Submitted by
Clayton M. Robinson, Jr., Saint Paul City
Attorney
and
Eric D. Larson, Assistant City
Attorney
February 7, 2001
Appendixes are not available as part of this web document. The Appendixes can
be reviewed free of charge or, upon payment of copy expenses, a copy can be
obtained at the City Clerk’s Office, 170 City Hall, 15 West Kellogg Blvd., Saint
Paul, Minnesota 55102.
INTRODUCTION
PART 1: STATEMENT OF THE HISTORY AND FACTS PERTAINING TO THE ETHANOL FACILITY
On Wednesday, October 18, 2000, the Saint Paul City Council held a public
hearing pursuant to Chapter 91 of the Administrative Code regarding potential
public nuisances originating from the Gopher State Ethanol plant located at 882
West Seventh Street, Saint Paul, Minnesota. Pursuant to that provision, the
Council adopted a resolution referring the matter to this office "to review the
operation of the Gopher State Ethanol plant and the effect of those operations
and whether there exist sufficient grounds to merit the preparation of a legal
action calculated to address the problems associated with the operations of the
plant." Saint Paul Administrative Code Section 91.03, Subd. e, states in
relevant part that "the city attorney's office shall provide the council with a
written report explaining its decision whether or not to commence a criminal or
civil action."
The following is the City Attorney's recommendation as to
commencement of either a civil or criminal action against Gopher State Ethanol
and its affiliates, a summation of the factual history obtained by the City
Attorney's Office to-date, and a summation of its legal analysis.
The Statement of the History and Facts pertaining to the Ethanol facility is organized as follows:
Although very comprehensive, in the interests of some brevity there are many facts not included in this report. The City Attorney's Office recognizes that there is additional important information yet to be obtained as further specified below.
A. HISTORY OF MINNESOTA BREWING AND GSE
The site
on which GSE operates its facilities has a long and rich history. The brewery
has been an integral part of the West 7th Street community for many years. It
was on this site that Christopher Stalmann founded a brewery in 1855 named the
"Cave Brewery." The site is approximately 1,000 feet from the bluff overlooking
the Mississippi River and now is about 7.1 acres in size. In 1897, the Stahlmann
family sold the Cave Brewery to the St. Paul Brewing Company. The St. Paul
Brewing Company then sold it to Jacob Schmidt, who renamed it as the Jacob
Schmidt Brewing Company ("Schmidt") in 1900.
Schmidt became the seventh largest brewing company in the United States by 1936. Beginning in 1955, however, a series of ownership changes occurred, ending in 1972 with the acquisition of Schmidt by G. Heileman Brewing Company ("Heileman") of LaCrosse, Wisconsin. For financial reasons, Heileman informed the public that it would be closing down the St. Paul brewing operation in July 1990.
In August 1991, a group of investors purchased the brewery from Heileman and incorporated under the name MBC Holding Company ("MBC"). In May, 1997, Jack Lee became president of MBC. Today the brewery employs over 150 people and is currently the 12th largest brewing operation in the country. In an effort to increase revenues, in 1998 MBC developed plans to utilize some of its brewing capacity to produce fuel ethanol. Subsequently these plans were expanded to also include the addition of a plant to recover and market the carbon dioxide which is a significant byproduct of GSE's ethanol production.
As noted above, in 1998, MBC investigated and began to develop a business for the production of ethanol. In March 1999, Gopher State Ethanol, LLC (GSE) was incorporated in Delaware for the purpose of constructing and operating an ethanol facility. MBC assisted GSE in obtaining financing by contributing operating assets to GSE and guaranteeing GSE loans. MBC also contributed production equipment with a net book value of $1,730,650. In return for this assistance, MBC obtained a 28.5% minority interest in GSE. Construction of the ethanol facility began in April 1999 and operations commenced in May 2000.
MBC entered into a joint venture agreement with Messer Griesheim Industries, a producer and marketer of carbon dioxide, for the recovery of carbon dioxide ("CO2") at the West 7th site. The joint venture is operated under the name MG-CO2 St. Paul ("MG-CO2") and is owned equally by MBC and Messer Griesheim Industries. The joint venture began operations in August 2000.
In sum, three inter-related commercial enterprises are located on the West 7th site: a brewery (MBC), an ethanol facility (GSE), and a carbon dioxide recovery plant (MG-CO2).
B. THE PUBLIC RESPONSE TO GSE
Soon after GSE and
MG-CO2 commenced operations in May 2000 and August 2000, respectively, citizens
began registering complaints about their operations. The complaints included
reports of obnoxious odor, residue from emissions, and loud noise. Citizens
further complained of adverse health effects resulting from the plants'
operation including nausea, skin and eye irritation, headaches, asthmatic
complications, and sleep deprivation problems. These complaints were submitted
to the City under its Legislative Code and to the MPCA pursuant to Minn. R.
7000.0900.
In response to the complaints, the City has requested and received monthly reports from LIEP and the Mayor's Office regarding efforts to address citizen concerns. In addition, a special public hearing was held on October 18, 2000, to allow citizens and other interested parties to directly voice their concerns to the City Council. The City Council continued to accept written submissions from the public and others through October 24, 2000.
On November 8, 2000, the Council adopted a resolution referring the matter to
the City Attorney's Office "to review the operation of the Gopher State Ethanol
plant and the effect of those operations for whether there exist sufficient
grounds to merit the preparation of a legal action calculated to address the
problems associated with the operations of the plant." To date, this Office has
submitted interim reports on November 22, 2000 and December 13, 2000 to the City
Council, with this final report being submitted on February 7, 2001. On November
22, 2000, the City Council added $50,000 to this Office's existing budget for
2001 for the retention of outside experts and consultants to assist in assessing
and preparing potential legal actions against GSE, MG-CO2, and MBC.
C. ADVERSE HEALTH EFFECTS
By mid-December, 2000, the
City Attorney's Office had spent approximately five weeks extensively reviewing
the statutes and case law relevant to any potential legal action against GSE and
its affiliates as well as the statutes and regulations which govern their
facilities and operations. Although the MPCA and the Minnesota Department of
Health had reviewed and continued to review chemical emission data as of
December of 2000, the City Attorney's Office determined that expert analysis
specifically studying the issue of odor and any adverse health effects
originating from the facilities needed to be undertaken.
Since mid-December, the City Attorney's Office has located and retained a nationally recognized expert in this field, Dr. Susan Schiffman of the Duke University Medical Center, to review existing studies of the facilities' emissions, and to assess the odor emissions, the public health complaints, and health risks associated with the GSE operation. See Appendix A, Susan Schiffman, Ph.D., Curriculum Vitae.
After review of many of GSE's submissions to the MPCA, including but not limited to the the emissions' reports and assessments completed by Environmental Resource Group ("ERG"), PACE Analytical, and the Environmental Assessment Worksheet for GSE, Dr. Schiffman has preliminarily concluded that the public complaints of nausea, eye irritation, sleeplessness, and breathing difficulties are consistent with the ethanol plant's emissions, including odor emissions. Dr. Schiffman recommends further testing to support or discount the public health-related complaints and better understand their nature, extent, and cause. In addition, Dr. Schiffman finds that the studies done to date raise as many questions as answers and, therefore, are incomplete as to the cause and nature of the problems attributed to the ethanol facility. She does conclude that this is a serious matter requiring further study and most definitely remediation of the current odor emissions from the ethanol facility.
1. Testing Odor Emissions and their Affect Upon Citizens.
For the most part, the only emissions testing completed to date has consisted of gas measurements to locate the existence and amount of chemicals meeting the definition of so-called "criteria pollutants." Although helpful, the greatest weakness of the gas measurement approach is that odor as such is not based purely upon individual gas composition. Odor results from the interaction of gases with each other and their further interaction with particulates (dust) and atmospheric conditions. Another weakness of the gas measurement approach is that it cannot detect all gas concentrations detectable by the human nose. Since a combination of these undetectable gaseous chemicals may be causing the foul and offensive odors emitted from the ethanol facility, measurement of individual gas concentrations does not define the odor problem. For this reason, amongst others, compliance with EPA and MPCA emissions standards has little to no correlation to odor. Additionally, EPA and the MPCA emissions standards apply to a limited number of chemical compounds, commonly referred to as "criteria pollutants", as compared to the tens of thousands of chemical compounds known the exist. Since there are most likely many chemical compounds emitted by GSE's operation currently unidentified by either the EPA or the MPCA and not directly regulated by either of the two agencies, compliance with EPA and MPCA standards do not resolve the problem nor do GSE's emission reports to the EPA and MPCA define the odor situation.
In order to better define the odorous emissions and their potential health effects, Dr. Schiffman recommends that the following testing be done under closely supervised conditions:
Olfactometry is a measurement technique that uses the human nose as the
sensor. It is the most precise approach to quantifying odors because the human
nose can detect compounds at concentrations that cannot be detected by current
analytical methods. Odorous air is collected in Tedlar® bags and diluted with a
machine called an olfactometer. Strong odors require many dilutions in order to
reduce or eliminate the odor while weak odors require only a few dilutions.
Portable olfactometers can also be used downwind from odor sources. In short,
the advantage to olfactometry is the direct correlation with the odor and the
human's sensitive sense of smell. Additionally, olfactometry analyzes the
complete gas mixture so that contribution of each compound in the sample is
included in the analysis.
Quantification of the perceived intensity of the odor of ambient air can also be achieved by comparisons of a series of dilutions of butanol standards. Twelve serial dilutions of 1-butanol are used starting at 10-ppm butanol with a geometric progression of two: 10 ppm through 20,480 ppm (10 ppm, 20 ppm, 40 ppm, up to 20,480 ppm). This is a standard method (E544-75) established by The American Society for Testing and Materials (ASTM, 1997).
Lateralization thresholds are determined to assess whether the emissions are
an irritant. Irritation, unlike olfaction, can be localized to one nostril or
the other; that is, when an odorous stimulus that is not an irritant is
presented to one nostril and a nonodorous stimulus is presented to the other
nostril, the subject cannot determine which nostril received the odor. However,
if the odorous stimulus is also an irritant, the subject can identify the
nostril that received the stimulus.
An Andersen Non-Viable Eight-Stage
Impactor or similar device takes ambient air and measures the size and total
mass of particulates. This data can assist in establishing the amount of odor
carried on particulates compared to that carried in gaseous form. The samples
are taken both at the odor emission site and from the neighborhoods. The dust
collected from the ethanol property is compared to dust from the neighborhoods
to determine if it comes from the same source. The tests help establish source
and categorize the characteristics and nature of the particulates.
Gas
chromatography and mass spectrometry are standard chemistry procedures that
determine the identity of the constituents in the emissions.
Spirometry
is a method for testing pulmonary functioning and used routinely to evaluate the
respiratory status of individuals exposed to pollutants.
The above-noted
tests will help establish the health effects on the residents, identify the
characteristics of odor, and establish the source of the odor. The studies and
analyses completed to date do not study odor and actually avoid any such
analysis.
