Archer v. Board of State Lands and Forestry
| Decision Date | 11 October 1995 |
| Docket Number | No. 940214,940214 |
| Parties | John D. ARCHER and Ashley Creek Phosphate Company, Plaintiffs and Appellants, v. BOARD OF STATE LANDS AND FORESTRY, State of Utah; Director, Division of State Lands and Forestry, State of Utah, Defendants and Appellees. |
| Court | Utah Supreme Court |
E. Craig Smay, Salt Lake City, for plaintiffs.
Jan Graham, Att'y Gen., Steven F. Alder, Asst. Att'y Gen., Salt Lake City, for defendants.
Peter Watson Billings, Jr., Denise A. Dragoo, Brock R. Belnap, Salt Lake City, for intervenor FS Industries.
Leonard John Lewis, Thomas W. Clawson, Salt Lake City, for intervenor Chevron Pipeline Company.
This is an appeal from a summary judgment by the district court upholding an order of the Board of State Lands and Forestry. We affirm.
On May 28, 1985, the Division of State Lands and Forestry (the Division) granted Chevron Pipeline Company (Chevron) an easement across state school trust lands. The purpose of the easement was to allow Chevron to build a pipeline to carry slurried phosphate from Vernal, Utah, to Rock Springs, Wyoming. In 1985, the Utah Public Service Commission prohibited the transportation of phosphate by truck, requiring instead that phosphate be transported by slurry pipeline.
Chevron knew that the pipeline was to be operated as a common carrier subject to regulation by the Interstate Commerce Commission (ICC). However, in 1986, Chevron commenced exclusive operation of the pipeline despite plaintiff Ashley Creek Phosphate's (ACP) objection that Chevron had not published a tariff, as required by the Interstate Commerce Act. In 1989, Chevron complied with an ICC order requiring it to publish rates for shipment on the pipeline. Later that same year, ACP, the lessee of Utah school trust lands, and the State brought actions against Chevron, challenging the reasonableness of the pipeline rates and alleging antitrust violations. The antitrust suit has been suspended while the ICC determines whether the Chevron tariff is reasonable.
In 1992, Chevron sought approval from the Division to assign its easement to FS Industries. ACP asked the Division not to approve the assignment and further asked the Division to terminate Chevron's easement across state lands on the basis of Chevron's failure to publish a tariff. Upon receiving the request to terminate the easement, the Division met with the parties and decided to approve the assignment rather than terminate the easement. In response, ACP filed a petition for consistency review with the Board of State Lands and Forestry (the Board). After an informal hearing, the Board affirmed the Division's decision. ACP then filed an action in Utah's Third District Court for a trial de novo. FS Industries and Chevron filed motions to intervene, which were granted. The district court upheld the Board's order and entered summary judgment against ACP. ACP now appeals, raising the following issues: (1) whether ACP lacks standing to challenge the district court's decision approving the assignment of the easement to FS Industries; (2) whether the district court correctly concluded that termination of the easement was not mandatory but was within the discretion of the Division's Director; and (3) whether the district court considered the best interests of the school trust lands in its decision not to terminate the easement and to approve the assignment to FS Industries.
Summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Utah R.Civ.P. 56(c); Higgins v. Salt Lake County, 855 P.2d 231, 235 (Utah 1993). On appeal from summary judgment, we accord the trial court's legal conclusions no deference but review them for correctness. Malone v. Parker, 826 P.2d 132, 133 (Utah 1992); Clover v. Snowbird Ski Resort, 808 P.2d 1037, 1040 (Utah 1991). When reviewing the facts supporting the order, we view them in a light most favorable to the party opposing the motion. Baldwin v. Burton, 850 P.2d 1188, 1192 (Utah 1993). Because this case is a review of an administrative adjudicative proceeding, we must ensure that the district court complied with the requirements of the Utah Administrative Procedures Act (UAPA). See Utah Code Ann. § 78-3-4(5).
