Envtl. Law & Policy Ctr. v. N. Dakota Pub. Serv. Comm'n

Decision Date15 September 2020
Docket NumberNo. 20190220,20190220
Citation948 N.W.2d 838
Parties ENVIRONMENTAL LAW & POLICY CENTER and Dakota Resource Council, Appellants v. NORTH DAKOTA PUBLIC SERVICE COMMISSION and Meridian Energy Group, Inc., Appellees
CourtNorth Dakota Supreme Court

Scott Strand (argued), Minneapolis, Minnesota, Derrick L. Braaten (appeared) and JJ W. England (on brief), Bismarck, North Dakota, and Rachel Granneman (on brief), Chicago, Illinois, for appellants.

Jennifer L. Verleger (argued), Assistant Attorney General, and John M. Schuh (appeared), Special Assistant Attorney General, Bismarck, North Dakota, for appellee North Dakota Public Service Commission.

Lawrence Bender, Bismarck, North Dakota, for appellee Meridian Energy Group, Inc.

Tufte, Justice.

[¶1] Environmental Law and Policy Center and Dakota Resource Council ("Appellants") appealed from a district court judgment affirming the Public Service Commission's order dismissing Appellants’ formal complaint on the basis of a lack of subject matter jurisdiction. We conclude the Commission did not err when it dismissed Appellants’ complaint. We affirm the district court's judgment and the Commission's order of dismissal.

I

[¶2] This appeal arises out of Meridian Energy Group, Inc.’s construction of a new oil refinery ("Davis Refinery") in Billings County. In June 2018, Appellants filed a formal complaint with the Commission, alleging Meridian was required to obtain a certificate of site compatibility from the Commission under N.D.C.C. ch. 49-22.1, governing energy conversion and transmission facilities, alleging Meridian's planned facility would have a capacity of refining 50,000 or more barrels per day (bpd). The Appellants filed their complaint after the North Dakota Department of Health, now Department of Environmental Quality, granted Meridian a construction permit for a "55,000 bpd" oil refinery.

[¶3] The Appellants’ complaint contained exhibits including Meridian's permit to construct the refinery, Meridian's application to the county for its conditional use permit with references to using the land for a 55,000 bpd refinery, and other exhibits purporting to contain Meridian's representations to the public and its investors that it was constructing a 55,000 bpd oil refinery. The complaint sought a declaration that Meridian's refinery was subject to N.D.C.C. ch. 49-22.1 and to the statutory siting process. The Commission determined the complaint stated a "prima facie case" under its pleading rule, N.D. Admin. Code § 69-02-02-02, and the Commission formally served the complaint on Meridian.

[¶4] In August 2018, Meridian made a motion to the Commission seeking to dismiss the complaint for lack of subject matter jurisdiction, contending that dismissal was appropriate under N.D.R.Civ.P. 12(b)(1) and that the case should be disposed of by informal disposition under N.D.C.C. § 28-32-22. Meridian asserted it was constructing a refinery with a capacity of 49,500 bpd, falling outside the Commission's statutory jurisdictional threshold of 50,000 bpd. Meridian argued, as a result, the Commission did not have jurisdiction over this matter and the complaint must be dismissed.

[¶5] In support of its motion, Meridian included the affidavit of William Prentice, Meridian's chairman and chief executive officer. His affidavit states, in relevant part: "Meridian is finalizing engineering and design plans for a facility that is designed for and capable of refining no more than 49,500 barrels per day (bpd), which is to be constructed in a single phase[,]" and "Meridian has no current plans for any addition to or expansion of the Davis Refinery beyond the capacity of 49,500 bpd."

[¶6] The Commission submitted Meridian's motion to an administrative law judge ("ALJ"). In September 2018, the ALJ issued a recommended decision to grant the motion to dismiss. Appellants moved to reopen and supplement the record and to permit jurisdictional discovery. The ALJ issued a recommended decision to deny the Appellants’ motion. In its October 10, 2018 order, the Commission adopted the ALJ's recommended decision granting Meridian's motion to dismiss the complaint. The Commission stated:

The Commission clarifies that consistent with the policy of ensuring "minimal adverse effects on the environment and the welfare of the citizens," the Commission may, of its own volition, investigate and inquire into the actions of persons in pursuance of compliance. N.D.C.C. § 49-22.1-20(1), (5). The matter upon which the Complaint is filed has been the subject of Commission monitoring. If Meridian operates a facility above the statutory threshold without a siting permit, or if Meridian files for a site certificate and does not have an appropriate showing of a previous design limitation, the project and company may be subject to criminal or civil action.

The Commission also corrected one of the ALJ's findings to state: "When plans to increase the facility to 50,000 bpd or beyond are implemented, that plan subjects the entire facility to the review and approval process."

