Court Opinion

ID: 7874404
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:02:07.759333+00
Date Added: 2024-06-11T16:31:21.054414
License: Public Domain

DUNN, Justice.
This is an appeal from an order of the circuit court affirming the South Dakota Water Management Board’s approval of Water Permit No. 1791-2, and from orders of the circuit court denying several motions. We affirm.
On September 24, 1981, the South Dakota Legislature passed legislation which allowed the South Dakota Conservancy District (SDCD) to make application to the Water Management Board (Board) for a permit to appropriate water from Oahe Reservoir; the same act also allowed SDCD to transfer the permit to Energy Transportation Systems, Inc. (ETSI).1 ETSI plans to pipe the water to Wyoming, where it will be used to transport coal in a coal slurry pipeline.
On September 25, 1981, SDCD submitted its application (No. 1791-2), including a project map, to Board. The application described the proposed location of the diversion point, the amount of water to be diverted, the period of use of the water, the intended use of the water, and the general project plan. The hearing on this application had originally been scheduled for October 15, 1981, but was rescheduled for October 27, 1981, then for November 5, 1981, and finally for January 5, 1982. The reason for the rescheduling was that SDCD had not yet entered into the contract to transfer the water permit to ETSI. Notice of the January 5, 1982, hearing was published on December 17 and 24, 1981, in The Times, the official newspaper of Stanley County, South Dakota, as required by statute,2 and in seventeen other South Dakota newspapers during the period of December 19 to 31, 1981.
Board held the hearing on the application on January 5, 1982, at Philip, South Dakota. At least forty-eight people who were neither witnesses, attorneys, nor interve-nors attended the hearing. Board made it clear at the beginning of the hearing that those persons who wished to intervene should identify themselves and that all others would have an opportunity to testify. After a lengthy meeting, Board continued the hearing until January 14, 1982, so the intervenors could obtain witnesses.
The January 14 hearing was held in Rapid City, South Dakota, and after a day of testimony, the hearing was again continued to facilitate case preparation and public participation. The continued hearing was held on January 21, 1982, in Pierre, South Dakota; at that time, after all parties had presented their testimony, Board voted to approve the permit. On February 4, 1982, after examining proposed findings of fact and conclusions of law from interested parties, Board adopted its findings and conclusions.
There are two appellants in the appeal before this court: Art Crowley, Jr. and Henry Bruch. Appellant Crowley did not attend any of the hearings, did not intervene, and did not submit proposed findings of fact and conclusions of law to Board. Appellant Bruch attended the hearings on January 5 and 14, 1982, and successfully intervened on January 14; on February 4, 1982, he submitted his own proposed findings of fact and conclusions of law to Board. Throughout the process, Bruch was given the opportunity to call his own witnesses, cross-examine other witnesses, *122and testify on his own behalf. The record indicates that his primary concerns at the hearings were the route of the pipeline and the question of eminent domain.
Appellants appealed the decision of Board to circuit court, pursuant to SDCL 1-26-30, and moved for a dismissal of the findings and conclusions of Board. They also moved to present additional evidence to Board, to present additional testimony before the circuit court, and to stay the use of Water Permit No. 1791-2 during appeal. The circuit court denied all the motions.
Our first concern in this appeal is the proper scope of review. Prior to the amendment of SDCL 1-26-37, this court reviewed the record of an administrative agency in the same manner as the circuit court, guided by SDCL 1-26-36 and not bound by any presumption that the circuit court was correct. We would uphold a ruling or decision of an administrative agency unless we found that in light of the entire record the decision was clearly erroneous or we were left with a firm and definite conviction that a mistake was made. Matter of Ackerson, Karlen & Schmitt, 335 N.W.2d 342 (S.D.1983); Deuter v. South Dakota Highway Patrol, 330 N.W.2d 533 (S.D.1983).
On July 1, 1983, the following addition to SDCL 1-26-37 became effective: “The Supreme Court shall give the same deference to the findings of fact, conclusions of law and final judgment of the circuit court as it does to other appeals from the circuit court. Such appeal may not be considered de novo.” In the recent decision of State v. Miller, 349 N.W.2d 42 (S.D.1984), we decided that despite the new language in the statute, this court still reviews the administrative decision essentially in the same manner as did the circuit court; the required deference to the circuit court has not changed.
Concerning the actual merits of the case, we first observe that we are here dealing with special legislation to permit the appropriation of water from the Missouri River for energy industry purposes and to permit SDCD to enter into a contract for sale of the water. The desirability and feasibility of such a contract were fully explored and passed on by the legislature. Standards were set by the legislature as to the amount of water which could be appropriated each year, so that there would be no appreciable diminution of the flow of water in the river.
