IN THE SUPREME COURT OF THE STATE OF MONTANA

MISSOULA CITY-COUNTYAIR POLLUTION CONTROL BOARD, Petitioner and Appellant,

v. BOARD OF ENVIRONMENTAL REVIEW, Respondent and Respondent, :/

.. 

### . and STONE CONTAINER CORPORATION, Intervernor and Respondent.

APPEAL FROM: District Court of the Fourth Judicial District, In and for the County of Missoula, The Honorable Ed McLean, Judge Presiding.

COUNSEL OF RECORD: For Appellant: Robert L. Deschamps, 111, County Attorney; Martha E. McClain, Deputy County Attorney, Missoula, Montana William A. Rossbach, Missoula, Montana For Respondents: Honorable Joseph P. Mazurek,Attorney General;W. D. Hutchison, Assistant Attorney General, Helena, Montana JeanneM. BenderandW. Scott Mitchell, Holland and Hart,Billings, Montana Cindy Younkin, Board ofEnvironmental Review, Helena, Montana

Filed: Heard and Submitted: March 11, 1997 Decided: April 17, 1997ChiefJustice J. A. Turnage delivered the Opinion of the Court. The Missoula City-County Air Pollution Control Board (Local Board) appeals a decision of the Fourth Judicial District Court, Missoula County, dismissing its petition for judicial review and declaratory judgment. We reverse and remand for further proceedings consistent with this Opinion. The issues are: 1. Did the District Court err in ruling that the Local Board does not have standing to challengethe validity of administrative rules adopted by the Board ofEnvironmental Review (State Board)? 2. Did the court err in ruling that the Local Board's first amendedpetition was not timely filed? 3. Did the court err in ruling that the State Board's September 1994 final order was moot? Stone ContainerCorporation operates a krafi pulp mill near Missoula, Montana. The Local Board is the local air pollution authority for the City and County of Missoula, approved by the StateBoard pursuant to 

## 5 75-2-301,MCA. The Local Board does not have general regulatory authority over Stone Container, however, because Stone Container is an airpollution sourcethat emits more than 250 tons of regulated pollutants per year. 

### See tj 75- 2-30 1 (4)(c), MCA. Instead, the Montana Department of Environmental Quality, formerly the Montana Department of Health and Environmental Sciences (Department),is responsiblefor issuing air quality permits to Stone Container. The State Board is responsible for adopting, amending, and repealing rules for the administration, implementation, and enforcement ofthe Clean Air Act ofMontana. 

### See 

## 8 75-2- 1 11,MCA. This case originated fiom a dispute between Stone Container andthe Department over modifications the Department made to the air quality permit for Stone Container's kraft pulp mill. In December 1992,Stone Container appealed to the StateBoard concerning changes by the Department in the most recent permit the Department had issued for the mill. The Department and Stone Container subsequently stipulated to the resolution of all but one of the provisions of the permit which Stone Container had appealed to the State Board. The remaining unresolved issue was the Department's inclusion in the permit of a 20 percent opacity limit for emissions fi-omrecovery boiler number 4 at the kraft pulp mill. Opacity is defined as the degree, expressed in percentage, by which emissions reduce the transmission of light and obscure the view of an object in the background. ARM 17.8.101(27). Stone Container petitioned the StateBoard for a declaratory ruling interpretingARM 16.8.1404 (now ARM 17.8.304),Visible Air Contaminants, and its application to recovery boiler number 4 atthepulp mill. The Local Boardpetitioned to intervene in the action before the State Board. Stone Container opposed the petition to intervene, and the State Board subsequently denied the petition.After holding ahearing on Stone Container's petition for a declaratoryruling,the State Board voted to interpretARM 16.8.1404to allow Stone Container a 35 percent opacity limit for recovery boiler number 4. The State Board entered its written order so ruling on September 16, 1994. On October 6, 1994, the Department petitioned for rehearing. On October 17, 1994,the Local Board, acting as a "person" aggrieved by the State Board's September 16order, filed apetition for judicial review in the Fourth Judicial District Court. The court granted Stone Container's motion to intervene in the judicial review proceeding. In addition, the court granted the State Board's motion to stay the proceeding pending the outcome of an administrative rule amendmentprocess then being conductedby the State Board. The StateBoard adopted amendmentsto the administrative rules in August 1995. The amendments made haftpulp mills (Stone Containerwas the onlyhaftpulp mill in Montana) exempt from

