Rock-Koshkonong Lake District v. State Department of Natural Resources ( 2013 )

2013 WI 74SUPREME COURT OF WISCONSIN
CASE NO.: 2008AP1523
COMPLETE TITLE:
Rock-Koshkonong Lake District, Rock River-
Koshkonong Association, Inc. and Lake Koshkonong
Recreational Association, Inc.,
Petitioners-Appellants-Petitioners,
v.
State of Wisconsin Department of Natural
Resources,
Respondent-Respondent,
Lake Koshkonong Wetland Association, Inc. and
Thiebeau Hunting Club,
Intervenors-Respondents.
REVIEW OF A DECISION OF THE COURT OF APPEALS
Reported at 336 Wis. 2d 677, 803 N.W.2d 853(Ct. App. 2011 - Published)
PDC No: 2011 WI App 115OPINION FILED: July 16, 2013
SUBMITTED ON BRIEFS:
ORAL ARGUMENT: September 5, 2012
SOURCE OF APPEAL:
COURT: Circuit
COUNTY: Rock
JUDGE: Daniel T. Dillon
JUSTICES:
CONCURRED:
DISSENTED: CROOKS, J., ABRAHAMSON, C.J., BRADLEY, J.,
dissent. (Opinion filed.)
NOT PARTICIPATING:
ATTORNEYS:
For the petitioners-appellants-petitioners, there were
briefs by William P. O’Connor, Mary Beth Peranteau and Wheeler,
Van Sickle & Anderson, S.C., Madison, and Arthur J. Harrington
and Douglas M. Poland and Godfrey & Kahn, S.C., Milwaukee, and
oral argument by William P. O’Connor and Arthur J. Harrington.
For the respondent-respondent, the cause was argued by
Cynthia R. Hirsch, assistant attorney general, and the brief was
filed by Joanne F. Kloppenburg, assistant attorney general, with
whom on the brief was J.B. Van Hollen, attorney general.
For the intervenors-respondents, there was a brief filed by
Charles V. Sweeney and Mitchell R. Olson, and Axley Brynelson,
LLP, Madison, and oral argument by Charles V. Sweeney.
An amicus curiae brief was filed by Miriam Ostrov and
Midwest Environmental Advocates, Inc., Madison, on behalf of the
River Alliance of Wisconsin.
An amicus curiae brief was filed by Thomas D. Larson,
Madison, on behalf of the Wisconsin Realtors Association.
An amicus curiae brief was filed by Elizabeth Wheeler,
Madison, on behalf of Clean Wisconsin, Wisconsin Wetlands
Association and Wisconsin Lakes.
An amicus curiae brief was filed by Duffy Dillon,
Janesville, on behalf of the Manitowish Chain Defense Fund, LLC.
An amicus curiae brief was filed by Andrew C. Cook and
Emily Stever Kelchen, and Great Lakes Legal Foundation, Inc.,
Madison, on behalf of Wisconsin Manufacturers & Commerce and
Midwest Food Processors Association.
2
2013 WI 74NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2008AP1523
(L.C. No. 2006CV1846)
STATE OF WISCONSIN : IN SUPREME COURT
Rock-Koshkonong Lake District, Rock River-
Koshkonong Association, Inc. and Lake
Koshkonong Recreational Association, Inc.,
Petitioners-Appellants-Petitioners,
v.
FILED
State of Wisconsin Department of Natural
Resources, JUL 16, 2013
Respondent-Respondent, Diane M. Fremgen
Clerk of Supreme Court
Lake Koshkonong Wetland Association, Inc. and
Thiebeau Hunting Club,
Intervenors-Respondents.
REVIEW of a decision of the Court of Appeals. Reversed and
cause remanded.
¶1 DAVID T. PROSSER, J. This case, involving a dispute
about the water levels on Lake Koshkonong, presents fundamental
questions about the authority of the Wisconsin Department of
Natural Resources (the DNR), and the criteria it uses in
No. 2008AP1523
regulating the level of water in navigable waters that are
affected by dams.
¶2 Wisconsin Stat. § 31.02(1)1 authorizes the DNR to
regulate the level and flow of water in the navigable waters of
Wisconsin. The DNR may order benchmarks designating "the
maximum level of water that may be impounded and the lowest
level of water that may be maintained by any dam." Wis. Stat.
§ 31.02(1). The statute provides that the DNR may regulate
water levels "in the interest of public rights in navigable
waters or to promote safety and protect life, health and
property." Id.¶3 The dispute here results from a 2003 petition (the
Petition) by the Rock-Koshkonong Lake District, Rock River-
Koshkonong Association, Inc., and Lake Koshkonong Recreational2
Association, Inc. (collectively, the District)3 to raise the DNR-
1
All subsequent references to the Wisconsin Statutes are to
the 2009-10 version unless otherwise indicated.
2
The complaint initiating judicial review of the DNR
decision by the Rock County Circuit Court named "Lake Koshkonong
Recreational Association, Inc." as one of the petitioners.
However, the proper name of the entity is "Lake Koshkonong
Recreation Association, Inc." as indicated by Wisconsin
Department of Financial Institution corporate records.
Therefore, all further references to the association will use
its proper name.
3
The Rock-Koshkonong Lake District filed the Petition in
2003 to raise the water levels on the lake. After the DNR
rejected the Petition, Rock River-Koshkonong Association, Inc.
and Lake Koshkonong Recreation Association, Inc. jointly
petitioned with the Rock-Koshkonong Lake District for a
contested case hearing. For the sake of simplicity, we will
refer to all three entities as the District throughout this
opinion, unless otherwise noted.
2
No. 2008AP1523
designated water levels of Lake Koshkonong. The DNR rejected
the Petition, and its denial was affirmed by an administrative
law judge (ALJ) in a contested case hearing by the Rock County
Circuit Court, Daniel T. Dillon, Judge, and by the court of
appeals. See Rock-Koshkonong Lake Dist. v. DNR, 2011 WI App
115, 336 Wis. 2d 677, 803 N.W.2d 853. The ALJ's decision was
adopted as the decision of the DNR.
¶4 We are presented with four issues.
¶5 First, what level of deference, if any, should be
accorded to the DNR's conclusions of law under the circumstances
of this case?
¶6 Second, did the DNR exceed its authority in making a
water level determination under Wis. Stat. § 31.02(1) "in the
interest of public rights in navigable waters," by considering
the impact of water levels on private wetlands that are adjacent
to Lake Koshkonong and located above the ordinary high water
mark?
¶7 Third, did the DNR exceed its authority in making a
water level determination under Wis. Stat. § 31.02(1) "in the
interest of public rights in navigable waters" by considering
wetland water quality standards in Wis. Admin. Code § NR 103?
¶8 Fourth, did the DNR err in making a water level
determination under Wis. Stat. § 31.02(1) by excluding evidence
and refusing to consider the impacts of water levels on
residential property values, business income, and public
revenue?
¶9 We conclude the following:
3
No. 2008AP1523
¶10 The DNR's conclusions of law are subject to de novo
review because the DNR's water level order under Wis. Stat.
§ 31.02(1) is heavily influenced by the DNR's interpretation of
the scope of its own powers, its interpretation of the Wisconsin
Constitution, its disputed interpretation of the statute it
utilized, and its reliance upon statutes and rules outside of
Wis. Stat. ch. 31.
¶11 The DNR properly considered the impact of the
Petition's proposed water levels on public and private wetlands
in and adjacent to Lake Koshkonong. However, the DNR
inappropriately relied on the public trust doctrine for its
authority to protect non-navigable land and non-navigable water
above the ordinary high water mark. The DNR has broad statutory
authority grounded in the state's police power to protect non-
navigable wetlands and other non-navigable water resources.
Thus, the DNR may consider the water level impact on all
adjacent property under Wis. Stat. § 31.02(1).
¶12 The DNR was entitled to consider the water quality
standards in Wis. Admin. Code § NR 103, promulgated under Wis.
Stat. ch. 281, when making a Wis. Stat.§ 31.02(1) water level
determination. By statute, the DNR is responsible for writing
and enforcing wetland water quality standards in this state.
Accordingly, it would be unreasonable for the DNR to ignore
statutes and its own administrative rules when making a water
level determination affecting wetlands. Therefore, the DNR may
consider § NR 103 water quality standards when making a water
level determination under Wis. Stat. § 31.02(1) that affects
4
No. 2008AP1523
wetlands and may apply these standards when appropriate after
weighing the factors in the statute. However, Wis. Stat.
§ 281.92 suggests that the DNR is not required to apply ch. 281
standards in making a determination under Wis. Stat. § 31.02because ch. 31 is excepted from the provisions of ch. 281.
¶13 The DNR erroneously excluded most testimony on the
economic impact of lower water levels in Lake Koshkonong on the
residents, businesses, and tax bases adjacent to and near Lake
Koshkonong. This evidence was relevant to the DNR's decision-
making under Wis. Stat. § 31.02(1). Although the DNR is granted
substantial discretion in its decision-making under the statute,
it must consider all probative evidence when its decision is
likely to favor some interests but adversely affect others. In
this case, the DNR's exclusion of most economic evidence was
inconsistent with its acceptance of competing economic evidence
that helped sustain its water level decision.
¶14 We remand this case to the circuit court for further
proceedings consistent with this opinion.
I. FACTS AND PROCEDURAL HISTORY
¶15 We begin the statement of facts and procedural history
with an examination of the Rock River, Lake Koshkonong, and the
Indianford Dam. Next, we explain the purpose of ch. 31 of the
Wisconsin Statutes, the history of water levels on Lake
Koshkonong, and the Petition. We then summarize the contested
case hearing and the resulting decision, In the Matter of the
Review of the Water Level Decision for Lake Koshkonong and the
Indianford Dam on the Rock River in Rock County, Wisconsin, Case
5
No. 2008AP1523
No. 3-SC-2003-28-3100LR, (DNR, Dec. 1, 2006) [hereinafter the
Decision], which was adopted by the DNR. Finally, we lay out
the procedural history of the District's appeal.
A. The Rock River
¶16 The Rock River originates in Dodge County near
Theresa, just south of the Fond du Lac County line. It flows in
a southerly, then southwesterly direction, passing through such
Wisconsin communities as Watertown, Fort Atkinson, Janesville,
and Beloit before entering Illinois. The Rock River empties
into the Mississippi River near Rock Island, Illinois. Its
total length is nearly 300 miles.
¶17 The mouth of the Rock River flows into Lake Koshkonong
about four miles downstream from the City of Fort Atkinson in
Jefferson County. The outlet of the lake, which funnels water
back into the narrow channel of the Rock River, is situated
about six miles upstream from the Indianford Dam in Rock County.
