State v. City of Minneapolis, A19-0999

• Decision Date: 10 February 2021
• Docket Number: A19-0999
• Citation: 954 N.W.2d 584
• Parties: STATE of Minnesota BY SMART GROWTH MINNEAPOLIS, et al., Appellants, v. CITY OF MINNEAPOLIS, Respondent.
• Court: Minnesota Supreme Court

954 N.W.2d 584

STATE of Minnesota BY SMART GROWTH MINNEAPOLIS, et al., Appellants,

v.CITY OF MINNEAPOLIS, Respondent.

A19-0999

Supreme Court of Minnesota.

Filed: February 10, 2021

Jack Y. Perry, Maren M. Forde, Taft Stettinius & Hollister LLP, Minneapolis, Minnesota; Timothy J. Keane, Kutak Rock LLP, Minneapolis, Minnesota; and Nekima Levy-Pounds, Levy Armstrong Law Firm, Minneapolis, Minnesota, for appellants.

James R. Rowader, Jr., Minneapolis City Attorney, Ivan Ludmer, Kristin R. Sarff, Assistant City Attorneys, Minneapolis, Minnesota, for respondent.

Elise L. Larson, Kevin S. Reuther, Saint Paul, Minnesota, for amicus curiae Minnesota Center for Environmental Advocacy.

OPINION

MOORE, III, Justice.

This appeal concerns a claim challenging the City of Minneapolis's (City) 2040 Comprehensive Plan (Plan), which alleges that adoption of the Plan violates Minnesota environmental law. We are asked to decide whether a challenge to the adoption of a comprehensive plan can be the proper subject of a claim under the Minnesota Environmental Rights Act (MERA), Minn. Stat. §§ 116B.01 –.13 (2020), when such a plan is exempted from environmental review by an administrative rule promulgated under the Minnesota Environmental Policy Act (MEPA), Minn. Stat. §§ 116D.01 –.11 (2020). We are also asked to decide what showing is necessary to overcome a motion to dismiss for failure to state a claim under MERA, particularly as to an allegation that certain conduct is likely to cause materially adverse environmental effects.

In early December 2018, before the vote of the Minneapolis City Council to approve the Plan, appellants Smart Growth Minneapolis, Audubon Chapter of Minneapolis, and Minnesota Citizens for the Protection of Migratory Birds (collectively, Smart Growth) filed a complaint against the City, asserting a claim that challenged the Plan under MERA. The City responded with a motion under Minnesota Rule of Civil Procedure 12.02(e) to dismiss Smart Growth's complaint for failure to state a claim upon which relief can be granted. The district court granted that motion, finding that Smart Growth's claim under MERA was barred by an administrative rule, Minn. R. 4410.4600, subp. 26 (2019), adopted under MEPA. The district court held that because comprehensive plans are specifically exempt from environmental review under rule 4410.4600, comprehensive plans are, therefore, also exempt from judicial review under MERA. The district court also dismissed Smart Growth's claim based on a second, independent conclusion: that Smart Growth "fail[ed] to establish a prima facie showing under MERA."¹ The court of appeals affirmed. Because we hold that adoption of a comprehensive plan can be the subject of a MERA claim and that appellants’ allegations are sufficient to state a claim for which relief can be granted under MERA, we reverse.

FACTS

Local governmental units in the metropolitan area are required to create and adopt comprehensive plans under the Metropolitan Land Planning Act, Minn. Stat. §§ 473.851 –.871 (2020). Comprehensive plans "provide guidelines for the timing and sequence of the adoption of official controls to ensure planned, orderly, and staged development and redevelopment." Minn. Stat. § 473.858, subd. 1. Governmental units are required to "review and, if necessary, amend" these plans at least once every 10 years. Minn. Stat. § 473.864, subd. 2. The Metropolitan Council reviews, and may require modification to, any proposed comprehensive plan or plan amendments. Minn. Stat. § 473.858, subd. 3 ; Minn. Stat. § 473.864, subds. 1, 2(b)(1).

In March 2018, consistent with the ten-year plan review requirement, the City released its proposed 2040 Plan for public comment.² The proposed Plan contained substantial amendments to the City's existing comprehensive plan, which would result in the elimination of single-family zoning and a city-wide increase in permissible building density.³ Following the comment period, the City scheduled a vote for December 7, 2018, on whether to submit the Plan to the Metropolitan Council for review.