### ARM 16.8.1404. The amendments provided opacity standards and monitoring requirements in amendments to 

### ARM 16.8.141 3 and 16.8.1429 (now ARM 17.8.302 and 17.8.321). Stone Container moved to withdraw its petition which was then still pending before the StateBoard. Stone Container and the Department also stipulated to request that the State Board withdraw its September 16, 1994 order. At its December 1995 meeting, the State Board voted to dismiss Stone Container's petition.Meanwhile,on November 7, 1995, the Local Board filed in the District Court its first amended petition forjudicial review and declaratory judgment, seeking, in addition to judicial review ofthe State Board's September 16, 1994order, a declaratoryjudgment that the amended rules were invalid. Stone Container moved the District Court to dismiss the amended petition pursuant to Rule 12(b)(6),M.R.Civ.P., for failure to state a claim upon which relief can be granted. The court granted the motion on grounds that the Local Board lacked standing to bring an action on behalf of the Missoula public to challenge the rulemakingproceduresleading to the StateBoard's adoption ofthe challenged amendments. The court also ruled that the State Board's actions and final ruling in the administrative declaratory proceeding had been rendered moot by the 1995 amendments to the rules. It further ruled that the petition's request forjudicial review of rule-making procedures was untimely. The Local Board appeals. As it did in District Court, Stone Container appears as

an intervenorpursuant to Rule 24(a)(2), M.R.Civ.P. STANDARD OF REVIEW A motion to dismiss under Rule 12(b)(6),M.R.Civ.P., has the effect of admitting all well-pled allegations in the complaint. In considering the motion, the complaint must be construed in the light most favorable to the plaintiff, whose allegationsof fact must be taken

as true. Lockwood v. W.R. Grace & Co. (1995), 272 Mont. 202,207, 900 P.2d 314, 317. The determination that a complaint does not state a claim upon which relief can be grantedis a conclusion of law which this Court reviews to determine whether the district court is correct. Lockwood, 900 P.2d at 3 17. ISSUE 1 Did the District Court err in ruling that the Local Board does not have standing to challenge the validity of administrative rules adoptedby the StateBoard? In Simon v. Eastern Ky. Welfare Rights Org. (1976), 426 U.S. 26,38,96 S.Ct. 1917, 1924,48L.Ed.2d 450,460, the United States Supreme Court defined standing as requiring (and assuming justiciability of the claim) that the plaintiff has shown an injury to himselfthat is likely to be redressed by a favorable decision. This Court has stated that the concept of standing arises fiom two different doctrines: (1) the discretionary doctrine aimed at prudently managing judicial review of the legality of public acts, and (2) the doctrine of constitutional limitations drawn fiom the "cases and controversies" definition of federal judicial power in Article I11 of the United States Constitution and the "cases at law and in equity" definition of state judicial power in Article VII, Section 4, Montana Constitution. Olson 

### v. Department ofRevenue (1986), 223 Mont. 464,469-70,726 P.2d 1162, 1166. With respect to the prudential basis for standing, this Court has stated that the trial court's discretion cannot be defined by hard and fast rules, and that the importance of the question to the public "surely is an important factor." Committee for an Effective Judiciary

v. State (1984), 209 Mont. 105, 110, 679 P.2d 1223, 1226. The constitutional aspect of standingrequires the plaintiffto showthatplaintiff has been personally injured or threatenedwith immediate injuryby the alleged constitutional or statutory violation. Olson, 726 P.2d

On the question of whether the Local Board has standing to bring this action, the District Court stated: [TlheMissoula Control Board has failed to show it has standing to prosecute such an action. The Missoula Control Board asserts in its First Amended Petition that it has standing because it has the role of serving as an advocate for the interests ofthe citizenry of Missoula County regarding the quality of Missoula's air and is charged with the responsibility to protect such interests on behalf ofthe Missoula public in the State of Montana Air Quality Control Implementation Plan (commonly referred to as "SIP").



### . . . In sum, a local control board is a legislatively-authorized, Department-approved agent of the Department, and as such has only those powers specifically allowedby the Legislature and specifically delegated to it by the Department. Nothing in either Part 3 of Title 75, Chapter 2, nor in the SIP, authorizesthe local control board to prosecute an action in an advocacy role on behalf ofthe citizenry of Missoula County. The Local Board disagrees with that ruling. At the outset, the Local Board disputes the District Court's statement that it is an agency of the Department. The Local Board points out that the powers of a local air pollution control board are set forth at 

### 5 75-2-301(3), MCA, as part of the Clean Air Act of Montana. The extent of the Local Board's responsibilities and the limits to its powers are contained in the MontanaAir Quality Control Implementation Plan (SIP). The SIP provides: [The Local Board's] air pollution control program 

