Envtl. Driven Solutions, LLC v. Dunn Cnty., 20160100

• Decision Date: 07 March 2017
• Docket Number: No. 20160100,20160100
• Parties: ENVIRONMENTAL DRIVEN SOLUTIONS, LLC, Plaintiff and Appellee v. DUNN COUNTY, a North Dakota Municipality, Defendant and Appellant v. North Dakota Industrial Commission, Intervenor and Appellee
• Court: North Dakota Supreme Court

890 N.W.2d 841

ENVIRONMENTAL DRIVEN SOLUTIONS, LLC, Plaintiff and Appellee

v.DUNN COUNTY, a North Dakota Municipality, Defendant and Appellant

v.North Dakota Industrial Commission, Intervenor and Appellee

No. 20160100

Supreme Court of North Dakota.

Filed March 7, 2017

Zachary E. Pelham (argued) and Meredith L. Vukelic (on brief), P.O. Box 400, Bismarck, N.D. 58502–0400, for plaintiff and appellee.

Ariston E. Johnson, Assistant State's Attorney, P.O. Box 1260, Watford City, N.D. 58854–1260, for defendant and appellant.

Hope L. Hogan, Office of the Attorney General, 500 North Ninth Street, Bismarck, N.D. 58501–4509, for intervenor and appellee.

Aaron G. Birst, 1661 Capitol Way, Bismarck, N.D. 58502–0877 and Karen S. Prout, Assistant State's Attorney, P.O. Box 2047, Williston, N.D. 58802, for amicus curiae North Dakota Association of Counties.

Stephanie E. Dassinger, 410 East Front Avenue, Bismarck, N.D. 58504, for amicus curiae North Dakota League of Cities.

John W. Morrison Jr., P.O. Box 2798, Bismarck, N.D. 58502–2798, for amicus curiae North Dakota Petroleum Council.

Crothers, Justice.

[¶ 1] Dunn County appeals from a judgment declaring the Industrial Commission has exclusive jurisdiction to determine the location of oil and gas waste treating plants. We affirm, concluding the County lacks the power to veto the Commission's approval of the location for an oil and gas waste treating plant.

I

[¶ 2] In August 2013 Environmental Driven Solutions, LLC ("EDS") received a permit from the Commission for a waste oil treating plant in Dunn County. The permit allowed EDS "to recycle and treat waste crude oil obtained from drilling operations, pit oil, swab oil, acid oil, tank bottoms, oil spills, pipeline breaks, skim oil from saltwater disposal tanks, and other waste crude oil related to oil and gas exploration and production." The permit also notes "treating plants must comply with all applicable local, state, and federal laws and regulations." Notice of the hearing on EDS's application was published in the Bismarck Tribune and in a Dunn County newspaper. Some area landowners objected in writing to EDS's application, but representatives of the County did not object or appear at the hearing.

[¶ 3] After EDS began constructing the treating plant, the County issued notices of "violation and order to abate," claiming the treating plant could not be constructed on the site because the property was zoned "Rural Preservation," and "Salt Water Storage Tank & similar facilities" were not an "allowed use." EDS applied to the County to rezone the property, but the County denied the application because its Land Development Code requires 120 acres to rezone and EDS's property comprised only 118.58 acres. EDS then applied for a conditional use permit, but the County denied the application.

[¶ 4] EDS brought this action against the County seeking a declaratory judgment that the Commission, rather than the County, had jurisdiction to determine the siting of its treating plant. The Commission was allowed to intervene in the proceedings. The district court granted summary judgment, concluding the Commission had exclusive jurisdiction to determine the location of the oil and gas waste treating plant and the County's zoning ordinances were preempted by state law.

II

[¶ 5] The County argues the district court erred because the Commission does not have the power to permit oil waste treating facilities that are barred by a county's "properly-enacted zoning ordinance and land use comprehensive plan."

[¶ 6] We review summary judgments in declaratory judgment actions under the same standard as other cases. See Ramsey Cty. Farm Bureau v. Ramsey Cty. , 2008 ND 175, ¶ 5, 755 N.W.2d 920. In State ex rel. Stenehjem v. FreeEats.com, Inc. , 2006 ND 84, ¶ 4, 712 N.W.2d 828, we explained:

"Summary judgment is a procedural device for the prompt resolution of a controversy on the merits without a trial if there are no genuine issues of material fact or inferences that can reasonably be drawn from the undisputed facts, or if the only issues to be resolved are questions of law. Summary judgment is appropriate if the issues in the case are such that resolution of any factual disputes will not alter the result. Whether the trial court properly granted summary judgment is a question of law that we review de novo on the entire record."

(Citations omitted). Because preemption analysis is largely a matter of statutory interpretation, summary judgment generally is an appropriate method for resolving the issue. See id. , at ¶¶ 5, 6, 22.

