Court Opinion

ID: 9897465
Source: CourtListenerOpinion
Date Created: 2023-11-14 19:14:21.877051+00
Date Added: 2024-06-11T09:15:49.916256
License: Public Domain

139 Nev., Advance Opinion

                          IN THE SUPREME COURT OF THE STATE OF NEVADA

                    ELEANOR F. KILLEBREW, TRUSTEE                          No. 83830
                    OF THE KILLEBREW REVOCABLE
                    TRUST, 5TH ADM 1978; KWS NEVADA
                    RESIDENTIAL LLC, A/K/A KERN
                    SCHUMACHER, LLC; DEAN
                    INGEMANSON, TRUSTEE OF THE
                    LFI-MORGAN PERSONAL                                        SEP 28 2023
                    RESIDENTIAL TRUST AND DEAN                              ELIAB TR A. aR
                    INGEMANSON AS TRUSTEE OF THE                          OLER . OF.Y        URT

                                                                          BY
                    INGEMANSON FAMILY TRUST;                                   IEF DEPUT1CLERK

                    DENNIS AND KATHERINE HART,
                    TRUSTEES OF THE HART TAHOE
                    TRUST; TODD AND JANET LOWE,
                    TRUSTEES OF THE LOWE PERSONAL
                    RESIDENCE TRUST; PAUL
                    INGEMANSON; FRED J. AMOROSO
                    AND REGINA A. AMOROSO,
                    TR USTEES OF THE AMOROSO
                    FAMILY TRUST; AND SHOREZONE
                    PROPERTY OWNERS ASSOCIATION,
                    INC., D/B/A TAHOE LAKEFRONT
                    OWNERS ASSOCIATION,
                    Appellants,
                    vs.
                    STATE OF NEVADA, EX REL.
                    CHARLES DONOHUE, STATE LAND
                    REGISTRAR AND ADMINISTRATOR
                    OF THE DIVISION OF STATE LANDS,
                    Respondent.

                              Appeal from a district court order granting summary judgment
                   in a declaratory relief action.   Second judicial District Court, Washoe
                   County; Barry L. Breslow, Judge.
                              Affirmed.

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                Lewis Roca Rothgerber Christie LLP and Daniel F. PoIsenberg and
                Abraham G. Smith, Las Vegas; Snell & Wilmer and William E. Peterson,
                Reno,
                for Appellants.

                Aaron D. Ford, Attorney General, and Daniel P. Nubel, Senior Deputy
                Attorney General, Carson City,
                for Respondent.

                Legislative Counsel Bureau, Legal Division, and Kevin C. Powers, General
                Counsel, Carson City,
                for Amicus Curiae Legislative Commission of the State of Nevada.

                BEFORI, THE SUPREME COURT, EN BANC.

                                                 OPINION

                By the Court, LEE, J.:
                            In this opinion, we are tasked with reviewing NAC 322.190, a
                regulation that sets permit fees for the residential use of piers and buoys on
                navigable waters in Nevada.       In completing that task, we clarify the

                standard of review for challenges to the validity of an agency's regulation
                und.er NRS 233B.110, which mandates that we review the regulation for
                violations of constitutional or statutory provisions or whether it exceeds the
                permissible scope of statutory authority. Because the regulation at issue
                does not violate any constitutional or statutory provision and does not
                exceed the statutory authority granted to the agency, we affirm the district
                court's grant of suminary judgment.

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                                      FACTS AND P.ROCEDURAL HISTORY
                                Appellants own property in Nevada along Lake , Talioe's
                    shoreline and have piers or buoys on the lak.e. For a. fee, the State Land
                    Registrar (the Registrar) issues permits for the use of piers and buoys on
                    Lake Tahoe. The Registrar serves as the Administrator of the Division of
                    State Lands of the State Department of Conservation and Natural
                    Resources (the Division), and Lake Tahoe is administered by the Division.
                                 Prior to 2017, the Legislature statutorily set a uniform permi.t
                    fee for piers and buoys in fOrmer NRS 322.120. See, e.g., 1.995. Nev. Stat.,
                    ch. 645, § 9, at 2511. In 2017, the Legislature amended NRS 322.120 to
                    require the Registrar to establish th permit fee aniount by regulation
                    rather than by statute. 2017 Nev. Stat., ch. 366, § 2, at 2256. In the
                    preamble to the amended bill, the Legislature stated that Itjhis fee
                    schedule has not been modified since 1995" and that ItPie fees charged
                    under this fee schedule are less than the fair market value for the uSe of
                    state land and, less than what other western states and. agencies charge for
                    comparable uses." Icl. at 2256.
                               In response to the amendniént, the Registrar promulgated NAC
                    322.195, which sets forth the fee schedule for pier and buoy permits. In
                    creating the fee schedule, the Division took into consideration•the following
                    five methodologies: (1) a historical review of the statutory.fee as establiSh.ed
                    in 1993; (2) a comparative analysis of fees in other Western states (Arizona,
                    California, Idaho, Washington, Oregon, and Utah); (3) an'evaluation of fees
                    charged by marinas and other businesses in Nevada and adjacent states,
                    such as Arizona and California; (4) an in-house evaluation method:to
                    estimate the fair market value of the piers in the ..Nevada side of Lake
                    Tahoe; and (5) an independent appraisal.          Additionally, the DiviSion