While the legislative act still required the formality of a hearing and the granting of a permit by Board, the act left very little power with Board to deny a permit. As the title to the act states, the legislation was intended “to authorize, facilitate and effectuate the marketing by the South Dakota conservancy district of water for energy industry use ...” (emphasis added). 1982 S.D.Sess.Laws, ch. 1 at p. 4. Furthermore, the act states: “Notwithstanding any other provision of law, the district may acquire, by obtaining a permit or permits from the water management board, rights to appropriate water for energy industry use ...” (emphasis added). Id. at § 3, p. 4-5.
With these realities in mind, we turn to the issues of this case. Appellants have raised a total of fourteen different issues on appeal. A close examination of the record, however, reveals that of all these issues raised on appeal, appellants raised only two of them before Board: actual notice to landowners and the necessity of an environmental impact statement. Appellant Bruch’s other concerns at the hearings dealt with eminent domain and the pipeline route, neither of which are raised on appeal. Appellant Crowley raised no issues before Board since he did not appear at any of the hearings.
It is well settled that if objections are not raised before the administrative agency at the hearing, they are not preserved for appeal. Application of Am. State Bank, Pierre, 254 N.W.2d 151 (S.D. 1977). Accord, Buchholtz v. Iowa Dept. of Public Instr., 315 N.W.2d 789 (Iowa 1982); Amoco Production Co. v. N.D. Indus. Com’n., 307 N.W.2d 839 (N.D.1981); B. Schwartz, Administrative Law § 206 (1976). *123See also Matter of South Lincoln Rural Water System, 295 N.W.2d 743 (S.D.1980). In addition, where objections at a hearing were made on behalf of parties who did not appeal, persons who did not join in those objections may not avail themselves of such objections in court proceedings. City of Portsmouth v. Public Utilities Com’n, 154 Ohio St. 174, 93 N.E.2d 563 (1950); 73A C.J.S. Public Administrative Law and Proc. § 214 (1983). Therefore, we will consider only those issues on appeal which appellants raised before Board at the hearings.
The first of these issues which appellants raised before Board is the question of notice to property owners on the pipeline route. Appellants claim they are “affected landowners” and thus should have been given actual notice by letter rather than merely notice by publication. They maintain that such actual notice is required by due process considerations whenever private property is taken. The circuit court ruled that holding a hearing on the application for a permit to appropriate water does not give rise to a requirement of personal service upon any citizen of South Dakota.
It is certainly correct that due process rights apply to contested cases before administrative agencies. Application of Union Carbide Corp., 308 N.W.2d 753 (S.D.1981). It is also correct that in proceedings affecting private property interests, when the owners of the property are known, notice to them by publication is insufficient. See, e.g., Mullane v. Central Hanover B. & T. Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1950). Nevertheless, a consideration of what procedures due process may require under any given set of circumstances must begin with a determination of the precise nature of the government function involved as well as of the private interest that has been affected by government action. Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970).
Here, the government function was not a determination of the pipeline route, or of ETSI’s powers of eminent domain, or of the taking of any private property. The sole question before Board was the granting of a permit for appropriation of water from Oahe Reservoir. This question was of concern to all South Dakotans equally, since “all water within the state is the property of the people of the state.” SDCL 46-1-3. Therefore, individual landowners within the state, such as appellants, had no greater interest in the matter than any other citizen of South Dakota, and notice by publication was sufficient.
The fallacy of appellants’ personal service argument is shown by the fact that the pipeline route was subject to change, and the current proposed right-of-way does not even cross the property of appellants. Also, all property owners on the final pipeline route will have due process rights under SDCL ch. 21-35 if ETSI attempts to use the power of eminent domain. Thus, the circuit court did not err in concluding that personal service was not necessary.
A related question involves the sufficiency of the published notice and whether the notice gave citizens a fair opportunity to participate at the hearings. Appellants maintain that the present case is similar to Application of Union Carbide Corp., supra, in which this court overturned administrative findings partly because notice of the hearings was published over a holiday period. We disagree.