B. Lake Koshkonong
¶18 Lake Koshkonong, the sixth largest inland lake in
Wisconsin, is a natural widening of the Rock River4 located in
Jefferson, Rock, and Dane Counties. While Lake Koshkonong has a
wide surface area (approximately 10,460 acres), it is quite
shallow. At the current targeted water level ordered by the DNR
in 1991, Lake Koshkonong's average depth is only five feet and
4
Lake Koshkonong and the Rock River are navigable waters
under Wisconsin law. See Wis. Stat. § 30.10(1) and (2)
(declarations of navigability for lakes and streams).
6
No. 2008AP1523
its maximum depth is only seven feet.5 The topography of the
shoreline is gently sloped in such a way that water levels of
one to two feet can extend quite far into the lake.
¶19 Lake Koshkonong has 27 miles of shoreline. Ten miles
of shoreline have been developed for residential and some
commercial use. Approximately 2,788 residential parcels are
located within a half-mile of the lake, with more than 600
riparian parcels adjacent to the lake.
¶20 Lake Koshkonong contains 12.4 miles of wetland
shoreline. Among the largest wetlands in and adjacent to the
lake are Koshkonong Creek (278 acres of shallow marsh and
floodplain forest); Krumps Creek (335 acres of shallow marsh);
Mud Lake (921 acres of shallow marsh); Otter Creek (334 acres of
shallow marsh and floodplain forest); Thiebeau Marsh (494 acres
of shallow marsh, shrub, and meadow); and the state-owned and
DNR-managed Koshkonong Wildlife Area (715 acres of shallow
marsh, shrub, and meadow known as an area of "special natural
resource interest" under Wis. Admin. Code § NR 103.04). These
areas and all of Lake Koshkonong are replete with diverse
species of wildlife and vegetation. The ALJ found that the
5
Around the time of statehood, Lake Koshkonong had a very
different appearance than it does today. Visiting the area in
July 1850, Dr. I.A. Lapham wrote, "The water is from 4 to 12
feet deep. At the time of our visit, . . . wild rice was
growing abundantly over almost its whole surface, giving it more
the appearance of a meadow than a lake." W.H. (Bill) Rodgers,
Early History of Lake Koshkonong 1 (Mar. 21, 1961) (unpublished
manuscript) (on file with Hoard Historical Museum, Fort
Atkinson, Wis.).
7
No. 2008AP1523
wetland shoreline has eroded since 1940. "The reduced frequency
of low water conditions during the summer and the increase in
the average summer water levels . . . account for the loss of
wetlands over the past 70 years."
C. The Indianford Dam
¶21 The Indianford Dam affects water levels on the Rock
River and Lake Koshkonong. In 1843 the Wisconsin territorial
legislature authorized Clouden and Luke Stoughton to build the
original dam; however, the Stoughtons did not construct the dam
until after March 1851, when the state legislature again
authorized construction. Around 1917 the dam was reconstructed,
which raised water levels on Lake Koshkonong. The Rock-
Koshkonong Lake District, which was created in 1999, took over
ownership and operation of the dam from Rock County in 2004.6
¶22 The dam fell into general disrepair in the 1960s until
it was rehabilitated in 2002. Because of this disrepair, the
dam's operation was compromised and it failed to regulate water
levels on Lake Koshkonong——to conform with the target levels set
by the DNR——for much of the time between the late 1960s until
about 2002. As a result, water levels on Lake Koshkonong since
1965 have almost always exceeded the current target level of
776.20 feet above mean sea level (msl),7 as the following chart
from the Decision illustrates:
6
Rock County took over ownership of the dam in December
1965 from the Wisconsin Power & Light Co.
7
Msl is a unit of measurement for water levels.
8
No. 2008AP1523
Date Water Level Date Water Level Date Water Level
(ft.) (ft.) (ft.)
1965 776.60 1978 777.64 1991 776.40
1966 776.25 1979 777.27 1992 776.49
1967 776.28 1980 777.23 1993 779.16
1968 777.01 1981 776.51 1994 776.51
1969 776.90 1982 776.88 1995 777.02
1970 776.36 1983 776.63 1996 777.72
1971 776.31 1984 776.63 1997 776.98
1972 777.23 1985 776.51 1998 776.79
1973 777.86 1986 778.98 1999 777.44
1974 777.61 1987 776.51 2000 777.59
1975 777.15 1988 776.10 2001 777.18
1976 776.49 1989 776.25 2002 776.68
1977 776.11 1990 776.75
¶23 The "statistically significant upward trend in average
water levels" on Lake Koshkonong from 1932 to 2003 was partly
attributable to the "diminished operating range of the wicket
gates" on the dam before its 2002 repairs, as well as debris on
the trash racks of the dam that impeded flowage.
D. Wis. Stat. Chapter 31 and the District's Petition
¶24 Chapter 31 of the Wisconsin Statutes grants the DNR
authority to regulate dams and bridges affecting navigable
waters in the state. The DNR may regulate and control the level
and flow of water in all navigable waters "in the interest of
9
No. 2008AP1523
public rights in navigable waters or to promote safety and
protect life, health and property." Wis. Stat. § 31.02(1).
Section 31.02(2) states that the "construction, operation, [and]
maintenance . . . of dams in navigable waters shall be subject
to the supervision of the [DNR] and to the orders and
regulations of the [DNR]." Thus, a dam operator must petition
the DNR8 for an order if it wishes to raise or lower the water
levels of a navigable body of water in a manner inconsistent
with a previously existing order.
¶25 The Wisconsin Railroad Commission (the Railroad
Commission) issued the first water level order for the
Indianford Dam in 1919. The next order was not issued until
1982, when the DNR, on its own motion, issued another order
reestablishing water levels pursuant to Wis. Stat. § 31.02(1).
The DNR determined that the existing order was inadequate to
control the water levels of Lake Koshkonong.
¶26 However, the 1982 order was appealed by three
individuals, two lake-based recreation clubs, a property owners
association, and Rock County. The Jefferson County Circuit
Court's decision affirming the 1982 order was appealed to the
court of appeals, which remanded to the DNR to hold a hearing
before issuing any water level order. A compromise between the
8
The legislature originally delegated authority to issue
water level orders to the Railroad Commission. § 3, ch. 380,
Laws of 1915 (creating Wis. Stat. ch. 69m. § 1596——2.1. (1915)).
The Public Service Commission and then the DNR became the
successor agencies responsible for issuing water level orders
under Wis. Stat. ch. 31.
10
No. 2008AP1523
DNR and the parties resulted in a 1991 water level order. The
1991 order left the 1982 order largely intact, raising slightly
the minimum lake elevation in the winter and eliminating a
flashboard9 requirement.10
¶27 In 2002, after the rehabilitation of the Indianford
Dam restored full operating capability to the dam's gates, the
water levels on Lake Koshkonong began to reflect more closely
the levels set by the 1991 order. As a result, water levels on
the lake dropped below recorded levels since the 1930s. On
April 21, 2003, the District11 petitioned the DNR, pursuant to
Wis. Stat. § 31.02(1), to amend the 1991 order. The District
contended that the 1991 order was "not consistent with the
public interest" because lower water levels on Lake Koshkonong
led to severe restrictions on recreational boating and in many
cases "piers must be extended far from shore to reach navigable
water depths." In addition, the District expressed concern for
the effect that the winter drawdown in the 1991 order had on
shore erosion, plants, and animal species.
9
A flashboard is a "board or structure of boards extending
above a dam to increase its capacity." The American Heritage
Dictionary of the English Language 691 (3d ed. 1992).
10
The DNR amended the 1991 order in 2004 to reflect the
change in ownership of the Indianford Dam from Rock County to
the Rock-Koshkonong Lake District. The 2004 amendment made no
substantive changes to the 1991 water order.
11
Rock-Koshkonong Lake District was established by Rock
County in 1999, pursuant to Wis. Stat. §§ 33.24 and 33.37(1),
"to undertake a program of . . . protection and rehabilitation
for Lake Koshkonong." More than 4,000 parcels of land in Rock,
Jefferson, and Dane Counties make up the Rock-Koshkonong Lake
District.
11
No. 2008AP1523
¶28 The following chart compares the 1991 water level
order and the proposed water levels in the Petition:12
MSL Levels 1991 Order Petition Change
(at lake gage)
May through October
Target 776.20' 776.8' +0.6' (7.2 in.)
Maximum 776.33' 777.0' +0.67' (8 in.)
(all gates open)
Minimum 775.73' 776.4' +0.67' (8 in.)
November through April
Maximum 775.77' 777.0' +1.23' (14.8 in.)
(all gates open)
Minimum 775.00' 776.4' +1.4' (16.8 in.)
¶29 In 2003 and 2004 the DNR conducted an environmental
assessment (EA) of the Petition's proposed water level order to
determine whether an environmental impact statement (EIS) would
be needed. The DNR completed a draft EA in December 2004, after
which a public hearing was held in January 2005 for comment on
the findings. The DNR certified the EA as complete in March
2005 and determined that an EIS would not be necessary.
¶30 On April 15, 2005, the DNR issued a proposed order
denying the Petition, keeping the summer maximum water level at
12
A chart with identical information appears in the
Decision and in the court of appeals opinion, Rock-Koshkonong
Lake District v. DNR, 2011 WI App 115, ¶5, 336 Wis. 2d 677, 803
N.W.2d 853.
12
No. 2008AP1523
776.33 msl but raising the winter drawdown minimum to 775.50 msl
instead of 775.00 msl.
¶31 Shortly thereafter, the District filed a joint
petition for a contested case hearing of the DNR's denial of the
Petition. The DNR granted the request and then filed a hearing
request with the Department of Administration, Division of
Hearings and Appeals (DHA).13
E. The Contested Case and Decision
¶32 The ten-day contested case hearing on the DNR's
proposed order commenced on March 29–30, 2006, in Jefferson, and
continued in Madison at the DHA offices on April 3–5 and 10–14.
During the Jefferson hearing, members of the public provided
sworn testimony and statements on how the Petition would affect
their community and personal interests, while representatives of
the parties to the contested case provided expert testimony.
¶33 As part of its pre-filed direct expert testimony, the
DNR sought to show the adverse impact that the District's
proposed water level increase would have on adjacent wetlands
13
Rock River-Koshkonong Association, Inc. (RRKA) and Lake
Koshkonong Recreation Association, Inc. (LKRA) joined in the
petition for a contested case hearing. RRKA is comprised of
more than 300 members, including riparian business owners on
Lake Koshkonong and the Rock River. LKRA is an association of
approximately 38 individual and business members who rely on
Lake Koshkonong and the Rock River for business, recreation, and
tourism.