On December 4, 2018, three days before the scheduled vote, Smart Growth served a complaint seeking a declaration that Smart Growth had satisfied the required prima facie showing under MERA that the Plan "is likely to cause the pollution, impairment, or destruction of the air, water, land or other natural resources located within the state" and that the City had no affirmative defenses. Smart Growth also sought to enjoin the City's approval of the Plan until the City offered a rebuttal to or affirmative defense against Smart Growth's prima facie showing, "presumably through a voluntary environmental review." Along with the complaint, Smart Growth also filed a motion for a temporary restraining order to enjoin the City from holding the vote on December 7.

Smart Growth alleged in the complaint that implementation of the Plan would cause increased density and related complications that are "likely to materially adversely affect the environment." The complaint also stated that an "immediate and full build-out" of the Plan would likely result in a "[d]ramatic" (1) increase in the amount of impervious surface area, thus resulting in the material increase in the rate and volume of stormwater runoff; (2) increase in the number of residents, thus resulting in the material increase in domestic wastewater generation, potable water usage, and parking needs/vehicles/traffic; and (3) loss of the amount of tree coverage/green space, thus resulting in the material decrease in aesthetic livability and bird and other wildlife habitat. Smart Growth further alleged that the "potential and likely environmental effects" of the build-out include (1) threats to the adequacy of existing public infrastructure, including storm and sanitary sewer systems and water supply; (2) threats of traffic congestion; (3) threats to air quality; and (4) threats to aesthetic livability, tree coverage, and wildlife habitat.

Smart Growth attached to the complaint, and incorporated by reference, an environmental analysis of the Plan by Sunde Engineering, PLLC.⁴ Sunde describes the Plan as a "dramatic shift in land use policy" that will "inherently impact the environment as well as existing infrastructure." The report calculates a number of projections under the Plan, including increased residential density, traffic trips per day, volume of water runoff, and contaminant loads on the storm sewer system.

The day before the City's scheduled vote on whether to approve the Plan for consideration by the Metropolitan Council, the district court denied Smart Growth's motion for a temporary restraining order. Two weeks later, the City filed a motion to dismiss the complaint for failure to state a claim under Minn. R. Civ. P. 12.02(e). It argued that Smart Growth's MERA claim is barred by rule 4410.4600, subp. 26, even though that administrative rule was promulgated under MEPA, not MERA. The City also argued that Smart Growth did not satisfy MERA's prima facie requirement. Specifically, the City claimed that because the Plan does not implement any specific project causing or likely to cause pollution, impairment, or destruction of the environment, Smart Growth cannot establish a prima facie showing.

Smart Growth then filed a motion for summary judgment pursuant to Minnesota Rule of Civil Procedure 56.01. It contended that its MERA claim is not barred by the MEPA exemption in rule 4410.4600, that it satisfied MERA's prima facie showing, and that the City failed to satisfy its own burden of rebutting or asserting an affirmative defense against that showing.⁵

The district court granted the City's motion to dismiss and denied Smart Growth's motion for summary judgment. The district court found that Smart Growth's claims "are barred by Minnesota law" and, therefore, do not state a claim upon which relief can be granted. The district court reasoned that because comprehensive plans are exempt from MEPA environmental review under the exemption in rule 4410.4600, Smart Growth's claim asking that the City be ordered to engage in environmental review under MERA, must be procedurally barred. The district court also found, as an independent basis for dismissal, that Smart Growth failed to make a prima facie showing under MERA because it did not identify any City project or action that would "itself cause any pollution, impairment, or destruction of natural resources."

Smart Growth appealed, and the court of appeals affirmed the district court on both grounds. State by Smart Growth Minneapolis v. City of Minneapolis , 941 N.W.2d 741 (Minn. App. 2020). The court of appeals first held that allowing Smart Growth to obtain environmental review of the Plan under MERA would be contrary to MEPA, which exempts the City from conducting an environmental review under rule 4410.4600, and would create conflict between the two acts. Id. at 745. The court of appeals next held that Smart Growth failed to plead a prima facie case under MERA because the complaint did not sufficiently allege "any specific facts to support [its] allegations that the approval of the plan is likely to materially and adversely affect the environment." Id. at 746. The court of appeals concluded that the City's mere approval of the Plan is too attenuated to support Smart Growth's claim. Id. at 746–47.

The concurring judge agreed that Smart Growth's complaint failed to plead sufficient facts to state a claim under MERA, but disagreed that the exemption in rule 4410.4600 precluded Smart Growth from pursuing relief under MERA as a matter of law. Id. at 748 (Johnson, J., concurring specially). The concurrence noted that "there is nothing in the text of MEPA or the MEPA exemption rule to suggest that the MEPA exemption rule extends to a cause of action arising under MERA" and concluded that the "district court applied an administrative rule outside the context for which it was intended." Id.

We granted Smart Growth's petition for...