OAH 03-3000-18088-2
STATE OF
OFFICE OF ADMINISTRATIVE HEARINGS
FOR THE DEPARTMENT OF TRANSPORTATION
|
In the Matter of
the Petition of the Treated Wood Council for a Declaration that a Department
of Transportation Memorandum Regarding a Hazard Evaluation Process of
Products and Waste Materials Is an Unadopted Rule |
ORDER
|
By
Petition filed May 23, 2007, the Treated Wood Council (Petitioner) seeks an
order directing the Department of Transportation (Department) to cease
enforcement of an unadopted rule. The
Department filed a written response on June 12, 2007. Oral argument was held on the Petition on
July 19, 2007, at the Office of Administrative Hearings. The record closed on August 2, 2007, following
submission by the parties of post-argument memoranda.
Stephen
A. Melcher, Fabyanske, Westra, Hart & Thomson, PA,
Based
upon all of the filings by the parties, the oral argument, and for the reasons
set out in the Memorandum which follows,
IT IS HEREBY ORDERED THAT:
1. The Department of Transportation’s
February 1, 2006, Technical Memorandum No, 06-05-ENV-01 regarding its Hazard
Evaluation Process of Products and Waste Materials is not an unadopted amendment
to a rule or an unadopted rule.
2. Treated Wood Council’s Petition is
DISMISSED.
Dated: September 6, 2007
s/Kathleen
D. Sheehy
|
KATHLEEN D. SHEEHY Administrative Law Judge |
Reported:
Digitally recorded (no transcript prepared)
NOTICE
This decision is the final administrative
decision under Minn. Stat. § 14.381. It
may be appealed to the Minnesota Court of Appeals under Minn. Stat. §§ 14.44
and 14.45.
MEMORANDUM
Petitioner is an
international trade association of organizations involved in the treated wood
industry, at least eight of which have offices and/or facilities, and conduct
business, in
Background Facts
The Minnesota Department of Transportation has used treated wood products in highway construction projects since at least 1976.[3] Traditionally, treated wood has been used in retaining walls, noise walls, vehicle bridge structures, guardrail posts, pilings, and buildings (such as salt sheds). The most common current uses for treated wood are as non-structural parts of noise walls.[4]
Over
time, the Department has decreased its use of wood products treated with
chromated copper arsenate (CCA) because of its propensity to leach
contaminants, particularly arsenic, into the ground.[5] In October 2002 the Commissioner of the
Minnesota Pollution Control Agency strongly recommended that the Department
examine the possibility of purchasing alternative materials, because of issues
concerning the disposal of CCA-treated wood in solid waste landfills.[6] Studies conducted by the Department confirmed
that there is soil contamination adjacent to noise barriers in the
Because
of these concerns, in late 2003 the Department began permitting or requiring the use of borate-treated wood (one such product
is Envirosafe Plus) for noise walls on its projects.[9] Borate-treated wood does not contain arsenic,
heavy metals, or chromium.[10] In late 2004, the Department issued a draft
Policy Guideline providing that it would no longer use chemically treated wood
products on its projects unless and until the products were reviewed and
approved by the Department’s Office of Environmental Services (OES).[11] This draft policy was not implemented.[12]
In February 2006 the review procedures contained in the draft Policy Guideline were, however, substantially incorporated into the Department’s policies concerning review of products used in construction and recycling of waste materials. The document at issue is a Technical Memorandum issued by the Department’s Engineering Services Division, entitled “Hazard Evaluation Process of Products and Waste Materials,” Technical Memorandum No. 06-05-ENV-01 (Memorandum).[13] The Memorandum provides that it replaces an earlier technical memorandum and will continue in force until February 1, 2011, unless superseded prior to that date. The Memorandum’s introduction provides that it is the policy of the Department to comply with state and federal regulatory requirements and to provide evidence of due diligence in preventing, detecting, and correcting violations of environmental requirements, as required by Minn. Stat. § 114C.21, subd. 2a. It further provides that in determining whether the Department will procure particular types of new products or reuse/recycle waste materials, “Mn/DOT must balance public health and safety, environmental risks and potential liabilities with the possible benefits received by using the product or waste material.”[14]
The “Guidelines” section of the Memorandum provides:
