Opinion ID: 1281848
Heading Depth: 1
Heading Rank: 4

Heading: Memorandum Opinion of the Judges of the District Court of Lake County

Text: Appeals were taken to the District Court of Lake County from the decisions of the PCA and DNR by Reserve Mining Company. A three-judge panel was convened and received additional evidence in the PCA appeal between November 3, 1976, and December 3, 1976. On January 28, 1977, the court filed its opinion and entered an order reversing the July 1, 1976, decisions of the PCA and DNR and directing those agencies to issue permits for the use of Mile Post 7 as a disposal site by Reserve. As to the PCA, the trial court applied Minn.St.1974, ง 115.05, subd. 7, and as to DNR, Minn.St. 105.47, in determining that its scope of review was whether or not the agencies' orders were lawful and reasonable and warranted or supported by the evidence. The court was of the opinion that applying this test was consistent with the Administrative Procedure Act set forth in Minn.St. 15.0425. Accordingly, the court held that it was required to engage in a thorough, probing, in-depth review   a searching judicial scrutiny of how and why the agency determinations were actually adopted. In discussing the issues, the court prefaced its opinion by alluding to the hearing officer's concern with imaginary or speculative possibilities, suggesting that the agencies became preoccupied with remote contingencies. The court declined to pass on the constitutionality of statutory authority for taking additional evidence in the PCA appeal since it asserted the issue was not timely raised. With respect to the possibility of dam failure at Mile Post 7, the court held that the agencies' findings and conclusions were based not only on unsubstantial evidence but on almost no evidence at all. All of the consulting firms retained by the agencies had concluded that the proposed dams would be safe, but the hearing officer required a showing of absolute safety, a standard which the trial court rejected. As to the use of Mile Post 20 as a prudent and feasible alternative, the trial court questioned its availability because much of it was held by the United States Forest Service. Since the PCA had the power and authority to monitor and oversee the construction and maintenance of the dam at Mile Post 7, the court was of the opinion that the health, safety, and welfare of the people would be secure. The court discussed at some length the evidence concerning the effect of Mile Post 7 on the ambient air in the vicinity of Silver Bay. It was impressed by the fact that the evidence indicated it was not possible to arrive at an unequivocal prediction concerning total suspended particulate levels or the levels of asbestiform fibers; that no state or Federal air standard has been promulgated for amphibole fibers; and that the level of asbestiform fibers was essentially comparable in Silver Bay, Hibbing, Virginia, and other Iron Range communities. The court construed the hearing officer's findings as requiring the elimination of all fugitive dust by water sprinkling, chemicals, and vegetation, which the court held to be unreasonable. A PCA witness testified that contemplated plant emission control devices would reduce total suspended particulates (TSP) from 65 tons to less than 2 tons per day at the processing plant, the court noted, and the PCA staff was of the opinion that Mile Post 7 was reasonable as a tailings site if conditions imposed for water quality and air quality and fiber reduction were met and coarse tailings were submerged. The court went on to stress the inaccuracy of fiber-count techniques which allowed errors of at least nine times on the high side to one-ninth on the low side according to a Mayo Clinic witness in Federal court. In assessing the evidence bearing on the mass and size of fibers in the ambient air, the court was of the opinion that the hearing officer's findings were based on assumptions which did not constitute substantial evidence. The trial court then dealt with the key issue of the impact on air quality in Silver Bay generated by construction and operation of a site at Mile Post 20 compared to the impact from Mile Post 7. It was undisputed that because of its proximity to Silver Bay the selection of Mile Post 7 would result in approximately three times the amount of fugitive dust in the populated area of Silver Bay that would result from the selection of Mile Post 20. However, the court relied strongly on the testimony of a state witness that a projected reduction in plant emissions of 97 percent, implemented by the air quality stipulation agreement together with the underwater storage of coarse tailings, would achieve a fiber level 75 percent less than existing levels. A decisive factor in arriving at the conclusion that there was no substantial evidence to justify the rejection of Mile Post 7 on the basis of air quality was the testimony of Dr. Chatten Cowherd, Jr., a witness for the state. At the agency hearing, Dr. Cowherd testified that his projection, on which the hearing officer relied, estimated that total suspended particulate levels for Silver Bay would increase by 1.75 micrograms per cubic meter as a result of the proposed use of Mile Post 7. An increase of 1.0 microgram from the use of Mile Post 20 was found to be acceptable by both the hearing officer and the PCA. When he testified before the trial court, Dr. Cowherd acknowledged his prior estimates had been