State Court Docket Watch: Clean Wisconsin v. Wisconsin Department of Natural Resources

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In a pair of related cases, the Wisconsin Supreme Court expanded Wisconsin administrative agencies’ authority to create policy.[1] These cases expand the scope of agency authority by revitalizing the use of general grants of authority, which the Wisconsin Supreme Court had previously ruled had been eliminated through legislative action.[2] In doing so, the court weakened a restraint the Wisconsin legislature had placed on its delegations of legislative authority: the explicit authority requirement.

In December 2010, Governor-elect Scott Walker announced he would call a special session of the Wisconsin legislature upon his inauguration in January 2011 to address various topics including regulatory reform.[3] In this “Wisconsin is Open for Business Special Session,” Governor Walker introduced 2011 January Special Session Assembly Bill 8, which became 2011 Wisconsin Act 21 (Act 21).[4] Prior to introduction, he released a white paper explaining the “problem” of “agency bureaucrats hav[ing] broad rulemaking authority” allowing them to draft administrative rules “based on . . . general duties provisions, not based on the more specific laws the legislature meant to govern targeted industries or activities.”[5] The paper went on to outline the “solution”:

Legislation that states an agency may not create rules more restrictive than the regulatory standards or thresholds provided by the legislatures [sic]. Specifically stating that the department’s broad statement of policies or general duties or powers provisions do not empower the department to create rules not explicitly authorized in the state statutes.[6]

This solution was codified as Act 21’s explicit authority requirement[7] and its prohibitions on agencies using declarations of legislative intent, general duties, or powers provisions to convey rulemaking authority.[8]

Both Clean Wisconsin I and Clean Wisconsin II stem from disputes over farmers seeking permits from the Wisconsin Department of Natural Resources (Department or DNR). In Clean Wisconsin I, a group of farmers attempted to have permits reissued to expand their dairies. A group of individuals and an environmental advocacy group sought to require the Department to include conditions on those permits that are not found in the text of the Wisconsin statutes, such as caps on the number of animals permitted and off-site monitoring wells.[9] In Clean Wisconsin II, farmers sought permits to operate high-capacity wells to support their agricultural operations. An environmental interest group and a lake association challenged these permits, arguing the Department needed to conduct an environmental review not specifically required in the Wisconsin statutes.[10] The contention underlying these disputes is how exact the legislature must be when delegating its lawmaking authority to administrative agencies.

In both cases, the court reviewed questions of agency authority and interpreted several statutory provisions in the process. The court reviews questions of agency authority de novo.[11] In such cases, the court directly reviews the agency’s decision, not that of the lower reviewing courts.[12] In both cases, the administrative law judge and lower courts ruled against the permit seekers, but all the lower court decisions were issued before the Wisconsin Supreme Court interpreted Act 21’s explicit authority requirement in 2020.

The focal point in both cases was the Wisconsin Administrative Procedures Act’s explicit authority requirement.[13] The statute requires that “[n]o agency may implement or enforce any standard, requirement, or threshold, including as a term or condition of any license issued by the agency, unless that standard, requirement, or threshold is explicitly required or explicitly permitted by statute or by a rule . . .”[14] Both scholarship and state supreme court precedent had acknowledged[15] that this requirement eliminated the doctrine of express and implied authority.[16] These new cases brought back  the superseded doctrine, reinterpreting “explicit” to mean “explicit but broad,” thus allowing agencies to include requirements in permits that the statutes do not contain.[17] The court sided with the Department in both cases.

In Clean Wisconsin I, the court (Justice Jill Karofsky joined by Chief Justice Annette Ziegler and Justices Rebecca Dallet and Ann Walsh Bradley) found that the Department had the authority to impose a maximum animal unit limitation and off-site groundwater monitoring as conditions on approving the applicants’ permits. The court found the Department had authority to cap the number of animals that could be on a property based on Wis. Stat. § 283.31(5), which  requires that permits “specify maximum levels of discharges.”[18] The court determined this language allowed the Department to limit the number of animals on a farm in a “practical way” to limit the amount of waste discharged.[19] The court also found the Department had the authority to implement off-site monitoring wells because they were necessary to enforce compliance with permittees’ obligations under Wisconsin’s Administrative Code and statutes. The Code requires permittees to apply manure and process wastewater[20] and to develop and submit a general plan.[21] The Department’s permit condition statutes impose similar requirements.[22] Finding the Department had the explicit authority to implement both of these conditions, the court upheld the ruling of the lower court.

