IN COURT OF APPEALS
R. Gordon Nesvig, et al.,
Filed April 4, 2006
Washington County District Court
File No. CX-04-4470
Janette K. Brimmer, James L. Erkel, Minnesota Center for Environmental Advocacy, 26 East Exchange Street, Suite 206, St. Paul, MN 55101-1667 (for appellant)
George C. Hoff, Amanda K. Morken, Hoff, Barry & Kuderer, P.A., 160 Flagship Corporate Center, 777 Prairie Center Drive, Eden Prairie, MN 55344-7319 (for respondent City of St. Paul Park)
Laurie J. Miller, Richard D. Snyder, Debra A. Schneider, Fredrickson & Byron, P.A., 200 South Sixth Street, Suite 4000, Minneapolis, MN 55402-1425 (for respondents Nesvig, et al.)
Mike Hatch, Attorney General,
David P. Iverson, Assistant Attorney General,
Considered and decided by Lansing, Presiding Judge; Shumaker, Judge; and Halbrooks, Judge.
S Y L L A B U S
A responsible governmental unit has discretion to select the geographic boundary for an alternative urban area-wide review and is not required to assess the cumulative impacts outside the boundary it selects.
O P I N I O N
material facts are not in dispute. This
litigation centers on the environmental review of a proposed development of a
667-acre parcel of land owned by respondent R. Gordon Nesvig. The property sits along the east bank of the
Mississippi River in
Part of the property is located within the Mississippi River Critical Area Corridor, permanently established in 1979 by executive order of the governor and designated as a “rural open space district.” Local government units are directed to protect the Critical Area’s resources, prevent and mitigate irreversible damage, and enhance its public value. According to the executive order, rural open-space districts “shall be used and developed to preserve their open, scenic and natural characteristics and ecological and economic functions.”
of the property is also located within the
In November 2002, Nesvig; developer D.R. Horton, Inc.; the township; and the city entered into an agreement to develop Nesvig’s property. The project was anticipated to begin in 2004 and to “be phased over the next 10-12 years.” In March 2003, the city and the township adopted resolutions providing for environmental review through an alternative urban area-wide review (AUAR), stipulated that the city would be the responsible governmental unit (RGU) for the review, and required that the AUAR assess three different development scenarios. A draft AUAR was completed in May 2003, made available for public review, and sent to several entities for review and comment, including federal and state agencies, local governmental units, and the Environmental Quality Board (EQB), the state entity responsible for ensuring the effectiveness of the environmental-review rules. Notice of the draft was also published in the EQB Monitor. A total of 20 different agencies, local units of government, nonprofit organizations (including MCEA), and individual citizens submitted comments. The RGU held open houses, workshops, and meetings to review and discuss the draft AUAR and comments to the draft.
In November 2003, a final AUAR was completed. The appendix to the final AUAR contained all of the comments submitted during the review process and was revised to incorporate the changes discussed at three joint workshops between the city and the township. The final AUAR was submitted to the EQB and all entities that commented on the draft. The Minnesota Department of Natural Resources (DNR) wrote a letter objecting to the final AUAR in March 2004, but the DNR withdrew its objection in May 2004 after additional meetings with the RGU. On May 17, 2004, the RGU adopted the final AUAR.
In June 2004, MCEA filed a complaint challenging the final AUAR. MCEA (1) alleged that the RGU improperly used an AUAR instead of an environmental-impact statement (EIS) to access the proposed development and that the AUAR inadequately assessed the environmental effects; (2) challenged the project settlement agreement between respondents and the township; and (3) claimed a violation of the Minnesota Environmental Rights Act, Minn. Stat. ch. 116B. A November 2004 stipulation and order dismissed most of the complaint, leaving only the issue of whether the RGU’s decision on the adequacy of the AUAR was arbitrary or capricious and not supported by substantial evidence or contrary to applicable law.
The parties submitted cross-motions for summary judgment on this issue. The district court denied MCEA’s motion, concluding that cumulative impacts within the AUAR-specified boundaries must be considered, but that cumulative impacts beyond the boundaries need not be considered. It also concluded that the AUAR is supported by substantial evidence and granted respondents’ motion. This appeal followed.
1. Did the AUAR process require the analysis of impacts on a geographical area larger than the project area selected by the RGU?
