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Friends of Great Salt Lake v. Utah Department of Natural Resources

Supreme Court of Utah

March 15, 2017

Friends of Great Salt Lake, et al., [1] Appellants,
v.
Utah Department of Natural Resources, et al., [2] Appellees, and Great Salt Lake Minerals Corporation, Intervenors/Appellees.

         On Direct Appeal Third District, Salt Lake The Honorable Deno G. Himonas No. 080902785

          Joro Walker, Charles R. Dubuc, Salt Lake City, for appellants Sean D. Reyes, Att'y Gen., Brent A. Burnett, Fredric J. Donaldson, Norman K. Johnson, Michael S. Johnson, Douglas J. Crapo, Assist. Att'ys Gen., for appellees Utah Dep't of Nat. Res., et al.

          Steven J. Christiansen, David C. Reymann, Cheylynn Hayman, Megan J. Houdeshel, Salt Lake City, for appellee Great Salt Lake Minerals Corp.

          Associate Chief Justice Lee authored the opinion of the Court, in which Chief Justice Durrant, Justice Durham, Judge Voros, and Judge Christiansen joined.

          Having recused themselves, Justice Himonas and Justice Pearce do not participate herein; Court of Appeals Judges J. Frederic Voros and Michele M. Christiansen sat.

          OPINION

          LEE, ASSOCIATE CHIEF JUSTICE

         ¶1 This case involves a series of legal challenges to the decision of the Division of Forestry, Fire and State Lands (Division) granting a mining lease covering a small portion of the Great Salt Lake. Plaintiffs-appellants, collectively known as Friends of Great Salt Lake (Friends), sought to halt the lease in various requests and petitions submitted to the Division or to the Utah Department of Natural Resources (Department). The agencies rejected them all. Friends then challenged those rejections in the district court. And in the district court proceedings Friends also sought leave to amend its complaint to raise additional constitutional and statutory arguments.

         ¶2 The district court affirmed the rejection of Friends' requests and petitions, denied in part Friends' attempt to amend its[3] complaint, and later dismissed the remaining arguments on summary judgment. Friends filed this appeal. It alternatively sought extraordinary relief in this court. We affirm in large part. And we deny Friends' request for extraordinary relief. Yet we reverse on one narrow question: We conclude that the Division was required to engage in "site-specific planning" as a prerequisite to the issuance of the record of decision approving the lease application in question, see Utah Admin. Code r. 652-90-300(2) (2007), and remand to allow the Department to decide on the appropriate remedy for the failure to perform such planning.

         I

         A

         ¶3 In 1996, the Division created a resource management plan for the Great Salt Lake. This "Mineral Leasing Plan for the Great Salt Lake" divided the lake into four leasing zones, with lands in all zones foreclosed from leasing until nominated by outside parties. The first zone-and the only one relevant here-was labeled "Open." This designation meant that "[n]o significant resource conflicts [were] identified." It also indicated that the area would be "[o]pen to hydrocarbon or mineral salt leasing with standard lease stipulations for Great Salt Lake environments."

         ¶4 One year later, the Division began the process of developing a comprehensive management plan for the Great Salt Lake, a process that included re-examining the previous year's mineral leasing plan. From 1998 to 1999, the Division invited public participation in formulating the new comprehensive management plan and received comments from interested parties, including some members of Friends. In 2000, the Division enacted a comprehensive management plan, which also incorporated the 1996 resource management plan.

         ¶5 Seven years later, in February 2007, the Great Salt Lake Minerals Corporation (Corporation) nominated 23, 000 acres for lease. This land fell under the "Open" zone of the resource management plan. In April, the Division invited the public to comment on what stipulations and restrictions should be applied to the lease. Numerous comments were submitted, including from Friends. In May, the Division opened up the nominated acreage to competitive bids. The Corporation's bid was accepted.

