State’s High Court Hears Arguments In Cases That Could Decide DNR’s Authority To Protect Water

The Wisconsin Supreme Court heard oral arguments Monday in a pair of cases that could decide whether state environmental regulators have the authority to place limits on farming in Wisconsin to protect groundwater.

In the first case, environmental group Clean Wisconsin and Kewaunee County residents contested the DNR’s approval of a wastewater discharge permit as part of Kinnard Farms’ request to expand its concentrated animal feeding operation (CAFO) by adding a second site and more than 3,000 dairy cows.

In the second case, Clean Wisconsin and the Pleasant Lake Management District challenged the Wisconsin Department of Natural Resources’ approval of eight high-capacity well applications made by farmers in the Central Sands region between 2014 and 2015.

Both cases hinge on a state law passed in 2011 that limits state agency authority. The 2011 law, known as Act 21, outlines that no agency may implement or enforce any standard or requirement unless they are explicitly required or allowed under state laws or rules.

Case Concerning Kinnard Farms Permit

Kewaunee County residents petitioned the DNR to review its 2012 approval of Kinnard Farms’ wastewater discharge permit, saying it failed to require groundwater monitoring or set limits on the number of animals. In 2014, an administrative law judge ordered the DNR to set animal limits on the operation and develop an off-site groundwater monitoring plan, saying there was “a crisis with respect to groundwater quality in the area.”

The DNR denied review of the judge’s decision and began implementing those conditions. But, former DNR Secretary Cathy Stepp later reconsidered and reversed the judge’s decision, ultimately leading to a review by the courts. The DNR argued under former Gov. Scott Walker’s administration that the agency couldn’t impose the permit conditions due to the 2011 law.

On Monday, Kinnard Farms attorney Jordan Hemaidan asked justices to affirm Stepp’s position. Hemaidan said Stepp correctly made that decision based on an opinion issued by then Attorney General Brad Schimel in 2016, who argued the DNR couldn’t impose conditions that weren’t specifically laid out under state regulations as set forth under Act 21.

“It’s a seismic shift in public policy — a reassertion by the Legislature over the agencies who owe their existence to the Legislature, including the DNR,” said Hemaidan.

The Legislature’s attorney Eric McLeod argued Act 21 sought to define the agency’s authority and define the basis for its decisions and actions. He said a standard must exist either in statute or rule prior to the agency implementing any conditions.

“Implied agency power has been specifically rejected in Act 21,” said McLeod.

Attorneys for Clean Wisconsin and the Wisconsin DNR argued existing environmental statutes are explicit and provide a clear standard for what conditions may be imposed based on the facts of each particular case.

“Nothing in Act 21 states an intent to repeal or alter the meaning of long-standing regulatory statutes,” said DNR’s attorney Jennifer Vandermeuse.

Supreme Court Justice Rebecca Bradley asked attorneys for Clean Wisconsin and the DNR whether it’s up to lawmakers or the rulemaking process to specify the types of permit conditions the DNR can impose.

“That would then give DNR the authority to impose these types of conditions, but it would also be fair to the regulated community, which then would be on notice that these are the types of conditions that could be imposed,” said Bradley.

Vandermeuse noted the reason state statutes weren’t designed to spell out every single permit condition is that there’s no way the agency could anticipate every scenario that may arise. She added that interpreting Act 21 as eliminating the agency’s case-by-case ability to impose conditions could threaten the state’s wastewater permitting authority because it’s required to comply with federal regulations.

McLeod confirmed the DNR would have to promulgate a rule for a permit condition that’s necessary to comply with federal regulations unless they’re already laid out under state law.

In a rebuttal, Hemaidan argued the DNR has the expertise to craft a rule that considers “categories of conditions” the agency may have to impose on farms, noting Kinnard Farms is not the only operation that could be impacted. He added there would be no consequences other than the DNR would have to gather input and write rules where the agency currently maintains broad authority.

Justice Jill Karofsky interrupted Hemaidan and fired back against those claims.

“For you to, again, bat last and say that there’s not going to be any consequences based on our decision is patently false,” said Karofsky.

Case Concerning High-Capacity Well Applications

In 2016, Clean Wisconsin and the Pleasant Lake Management District filed legal challenges against the DNR after it approved eight high-capacity well applications in the Central Sands region.

The DNR began approving a backlog of high-capacity well applications, including those challenged by Clean Wisconsin, after Schimel issued his 2016 opinion that limited the agency’s authority to consider the collective impacts of high-capacity wells based on the 2011 law. Act 21 counters a previous Supreme Court ruling known as the Lake Beulah decision. In that case, the court ruled the DNR does have the authority and responsibility to consider potential environmental harm to waters of the state when reviewing a high-capacity well application.

Lawmakers and farm and industry groups are intervening in the case, including the state’s largest business lobby Wisconsin Manufacturers and Commerce (WMC).

WMC’s attorney Robert Fassbender told justices he’s asking them to overrule the court’s previous decision in Lake Beulah, which found the DNR can consider potential harm to state waters because no language in state law prohibits it.

“I think it’s fair to say that the concept there is if it’s not clearly prohibited, it’s allowed,” said Fassbender. “From a statutory interpretation, issue, perspective, we find that that’s problematic. But clearly, with respect to Act 21, it’s inconsistent.”

Justice Rebecca Dallet said the court’s ruling in Lake Beulah recognized the state has delegated protection of state waters for a variety of uses under the public trust doctrine in the state constitution.

“How do you reconcile your reading with our requirement that we abide by the Wisconsin Constitution’s public trust doctrine?” asked Dallet.

Fassbender said the Legislature has delegated oversight of the public trust doctrine to the DNR, but it did not give the agency explicit authority with respect to high-capacity wells. The Legislature’s attorney, McLeod, said powers designated to the DNR are intended to carry out the Legislature’s or state’s obligations under the public trust doctrine.

“That doesn’t mean that the public trust doctrine has been delegated to the agency or that the agency has any constitutional authority to take certain independent actions separate from what the Legislature has authorized,” said McLeod.

Karofsky questioned McLeod on whether the DNR has to abide by the state constitution.

“It does, but not independently from the statutes which govern the scope of its authority,” said McLeod.

Chief Justice Pat Roggensack asked Clean Wisconsin’s attorney Carl Sinderbrand whether the DNR could consider the cumulative effects of the eight wells at issue in the case.

“Absolutely,” said Sinderbrand. “There is nothing in that statute that prohibits or directs DNR not to consider cumulative impacts. And we believe, and DNR believes, that you cannot protect public trust resources in this context unless you consider cumulative impacts.”

The DNR’s attorney, Gabe Johnson-Karp, added that state statute governing high-capacity wells clearly says, “the department shall do what is necessary to protect, maintain and improve state waters.”

“So this is an unquestionably explicit mandate and authorization that this court recognized in Lake Beulah that requires the department to assess in every instance whether state waters are protected,” said Johnson-Karp.

Under Democratic Gov. Tony Evers’ administration, the state has shifted its position on the review of high-capacity well applications. Wisconsin Attorney General Josh Kaul reversed Schimel’s opinion last year, allowing the agency to consider collective impacts of those wells.

High-capacity wells can draw more than 100,000 gallons of water per day to irrigate farm fields, but they’ve raised concerns as they’ve reduced water levels or dried up streams in some areas of the state. Last week, the DNR issued findings from a report ordered by lawmakers that found hundreds of high-capacity wells are significantly lowering water levels in two lakes within the Central Sands region.

Editor’s note: This story was updated to clarify comments from Rebecca Bradley and Rebecca Dallet that were wrongly attributed to each other in an earlier version of the story.