2010 WI App 64
court of appeals of
published opinion
Case No.: |
2009AP3235 |
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Complete Title of Case: |
†Petition for Review Filed |
Opinion Filed: |
April 13, 2010 |
Submitted on Briefs: |
December 10, 2009 |
Oral Argument: |
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JUDGES: |
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Concurred: |
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Dissented: |
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Appellant |
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ATTORNEYS: |
On behalf of the petitioners-appellants, the cause was submitted on the briefs of Elizabeth R. Lawton of Midwest Environmental Advocates, Inc., Madison. |
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Respondent |
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ATTORNEYS: |
On behalf of the respondent-respondent, the cause was submitted on the brief of J.B. Van Hollen, attorney general, and Joanne F. Kloppenburg, assistant attorney general. |
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2010 WI App 64
COURT OF APPEALS DECISION DATED AND FILED April 13, 2010 David
R. Schanker Clerk of Court of Appeals |
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NOTICE |
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This opinion is subject to further editing. If published, the official version will appear in the bound volume of the Official Reports. A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals. See Wis. Stat. § 808.10 and Rule 809.62. |
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Appeal No. |
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STATE OF |
IN COURT OF APPEALS |
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Curt Andersen, John Hermanson, Rebecca Leighton Katers, Christine Fossen Rades, Thomas Sydow, National Wildlife Federation and Clean Water Action Council of Northeastern Wisconsin, Inc.,
Petitioners-Appellants, v. Department of Natural Resources,
Respondent-Respondent. |
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APPEAL
from a judgment of the circuit court for
Before
¶1 BRUNNER, J. Curt Andersen, John Hermanson, Rebecca Leighton Katers, Christine Fossen Rades, Thomas Sydow, National Wildlife Federation and Clean Water Action Council of Northeastern Wisconsin, Inc. (collectively, the Council) appeal a judgment affirming a Department of Natural Resources (DNR) decision denying a hearing on a majority of their objections to a state-issued wastewater discharge permit. The Council claims the DNR and circuit court (1) incorrectly interpreted Wis. Stat. § 283.63[1] to require that contested issues be raised during the public comment period to preserve them for consideration during later proceedings; and (2) improperly concluded the DNR lacks authority to determine whether the permit violates federal law. We agree with both contentions and remand for a public hearing on the Council’s objections, to be conducted in accordance with the procedures set forth in § 283.63.
BACKGROUND
¶2 On May 27, 2005, the DNR issued a public notice of its intent
to reissue a Wisconsin Pollutant Discharge Elimination System (WPDES) permit to
Fort James Operating Company in
¶3 The Council objected to the proposed phosphorus limitations. It claimed the DNR failed to conduct a “reasonable potential analysis” required by federal law to determine the impact of additional phosphorus discharges on water quality.[3] The comment also alleged state rules permitting expression of phosphorus effluent limitations as a rolling twelve-month average violated federal law. Finally, the Council claimed the DNR violated state law by failing to perform an anti-degradation analysis. The Council did not contest the permit terms governing mercury sampling.
¶4 On August 24, 2005, the DNR issued a final decision on the permit. It determined none of the Council’s objections merited further action.[4] The permit was reissued without substantive changes.
¶5 The Council petitioned the DNR for review pursuant to Wis. Stat. § 283.63(1) and requested a public hearing.[5] The Council renewed its earlier assertions and raised new objections, including that the permit required mercury sampling too infrequently and that a reasonable potential analysis was also required for mercury discharges.
¶6 The DNR denied the petition in part on March 16, 2006. Interpreting Village of Thiensville v. DNR,
130
¶7 The Council was nonetheless denied a public hearing on many of its challenges to permitted phosphorus discharges. The DNR summarily concluded it lacked authority to resolve any challenges based on federal law. Because all the Council’s objections to the phosphorus provisions invoked federal law, the DNR’s decision effectively denied the Council a hearing on all claims except its assertion that state law required an anti-degradation analysis for phosphorus.
¶8 On April 13, 2006, the Council petitioned for judicial review of the DNR’s March 16 decision. In addition, the Council requested a judgment declaring the availability of a Wis. Stat. § 283.63 public hearing is not conditioned upon having raised issues during the public comment period. It also sought judgments declaring the DNR was required to comply with federal regulations and invalidating several state administrative code provisions relating to phosphorus and mercury discharges as conflicting with federal law.