In Application of Union Carbide Corp., we ruled that the published notice was insufficient for two reasons: 1) the only notice appeared just seven days before the hearing date, and that seven-day period included a three-day Labor Day weekend; 2) the notice was not in conformity with the statute or agency rules. 308 N.W.2d at 759. In the present ease, however, quite a different situation exists. First, the published notice not only met the statutory requirements, it exceeded them. SDCL 46-5-17 required publication once each week for at least two consecutive weeks in the newspaper in the county where the water is appropriated, with the second publication at least four days before the hearing. Here, publication was made in the official *124Stanley County newspaper on December 17 and 24, 1981, while the hearing was not held until January 5, 1982. Notice was also published in seventeen other South Dakota newspapers, including the Rapid City Journal, Pierre Daily Capitol Journal, Sioux Falls Argus-Leader, and numerous West-River publications. In Application of Union Carbide Corp., the only notice was published in the Hot Springs Star. Second, even though the holiday season intervened during publication, there still remained at least ten working days between the first notice and the first day of hearing, compared with the four days in Application of Union Carbide Corp.
It is also difficult to believe that appellants were caught by surprise by the hearing and its contents in light of the following facts: the South Dakota Legislature met in special session in September of 1981 to deal with just this issue; and notice of the proposed October 15 and 27, 1981, and November 5, 1981, hearings was published in a manner similar to that for the January 5, 1982, hearing. Therefore, not only was there proper statutory notice for the January 5, 1982, hearing, it is clear that news of the ETSI pipeline and of Board hearings was extant throughout South Dakota prior to the holiday season.
An additional factor of importance in this case is that unlike Application of Union Carbide Corp., in which the administratve hearing was held for only one day, in the present case the hearings were held on three separate days in three different cities. At the January 5 hearing in Philip, almost fifty people appeared, and all were given an opportunity to testify. At the request of the Black Hills Alliance, the hearing was postponed until January 14 to give time to bring in witnesses. At the Rapid City hearing on January 14, in response to a request for more time to prepare, the hearing was again postponed until January 21 in Pierre. All of these hearings were well attended and everyone present was given an opportunity to be heard. At no time did Board deny a request for further postponement. It would seem that despite the holiday season, the interested parties were given every opportunity to appear and be heard. We conclude that the due process rights of South Dakota citizens were not violated.
The second contention raised by appellants before Board is that Board should have required an environmental impact statement prior to hearings on the application for the permit. They maintain that although an environmental impact statement is discretionary under SDCL 34A-9-4,3 other statutes have transferred to Board the functions of environmental protection, and that these functions require an environmental impact statement. The circuit court found no such statement was necessary.
Under our present statutes, Board is required to perform the functions of the former state water rights commission, SDCL 1-40-19, and the former environmental protection department. SDCL 1-40-20. Board is also required, under SDCL 34A-2-11, to formulate standards of water quality and to consider environmental conditions placed upon state waters. However, none of these statutes requires a formal environmental impact statement. More importantly, SDCL 34A-9-4, the statute most pertinent to this issue, explicitly makes an environmental impact statement optional. Therefore, contrary to appellants’ claims, these statutes evidence a legislative intent not to require an environmental impact statement every time Board rules on a water appropriation permit. Here Board exercised its discretion and decided not to order such a statement; this may have been due to the fact that no evidence was produced at the hearings to indicate any serious effects on the environment. We hold that the circuit court’s finding was not clearly erroneous.
*125Finally, appellants’ claims that the circuit court improperly denied motions to present additional testimony to the court and to present additional evidence to Board (issues III and IV) are without merit. These motions were based upon evidence which appellants could have raised before Board at the hearings, but they failed to do so.
The judgment of the circuit court is affirmed.
FOSHEIM, C.J., and WOLLMAN and MORGAN, JJ., concur.
HENDERSON, J., dissents.

. This act was passed during the second special session of the 1981 South Dakota Legislature. The text of the act is found at 1982 S.D.Sess. Laws, ch. 1 at p. 4-10.

. SDCL 46-5-17, later repealed by 1983 S.D. Sess.Laws, ch. 316, § 7.

. SDCL 34A-9-4 provides in pertinent part: "AH agencies may prepare, or have prepared by contract, an environmental impact statement on any major action they propose or approve which may have a significant effect on the environment _" (Emphasis added.)