Sea View Estates Beach Club, Inc. v. State Dept. of Natural Resources, 97-3418

Citation588 N.W.2d 667,223 Wis.2d 138
Decision Date18 November 1998
Docket NumberNo. 97-3418,97-3418
PartiesSEA VIEW ESTATES BEACH CLUB, INC., Petitioner-Appellant, d v. STATE of Wisconsin DEPARTMENT OF NATURAL RESOURCES, Respondent-Respondent, Michael and Lauren Zimmerly, Intervenors-Respondents-Respondents.
CourtCourt of Appeals of Wisconsin

On behalf of the respondent-respondent, the cause was submitted on the brief of James E. Doyle, attorney general, and Joanne F. Kloppenburg, assistant attorney general.

On behalf of the intervenors-respondents-respondents, the cause was submitted on the brief of Jeffrey P. Clark and Colleen D. Ball Before SNYDER, P.J., BROWN and NETTESHEIM, JJ.

of Reinhart, Boerner, Van Deuren, Norris & Rieselbach, S.C., of Milwaukee.


This is an appeal from an order affirming a Department of Natural Resources (DNR) decision granting a permit for a 110-foot pier with twelve boat slips to Sea View Estates Beach Club, Inc. (Sea View). Sea View contends that the circuit court erred by failing to defer to the DNR's initial recommendation for a 190-foot pier permit with twenty-four boat slips. Additionally, Sea View argues that it does not need a pier permit and disputes findings that the 190-foot pier would violate the rights of other riparian owners, the Waukesha county "anti-pyramiding" ordinance and the public interest. We are not persuaded by these arguments; therefore, we affirm.


Sea View consists of residential property owners who collectively own sixty feet of lakefront on Pewaukee Lake. In 1994 Michael and Lauren Zimmerly, owners of a lakefront home next to Sea View's property and existing pier, complained that the pier was too long and disruptive. At the time, Sea View operated and maintained a 215-foot pier without a permit. 1 In response to the Zimmerlys' concerns, DNR water management specialist Marty Johnson conducted a site inspection of the Sea View pier on June 28, 1994, and reported his findings to the DNR's Bureau Director for Water Regulation and Zoning. Johnson's report noted several concerns about the pier length, including its effect on swimmers and boat traffic and its impact on lakeshore aesthetics. Despite these concerns, Johnson recommended that the DNR issue a permit for a 190-foot pier with twenty-four boat slips.

On June 5, 1995, Sea View applied for the permit recommended by Johnson. 2 The Zimmerlys and three other parties objected and Administrative Law Judge Jeffrey Boldt (ALJ), a hearing officer for the Division of Hearings and Appeals (DHA), conducted a § 227.43(1)(b), STATS., contested hearing on June 27 and July 12, 1996. After hearing testimony from several DNR experts, including Johnson, and others both in support of and in opposition to Sea View's proposed pier, the ALJ found that the proposed 190-foot pier would violate: (1) the line of navigation pursuant to WIS. ADM.CODE §§ NR 326.04(1) and 326.03(3); (2) the public interest under § 30.12(2), STATS.; (3) "the rights of other riparian owners" within § NR 326.04(6); and (4) Waukesha county's anti-pyramiding ordinance. The ALJ concluded that a pier permit limited to 110 feet and no more than twelve boat slips should be issued.

In spite of Johnson's initial recommendation for a 190-foot pier, the DNR adopted the ALJ's decision as its own and Sea View then appealed to the Waukesha county circuit court. 3 On September 23, 1997, the court affirmed the decision limiting Sea View's pier as recommended by the ALJ. Sea View appeals from that order.


Sea View initially contends that the circuit court erred in reviewing and giving deference to the ALJ's decision, which it characterizes as a DHA decision, rather than to Johnson's recommendation, which it maintains is a DNR decision. In an appeal from a circuit court order affirming an agency decision, we review the agency's decision, not the circuit court's. See Sterlingworth Condominium Assn. v. DNR, 205 Wis.2d 710, 720, 556 N.W.2d 791, 794 (Ct.App.1996). Relying upon Roehl Transport, Inc. v. Wisconsin Division of Hearings Appeals, 213 Wis.2d 452, 570 N.W.2d 864 (Ct.App.1997), Sea View argues that deference should be given to Johnson's initial DNR recommendation rather In Roehl, we addressed the standard of review applicable to a DHA-assigned ALJ decision involving the assessment of state fuel taxes on an interstate trucking firm. See Roehl, 213 Wis.2d at 455, 570 N.W.2d at 866. We reviewed the different levels of agency deference and noted that the greater the experience and expertise of the agency in the area at issue, the greater the deference the agency should be afforded. See id. at 458-60, 570 N.W.2d at 867-68. In Roehl, we concluded that the DHA had not developed the experience, expertise or specialized knowledge in the area of fuel or excise taxation possessed by the Department of Transportation (DOT) or the Tax Appeals Commission. See id. at 460-61, 570 N.W.2d at 868. We pointed out that the DHA is unlike a "line" agency because it operates under the province of the Department of Administration, see § 15.103, STATS., whose purpose is to provide management services and assistance to other state agencies and departments, see § 16.001, STATS. See Roehl, 213 Wis.2d at 460, 570 N.W.2d at 868. Accordingly, we held that the DHA determination should be accorded no deference at all.

