SDDS, Inc. v. State of SD

• Decision Date: 28 January 1994
• Docket Number: No. 91-5121.,91-5121.
• Citation: 843 F. Supp. 546
• Parties: SDDS, INC., a South Dakota corporation, Plaintiff, v. STATE OF SOUTH DAKOTA, Mark Barnett, as Attorney General for the State of South Dakota; Walter D. Miller, as Governor of the State of South Dakota; and Joyce Hazeltine, as Secretary of State of the State of South Dakota, Defendants, and Action for the Environment, Intervenor/Defendant.
• Court: U.S. District Court — District of South Dakota

843 F. Supp. 546

SDDS, INC., a South Dakota corporation, Plaintiff, v. STATE OF SOUTH DAKOTA, Mark Barnett, as Attorney General for the State of South Dakota; Walter D. Miller, as Governor of the State of South Dakota; and Joyce Hazeltine, as Secretary of State of the State of South Dakota, Defendants and Action for the Environment, Intervenor/Defendant.

No. 91-5121.

United States District Court, D. South Dakota, W.D.

January 28, 1994.

COPYRIGHT MATERIAL OMITTED

Marvin D. Truhe, Rapid City, SD, Edward T. Lyons, Jr., David E. Driggers, Thomas J. Burke, Jr., Jones & Keller, Denver, CO, for plaintiff.

Mark W. Barnett, Roxanne Giedd, Diane M. Best, Atty. General's Office, Pierre, SD, for defendants.

Bruce H. Ellison, Rapid City, SD, for intervenor.

MEMORANDUM OPINION

BATTEY, District Judge.

PROCEDURAL HISTORY

On October 18, 1993, defendants the State of South Dakota, Attorney General of South Dakota Mark Barnett, Secretary of State Joyce Hazeltine, and Governor Walter D. Miller (collectively "defendants") filed a second motion seeking summary judgment in their favor. On December 3, 1993, plaintiff South Dakota Disposal Systems, Inc. (SDDS) filed a response in opposition to defendants' motion and a cross motion for summary judgment in favor of SDDS. Based upon this memorandum opinion, defendants' motion is granted.

FACTS

The facts of this case are complicated by a series of seven judicial opinions which have resulted from the numerous lawsuits initiated by SDDS. Because all but one of these decisions have some bearing on the present lawsuit before this Court, a brief reference to these decisions will be included.

A. Preliminary Events

On November 17, 1988, SDDS applied for a permit with the South Dakota Department of Water and Natural Resources (Department). SDDS sought a permit to construct and operate the Lonetree Facility in Fall River County, South Dakota. SDDS intended to dispose of baled municipal solid waste (MSW) at Lonetree. The Department ultimately published a recommendation to deny the permit.

Under South Dakota law, SDDS had a right to request a contested case hearing before the Board of Minerals and Environment (BME) and SDDS did so. Technical Information Project (TIP) intervened and an evidentiary hearing was held before the BME. On September 21, 1989, the BME issued SDDS a one-year permit allowing Lonetree to accept up to 300,000 tons of MSW during the term of the permit. TIP appealed the BME decision to a South Dakota trial court, which affirmed the BME decision. TIP then appealed the trial court decision to the South Dakota Supreme Court.

While the court case concerning the one-year permit was winding its way through court, in March of 1990 SDDS applied for a renewal permit. SDDS sought a five-year renewal of its initial permit allowing Lonetree to take in 7.75 million tons of MSW. SDDS had no contracts for the disposal of the waste at this time, but anticipated that 90 percent of its 7.75 million tons of MSW would come from outside of South Dakota.

In the spring of 1990, the Surface Mining Initiative Fund (SMIF), now Action for the Environment (ACT), collected petitions sufficient to place an Initiated Measure¹ on the ballot at the November 6, 1990, general election. The Initiated Measure required that all large-scale solid waste disposal facilities obtain legislative approval as a prerequisite to operation. Legislative approval was to be given only upon the legislature finding that such facility was environmentally safe and in the public interest. The Initiated Measure defined "large-scale solid waste disposal facilities" as those facilities disposing of over 200,000 tons of solid waste annually. It was passed and became effective on November 22, 1990. The provisions of the measure were applicable retroactively to any facility permitted after July 1, 1989.

On November 7, 1990, the day after the initiated measure passed, SDDS laid off its work force at Lonetree and ceased preparing the site for operation. On December 7, 1990, after another contested case hearing, the BME issued the five-year renewal permit sought by SDDS.

B. SDDS I (The subject of the one-year permit.)

On June 26, 1991, the South Dakota Supreme Court issued a decision on TIP's appeal of the issuance of the one-year permit to SDDS. See In re Application of SDDS, Inc. for a Solid Waste Permit, 472 N.W.2d 502 (S.D.1991) (SDDS I). SDDS I resolved the issue raised by TIP as to whether the BME's findings were adequate to support the issuance of the one-year permit to SDDS. Id. at 510-14. The Supreme Court found that the BME findings were inadequate to support the issuance of the permit. Id. at 514.

