Minn. Sands, LLC v. Cnty. of Winona, A18-0090

CourtSupreme Court of Minnesota (US)
Citation940 N.W.2d 183
Docket NumberA18-0090
Parties MINNESOTA SANDS, LLC, Appellant, v. COUNTY OF WINONA, Minnesota, Respondent.
Decision Date11 March 2020

940 N.W.2d 183

COUNTY OF WINONA, Minnesota, Respondent.


Supreme Court of Minnesota.

Filed: March 11, 2020


CHUTICH, Justice.

940 N.W.2d 188

In November 2016, the Winona County Board of Commissioners revised its comprehensive zoning ordinance to prohibit "[i]ndustrial mineral operations" within the county. See Winona County, Minn., Winona County Zoning Ordinance (WCZO) § 9.10.2 (2016). The ordinance continues to allow extraction of "construction minerals," provided that the landowner secures a conditional-use permit. Winona County, Minn., WCZO §§ 4.2, 9.10.3.a (2016). Appellant Minnesota Sands, LLC (Minnesota Sands) is a Minnesota mining company that seeks to mine and process silica sand in Winona County (County)—an industrial mineral operation under the zoning ordinance—and sell its product to out-of-state oil and gas producers for use in hydraulic fracturing. The company claims that the County’s prohibition on its proposed land use violates the Commerce Clause. U.S. Const. art. I, § 8. It also contends that the ordinance is an unconstitutional taking of its property interests in five mineral leases that it holds within the County. See U.S. Const. amends. V, XIV ; Minn. Const. art. I, § 13.

This appeal arises from the district court’s order granting summary judgment to the County on all of Minnesota Sands’ claims. A panel of the court of appeals affirmed, with one judge concurring in part and dissenting in part. Minn. Sands, LLC v. Cty. of Winona , 917 N.W.2d 775 (Minn. App. 2018). We granted Minnesota Sands’ petition for further review, and we now affirm.


The southeastern Minnesota region, where Winona County is located, contains rich deposits of silica sand. Because silica sand consists of nearly 95 percent quartz—a hard mineral—it is used in the extraction process for drilling oil and natural gas known as hydraulic fracturing, or "fracking." The recent upsurge in fracking in oil-producing states has created high demand for the raw silica sand found in southeastern Minnesota.

Before raw silica sand can be used as "frac sand," however, it must be processed to meet industry standards for purity, grain size, shape, and intactness. Although processing methods vary, the typical method involves washing, screening, and filtering raw sand in unlined sedimentation ponds located at the mines themselves. This process requires large volumes of water—up to 6,000 gallons per minute—and chemicals called flocculants that cause the sediments to aggregate so that the desired sand particles can be collected and removed. The leftover mixture of undesired sand, water, and flocculants is then returned to the mines untreated. Some of the flocculants that are used during this process are known hazards to human health.1

No end-user market for processed frac sand exists within Minnesota, because no significant reserves of oil or natural gas exist in this state. But the oil and gas industry is not the only industry that generates demand for raw silica sand. For example, silica sand is used in glass-making, in the abrasives industry, in agriculture as livestock bedding, and for sand traps on golf courses. It is also used in the construction industry. Unlike the market for frac sand, the silica sand that supplies these other markets is not necessarily bound to leave Minnesota. The record here shows that silica sand is used by Minnesota

940 N.W.2d 189

firms that manufacture countertops, glass, shingles, and more.

The silica sand deposits in Winona County are located in an ecologically sensitive area. They are part of a large, geologically unique karst region in southeastern Minnesota.2 Karst regions are areas with a shallow or unconsolidated layer of sediment covering a bedrock of limestone, dolostone, or sandstone. Below the surface, karst regions are defined by large, highly interconnected networks of caverns, sinkholes, springs, and disappearing and underground streams.