Dr. Schiffman's estimate is that these tests would take 3 to 4 months to complete at a cost of approximately $100,000. This Office strongly recommends the completion of such testing as the results would provide a substantially more complete picture of the odor problem and its effect on public health. Some of these tests, such as olfactometry and nasal lateralization, could be completed within a few weeks from the date of the request for the testing.
2. Deficiencies of Current Available Studies
Despite the fact that an ethanol facility was seeking approval for operations in a densely populated urban area, the documentation suggests only the most basic and minimum permitting standards and testing requirements were applied. Although more extensive tests have been undertaken by GSE since it commenced operations, such tests are insufficient for purposes of obtaining as thorough an understanding of the odor emissions as scientifically possible.
Environmental Research Group ("ERG") is the company retained by GSE and MBC to provide the emissions and plant operation data required by the EPA and the MPCA both for the ethanol facility's initial permit approval and for the three and six month reviews required by the MPCA. To date, these reports do not substantiate that any health hazards may be associated with the facilities' operations. However, according to Dr. Schiffman, the data contained in the studies should not be uncritically relied upon.
ERG's initial assessment only covered what the MPCA permit application required. Yet, ethanol plants are well-known to be potential sources of odor and nasal/respiratory irritation. No measurements were required by the MPCA or included regarding odor and irritation at other ethanol facilities and yet the importance of such measurements and information should have been known by GSE, ERG, and the MPCA. Prior to the permitting process and the EAW, both GSE and ERG knew or should have known that similar ethanol facilities, nationwide and in Minnesota, have experienced odor problems.
In addition, a complete gas chromatography/mass spectrometry analysis (GC/MS) was not performed prior to opening the GSE plant to identify the full range of chemicals emitted at ethanol facilities. As noted above, this is critical because individual chemicals and compounds can interact to produce odor and irritation. Also, identification and determination of levels of individual sulfur compounds emitted from ethanol plants has not been done. With proper testing, some sulfur compounds can be detected in the high ppt (parts per trillion) range. Furthermore, certain sulfur compounds do interact (summate or synergize) to produce a stench.
The Screening Risk Assessment submitted by GSE to the City Council cannot be relied upon because it did not account for the simultaneous exposure to hundreds of low level compounds. The report minimized the toxicity of acetaldehyde and did not report health effects from breakdown products of nutrients (e.g. organic acids, phenols, and nitrogenous compounds). The determination of estimated exposure concentrations was for individual compounds only. Models were inadequate and did not estimate the simultaneous impact of hundreds of compounds. The models did not account for simultaneous exposure to odorants in the gas phase and odorants delivered on particulates. Simultaneous exposure to gases and particulates potentiates adverse health effects; that is, gases and particulates are synergistic and can produce high levels of irritation.
In short, the public complaints of nausea, eye irritation, sleeplessness, and breathing difficulties appear to be consistent with the ethanol plant's emissions, including odor emissions. Analysis is required to substantiate to the extent possible the linkage between the emissions and these public health issues. To date, as discussed in the MBC and MPCA Permitting History Section below, EPA and MPCA criteria have not focused on odor and its health consequences. Mere compliance with EPA and MPCA emission criteria will not address these significant health concerns.
D. MBCA AND MPCA PERMITTING HISTORY
Not until
after the public complaints began in May 2000, did nuisance issues, including
odors, come to the fore. The permitting history and review process were as
follows.
On November 20, 1997, MBC applied with the MPCA for the necessary permits to continue the existing operation of its brewing facilities and to construct and operate an ethanol production facility at the West 7th site. The application was for a Total Facility Operating Permit, which means that the brewery and the ethanol operations would be considered a single operating unit for regulatory oversight as opposed to two separate units. See Appendix B, Minnesota Brewing Company Title V Air Permit Application, dated November 20, 1997 (first part only).
As part of its application, MBC proposed to convert approximately 40% of its fermentation capacity from beer production to fuel ethanol production. The proposed ethanol facility had the capacity to produce approximately 18 million gallons per year of ethanol. MBC's facilities were to be modified by adding a hammermill, distillation and molecular sieve dehydration processes and storage tanks. An Environmental Analysis Worksheet (EAW) was completed in April of 1998. See Appendix C, Environmental Assessment Worksheet. After receipt of the EAW and public hearings, (See Appendix D, Response to Public Notice Comments submitted by Rust Environmental & Infrastructure, Inc. on behalf of MBC, dated February 9, 1998), MPCA authorized the construction and operation of the ethanol plant and concluded that "the project does not have the potential for significant environmental effects" and, therefore, decided that "[a]n Environmental Impact Statement for the Minnesota Brewing Company ethanol facility is not required." MPCA issued an initial air quality permit in April, 1998, which was amended in April, 2000. The plant went into operation in late April, 2000.
1. MPCA and the Permitting Process
Under Minnesota's Environmental Policy Act, Minn. R. Section 4410.4300, Subp.
5b, mandates that an EAW be completed prior to "construction or expansion of a
facility for the production of alcohol fuels which would have or would increase
its capacity by 5,000,000 or more gallons per year of alcohol produced." During
the public comment period on the EAW, the West Side Citizens Organization
requested that an Environmental Impact Statement ("EIS") be completed. In
addition, Mary C. Zanmiller, an area resident, requested an EIS. The Minnesota
DNR and the Metropolitan Council both stated that an EIS was unnecessary. At the
conclusion of the EAW process, the MPCA concluded that the proposed ethanol
facility would not have the potential for significant environmental effects
under the criteria set forth in Minn. R. 4410.1700. Accordingly, an EIS was not
completed. Whether an EIS would have pinpointed the current noise and odor
problems is uncertain and arguments can be made on both sides. Regardless, on
April 15, 1998, an Air Emission Permit No. 12300019-001 was issued to MBC
authorizing the continued operation of existing facilities and modification of
MBC's facilities to incorporate ethanol production. See Appendix E, Air
Emission Permit 12300019-001, Issuance date April 15, 1998.
On
December 23, 1999, MBC applied for a major permit amendment to its Total
Facility Permit which also had been previously granted in 1998. The application
requested that MBC be authorized to increase proposed ethanol production from 18
million gallons per year to 20 million, install separate grain handling units
for the ethanol plant, install a new 250,000 gallon denatured storage tank and a
new 19,000 gallon ethanol day tank, install a new bio-digester flare, and,
finally, install a carbon dioxide recovery system. On March 15, 2000, an Air
Emission Permit No. 12300019-002 was issued to MBC amending the permit to
incorporate these changes. See Appendix F, Air Emission Permit No.
12300019-002, Issuance date March 15, 2000.
2. Total Facility Operating Permit
The Total Facility Permit issued to MBC is a "Part 70 Operating Permit," which encompasses both the brewing and ethanol production components of MBC's operations. 40 CFR § 70.2. Part 70 permit conditions apply in circumstances where a facility's potential emissions for any criteria pollutant may exceed 100 Tons Per Year (TPY), and is thus considered a "major source" of air pollution. Minn. R. 7007.0200. Criteria pollutants are those pollutants for which a national ambient air quality standard (NAAQS) exists under the Clean Air Act (CAA). MBC's facilities potentially emit nitrous oxide ("NOx") and volatile organic compounds ("VOCs"), two criteria pollutants, in amounts which exceed the Part 70 threshold of 100 TPY per regulated pollutant, in this case 164.6 TPY and 210 TPY, respectively. For this reason, the entire MBC facility (brewing and ethanol production) is considered a "major source" of air pollution under Minnesota and federal law.
The ethanol operation alone would not necessitate a Part 70 Permit, because it does not have the potential to emit more than 100 TPY per any regulated pollutant. However, both the brewing and ethanol operations depend upon the same equipment (e.g., boilers and grain handling equipment) and their total operation does have the potential to emit more than 100 TPY. As a result, the ethanol operation is subject to the Part 70 permit conditions.
3. Prevention of Significant Deterioration
In granting the Part 70 permit to MBC, the MPCA also performed a Prevention of Significant Deterioration (PSD) review applicable for new sources of pollution. The PSD process requires that states in their State Implementation Programs ensure that areas already in compliance with the national ambient air quality standards do not deteriorate their air quality condition. Such areas, depending upon the quality of their air in a baseline year, must control the emissions of certain pollutants such that the concentration of those pollutants increases no more than the allowable increment as set forth in Title I of the Clean Air Act. Before any new source may be built, or any existing source may be modified, such sources must apply for and be issued a PSD permit, which demonstrates that they will be in compliance with the PSD program.
Minnesota incorporates the PSD review process as part of its State Implementation Plan. Pursuant to Minn. R. 7007.3000 "PREVENTION OF SIGNIFICANT DETERIORATION OF AIR QUALITY:"
Any person who constructs, modifies, reconstructs, or operates an emissions unit, emission facility, or stationary source must meet the requirements of Code of Federal Regulations, title 40, part 52.21(b)-(f) and (h)-(w), as amended, entitled "Prevention of Significant Deterioration of Air Quality," which is adopted and incorporated by reference.
PSD standards are applicable when a modification to a source results in a significant "net emissions increase" of any regulated pollutant and the source is located in an area which has been designated as "attainment" for any criteria pollutant. 40 CFR § 52.21. Under PSD, there are essentially two thresholds to determine whether a new source will be considered a "major source" of air pollution, which would further subject the source to New Source Review, and potentially New Source Performance Standards and Best Available Control Technology (BACT) mandates under Title I of the CAA. First, any new source, or major modification of an existing source which has the potential to emit over 250 TPY of any regulated pollutant is considered a "major source" under PSD. 40 CFR § 52.21 (b)(1)(i)(b). Here, MBC's combined brewing and ethanol operation do not exceed this 250 TPY threshold.
The second standard, which would trigger a PSD review, applies to an enumerated list of 26 sources that have a specific Standard Industrial Classification (SIC), which are subject to a 100 TPY threshold. 40 CFR § 52.21 (b)(1)(i)(a). The ethanol production component of MBC's operations is, in fact, one of the 26 specified major sources limited to 100 TPY under PSD, as it is considered a "fuel conversion plant." In order to avoid PSD review, however, and the potential application of New Source Standards, GSE has agreed to limit emission levels to less than 100 TPY for all criteria pollutants.
By avoiding PSD thresholds, GSE essentially avoided New Source Review (40 CFR Part 51, which is a review that is undertaken prior to any construction or, in our case, modification of the brewery facility to include the ethanol operation. Essentially, GSE avoided a great deal of expense and possibly stricter environmental standards.