than to the ALJ's later DHA decision. Conversely, the DNR and the Zimmerlys contend that the ALJ's decision should be accorded deference because the DNR adopted it as its final agency decision pursuant to § 227.46(3), STATS. We agree with the DNR and the Zimmerlys.

Although in many ways Roehl is analogous to the instant case, it is not controlling because, unlike the DOT in Roehl, the DNR has expressly adopted the ALJ decision here. Section 227.43(1), STATS., provides that the DHA administrator is authorized to "[a]ssign a hearing examiner to preside over any hearing of a contested case" in matters before certain state agencies, including both the DOT and the DNR. See § 227.43(1)(b), (br); Roehl, 213 Wis.2d at 455 n. 1, 570 N.W.2d at 866. Once the DHA hearing examiner has made a final determination, the agency is provided three options with respect to the contested case. The agency "may by rule or in a particular case may by order":

(a) Direct that the hearing examiner's decision be the final decision of the agency;

(b) [D]irect that the record be certified to it without an intervening proposed decision; or

(c) Direct that the procedure in sub. (2) be followed, except that in a class 1 proceeding both written and oral argument may be limited.

Section 227.46(3), STATS. (emphasis added).

The DNR has promulgated the following rule pursuant to § 227.46(3)(a), STATS.:

Unless the department petitions for judicial review as provided in s. 227.46(8), Stats., the decision [of the DHA hearing officer] shall be the final decision of the department, but may be reviewed in the manner described in s. NR 2.20.

WISCONSIN ADM.CODE § NR 2.155(1) (emphasis added); see Town of Two Rivers v. DNR, 105 Wis.2d 721, 737, 315 N.W.2d 377, 384-85 (Ct.App.1981), overruled on other grounds by Milwaukee Metro. Sewerage Dist. v. DNR, 126 Wis.2d 63, 375 N.W.2d 648 (1985). Roehl is distinguishable because the DOT has no such rule. Here, the DNR chose not to seek review of the DHA hearing examiner's decision, thereby making the ALJ decision its own under its own rule.

We now turn to the level of deference accorded to an ALJ decision adopted by the DNR. A different standard of review for agency decisions is applied for questions of law and questions of fact. See Knight v. LIRC, 220 Wis.2d 137, 147, 582 N.W.2d 448, 453 (Ct.App.), review denied, 220 Wis.2d 365, 585 N.W.2d 157 (1998). If presented with a question of fact, we employ the "substantial evidence" standard. See § 227.57(6), STATS. Substantial evidence is such relevant evidence as a reasonable mind would accept as adequate to support a conclusion. See Sterlingworth, 205 Wis.2d at 727, 556 N.W.2d at 797. An agency's decision may be set aside by a reviewing court only when, upon examination of the entire record, the evidence, including the inferences therefrom, is such that a reasonable person could not have reached the decision from the evidence and its inferences. See id.

If the issue presents a question of law, we must "set aside or modify the agency action if [we] find[ ] that the agency has erroneously interpreted a provision of law and a correct interpretation compels a particular action, or [we] shall remand the case to the agency for further action under a correct interpretation of the provision of law." Section 227.57(5), STATS. To this end, we apply one of three levels of deference to the conclusion of the agency: "great weight," "due weight" or "de novo." See Knight, 220 Wis.2d at 147, 582 N.W.2d at 453; Harnischfeger Corp. v. LIRC, 196 Wis.2d 650, 659-60, 539 N.W.2d 98, 102 (1995).

The great weight standard is the highest degree of deference. It is applied when the agency is charged with administration of the statute at issue, the agency's interpretation is based on "its expertise or specialized knowledge," the interpretation provides "uniformity and consistency in the application of the statute," and the agency conclusion or interpretation is "long standing." See Roehl, 213 Wis.2d at 458-59, 570 N.W.2d at 867 (quoting Harnischfeger, 196 Wis.2d at 660, 539 N.W.2d at 102). If the foregoing criteria are met, we will sustain the agency's interpretation even if an equally or more reasonable interpretation is offered. See id. at 459, 570 N.W.2d at 868.

Although Sea View disputes what constitutes the DNR's final decision, all of the parties agree that the DNR's decision should be granted great...

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