Anglers of The Ausable Inc. v. Dep't of Envtl. Quality

• Decision Date: 29 December 2010
• Docket Number: Docket Nos. 138863, 138864, 138865, 138866.
• Citation: 488 Mich. 69,793 N.W.2d 596
• Parties: ANGLERS OF THE AuSABLE, INC., Mayer Family Investments, LLC, and Nancy A. Forcier Trust, Plaintiffs-Appellants, v. DEPARTMENT OF ENVIRONMENTAL QUALITY, Director of the Department of Environmental Quality, and Merit Energy Company, Defendants-Appellees.
• Court: Michigan Supreme Court

488 Mich. 69

793 N.W.2d 596

ANGLERS OF THE AuSABLE, INC., Mayer Family Investments, LLC, and Nancy A. Forcier Trust, Plaintiffs-Appellants,

v.DEPARTMENT OF ENVIRONMENTAL QUALITY, Director of the Department of Environmental Quality, and Merit Energy Company, Defendants-Appellees.

Docket Nos. 138863, 138864, 138865, 138866.

Supreme Court of Michigan.

Dec. 29, 2010.

Background: Anglers' association and landowners brought action against energy company and the Department of Environmental Quality(DEQ) alleging violations of surface-water law, riparian law, and the Michigan Environmental Protection Act (MPEA) arising from energy company's plan to discharge contaminated water from environmental cleanup site into a previously unpolluted site.The Circuit Court, Otsego County, Dennis F. Murphy, J., 2007 WL 7029100, entered injunction enjoining the discharge, but left open possibility that energy company could discharge water at a lower rate.All parties appealed.The Court of Appeals, 283 Mich.App. 115, 770 N.W.2d 359, affirmed in part and reversed in part.Association and landowners appealed.

Holdings:The Supreme Court, Davis, J., held that:

(1) reviewing permit decisions of the DEQ was within the judicial authority under the MPEA;overrulingPreserve the Dunes v. Department of Environmental Quality,471 Mich. 508, 684 N.W.2d 847;

(2) landowners and anglers' association had standing; and

(3) proposes use was unreasonable.

Affirmed in part, reversed in part, and remanded.

Marilyn J. Kelly, C.J., concurred separately and filed opinion in which Michael F. Cavanagh, J., joined.

Robert P. Young, Jr., J., dissented and filed opinion in which Maura D. Corrigan and Stephen J. Markman, JJ., joined.Olson, Bzdok & Howard, P.C.(by James M. Olson, Jeffrey L. Jocks, and Thomas A. Baird), Traverse City, for Anglers of the AuSable, Inc.

Topp Law Office(by Susan Hlywa Topp), Gaylord, for Mayer Family Investments and Nancy A. Forcier Trust.

Michael A. Cox, Attorney General, B. Eric Restuccia, Solicitor General, S. Peter Manning, Neil D. Gordon, and Darryl J. Paquette, Assistant Attorneys General, for the Department of Natural Resources and Environment.

Foster, Swift, Collins & Smith, P.C.(by Charles E. Barbieri and Zachary W. Behler), Lansing, for Merit Energy Company.

Dawda, Mann, Mulcahy & Sadler, PLC(by Brian J. Considine), Bloomfield Hills, for Amici Curiae the Michigan Council of Trout Unlimited.

Neal, Gerber & Eisenberg LLP(by Phil C. Neal and Dao L. Boyle) for Amici Curiae Preserve the Dunes, Inc.

Michael H. Dettmer, Traverse City, for Amici Curiae Michigan Citizens for Water Conservation.

Clark Hill PLC(by David D. Grande-Cassell and Kristin B. Bellar), Lansing, for Amici Curiae the Michigan Manufacturers Association.

Beier Howlett, P.C.(by Jeffrey K. Haynes and Keith C. Jablonski), Bloomfield Hills, for Amici Curiae the Michigan Environmental Council.

Nicholas J. Schroeck and Sara R. Gosman for Amici Curiae the National Wildlife Federation and the Great Lakes Environmental Law Center.

DAVIS, J.

In this casewe determine whether defendantMerit Energy Company's plan to discharge contaminated water from an environmental cleanup site in the Manistee River watershed into a previously unpolluted site in the AuSable River watershed is an allowable use of water.We also determine in this case whether the Michigan Department of Environmental Quality(DEQ)(which is now the Department of Natural Resources and Environment) can be sustained as a defendant in an action brought under the Michigan environmental protection act (MEPA), MCL 324.1701 et seq., when the DEQ is alleged to have authorized activity that will harm the environment.

We hold that Merit's discharge plan is not an allowable use of water because it is manifestly unreasonable, and we further hold that the DEQ can be sustained as a defendantin a MEPA action when the DEQ has issued a permit for activity that it is alleged will cause environmental harm.Accordingly, we reverse the Court of Appeals' judgment in part and remand the case for reinstatement of the trial court's decision holding the DEQ accountable for violating MEPA.

I.FACTS AND PROCEDURAL HISTORY

This case arises out of Merit's proposed plan to discharge treated, but still partially contaminated, water from the ManisteeRiver watershed into the AuSable River water system in an effort to clean a plume of contaminated groundwater.

