Tri-State Generation and Transmission Ass'n, Inc. v. Environmental Quality Council

• Decision Date: 28 February 1979
• Docket Number: No. 4944,TRI-STATE,4944
• Citation: 590 P.2d 1324
• Parties: GENERATION AND TRANSMISSION ASSOCIATION, INC., a Colorado Corporation, Appellant (Petitioner below), v. The ENVIRONMENTAL QUALITY COUNCIL of the State of Wyoming, Robert E. Sundin, as Director of the Department of Environmental Quality, and Randolph Wood, as Administrator of the Air Quality Division of the Department of Environmental Quality, Appellees (Respondents below).
• Court: Wyoming Supreme Court

Page 1324

590 P.2d 1324

TRI-STATE GENERATION AND TRANSMISSION ASSOCIATION, INC., a Colorado Corporation, Appellant (Petitioner below), v. The ENVIRONMENTAL QUALITY COUNCIL of the State of Wyoming, Robert E. Sundin, as Director of the Department of Environmental Quality, and Randolph Wood, as Administrator of the Air Quality Division of the Department of Environmental Quality, Appellees (Respondents below).

No. 4944.

Supreme Court of Wyoming.

Feb. 28, 1979.

Nick Kalokathis and David D. Uchner, Cheyenne, and John J. Conway, Denver, Colo., for appellant.

John J. Rooney, Acting Atty. Gen. and E. Michael Weber, Asst. Atty. Gen., Cheyenne, for appellees.

Before RAPER, C. J., McCLINTOCK, THOMAS and ROSE, JJ., and GUTHRIE, J., Retired. ^*

ROSE, Justice.

This appeal questions the process through which the Environmental Quality Council of the State of Wyoming (hereafter the Council) promulgated certain standards pertaining to sulfur dioxide (SO 2) emissions. In addition, Tri-State Generation and Transmission Association, Inc., (hereafter Tri-State) contends that the Council failed to conform to the requirements of § 35-502.17, W.S.1957, 1975 Cum.Supp. ¹ We will affirm the district court judgment in part, reverse it in part and remand the case for further proceedings.

In June, 1974, the Air Quality Advisory Board recognized sulfur dioxide as a pollutant of existing and potentially increasing importance, and requested the Division of Air Quality of the Wyoming Department of Environmental Quality to investigate the various aspects of regulating SO 2. In September, 1974, the Division presented a proposed regulation to the Advisory Board, whereupon the Board adopted certain recommendations for SO 2 emission regulations. The Administrator of the Air Quality Division, on October 29, 1974, recommended a regulation to the Director of the Department of Environmental Quality. This recommendation was different from the Division and Board proposals. The Director recommended the Division proposal to the Council and gave timely public notice of a public hearing to be held before the Council on December 9, 1974.

At the commencement of the public hearing, it was announced that cross-examination of witnesses would not be permitted, although members of the Council were allowed to ask questions for clarification purposes, and that oral presentations would be limited to ten minutes. Apparently, groups of three companies were permitted to make a thirty-minute presentation, and objections were lodged on behalf of Tri-State and others, with respect to the time limitations imposed. The submission of written statements and documentation was encouraged, and the record was left open for ten days after the hearing to allow for additional written statements.

On January 31, 1975, after giving public notice of the meeting, the Council met, considered "The principal reasons for overruling the considerations against adoption of said regulations urged by Tri-State Generation and Transmission Association, Incorporated are that:

                and adopted a Division proposal based, at least in part, on comments made at and after the December public hearing.  Subsequently, Tri-State timely filed its Petition for Review with the district court, and requested from the Council a statement of reasons why the Council did not adopt Tri-State's suggestions regarding the SO 2 emission standards.  2  In response, the Council, on March 4, 1975, issued a statement which provides in relevant part
                

"(1) Sufficient evidence was presented to indicate that the technology necessary to comply with the SO 2 emission regulations is both technically and economically feasible.

"(2) Said SO 2 emission regulations are necessary to carry out the policy and purpose of the Environmental Quality Act, and the rules and regulations promulgated thereunder."

In its amended petition for review, Tri-State contended that:

1. The Council had exceeded its powers by adopting emission standards without a showing that the quantities and duration prohibited may be injurious.

2. The Council, Director and Administrator acted contrary to law in failing to consider the factors set forth in § 35-502.17, supra.

3. The Council's action was arbitrary, capricious and characterized by an abuse of discretion in that the action was taken without finding, or having sufficient evidence upon which to find, that the standards were necessary to prevent air pollution.

