Michigan Waste Systems v. Department of Natural Resources

Decision Date21 March 1986
Docket NumberDocket No. 78507
Citation147 Mich.App. 729,383 N.W.2d 112
PartiesMICHIGAN WASTE SYSTEMS, Plaintiff-Appellant, v. DEPARTMENT OF NATURAL RESOURCES, Howard A. Tanner, Director, Department of Natural Resources, Defendants-Appellees, and Charleston Township, Ross Township, and the Barn Theatre, Intervening Defendants-Appellees.
CourtCourt of Appeal of Michigan — District of US

Daniel S. Cooper, Detroit, for plaintiff-appellant.

Frank J. Kelley, Atty. Gen., Louis J. Caruso, Sol. Gen., Robert P. Reichel, Asst. Atty. Gen., for the Dept. of Natural Resources and Howard A. Tanner, Director.

Foster, Swift, Collins & Coey by Stephen O. Schultz, Lansing, for defendants-appellees Charleston Tp., Ross Tp. and the Barn Theatre.



Plaintiff appeals as of right from an order of the Ingham County Circuit Court vacating a temporary restraining order and granting summary judgment to defendants.

Plaintiff, Michigan Waste Systems, is in the business of constructing and operating sanitary landfills. The instant dispute arose when the Department of Natural Resources (DNR) denied plaintiff's application for a landfill construction permit. Plaintiff is also the lessee of the proposed landfill site, called "Twin Oaks", which is located in Augusta, Kalamazoo County, Michigan.

Pursuant to M.C.L. Sec. 299.410(1); M.S.A. Sec. 13.29(10)(1), plaintiff applied to the Kalamazoo County Health Department for a construction permit for the proposed Twin Oaks landfill. The application was acknowledged by the Health Department on March 11, 1982, and was forwarded to the DNR. Initially, the DNR concluded that the proposed landfill met or exceeded the requirements of the Solid Waste Management Act, 1978 P.A. 641; M.C.L. Sec. 299.401 et seq.; M.S.A. Sec. 13.29(1) et seq., and administrative rules promulgated thereunder. However, in a letter dated May 11, 1982, then-Governor William Milliken requested that DNR director Dr. Howard Tanner initiate a review of the proposed landfill by the Michigan Environmental Review Board (MERB). The MERB was established by Executive Order 1974-4 to assist and advise the Governor on environmental matters. Under the terms of Executive Order 1974-4, an environmental impact statement must be prepared and forwarded to the MERB on every proposed major action that may have a significant impact upon the environment.

On May 24, 1982, plaintiff's landfill construction permit application was presented to the MERB, which declared it to be a "major state action" subject to further MERB review. Apparently, as part of its review, the MERB directed the DNR to examine potential odor problems at the proposed site. The DNR's Air Quality Division examined the proposed site for potential odor problems and recommended denial of plaintiff's application because of the unique topography of the area. In October, 1982, the DNR followed this recommendation and denied plaintiff's application. A letter was sent by DNR director Tanner to plaintiff which stated in pertinent part:

"During the course of the review before MERB, the issue of potential odor problems at the site was raised. Subsequently, the Air Pollution Control Commission directed the Air Quality Division to investigate the alleged odor problem and report to me their findings and recommendations.

"I have read the attached report from the Air Quality Division and I concur with their findings.

"On the basis of R 299.4305(12)(a) of rules promulgated under ACT 641, P.A. 1978, I have determined that the isolation distances proposed in your application will not protect adjacent property from odors. I have also determined, under the provisions of the Michigan Environmental Protection Act, Act 127, P.A. 1970, that the alleged pollution and impairment is likely to occur if the landfill is constructed and operated as proposed in your application. In addition, I find that such odors are likely to violate the odor standards promulgated under the provisions of Act 348, P.A. 1965. Therefore, I must deny your application for a solid waste disposal construction permit at the Augusta site."

Plaintiff filed a four-count complaint in the Ingham County Circuit Court on November 16, 1982. Apparently, plaintiff sought review under the Administrative Procedures Act (APA), M.C.L. Sec. 24.301 et seq.; M.S.A. Sec. 3.560(201) et seq. by alleging that the application denial was a final order. Count I alleged that the DNR improperly relied on an unpromulgated "policy with respect to odor" in denying the permit. In Count II, plaintiff alleged that, as a matter of law, the permit must issue because the DNR failed to make a final decision within 120 days. See M.C.L. Sec. 299.412(1); M.S.A. Sec. 13.29(12)(1). Count III simply alleged that the term "odor" contained in the DNR administrative rules is impermissibly vague. Lastly, plaintiff alleged that the DNR director employed unlawful procedures by basing his denial, in part, upon the Michigan Environmental Protection Act, M.C.L. Sec. 691.1201 et seq.; M.S.A. Sec. 14.528(201) et seq.

