IN THE MATTER OF THE ADMINISTRATIVE APPEAL OF GARRY EHLEBRACHT, STEVEN GREBER, MARY GREBER, RICHARD RALL, AMY RALL, AND LARETTA KRANZ, Aрpellants, v. CROWNED RIDGE WIND II, LLC, and SOUTH DAKOTA PUBLIC UTILITIES COMMISSION, Appellees.
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IN THE SUPREME COURT OF THE STATE OF SOUTH DAKOTA
OPINION FILED 03/23/22
2022 S.D. 19
THE HONORABLE DAWN M. ELSHERE Judge
ARGUED OCTOBER 5, 2021
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APPEAL FROM THE CIRCUIT COURT OF THE THIRD JUDICIAL CIRCUIT DEUEL COUNTY, SOUTH DAKOTA
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A.J. SWANSON Canton, South Dakota Attorney for appellants.
DANA VAN BEEK PALMER MILES F. SCHUMACHER of Lynn, Jackson, Shultz & Lebrun P.C. Sioux Falls, South Dakota
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BRIAN J. MURPHY of NextEra Energy Resources, LLC Juno Beach, Florida Attorneys for appellees Crowned Ridge Wind II, LLC.
AMANDA R. REISS KRISTEN N. EDWARDS Special Assistant Attorneys General Pierre, South Dakota Attorneys for appellees South Dakota Public Utilities Commission.
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[¶1.] Crowned Ridge Wind II, LLC (Crowned Ridge) applied to the South Dakota Public Utilities Commission (the PUC) for a permit to construct a large-scale wind energy farm in northeast South Dakota. Several individuals intervened and objected to Crowned Ridge‘s application. After conducting an evidentiary hearing, the PUC issued a written decision approving the application. The intervenors appealed to the circuit court, which affirmed
Facts and Procedural History
[¶2.] Crowned Ridge is a wind energy company that sought to construct a wind farm comprised of 132 wind turbines capable of producing 300.6 megawatts of electricity in Codington, Grant, and Deuel Counties (the Project). Under the provisions of
[¶3.] Crowned Ridge submitted its application for a permit on July 9, 2019. The six individuals who are the aрpellants in this appeal (the Intervenors) timely sought and obtained party status to oppose the issuance of a permit.2 Each of the Intervenors are residents of Deuel County living near the Project. Their opposition to the permit was primarily based on the wind turbines’ production of ambient noise and a phenomenon known as shadow flicker, which refers to momentary disruptions of natural sunlight caused by the rotation of a wind turbine‘s blades.
[¶4.] Crowned Ridge did not propose to construct turbines on land owned by the Intervenors and did not enter into lease or easement agreements with them, as it had done with the other area landowners on whose property the Project was directly sited. Members of this latter group arе known as participating landowners, while those in the former category, including the Intervenors, are described as non-participating landowners.
[¶5.] Where, as here, an application meets with opposition, the PUC conducts a contested case hearing using the procedures set out in South Dakota‘s Administrative Procedure Act contained in
[¶6.] The evidentiary hearing produced extensive testimony from seventeen witnesses. Many of the witnesses had previously submitted “pre-filed” direct testimony and exhibits tо the PUC, detailing their views about the Project. See ARSD 20:10:22:39 (stating in part, “[u]pon the filing of an application pursuant to
[¶7.] For instance, Crowned Ridge submitted pre-filed direct testimony from Jay Haley, a wind energy consultant who was engaged by Crowned Ridge to conduct studies on the levels of noise and shadow flicker the Project would produce. At the
[¶8.] Crowned Ridge also submitted pre-filed direct testimony from Christopher Ollson, PhD. Dr. Ollson was engaged by Crowned Ridge to study the potential health implications associated with sound and shadow flicker. At the evidentiary hearing, Dr. Ollson testified that the proposed limits of forty-five decibels of sound at non-participating residences and no more than thirty hours of shadow flicker would pose “no potential health or welfare risk to the county residents.”
