White Bear Lake Restoration Ass'n ex rel. State v. Minn. Dep't of Natural Res., A18-0750

• Decision Date: 15 July 2020
• Docket Number: A18-0750
• Parties: WHITE BEAR LAKE RESTORATION ASSOCIATION, EX REL. STATE of Minnesota, Appellant, and White Bear Lake Homeowners’ Association, Inc., ex rel. State of Minnesota, Appellant, v. MINNESOTA DEPARTMENT OF NATURAL RESOURCES, et al., Respondents, and Town of White Bear, Respondent, City of White Bear Lake, Respondent.
• Court: Minnesota Supreme Court

946 N.W.2d 373

WHITE BEAR LAKE RESTORATION ASSOCIATION, EX REL. STATE of Minnesota, Appellant,andWhite Bear Lake Homeowners’ Association, Inc., ex rel. State of Minnesota, Appellant,

v. MINNESOTA DEPARTMENT OF NATURAL RESOURCES, et al., Respondents,andTown of White Bear, Respondent,City of White Bear Lake, Respondent.

A18-0750

Supreme Court of Minnesota.

Filed: July 15, 2020

OPINION

LILLEHAUG, Justice.

After White Bear Lake's water levels reached historic lows in the early 2010's, two associations sued the Minnesota Department of Natural Resources (the DNR) for pollution and impairment of the lake, primarily arising out of alleged mismanagement of the groundwater-appropriation permitting process. Both associations brought claims under Minn. Stat. § 116B.03 (2018), part of the Minnesota Environmental Rights Act (MERA), and one association brought a claim under the common-law public trust doctrine. In this appeal, we consider whether the associations stated claims upon which relief could be granted. We conclude that the associations stated a claim under section 116B.03, and thus we reverse the court of appeals’ decision on that issue. We further conclude that one of the associations failed to state a claim under the public trust doctrine; thus, we affirm the decision of the court of appeals on that issue, although on different grounds. Finally, we remand to the court of appeals to address the remaining issues raised in this appeal.

FACTS

White Bear Lake is a closed-basin lake in Ramsey and Washington counties. It has no natural surface-water inlets or outlets and has a small watershed for a lake of its size. Its water levels therefore depend on precipitation, evaporation, and groundwater.

White Bear Lake's water levels have been recorded since 1924. The water levels have experienced significant fluctuations in that time, spanning a range of more than 7 feet. White Bear Lake's lowest water level was 918.84 feet, recorded on January 10, 2013. Other notable low-water periods include 1924–39 and 1988–93, which correlate to the Dust Bowl and a statewide drought.

The effect of groundwater on White Bear Lake's water level is at issue in this case. Appellants White Bear Lake Restoration Association (Restoration) and White Bear Lake Homeowners’ Association (Homeowners) allege that White Bear Lake has been polluted and impaired by groundwater pumping from the Prairie du Chien and Jordan aquifers (collectively, "the aquifer"). White Bear Lake and the aquifer are hydrologically connected, meaning that aquifer groundwater levels have an effect on the lake's water levels. The aquifer is the most commonly used aquifer for drinking water in the Twin Cities metropolitan area. Annual withdrawals from the aquifer have more than doubled since 1980, from 1,873 million gallons in 1980 to 4,557 million gallons in 2007.

Minnesota Statutes §§ 103G.255 –.299 (2018) authorize the DNR to manage groundwater and surface water appropriations through a permitting process. The permits contributing to the alleged over-appropriation from the aquifer were issued to municipalities over the last four to five decades. Allegedly, many of the DNR's permits to municipalities are "evergreen," which means that they have no expiration date.

Restoration, a registered nonprofit corporation dedicated to the restoration and preservation of White Bear Lake, commenced this lawsuit against respondents the DNR and its then-commissioner, alleging MERA violations under Minn. Stat. § 116B.03, subd. 1, based on alleged pollution and impairment of White Bear Lake and the aquifer. Specifically, Restoration alleged that the DNR mismanaged the groundwater-appropriations permitting process, leading to materially adverse effects on the lake and aquifer including effects on the natural environment; recreational activities; historical, cultural, scenic, and aesthetic qualities; and on homes and businesses. Further, Restoration alleged that the DNR violated Minn. Stat. §§ 103G.211 (2018), .271, .285, and .287 and Minn. R. 6115.0270, .0670, and .0750 (2019)—all "environmental quality standards"—and thereby violated MERA, as well.¹

Homeowners intervened in the district court as a plaintiff. Homeowners is a registered nonprofit formed to protect the water quality of White Bear Lake and help prevent the spread of invasive species. All of Homeowners’ members hold riparian rights to the lake. Homeowners’ complaint echoed Restoration's MERA claim and added another: a claim that the DNR had violated the common-law public trust doctrine. The state and its agencies are trustees of White Bear Lake's waters and lakebed, asserted Homeowners’ complaint, and the DNR's actions and failure to act violated its duty as trustee to maintain the lake's levels and water quality.

