June 30, 2002
Council
Member Priscilla Faris
Council
Member Timothy Stoddard
Council
Member Peter Dunning
Council
Member Joel Bennett
RE: NSP
d/b/a Xcel Energy v. City of Sunfish Lake, et al
Dear Mayor Tiffany and Members of the
Council:
I am writing on behalf of the Power Line Task Force, a
group of Sunfish Lake residents opposed to the application for a Conditional
Use Permit (CUP) by Xcel Energy for the construction of the 115 KV transmission
line through the community. As you know,
the group has formally intervened in the pending lawsuit entitled N.S.P.
d/b/a Xcel Energy v. City of Sunfish Lake, which is now pending in Dakota County
District Court.
The Task Force strongly opposes the proposed settlement of
the lawsuit with Xcel and believes that the recent ruling of Judge Stacey
granting Summary Judgment to Xcel should be appealed. We believe that there is a distinct
likelihood that the decision could be reversed on appeal, for several reasons. Members of the group have asked me to
communicate, in summary form, the reasons for their view, which include the
following:
1. The case was argued and presented as a
matter of Summary Judgment, which means that there was no trial on the
merits. Under Rule 56.03 of the
Minnesota Rules of Civil Procedure Summary Judgment may be granted only if
there is “no genuine issue as to any material fact . . .” This is a very high standard and
dictates that Summary Judgment is inappropriate if there are any factual
disputes in the record.
In
this case, there were ample factual disputes in the voluminous record compiled
by the City, which arose out of the lengthy and well-documented hearings. They included contentious issues
regarding health risks of the new power line that could ensue if the CUP were
granted; the impact upon the value of properties in Sunfish Lake, whether
adequate “need” exists for the replacement, among other matters. Some of these issues were raised by the City
in opposition to Summary Judgment, while others were glossed over, only
mentioned in passing, or otherwise not highlighted.
For instance, the record reflects that there may be a
diminution of property values of at least 1.1%, a matter that Judge Stacey deemed
be de minimis.
However, the record indicates that the claim of diminution of property
values can be substantiated even at a 1.1% diminution of value. Further, there would be a spillover of diminution
of property values throughout the community.
I understand that there are approximately 200 homes in the
community. Assuming an average value of,
say, $750,000 (which is quite conservative), the property values in the
community may be in the range of close to $150,000,000. A diminution of 1.1% is substantial, more
than $8,000 per home and about $1,650,000 million in the community at large.
In addition to the numerous disputed facts in the record,
of which the valuation issue is only one, there are significant and unresolved
legal issues. One of Xcel’s contentions
is that it was not required to have a certificate “of need” from the Public
Utilities Commission because it began the application process in other
communities before the August 1, 2001, when a PUC approval was required. However, the application sought in Sunfish
Lake was not filed until November 13, 2001, after the statute went into
effect. In effect, the court ruling
gives retroactive effect to Xcel’s application, which is a questionable legal
interpretation and could be subject to Appellate Court reversal.
At any rate, the record is replete with disputed factual
issues. In his ruling granting Summary
Judgment in favor of Xcel, Judge Stacey seemed to resolve the factual disputes
uniformly in favor of Xcel. However, the
legal standard for Summary Judgment requires that all disputed facts be
resolved against the party seeking Summary Judgment. This standard is required to assure that
Summary Judgment is only granted when there are clear, unequivocal and
undisputed facts and no disputes about facts.
The Court ruling seems to ignore this standard and rushes to judgment in
drawing conclusions stemming from hotly-disputed facts.
While the City did move for Summary Judgement,
the Court did not rule upon its Motion, rather it granted Summary Judgment in
favor of Xcel. In so doing, the ruling
is quite vulnerable to appellate challenge on grounds that it violates the two
precepts of Rule 56 of the Minnesota Rules of Civil Procedure: (a) that all
factual disputes be resolved in favor of the non-moving party; and (b) that
Summary Judgment not be granted when there is a genuine issue of material
fact. The Minnesota Court of Appeals has
reversed trial court rulings, like this one, when Summary Judgment has been
entered into too hastily in the face of a disputed factual record, as exists in
this case. Leamington Co. v. Non
Profit’s Ins. Ass’n. 615
N.W. 2d 349, 355 (Minn. 2000); Cantor v. Peace Officers Standard Training
Board, 538 N.W. 2d 267, 272 (Minn. App. 1997).
2. Another reason that an appeal can be
successful is the high standard that should be imposed when reviewing municipal
decision-making of this type. It is a
general rule of law that municipal zoning and land use decisions bear a
presumption of legitimacy, and the party challenging any such decision has the
heavy burden of proving its invalidity. Sun Oil Co. v. Village of New Hope, 300 Minn. 326, 334, 220
N.W. 2d 256, 261 (1974). To
prevail, a challenger must show that the municipality’s decision is not
supported by any “rational basis related to promoting the public health,
safety, morals, or general welfare” of the community and that the decision was
arbitrary, capricious and unreasonable. BECA
of Alexandria, L.L.P. v. County of Douglas, 607 N.W. 2d 459, 462-63 (Minn.
Ct. App. 2000); St. Croix Development, Inc. v. City of Apple Valley, 446
N.W. 2d 392, 397-99 (Minn. Ct. App. 1989) rev. denied (Minn. Dec. 1,
1989).
The applicable City ordinance refers to impact upon
health, surrounding properties, and need for the project, which essentially
tracks the general principle of land use decision-making based upon public
health, safety, and general welfare considerations. State,
by Rochester Ass’n. of
Neighborhoods v. City of Rochester, 268 N.W. 2d 885, 888 (1978). To prevail, a challenger must show that there
was “no rational basis” upon which the decision can be sustained. Holt v. City of Sauk Rapids, 559 N.W.