¶9 The circuit court dismissed the Council’s petition and
affirmed the DNR’s decision. Relying on both its interpretation of
statutory language and the exhaustion of administrative remedies doctrine
articulated in
DISCUSSION
¶10 We have distilled two primary questions from those presented by the Council. The first is whether the DNR’s failure to receive submissions disputing the permit’s mercury monitoring requirements bars the Council from challenging them in a Wis. Stat. § 283.63 public hearing. The second is whether the DNR correctly limited the scope of the hearing to state law challenges. This question requires us to review the DNR’s conclusion that it lacked authority to determine whether state law complies with federal environmental legislation and rules. We consider each issue separately and resolve the remaining contested issues in the final section of this opinion.
1. Public Comment as a
Prerequisite to a Wis. Stat. § 283.63
Hearing
¶11 The circuit court offered two alternative rationales for its
conclusion that the allegations contained in a Wis. Stat. § 283.63 petition must first be raised during
the public comment period. First, the
court emphasized statutory language directing the DNR to “consider anew all
matters concerning [the challenged administrative action].” See Wis. Stat. § 283.63(1)(b). Statutory interpretation is a matter of law
we review de novo, regardless whether the analysis was conducted by the
circuit court, see State v. Long, 2009 WI 36, ¶20, 317
¶12 Wisconsin Stat. § 283.63
provides individuals aggrieved by a wastewater discharge permit one of the few
opportunities to challenge the permit after its issuance.[6] Within sixty days of the DNR’s action on a
permit, “5 or more persons may secure a review by the department of any permit
denial, modification, suspension or revocation, [or] the reasonableness of or
necessity for any term or condition of any issued, reissued or modified
permit ….” Wis. Stat. § 283.63(1).
Upon receipt of a petition, the DNR must schedule a public hearing at
which “the petitioner shall present evidence to the department which is in
support of the allegation made in the petition. All interested persons … shall be afforded an
opportunity to present facts, views or arguments relevant to the issues raised
by the petitioners, and cross-examination shall be allowed.” Wis.
Stat. § 283.63(1)(b). The
DNR must “consider anew all matters concerning the permit denial, modification,
suspension or revocation.”
¶13 The DNR suggests the words “review” and “anew” plainly evince a legislative intent to limit the hearing to matters previously raised but not yet resolved to a commenter’s satisfaction through the informal public comment process. The DNR places more weight on these words than they can reasonably bear. “Review,” as used in Wis. Stat. § 283.63, does not refer to an issue raised during the public comment period, but to a prior action taken by the DNR—in this case the reissuance of Fort James’ permit.[7] “Review” does not limit the § 283.63 hearing to matters previously raised.
¶14 Nor does the legislature’s use of the word “anew” manifest, as
the DNR claims, an unambiguous legislative intent to restrict the scope of a Wis. Stat. § 283.63 hearing. As the Council cogently observes, the
legislature replaced the phrase “de novo” with the term “anew” when removing
Latin terms from the statutes. 1979
¶15 When interpreting a statute, the context in which it appears is
important. State ex rel. Kalal v. Circuit
Court for Dane County, 2004 WI 58, ¶46, 271 Wis. 2d 633, 681
N.W.2d 110. The legislature’s desire to
achieve significant public participation in the permit process is evident
throughout Wis. Stat. ch.
283. Wisconsin
Stat. § 283.39 requires the DNR to give public notice of “each
complete application for a permit.”
Moreover, “[t]he department shall provide a period of not less than 30
days following the date of the public notice during which time interested
persons may submit their written views” on a permit application. Wis.
Stat. § 283.39(2).
¶16 The DNR has implicitly recognized this legislative goal in regulations facilitating public participation. Public notice of a completed permit application “is intended to inform interested and potentially interested members of the public of a completed application, [the DNR’s] tentative determination to issue or deny the permit … and the public’s right to obtain additional information, submit written comments, or request a public hearing.” Wis. Admin. Code § NR 203.02(1) (Nov. 1996). Public informational hearings are intended “to give all interested persons an additional opportunity to make a statement with respect to a proposed permit … and to have such statement considered in the final determination.” Wis. Admin. Code § NR 203.04 (Nov. 1996). Even the DNR’s statement of intent with respect to Wis. Stat. § 283.63 hearings reflects a desire for public involvement: “The purpose of this subchapter is to provide adequate procedures to insure as broad a degree of public participation in administrative adjudication of WPDES permits and their conditions as is consistent with procedural due process to the parties involved in the proceeding.” Wis. Admin. Code § NR 203.14 (Nov. 1996). These provisions demonstrate an intent to encourage public participation, not to progressively limit it.