Under UAPA, "[t]he district courts shall have jurisdiction to review by trial de novo all final agency actions resulting from informal adjudicative proceedings." Utah Code Ann. § 63-46b-15(1)(a). This section requires that the district court's review of informal adjudicative proceedings be performed by holding a new trial rather than by reviewing the informal record. Cordova v. Blackstock, 861 P.2d 449, 451 (Utah Ct.App.1993). The State argues that where the governing statute grants discretion to an administrative agency, the standard of review in a trial de novo of an informal administrative proceeding should be limited to determining whether the agency's decision was reasonable in view of the facts presented at the district court. In other words, the State argues that the district court's de novo review of an informal proceeding should defer to the reasonable exercise of statutorily delegated discretion to the Division. We disagree.
Instead, we note with approval and adopt the rule previously used in two decisions from the Utah Court of Appeals establishing the right to a new trial without deference to the determinations of an informal administrative proceeding. Id. at 452
("[D]istrict court does not have discretion to review an informal adjudicative proceeding by any method other than a trial de novo, as mandated by UAPA."); Brinkerhoff v. Schwendiman, 790 P.2d 587, 590 (Utah Ct.App.1990) (). This rule guarantees the district court the opportunity to correct any deficiencies that may arise because of the informal nature of administrative proceedings and provides an adequate record for future review. Cordova, 861 P.2d at 452; see also Southern Utah Wilderness Alliance v. Board of State Lands & Forestry, 830 P.2d 233, 236 (Utah 1992) (). Thus, pursuant to section 63-46b-15(1)(a), review by trial de novo means a new trial with no deference to the administrative proceedings below. Accordingly, we examine, without deference, the district court's legal conclusions and determine whether, on de novo review, the district court properly granted summary judgment. See East Jordan Irrigation Co. v. Morgan, 860 P.2d 310, 312 (Utah 1993); Ferree v. State, 784 P.2d 149, 151 (Utah 1989).
FS Industries argues that ACP lacks standing to challenge the Director's decision. When determining questions of standing, we rely on the factors articulated in Jenkins v. Swan, 675 P.2d 1145, 1150-51 (Utah 1983). Jenkins requires that a party seeking standing demonstrate only one of the following: (1) a personal stake in the controversy and some causal relationship between the injury, the governmental actions, and the relief requested; (2) that no other party has a greater interest in the outcome of the case and the issues are unlikely to be raised at all unless the present party has standing to raise them; or (3) that the issues are of such great public importance that they ought to be decided in furtherance of the public interest. Id.
In this case, ACP has standing under the first Jenkins criterion. As the lessee of state school trust lands, ACP owns the right to use the easement through its access to Chevron's common carrier pipeline. Effective denial of this right would cause ACP to suffer direct injury because the pipeline represents the only legal method available to ACP for transporting phosphate to commercial markets. Therefore, ACP has standing.
ACP argues that termination of the easement was mandatory because Chevron did not immediately publish a tariff upon commencing operation of the pipeline in 1986. However, even assuming that Chevron's failure to publish a tariff in 1986 is a violation of the law, rule 640-40-1700 of the Utah Administrative Code vests discretion in the Director of the Division to determine whether the violation justifies termination. This rule states:
Any easement granted by the Division across state land may be terminated in whole or in part for failure to comply with any term or conditions of the conveyance document or applicable laws or rules. Upon determination by the Director that an easement is subject to termination pursuant to the terms of the grant or applicable laws or rules, the Director shall issue an appropriate instrument terminating the easement.
Utah Admin.Code R640-40-1700 (emphasis added). Statutes and administrative rules should generally be construed according to their plain language. See Brinkerhoff v. Forsyth, 779 P.2d 685, 686 (Utah 1989). Thus, in reviewing a statute or an administrative rule, we read each term literally unless such a reading is unreasonably inoperable or confused. See Morton Int'l Inc. v. Auditing Div., 814 P.2d 581, 590 (Utah 1991).
The language of this rule is not ambiguous. The rule clearly states that the Director may, not shall, terminate the easement for violations of the law. ACP ignores the first sentence of the rule, focusing instead on the second half of the second sentence, which states that "the Director shall issue an appropriate instrument terminating the easement." ACP argues that this part of the second sentence absolutely requires the Director to terminate the easement for any violation of the law. However, the rule predicates this result on the Director's "determination" that the easement is terminable. If the Director had no discretion, the need for a "determination" would be surplusage. Thus, the plain language of the rule grants...
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