Specifically, the court stated that under South Dakota law, when a state agency is required to make certain findings of fact on the record, the agency must state in the record its conclusion as well as the basic or underlying facts which supported its conclusion. Id. at 512 (citing SDCL 1-26-25). The BME was required to make findings of fact that the permit issued for SDDS met five specific environmental requirements and further that the issuance of the permit was in the public interest. Id. at 512-13 (citing ARSD §§ 74:27:03:08, 74:27:02:01, 74:27:03:07, 74:27:04:04, and 74:27:04:09). The BME had merely stated its conclusions that the permit issued to SDDS was in the public interest and that the waste facility was environmentally safe. Id. at 512-13. The BME did not state the underlying or basic facts supporting its conclusions, as was required under South Dakota law. Id. Therefore, the South Dakota Supreme Court held that there were no findings which would support the issuance of the permit to SDDS and reversed. Id. at 514. The one-year permit was therefore a nullity.

C. SDDS III (The constitutionality of the Initiated Measure.)

On December 7, 1990, the day SDDS received its five-year renewal permit from the BME, SDDS filed an action before a state trial court challenging the constitutionality of the Initiated Measure under the South Dakota and United States Constitutions. SDDS argued, among other things, that the Initiated Measure violated its rights to due process of law, violated the dormant aspect of the interstate commerce clause, and violated the equal protection clause.

Judge Steven Zinter, Circuit Judge for the Sixth Judicial Circuit of South Dakota, issued a decision on October 31, 1991, denying most of the claims raised by SDDS. Specifically, Judge Zinter found that the Initiated Measure did not violate the rights of SDDS under either the equal protection clause or the dormant aspect of the interstate commerce clause. As to the violation of due process rights alleged by SDDS, Judge Zinter held that the retroactive provision of the Initiated Measure did violate SDDS's rights insofar as it interfered with SDDS's rights under the one-year permit. However, as to the five-year permit, Judge Zinter held that SDDS did not have a constitutionally protected property interest in the five-year permit at the time the Initiated Measure became law because the BME did not grant the five-year permit until after the measure became effective. Because SDDS had no property interest in the five-year permit, Judge Zinter ruled that SDDS had no due process rights which could be violated in connection with that permit.

D. Actions Occurring Between SDDS I and SDDS II

Immediately following the decision in SDDS I, the BME conducted a remand hearing on the one-year permit. TIP again appealed the permit to a state trial court. Before the trial court could issue a decision, the next decision by the South Dakota Supreme Court was issued.

In February 1991, the South Dakota Legislature passed and the governor signed Senate Bill 169 (S.B. 169) which approved the Lonetree facility pursuant to the requirements of the Initiated Measure.² In the spring of 1991, ACT filed petitions with the secretary of state sufficient to refer S.B. 169 to a vote of the electorate at the next general election in November 1992.

E. SDDS II³ (The subject of the effective date of S.B. 169.)

SDDS commenced SDDS II in state court seeking a declaration that when the legislature passed and the governor signed S.B. 169, SDDS had obtained the legislative approval required by the Initiated Measure and could immediately thereafter begin operating its disposal facility notwithstanding the pending Referendum. SDDS, Inc. v. State, 481 N.W.2d 270, 272 (S.D.1992) (SDDS II). On February 19, 1992, the South Dakota Supreme Court held that in South Dakota a law does not become effective until passed by the legislature, signed by the governor, and, if referred, until approved by a majority vote in the next general election. Id. Therefore, the court reasoned that S.B. 169 was not yet effective because, although it had been passed by the legislature and signed by the governor, proper petitions for referral of S.B. 169 had been timely filed with the secretary of state and the referral election had not yet been held. Id.

Justice Amundson wrote an opinion concurring in the result that the majority had reached. Id. at 273-74 (Amundson, J., concurring). Justice Amundson stated that, because the BME had failed to make the express findings of fact required by law, the BME action purporting to issue the one-year permit was void. Id. at 273. Because the one-year permit was void, Justice Amundson wrote that SDDS could not begin operating even if SDDS had obtained legislative approval. Id. at 274. Essentially, Justice Amundson held the legislative approval to be meaningless because, without a permit, there was nothing for the legislature to approve in passing S.B. 169. Id.

F. Initial Decision in This Court

Following Judge Zinter's decision on the constitutionality of the Initiated Measure, SDDS in November 1991 filed its complaint with this Court seeking a decision on the constitutionality of the Referendum. SDDS alleged in its complaint that the Referendum violated its rights...