In re Reichmann Land & Cattle, LLP

847 N.W.2d 42, 2014 WL 2013430, 2014 Minn. App. LEXIS 50

• Court: Court of Appeals of Minnesota
• Decided: May 19, 2014
• Docket: No. A13-1461
• Status: Published

Opinions

OPINION

SMITH, Judge.

We affirm the order of respondent Commissioner of the Minnesota Pollution Control Agency (the MPCA) requiring relator, Reichmann Land and Cattle, LLP, to obtain a State Disposal System permit for its winter cattle lands because the lands are not exempt from such a permit under the statutory definition of pasture. We reverse the commissioner’s order requiring a federal National Pollutant Discharge Elimination System permit because Reich-mann’s operation is not an animal feeding operation as defined under federal law.

FACTS

Reichmann operates a fifth-generation family farm in Pope County, Minnesota. The farm, which includes two registered feedlots and 4,000 acres of cropland, is located atop a highly productive aquifer that is especially vulnerable to manure deposits. Each winter, from approximately November or December until March or April, Reichmann places more than 2,000 beef cattle on approximately 400 acres of its cropland. The resulting cattle density is several times higher than that on a typical foraging field and, although there is at least an initial vegetative cover, Reich-mann provides its cattle with feed that supplies at least 90 percent of their nutritional needs.

The winter feeding fields are divided into four tracts: tract one is approximately 215 acres; tract two is approximately 29 acres, divided into several parcels or pens; tract three is approximately 78 acres; and tract four is approximately 94 acres. Tract two is steeply sloped and surrounded by a system of engineered berms and buffers. An intermittent stream runs from west to east amidst these four tracts. This stream is joined by a second intermittent stream in tract two. In the past, Reichmann has discharged pollutants into these streams. These streams flow into a creek which has been designated an “impaired water” due to E. coli bacteria and dissolved oxygen levels. This creek joins the Sauk River, which empties into the Mississippi River at St. Cloud.

In and around Pope County, crop fields are typically tilled, and crops planted, between late April and early June; the growing season continues until the first frost, sometime in the fall. Every year, Reich-mann removes all cattle from its winter feeding fields prior to the normal planting season, and it tills the soil and plants crops on the winter feeding-fields at the same time as other crop fields in the area. The crops that are planted on the winter feeding fields are sustained throughout the summer growing season and are harvested at the same time as other similar crops in the area.

In 2008, Pope County adopted an ordinance that requires a permit for winter feeding. In 2009, Reichmann failed to obtain a permit, and was fined. Since 2010, Reichmann has obtained a county permit; it is the only operation that has sought a winter feeding permit from the county. The MPCA cannot enforce the Pope County permit. In February 2010, the MPCA notified Reichmann that its “winter feeding” operation required a National Pollutant Discharge Elimination System (NPDES) permit and a State Disposal System (SDS) permit, because it was discharging pollutants and it was an “animal feeding operation” (AFO) under federal law or an “animal feedlot” under state law. Reichmann disputed the necessity of an NPDES/SDS permit, arguing that it was not an AFO and that it fell within a state statutory exemption for “pasture.” The following year, in March, the MPCA sent Reichmann a draft Administrative Order that would require Reichmann to terminate its winter feeding operation or obtain an NPDES/SDS permit. Reichmann petitioned for a contested case hearing, and both parties moved for summary judgment. The administrative-law judge (ALJ) denied both motions and ordered the parties to prefile written direct testimony of their witnesses. Following a five-day administrative hearing, the ALJ recommended affirming the draft Administrative Order. Specifically, the ALJ concluded that, under federal law, Reichmann’s winter feeding fields are an “animal feeding operation” because “during the time the animals are present, a vegetative cover of crop residue is not sustained,” and because “crops or crop residue is not ‘sustained’ in the ‘normal growing season,’ but only for a part of the growing season after a crop is planted and it grows.” Additionally, the ALJ concluded that Reichmann’s winter feeding fields do not qualify for the state pasture exemption because “ ‘the concentration of animals is such’ that a vegetative cover of crops is not maintained ‘during the growing season,’ ” and because the cattle are not “‘allowed to forage on agricultural land.’ ”

When the Commissioner of the MPCA began his review, he determined that the ALJ record was missing several pre-trial pleadings. The commissioner contacted the Chief ALJ requesting either the missing documents or a 45-day extension, so that the commissioner could obtain the documents from the parties before making a final decision. The Chief ALJ granted the extension, noting that the ALJ who issued the report “has retired and after a thorough search we are unable to locate the referenced documents.”

