Niagara of Wisconsin Paper Corp. v. Wisconsin Dept. of Natural Resources

• Decision Date: 30 June 1978
• Docket Number: Nos. 76-668,77-326,s. 76-668
• Citation: 84 Wis.2d 32,268 N.W.2d 153
• Parties: , 11 ERC 2024, 8 Envtl. L. Rep. 20,739 NIAGARA OF WISCONSIN PAPER CORPORATION, Petitioner-Respondent, v. WISCONSIN DEPARTMENT OF NATURAL RESOURCES, Appellant. FORT HOWARD PAPER COMPANY, Petitioner-Respondent, v. WISCONSIN DEPARTMENT OF NATURAL RESOURCES, Appellant.
• Court: Wisconsin Supreme Court

Page 153

268 N.W.2d 153

84 Wis.2d 32, 11 ERC 2024, 8 Envtl.

L. Rep. 20,739

NIAGARA OF WISCONSIN PAPER CORPORATION, Petitioner-Respondent, v. WISCONSIN DEPARTMENT OF NATURAL RESOURCES, Appellant.

FORT HOWARD PAPER COMPANY, Petitioner-Respondent, v. WISCONSIN DEPARTMENT OF NATURAL RESOURCES, Appellant.

Nos. 76-668, 77-326.

Supreme Court of Wisconsin.

Argued May 1, 1978.

Decided June 30, 1978.

These are actions to review orders of the Wisconsin Department of Natural Resources (DNR). In each case the judgment appealed from reversed an order of the DNR which refused to change a Wisconsin Pollution Discharge Elimination System (WPDES) permit issued to the respective paper manufacturing companies. In each instance the judgment ordered the record remanded to the DNR for further proceedings. Case No. 76-668, Niagara of Wisconsin Paper Corporation (Niagara) v. DNR was heard before the Honorable GEORGE R. CURRIE, Reserve Circuit Judge. The judgment was issued on March 31, 1977. Case No. 77-326, Ft. Howard Paper Company (Ft. Howard) v. DNR, was heard by the Honorable RICHARD W. BARDWELL, Circuit Judge. The judgment was issued September 14, 1977. DNR appeals in both actions. Because of the similarity of issues, the cases were argued together; for this same reason both cases will be decided in a single opinion. ¹

Mary V. Bowman, Asst. Atty. Gen. (argued), Bronson C. La Follette, Atty. Gen., and Linda M. Clifford, Asst. Atty. Gen., on briefs, for appellant in No. 76-668.

Mary V. Bowman, Asst. Atty. Gen. (argued), with whom on the briefs was Bronson C. La Follette, Atty. Gen. for appellant in No. 77-326.

Charles Q. Kamps, Milwaukee (argued), for Niagara of Wis. Paper Corp.; Andrew M. Barnes and Quarles & Brady, Milwaukee, on the brief.

Sanford Sagalkin, Acting Asst. Atty. Gen., Washington, D.C., Angus MacBeth, New York City, Donald W. Fowler, Dept. of Justice, Joan Z. Bernstein, Gen. Counsel, Alan W. Eckert, Deputy Associate Gen. Counsel, Washington, D. C., and Mary Bryant Kodani, Asst. Regional Counsel, Region V, E. P. A., Chicago, Ill., on brief, for amicus curiae U. S.

Irvin B. Charne, Milwaukee (argued), for Ft. Howard Paper Co.; Raymond R. Krueger and Charne, Glassner, Tehan, Clancy & Taitelman, S. C., Milwaukee, on the brief.

BEILFUSS, Chief Justice.

These cases involve the interpretation and application of ch. 147, Stats. This chapter, enacted in 1973, is based on the Federal Water Pollution Control Act Amendments of 1972 (FWPCAA), 33 U.S.C., sec. 1251 et seq. The FWPCAA begins with a policy statement:

"Sec. 1251 Congressional declaration of goals and policy

"(a) The objective of this chapter is to restore and maintain the chemical, physical, and biological integrity of the Nation's waters. In order to achieve this objective it is hereby declared that, consistent with the provisions of this chapter "(1) It is the national goal that the discharge of pollutants into the navigable waters be eliminated by 1985."

This primary, national goal the elimination of all pollution discharge by 1985 is also set forth in ch. 147, sec. 147.01(1)(a), as the primary objective of the State Act.

The Federal Act, 33 U.S.C., sec. 1311, prohibits the discharge of pollution except under a National Pollution Discharge Elimination System (NPDES) permit. Sec. 1342, 33 U.S.C., provides that states wanting to administer their own permit programs may do so. Such programs must have standards at least as stringent as those of the federal programs, but may be more strict if the state wishes. Accordingly, Wisconsin enacted ch. 147, Stats., which authorizes the DNR to implement a Wisconsin Pollution Discharge Elimination System (WPDES) program. A key provision in the Wisconsin Act, and a central focus of this case, is sec. 147.021, Stats.:

"Compliance with federal standards. All rules adopted by the department pursuant to this chapter as they relate to point source discharges, effluent limitations, water quality related limitations, municipal monitoring requirements, standards of performance and toxic and pretreatment effluent standards shall comply with and not exceed the requirements of the federal water pollution control act amendments of 1972, P.L. 92-500, and regulations adopted pursuant thereto." (Emphasis added.)

