                               STATE OF MINNESOTA
                               IN COURT OF APPEALS
                                     A14-1694

         Minnesota Environmental Science and Economic Review Board, et al.,
                                    Petitioners,

                                            vs.

                          Minnesota Pollution Control Agency,
                                     Respondent.

                                 Filed August 10, 2015
                                 Rules declared valid
                                     Stauber, Judge

                          Minnesota Pollution Control Agency
                               File No. 60-2200-30791

Steven Nyhus, Flaherty & Hood, P.A., St. Paul, Minnesota; and

John C. Hall (pro hac vice), Hall & Associates, Washington, D.C. (for petitioners)

Lori Swanson, Attorney General, Max Kieley, Assistant Attorney General, St. Paul,
Minnesota (for respondent)

Loyd W. Grooms, LWG, P.A., St. Paul, Minnesota (for amicus curiae Minnesota
Chamber of Commerce)

Paige Stradley, Michael Erbele, Merchant & Gould, P.C., Minneapolis, Minnesota (for
amicus curiae Minnesota Center of Environmental Advocacy, et al.)

       Considered and decided by Stauber, Presiding Judge; Schellhas, Judge; and

Bjorkman, Judge.

                                    SYLLABUS

       As part of the rulemaking process, an agency must respond to public comments by

explaining its decision and how the evidence rationally supports its action; a reviewing
court will not substitute its judgment if an agency can demonstrate that it has complied

with rulemaking procedures and made a considered and rational decision.

                                       OPINION

STAUBER, Judge

       In this declaratory-judgment action, petitioners challenge the validity of certain

water-quality standard rules promulgated by respondent Minnesota Pollution Control

Agency (the MPCA), arguing that the agency failed to comply with statutory rulemaking

procedures. We declare the rules valid.

                                          FACTS

       This is a declaratory-judgment action brought under Minn. Stat. § 14.44 (2014).

The petitioners include Minnesota Environmental Science and Economic Review Board

(MESERB), Coalition of Greater Minnesota Cities (CGMC), League of Minnesota Cities

(League), and Minnesota Soybean Growers Association (MSGA). Petitioners

collectively represent municipalities, public-utilities commissions, sanitary sewer

districts, and farmers who potentially are affected by changes in clean-water rules. The

Minnesota Chamber of Commerce filed an amicus brief in support of petitioners’

position. A number of environmental organizations filed an amicus brief in support of

the position of the MPCA.

       The MPCA is the state agency charged with enforcing the federal Clean Water Act

(CWA), 33 U.S.C. §§ 1251-1387 (2012). See Minn. Stat. § 115.03 (2014). The MPCA

has the authority to “establish and alter such reasonable pollution standards for any water

of the state in relation to the public use to which they are or may be put as it shall deem


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necessary.” Minn. Stat. § 115.03, subd. 1(c). As a state agency, the MPCA must follow

the provisions of the Minnesota Administrative Procedure Act (MAPA) when it engages

in rulemaking. See Minn. Stat. §§ 14.001-.69 (2014). MAPA defines a “rule” as “every

agency statement of general applicability and future effect, including amendments,

suspensions, and repeals of rules, adopted to implement or make specific the law

enforced or administered by that agency or to govern its organization or procedure.”

Minn. Stat. § 14.02, subd. 4.

       Under the CWA, each state agency charged with administering the federal law

must review the applicable water quality standards (WQS) at least once every three years.

33 U.S.C. § 1313(c)(1). In 2008, during a triennial review, the MPCA determined that it

was necessary to address eutrophication standards for lakes.1 In 2011, as part of another

triennial review, the MPCA determined that it was necessary to address eutrophication

standards for rivers and streams.

       The MPCA has enacted WQS that are set forth in Minn. R. 7050.0110-0470

(2013). A WQS can be either narrative or numeric. A narrative WQS is a descriptive

standard that describes impairment; for example, waters “shall not be degraded in any

material manner” or show “undesirable slime growths or aquatic plants” or “harmful

pesticide or other residues.” Minn. R. 7050.0150, subp. 3. A numeric WQS is

quantitative rather than descriptive, and it measures “the concentration of a pollutant in

water, associated with a beneficial use and [the] narrative standards based on protecting


1
 Eutrophication refers to the over-enrichment of waters with nutrients, which stimulates
excessive growth of aquatic plants.

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that use.” The numeric WQS are specific to each pollutant. Numeric standards are

favored under the CWA. See 33 U.S.C. § 1313(c)(2)(B). The rulemaking challenged

here involved the development of numeric WQS to limit eutrophication of rivers and

streams. See Minn. R. 7050.150, .0220, .0222 (Supp. 2014).

