In the matter of the reissuance of an NPDES/SDS Permit to United States Steel Corporation (U.S. Steel) for its Minntac facility and response to Contested Case Hearing requests filed by U.S. Steel and the Minnesota Center for Environmental Advocacy (“MCEA“) And In the matter of the Application for Variance from Water Quality Standards in the proposed NPDES/SDS permit, MPCA‘s Preliminary Determination to Deny the Variance Request and U.S. Steel‘s Contested Case Hearing request on the Variance denial.
A18-2094
A18-2095
A18-2159
A18-2163
STATE OF MINNESOTA IN SUPREME COURT
February 10, 2021
Thissen, J.
Court of Appeals. Filed: February 10, 2021 Office of Appellate Courts
Paula G. Maccabee, Just Change Law Offices, Saint Paul, Minnesota, for appellant WaterLegacy.
Sara K. Van Norman, Van Norman Law, PLLC, Minneapolis, Minnesota; and
Sean Copeland, Fond du Lac Band Legal Department, Cloquet, Minnesota, for appellant Fond du Lac Band of Lake Superior Chippewa.
Jeremy Greenhouse, Kenneth Podpeskar, The Environmental Law Group, Ltd., Mendota Heights, Minnesota, for respondent United States Steel Corporation.
Joy R. Anderson, Saint Paul, Minnesota, for amicus curiae Minnesota Center for Environmental Advocacy.
S Y L L A B U S
The Minnesota Pollution Control Agency properly exercised its authority by applying the Class 1 secondary drinking water standards to a National Pollutant Discharge Elimination System/State Disposal System permit issued to United States Steel Corporation.
Reversed and remanded.
O P I N I O N
THISSEN, Justice.
In this case, we must determine whether groundwater is a Class 1 water under Minnesota law and therefore subject to the secondary drinking water standards, including a sulfate standard of 250 milligrams per liter (mg/L), promulgated by the United States Environmental Protection Agency (EPA).1
Appellant Minnesota Pollution Control Agency (MPCA) issued a National Pollutant Discharge Elimination System/State Disposal System permit (the 2018 Permit) to respondent United States Steel Corporation (U.S. Steel) in 2018. The 2018 Permit governs U.S. Steel‘s Minntac Tailings Basin Area in Mountain Iron and sets a groundwater sulfate limit of 250 mg/L at the facility‘s boundary, which U.S. Steel must meet by 2025.
U.S. Steel argues that the MPCA did not have authority to impose the 250 mg/L sulfate standard in the 2018 Permit because the EPA‘s secondary drinking water standards apply only to bodies of water classified as “Class 1 waters” and groundwater is not classified as Class 1. In response, the MPCA and appellants WaterLegacy and Fond du Lac Band of Lake Superior Chippewa argue that groundwater is a Class 1 water to which the secondary drinking water standards apply.
We conclude that groundwater is a Class 1 water under Minnesota law. Accordingly, we hold that the MPCA correctly exercised its authority by applying the Class 1 secondary drinking water standards to the 2018 Permit. We therefore reverse the decision of the court of appeals on this issue and remand the case to the court of appeals for further proceedings.
U.S. Steel processes taconite at its Minntac Taconite Facility in St. Louis County. Taconite is a raw form of iron ore that U.S. Steel refines to produce high-grade iron ore pellets later used to make steel. During the refining process, 70 to 72 percent of ore mined becomes waste, known as “tailings.”
Tailings are stored in a tailings basin, which is not lined. The taconite mining and refining process produces a significant amount of wastewater, most of which goes directly into the tailings basin.2 This wastewater contains various chemical constituents, including sulfate. Because the basin is unlined, some of the stored wastewater leaks into the surrounding surface waters and groundwater. For example, in 2018, U.S. Steel estimated that approximately 2,000 gallons per minute of wastewater seeped from the tailings basin directly into local groundwater.
The MPCA first issued a National Pollutant Discharge Elimination System/State Disposal System (NPDES/SDS) permit covering the Minntac Tailings Basin Area facility (the Facility) in 1987 (the 1987 Permit). The 1987 Permit expired in 1992, but U.S. Steel continued to operate the Facility until 2018 pursuant to
In 2000, the MPCA issued a warning letter to U.S. Steel, highlighting elevated levels of sulfate in the waters surrounding the Facility. U.S. Steel and the MPCA subsequently entered into a series of compliance schedules over the next decade designed to reduce sulfate levels in local groundwater. However, sulfate levels have continued to increase since then, despite U.S. Steel‘s 2010 installation of a “Seep Collection and Return System” on one side of the tailings basin designed to capture and return wastewater seepage. As of 2018, U.S. Steel reported groundwater sulfate levels ranging between 585 mg/L and 928 mg/L at various collection points surrounding the Facility.
