This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2000).
STATE OF MINNESOTA
IN COURT OF APPEALS
Douglas Stephen O’Neill, et al.,
Appellants,
vs.
Minnesota Pollution Control Agency,
Respondent.
Affirmed in part, reversed in part, and remanded
Gordon W. Shumaker, Judge
Renville County District Court
File No. C000414
Thomas G. Dunnwald, 1150 East Grain Exchange, 412 South Fourth Street, Minneapolis, MN 55415 (for appellants)
Mike Hatch, Attorney General, Robert B. Roche, Assistant Attorney General, 445 Minnesota Street, Suite 900, St. Paul, MN 55101 (for respondent)
Considered and decided by Shumaker, Presiding Judge, Willis, Judge, and Hanson, Judge.
U N P U B L I S H E D O P I N I O N
GORDON W. SHUMAKER, Judge
Appellants challenge the Minnesota Pollution Control Agency’s denial of their petition to require preparation of an environmental assessment worksheet on the expansion of a hog feedlot. Appellants argue that the Minnesota Pollution Control Agency (MPCA) failed to consider the potential for significant environmental effects regarding air, soil, and water, and the potential for adverse health effects from those environmental effects. Appellants also argue that the district court erred in denying their motion to expand the administrative record. Because the MPCA was not arbitrary and capricious in its denial of the petition to require an Environmental Assessment Worksheet (EAW) relating to the water and soil issues, we affirm. But because the evidence does not support the MPCA’s denial of the petition to require preparation of an EAW relating to air-quality issues, the MPCA was arbitrary and capricious, and we reverse and remand. Because the district court did not err in denying appellants’ motion to expand the administrative record, we affirm.
FACTS
Russell Livingood has operated a hog farm at the same site in Renville County since 1972. His current feedlot permit allows him to have a single barn with a capacity to house 600 hogs.
In 1997, Livingood applied to the MPCA for a permit to construct two additional barns that would house 960 hogs each. The barns would have slatted floors and concrete manure-storage pits under the floors.
Livingood had also applied to Renville County for a conditional-use permit. The county denied the permit, and Livingood sued. Because that litigation was pending, the MPCA only tentatively approved Livingood’s application for the new permit. Ultimately, the courts determined that the county was required to issue the conditional-use permit. In re Livingood, 594 N.W.2d 889, 895 (Minn. 1999).
Before the MPCA gave final approval of the new permit, Douglas and Kristi O’Neill, acting for themselves and on behalf of other area residents, petitioned the Environmental Quality Board to require the preparation of an EAW for the Livingood site. The O’Neills live about a quarter of a mile from the Livingood farm. In the petition, they expressed concerns about the effects an expanded feedlot would have on ground water, the soil, and the air. They noted that they have a disabled child and noxious odors from the feedlot could threaten his health. Finally, they suggested that the cumulative effect of several feedlots within three miles of the O’Neill residence would be detrimental to the environment.
The MPCA reviewed the proposed expansion in light of the issues raised in the petition and concluded that the available information did not indicate that the expansion has the potential for significant environmental impact. Accordingly, the MPCA denied the petition for the EAW.
The O’Neills then started a declaratory-judgment action, seeking review of the MPCA’s decision. They also moved to expand the administrative record for the district court’s review. The court denied the motion to expand the record, reviewed the administrative record before the court, and dismissed the action, concluding that the MPCA’s denial of the petition for an EAW was not arbitrary and capricious. This appeal followed.
D E C I S I O N
The O’Neills argue that the MPCA acted arbitrarily and capriciously in denying the petition for an EAW because there was evidence in the record showing that the feedlot expansion creates the potential for significant adverse effects on water, soil, and air.
In the O’Neills’ declaratory-judgment action, the district court limited its review to the record before the MPCA, and thereby exercised an appellate function rather than a de novo review. Trout Unlimited v. Minn. Dep’t of Agric., 528 N.W.2d 903, 907 (Minn. App. 1995), review denied (Minn. Apr. 27, 1995). Accordingly, this court must independently examine the MPCA’s record and decision, and arrive at its own conclusions as to the propriety of the MPCA’s determination without according any special deference to the district court’s review. Id.
Administrative-agency decisions are reversed only when they reflect an error of law or the findings of fact are either arbitrary and capricious or are unsupported by substantial evidence. White v. Minn. Dept. of Natural Res., 567 N.W.2d 724, 730 (Minn. App. 1997). We have defined “substantial evidence” as:
1. Such relevant evidence as a reasonable mind might accept as adequate to support a conclusion;
2. More than a scintilla of evidence;
3. More than some evidence;
4. More than any evidence; and
5. Evidence considered in its entirety.
Id. Under this definition, we evaluate the evidence upon which the agency relied in view of the entire record as submitted. Id. If an administrative agency engages in reasoned decision-making, we will affirm, even though we may have reached a different conclusion. Id. We will intervene, however, where there is a “combination of danger signals which suggest the agency has not taken a ‘hard look’ at the salient problems” and the decision lacks “articulated standards and reflective findings.” Id. (citations omitted).
