IN RE ANNANDALE AND MAPLE LAKE PERMIT

• Decision Date: 09 August 2005
• Docket Number: No. A04-2033.,A04-2033.
• Citation: 702 N.W.2d 768
• Parties: In the Matter of the CITIES OF ANNANDALE AND MAPLE LAKE NPDES/SDS PERMIT ISSUANCE FOR the DISCHARGE OF TREATED WASTEWATER, and Request for Contested Case Hearing.
• Court: Minnesota Court of Appeals

702 N.W.2d 768

In the Matter of the CITIES OF ANNANDALE AND MAPLE LAKE NPDES/SDS PERMIT ISSUANCE FOR the DISCHARGE OF TREATED WASTEWATER, and Request for Contested Case Hearing.

No. A04-2033.

Court of Appeals of Minnesota.

August 9, 2005.

Janette K. Brimmer, Minnesota Center for Environmental Advocacy, St. Paul, MN, for relator Minnesota Center for Environmental Advocacy.

Mike Hatch, Attorney General, Stephanie Morgan, Assistant Attorney General, St. Paul, MN, for respondent Minnesota Pollution Control Agency.

Edward J. Laubach, Jr., Christopher W. Harmoning, Heather I. Olson; Gray, Plant, Mooty, Mooty & Bennett, P.A., St. Cloud, MN, for respondents Cities of Annandale and Maple Lake.

Considered and decided by PETERSON, Presiding Judge; SCHUMACHER, Judge; and WRIGHT, Judge.

OPINION

WRIGHT, Judge.

Respondents City of Annandale and City of Maple Lake applied for a permit for a new wastewater-treatment plant, the discharge from which would flow into waters with impaired status under the Clean Water Act. The Minnesota Pollution Control Agency granted the permit. Relator Minnesota Center for Environmental Advocacy challenges the permit, asserting that the new source of discharge would contribute to the impairment of waters with impaired status, in violation of federal regulations. We reverse.

FACTS

For its wastewater treatment, the City of Annandale currently utilizes a pond system with spray irrigation that does not discharge phosphorus directly into a body of water. The City of Maple Lake currently utilizes a mechanical plant for its wastewater treatment. This wastewater plant discharges into Mud Lake, which later flows into the North Fork of the Crow River (the North Fork). Approximately 1,400 pounds of phosphorus are discharged from this plant each year.

Respondents City of Annandale and City of Maple Lake (the Cities) jointly submitted plans for a new wastewater-treatment plant in late 2002. The proposed plant will discharge 3,600 pounds of phosphorus into the North Fork each year, 2,200 pounds greater than the phosphorous discharged by the Cities' existing wastewater-treatment facilities. The North Fork flows into the Mississippi River and contributes to the Lake Pepin watershed.

Section 303(d) of the federal Clean Water Act provides that, when a designated body of water does not meet water quality standards due to an excessive level of a pollutant or lax controls over thermal discharges, a state environmental agency shall identify it as an impaired water and establish a priority ranking for the body of water. 33 U.S.C. § 1313(d)(1)(A), (B) (2000). Once a body of water is identified and ranked under Section 303(d), the state environmental agency shall establish a "total maximum daily load," (TMDL), setting the maximum amount of the pollutant permitted in that water. Id., (C) (2000). One section of the North Fork, 17.9 miles downstream from the discharge point of the Cities' proposed plant, is identified as impaired under Section 303(d) because of insufficient dissolved-oxygen levels. Lake Pepin also is listed as impaired under Section 303(d) because of excessive nutrient levels. The Minnesota Pollution Control Agency (PCA) has not completed TMDLs for these waters. The PCA estimates that TMDLs will not be set before 2012 for the North Fork and 2009 for Lake Pepin.

Pursuant to the plans for the plant, on July 25, 2003, the Cities submitted an application for a National Pollutant Discharge Elimination System (NPDES) permit to the PCA for the proposed wastewater-treatment plant. The PCA gave due notice of the application and, with its request for public comment, submitted a proposed draft of the NPDES permit. The draft NPDES permit placed several limits on the plant's discharge, including a maximum level for phosphorus and a minimum level for dissolved oxygen.

Relator Minnesota Center for Environmental Advocacy (MCEA) submitted comments on July 21 and August 18, 2004. The MCEA claimed that additional phosphorus from the plant would contribute to the low dissolved-oxygen levels on the North Fork and excessive nutrients in Lake Pepin. Asserting that federal regulations do not allow a new source to cause or contribute to the impairment of Section 303(d) waters, the MCEA argued against issuance of the NPDES permit.

Following a public hearing, the PCA addressed the comments of the MCEA and recommended approval of the NPDES permit in its order dated September 28, 2004. The PCA interpreted the federal regulations to provide that, if a new source contributes to the impairment of Section 303(d) waters, but the aggregate impairment of those waters is reduced by improvements elsewhere, a NPDES permit may be issued for the new source. The PCA concluded that the 2,200-pound increase in the phosphorus discharge from the Cities' proposed plant would be offset by a new wastewater-treatment plant in Litchfield that will reduce the phosphorus discharge into the North Fork by approximately 53,500 pounds per year.

