Clean Water Action Council of Ne. Wis. v. Wis. Dep't of Natural Res.

Decision Date29 April 2014
Docket NumberNo. 2013AP2112.,2013AP2112.
Citation848 N.W.2d 336,354 Wis.2d 286,2014 WI App 61
PartiesCLEAN WATER ACTION COUNCIL OF NORTHEAST WISCONSIN, Petitioner–Appellant, v. WISCONSIN DEPARTMENT OF NATURAL RESOURCES, Respondent–Respondent, Appleton Coated LLC, Respondent.
CourtWisconsin Court of Appeals

OPINION TEXT STARTS HERE

On behalf of the petitioner-appellant, the cause was submitted on the briefs of James E. Parra and Elizabeth R. Lawton of Midwest Environmental Advocates, Inc., Madison.

On behalf of the respondent-respondent, the cause was submitted on the brief of Jordan J. Hemaidan and Michael P. Screnock of Michael Best & Friedrich LLP, Madison.

Before HOOVER, P.J., MANGERSON and STARK, JJ.

STARK, J.

¶ 1 Clean Water Action Council of Northeast Wisconsin (CWAC) appeals an order dismissing its petition for judicial review of the Wisconsin Department of Natural Resources' (DNR) decision to reissue a Wisconsin Pollution Discharge Elimination System (WPDES) permit to Appleton Coated LLC. Relying on Sewerage Commission v. DNR, 102 Wis.2d 613, 307 N.W.2d 189 (1981), the circuit court concluded CWAC failed to exhaust its administrative remedies because it petitioned for judicial review under Wis. Stat. § 227.521 without first obtaining a contested case hearing under Wis. Stat. § 283.63. We agree with the circuit court that Sewerage Commission is controlling and requires a contested case hearing under § 283.63 as a prerequisite to judicial review of the DNR's decision to issue a WPDES permit. We therefore affirm the order dismissing CWAC's petition.

BACKGROUND

¶ 2 The United States Congress enacted the Federal Water Pollution Control Act Amendments of 1972 (the Clean Water Act) to “restore and maintain the chemical, physical, and biological integrity of the Nation's waters.” 33 U.S.C. § 1251(a). “To effectuate that objective, the Clean Water Act generally prohibits the discharge of any pollutant into navigable waters except when done pursuant to a National Pollution Discharge Elimination System (NPDES) permit.” Andersen v. DNR, 2011 WI 19, ¶ 33, 332 Wis.2d 41, 796 N.W.2d 1 (citing 33 U.S.C. § 1311(a)). The United States Environmental Protection Agency (EPA) has primary authority to issue NPDES permits, but it may delegate that authority to a state when certain conditions are met. 33 U.S.C. § 1342(a)(1), (b). The EPA approved Wisconsin's WPDES permitting program on February 4, 1974. Andersen, 332 Wis.2d 41, ¶ 37, 796 N.W.2d 1. The WPDES program is administered by the DNR and governed by Wis. Stat. ch. 283. Wis. Stat. §§ 283.001(2), 283.01(3).

¶ 3 On October 1, 2012, the DNR reissued a WPDES permit to Appleton Coated authorizing it to discharge treated wastewater from its paper production facility into the lower Fox River. CWAC filed a petition for judicial review of the DNR's decision to reissue the permit, under Wis. Stat. § 227.52, arguing the permit violated several state statutes and administrative rules. Appleton Coated moved to dismiss CWAC's petition, arguing: (1) CWAC failed to exhaust its administrative remedies because it did not obtain a contested case hearing under Wis. Stat. § 283.63 before seeking judicial review; and (2) the portions of the permit that CWAC asserted were illegal did not constitute final agency decisions. The circuit court agreed with Appleton Coated's first argument and dismissed CWAC's petition. CWAC now appeals.

DISCUSSION

¶ 4 [W]here a statute sets forth a procedure for review of administrative action and court review of the administrative decision, such remedy is exclusive and must be employed before other remedies are used.” Nodell Inv. Corp. v. City of Glendale, 78 Wis.2d 416, 422, 254 N.W.2d 310 (1977). Pursuant to this principle, courts generally deny judicial relief until the parties have exhausted their administrative remedies. Id. at 424, 254 N.W.2d 310. The requirement that parties exhaust their administrative remedies ‘is a doctrine of judicial restraint, justified by good policy reasons.’ It permits the administrative agency to apply its own expertise to the matter, promotes judicial efficiency, and may provide the court with greater clarification of the issues in the event the matter is not resolved before the agency.” St. Croix Valley Home Builders Ass'n, Inc. v. Township of Oak Grove, 2010 WI App 96, ¶ 11, 327 Wis.2d 510, 787 N.W.2d 454 (quoting State ex rel. Mentek v. Schwarz, 2001 WI 32, ¶ 8, 242 Wis.2d 94, 624 N.W.2d 150).