Reichmann independently reviewed the contents of the record, and discovered that all of its prefiled testimony was also missing. In response, the commissioner ordered the parties to review the record before him and “jointly confer on whether” he had “a complete record from the proceedings.” The parties determined that, after providing copies of the previously identified items, the record was complete. Reichmann challenged the fairness of the hearing based on the gaps in the record, and the commissioner permitted legal argument on this issue. The commissioner then sought and received a second extension of 21 days.

On July 15, 2018, the commissioner issued his final order, affirming the draft Administrative Order, adopting the ALJ report with certain modifications, and concluding that the ALJ report “was not made upon improper and unlawful procedure” and that “Reichmann has been provided adequate due process of law in this matter.”

ISSUES

I. Did the commissioner err by requiring Reichmann to obtain a state SDS permit for its winter feeding fields?

II. Did the commissioner err by requiring Reichmann to obtain a federal NPDES permit for its winter feeding fields?

III. Does the temporary absence of Reichmann’s prefiled testimony from the record warrant relief?

ANALYSIS

We review a final decision of the MPCA under the Administrative Procedures Act (APA). In re Request for Issuance of SDS General Permit, 769 N.W.2d 812, 316-17 (Minn.App.2009). Under the APA, we may affirm the commissioner’s decision, remand the case for further proceedings, or reverse or modify the decision if the petitioner’s substantial rights may have been prejudiced because the findings, inferences, conclusions, or decision are affected by an error of law, unsupported by substantial evidence, or are arbitrary and capricious. Minn.Stat. § 14.69 (2012). “On appeal, the party challenging the agency’s decision has the burden of proof.” In re Request for Issuance of SDS General Permit, 769 N.W.2d at 317.

I.

Under Minnesota law, when a federal NPDES permit is not required, a state SDS permit is generally required for “an animal feedlot or manure storage area that has been demonstrated not to meet the criteria for [a concentrated animal feeding operation] and is capable of holding 1,000 or more animal units or the manure produced by 1,000 or more animal units.” Minn. R. 7020.0405, subd. 1(B)(1).¹ But “agricultural land on which livestock have been allowed to pasture at any time during the ten-year period beginning January 1, 2010, is permanently exempt from” this requirement “for so long as the property remains in pasture.” Minn.Stat. § 116.07, subd. 7d(a) (2012). The statute defines “pasture” as:

areas where livestock graze on grass or other growing plants. Pasture also means agricultural land where livestock are allowed to forage during the winter time and which land is used for cropping purposes in the growing season. In either case, the concentration of animals must be such that a vegetative cover, whether of grass, growing plants, or crops, is maintained during the growing season except in the immediate vicinity of temporary supplemental feeding or watering devices.

Id., subd. 7d(b) (2012).²

The parties dispute whether the concentration of cattle on Reichmann’s winter feeding fields is commensurate with the statutory definition of “pasture.” This issue presents a question of statutory interpretation, subject to de novo review. See Halvorson v. Cnty. of Anoka, 780 N.W.2d 385, 389 (Minn.App.2010). When interpreting a statute, we must “ascertain and effectuate the intention of the legislature.” Minn.Stat. § 645.16 (2012). In doing so, we first determine whether the statute’s language, on its face, is ambiguous. Am. Tower, L.P. v. City of Grant, 636 N.W.2d 309, 312 (Minn.2001). A statute’s language is ambiguous only when it “is subject to more than one reasonable interpretation.” Amaral v. Saint Cloud Hosp., 598 N.W.2d 379, 384 (Minn.1999). We construe words and phrases according to their plain and ordinary meanings. Frank’s Nursery Sales, Inc. v. City of Roseville, 295 N.W.2d 604, 608 (Minn.1980); see also Minn.Stat. § 645.08(1) (2012) (providing that words are construed according to their common usage). When the legislature’s intent is clearly discernible from a statute’s plain and unambiguous language, we interpret the language according to its plain meaning without resorting to other principles of statutory construction. State v. Anderson, 683 N.W.2d 818, 821 (Minn.2004).

The commissioner concluded that Reich-mann’s winter feeding fields are not pastures because (1) a vegetative cover of crops is not “maintained during the growing season,” and (2) the cattle are not “allowed to forage.”

