Wisconsin's Environmental Decade, Inc. v. Department of Industry, Labor and Human Relations

• Decision Date: 01 December 1981
• Docket Number: No. 81-954,81-954
• Citation: 104 Wis.2d 640,312 N.W.2d 749
• Parties: , 12 Envtl. L. Rep. 20,461 WISCONSIN'S ENVIRONMENTAL DECADE, INC.; Door County Environmental Council, Inc.; The Gibraltar Township Property Owners Association, Inc.; and Lake Michigan Federation, Inc., Petitioners- Respondents, v. DEPARTMENT OF INDUSTRY, LABOR AND HUMAN RELATIONS, State of Wisconsin, Respondent-Appellant.
• Court: Wisconsin Supreme Court

Page 749

312 N.W.2d 749

104 Wis.2d 640, 12 Envtl. L. Rep. 20,461

WISCONSIN'S ENVIRONMENTAL DECADE, INC.; Door County

Environmental Council, Inc.; The Gibraltar

Township Property Owners Association,

Inc.; and Lake Michigan

Federation, Inc., Petitioners- Respondents, v. DEPARTMENT OF INDUSTRY, LABOR AND HUMAN RELATIONS, State of

Wisconsin, Respondent-Appellant.

No. 81-954.

Supreme Court of Wisconsin.

Argued Oct. 5, 1981.

Decided Dec. 1, 1981.

Arvid A. Sather (argued), and Michael, Best & Friedrich, Madison, on brief for respondent-appellant.

Kathleen M. Falk, Madison, for Wisconsin's Environmental Decade, Inc.

Brady C. Williamson (argued), La Follette, Sinykin, Anderson & Munson, Madison, on brief for other respondents.

Eric Englund, Madison, amicus curiae brief, for Wisconsin Society of Architects and others.

DAY, Justice.

This is a review of an order of the circuit court for Dane county, P. CHARLES JONES, presiding.

The issue in this case is whether the Wisconsin Environmental Policy Act (WEPA), sec. 1.11, Stats.1979, requires the Department of Industry, Labor and Human Relations (DILHR), to take environmental factors into account when reviewing the plans of a building project for code compliance. We conclude that, while WEPA requires DILHR to consider environmental factors when promulgating building codes, WEPA does not apply to individual code approval decisions.

In 1978, the James Building Corporation (James) announced plans to build one hundred condominium units in Fish Creek, an unincorporated village in Door County, Wisconsin. The plans provided for a sewage treatment facility which would empty into Green Bay. This system required a number of permits from the Department of Natural Resources, (DNR). DNR prepared an environmental assessment screening worksheet (EASW) on the project and concluded that an environmental impact statement (EIS) was not necessary.

Persons opposed to the project, including some of the respondents in this action, commenced a lawsuit in the Door county circuit court, seeking to have the DNR decision reversed. The Door county circuit court issued a stay ordering DNR to halt all proceedings on the project until it reached a decision on the merits. That stay remains in effect.

On September 8, 1980, James submitted plans to DILHR providing for a 186,750-gallon holding tank as an alternative method of sewage disposal. A holding tank does not treat sewage, but stores it temporarily. Holding tanks must comply with chs. H 62-63, Wis.Adm.Code, but do not require DNR approval.

DILHR initially approved the plans, but, after receiving objections from interested parties including respondents, rescinded its approval since the holding tank was in a flood plain but did not meet the code requirements for holding tanks in flood plains. James submitted new plans, providing for a 250,000-gallon holding tank to be placed outside of the flood plain, on October 21, 1980. Respondents petitioned DILHR for a declaratory ruling that WEPA applied to the code compliance decision and asked for a contested case hearing. DILHR denied these requests on November 11, 1980, and approved James' plans on November 17, 1980.

On December 10, 1980, respondents filed a petition in Dane county circuit court for review of DILHR's approval of the plans, and on January 6, 1981, filed a motion for a stay of DILHR's approval of the plans. On January 16, 1981, Dane county circuit court Judge P. Charles Jones granted the stay, halting construction. The circuit court issued its memorandum decision and order on April 20, 1981, holding that WEPA did apply to DILHR's code compliance review and remanding the case to DILHR for WEPA compliance. DILHR petitioned this court to bypass the court of appeals, sec. 808.05(1), Stats. 1979-80. The petition was granted by this court.