4. Conclusion of the MPCA Permitting Process
The entire facility (brewing and ethanol) is subject to the 250 TPY emission threshold under PSD, 40 CFR § 52.21. As noted above, however, the ethanol operations have stricter emission limitations, which restricts the ethanol plant's authorized contribution to the 250 TPY standard. MBC agreed that the entire facility would not exceed the 250 TPY emission thresholds and that GSE's operations would not exceed 100 TPY in order to avoid "major source" classification under PSD. The EPA approved this method of permitting by the MPCA. The EPA reviews all Part 70 permits and did not raise any objection to the manner in which the MPCA permitted MBC's operations. Minn. R. 7007.0950. Pursuant to its regulatory duties, MPCA commenced a three month and a six month reviews which have uncovered both monitoring and emission violations which are now the subject of MPCA enforcement action. However, it must be emphasized that the MPCA's current enforcement action does not address odors or the public complaints regarding odors and adverse health effects.
E. MPCA ENFORCEMENT ACTION: AIR EMISSIONS AND OPERATING
VIOLATIONS
Pursuant to its three month review of the brewery and
ethanol plant operations MPCA staff conducted an inspection of MBC's facilities
on July 21, 2000 and on July 26, 2000, and documented multiple permit
violations. The violations include the following:
See Appendix G, MPCA letter, dated August 16, 2000, addressed to Jack Lee, President/CEO, regarding July 21 and 26, 2000 Air Quality Compliance Inspection. In addition to these violations, from April through June of 2000, NOx levels were recorded to be 28.4 tons. At this rate, the TPY would be approximately 113 TPY over a twelve month term exceeding permit levels and federal PSD standards. These levels of emissions would trigger PSD review and potentially subject GSE to New Source Standards. Compliance with New Source Standards could have a profound affect on GSE's operations. As a result of the violations of its permit, MBC and MPCA are currently negotiating a Stipulation Agreement, which sets forth a compliance schedule, a civil penalty for past violations and stipulated penalties for violation of the Agreement. The Draft Agreement was forwarded to MBC on October 30, 2000. The Draft Agreement also addresses noise violations based upon tests conducted on September 26, 2000.
As part of its investigation, the City Attorney's Office met with the MPCA staff and the Special Assistant Attorney General representing the agency on February 2, 2000. Questions relating to potential adverse public health effects associated with ethanol production were raised. The MPCA noted that rules regarding odor were repealed in 1995, and that the agency had a policy of not becoming involved in odor disputes. However, the MPCA staff did indicate that the agency was addressing potential public health concerns. The MPCA has contacted the Minnesota Department of Health, and they are jointly examining public health-related issues. The MPCA staff stated that the agency and the Department of Public Health were completing a health risk assessment, and invited the City of Saint Paul to work with both agencies regarding these issues. These measures may be productive in both assessing the problem and arriving at a dependable solution.
Additionally, the MPCA staff indicated that GSE and the agency were close to finalizing the Stipulation Agreement. The City Attorney raised the prospect of including the City of Saint Paul as a party to the Stipulation Agreement to address the noise issues, which are regulated by city ordinances, and issues relating to odor emissions and their potential adverse public health effects. MPCA staff and its attorney responded that local governments did not routinely become involved in MPCA Stipulation Agreements, but the agency would discuss the matter and respond. There appeared to be a general willingness to cooperate with the City in terms of resolving all of the issues, with the exception of MPCA's reluctance to become involved with odor.
As discussed in the legal analysis regarding MPCA regulatory oversight and authority over GSE, the City communicated its understanding to MPCA that the MPCA has a legal mandate to ensure GSE's abatement of the obnoxious odors.
1. Scrubber
To address the community's concerns, GSE has taken several steps in an attempt to abate the odor, noise, and public health concerns. As early as June 2000, GSE began examining its operations to determine the source of the odor and noise problems. During the course of GSE's evaluation, it determined that the original scrubber for the fermentation process was inadequate to accommodate its expansive operations. As a result, in July 2000, GSE commissioned a larger scrubber to catch and clean exhaust emissions. GSE also modified its dryer cyclone to include a muffler to reduce noise. Further, in July 2000, GSE installed a CO2 recovery system, which captures both CO2 and other odorous compounds.
During the same period, GSE retained an expert, who subsequently performed a Health Risk Assessment. See Appendix H, Gopher State Ethanol Plant Screening Assessment, dated October 2000, prepared by Environmental Resource Group, LLC and STS Consultants. As noted above, the health risk assessment concluded that emissions from the ethanol plant do not pose a risk to human health or the environment. GSE also retained Harris Engineering to determine whether any further abatement efforts would be feasible. Harris' testing initially determined that a scrubber could be installed on the dryer to further reduce odor emissions, but later concluded that a thermal oxidizer would be more efficient.
2. Thermal Oxidizer
A thermal oxidizer functions as follows. The emissions gas and particulates pass through a chamber heated by the thermal oxidizer to approximately 1300 Fahrenheit. The high heat is known to convert organic compounds such as toxins and odorants to carbon dioxide, carbon monoxide, nitrogen oxide, sulfer dioxide, water vapor, and other trace residual compounds. In short, a thermal oxidizer incinerates the gas and particulate emissions. The recovery boiler will generate the steam needed for brewing, making the thermal oxidizer more financially feasible given that it is expensive to acquire and expensive to operate.
Because the character and nature of the emissions will be changed, GSE is required to and has filed an amended emissions permit with the MPCA. In December 2000, GSE applied for an Air Permit Major Modification, which would authorize it to add new equipment, including a boiler, DDGS rail loadout spout and a new thermal oxidizer/heat recovery boiler, to the facility. GSE requested expedited review by the MPCA. The agency has denied the request based upon likely controversy and public concern in connection with the application.
With respect to odor, the initial tests of the thermal oxidizer are
promising. Chuck McGinley of McGinley Associates P.A. retained by a non-profit
citizens group, Minnesota Citizens for Environmental Advocacy participated in
the tests of the thermal oxidizer which were conducted in December, 2000 and
January, 2001. Mr. McGinley's tests indicated an odor reduction of approximately
96 to 98 percent. However, Mr. McGinley was cautious in his report noting that
further study needs to be undertaken. See Appendix I, McGinley Associates,
P.A., Preliminary Assessment of Thermal Oxidizer Pilot Testing at GSE, dated
January 15, 2001.
In fact, a further thermal oxidizer test is to take
place in February. The exact date has not been set. On Thursday, Feburary 8,
2001, Dan Pena of the Minnesota Department of Health will be conducting a second
inspection of the entire facility complex in order to ascertain any and all
other emission sources. In March, McGinley Associates is scheduled to conduct
further odor analysis.
In the interim, further questions have arisen regarding the thermal oxidizer and whether it will lead to new and problematic emissions. For instance, the thermal oxidizer tests indicated a potential increase in the water vapor emissions from approximately 10% to in excess of 30 %, plus different compounds are being emitted at different ratios. Furthermore, stack design and the volume and velocity at which the emissions leave the stack are important issues in order to assess dispersion of the emissions throughout the neighborhood. Odor can be caused by one compound and many compounds and how they are carried through the air and how they are smelled can also be affected by the amount and nature of particulate in the air and concentration of such things as water vapor. In addition, GSE has many emission points, but three emission sources appear to be the primary contributor to the odor problem: (1) the dryer, (2) the fermentation stack, and (3) the distillation stack. As currently proposed, the thermal oxidizer is to be installed as part of the dryer stack only. GSE believes that this stack is the cause of the odor problem.
It should be noted that GSE has not submitted full and complete design plans. Other than GSE's own outside expert, no engineering expert with knowledge, experience, and expertise with thermal oxidizers has studied and reviewed the GSE proposal, although the MPCA is undertaking its own internal review. The MPCA is very familiar with thermal oxidizers; however, the City Attorney's Office has been led to believe that its application to an ethanol facility is relatively novel.
The MPCA review process is anticipated to take anywhere from three to six months. From the date of approval to installation, the process has been represented to take 8-10 weeks.
Therefore, assuming best case scenario, the thermal oxidizer will not be in place any earlier than June 2001 and potentially some time in the Fall, 2001. In the interim, it has been suggested that since the drying of the distiller's grain is thought to be the source of most if not all the odor problem, that the drying time and the heat be reduced and that GSE take steps made to reduce the moisture in the grain prior to the drying process. Whether these steps will have a noticeable beneficial effect in reducing the odor remains to be seen.
Given that only the City Attorney's Office has retained an odor expert, it is recommended that Dr. Schiffman become immediately involved in the testing and analysis process to ensure adequate odor reduction to acceptable environmental and human health levels.
G. HISTORY OF ETHANOL IN MINNESOTA
As part of my
investigation, I and Eric Larson of this Office met with the Commissioner of the
Department of Agriculture on January 29, 2001, regarding the impact of any City
action against GSE upon the State Ethanol Program. The Department acknowledged
odor issues in connection with ethanol production. The Department, however,
believes that the State's Ethanol Production Program is an important program to
Minnesota farmers throughout the state, and is hopeful that any controversy over
GSE operations would not adversely effect the Department's efforts to continue
to promote ethanol production. The Department is particularly concerned about
any potential adverse health effects associated with ethanol production. The
Commissioner and his staff encourage resolution of the issues in connection with
GSE and indicated their willingness to assist the City in reaching a successful
resolution.
In Minnesota, a market for fuel ethanol has been created through the enactment of legislation. Minnesota requires distributors of gasoline to sell oxygenated gasoline year-round made up of 2.7 percent to 10 percent ethanol.1 The Minnesota Department of Agriculture is directed by statute, Minnesota Statutes Chapter 41A.09, to implement the key incentive of Minnesota's ethanol production development program. The statute first sets forth an annual in-state production goal for ethanol of 240,000,000 gallons.2 The Commissioner of the Department of Agriculture is required to make quarterly cash payments of 20 cents per gallon of ethanol produced, from state funds appropriated for the ethanol program, to in-state producers of ethanol. The maximum cash payment an in-state ethanol producer can obtain is $3 million per year. GSE receives the $3 million per year maximum. The state spends more than $77 million on this program annually. These incentive payments expire June 30, 2010.3
In addition, financial assistance is available for construction and start-up of ethanol production facilities, since they meet the definition of an "agricultural resource project" under Minn. Statutes 41A.02, Subd. 6. Loans and loan guarantees, and other financial tools are available for construction of ethanol production facilities, from the Minnesota Agricultural and Economic Development Board, which is chaired by the Commissioner of Finance. The Commissioner of Agriculture, the Commissioner of Trade and Economic Development, and the Commissioner of the Pollution Control Agency are also members of the Board. Minn. Stat. 41A.02 Subd. 3; and generally, Minn. Stat. 41A.01 to 41A.08. In keeping with one of the goals of the Department of Agriculture, twelve (12) of Minnesota's fourteen (14) ethanol production facilities are owned by farm cooperatives so that plant profits are paid out to farmer shareholders in addition to what farmers are paid for the corn crop that is processed. See, Minnesota Department of Agriculture's Description of Ethanol Program, www.mda.state.mn.us/Ethanol. The Gopher State Ethanol Plant is privately owned.
