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Clean Wisconsin, Inc. v. DNR – Act 21 Explicit Authority and Public Trust Delegation

Appeal No. 2018AP0059

GLLF represents eight Wisconsin business associations in this Act 21 explicit authority case. The question at issue is whether an agency must consider only the authority given to it explicitly by the legislature, or consider other sources of authority as well.

On Oct. 11, 2017, the Dane County Circuit Court ruled in favor of Clean Wisconsin to void seven high capacity well permits approved by the Wisconsin Department of Natural Resource (DNR). The court rested its decision on the Public Trust Doctrine and the Wisconsin Supreme Court’s Lake Beulah Decision. On April 9, 2019, the Wisconsin Supreme Court accepted Clean Wisconsin and its companion case, Kinnard Farms. Opening and reply briefs have been filed and oral arguments are scheduled for April 12, 2021.

Latest Developments

  • On March 24, 2021 GLLF filed its reply brief, which was also joined by the Wisconsin Legislature’s reply brief
  • On February 4, 2021 GLLF filed its opening brief on the merits of the case, which was also joined by the Legislature’s initial brief
  • On January 5, 2021, the Wisconsin Supreme Court granted the Wisconsin Legislature’s motion to intervene, and ordered briefing on the merits of the case. 
  • On April 25, 2019, the Wisconsin Legislature moved to intervene in the case to support of the validity of the well permits.
  • On May 2, 2019 due to a change in leadership at the DOJ, the DNR moved to reverse its prior position and join Clean Wisconsin in asking the court to vacate its permits.
    • GLLF opposed DNR efforts to void its own permits and filed a brief and reply brief in support of the Legislature’s intervention.
    • Whether the legislature can intervene remains at issue, causing the case has been put on hold until that matter is settled.
  • On May 13, 2020, the Wisconsin Supreme Court ruled in favor of the legislature in Wisconsin Legislature v. Palm affirming Act 21’s limits on agency authority in the context DHS’s COVID-19 emergency orders.
  • On Oct. 6, 2020, the Wisconsin Supreme Court cleared the way for legislative intervention under Wis. Stat. § 803.09(2m) in Democratic National Committee v. Bostelmann

Why This Case is Important

  • 2011 Wis. Act 21 limits agency authority to the explicit language of a statuteno delegations arising from legislative intent, purpose, findings, or policy. DNR followed the explicit language in high capacity well permitting statutes that limited considerations when it approved nine high capacity well permits. Clean Wisconsin, DOJ and DNR argue agencies must take into account other sources of authority, including authority implied in prefatory statutory provisions.
  • While Wisconsin Legislature v. Palm recently addressed Act 21’s prescriptions for agency authority, DNR continues to ignore the bounds of its enabling legislation with its high capacity well permitting program. In its decision, the court should establish judicial review standards when assessing the reach of agency authorities. If the court finds that such legislative delegations to agencies must indeed be explicit, then Act 21 may well be the most important constraint ever on the administrative state.

Case Analysis

For modern farmers, high-capacity wells provide a vital tool for success in agricultural irrigation and livestock care. A high-capacity well is a well capable of pumping more than 100,000 gallons of water per day when combined with other wells on the same property. In order to build a high-capacity well, a farmer must first receive approval via a permit from DNR. In 2014, nine Wisconsin farmers applied for high-capacity well permits later approved by DNR in 2016.

The Wisconsin Legislature provides detailed specifications for DNR’s high-capacity well permit approval process in Wis. Stat. § 281.34 and § 281.35. For example, all applications must include comprehensive information about the proposed well’s location and features so DNR can evaluate whether it would impact a public water supply or other sensitive resource. Certain factors about the proposed well might trigger further requirements, such as a review under the Wisconsin Environmental Policy Act (WEPA Review). But the legislature clearly specifies those factors and never explicitly grants DNR authority to impose additional requirements not otherwise triggered by the proposed well.

DNR approved the nine high capacity well permit applications following the regulatory scheme established in Wis. Stat. § 281.34 and § 281.35. Undisputedly, the proposed wells did not trigger further analysis under the legislature’s regulatory scheme. But immediately following their approval, Clean Wisconsin, Inc., an environmental group, filed a contested case hearing against the permit approvals, saying DNR ignored its duty to the public trust doctrine by approving the wells.

The public trust doctrine, incorporated into Wisconsin Constitution art. IX, § 1, is a legislative responsibility to hold navigable waters in trust for public use. Clean Wisconsin argues that the legislature delegated its public trust duty to DNR through Wis. Stat. §§ 281.11-.12 as recognized in Lake Beulah Management Dist. v. DNR and DNR failed to consider it when approving the wells.

Clean Wisconsin’s analysis is problematic, as discussed in more detail later, but the circuit court ruled in their favor against the permits. The farmers appealed and the Court of Appeals certified it to the Wisconsin Supreme Court without ruling.

