In a 5-2 decision, the Wisconsin Supreme Court declared that Wisconsin Department of Natural Resource’s (“WDNR’s”) authority and the scope of its administrative review of Wisconsin Pollutant Discharge Elimination System (“WPDES”) permit challenges is limited to challenges based on state law.  Practically speaking, the WDNR need not accept for administrative review a challenge to a WPDES permit on the basis that the permit fails to comply with federal law. 

In 1974 WDNR was delegated authority by the Environmental Protection Agency (“EPA”) to implement and enforce an EPA-approved state-level program to meet all standards and requirements of the federal Clean Water Act (“CWA”). The state legislature enacted Wis. Stat. ch. 283 and WDNR adopted a comprehensive administrative rule package which included the EPA approved WPDES permit program. 

Petitioners in this case challenged a WPDES permit issued to the Fort James' Broadway Mill, claiming, among other things, that the permit did not comply with federal law and that state statutes require WDNR to ensure all WPDES permits comply with federal law. The WDNR refused to grant a hearing on the federal law challenges, arguing WDNR’s authority only allowed it to review WPDES permit challenges based on state law. Petitioners appealed WDNR’s refusal to grant a hearing to the circuit court, which agreed with WDNR’s position; Petitioners then appealed to the court of appeals, which agreed with Petitioners; WDNR then appealed to the Wisconsin Supreme Court.

Throughout the case, the Wisconsin Department of Justice defended WDNR and its decision not to accept review of Petitioner’s federal law challenges. A number of municipal and industry associations, including the Wisconsin Dairy Business Association, Wisconsin Paper Council, Midwest Food Processors Association, Wisconsin Industrial Energy Group, Lake States Lumber Association and Georgia-Pacific Consumer Products, submitted amicus briefs to the Wisconsin Supreme Court in support of WDNR’s position.

The Wisconsin Supreme Court gave great weight deference to WDNR’s statutory interpretation and agreed with the agency that, if followed to its logical conclusion, Petitioner’s position would render Wisconsin’s delegated CWA authority and its WPDES permit program moot.  In other words, if WDNR is required to review every WPDES permit for compliance with federal law, as opposed to its own EPA approved state statutes, why bother having state statutes at all?  The court noted that EPA has authority to review and object to every single WPDES permit issued by WDNR. In this case, EPA reviewed the proposed WPDES permit and also reviewed Petitioner’s claim that the permit failed to comply with federal law, yet EPA found no reason to object to the permit.  Moreover, the court clarified that the proper remedy for Petitioner’s federal law challenges is to petition EPA to review or object to the WPDES permit issuance, and thereafter to appeal any EPA decision in the appropriate federal district court.  

The majority opinion was authored by Justice Ziegler. Chief Justice Abrahamson, joined by Justice Bradley dissented stating that they would have upheld the court of appeals decision.  

Another important issue that was decided by the court of appeals, but not a subject of WDNR’s appeal to the Wisconsin Supreme Court, is whether a petitioner may challenge a WPDES permit and request a public hearing on an issue that was not brought up during the public comment period. The court of appeals held thatany issue, regardless of whether it was identified or addressed in public comments, may be the subject of an administrative challenge and hearing request. Practically speaking, this means that WDNR will be required to address issues in an administrative challenge that it never had the opportunity to address or remedy before the permit was issued. The court of appeals’ holding on this issue, and WDNR’s failure to appeal, injects a significant layer of uncertainty into the WPDES permit process.