One of the unfortunate byproducts of the production of ethanol is the odor emitted from the production process. It was noted at the City's August 9, 2000, City Council meeting that numerous complaints have been recorded regarding odor from ethanol plants in Benson, Luverne, Little Falls, and Marshall, Minnesota. In Luverne, it was discovered that nearly 90% of the plant's odors derived from drying corn byproducts. As a result, to abate odor problems the plant decided to sell wet grain on the market, thus abating some of the odor problems. Another abatement measure included heightening the plant's emission stack. Even with the implementation of these measures, odor from the Luverne plant's operation remains.
H. NOISE VIOLATIONS
The State of Minnesota has
adopted noise standards, which are set forth in Minnesota R. 7030.0010-0080.
Minn. R. 7030.0040, subp.2, sets forth the following standards, which limit the
number of decibels ("dB") permitted during certain hours:
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See Appendix J, Minnesota Rules Chapter 7030. Specific "Noise Area Classifications" are contained in Minn. R. 7030.0050. GSE's operations are included in a Classification 1 area, because of its proximity to neighborhood housing units. Under the regulation, a Classification 1 area places a 60 to 65 dB maximum level during the daytime and 50 to 55 dB maximum levels during the nighttime. "L10" refers to the sound level, expressed in dB, which "is exceeded ten percent of the time for a one hour survey." "L50" refers to sound level, expressed in dB, which "is exceeded 50 percent of the time for a one hour survey." Minn. R. 7030.0020.
For instance, for classification number 1, the L10 standard permits short bursts of noise in excess of 50 dBA, but no greater than 55 dBA as long as those sound levels up to 55 dBA durations do not add up to greater than 6 minutes out of the hour, i.e. 10% of 60 minutes. 30 dBA is the level considered necessary for a good night's sleep. A house with the windows slightly open is said to reduce outside sound levels by 15 decibels by the time the sound reaches the indoors. 5 decibels was then added to provide some accommodation for various conditions. As a result, the L50 level was set at 50 dBA and the L10 level was set at 55 dBA for nighttime sound levels in residential areas.
The City has also adopted noise standards in the Saint Paul Code Chapter 293, entitled Noise Regulation (Chapter 293). Section 293.09 states that "no person shall operate or cause to be operated on any property or properties any source of noise or sound in such manner as to create a sound level outdoors which exceeds the limits set forth for the receiving land use classification . . . when measured at the point of human activity which is nearest the noise source." The land use classifications are based upon the City's zoning classifications. Id. Chapter 293 imposes a 55 dBA from 10:00 p.m. to 7:00 a.m. and 65 dBA from 7:00 a.m. to 10:00 p.m. in Classification No. 1 neighborhoods, which applies to GSE's operations.
Both the MPCA and the City's Licensing Inspection and Environmental Protection Office (LIEP) conducted noise tests on September 26, 2000. The test results demonstrated that the plant operations were emitting noise in excess of both the state and City noise standards. At a monitoring station located at 601 Palace Avenue, LIEP found the noise levels originating from the facility to be 62.5 L10 dBA, 5:14 a.m. to 6:14 a.m., exceeding the City's 55 dBA noise standards. At a monitoring station located at Toronto Street, the MPCA found the noise levels originating from the facility to be 67 L10 dBA and 65 L50 dBA, from 4:00 a.m. to 5:00 a.m., and 67 L10 dBA and 65 L50 dBA, 5:00 a.m. to 6:00 a.m., exceeding the State 50 to 55 dBA noise standard. Based upon these findings, the MPCA and LIEP issued GSE written notice of noise violations on October 17, 2000. The notice imposed a November 17, 2000, deadline to comply with the sound level limits in Minn. R. 7030.0040 and Chapter 293. See Appendix K, MPCA Warning Letter, dated October 17, 2000 and LIEP Inspection Report, dated September 26 and 27, 2000.
On November 17, 2000, LIEP received a letter from Charles S. Matasic, General Manager of MG CO2. In this letter Mr. Matasic stated that the CO2 plant is the cause of the noise problem and that "options to reduce sound levels of the evaporative condenser," the primary cause of the excess sound levels, were being evaluated. See Appendix L, Charles S. Matasic, General Manager of MG CO2-St. Paul, Letter to LIEP, dated November 17, 2000. Subsequently, on December 1, 2000, LIEP monitored the noise levels originating from the site. LIEP found the sound levels originating from the subject property still in violation of the Chapter 293. The L10 sound level at the Toronto site was 64 dBA, 5:06 a.m. to 6:06 a.m. The L10 sound level at the Palace Avenue site was 62 dBA, 4:00 a.m. to 5:00 a.m., both exceeding the City's 55 dBA standards.
On December 4, 2000, a second notice of violation was issued to GSE, which included Minnesota Brewing Company and MG CO2-St. Paul in the notice. The December 4, 2000 Inspection Report was issued to Jack Lee on behalf of GSE and MBC, and Mr. Matasic, on behalf of MG CO2-St. Paul. The Inspection Report noted an initial compliance date of November 17, 2000, and the failure to bring the facility and its operations into compliance. See Appendix M, LIEP Inspection Report, dated December 4, 2000. Subsequent to this notice, GSE filed an Application for Appeal of the Inspection Report and Abatement Order, dated December 4, 2000. The Legislative Hearing was originally scheduled for January 16, 2001, but has since been rescheduled to March 6, 2001.
MG CO2 has reported to the City its attempts to bring its facilities into compliance with the applicable noise standards to the City. On December 1, 2000, MG CO2 moved the absorber bed vent from the north side of the building to the south side. On December 8, 2000, MG CO2 installed silencers on the dryer bed and non-condensable vents. MG CO2 has informed the City that on or before April 2, 2001, it would install a shell and tube condenser to be used in place of the evaporative condenser.
MG CO2 has also indicated that the existing evaporative condenser will operate only when the dew point exceeds 80 degrees Fahrenheit and, if operated, the evaporative condenser will operate only during the hours of 7:00 a.m. and 10:00 p.m. It has been further represented that under no circumstances would the evaporative condensers operate during the hours of 10:00 p.m. and 7:00 a.m. Based upon the City's noise monitoring, however, the evaporative condensers cannot operate during the daytime hours until sound level emissions are reduced by 10 decibels. Additionally, all three operations, the brewery, the ethanol plant and the carbon dioxide plant, need to further reduce noise levels in order to meet the 55 dBA, L10, and 50 dBA, L50 nighttime noise requirements. See Appendix N, Memorandum and materials received from MG Industries outlining abatement measures.
Given the appeal by GSE of the December 4, 2000 Inspection Report and Abatement Order, the largely ineffective noise abatement actions taken to date, and the uncertainty surrounding the recently proposed shell and tube device, in mid-December, 2000, the City Attorney's Office hired Al Perez, Registered Professional Engineer, to assess GSE's noise pollution problems. Mr. Perez worked for the MPCA from 1973 to 1981 and was responsible for developing, implementing, and overseeing enforcement of the noise pollution control regulations. Since 1981 Mr. Perez has worked as an independent industrial, environmental, and architectural noise control consultant. See Appendix O, Al Perez, Registered Professional Engineer, Resume.
On January 22, 2001, LIEP conducted further noise testing and again found further violations of the City's noise standards. Testing was conducted from approximately 6:00 a.m. to 7:00 a.m. at five locations. The first location was on Toronto Street set back 200 feet from the centerline of West 7th Street (M-1). The second location was on Toronto Street set back 400 feet from the centerline of West 7th Street (M-2). The third location was on Palace Avenue set back 200 feet from the centerline of West 7th Street (M-3). The fourth location was on Palace Avenue set back 400 feet from the center line (M-4). The fifth location was at the intersection of Osceola Avenue and West 7th Street (M-5).
At location M-2 noise levels from the CO2 facility were approximately 70 dBA, L10, and 67 dBA, L50; at location M-1 the noise levels were 59 dBA, L10, 56.5 dBA, L50, and 53.0 dBA, L10. Separate and apart from the carbon dioxide plant, the brewery and ethanol facilities are also exceeding applicable standards for a Classification No. 1 area. In particular, between the hours of 10:00 p.m. and 7:00 a.m., GSE and MBC's operations emitted noise levels in excess of 50 dBA, L50, and 55 dBA, L10. As the noise monitoring tests indicate, the carbon dioxide plant, the brewery, and the ethanol plant continue to operate in excess of both the day and nighttime state and City noise standards. See Appendix P, January 22, 2001 Noise Level Test Results.
On January 30, 2001, the City Attorney's Office and LIEP officials met with officials from MBC, GSE and MG-CO2 in an attempt to address the noise violations. At this meeting, MBC, GSE and MG-CO2 agreed to take specific remedial measures, including placing a shell and tube device in the carbon dioxide plant which is intended to replace the use of the evaporative condensers during the night; install a silencer on its compressor units; and actively monitor compliance with the City's noise regulations.
The City Attorney has reduced to writing the facilities' commitment to abate noise levels in correspondence to GSE's attorney, and Charles S. Matsic, MG Industries has recently reiterated their noise abatement commitments. See Appendix Q, Correspondence from Eric D. Larson, Assistant City Attorney, to Thomas Fabel, counsel for GSE and its affiliates, dated February 2, 2001, and Confirmation from Charles S. Matasic, Vice President/General Manager, MG Industries, dated February 6, 2001.
Absent circumstances totally out of the control of MBC, GSE and MG-CO2, the
City Attorney's Office expects the facilities to meet their commitments by April
2, 2001, but, once again, whether compliance with legal standards is achieved
remains to be seen.
I. INTRODUCTION
On October 18, 2000, the St. Paul
City Council held a public hearing. Pursuant to Chapter 91 of the Administrative
Code, the City Council referred the matter the City Attorney's Office for review
for sufficiency to file criminal charges or to commence a civil action. Pursuant
to Section 91.01(d) of the Administrative Code, the Office of the City Attorney
has completed an exhaustive investigation of the facts pertaining to MBC's
collective operations, including the brewery, the ethanol production facility
and the CO2 recovery facility. The Office of the City Attorney has also
completed a review and analysis of the law as it relates to any potential
criminal or civil actions arising from the operation of these facilities. In
terms of the facts, the following legal analysis focuses on air emissions,
noise, odor and related adverse health effects. In terms of the potential civil
actions, the analysis focuses upon public nuisance actions and actions arising
under the Minnesota Environmental Rights Act and the federal Clean Air Act. In
terms of criminal action, the analysis addresses both state statutes and the
City's local nuisance ordinances. The analysis includes a review of the
applicable law and its application to GSE's operations.
II. PUBLIC NUISANCE
The City has the authority to
initiate a civil public nuisance action under Saint Paul ordinances and state
statutes.4
Under state law, the City can not initiate either a civil or criminal public
nuisance action until GSE or its affiliated companies have violated either local
or state nuisance laws at least on two occasions. Whether Minnesota Statutes
Section 617.80 et seq. imposing a two violation prerequisite supercedes earlier
common law which gave state and local authorities the opportunity to bring
abatement and injunctive actions upon the first occurrence of a nuisance is
arguable.5
Without conceding its common law rights, the City Attorney's Office has
evaluated a civil public nuisance action against GSE presupposing written notice
of a public nuisance violation and providing GSE a reasonable time period to
abate the nuisance.