Following a notice and comment period that began in December 2014, the MPCA issued the 2018 Permit. The 2018 Permit requires U.S. Steel to meet a sulfate limit of 250 mg/L in groundwater at the Facility‘s boundary by 2025. It also requires U.S. Steel to reduce sulfate levels in the tailings basin itself to 357 mg/L by 2028. The 250 mg/L sulfate standard applied by the MPCA is set out in secondary drinking water standards promulgated by the EPA, see
ANALYSIS
The issuance of the 2018 Permit is a contested agency decision. In reviewing such decisions, we may “affirm the decision of the agency or remand the case for further proceedings; or [we] may reverse or modify the decision” if made “in excess of the statutory authority or jurisdiction of the agency.”
Whether the MPCA had the authority to impose a 250mg/L sulfate standard in the 2018 Permit turns on the interpretation of chapter 115 of the Minnesota Statutes and chapters 7050 and 7060 of the Minnesota Rules. The interpretation of statutes and administrative regulations presents a question of law which we review de novo. Cocchiarella v. Driggs, 884 N.W.2d 621, 624 (Minn. 2016); J.D. Donovan, Inc. v. Minn. Dep‘t of Transp., 878 N.W.2d 1, 5 (Minn. 2016).
“Like statutes, administrative regulations are governed by general rules of construction.” White Bear Lake Care Ctr., Inc. v. Minn. Dep‘t of Pub. Welfare, 319 N.W.2d 7, 8 (Minn. 1982). “[W]hen the language of the regulation is clear and capable of understanding,” we do not defer to an agency‘s interpretation and may substitute our own judgment for that of the agency. In re Cities of Annandale & Maple Lake NPDES/SDS Permit Issuance (Annandale), 731 N.W.2d 502, 515 (Minn. 2007). However, “when the relevant language of the regulation” is ambiguous, we will defer to the agency‘s interpretation and “will generally uphold that interpretation if it is reasonable.” Id. When ambiguity exists, we consider several factors to determine whether the agency‘s interpretation is reasonable, including the nature of the regulation at issue and the agency‘s expertise and judgment in relation to the subject matter of the regulation. See In re Alexandria Lake Area Sanitary Dist. NPDES/SDS Permit No. MN0040738 (Alexandria), 763 N.W.2d 303, 312–13 (Minn. 2009).
A.
As an initial matter, we provide some background on the relevant regulatory framework. The Clean Water Act (CWA) aims to “restore and maintain . . . the integrity
The CWA prohibits “the discharge of any pollutant” without a permit.
The MPCA administers the NPDES program in Minnesota.
To protect Minnesota “waters of the state,” the MPCA groups designated waters into different classes.
The MPCA‘s water classification system and associated quality standards are outlined in chapter 7050 of the Minnesota Rules. See
B.
We next turn to the question of whether Minnesota Rules chapters 7050 and 7060 classify groundwater as a Class 1 water. When determining the meaning of administrative rules, “we interpret words and sentences in the light of their context and construe rules as a whole.” In re Ali, 938 N.W.2d 835, 838 (Minn. 2020) (citation omitted) (internal quotation marks omitted). After reading chapters 7050 and 7060 in context, considering the regulatory framework as a whole, we conclude that the rules are ambiguous because they can reasonably be read either to support or disprove groundwater‘s classification as a Class 1 water.
As the court of appeals pointed out, one textual clue that reasonably supports an interpretation that chapters 7050 and 7060 do not classify groundwater as a Class 1 water is that those chapters never expressly state that groundwater is classified as a Class 1 water. U.S. Steel, 937 N.W.2d at 783. Notably, chapters 7050 and 7060 also do not expressly classify groundwater as belonging to any other primary class of water. Stated another way, the gap in the rules identified by the court of appeals is that chapters 7050 and 7060 do not
Other textual clues in chapters 7050 and 7060, however, make clear that groundwater is subject to certain numeric standards in chapter 7050. First, Rules 7050.0130 to .0227—provisions that include the definition of and standards for Class 1 waters—“apply to all waters of the state, both surface and underground.”
Similarly, Rule 7050.0221 notes that its “numeric [including Class 1] and narrative water quality standards” broadly apply to “the waters of the state.”
