Water in Motion, Inc. v. Minnesota Department of Labor and Industry, Minnesota Plumbing Board
A16-335
| Minn. Ct. App. | Dec 5, 2016Background
- Minnesota Plumbing Board (14 members) considered replacing the state plumbing code with a model code (IPC or UPC); Board chaired by John Parizek.
- A National Code Review Committee recommended adopting a model code; at an April 19, 2011 board meeting the board voted to adopt the UPC and to pursue rulemaking to formally adopt it.
- The board initiated formal rulemaking (SONAR, notices) in Nov. 2012 proposing incorporation of the 2012 UPC with amendments; an ALJ hearing was held after >25 hearing requests and the record was left open for written comments.
- The board defended choosing the UPC over the IPC based on UPC’s greater resemblance to current Minnesota code, adoption in adjacent states (reciprocity), and smoother transition; the SONAR addressed cost and implementation considerations but was relatively brief.
- ALJ recommended adoption; the board promulgated rules July 27, 2015 (effective Jan 23, 2016); petitioners filed a preenforcement challenge under Minn. Stat. § 14.44, alleging procedural defects (SONAR and § 14.127 analysis), and that the rules were arbitrary and lacked a rational basis.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope: whether court may review the April 19, 2011 board vote as a rule | The April 19 vote adopted a rule and is reviewable under § 14.44; board failed to follow rulemaking then | Only formally promulgated rules are reviewable under § 14.44; the April 19 vote was not a formal rule and board knew rulemaking was required | Court limited review to formally promulgated rules; April 19, 2011 vote not reviewable under § 14.44 and was not a rule for preenforcement review |
| SONAR adequacy under Minn. Stat. § 14.131 | SONAR was conclusory and failed to adequately analyze less-costly alternatives, probable compliance costs, and implementation costs—invalidating the rule | SONAR addressed required topics; any deficiencies were not prejudicial because petitioners were able to participate and the hearing considered costs and comments | SONAR was conclusory but not prejudicially defective; no invalidation required |
| Substantive due process / rational-basis (arbitrary & capricious) | Adoption was arbitrary: board failed to quantify costs and relied on inadequate analysis, so rules lack rational relation to public-health purpose | Board reasonably relied on expertise, testimony, reciprocity, similarity to existing code, and transition considerations; rational basis exists | Rules bear a rational relationship to legitimate public purpose; not arbitrary or capricious; due-process challenge fails |
| § 14.127 small-business cost determination | Board failed to adequately determine whether first-year costs exceed $25,000 for small businesses/municipalities | Board made the required § 14.127 determination; ALJ reviewed and approved it; statute does not invite substantive appellate reweighing | Court declined to invalidate rules for lack of more detailed § 14.127 analysis; compliance satisfied and no statutory or constitutional violation shown |
Key Cases Cited
- Coal. of Greater Minn. Cities v. Minn. Pollution Control Agency, 765 N.W.2d 159 (Minn. App. 2009) (scope and standard for preenforcement challenges under Minn. Stat. § 14.44)
- Mfg. Hous. Inst. v. Pettersen, 347 N.W.2d 238 (Minn. 1984) (arbitrary-and-capricious / substantive due-process standard for administrative rules)
- Minn. League of Credit Unions v. Minn. Dep’t of Commerce, 486 N.W.2d 399 (Minn. 1992) (deficiencies in a SONAR do not require invalidation absent prejudice)
- Builders Ass’n of the Twin Cities v. Minn. Dep’t of Labor & Indus., 872 N.W.2d 263 (Minn. App. 2015) (invalidated a rule as arbitrary and capricious; discussed § 14.127 obligations)
- Minn. Ass’n of Homes for the Aging v. Dep’t of Human Servs., 385 N.W.2d 65 (Minn. App. 1986) (only formally promulgated rules are reviewable in preenforcement § 14.44 actions)