A. Public Nuisance Defined.
The determination of whether a nuisance has occurred is a fact-based, case-by-case, inquiry.6 The definition of what constitutes a public nuisance is the same whether the action is civil or criminal. The City ordinance and the state criminal code define nuisance as: intentionally maintaining or permitting a "condition which unreasonably annoys, injures or endangers the safety, health, morals, comfort, or repose of any considerable number of members of the public."7,8 The City Attorney's Office believes strongly that the facts regarding the odor and noise emitting from GSE's operations would ultimately be found by either a trial judge or jury to be unreasonable and thereby a public nuisance. However, a lengthy, fact-intensive hearing, including an intensive review of GSE's operation would occur prior to any such determination.
For instance, GSE and its affiliates are a lawful operation. And, as a matter of law, "[r]easonable use of one's property is not a nuisance . . . [under] present law."9 At the same time, Minnesota cases hold that a defendant's reasonable use is not synonymous with regulatory compliance. Nuisance can result from harm from an authorized use.10 In short, even if lawful in all respects, companies such as GSE can be and have been held liable for creating a public nuisance arising out of those otherwise lawful operations.
In addition, the rights of residents have been held superior to the rights of trades and businesses in the same neighborhood, particularly where the business is nonessential and not dependent on a fixed location.11
To restate, the operations of GSE and its affiliates, in the judgment of the City Attorney's Office constitute a public nuisance. However, as set forth below, otherwise lawfully operating businesses such as GSE have been provided a reasonable time period to abate the nuisance and, in the instant case, the City Attorney's Office presently does not possess the requisite evidence to request relief beyond what is already anticipated.
B. Relief Imposed by the Courts.
A civil public nuisance action, under Saint Paul Legislative Code Chapter 45 and Minnesota Statutes Section 617.80 et. seq., specifically entitle the City to injunctive remedies to abate nuisances. Listed acts constituting a nuisance include "violation by a commercial enterprise of local or state business licensing regulations, ordinances, or statutes prohibiting maintenance of a public nuisance as defined in section 609.74 [of the state criminal code] or the control of a public nuisance as defined in section 609.745."12
Minnesota Statutes Section 617.81, subd. 4, requires a written notice to the owner of the property and all known interested parties that allows the recipient(s) to abate the conduct constituting the nuisance or to otherwise resolve the matter with the City Attorney within 30 days. Failure to abate the nuisance or otherwise resolve the matter "may result in the filing of a complaint for relief in district court that could, among other remedies, result in enjoining the use of the building for any purpose for one year . . ."13 "One of the legislature's purposes in enacting the public nuisance statute was to encourage property owners to abate the nuisance themselves."14 Failure to comply with a written notice of a nuisance authorizes the prosecuting attorney to seek a temporary injunction by verified petition to the district court.15 Upon proof of a public nuisance, the court may also issue a permanent injunction and enter an order of abatement.16
The question before the City Attorney is whether sufficient grounds exist
upon which to bring a public nuisance action. At present there exist sufficient
grounds upon which to bring a public nuisance action. GSE, however, has filed an
application to amend its air facility emissions permit with the MPCA to secure
approval for installation of a thermal oxidizer to abate odors coming from the
grain dryer. Further, GSE is presently negotiating a Stipulation Agreement with
the MPCA agreeing not to commit further violations of air emission and noise
standards in the future. GSE and its affiliated companies have also committed to
a City noise abatement plan. Finally, the City Attorney's medical expert has not
had the opportunity to complete the testing and analysis necessary to confirm a
causal connection between the air emissions associated with ethanol production
and the symptomology of the area residents.
Under these circumstances,
where significant abatement efforts have been initiated in terms of both odor
and noise, and a stipulation with the MPCA is currently being negotiated, it
would be premature to commence a civil abatement action under the City's local
ordinance. Any action would no doubt be contested by GSE, and any court would
more than likely allow GSE to complete its abatement efforts.
In a criminal action, the maximum penalties to which GSE or any of its affiliated companies would be subject are those associated with a misdemeanor. Whether to commence a criminal action is a question which arises after GSE's failure to comply with abate orders. The criminal prosecution analysis is set forth in greater detail in Part 3 of this Report.
III. MPCA: ODOR AND PUBLIC HEALTH
GSE's operations
are regulated by the MPCA which is adamant that it does not regulate odor
emissions. The City Attorney's Office has investigated MPCA's regulatory
requirements, both generally and in the instant case, and has concluded that
here MPCA should exert its authority to address the odor problem. Set forth
below is an analysis of how the City Attorney reaches this conclusion followed
by an analysis of the Minnesota Environmental Rights Act ("MERA") which provides
additional legal relief for the City against GSE and, if applicable, the
MPCA.
In 1995, the MPCA rescinded its Ambient Odor Control regulations, which were
originally incorporated into Minnesota's State Implementation Plan ("SIP") in
the 1970s. The MPCA purged these regulations, noting in its submission to the
EPA that such regulations were never intended to achieve air quality standards,
or other CAA goals, and are unnecessary for such purposes.17
As a result, on July 24, 1995, Minnesota's SIP was amended to remove MPCA's odor
regulations.
Notwithstanding the fact that the MPCA eliminated its odor
control regulations, Minnesota Statutes Section 116.0713 indirectly regulates
odors resulting from feedlot operations. The MPCA feedlot program, however,
focuses on hydrogen sulfide emissions, and not specifically odor. This is true
despite the fact that hydrogen sulfide levels are not always an adequate
indication of an odor problem. The MPCA does nevertheless have the authority to
address odor concerns in certain broader contexts.
Pursuant to Minn. Statutes Section 116.061, a "person" who controls an existing emission source is required to notify the MPCA of "excessive or abnormal unpermitted emissions that:
Subsequent to this notice, the responsible party is required to "minimize the
emissions or abate the air pollution and obnoxious odors caused by the
emissions."18
The question arises as to what constitutes "unpermitted emissions." One
reasonable interpretation could be that "unpermitted emissions" are those
emissions not regulated by statute, rule or permit; in other words, emissions
other than the "criteria pollutants" regulated by the MPCA. Therefore, if the
odor is caused by pollutants which are not "criteria pollutants", then
the responsible party must notify the MPCA of the obnoxious odor and the MPCA
must ensure abatement of the obnoxious odor.
MPCA is extremely reluctant
to get involved with local odor issues. Minnesota Statutes Section 116.061 was
raised during the City Attorney's meeting with the MPCA. It was noted that
obnoxious odor is subject to abatement and MPCA's authority if the odor emanates
from unpermited emissions. MPCA's staff and its legal representatives
acknowledge the statute, but made no commitment to assist the City in terms of
odor alone. MPCA staff did indicate the agency's concern regarding potential
adverse public health effects and indicated a willingness to work the City in
this regard.
Additionally, the MPCA is granted expansive powers when addressing a threat
to public health. Therefore, if the odor concerns are found to directly impact
upon the health of the surrounding community, the MPCA has the authority to take
appropriate action to address this threat to the public's health. Under
Minnesota Statutes Section 116.11, the MPCA may enjoin an activity if
there is an imminent and substantial danger to the health and welfare" of
persons. Further, the MPCA may take such action without notice, and prior to
affording the owner of the emission source a right to a hearing. The inquiry
under Minn. Statutes Section 116.11 is whether MBC's activities could be said to
pose an "imminent and substantial" threat to the health of the persons in the
surrounding community. This burden is exacting, and would require proof that the
emissions from GSE posed a substantial danger to the health of persons affected
by the facility's emissions. This proof would no doubt entail a significant body
of scientific and medical evidence establishing a causal connection between the
GSE emissions and the adverse public health affects. Dr. Schiffman's proposed
work may establish the "imminent and substantial" threat to the public
health.
Whether or not MPCA is responsible to abate odor under Minn.
Statutes §116.061 may be open to legal debate. Regardless, any legal action
under this section may be premature because of the abatement efforts being made
by MBC and its affiliated companies in terms of odor, air emissions and noise.
Further any actions under Minn. Statutes §116.11 would be premature until
further evidence establishing a causal connection between the emissions from the
GSE operations and the symptoms of area residents is obtained. If odor and
adverse public health effects persist into the future, both of these statutory
provision may serve as a basis for an action against GSE.
IV. MINNESOTA ENVIRONMENTAL RIGHTS ACT
In 1971,
the legislature enacted the Minnesota Environmental Rights Act (MERA), entitling
any political subdivision of the state to initiate a civil cause of action for
"the protection of the air, water, land, or other natural resources located
within the state of Minnesota."19
Relief available under MERA includes "declaratory relief, temporary and
permanent equitable relief."20
In addition a court "may impose such conditions upon a party as are necessary or
appropriate to protect the air, water, land or other natural resources."21
MERA provides additional legal relief against GSE and, if necessary, against the
MPCA.
Any cause of action under MERA must first establish two elements by prima facie evidence: a "natural resource" capable of protection; and "pollution, impairment or destruction" of that resource. Freeborn County by Tuveson v. Bryson, 210 N.W.2d 290 (Minn. 1973). Minnesota Statutes Section 116B.02 defines "natural resource" and "pollution, impairment, or destruction" in the following manner:
Subd. 4. "Natural resources" shall include, but not be limited to, all mineral, animal, botanical, air, water, land, timber, soil, quietude, recreational and historical resources. Scenic and esthetic resources shall also be considered natural resources when owned by any governmental unit or agency.Subd. 5. "Pollution, impairment or destruction" is any conduct by any person which violates, or is likely to violate, any environmental quality standard, limitation, rule, order, license, stipulation agreement, or permit of the state or any instrumentality, agency, or political subdivision thereof which was issued prior to the date the alleged violation occurred or is likely to occur or any conduct which materially adversely affects or is likely to materially adversely affect the environment; provided that "pollution, impairment or destruction" shall not include conduct which violates, or is likely to violate, any such standard, limitation, rules, order, license, stipulation agreement or permit solely because of the introduction of an odor into the air.
(Emphasis added).
In terms of GSE's operations, the affected "natural resources" are air and quietude. Both are expressly included in the definition of "natural resource." The burden of providing prima facie evidence establishing that these natural resources are capable of protection should not be difficult, since both are expressly protected by environmental standards promulgated under state and federal law. Air quality is protected under the CAA and Minnesota's SIP. Quietude is protected under both state law and the City's ordinances.
The next threshold is to establish the "pollution, impairment or destruction"
of a "natural resource." First, a party advancing a MERA claim may establish
that the offending party "violates or is likely to violate an environmental
quality standard, rule, or simply the provisions of its permit."22
A MERA action is not available, however, "solely because of the introduction of
an odor into the air."23
An alternative approach to establishing "pollution, impairment or destruction"
is to demonstrate that the offending party's action are "materially and
adversely affects or is likely to effect" the environment.24
Under this approach, the City may draw odor issues back into the equation. The
limitation entailed in bringing an action based upon odor issues appears to
apply only to those claims based on violations of "any such standard,
limitation, rule, order, license, stipulation agreement or permit," and not
action based upon "materially adversely" affecting the environment.
