eject large amounts of

dust onto neighboring properties, and decrease traffic safety. 3 Several area

businesses also opposed the permit, anticipating a reduction in local tourism.

Considering the broad definition of the word affect, PCZO § 507(A)(7)(f)’s

requirements were met in this case.

[¶13.]         Even so, Croell contends “the appellants failed to show concrete,

particularized, and actual injury that was specifically and personally directed at

them[.]” To support this argument, Croell cites to Cable v. Union County Board of

County Commissioners, 2009 S.D. 59, 769 N.W.2d 817. In that case, this Court

applied judicial standing requirements to an appeal brought under SDCL chapter 7-

8, which permits an appeal “[f]rom all decisions of the board of county

commissioners . . . by any person aggrieved” by such decision. SDCL 7-8-27. The

Court held that a person is not aggrieved within the meaning of SDCL 7-8-27


3.       The quarry exits directly onto U.S. Highway 16.

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#28173

absent a showing of injury in fact, causation, and the likelihood of effective redress.

Cable, 2009 S.D. 59, ¶ 21, 769 N.W.2d at 825-26.

[¶14.]        Croell’s reliance on Cable is misplaced. The wording of the appeal

provision in Cable is substantially narrower than that at issue here. The right to

appeal under SDCL 7-8-27 is limited to those persons aggrieved by the decision of a

board of commissioners, whereas the right to appeal under PCZO § 507(A)(7)(f)

applies to all who are affected by the Planning Director’s administering of § 507(A).

More importantly, Cable involved an appeal from an administrative body into the

circuit court, which is usually limited to reviewing cases and controversies. See

State v. Kvasnicka, 2013 S.D. 25, ¶ 23, 829 N.W.2d 123, 129. In the present case,

the level of appeal at issue was from one administrative body to another—from the

Planning Director to the Board of Commissioners—and did not involve the judicial

branch. Croell has not cited any authority establishing that the Board’s power to

review the Director’s decision was subject to the same case-or-controversy

limitation.

[¶15.]        The right to appeal the Planning Director’s decision to approve CP 15-

17 is governed by PCZO § 507(A)(7)(f). The individuals who appealed to the Board

of Commissioners were or would be affected by the Director’s decision. Croell has

not established that any more-stringent standing requirements apply. Therefore,

the Board properly entertained the appeal from the Director’s decision, and the

circuit court erred in concluding otherwise.




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#28173

[¶16.]       2.    Whether Croell’s proposed use of land in an A-1
                   General Agriculture District could be authorized
                   under a construction permit.

[¶17.]       Croell argues its intended use of the property is a permitted use under

PCZO § 205(B). Specifically, Croell contends its intended use is permitted under

§ 205(B)(13), which permits “[t]emporary quarries”; § 205(B)(16), which permits

“the extraction of sand, gravel, or minerals”; and § 205(B)(17), which permits

“[m]ining[.]” Croell further contends that even if its intended use is not a permitted

use, it is a legal, nonconforming use. The Board argues that under the plain

language of the PCZO, a construction permit may not be issued for a quarry of the

scope and duration intended by Croell. The Board further contends that the

Planning Commission’s interpretation of the PCZO should not override the plain

language of the applicable ordinances.

[¶18.]       Even if Croell’s intended use would normally be permitted under

PCZO § 205(B), § 507 expressly prohibits the Board from issuing a construction

permit authorizing the mining proposed by Croell. According to § 507(A)(1)(b),

“[t]he requirements of Section 507(A) should be considered minimum requirements,

and where any provision of Section 507(A) imposes restrictions different from those

imposed by any . . . other provision of law, whichever provisions are more

restrictive . . . shall be considered to take precedence.” (Emphasis added.) Under

§ 507(B), “[n]o extraction of any mineral or substance exceeding 100 cubic yards

from the earth shall be conducted without a Mining Permit issued by the

Commission.” This language is unambiguous. Croell does not dispute that it

intends to extract more than 100 cubic yards from the earth. Neither does Croell

claim its mining operation is related to agriculture. Croell’s mining operation is
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#28173

simply a commercial enterprise that sells the product it extracts. Therefore, under

the clear language of § 507(B), Croell’s intended use could not be authorized under a

construction permit; a mining permit was required.

[¶19.]       Even so, Croell contends the “historical interpretation, application, and

implementation of the [PCZO] by staff and legal counsel is relevant to this appeal.”

According to Croell,

             the County, including its administrative officials, have
             historically and consistently interpreted the [PCZO] to allow
             mining of sand, gravel, and construction aggregate in an A-1
             General Agriculture zoning district and to mean that operations
             existing prior to the addition of Section 507(B) are not required
             to obtain a mining permit.