Vendors that would like Mn/DOT to consider using their products or waste materials should be directed to contact the Mn/DOT Product Evaluation Committee (PEC). The vendor must follow the application process established by the PEC. The PEC will distribute the product information to the appropriate Mn/DOT functional groups for review and possible inclusion in the Mn/DOT Qualified Products List. The Office of Environmental Services will inform the PEC which product types must be sent to OES for review using the Hazard Evaluation Process.[15]
The Memorandum further outlines the procedural steps OES will use to evaluate the product and specifies the information a vendor must submit for completion of the Hazard Evaluation Process (HEP).[16] It describes the general principles that OES will use in making product procurement decisions, including consideration of short- and long-term environmental liabilities associated with using the product, as well as current and future legal and financial liability issues associated with the intended use of the product. Upon completion of the review, it provides that OES will make a recommendation to the Engineering Services Division Director as to whether the product should be included in the Department’s Qualified Product List or rejected based on the product’s expected environmental performance.[17] To date, the OES has completed reviews of approximately 20 new products.[18]
As indicated above, the Department maintains a Qualified Product List identifying products of various kinds that are acceptable for use in road projects.[19] The list includes hundreds if not thousands of products ranging from joint and crack sealer, cement, epoxies, concrete curing compounds, grouts, paints, pavement markers, soil stabilizers, and erosion control blankets. The list also includes treated wood products.[20] The current Approved Treated Wood Products page lists the product name or the type of protective treatment in the wood as well as restrictions on the use of each type of wood or treatment listed. For example, Envirosafe Plus has been approved for structural members that are not in contact with soil; another product is approved for use except within 100 feet of surface water bodies; and treated wood products currently in Mn/DOT stock are approved for their intended purpose until Mn/DOT’s supply is exhausted. A note at the bottom of this list states that “[m]anufacturers or distributors of treated wood products can submit a request to Mn/DOT for product evaluation by the Product Evaluation Committee.”[21]
In addition,
approximately every five years the Department publishes a book of standard
contract specifications for highway construction contracts.[22] The last such book was published in
2005. The Department’s book of
Standard Specifications (2005) includes, among many other things, requirements
for various types and uses of wood products, such as timber bridges, guardrail
and fence posts, structural timber, bridge wearing course planks, timber
piling, traffic signal poles, and light poles.
The book of Standard Specifications describes the type and quality of
wood products required for each intended use, and generally requires the use of
timber treated with a preservative in accordance with Section 3491 of the
Standard Specifications.[23] Section 3491 of the Standard Specifications
is captioned “Preservatives and Preservative Treatment of Timber Products,” and
it requires the use of products treated in accordance with standards developed
by the American Wood Preservers Association (AWPA).[24] The
AWPA does not approve the use of borate-treated wood for exterior applications;
it only lists applications for borate-treated wood that are above ground and
continuously protected from liquid water.[25]
Legal Issues
The Petitioner asserts that, because the Department’s book of Standard Specifications requires compliance with AWPA standards, it cannot, by issuing a Technical Memorandum, cease to rely on those standards in determining whether a particular treated wood product or preservative is approved by the Department for use in its construction projects. Petitioner argues that the Department must accept products and product uses consistent with AWPA approvals, regardless of the outcome of the HEP outlined in the Memorandum. The foundation for this argument is that the Memorandum constitutes either an improperly adopted amendment to the Standard Specifications or that the Memorandum is itself an improperly adopted rule that should have been adopted, if at all, through formal rule-making procedures, during which the Department would be required to demonstrate the need for and reasonableness of its policy. The Petitioners seek an order requiring the Department to “cease its implementation of the Policy and return to its historic practice of specifying wood treated with EPA-registered pesticides and in accordance with AWPA standards.”
The Department maintains the February 2006 Memorandum is not a rule; and in the alternative, if it is considered a rule, then it falls within several exceptions to rule-making requirements contained in the Minnesota Administrative Procedure Act.