[¶7] Appellants appealed to the district court, which affirmed the Commission's order.

II

[¶8] The Administrative Agencies Practice Act ("AAPA"), N.D.C.C. ch. 28-32, governs an appeal from a Commission decision. Voigt v. N.D. Pub. Serv. Comm'n , 2017 ND 76, ¶ 8, 892 N.W.2d 149. This Court, under N.D.C.C. § 28-32-49, reviews the Commission's order in the same manner as the district court under N.D.C.C. § 28-32-46. Voigt , at ¶ 8. "Although our review is limited to the record before the administrative agency, the district court's analysis is entitled to respect if its reasoning is sound." Bridgeford v. Sorel , 2019 ND 153, ¶ 5, 930 N.W.2d 136 (quotations omitted). We must affirm the Commission's order unless:

1. The order is not in accordance with the law.
2. The order is in violation of the constitutional rights of the appellant.
3. The provisions of this chapter have not been complied with in the proceedings before the agency.
4. The rules or procedure of the agency have not afforded the appellant a fair hearing.
5. The findings of fact made by the agency are not supported by a preponderance of the evidence.
6. The conclusions of law and order of the agency are not supported by its findings of fact.
7. The findings of fact made by the agency do not sufficiently address the evidence presented to the agency by the appellant.
8. The conclusions of law and order of the agency do not sufficiently explain the agency's rationale for not adopting any contrary recommendations by a hearing officer or an administrative law judge.

N.D.C.C. § 28-32-46.

[¶9] In reviewing its findings of fact, we do not substitute our judgment for that of the Commission, nor do we make independent findings. Voigt , 2017 ND 76, ¶ 9, 892 N.W.2d 149. We decide "only whether a reasoning mind reasonably could have determined that the factual conclusions reached were proved by the weight of the evidence from the entire record." Capital Elec. Coop. v. N.D. Public Serv. Comm'n , 2016 ND 73, ¶ 6, 877 N.W.2d 304. The Commission's decision on questions of law is fully reviewable. Id. Statutory interpretation is a question of law subject to full review on appeal. Harter v. N.D. Dep't of Transp. , 2005 ND 70, ¶ 7, 694 N.W.2d 677.

III

[¶10] Appellants argue the Commission's decision violated the fair hearing and other requirements of the AAPA when the Commission summarily dismissed the Appellants’ complaint, which it had found stated a prima facie case, without allowing any opportunity for discovery; without conducting an evidentiary hearing; and without considering evidence other than Meridian's proffered affidavit that contradicted earlier statements.

A

[¶11] The Commission's "authority to regulate" is limited to that authority provided to it by the legislature. In re Application of Neb. Pub. Power Dist. , 330 N.W.2d 143, 149 (N.D. 1983) (citation omitted). "The term ‘jurisdiction’ may be used to designate the authority of an administrative body to act and relates to the competence of that body to determine controversies of the general class to which the case presented for its consideration belongs."

2 Am. Jur. 2d Administrative Law § 272 (February 2020 Update) (footnotes omitted). In the administrative context, therefore, the term "jurisdiction" has three components:

(1) personal jurisdiction, referring to the agency's authority over the parties and intervenors involved in the proceedings; (2) subject matter jurisdiction, referring to the agency's power to hear and determine the causes of a general class of cases to which a particular case belongs; and (3) the agency's scope of authority under statute.

Id. (emphasis added ); see also Bus. & Prof'l People for the Pub. Interest v. Ill. Commerce Comm'n , 136 Ill.2d 192, 144 Ill.Dec. 334, 555 N.E.2d 693, 716 (1989) (same); Kraft v. Moore , 517 N.W.2d 643, 645 (N.D. 1994) ("Subject matter jurisdiction refers to a tribunal's power to hear and determine the general subject involved in the action; personal jurisdiction refers to the power of the tribunal over a party."). Cf. City of Arlington, Tex. v. F.C.C. , 569 U.S. 290, 297-98, 133 S.Ct. 1863, 185 L.Ed.2d 941 (2013) ("[W]hether framed as an incorrect application of agency authority or an assertion of authority not conferred," the question is always whether an agency has gone beyond what it legislatively has been permitted to do, and "there is no principled basis for carving out some arbitrary subset of such claims as ‘jurisdictional.’ ").

[¶12] Chapter 49-02, N.D.C.C., generally provides for the Commission's powers. The Commission's general jurisdiction over public utilities is set forth in N.D.C.C. § 49-02-01, and specific powers of the Commission are delineated in N.D.C.C. § 49-02-02. Relevant to this case is whether Meridian needed to obtain a certificate of site compatibility from the Commission under N.D.C.C. ch. 49-22.1, governing energy conversion and transmission facilities.

[¶13] Section 49-22.1-04, N.D.C.C., states, in...

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