State v. City of Green Bay

• Decision Date: 09 June 1980
• Docket Number: No. 77-440,77-440
• Citation: 291 N.W.2d 508,96 Wis.2d 195
• Parties: STATE of Wisconsin, Plaintiff-Appellant, v. CITY OF GREEN BAY, a Municipal Corporation, Defendant-Respondent-Petitioner.
• Court: Wisconsin Supreme Court

Page 508

291 N.W.2d 508

96 Wis.2d 195

STATE of Wisconsin, Plaintiff-Appellant, v. CITY OF GREEN BAY, a Municipal Corporation Defendant-Respondent-Petitioner.

No. 77-440.

Supreme Court of Wisconsin.

Argued March 31, 1980.

Decided May 6, 1980.

Reconsideration Denied June 9, 1980.

Richard J. Dietz, Green Bay, argued, for the City of Green Bay; with whom on the briefs was Mark A. Warpinski, Asst. City Atty., Green Bay, on brief.

Nancy L. Arnold, Asst. Atty. Gen., with whom on the briefs was Bronson C. La Follette, Atty. Gen., for plaintiff-appellant.

ABRAHAMSON, Justice.

This case is a review of an unpublished decision of the court of appeals, State of Wisconsin v. City of Green Bay (December 8, 1978), which affirmed in part and reversed in part a judgment entered by the circuit court for Brown county, the Honorable William J. Duffy, circuit judge.

The State of Wisconsin commenced this action in August, 1974, against the City of Green Bay seeking an injunction to enforce four amended orders issued by the Department of Natural Resources (DNR) concerning certain solid waste disposal facilities and seeking forfeitures for failure to comply with these orders by July 1, 1974. Two issues were presented to the circuit court. The first related to alleged violations with respect to maintenance of certain landfill sites by the City of Green Bay. The second related to alleged violations with respect to closing and abandoning certain landfills and an incinerator in accordance with orders of the Wisconsin Department of Natural Resources.

In its memorandum decision dated April 11, 1977, the circuit court determined that the city violated DNR orders relating to maintenance of the landfill site on 20 separate occasions, and the judgment imposed a forfeiture pursuant to sec. 144.57, Stats., ¹ of $15 per violation for a total forfeiture of $300. The circuit court refused to impose any forfeiture for the city's failure to close down landfill sites and an incinerator by July 1, 1974, because the circuit court concluded that the state was estopped from claiming these forfeitures.

The award of the $300 forfeiture was not challenged on appeal, and the court of appeals affirmed that part of the judgment. The court of appeals reviewed the record and determined that estoppel was not proved in this case. The court of appeals remanded the case to the circuit court to impose a forfeiture for 2,957 days of violation of the closure orders within the statutory range provided in sec. 144.57, Stats. ($10 to $5,000 per day for each day of violation) and instructed the circuit court to impose a forfeiture of at least $29,570. We granted the City of Green Bay's petition for review of the decision of the court of appeals. We conclude that the circuit court's finding that the state was estopped from claiming forfeitures for Green Bay's failure to close down landfill sites and an incinerator by July 1, 1974, is not contrary to the great weight and clear preponderance of the evidence, and that the judgment of the circuit court should be affirmed.

For purposes of this action it is sufficient to summarize the proceeding in the circuit court as follows. One DNR order (June, 1972) required Green Bay to close an incinerator prior to October 1, 1972, or upgrade its operation to comply with DNR rules by July 1, 1973, and three DNR orders (March, 1973) required Green Bay to close three solid waste disposal sites on or before September 30, 1973. Pursuant to an "informal enforcement conference," held on October 10, 1973, and followed by a letter from the DNR on October 16, 1973, the time for the city's compliance with all four orders was extended to July 1, 1974. Green Bay did not seek administrative or judicial review of the orders. One disposal site was used by Green Bay until March 21, 1976, and the incinerator and other two disposal sites were utilized until August 16, 1976. Thus, that part of this action seeking injunctions had become moot by the time of the circuit court judgment.

In its amended answer to the state's complaint, Green Bay raised the affirmative defense of estoppel. ² Green Bay's answer alleged that during the period involved in the complaint, the DNR and Brown County (in which the City of Green Bay is located) were actively engaged in planning for a county waste disposal system for use by the county and municipalities on a regional basis; that Brown county had applied to the DNR for the necessary approval and licensing of such sites; that on September 17, 1974, the Green Bay city council entered into a joint municipal corporation contract with Brown County whereby Green Bay would participate in and use the facilities developed by Brown County; that the DNR had made representations to the county and the city relating to the probability of approval and licensing of the county system by the DNR; that the DNR because of its own negligence by inaction failed to approve the license of the proposed county sites by July 1, 1974; that the city had relied upon representations made by DNR to it and to the county; and that the city had refrained from taking any other course of action to develop alternate sites. The state demurred to the affirmative defense of estoppel on the ground that it appeared on the face of the amended answer that it did not state facts sufficient to constitute the defense. The trial court in a lengthy memorandum decision reviewed the facts stated in the answer and the law of estoppel and overruled the demurrer. A trial ensued, and the circuit court entered the judgment previously described.