Croell bases this argument on Justice Zinter’s concurring opinion in Atkinson v.

City of Pierre, 2005 S.D. 114, 706 N.W.2d 791. In particular, Croell quotes the

following:

             Appellate courts are also required to give . . . deference to the
             City’s interpretation [of a municipal ordinance]. For over thirty
             years, the City has interpreted and applied the 1970 and 1999
             ordinances to allow this building, its various additions, and its
             use. “Courts will consider and give weight to the construction of
             the ordinance by those administering the ordinance.”

Id. ¶ 38, 706 N.W.2d at 801-02 (Zinter, J., concurring specially) (footnote omitted)

(quoting Wegner Auto Co. v. Ballard, 353 N.W.2d 57, 58 (S.D. 1984)).

[¶20.]       Croell’s argument omits essential context. The full rule from Wegner

Auto is as follows:

             [I]n passing on the meaning of a zoning ordinance, the courts
             will consider and give weight to the construction of the
             ordinance by those administering the ordinance. However, “an
             administrative construction is not binding on the court, which is
             free to overrule the construction if it is deemed to be wrong or
             erroneous.”

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#28173

Wegner Auto, 353 N.W.2d at 58 (citation omitted) (quoting 82 Am. Jur. 2d Zoning &

Planning § 66 (1976)). 4 The United States Supreme Court has outlined a similar

rule for determining when to afford deference to an administrative agency’s

interpretation of a statute.

               When a court reviews an agency’s construction of the statute
               which it administers, it is confronted with two questions. First,
               always, is the question whether Congress has directly spoken to
               the precise question at issue. If the intent of Congress is clear,
               that is the end of the matter; for the court, as well as the agency,
               must give effect to the unambiguously expressed intent of
               Congress. If, however, the court determines Congress has not
               directly addressed the precise question at issue, the court does
               not simply impose its own construction on the statute, as would
               be necessary in the absence of an administrative interpretation.
               Rather, if the statute is silent or ambiguous with respect to the
               specific issue, the question for the court is whether the agency’s
               answer is based on a permissible construction of the statute.

Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842-43, 104 S. Ct.

2778, 2781-82, 81 L. Ed. 2d 694 (1984) (footnotes omitted). In light of this Court’s

opinion in Wegner Auto, the same analysis applies here. When the meaning of an

ordinance is unambiguous, the contrary interpretation of those administering the

ordinance is not entitled to deference. See id.; Wegner Auto, 353 N.W.2d at 58.

[¶21.]         As explained above, the meaning of PCZO § 507 is unambiguous.

Under § 507(B), a construction permit may not authorize the mining or extraction

proposed by Croell: “No extraction of any mineral or substance exceeding 100 cubic



4.       The ordinances at issue in Atkinson had not been placed into the record, and
         so this Court was “asked to interpret ordinances that [it could not] read.”
         Atkinson, 2005 S.D. 114, ¶ 38, 706 N.W.2d at 802 (Zinter, J., concurring
         specially). Thus, deference for the city’s interpretation of the ordinances was
         appropriate because there was no basis for concluding that interpretation
         was erroneous.

                                           -10-
#28173

yards from the earth shall be conducted without a Mining Permit issued by the

Commission.” (Emphasis added.) Because the plain language of § 507 is

unambiguous, the County’s contrary interpretation of that ordinance is not entitled

to deference.

[¶22.]          Relatedly, Croell contends the mining-permit requirement of the PCZO

does not apply to the Perli Quarry because it “has been in operation since the 1970s,

long before County adopted its first comprehensive plan and zoning ordinances in

1994, and long before County enacted Section 507(B) in 2001.” To support this

claim, Croell points to the circuit court’s 13th finding of fact: “County explicitly

acknowledges that as a result of [Pennington County v. Moore, 525 N.W.2d 257 (S.D.

1994)], ‘all existing uses, which did not comply with the [PCZO] as adopted in 1994,

are considered legal nonconforming uses.’” The Board has not challenged this

finding as clearly erroneous. Regardless, this finding is not relevant. Croell’s

construction-permit application did not simply seek to continue a nonconforming

use—Croell sought to expand its operation, converting additional acres of land

zoned as an A-1 General Agriculture District to use as a quarry that had not

previously been used as a quarry.

[¶23.]          Section 507(B) of the PCZO unambiguously prohibits extracting more

than 100 cubic yards of material from the earth without a mining permit. Section

507(A) does not override this prohibition. Because § 507(B) is unambiguous, the

Planning Department’s interpretation of § 507 is not relevant. Therefore, the Board

properly declined to issue a construction permit for the purpose of doing that which




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is prohibited under § 507(B), and the circuit court erred by reversing the Board’s

decision.