An agency ruling “is arbitrary and capricious if the agency: (a) relied on factors not intended by the legislature; (b) entirely failed to consider an important aspect of the problem; (c) offered an explanation that runs counter to the evidence; or (d) the decision is so implausible that it could not be explained as a difference in view or the result of the agency’s expertise.”
Id. (quotation omitted).
An EAW is a brief document that is designed to set out the basic facts necessary to determine whether an environmental impact statement is required for a proposed action. Minn. Stat. § 116D.04, subd. 1a (c) (2000); Minn. R. 4410.0200, subp. 24 (1999). When a petition requests the preparation of an EAW, the responsible governmental unit (RGU), in this case the MPCA, must order the preparation of an EAW if the evidence demonstrates that, because of the proposed project’s nature and location, it might have the potential for significant environmental effects. Minn. Stat. § 116D.04, subd. 2a (c) (2000); Minn. R. 4410.1100, subp. 6 (1999). However, the RGU must deny the petition if the evidence fails to demonstrate that the project might have the potential for significant environmental effects. Minn. R. 4410.1100, subp. 6 (1999).
2. Potential for adverse effect on air quality
The MPCA determined that the expansion project will not likely violate any air-quality standards and that the installation of biofilters on the new barns give even “more reason to believe that potential impact from air emissions and odors would be significantly reduced.”
The O’Neills contend that there are 23,000 hogs within a three‑mile radius of the Livingood feedlot and that the expansion would increase the animal-unit concentration by 3%. Although this increase might ordinarily be expected to affect air quality, the MPCA argues that the total confinement of the hogs in the barns and the use of concrete manure pits will likely decrease the odor emissions, despite the increase in the number of animals.
The MPCA has not done air-quality testing at the Livingood site or within a 5.5-mile radius of the site because, under MPCA guidelines, an analysis is not required until the average animal-unit density exceeds 0.25 animal units per acre. The Livingood expansion will result in an animal-unit density of 0.151 units.
In reaching its conclusion that the expansion will not likely affect air quality, the MPCA relied on its air-testing guidelines, the proposed physical construction of the expansion, tests that were conducted at another feedlot site near Morris, Minnesota, and the voluntary installation of biofilters on the new barns to mitigate air-emission sources. Biofilters have been known to reduce odors by an average of 78%, hydrogen sulfide emissions by 86%, and emissions of ammonia by 50%.
Perhaps the physical construction of the expansion will help decrease emissions. This proposition has not been demonstrated, however. Emission data from another site is undoubtedly informative, but, even by the MPCA’s acknowledgment, caution must be exercised in extrapolating data from one site to another because significant differences between the sites might not be accounted for. And at the Morris site, despite the lack of indications of the presence of pollutants, the testing personnel noted a strong odor coming from the feedlot.
As to biofilters, the MPCA noted the development of new guidelines:
More refined guidance for air emission Modeling has been developed and is under consideration at this time. The new guidance would allow, for the purpose of completing an EAW, that a project proposer may choose to mitigate air emission sources or conduct air emission and ambient air quality modeling.
In Trout Unlimited, 528 N.W.2d at 908, we held that the determination of the potential for significant environmental effects is to be made before they occur. The MPCA’s new guidelines would allow the project proposer to take steps to mitigate environmental effects. But that would occur after the fact. The purpose of the EAW is to determine before the fact whether there will be significant environmental effects. Other than the use of biofilters, which has been demonstrated to be a reliable way to protect against deleterious air emissions, the MPCA had only supposition to support its conclusion that an EAW is not necessary to address air-quality issues. Thus, we hold that the MPCA’s conclusion is not supported by substantial evidence and was erroneous.
3. Potential for significant effects on soil and water
The O’Neills argue that the MPCA ignored evidence that the presence of porous soil on the site may have the potential for significant environmental effects because pollutants from the site may quickly drain into the soil. They also argue that the MPCA ignored evidence of shallow aquifers, which may become contaminated with the expansion.
The MPCA reviewed hydrological and soil reports for the general area in which the expansion would take place. The reports show that the aquifers suitable for drinking-water supplies generally consist of sand and gravel deposits that are interspersed with lower permeable clay and silt. The deposits are “more protected from contamination than more sensitive surficial aquifers,” and the aquifers and well‑water levels are not shallow or sensitive. Although there is a small percentage of the soil complex that “would possibly warrant further investigation,” the predominant soils are such that the expansion will not have potential significant effects on either soil or ground water.