In
determining whether conduct "materially adversely affects" the environment under
Minnesota Statutes Section 116B.02, subd. 5, five non-exclusive factors are may
be considered by courts. These factors include:
Once a prima facie case has been established, through either course of proof, it is incumbent upon the offending party to rebut such evidence or offer an affirmative defense.
If the claim is based on allegations the conduct "materially adversely affects" the environment, an affirmative defense may be asserted that "no feasible alternative exists," and that its actions promote the safety, health or the welfare of the community.26 A court will more than likely balance the utility of the offending party's conduct against the gravity of the harm caused to a natural resource.27 MERA does not permit an affirmative defense under circumstances where environmental regulations or permits have been violated.
MERA also provides a second defense -- compliance with an existing regulation, rule or permit. This defense can be overcome, however, if the party asserting the claim can demonstrate that the permit or standard in question is inadequate for the purposes of the protecting a particular natural resource.28 Consequently, the defense of compliance with the law is available only after a court has determined that the standard or permit in question is insufficient to protect the natural resource as defined in Minnesota Statutes Section 116B.02, subd. 4.
In the present case, a sufficient factual basis exists to advance a claim against GSE based upon a violation of an "environmental quality standard, limitation, rule, order, license, stipulation agreement, or permit." On July 21, 2000, and July 26, 2000, MPCA staff conducted an inspection of MBC's facilities and documented multiple permit violations. These violations range from reporting and monitoring deficiencies to evidence that GSE will exceed its permitted emission limitation for criteria pollutants. In addition, both the MPCA and LIEP conducted noise tests which demonstrated that the plant operations were emitting noise in excess of both the state and City noise standards. Under these circumstances, a MERA action may well be appropriate to protect two specific natural resources, air and quietude. However, GSE and MPCA are negotiating a Stipulation Agreement to address MBC's violation of its air emissions permit and noise standards, which diminishes the efficacy of advancing a MERA action at this time.
In addition to bringing an action under MERA against an offending party, MERA permits political subdivisions to bring an action against a state agency for failing to protect a natural resource. Minnesota Statutes Section 116B.10 provides that a political subdivision,
may maintain a civil action in the district court for declaratory or equitable relief against the state or any agency . . .where the nature of the action is a challenge to an environmental quality standard, limitation, rule, order, license, stipulation agreement, or permit promulgated or issued by the state . . . for which the applicable statutory appeal period has elapsed.
In Minnesota, the MPCA is responsible for the protection of Minnesota's environment, and is the primary permitting agency with respect to air emissions, including permitting MBC's operations.29 In addition to the MPCA's role in environmental protection, a citizen suit provision has been enacted, which provides a private cause of action in protecting the environment.
This provides a cause of action, which may enable a party to effectively argue that an "environmental quality standard, limitation, rule, order, license, stipulation agreement, or permit promulgated or issued by the state" does not adequately protect a natural resource. In addition, this provision also gives rise to a party's ability to challenge any future stipulation agreement as inadequate.
In advancing such a claim, a party would have the burden of proving that the environmental quality standard, limitation, rule, order, license, stipulation agreement, or permit is inadequate to protect the air, water, land, or other natural resources located within the state from pollution, impairment, or destruction. The plaintiff shall have the burden of proving the existence of material evidence showing said inadequacy of said environmental quality standard, limitation, rule, order, license, stipulation agreement, or permit.30
Under this standard, the City would be required to prove that the MPCA's regulation of MBC's operations is inadequate to protect a "natural resource" from "pollution, impairment or destruction." Furthermore, the City could also bring an action against any state agency for failure to protect a "natural resource" from "pollution, impairment or destruction." For example the Minnesota Department of Health has the authority to "establish and enforce health standards for the protection and the promotion of the public's health."31 This specifically includes "environmental health hazards." The Department has not promulgated regulations pertaining to odor which may pose an environmental health hazard.
In short, MERA provides additional legal leverage against GSE if it does not readily abate the public nuisance and upon the MPCA if it fails to appropriately regulate and ensure abatement of the public nuisance. Albeit, any action against a state agency will have to be well documented and advanced based upon identifiable health and environmental concerns.
V. CLEAN AIR ACT (CAA) CITIZEN SUITS
Similar to
MERA, the CAA provides for citizen suits against persons alleged to be violating
emission and/or operating standards or limitations under Title III of the CAA,
and similarly provides legal relief against the responsible regulatory
authority. The Clean Water Act (CWA) has an identical citizen suit provision.
The violations under the CAA may arise from non-compliance with EPA or state
orders, as well as violations of PSD requirements. Pursuant to Section 304 (42
U.S.C. § 7604) of the CAA, a civil action may be commenced against a party that
it is in violation of an emission standard or limitation. 42 U.S.C. Section 7604
also permits the City to bring an action against the EPA for "a failure of the
Administrator to perform any act or duty under this Chapter [CAA] which is not
discretionary . . .." This provision authorizes citizen suits, in the form of a
mandamus action against the EPA when it fails to enforce "specific
nondiscretionary clear-cut requirements" of the CAA.32
Therefore, under the CAA citizen suit provision, the City would be required to
allege a specific violation of the CAA in order to effectively argue that the
EPA is failing to enforce a specific standard.
Under the citizen suit provisions monetary penalties up to $100,000 may be assessed, along with injunctive relief.33 In addition, a claimant may be awarded the costs it incurs as a result of litigation, including attorney fees. 42 U.S.C. § 7604 (d). In advancing a citizen suit, the party is required to provide the EPA, the State and MBC with 60 days notice prior to commencing an action pursuant to Section 304(b)(1)(A). This allows the relevant agencies to take action.34
The citizen suit provision of the CAA has a "diligent prosecution" restriction, which effectively acts as a bar against citizen suit claims in certain circumstances. 42 U.S.C. Sec. 7604 (b)(1)(B). 42 U.S.C. Section 7604 (b)(1)(B) states that no citizen action may be commenced,
if the Administrator or State has commenced and is diligently prosecuting a civil action in a court of the United States or a State to require compliance with the standard, limitation, or order, but in any such action in a court of the United States any person may intervene as a matter of right.
(Emphasis added).
As such, "diligent prosecution" by the MPCA
could potentially act as a bar against any action brought by the City under the
CAA. The question, therefore, is whether the MPCA can be said to be "diligently
prosecuting" GSE for alleged violations of either emission limits or operating
standards.
On two separate occasions in July 2000, the MPCA observed and recorded a number of GSE operating and potential emission violations. These violations give rise to a citizen-based cause of action.35 The MPCA is currently negotiating a Stipulation Agreement with GSE. This effort by the MPCA potentially curtails the effectiveness of the City advancing a citizen suit under the CAA. The plain language of 42 U.S.C. Section 7604 (b)(1)(B) would appear not to preclude the City from asserting an action in the instant situation. A citizen suit by the City is only precluded if the MPCA was advancing a "civil" action in a "court" of law. In the present case, the GSE has not commenced an action in any court of law. Rather, the MPCA has taken administrative action against MBC in the form of a letter documenting alleged violations, dated August 16, 2000. Notwithstanding the seemingly unambiguous language contained in 42 U.S.C. Section 7604 (b)(1)(B), there have been disagreements within the various federal Circuits on how to address the question of whether a state is "diligently prosecuting" violations, particularly where a state agency is taking only administrative action.
Although the Supreme Court has not yet resolved the controversy in question,
it has noted that the various citizen suit statutes are "meant to supplement
rather than to supplant government action."36
This statement, however, provides little guidance as to the manner in which one
interprets "action." The method of administrative consent-prosecution currently
being advanced by the MPCA has been considered "diligent" in some circuits,
including the Eighth Circuit, in the context of both the Clean Water Act and
Clean Air Act, which as noted above have identical citizen suit provisions and
diligent prosecution standards.37
For this reason, the relevant CWA and CAA provisions can be analyzed in
conjunction with one another.
In Arkansas Wildlife Federation
v. ICI Americas, Inc., 29 F.3d 376, 380 (8th Cir. 1994), the Eighth Circuit
Court of Appeals held that Arkansas' Department of Pollution Control and Ecology
was "diligently prosecuting" Clean Water Act violations through appropriate
administrative processes. The Court noted that "allowing suits. . .despite a
state's diligent efforts at administrative enforcement, could result in undue
interference with, or unnecessary duplication of, the legitimate efforts of the
state agency."38
Also in the Eighth Circuit, a District Court concluded that CWA citizen suits
may be barred even absent formal administrative proceedings by a state, if the
state is found to be taking appropriate "action."39
The Williams Court relied, in part, on another provision in the CWA,
which purportedly limited CWA citizen suits where state administrative action
was pending.40
In the context of the CAA's citizen suit provision, another Court in the Eighth Circuit arrived at the same conclusion as the ICI and Williams courts. In Citizens Legal Environmental Action Network, Inc. v. Premium Standard Farms, Inc., February 23, 2000 (W.D. MO), the Court held in the context of the CWA and the CAA, citizens may not sue when "the EPA or the relevant state has "commenced and is diligently prosecuting a civil, criminal or administrative action." (Emphasis added). Other Circuits, however, have taken a more literal approach to interpreting action "in a court" as stated in 42 U.S.C. Section 7604.
In the context of the CAA, other Circuits have held that a state agency's administrative action does not preclude a citizen suit under the CAA. In Texans United for a Safe Economy Education Fund v. Crown Central Petroleum Corp., 207 F.3d 789 (5th Cir. 2000), the Fifth Circuit Court of Appeals noted that the plain meaning of "civil action" and "court" in Section 304 of the CAA does not include administrative or non-judicial proceedings. In Friends of the Earth v. Consolidated Rail Corp., 768 F.2d 57, 59 (2d Cir. 1998), plaintiffs brought a citizen suit under the CWA. The Second Circuit held that administrative enforcement actions by the New York State Department of Environmental Conservation did not preclude a citizen suit. The Court noted that it would be inappropriate to expand the meaning of "action in a court of the United States, or a state" to include administrative action.41 Furthermore, in Sierra Club v. Chevron U.S.A., Inc., 834 F.2d 1517 (9th Cir. 1987), the Ninth Circuit Court of Appeals held that citizen enforcement action under the CWA was not precluded by nonjudicial action by a state agency.
As is apparent, there is not a consensus among the Circuits as to what
constitutes "diligent prosecution" so as to bar citizen suits under Section 304
of the CAA. In fact, some courts have taken a hybrid approach. In Baughman v.
