In re Annexation of Certain Real Prop. to the City of Proctor from Midway Twp.
Docket: A17-1210
Court: Supreme Court of Minnesota; March 27, 2019; Minnesota; State Supreme Court
An orderly annexation agreement was established between Midway Township and the City of Duluth under Minn. Stat. 414.0325, which designated certain property in Midway for future annexations by Duluth. Following the agreement, property owners within the designated area petitioned the City of Proctor, a non-party to the agreement, to annex their property by ordinance, which Proctor enacted on August 18, 2014. Duluth and Midway challenged this annexation, leading to a ruling by the Chief Administrative Law Judge (ALJ) that upheld Proctor's authority to annex the property via ordinance, citing no statutory basis for the order of the orderly annexation agreement to preempt the process under Minn. Stat. 414.033.
The district court vacated the ALJ's decision, arguing that Minn. Stat. 414.0325, subd. 1(e) restricts annexations by ordinance within designated areas to specified methods. However, the court of appeals reversed this decision, interpreting the statute as not precluding additional annexation methods and finding that Minn. Stat. 414.0325, subd. 6 was ambiguous regarding its application to non-parties. The court concluded that legislative intent did not aim to restrict third parties from annexing property by ordinance within designated areas. The Supreme Court has agreed to review the appeals from Duluth and Midway.
Minn. Stat. 414.0325, subd. 1(e) is evaluated to determine if it prevents non-parties to an orderly annexation agreement from annexing property within the designated area via ordinance. Statutory interpretation is conducted de novo, focusing on the legislature's intent, with initial scrutiny of the statute's plain language for clarity or ambiguity. The statute mandates that annexation by ordinance, governed by Minn. Stat. 414.033, requires specific conditions, including land proximity to the municipality and adherence to wastewater facility requirements. Notably, subdivision 2(3) restricts annexation to the terms of an orderly annexation agreement for certain property conditions.
Orderly annexation processes are outlined in Minn. Stat. 414.0325, which designates areas needing orderly annexation and entrusts the Chief ALJ with jurisdiction post-agreement. Subdivision 1(e) permits initiation of annexation by resolution from any signatory to the joint resolution or the Chief ALJ. Subdivision 6 enforces orderly annexation agreements as binding contracts, not preempted unless specifically stated, and mandates adherence to established procedures for annexation of identified unincorporated property.
Appellants contend that subdivisions 1(e) and 6 limit annexations to those methods enumerated or permitted by the orderly annexation agreement, arguing that subdivision 1(e) outlines exclusive methods for annexation and that subdivision 6 applies universally to all, not just agreement signatories. They also cite section 414.01, subd. 1a(5), emphasizing legislative encouragement for joint resolutions in orderly annexation and regional planning, suggesting that binding non-signatories aligns with this intent.
Non-parties to an orderly annexation agreement under section 414.0325 are not barred from conducting annexation by ordinance under section 414.033. The language of section 414.0325 does not indicate that the methods of initiating annexation listed in subdivision 1(e) are exhaustive, nor does it imply that these methods exclude non-parties from other avenues of annexation. The statute does not contain language that suggests exclusivity; thus, the court cannot add terms not provided by the Legislature. Additionally, while an orderly annexation agreement binds only its parties, it does not restrict the rights of non-parties. Notice of proposed agreements is limited to residents of the involved township and municipality, not extending to other municipalities, reinforcing the interpretation that non-parties retain their rights. Furthermore, section 414.033 allows for annexation by ordinance, as it recognizes the existence of orderly annexation agreements without precluding such procedures for designated areas. This interpretation is necessary to prevent rendering any part of the statute redundant, aligning with the principle that statutes should be read in a manner that harmonizes all provisions. Thus, section 414.0325, subdivision 1, does not preclude annexation by ordinance.
Appellants contend that subdivision 6 of section 414.0325 includes an "express preemption" provision that prevents non-parties from annexing property by ordinance. The subdivision consists of three sentences: the first establishes that an orderly annexation agreement is binding and enforceable, the second indicates that no provisions of the chapter preempt an agreement unless explicitly stated, and the third restricts municipalities party to the agreement from annexing property through other methods. Appellants assert that the second sentence applies to non-parties, but the court disagrees, emphasizing the need to interpret the statute as a whole. The first and third sentences clearly pertain only to parties to the agreement, indicating that the second sentence should be interpreted similarly, thus binding only the parties and not preempting actions by non-parties. The court finds the appellants’ reliance on the legislative purpose of Chapter 414 unconvincing, stating that the general encouragement for cooperation does not alter the plain meaning of the provisions. Additionally, the court notes that the legislative framework designates the Chief ALJ to resolve disputes regarding municipal creation and annexations, suggesting that allowing parties to restrict third-party annexation would be inconsistent with this framework. Therefore, the court concludes that the statutes do not preempt each other, affirming that the legislative intent does not support the appellants' interpretation.
Permitting one type of annexation to take precedence over another is inconsistent with the legislative framework that allows the Chief Administrative Law Judge (ALJ) to resolve conflicts between annexation processes. Orderly annexation agreements under section 414.0325 do not prevent non-parties from annexing property by ordinance under section 414.033. The court affirms the court of appeals' decision. The Office of Administrative Hearings (OAH) may appeal a district court order if the Chief ALJ finds that the final order adversely affects public interest, as stated in Minn. Stat. 414.08 (2018). Appellants claim that because the second sentence of subdivision 6 pertains to non-parties, Proctor's ordinance annexation was not allowed. Respondents challenge the premise of this argument but do not dispute its logical implication. The court accepts this framing but questions the correctness of the appellants' logic, noting that the second sentence indicates the agreement is not preempted by other statutory provisions. The appellants' assertion that the agreement excludes other statutory applications differs from the actual wording. The Chief ALJ may not have had the authority to apply certain statutory factors in this case, as per Gilbert v. Minn. State Office of Strategic Long-Range Planning. There is no statutory provision granting the Chief ALJ the authority to consider criteria from section 414.031, subd. 4, in ordinance annexations under section 414.033, subd. 2. While the limits of the Chief ALJ's discretion are not in question here, it is noted that the relevant sections fall within a statutory framework that allows multiple annexation methods and mandates that conflicts be addressed by the Chief ALJ.