¶ 5 Whether to apply the doctrine of exhaustion is committed to the circuit court's discretion. Id., ¶ 10 & n. 5. Thus, we will uphold the circuit court's decision if it examined the relevant facts, applied a proper standard of law, and used a demonstrably rational process to reach a reasonable conclusion. Id., ¶ 10. We independently review any questions of law underlying the court's discretionary decision. Monicken v. Monicken, 226 Wis.2d 119, 125, 593 N.W.2d 509 (Ct.App.1999).

¶ 6 The circuit court concluded CWAC failed to exhaust its administrative remedies because it proceeded directly to judicial review under Wis. Stat. § 227.52 without first obtaining a contested case hearing under Wis. Stat. § 283.63. CWAC argues the court erred because § 283.63 is not the exclusive review procedure for WPDES permitting decisions. In the alternative, CWAC argues that, even if it was required to proceed under § 283.63, the circuit court should have applied an exception to the exhaustion doctrine. We reject both of these arguments for the reasons explained below.

I. Failure to exhaust administrative remedies

¶ 7 To determine whether the circuit court properly exercised its discretion when it concluded CWAC failed to exhaust its administrative remedies, we must interpret the relevant statutesWis. Stat. §§ 227.52 and 283.63. Statutory interpretation presents a question of law that we review independently. McNeil v. Hansen, 2007 WI 56, ¶ 7, 300 Wis.2d 358, 731 N.W.2d 273.

¶ 8 Wisconsin Stat. § 227.52 provides a general right to judicial review of administrative decisions “except as otherwise provided by law.” 2 The circuit court concluded Wis. Stat. § 286.63 provides an exception to § 227.52 review for WPDES permitting decisions. Section 286.63(1) states:

Any [WPDES] permit applicant, permittee, affected state or 5 or more persons may secure a review by the [DNR] of any permit denial, modification, termination, or revocation and reissuance, 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).

The statute further provides that a petition for review of a WPDES permitting decision must be filed “within 60 days after notice of any action which is reviewable under this section is issued[.] Wis. Stat. § 283.63(1)(a). After the DNR receives the petition, it must hold a public hearing, at which the petitioner “shall present evidence ... which is in support of the allegation made in the petition.” Wis. Stat. § 283.63(1)(b). In addition, [a]ll interested persons or their representative 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.” Id. The DNR must “consider anew all matters concerning the permit denial, modification, termination, or revocation and reissuance” and issue a decision within ninety days. Wis. Stat. §§ 283.63(1)(b), (1)(d). The DNR's decision is then “subject to judicial review as provided in ss. 227.52 to 227.58.” Wis. Stat. § 283.63(2).

¶ 9 The circuit court concluded the two-step review procedure set forth in Wis. Stat. § 283.63—that is, agency review, followed by judicial review—is the exclusive, mandatory method of review for WPDES permitting decisions. CWAC disagrees, asserting the language of § 283.63 is not explicit enough to displace the general right to judicial review provided by Wis. Stat. § 227.52. In support of this argument, CWAC emphasizes that § 283.63(1)states certain parties may secure a review by the [DNR] of any permit denial, modification, termination, or revocation and reissuance[.] (Emphasis added.) CWAC argues § 283.63 merely “provides an additional layer of administrative review through which certain persons are afforded an opportunity to secure de novo review of the DNR's WPDES permitting decisions ... and to further develop the factual record in a contested case hearing.”

¶ 10 CWAC's argument is foreclosed by Sewerage Commission. There, the DNR issued two WPDES permits to the Milwaukee sewerage commission in December 1974. Sewerage Commission, 102 Wis.2d at 615, 307 N.W.2d 189. The permits required the commission to achieve certain effluent limitations by December 27, 1974, and January 1, 1975. Id. The commission petitioned the DNR for clarification of certain permit terms, but it did not challenge the DNR's authority to require the achievement of effluent limitations by the dates listed in the permits. Id.

¶ 11 The commission apparently failed to meet the permits' deadlines for the achievement of effluent limitations. Id. Faced with the threat of an enforcement action by the DNR, the commission filed a declaratory judgment action under Wis. Stat. § 227.40,3 alleging the relevant state and federal statutes did not require publicly owned treatment works to achieve effluent limitations until July 1, 1977. Id. The commission asked the circuit court to declare the effluent limitation deadlines in its permits void and the DNR's underlying administrative rule invalid. Id. at 615–16, 307 N.W.2d 189. The circuit court granted the commission's request to void the deadlines, but it did not invalidate the administrative rule. Id. at 619, 307 N.W.2d 189.

¶ 12 On appeal, the DNR argued the circuit court never gained “subject matter jurisdiction” over the commission's declaratory judgment action because...

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