Opinion
No. A06-1041.
Filed May 22, 2007.
Appeal from the District Court, Rice County, File No. 66-C7-05-002141.
Carol A. Overland, Overland Law Office, (for appellant).
Paul D. Reuvers, Jeffrey A. Egge, Iverson Reuvers, (for respondents).
Considered and decided by Stoneburner, Presiding Judge; Willis, Judge; and Wright, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2006).
UNPUBLISHED OPINION
Appellant challenges the district court's dismissal of the complaint for failure to state a claim on which relief may be granted, arguing that the allegations are sufficient to establish a prima facie case under the Minnesota Environmental Rights Act (MERA). By notice of review, respondent challenges the district court's denial of respondent's motion for sanctions. We affirm.
FACTS
In June 2005, appellant State of Minnesota, by Rice County Land Use Accountability, Inc. (RCLUA), filed a complaint for declaratory judgment against respondent Rice County, alleging that Rice County had violated several environmental rules. The complaint sought an order replacing Rice County as the responsible governmental unit for environmental review and mandating Rice County's employees to participate in environmental-review training. Rice County moved to dismiss the complaint for failure to state a claim on which relief may be granted. Minn. R. Civ. P. 12.02(e). The district court granted the motion, holding that RCLUA failed to comply with procedural requirements for filing the complaint. The district court declined to address Rice County's other arguments but warned RCLUA that, "absent a legitimate controversy, [it] has no authority to dictate to an executive body, such as a county board, how it should conduct its business or to scold it if its procedures are alleged to be lacking."
RCLUA filed another complaint in December 2005, again alleging rule violations and seeking the same relief that it sought in the dismissed complaint. RCLUA also seeks an order mandating Rice County to comply with Minnesota's environmental rules and regulations and to review its environmental practices to ensure compliance with those rules and regulations. Rice County moved to dismiss this complaint and to impose sanctions against RCLUA. The district court granted Rice County's motion to dismiss, holding that a case or controversy does not exist because Rice County already is required to follow the law and RCLUA's allegations are not sufficient to establish a prima facie case that Rice County failed to do so. The district court also concluded that, even if RCLUA's complaint sets forth a legally sufficient claim, RCLUA is not entitled to relief under MERA. The district court denied Rice County's motion for sanctions. This appeal followed.
DECISION I.
We review a dismissal for failure to state a claim on which relief may be granted to determine whether as a matter of law the complaint sets forth a legally sufficient claim for relief. Barton v. Moore, 558 N.W.2d 746, 749 (Minn. 1997). In doing so, we accept the facts alleged in the complaint as true and review de novo the legal sufficiency of the claims. Stead-Bowers v. Langley, 636 N.W.2d 334, 338 (Minn.App. 2001), review denied (Minn. Feb. 19, 2002).
RCLUA brought its claims under MERA, Minn. Stat. ch. 116B (2006), which authorizes individuals and organizations to seek "declaratory or equitable relief in the name of the state of Minnesota against any person, for the protection of the air, water, land, or other natural resources . . . from pollution, impairment, or destruction." Minn. Stat. § 116B.03, subd. 1. To establish a prima facie case under MERA, the plaintiff must show (1) the existence of a natural resource protectable under MERA, and (2) that defendant's conduct will or is likely to cause pollution, impairment, or destruction of that natural resource. State by Schaller v. County of Blue Earth, 563 N.W.2d 260, 264 (Minn. 1997). Such conduct causes pollution, impairment, or destruction if it violates or is likely to violate any environmental quality standard, rule, order, or other mandate of the state or its political subdivisions, or if it materially adversely affects or is likely to materially adversely affect a natural resource. Minn. Stat. § 116B.02, subd. 5. Thus, to set forth a legally sufficient claim for relief, a complaint must allege (1) the existence of a protected natural resource, and (2) that defendant's conduct caused pollution, impairment, or destruction of that natural resource because it (a) violated an environmental-quality standard, rule, order, or mandate, or (b) materially adversely affected a natural resource.
"Natural resources" include, but are not limited to, air, water, and land. Minn. Stat. § 116B.02, subd. 4.
Assuming for purposes of our analysis that RCLUA's complaint alleged the existence of a protected natural resource, we consider whether the complaint's allegations establish a prima facie case that Rice County's conduct caused pollution, impairment, or destruction. The complaint alleges that Rice County violated environmental-review rules codified in chapter 4410 of Minnesota's administrative-agency rules. We have expressly held that environmental review "does not constitute `pollution, impairment, or destruction' of the environment as defined in MERA." Nat'l Audubon Soc. v. Minn. Pollution Control Agency, 569 N.W.2d 211, 218 (Minn.App. 1997), review denied (Minn. Dec. 16, 1997).
Although RCLUA's complaint does not specifically allege that protected natural resources are at risk of pollution, impairment, or destruction, it does identify the natural resources that are the subject of RCLUA's claims, including land, wetlands, and feedlots.
In Nat'l Audubon, appellants brought a MERA claim under Minn. Stat. § 116B.03, subd. 1, alleging that respondent's decision not to order an environmental-impact statement was improper. Id. at 214. The district court dismissed the MERA claim under Minn. R. Civ. P. 12.02(e) for failure to state a claim on which relief may be granted. Id. at 215. On appeal, we held that environmental review is "a process of information gathering and analysis" and, as such, it "cannot result in pollution, impairment, or destruction of the environment." Id. Therefore, "environmental review does not constitute `pollution, impairment, or destruction' of the environment as defined in MERA." Id. (affirming dismissal of complaint for failure to state claim on which relief may be granted when complaint did not contain legally sufficient allegations regarding second element of MERA prima facie case).
As in Nat'l Audubon, all of RCLUA's claims challenge Rice County's environmental-review process. Therefore, as in Nat'l Audubon, none of these claims sets forth legally sufficient allegations that Rice County caused pollution, impairment, or destruction of a natural resource. Without such allegations, RCLUA's complaint fails to set forth a legally sufficient claim for relief. Accordingly, the district court properly dismissed RCLUA's complaint for failure to state a claim on which relief may be granted.
II.
Rice County challenges the district court's denial of its motion for sanctions and attorney fees under Minn. Stat. § 549.211 (2006) and Minn. R. Civ. P. 11.03, arguing that sanctions are warranted because RCLUA did not heed the district court's warning in its prior order that it "can only decide actual `cases and controversies.'" We review a district court's decision regarding the imposition of sanctions for an abuse of discretion. Peterson v. Hinz, 605 N.W.2d 414, 417 (Minn.App. 2000), review denied (Minn. Apr. 18, 2000); In re Trust Created by Hill, 499 N.W.2d 475, 495 (Minn.App. 1993), review denied (Minn. July 15, 1993). A finding that counsel proceeded in bad faith is required to award sanctions. Whalen ex rel. Whalen v. Whalen, 594 N.W.2d 277, 282 (Minn.App. 1999). Sanctions should not be imposed when an attorney has an "objectively reasonable basis for pursuing a factual or legal claim or when a competent attorney could form a reasonable belief that a pleading is well-grounded in fact and law." Gibson v. Coldwell Banker Burnet, 659 N.W.2d 782, 787 (Minn.App. 2003) (quotation omitted). Based on the record before us, we cannot conclude that RCLUA's counsel proceeded in bad faith such that the district court's decision to deny the motion for sanctions and attorney fees was an abuse of discretion.