2. Was the final AUAR inadequate as a matter of law?
there is potential for significant environmental effects resulting from any
major governmental action, the action shall be preceded by a detailed [EIS]
prepared by the [RGU].”
the AUAR process, the RGU first prepares a “draft environmental analysis
document” that addresses the developmental scenarios established in the
these revisions are made, the RGU must distribute the new document “in the same
manner as the draft document and also to any persons who commented on the draft
1. Necessity of Cumulative-Impact Analysis Beyond the AUAR-Specified Area
“When . . . the
language of an administrative rule is clear and capable of understanding,
interpretation of the rule presents a question of law reviewed de novo.” Jasper
v. Comm’r of Pub. Safety, 642 N.W.2d 435, 440 (
MCEA’s first argument is geographic: that the AUAR process required the RGU to analyze cumulative impacts on a geographic area larger than the area for environmental review selected by the RGU. Respondents do not dispute the need for cumulative-impacts analysis under an AUAR, but contend that the RGU is entitled to select the study area and is required to analyze cumulative impacts only in that area.
Under the AUAR process, “[t]he RGU
shall adopt an order for each review . . . that specifies
the boundaries of the geographic area within which the review will apply.”
To support its claim, MCEA relies primarily on a statement from the federal Council on Environmental Quality’s (CEQ) Considering Cumulative Effects Under the National Environmental Policy Act (Jan. 1997): “When analyzing the contribution of this proposed action to cumulative effects, however, the geographic boundaries of the analysis almost always should be expanded.” MCEA argues that reliance on this statement is appropriate because the EQB’s own guidance for environmental review refers specifically to the CEQ’s guidance on cumulative impacts.
courts “defer to an agency’s interpretation of its own regulations.”
require the analysis of cumulative impacts beyond the selected area.
MCEA also cites several cases to support its position. It cites Trout
Unlimited, Inc., v. Minn. Dep’t of Agric., 528 N.W.2d 903 (Minn. App.
1995), review denied (Minn. Apr. 27,
1995), for the proposition that an RGU “must consider the impacts of many
different irrigation and chemigation projects on the environment, regardless of
their specific relationship to the project under consideration.” But Trout
Unlimited is distinguishable. It
held that the commissioner’s conclusion—that potential impacts from future
projects could not be inferred from the proposed project—was arbitrary because the
“EAW itself stated that future stages of irrigation projects in the area were
‘planned or likely.’”
the district court did, we also share MCEA’s concern about potential
environmental impacts from the development of the property. But our decisions are controlled by what the
law is, not what we think it should be. Policy
decisions are the prerogative of the legislature. We also recognize the potential for abuse in
setting the AUAR boundary, and our opinion is in no way meant to preclude
claims that an RGU acted arbitrarily and capriciously in determining the
geographic area for review. But MCEA
does not argue on appeal that the RGU here acted in an arbitrary or capricious
manner when it selected the area for review. And although several commentators to the draft
AUAR, including MCEA, suggested that the RGU was misusing the AUAR process, this
claim is not before us on appeal. See Melina v. Chaplin, 327 N.W.2d 19, 20
2. AUAR Assessment of “Cumulative Impacts”
argues that regardless of the boundary of the review area, the RGU’s adoption
of the AUAR was inadequate under the law because the AUAR failed to “assess
the cumulative impacts from the Project and past, present and future projects,
on the Mississippi Critical Area.” We
review an agency decision to determine if it was “unsupported by substantial
evidence in view of the entire record as submitted or was arbitrary or
the agency relied on factors the legislature never intended it to consider, if it entirely failed to consider an important aspect of the problem, if it offered an explanation for the decision that runs counter to the evidence, or if the decision is so implausible that it could not be ascribed to a difference in view or the result of agency expertise.
Pope County Mothers v.
MCEA first points to the RGU’s response to the cumulative-impacts section of the AUAR. The AUAR requests that the RGU “[i]dentify any past, present or reasonably foreseeable future projects that may interact with the project described in this EAW in such a way as to cause cumulative impacts.” In response, the AUAR adopted by the RGU cites the EQB’s Recommended Content and Format Alternative Urban Areawide Review Documents (revised Oct. 2, 2000), a document that assists in the preparation of an AUAR, and states: “Cumulative Impacts. This item does not require a response for an AUAR since the entire AUAR process deals with cumulative impacts from related developments within the AUAR area.” MCEA claims that this response evades the need to consider cumulative impacts.
But the AUAR is clearly designed to address cumulative impacts. The working group that originally devised the AUAR process stated that an AUAR “provides an excellent tool for review of the cumulative impacts of multiple projects in a given area.” The EQB guidance for environmental review makes this same statement and also claims that “[w]hen cumulative impacts from concurrent or future projects are likely to be significant, review can often be better accomplished through the [AUAR] process or the related actions EIS.” Even the EQB’s Recommended Content and Format Alternative provides that “the entire AUAR process deals with cumulative impacts from related developments.” The AUAR’s failure to specifically address this question in the AUAR does not render the final AUAR inadequate.
