In re A Contested Case Hearing Request

• Decision Date: 02 May 2022
• Docket Number: A21-0986
• Parties: In the Matter of Denial of a Contested Case Hearing Request and Reissuance of National Pollutant Discharge Elimination System/State Disposal System Permit No. MN0020228 for the City of Osakis Wastewater Treatment Facility.
• Court: Minnesota Court of Appeals

In the Matter of Denial of a Contested Case Hearing Request and Reissuance of National Pollutant Discharge Elimination System/State Disposal System Permit No. MN0020228 for the City of Osakis Wastewater Treatment Facility.

No. A21-0986

Court of Appeals of Minnesota

May 2, 2022

This opinion is nonprecedential except as provided by Minn. R Civ. App. P. 136.01, subd. 1(c).

Minnesota Pollution Control Agency

Daniel M. Marx, Robert T. Scott, Gretel L. Lee, Flaherty & Hood P.A., St. Paul, Minnesota (for relator City of Osakis)

Keith Ellison, Attorney General, Philip S. Pulitzer, Assistant Attorney General, St. Paul, Minnesota (for respondent Minnesota Pollution Control Agency)

Considered and decided by Reyes, Presiding Judge; Johnson, Judge; and Cochran, Judge.

JOHNSON, JUDGE

The Minnesota Pollution Control Agency (PCA) re-issued a water-discharge permit to the City of Osakis that limits the discharge of phosphorus from the City's wastewater-treatment facility. The PCA also denied the City's request for a contested-case hearing on factual issues related to the permit. The City appeals. We conclude that the PCA erred by misinterpreting administrative rules and regulations and by denying the City's request for a contested-case hearing. Therefore, we reverse and remand for reconsideration and for a contested-case hearing.

FACTS

The federal Clean Water Act (CWA) "was enacted 'to restore and maintain the chemical, physical, and biological integrity of the Nation's waters.'" In re Alexandria Lake Area Sanitary Dist. NPDES/SDS Permit No MN0040738, 763 N.W.2d 303, 308 (Minn. 2009) (Alexandria Lake) (quoting 33 U.S.C. § 1251 (2006)). "To effectuate this policy, the CWA authorizes states to implement the [National Pollutant Discharge Elimination System (NPDES)] permit program . . . ." Id. at 308-09 (citing 33 U.S.C. § 1342(a)-(d) (2006)). The CWA requires that every NPDES permit contain: "(1) 'effluent limitations' that reflect the practicable pollution reduction a state can achieve; and (2) any more stringent limitations required for a body of water to meet 'water quality standards.'" Id. at 309 (quoting American Paper Inst., Inc. v. U.S. EPA, 996 F.2d 346, 349 (D.C. Cir. 1993)).

The PCA is the state agency charged with implementing the requirements of the CWA by, among other things, adopting water-quality standards for the state's waters, preparing total-maximum-daily-load (TMDL) studies for waters on the state's impaired-waters list, and issuing permits that allow limited discharges of pollutants into the state's waters. See 33 U.S.C. §§ 1313(a), (d)(1)(C), 1342(b) (2018); Minn. Stat. §§ 114D.25, subd. 1(a)(2), 115.44 (2020); see also Alexandria Lake, 763 N.W.2d at 312-13 (discussing PCA's duties in relation to NPDES permits); In re Cities of Annandale & Maple Lake NPDES/SDS Permit Issuance for the Discharge of Treated Wastewater, 731 N.W.2d 502, 510-11 (Minn. 2007) (Annandale) (discussing PCA's duties in relation to water-quality standards and TMDL studies).

The City of Osakis, which has a population of approximately 1, 750, is located in Douglas County and Todd County. The City owns and operates a wastewater-treatment facility that discharges water directly to the Clifford Wetland and indirectly to nearby Faille Lake and Lake Osakis.

Lake-Eutrophication Standards

In 2008, the PCA adopted lake-eutrophication standards as amendments to the state's pre-existing water-quality standards. See 32 Minn. Reg. 1699, 1722-23 (Mar. 10, 2008); 32 Minn. Reg. 87, 156, 162 (July 23, 2007). The term "eutrophication" is defined by an administrative rule to mean

the increased productivity of the biological community in water bodies in response to increased nutrient loading. Eutrophication is characterized by increased growth and abundance of algae and other aquatic plants, reduced water transparency, reduction or loss of dissolved oxygen, and other chemical and biological changes. The acceleration of eutrophication due to excess nutrient loading from human sources and activities . . . causes a degradation of water quality and possible loss of beneficial uses.

Minn. R. 7050.0150, subp. 4(L) (2021). Stated differently, "Eutrophication refers to the over-enrichment of waters with nutrients, which stimulates excessive growth of aquatic plants." Minnesota Environmental Sci. & Econ. Rev. Bd. v. Minnesota Pollution Control Agency, 870 N.W.2d 97, 99 n.1 (Minn.App. 2015).