¶17 The DNR argues our decision in
¶18 In Village of Thiensville, we held Wis. Stat. § 147.20(1) (1985-86), barred review and
concluded the statute did not “[open] the door to review of unmodified, as well
as modified, portions of a modified permit.”
¶19 “The
exhaustion doctrine is typically applied when a party seeks judicial
intervention before completing all the steps in the administrative
process.”
Functionally, [Thiensville’s interpretation] would result in a hearing examiner from the Department of Administration reviewing permit terms which might well be years old and which might never have been timely challenged at the basic DNR level. … [I]t is more appropriate for that initial reconsideration to be made by the DNR, rather than by the Division of Hearings and Appeals.
….
We are persuaded that the [administrative exhaustion] doctrine is as apt when applied to different administrative agencies as it is in its conventional usage—an agency versus a reviewing court. We believe the spirit of the exhaustion of remedies doctrine is served by allowing the agency with the expertise and experience to retain the right of first review.
¶20 We do not read
¶21 That the DNR may initially review a petitioner’s claims further
undermines its assertion of the administrative exhaustion doctrine. Wisconsin
Stat. § 283.63 identifies the DNR as the reviewing department, not
the Division of Hearings and Appeals. The administrator of
the division must assign a hearing examiner only if the DNR secretary does not
conduct the hearing. Wis. Stat. § 227.43(1)(b). Moreover, the DNR secretary may direct an
administrative law judge to conduct the hearing, but certify the record to a
DNR official for decision. Wis. Stat. § 227.46(3)(b); Wis. Admin. Code § NR 2.155(2)(a)
(Sept. 2004). Because the DNR may
initially adjudicate a petitioner’s claims, our concern in Village of Thiensville—that
the agency with the expertise and experience should retain the right of first
review—appears unfounded outside the specific context of that case.[10]
¶22 Neither Wis. Stat. § 283.63’s
language nor our decision in
2. DNR’s Authority to
Determine Whether Proposed Permit Terms Comply with Federal Law
¶23 The scope of review in an administrative appeal is identical to
that in proceedings before a circuit court.
City of
¶24 The DNR claims it lacks authority to determine whether permit conditions established by state regulations comply with federal law. The DNR provided scant justification for its position in its March 16, 2006, decision letter rejecting the Council’s hearing petition:
The sole authority for the [DNR] to administer the
WPDES permit program appears in Wis.
Stat. chs. 281 and 283, and Wisconsin Administrative Codes adopted
pursuant to those authorities. To the
extent that a challenge to a WPDES permit term or condition is made pursuant to
Wis. Stat. § 283.63, the
challenge must be based on
The DNR acknowledged in its decision letter that Wis. Stat. ch. 283 directs the DNR to conduct certain activities in accordance with federal law. The DNR makes the same concession on appeal, but argues only the EPA may determine whether permit provisions comply with federal requirements. The DNR’s position requires us to analyze the precise balance between federal and state authority struck by federal water pollution legislation.
¶25 The Federal Water Pollution Control Act Amendments of 1972,
“joined the Environmental Protection Agency and the fifty states in a delicate
partnership charged with controlling and eventually eliminating water pollution
throughout the
¶26 The EPA’s involvement in the permit process does not end when
its permitting authority is delegated to the state. Section 402(c)(1). The state must submit to the EPA a copy of
each application for a state permit.
Section 402(d)(1). The EPA
then has ninety days to object to the state permit, and may exercise its veto
“on the grounds that [the proposed permit terms] are ‘outside the guidelines
and requirements’ of the Amendments.” Save
the Bay, Inc., 556 F.2d at 1294.
Despite the EPA’s continuing supervisory role over state permit
programs, “[p]ermits granted under state NPDES programs are state-issued
permits, not EPA-issued.”
¶27 The legislative history of the Amendments makes clear Congress
envisioned the EPA would use its veto power judiciously. As the United States Court of Appeals for the
Fifth Circuit noted in Save the Bay, Inc., the public works
committee expected that “after delegation, the Administrator will withhold his
review of proposed permits which are not of major significance.”
