MECA v. MN POLLUTION CONTROL AGENCY, C6-01-96.

• Decision Date: 23 May 2002
• Docket Number: No. C6-01-96.,C6-01-96.
• Citation: 644 N.W.2d 457
• Parties: MINNESOTA CENTER FOR ENVIRONMENTAL ADVOCACY, Respondent, v. MINNESOTA POLLUTION CONTROL AGENCY, Petitioner, Appellant, Boise Cascade Corporation, Intervenor, Petitioner, Appellant.
• Court: Minnesota Supreme Court

644 N.W.2d 457

MINNESOTA CENTER FOR ENVIRONMENTAL ADVOCACY, Respondent, v. MINNESOTA POLLUTION CONTROL AGENCY, Petitioner, Appellant, Boise Cascade Corporation, Intervenor, Petitioner, Appellant.

No. C6-01-96.

Supreme Court of Minnesota.

May 23, 2002.

Mike Hatch, Minnesota Attorney General, Eldon G. Kaul (#54070), Leah M.P. Hedman (# 280501), St. Paul, MN, for Appellant MPCA.

Winthrop & Weinstine, P.A., Lloyd W. Grooms (#188694), Eric F. Swanson (#188128), St. Paul, MN, for Appellant Boise Cascade.

Faegre & Benson LLP, Brian B. O'Neill (# 82521), Richard A. Duncan (# 192983), Kristin R. Eads (#275414), Elizabeth H. Schmiesing (#229258), Anne E. Mahle (# 312861), Minneapolis, MN, for Respondent MCEA.

Dunkley, Bennett, Christensen & Madigan, P.A., Michael D. Madigan (# 129586), David G. Parry (#281980), Minneapolis, MN, for Amicus Trout Unlimited, et al.

David R. Oberstar (# 144162), Duluth, MN, for Amicus MN Timber.

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

OPINION

GILBERT, Justice.

Respondent Minnesota Center for Environmental Advocacy (MCEA) brought a declaratory judgment action in district court seeking an order requiring the preparation of an Environmental Impact Statement (EIS), pursuant to Minn.Stat. § 116D.04, subd. 2(a) (2000), on Appellant Boise Cascade Corporation's proposed Efficiency Improvement Project.¹ Appellant Minnesota Pollution Control Agency (MPCA), as the responsible governmental unit (RGU), concluded that the proposed project did not have the potential for significant environmental effects and therefore an EIS was not required. The district court granted summary judgment to the MPCA, holding there was substantial evidence in the record to support the MPCA's decision not to require an EIS. The Minnesota Court of Appeals reversed the district court and remanded to the MPCA for the preparation of an EIS. We reverse the court of appeals.

Boise Cascade operates an integrated pulp and paper mill on the Rainy River in International Falls, Minnesota. The mill manufactures a variety of coated and uncoated fine paper products. Wood for the mill is supplied from Boise Cascade's timberlands in Minnesota, public and private timberlands, and residues from local sawmills. Boise Cascade supplies 72 percent of the wood for the mill and purchases the remainder on the outside market in the form of pulp. Currently, the mill consumes approximately 600,000 cords² of wood per year.

Because the mill is not completely integrated and must purchase part of its pulp requirements, Boise Cascade has proposed an efficiency improvement project to make the mill less dependent on pulp purchased on the outside market. The improvements would increase the mill's maximum wood consumption by up to 100,000 cords per year, bringing the total consumption to approximately 700,000 cords per year. This wood is expected to be harvested from an area within a 150-mile radius of International Falls, but some may come from farther away.

The MPCA was required by law to complete an environmental assessment worksheet (EAW)³ for the proposed improvement project.⁴ Because some issues surrounding the project involved management of the state's forest resources, the MPCA requested the Minnesota Department of Natural Resources (DNR) to assist in preparation of the EAW. The legislature has designated the DNR as the appropriate agency to monitor and evaluate the trends, conditions, and other governmental interagency information under the Sustainable Forest Resources Act (SFRA). See Minn.Stat. §§ 89A.01, subds. 4, 6 (2000); 89A.07, subd. 1 (2000); 89A.09, subd. 1 (2000).

The DNR noted that the proposed project represents a maximum 2.5 percent increase in statewide harvest levels. The timber procurement area consists of approximately 11,400,000 acres of timberland and the project will increase timber harvests by an estimated range of 2,500-6,000 acres in this base disbursed across the 150-mile wide procurement zone.