In addition to soil composition, the MPCA considered the concrete manure pits that will be part of the expansion. The pits are impermeable and will prevent contact between manure and soil or ground water.
The MPCA’s conclusion that an EAW is not required as to the soil and ground-water issues was supported by substantial evidence and was not arbitrary and capricious.
4. Motion to expand the administrative record
The O’Neills argue that the district court erred in denying their request to expand the administrative record. Evidence considered for the first time in the district court in reviewing an agency’s decision may only be used for limited purposes. White, 567 N.W.2d at 734-35. This prevents the possibility of the district court second-guessing the agency’s decision that was based upon the evidence in the record before the agency when it made its decision. Id. at 734. Thus, the district court may consider evidence outside of the administrative record only when:
(1) the agency’s failure to explain its action frustrates judicial review; (2) additional evidence is necessary to explain technical terms or complex subject matter involved in the agency action; (3) the agency failed to consider information relevant to making its decision; or (4) plaintiffs make a showing that the agency acted in bad faith.
Id. at 735. Evidence introduced in district court for the first time would be probative only insofar as it tended to show either that the agency’s research or analysis was clearly inadequate or that the agency improperly failed to set forth opposing views widely shared in the relevant scientific community. Id. If the evidence indicates these deficiencies, our proper function is to remand to the agency for correction of the agency’s errors. Id.
It is not entirely clear from the O’Neills’ brief what documentation they intended to bring into the record in district court. But their motion in the district court file indicates several items.
They first requested the admission of certain e-mails that are contained in a list entitled “documents and studies either provided to or received from the MPCA staff and relevant to the EAW” on Livingood’s feedlot. The list is in the administrative record, although the e-mails themselves are not. The O’Neills argue that the e-mails “clearly lay out the concerns at the MPCA arising from the cumulative air-quality studies started as a result of the court ordered Environmental Impact Statement” on the Hancock farm, which was used as a comparison to determine potential air-quality impact of the Livingood expansion.
It is unclear whether the e-mails relate to the cumulative air-quality standards because they are not in any record. Thus, it is uncertain whether any of the e-mails listed fits within any of the applicable categories, and the O’Neills have not demonstrated that the e-mails should be admitted for any of the reasons for expanding the record. The district court did not err in denying the motion for this particular request.
The O’Neills also request that the studies listed as numbers 22-31 on the same list be admitted into the record. These listings appear to refer to specific studies done around the area of the proposed expansion. But the studies are included in the record before us, and there is no evidence as to how these studies show that the MPCA failed in some manner to adequately research or analyze the proposed expansion. Conversely, it seems that if these studies were included on the list, they were reviewed and considered by the MPCA. Therefore, although the O’Neills’ request refers to specific studies, the district court did not err in denying their request because there is no showing that the information satisfies one of the categories required in order to expand the record.
The O’Neills next request the admission of
[a]ll documents, notes and drafts related to the Livingood feedlot application * * * or the petition for EAW review of the Livingood feedlot application, whether contained in the MPCA file * * * “ any MPCA Environmental Review Office file * * * or in any other state office or maintained by any state employee or MPCA Board member. To include all permits and authorizations so far granted to Livingood on this proposal
They also request any telephone notes and records or e-mails relating to the Livingood EAW from any of the sources above. They claim that these documents are public record for this case. But even if these items are of public record, the O’Neills do not indicate how they are necessary to show that the MPCA failed to fully explain its decision or to consider relevant information, or that the MPCA acted in bad faith. Lastly, the O’Neills have not shown that the information is necessary to prove that the agency failed to explain its action and, therefore, frustrated judicial review. Overall, the request for expansion of the record is broad and vague and fails to satisfy any of the criteria for expansion. Thus, the district court did not err in denying the O’Neills’ request to expand the record.
Finally, the O’Neills request
[a]ll relevant documents related to MPCA or other state agency policies considered or applied to the Livingood feedlot application or to the analysis of the EAW petition, including the policies themselves.
The O’Neills argue that this information may have slipped mention in the record and is necessary because the petition seems to have been denied on formal or informal policies. Again, the request does not fit into any of the categories necessary to expand the record, and the district court did not err in denying the request.
Because there was no showing that the information requested is necessary to aid in judicial review, to explain technical terms or complex subject matter, to show that the agency failed to consider material information, or to show that the agency acted in bad faith, the district court did not err in declining to expand the administrative record
Affirmed in part, reversed in part, and remanded.