MCEA also claims that the “selective
impacts the AUAR did examine are those least damaging . . . and
that have no bearing . . . to the Mississippi Critical
Area” and that the AUAR makes “no list, or even mention, of past, present, or
reasonably foreseeable future projects in or on the Mississippi Critical
Area.” MCEA argues that the AUAR does
not address habitat fragmentation and river-edge effects in the
The record, however, shows that the
AUAR considers several cumulative impacts.
It addresses the impact of the development on “three Bald Eagle nests
within 1 mile of the AUAR” and revises the development scenarios to move potential
disturbances away from these nests. It
also addresses three threatened mussel species “living in the
Furthermore, the AUAR addresses the
physical impacts to “any surface water” from “any residential or commercial
development expected to physically impact any water resources.” It proposes restoration and repair of an old
manure lagoon and related erosion, construction of two “outfall structures”
MCEA criticizes the AUAR’s
mitigation plan, alleging that there is limited discussion of the Mississippi
Critical Area and mitigation measures that “simply chang[e] the law and
protective designation.” An AUAR must
identify and discuss measures to mitigate potential environmental impacts.
points only to the discussion of the Mississippi Critical Area under the
“Water-related Land Use Management Districts” portion of the AUAR. It ignores the other parts of the AUAR discussed
above that relate to the
Five government agencies, five local units of government, four nonprofit organizations, and six citizens submitted comments to the draft AUAR. The final AUAR contains detailed and sufficient responses to the substantive comments. For instance, several commentators complained that the AUAR underestimated the impacts on wildlife. The RGU admitted that some local decline in wildlife is expected from the development and that regional development pressures were causing total habitat to decline. But the RGU responded that “[p]reservation of riverine habitat, restoration of native vegetation communities, and increased setbacks along the bluffs are expected to mitigate adverse effects on wildlife.” Trails and other disturbances were moved further away from bald-eagle nests and “upland buffers extending to 100 feet landward [of] the bluffline will help mitigate potential impacts on many migratory birds.” The final AUAR includes and responds to more than 80 separate comments.
We find it significant that the DNR, whose mission is in part to “work with citizens to conserve and manage the state’s natural resources . . . and to provide for commercial uses of natural resources in a way that creates a sustainable quality of life,” withdrew its objection to the AUAR. In objecting, the DNR complained that the final AUAR and Mitigation Plan contained inaccurate or incomplete information relative to the identification and mitigation of potentially significant environmental impacts. The DNR felt it was important to inquire into the significant increase in building density, proposed changes in use, and the locations and sizes of the development within the Critical Area. Yet despite these concerns, the DNR withdrew its objection after “beneficial” meetings with the city, township, developer, and consultants. Importantly, the DNR noted that it “recognize[s] that the level of project specific detail needed to fully evaluate the potential for significant impacts is not required by the AUAR process.” The DNR’s objection was the last item preventing the RGU from adopting the final AUAR. By withdrawing its objection, the DNR permitted the RGU to adopt the final AUAR.
Based on the analysis of cumulative impacts, creation of a mitigation plan, and consideration of submitted comments, the RGU’s adoption of the AUAR was supported by substantial evidence and was not arbitrary or capricious.
D E C I S I O N
The rules regarding the use of the AUAR do not require an RGU to assess cumulative impacts outside the area selected for environmental review. Here, the RGU’s adoption of the AUAR is supported by substantial evidence and is not arbitrary or capricious.
LANSING, Judge (dissenting)
I respectfully dissent. Three fundamental principles apply in this case. First, an urban areawide review (AUAR) must evaluate cumulative impacts caused by the project. Second, cumulative impacts, unlike direct impacts, are impacts outside the project area. Third, no evaluation of public responses or mitigation proposals can be adequate if a responsible governmental unit (RGU) does not properly evaluate cumulative impacts to determine what is necessary.
Although the alternative
AUAR process provides for a more streamlined review of the environmental
impacts of a development project than an environmental impact statement (EIS),
nothing in the AUAR rules relieves an RGU of its obligation to engage in
reasoned decision-making and to issue written findings in support of its
determinations. See Minn. R. 4410.3610 (2005) (specifying process for AUAR); Reserve Mining Co. v. Minn. Pollution
Control Agency, 364 N.W.2d 411, 414-15 (Minn. App. 1985) (concluding that
agency’s failure to provide written findings and reasons for its determination
was arbitrary and capricious), review
The district court concluded
that “[t]here are no specific requirements that the AUAR consider cumulative
impacts outside of the AUAR area.” But
both the rules and the cases to which we look for interpretation of these rules
state otherwise. The AUAR process
requires the RGU, as an initial step, to “adopt an order for each
review . . . that specifies the boundaries of the
geographic area within which the review will apply and specifies the
anticipated nature, location, and intensity of [development] within those
The depth of analysis
required for the selection of the geographic boundary is clearly set forth in
federal caselaw. Although the RGU has
discretion to select the geographic boundary for analysis of cumulative impacts
of the project, the selection must “represent a reasoned decision and cannot be
arbitrary.” Habitat Educ. Ctr., Inc. v. Bosworth, 381 F. Supp. 2d 842, 849
(E.D. Wis. 2005) (quoting Idaho Sporting Cong., Inc. v. Rittenhouse, 305 F.3d 957, 973 (9th Cir. 2002))
(concluding that agency’s geographic-boundary determination was arbitrary); see also Kleppe v. Sierra Club, 427
The record provides no order that sets forth the reasons for selecting the geographic boundary of the cumulative-impacts analysis. The AUAR itself refers to the geographic boundary of the project area as the geographic boundary of the cumulative-impacts review but, again, contains no discussion of the reasons for its decision to limit its analysis to the project area and no indication that the RGU considered cumulative impacts outside the project area.