The Intervenors in this case——Lake Koshkonong Wetland
Association, Inc. and the Thiebeau Hunting Club (the
Intervenors)——also were certified as parties to the contested
case proceeding.
13
No. 2008AP1523
and water quality in Lake Koshkonong and the Rock River. One
DNR expert testified in detail how raising the water levels of
Lake Koshkonong would "result in secondary and cumulative
adverse impacts to wetlands." These adverse impacts included
continued erosion of wetlands; loss of wildlife and fish
habitat; loss of vegetation and floodplain forest; and
eventually reduced recreational opportunities for hunters,
fishermen, trappers, and birdwatchers. Furthermore, while Lake
Koshkonong has lost a great deal of wetlands over the years and
will continue to lose wetlands, raising water levels in the lake
as the District proposes would exacerbate the losses. Other DNR
experts echoed these conclusions.14 Overall, the DNR experts
testified to the importance of making sure the proposed DNR
water level order satisfied the wetland water quality standards
in Wis. Admin. Code § NR 103.
¶34 Expert testimony on behalf of the Intervenors
concurred with the DNR testimony on adverse impacts to wetlands
and wetland water quality if the District's proposed water level
order were implemented.
¶35 The Jefferson County Farm Drainage Board also
presented testimony on the adverse impact of higher water levels
on Lake Koshkonong: any increase in water levels would lead to
backups in the drainage district upstream from the lake, causing
lands to stay flooded longer and increase crop losses. Dennis
14
The District and the DNR also devoted a significant
amount of testimony to disputing the validity of water level
modeling by the District.
14
No. 2008AP1523
Kutz, an agricultural landowner in the drainage district,
indicated in pre-filed direct testimony that his yield on corn
could "be reduced downward from 180 to 100 bushels per acre at a
cost of $200–$300 per acre. Other farmers would likely have
similar losses."
¶36 The District presented evidence at the contested case
hearing, through expert testimony, on modeling data to predict
water levels under the Petition, along with the probable effect
of the District's water level order on navigation, water
quality, and fish and wildlife habitat.
¶37 The District also presented evidence of economic
impacts resulting from, and anticipating, lower water levels on
the lake. Land use planner and real estate analyst John
Stockham testified that a reduction in historical water levels
on Lake Koshkonong would have adverse effects on property values
and commercial activity related to the lake. Essentially,
Stockham testified that lower water levels than those observed
before the Indianford Dam was fully operational in 2002 would
result in decreased waterfront usage; loss of the ability to use
existing piers for boating, swimming, and other water
activities; loss of access to shoreline for boats; and reduced
areas of navigability. Reduced usable water access would, over
time, have an adverse impact on property values around Lake
Koshkonong; this reduced value would be reflected in the slower
rate of increase for Lake Koshkonong property values compared to
"lakefront property values in general in south central
15
No. 2008AP1523
Wisconsin."15 Stockham testified that lake-based businesses also
would suffer losses from reduced water levels. The most
affected businesses would be lakefront marinas, taverns, and
restaurants that depend on boaters and tourists for a large
portion of their revenue. Even businesses in nearby communities
who cater to lake-related activity would suffer from water
levels on Lake Koshkonong reduced from their historical levels.
In addition, reduced water access and property values would
result in a loss of tax base for local taxing jurisdictions.
¶38 Dr. Russell Kashian, an economics professor at the
University of Wisconsin-Whitewater, also provided testimony on
behalf of the District on the economic impact of lowering a
lake's water level. Using various economic methodologies,
Kashian concluded that a reduction in historical water levels on
Lake Koshkonong would result in a negative economic impact in
two areas: property values and a reduced rate of appreciation of
those values, and economic activity in communities surrounding
the lake.
¶39 In regard to lake property values, Kashian posited
that lower water levels mean a greater distance between the lake
home and the shore, and that the increased distance would result
15
Testimony on behalf of the Intervenors by Linn
Duesterbeck, a real estate appraiser, contradicted John
Stockham's assertions on the reduced rate of property value
increases around Lake Koshkonong since 2002. Duesterbeck's
property value testimony was later excluded by the ALJ, along
with the testimony of John Stockham and Dr. Russell Kashian, as
outside the scope of a Wis. Stat. § 31.02(1) water level
determination.
16
No. 2008AP1523
in lower property value; Kashian also testified that property
value is adversely affected by a decrease in shoreline length.
The reduction in lake water levels, both real and perceived by
potential property buyers, would lead to a softening of demand
for lake property and a consequent reduction in prices, along
with a slower appreciation in property value over time. Kashian
cited numerous studies on the economic impact of reduced lake
water levels to support his conclusions. Kashian concluded that
the DNR's proposed water level order would endanger Lake
Koshkonong property values.
¶40 Finally, Kashian testified on the adverse effects that
reduced lake water levels would have on economic activity in the
local community. Assuming a three-foot reduction in Lake
Koshkonong water levels, Kashian testified that "real estate and
service sector businesses would witness a decline of $9 million
in gross sales that support an estimated 150 total jobs."
Moreover, "local retail businesses would witness a decline of
$5.25 million in gross retail sales that support an estimated
200 total jobs."
¶41 Public testimony on the commercial effects of adhering
to the DNR's 1991 water level order echoed the District's expert
testimony. A campground and marina owner testified to the
"huge" economic impact that lake-based tourism has on area
business and property values, as well as the negative impact
that lower water levels would have. Several other business
owners on Lake Koshkonong testified that current low water
levels required the installation of piers of up to 300 feet in
17
No. 2008AP1523
length in order to accommodate customers who access their
businesses by boat.
F. The Decision's Findings of Facts and Analysis
¶42 On December 1, 2006, the ALJ, William S. Coleman, Jr.,
issued a meticulous, comprehensive Decision affirming the DNR's
proposed order rejecting the Petition. The Decision contained
120 findings of fact,16 which, after laying out the history and
statistics on Lake Koshkonong and the Indianford Dam, may be
briefly summarized as follows:
1. Historical Water Levels on Lake Koshkonong——Water
levels rose from 1932 to 2003, and this was due in part to the
defective Indianford Dam. Consequently, summer water levels on
the lake were above the DNR's target levels every year but two
from 1965 to 2003.
2. Wetlands——The high historical water levels on the lake
have eroded shoreline wetlands around the lake. The reduced
frequency of low water conditions in the lake have contributed
to this loss of wetland. Other than the state-owned Koshkonong
Wildlife Area, the findings of fact do not explicitly identify
how much of the wetlands are publicly owned, or what portion of
the wetlands are above the ordinary high water mark.
3. Water Quality——Higher water levels have caused a
"degraded turbid algae-dominant water condition" in Lake
Koshkonong. An increase in water levels would likely further
16
The District does not dispute any of the 120 findings of
fact.
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No. 2008AP1523
degrade water quality in the lake.17 Higher water levels would
lead to additional loss of wetlands, which would affect the lake
system's ability to slow flood and storm waters, and "filter
nutrients, sediments and other pollutants," such that more
pollutants would be carried downstream.
4. The Ordinary High Water Mark18 (OHWM)——The OHWM on Lake
Koshkonong increased from 1979 to 2001, due in part to the
diminished capacity of the Indianford Dam to properly regulate
water levels. The DNR considered 778.11 msl to be "a
representative OHWM" for purposes of evaluating the Petition.
The higher water levels under the Petition could result in a
higher OHWM.
5. Erosion Protection from Riprap Structures19——Higher
water levels on the lake would likely overwhelm existing riprap
structures that protect wetland shoreline. These structures
would more quickly degrade and result in expensive fortification
of the structures. In any event, the riparian wetlands would
17
According to the findings of fact, Lake Koshkonong is
likely to remain in a degraded condition regardless of whether
the DNR's proposed order or the Petition is adopted.
18
"By ordinary high-water mark is meant the point on the
bank or shore up to which the presence and action of the water
is so continuous as to leave a distinct mark either by erosion,
destruction of terrestrial vegetation, or other easily
recognized characteristic." Diana Shooting Club v. Husting, 156
Wis. 261, 272, 145 N.W. 816 (1914).
19
Riprap is a "loose assemblage of broken stones erected in
water or on soft ground as a foundation." The American Heritage
Dictionary of the English Language 1556 (3d ed. 1992). Riprap
is used to protect shorelines from water or ice erosion.
19
No. 2008AP1523
not be protected from increased wave action and would continue
to erode.
6. Wildlife——Past and continued higher water levels would
adversely impact habitats for herptiles and bird species.
Continued loss of wetland would result in loss of wildlife and
fish habitat in and around Lake Koshkonong.
7. Winter Drawdown——The findings of fact contain numerous
pros and cons of maintaining the winter drawdown of the lake
levels (under the DNR's proposed order) and eliminating the
winter drawdown under the Petition. The findings generally
point to adverse impacts on wetlands, wildlife, water quality,
and riprap structures if the winter drawdown were eliminated.
8. Agricultural Drainage——Higher water levels will cause
backups in a drainage district upstream from Lake Koshkonong.
Slower drainage would cause farmland to be flooded longer,
resulting in delays in planting and smaller crop yields.
9. Public Access——The shallow, sloping waters of Lake
Koshkonong make it difficult for most recreational boats to
utilize public boat ramps on the lake under either the DNR's
proposed water level order or the District's proposed higher
levels. However, there are a number of boat access points along
the Rock River near the lake that have sufficient depth for
recreational boats.
10. Riparian Access——Most riparian property owners favor
raising the lake's water levels so that they may shorten their
piers. Boat lifts and shore stations also could be maintained
20
No. 2008AP1523
closer to shore if the District's proposed higher water levels
were implemented.
11. Natural Scenic Beauty——Fuller "pool levels" are more
aesthetically pleasing to riparian property owners than exposed
lake beds. However, some riparians value the beauty of the
wetlands that would be lost with higher water levels.
12. Navigability——Raising water levels on the lake would
increase the surface area of the lake by up to 63 acres and
mitigate existing navigational obstacles in the lake.20
13. The Wis. Stat. § 31.02(1) Standard——The findings of
fact concluded with, "The net negative effects of the proposed
higher water levels far outweigh the enhancements to navigation
and access." Thus,
[a]llowing increased water levels as proposed by the
District would be inconsistent with the interest of
public rights in Lake Koshkonong and the Rock River,
and would not serve to protect life, health or
property. Public safety may be marginally promoted
with increased water levels, but the water levels
specified in the DNR's 2005 order do not pose undue
risks to public safety.
¶43 The Decision noted that the DNR objected during the
contested case hearing to admitting evidence related to the
20
No one appears to have challenged any of the ALJ's
findings of fact. We note, however, that the ALJ found that
Lake Koshkonong has a surface area of approximately 10,460
acres, after the water levels in Lake Koshkonong were lowered to
conform to the DNR's 1991 order. The figure 10,460 acres is
identical to the figure used by the DNR in a 1971 Wisconsin
Conservation Bulletin. Shoreland is Vulnerable, Wis.