       The MPCA engaged in formal rulemaking procedures under MAPA in setting the

new numeric WQS, including issuance of a statement of need and reasonableness

(SONAR), publication of the proposed changes, public hearings, review by an

administrative law judge (ALJ), post-hearing comments and rebuttal, supplementation of

the record by petitioners, a comment period on the supplementary materials,

recommendations by the ALJ, adoption of the amended rules by the MPCA Citizens’

Board, additional testimony before the board, final adoption of the amendments by the

board, and publication. Petitioners object to the amended WQS and brought this

declaratory-judgment action to challenge adoption of the standards. At oral argument,

petitioners emphasized that they are challenging the rulemaking process, and not the

scientific basis for the rules.

                                          ISSUES

I.     Do petitioners have standing to bring this declaratory judgment action?

II.    Did the MPCA violate statutory rulemaking procedures by failing to respond
       in a meaningful fashion to public comments?

                                        ANALYSIS

       Minn. Stat. § 14.44 permits an interested party to challenge the validity of an

agency rule “when it appears that the rule, or its threatened application, interferes with or



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impairs, or threatens to interfere with or impair the legal rights or privileges of the

petitioner.” A party may petition this court to declare a rule invalid if it violates the

constitution, is in excess of statutory authority, or adopted without compliance with

rulemaking procedures. Minn. Stat. § 14.45. In a preenforcement action, this court is

limited to considering these three bases for a challenge. Save Mille Lacs Sportsfishing,

Inc. v. Minn. Dep’t of Natural Res., 859 N.W.2d 845, 850 (Minn. App. 2015). This is a

more restrictive standard of review than an appeal from a contested proceeding “in which

the validity of the rule as applied to a particular party is adjudicated.” Coalition of

Greater Minn. Cities v. Minn. Pollution Control Agency, 765 N.W.2d 159, 164 (Minn.

App. 2009), review denied (Minn. Aug. 11, 2009).

                                              I.

       As a preliminary matter, the MPCA argues that petitioners lack standing because

they “fail[ed] to specify any specific rights which are currently affected” and their

“potential harms are too tenuous and rely on too many indeterminate assumptions to

establish standing.” To have standing to bring an action under section 14.44, a petitioner

must show that a rule or its “threatened application” will interfere with or threaten to

interfere with legal rights of the petitioner. Rocco Altobelli, Inc. v. State, Dep’t of

Commerce, 524 N.W.2d 30, 34 (Minn. App. 1994). A petitioner’s interest must be

different in character than the interest of the general citizenry. Id. The MPCA argues

that petitioners are alleging hypothetical scenarios that “may or may not become

actualized,” and that will be harmful only if several contingencies are met.




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       In Coalition of Greater Minn. Cities, the petitioner, which represented many

municipalities, challenged the new eutrophication rules for surface waters promulgated

by the MPCA. 765 N.W.2d at 162-63. This court reasoned that the petitioner had

standing to bring a preenforcement declaratory judgment action because of the effect

“that an overbroad application of the rule would have on its municipalities, namely,

requiring them to expend funds to upgrade, operate, and maintain wastewater facilities to

comply with the rule.” Id. at 164. Petitioners here make similar allegations.

       In support of its position, the MPCA cites Missouri Soybean Ass’n v. U.S. Envtl.

Prot. Agency, 289 F.3d 509, 511 (8th Cir. 2002), in which a federal court dismissed an

action brought under the federal Administrative Procedures Act to challenge the EPA’s

list of pollution-impaired waters. The court concluded that the suit was not ripe for

adjudication because the petitioner’s claims of potential harm were too remote and,

therefore, the court lacked jurisdiction. Missouri Soybean, 289 F. 3d at 513. After

identifying the pollution-impaired waters, the EPA would have to both develop numeric

standards for pollutants and implement them before the petitioners would be harmed. Id.

at 512. Even then, the potential for harm to a member of petitioner’s group was

uncertain. Id.

       But here, petitioners are challenging a rule that created numeric standards, not

merely the inclusion of certain rivers on a list that would eventually lead to numeric

standards. Petitioners are among the class of persons who would be affected by a change

in WQS; the petitioning groups represent municipalities, wastewater-treatment facilities,

sanitary sewer districts, and farming operations, all of which have a more particularized


                                             6
interest than the general citizenry. On these grounds, we conclude that petitioners have

standing to bring an action for a pre-enforcement declaratory judgment.

                                             II.

       Petitioners allege that the MPCA did not comply with statutory rulemaking

procedures because the agency failed to adequately respond to petitioners’ comments

during the rulemaking process. In particular, petitioners argue that the MPCA did not

respond in a meaningful way because the agency relied on outdated studies or failed to

make the studies it relied on part of the public record.

       Agency rulemaking is strictly controlled by statute and the statutory procedures

must be followed in order to create a valid rule. White Bear Lake Care Ctr., Inc. v. Minn.

Dep’t of Pub. Welfare, 319 N.W.2d 7, 8-9 (Minn. 1982). After a public hearing on a

proposed rule, the ALJ overseeing the public hearings must allow for a comment period

and must permit an agency to rebut or respond to comments made by the public. Minn.

Stat. § 14.15, subd. 1; Minn. R. 1400.2230 (2013).

