This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2004).







Dead Lake Association, Inc.,





Commissioner of Minnesota

Pollution Control Agency,



R. Murray Partnership, LLP,




Filed February 8, 2005

Affirmed in part, reversed in part, and remanded

Klaphake, Judge


Minnesota Pollution Control Agency


Gerald W. Von Korff, Mary Jo Murray, Rinke-Noonan, 1015 West St. Germain Street, Suite 300, P.O. Box 1497, St. Cloud, MN 56302-1497 (for relator)


Mike Hatch, Attorney General, Robert B. Roche, Assistant Attorney General, 445 Minnesota Street, Suite 900, St. Paul, MN 55101-2127 (for respondent Minnesota Pollution Control Agency)


Peder A. Larson, Peder Larson & Associates, LLP, 5200 Willson Road, Suite 315, Edina, MN 55424 (for respondent R. Murray Partnership, LLP)


            Considered and decided by Halbrooks Presiding Judge; Randall, Judge; and Klaphake, Judge.

U N P U B L I S H E D   O P I N I O N


            Relator Dead Lake Association, Inc. challenges respondent Commissioner of Minnesota Pollution Control Agency’s (MPCA) denial of a contested case hearing and grant of a wastewater treatment system permit to respondent developer R. Murray Partnership, LLP, arguing that the existence of disputed material facts requires a contested case hearing and that the record does not support the grant of the permit.  Because we conclude that relator’s petition does not meet the criteria for a contested case hearing, we affirm the denial of the hearing.  But because the grant of the permit was based on an inadequate environmental review, it was premature and we therefore reverse and remand.


            The standard of review of an agency decision denying a contested case hearing and granting a permit is governed by Minn. Stat. § 14.69 (2004).  This court determines whether the agency’s decision is in violation of constitutional provisions, in excess of the agency’s statutory authority or jurisdiction, made upon unlawful procedure, affected by other error of law, unsupported by evidence, or arbitrary or capricious. Id.; In re City of Owatonna’s NPDES/SDS Permits, 672 N.W.2d 921, 926 (Minn. App. 2004).  Appellate courts defer to an agency’s expertise in fact-finding and will affirm the agency’s decision as long as it is lawful and reasonable.  Id.  “‘If an administrative agency engages in reasoned decisionmaking, this court will affirm, even though it may have reached a different conclusion had it been the factfinder.’”  Id. (quoting Cable Communications Bd. v. Nor-West Cable Communications P’ship, 356 N.W.2d 658, 669 (Minn. 1984)).

I.  Contested Case Hearing

            Relator argues that respondent MPCA should have granted a contested case hearing because material facts were in dispute and additional information would have aided the agency in making its decision.  Specifically, relator petitioned for a contested case hearing, stating that the disputed material issues of fact included:  (1) whether the environmental assessment worksheet (EAW) was an inadequate environmental review; (2) whether the permit lacked a limit for nitrates; and (3) whether the permit lacked a monitoring and mitigation plan. 

            A contested case hearing must be granted if (1) there is a material issue of fact in dispute concerning the matter pending before the board or commissioner; (2) the board or commissioner has the jurisdiction to make a determination on the disputed material issue of fact; and (3) there is a reasonable basis underlying the disputed material issue of fact such that holding a contested case hearing would allow the introduction of information that would aid the board or commissioner in resolving the disputed facts in making a final decision on the matter.  Minn. R. 7000.1900, subp. 1 (2003).  The petitioners for a contested case hearing have the burden of demonstrating the existence of material facts that would aid the agency in making a decision before they are entitled to a contested case hearing.  In re Solid Waste Permit of NSP Red Wing Ash Disposal Facility, 421 N.W.2d 398, 404 (Minn. App. 1988), review denied (Minn. May 18, 1988). 

            A.         Inadequacy of EAW

            In this case, relator argues that the EAW completed by Otter Tail County is inadequate, which creates a material issue of fact.  Decisions on the need for, and adequacy of, an environmental impact statement may be reviewed by a declaratory judgment action in the district court of the county wherein the proposed action would be undertaken.  Minn. Stat. § 116D.04, subd. 10 (2004).  Therefore, the MPCA does not have jurisdiction to make a decision as to the adequacy of the EAW.  Because the MPCA lacks jurisdiction to decide this issue, the second criterion for a contested case hearing is not satisfied, and the MPCA did not err when it denied relator a contested case hearing. 

            Additionally, a “material issue of fact” is defined as “a fact question, as distinguished from a policy question, whose resolution could have direct bearing on a final agency decision.”  Minn. R. 7000.0100, subp. 5(b) (2003).  The MPCA determined that the adequacy of the EAW was a question of law rather than of fact, and thus it does not satisfy the first criterion for a contested case hearing.  Because the petition for a contested case hearing regarding the adequacy of the EAW does not satisfy each of the three criteria, the MPCA did not err when it denied the contested case hearing.  

            B.         Nitrate Limit and Monitoring and Mitigation Plan

            The other two material fact issues that relator asserts in its petition for a contested case hearing are the lack of nitrate limits and the lack of a mitigation and monitoring plan.  However, the MPCA included in the permit a nitrate limit of 10 milligrams/liter, as well as a monitoring and mitigation plan.  Because these two issues were included in the permit, there are no issues of material fact to support the first criterion for a contested case hearing, and therefore the MPCA’s decision to deny the hearing was not arbitrary or capricious. 

            Additionally, relator now raises the argument on appeal that the potential environmental damage that could occur in the lake due to a misclassification of the hydrology of the lake supports a contested case hearing.  However, a party may not obtain review by raising the same issue litigated below but under a different theory.  Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988).  Therefore, we decline to consider this argument.

II.  State Disposal System (SDS) Permit

            The MPCA granted the developer of this project an SDS permit for the creation and operation of a wastewater treatment facility.  A completed environmental review must be in place before this permit can be granted.  Minn. Stat. § 116D.04, subd. 2b (2004).  In a companion case, we concluded that the environmental review completed by the county was inadequate and that an environmental impact statement (EIS) would be necessary for the current development.  Dead Lake Ass’n, Inc.  v. Otter Tail County, No. A04-717 (Minn. App. Feb. 1, 2005).  Based on our decision in that proceeding, this permit was granted under an inadequate environmental review.  Because a completed, adequate environmental review is required for a permit, the grant of the SDS permit was premature.  Thus, we reverse the MPCA’s grant of the SDS permit, and remand for further proceedings consistent with this opinion and the opinion filed on February 1, 2005, in Dead Lake Ass’n, Inc. v. Otter Tail County.         

            Affirmed in part, reversed in part, and remanded.