Non-profit association has standing to challenge major North Dakota coal gasification facility; loses on merits

by Gary Taylor

Dakota Resource Council, et al. v. Stark County Board of County Commissioners
(North Dakota Supreme Court, June 7, 2012)

Great Northern planned to construct and operate a coal gasification facility on 8,100 acres of land in Stark County. Great Northern’s planned complex would include a coal gasification plant, chemical fertilizer plant, electrical power plant, coal mine, solid waste landfill, and facilities for manufacture and storage of hazardous, explosive, and odorous products. Great Northern submitted an application to the Stark County Zoning Commission (Commission) to change the zoning of the land from agricultural to industrial and to allow nine conditional uses of the land, including “[m]ineral and other substance exploration or excavation and mining [in] accordance with provisions of Sec. 6.10” of the Stark County Zoning Ordinance. The Commission scheduled a hearing and sent notice by certified mail to all persons who owned land within 200 feet of the boundaries of the proposed rezoned tract. Following the hearing, the Commission voted to recommend that the County Board of Supervisors (Board) approve the application, conditioned upon Great Northern obtaining all necessary local, state, and federal permits or approvals. The Board subsequently approved the application to rezone the property from agricultural to industrial and approved the requested conditional uses. The Board’s approval was subject to several express conditions, including a requirement that Great Northern “obtain all the necessary local, state and federal approvals, licenses and permits relative to the operation of the coal mine.”

The Dakota Resource Council (Council) is a membership-based non-profit corporation which, among other things, works for preservation of family farms, regulation of coal mining and oil and gas development, protection of ground water and clean air, and sound management of solid and toxic wastes. Neighbors United is an unincorporated association which promotes the protection of farming and ranching. The Council, Neighbors United, and several individuals who owned land near the rezoned tract appealed the Board’s decision to the district court. The district court initially determined that the Council, Neighbors United, and the individual landowners had standing to challenge the Board’s decision, but the district court affirmed on the merits the Board’s decision to rezone the property and allow the conditional uses.

The Council, Neighbors United, and landowners appealed.  The Board and Great Northern cross-appealed, arguing that the Council lacked standing to appeal the Board’s decision to the district court.

Standing.  The North Dakota Supreme Court noted at the outset that “standing is the concept used to determine if a party is sufficiently affected so as to insure that a justiciable controversy is presented to the court.”  A not-for-profit association such as the Council that has not suffered an injury itself must satisfy a three-pronged test to demonstrate standing: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit. In addition, a nonprofit membership corporation has standing to seek judicial review on behalf of its members, of governmental or municipal regulations directly affecting such members.  The Board and Great Northern challenged the Council’s standing only on the first prong of the test.  The Court affirmed the district court’s conclusion that the Council had standing in this case, at the same time acknowledging that it presented a “close question.” The Stark County Zoning Ordinance requires that, when a proposed amendment to the Zoning Ordinance and Map affects a property use, all property owners within 200 feet of the affected property must be notified of the hearing by personal service or certified or registered mail. In this case, the record demonstrated that at least two individuals identified as Council members received notice of the scheduled hearing from Stark County by certified mail because they owned property within 200 feet of the proposed rezoned tract.  The Court saw the notice requirement “effectively [as] a legislative determination that landowners within 200 feet of the proposed rezoned property have a significant, protectable interest in the Board’s decision whether to grant an application to rezone the property and permit requested conditional uses.  The notice requirement established that Kenneth Kudrna and Randall Kudrna’s property interests were affected by the Board’s decision in a manner different than that suffered by the public generally, and they were more than just an elector and resident taxpayer affected by the decision….We do not believe it can be seriously argued that an 8,100 acre industrial complex, including a coal gasification plant, chemical fertilizer plant, electrical power plant, coal mine, solid waste landfill, and facilities for manufacture and storage of hazardous, explosive, and odorous products, would not adversely affect the Kudrnas’ use and enjoyment of their respective properties located within 200 feet of the proposed complex.”

Rezoning decision.  The Council contended that the Board failed to correctly interpret and apply the Stark County Zoning Ordinance. The Court began this analysis by noting that although interpretation of an ordinance presents a question of law fully reviewable on appeal, the interpretation of a zoning ordinance by a governmental entity is a quasi-judicial act, and a reviewing court should give deference to the judgment and interpretation of the governing body rather than substitute its judgment for that of the enacting body.  The Council argued that Great Northern was required by the ordinance to submit all application materials necessary to apply for a land disturbance permit.  The Board disagreed.  The Court disagreed, as well.  The Board, construing its Zoning Ordinance in light of the facts presented in this case, concluded that the Zoning Ordinance allowed the Board to issue a conditional use permit for mining operations, subject to the requirement that Great Northern ultimately comply with another section of the ordinance and obtain a land disturbance permit before commencing any exploration, excavation, or mining activities on the property.  The Board viewed the granting of the conditional use permit as merely the first step in a lengthy and complex process, and its approval of the conditional use was contingent upon Great Northern complying with all of the enumerated special conditions imposed upon the conditional use permit.  The Court concluded that “this is a reasonable interpretation of the Zoning Ordinance, and we give deference to the Board’s interpretation and will not substitute our judgment for that of the Board.”

The district court decision was affirmed in all respects.

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