Conservation Bulletin, (DNR, Madison, Wis.), July-August 1971,
at 22.
21
No. 2008AP1523
effect of water levels on real estate values, business income,
and public revenues. The Decision sustained the DNR's
objections, citing Wisconsin's Environmental Decade, Inc. v.
DNR, 115 Wis. 2d 381, 404, 340 N.W.2d 722 (1983), and asserting
that "[s]econdary or indirect economic impacts of a water level
determination do not bear on the statutory standard set forth in
section 31.02(1)." Therefore, the ALJ struck Stockham and
Kashian's economic testimony on behalf of the District, along
with all related exhibits, as secondary economic impacts outside
the scope of the statute.21 The Decision did consider riparian
access, which the ALJ said "comprehends at least one component
of these asserted secondary impacts." The Decision acknowledged
that riparian owners' "diminished utility and enjoyment of their
property [resulting from lower water levels] . . . doubtless
reduces the value of that property to them."
¶44 The Decision noted that the DNR was required to
balance and accommodate conflicting interests when making a
water level determination and that the DNR had done that here.
Furthermore, the DNR "evaluated the proposed water level
increase against the appropriate regulatory standards, including
chapter NR 103, Wis. Admin. Code."
21
In a contested case hearing, a hearing examiner "shall
not be bound by common law or statutory rules of evidence. The
agency or hearing examiner shall admit all testimony having
reasonable probative value, but shall exclude immaterial,
irrelevant or unduly repetitious testimony or evidence that is
inadmissible under s. 901.05." Wis. Stat. § 227.45(1).
22
No. 2008AP1523
¶45 Thus, the Decision closes with a conclusion of law
that "the DNR's decision [to reject the District's proposed
higher water levels] . . . is necessary to protect the public
rights in navigable waters and reasonably balances and
accommodates public and private rights, the promotion of safety,
and the protection of life, health, and property."
¶46 The DNR adopted the Decision as its own, by operation
of Wis. Stat. § 227.46(3)(a) (2003–04) and Wis. Admin. Code § NR
2.155(1) (Sept. 2004).
G. The District's Appeal
¶47 Following the Decision, the District petitioned for
review by the Rock County Circuit Court under Wis. Stat.
§ 227.53. The District contended that the Decision erroneously
interpreted "public rights in navigable waters" and the phrase
"protect . . . property." The District argued that the DNR
improperly expanded its consideration of "public rights in
navigable waters" to include private wetlands and that the DNR
improperly considered wetland water quality standards in Wis.
Admin. Code § NR 103, as promulgated under Wis. Stat. ch. 281.
The District further argued that it was improper for the DNR to
categorically exclude all evidence of economic effects on
property in its Decision because, by doing so, it misinterpreted
the mandate in Wis. Stat. § 31.02(1) to
"protect . . . property." However, the circuit court affirmed
the Decision, concluding that the DNR's interpretation of the
statutes was reasonable and that the Decision was supported by
substantial evidence.
23
No. 2008AP1523
¶48 The District appealed to the court of appeals, which
certified the District's appeal to this court on the issue of
"ambiguity" in Wis. Stat. § 31.02(1) related to the phrase
"protect . . . property." This court denied the certification
request.
¶49 The court of appeals then issued an opinion affirming
the DNR's Decision, this time holding that Wis. Stat.
§ 31.02(1), including its "protect . . . property" language, was
"unambiguous." Rock-Koshkonong Lake Dist., 336 Wis. 2d 677,
¶47. First, the court of appeals reasoned that when the
legislature wants the DNR to consider property values and
economic effects in its decision-making, "it does so in clear,
unambiguous language." Id., ¶42 (citing statutes). Second, the
court of appeals concluded that if the DNR were required to
consider economic factors when making a determination under Wis.
Stat. § 31.02(1) to "protect . . . property," such an
interpretation "would have no logical stopping point." Id.,
¶43. Finally, the court of appeals looked to this court's
interpretation of similar statutory language in City of New
Lisbon v. Harebo, 224 Wis. 66, 271 N.W. 659 (1937), for the
proposition that protection of property is "limited to
protection of real property from hydrologic events like
flooding." Id., ¶45.
¶50 The court of appeals decision also held that the DNR's
consideration of the impact of water levels on adjacent wetlands
and § NR 103 water quality standards was reasonable. The court
of appeals determined these considerations to be consistent with
24
No. 2008AP1523
"the very resources [the DNR] has been assigned to protect" and
that the DNR is not restricted to considerations below the OHWM.
Id., ¶¶52–53. The court of appeals also concluded that the DNR
has a responsibility to protect water quality standards in this
state, and to disregard that duty when making a water level
determination under Wis. Stat. § 31.02(1) would be absurd. Id.,
¶56.
¶51 The District petitioned this court for review, which
we granted on February 23, 2012.
II. DISCUSSION
A. Standard of Review
¶52 This court normally provides a separate section on
"standard of review" before proceeding to its legal analysis.
In this case, the standard of review is itself an issue, namely,
whether the court should give deference to the DNR's conclusions
of law.
¶53 When a party appeals to the court of appeals or seeks
review in this court "from a circuit court order reviewing an
agency decision," the appellate court reviews the decision of
the agency, not the decision of the circuit court. Lake Beulah
Mgmt. Dist. v. DNR, 2011 WI 54, ¶25, 335 Wis. 2d 47, 799
N.W.2d 73 (quoting Hilton ex rel. Pages Homeowners' Ass'n v.
DNR, 2006 WI 84, ¶15, 293 Wis. 2d 1, 717 N.W.2d 166).
¶54 In Hilton, the court examined the standard of review
that should be applied to an ALJ decision that had been
expressly adopted by the DNR pursuant to Wis. Stat.
§ 227.46(3)(a). The court concluded that "because the DNR has
25
No. 2008AP1523
expressly adopted the ALJ decision, the ALJ decision should be
afforded the same deference afforded the agency." Hilton, 293
Wis. 2d 1, ¶14.
¶55 In this case, the Decision contains 120 specific
findings of fact. The District does not challenge any of these
findings. If it did challenge any of the findings of fact, the
court would apply a substantial evidence standard. See id., ¶16
(citing Borsellino v. DNR, 2000 WI App 27, ¶7, 232 Wis. 2d 430,
606 N.W.2d 255).
¶56 In this case, the Decision contains four conclusions
of law grounded in the facts. However, the District asserts
that the DNR exceeded the scope of its authority under Wis.
Stat. § 31.02(1) by focusing on the protection of public and
private wetlands above the OHWM; misinterpreted the mandate to
"protect . . . property" in § 31.02(1); and excluded relevant
evidence that should have been considered under the statute.
The District also asserts that the DNR improperly considered the
standards in Wis. Admin. Code § NR 103 in making its water level
determination under § 31.02(1).
¶57 These assertions involve issues of agency procedure
and agency interpretation of law that are treated separately as
questions of law.
¶58 Agency determinations involving questions of law,
including interpretation and application of statutes, are
reviewable by this court under Wis. Stat. § 227.57(5). ABKA
Ltd. P'ship v. DNR, 2002 WI 106, ¶30, 255 Wis. 2d 486, 648
N.W.2d 854. Section 227.57(5) provides that "[t]he court shall
26
No. 2008AP1523
set aside or modify the agency action if it finds that the
agency has erroneously interpreted a provision of law."
¶59 While statutory interpretation is normally a question
of law determined independently by a court, a court may give an
agency's interpretation of a statute great weight deference,22 or
due weight deference,23 or no deference.24 Racine Harley-
Davidson, Inc. v. Wis. Div. of Hearings & Appeals, 2006 WI 86,
¶¶11, 19, 292 Wis. 2d 549, 717 N.W.2d 184. See generally
22
Great weight deference is appropriately applied to an
agency's legal conclusions where:
(1) the agency was charged by the legislature
with the duty of administering the statute; (2) the
interpretation of the statute is one of long-
standing; (3) the agency employed its expertise or
specialized knowledge in forming the interpretation;
and (4) the agency's interpretation will provide
uniformity and consistency in the application of the
statute.
Hilton ex rel. Pages Homeowners' Ass'n v. DNR, 2006 WI 84, ¶15,
293 Wis. 2d 1, 717 N.W.2d 166 (quoting Clean Wis., Inc. v. Pub.
Serv. Comm'n, 2005 WI 93, ¶39, 282 Wis. 2d 250, 700 N.W.2d 768)
(brackets omitted).
23
Due weight deference is applied when "the agency has some
experience in an area, but has not developed the expertise which
necessarily places it in a better position to make judgments
regarding the interpretation of the statute than a court."
Clean Wis., 282 Wis. 2d 250, ¶42 (quoting Hutson v. Wis. Pers.
Comm'n, 2003 WI 97, ¶33, 263 Wis. 2d 612, 665 N.W.2d 212)
(internal quotation marks omitted).
24
As a general rule, a reviewing court accords an agency no
deference when the agency has decided an issue of first
impression, when an agency lacks experience or expertise in
deciding a legal issue, or when an agency has taken inconsistent
positions on a legal issue. UFE, Inc. v. LIRC, 201 Wis. 2d 274,
285, 548 N.W.2d 57 (1996). But there are additional reasons for
not according deference, as noted infra in this opinion.
27
No. 2008AP1523
Salvatore Massa, The Standards of Review for Agency
Interpretations of Statutes in Wisconsin, 83 Marq. L. Rev. 597(2000). Deference, however, "does not mean that the court
accepts the agency interpretation without a critical eye. The
court itself must always interpret the statute to determine the
reasonableness of the agency interpretation. Only reasonable
agency interpretations are given any deference." Racine Harley-
Davidson, 292 Wis. 2d 549, ¶15.
¶60 Here the DNR is charged by the legislature with the
duty of administering Wis. Stat. § 31.02(1), and it brought to
its enforcement of the statute a great deal of expertise and
specialized knowledge. However, the DNR's interpretation of the
statute is not long-standing with respect to some of the issues
before this court, and, as will be seen, its interpretation is
not likely to be uniform and consistent in its application
because of the diverse factual circumstances that will be
presented. Thus, the DNR's conclusions of law in statutory
interpretation are not entitled to great weight deference.
¶61 Another factor works against deference. "The nature
and scope of an agency's powers are issues of statutory
interpretation." Wis. Citizens Concerned for Cranes & Doves v.