Respondents City of White Bear Lake and Town of White Bear intervened in the district court as defendants. Both are municipalities bordering White Bear Lake that hold DNR-issued permits, allowing them to pump groundwater from the aquifer.

In May 2013, the DNR filed motions to dismiss the associations’ complaints, in part for failure to state claims upon which relief could be granted. The district court denied the motions. All parties filed motions for summary judgment in early 2014. The district court denied the motions of Restoration, the DNR, and the Town of White Bear in full. The district court granted Homeowners’ motion in part, concluding that the public trust doctrine affords a common-law cause of action to protect public use of the water and lakebed of White Bear Lake, but denied summary judgment as to whether the DNR had breached its fiduciary obligation as trustee.

A bench trial began on March 6, 2017,² and took place over the course of three and a half weeks. Based on the evidence at trial, the district court found that the DNR had violated both Minn. Stat. § 116B.03 and the public trust doctrine. The court's broad injunctive relief prohibited the DNR from issuing permits for new wells or increasing appropriations within a 5-mile radius of White Bear Lake until the DNR complied with certain statutory requirements. These included, among other things, reviewing all existing groundwater appropriation permits within the 5-mile radius, reopening and downsizing noncompliant permits, analyzing the cumulative impact of permits, setting a trigger elevation of 923.5 feet for the lake, preparing a process for a contingent residential irrigation ban, and immediately amending all permits to require permit holders to submit a contingency plan for conversion to surface water sources.

The DNR appealed on nine grounds, arguing that the district court erred by:

(1) allowing the action to proceed under Minn. Stat. § 116B.03 instead of Minn. Stat. § 116B.10, (2) misapplying the public-trust doctrine, (3) denying summary judgment on the ground that respondents failed to exhaust administrative remedies, (4) refusing to require joinder of affected permit holders not parties to the case, (5) interpreting MERA to require DNR to reopen and amend permits, (6) failing to give deference to DNR's permitting decisions, (7) violating separation-of-powers principles, (8) requiring DNR to amend existing permits without holding administrative hearings, and (9) making clearly erroneous factual findings.

White Bear Lake Restoration Ass'n ex rel. State v. Minn. Dep't of Nat. Res. , 928 N.W.2d 351, 358 (Minn. App. 2019).

A divided court of appeals decided the first two issues, and did not reach the other seven. Id. at 358–59. The court concluded that neither Minn. Stat. § 116B.03 nor the public trust doctrine were available to afford relief to the associations. Deciding that the associations had made a prima facie showing under Minn. Stat. § 116B.10 (2018), however, the court remanded the MERA claims to the district court for remittitur to institute DNR administrative proceedings. Id. at 368. Judge Bratvold dissented on both issues. Id.

We granted review on the two issues reached by the court of appeals and denied the DNR's conditional cross-appeal on four issues.

ANALYSIS

I.

Whether the associations have stated claims upon which relief may be granted under Minn. Stat. § 116B.03 is an issue of statutory interpretation. Issues of statutory interpretation are questions of law, which we review de novo. Bruton v. Smithfield Foods, Inc. , 923 N.W.2d 661, 664 (Minn. 2019). The goal of statutory interpretation is to ascertain and effectuate the intent of the legislature. Minn. Stat. § 645.16 (2018). Words and phrases are construed according to rules of grammar and common and approved usage. Minn. Stat. § 645.08 (2018). If the legislative intent is clear, we apply the statute's plain meaning. Fish v. Ramler Trucking, Inc. , 935 N.W.2d 738, 741 (Minn. 2019).

The associations brought their MERA claims under Minn. Stat. § 116B.03, subd. 1. To determine whether they were appropriately brought under that section, we must first determine whether the associations pleaded all of the elements of a claim within the meaning of the statute. If so, we must then determine whether the claims are nevertheless barred by the no-action clause in section 116B.03, subdivision 1.

A.

Section 116B.03, subdivision 1, provides that "[a]ny person ... may maintain a civil action in the district court for declaratory or equitable relief in the name of the state of Minnesota against any person, for the protection of ... natural resources located within the state, whether publicly or privately owned, from pollution, impairment, or destruction." The parties agree that, under MERA, the associations are "person[s]" able to maintain a civil action, and the DNR is a "person" against whom a civil action may be maintained. See Minn. Stat. § 116B.02, subd. 2 (2018) (defining "person").

"Pollution, impairment, or destruction," as used in section 116B.03, subdivision 1, is defined by MERA as either (1) "any conduct by any person which violates, or is likely to violate, any environmental quality standard,...