Judge largely backs state regulators’ handling of PolyMet permit

PolyMet Mine
Eric Olson, right, gathers his tools last May as contractor Robert Radotich uses a backhoe to dig areas so the soil stratification can be observed, which will help them engineer and design the infiltration pods for the PolyMet copper-nickel mine in Hoyt Lakes, Minn.
Anthony Souffle | Star Tribune via AP 2019

In a 104-page report issued Thursday afternoon, a Ramsey County judge largely backed the Minnesota Pollution Control Agency’s handling of a key water quality permit in the PolyMet copper-nickel mine project, proposed for northeastern Minnesota. 

Chief Ramsey County District Court Judge John Guthmann oversaw a seven-day hearing in January, exploring allegations of irregularities in the way the MPCA developed and eventually approved the water permit, called an NPDES permit, which the agency ultimately granted in December 2018. It was the last state approval PolyMet needed in its bid to build the state’s first-ever copper-nickel mine. 

A judge presides over a hearing in the PolyMet permit case.
Judge John Guthmann presides over an evidentiary hearing regarding “procedural irregularities’’ in the PolyMet permit case held at Ramsey County District Court in St. Paul in January.
Leila Navidi | Star Tribune file

At the root of the allegations, which were levied by several environmental groups and the Fond du Lac Band of Lake Superior, was a claim that the MPCA sought at every turn to keep substantial concerns about the water quality permit coming from their counterparts at the federal EPA out of the administrative record. The MPCA’s challengers contended it had the effect of “robbing the court of appeals of a complete record to review.” 

In court briefs, they argued that the state agency “engaged in an unprecedented and deceptive campaign to keep EPA’s written comments on the draft PolyMet permit hidden from the public and the courts.”

In addition, they argued that the MPCA tried to hide its efforts from the public by deleting emails and wiping computers of former agency officials that detailed efforts to lobby the EPA to delay submitting written comments that were critical of the permit. 

But in his report, Guthmann wrote that, while evidence presented at the hearing demonstrated that the MPCA’s request for the EPA to delay its comments was highly unusual, that didn’t mean it was improper. 

“There is no statute, rule, written policy or other adopted procedure applicable to the NPDES permitting process making it procedurally improper or irregular for the MPCA to request the EPA to delay its written comments until later in the permit review process or for the EPA to agree to such a request,” the judge wrote. 

MPCA officials testified that they wanted the EPA to delay submitting written comments so they could first respond to public comments, and incorporate those responses into a new draft permit, before seeking the EPA’s formal comments. They argued that would allow the MPCA and EPA to focus on remaining issues, and would help avoid further “overwhelming” MPCA staff with responding to additional comments. 

Attorney Monte Mills argues for PolyMet.
Attorney Monte Mills argues for PolyMet during an evidentiary hearing in January.
Leila Navidi | Star Tribune file

While Guthmann didn’t dispute that rationale, he wrote that “MPCA’s primary motivation was its belief that there would be less negative press about the NorthMet project if EPA comments were delayed until after public comments and verbally expressed EPA concerns were incorporated into the draft permit.” 

“Nevertheless,” Guthmann continued, “the MPCA effort to convince the EPA to delay issuing written comments about the draft permit was not an irregularity in procedure. There is no statute or rule that prohibits the MPCA from asking the EPA to delay an optional course of action.”

The MPCA praised Guthmann’s decision. “The court renewed its confidence in the MPCA’s permitting process for PolyMet, said agency spokesperson Darin Broton. “While the MPCA always strives to do better, the court overwhelmingly said the agency’s permitting procedures were not irregular.”

Destruction of documents

Toronto-based PolyMet Mining is vying to build the state’s first ever mine to extract copper, nickel and precious metals, at a site between Babbitt and Hoyt Lakes in far northeastern Minnesota. 

After about 15 years of environmental and regulatory review, in 2018 the company secured the many approvals it needs to build the project, including the MPCA’s water quality permit. 

But environmental groups and tribes filed several suits at the Minnesota Court of Appeals to block the project, including the challenge to the NPDES water quality permit. 

After EPA staffers leaked an email from a top MPCA official, Shannon Lotthammer, to her counterparts at the federal EPA, in which the MPCA asked for a delay in the EPA’s comments, the appeals court suspended the permit and agreed to send the issue to the lower court for a fact-finding hearing on whether there were any “procedural irregularities” in how the MPCA handled the permit. 

While Guthmann did not find evidence of the MPCA trying to suppress EPA comments, he did find that the agency improperly destroyed emails and other records detailing officials’ multiple requests of the EPA to delay submitting comments that were critical of the water permit, and of former MPCA Commissioner John Linc Stine’s personal approval of the negotiated agreement with the EPA. 

Attorney Paula Maccabee, left, of Just Change Law questions a witness.
Attorney Paula Maccabee, left, of Just Change Law questions witness Kevin Pierard, former chief of the water quality permitting branch of the Chicago office of the Environmental Protection Agency, via video link in January.
Leila Navidi | Star Tribune file

Guthmanmn also determined that the MPCA should have placed what’s called a “litigation hold” on its data, which would require the MPCA under law to retain documents related to the PolyMet permit, much sooner than it did, because the agency realized as far back as 2015 that legal challenges were likely. 

However, because the documents that the MPCA destroyed as part of its routine data practices ultimately made their way into the administrative record through other means — leaked by EPA officials, or uncovered by attorneys during the trial — Guthmann ruled that the agency shouldn’t be sanctioned for the so-called “spoliation” of evidence. 

Pete Marshall, a spokesperson for Friends of the Boundary Waters, one of the environmental groups that challenged the MPCA’s handling of the permit, said he was disappointed in that point, because were it not for their lawsuit, those documents likely never would have surfaced. 

“It shouldn't take a whistleblower or a lawsuit brought by multiple organizations to make the MPCA do their job,” Marshall said. 

Marshall and representatives from other environmental groups said they would likely appeal the judge’s ruling, arguing that he applied the definition of “irregular procedures” too narrowly. 

Still, Paula Maccabee, attorney for WaterLegacy, another environmental group involved in the case, said for the first time the case gave Minnesotans the chance to “peek under the hood” and see how these kinds of controversial permits are granted. 

She said she believes it’s “the first time in Minnesota history that any court has found that an agency decision was subject to irregularities and procedures not shown in the record.”

Next steps

Guthmann’s report now goes to the Minnesota Court of Appeals, which will resume its consideration of several lawsuits filed by environmental groups and the Fond du Lac band, arguing the MPCA permit violates state law and the federal Clean Water Act. 

“We are pleased with the district court’s ruling and look forward to defending the challenge to the water permit currently pending in the court of appeals,” said PolyMet CEO Jon Cherry.

The appeals court has also suspended key permits issued by the Minnesota Department of Natural Resources, and sent those permits back to the agency for further proceedings. 

But PolyMet and the MPCA appealed that decision to the state supreme court, which agreed to hear the case. Oral arguments have been scheduled for Oct. 13.

Your support matters.

You make MPR News possible. Individual donations are behind the clarity in coverage from our reporters across the state, stories that connect us, and conversations that provide perspectives. Help ensure MPR remains a resource that brings Minnesotans together.