Justice Patience Roggensack (joined by Justice Rebecca Bradley) dissented,[23] arguing that the majority’s decision finding DNR has the authority to implement the conditions has “restored court deference to administrative agency assertions of power that the legislature explicitly limited in Act 21.”[24] Justice Roggensack explained that the court had previously interpreted the statutes passed as part of Act 21 as a “legislatively-imposed canon of construction that requires [courts] to narrowly construe imprecise delegations of power to administrative agencies.”[25] Looking at the legislative history of Act 21, she asserted it was intended to prohibit agencies from creating rules more restrictive than regulatory standards or thresholds provided by the legislature.[26] Further, Justice Roggensack showed that the legislature amended out the phrase “expressly” from the explicit authority requirement and replaced it with “explicitly.”[27] She cited to statements made by former state Representative Tom Tiffany[28] during his floor speech explaining the amendment that “courts have interpreted expressly very broadly” and that using “explicitly” instead would be a stronger limitation on agency authority.[29] Concluding her opinion, Justice Roggensack stated the majority stepped “out of the judicial lane” to become “a maker of the law” by taking “apart what the legislature enacted in Act 21” and “reinstat[ing] control by agency regulation.”[30]

In Clean Wisconsin II, the court (Justice Dallet, joined by Chief Justice Ziegler and Justices Karofsky and Ann Walsh Bradley) ruled that DNR has the authority to consider the environmental effects of the proposed high capacity wells not written in the statutes because the requirement of “explicit” authority does not mean the Department needs “specific” authority to do so.[31] The court went on to state the Department has explicit authority under Wis. Stat. §§ 281.11 and 281.12 to consider a proposed well’s potential impact on the environment.[32] While intervenors (the Wisconsin Legislature and industry groups) argued that the Department does not have authority to conduct such a review because Wis. Stat. § 281.34(4) lists only three circumstances in which the Department can review environmental impacts of high capacity wells (none of which applied in this case), the court determined that Wis. Stat. § 281.12’s statement that DNR “shall formulate plans and programs” to prevent water pollution was explicit authority to conduct the environmental review.[33] The court affirmed the lower court’s judgement.

Justice Rebecca Bradley (joined by Justice Roggensack) dissented, arguing that through Act 21, “the legislature reclaimed a portion of its constitutionally-conferred powers previously delegated to agencies” in line with the principle that an “agency’s powers, duties and scope of authority are fixed and circumscribed by the legislature and subject to legislative change.”[34] Justice Bradley stated the majority opinion nullifies this legislative reclamation, explaining that “contrary to the majority’s conclusions, there is no legal authority for DNR to conduct environmental impact reviews of any of the eight proposed high capacity wells, much less any ‘explicit authority’ as § 227.10(2m) commands.”[35] Attacking the majority’s findings of explicit authority in Wis. Stat. §§ 281.11 and 281.12, Bradley said agencies cannot “transform broad statements of legislative purpose or intent into a conferral of authority.”[36] According to Bradley, the majority’s decision transforms Wisconsin’s administrative state into “Frankenstein’s monster, a behemoth beyond legislative control unless the legislature kills it.”[37]

Together, these decisions change  much of what the legislature accomplished through the passage of Act 21. Agencies can rely on “explicit” and “broad” statutory authority[38] along with general statutory provisions[39] when making policy decisions. In a reversal from its positions in Legislature v. Palm, Tavern League v. Palm, and Papa v. DHS, the Clean Wisconsin court restricted the legislature’s ability to police delegations of its lawmaking authority to administrative agencies.