¶28 The DNR suggests EPA’s failure to object is outcome
determinative, at least with respect to the Council’s federal law claims. In the DNR’s view, “Any permit challenges
must be based on state law only, because neither DNR nor the Division of
Hearings and Appeals has the authority to overrule the EPA’s prior
determination that this permit’s provisions are not objectionable under federal
law.” As shown, the EPA’s failure to
object does not mean it has found no reason to do so. While the lack of objection may indicate the
EPA has found no violation of federal law, it may also mean the EPA has found a
violation it does not deem substantial enough to warrant a veto, or it may mean
the EPA has abdicated its oversight duties altogether. See Federal
Water Pollution Control Act Amendments of 1972, § 402(d)(3);
¶29 “An administrative agency has only
those powers which are expressly conferred or can be fairly implied from the
statutes under which it operates.”
¶30 That the Council’s desired review will occur in a state administrative hearing under Wis. Stat. ch. 283 is irrelevant. As the DNR concedes, nothing in Wis. Stat. § 283.63 restricts the scope of the hearing to challenges grounded in state law. The DNR argues, however, that the statutory scheme leading up to this section reserves to the EPA the exclusive right to review a permit for consistency with federal law. The statutory scheme merely requires the DNR to provide the EPA with notice of a proposed permit and prohibits the DNR from issuing any permit the EPA has objected to. See Wis. Stat. §§ 283.41(1), (2), 283.31(2)(c). These statutory notice-and-approval sections do no more than that required by federal law and in no way defer to the EPA the exclusive right to determine state compliance with federal law.
¶31 Our conclusion is consistent with case law suggesting state
administrative agencies and courts may determine the requirements of, and state
compliance with, federal law. In Northern
States Power Co. v. Bugher, 189
¶32 The United States Court of Appeals for the Seventh Circuit has
also suggested both the DNR and state courts possess authority to measure state
regulatory action against the requirements of federal law. In Froebel v. Meyer, 217 F.3d 928,
930-32 (7th Cir. 2000), a state resident brought suit against the DNR and
Waukesha County in federal court, alleging the DNR’s removal of a dam violated
state environmental laws. The Seventh
Circuit concluded the plaintiff’s claims against the DNR were precluded because
he previously challenged the dam removal in a series of state proceedings
culminating in this court’s decision in Froebel v. DNR, 217
¶33 We conclude the DNR possesses authority to determine whether provisions within a state-issued wastewater discharge permit comply with federal law. Contrary to the DNR’s claims, no authority we have reviewed reserves to the EPA the exclusive right to determine state compliance with federal environmental legislation or rules. Our legislature has directed that all rules promulgated, and permits issued, comply with federal law, and the DNR acts within its statutory authority when determining whether they do so.
3. Remaining Contested
Issues
¶34 Our formulation of the critical issues has left unresolved several arguments raised by the Council, which we now address.
¶35 The
Council argues the circuit court erroneously dismissed its declaratory judgment
action for absence of a necessary party under Wis.
Stat. § 803.03. According to
the Council’s description of its request, it merely sought a declaration that
the “DNR must impose effluent limits and conditions in all WPDES permits that comply with federal law.” The circuit court properly dismissed the
action. There is no dispute state law
already requires the declaration sought by the Council. See
Wis. Stat. § 283.31(3)(d)2.
(authorizing the DNR to issue a discharge permit upon condition that any
discharges “comply with any applicable federal law or regulation”). “[D]eclaratory relief is appropriate wherever
it will serve a useful purpose ….” Lister
v. Board of Regents, 72
¶36 We need not address
whether the circuit court properly dismissed the Council’s declaratory judgment
action challenging the validity of Wis.
Admin. Code §§ NR 106.145 and 217.04(1)(a)2. (May 2005). The Council has supplied no argument on appeal
regarding the challenged rules’ validity, and notes in its reply brief that
these declaratory judgment requests “were not pursued and not before the court when it rendered its
decision.” See M.C.I., Inc. v. Elbin,
146
¶37 We decline to take judicial notice of a February 17, 2009, letter in which the EPA allegedly disapproved portions of Wis. Admin. Code § NR 106.145 (May 2005), as inconsistent with federal law. We agree with the DNR that the letter would have no bearing on whether the DNR properly denied the Council’s request for a hearing under state law. The letter would therefore be irrelevant to the resolution of this appeal.
¶38 Finally, the Council claims any requirement that it submit
objections during public comment to preserve review is an invalid unpromulgated
rule for which the DNR failed to follow rulemaking procedures. Because the Council has not responded to the
DNR’s argument to the contrary, we deem the matter conceded. See Charolais Breeding Ranches, Ltd. v. FPC
Secs. Corp., 90
CONCLUSION
¶39 We conclude the circuit court incorrectly interpreted Wis. Stat. § 283.63 and hold that the DNR must conduct a public hearing regardless of whether it received comments on the contested matter prior to a final decision on the permit application. We also conclude the DNR has authority to determine whether discharge permit provisions authorized by state regulations comply with federal law. We therefore reverse the circuit court and remand for entry of an order requiring the DNR to conduct a public hearing in accordance with the procedure set out in § 283.63.
By the Court.—Judgment reversed and cause remanded with directions.
[1] All references to the Wisconsin Statutes are to the 2007-08 version unless otherwise noted.
[2] Wisconsin
Stat. § 283.39(2) mandates the DNR “provide a period of not less
than 30 days following the date of the public notice during which time
interested persons may submit their written views on the tentative
determinations with respect to the permit application.” Wisconsin
Stat. § 283.49(1)(a) requires the DNR to “provide an opportunity
for … any interested … person or group of persons to request a public hearing
with respect to a permit application.”
[3] According to the Council, the proposed
permit increased the total volume of wastewater discharged by 19%. The Council noted, “While the 1.0 mg/l
effluent limitation for phosphorus has not changed, an increase in volume
without a corresponding decrease in concentration results in an increase in the
pollutant load.”
[4] The DNR agreed the “mass loading of phosphorus
discharged to the Fox River increased from an average of 42.6 pounds per day to
69.9 [pounds] per day,” but concluded a reasonable potential analysis—which
would determine whether phosphorus discharges exceeded water quality
standards—could not be performed “due to the lack of water quality criteria for
phosphorus.” The DNR also rejected the
Council’s contention that federal law required expression of phosphorus limits
as average monthly and maximum daily values, concluding that doing so would be
impracticable because state law did not require it. Finally, the DNR concluded its obligation to
conduct an anti-degradation analysis was not triggered because the increased
phosphorus discharge did not exceed permit limits.
[5] Wisconsin
Stat. § 283.63(1) allows
[a]ny … 5 or more persons [to] secure a review by [the
DNR] of any permit denial, modification, suspension or revocation, the
reasonableness of or necessity for any term or condition of any issued,
reissued or modified permit, any proposed thermal effluent limitation
established under s. 283.17 or any water quality based effluent limitation
established under s. 283.13(5).
After receiving a verified petition, § 283.63(1)(b) obligates the DNR to hold a public hearing at which the petitioner may present evidence in support of his or her petition. The DNR must issue its decision within ninety days after the close of the hearing. Wis. Stat. § 283.63(1)(d).
[6] Wisconsin
Stat. § 283.53(2)(b) allows the DNR, on its own initiative, to
modify, suspend or revoke a permit whenever it finds cause based on any
information available to it. While we
have recognized this statute may provide a remedy for those aggrieved by a DNR
permit decision but who fail, for whatever reason, to object within the times
set forth in Wis. Stat. ch. 283,
aggrieved parties have no right to reconsideration under this paragraph.
[7] The DNR relies on our statement in Village
of Thiensville that, by its use of the word “review,” the legislature
“envision[ed] a process repetitive of an earlier process, rather than a process
which breaks new ground in terms of its scope.”
[8] Our other rationales concerned the fact
that the Village’s interpretation would render certain statutory language
superfluous and the existence of the DNR’s discretionary review authority under
Wis. Stat. § 283.53(2)(b).
[9] The permit reissued on August 30, 2005. The Council filed its petition on October 28, 2005.
[10] The relationship between the DNR and the division of hearings and appeals is more nuanced than Village of Thiensville suggests. An agency may contract with the division to provide hearing services. Wis. Stat. § 227.43(1m). Where an administrative law judge presides over a hearing, the judge’s decision is, by rule, the final decision of the DNR, unless the DNR petitions for judicial review. Wis. Admin. Code § 2.155(1) (Sept. 2004). The DNR may nonetheless review the administrative law judge’s decision upon petition by an adversely affected party. Wis. Admin. Code § NR 2.20(1) (Sept. 2004).
[11] The DNR makes much of a stipulation in Sewerage
Commission of Milwaukee v. DNR, 102