erroneous. He revised his opinion to project 0.63 microgram of total suspended particulates per cubic meter at Silver Bay from the use of Mile Post 7. In short, the revised estimate of air pollution brought the level below a figure which had previously been found acceptable by the state. The court concluded by comparing the ultimate estimated levels of total suspended particulates in terms of micrograms per cubic meter at St. Paul as 65, Duluth, 52, and Silver Bay, 22. Because of the anticipated reduction in plant emissions and the steps to be taken in mitigating the generation of fugitive dust at the tailings site, factors which at one time prompted the PCA to approve issuance of a permit for Mile Post 7, the court was of the opinion there was no substantial evidence to reject Mile Post 7 on the basis of air quality. The trial court, in discussing the impact on natural resources at the two sites, found only insignificant differences in the effect on streams, fish, animals, timber, and water. However, great emphasis was placed on the fact that testimony adduced by the state indicated the selection of Mile Post 20 was completely contrary to the principle of consolidation of land use activities    opening up a third area to mining activities. The court stressed the fact that Mile Post 7 was ancillary to an existing industrial facility and that it was not a new industry seeking to intrude into a natural resources recreational area but an on-going concern of many years. The court referred to the testimony of the executive director of the PCA who conceded that wherever the tailings site was located it would have a major impact on the environment, but that the differences would be small and that the environmental hazards at Mile Post 7 could be minimized by the best available technology to make it a feasible site. With respect to economic factors, it was the opinion of the court that the hearing officer inadequately assessed the probability that Reserve would be shut down if denied permits for Mile Post 7. The dollar amounts for the year 1975 had increased to a total payroll of $55 million, purchases of material and supplies in Minnesota to $45 million, and state and local taxes payable by Reserve to nearly $16 million. Minn.St. 116.01, 116D.02, 116D.03, and 116.07, subd. 6, were cited as mandating greater consideration for business, commerce, trade, industry, traffic, and other economic factors than was accorded by the hearing officer. The court concluded by echoing the concern of the hearing officer that a shutdown would have a disastrous effect on the economic well-being of families dependent on Reserve for a livelihood. In considering a feasible and prudent alternative pursuant to Minn.St. 116D.04, subd. 6, the trial court discussed in some detail the problems of acquisition of a site at Mile Post 20. That area is entirely within the Superior National Forest. The consultant who drafted the Environmental Impact Statement testified that nine major steps were necessary to acquire Federal forest land under Federal law. The court noted there was no assurance Mile Post 20 would become available, and that if it were ultimately acquired, a period of 6 years might elapse during which either the plant would be shut down or it would continue to discharge tailings into Lake Superior. Accordingly, the hearing officer's finding that Mile Post 20 is a feasible and prudent alternative was held not to be supported by substantial evidence. The court found that the permit conditions imposed on Reserve for the construction and operation of a disposal site at Mile Post 7 had been unequivocally accepted by Reserve and by Armco and Republic, as set forth in our order of April 8, 1977, supra. The court held that those permit conditions were adequate to protect the health, welfare, and safety and all legitimate concerns of the public as a matter of law. One of the issues presented to this court by Save Lake Superior Association and Sierra Club was the trial court's refusal to grant their motion to reopen. Those parties claimed to have obtained newly discovered evidence that wet-wall electrostatic precipitators which had been installed in Reserve's plant to eliminate emission of asbestos fibers were deteriorating and would not effect a 97-percent reduction in the fibers emitted by the plant, contrary to what the system was represented as being capable of achieving. Since this had to do with implementing the air quality stipulation agreement, the court held that it was a matter for future consideration between the parties. Finally, the trial court discussed at some length the influence of the Federal district court's so-called educational session on the hearing officer; the PCA director, staff, and board members; and the DNR staff. It criticized those procedures and the manner in which various other meetings were held by the PCA as not complying with the statutory requirement for open meetings. It was the court's decision that the denial of permits for Mile Post 7 was unlawful, unreasonable, and not supported by substantial evidence; that permits be issued, subject to mutually agreeable conditions; that the plans submitted by Reserve together with the permit conditions were reasonable, practical, and adequately protected public safety and promoted public welfare; that no other feasible and economical method for mining taconite is reasonably available; and that the plan was otherwise in the public interest.