Dane County Circuit Court
In November 2016, Clean Wisconsin filed nine petitions for judicial review challenging DNR’s decisions to approve these nine high capacity well permits. They asked the court to invalidate the permits because DNR failed to exercise broad statutory authorities and Public Trust duties.

Ostensibly, Clean Wisconsin is asking the court to throw out Attorney General Brad Schimel’s May 10, 2016, formal opinion finding that DNR lacks authority to consider cumulative impacts of wells seeking permits. In response to that opinion, DNR revamped its high capacity well program, which in turn significantly reduced the permit application backlog. The Schimel opinion rests on 2011 Wisconsin Act 21, which requires explicit legislative delegation of authorities to agencies.

On Jan. 6, 2017, GLLF, on behalf of eight Wisconsin business associations, asked a Dane County court for permission to intervene in the litigation. These associations supported 2011 Wis. Act 21 and its explicit authority requirement as set forth in the Schimel AG opinion. In addition, although the litigation was aimed at individual permit holders, if the relief requested by Clean Wisconsin is granted, the court decision could threaten the validity of hundreds of high capacity well permits issued under new DNR policies.

GLLF was granted intervention-party status on June 9, 2017.  The intervenors argue in their brief that Act 21 limits DNR’s authority, and that any ruling in favor of Clean Wisconsin would put in jeopardy hundreds of high capacity well permits issued since the attorney general opinion.

On October 11, 2017, the circuit court ruled in favor of Clean Wisconsin. Resting its decision on the Public Trust Doctrine and the Wisconsin Supreme Court’s Lake Beulah Decision, the court vacated seven of the high capacity well permits and remanded one back to DNR for further evaluation of possible cumulative impacts consistent with its decision.

Court of Appeals
DOJ/DNR, along with GLLF, appealed the circuit court case to Wisconsin Court of Appeals District II. Madison’s District IV, however, grabbed the case and its sister case Kinnard Farms, creating a separate dispute ending up before the Wisconsin Supreme Court on venue—Wisconsin Department of Natural Resources v. Wisconsin District IV Court of Appeals  (Case No.: 2016AP1980). On April 3, 2018, the Supreme Court ruled in favor of having District II hear the cases (2018 WI 25).

On May 2, 2018, the Great Lakes Legal Foundation filed with the Court of Appeals its initial brief on behalf of eight Wisconsin associations, followed a reply brief on June 18, 2018.

Supreme Court
Briefing on the case has been delayed at the Supreme Court

2011 Wis. Act 21 and Agency Delegation
The question of DNR’s authority to impose additional requirements on permit applications falls squarely within the bounds of a larger debate about the meaning of 2011 Wis. Act 21 (Act 21) and how the legislature grants agencies authority. Administrative agencies can only operate with authority granted by the legislature. Historically, Wisconsin courts interpreted grants of legislative authority to include express grants, such as the regulatory scheme for high capacity well permits, and implicit grants, those “implied” by express grants of authority. For example, if the legislature provided a general description of department duties, the court presumed the legislature implicitly granted the agency legislative authority to enact those duties.

In 2011, the Wisconsin legislature pushed back on the court’s interpretations of its grants of legislative authority by amending the Wisconsin Administrative Procedure Act (Wisconsin APA) with Act 21. For the purpose of this case, Act 21 added two important provisions to the Wisconsin APA: Wis. Stat. § 227.10(2m) (which requires explicit delegations) and Wis. Stat. §§ 227.11 (2)(a)1 and 2 (which explicitly rejects finding delegation in statements of legislative intent, purpose, findings, or policy or statutory provision describing the agency’s general powers or duties.)

 Wis. Stat. § 227.10(2m)’s “explicit authority” requirement came as a direct response to the court’s use of phrases like express and implicit authority. As introduced in the Assembly, Act 21 used the word “expressly” instead of “explicitly” because the Legislative Reference Bureau (the agency that writes the legal language in bills) found the term “expressly” more comfortable given its traditional usage. In response, the Senate amended the bill to replace “expressly” with “explicitly.” It returned to the Assembly for concurrence it went through a floor amendment to approve the change. Not often does a floor amendment target one word. Clearly, that word—explicit—holds important definitional meaning: not implied.

Read the full history of Act 21 here.

The Wisconsin Supreme Court also recognized the importance of the change. In Wisconsin Legislature v. Palm, it noted:

[T]he Legislature significantly altered our administrative law jurisprudence by imposing an explicit authority requirement on our interpretations of agency powers…[and] prevents agencies from circumventing this new explicit authority requirement by simply utilizing broad statutes describing the agency’s general duties or legislative purpose as a blank check for regulatory authority.

2020 WI 42, ¶ ¶ 51-52 (internal quotation marks omitted).

Only one other precedential case mentions Act 21: Lake Beulah Management Dist. v. DNR relied on by Clean Wisconsin for its argument that the legislature delegated DNR its public trust responsibility. But Lake Beulah never purported to analyze the scope of Act 21. It referenced it in a single footnote only, noting: “None of the parties argues that the amendments to Wis. Stat. ch. 227 in 2011 Wisconsin Act 21 affect the DNR’s authority in this case…. We agree with the parties that 2011 Wisconsin Act 21 does not affect our analysis in this case. Therefore, we do not address this statutory change any further.”

