Huggett v. Department of Natural Resources

• Decision Date: 16 October 1998
• Docket Number: Docket No. 195548
• Citation: 590 N.W.2d 747,232 Mich.App. 188
• Parties: Wallace A. HUGGETT, an individual and Huggett Sod Farm, a Michigan corporation d/b/a Michigan Cranberry Farm, Plaintiffs-Appellees/Cross-Appellant, v. DEPARTMENT OF NATURAL RESOURCES, Defendant-Appellant/Cross-Appellee.
• Court: Court of Appeal of Michigan — District of US

Page 747

590 N.W.2d 747

232 Mich.App. 188

Wallace A. HUGGETT, an individual and Huggett Sod Farm, a Michigan corporation d/b/a Michigan Cranberry Farm, Plaintiffs-Appellees/Cross-Appellant, v. DEPARTMENT OF NATURAL RESOURCES, Defendant-Appellant/Cross-Appellee.

Docket No. 195548.

Court of Appeals of Michigan.

Submitted May 5, 1998, at Lansing.

Decided Oct. 16, 1998, at 9:00 a.m.

Released for Publication Jan. 15, 1999.

D. Haywood & Associates, P.C. (by David J. Haywood and Mark A. Cooley ), Lansing, for the plaintiff.

Frank J. Kelley, Attorney General, Thomas L. Casey, Solicitor General, A. Michael Leffler and Stephen F. Schuesler, Assistant Attorneys General, for the defendant.

Before: WHITE, P.J., and SAAD and MARKEY, JJ.

MARKEY, J.

Defendant appeals as of right a declaratory judgment in favor of plaintiffs. We affirm in part and reverse in part.

In 1982, the state of Michigan, through defendant, deeded the wetland at issue to Michigan National Bank (MNB) in exchange for a parcel of land owned by MNB. The deed from the state to MNB included a condition that the land be used for peat farming and that if the condition were violated, the state had the right to reenter and retake the land. Plaintiffs later became owners of the wetland after MNB assigned its mortgage interest in the land to plaintiffs, and plaintiffs foreclosed the mortgage. Plaintiffs seek to construct a 200-acre, $6 million cranberry farm. The construction will consist of, among other things, building dikes, digging ditches, and constructing a reservoir. The proposal also calls for some excavating and filling in of the wetland. Plaintiffs sought, but were denied, a wetland permit from defendant to begin the project, so they initiated the instant declaratory judgment action claiming, inter alia, that the proposed activity was exempt from the permit requirement of the wetland protection act (WPA), M.C.L. § 324.30301 et seq.; MSA 13A.30301 et seq., and that the state's interest in the wetland was void because the condition placed in the deed is of nominal value to the state. The trial court agreed.

I

First, defendant claims that the trial court should have denied plaintiffs' claims because of plaintiffs' failure to exhaust the available administrative remedies. We disagree.

Plaintiffs applied for a permit to construct the cranberry farm. Defendant denied the application. Plaintiffs initiated contested case proceedings to challenge the denial of the permit, but before the conclusion of the contested case proceedings, plaintiffs filed the instant action in the circuit court. ¹ Michigan courts have long recognized the importance of the doctrine of exhaustion of administrative remedies. Int'l Business Machines Corp. v. Dep't of Treasury, 75 Mich.App. 604, 608, 255 N.W.2d 702 (1977). Exhaustion of administrative remedies is not an inflexible condition precedent to judicial consideration, however, and will not be required if review of the agency's final decision would provide an inadequate remedy. Id.

In Int'l Business Machines Corp., this Court allowed the plaintiff to seek relief in the circuit court even though the available administrative remedies had not been exhausted because the plaintiff did not challenge the propriety of the agency action taken (declaration of tax liability). Instead, the plaintiff argued that the agency had no authority to take any action in the first place. Because the plaintiff sought to avoid submitting the dispute to the agency procedures, the "very harm that plaintiff seeks to avoid would inevitably occur if plaintiff were required to exhaust administrative remedies before access to judicial review." Id. at 610, 255 N.W.2d 702. This Court also considered whether the agency's statutory authority to act was clearly framed for the circuit court, whether extensive findings of fact were unnecessary, and whether a resolution of the issue did not demand special technical expertise. Id.; see also Universal Am-Can Ltd. v. Attorney General, 197 Mich.App. 34, 38-39, 494 N.W.2d 787 (1992) (holding that where the plaintiff claimed that the agency lacked statutory authority to regulate the plaintiff's activity, "both judicial economy and the interests of justice supported the plaintiff's actions in filing a complaint in the circuit court for declaratory relief).