The state argued before the court of appeals, and argues here, that the city cannot assert an estoppel defense in this forfeiture action, because the city's exclusive method for obtaining review of the DNR order was under ch. 227, Stats., and the time for a ch. 227 review has expired. ³ We agree with the court of appeals that the city can assert an estoppel defense in this forfeiture action. The city is not challenging the validity of the DNR orders; ⁴ the city is raising a defense which is based on DNR conduct occurring both before and after the orders were issued. The defense of estoppel is not necessarily one which would have been available to the city on judicial review of the DNR orders.

The state concedes that if the city may raise the defense of equitable estoppel in the forfeiture proceeding, then the defense of equitable estoppel if proved, is available against governmental entities. In Department of Revenue v. Moebius Printing Co., 89 Wis.2d 610, 638-41, 279 N.W.2d 213, 225-226 (1979), this court summarized the application of the defense of equitable estoppel against governmental entities as follows:

"We have frequently said that 'the doctrine of estoppel is not applied as freely against governmental agencies as it is in the case of private persons.' Libby, McNeil & Libby v. Dept. of Taxation, supra, 260 Wis. (551) at 559 (51 N.W.2d 796).

"Courts have recognized 'the force of the proposition that estoppel should be applied against the Government with utmost caution and restraint, for it is not a happy occasion when the Government's hands, performing duties in behalf of the public, are tied by the acts and conduct of particular officials in their relations with particular individuals.' Schuster v. CIR, 312 F.2d 311, 317 (9th Cir. 1962). Nevertheless we have recognized that estoppel may be available as a defense against the government if the government's conduct would work a serious injustice and if the public's interest would not be unduly harmed by the imposition of estoppel. Park Bldg. Corp. v. Industrial Comm., 9 Wis.2d 78, 87, 100 N.W.2d 571 (1960). See also United States v. Lazy FC Ranch, 481 F.2d 985, 989 (9th Cir. 1973); Comment, Emergence of an Equitable Doctrine of Estoppel Against the Government The Oil Shale Case, 46 U.Colo.L.Rev. 433 (1974-75); Annot., Modern Status of Applicability of Doctrine of Estoppel Against Federal Government and Its Agencies, 27 A.L.R.Fed. 702 (1976). In each case the court must balance the injustice that might be caused if the estoppel doctrine is not applied against the public interests at stake if the doctrine is applied.

"We have not allowed estoppel to be invoked against the government when the application of the doctrine interferes with the police power for the protection of the public health, safety or general welfare. State v. Chippewa Cable Co., 21 Wis.2d 598, 608, 609, 124 N.W.2d 616 (1963); Park Bldg. Corp. v. Ind. Comm., 9 Wis.2d 78, 87, 88, 100 N.W.2d 571 (1960); Town of Richmond v. Murdock, 70 Wis.2d 642, 653, 654, 235 N.W.2d 497 (1975); McKenna v. State Highway Comm., 28 Wis.2d 179, 186, 135 N.W.2d 827 (1965); Milwaukee v. Milwaukee Amusement, Inc., 22 Wis.2d 240, 252-53, 125 N.W.2d 625 (1964).

"We conclude that where a party seeks to estop the Department of Revenue and the elements of estoppel are clearly present, the estoppel doctrine is applicable where it would be unconscionable to allow the state to revise an earlier position. Libby, McNeil & Libby v. Dept. of Taxation, supra, 260 Wis. at 558, 559 (51 N.W.2d 796). In each case the court must determine whether justice requires the application of the doctrine of estoppel; the determination of whether the state is estopped must be made on a case-by-case basis."

The first question for this court is therefore whether the city proved the basic elements of the defense of equitable estoppel applicable to both governmental and non-governmental entities. This court has recognized the following test for the applicability of equitable estoppel as a defense:

"The defense of equitable estoppel consists of action or non-action which, on the part of one against whom estoppel is asserted, induces reliance thereon by the other, either in action or non-action, which is to his detriment. Chicago & Northwestern Transportation Co. v. Thoreson Food Products, Inc., 71 Wis.2d 143, 153, 238 N.W.2d 69 (1976). It is ...