DNR, 2004 WI 40, ¶6, 270 Wis. 2d 318, 677 N.W.2d 612 (citing GTE
N., Inc. v. Pub. Serv. Comm'n, 176 Wis. 2d 559, 564, 500
N.W.2d 284 (1993)). Courts are not bound by an agency's
decision concerning the scope of its own power. Wis. Citizens
Concerned, 270 Wis. 2d 318, ¶11; Wis.'s Envtl. Decade, Inc. v.
Pub. Serv. Comm'n, 81 Wis. 2d 344, 351, 260 N.W.2d 712 (1978);
28
No. 2008AP1523
Big Foot Country Club v. DOR, 70 Wis. 2d 871, 875, 235
N.W.2d 696 (1975); Nekoosa-Edwards Paper Co. v. Pub. Serv.
Comm'n, 8 Wis. 2d 582, 592, 99 N.W.2d 821 (1959) (citing cases).
¶62 In this case, the DNR is at odds with the District
over the scope of the agency's power. As will be seen, the DNR
has given new interpretations to both the Wisconsin Constitution
(Article IX, Section 1) and Wisconsin Statutes, disregarded some
past decisions of this court, and acted inconsistently with some
of its own prior positions. Under these circumstances, we
afford no deference to the DNR's interpretation and application
of Wis. Stat. § 31.02(1) and consider the legal issues presented
de novo.25
¶63 The DNR concluded that the economic impacts of lower
water levels on residential and business property are not
relevant in making a water level determination, despite language
in Wis. Stat. § 31.02(1) authorizing the DNR to
25
Wisconsin Stat. § 227.57(8) provides in part:
The court shall reverse or remand the case to the
agency if it finds that the agency's exercise of
discretion is outside the range of discretion
delegated to the agency by law; is inconsistent with
an agency rule, an officially stated agency policy or
a prior agency practice, if deviation therefrom is not
explained to the satisfaction of the court by the
agency; or is otherwise in violation of a
constitutional or statutory provision . . . .
This statute implicates the scope of the DNR's authority as well
as the agency's past decisions and policy. It provides
additional authority for not affording deference to the DNR in
this matter.
29
No. 2008AP1523
"protect . . . property." As will be discussed later in this
opinion, categorically excluding these economic factors from
consideration in a water level determination under § 31.02(1) is
not reasonable. Cf. Racine Harley-Davidson, 292 Wis. 2d 549,
¶15 (stating that only reasonable agency interpretations receive
deference).
¶64 Thus, we afford no deference to the DNR's
interpretation and application of Wis. Stat. § 31.02(1) in this
case.
B. The DNR'S Consideration of Impacts on Wetlands
Adjacent to Navigable Waters
¶65 The District contends that the DNR, in making a water
level determination under Wis. Stat. § 31.02(1) "in the interest
of public rights in navigable waters," exceeded its authority
when it considered impacts on private wetlands adjacent to Lake
Koshkonong that are above the OHWM. The District is also
concerned about the application of the public trust doctrine to
any wetlands that are not navigable in fact unless those
wetlands are below the OHWM. The District asserts that the
DNR's position significantly expands the scope of the DNR's
public trust jurisdiction.
¶66 The Decision explains the decision-maker's
understanding of the applicable law. In his Discussion section,
the ALJ wrote:
"Public rights" in the state's public trust
navigable waters extend beyond navigation relating to
commerce, and include the following: "sailing, rowing,
canoeing, bathing, fishing, hunting, skating, and
30
No. 2008AP1523
other public purposes," Nekoosa Edwards Paper Co. v.
Railroad Commission, 201 Wis. 40, 228 N.W. 144, 147
(1929); right to clean, unpolluted water, Reuter v.
DNR, 43 Wis. 2d 272, 168 N.W.2d 860 (1969);
consideration of wetlands and near shore lands, Just
v. Marinette County, 56 Wis. 2d 7, 201 N.W.2d 761(1972); wildlife habitat, and preservation of scenic
beauty, Village of Menomonee Falls v. DNR, 140
Wis. 2d 579, 412 N.W.2d 505 (Ct. App. 1987).
¶67 This paragraph cites the public trust doctrine as
authority for the DNR to regulate wetlands and near shorelands,
wildlife habitat, and scenic beauty.
¶68 The DNR's brief to this court confirms this position:
1. "Wetlands in and adjacent to navigable waters
have long been included in public rights to navigable waters
because of their special relationship to navigable waters."
2. "[P]ublic rights in wetlands 'adjacent to or near
navigable waters' are public rights in, not beyond, navigable
waters."
3. "If petitioners were correct that the public
trust does not extend to privately owned non-navigable
lands . . . then the shoreland zoning law fails, too."
4. "[P]ublic rights embrace all wetlands in or
adjacent to navigable waters, privately or publicly owned, above
or below the OHWM."
¶69 In evaluating the District's concerns about these
claims, it is necessary to examine the constitutional and
statutory directives associated with public rights in navigable
waters and the wetlands adjacent to them, along with this
court's interpretation of these directives.
31
No. 2008AP1523
¶70 Wisconsin has a long tradition of "protect[ing] our
valuable water resources." Lake Beulah, 335 Wis. 2d 47, ¶31.
The state relies on several sources of authority to achieve this
objective.
¶71 Article IX, Section 1 of the Wisconsin Constitution
commands that the state hold navigable waters in trust for the
public:
The state shall have concurrent jurisdiction on
all rivers and lakes bordering on this state so far as
such rivers or lakes shall form a common boundary to
the state and any other state or territory now or
hereafter to be formed, and bounded by the same; and
the river Mississippi and the navigable waters leading
into the Mississippi and St. Lawrence, and the
carrying places between the same, shall be common
highways and forever free, as well to the inhabitants
of the state as to the citizens of the United States,
without any tax, impost or duty therefor.
Wis. Const. art. IX, § 1.
¶72 This court has long held that the public trust in
navigable waters "should be interpreted in the broad and
beneficent spirit that gave rise to it in order that the people
may fully enjoy the intended benefits." Diana Shooting Club v.
Husting, 156 Wis. 261, 271, 145 N.W. 816 (1914); Lake Beulah,
32
No. 2008AP1523
335 Wis. 2d 47, ¶31.26 Broadly interpreting the public trust has
resulted in recognition of more than just commercial
navigability rights. Protection now extends to "purely
recreational purposes such as boating, swimming, fishing,
hunting, . . . and . . . preserv[ing] scenic beauty." R.W.
Docks & Slips v. State, 2001 WI 73, ¶19, 244 Wis. 2d 497, 628
N.W.2d 781 (citing State v. Bleck, 114 Wis. 2d 454, 457, 338
N.W.2d 492 (1983)).
¶73 Because the public trust doctrine is rooted in Article
IX, Section 1, however, it is important to understand its
history and its core principles so that it is properly
interpreted. There is no better place to start than Justice
George Currie's scholarly analysis of the doctrine in Muench v.
Public Service Commission, 261 Wis. 492, 53 N.W.2d 514 (1952):
After the Revolutionary War, the original
thirteen states were impoverished and were confronted
with the problem of paying the debts created by the
war. States without western lands demanded that
Virginia, and other states claiming such lands to the
west, should cede the same to the Confederation to be
sold to pay such debts. In 1783 the Virginia
legislature authorized the ceding of the Northwest
26
The legislature is "bound by its duty to protect the
navigable waters of the state for the citizens' benefit" and "to
evaluate," before acting to affect the water, "all potential
benefits that can be derived from water." Gabe Johnson-Karp,
That the Waters Shall be Forever Free: Navigating Wisconsin's
Obligations Under the Public Trust Doctrine and the Great Lakes
Compact, 94 Marq. L. Rev. 415, 422 & n.37 (2010). For a general
discussion of the evolution of the public trust doctrine in
Wisconsin, see Melissa Kwaterski Scanlan, The Evolution of the
Public Trust Doctrine and the Degradation of Trust Resources:
Courts, Trustees and Political Power in Wisconsin, 27 Ecology
L.Q. 135 (2000).
33
No. 2008AP1523
Territory to the Confederation, and the actual deed of
conveyance was executed March 1, 1784. This cession
was made upon two conditions: (1) The new states to be
admitted as members of the Federal Union were to have
the same rights to sovereignty as the original states;
and (2) the navigable waters flowing into the
Mississippi and the St. Lawrence rivers, and the
carrying places between them, were to be forever free
public highways. These conditions were incorporated
into the Northwest Ordinance of 1787, which set up the
machinery for the government of the Northwest
Territory.
Sec. 1, art. IX of the Wisconsin constitution,
adopted by the territorial convention on February 17,
1848, and approved by the act of congress admitting
Wisconsin into the Union, incorporated verbatim the
wording of the Northwest Ordinance with respect to
navigable waters . . . .
Muench, 261 Wis. at 499.
¶74 Justice Currie then explained that a number of
questions rise naturally from the article: (1) What are
"navigable waters"? (2) Who owns the "land" under "navigable
waters"? (3) What are the public rights in navigable streams
apart from navigation for commercial purposes? (4) What are the
geographic limits of the public trust in navigable waters? Id.
at 500–08.
¶75 The answers to these questions, in Muench and other
cases, are interrelated, and they help to explain the District's
concern with the DNR's position.
1. Questions Raised by the Public Trust Doctrine
¶76 The public trust doctrine is premised upon the
existence of "navigable waters." The test of navigability
discussed in Olson v. Merrill, 42 Wis. 203, 212 (1877), whether
a stream has the capacity to float logs to market (at least part
34
No. 2008AP1523
of the year), has long since been replaced by the standard of
"navigable in fact for any purpose."27 Muench, 261 Wis. at 505–
06.
[S]ince 1911 it is no longer necessary in determining
navigability of streams to establish a past history of
floating of logs, or other use of commercial
transportation, because any stream is "navigable in
fact" which is capable of floating any boat, skiff, or
canoe, of the shallowest draft used for recreational
purposes.
Id. at 506; see also Bleck, 114 Wis. 2d at 459; DeGayner & Co.
v. DNR, 70 Wis. 2d 936, 946–47, 236 N.W.2d 217 (1975).
¶77 The DNR's position seeks to extend its public trust
jurisdiction28 beyond navigable waters to non-navigable waters
and land. Wetlands are often not "navigable in fact." Non-
navigable land is by definition not navigable and may not be
marshy or "wet." Eliminating the element of "navigability" from
the public trust doctrine would remove one of the prerequisites
for the DNR's constitutional basis for regulating and
27
Justice Currie cites Olson v. Merrill, 42 Wis. 203, 212
(1877), as one of the early cases that established the "saw-log"
test. Muench v. Pub. Serv. Comm'n, 261 Wis. 492, 500, 53
N.W.2d 514 (1952). The "saw-log" test first appears in Whisler
v. Wilkinson, 22 Wis. 546 (*572), 549 (*576) (1868).