GLLF Briefing Positions
Under Act 21, administrative agencies can only operate with authority explicitly delegated to them through an enabling statute. And for statutes purporting to delegate constitutional responsibilities, caselaw arguably imposes an even higher standard of clarity and specificity than general statutory delegations. See City of Madison v. Tolzman, 7 Wis. 2d 570, 575, 97 N.W.2d 513 (1959). To prove the legislature delegated its public trust responsibility, Clean Wisconsin must first find the delegation within the explicit boundaries of DNR’s enabling legislation and then prove it reaches the heightened clarity for constitutional delegation. But it can do neither.

Clean Wisconsin—and now DNR—claim the legislature explicitly delegated public trust authority under Chapter 281’s preamble and purpose clauses: Wis. Stat. §§281.11 (Statement of policy and purpose) and 281.12 (General department powers and duties). The circuit court agreed, noting:

Wis. Stat. § 281.11 explicitly states that the purpose of this subchapter is to grant necessary powers and organize a comprehensive program under a single state agency for the enhancement of the quality management and protection of all others of the state, ground and surface, public and private.

Wis. Stat. § 281.12 explicitly grants the DNR authority to ‘have general supervision and control over the waters of the state. It shall carry out the planning, management and regulatory programs necessary for implementing the policy and purpose of the state. It shall carry out the planning, management and regulatory programs necessary for implementing the policy and purpose of the chapter…’

(Emphasis theirs)

But such an analysis fails on three grounds: first, it ignores the direct language of Act 21. Second, it misinterprets enabling statutes. And third, it overlooks the political process necessary to create a regulatory scheme like the one governing high capacity wells.

The Legislature Has Not Explicitly Delegated DNR Authority to Regulate High Capacity Wells Outside of The Comprehensive Regulatory Scheme Set Forth in Wis. Stat. § 281.34

Wis. Stat. §§ 227.11 (2)(a)1. and 2. make clear that statements of policy and purpose (referring to DNR’s role under Wis. Stat. § 281.11 in managing the waters of the state) and its general powers and duties (§ 281.12—to supervise and control the waters of the state), are not a basis for rulemaking authority. Prefatory provisions do not provide explicit delegation of authority to regulate high capacity wells. The terms used in both provisions describe general responsibilities, not authorities to regulate. If there was doubt on this issue before, there is none post-Act 21.

Rather than using prefatory clauses as a regulatory wildcard, the legislature conferred DNR explicit authority when it enacted high capacity well regulatory authority under Wis. Stat. § 281.34. This section provides a comprehensive permitting framework with explicit standards that do not trump general prefatory clauses.

Wis. Stat. § 281.34 is the enabling statute relating to high capacity wells. Any mandates relating to high capacity wells must be explicitly set forth within those boundaries.

Key Documents

Supreme Court Party Filings 
GLLF Reply Brief (March 24, 2021)
Wisconsin Legislature Reply Brief (March 24, 2021)
DNR Response Brief (March 10, 2021) 
Clean Wisconsin Response Brief (March 10, 2021)
GLLF Opening Brief (February 4, 2021)
Legislature Initial Brief (February 4, 2021)
Filings Relating to Legislative Intervention

Supreme Court Orders
SC Order on Briefing Schedule (January 5, 2021)
SC Order on Motion to Intervene (January 5, 2021)
SC Order Intervention Briefing (May 30, 2019)
SC Order Briefing Stay (May 7, 2019)
SC Order_Taking Case and Briefing (April 4, 2019)

Appellate Court Documents
GLLF Co-Appellants’ Initial Brief (May 2, 2018)
DOJ/DNR Appellate Opening Brief (May 2, 2018)
Clean Wisconsin Response Brief (June 1, 2018)
GLLF Co-Applellants’ Reply Brief (June 18, 2018)

Circuit Court Filings
Circuit Court Decision (Oct. 11, 2017)

Clean Wisconsin’s Principal Brief (June 16, 2017)
DOJ/DNR Response Brief (Aug. 4, 2017)
GLLF Response Brief (Aug. 7, 2017)
Clean Wisconsin Reply Brief (Aug. 23, 2017)

Amicus Brief in Support of Petitioners on Behalf of the Town of Rome (June 26, 2017)
Amicus Brief in Support of Petitioners on Behalf of Central Sands Water Action Coalition
(June 19, 2017)

GLLF Notice of Petition and Petition to Intervene (Jan. 6, 2017)
GLLF Brief in Support of Petition to Intervene (Jan. 6, 2017)
GLLF Combined Affidavits (Various dates)
Order Granting Permission to Intervene (June 9, 2017)

Other Documents
Affidavit of Carl A. Sinderbrand (June 16, 2017)
Noting Wisconsin Supreme Court in Lake Beulah did not address Act 21 provisions at issue in this case.