[¶9.] Darren Kearney, a utility analyst employed by the PUC staff, testified about the proсess by which the PUC has historically regulated shadow flicker limits. During cross-examination, counsel for the Intervenors questioned Kearney about a lower shadow flicker level (fifteen hours per year) previously imposed as a condition for a different wind energy project, known as Prevailing Wind Park.4 Kearney explained that the fifteen-hour-per-year condition was not a recommendation from the PUC staff, but was instead adopted by the commissioners after an evidentiary hearing. Kearney further testified that, in working with the permit applicants, the PUC staff commonly deferred to county regulations setting the maximum amount of shadow flicker and incorporated those limits into the permit conditions. He stated the “there are no [PUC] regulations. It‘s a case-by-case basis.”
[¶10.] The PUC staff also submitted pre-filed direct testimony from acoustical engineer David Hessler who was engaged to review the noise study conducted by Jay Haley. During cross-examination at the evidentiary hearing, Hessler testified that the Project was “aggressively devised” by Crowned Ridge “in the sense of they‘re trying to put a lot of turbines into the project area.” Hessler stated that Crowned Ridge had accommodated his requests to move certain turbines to alternate locations in an attempt to mitigate sound emissions. Nevertheless, Crowned Ridge was unable to achieve projected noise levels below forty decibels, which Hessler described as the ideal noise limit. In his view, “annoyance and cоmplaints from property owners and residents around the wind farm [are] more likely” at noise levels exceeding forty decibels. Despite this conclusion, Hessler testified that he believed the forty-five-decibel limit proposed by Crowned Ridge was “a reasonable and fair noise limit.”
[¶11.] Hessler explained that he was also engaged by the PUC staff for the Prevailing Wind Park application and discussed the variance between the forty-five-decibel limit sought by Crowned Ridge and a forty-decibel condition imposed on Prevailing Wind Park. As part of his assessment of the Prevailing Wind Park project, Hessler recommended a forty-decibel noise limit at
[¶12.] Later, in their post-hearing brief to the PUC, the Intervenors claimed that the effect of the turbines’ sound and shadow flicker on their nearby property constituted a burden on land under principles of state easement law, and Crowned Ridge was therefore required to purchase easements or enter into lease agreements before constructing turbines near their property. The Intervenors also alleged that the PUC failed to properly exercise its rulemaking authority because it had not adopted standards for the maximum levels of sound and shadow flicker. On this latter point, the Intervenors highlighted the difference between the noise and shadow limits sought by Crоwned Ridge and those imposed by the PUC on the Prevailing Wind Park project.
[¶13.] The PUC voted unanimously to approve Crowned Ridge‘s permit. In its final decision and order,5 the PUC issued findings of fact and conclusions of law. See
[¶14.] The PUC‘s order contained forty-nine permit conditions. Condition twenty-six stated that the Project “shall not generate a sound pressure level . . . of more than 45 dBA7 as measured within 25 feet of any non-participating residence unless the owner of the residence has signed a
[¶15.] The Intervenors filed a notice of appeal in circuit court seeking judicial review of the PUC‘s decision to issue the permit. See
[¶16.] First, they argued that the PUC‘s exercise of its permit authority allowed Crowned Ridge to emit noise and produce shadow flicker on their property without their consent, thereby resulting in an uncompensated taking under the state and federal constitutions. Second, the Intervenors suggested that the PUC‘s approval of the application had effectively foreclosed a future nuisance remedy they might otherwise seek against Crowned Ridge, which they alleged also constituted a taking.
[¶17.] The circuit court affirmed the issuance of the permit. The court determined that the PUC was not required by statute to promulgate standards for sound and shadow flicker, but that the PUC was bound by the limits imposed by local county ordinances in conditioning permit approval. The court also determined that, as an administrative body, the PUC possessed no authority to create easements, and, in any event, the court was limited in the context of an administrative appeal to determining whether the PUC‘s findings were clearly erroneous without regard to ancillary claims regarding property rights. Finally, the court rejected the easement, taking, and nuisance claims, concluding the Intervenors failed to demonstrate a taking under South Dakota law, and that the nuisance claim “was not ripe.”8
[¶18.] The Intervenors now appeal to this Court, raising five issues we have restated as follows:
- Whether the PUC is required by statute to promulgate rules establishing the maximum lеvels of noise and shadow flicker allowed for all wind energy facilities.