DILHR's decision not to conduct an environmental inquiry when reviewing the project's holding tank plans for code compliance was a result of its policy of applying WEPA to its rulemaking process but not to its code compliance review decisions. Interpretation of a statute by an administrative agency is a conclusion of law which may be independently reviewed by the supreme court. Bucyrus-Erie Co. v. ILHR Dept., 90 Wis.2d 408, 417, 280 N.W.2d 142 (1979). However, the construction and interpretation of a statute by the administrative agency which must apply the law is entitled to great weight and if several rules or applications of rules are equally consistent with the purpose of the statute, the court should defer to the agency's interpretation. Milwaukee County v. ILHR Dept., 80 Wis.2d 445, 455-456, 259 N.W.2d 118 (1977). In general, the reviewing court should not upset an administrative agency's interpretation of a statute if there exists a rational basis for that conclusion. Dairy Equipment Co. v. ILHR Dept., 95 Wis.2d 319, 327, 290 N.W.2d 330 (1980).

The test as to whether an environmental impact study should be conducted is essentially one of reasonableness and good faith, Wisconsin's Environmental Decade v. Public Service Commission, 79 Wis.2d 409, 421-423, 256 N.W.2d 149 (1977). Accordingly, the method by which an administrative agency chooses to comply with WEPA's mandate that it take environmental factors into account when undertaking its statutory duties should be affirmed if that method is a reasonable one in light of the purposes of WEPA and the agency's functions and duties.

WEPA requires that state agencies review the environmental consequences of decisions which may significantly affect the quality of the human environment. ¹

In 1976, an executive order, entitled Revised Order, Guidelines For The Implementation Of The Wisconsin Environmental Policy Act, Executive Order No. 26 (February 12, 1976), instructed all state agencies to categorize the decisions which they make according to the likelihood that they will require a review of their environmental consequences.

To fulfill WEPA's mandate, DILHR decided to apply WEPA review, including an EASW and, if necessary, an EIS, to the code promulgation process but not to code compliance review. ²

DILHR is responsible for the adoption and enforcement of building, heating, electrical, ventilation, air conditioning and plumbing codes. ³ Pursuant to secs. 145 01 (5) and 145.02, Stats.1979-80, DILHR is responsible for general supervision of plumbing construction, installation and maintenance. ⁴ Sec. 145.02(3)(d) authorizes DILHR to promulgate plumbing codes. When the codes are adopted or revised, DILHR applies the WEPA mandated environmental review process as a part of the rulemaking procedure which it undertakes pursuant to ch. 227, Stats.

Secs. 227.011-227.029, Stats., provide a comprehensive framework for administrative rulemaking. Persons may petition an agency to adopt, repeal or revise a rule. ⁵ Fiscal estimates are prepared, ⁶ and the rule is submitted to the legislative council for form, need and validity. ⁷ Hearings are held, ⁸ for which proper notice must be given ⁹ the conduct of which is governed by statute. ¹⁰ The proposed rules are then submitted to the legislature ¹¹ and published ¹² before they go into effect.

The administrative rulemaking procedures seem to parallel the consultation, notice and hearing provision of WEPA. ¹³ Persons or organizations with opinions as to the environmental effect of a rule can make their views known to the rulemaking body, and the ch. 227 procedure provides a framework for a comprehensive consideration of environmental factors.

Assuming, without deciding, that DILHR has authority to apply WEPA considerations to code compliance reviews, ¹⁴ the question is: Has DILHR complied with WEPA in applying its provisions only to its code promulgation functions. DILHR has in effect focused its environmental review on the program or policy level rather than the specific project level. This mode of analysis provides for review, on a broad scale, of agency decisions which individually might be overlooked as environmentally insignificant. ¹⁵ It also assures that environmental considerations are taken into account before significant resources are expended on a project.

We conclude WEPA does not compel DILHR, which has complied with WEPA in the rulemaking process, to also apply WEPA review to code compliance decisions. Building codes are contained in Chs. IND. 50-64 and H 62-63, Wis.Adm.Code. They contain detailed and comprehensive specifications which must be adhered to before a permit may be issued. Sec. IND. 50.14 provides for an interim permit to start construction, which may be issued by the department upon submission, but prior to approval, of the plans. While someone who starts construction based upon the interim permit runs the risk that the department may not approve the plans, this risk is minimized by the specificity of the codes, which enable the builder who has diligently incorporated the code provisions into his plans to start work, confident that the plans will be approved.

DILHR has estimated that it makes around 12,000 code compliance decisions a year. Respondents did not take issue with this assessment. Review on such a scale is possible because of the detail of the codes. The straight forward and nondiscretionary process by which plans are reviewed for code compliance was commented on by this court in Dunn v. State, 125 Wis. 181, 190-191, 102 N.W. 935 (1905):

"It is clear from the uncontradicted facts in evidence that the application by the Pabst Brewing Company for a permit to erect this bottling house involved no exercise of any discretion by the accused as building inspector. He informed Mr. Pabst, and insisted upon the trial, that he could not grant the permit applied for, because the plans and specifications obviously violated the building regulations of the city, in that the floor areas within the specified walls were largely in excess of what was permitted and allowed by such regulations; nor does the plaintiff in error...