Circuit Court Rules in Favor of New Chester Dairy!

[While this post is a little late] Christmas came early for the Great Lakes Legal Foundation this year when, on December 2nd, Judge Mark McGinnis of the Outagamie Circuit Court released his decision in favor of New Chester Dairy and Intervenors, in New Chester Dairy v. DNR, holding DNR does not have authority to impose monitoring conditions on high capacity well permits without explicit authority to do so. This is good news for all those who believe in the rule of law.

In 2012 New Chester Dairy (New Chester) applied to modify its Wisconsin Pollutant Discharge Elimination System (WPDES) permit. DNR approved the modification but placed a monitoring condition on the permit requiring New Chester to install five groundwater monitoring wells and collect data from the wells for at least three years. New Chester was then required to provide the data to DNR. New Chester challenged the condition in a contested case hearing, but the administrative law judge granted a motion of summary judgment in favor of DNR holding DNR had authority to impose the monitoring condition.

When New Chester appealed, the Great Lakes Legal Foundation (GLLF) intervened on behalf of Wisconsin Manufacturers and Commerce, Diary Business Association, Midwest Food Processors Association, and Wisconsin Potato and Vegetable Growers Association. New Chester and GLLF argued that that 2011 Act 21, specifically Wis. Stat. § 227.10(2m), prohibits DNR from imposing conditions on permits unless they are given explicit authority to do so by state statute or administrative rule. DNR and Clean Wisconsin argued DNR (1) had explicit authority to impose the condition under Wis. Admin. Code § 812.09 and (2) had implicit authority to impose the condition.

The Court held that DNR did not have authority to impose a monitoring condition on New Chester because DNR had neither explicit nor implicit authority to do so. Judge McGinnis stated that Wis. Admin. Code NR § 812.09 does not grant DNR explicit authority to impose the condition because it only applies to well and heat exchange drill holes. He further said DNR cannot rely on implicit authority because the plain language of Wis. Stat. § 227.10(2m) states that such conditions must be “explicitly required or explicitly permitted by statute or by a rule” for an agency to place a “term or condition” on a permit. The Court reversed the administrative law judge’s decision and remanded to DNR for removal of the monitoring condition.

Beyond the holding of the case, the dicta[1] holds good news for GLLF and those who believe in the rule of law. The Court stated that “under the plain language of Wis. Stat. § 227.10(2m), agencies cannot rely on implied authority to impose conditions.” Furthermore, in response to Clean Wisconsin’s argument that “courts have consistently found that limiting agency powers to those expressly granted is too restrictive to allow agencies to function in an efficient and effective manner” the Court declared that “the legislature disagrees with Clean Wisconsin… legislative history indicates the Legislature wanted to provide subjects of agency regulation more notice and involvement in how regulations will be applied to them.” Essentially this means that the Legislature can, and within the scope of Wis. Stat. § 227.10(2m) did, eliminate agencies’ implicit authority to regulate. The elimination of such authority would prevent administrative agencies from levying previously unheard-of regulatory burdens without prior notice or input from regulated stakeholders and the general public. This case is a win for transparent and accountable government and helps reassert the Legislature’s proper role as the source of agency authority.

Links to the decision can be found here and the GLLF’s page on the case and unlawful imposition of conditions on high capacity well permits can be found here.