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K Tre Holdings, LP v. Missouri Department of Natural Resources

Court of Appeals of Missouri, Southern District, Second Division

July 26, 2019




          JEFFREY W. BATES, J.

         K Tre Holdings, LP, Sharon Engle, Frances Hare and Jes Blair (collectively referred to as K Tre) seek judicial review of the decision of the Missouri Clean Water Commission (CWC) to approve a permit application filed by RNR Farm, LLC (RNR) for a poultry concentrated animal feeding operation (CAFO) in McDonald County, Missouri.[1] K Tre contends the CWC erred by approving the permit because: (1) RNR failed to provide the Department of Natural Resources (DNR) with an aerial map showing production area setback distances; (2) RNR failed to provide DNR with a copy of proposed building plans; and (3) four of the commissioners were unlawfully appointed to the CWC.[2] We affirm the CWC's order approving RNR's permit, but we transfer this case to our Supreme Court after opinion pursuant to Rule 83.02.[3]


         The subchapter containing the Missouri Clean Water Law is set out in §§ 644.006 through 644.141. It is Missouri's public policy to conserve, protect and maintain the waters of the state, and to meet these objectives while maintaining maximum employment and full industrial development. § 644.011. The administration of programs relating to environmental control and the conservation and management of natural resources is vested in DNR. § 640.010. The CWC is one of the commissions assigned to, and domiciled with, DNR. See § 640.010.3; § 644.021.1. Implementation of the Clean Water Law is vested in the CWC and DNR. § 644.026.1. DNR is authorized to promulgate rules regulating CAFOs. § 640.710.1. In accordance with regulations promulgated for that purpose, DNR reviews CAFO applications to determine permit eligibility. 10 CSR 20-6.010(2).[4]

         On February 16, 2016, RNR applied to DNR for a "General Operating Permit" to operate a Class 1C poultry CAFO in McDonald County, Missouri. On July 6, 2016, DNR issued the "State No-Discharge" CAFO operating permit to RNR. The facility description stated that "[p]rocess wastes are collected and managed as fertilizer by spreading onto agricultural fields at agricultural rates in accordance with this permit."

         On August 2, 2016, K Tre appealed the issuance of that permit to the Administrative Hearing Commission (AHC). See § 621.250.1; § 640.013. RNR was granted leave to intervene in the appeal.

         On October 21, 2016, the AHC conducted a hearing on K Tre's appeal, using the contested case procedures described in §§ 536.063 through 536.090 of the Missouri Administrative Procedure Act (MAPA). See § 621.250. As required by § 621.250.6, DNR bore the burden of proof in the proceeding before the AHC as the party defending the issuance of the CAFO permit. See § 640.012.

         On November 14, 2016, the AHC issued a recommended decision, with findings of fact and conclusions of law. The AHC found that DNR sustained its burden of proof to establish that a CAFO permit was issued to RNR in accordance with the applicable law and regulations.

         Once the AHC issued its recommended decision, the CWC was obligated to "issue its own decision, based on the appeal, for permit issuance, denial, or any condition of the permit." § 644.051.6; see also § 621.250.3. In doing so, the CWC was not required to issue its own decision with findings of fact and conclusions of law unless it decided to: (1) change a factual finding or legal conclusion made by the AHC; or (2) modify or vacate the AHC's recommended decision. § 644.051.6. The AHC's recommended decision was placed on the CWC's December 12, 2017 meeting agenda. The CWC voted 5-0 (with Commissioner Hurst abstaining) to accept the AHC's recommended decision. The CWC's vote was reflected by the signature of five commissioners on the AHC's recommended decision, which the CWC adopted as its own. See § 621.250.3; § 644.051.6.

         Pursuant to § 644.051.6, this Court possesses original jurisdiction over judicial review of the CWC's decision pursuant to the procedures for judicial review described in chapter 536 of the MAPA. K Tre timely filed its request for judicial review from the CWC's decision on January 11, 2018. The evidence presented to the AHC, as well as its findings of fact and conclusions of law, will be addressed in more detail as we consider K Tre's three points on appeal.

         Standard of Review

         On judicial review of an administrative action pursuant to chapter 536, this Court is directed to determine the matter "upon the petition and record filed[.]" § 536.140.1. As provided by that statute:

         The inquiry may extend to a determination of whether the action of the agency

(1) Is in violation of constitutional provisions;
(2) Is in excess of the statutory authority or jurisdiction of the agency;
(3) Is unsupported by competent and substantial evidence upon the whole record;
(4) Is, for any other reason, unauthorized by law;
(5) Is made upon unlawful procedure or without a fair trial;
(6) Is arbitrary, capricious or unreasonable;
(7) Involves an abuse of discretion.

§ 536.140.2. This Court must render a decision "affirming, reversing, or modifying the agency's order, and may order the reconsideration of the case in the light of the court's opinion ... and may order the agency to take such further action as it may be proper to require; but the court shall not substitute its discretion for discretion legally vested in the agency, unless the court determines that the agency decision was arbitrary or capricious." § 536.140.5.

         Discussion and Decision

         Point 1

         K Tre's first point contends the CWC erred in approving the CAFO permit because RNR failed to provide DNR with an aerial map showing production area setback distances in response to a DNR deficiency letter requesting ...

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