In the case at bar, we believe that plaintiffs' claim in the circuit court was proper even though they had not exhausted the available administrative remedies. In the circuit court, plaintiffs did not challenge the propriety of defendant's denial of the permit but sought a declaration that defendant had no statutory authority to require a permit in the first place. Plaintiffs' argument is that the Legislature exempted the proposed activity from defendant's regulation. While copious testimony was admitted at trial, the issue was clearly framed for the court as one of law (statutory interpretation) that did not call for extensive findings of fact or technical expertise. Under these circumstances, requiring exhaustion of the available administrative remedies would have been "nothing more than a formal step on the way to the courthouse." Michigan Supervisors Union OPEIU Local 512 v. Dep't of Civil Service, 209 Mich.App. 573, 577, 531 N.W.2d 790 (1995). The trial court therefore did not err in failing to require plaintiffs to exhaust administrative remedies.

II

Next, defendant claims that the trial court improperly ruled that plaintiffs' proposed activities were exempt from the permit requirements of the WPA. With regard to this issue we agree with defendant.

M.C.L. § 324.30304; MSA 13A.30304 prohibits placing fill material in a wetland, dredging or removing soil from a wetland, draining surface water from a wetland, and constructing, operating, or maintaining any use in a wetland without a permit; however, M.C.L. § 324.30305; MSA 13A.30305 exempts certain uses from the permit requirement. The exemption at issue here is M.C.L. § 324.30305(2)(e); MSA 13A.30305(2)(e) (referred to as the "farming exemption"):

Farming, horticulture, silviculture, lumbering, and ranching activities, including plowing, irrigation, irrigation ditching, seeding, cultivating, minor drainage, harvesting for the production of food, fiber, and forest products, or upland soil and water conservation practices. Wetland altered under this subsection shall not be used for a purpose other than a purpose described in this subsection without a permit from the department.

The trial court opined that this farming exemption "is not limited in scope to existing farming operations nor limited by the size of the project but includes all activities necessary to commence and to continue farming in a commercially viable manner and to bring land into agricultural production." We disagree.

The fundamental purpose of statutory construction is to assist the court in discovering and giving effect to the intent of the Legislature. Ansell v. Dep't of Commerce (On Remand), 222 Mich.App. 347, 355, 564 N.W.2d 519 (1997). Statutory exceptions operate to restrict the general applicability of legislative language and are strictly construed. See People v. Brooks, 184 Mich.App. 793, 797, 459 N.W.2d 313 (1990), citing Grand Rapids Motor Coach Co. v. Public Service Comm., 323 Mich. 624, 36 N.W.2d 299 (1949).

According to Senate Bill Analysis, S.B. 3, January 17, 1980, and House Legislative Analysis, H.B. 4049, February 6, 1979, the WPA was intended to enable the state to assume authority to administer the federal Clean Water Act to Michigan's wetlands. ² In order for Michigan to assume administration of the Clean Water Act, Michigan's analogous statute, the WPA, must be enforced in accordance with, and be just as or more stringent than, its federal counterpart. See 40 C.F.R. § 233.1(d). The analogous, similarly worded federal farming exemption statute, 33 U.S.C. § 1344(f), ³ applies only to ongoing, established farming operations; activities that convert an area into farmland or bring an area into farming use are not exempted. See 40 C.F.R. § 232.3(c)(1); Avoyelles Sportsmen's League v. Alexander, 473 F.Supp. 525 (W.D.La., 1979). Therefore, because the intent behind the WPA was to confer authority over the Clean Water Act, and because in order to assume such authority the WPA must be consistent with, and at least as stringent as, its federal counterpart, the WPA farming exemption must apply only to established uses and not to activities necessary to create new farmland.

The conclusion that the farming exemption was intended to apply to land in established use for agriculture, and was not intended to refer to new farming activities, is also supported by the language of the statutory exemption itself. The farming exemption lists "minor drainage" as an example of a permissible farming activity. According to the definition section of the WPA, M.C.L. § 324.30301(b); MSA 13A.30301(b), "minor drainage" refers to activities on "land in established use for agriculture." Further, it appears that the other examples of permissible farming activities listed in the farming exemption are "activities that would only occur on a continuing basis as part of an ongoing farming or forestry operation." See Alexander, supra at 535 (interpreting the analogous federal statute in the Clean Water Act, 33 U.S.C. § 1344[f] ).

Also, Michigan courts recognize the principle of statutory construction that express mention in a statute of one thing implies the exclusion of other similar things. Jennings v. Southwood, 446 Mich. 125, 142, 521 N.W.2d 230 (1994). The exemption statute, M.C.L. § 324.30305; MSA 13A.30305, in the WPA specifically exempts some farm-related construction. Subsection 2(g) allows construction of farm ponds, and subsection 2(i) allows construction of farm roads. No other farm-related construction is specifically allowed. As a result, we are of the opinion that it would be improper to infer that other farm-related construction...