This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2006).
STATE OF MINNESOTA
IN COURT OF APPEALS
In the Matter of the License Revocation of
Woodlyn Court, L.L.P.
Filed July 31, 2007
Minnesota Department of Health
OAH Docket No. 2-0900-16778-2
John F. Bonner III, Thomas F. DeVincke,
Bank Plaza, 220
South Sixth Street, Minneapolis, MN 55402
(for relator Woodlyn Court,
Lori Swanson, Attorney General, Kristen M. Olsen,
Assistant Attorney General, 1800 Bremer Tower, 445 Minnesota Street, St. Paul,
MN 55101 (for respondent Minnesota
Department of Health)
and decided by Halbrooks, Presiding Judge; Lansing, Judge; and Hudson, Judge.
U N P U B L I S H E D O P I N I O N
commissioner of health revoked Woodlyn
Court, L.L.P.’s license to operate a manufactured-home
park and imposed a $10,000 administrative penalty. Because the record establishes that Woodlyn Court
violated sewage regulations and that the imposition of the $10,000 penalty was
not arbitrary and capricious, we affirm.
F A C T S
L.L.P. operates a manufactured-home park in Anoka County.
Between September 2004 and June 2005,
the Minnesota Department of Health repeatedly notified Woodlyn Court that its sewage-disposal
system failed to comply with applicable regulations. The department had received complaints about
a strong smell of sewage on the property and discovered that the sewage system
failed to comply with the requirements for sewage-treatment systems in Minn. R.
7080.0600 (2005). The department
informed Woodlyn Court
that under Minn. R. 4630.0800 (2005) the park either needed to connect to a
municipal sewage system or upgrade to a system acceptable to the department.
June 2005 Woodlyn Court had still not submitted a plan for bringing its sewage
system into compliance and informed the department that it intended to sell the
property. Woodlyn Court requested an additional
extension of two years to sell the property.
During that time, Woodlyn
Court planned to market the property informally to
avoid losing revenue from existing residents.
The department rejected the plan and informed Woodlyn Court that its license was being
revoked and that a previously imposed $10,000 administrative penalty was now
challenged the decision. An
administrative law judge granted the department’s motion for a summary
disposition and recommended that the department affirm the revocation and the
penalty. The department followed the
recommendation, and Woodlyn Court
appeals that decision.
D E C I S I O N
review of agency decisions is guided by the state Administrative Procedure
Stat. § 14.69 (2006). We will
reverse or modify the agency’s decision only if the decision was (1) in
violation of constitutional provisions, (2) in excess of statutory authority or
jurisdiction, (3) made upon unlawful procedure, (4) affected by other error of
law, (5) unsupported by substantial evidence, or (6) arbitrary and
capricious. Id.; Hy-Vee Food Stores, Inc. v. Minn.
Dep’t of Health, 705 N.W.2d 181, 184 (Minn.
2005). When reviewing an agency’s
summary disposition, we view the evidence in the light most favorable to the
relator. In re Rate Appeal of Benedictine
Health Ctr., 728 N.W.2d 497, 500 (Minn. 2007).
challenges the decision of the Minnesota Department of Health’s decision on
three grounds. First, Woodlyn Court argues that
substantial evidence does not support the conclusion that it violated Minn. R.
4630.0800 (2005). Second, Woodlyn Court
argues that it was arbitrary and capricious to impose the $10,000
administrative penalty. Third, Woodlyn Court
argues that the application of Minn. R. 4630.0800 involved an error of law.
the department’s regulations, all sewage at a mobile-home park must be
“discharged into a municipal sewage system . . . whenever
such a system is available.” Minn. R. 4630.0800, subp.
1 (2005). When a municipal sewage system
is not available, then “a sewage disposal system acceptable to the [department]
and the Minnesota Pollution Control Agency shall be provided.” Id.
the administrative law judge (ALJ) considered the case based on a motion for
summary disposition, the ALJ was required to view the facts in the light most
favorable to Woodlyn Court. Benedictine
Health Ctr., 728 N.W.2d at 500. The
ALJ concluded that, viewing the facts in that light, he could not find that a
municipal sewage system was available for Woodlyn’s discharge. Nonetheless, the ALJ found that Woodlyn Court had
failed to provide a sewage-disposal system acceptable to the department.
Woodlyn Court argues
that the ALJ could not base his decision on this finding. According to Woodlyn Court, the department’s license
revocation was based on its position that a municipal sewage system was
available. Woodlyn Court argues that the ALJ could
therefore only grant summary disposition if it agreed that a municipal sewage
system was available. But Woodlyn Court’s
argument is not supported by the facts.
When the department revoked Woodlyn Court’s license, it did so for “failure
to comply with Minnesota Rules, part 4630.0800, which requires that all sewage
and other water-carried wastes be discharged into a municipal sewage system or
a sewage disposal system acceptable to the [department of health] and the
Minnesota Pollution Control Agency.”