Other parts of chapter 7050 also treat groundwater as subject to numeric standards, including the Class 1 standards specifically. For instance, Rule 7050.0221 applies the
Rule 7050.0221 also sets a specific standard for a subclass of Class 1 waters: “The quality of class 1A waters of the state shall be such that without treatment of any kind the raw waters will meet in all respects both the [EPA‘s] primary . . . and secondary drinking water standards . . . .”
Provisions in chapter 7060, which specifically govern groundwater, support the conclusion that groundwater is subject to the numeric standards and that groundwater fits
Rule 7060.0200 expressly provides that Rules 7050.0100–.0220—provisions that include numeric water quality standards, including the general rules for Class 1 waters6—“apply to underground waters” and further states that “[w]here differences exist between parts 7050.0100 to 7050.0220 and this chapter, the more stringent of the conditions shall be construed to apply.”
This suggests that a reasonable reading of chapters 7050 and 7060 is that groundwater is properly classified as a Class 1 water.
Further, chapter 7060 makes clear that the highest priority use for groundwater is “as a source of drinking, culinary, or food processing water.”
These standards for groundwater in chapter 7060 look strikingly similar to the definition of Class 1 waters in chapter 7050: “[A]ll waters of the state that are or may be used as a source of supply for drinking, culinary or food processing use, or other domestic purposes and for which quality control is or may be necessary to protect the public health, safety, or welfare.”
As U.S. Steel points out, however, the overlap between the definition of potable water and the definition of Class 1 waters is not precise. In particular, the statutory definition of potable water does not incorporate the EPA‘s drinking water standards.
In summary, the fact that chapters 7050 and 7060 do not expressly define groundwater as a Class 1 water and the lack of a precise overlap between the definition of Class 1 waters in Rule 7050.0140 and the classification of groundwater in Rule 7060.0400 provide a reasonable basis to conclude that groundwater is not classified as a Class 1 water under chapters 7050 and 7060. On the other hand, the frequent references to Class 1 groundwaters in chapter 7050, the provisions in chapter 7060 that require groundwater to be protected at the maximum level and direct that the more stringent of competing standards under chapters 7050 and 7060 apply, and significant language overlap between the definitions of Class 1 waters and potable water also support a reasonable textual interpretation of chapters 7050 and 7060 as classifying all groundwater as a Class 1 water despite the lack of an express statement stating as much.
Because the text of chapters 7050 and 7060 can be reasonably read as supporting both an interpretation that groundwater is classified as a Class 1 water and an interpretation that groundwater is not so classified, we conclude that the regulations are ambiguous.
Having concluded that the text of chapters 7050 and 7060 does not clearly answer whether groundwater is classified as Class 1 water, we turn to other tools of construction to determine whether the MPCA‘s interpretation of these ambiguous regulations is reasonable. See Annandale, 731 N.W.2d at 516. Applying those tools of construction, we hold that groundwater is a Class 1 water under Minnesota law.
First, the MPCA‘s interpretation of its own regulations that groundwater is a Class 1 water is entitled to “considerable deference.” St. Otto‘s Home v. Minn. Dep‘t of Hum. Servs., 437 N.W.2d 35, 40 (Minn. 1989). Such deference is particularly apt here because water pollution control and classification is a technical issue. See Alexandria, 763 N.W.2d at 313 (observing that we consider an agency‘s interpretation in light of the agency‘s technical expertise in relation to the subject matter of the regulation).
In addition, the MPCA‘s interpretation that groundwater is a Class 1 water “is one of long standing.” Resident v. Noot, 305 N.W. 311, 312 (Minn. 1981); see also Annandale, 731 N.W.2d at 528 (Page, J., dissenting) (“[D]eference may be justified because longstanding and consistent interpretations may have encouraged reliance by the public . . . .“). Since at least 1993, the MPCA (under a variety of administrations) has unequivocally and consistently stated in Statements of Need and Reasonableness (SONARs) that groundwater is a Class 1 water. See Citizens Advocating Responsible Dev. v. Kandiyohi Cnty. Bd. of Comm‘rs (CARD), 713 N.W.2d 817, 830 (Minn. 2006) (relying
In a 1993 SONAR, the MPCA stated that “[g]round waters (Class 1) are protected for just one beneficial use, drinking water, and only the drinking water standards apply to ground waters.” 1993 SONAR 49 (Apr. 1993). A 2006 SONAR highlighted that chapter 7050 “contains statewide provisions that protect Minnesota‘s surface and ground water resources from pollution” before going on to state that “all ground water is protected for just one use, as an actual or potential source of drinking water (Class 1).” 2006 SONAR 1, 3 (May 2006). More recently, in a 2014 SONAR, the MPCA stated that “Minn. R. ch. 7050 addresses drinking water use through the Class 1 Domestic Consumption (DC) designation. Class 1 applies to all groundwater and specified surface waters.” 2014 SONAR 5 (June 2014); see also 2007 SONAR 6 (July 2007) (“In Minnesota all ground water is protected as an actual or potential source of drinking water (Class 1).“); 2013 SONAR 8 (Nov. 2013) (“In Minnesota all ground water is protected as an actual or potential source of drinking water (Class 1 Domestic Consumption).“).