Discussion
The Minnesota Administrative Procedure Act (MAPA) defines a rule as:
every agency statement of general applicability and future effect, including amendments, suspensions, and repeals of rules, adopted to implement or make specific the law enforced or administered by that agency or to govern its organization or procedure.[26]
Certain agency statements are expressly excluded from the statutory definition of a rule, including rules concerning only the internal management of the agency or other agencies that do not directly affect the rights of or procedures available to the public.[27] Unless an agency statement is excluded from the definition of a rule, it is subject to the rulemaking requirements set forth in Chapter 14 of Minnesota statutes. However, an agency may adopt rules “only pursuant to authority delegated by law.”[28]
In
general, an agency is not deemed to have engaged in rulemaking if its
interpretation of a statute or rule coincides with the plain meaning of that
statute or rule.[29] In other words, if an interpretation is
consistent with the plain meaning of the statute or rule that is being
interpreted, the agency action is authorized by the statute or rule itself, and
the fact that no rule was adopted does not render the interpretation invalid.[30] However, if an agency’s announced policy is
inconsistent with the statute or rule, the courts have often invalidated that
policy. And, if the policy makes new law
without the public input required by the APA, the policy will be
invalidated.
The Memorandum As an Unadopted Amendment to a Rule
Petitioner’s claim
that the Memorandum is an unadopted amendment to a rule rests on two main
ideas: that the Standard Specifications are a rule; and, that the Memorandum,
by eliminating reference to the AWPA standards, is an unadopted amendment to
those parts of the Standard Specifications that refer to the AWPA
standards. To prevail on this argument, the Petitioner would have to demonstrate
that the book of Standard Specifications is itself a product of statute or rule
and that the Memorandum is inconsistent with such statute or rule.
In general, the Department is required to comply with a
variety of statutory mandates concerning the environment. It is charged with providing “a balanced
transportation system” for the State of
consider the social, economic, and
environmental effects resulting from existing and proposed transportation
facilities and . . . make continuing
efforts to mitigate any adverse effects.
The commissioner shall utilize a systematic, interdisciplinary approach
which shall insure the integrated use of the natural, social, and physical
sciences and the environmental design arts in plans and decisions which may
affect the environment.[33]
In addition, the state’s Environmental
Policy Act requires all state agencies to “identify and develop methods and
procedures that will ensure that environmental amenities and values, whether
quantified or not, will be given at least
equal consideration in decision making along with economic and technical
considerations.”[34] Other state laws and executive orders make
state agencies responsible for “a release or threatened release of a hazardous
substance” from a state facility and require state agencies to “encourage
pollution prevention through their purchasing policies and specifications.”[35]
With regard to the
Department’s own purchasing policies and specifications, the Commissioner has
authority to “construct and maintain transportation facilities as authorized by
law.”[36] In order to accomplish these tasks, “[t]he
commissioner may conduct the work or any part of the work incidental to the
construction and maintenance of the trunk highways . . . by contract.”[37] The legislature has explicitly warned that
“the opportunity to be awarded [transportation] department contracts or to
supply goods or services to the department is a privilege, not a right . . . .”[38] Department contracts “must be based on
specifications prescribed by the commissioner.”[39]
In accordance with the
requirement to prescribe specifications, the Department publishes its book of
Standard Specifications. The book recognizes
that, despite the apparent purpose of making specifications uniform and
predictable, specifications will change over time and with individual projects:
These Standard Specifications, the Plans, Special Provisions, supplemental Specifications, and all supplementary documents are essential parts of the Contract, and a requirement occurring in one is as binding as though occurring in all. They are intended to be complementary and to describe and provide for a complete work.
In case of discrepancy, calculated dimensions will govern over scaled dimensions; Special Provisions will govern over Standard and supplemental Specifications and Plans; Plans will govern over Standard and supplemental Specifications; supplemental Specifications will govern over Standard Specifications.[40]
“Special Provisions” are defined in the book as “[a]dditions and revisions to the standard and supplemental Specifications covering conditions peculiar to an individual Project.”[41] “Supplemental Specifications" are defined as “[a]dditions and revisions to the standard Specifications that are approved subsequent to issuance of the printed book of standard Specifications.”[42]
Importantly, the Petitioner does not contend that the Department’s book of Standard Specifications is itself an improperly adopted rule. The Petitioner argues that it both “assumes” and “hopes” that the Standard Specifications were adopted pursuant to the rulemaking process set forth in the MAPA, but the Petitioner has pointed to no legal or factual basis to support such assumptions or hopes. The Petitioner has identified no statutory requirement that the book of Standard Specifications be subject to rulemaking, nor is there any evidence that the Department, despite the lack of express authority to do so, chose to use the rulemaking process in publishing it. On the contrary, the Department maintains it was not required to adopt the Standard Specifications through MAPA rulemaking procedures and that it did not in fact do so.