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                solicited comment and feedback from speci.fic stakeholders, including
                appellant Tahoe Lakefront Owners Association. The Division also provided
                individual notice to all perrnittees, posted notice at every Nevada library,
                advertised in newspapers, and held five public workshops.
                            In response to comments, the Division reduced its proposed fee
                schedule and phased in fee increases over time. The Division ultimately set
                a uniform fee for the residential use of piers at $750 and buoys at $250 in
                the regulation, an increase to the previously set.fees of $50 for piers and $30
                for buoys. The regulation was subsequently approved by the Legislative
                Commission, a legislative body that reviews agenCy regulations for
                legislative intent and statutory authority.
                            in March 2020, appellants petitioned under NRS 233B.110 for
                a declaratory judgment that the fee-setting regulation Was invalid. The
                Division moved for surnraary judgment, claiming the regulation did not
                violate statutory or constitutional provisions and did ri lot exCeed the
                Division's statutory authority. After a hearing on the motion; t-he district.
                court granted summary judgment in the Division's . favor. This appeal
                follows.
                                                DISCUSSION
                            -.Appellants argue the district court erred in granting- summary
                judgment because it (1) used the wrong standard of review for the
                regulation, and (2) erroneously concluded that the regulation.did not exceed
                or violate statutory authority. "A district court's decision to grant summary
                judgment is reviewed de novo." A Cab, ELC v. Murray, 137. Nev. 805, 813,
                501 P.3d 961, 971 (2021). "Summary judgment is appropriate. . when the
                pleadings, depoSitions, answers to interrogatories, admissions, and
                affidavits, if any, that are properly before the court demonstrate-that -no

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                judgment as a matter of law." Wood v. Safeway, Inc., 121 Nev. 724, 731,
                121 P.3d 1026, 1031 (2005).
                Standard for reviewing the validity-of a regulation
                             Appellants first contend that the district court. applied the
                wrong legal standard when considering the' validity of the fee-setting
                regulation and insist the district court should have reviewed whether the
                regulation was "arbitrary and capricious." We take this opportunity to
                clarify the standard of review when assessing the validity of a regulation.'
                             The standard• for reviewing the validity of a regulation is
                outlined in NRS 233B.110(1), which states that "[t]he court shall declare
                the regulation invalid if it finds that it violates constitutional or statutory
                provisions or exceeds the statutory authority .of the agency."2        (Emphasis

                       'Nothing in our discussion here should be conflated with. the standard
                of review of an agency's final decision. under NRS 233B.135, which includes
                arbitrary and capricious review. See NRS 233B.135(3)(f).. Because
                appellants did not petition for judicial review under that statute, our review
                is confined by the review mandates articulated in NRS 233B.,110.

                      2 In order to remain within the authority provided by statute,. an
                agency must articulate a basis or reason for the adopti.on of the challenged
                regulation that rationally relates to a reasonable interpretation of the
                agency's governing statutory authority. See NRS 233B.040(1)..("To the
                extent authorized by the statutes applicable to it, each agency may adopt
                reasonable regulations to aid it in carrying out the fun.ctions assigned to it
                by law . .. . [This] power . . . is limited by the terms of the grant of authority
                pursuant to which the function was assigned."); The Nev. Indep. v. Whitley,
                138 Nev. 122, 126, 506 P.3d 1037, 1.042 (2022) (stating tha "regulations
                cannot contra.dict or conflict' with the statute they are intended to
                implement" (internal quotation marks. omitted)); 73 .c.J.S. .Public
                                                               •

