City of Lake Elmo v. Metropolitan Council

• Decision Date: 05 August 2004
• Docket Number: No. A03-458.,A03-458.
• Citation: 685 N.W.2d 1
• Parties: The CITY OF LAKE ELMO, Appellant, v. METROPOLITAN COUNCIL, Respondent.
• Court: Minnesota Supreme Court

685 N.W.2d 1

The CITY OF LAKE ELMO, Appellant, v. METROPOLITAN COUNCIL, Respondent.

No. A03-458.

Supreme Court of Minnesota.

August 5, 2004.

Thomas F. Pursell, Forrest D. Nowlin, Lindquist & Vennum, PLLP, Minneapolis, MN, for Relator.

Andrew D. Parker, Charles B. Holtman, Michael D. Christenson, Smith Parker, PLLP, Minneapolis, MN, for Respondent.

Heard, considered, and decided by the court en banc.

OPINION

BLATZ, Chief Justice.

This appeal arises out of the City of Lake Elmo's challenge to the Metropolitan Council's ("Council") final decision, Resolution 2003-10, which requires Lake Elmo to conform its comprehensive land use plan ("comprehensive plan") to the Council's regional system plans ("system plans"). See Metropolitan Council Res.2003-10 (April 7, 2003) (hereinafter "Resolution 2003-10"). The City of Lake Elmo argues that the Council does not have the statutory authority to adopt Resolution 2003-10 and, therefore, the resolution is not binding upon it. The court of appeals affirmed the Council's decision, holding that Lake Elmo's comprehensive plan may have both a substantial impact on and contain a substantial departure from the Council's system plans. City of Lake Elmo v. Metro. Council, 674 N.W.2d 191, 198 (Minn.App.2003). Applying the relevant statutory provisions, the court also concluded that the Council had the statutory authority to compel the City of Lake Elmo to modify its comprehensive plan. Id. We affirm.

In February 2002, the City of Lake Elmo, appellant, submitted its completed comprehensive plan to the Council, respondent, for review as required by Minn.Stat. § 473.858, subd. 1 (2002). Lake Elmo's comprehensive plan proposed to restrict future development and maintain the rural character of the city. On September 11, 2002, the Council adopted Metropolitan Resolution 2002-30 (hereinafter Resolution 2002-30), the initial resolution in this matter. The Council found that Lake Elmo's comprehensive plan "may have a substantial impact on or contain a substantial departure from" the Council's system plans. See Minn.Stat. § 473.175, subd. 1 (2002). The resolution required Lake Elmo to make nine modifications to its comprehensive plan that would allow for continued population growth through the year 2040. Lake Elmo contested the resolution and requested a hearing before an administrative law judge ("ALJ") pursuant to Minn.Stat. § 473.866 (2002).¹

The ALJ addressed two issues: (1) whether Lake Elmo's comprehensive plan may have a substantial impact on or contain a substantial departure from the metropolitan system plans; and (2) whether the Council possessed the statutory authority to require modification of Lake Elmo's comprehensive plan in the manner prescribed by Resolution 2002-30. On March 13, 2003, the ALJ issued its report, findings of fact, and conclusions of law, determining that the Council met its burden of proof and showed by a preponderance of the evidence that Lake Elmo's comprehensive plan may have both a substantial impact on and contain a substantial departure from metropolitan system plans. The ALJ also concluded that the Council possessed the statutory authority to modify Lake Elmo's comprehensive plan. Following the ALJ's decision, the Council passed Resolution 2003-10, the Council's final decision. In that resolution, the Council adopted the ALJ's recommended decision in its entirety and decided that Lake Elmo must modify its comprehensive plan as prescribed in its first resolution, Resolution 2002-30. Lake Elmo then sought review of the Council's final decision from the court of appeals, which upheld the Council's decision in all material respects. City of Lake Elmo v. Metro. Council, 674 N.W.2d 191. We granted Lake Elmo's petition for review on February 25, 2004.

I.

Minnesota Statutes § 473.866 sets forth the scope of review applicable to contested Council decisions. By reference, it incorporates Minn.Stat. § 14.69 (2002), which states that a reviewing court may reverse or modify an agency's decision "if the substantial rights of the petitioners may have been prejudiced" because the administrative decision was, among other things, in excess of statutory authority, unsupported by substantial evidence, or arbitrary or capricious. Important to our review here, section 473.866 goes on to modify this traditional scope of review in two ways:

The scope of review shall be that of section 14.69, provided that: (1) the court shall not give preference to either the administrative law judge's record and report or the findings, conclusions and final decision of the council, and (2) the decision of the court shall be based upon a preponderance of the evidence * * *.