The circuit court issued a temporary restraining order, enjoining the DNR from approving any further Kalamazoo County Solid Waste Management Plans which did not also include the Twin Oaks site. In December, 1982, Charleston and Ross Townships and the historic Barn Theatre were permitted to intervene in this action.

Plaintiff brought a motion pursuant to GCR 1963, 117.2(3), alleging that no genuine issue of material fact existed. The circuit court reviewed the DNR's denial of plaintiff's permit application and issued its opinion dated March 30, 1984.

In its opinion, the court indicated that the director of the DNR did not deny plaintiff's application on unlawful procedures resulting in material prejudice to plaintiff and that the decision was neither arbitrary nor capricious. The circuit court further found that neither the pleadings, affidavits, nor the voluminous "record" presented a genuine issue of material fact. The nonmoving parties--the DNR, Charleston and Ross Townships, and the Barn Theatre--were therefore granted summary judgment. The court entered an order lifting the temporary restraining order and dismissing all four counts of plaintiff's complaint.

Plaintiff's first issue on appeal concerns the proper scope and standard of review to be applied in the instant case. Apparently, plaintiff sought de novo review of its permit denial in the circuit court. Confusion was engendered, however, because plaintiff's complaint stated that review was sought under the Administrative Procedures Act, M.C.L. Sec. 24.301 et seq.; M.S.A. Sec. 3.560(201) et seq. The circuit court correctly ruled that an appeal under the APA was unavailable to plaintiff because the permit denial was not "a final decision or order in a contested case". M.C.L. Sec. 24.203(3); M.S.A. Sec. 3.560(103)(3); see 13-Southfield Associates v. Dep't of Public Health, 82 Mich.App. 678, 267 N.W.2d 483 (1978). As the circuit court recognized, plaintiff's appeal was proper under section 631 of the Revised Judicature Act, M.C.L. Sec. 600.631; M.S.A. Sec. 27A.631. Under the RJA, review is not de novo.

Defendant DNR spends a great deal of time in its brief arguing that the circuit court's application of the RJA was correct, and it is clear from defendant's arguments that it mistakenly believes that review under the APA is de novo. Defendant is, however, incorrect. Review under the APA is not de novo, and the scope and standard of review under either the RJA or APA is similar. See generally, 3 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed.), pp. 614-616, and cases cited therein. We believe that defendant was misled by plaintiff's ambiguous complaint. The circuit court, however, correctly recognized that plaintiff was seeking de novo review pursuant to the Michigan Environmental Protection Act, rather than the APA. Under the Michigan Environmental Protection Act (MEPA), M.C.L. Sec. 691.1201 et seq.; M.S.A. Sec. 14.528(201) et seq., review by the circuit court is de novo. West Michigan Environmental Action Council v. Natural Resources Comm., 405 Mich. 741, 275 N.W.2d 538 (1979), cert. den. 444 U.S. 941, 100 S.Ct. 295, 62 L.Ed.2d 307 (1979).

We turn now to plaintiff's issue, namely, whether the circuit court erred in failing to treat plaintiff's appeal under the MEPA, rather than the RJA. The circuit court found that the MEPA cases cited

"do not pertain since they involved challenges to administrative action grounded on the allegation that the proposed administrative action would result in a violation of the MEPA. In short, those actions were brought pursuant to the Michigan Environmental Protection Act. Plaintiff here makes no claim that the DNR's denial of the construction application will damage the environment, that is, violates the MEPA, and de novo review is, therefore, unavailable.

"The scope of review under RJA 631 is limited. Where no hearing is required, the issue is 'whether such final decision, findings, rulings and orders are authorized by law; * * *.' Constitution 1963, Art. 6, Sec. 28; Viculin v. Department of Civil Service [386 Mich. 375, 192 N.W.2d 449 (1971) ], supra, at 392 . The decision of the Director to deny Plaintiff's application must be affirmed unless it is in violation of a statute, in excess of the statutory authority or jurisdiction of the agency, made upon unlawful procedure resulting in material prejudice to a party, is arbitrary or capricious."

It is clear that the circuit court was correct. It is equally clear that the court utilized the proper standard of review under the RJA. We therefore find no error.

Plaintiff next argues that the circuit court erred in granting summary judgment to defendants under GCR 1963, 117.2(3). We again disagree.

Plaintiff first claims the DNR relied upon some unpromulgated policy with respect to odor from...

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