The procedural failure to make an initial geographic-boundary determination that accounts for cumulative impacts outside the project area results in a legally deficient substantive consideration of these effects in the AUAR process. The limitation on the consideration of the appropriate geographic scope at the outset necessarily reduces the scope of analysis in the subsequent processes, and the overall substantive consideration becomes arbitrary. See Bosworth, 381 F. Supp. 2d at 850 (observing that failure to explain reasons for selecting geographic boundary adversely affects decision-making process and renders determination arbitrary). The failure to consider the project’s impact outside the project area at any point in the determination defeats the ordinary deference that this court accords to agency decisions. See id. (stating that failure to discuss selection of area indicates agency did not employ reasoned decision-making); Reserve Mining Co. v. Herbst, 256 N.W.2d 808, 825 (Minn. 1977) (“[W]here there is a combination of danger signals which suggest the agency has not taken a hard look at the salient problems and has not genuinely engaged in reasoned decision making it is the duty of the court to intervene.” (quotation omitted)).
The majority recognizes “the
potential for abuse in setting the AUAR boundary,” but interprets MCEA’s appeal
to be limited solely to the adequacy of the final AUAR document. Whether the question is framed substantively
or procedurally, the issue at the heart of the appeal remains the same: the failure to consider cumulative impacts
outside the project area. The purpose of
requiring a cumulative-impacts analysis is to “preclude the breaking down of
projects into small component parts to avoid cumulative significance.”
Although a significant number of public comments were submitted throughout the AUAR process, the absence of an explicit decision on the geographic boundary of the AUAR “deprived the public of an opportunity to comment on the issue and thus assist in the decision-making process.” See Bosworth, 381 F. Supp. 2d at 850 (expressing concern that procedural flaw undermines purpose of review process). The RGU cannot evade responsibility for a decision by failing to make it. The procedural irregularities are also evidenced by the evolving position of the Minnesota Department of Natural Resources (DNR). The DNR initially objected to the AUAR and later withdrew its objection. But the DNR renewed its objection in an amicus brief on appeal because of the AUAR’s failure to examine cumulative impacts outside the project area. In its brief, the DNR emphasizes the heavy ecological price of piecemeal development of discrete portions of land within the Mississippi River Corridor Critical Area without considering the environmental impacts on the entire critical area.
Requiring the RGU to consider cumulative impacts outside the project area does not preclude development in the area. Rather, it ensures that the purposes of the Minnesota Environmental Policy Act are fulfilled by fostering informed decision-making and by avoiding incremental analysis that fails to assess adequately a project’s impact on the environment. Because the AUAR fails to comply with the requirements to analyze cumulative impacts outside the project area and is therefore inadequate, I would reverse the district court’s grant of summary judgment.
 The CEQ is a federal agency charged with promulgating rules under the National Environmental Protection Act. 42 U.S.C. § 4342 (2000).
 MCEA also asserts that the “EQB’s express reliance on, and citation to, the CEQ Guidance demonstrates EQB’s intention to cast the cumulative effects analysis net much wider than a project’s specific boundaries.” The EQB, however, has statutory authority to promulgate rules for environmental review, including, if it chooses, a rule to enhance or specifically define the geographical scope for review. The fact that it has not done so supports the argument that RGUs are entitled to use their discretion in selecting the area for review.
“[L]ooking to federal case law is appropriate and helpful” when the procedural
protections of MEPA at issue are similar to the federal protections in
NEPA. Minn. Ctr. for Environmental Advocacy v. Minn. Pollution Control Agency,
644 N.W.2d 457, 468 n.10 (
The EAW is the form an RGU follows to create an AUAR. See
 MCEA notes that the EQB revised its guidelines to recommend assessing the cumulative impacts outside the AUAR boundary. But the revisions MCEA cites were implemented in July 2004, after the RGU adopted the final AUAR.