2d 444, 445-6 (Minn. App. 1997), rev. denied (Minn. April 24, 1997).
This is an extremely high standard. It means, in effect, that to
invalidate the City’s decision to deny a CUP to Xcel, no reasonable person
could have made the decision that the four Council Members made in denying the
application and that the denial was arbitrary and capricious. The Court is not supposed to weigh the merits
of the determination, but solely to decide whether the decision that was made
was so irrational that no reasonable person could have made it.
The decision-making process here belies any contention
that the City acted irrationally. Xcel
certainly has arguments in its favor, but so do the opponents of the
application. Both sides had ample
opportunity to present their positions and the City, by a 4-1 vote, sided
against Xcel’s position. Whether the
decision was right or wrong may be debated, but it is hard to conceive that it
was irrational or made in an arbitrary or capricious way.
I believe that strong arguments can be presented to the
Appellate Court to show that the decision was not arbitrary, capricious,
or irrational, but the
result of deliberate and thoughtful
decision-making by the Council.
It was supported by a lengthy and voluminous
record, evidence presented by several expert witnesses, including Martin Blank
and Magda Havas among
others.
The Court of Appeals has reversed other Trial Court ruling
in zoning cases for similar reasons. See
St. Croix Development, Inc. v. City of Apple Valley, 446 N.W. 2d 392
(Minn. Ct. App. 1989), rev. denied, (Minn. Dec. 1, 1989) (Court of
Appeals, reversing Trial Court, held that the city had a rational basis for
denying the developer’s petition for rezoning.) Kehr
v. City of Roseville, 426 N.W. 2d 233 (Minn. Ct. App. 1988), rev. denied
(Sept. 16, 1988) (court of appeals reversed Trial Court’s judgment granting
landowner’s request for rezoning).
To conclude, under these circumstances, that the City’s
decision was irrational, arbitrary, or capricious is an affront to the process,
which was extensive, and the Council Members, who presumably undertook due
diligence in making the decision. While
their decision may be debatable, it was hardly irrational, and the Appellate
Court could reach this conclusion and reversing the decision of Judge
Stacey.
3. Notably, the Trial Court’s decision cites
very little legal authorities in support of the ruling. A few cases are sprinkled into the decision
to support the proposition that a municipality may not take action that is
inconsistent with a “business decision” made by a private party, citing Trisko v. City of Waite Park, 566 N.W. 2d
349, 355 (Minn. App. 1997), rev denied (Minn. Sept. 25, 1997). That is a rather bold statement since
municipal decision makers often have to pass upon “business decision[s]” made
in the private sector. Indeed, most land
use and zoning issues involve municipal decision-makers having to pass upon a
“business decision” made in the private sector.
It is the duty and responsibility of elected officials to do so in order
to have any semblance of order and stability in land use and zoning related
matters. Under the Trial Court’s
reasoning, any decision that a “business” deems to be in its own interest is to
be presumed valid by a municipality, which avoid under the ineffectual, or
useful, any land use zoning recommendations at all or, for that matter, any
municipal review through a planning commission, city council, or
otherwise.
While lauding the “business decision” philosophy, the
Trial Court’s ruling totally overlooks the high legal standard for invalidating
a municipality’s land use decision. The
Trial Court does not refer to the Minnesota cases that establish the
prescription of municipal validity and the deferential standard of judicial
review, including the criteria of rational basis, arbitrary, and capricious
decision-making. By disregarding this
standard, the Trial Court decision leaves itself extremely vulnerable to
appellate reversal.
4. The Power Line Task Force was granted the
right to intervene in this lawsuit under Rule 24 of the Minnesota Rules of
Civil Procedure. As an intervening
party, it is clothed with all rights of a litigant, including the right to
appeal.
Therefore, even if the City were to
settle the case with Xcel and choose not to appeal, the Task Force could
proceed with an appeal. It
would, however, be far preferable for the City to join in that appeal for
several reasons. First, any potential
appeal by the Power Line Task Force may, as a practical matter, result in
deferral of decision-making and any action pending the outcome of that
appeal. Therefore, the City’s inaction
will not necessarily make the process move more rapidly. Further, the possibility exists of more
extensive and prolonged litigation, with potentially conflicting results, if
the City and the Power Line Task Force are at odds with each other or do not
move in parallel paths. It would be far
preferable for both the City and the Power Line Task Force to speak with a
united voice before the Appellate Court.
Although, as noted, the Task Force may proceed on its own behalf since
it is an intervener in the lawsuit.
5. I also understand that there is some
concern about the potential for damages against the City if an appeal is
brought and is unsuccessful. I do not
believe that this is a realistic threat or likely to occur. The appellate process moves fairly swiftly
and should be concluded within 6-9 months.
I understand that this would not inconvenience Xcel or significantly
disrupt or delay the project. It also is
questionable whether the City would be liable for damages, even if Xcel
ultimately prevails, since the City was engaged in the lawful exercise of its
discretion.
These issues and several others lead me to conclude that
there are legitimate and strong grounds for an appeal of the ruling by Judge
Stacey and that there is significant and distinct possibility that the appeal
can be successful in overturning that decision, which would result in either a
reversal of the Trial Court’s ruling overturning the City’s denial of the CUP
or, in the alternative, remanding the matter for further consideration by the
City Council or possible further deliberation by an appropriate trial judge.
Please let me know if you have any questions or if I can
furnish any additional information concerning this matter.
Very truly yours,
MANSFIELD, TANICK & COHEN, P.A.
Marshall H. Tanick
MHT:ghc
292867.1