Bradford Coal Co., Inc., 592 F.2d 215 rev. denied (3d Cir. 1979), the
Third Circuit Court of Appeals concluded that if agency action is functionally
equivalent to an action in a court, than a citizen suit may be barred under the
CWA. In others words, the Court concluded that if the relevant state agency is
empowered to effectively enforce and grant appropriate relief and is doing so,
this would effectively bar a private action by a citizen.42
The Baughman Court's position was subsequently endorsed in SPIRIG v.
Fritzcje, Dodge & Olcott, Inc., 759 F.2d 1131 (3d Cir.
1985).
If a Court adheres to the principle that administrative
action is sufficient to bar a citizen suit, with the appropriate supporting
documentation, the City might be able to argue that the MBC's alleged violations
will continue despite its stipulated agreement with the MPCA.43
Further, the City could potentially argue that the MPCA's proposed penalties are
drastically outweighed by the economic benefits MBC would reap by not complying
with a stipulation agreement.44
In order to sufficiently advance such a claim, a more comprehensive
understanding of the MPCA's proposed agreement with MBC will need to be
evaluated.
The ability of the City to successfully advance a citizen suit depends upon whether the MPCA's actions are considered sufficient to act as a bar to a citizen suit. While the answer is to some degree unclear, the Eighth Circuit has interpreted the "diligent prosecution" standard in some instances to include state administrative action. In light of the MPCA's enforcement actions, the City's ability to assert a citizen suit against GSE or the EPA, at this time, is problematic.
VI. WRIT OF MANDAMUS
A cause of action exists
where a party may petition the courts for a writ of mandamus requesting
that the court "compel the performance of an act which the law specially enjoins
as a duty resulting from an office, trust or station."45
In order to secure such a writ, the petitioner must satisfy a demanding burden
of proof. In order to obtain mandamus relief the City would be required to
demonstrate the following three elements:
. The failure of an official duty imposed by law;
. A public wrong that
injures the City; and
. No other adequate remedy at law.46
In this instance, the City could possibly request that the court order the
MPCA to enjoin MBC's operations on the basis of its violation of air emission
and noise standards. In terms of odors, there are not any specific laws or
regulations, which require the MPCA to act. In Northwoods Environmental
Institute v. Minnesota Pollution Control Agency, 370 N.W.2d 449 (Minn. App.
1985), the Northwoods Environmental Institute ("NEI") sought mandamus relief to
compel the MPCA to rescind a permit issued to a company. The court held that the
MPCA had no such duty to rescind the permit and noted that the NEI had an
adequate remedy at law under MERA. In this instance, MERA may be a more viable
cause of action than requesting mandamus relief.
I. INTRODUCTION
As authorized by Chapter 91
of the Saint Paul Legislative Code, the City Council has specifically requested
that the City Attorney examine the available facts and determine whether there
is a sufficient legal basis to proceed with criminal prosecution for the
activities surrounding the operations of West 7th Street plant. The requested
analysis and conclusions are provided below.
II. FACTUAL BACKGROUND
In addition to those
facts as stated in the preceding Part 1 of this report, certain facts and events
have particular significance in determining whether there is a legally
sufficient basis to institute criminal proceedings in this matter. Those facts
include information received through public testimony and written submissions to
the City Council following the October 18, 2000 public hearing, together with
consultations with and testing by experts.
As previously noted, chief among those complaints were allegations of malodorous emissions, claims of associated physical ailments and complaints of excessive noise emanating from those enterprises. The following will analyze the legal sufficiency to institute criminal proceedings based upon those facts and supplemental information.
A. Odor Emissions and Claims of Associated Physical Ailments
The claims of odor emissions and associated physical ailments have been fully analyzed in Part 1. Based upon the facts which I have examined, it is my opinion that there does not currently exist a sufficient legal basis to institute criminal litigation regarding those complaints. As set forth in the analysis regarding noise, criminal prosecution is reserved after reasonable and clear efforts to abate the nuisance have either failed or willfully been ignored by the offending party. Although the following analysis applies to the noise complaints, the basic principles apply to the odor, emissions, and health issues as well.
B. Excessive Noise Complaints
In regard to the excessive noise complaints, noise level tests were conducted on three separate occasions with the following results:
To date, GSE and its affiliates remain in violation of state regulations and city noise ordinance.
III. APPLICABLE CRIMINAL LAWS
Saint Paul
Administrative Code Section 293.09(a) proscribes noise levels exceeding 55 dBA
from 10:00 p.m. to 7:00 a.m. and 65 dBA from 7:00 a.m. to 10:00 p.m. in
classification No. 1 neighborhoods. Under Saint Paul Administrative Code,
violation of this provision is a misdemeanor which carries a maximum fine of
$1000 or a maximum workhouse term of 90 days or both.
Minnesota Statutes
Section 116.07 empowers the MPCA to adopt standards regarding and proscribing
noise levels. Minnesota Statutes Section 115.071 imposes upon local enforcement
officials the duty to enforce laws related to environmental protection,
Minnesota Statutes Chapter 116 included, and specifically allows for misdemeanor
prosecution for violations of these provisions. Therefore, the City of Saint
Paul has the authority to enforce the State of Minnesota Noise Regulations which
include additional sound level standards. Therefore, the City of Saint Paul has
the authority to enforce the State of Minnesota Noise Regulations which include
additional sound level standards.
IV. POTENTIAL CRIMINAL LIABILITY OF CORPORATE
OFFICERS
Generally, a corporate officer may be held criminally
liable: (1) for actually perpetrating the criminal act, (2) for aiding and
abetting the criminal act, or (3) under the "responsible corporate officer"
doctrine. Each basis for liability will be discussed below.
A. Personal Participation in the Criminal Act
A corporate officer may, of course, be held criminally liable if that officer personally participated in the "wrongful, injury producing act." In order to be personally liable, "the evidence must show that the individual either directs or participates in the violations."50 In other words, if a corporate officer personally carries out the act constituting the violation or personally directs another to do the same, then that corporate officer may be held criminally liable.
1. Aiding and Abetting
A corporate officer may also be held criminally liable for aiding and abetting in the perpetration of a crime. Under Minnesota law, a person may be held criminally liable as aider and abettor to a crime without personally or actively participating in the overt acts constituting the violation.51 The Minnesota Supreme Court has affirmed the conviction of a corporate officer as an aider and abettor where the officer played at least some knowing role in the commission of the criminal act, knew that the act was illegal and took no steps to thwart its completion.52
2. Responsible Corporate Officer Doctrine
The application of the "responsible corporate officer doctrine" is confined to select offenses and select defendants. Under this civil law theory, a corporate officer may be held personally liable for violations of public welfare statutes53 or ordinances "which impose strict liability by plain language and intent." In Matter of Dougherty,54 the Minnesota Court of Appeals held that the responsible corporate officer doctrine "imposes liability on individuals due to their responsible relationship to a violation" despite their not having personally participated in the actual act.55
The Dougherty court identified three elements that must be satisfied in order for responsible corporate officer liability to attach: (1) the individual must be in a position of responsibility which allows the person to influence corporate policies or activities; (2) there must be a nexus between the individual's position and the violation in question such that the individual could have influenced the corporate actions which constituted the violations; and (3) the individual's actions or inactions facilitated the violations."56
Arguably, under Minnesota law a corporate officer may also be held criminally liable under the responsible corporate officer doctrine for the culpable acts of the business. Although the Minnesota appellate courts have not addressed the applicability of that theory in a criminal context, the Dougherty court stated in dicta stated that though civil liability may be more easily attainable, responsible corporate officer criminal liability may be appropriate in certain circumstances.57
B. Serialized Prosecution
As discussed above, noise monitoring evidence shows that on three dates, noise levels from the plant exceeded those permitted by law. A more meaningful prosecution can be initiated if noise violations could be proven beyond a reasonable doubt to have occurred several times. In that event, theoretically, responsible parties could be prosecuted and sentenced for a series of noise violations occurring at different times and on different dates. The City could then credibly request sentencing that more appropriately reflects the number of violations and which provides greater incentive for responsible defendants to bring the enterprise into compliance in a timely manner. If continued noise monitoring reveals additional violations, such violations will serve as the basis for serialized prosecution.
Clearly, the determination of whether officers' acts warrant liability under
the responsible corporate officer doctrine is fact specific and therefore
subject to the judgment of the trier of fact. However, further research and
investigation would be needed to determine the "nexus" or the extent to which
individual corporate officers were involved in the production operations of GSE,
MBC and MG-CO2. This information must be obtained before a good faith
prosecution could be initiated.
V. LEGAL SUFFICIENCY TO
INSTITUTE CRIMINAL PROSECUTIONS
Whether there is a sufficient legal
basis to institute criminal litigation for allegations of excessive noise, and
against whom, has been thoroughly examined. Significantly, the facts demonstrate
that tests at four different locations on three separate occasions revealed that
each of the three enterprises generated noise levels which exceeded those
permitted by state and local law. Furthermore, it may be reasonably presumed
that ongoing violations have occurred and continue to occur on a daily
basis.
Based upon this, I have concluded that a sufficient legal basis exists to institute misdemeanor prosecutions against GSE, MBC, MGI, and potentially their officers and directors for the three verifiable violations of the City's noise ordinance. Nonetheless, I have concluded that at this time it is appropriate to hold in abeyance any decision about whether to institute criminal prosecutions against any of the three enterprises and/or their employees or corporate officers.58 The following are the reasons for my decision.
LIEP and MPCA are currently involved in ongoing discussions with the three enterprises to correct their excessive noise levels. Specifically, MPCA and the management of the respective enterprises are presently negotiating a stipulation which will bring them into compliance with state noise emission standards. Furthermore, a schedule whereby those enterprises will come into compliance with city's noise ordinance has been accepted by LIEP. See Appendix Q.
Furthermore, additional time taken to monitor noise levels, time to isolate and to specifically identify the sources of noise violations, and time to eliminate other potential sources of the offending noise levels improves the City's position with respect to any prosecution concerning noise violations by GSE, MBC and/or MG-CO2. This deliberation also allows the opportunity to develop solutions that will assist any violating entity or individual in bringing the facilities into compliance.
As set forth above in the analysis regarding public nuisance and odor emissions, extensive testing of abatement proposals is required prior to the contemplation of criminal prosecution.
Most prosecutions initiated by regulatory enforcement agencies such as LIEP are primarily undertaken as a last resort to obtain compliance with applicable laws. Here, the opportunity for the plant and its officers and employees to comply with its proposed noise abatement schedule, and thereby avoid virtually certain criminal prosecution for their past and ongoing violations, serves as a strong incentive to come into and remain in compliance with the City's noise standards. Each enterprise will be closely monitored by LIEP to assure their compliance with that abatement schedule. Should it not be achieved, the City Attorney's Office retains the right to institute multiple criminal charges and seek appropriate criminal sanctions against any individual or entity which may be criminally liable.
I. RECOMMENDATIONS
While the City Attorney's
Office does not recommend immediate civil or criminal action against GSE or its
affiliates at this time, it recommends this Office continue preparation for a
civil action, with the approval of the City Council and the Mayor, or a criminal
action to be commenced when and if appropriate.