First, the statute gives no preference to the fact-finder and, second, it adopts a preponderance of the evidence standard, rather than an "unsupported by substantial evidence" standard.² The preponderance of the evidence standard requires that to establish a fact, it must be more probable that the fact exists than that the contrary exists. Netzer v. N. Pac. Ry. Co., 238 Minn. 416, 425, 57 N.W.2d 247, 253 (1953). If evidence of a fact or issue is equally balanced, then that fact or issue has not been established by a preponderance of the evidence. Id. The preponderance of the evidence standard is a higher standard than the substantial evidence standard set forth in section 14.69, which is the typical evidentiary standard applied by appellate courts when reviewing agency decisions.³ Therefore, in following the statutory dictates of section 473.866, we will give no "preference" to either the ALJ's report or the Council's decision. Additionally, when determining whether Lake Elmo's comprehensive plan may substantially depart from or substantially impact the Council's system plans, we will review the record applying the preponderance of the evidence standard, and decide whether the evidence supports Resolution 2003-10.

II.

We first address Lake Elmo's arguments challenging the Council's statutory authority to require Lake Elmo to modify its comprehensive plan. Specifically, Lake Elmo argues that the Council lacks the statutory authority to "dictate" Lake Elmo's population density in the manner provided by Resolution 2003-10.

The Council was created by the legislature in 1967 to coordinate interdependent local governments in long-term development and to avoid sprawl within the Twin Cities metropolitan area.⁴ See City of Brooklyn Ctr. v. Metro. Council, 306 Minn. 309, 311, 243 N.W.2d 102, 105 (1975),

rev'd on other grounds, City of Shorewood v. Metro. Waste Control Com'n, 533 N.W.2d 402 (Minn.1995); Minn.Stat. §§ 473.123, 473.851 (2002). To facilitate the long-term planning process, state law requires the Council to periodically prepare and adopt a comprehensive development guide, commonly known as the Regional Blueprint. Minn.Stat. § 473.145 (2002). The Regional Blueprint consists of "a compilation of policy statements, goals, standards, programs, and maps prescribing guides for the orderly and economical development, public and private, of the metropolitan area." Id.⁵ In addition to the Regional Blueprint, the Council must also adopt "long-range comprehensive policy plan[s]" for airport, transportation, wastewater treatment, and park systems — the system plans. Minn Stat. §§ 473.146, subd. 1, 473.851, 473.852, subd. 8. (2002). These system plans must conform to the Council's Regional Blueprint. Minn.Stat. § 473.146. Each system plan must include forecasts of changes in population, households, employment, and land uses for the metropolitan area. Id. Together, the Regional Blueprint and the system plans coordinate and steer the Council's plans for the seven county metropolitan area over the next 40 years.

Subsequent to the creation of the Council, the legislature enacted the Metropolitan Land Planning Act ("MLPA"), which increased coordination between local governments and the Council. See Minn.Stat. §§ 473.851-.871 (2002). The MLPA clearly sets forth the policy and purposes supporting regional planning and the legislative goal that the parts of the metropolitan area work together for the benefit of the whole:

The legislature finds and declares that the local governmental units within the metropolitan area are interdependent, that the growth and patterns of urbanization within the area create the need for additional state, metropolitan and local public services and facilities and increase the danger of air and water pollution and water shortages, and that developments in one local governmental unit may affect the provision of regional capital improvements for sewers, transportation, airports, water supply, and regional recreation open space. Since problems of urbanization and development transcend local governmental boundaries, there is a need for the adoption of coordinated plans, programs and controls by all local governmental units and school districts in order to protect the health, safety and welfare of the residents of the metropolitan area and to ensure coordinated, orderly and economic development.

Minn.Stat. § 473.851.

Under the MLPA, each local government must periodically prepare or amend its own comprehensive plan and submit it for review and comment by the Council as well as by adjacent governmental units. Minn.Stat. §§ 473.858, subds. 1, 2, 473.864 subd. 2. The Council reviews the comprehensive plans of local governmental units "to determine their compatibility with each other and conformity with metropolitan system plans." Minn.Stat. § 473.175, subd. 1 (2002). If the Council finds that a local government's comprehensive plan "may have a substantial impact on or contain a substantial departure from metropolitan system plans," it can, by resolution, require the local government to modify its comprehensive plan. Id.⁶ Lake Elmo takes issue with the reach of the Council's powers, specifically its requirement that it accommodate up to 9,350 sewered households at a minimum of 3 housing units per...