Regarding the impact of the phosphorus discharge on dissolved oxygen in the North Fork, the PCA observed that the impaired section of the North Fork is 17.9 miles downstream from the discharge point for the Cities' proposed plant. Relying on an internal study, the PCA found that dissolved oxygen is most severely affected 1.8 miles downstream from the discharge point. The PCA then concluded that the discharge would not contribute to the impairment of the North Fork.

On September 30, 2004, the PCA then adopted the proposed draft and issued the NPDES permit. This appeal followed.

ISSUE

Does a discharge of phosphorus from a new source contribute to the impairment of Section 303(d) waters, in violation of 40 C.F.R. § 122.4(i) (2004), when that discharge contains an increase in phosphorus that is offset by reductions from other sources?

ANALYSIS

Appellate review of an agency decision ordinarily is governed by the Minnesota Administrative Procedure Act, which provides in relevant part:

In a judicial review ... the court may affirm the decision of the agency or remand the case for further proceedings; or it may reverse or modify the decision if the substantial rights of the petitioners may have been prejudiced because the administrative finding, inferences, conclusion, or decisions are:... (d) [a]ffected by other error of law[.]

Minn.Stat. § 14.69 (2004); Minn. Ctr. for Envtl. Advocacy v. Minn. Pollution Control Agency, 644 N.W.2d 457, 463-64 (Minn.2002). The decision of an agency is presumed to be correct, and we ordinarily accord deference to an agency in its field of expertise. Reserve Mining Co. v. Herbst, 256 N.W.2d 808, 824 (Minn.1977).

The MCEA challenges the PCA's interpretation of 40 C.F.R. § 122.4(i) (2004) and argues that, under this regulation, the Cities are not entitled to receive a permit. The MCEA asserts that, when a new source will contribute to the impairment of Section 303(d) waters, the discharge cannot be offset by reductions from other sources. Because the interpretation of a federal regulation is a question of law, we need not defer to a state agency's interpretation, and we thus review de novo.¹MCIMetro Access Transmission Servs., Inc. v. Bellsouth Telecomms., Inc., 352 F.3d 872, 876 (4th Cir.2003); Denelsbeck v. Wells Fargo & Co., 666 N.W.2d 339, 346 (Minn.2003); see also In re Denial of Eller Media Co.'s Applications for Outdoor Adver. Device Permits, 664 N.W.2d 1, 7 (Minn.2003)

(stating that courts retain authority to review de novo errors of law arising when agency decision is based on statutory construction). See generally 1 Richard J. Pierce, Jr., Administrative Law Treatise § 6.11 (4th ed.2002) (observing that, when separate agencies promulgate and enforce regulations, deference to the enforcing agency improperly allows inconsistent interpretation of regulations).

When a federal regulation is unambiguous, it shall be given effect according to its plain language without considering the intent of the agency or other extrinsic evidence. Tozzi v. U.S. Dep't of Health & Human Servs., 271 F.3d 301, 311 (D.C.Cir.2001). When the meaning is in doubt, the primary consideration is the intent of the promulgating agency, which controls unless such intent is plainly inconsistent with the language of the regulation. Auer v. Robbins, 519 U.S. 452, 461, 117 S.Ct. 905, 911, 137 L.Ed.2d 79 (1997). In the absence of controlling interpretation by an agency, the meaning of a regulation is determined in accordance with canons of statutory construction. Burns v. Barnhart, 312 F.3d 113, 125 (3d Cir.2002); White Bear Lake Care Ctr., Inc. v. Minn. Dep't of Pub. Welfare, 319 N.W.2d 7, 8 (Minn.1982).

Section 122.4(i) provides in relevant part:

No permit may be issued: ... [t]o a new source or a new discharger, if the discharge from its construction or operation will cause or contribute to the violation of water quality standards. The owner or operator of a new source or new discharger proposing to discharge into a water segment which does not meet applicable water quality standards or is not expected to meet those standards even after the application of the effluent limitations required by [Section 301(b)] of [the] CWA,[²] and for which the State or interstate agency has performed a pollutants load allocation for the pollutant to be discharged, must demonstrate, before the close of the public comment period, that:

(1) There are sufficient remaining pollutant load allocations to allow for the discharge; and

(2) The existing dischargers into that segment are subject to compliance schedules designed to bring the segment into compliance with applicable water quality standards.

40 C.F.R. § 122.4(i). Two basic propositions may be derived from the regulation. One is that a new source cannot discharge if it will contribute to the violation of water-quality standards. The other is that, when a new discharge is proposed and a TMDL has been established, the proponent must demonstrate that the discharge...