28
In furtherance of the state's public trust obligations,
"the legislature has delegated substantial authority over water
management matters to the DNR." Wis.'s Envtl. Decade, Inc. v.
DNR, 85 Wis. 2d 518, 527, 271 N.W.2d 69 (1978); see also ABKA
Ltd. P'ship v. DNR, 2002 WI 106, ¶12, 255 Wis. 2d 486, 648
N.W.2d 854 (noting that the "legislature has delegated to the
DNR broad authority to regulate under the public trust
doctrine").
35
No. 2008AP1523
controlling water and land.29 Applying the public trust doctrine
to non-navigable land above the OHWM would eliminate the
rationale for the doctrine. The ramifications for private
property owners could be very significant.
¶78 The public trust doctrine vests the ownership of land
under lakes——i.e., lake beds——in the state. By contrast, the
public trust doctrine in Wisconsin gives riparian owners along
navigable streams a qualified title in the stream beds to the
center of the stream, while the state holds the navigable waters
in trust for the public. In reality, the state effectively
29
This court has rejected theories that attempt to extend
the public trust doctrine beyond its historical limitations.
For instance, in DeGayner & Co. v. DNR, 70 Wis. 2d 936, 236
N.W.2d 217 (1975), the court reviewed the issue of whether Five
Mile Creek, a tributary of the Namekagon River in Bayfield
County, was navigable in fact, thereby requiring a permit to
construct a dam to create an artificial lake. Id. at 938–39.
While the court determined that the creek was navigable in fact,
it rejected a theory offered by an amicus that a stream should
be considered "as a navigable water [irrespective of any other
finding], because it is a tributary of a natural and valuable
navigable resource, the Namekagon river." Id. at 948. The
DeGayner court continued:
There is evidence to show that the flow of spring
water from Five Mile Creek is important in maintaining
the fish life and the water quality of the
Namekagon . . . . [Nonetheless, the] test, proposed
by the amicus . . . , has not been recognized by the
statutes or by the common law; and, as the trial judge
pointed out, that test, in its simplistic form, can be
carried to ridiculous extremes, for it would mean that
all tributaries, since they eventually run into some
navigable body of water, must be held navigable.
Id.36
No. 2008AP1523
controls the land under navigable streams and rivers without
actually owning it.
¶79 In Muench, the court observed:
The United States [S]upreme [C]ourt in Barney v.
Keokuk (1876), 94 U.S. 324, 24 L. Ed. 224, declared
that the individual states have the right to determine
for themselves the ownership of land under navigable
waters. At an early date in its history the Wisconsin
court put itself on record as favoring the trust
doctrine, that the state holds the beds underlying
navigable waters in trust for all of its citizens,
subject only to the qualification that a riparian
owner on the bank of a navigable stream has a
qualified title in the stream bed to the center
thereof. See the discussion of this subject in
McLennan v. Prentice (1893), 85 Wis. 427, 443-445, 55
N.W. 764.
Muench, 261 Wis. at 501–02.
¶80 Muench quotes two sentences from Illinois Steel Co. v.
Bilot:
The United States never had title, in the
Northwest Territory out of which this state was
carved, to the beds of lakes, ponds, and navigable
rivers, except in trust for public purposes; and its
trust in that regard was transferred to the state, and
must there continue forever, so far as necessary to
the enjoyment thereof by the people of this
commonwealth. Whatever concession the state may make
without violating the essentials of the trust, it has
been held, can properly be made to riparian
proprietors.
Id. at 502 (quoting Ill. Steel Co. v. Bilot, 109 Wis. 418, 426,
84 N.W. 855 (1901)).
¶81 The Bilot case went on to say:
Under that [concession to riparian proprietors], by
long-established judicial policy, which has become a
rule of property, a qualified title to submerged lands
of rivers navigable in fact has been conceded to the
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No. 2008AP1523
owners of the shores. Otherwise the title to lands
under all public waters is in the state, and it is
powerless to change it. . . . Hence we must presume
from the evidence that the title to the land in
dispute is where the evidence tends to show it is. We
should say in passing that the term "qualified title"
as above used refers to that interest in the beds of
navigable streams which has passed to private
ownership according to the uniform holdings of this
court,——a full title, subject to the public rights
which were incident to the lands forming such beds at
the time of the creation of the trust above mentioned.
No private ownership has been conceded which displaces
or materially affects such public rights. As to them
the state has not abdicated and cannot abdicate its
trust.
Bilot, 109 Wis. at 426 (emphasis added).
¶82 The state's ownership of lake beds was confirmed in
State v. McDonald Lumber Co., 18 Wis. 2d 173, 176, 118
N.W.2d 152 (1962), Wisconsin's Environmental Decade, Inc. v.
DNR, 85 Wis. 2d 518, 526, 271 N.W.2d 69 (1978), and State v.
Trudeau, 139 Wis. 2d 91, 101–02, 408 N.W.2d 337 (1987). The
rule is different with respect to the beds under streams30 in
part because streams can change course, streams can become
unnavigable over time, and navigable streams can be very narrow
and shallow, so that state ownership of stream beds could be
problematic and impractical.
¶83 Writing in Diana Shooting Club, Justice Vinje observed
that "[i]t would no doubt have been more logical to hold, as
English courts do, that private ownership ends where
30
"In some of the states embraced within the Northwest
territory the title to the bed of navigable streams remained in
the state. In Wisconsin it is held to be in the riparian
owners." Diana Shooting Club, 156 Wis. at 268.
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No. 2008AP1523
navigability begins." Diana Shooting Club, 156 Wis. at 269.
But he added that,
there is nothing inconsistent in the doctrine of
private ownership of beds of navigable streams subject
to all the burdens of navigation and the incidents
thereof. As long as the state secures to the people
all the rights they would be entitled to if [the
state] owned the beds of navigable rivers, it fulfills
the trust imposed upon it by the organic law which
declares that all navigable waters shall be forever
free.
Id.
¶84 Contemplating the question of ownership is important
because the public trust doctrine implicates state ownership or
virtual state ownership——by virtue of its trust responsibility——
of land under navigable waters. If the public trust were
extended to cover wetlands that are not navigable, it would
create significant questions about ownership of and trespass on
private land, and it would be difficult to cabin expansion of
the state's new constitutionally based jurisdiction over private
land.31
¶85 In its discussion of public trust, the DNR points
specifically to M&I Marshall & Ilsley Bank v. Town of Somers,
141 Wis. 2d 271, 288, 414 N.W.2d 824 (1987), where this court
31
Virtual state ownership of navigable waters and the land
beneath navigable waters——under the public trust doctrine——does
not implicate questions of eminent domain. The State has no
need to take what it already "owns." However, geographic
expansion of the public trust beyond the boundaries of the OHWM
of navigable waters would inevitably raise a slew of new
questions about just compensation. This has never been a part
of public trust jurisprudence.
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No. 2008AP1523
stated that a parcel of private wetland located "partly within
and partly outside a shoreland area should be treated as if the
entire wetland was located within a shoreland area." To apply
this reasoning to the scope of the public trust doctrine would
not represent a logical application of the doctrine.
¶86 There is no constitutional foundation for public trust
jurisdiction over land, including non-navigable wetlands, that
is not below the OHWM of a navigable lake or stream. Applying
the state's police power to land above or beyond the OHWM of
navigable waters——to protect the public interest in navigable
waters——is different from asserting public trust jurisdiction
over non-navigable land and water.
¶87 The public trust doctrine entails public rights in
navigable waters, including non-commercial "sailing, rowing,
canoeing, bathing, fishing, hunting, skating, and other public
purposes." Nekoosa-Edwards Paper Co., 201 Wis. at 47. The
state's public trust duty "requires the state not only to
promote navigation but also to protect and preserve its waters
for fishing, hunting, recreation, and scenic beauty." Wis.'s
Envtl. Decade, 85 Wis. 2d at 526 (emphasis added). The court
cited Muench to support scenic beauty.
¶88 Applying the "scenic beauty" referenced in Muench and
Wisconsin's Environmental Decade to this case takes the concept
beyond its original purpose to protect and preserve navigable
"waters." In Muench, the court noted the passage of Chapter
523, Laws of 1929, which amended Wis. Stat. § 31.06(3) "so as to
provide that the enjoyment of scenic beauty is a public right to
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No. 2008AP1523
be considered by the Public Service Commission in making
findings as to whether a permit for a proposed dam shall be
issued." Muench, 261 Wis. at 508.32 See also DeGayner, 70
Wis. 2d at 949.
¶89 Considering scenic beauty in relation to the
construction of a dam in navigable waters is different from
claiming public rights under the public trust doctrine to the
scenic beauty of non-navigable shoreland. Yet, the DNR has
taken the position that the public trust doctrine protects a
public right to "scenic beauty (which on its face extends to the
shore above the OHWM)."
¶90 Article IX, Section 1, does not vest the state with
constitutional trust powers to "protect" scenic beauty by
regulating non-navigable land bordering lakes and rivers. As
will be noted, the state may have statutory authority to weigh
in on scenic beauty beyond its public trust jurisdiction, but
giving the state constitutional trust power to regulate "scenic
beauty" would arguably give the state authority to regulate any
private land that could be seen from navigable waters.
32
In Just v. Marinette County, 56 Wis. 2d 7, 201 N.W.2d 761(1972), the state correctly argued in its brief to this court
that the public trust doctrine requires the legislature to
preserve the trust in navigable waters: "The carrying out of
that duty requires not only a promotion of navigation . . . but
the protection and preservation of the incidents to navigation
such as hunting, fishing, recreation, and scenic beauty, as they
are defined in Muench v. Public Service Comm[ission] (1952), 261
Wis. 492, 53 N.W.2d 514, 55 N.W.2d 40." (Emphasis added.)
41
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¶91 Public trust jurisdiction has always been confined to
a limited geographic area. In Diana Shooting Club, the court
said:
Hunting on navigable waters is lawful when it is
confined strictly to such waters while they are in a
navigable stage, and between the boundaries of
ordinary high-water marks. When so confined it is
immaterial what the character of the stream or water
is. It may be deep or shallow, clear or covered with
aquatic vegetation. By ordinary high-water mark is
meant the point on the bank or shore up to which the
presence and action of the water is so continuous as
to leave a distinct mark either by erosion,
destruction of terrestrial vegetation, or other easily
recognized characteristic. Lawrence v. Am. W[riting]
P[aper] Co., 144 Wis. 556, 562, 128 N.W. 440 [(1910)].
And where the bank or shore at any particular place is
of such a character that it is impossible or difficult
to ascertain where the point of ordinary high-water
mark is, recourse may be had to other places on the
bank or shore of the same stream or lake to determine
whether a given stage of water is above or below
ordinary high-water mark.