[¶ 7] Our caselaw addressing preemption in the context of state and local laws and ordinances mirrors federal preemption analysis. The three forms of federal preemption are "express preemption, field preemption, and conflict preemption." FreeEats , 2006 ND 84, ¶ 23, 712 N.W.2d 828. Describing express preemption and field preemption we have said a county ordinance contravenes state law "(1) when there is an explicit state law or rule restraining the county's authority" and "(2) when the industry or activity involved is already subject to substantial state control through broad, encompassing statutes or rules." State v. Brown , 2009 ND 150, ¶ 21, 771 N.W.2d 267 ; see also N.D.C.C. § 11–09.1–05(5). We described conflict preemption in Mountrail Cty. v. Hoffman :

"Although counties have general authority to enact zoning ordinances, see N.D.C.C. § 11–33–01 ; Shaw v. Burleigh County , 286 N.W.2d 792, 795 (N.D. 1979), a local governing body cannot validly enact a zoning ordinance that contravenes federal or state law. See State ex rel. City of Minot v. Gronna , 79 N.D. 673, 697, 59 N.W.2d 514, 531 (1953) ; 1 E. Yokley, Zoning Law and Practice § 3–12 (1978); see also County of Hoke v. Byrd , 107 N.C.App. 658, 421 S.E.2d 800, 805 (1992)."

2000 ND 49, ¶ 7, 607 N.W.2d 901 ; see also Ramsey Cty. , 2008 ND 175, ¶ 25, 755 N.W.2d 920.

[¶ 8] Judicial decisions often are not clear which type preemption is being considered. However, those decisions are clear that a local governing body's actions and decisions may be preempted by state or federal law, or by the actions and decisions of state or federal agencies. See, e.g. , Green Mountain R.R. Corp. v. Vermont , 404 F.3d 638, 644 (2nd Cir. 2005) (pre-construction permit requirement of state's environmental land use law was preempted by federal law because it "necessarily interfere[d]" with railroad's ability to construct facilities); Wilderness Soc'y v. Kane Cty. , 560 F.Supp.2d 1147, 1159 (D. Utah 2008)vacated on other grounds , 632 F.3d 1162 (10th Cir. 2011) (county's ordinance and actions to manage routes on federal land "actually conflict[ed]" with federal law and were preempted); Bosscher v. Twp. of Algoma , 246 F.Supp.2d 791, 800–01 (W.D. Mich. 2003) (township's denial of special use permit to build radio tower was not preempted by federal commission's declaratory ruling); Ogden Envtl. Servs. v. City of San Diego , 687 F.Supp. 1436, 1448 (S.D. Cal. 1988) (city's denial of conditional use permit to operate incineration facility was impermissible under federal preemption principles because federal agency had approved and granted permit to do so); Brubaker v. Bd. of Cty. Comm'rs , 652 P.2d 1050, 1060 (Colo. 1982) (county's denial of special use permit to conduct test drilling conflicted with use of federal lands authorized by federal legislation and was preempted); Town of Colchester v. Reduction Assocs., Inc. , 34 Conn.Supp. 177, 382 A.2d 1333, 1336 (1977) (town could not enforce zoning regulation prohibiting the disposal of unbaled waste because it was in "direct conflict" and preempted by a state agency's permit to allow disposal of unbaled waste); Bannum, Inc. v. Dist. of Columbia Bd. of Zoning Adjustment , 894 A.2d 423, 432–33 (D.C. Ct. App. 2006) (local government's denial of building permit was not preempted by federal law because applicant could comply with both federal and local requirements); Tumino v. Long Beach Twp. , 319 N.J.Super. 514, 725 A.2d 1173, 1180 (Ct. App. Div. 1999) (state department's granting of permit to build dock preempted township's ordinance and denial of local building permit).

[¶ 9] Chapter 38–08, N.D.C.C., the "Act for the Control of Gas and Oil Resources[,] equipped the Industrial Commission with comprehensive powers to regulate oil and gas development" in this state. Cont'l Res., Inc. v. Farrar Oil Co. , 1997 ND 31, ¶ 12, 559 N.W.2d 841. "The Commission's powers are continuous ... and are exclusive." Egeland v. Cont'l Res., Inc. , 2000 ND 169, ¶ 11, 616 N.W.2d 861 (internal citations omitted); see also Amerada Hess Corp. v. Furlong Oil & Minerals Co. , 348 N.W.2d 913, 916 (N.D. 1984). Because this is a declaratory judgment action, we interpret the law as it currently exists. See Ramsey Cty. , 2008 ND 175, ¶¶ 22–25, 755 N.W.2d 920.

[¶ 10] Section 38–08–04, N.D.C.C., provides in part:

"The commission has continuing jurisdiction and authority over all persons and property, public and private, necessary to enforce effectively the provisions of this chapter. The commission has authority, and it is its duty, to make such investigations as it deems proper to determine whether waste exists or is imminent or whether other facts exist which justify action by the commission. The commission has the authority:

....

2. To regulate:

a. The drilling, producing, and plugging of wells, the restoration of drilling and production sites, and all other operations for the production of oil or gas.

....

e. Disposal of saltwater and oilfield wastes.

(1) The commission shall give all affected counties written notice of hearings in such matters at least fifteen days before the hearing.

(2) The commission may consider, in addition to other authority granted under this section, safety of the location and road access to saltwater disposal wells, treating plants, and all associated facilities."

[¶ 11] A "treating plant" is defined as:

"[A]ny plant permanently constructed or portable used for the purpose of wholly or

...