It is important for the City Council and for the people of Saint Paul to understand that there is a distinction between whether there is a sufficient factual basis upon which to bring either a civil or criminal action, and the likelihood of prevailing on such actions. There may be instances where a sufficient factual basis exists to commence the action, but as a practical matter, the strength of the facts and law do not merit bringing the action. Even where there is a substantial likelihood of prevailing on the action, the available remedies may not warrant bringing the action, because those remedies do not accomplish the City's objectives. In exercising my judgment on whether or not it is advisable to commence a criminal or civil action, I must carefully balance the City's objectives, the facts and the applicable/relevant law, the resources necessary to prosecute the criminal or civil action, and the likely outcome. Clearly, the objective for the City of Saint Paul is cessation of the odor and noise public nuisance as soon as reasonably possible.
Abatement efforts have been and are being taken in terms of odor, air emissions and noise. Currently, a Stipulation Agreement is being negotiated between GSE and its affiliates and the Minnesota Pollution Control Agency ("MPCA"). As the legal analysis suggests, a court is more than likely going to allow GSE and its affiliates a reasonable opportunity to abate the public nuisance. Given the significant abatement efforts that are ongoing, a civil public nuisance action at this time is premature. However, preparation by the City Attorney's Office for a possible civil or criminal action is necessary to ensure that the City Attorney's Office is ready for immediate legal action to obtain immediate judicial relief if either GSE and/or the applicable state regulatory agencies fail to properly and timely eliminate the odor and noise problems. Additionally, as the City Council can appreciate, continued intensive preparation by the City Attorney's Office should have the additional effect of spurring GSE and its affiliates to more speedily and comprehensively correct the problem rather than deal with the City of Saint Paul in a legal action.
Criminal prosecution occurs only after the failure by the offending party to
abate the public nuisance. The offending party must first be provided a clear
official notice and order to abate and a reasonable opportunity after the
official notice to abate. Consequently, criminal prosecution is an option only
when and if GSE and its affiliated companies or its officers fail to correct the
odor emissions or the noise problems. As set forth above, the noise problem
should be corrected in April, 2001. The timing of correcting the odor emissions
is dependent upon testing, the MPCA permitting process, the designing, the
engineering and finally the installation of the proposed thermal oxidizer. The
City Attorney's Office has full and complete discretion regarding criminal
prosecution and, here, makes no representation as to whether the matter will or
will not be criminally prosecuted now or in the immediate future.
The
City Council, GSE and its affiliated companies, and the general public should
not construe this Office's recommendation not to proceed with a public nuisance
action at this time to mean that the City Attorney does not consider the
problems associated with this ethanol plant to be an extremely important matter.
On the contrary, let me assure one and all that this Office is very concerned
about the current adverse environmental and physical health consequences arising
from GSE's and its affiliates' operations. Make no mistake, this Office stands
ready, willing and able to commence both criminal and civil actions in
connection with GSE's continued emission of obnoxious odors, air emissions in
excess of state standards, noise levels in violation of state and local
standards, or any other conduct which constitutes a threat to the public health
and safety or, which otherwise constitutes a public nuisance under state and
local law. In this respect, if directed to do so, the City Attorney intends to
closely monitor GSE's remedial and abatement efforts to ensure full and complete
compliance with applicable law.
Based upon the foregoing my Office recommends the following course of action:
II. CONCLUSIONS
This Report has identified
several violations of law, both criminal and civil, concerning which I have
concluded that a sufficient legal basis exists to institute litigation. Further,
it is my belief that under the St. Paul City Charter and Administrative Code,
the City Attorney is granted the authority to independently determine whether to
institute such proceedings on behalf of the City. Nonetheless, I have concluded
that it is inappropriate to do so in this matter without the specific direction
by the City Council via resolution, and with the approval or acquiescence of the
Mayor. The complex and myriad public policy issues surrounding the propriety of
initiating such civil litigation, whether now or at a future date and under what
circumstances, is properly a decision that is within your exclusive purview as
the City's policy makers. Therefore, I will await your direction before
undertaking any appropriate civil action. With respect to any criminal action,
the decision to pursue the same remains solely within my discretion, and as I
have earlier indicated, the circumstances are not appropriate to commence a
criminal prosecution at this time.
It was the goal of the City Attorney to provide the City Council with a comprehensive factual basis and sound legal analysis upon which to make future decisions regarding GSE and its operations. The City Attorney would note, that if the City Council desires to complete further analysis regarding the public health effects of emissions from GSE's operations, or to further pursue any civil or criminal actions, it would be necessary to appropriate additional funds. The City Attorney appreciates the opportunity to assist the City Council with respect to this important matter. The City Attorney remains available for any questions which members of the City Council may have regarding this Final Report.
1. Minn. Stat. § 239.761 and § 239.791. In a basic sense, ethanol is made by fermenting and distilling simple sugars. The most prominent use of ethanol in the United States is as an additive in gasoline. Ethanol is produced and consumed mostly in the Midwest, where corn, which is the primary feedstock for ethanol production, is produced. The initial stimulus to ethanol production in the mid-1970s was the drive to develop alternative and renewable supplies of energy, thus reducing the nation's dependence upon foreign oil. Further fuel ethanol production gained broad support from corn producing states anxious to expand the market for their commodity. More recently, the use of fuel ethanol has been stimulated by the Clean Air Act Amendments of 1990, which require oxygenated or reformulated gasoline to reduce emissions of carbon monoxide (CO) and volatile organic compounds (VOCs) in certain instances. See CAA Title II Part A.4. The only civil nuisance action currently authorized by state statute that can result in an award of damages is a private nuisance action, which is brought by affected property owners. See Hill v. Stokely-Van Camp, Inc., 109 N.W.2d 749, 752 (Minn. 1961) ("A nuisance may at the same time be public and private, but the distinction must be kept in mind in determining the redress available as to each."). Civil public nuisance actions previously were available by state statute to a prosecuting attorney for the jurisdiction where a nuisance has occurred, if requested by affected residents or neighborhood organizations. Minn. Stat. § 617.89 (1999). This statute, which allowed injunctive relief and damages, however, was repealed, effective August 1, 1999. Minn. Laws 1996, c. 453, § 3.
5. Public nuisances justifying injunctive relief and abatement under Minn. Statutes Section 617.80 et seq. are limited to situations where there is "proof of two or more separate behavioral incidents of one or more of the [listed acts constituting nuisance], committed within the previous 12 months in the building[.]" Minn. Stat. § 617.81(2).
6. See Excelsior Baking Co. v. City of Northfield, 77 N.W2d 188, 192 (Minn. 1956) ("Nuisance is not a static concept and that is particularly true with respect to nuisance in fact. A pursuit which once was not a nuisance, may subsequently, through evolutionary changes in the surrounding social and economic conditions, become a nuisance in fact.").
7. Saint Paul Legislative Code, § 231.01(1); Minn. Stat. § 609.74(1).
8. CRIMJIG 24.35 sets forth the elements of a public nuisance action: "First, the defendant acted intentionally [or failed to perform a legal duty] . . . second, by such act or failure to perform a legal duty, defendant maintained or permitted a condition which unreasonably annoyed, injured, endangered the safety, health, morals, comfort and repose of any considerable number of members of the public. Third, defendants' act(s) took place on [DATE]. If you find that each of these three elements has been proved beyond a reasonable doubt, defendant is guilty of public nuisance . . . "
9. See Minn. Stat. § 609.74 (Advisory Committee Comments).
10. Sletten v. City of Maplewood, 1999 WL 595368 (citing Penland v. Redwood Sanitary Sewer Serv. Dist., 965 P.2d 433, 438 (Or. App. 1998) ("regulatory compliance does not preclude a determination that its operation constitutes a nuisance")).
11. Robinson v. Westman, 29 N.W.2d 1, 7 (Minn. 1947).
14. City of St. Paul v. Spencer, 497 N.W.2d 305, 308 (Minn. App. 1993).
17. See Federal Register Volume 40, Number 100, Page 27411-27414.
24. See generally MPIRG v. White Bear Rod and Gun Club, 257 N.W.2d 762 (Minn. 1977).
25. State by Schaller v. County of Blue Earth, 563 N.W.2d 260, 267 (Minn. 1997).
26. State by Drabik v. Martz, 451 N.W.2d 893 rev. denied (Minn. App. 1990).
28. See generally, MPIRG, 257 N.W.2d at 781-782.
30. Minn. Stat. § 116B.10 subd. 2.
31. Minn. Stat. § 144.05 subd. 1 (c).
32. Mountain States Legal Foundation v. Costle, 630 F. 2d 754 (C.A.10 1980).
34. Friends of the Earth v. Potomac Elec. Power Co., 546 F. Supp. 1357 (D.C.D.C. 1982).
36. Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Foundation, 484 U.S. 49, 60 (1987).
37. See CWA 33 U.S.C. Sec. 1365 (b)(1)(B).
39. Williams Pipeline Co. v. Bayer Corp., 964 F. Supp. 1300, 1321 (S.D. Iowa 1997).
40. See 33 U.S.C. § 1319 (g)(6)(A)(ii).
43. See generally Friends of the Earth v. Consolidated Rail Corp., 768 F.2d 57 (2nd Cir. 1985).
44. Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 120 S.Ct. 693, (U.S. 2000).
46. Demolition Landfill Services, L.L.C. v. City of Duluth, 609 N.W.2d 278 (Minn. App. 2000).
47. Twin City Testing was selected and retained by GSE to conduct those noise tests.
48. Minn. R. 7030.0040 and St. Paul Legislative Code § 293.09.
49. Minn. R. 7030.0040 and St. Paul Legislative Code § 293.09.
50. Dougherty, Matter of, 482 N.W.2d 485, 488 (Minn.App. 1992) citing United States v. Wade, 577 F.Supp. 1326, 1341 (E.D.Pa. 1983) (citing Morgan v. Eaton's Dude Ranch, 239 N.W.2d 761, 762-63 (Minn. 1986)).
51. State v. Strimling, 265 N.W.2d 423 (Minn. 1978).
53. In Minnesota, a public welfare offense "occurs where a statute is intended to improve the common good and the legislature eliminates the normal requirement for culpable intent, resulting in strict liability for all those who have a responsible share in the offense." Matter of Dougherty, 482 N.W.2d 485, 489 (Minn.App.).
54. 482 N.W.2d 485, 488 (Minn.App. 1992).
55. Dougherty, at 489. Dougherty involved a determination that a public welfare offense had occurred where the violation of hazardous waste laws was alleged because they pervasively affect activities which threaten human health and safety as well as the environment."
57. In Dougherty, the Minnesota Court of Appeals stated: "imposing liability on corporate officers is especially appropriate in the civil context" Id. at 489.
58. Saint Paul City Charter Section 5.02 imposes upon the City Attorney the duty to represent the City in all causes in which the City is interested, and further grants the City Attorney the authority to exercise prosecutorial discretion.