Vegetative cover

The commissioner found that because certain crop varieties emerge before the particular varieties Reichmann plants on its winter feeding fields, Reichmann “establishes a vegetative cover for only a portion of the growing season.” However, this is contrary to the plain meaning of the statute, which unambiguously provides that “crops” may satisfy the vegetative cover requirement. See Minn.Stat. § 116.17, subd. 7d(b). Where, as here, agricultural land maintains a crop for the duration of the variety’s normal growing season, the “vegetative cover” element of the “pasture” definition is satisfied. Therefore, the commissioner’s first basis for concluding that Reichmann’s -winter feeding fields are not pasture is based on an erroneous interpretation of the statute.

Allowed to forage

The commissioner found that after the cattle “are on the fields for a few weeks, the incidental vegetation is downed and soiled and not truly available as ‘forage.’ ” Therefore, the commissioner concluded, the cattle on the winter feeding fields are not “allowed to forage” within the meaning of the statutory exemption. On appeal, Reichmann argues only that the evidence supporting this finding and conclusion is not credible. Because we defer to the agency’s credibility determinations, Saif Food Market v. Comm’r, Dept. of Health, 664 N.W.2d 428, 431 (Minn.App.2003), Reichmann’s argument is unavailing. Because Reichmann’s cattle are not “allowed to forage,” Reichmann’s winter feeding fields do not qualify for the statutory pasture exemption. Accordingly, the winter feeding fields require an SDS permit.

II.

We review a decision de novo when the “decision turns on the meaning of words in an agency’s own regulation,” or in a federal regulation which the agency is charged with “enforcing and administering.” In re Cities of Annandale and Maple Lake NPDES/SDS Permit Issuance, 731 N.W.2d 502, 513, 515-16 (Minn.2007). “[W]hen the language of the regulation is clear and capable of understanding, we give no deference to the agency’s interpretation and we may substitute our own judgment for that of the agency.” Id. at 515. However, “when the relevant language of the regulation is unclear and susceptible to different reasonable interpretations, i.e. ambiguous, we will give deference to the agency’s interpretation and will generally uphold that interpretation if it is reasonable.” Id.

Under federal law, an animal feeding operation (AFO) is a lot or facility where (1) animals “have been, are, or will be stabled or confined and fed or maintained for a total of 45 days or more in any 12-month period” and (2) “[cjrops, vegetation, forage growth, or post-harvest residues are not sustained in the normal growing season over any portion of the lot or facility.” 40 C.F.R. § 122.23(b)(1) (2012). Certain AFOs, including AFOs that stable or confine at least 1,000 cattle, are concentrated animal feeding operations (CAFOs). 40 C.F.R. § 122.23(b)(2), (4)(iii) (2012). A CAFO “must not discharge unless the discharge is authorized by an NPDES permit.” 40 C.F.R. § 122.23(d)(1) (2012).

Reichmann challenges the commissioner’s conclusion that its winter feeding fields are an AFO. The commissioner concluded that the fields are an AFO because (1) “during the time the animals are present, a vegetative cover of crop residue is not sustained,” and (2) “crops or crop residue is not ‘sustained’ in the ‘normal growing season,’ but only for a part of the growing season after a crop is planted and it grows.”

During the time the animals are present

The language of the regulation establishes that the relevant timeframe is “the normal growing season.” See 40 C.F.R. § 122.23(b)(1)(ii). In a preamble to the regulation, the Environmental Protection Agency (EPA) purports to clarify the regulation by stating that “in the case of a winter feedlot, the ‘no vegetation’ criterion in the AFO definition is meant to be evaluated during the winter, when the animals are confined.” 68 Fed.Reg. 7176, 7189 (Feb. 12, 2003). But we will only consult the preamble “when, unlike here, the regulation’s plain language is ambiguous.” Albemarle Corp. v. Herman, 221 F.3d 782, 786 (5th Cir.2000); see also Advanta USA, Inc. v. Chao, 350 F.3d 726, 728-29 (8th Cir.2003) (consulting preamble to interpret ambiguous term); Weiss v. Fujisawa Pharmaceutical Co., 464 F.Supp.2d 666, 673 (E.D.Ky.2006) (a preamble is “entitled only to limited deference because it is not subject to notice and comment procedures”). Here, the commissioner explicitly found that “Reichmann removes all of the cattle from the winter-time feeding sites prior to the normal planting season.” Therefore, “the time the animals are present” is irrelevant to the determination of whether Reichmann’s fields are an AFO. Accordingly, we conclude that the commissioner’s first basis for deeming the fields an AFO is grounded in an erroneous interpretation of the regulation.

Normal growing season

The language of the regulation unambiguously provides that a lot that sustains crops in the normal growing season is not an AFO. See 40 C.F.R. § 122.23(b)(1)(ii). Because the commissioner explicitly found that Reichmann “tills the soil and plants crops on the winter-time feeding sites at the same time as other crop fields in the area” and Reich-mann’s crops “are sustained throughout the summer growing season,” the commissioner’s conclusion that Reichmann only sustains crops “for a part of the growing season” relies on an unreasonable interpretation of the phrase “normal growing season.” We conclude that a crop’s “normal growing season” does not begin before the crop typically begins to grow in the region. Accordingly, we conclude that the commissioner’s second basis for deeming Reichmann’s winter feeding fields an AFO is grounded in an erroneous interpretation of the regulation.

Under the plain meaning of the regulation, because Reichmann’s winter feeding fields sustain crops in the normal growing season, they are not an AFO. See 40 C.F.R. § 122.23(b)(1). Because the winter feeding fields are not an AFO, they are not a CAFO and do not require an NPDES permit. See 40 C.F.R. § 122.23(b)(2), (d)(1).³

The dissent finds the language of subdivision (2) to be “unclear or reasonably susceptible to more than one reasonable interpretation”. We disagree. While we agree that the language of the regulation could be written better to accomplish the purposes of the Clean Water Act, we find the language of the regulation to provide a clear and unambiguous threshold for defining an AFO. The Reichmann “winter feeding” operation does not meet this threshold and therefore a NPDES permit is not required under the regulation. See id.

III.

Finally, Reichmann argues that because its prefiled testimony “may not have been available to [the] ALJ,” the commissioner’s decision was made upon unlawful procedure and violates the constitutional right to- due process, and that these errors may have prejudiced Reich-mann’s substantial rights. But the commissioner specifically found that the ALJ “had the Reichmann pre-filed testimony before him during the hearing and when he prepared the ALJ report.” In support of this finding, the record establishes that the prefiled testimony was (1) reviewed by the ALJ before the contested case hearing, (2) discussed during the contested case hearing, (3) referenced in writing by the parties after the contested case hearing, and (4) referenced in the ALJ report. Because the commissioner’s finding is supported by substantial evidence, Reichmann is not entitled to relief. See Reserve Min. Co. v. Herbst, 256 N.W.2d 808, 827 (Minn.1977). Moreover, because the commissioner was keenly aware of the issue and made a final decision based on the complete record, Reichmann has failed to establish the requisite prejudice.

DECISION

Because Reichmann’s winter feeding fields are not a pasture — because its cattle are not “allowed to forage” — the commissioner did not err by ordering Reichmann to obtain a state SDS permit. But because Reichmann’s winter feeding fields are not a CAFO, the commissioner erred by ordering it to obtain a federal NPDES permit.

Affirmed in part and reversed in part.

1 . For the first time on appeal, Reichmann argues that the commissioner erred by ordering Reichmann to obtain a combined NPDES/ SDS permit. Reichmann waived this issue by not raising it below. See North Am. Water Office v. LTV Steel Mining Co., 481 N.W.2d 401, 405 (Minn.App.1992) (on appeal from an administrative agency decision, this court will not consider issues that were not raised before the agency). Moreover, because we conclude that Reichmann is not required to obtain an NPDES permit, see infra section II, this argument is moot.

2 . The legislature crafted this independent definition of "pasture” in 2011, having previously deferred to the MPCA’s definition. Compare Minn.Stat. § 116.07, subd. 7d (2010) with Minn.Stat. § 116.07, subd. 7d(b) (Supp. 2011). The MPCA's definition does not explicitly include winter foraging. Minn. R. 7020.0300, subd. 18 (defining "pasture” as "areas where grass or other growing plants are used for grazing and where the concentration of animals is such that a vegetation cover is maintained during the growing season except in the immediate vicinity of temporary supplemental feeding or watering devices”).

3 . Because we conclude that Reichmann's winter feeding fields are not a CAFO, and therefore do not require an NPDES permit, we decline to address either Reichmann’s contention that it is not currently discharging pollutants or whether the MPCA can require an NPDES permit for a CAFO that has discharged but is no longer discharging.