The HEP outlined in the Memorandum is consistent with the statutory mandate that the Department must weigh environmental considerations heavily as it fulfills its road-building responsibilities. It is also consistent with executive orders requiring it to prevent pollution in developing its purchasing policies and specifications. And the Commissioner of Transportation has statutory authority to “prescribe” standard contract specifications pursuant to Minn. Stat. § 161.32, subd. 1a (2006). When the legislature wishes to authorize or require rulemaking, the legislature uses the language of rulemaking.[43] In requiring the Commissioner of Transportation to “prescribe” contract specifications, the legislature chose to permit the Commissioner to dictate the terms of those specifications, not to require them to be adopted through the rulemaking process. The Administrative Law Judge has found no authority that would either authorize or require the Department to “adopt” standard contract specifications as rules. Because the Standard Specifications are not required to be adopted through rulemaking, there is no basis for concluding that the February 2006 Memorandum’s departure from those specifications is an unadopted amendment to a rule.
In the alternative, the Petitioner argues that the Standard Specifications can be considered “rules” based on long-held, unchanging agency policy. Petitioner’s argument cannot succeed because the book of Standard Specifications, by its own terms, contains clear language indicating that the specifications are subject to change in any given contract.[44] Because the Standard Specifications are not rules, a document reflecting a process that departs from them cannot be said to be an amendment of a rule.
The Memorandum Itself As an Unadopted Rule
In order to be considered a rule, an agency statement must be “of general applicability.” Although it is true that, according to the procedures spelled out in the Memorandum, all products submitted to the Department for approval must be submitted to the PEC for review and possible evaluation under the HEP, it does not necessarily follow that the Memorandum is a statement of general applicability. The process applies only to those vendors who wish to have their products reviewed and recommended for possible inclusion in the specifications for road construction contracts. The HEP provides a process and guidelines to make the review consistent and orderly, but does not impose blanket rules applicable to all products, or even to all wood-treated products. The Administrative Law Judge accordingly concludes the Memorandum is not a statement of general applicability and that it falls outside the definition of a rule.[45]
In
addition,
Even if the Memorandum were within the general definition of a rule, however, the Department maintains the Memorandum is not subject to rulemaking because it falls within a statutory exception to the definition of a rule, which exempts rules concerning only the internal management of the agency that do not directly affect the rights of or procedures available to the public.[47]
The
Memorandum describes the process by which the Department will review and
specify products to be used in highway construction contracts. This concerns the internal management of the
agency’s road-building responsibilities and does not directly affect the rights
of or procedures available to the public.
It does not preclude the Petitioner’s members from selling their products
in
Neither Petitioner’s member producers nor anyone else has a right to sell goods to the Department.[49] Nor do Petitioners have a right to dictate the process by which the Department evaluates the various products it may or may not purchase. The agency has the discretion to determine what products will suit its needs and to balance the sometimes-competing interests such as environmental hazard, cost, and long-term efficacy. The HEP process, if it does fall within the general definition of a rule, is statutorily excluded from rulemaking requirements because it concerns the internal management of the agency.
Finally, much of Petition is devoted to addressing the efficacy of borate-treated products, as opposed to products treated in accordance with AWPA standards. The Department agrees that the HEP was never intended to address efficacy considerations; by its terms it is intended to address other issues, including environmental impacts and potential liability.[50] These arguments are irrelevant to this proceeding, which, under Minn. Stat. §14.381, can only consider whether the Memorandum, and specifically the HEP, is an unadopted rule. The ALJ concludes that the Memorandum is not an unadopted rule.
K. D.S.
[1] Petition at 2; Affidavit of Jeffrey T. Miller ¶¶ 2-3.
[2] Miller Aff. ¶¶ 4-5.
[3] Affidavit of John Sampson ¶ 8.
[4]
[5]
[6] Dept. Ex. 11. This recommendation was repeated in February 2006. See Dept. Ex. 12.
[7] Dept. Ex. 9. See also Dept. Exs. 19 & 20.
[8] Dept. Ex. 19 at CRS-2.
[9] Petitioner’s Exs. 19-24; Miller Aff. ¶¶ 7a-7f.