4. The Council failed to afford Tri-State a reasonable opportunity to be heard.

In its brief in support of the petition for review, Tri-State additionally asserted that the Council had not complied with its own rules of practice when it failed to render a written decision containing the reasons for the emission standards adopted. In its brief to the district court, Tri-State did not refer to the Council's action as being arbitrary, capricious, or characterized as an abuse of discretion, but chose to rely only on the review grounds set forth in § 9-276.32(c)(i) and (ii), W.S.1957, 1975 Cum.Supp. ³ As a result, the district court specifically addressed and rejected only these grounds and, then, generally found all further points raised in the petition for review to be without merit.

In it's order, filed October 28, 1977, affirming the Council's adoption of the SO 2 emission standards, the district court found that the Council had not acted in excess of its powers, and that the Council's action was in conformity with the law and in compliance with § 9-276.21, W.S.1957, 1975 Cum.Supp. ⁴ The district court found, however On appeal to this court, Tri-State identifies the issues as follows:

that the Council's March 4, 1975, statement inadequately set forth the reasons for overruling Tri-State's position against the adoption of the SO 2 emission standards, and ordered that the standards not be enforceable against Tri-State until an adequate statement was issued. On December 30, 1977, the Council did file a more detailed statement of reasons for overruling Tri-State's position against the emission standards.

"I. THE DISTRICT COURT ERRED WHEN IT UPHELD THE AGENCY ACTION BEFORE ASCERTAINING WHETHER THE AGENCY HAD COMPLIED WITH THE APPROPRIATE STATUTORY CRITERIA.

"II. UNDER SECTION 9-4-103, THE AGENCY IS UNDER AN OBLIGATION TO PROVIDE A CONCISE STATEMENT OF PRINCIPAL REASONS AND FAILURE TO DO SO RENDERS THE AGENCY ACTION INVALID.

"III. THE AGENCY HAS FAILED TO DEMONSTRATE AWARENESS OF THE PROBLEM.

"IV. THE DISTINCTION BETWEEN 'CONTESTED CASES' AND 'NONCONTESTED CASES' IS LOSING ITS VITALITY AND IS OF LITTLE VALUE HERE.

"V. THE COUNCIL DID NOT COMPLY WITH ITS OWN RULES OF PRACTICE AND PROCEDURE, AND IN VIEW OF SUCH FAILURE THE AGENCY ACTION MUST BE SET ASIDE.

"VI. THE RECORD IS BARREN OF ANY EVIDENCE DEMONSTRATING CONFORMITY TO THE STATUTORY REQUIREMENTS."

Before disposing of certain of these issues, it is important to explain what issues this opinion does not decide. It is readily apparent from the order and letter opinion of the district court that the district court did not consider whether the Council's action was arbitrary, capricious, or characterized by an abuse of discretion. In other words, the district court did not consider whether the Council's decision was based on a consideration of the relevant factors or whether the Council committed error so clear as to deprive its decision of a rational basis. See, Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971), and Ethyl Corp. v. Environmental Protection Agency, 176 U.S.App.D.C. 373, 541 F.2d 1, 34-35 fn. 74 (1976), cert. denied, 426 U.S. 941, 96 S.Ct. 2663, 49 L.Ed.2d 394. See, generally, Monahan v. Board of Trustees, etc., County of Sheridan, Wyo., 486 P.2d 235, 237 (1971). Tri-State Second, it is also apparent from the record on appeal that the district court did not review the Council's supplementary statement of reasons for overruling the considerations urged by Tri-State against adoption of the SO 2 emission standards. As the Council correctly points out in its brief, Tri-State made no attempt to have the district court reconsider that statement of reasons, even though Tri-State had a two-month period, prior to the docketing of this appeal, within which to do so. Tri-State argues that the district court should have limited its ruling to the question of the adequacy of the statement originally provided, and reserved ruling on the validity of the agency action until the agency complied with the remand order. The reasons for requiring a concise statement of the principal reasons for overruling the consideration urged against the adoption of a rule are to assure that the agency considered arguments made at the public hearing and to facilitate judicial review. Anderson, Leech & Morse, Inc. v. Washington State Liquor Control Board, 89 Wash.2d 688, 575 P.2d 221, 224 (1978); and 13 Uniform Laws Annotated 374 (Supp.1978), Commissioners' Comment to Model State Procedure Act Due to the manner in which this appeal reaches this court, we will consider only the following issues:

                argued below, and now on appeal, that either the Council's own rules of practice, or the Wyoming Administrative Procedure Act, or the general body of administrative law required that the Council provide a sufficient statement of reasons for the establishment of the SO 2 emission standards.  The district court found that the Council's rules of practice applied only to "contested cases"; that the proceeding in question was not a "contested case"; and, therefore, that there was no statutory requirement that the Council provide reasons for its action.  The district court did find, however, that the Council was required to file a somewhat detailed statement of reasons for overruling the considerations voiced by Tri-State against adoption of the emission standards.  We have concluded that the alleged requirement to provide Reasons for adoption of an administrative rule is different from the

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