- Whether the PUC‘s issuance of the permit violated the equal protection clauses of the South Dakota Constitution and the United States Constitution.
- Whether the PUC‘s issuance of the permit created a “de facto easement” in favor of Crowned Ridge.
- Whether the PUC‘s issuance of the permit constitutes a per se taking.
- Whether the PUC‘s issuance of the permit would foreclose a future nuisance
claim, thereby resulting in a compensable taking.
Standard of Review
[¶19.] The text of
The court shall give great weight to the findings made and inferences drawn by an agency on questions of fact. The court may affirm the dеcision of the agency or remand the case for further proceedings. The court may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:
- In violation of constitutional or statutory provisions;
- In excess of the statutory authority of the agency;
- Made upon unlawful procedure;
- Affected by other error of law;
- Clearly erroneous in light of the entire evidence in the record; or
- Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.
[¶20.] We have held that ”
Questions of law are reviewed de novo. Matters of reviewable discretion are reviewed fоr abuse. The agency‘s factual findings are reviewed under the clearly erroneous standard. The agency‘s decision may be affirmed or remanded but cannot be reversed or modified absent a showing of prejudice.
Id. ¶ 10, 924 N.W.2d at 149 (cleaned up).
Analysis and Decision
The PUC‘s Rulemaking Authority
[¶21.] The Legislature has found that “energy development in South Dakota . . . significantly affects the welfare of the population” and, therefore, “it is necessary to ensure that the location, construction, and operation of facilities will produce minimal adverse effects on the environment and upon the citizens of this state by providing that a facility may not be constructed or operated in this state without first obtaining a permit from the commission.”
[¶22.] The Legislature has also delegated to the PUC the authority to promulgate rulеs regarding the permitting and construction of wind energy facilities. The text of
To implement the provisions of this chapter regarding facilities, the commission shall promulgate rules pursuant to
chapter 1-26 . Rules may be adopted by the commission:
- To establish the information requirements and procedures that every utility must follow when filing plans with the commission regarding its proposed and existing facilities;
- To establish procedures for utilities to follow when filing an application for a permit to construct a facility, and the information required to be included in the application; and
- To require bonds, guarantees, insurance, or other requirements to provide funding for the decommissioning and removal of a solar or wind energy facility.
[¶24.] The Intervenors allege that the combination of rulemaking authority in
[¶25.] The Intervenors’ arguments concerning the PUC‘s obligation to ensure “minimal adverse еffects” are better viewed in the context of
[¶26.] As “an administrative tribunal with expertise,” In re W. River Elec. Ass‘n, Inc., 2004 S.D. 11, ¶ 25, 675 N.W.2d 222, 230 (citation omitted), the PUC is tasked with reviewing the evidence submitted
[¶27.] We conclude, therefore, that the PUC has satisfied the obligation imposed on it by the Legislature in its consideration of Crowned Ridge‘s application, and the PUC was not otherwise required to promulgate rules defining “minimal adverse effects.”
Equal Protection12
[¶28.] Additionally, the Intervenors allege that the PUC‘s “ad hoc” determinations of limits for sound and shadow flicker violate the equal protection provisions of the state and federal constitutions. They point to differences between the permit conditions approved for Crowned Ridge and those imposed for the separate and unrelated Prevailing Wind Park project described above. The Intervenors claim that the PUC‘s imposition of regulatory limits on а case-by-case basis allows applicants like Crowned Ridge to exert influence over the permitting process by submitting “aggressively devised” projects, which necessarily results in the PUC‘s approval of higher sound or shadow flicker levels.
[¶29.] As an initial matter, we note that as an administrative agency the PUC “is not bound by stare decisis, and therefore it can redefine its views to reflect its current view of public policy regarding the utility industry.” 2004 S.D. 11, ¶ 25, 675 N.W.2d at 230. See also Yellow Robe v. Bd. of Trustees of South Dakota Ret. Sys., 2003 S.D. 67, ¶ 14, 664 N.W.2d 517, 520 (“An agency‘s view of what is in the public interest may change, either with or without a change in circumstances.”