The County’s efforts to manage industrial silica sand mining began in September 2011, when it received three conditional-use permit applications for silica sand mining operations. The county planning and environmental services department and county attorney raised concerns about the need to regulate silica sand mining operations. In January 2012, the Winona County Board of Commissioners (Board) denied the three applications and imposed a 3-month moratorium on silica sand mining operations to allow the County to conduct a land-use planning study. The moratorium was allowed to expire in May 2012, after the County adopted additional land-use regulations for silica sand mining.3

In February 2012—during the moratorium—Minnesota Sands acquired four leases to remove silica sand from property located within the County. It acquired a fifth lease in November 2015.4 Each lease provides that, in exchange for a one-time payment of $1,000, royalties on any sand removed from the premises, and other conditions, Minnesota Sands was granted the right to use and possess the premises "solely to mine Frac Sand to be used by [Minnesota Sands] for commercial purposes."5 The leases also grant Minnesota Sands permission to use the premises to "[p]rocess mined minerals ... including the building of a processing plant and all accessories thereof." The company’s obligations under the leases are expressly "conditioned upon ... obtaining any zoning or other governmental approvals" required to permit silica sand mining operations.

Minnesota Sands submitted applications for conditional-use permits for two sites in August 2012, as required by the zoning ordinance then in effect. See Winona County, Minn., WCZO § 9.10.1.a (2010) ("A Conditional Use Permit shall be required for all extraction pits and land alteration operations."). At that time, any mining operation in Winona County required a conditional-use permit. Id. The County determined that the company was required to obtain an environmental impact statement before applying for a permit. According to the company’s president, the frac sand market crashed as the company was pursuing the environmental review

940 N.W.2d 190

process. Consequently, the company abandoned its efforts to obtain the needed permits for the two sites. It never sought permits or environmental review for any of its other leased properties in Winona County. Effective June 1, 2013, moreover, the Legislature created additional environmental review requirements for all silica sand projects. See Act of May 23, 2013, ch. 114, art. 4, § 92, 2013 Minn. Laws 1653, 1752–53 (codified as amended at Minn. Stat. § 116C.991 (2018) ).6 After June 1, 2013, therefore, Minnesota Sands was required to complete the environmental review process before it could receive any conditional-use permits for silica sand mining facilities. See Minn. Stat. § 116C.991(a)(1). Nearly 4 years passed without any further action by Minnesota Sands.

In 2016, the Board considered an amendment to the zoning ordinance, which was proposed by the Land Stewardship Project, that would prohibit "[f]rac sand operations." After referring the proposal to the planning commission and county attorney’s office for further analysis, the Board opened the amendment and several alternatives to public comment and held public hearings. The County received hundreds of oral and written comments about these proposals.

At its October 25, 2016 meeting, the Board voted to adopt a version of the amendment recommended by the county attorney entitled "Large Scale Industrial Silica Sand Mining and Processing Prohibited." The amended provisions of the ordinance have remained unchanged since their adoption. As noted above, before adoption of the amendment, the ordinance required all proposed mineral extraction projects to obtain a conditional-use permit. Winona County, Minn., WCZO § 9.10.1.a (2010); see also Winona County, Minn., WCZO § 9.11.1 (2010) ("All Subsurface Mineral Exploration borings shall require a Conditional Use Permit in all zoning districts."). The current ordinance continues to require a conditional-use permit for "all extraction pits and land alteration operations." Winona County, Minn., WCZO § 9.10.3.a. But any "[i]ndustrial mineral operations, which includes excavation, extraction, mining, and processing of industrial minerals[,] are prohibited" within the County unless those uses were legally established operations before the amended ordinance was adopted. Id. § 9.10.2.

Central to the issues presented here are the definitions of "industrial minerals" and "construction minerals" set forth in the ordinance. The term "industrial minerals" is defined as:

naturally existing high quartz level stone, silica sand, quartz, graphite, diamonds, gemstones, kaolin, and other similar minerals used in industrial applications, but excluding construction minerals as defined [elsewhere].


"Silica sand" has the meaning given in Minnesota Statutes, section 116C.99, subd. 1(d) : " ‘Silica sand’ means well-rounded,
940 N.W.2d 191
sand-sized grains of quartz (silicon dioxide), with very little impurities in terms of other minerals. Specifically, the silica sand for the purposes of this section is commercially valuable for use in the hydraulic fracturing of

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