Similarly, the department had previously informed Woodlyn Court that it needed to “hook up
to the city sewer system or provide an alternate system that is approved by the
local sewer authority.” Thus, the
department’s decision to revoke Woodlyn
Court’s license, was based on both the failure to connect to a municipal sewage system and the failure to provide a system
acceptable to the department.
if the department’s revocation decision was
based solely on the availability of the municipal sewage system, the summary
disposition was still appropriate. Minn. R. 4630.0800
establishes a legal standard for operating a manufactured-home park, not a
procedure that the department must follow before revoking the license. The legal standard is violated if a manufactured-home
park does not either discharge its
sewage into a municipal sewage system that is available for discharge or the nonmunicipal sewage-disposal
system provided is not acceptable to the department. Minn. R.
4630.0800, subp. 1. Thus, the ALJ could
base its decision solely on its finding that the sewage-disposal system is not
acceptable to the department.
the ALJ’s decision to grant the summary disposition was supported by the
evidence. Woodlyn Court argues that the department
incorrectly claimed that it uses “cess pools.”
If we view the evidence in the light most favorable to Woodlyn Court, then
may be correct. But that does not mean
that its sewage system wasacceptable
to the department or that the sewage system complied with Minn. R. 7080.0600. See Minn. R. 7080.0600 (2005) (defining requirements for
sewage-treatment systems). There is no
real dispute that Woodlyn Court
has failed to provide an acceptable sewage system. Therefore, the ALJ could grant the motion for
summary disposition and the department could properly accept his recommendation.
agency action is arbitrary and capricious if it relies on improper factors,
fails to consider an important aspect of the problem, offers an explanation
that runs counter to the evidence, or is “so implausible that it could not be
explained as a difference in view or the result of the agency’s expertise.” Citizens
Advocating Responsible Dev. v. Kandiyohi
of Comm’rs, 713 N.W.2d 817, 832 (Minn.
argument that the $10,000 administrative penalty was arbitrary and capricious
has no merit. First, contrary to Woodlyn
Court’s claims, the department convened a penalty-calculation
forum and filled out the penalty-calculation worksheet. Thus, the department followed the proper
procedures for imposing the penalty.
Second, Woodlyn Court
incorrectly claims that it was not a repeat offender, it only violated a single
regulation, and it had not been previously advised of its need to change its
sewage-disposal system. Woodlyn Court was
repeatedly warned about its violations and failed to remedy the situation after
being given ample time. Furthermore,
even if these claims were correct, the department’s penalty would still be permissible
under the guidelines. The penalty
guidelines permit a $10,000 penalty based on the seriousness of the offense
alone. Therefore, the $10,000 administrative
penalty was not arbitrary and capricious.
argues that Minn. R. 4630.0800 does not apply to it because it is a
manufactured-home park, not a mobile-home park.
The interpretation of an administrative rule involves a question of law,
which we review de novo. Benedictine Health Ctr., 728 N.W.2d at 503. If the meaning of a regulation is
unambiguous, we will apply its plain meaning.
See Citizens Advocating
Responsible Dev., 713 N.W.2d at 827 (stating that courts cannot ignore regulation’s
plain meaning by deferring to agency’s contrary interpretation). If a regulation is ambiguous, we will defer
to an agency’s reasonable interpretation of the rule. St.
Otto’s Home v. Minn. Dep’t of Human Servs., 437 N.W.2d 35, 40 (Minn. 1989).
“manufactured home” is defined as a transportable structure “designed to be
used as a dwelling with or without a
permanent foundation.” Minn. Stat. § 327.31, subd. 6 (2006)
(emphasis added). In 1982, the term
“mobile home” was replaced by “manufactured home” in the statute giving the
department the authority to issue Minn. R. 4630.0800. See
1982 Minn. Laws, ch. 526, art. 3, § 3. But “mobile home” had a different
definition. A “mobile home” was defined
as a transportable dwelling “having no foundation other than wheels, jacks or
skirtings.” Minn. Stat. § 327.14, subd. 2 (1980).
this case, Woodlyn Court’s
homes are all placed on permanent block foundations. Therefore, Woodlyn Court qualifies as a
“manufactured-home park” under the current statutory definition. But it would not have qualified as a “mobile-home
park” under the previous statutory definition.
current rule is essentially identical to the rule the department had before the
statutory changes in 1982. Minn. Reg. MHD 187(g) (1974). Before the changes in 1982, the statute only provided
the power to regulate mobile-home parks and the Minnesota Department of Health apparently
would not have been able to apply the rule to Woodlyn Court. Under the current version of Minn. Stat. § 327.20
(2005), the department certainly has the power
to regulate manufactured-home parks such as Woodlyn Court. The question is whether the department has actually
exercised that power.
conclude that revocation of Woodlyn
Court’s license was a proper use of the
department’s power. First, we defer to
an agency’s reasonable interpretation of its rule if the language of the rule
is unclear. St. Otto’s Home, 437 N.W.2d at 40.
The department has reasonably interpreted Minn. R. 4630.0800 to apply to
Woodlyn Court. Second, the department has
authority—independent of Minn. R. 4630.0800—to regulate sewage systems at
manufactured-home parks and to impose the administrative penalties. See Minn.
Stat. §§ 327.20, subd. 1(2) (imposing by statute same sewage-system requirements),
.35, subd. 1 (2005) (providing power to impose administrative penalties). Therefore, the department properly exercised
its authority when it revoked Woodlyn
Court’s license and imposed the administrative