(citations omitted)). Moreover, conducting a studied, individualized determination reflects the very nature of a contested case hearing and is precisely what administrative tribunals possessing expertise, like the PUC, are designed to do.
[¶30.] Regardless, the Intervenors’ claim appears unsustainable under a basic application of our decisional law regarding equal protection. As we have previously held, “[t]his Court has adopted a two-pronged test regarding equal protection when legitimacy, suspect classes and fundamental rights are not involved[.]” Cheyenne River Sioux Tribe Tel. Auth. v. Pub. Utils. Comm‘n of South Dakota, 1999 S.D. 60, ¶ 46, 595 N.W.2d 604, 614 (cleaned up). The principal inquiries under that test are “(1) [w]hether the statute does set up arbitrary classifications among various persons
[¶31.] Here, the Intervenors are not challеnging the constitutionality of a specific statute as is often the case in equal protection claims. Rather, the Intervenors take issue with the outcome of a contested case before an administrative tribunal. At the heart of the Intervenors’ claim is their belief that the difference between the noise and shadow flicker conditions for Crowned Ridge and Prevailing Wind Park reflect unconstitutional disparity.
[¶32.] Beyond this conclusory view, however, the Intervenors’ equal protection argument is not further developed. Indeed, the Intervenors simply presume the difference between the limits for the Crowned Ridge and Prevailing Winds projects implicate equal protection concerns solely because they are differеnt, and the Intervenors make no attempt to analyze their claim under the rules governing equal protection. Under the circumstances, we conclude that the Intervenors have not identified a cognizable equal protection claim.13
“De Facto Easements”
[¶33.] “An easement is a property interest in land owned by or in the possession of another, which entitles the easement owner to a limited use or enjoyment of the land in which the interest exists.” Picardi v. Zimmiond, 2004 S.D. 125, ¶ 16, 689 N.W.2d 886, 890 (cleaned up). “Easements may be created by written grants, pursuant to a plat or by force of law.” Kokesh v. Running, 2002 S.D. 126, ¶ 12, 652 N.W.2d 790, 793. The provisions of
[¶34.] Here, the Intervenors claim that the intermittent occurrence of shadow flicker as a result of the operation of the wind turbines constitutes a discharge of light as contemplated by
[¶35.] In Ehlebracht v. Deuel County, we were unable to reconcile the text of
[¶36.] Moreover, as the circuit court noted, the PUC is an administrative body charged by the Legislature with considering applications for wind energy facility construction permits, not determining questions involving easement law. The PUC‘s issuance of the permit in this case does not subject the Intervenors’ property to an easement. Id. ¶ 35, 972 N.W.2d at 475. Crowned Ridge retains no interest in the Intervenors’ property and the Intervenors have not been forced to relinquish any legally recognized property rights. They are not bound by any agreement with Crowned Ridge and may compel Crowned Ridge‘s compliance with the shadow flicker limits imposed by the permit conditions set by the PUC.
[¶37.] Therefore, we conclude here that the statutory provisions of
The Issuance of the Permit as a Taking15
[¶38.] The United States Constitution prohibits the taking of property “for public use, without just compensation.”
[¶39.] Within these classifications, we have previously held that claimants seeking compensation from the government under a takings claim must genеrally pursue their claim under one of four theories:
- “a per se regulatory physical taking under Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 102 S. Ct. 3164, 73 L. Ed. 2d 868 (1982), where government requires an owner to suffer a permanent physical invasion of her property“;
- “a per se total regulatory taking under Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 112 S. Ct. 2886, 120 L. Ed. 2d 798 (1992), that deprives an owner of all economically beneficial uses of the property“;
- “a regulatory taking under Penn Central Transp. Co. v. City of New York, 438 U.S. 104, 98 S. Ct. 2646, 57 L. Ed. 2d 631 (1978), when a temporary or partial taking is alleged“; or
-
“a land-use exaction violating the standards as set forth in Nollan v. California Coastal Comm‘n., 483 U.S. 825, 107 S. Ct. 3141, 97 L. Ed. 2d 677 (1987), and Dolan v. City of Tigard, 512 U.S. 374, 114 S. Ct. 2309, 129 L. Ed. 2d 304 (1994).”