[10] Petitioner’s Ex. 24; Dept. Exs. 13-14.
[11] Petitioner’s Ex. 28; Miller Aff. ¶ 10.
[12] Sampson Aff. ¶ 31.
[13] Petitioner’s Ex. 29; Dept. Ex. 1.
[14]
[15] Dept. Ex. 1 at 2.
[16] Id.at 3-5.
[17]
[18] Dept. Exs. 23-42; Affidavit of Dr. Robert Edstrom.
[19] The list is titled “Approved Products and Certified Products and Sources for Acceptance on Mn/DOT and Federal-Aid Projects.” See http://www.mrr.dot.state.mn.us/materials/apprprod.asp.
[20]
Dept. Ex. 5; http://www.mrr.dot.state.mn.us/materials/apprprod.asp.
[21] Petitioner’s Ex. 10; http://ww.mrr.dot.state.mn.us/materials/ApprovedProducts/approvedwood.pdf. Two other treated wood products have been submitted for review under the HEP. TimberSil was reviewed and given a low risk hazard rating and a recommendation that it could be safely used on Mn/DOT projects, but it was not yet on the approved product list when the record closed. Another product, Merichem CuNap-8, was submitted for review in September 2006 and is still under review. See Miller Aff. ¶¶ 15 & 16; Petitioner’s Exs. 37 and 41.
[22] Dept.’s Letter Brief at 1 (Aug. 2, 2007); http://www.dot.state.mn.us/tecsup/spec.
[23] Department of Transportation Standard Specifications §§ 2403, 3412, 3413, 3426, 3457, 3471, and 3840 (2005) (Petitioner’s Exs. 11-16, 18).
[24] Petitioner’s Ex. 17.
[25] Affidavit of Scott W. Conklin ¶¶ 10-11.
[26]
[27] Minn. Stat. § 14.03, subd. 3 (1).
[28]
[29] Cable Communications Board v. Nor-west Cable Communications Partnership, 356 N.W.2d 658, 667 (Minn. 1984); In the Matter of the Petition for Review of the Minnesota Department of Commerce Policy Pronouncement and Guidance Document Regarding Insurance/Credit Scoring Filings, OAH Docket No. 1-1004-15233-2 (2003) at 3.
[30] Sellner
Manufacturing Co. v. Commissioner of Taxation, 202 N.W.2d 886, 888-89 (
[31]
[32]
[33] Minn. Stat. § 174.03, subd. 6.
[34]
[35]
[36]
[37]
(1) solicitations and
responses to solicitations, bid security, vendor errors, opening of responses,
award of contracts, tied bids, and award protest process;
(2) contract performance
and failure to perform;
(3) authority to debar or
suspend vendors, and reinstatement of vendors;
(4) contract cancellation;
(5) procurement from
rehabilitation facilities; and
(6) organizational
conflicts of interest.
Minn. Stat. § 16C.03, subd. 2. The rules promulgated
pursuant to this rulemaking authority are at Minn. R. 1230 et. seq. These rules are essentially procedural and do not pertain
to the development of contract specifications or product procurement.
[38] Minn. Stat. § 161.315, subd. 1(2).
[39]
[40] Minnesota Department of Transportation, Standard
Specifications § 1504 (2005) (emphasis added).
[41]
[42] Minnesota Department of Transportation, Standard Specifications § 1103 (2005).
[43] See, e.g., Minn. Stat. § 161.321, subd. 6 (permitting the Commissioner to promulgate rules regarding small business contracting); Minn. Stat. § 16C.03, subd. 2 (permitting the Commissioner of Administration to adopt rules relating to specific contracting topics).
[44] Minnesota Department of Transportation, Standard Specifications § 1103 (2005).
[45] Cf. MacNeil
Environmental, Inc. v. Allmon, 2002 WL 767754 (
[46] Reserve Life Insurance Co. v. Commissioner
of Commerce, 402 N.W. 2d 631, 634 (
[47]
[48] Cf. Perkins v. Lukens Steel Co., 310 U.S. 113, 127 (1940) (“Like private individuals and businesses, the Government enjoys the unrestricted power to produce its own supplies, to determine those with whom it will deal, and to fix the terms and conditions upon which it will make needed purchases.”).
[49] See
[50] Sampson Aff. ¶ 28.