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OAH and Collateral Estoppel: We're All Inclined to Follow Klein

By Eric L. Lipman

As I have noted before, retired Administrative Law Judge Allan Klein was fond of remarking that in proceedings before the Office of Administrative Hearings, parties who ?save? their best arguments for later decision-makers ? whether it be an agency head or a reviewing Court ? do so at their peril. An unpublished decision issued yesterday by a panel of the Minnesota Court of Appeals gives further support to Judge Klein?s view (and, ironically enough, was rendered in a case that was first presented to Judge Klein himself).

Lake of the Woods County real estate developer, Gary Bailey, proposed the development of 13 acres of lakeshore property. While the Minnesota Pollution Control Agency had initially issued a certification to the effect that the proposed project complied with Section 401 of the Clean Water Act, it later reversed that determination and revoked the certificate. Bailey complained that the Agency?s withdrawal of the certification amounted to a regulatory taking.

Turning away the developer?s appeal, the panel held that a 2003 determination by Judge Klein of OAH that Bailey?s proposed project would create a nuisance, was binding upon Bailey and disposed of his regulatory taking claim. Writing for the panel, Judge Michelle Larkin observed:

The MPCA concluded that revocation was appropriate because appellant had failed to fully disclose the nature of the wetlands on his property and because appellant?s proposed development would endanger public health by creating a nuisance condition where septic systems installed in the wetland soil would fail and discharge untreated sewage into the water supply.

Appellant appealed the MPCA?s findings to an administrative law judge (ALJ), who affirmed the MPCA?s conclusions after a contested-case hearing.? The MPCA adopted the ALJ?s findings and recommendation and revoked the certification. Appellant did not seek review of the MPCA?s decision by writ of certiorari.

The ALJ?s conclusion that appellant?s proposed development would create a nuisance is binding in this case?.
?.

Given the binding determination that appellant?s proposed development would create a nuisance, summary judgment was appropriate because the enforcement of regulations in an effort to abate a nuisance does not result in an unconstitutional taking.

Judge Klein?s opinion on the propriety of the revocation of the certification is accessible here and the panel?s analysis from yesterday is accessible here.

Full post as published by Within the Scope on November 05, 2008 (boomark / email).