Benson v. State, 2006 S.D. 8, ¶ 46, 710 N.W.2d 131, 149 (cleaned up) (citing Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 538–39, 545–48, 125 S. Ct. 2074, 2081–82, 2086-87, 161 L. Ed. 2d 876 (2005)).
[¶40.] The text of our South Dakota Constitution also contains a takings clause; however, it differs from the federal Constitution in one important respect. Article VI, section 13 of the South Dakota Constitution states: “Private property shall not be taken for public use, or damaged, without just compensation . . . .” (Emphasis added). Recognizing consequential “damage” to property as a compensable result of government action “provides an additional theory by which a plaintiff may bring a claim for damages against the state.” Krier v. Dell Rapids Twp., 2006 S.D. 10, ¶ 23, 709 N.W.2d 841, 847.
[¶41.] In order to recover under this consequential damages theory, the plaintiff must show that the injury is “peculiar to the owner‘s land and not of a kind suffered by the public as a whole.” Id. “The injury to the plaintiff ‘must be different in kind and not merely in degree from that experienced by the general public.” Id. ¶ 26, 709 N.W.2d at 848 (quoting Hurley v. State, 82 S.D. 156, 163, 143 N.W.2d 722, 726 (1966)).
[¶42.] It is unclear which of the taking or damage theories outlined above the Intervenors allege is applicable to the actions of the PUC. Beyond the bare assertion in their brief that the issuance of the permit would result in a “per se” taking, they make no attempt to analyze their claim under our takings precedent. Although the Intervenors cite the rеcent United States Supreme Court decision of Cedar Point Nursery v. Hassid, 141 S. Ct. 2063, 210 L. Ed. 2d 369 (2021), to support their claim that the permit results in a per se physical taking, the Intervenors’ reliance on the case is misplaced.
[¶43.] In Cedar Point, the Supreme Court examined a California law that granted labor organizations a right of access to private farms in order to speak with farm laborers at various times throughout the day, up to 120 days per year. 141 S. Ct. at 2069. Two California fruit farmers argued that the law constituted a per se physical taking because it required them to allow union representatives to enter and remain on their farms. Id. at 2069–70. After examining its takings jurisprudence, the Court concluded, “The access regulation appropriates a right to invade the growers’ property аnd therefore constitutes a per se physical taking.” Id. at 2072.
[¶44.] Here, however, there is no physical invasion of the Intervenors’ property in any legally cognizable sense, as a survey of principal “physical-invasion” takings decisions illustrates. See, e.g., id. at 2074 (the right of union officials “to literally ‘take access‘” to the farmers’ operations); Loretto, 458 U.S. at 422, 102 S. Ct. at 3169 (the installation of cable boxes on a privately owned apartment complex); Kaiser Aetna v. United States, 444 U.S. 164, 168, 100 S. Ct. 383, 387, 62 L. Ed. 2d 332 (1979) (the right of public access to a private marina by boat); United States v. Causby, 328 U.S. 256, 259, 66 S. Ct. 1062, 1064, 90 L. Ed. 1206 (1946) (military aircraft flying low over the rooftops of private homes); see also Rupert v. City of Rapid City, 2013 S.D. 13, ¶ 10, 827 N.W.2d 55, 61 (“[A]n action by a landowner for inverse condemnation
[¶45.] Despite invoking the per se taking designation, the Intervenors have failed to support their claim under a recognized legal theory. Under the circumstances, we conclude that PUC‘s decision to approve Crowned Ridge‘s permit application to construct wind turbines on sites not owned by the Intervenors was not a physical invasion of their property.
[¶46.] Beyond this, Intervenors have not suggested this case involves a per se regulatory taking under Lucas, 505 U.S. 1003, 112 S. Ct. 2886, or a partial regulatory taking under Penn Central, 438 U.S. 104, 98 S. Ct. 2646. And no governmental entity has exacted an easement from the Intervenors in exchange for the grant of a building permit or zoning variance as would establish a taking under Nollan, 483 U.S. 825, 107 S. Ct. 3141, and Dolan, 512 U.S. 374, 114 S. Ct. 2309.