The DNR also assisted by contributing to the part of the EAW that addressed environmental impacts related to the increase in timber harvesting. The DNR relied in part upon the timber harvest and forest management guidelines promulgated by the Minnesota Forest Resources Council (MFRC) under the SFRA. In the DNR's analysis of the potential environmental impacts, it also relied upon the 1994 Generic Environmental Impact Statement for Timber Harvesting and Forest Management (Forestry GEIS).⁵ The Forestry GEIS was prepared at the request of the Minnesota Environmental Quality Board (EQB) to examine the effect that expanded timber harvesting might have on the environment. Here, the EQB determined that the Forestry GEIS remained adequate for use in the analysis of Boise Cascade's project.

The EAW was completed and distributed for public comment on February 19, 1999. A comment and response period followed, during which the MPCA and the DNR received comments from the MCEA and others regarding the need for an EIS and specifically responded to those comments. See Minn.Stat. § 116D.04, subd. 2a(b) (2000). At the completion of this comment period, the MPCA concluded that the proposed project did not have the potential for significant environmental effects and that preparation of an EIS was not required.⁶See Minn.Stat. § 116D.04, subd. 2b(2). The MPCA made several important findings and conclusions in support of its decision, including the following:

[C]5. The MPCA finds that the potential environmental effects of the project are subject to mitigation by ongoing public regulatory authority.

* * * *

[D]4. The MPCA finds that the environmental effects of the project can be anticipated and controlled as a result of the previous environmental review, previous environmental studies, and permitting processes undertaken by the MPCA and other public agencies or the project proposer, including other EISs.

* * * *

CONCLUSIONS

* * * *

2. Areas where the potential for significant environmental effects may have existed have been identified and appropriate mitigative measures have been incorporated into the project design and proposed permits. The project is expected to comply with all MPCA standards.

3. An Environmental Impact Statement is not required on the proposed Boise Cascade Efficiency Improvement Project.

The MCEA then initiated an action in district court against the MPCA for declaratory and injunctive relief, challenging the MPCA's decision not to require an EIS under Minn.Stat. § 116D.04, subd. 10 (2000). Boise Cascade intervened and was joined as a party defendant. The MCEA argued that the MPCA unlawfully relied upon (1) the Forestry GEIS as a substitute for project-specific review and (2) unimplemented and outdated mitigation measures, including the ongoing implementation of programmatic mitigation under the SFRA.

The parties brought cross-motions for summary judgment, and the district court granted summary judgment in favor of Boise Cascade and the MPCA and against the MCEA. The court noted the undisputed facts, including that the MPCA was the RGU for this project, and that the MPCA had enlisted the aid of the DNR's forestry expertise. The court then addressed each issue raised by the MCEA. First, the court ruled that the issues raised regarding the Forestry GEIS were essentially the same issues that the MCEA raised before the EQB when it originally challenged the adequacy of the Forestry GEIS before the EQB. Because the MCEA did not timely appeal the EQB's determination of adequacy, the court ruled that it was not required to address the issue. However, the court went on to find that the MPCA did use the Forestry GEIS properly because the MPCA did not use the Forestry GEIS as a substitute for environmental review of the project and because a comprehensive EAW was prepared in which the Forestry GEIS was used in accordance with state regulations.

Second, addressing the adequacy of mitigation issue raised by the MCEA, the court ruled that there was "substantial support in the record that the mitigation measures identified and relied upon are real, and are more than vague statements of good intentions." (Internal punctuation and citations omitted). Further, the court approved the MPCA's finding that:

the progress of implementing [the SFRA] and other ongoing activities of forest landowners and managers, which represents the State's primary policy tool for addressing the cumulative environmental effects of timber harvest, [was] sufficient to provide ongoing mitigation for any cumulative potential effects that are present consistent with the findings and recommendations of the [Forestry] GEIS.

The court ruled that this finding was not arbitrary and capricious.

The court concluded by ruling that substantial evidence in the record supported the MPCA's conclusions. Specifically, the court ruled that, because decisions of administrative agencies generally enjoy a presumption of correctness, the MCEA had not demonstrated that the MPCA's decision was unreasonable, arbitrary and capricious, or lacked a factual basis.

The MCEA appealed. The court of appeals concluded that while some mitigation strategies were being identified and implemented, the MPCA's determination that the potentially adverse environmental effects of the Boise Cascade project were subject to mitigation by ongoing public regulatory authority was not supported by substantial evidence. Specifically, the court concluded that "[t]he efficacy of the mitigation measures for the Boise project was questionable" because (1) some of the measures were only monitored; (2) there were inaccuracies in the GEIS; (3) some of the conclusions in the GEIS were outdated; and (4) none of the measures were mandatory. Additionally, the court concluded that the MFRC did not "truly perform a regulatory function" and that "[w]ithout some assurances that mitigation measures can be compelled, even good-faith intentions can have an evanescent quality * * *." It further...