In 2004, Merit acquired the Hayes 22 Central Production Facility (CPF) located in Otsego County, Michigan.As a condition to purchasing the CPF, Merit entered into a settlement agreement with the DEQ to remediate the plume of contaminated groundwater that had originated from the CPF.

The exact size of the plume, which at the time was continuing to expand, is unknown.The plume contains benzene, toluene, ethylbenzene, and xylenes and chlorides contained in brine, among other contaminants.The plume is known to have contaminated several residential drinking wells and may have contaminated other residential wells as it continued to expand.

Merit evaluated a number of options for remediation and ultimately chose air stripping—a process that forces a stream of air through water, causing hydrocarbons to evaporate.¹Merit submitted a corrective action plan to the DEQ to remediate 1.15 million gallons of plume water a day through the use of air stripping.

The plan was to send the 1.15 million gallons a day through a 1.3-mile pipeline from the air-stripping site to be discharged into Kolke Creek.Kolke Creek forms the headwater system for the AuSable River watershed.Kolke Creek feeds into Bradford Creek, Lynn Lake, and the AuSable River.²

The DEQ approved Merit's corrective action plan and issued a general permit and certificate of coverage allowing discharge of treated water from the air stripper into the wetland area flowing into Kolke Creek.The DEQ also granted Merit an easement through state-owned land to allow Merit to construct the pipeline from the air stripper to the discharge point.

Plaintiffs filed a complaint against Merit and the DEQ in the Otsego County Circuit Court.Plaintiffs alleged violations of surface-water law, riparian law, and MEPA.Plaintiffs sought an injunction against the discharge plan.

After a bench trial on plaintiffs' complaint, the trial court issued an opinion and injunction preventing Merit from discharging the air-stripped water into Kolke Creek.The court made detailed findings of fact and concluded that the proposed discharge plan would severely harm the AuSable River water system because of the increased flow of water and the increased level of substances not previously found in Kolke Creek.³It applied the "reasonable use balancing test" from Mich. Citizens for Water Conservation v. Nestlé Waters North America Inc.,269 Mich.App. 25, 709 N.W.2d 174(2005).

In applying the reasonable-use balancing test from Nestlé,the trial court concluded that Merit's proposed amount ofdischarge constituted an unreasonable use.The court ruled that the proposed discharge, and the DEQ's authorization of the discharge, violated MEPA.However, in its injunction preventing the discharge, the court left open the possibility that Merit could discharge treated water into Kolke Creek at a lower rate that might be considered reasonable under the reasonable-use balancing test.⁴

All parties appealed in the Court of Appeals.In a unanimous opinion, the Court of Appeals affirmed the trial court's decision regarding the reasonableness of Merit's proposed discharge plan.Anglers of the AuSable, Inc. v. Dep't of Environmental Quality,283 Mich.App. 115, 770 N.W.2d 359(2009).The Court applied the reasonable-use balancing test and noted that the trial court had left open the possibility that Merit could discharge treated water at a lower, more reasonable rate.Id. at 136-137, 770 N.W.2d 359.The Court of Appeals also unanimously dismissed the DEQ as a defendant, applying this Court's precedent from Preserve the Dunes, Inc. v. Dep't of Environmental Quality,471 Mich. 508, 684 N.W.2d 847(2004).

Plaintiffs sought leave to appeal in this Court.We granted leave to appeal, asking the parties to discuss, among other issues, whetherMich. Citizens for Water Conservation v. Nestlé Waters North America Inc., 479 Mich. 280, 737 N.W.2d 447(2007), andPreserve the Dunes were correctly decided.⁵

II.STANDARD OF REVIEW

[1][2]We review a trial court's factual findings for clear error and its legal conclusions de novo.Hendee v. Putnam Twp.,486 Mich. 556, 566, 786 N.W.2d 521(2010).Whether this Court's decision in a previous case should be overruled is a question of law that this Court reviews de novo.Bush v. Shabahang,484 Mich. 156, 164, 772 N.W.2d 272(2009).

III.ANALYSIS

A.PRESERVE THE DUNES v. DEP'T OF ENVIRONMENTAL QUALITY

[3] In our order granting leave to appeal, we asked the parties to address whether this Court's opinion in Preserve the Dunes was correctly decided.After further review of the Preserve the Dunes decision, we conclude that it was decided incorrectly and, accordingly, we overrule it.

Preserve the Dunes involved a group of citizens suing the DEQ for authorizing a permit for a sand dune mining operation ⁶ in violation of the sand dune mining act (SDMA).MCL 324.63701 et seq.The dune that was to be mined had previously been designated as a protected dune that could not be mined unless one of two exceptions contained in the SDMA applied.The two exceptions were not applicable in that case; therefore, the DEQ's permitallowing the mining operation on the protected dune violated the law.

The concerned citizens in that case filed a lawsuit against the DEQ under MEPA to protect "the air, water, and other natural resources and the public trust in these resources from pollution, impairment, or destruction."MCL 324.1701(1).The majority in Preserve the Dunes held that reviewing the DEQ's permit decisions was outside the judicial authority under MEPA.Preserve the Dunes,471 Mich. at...