As part of the plan to reduce pollution discharge, both Acts set forth a timetable to attain effluent limits. By July 1, 1977, "point sources" discharging pollutants are to limit effluent by utilizing the "best practicable control technology currently available." (BPT) 33 U.S.C., sec. 1311(b)(1)(A), sec. 147.04(2)(a), Stats. Acceptable effluent standards under BPT are to be determined by the Administrator of the United States Environmental Protection Agency (EPA). The second stage of effluent limitation, not involved in this case, requires the application of the "best available technology economically achievable" (BAT), by July 1, 1983. 33 U.S.C., sec. 1311(b)(2)(A); sec. 147.04(2)(b), Stats. Until final determinations of effluent limitations feasible under the above standards are determined, sec. 147.04(5), Stats., provides that the DNR may adopt interim limitations.

The DNR issued interim effluent limitations applicable to the paper companies involved in these cases on February 1, 1974, and reissued substantially the same limitations on February 28, 1975. NR 283, Wis.Adm.Code (1974-1975). These interim limitations were based on an EPA guidance document entitled "Interim Effluent Guidance for NPDES Permits," dated May 3, 1973. Interim final BPT effluent limitations were published by the EPA on February 19, 1976. (41 Fed.Reg. 7662) Final limitations were published on January 6, 1977. (41 Fed.Reg. 1397) Identical limitations were adopted in Wisconsin on February 17, 1977. NR 284, Wis.Adm.Code (1977). It is uncontroverted that the final BPT effluent limitations are less stringent than the interim effluent limitations adopted by the DNR and outlined in the 1973 EPA guidance document.

On June 26, 1974, the DNR issued a WPDES permit to Niagara allowing it to discharge pollutants from its paper mill into the Menominee River. The permit was to expire on December 31, 1978. It began under the interim effluent limitations and overlapped into the interim final and final EPA-BPT standards.

On August 23, 1974, Niagara petitioned the DNR for an adjudicatory hearing under sec. 147.20, Stats., to challenge the reasonableness and necessity of the permit terms. A hearing was held on August 21, 1975. Niagara contended that its permit should not specify effluent limits because the EPA had not promulgated actual limits, only guidelines, and because the interim limits adopted by the DNR had been adopted without benefit of a formal rule-making process. A DNR official admitted that the DNR was aware of the impending issuance of interim final effluent limitations around January 1st of 1976 by EPA, and indicated the DNR's complete reliance on the EPA guidelines in setting effluent limits.

When the DNR issued its findings of fact, conclusions of law, and order of July 28, 1976, it affirmed the effluent limitations in Niagara's permit despite the fact that the EPA had issued interim final effluent limitations on February 19, 1976. The DNR intimated that only final EPA rules were binding and that if final EPA rules necessitating amendment of N.R. 283 were issued, Niagara could again petition for modification.

Niagara commenced this action to review the DNR decision in Dane County Circuit Court on August 25, 1976. While judicial review was pending, the EPA issued its final effluent limitations on January 6, 1977. As noted supra, the DNR adopted these limitations on February 17, 1977. In a letter dated March 4, 1977, the DNR refused to modify the WPDES permit to bring it into alignment with the new limitations. The DNR contended that, new limitations notwithstanding, it would not modify Niagara's permit before its termination date unless Niagara demonstrated that it was unable to achieve the discharge limitations set forth in the permit.

On March 31, 1977, the Circuit Court for Dane County, GEORGE R. CURRIE, Reserve Circuit Judge, reversed the DNR order and remanded, with directions, that the permit be modified to meet the new effluent limitations. The court held that the refusal of the DNR to modify Niagara's WPDES permit to comply with the less stringent effluent limitations set forth in the final EPA limitations constituted a violation of sec. 147.021, Stats.:

"It is the Court's considered judgment that to accord DNR such power would nullify the legislative purpose underlying the enactment of sec. 147.021, Stats., which was to insure that DNR prescribed effluent limitations should not exceed the requirements of FWPCAA and any EPA regulations adopted pursuant thereto. The legislature may well have concluded that Wisconsin industries should not be put under the competitive disadvantage of having to meet effluent limitations more stringent than those prescribed by EPA which their out of state competitors might not be required to do."

On November 15, 1974, respondent Fort Howard was issued a WPDES permit to discharge pollutants from its plant in Green Bay into the Fox River. The permit was to expire on December 31, 1978. As in the Niagara Case, it began under the interim limitations and overlapped into the interim final and final EPA limitations. On December 9, 1974, Fort Howard petitioned the DNR for an adjudicatory hearing to review certain permit terms. In its petition, Fort Howard averred, inter alia, that the effluent limitations set forth in the permit were not attainable by application of BPT. Fort Howard also challenged a limitation on phosphorus discharge.

Hearings on the matter were held on May 5-8, June 5, and June 23, 1975. Although modifying the phosphorus limits, on January 30, 1976, the hearing examiner affirmed the permit in all other respects. The phosphorus reduction was granted because neither the NR 283 nor the EPA...