                Administrative Law and Procedure § 2'75 (2014) (noting that • courts
                reviewing "whether a regulation that haS been proMulgated is consistent
                with the statutes" only defer when the agency's determination is
                CC
                 reasonable and not arbitrary")..
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add.ed.) "Where the language of a statute is plain and unambiguous, and
its meaning clear and unmistakable, there- is no room for construction, and
the courts are not permitted to search for its rneaning beyond the statute
itself." State u. Jepsen, 46 Nev. 193, 196, 209 P. 501, 502 (1922).
            Based on the statute's plain language, arbitrary and capricious
review is not contemplated. NRS 2338.110(1) is clear and unambiguous--
an agency regulation is reviewed for whether it violates statutory or
constitutional provisions or whether it exceeds the agency's statutory
authority. There is no room for us to read arbitrary and capricious review
into the standard provided by statute.
            Despite the distinct lack of language in NRS 233B.110

authorizing arbitrary and capricious review, we acknowledge our caselaw
.has incl.uded the words "arbitrary and capricious"• when discussing
regulatory review, beginning with State, Division of Insurance v. 'State
Farm Mutual Automobile Insurance Co. 116 Nev, 290,- 995 P.2d 482 (2000).
There, we said "a court will not hesitate to declare•a. regulation invalid When
the regulation Violates the constitution, conflicts with existing statutory
provisions or exceeds the statutory authority of the agency or is otherwise
arbitrary and capricious." Icl. at 293, 995 P.2d at 485 (ernphaSis added).
We repeated this same standard in subsequent caselaw. • See Romano. v.
Romano, 138 Nev. 1, 8, 501 P.3d 980, 985 (2022); Felton v. Douglas County,
134 Nev. 34, 38, 410. P.3d 991, 995 (2018); Meridian Gold Co. 0.. State ex rel.
Dep't of Taxation, 119 Nev. 630, 635, 81 P.3d 516,.519 (2003).        -

            No analysis or discussion, however, was presented in State
Farm to account for the addition of the "arbitrary and capricious. language.
We further cited two cases that also do not contain language kor arbitrary
and capricious review, see Clark Cty. Social Seri). Dep't-u: Yewkirk, 106 Nev.

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                177, 179, 789 P.2d 227, 228 (1990); Roberts v. State, 104 Nev. 33, 37, 752
                P.2d 221, 223 (1988). State Farm, 116 Nev. at 293, 995 P.2d a 485.
                            Furthermore, of the cases that have included the " rbitrary and
                capricious" language, none have actually used the standard to review a
                regulation, including State Farrn, and all were instead decide on different
                grounds. See Romano, 138 Nev. at 7-8, 501 P.3d at 985-86 (lis ing grounds
                for invalidating a regulation and concluding "none of those ci cumstances
                apply *here"); Felton, 134 Nev. at 38, 410- P.3d at 995 -(inte preting the
                challenged regulation in harmony with statutory authority); M ridian Gold,
                119 Nev. at 635-36, 81 P.3d at 519-20 (applying arbitrary a d capriciorts
                review to an agency decision, not a regulation);. State Farm, 116 Nev. at 295-
                96, 995 P.2d at 486 (determining the agency exCeeded, i s . statutory
                authority in. promulgating the challenged regulation):-
                            The statute at issue expressly provides for the standard of
                -reView that should be applied.3 Therefore, we clarify that the third ard. for
                reviewing the validity of a regulation under NRS 233B.110 is t at which is
                provided for in NRS 233B.110(1.).--whether the regUlati n "violates

                      3Appellants do not raise an issue of fundamental rights i • the present
                case. We note, however, that a court's review of a regulati n irwolving.
                fundamental rights is not, and cannot be, limited by standar set• by the
                Legislature. See Salisbury v. List, 501 F. Supp. 10,5, 109 03 Nev. 1980)
                ("Where a fundamental. right is involved, the inquiry of the co rt does not
                end upon a finding that the regulation ... is reasonably r lated to its
                enabling legislation . . . ."); 73 C.3..S. Public Administrativ Law and
                Procedure § 275; see also Marbury v. Madison, 5 U.S. 137, 178 ( 803) C VT] he
                constitution is superior to any ordinary act of the legi, lature; the
                constitution, and not such ordinary act, must govern the case t whith they
                both apply.").
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                constitutional or statutory provisions or exceeds the statutory authority of
                the agency."4
                Application of the standard of review in the promulgation of NAC 322.195
                            Turning to the regulation at issue., appellants next argue that
                the Division exceeded its statutory authority in promulgating NAC 322.195
                because the fee schedule does not comport with the statutory standard for
                setting fees. "Appeals involvin.g interpretation of a statute or regulation
                present questions of law subject -to our independent review." Silver.. State
                Elec. Supply Co. v. State ex rel. Dep't Of Taxation, 123 Nev. 80, 84, 15TP.3d
                710, 713 (2007). Although this court "will generally odder tO an agency's
                interpretation of its governing statutes and regulations, we need only do .so
                if its interpretation is reasonable," Pub. Ernps.' Ret. Sys. of Nev. v. Nev.
                .Policy Research Inst., Inc., 134 Nev. 669, 673 n.3, 429 P.3d 280, 284 n.3
                (2018), and it is firmly established that "regulatións canna contradict or
                conflict with the statute they are intended to iMplement," The Nev. IndeP:
                v. Whitley, 138 Nev. 122, 126, 506 P.3d 1037, 1042 (2022) (internal
                quotation marks omitted). Because lalgency regulations are presumed.
                valid," the burden to overcome that presumption rests withthe challenger..
                Id.
                            The Division created the challenged regulation, NAC 322195,
                based on amendments to NRS 322.120. NRS 322.120 mandates that the
                Registrar charge a fee when issuing permits for the resid.ential uscofá pier.
                or buoy.   NRS 322.120(1), (2)(b)(2).    The statute does not specify the