       Although no Minnesota case discusses the extent of an agency’s duty to respond to

comments, petitioners rely on federal caselaw under the federal Administrative

Procedures Act to argue that an agency’s response to comments must be “meaningful.”

See W. Watersheds Project v. Kraayenbrink, 632 F.3d 472, 492-93 (9th Cir. 2010)

(stating that “agency renders the procedural requirement [of comments] meaningless”

when it fails to offer a “meaningful response to serious and considered comments by

experts”); see also Int’l Fabricare Inst. v. U.S. Envtl. Prot. Agency, 972 F.2d 384, 389

(D.C. Cir. 1992) (stating that court will overturn rulemaking as arbitrary and capricious if


                                              7
agency fails to respond to specific challenges involving issues central to its decision). An

agency must respond in a manner that states the main reasons for its decision and

explains why the agency reached the decision it did. Pub. Citizen, Inc. v. Fed. Aviation

Admin., 988 F.2d 186, 197 (D.C. Cir. 1993). We consider this standard to be implicit in

the provisions of MAPA, which permits the public to submit comments to test a proposed

rule. Minn. Stat. § 14.14, subd. 2a. An agency must respond to questioning “in order to

explain the purpose or intended operation of a proposed rule, or a suggested modification,

or for other purpose if material to the evaluation or formulation of the proposed rule.” Id.

       The MPCA responded to all of the written comments received after each public

hearing. Each response includes a summary of the comment and a response with

citations to the documents or sources that provide a basis for the response. The

environmental groups that filed an amicus brief in support of the MPCA’s position

pointed out that they also had made comments during the rulemaking process and had

disagreed with the MPCA’s responses, but they nevertheless concluded that the MPCA

had “considered and responded to [their] and Petitioner’s concerns.”

       In addition to their assertion that the MPCA did not respond to their comments,

petitioners argue that the MPCA failed to respond in a meaningful way about its choice

of WQS on two of the disputed issues: the failure to distinguish between small streams

and large rivers, and the basis for “using DO flux and BOD as nutrient response

variables.”2 Petitioners argue that, in order to respond in a meaningful way, the MPCA


2
“Daily dissolved oxygen variation” or “DO flux,” is “the difference between the
maximum daily dissolved oxygen concentration and the minimum daily dissolved oxygen

                                             8
had a duty to provide a “scientific basis for its position on these issues,” and that instead

it relied on outdated or “secret” peer reviews of its studies.

       We will not second-guess the MPCA’s use of or reliance on its chosen scientific or

technical sources. An agency decision, including rulemaking, enjoys “a presumption of

correctness” and a court “should defer to an agency’s expertise and special knowledge.”

Peterson v. Minn. Dep’t of Labor & Indus., 591 N.W.2d 76, 79 (Minn. App. 1999),

review denied (Minn. May 18, 1999). An agency must “explain on what evidence it is

relying and how that evidence connects rationally with the agency’s choice of action.”

Id. (quotation omitted). Agencies must at times “make judgments and draw conclusions

from suspected, but not completely substantiated, relationships between facts, from

trends among facts, from theoretical projections from imperfect data, from probative

preliminary data not yet certifiable as fact, and the like.” Manufactured Hous. Inst. v.

Pettersen, 347 N.W.2d 238, 244 (Minn. 1984) (quotation omitted).

       In Pettersen, the supreme court concluded that the agency had not demonstrated a

rational relationship between the record evidence and the proposed standard for ambient

formaldehyde in housing. Id. at 246. In that agency record, the hearing examiner noted

that “nothing in the record . . . justif[ies] the selection of [a lesser rather than a higher

standard] other than the fact that the lesser concentration that exists, the less chance there

is that any effects may be felt. Even that assumption is questionable, however, based

upon the wide disparity of study results.” Id. at 245 n.5. In contrast, here, the MPCA

concentration.” “Five-day biochemical oxygen demand” or “BOD5,” is “the amount of
dissolved oxygen needed by aerobic biological organisms to break down organic material
present in a given water sample at a certain temperature over a five-day period.”

                                                9
cited a number of scientific studies that supported the disputed WQS standards, including

an EPA review, DNR studies, and the opinion of an agronomist from the Water

Resources Center at the University of Minnesota. The MPCA provided scientific studies

to rebut the specific challenges to the failure to distinguish small streams from large

rivers and to the use of BOD5 and DO flux.

       This record is extensive and includes scientific evidence to support the rules

adopted by the MPCA. While the petitioners may not agree with the rules adopted, the

MPCA explained the reasons for adoption and provided supporting documentation. This

is a sufficient and meaningful response to the public comments in opposition to the

proposed rules.

                                     DECISION

       The MPCA responded to public comments in a meaningful way by describing its

decision to adopt WQS for rivers and streams and how it reached that decision. By doing

so, the MPCA followed the proper rulemaking procedures under MAPA, and the

amendments to Minn. R. 7050.0150, .0220, and .0222 are valid.

       Rules declared valid.




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