Willamette Ind., Inc., v. The Clean Water Commission

• Decision Date: 21 November 2000
• Citation: 34 S.W.3d 197
• Parties: (Mo.App. W.D. 2000) . Willamette Industries, Inc., Appellant v. The Clean Water Commission of the State of Missouri and Thomas Herman in his Official Capacity as Chairman of the Clean Water Commission of the State of Missouri, and The Missouri Department of Natural Resources, and Stephen Mahfood in his Official Capacity as Director of the Missouri Department of Natural Resources, Respondent. Case Number: WD57874 Missouri Court of Appeals Western District Handdown Date:
• Court: Missouri Court of Appeals

34 S.W.3d 197 (Mo.App. W.D. 2000)

This slip opinion is subject to revision and may not reflect the final opinion adopted by the Court.

Willamette Industries, Inc., Appellant v. The Clean Water Commission of the State of Missouri and Thomas Herman in his Official Capacity as Chairman of the Clean Water Commission of the State of Missouri, and The Missouri Department of Natural Resources, and Stephen Mahfood in his Official Capacity as Director of the Missouri Department of Natural Resources, Respondent.

Case Number: WD57874

Missouri Court of Appeals Western District

Handdown Date: 11/21/2000

Appeal From: Circuit Court of Cole County, Hon. Thomas Joseph Brown

Counsel for Appellant: David Shorr

Counsel for Respondent: Deborah Jean Neff and William J. Bryan

Opinion Summary:

Willamette Industries appeals dismissal of its petition for declaratory judgment, temporary restraining order and preliminary injunction. Willamette filed its petition after the Missouri Clean Water Commission imposed certain new special conditions into its storm water permit. At issue is whether the circuit court was correct in dismissing Willamette's claim for failing to exhaust its administrative remedies.

AFFIRMED.

Division holds: All of the statutory exceptions to administrative exhaustion found under 536.050.2 hinge upon the determination of whether the disputed action is a "rule," rather than a decision.

Willamette's petition does not seek a declaration in advance of whether the Clean Water Commission adopted a policy that amounts to a rule without formulating proper procedures. Instead, it attacks the inclusion of certain conditions placed upon its storm water-operating permit. Its remedy is through the Administrative Procedure Act.

In order to receive a remedy under the Declaratory Judgment Act, one must first exhaust all available administrative remedies. Willamette did not do this

Opinion Author: Ronald R. Holliger, Presiding Judge

Opinion Vote: AFFIRMED. Breckenridge and Smart, Jr., JJ., concur.

Opinion:

Willamette Industries ("Willamette") appeals the dismissal of its petition for Declaratory Judgment, Temporary Restraining Order, and Preliminary and Permanent Injunction. Willamette claims that the imposition of certain special conditions to its storm water permit was illegal and unauthorized. The issue is whether Willamette's failure to exhaust its administrative remedies before the Missouri Clean Water Commission supported the circuit court's dismissal of its petition.

The Parties

Willamette is an Oregon Corporation operating a wood recovery facility in Wayne County. The facility is designed to produce chips from whole logs and wood residuals. The product produced is then shipped to Willamette's paper mill in Kentucky. Willamette does no logging at this facility. The raw product that it processes is purchased on the open market and comes from several states including Missouri.

The defendants sued by Willamette are the Missouri Clean Water Commission (Commission), its Chairman, Thomas Herman (Herman), the Missouri Department of Natural Resources (MDNR), and its Director, Stephen Mahfood (Mahfood). The Commission is the water contaminant control agency for the State of Missouri. section 644.021.1, RSMo 1994.¹

The Commission's statutory charges include: (1) general supervision of the administration and enforcement of the Missouri Clean Water Law,² (2) issuing, renewing, revoking, modifying or denying permits to prevent, control or abate water pollution or violations of the Missouri Clean Water Law or federal water pollution control laws.³

MDNR is established in RSMo. Chapter 640 as Missouri's general environmental agency charged with administering "the programs assigned to the Department relating to environmental control and the conservation and management of natural resources." The Commission is structurally assigned to MDNR. section 640.010.3 RSMo, Cum. Supp. 1999 as amended.