         ¶6 In early July 2007, the Division released a record of decision detailing the grounds for its decision to grant the Corporation the lease. And the Division concluded that granting the lease would not violate the comprehensive management or mineral leasing plans.

         B

         ¶7 Friends made three parallel, simultaneous attempts to halt approval of the Corporation's mining lease on the Great Salt Lake: (1) it petitioned the Department for "consistency review" of the Division's record of decision regarding the lease, asserting that the decision ran afoul of the state public trust doctrine and the Division's planning regulations; (2) it filed a request for agency action with the Division's director, asking the Division to "redo" its analysis or "undertake site-specific analysis" in furtherance of the Division's responsibilities to protect the public trust, and to determine how the leases should be changed and "implement those changes, " Request for Agency Action at 3; and (3) it petitioned the Division for an agency declaratory order "on the correct applicability" of article XX, section 1 of the Utah Constitution, [4]Utah Code section 65A-10-1(1), [5] and the Division's Sovereign Land Management Planning regulation[6] relating to the Division's record of decision.

         ¶8 In January 2008, the Division's Director and the Department's Executive Director consolidated the request and two petitions and issued a single agency order denying all three. The petition for consistency review and request for agency action were denied on the ground that Friends wasn't a party to the lease application; the order concluded that the Utah Administrative Procedures Act (UAPA) prevents non-parties from intervening in informal adjudications. The petition for a declaratory order was denied for three reasons: (1) granting it would substantially prejudice the Corporation's rights without its consent, (2) the petition improperly relied on disputed facts, and (3) the petition sought a declaratory order on what was not yet an executed contract. But the directors stayed the execution of the lease to give Friends a chance to request an amendment to the 2000 comprehensive management plan.

         ¶9 Friends responded in three ways. First, Friends petitioned the Division to amend the comprehensive management plan based on the same arguments it had put forth in its previous petitions and request. Second, it appealed the directors' denial of the initial petitions and request to district court.[7] Finally, Friends sought a stay of the issuance of the lease to the Corporation.

         ¶10 The Division's director denied the request to amend the comprehensive management plan amendment under Utah Administrative Code Rule 652-90-1000 (2007), a rule requiring "unforeseen circumstances" to sustain an amendment to a comprehensive management plan. In the director's view, Friends had identified no "unforeseen circumstances" that were not addressed in the original comprehensive management plan; instead Friends put forth only its disagreements with the plan. The director also noted that the 2000 comprehensive management plan would be reviewed in 2010 and invited Friends to participate in that process.

         ¶11 The Division also denied Friends' stay request. It concluded that construction could not occur until the Corporation received a Clean Water Act permit authorizing development.

         ¶12 The Division executed the lease with the Corporation a day later. And one month after that, the Department's Executive Director affirmed the Division director's denial of the plan amendment and lease stay requests.

         ¶13 Friends responded by amending its complaint in the district court. The amended complaint sought judicial review of the denial of the petition to amend the comprehensive management plan. At that point the Corporation moved to intervene in the district court proceedings. That motion was granted, and the Corporation thereafter filed a motion for partial summary judgment on the claims related to the two original petitions and the request (a motion echoed by the Division a few months later). Friends then filed a cross-motion for partial summary judgment.

         ¶14 The district court granted the partial summary judgment motions of the Corporation and the Division and denied the cross-motion filed by Friends. In so doing the court affirmed the directors' decision, rejecting Friends' original petitions and request on several grounds. First, the district court rejected Friends' argument that it was entitled to challenge the record of decision as an "interested part[y]" commenting on a site-specific plan under Utah Code section 65A-2-4(1). In so doing, the court found that the record of decision proceeding was an adjudication, not a proceeding involving a "state land management plan[]" under section 65A-2-4(1).[8] And because Friends was not a party to the Corporation's lease application to the Division, the court concluded that it lacked authority to file a petition for consistency review.[9]