This history makes clear that the MPCA interprets the rules to mean that all groundwater is Class 1 water and demonstrates that the MPCA has not suddenly or recently
The evolution of chapters 7050 and 7060 also supports our holding that groundwater is classified as a Class 1 water. See J.D. Donovan, Inc., 878 N.W.2d at 9–12 (examining the rulemaking record to determine agency intent); CARD, 713 N.W.2d at 828 (stating that we may use the legislative and rulemaking record to ascertain the agency‘s intent).
As previously discussed, Rule 7060.0200 provides that Rules “7050.0100 to 7050.0220 also apply to underground waters.” That language has been in effect and unchanged since 1983 when Chapter 7060 was adopted as a recodification of its predecessor rule, WPC-22.
The standards in the proposed tables [in the newly created parts 7050.0221–.0227] are restricted to surface waters because surface waters have multiple beneficial uses and multiple sets of standards assigned to them, which has been the source of some confusion . . . . Ground waters (Class 1) are protected for just one beneficial use, drinking water, and only the drinking water standards apply to ground waters. For this reason the proposed tables are restricted to the associated use classes and standards applicable to surface waters. However, it should be noted that some surface waters are protected for drinking water in addition to their other uses, and the same drinking water standards applicable to these surface waters are applicable to ground waters.
1993 SONAR 49 (Apr. 1993). Despite the MPCA‘s failure to amend the relevant language in chapter 7060, the history of chapters 7050 and 7060, including the 1993 adoption of Rule 7050.0221, supports the MPCA‘s interpretation that groundwater is properly classified as a Class 1 water and, accordingly, subject to the 250 mg/L sulfate standard.
Because the MPCA‘s interpretation of the ambiguous regulations contained within chapters 7050 and 7060 as classifying all groundwater as a Class 1 water is reasonable, longstanding, and supported by the evolution of the regulatory scheme, we hold that
D.
We now turn to the proper disposition of this appeal. First, we reverse the court of appeals’ decision that the MPCA improperly imposed the 250 mg/L sulfate standard in the 2018 Permit because chapters 7050 and 7060 unambiguously do not classify groundwater as a Class 1 water. We also clarify that our decision reverses only those portions of the court of appeals’ opinion concerning the application of the CWA to groundwater, see supra n.1, and Class 1 water issues. We granted review only on those two issues and we do not address other issues raised at the court of appeals.
Because the court of appeals held that groundwater is not a Class 1 water, however, it did not reach the issue of whether the MPCA properly denied U.S. Steel‘s requests for a permit-related contested case hearing and a variance from certain groundwater standards included in the 2018 Permit. U.S. Steel, 937 N.W.2d at 785. Accordingly, we remand to the court of appeals for analysis of those issues. After the court of appeals completes its analysis, it should remand to the MPCA to complete a functional equivalence analysis under the standards set forth in the Supreme Court‘s decision in County of Maui v. Hawaii Wildlife Fund, __ U.S. __, 140 S. Ct. 1462 (2020).10
Finally, WaterLegacy asks that in reversing the court of appeals’ decision on the Class 1 waters issue, we deny a stay requested by U.S. Steel to postpone application of the 250 mg/L sulfate standard in the 2018 Permit until the MPCA completes its CWA functional equivalence analysis on remand. We agree that the MPCA‘s functional equivalence analysis should not delay application of the sulfate limit contained in the 2018 Permit. However, application of that limit must wait until the court of appeals completes its analysis of U.S. Steel‘s request for a contested case hearing and groundwater standards variance.
CONCLUSION
For the foregoing reasons, we reverse the decision of the court of appeals and remand to the court of appeals for further proceedings consistent with this opinion.
Reversed and remanded.