The Permit Process

The Missouri Clean Water Law was enacted, in part, to protect public health, public welfare, wildlife, fish and aquatic life, domestic, agricultural, industrial, recreational and other use of Missouri's water. section 644.011. Any person who wishes to "build, erect, alter, replace, operate, use or maintain any water contaminant or point source in this state" must have a permit. section644.051.2. All parties agree that Willamette is required to have a storm water permit to operate its facility in Wayne County. 10 CSR 20-6.200(2)(c)1.A.⁴

On May 21, 1999, Willamette was issued a new storm water permit. It objects here to special conditions 16 and 17 of the permit and to the limitation of the permit to a period of one year.

Special Condition 16

(Training Requirement)

Special condition 16 in Willamette's permit would require it to supply MNDR with proof that the entities with which Willamette contracts to harvest timber, in and outside of Missouri, as well as on federally owned land, have attended the Missouri Professional Timber Harvester Program. Willamette would be required to provide this proof within twelve months of signing a contract to do business.

Special Condition 17

(Harvest Location Condition)

Special Condition 17 would mandate Willamette to provide MDNR with legal descriptions of harvest locations for timber harvests, past and future, including those on out-of-state land and federally owned lands.

On June 23, 1999, Willamette filed a petition for Declaratory Judgment, Temporary Restraining Order, Preliminary Injunction and Permanent Injunction ("petition") in the Cole County Circuit Court. The petition generally sought both a declaration that the two special conditions and one-year permit period are illegal, and injunctive relief prohibiting the inclusion of the two conditions in its permit and directing the agency to issue a permit for some reasonable period longer than one year. After the granting of a temporary restraining order, MDNR, the Commission and the individual defendants filed motions to dismiss alleging that Willamette was required to exhaust its administrative remedies. On September 9, 1999, Judge Thomas Brown entered an order dismissing Willamette's petition without prejudice. The trial court found that, as a general rule, administrative remedies must be exhausted before contesting an agency action in the courts. The court also found that Willamette's claim did not fall within a narrow exception where constitutional challenges can be decided without resolution of factual disputes.

STANDARD OF REVIEW

When reviewing the propriety of the dismissal of a petition, the court examines the pleading allowing the broadest intendment, treating all facts alleged as true and construing the allegations in favor of the pleader, to determine whether they invoke principles of substantive law which would entitle the plaintiff to relief. Hagley v. Board of Educ. Of Webster Groves School District, 841 S.W.2d 663, 665 (Mo. banc 1992). Conclusory allegations of fact and legal conclusions are not considered in determining whether a petition states a claim upon which relief can be granted. Cady v. Hartford Accident and Indemnity Co., 439 S.W.2d 483, 485-86 (Mo. 1969). The test for the sufficiency of a petition for declaratory judgement is not whether plaintiff is entitled to the relief requested, but whether he is entitled to a declaration of rights or status on the pleaded facts. Cooper v. State, 818 S.W.2d 653, 655 (Mo.App.1991). Affidavits and exhibits offered by a plaintiff in response to a motion to dismiss may be consulted to determine the intent of a pleading. Missourians for Separation of Church and State v. Robertson, 592 S.W. 2d 825, 835 (Mo. App. 1979).

DECLARATORY JUDGMENTS AND ADMINISTRATIVE AGENCY ACTIONS

The power to issue declaratory judgments clearly extends to the validity of rules adopted by administrative agencies. section 536.050.1, RSMo, Cum. Supp. 1998. Section 536.010(4) defines "rule" as an "agency statement of general applicability that implements, interprets, or prescribes law or policy, or that describes the organization, procedure, or practice requirements of any agency. . . . " To be valid, an administrative rule must be promulgated pursuant to the rulemaking procedure set out in section 536.021 RSMo, Cum. Supp. 1997. Baugus v. Director of Revenue, 878 S.W.2d 39, 42 (Mo. banc 1994). Willamette contends that the two conditions and the change in permit length described above constitute rulemaking without compliance with the requirements of Chapter 536. The respondents dispute this contention, but argue that even assuming Willamette's argument is valid, Willamette was still required to exhaust its administrative remedies before the Commission prior to seeking judicial intervention.

The doctrine of exhaustion of administrative remedies ". . .[i]s...