## . . . is designed to mesh with and enhance the state air pollution control program. It is the purpose of the Missoula City and County air pollution control program to achieve and maintain such levels of air quality as will protect human health and safety and, to the greatest degree practicable, prevent injury to plant andanimal life and property, foster the comfort and convenience of the people, promote the economic and social development of Missoula City and County and facilitate the enjoyment of the natural attractions of Missoula City and County. The federal Environmental Protection Agency (EPA) reviews SIPS and may impose sanctions, includingwithholding of federal highway transportation funds, if a local area fails to comply with the provisions ofthe SIP. Stone Container points out that the Local Board does not have general regulatory authority over its kraft pulp mill. It contends that, as a result, the Local Board has no standing to bring this action. The Local Board respondsby citing its emergency regulatory powers under fj 75-2-402, MCA, and the Missoula City-County Air Pollution Control Program, which include authority to order persons causing or contributingto airpollution to immediatelyreduce or discontinue emissions, and which extend over Stone Container's kraft pulp mill. Moreover, the Local Board strongly disagrees with the idea that it must possess regulatory power over Stone Container to have standing to bring this action. It correctly states that a distinction exists between possessing regulatory authority over an entity and having standing to sue, under the above two-pronged standard, concerning administrative regulation of that entity. The State Board and Stone Container assert that the Local Board has made no showing, other than speculative, of present or threatened injury to it, personally. Stone Containerpoints out that the personal stakerequirement in standing analysis is dispositive, 8citing Carterv. Montana Dept. ofTransp. (1995), 274 Mont. 39,905 P.2d 1 102. The Local Boardreplies, however, that injury need not be exclusive to the complaining party in order for that party to have standing. Sandersv. Yellowstone County (1996),276 Mont. 116, 9 15 P.2d 196. The Local Board contends, and we agree, that its interestin the effective discharge ofthe obligationsimposed upon itby law is the equivalentofthepersonal stake which would support standing of a private citizen ofthe Missoula airshed. It is clear to this Court that a citizen of Missoula, as one who breathes the air into which Stone Container is expelling pollutants, would have standing to bring this action. The Local Board is a person within the definition of that word at 

## 5 2-4-102(8), MCA, as "an individual, partnership, corporation, association,govenunental subdivision, agency, orpublic organization of any character." In the same way as a citizen of the Missoula airshed is more particularly affected by the State Board's act than is a citizen of another area, the interest of the Local Board is distinguishable from and greater than the interest ofthe public generally. As to the requirement ofpresent or threatened injury, "[olther courts have held and

we agree, thatpotential economic injury is sufficientto establishstanding." MontanaHuman Rights Div. v. City of Billings (1982), 199 Mont. 434, 443, 649 P.2d 1283, 1288. For example, in Rosebud Cty. v. Dept. ofRev. (1993), 257 Mont. 306, 849P.2d 177,a county's substantial interestin the protection ofits tax base and its potential for economic harm in the valuation of heavy equipment was sufficient to give the county standing to challenge administrativerules.The Local Board argues that it faces potential economic harm fiom the additional expensesnecessaryto monitor, collect and analyze data and to develop a regulatory response which will ensure that Missoula air quality meets minimum federal standards in the face of increased airpollution from Stone Container. In its amendedpetition forjudicial review and declaratory judgment, the Local Board points out that Missoula County has been designated

a nonattainrnent area by the 

### EPA for carbon monoxide and fine particulate, and that additionalrequirementsare imposed upon Missoula County and the Stateby federal law as

a result of this nonattainment status. The Local Board further points out that the State Board's action in reducing air quality standards applicable to Stone Container may require the Local Board to take additional regulatory and enforcement action against otherpollution

sources in the Missoula airshed to comply with state and federal particulate standards and SIPrequirements. The issuehere involved, air quality in Missoula, is indubitablyan issue ofimportance to the Missoula public. Further, where two entities share regulatory power regarding air quality in onephysical location, as do the Local Board and the Department in the Missoula airshed, the actions of one necessarily impact the other. We conclude that threatened injury to the Local Board has been established. We hold that the Local Board has standing to challenge the validity of administrative rules concerning airpollution applicable within its

area of jurisdiction.We thus hold that the District Court erred in concluding that the Local Board did not have standing to bring this action. Therefore, this matter must be remanded to District Court for further proceedings. ISSUE 2 Did the court errin ruling that the Local Board's first amended petition was not timely filed? The Local Board's amended petition states that this action was brought pursuant to Title 2, Chapter4, part 7, MCA, "JudicialReview of Contested Cases." The District Court ruled that to the extent the amended petition sought judicial review of rule-making procedures, suchjudicial review was barred under $ 2-4-702(2)(a), MCA. That statute requires that a claim for judicial review of a contested case must be filed within thirty days of the final decision of the agency. The State Board claims that date is the August 1995 publication date giving public notice that the agencyhad adopted amendments to the rules. The State Board argues that new issues raised in the Local Board's November 7, 1995first amended petition (i.e., the claims concerning the amendedrules) do not relate back to the original petition. In addition to citing Title 2, Chapter 4, part 7, MCA, the amendedpetition also asserts that the amendments to the administrative rules violate 

