Wisconsin Supreme Court Upholds Village of East Troy’s High Capacity Well Permit; Finds WDNR Has a General Duty under Statute and the Public Trust Doctrine to Consider Impact to Waters of the State

On July 6, 2011, the Wisconsin Supreme Court issued two decisions - Lake Beulah Management District v. Dep’t of Natural Res., 2011 WI 54 (July 6, 2011) and Lake Beulah Management District v. Village of East Troy, 2011 WI 55 (July 6, 2011).

 In Lake Beulah Management District v. Dep’t of Natural Res., the Wisconsin Supreme Court ended an eight-year battle over the Wisconsin Department of Natural Resources (“WDNR”) issuance of a high capacity well permit to the Village of East Troy near Lake Beulah. WDNR issued the Village a permit in 2005 for a well with a capacity of 1,440,000 gallons per day (“GPD”). The issue arose because Wisconsin’s statutory scheme for permitting high capacity wells specifically requires WDNR to determine that proposed wells with the greatest pumping capacity (in excess of 2,000,000 GPD) will not adversely affect public water rights in navigable waters but no corollary requirement exists for high capacity wells below the 2,000,000 GPD threshold. In this decision, the Supreme Court extended the obligation to consider impacts to navigable waters when WDNR reviews applications for wells below the statutory 2,000,000 GPD threshold. 

Based on both the public trust doctrine, which protects navigable waters, and the statutory provisions regarding permitting of high capacity wells, which protect a broader universe of “waters of the state,” the Court found that WDNR “has the authority and a general duty to consider whether a proposed high capacity well may harm waters of the state.” 2011 WI 54, at 3. 

To comply with its duty, the Court held that WDNR “is required to consider the environmental impact of a proposed high capacity well when presented with sufficient concrete, scientific evidence of potential harm to waters of the state.” 2011 WI 54, at 29. The Court advised that WDNR should use “both its expertise in water resources management and its discretion to determine whether its duty as trustee of public trust resources is implicated by a proposed high capacity well permit application.” Id. at 30. 

The WDNR’s “general duty” to consider the impact of a proposed high capacity well is limited to the information submitted by the well owner in the permit application and any other information submitted to the WDNR decision makers while they are reviewing the permit application. Id. at 29-30. The Court warned that because a legal challenge to a WDNR decision is limited to the record on review, citizens must present any concrete, scientific evidence of potential harm to the WDNR decision makers before a permit issuance decision is made or risk losing the ability to challenge WDNR’s decision. Id. at 30. 

In this case, the Supreme Court concluded that there was no “concrete, scientific evidence of potential harm” in the record on review (the record compiled and certified by the WDNR). As a result, the Court held that WDNR properly exercised its discretion and complied with the law in issuing the Village’s 2005 high capacity well permit.

The Court rejected the Village’s argument that the specific limited statutory scheme enacted by the legislature with respect to high capacity wells in Chapter 281 could not be superseded by the public trust doctrine or by more general statutory provisions. Id. at 18. In response to an argument advanced by certain amicus parties, the Court found without analysis that recently enacted 2011 Wisconsin Act 21 had no impact on the instant case.Id. at 25, fn. 31.

In the companion case, the Supreme Court held that the Water District’s ordinance purporting to regulate and require permits for certain wells that withdraw water from the area around Lake Beulah was invalid as preempted by the legislature’s grant of authority to WDNR to regulate high capacity wells. Lake Beulah Management District v. Village of East Troy, 2011 WI 55 (July 6, 2011).

Going Forward

The significance of Lake Beulah Management District v. Dep’t of Natural Res., will be debated for some time. Some will be tempted to read it broadly, but the factual and legal context of the case is narrow – a high capacity well permit issued under Wis. Stat. Ch. 281 challenged on the basis that it would negatively impact a nearby navigable surface water, Lake Beulah. The holdings of the case are succinctly stated by the Court:  “. . . the WDNR has the authority and a general duty to consider whether a proposed high capacity well may harm waters of the state. . . . to comply with this general duty, the WDNR must consider the environmental impact of a proposed high capacity well when presented with sufficient concrete, scientific evidence of potential harm to waters of the state.”

 As a result, whether or not the statutory scheme in Chapter 281 requires it, this decision means that WDNR will consider the factor of potential harm to waters of the state – including nearby navigable surface waters -- for all high capacity well permits if “sufficient concrete, scientific evidence” is presented during the application process.