The Minnesota Court of Appeals' decision last month tossing out permits issued to PolyMet Mining to build the state's first copper-nickel mine brought to mind a famous quote from the late U.S. Supreme Court Justice William O. Douglas: "Common sense often makes good law."
Apart from the serious legal questions raised by PolyMet and the Minnesota Department of Natural Resources (DNR) on appeal to the Minnesota Supreme Court, the lower court ruling falls well short of common sense in numerous ways.
It opens an endless new loop of costly litigation and delay for both businesses and municipalities seeking state building permits. It ignores legal precedent and practical regulatory practices in place for many years. And it effectively replaces the judgment of experienced scientists and engineers who, in this case, worked for the DNR and spent months and years reviewing technical data on behalf of the public, with the judgment of solitary outside lawyers working as administrative law judges (ALJs).
We sincerely hope the state Supreme Court takes up the appeal. The threat to business growth and job creation in the state from the appeals court ruling doesn't stop with PolyMet, which spent 15 years navigating the state's comprehensive environmental review and permitting processes. In late 2018 the company finally secured the last permits needed from the DNR and state Pollution Control Agency to start building its $1 billion mine near Hoyt Lakes.
That's when their opponents pushed things into overtime. They asked the courts to order a do-over, contending the DNR erred by failing to outsource to ALJs a laundry list of issues to be argued separately in contested case hearings. These hearings allow citizens to challenge acts by the government, but only when certain narrow criteria are met, such as disputes over facts or jurisdiction that the agency hadn't reviewed previously.
Under Minnesota law, ALJs hold such hearings, deliberate the issues and finally issue recommendations back to agencies, whose decisions are then again subject to appeal.
It would be hard to imagine a better recipe for regulatory uncertainty than having a loose outside process that allows virtually anyone who loses a permitting fight to demand a do-over, as happened in the PolyMet situation.
Communities and the skilled labor that build and maintain these projects are hard hit when opponents use these delay tactics. Investors, especially those pouring millions or billions of dollars into big-ticket, job-creating projects like mines, light rail, waste treatment facilities, pipelines or energy plants, need certainty that permitting processes will be fair, objective and predictable.
In Minnesota, the system works pretty smoothly, as many big projects successfully go through permitting every year, creating good jobs in the process. PolyMet's case illustrates what can happen if the process goes off the rails. By loosening the strict standards to be met for permitting decisions to be handed over for contested case hearings, the PolyMet ruling opened the floodgates to such hearings and delays. It ruled, in effect, that if any credible witness disagrees with the findings of an agency, a contested case hearing — a do-over — is required.
Contested case hearings under state law are supposed to be held in limited, strictly defined situations when the agency needs more information to help it make a decision, even after (in PolyMet's case) years of careful review. In the PolyMet case, the DNR decided the 15-year record cleared the bar, and that the issues in question had already been addressed during PolyMet's environmental review and permitting process.
Notably, the court made no finding that the DNR's science was incorrect or faulty. What's in question are matters better left to the review of independent state regulators with training and expertise to evaluate proposals under statute. Opponents who dislike outcomes can sue if they believe approvals were unlawful. But Minnesota should not allow critics to grab the wheel and steer job-creating business projects off onto endless exit ramps for contested case hearings.
If this is how we operate going forward, investors will get the message: Minnesota doesn't want your business.
We hope the Supreme Court will not let that happen.
Tim Worke is CEO, Associated General Contractors of Minnesota. Jason George is business manager/financial secretary, International Union of Operating Engineers, Local 49.