## 5 2-4-506, MCA. That statute provides: (1) A rule may be declared invalid or inapplicable in an action for declaratoryjudgment if it is found that the rule or its threatened applicationinterferes with or impairs or threatens to interfere with or impair the legal rights or privileges of the plaintiff. (2) A rule may also be declared invalid in such an action on the grounds that the rule was adopted with an arbitrary or capricious disregard for the purpose of the authorizing statute as evidenced by documented legislative intent. (3) A declaratory judgment may be rendered whether or not the plaintiffhas requested the agency to pass upon the validity or applicability of the rule in question. (4) The action may be brought in the district court for the county in which the plaintiff resides orhas his principalplace ofbusiness or in which the agencymaintains its principal office. The agency shall be made a party to the action. A declaratory actionpursuant to 

## 9 2-4-506, MCA, is not subjectto the thirty-day limitation imposed on proceedings forjudicial review in contested cases under 

## 5 2-4-702, 

### MCA. The amendedpetition in this case asks the court to, among other things, declare void the 1995 amendments to 

### ARM 16.8.1404, 16.8.1413 and 16.8.1429 (now

### ARM 17.8.304, 17.8.302 and 17.8.321),which the Local Board alleges were adopted with an arbitrary or capricious disregard forthe purpose of the authorizing statute. The amendedpetition thereby seeks declaratory judgment regarding the amendmentsto the rules. We conclude that, to the extent it seeks declaratory judgment on the validity of the 1995 amendments to those administrative rules, the amended petition is not subjectto the thirty-day rule set forth at 

### 5 2- 4-702(2)(a), MCA, and was timely filed. ISSUE 3 Did the court err in ruling that the State Board's September 1994 final order is moot?A question is moot when it no longer presents a justiciable controversy because the issues involved have become academic or dead or any action the court may take will have

no effect on the situation of the parties. State v. Mesler (1984), 210 Mont. 92,682 P.2d 714; Statev. Warden (198I), 191Mont. 520,625 P.2d 543. In short, a question is moot when the court cannot grant effective relief. Turner v. Mountain Engineering and Const., Inc. (1996), 276 Mont. 55,915 P.2d 799. An exception to the mootness doctrine exists for actions which are capable of repetition, yet, because they are too short in duration to be fully litigated prior to cessation

or expiration, they evade review. This exception is usually applied to situations involving governmental action where it is feared that the challenged action will be repeated. ButteSilver Bow Local Govern. v. Olsen (1987), 228 Mont. 77,82,743 P.2d 564, 567. In the present case, the amended administrative rules were published on August 10, 1995. At its December 1995 meeting, after the Local Board's first amended petition was filed, the State Board voted to dismiss Stone Container's petition for declaratory ruling which was the subjectofthe State Board's September 1994 final order. No written order of dismissal was entered, however. The State Board and Stone Container argue that the September 1994 final order is moot because it has been superseded by the amended rules and because the order was withdrawn by the State Board when the State Board voted to dismiss Stone Container's petition for declaratory ruling. They argue that no live controversy exists as to this matter.Amending disputed rules as a means of resolving a contested case without fully engaging in statutory administrative rule-making procedural requirements, as is alleged to have occurred in this case, is a governmental action which may evadereview, yet is capable of repetition. Ifthe District Court determinesthat the 1995 rule amendments are valid, this allegation ofimpropriety may well be adjudged disproved as part ofthat determination. If, however, the court determines that the amendments are invalid, it must then determine whetherthe previous version ofthe rules is revived. If the District Court determines that the amendments are invalidbut that the preamendment rules are still in effect, the issue is within the exception to the mootness doctrine, because it evadesreview,yet is capable ofrepetition. In summary,we conclude that the District Court erred in ruling that the Local Board lacked standing to maintain this action and that the Local Board's amended petition for declaratory relief was untimely. We therefore remand for further proceedings concerning those matters. Final resolution of the mootness issue concerningthe State Board's September 16, 1994 order will dependupon additional determinationsto be made by the District Court

on remand. Reversed and remanded for further proceedings consistent with this Opinion.We concur: