SDDS, Inc., Matter of

• Citation: 472 N.W.2d 502
• Decision Date: 26 June 1991
• Docket Number: No. 17180,17180
• Parties: In the Matter of the Application of SDDS, INCORPORATED, for a Solid Waste Permit.
• Court: Supreme Court of South Dakota

Page 502

472 N.W.2d 502

In the Matter of the Application of SDDS, INCORPORATED, for

a Solid Waste Permit.

No. 17180.

Supreme Court of South Dakota.

Argued March 18, 1991.

Decided June 26, 1991.

Patrick Duffy of Bangs, McCullen, Butler, Foye & Simmons, Rapid City, for appellant Technical Information Project; Mark F. Marshall of Bangs, McCullen, Butler, Foye & Simmons Rapid City, on brief.

Marvin D. Truhe of Marvin D. Truhe Law Offices, Rapid City, for appellee South Dakota Disposal Systems, Inc.; Dale R. Cockrell and Marvin D. Truhe of Marvin D. Truhe Law Offices, Rapid City, on brief.

Brian L. Radke, Asst. Atty. Gen., Pierre, for amicus curiae S.D. Dept. of Water and Natural Resources; Roger A. Tellinghuisen, Atty. Gen., Pierre, on brief.

AMUNDSON, Justice.

Technical Information Project (TIP) appeals from a judgment of the circuit court affirming the decision of the Board of Minerals and Environment (Board) to grant a permit to South Dakota Disposal Systems, Inc. (SDDS) for the construction and operation of a municipal solid waste balefill disposal facility. We affirm in part, reverse in part, and remand.

FACTS

This controversy involves the validity of Board's original decision to issue a solid waste permit to SDDS. ¹ On November 17, 1988, SDDS filed an application with the South Dakota Department of Water and Natural Resources (Department) for a solid waste permit. ² SDDS sought a permit to construct and operate the Lonetree Balefill Facility (Lonetree) in Fall River County near Edgemont, South Dakota. The municipal solid waste (MSW) disposal facility was designed to receive approximately 7.75 million tons of baled MSW.

Department reviewed the permit application and found it procedurally complete and otherwise in compliance with applicable laws and regulations. On June 30, 1989, Department published a recommendation of approval in the Rapid City Journal, however, the recommendation was in error and Department immediately withdrew the recommendation of approval. On July 10, 1989, pursuant to an Alternative Writ of Mandamus, Department published a recommendation of denial in four local newspapers, the Rapid City Journal, the Sioux Falls Argus Leader, the Edgemont Herald-Tribune, and the Pierre Times. The recommendation listed six deficiencies of the permit application, ³ and included a notice that aggrieved persons could petition the Board for a contested case hearing within thirty days.

SDDS petitioned for a contested case hearing, opposing Department's recommendation. Department published its Notice of Contested Case Hearing setting the hearing on SDDS' permit application for August 23, 1989, and notifying interested persons of the opportunity to intervene. TIP then filed its Petition to Intervene/Request for Environmental Impact Statement on July 19, 1989. TIP's requests were considered at a prehearing conference held on July 20, 1989. The hearing chairperson granted TIP's petition to intervene ⁴ but denied its request for an environmental impact statement (EIS). Thereafter, the parties engaged in discovery.

Prior to the hearing, SDDS continued to correspond with Department in an attempt to satisfy Department's requirements and cure the deficiencies prior to the hearing on the permit application. All of the correspondence between SDDS and Department, and all of the additional information submitted by SDDS to Department, was immediately made part of the public permit application file.

SDDS' attempts to cure all the deficiencies in the hope that Department might change its recommendation from one of denial to one of approval were unsuccessful. At the time of the hearing, SDDS disputed the design mandated by Department for the final clay cap to be placed on the facility. As a result, although five of the six deficiencies were cured by the hearing date, Department recommended denial of the permit at the hearing based on the cap design deficiency.

The contested case hearing was held before Board on August 23-26, 1989, and September 7, 1989. Eighteen witnesses, most of them experts, testified at the hearing. ⁵ Department continued to recommend denial of the permit but, in the alternative, recommended that conditions be attached to any permit issued by Board. On September 7, 1989, after the conclusion of the hearing, Board approved SDDS' permit application by a vote of five to one. Findings of fact and conclusions of law were entered by Board on the same day. A one-year permit to construct and operate Lonetree, together with ten pages of conditions, was issued to SDDS on September 21, 1989.

TIP appealed Board's decision to the Seventh Judicial Circuit Court, which affirmed Board's decision in its entirety. From that decision, TIP appeals.

ISSUES

1. Did Board err in denying TIP's request for an environmental impact statement?

2. Was Board's decision based on unlawful procedure involving ex parte communications in violation of the due process rights of the people of South Dakota and TIP?

3. Did Board err in determining that the proposed facility is in the public interest of the entire state?

4. Did Board err in determining that the proposed facility is environmentally safe?

ANALYSIS

Our standard of review in administrative appeals is governed by SDCL 1-26-36, and is well settled. When reviewing questions of fact, it is the duty of both the circuit court and this court to determine whether the agency's findings of fact are clearly erroneous. Kennedy v. Hubbard Milling Co., 465 N.W.2d 792, 794 (S.D.1991); Permann v. Department of Labor, Unemployment Ins. Div., 411 N.W.2d 113, 116-17 (S.D.1987). Further, "the question is not whether there is substantial evidence contrary to the agency finding, but whether there is substantial evidence to support the agency finding.... [T]he court shall give great weight to findings made and inferences drawn by an agency on questions of fact." Schlenker v. Boyd's Drug Mart, 458 N.W.2d 368, 371 (S.D.1990) (citing Lawler v. Windmill Restaurant, 435 N.W.2d 708, 711 (S.D.1989) (Morgan, J., concurring specially)). When the issue presented is a question of law, however, the decisions of the administrative agency and the circuit court are fully reviewable. Permann, 411 N.W.2d at 117. Likewise, mixed questions of fact and law, which require the application of a legal standard to an established set of facts, are fully reviewable. In re Groseth Int'l, 442 N.W.2d 229, 232 (S.D.1989) (Sabers, J., concurring in part and concurring specially in part). With these standards in mind, we address the merits of the issues raised by TIP.

1. Request for Environmental Impact Statement.

TIP contends that the hearing chairperson erred when he denied its request for an EIS. SDDS responds by arguing that TIP failed to satisfy statutory prerequisites which must be met before an EIS may be ordered, and that the decision to order an EIS is a discretionary one.

SDCL chapter 34A-9 provides the statutory mechanism for addressing the environmental impact of governmental actions. SDCL 34A-9-4 provides in part: "All agencies may prepare, or have prepared by contract, an environmental impact statement on any major action they propose or approve which may have a significant effect on the environment." (Emphasis added.) Under this section, an EIS is optional, not mandatory. In re Water Management Board, 351 N.W.2d 119, 124 (S.D.1984). TIP has conceded that the decision to require an EIS is discretionary. Since the matter is one which lies in the discretion of the agency, we can reverse its decision only if it reflects a clearly unwarranted exercise of discretion. SDCL 1-26-36(6). See Estate of Donahue, 464 N.W.2d 393 (S.D.1990) (defining abuse of discretion standard). Cf. Lee v. Department of Health, 411 N.W.2d 108 (S.D.1987); In re Templeton, 403 N.W.2d 398 (S.D.1987).

TIP filed its Petition to Intervene/Request for Environmental Impact Statement one day before the first prehearing conference. TIP's request that SDDS be required to complete an EIS was supported by two sentences in its motion:

The Technical Information Project further moves that the Board require SDDS to complete an [EIS] pursuant to SDCL 34A-9. Many of the requirements of SDCL 34A-9 and ARSD 74:27:01 through 04 can only be assessed for compliance if a comprehensive environmental study is undertaken.

At the prehearing conference, TIP did not present evidence to support its motion. TIP's counsel argued that SDDS' permit application was a major action and that the facility would have a significant effect on the environment, but did not allege any specific facts to support its request for an EIS. Department argued that an EIS was unnecessary because the concerns that could be addressed by an EIS were adequately addressed by the review conducted by the state archaeologist, and a previously published study of rare plants and animals in South Dakota conducted by the state Game, Fish, and Parks Department and The Nature Conservancy. SDDS argued that an EIS would be duplicative of information already contained in the administrative file, that preparation of an EIS would delay the project for two years, and that there was no showing that the project will have a significant effect on the environment.

"The purpose of an environmental impact statement is to provide detailed information about the effect which a proposed action is likely to have on the environment, to list ways in which any adverse effects of the action might be minimized, and to suggest alternatives to the action." SDCL 34A-9-4. At the time of the prehearing conference on July 20, 1989, SDDS' permit application had been evaluated for technical and engineering compliance by a number of state agencies, including Air Quality and Solid Waste, Water Rights, the Ground Water Quality Program, the Surface Water Program, Geological Survey, the Oil and Gas Program, Division of Wildlife, and the Archaeological Research Center. The Lonetree proposal was also reviewed by the United...