                      4The Legislative Commission, as arnicus curiae, urges us to give
                deference to its approval of the regulation and to review whether the
                regulation is reasonable as a matter of law. We decline the invitatioxi. to
                alter our statutorily mandated review of a regulation.
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                amounts to be charged or how they should be calculated. Both appellants
                and the Registrar agree, as do we, that. we must look to another statute in
                the same section to find. legislative guidance for calculating the fee8—NRS
                322.100.
                            NRS 322.100(1) provides that the fee charged for issuing a
                permit 'for any lawful use of state land" be "in such an amount as the State
                Land Registrar determines to be reasonable based upon the fair market
                value of the use." •Therefore, when read -together, NRS 322.100 and NRS
                322.1.20 require the Registrar to charge a permit fee for the residential use
                of a pier or buoy in an amount the Registrar determi.nes is reasonable based
                on the fair market value of the use of state land. See Ceballos v. NP Palace,
                LLC, 138 Nev., Adv. Op. 58, 514 P.3d 1074., 10'78 (2022) ("Whenever
                possible, this court interprets separate statutes harmoniouslY."):
                            Appellants argue that the "reasonable baSed upon the fair
                market value of the use" language in NRS 322.100(1)(b) means that the fee
                must be based solely on the fair market value of the state-owned submerged
                land that a pier or buoy occupies, °without regard • to other factors. They
                likewise argue that a uniform fee cannot be based on the fair market Value
                of the use of state land because it charges the same fee regardless of the
                amount or location of the state-owned submerged land.             Because the
                Division considered factors beyond the fair market Value of the.state-owned.
                submerged land and imposed a uniform fee in NAC 322.195, appellants
                assert the Division exceeded its statutory authority.
                            We find that in attempting tO establish a fair market value in
                line with i.ts 'interpretation of the statutes, the Division did not exceed. its
                statutory authority by referencing multiple methodologies; The statutes d.o
                not. identify a. particular formula for calculating the fair market value of the
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                use of piers and buoys on state land. And the Division ernploYed a range of
                approaches to obtain varying estimates. The Division then determined a
                reasonable amount to charge for pier and buoy permits based on. those
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                varying estimates. All of this was done within the authority provided by
                NRS 322.100 and NRS 322.120.
                           Lastly, we are unpersuaded by appellants' attempts to
                supplement the statutory language by arguing that the'fees should be bgsed
                on the fair market value of the individualized use of state la.nd and that a
                uniform fee Conf.lids with the statutes. Nothing in NRS 322.100. or 70S
                322.120 provides for such a customized approach to setting fees, and we
                note that the statute previously set fees for piers and buoys in• a Uniflorin
                manner.
                                             CONCLUSION-
                            In. conclusion, the Division did not exceed' its statutory
                authority in promulgating NAC 322.195, and appellants b.ave not overcome
                the presumption that the regulation i.s valid.5     Contrary to appellants'
                assertion, no genuine issue of material fact exists, and th.e Divisiori is

                      5.Appellants assert the district court erred by imposing on them a
                burden to propose an alternative fee schedule in order to prevail: •in their
                challenge to the regulation. As discussed, regulations are entitled 4) a
                presumption of validity, and it Was aPpellants' burden to overcome that
                presumption. In concluding appellants • had not met their burden, ..ithe
                district court commented that. appellants did not preSent* evidence of what
                consti.tuted a fair market value or what a reasonable.fee based -cm the fair
                market value would have been. We discern no error by the district court in..
                this regard. Cf. Cuzze v. Univ. & Only. Coll. Sys. of Neu., 123- Nev. 598,
                602-03, 172 P.3d 131, 134 (2007) (1.11f the nonmoving party will bear the
                burden of persuasion at trial, the party moving.for summary judgment may
                satisfy the burden of .production by . ... pointing out . . that there is an
                absence of evidence to support the nonmoving party's case." (second
                omission in original) (internal quotation marks omitted)).
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                 entitled to judgment as a matter of' law. Accordingly, we affirm the district
                 court's or(ler granting summary judgment.

                                                      Lee   -6,co
                 We concur:

                               auf)          , C.J.
                 Stiglich

                 Cadish

                                                J.

                                                j.
                 Herndon

                    (.17
                       )

                 Parraguirre

                 Bell

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