Sean Foss: AG Stenehjem’s Recent Performance Illustrates Need for Independent Counsel on Open Records/Meetings Opinions

On October 27, 2017, Attorney General Wayne Stenehjem issued an Open Records and Meetings opinion regarding a recent visit to North Dakota by EPA Administrator Scott Pruitt. During a meeting on the NDSU campus that was closed to the public but included both Governor Doug Burgum and Attorney General Stenehjem, Pruitt discussed the controversial Waters of the United States (WOTUS) regulations and pending litigation related to such regulations.

By way of simplified background, in 2015, the EPA under the Obama administration proposed a new definition for WOTUS. The new definition would have greatly expanded the regulatory authority of the federal government over small streams, creeks, and wetlands. Stenehjem sued the EPA on behalf of North Dakota and obtained an injunction to prevent the new definition from going into effect, at least in North Dakota and the other states that joined the suit. In 2017, the EPA declared its intention to withdraw the 2015 definition, but the regulatory process takes time, so the litigation remains pending.

As Burgum and Stenehjem constitute a quorum of the North Dakota Industrial Commission, the question arose as to whether their attendance at the event with Administrator Pruitt constituted a “meeting” of the Industrial Commission under North Dakota’s open meetings law.

Stenehjem concluded it did not.

To reach such conclusion, not only did Stenehjem have to overcome the clear conflict of interest in providing a legal opinion about his own conduct, but Stenehjem also had to ignore the plain language of the governing statute, the authority of the Industrial Commission, and the underlying basis for the WOTUS litigation.

The opinion boils down to whether the meeting with Pruitt related to the “public business” of the Industrial Commission. As Stenehjem’s opinion notes, North Dakota state law defines “public business” as follows:

“Public business” means all matters that relate or may foreseeably relate in any way to:

1. The performance of the public entity’s governmental functions, including any matters over which the public entity has supervision, control, jurisdiction, or advisory power; or
2. The public entity’s use of public funds.

See N.D.C.C. § 44-04-17.1(12).

Stenehjem’s opinion emphasizes “public entity” when quoting the above statute, suggesting the meeting with Pruitt did not relate to the specific business of the Industrial Commission as a public entity. Stenehjem’s opinion explains the WOTUS regulations and litigation are not within the scope of the Industrial Commission’s governmental functions because Stenehjem pursued the litigation in his distinct role as attorney general. Similarly, the opinion claims the WOTUS litigation does not relate to the Industrial Commission’s use of public funds because the litigation is funded through the AG’s office. As Stenehjem states: “Nothing in N.D.C.C. ch. 54-17, or any other state statute or regulation, gives the NDIC any supervision, control, or jurisdiction over the WOTUS litigation. The NDIC has no control over the public funds used on the WOTUS litigation.”

A review of the definition of “public business” suggests Stenehjem focused upon the wrong terms. The definition includes “all matters that relate or may foreseeably relate” to the Industrial Commission’s governmental functions or its use of public funds. “Matters” include not just governmental functions over which the Industrial Commission has direct supervision or control, but also those over which the Industrial Commission has “advisory power.” Therefore, if a matter is discussed that may foreseeably relate in any way to an issue over which the Industrial Commission has so much as advisory power, it falls within the definition of “public business.” Similarly, if a matter is discussed that may foreseeably relate in any way to the Industrial Commission’s future use of public funds, it falls within the definition of “public business. “ The scope of “public business” is intentionally broad to avoid the type of narrow line drawing that Stenehjem’s opinion seeks to impose.

[mks_pullquote align=”right” width=”300″ size=”24″ bg_color=”#ffffff” txt_color=”#000000″]Stenehjem’s conduct suggests the need for legislation requiring the appointment of independent counsel to provide future Open Records and Meetings opinion when it involves the conduct of the attorney general or his office.[/mks_pullquote]

The WOTUS rules proposed by the EPA have the potential to impact North Dakota’s two biggest industries: agriculture and energy development. The definition of WOTUS governs the reach of the Clean Water Act of 1972. Generally speaking, the broader the definition, the greater the reach of the federal government to regulate what can and cannot be permissibly placed into such waters. North Dakota has a huge interest in this definition, as Stenehjem’s pending lawsuit demonstrates. Stenehjem’s opinion seems to suggest a conversation about the litigation does not specifically relate to a conversation about the WOTUS regulations themselves. As the lawsuit seeks to invalidate the 2015 WOTUS definition, a discussion of the lawsuit is the same as a discussion of the regulations themselves.

Based on nothing else, it is difficult to see how the WOTUS litigation does not relate to a matter over which the Industrial Commission at least has advisory power. But the Industrial Commission has substantial, direct regulatory authority over oil and gas development in North Dakota. The WOTUS definition could directly impact oil and gas drilling in this state. At a minimum, a discussion regarding WOTUS with the administrator of the EPA is something that relates or may foreseeably relate to the Industrial Commission’s own regulation of the oil and gas industry in this state.
Similarly, while the Industrial Commission has less direct regulatory authority over agriculture, it does operate the North Dakota State Mill and Elevator Association. If WOTUS impacts the business of farmers, it would impact the operations of the state mill and within the “public business” of the Industrial Commission.

A final example may be the least obvious, and yet the most direct. On the main page of its own website, the Industrial Commission cites its authority over the North Dakota Public Finance Agency, which it states “is the financial administrator of the State’s water pollution control revolving loan fund established by the State in conformity with the federal Clean Water Act.” (http://www.nd.gov/ndic/ic-about.htm). The Industrial Commission literally manages public funds for water pollution control prescribed by the Clean Water Act, yet Stenehjem issued an opinion stating the WOTUS regulations and litigation about the 2015 revised definition do not relate to the Industrial Commission’s public business.

With all fairness to Attorney General Stenehjem, I did not know about the Industrial Commission’s direct oversight of the “water pollution control revolving loan fund” when I started this article. I was just focused upon the Industrial Commission’s oversight over the oil and gas industry as directly relating to the WOTUS regulations and litigation. But I presume Stenehjem knew about the loan fund under the Clean Water Act, which makes his opinion all the more galling.

Keep in mind what we are talking about here. The open meetings laws exist to ensure that the business of the public is conducted in public. A few months ago, the EPA Administrator, Governor, and Attorney General discussed WOTUS regulations and pending litigation at a closed-door meeting at a public university. The Attorney General has now issued an opinion stating that the meeting in which he participated did not violate open meetings laws despite the patent connection to the business of the Industrial Commission. I suspect most North Dakotans would be happy to hear Pruitt informed Burgum and Stenehjem that the EPA is looking at ways to reduce the federal regulatory burden, not to increase it. However, so long as Stenehjem is issuing opinions seeking to limit the scope of the open meeting laws, North Dakotans should not hold their breath waiting for such explanation.

Stenehjem’s conduct suggests the need for legislation requiring the appointment of independent counsel to provide future Open Records and Meetings opinion when it involves the conduct of the attorney general or his office. The attorney general should not get to decide whether his or her meetings comply with the law. Governor Burgum and Attorney General Stenehjem also owe the public a full explanation of not only the topics that were discussed at their meeting with Pruitt, but the substance.