         ¶15 The court also concluded that the Division's rules don't allow non-parties to a lease to collaterally challenge lease decisions. And it held that the request for agency action failed on that basis. Because intervention is not allowed in informal adjudications under Utah Code section 63G-4-203(g), moreover, the court rejected Friends' attempt at intervention in the informal adjudication. Finally, the court noted that UAPA prevents an agency from issuing a declaratory order if (1) the order is based on disputed facts; or (2) the order would substantially prejudice a party's rights without its consent. See Utah Code § 63G-4-503. And the court dismissed the declaratory judgment claim because it found both disputed facts and a likelihood of substantial prejudice, especially given that the order sought by Friends challenged existing leases the Corporation had held for years.

         ¶16 Friends responded by moving to amend its complaint a second time. In this proposed second amended complaint, Friends sought to challenge the Division's record of decision. It also sought to assert claims under the public trust doctrine, for breach of fiduciary duty, and for infringement of its alleged constitutional rights-under the federal Due Process Clause, the Open Courts Clause of the Utah Constitution, and the Separation of Powers Clause of the Utah Constitution. In addition, Friends also sought declaratory judgments that (1) the comprehensive management plan didn't require the Division approve the Corporation's lease if it was in compliance; (2) Friends is entitled to direct judicial review of the record of decision; and (3) the record of decision violates the public trust doctrine.

         ¶17 The district court refused to allow the amended complaint to the extent it sought to assert constitutional claims (due process, open courts, separation of powers) or a declaratory judgment claim recognizing a right to direct judicial review of the record of decision. It did so on the ground that those claims weren't preserved in the proceedings before the Division and because UAPA doesn't allow direct judicial review of a record of decision. For these reasons the district court found that the proposed amendments would be "futile." Memorandum Decision, at 6. (June 9, 2011).[10]

         ¶18 In addition, the district court found it "axiomatic that '[o]nly those issues that were brought to the factfinder's attention at the administrative level may be litigated in the de novo review in the district court.'" Id. (quoting Taylor-West Weber Water Improvement Dist. v. Olds, 2009 UT 86, ¶ 12, 224 P.3d 709). Thus, the district court held that the constitutional claims are "deemed waived and may not be raised for the first time on appeal." Memorandum Decision, at 6 (June 9, 2011).[11] It also reached a similar conclusion as to Friends' attempt to challenge the record of decision through a declaratory judgment claim. It held that it lacked jurisdiction to review the record of decision on a declaratory judgment claim.

         ¶19 Initially, the court allowed Friends to amend its complaint to add the other claims (public trust, fiduciary duty, and declaratory judgments that the comprehensive management plan isn't controlling and the record of decision violates the public trust). But it ultimately reversed course. After further briefing and a motion to dismiss, the district court concluded that it lacked subject matter jurisdiction over these claims as well. Minute Entry Ruling, at 1 (April 10, 2012).

         ¶20 The district court concluded that its jurisdiction in this proceeding was limited to review of the underlying informal adjudication. Because Friends sought a collateral attack on the underlying adjudication, the court concluded that it lacked jurisdiction. And it dismissed the remaining claims on that basis.

         ¶21 A period of inactivity ensued. This led the district court to issue an order to show cause demanding that the parties explain why the case shouldn't be dismissed for failure to prosecute. Friends then moved for partial summary judgment on its remaining claim-the challenge to the denial of its attempt to have the 2000 comprehensive management plan amended. Shortly thereafter the Division adopted new comprehensive management and mineral leasing plans. With that in mind, the district court dismissed Friends' final claim as moot since the new plans superseded the 2000 plan that Friends was petitioning the Division to alter. Friends then filed a timely appeal.

         II

         ¶22 Friends' appeal presents three sets of issues: (1) whether the district court erred in affirming the directors' order rejecting Friends' petition for consistency review, request for agency action, and petition for an agency declaratory order; (2) whether the district court erred in denying Friends' attempt to amend its complaint and in dismissing its remaining claims on summary judgment; and (3) whether the district court ...


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