[¶47.] If the Intervenors’ arguments suggest any sort of taking claim, it is, at best, the assertion that the PUC‘s decision to grant Crowned Ridge‘s application has caused сompensable damages in a Krier-style claim arising under Article VI, section 13 of the South Dakota Constitution. As we have previously held, this type of claim does not require “that the damage . . . be caused by a trespass or an actual physical invasion of the owner‘s real estate.” Rupert, 2013 S.D. 13, ¶ 10, 827 N.W.2d at 61 (cleaned up). However, the Intervenors have not alleged, much less established, that the noise and shadow flicker would satisfy Krier‘s specific damage requirement.
[¶48.] We conclude, therefore, that the Intervenors have not established that the PUC exceeded its authority by issuing the construction permit to Crowned Ridge under the theory that the permit resulted in an uncompensated taking under the federal or state constitutions.
Foreclosure of a Nuisance Claim as a Taking16
[¶49.] The provisions of
[¶50.] In Bormann, the court held that “statutory immunity from nuisance suits results in a taking of private property for public use without just compensation.” Id. at 311. Citing its nineteenth century decision in Churchill v. Burlington Water Co., 62 N.W. 646, 647 (Iowa 1895), the Iowa Supreme Court reaffirmed its view “that the right to maintain a nuisance is an easement.” 584 N.W.2d at 315. Therefore, eliminating that right through a legislative
[¶51.] But the decision in Bormann appears to be an outlier. We have never regarded the right to maintain a nuisance as an easement. See Schliem v. State ex rel. Dep‘t of Transp., 2016 S.D. 90, ¶ 14 n.10, 888 N.W.2d 217, 224 n.10 (“What property is and the rights that attach to ownership are primarily a matter of state law.” (citation omitted)). Nor have we held that statutes providing immunity from nuisance suits effect a taking, and neither, it appears, have any other states. See Honomichl v. Valley View Swine, LLC, 914 N.W.2d 223, 232–33 (Iowa 2018) (“All fifty states have right-to-farm laws that provide farmers with various forms of statutory immunity from nuisance claims . . . but Iowa is the only state to hold that the statutory immunity available under its right-to-farm law is unconstitutional in any manner.“); see also Lindsey v. DeGroot, 898 N.E.2d 1251, 1259 (Ind. Ct. App. 2009) (“[W]e have found nothing to suggest that Indiana has adopted the seemingly unique Iowa holding that the right to maintain a nuisance is an easement . . . .“); accord Moon v. N. Idaho Farmers Ass‘n, 96 P.3d 637, 644 (Idaho 2004).
[¶52.] We conclude that preempting nuisance suits under
Conclusion
[¶53.] The Intervenors have failed to raise any meritorious issues upon which the final decision and order of the PUC may be reversed or modified. We affirm.
[¶54.] KERN, DEVANEY, and MYREN, Justices, and ANDERSON, Circuit Court Judge, concur.
[¶55.] ANDERSON, Circuit Court Judge, sitting for JENSEN, Chief Justice, disqualified.
[¶56.] JENSEN, Chief Justice, deeming himself disqualified, did not participate.
Notes
The applicant has the burden of proof to establish by a preponderance of the evidence that:
- The proposed facility will comply with all applicable laws and rules;
- The facility will not pose a threat of serious injury to the environment nor to the social and economic condition of inhabitants or expected inhabitants in the siting area. An applicant for an electric transmission line, a solar energy facility, or a wind energy facility that holds a conditional use permit from the applicable local units of government is determined not to threaten the social and economic condition of inhabitants or expected inhabitants in the siting area;
- The facility will not substantially impair the health, safety or welfare of the inhabitants; and
- The facility will not unduly interfere with the orderly development of the region with due consideration having been given the views of governing bodies of affected local units of government. An applicant for an electric transmission line, a solar energy facility, or a wind energy facility that holds a conditional use permit from the applicable local units of government is in compliance with this subdivision.