Diana Shooting Club, 156 Wis. at 272; see also Bilot, 109
Wis. at 425.
¶92 The Diana Shooting Club holding was reaffirmed in
Trudeau, 139 Wis. 2d at 104, where the court stated that "Lake
Superior is navigable and if the non-navigable site is a part of
the lake, then the land below the OHWM is held in trust for the
public." (Emphasis added.). See also McDonald Lumber Co., 18
Wis. 2d at 176–77; Houslet v. DNR, 110 Wis. 2d 280, 286, 329
N.W.2d 219 (Ct. App. 1982) ("[T]he OHWM marks the boundary
between lake bed titled in the state, which is subject to state
regulation in the public interest, and property titled in
private owners.").
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¶93 The limitation thus stated in the cases is clearly
inconsistent with the interpretation of the public trust
doctrine espoused by the DNR.
¶94 In sum, we believe the District has raised legitimate
concerns about the DNR's reliance upon the public trust doctrine
as authority for some of its regulation in this case.
2. Police Power as a Basis for Protecting Water Resources
¶95 This review of the constitutionally based public trust
doctrine does not disarm the DNR in protecting Wisconsin's
valuable water resources. For instance, the DNR has broad
statutory authority grounded in the state's police power to
protect wetlands and other water resources. See Just, 56
Wis. 2d at 10–11. This police power is sometimes buttressed by
requirements imposed by federal law. Moreover, the agency has
explicit statutory authority in this case to consider the impact
of the water levels of Lake Koshkonong on public and private
wetlands adjacent to the lake, Wis. Stat. § 31.02(1), because it
has police power authority to "protect . . . property."
¶96 The Just case is a textbook example of using the
state's police power to support legislation "to protect
navigable waters and the public rights therein from the
degradation and deterioration which results from uncontrolled
use and development of shorelands." Id. at 10. The Wisconsin
Legislature approved the Water Quality Act of 1965 by Chapter
614, Laws of 1965. The Act authorized the passage of shoreland
zoning ordinances by counties, subject to certain requirements.
Marinette County passed such an ordinance. It later prosecuted
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No. 2008AP1523
Ronald Just for filling in wetlands on his shoreland property
without a required permit. Id. at 14.
¶97 When the case reached the supreme court, the court
explained that the real issue was whether "the conservancy
district provisions and the wetlands-filling restrictions are
unconstitutional because they amount to a constructive taking of
the Justs' land without compensation." Id.
¶98 Marinette County and the state argued that the
contested provisions constituted "a proper exercise of the
police power of the state and do not so severely limit the use
or depreciate the value of the land as to constitute a taking
without compensation." Id. The state's principal argument in
its brief had been that "[t]he Marinette County Shoreland Zoning
Ordinance Is A Valid Police Power Regulation." The state
explained that the purpose of the ordinance was not intended to
"preserve wetlands in their natural state. The basic purpose of
the ordinance is the protection of navigable waters, and the
public rights therein, from the degradation and deterioration
which results from the uncontrolled use and development of
shorelands." The state said:
It has long been the law in Wisconsin that laws
and regulations to prevent pollution and protect the
waters of the state from degradation are valid police
power enactments. . . . The basis for such police
power regulation is the legislature's duty to promote
the general health, safety and welfare and to protect
and preserve the public trust in navigable waters of
the State of Wisconsin.
. . . .
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No. 2008AP1523
The ordinance should . . . be upheld as a valid police
power regulation.
The court then responded in the Just opinion as follows:
The protection of public rights may be accomplished by
the exercise of the police power unless the damage to
the property owner is too great and amounts to a
confiscation. The securing or taking of a benefit not
presently enjoyed by the public for its use is
obtained by the government through its power of
eminent domain. The distinction between the exercise
of the police power and condemnation has been said to
be a matter of degree of damage to the property owner.
In the valid exercise of the police power reasonably
restricting the use of property, the damage suffered
by the owner is said to be incidental. However, where
the restriction is so great the landowner ought not to
bear such a burden for the public good, the
restriction has been held to be a constructive taking
even though the actual use or forbidden use has not
been transferred to the government so as to be a
taking in the traditional sense.
Id. at 15.
¶99 The court's emphasis on the state's police power is
evident in the following passages:
This case causes us to re-examine the concepts of
public benefit in contrast to public harm and the
scope of an owner's right to use of his property. In
the instant case we have a restriction on the use of a
citizen['s] property, not to secure a benefit for the
public, but to prevent a harm from the change in the
natural character of the citizens' property. . . .
What makes this case different from most condemnation
or police power zoning cases is the interrelationship
of the wetlands, the swamps and the natural
environment of shorelands to the purity of the water
and to such natural resources as navigation, fishing,
and scenic beauty. Swamps and wetlands were once
considered wasteland, undesirable, and not
picturesque. But as the people became more
sophisticated, an appreciation was acquired that
swamps and wetlands serve a vital role in nature, are
part of the balance of nature and are essential to the
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No. 2008AP1523
purity of the water in our lakes and streams. Swamps
and wetlands are a necessary part of the ecological
creation and now, even to the uninitiated, possess
their own beauty in nature.
The exercise of the police power in zoning must be
reasonable and we think it is not an unreasonable
exercise of that power to prevent harm to public
rights [in navigable waters] by limiting the use of
private property to its natural uses.
. . . .
Wisconsin has long held that laws and regulations
to prevent pollution and to protect the waters of this
state from degradation are valid police-power
enactments.
Id. at 16-18.33
¶100 If there is any question that the court was not
relying on the public trust doctrine to sustain the shoreland
zoning ordinance and its authorizing legislation, the court
noted that the Marinette County ordinance applied to "lands
within 1,000 feet of the normal high-water elevation of
navigable lakes, ponds, or flowages and 300 feet from a
navigable river or stream." Id. at 10. These dimensions far
exceed the geographic limitations of public trust jurisdiction.
It should be obvious that the state does not have constitutional
public trust jurisdiction to regulate land a distance of more
than three football fields away from a navigable lake or pond.
33
"In Just we upheld, as a valid exercise of the police
power, Marinette County's shoreland zoning ordinance against a
challenge that the ordinance amounted to a constructive taking
of the Just[s'] land without compensation." M&I Marshall &
Ilsley Bank v. Town of Somers, 141 Wis. 2d 271, 286, 414
N.W.2d 824 (1987) (emphasis added).
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No. 2008AP1523
¶101 The police power is potent, and legislation grounded
in the state's police power is presumed constitutional and will
be sustained unless it is deemed unconstitutional beyond a
reasonable doubt. Nonetheless, as Just makes clear, the
distinction between the DNR's constitutionally based public
trust authority and the DNR's police power-based statutory
authority is that the latter is subject to constitutional and
statutory protections afforded to property, may be modified from
time to time by the legislature, and requires some balancing of
competing interests in enforcement.
¶102 Wisconsin Stat. § 31.02(1) also makes a distinction
between the DNR's public trust authority and its police power
authority. Only part of Wis. Stat. § 31.02(1) embodies the
public trust doctrine. See Wis. Power & Light Co. v. Pub. Serv.
Comm'n, 5 Wis. 2d 167, 174, 92 N.W.2d 241 (1958) (stating that
language in § 31.02 "promot[ing]
safety . . . and . . . protect[ing] property" "involve[s]
subjects covered by the police power of the state").
¶103 If the statute read only that the department "in the
interest of public rights in navigable waters," may regulate and
control the level and flow of water in all navigable waters, the
statute would be seen as a direct enforcement mechanism for the
public trust in navigable waters. But the statute does more.
It contains a disjunctive element giving the department
authority to regulate and control the flow of water in all
navigable waters "to promote safety and protect life, health and
property." Wis. Stat. § 31.02(1). Because the quoted language
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No. 2008AP1523
follows the key word "or," the department is given distinct and
different authority to consider interests affected by the level
of the "navigable waters."
3. The History of Wis. Stat. § 31.02(1) and Application
¶104 Wisconsin Stat. § 31.02(1) originated in Section 3,
Chapter 380, Laws of 1915. The "or" between the words "the
interest of public rights in navigable waters" and the words "to
promote safety and protect life, health and property" was
present in the beginning in relation to the power to control
water levels. See Wis. Stat. ch. 69m., § 1596——2.1. (1915)
(created by Section 3 of Chapter 380, Laws of 1915).
¶105 By contrast, Wis. Stat. ch. 69m., § 1596——7.3. (1915),
created by the same section of ch. 380, directs the Railroad
Commission to consider whether "the construction, operation or
maintenance of the proposed dam will not materially obstruct
existing navigation or violate other public rights and will not
endanger life, health or property." (Emphasis added.)
¶106 Both provisions distinguish "public rights" from other
interests, and those other interests need not be in or part of
navigable waters. The section relating to the water level
regulations appears to give the Railroad Commission some
discretion about what it will consider; the other section
requires consideration of multiple factors before permitting
construction of a dam.
¶107 Clearly, both sections empower the Railroad Commission
to consider water level effects on property. Flooding was an
obvious concern. The early statutes contain frequent references
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No. 2008AP1523
to flooding caused by dams. We see no reason, however, why
"property" would not include property rights generally,
particularly riparian rights under common law.
¶108 The "bundle of rights conferred upon a property owner
by virtue of his contiguity to a body of water, whether a lake
or stream, are referred to as riparian rights." Mayer v.
Grueber, 29 Wis. 2d 168, 174, 138 N.W.2d 197 (1965). "It is
clear in Wisconsin that the mere fact that one owns property
abutting a natural body of water presumptively confers certain
rights." Id.; see also Stoesser v. Shore Drive P'ship, 172
Wis. 2d 660, 667, 494 N.W.2d 204 (1993). We see no evidence
that the legislature in 1915 intended to exclude riparian rights
from the consideration of property in Wis. Stat. § 31.02(1).
¶109 Property abutting a natural body of water includes
wetlands, which make up 12.4 miles of Lake Koshkonong's
shoreline. The District acknowledges that "privately owned
wetlands are entitled to consideration as 'property' to be
protected in establishing a water level order." There can be no
dispute that the DNR can consider water level impact on all
adjacent property under Wis. Stat. § 31.02(1).
¶110 No property owner's riparian rights are absolute.
They are balanced against the rights of other riparians and the
public, particularly if they impinge upon public rights in
navigable waters. But the rights of all riparians must be
considered in a water level determination. The DNR may
emphasize some rights over others in its water level
determinations, and its exercise of discretion will normally be
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No. 2008AP1523
upheld so long as it considers all property rights and so long
as it does not accord some non-navigable land or water above the
OHWM a constitutional preference as trust land over other
property.
C. Application of Water Quality Standards
¶111 We next turn to the District's contention that
applying wetland water quality standards in a Wis. Stat.