The PCA's lake-eutrophication standards include both narrative and numeric criteria. Minn. R. 7050.0222, subp. 1(A) (2021). For a lake with Class 2B waters in the North Central Hardwood Forest Ecoregion, such as Faille Lake and Lake Osakis, the narrative criteria are that "[t]he quality of [the] waters shall be such as to permit the propagation and maintenance of a healthy community of cool or warm water aquatic biota, and their habitats" and that the waters "shall be suitable for aquatic recreation of all kinds, including bathing, for which the waters may be usable" but that the waters are "not protected as a source of drinking water." Minn. R. 7050.0222, subp. 4; see also Minn. R. 7050.0222, subp. 4a.

The numeric criteria for lake-eutrophication standards consist of three variables that describe the extent of eutrophication. See Minn. R. 7050.0222, subps. 4, 4a(B). The first variable, "total phosphorus" (which is defined by an administrative rule to mean "the sum of all forms of phosphorus," Minn. R. 7083.0020, subp. 22 (2021)), is the maximum permissible concentration of phosphorus in a body of water. Minn. R. 7050.0222, subp. 4. For lakes in the North Central Hardwood Forest Ecoregion, such as Lake Osakis, the lake-eutrophication standards set a total-phosphorus criterion of 40 micrograms per liter (µg/L). Id. For a shallow lake in the same region, such as Faille Lake, the criterion is 60 µg/L. Id.

The second variable, chlorophyll-a, is a pigment in green plants, including algae. Minn. R. 7050.0150, subp. 4(I) (2021). The concentration of chlorophyll-a may be measured by a chemical test of a water sample. For lakes in the North Central Hardwood Forest Ecoregion, the lake-eutrophication standards set a numeric criterion of 14 µg/L for chlorophyll-a. Minn. R. 7050.0222, subp. 4. For shallow lakes in the same region, the numeric criterion is 20 µg/L. Id.

The third variable, "Secchi disk transparency," is a measurement of the transparency of water. Minn. R. 7050.0150, subp. 4(EE). A Secchi disk is an eight-inch weighted disk, which is either white or black and white, that is suspended on a calibrated rope. Minn. R. 7050.0150, subp. 4(DD). To measure water transparency with a Secchi disk, a person lowers the disk into the water on the shaded side of a boat and gradually raises the disk until it reappears, at which time the tester notes the water depth on the calibrated rope. Id. For lakes in the North Central Hardwood Forest Ecoregion, the lake-eutrophication standards establish a numeric criterion of not less than 1.4 meters. Minn. R. 7050.0222, subp. 4. For shallow lakes in the same region, the numeric criterion is not less than 1 meter. Id.

The lake-eutrophication standards further provide, "Exceedance of the total phosphorus and either the chlorophyll-a or Secchi disk transparency standard is required to indicate a polluted condition." Minn. R. 7050.0222, subp. 4a(B) (emphasis added). Similarly, another administrative rule provides that a "finding of an impaired condition must be supported by data showing" an elevated level of total phosphorus and an elevated level of either chlorophyll-a or Secchi-disk transparency. Minn. R. 7050.0150, subp. 5a(A). This court has referred to total phosphorus as a "cause criterion" and chlorophyll-a and Secchi-disk transparency as "response criteria." Minnesota Ctr. for Environmental Advocacy v. City of Winsted, 890 N.W.2d 153, 155 (Minn.App. 2017) (Winsted). Thus, a lake is not in compliance with the lake-eutrophication standards if the first variable (total phosphorus) and, in addition, either the second variable (chlorophyll-a) or the third variable (Secchi-disk transparency) are exceeded.

TMDL Studies

A TMDL study is "a scientific study that contains a calculation of the maximum amount of a pollutant that may be introduced into a surface water and still ensure that applicable water quality standards for that water are restored and maintained." Minn. Stat. § 114D.15, subd. 10 (2020). A TMDL study determines a body of water's "loading capacity" (i.e., the total amount of a pollutant that may flow into it) and allocates that allowable load by setting "wasteload allocations for point sources" (such as wastewater-treatment facilities) and "load allocations" for non-point sources (such as agricultural runoff). See 40 C.F.R. § 130.2; Minn. Stat. § 114D.15, subd. 10.

The PCA must prepare a TMDL study for each water listed on the state's impaired-waters list. 33 U.S.C. § 1313(d)(1)(C); see also 40 C.F.R. § 130.7(d)(1) (requiring PCA to submit biannual impaired waters list to federal government). A TMDL study prepared by the PCA must be approved by the United States Environmental Protection Agency (EPA). 33 U.S.C. § 1313(d)(2) (2018). If the EPA has approved a TMDL that assigns a wasteload allocation to a point source, a NDPES permit authorizing discharges from that point source must include a water-quality-based effluent level (WQBEL) that is consistent with the wasteload allocation in the TMDL study. 40 C.F.R. § 122.44(d)(1)(vii)(B).

PCA's TMDL Studies

In May 2013, the PCA finalized a TMDL study for the Lake Osakis area, which encompasses Smith Lake, Faille Lake, and Lake Osakis. At that time, all three lakes were on the impaired-waters list because of exceedances of lake-eutrophication standards. The 2013 TMDL study did not...