[¶24.]         3.     Whether the Board’s decision was arbitrary.

[¶25.]         Finally, the circuit court held that the Board of Commissioners’

decision to reverse the Planning Director’s decision was arbitrary and not supported

by substantial evidence. In the court’s view, the assertions of the area residents

were unfounded. Because the court viewed the Board’s decision as being premised

on those assertions, the court concluded the Board’s decision was arbitrary.

According to the court, the Board’s review “was restricted to storm water runoff and

erosion controls.” Thus, the court concluded that “[t]he question before the Board

was not if Croell was to receive a Construction Permit, but rather what conditions

and requirements were necessary to meet the purpose of the four objectives of

Section 507(A).”

[¶26.]         There is no reason to apply arbitrariness or substantial-evidence

review to the Board’s decision. The circuit court’s conclusion that the Board’s

decision was arbitrary is premised on the court’s erroneous interpretation of the

controlling ordinances. The interpretation of an ordinance is a question of law

reviewed de novo, see Hoffman v. Van Wyk, 2017 S.D. 48, ¶ 8, 900 N.W.2d 596, 598-

99, and the appeal before the court was “heard and determined de novo[,]” SDCL 7-

8-30. 5 As explained above, the court’s de novo review of PCZO § 507 erroneously



5.       SDCL 7-8-27 permits an appeal to the circuit court “[f]rom all decisions of the
         board of county commissioners upon matters properly before it . . . by any
         person aggrieved[.]” Under SDCL 7-8-30, “[a]ll appeals thus taken to the
         circuit court . . . shall be heard and determined de novo.” As this Court
                                                               (continued . . . )
                                              -12-
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excludes § 507(B) from consideration despite that section’s explicit application to

the central issue in this case. Therefore, even if there were a reason to review the

Board’s decision under the arbitrariness standard, the premise of the court’s

arbitrariness review is incorrect.

                                      Conclusion

[¶27.]         The Board of Commissioners properly entertained the appeal of the

Planning Director’s decision to approve CP 15-17. Under § 507(B) of the

Pennington County Zoning Ordinance, Croell’s intended use of land zoned as A-1

General Agriculture District could not be authorized in the absence of a mining

permit. The circuit court’s conclusion that the Board acted arbitrarily in denying


____________________
(. . . continued)
         recently explained, however, even “when presented with an appeal of
         administrative action under a statute prescribing de novo review, . . .
         [d]e novo review is only appropriate if the administrative action is quasi-
         judicial.” State, Dep’t of Game, Fish & Parks v. Troy Twp., 2017 S.D. 50,
         ¶ 24, 900 N.W.2d 840, 850.
         This Court has previously held that “a local zoning board’s decision to grant
         or deny a conditional use permit is quasi-judicial and subject to due process
         constraints.” Armstrong v. Turner Cty. Bd. of Adj’t, 2009 S.D. 81, ¶ 19,
         772 N.W.2d 643, 650-51. A number of other courts have held the same. See,
         e.g., Arnel Dev. Co. v. City of Costa Mesa, 620 P.2d 565, 569 (Cal. 1980) (en
         banc) (“[Z]oning amendments are legislative, but administrative decisions,
         such as variances and use permits, are adjudicative.”); Mustang Run Wind
         Project, LLC v. Osage Cty. Bd. of Adj’t, 387 P.3d 333, 345 (Okla. 2016) (“A
         board of adjustment deciding an application for a variance or a conditional
         use does not exercise a legislative power in changing a zoning ordinance, but
         exercises a quasi-judicial power based upon the facts presented to the
         board.”); Chioffi v. Winooski Zoning Bd., 556 A.2d 103, 106 (Vt. 1989)
         (“[Z]oning boards, in ruling on applications for special exceptions to a zoning
         ordinance, perform quasi-judicial functions.”). “In the instant case, the Board
         was performing a quasi-judicial function in determining the applicability of a
         valid [county] zoning ordinance to the facts of the case, i.e., in applying the
         law to the facts.” Chioffi, 556 A.2d at 106. Therefore, de novo review was
         constitutionally permissible.

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the construction permit is premised on an erroneous interpretation of the

controlling ordinances. Therefore, the circuit court erred by reversing the Board’s

decision.

[¶28.]          We reverse.

[¶29.]          ZINTER and SEVERSON, Justices, WILBUR, Retired Justice, and

SWANSON, Circuit Court Judge, concur.

[¶30.]          SWANSON, Circuit Court Judge, sitting for KERN, Justice,

disqualified.

[¶31.]          JENSEN, Justice, not having been a member of the Court at the time

this action was submitted to the Court, did not participate.




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