§ 31.02(1) water level determination, specifically water quality
standards in Wis. Admin. Code § NR 103,34 is expressly prohibited
by Wis. Stat. § 281.92.
¶112 The District asserts that the legislature delegated
rule-making authority to the DNR in Chapter 614, Laws of 1965.
Chapter 614 extensively revised then-Wis. Stat. ch. 144 of the
statutes, giving what is now the DNR a directive to "adopt rules
setting standards of water quality to be applicable to the
waters of the state, recognizing that different standards may be
required for different waters or portions thereof."35 § 37, ch.
614, Laws of 1965.
34
Chapter NR 103 was promulgated pursuant to Wis. Stat.
§ 281.15(2)(b), which authorizes the DNR to adopt rules for
wetland water quality standards.
35
Wisconsin Stat. § 144.025(2)(b) (1965), which is now Wis.
Stat. § 281.15(1), read in full:
The department shall adopt rules setting
standards of water quality to be applicable to the
waters of the state, recognizing that different
standards may be required for different waters or
portions thereof. Such standards of quality shall be
such as to protect the public interest, which include
the protection of the public health and welfare and
the present and prospective future use of such waters
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No. 2008AP1523
¶113 Chapter 614 defined "waters of the state":
"Waters of the state" includes those portions of
Lake Michigan and Lake Superior within the boundaries
of Wisconsin, and all lakes, bays, rivers, streams,
springs, ponds, wells, impounding reservoirs, marshes,
watercourses, drainage systems and other surface or
ground water, natural or artificial, public or
private, within the state or its jurisdiction.
Wis. Stat. § 144.01(1) (1965).
¶114 The District asserts that:
DNR erred as a matter of law in applying ch. NR 103.
Those rules, which define wetland functions and values
and are intended to be determinative of regulatory
decisions, were promulgated under the authority of ch.
281. But DNR's authority to apply rules promulgated
under sec. 281.15 has always been limited by sec.
281.92, which provides: "Nothing in this chapter [ch.
281] affects ss. 196.01 to 196.79 or ch. 31."
Therefore, the District concludes, consideration of "public
rights in navigable waters" in Wis. Stat. § 31.02(1) cannot
include the application of water quality standards in Wis. Stat.
ch. 281 and its underlying administrative code. In effect, the
District contends that nothing in Wis. Stat. ch. 281 affects
Wis. Stat. ch. 31.36
for public and private water supplies, propagation of
fish and aquatic life and wildlife, domestic and
recreational purposes and agricultural, commercial,
industrial and other legitimate uses. In all cases
where the potential uses of water are in conflict,
water quality standards shall be interpreted to
protect the general public interest.
36
A March 27, 2006, memorandum from Patricia Ann Trochlell
of the DNR——labeled Exhibit 850 at the contested case hearing——
appears to confirm the District's contention, as Trochlell
wrote:
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No. 2008AP1523
¶115 Once again, the text of Wis. Stat. § 31.02(1)
authorizes the DNR to "regulate and control the level and flow
of water in all navigable waters" in the interest of "public
rights in navigable waters or to promote safety and protect
life, health and property." Some of the "property" to be
"protected" is wetlands, both public and private. How should
the DNR square this with Wis. Stat. § 281.92?
¶116 The District's reading of these two statutes——that the
DNR cannot apply wetland water quality standards in § NR 103
when making a § 31.02(1) water level determination——is not
reasonable. The DNR should not be forced to ignore relevant
statutes and its own administrative rules on water quality
standards in making a water level determination. It should not
be forced to disregard its recognized statewide statutory
mission as well as its own property.37
Questions have arisen regarding the department's
authority to consider water quality standards for
activities regulated under ch. 31. Ch. 281.92
provides: "Nothing in this subchapter affects ss.
196.01 to 196.79 or ch. 31.["] This means that the
department cannot apply water quality standards such
as NR 102 and NR 103 to dams regulated under ch. 31.
(Emphasis added.) However, Trochlell goes on to state that
DNR's responsibility under Wis. Stat. § 31.02(1), "in the
interest of public rights in navigable waters" and to "promote
safety and protect life, health and property" requires DNR to
"consider [effects] to wetlands under ch. 31 when evaluating
water level impacts to wetlands." (Emphasis added.)
37
See Wis. Stat. § 281.11 ("The [DNR] shall serve as the
central unit of state government to protect, maintain and
improve the quality and management of the waters of the state,
ground and surface, public and private.").
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No. 2008AP1523
¶117 The history of the two statutes at issue is
enlightening. As previously noted, Wis. Stat. § 31.02 was
originally enacted in 1915 as Section 1596——2.1. of ch. 69m.
§ 3, ch. 380, Laws of 1915 (the Water Powers Act). The statute
in 1915 read: "The commission, in the interest of public rights
in navigable waters or to promote safety and protect life,
health and property is empowered to regulate and control the
level and flow of water in all navigable waters." Wis. Stat.
ch. 69m, § 1596——2.1. (1915). This section was renumbered in
1917 as Wis. Stat. § 31.02, as part of the newly created Wis.
Stat. ch. 31. § 3, ch. 474, Laws of 1917. The new § 31.02 was
entitled "Powers of the railroad commission" because the
Railroad Commission was the state agency originally responsible
for making water level determinations.
¶118 Wisconsin Stat. § 281.92 was first enacted in 1919,
four years after the predecessor statute to Wis. Stat.
§ 31.02(1). Section 1407m——1.(12) stated: "Nothing in this act
shall be construed to alter, amend, repeal, impair, or affect
any of the provisions of sections 1797m——1 to 1797m——109 or of
chapter 31 of the Wisconsin statutes." § 2, ch. 447, Laws of
1919 (emphasis added). The state board of health originally had
the responsibility for enforcing the predecessor to Wis. Stat.
ch. 281. See generally ch. 447, Laws of 1919.
¶119 Four years later, the latter statute was renumbered as
Wis. Stat. § 144.12 and amended to read, "Nothing in this
chapter shall be construed to affect the provisions of sections
1797m——1 to 1797m——109 or of chapter 31 of the statutes." § 27,
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No. 2008AP1523
ch. 448, Laws of 1923. This section was renumbered as Wis.
Stat. § 144.27 in 1979, § 624, ch. 221, Laws of 1979, and
finally renumbered as the current Wis. Stat. § 281.92 in 1995.
1995 Wis. Act. 227, § 435.
¶120 The court of appeals looked at this history and made
the following observations:
This statutory history shows that Wis. Stat.
§ 281.92 was originally adopted to demarcate the
regulatory spheres of influence of the state Board of
Health and the Railroad Commission; the Board of
Health's water purification and water pollution
prevention responsibilities were not to affect the
authority of the Railroad Commission in dam regulation
under Wis. Stat. ch. 31, and the Railroad Commission's
responsibilities were not to affect the authority of
the Board of Health in its sphere of regulation.
Rock-Koshkonong Lake Dist., 336 Wis. 2d 677, ¶60. Now that both
Wis. Stat. ch. 281 and ch. 31 responsibilities fall to the DNR,
the court of appeals said, the District's reading of these two
statutes is illogical. Id.¶121 In our view, the effect of Wis. Stat. § 281.92 upon
Wis. Stat. § 31.02(1) cannot be so easily dismissed. Wisconsin
Stat. § 281.92 has remained essentially intact for nearly a
century, including almost 50 years in which the DNR has had the
dual responsibility of enforcing Wis. Stat. chs. 31 and 281.
The DNR's jurisdiction in Wis. Stat. ch. 281 is broader and
different from its jurisdiction in Wis. Stat. ch. 31. If the
purpose served by Wis. Stat. § 281.92 had ceased to exist, the
statute would probably have been amended or eliminated rather
than simply renumbered.
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No. 2008AP1523
¶122 Ultimately, we must interpret both Wis. Stat.
§§ 31.02(1) and 281.92 in a way that harmonizes the purposes of
the two statutes. "Apparently conflicting provisions of law
should be construed so as to harmonize them and thus give effect
to the leading idea behind the law." Beard v. Lee Enters., 225
Wis. 2d 1, 15, 591 N.W.2d 156 (1999). Construing Wis. Stat.
§ 281.92 as forbidding the DNR from applying water quality
standards when making a water level determination in the
interest of "public rights in navigable waters" is too absolute.
As the court of appeals stated, the more reasonable
interpretation is that "nothing in the DNR's water protection
responsibilities under ch. 281 and the associated administrative
rules expands or restricts its responsibilities to set water
levels under Wis. Stat. § 31.02(1)." Rock-Koshkonong Lake
Dist., 336 Wis. 2d 677, ¶57. That interpretation harmonizes the
statutes and "give[s] effect to" the idea behind both laws: that
the DNR should not be straitjacketed when managing the water
resources of this state. Beard, 225 Wis. 2d at 15.
¶123 The DNR may consider the water quality standards in
Wis. Admin. Code § NR 103, promulgated under Wis. Stat. ch. 281,
when making a Wis. Stat. § 31.02(1) water level determination.
Full consideration of these standards is different from a
requirement that the DNR always apply them in making a
§ 31.02(1) determination.
¶124 As we understand it, the DNR did not apply the § NR
103 wetland water quality standards in this case. Rather, the
analysis in the ALJ's Decision stated that the DNR evaluated the
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proposed water level increase in the District’s Petition
"against the appropriate regulatory standards, including chapter
NR 103, Wis. Admin. Code."
¶125 Therefore, we conclude that the DNR may consider
wetland water quality standards in Wis. Admin. Code § NR 103
when making a water level determination under Wis. Stat.
§ 31.02(1). Wisconsin Stat. § 281.92 does not preclude the DNR
from applying the wetland water quality standards in § NR 103 or
other parts of ch. 281, when appropriate, after weighing factors
under § 31.02(1).
D. Consideration of Economic Impacts
¶126 We turn now to the District's final contention that it
was wrong as a matter of law for the DNR to exclude most of the
evidence of economic impacts at the contested case hearing. The
District argues that the requirement in Wis. Stat. § 31.02(1) to
"protect . . . property" should be broadly interpreted so as to
consider the effect of proposed water levels on residential
property values, business income, and local tax revenue. The
DNR, on the other hand, asserts that it properly interpreted
"protect . . . property" to include consideration of only the
direct "hydrologic impacts" to real property like flooding and
the impacts on the utility and enjoyment of riparian access
rights.
¶127 Statutory interpretation starts with the text of the
statute. State ex rel. Kalal v. Circuit Court for Dane Cnty.,
2004 WI 58, ¶45, 271 Wis. 2d 633, 681 N.W.2d 110. "If the
meaning of the statute is plain, we ordinarily stop the
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No. 2008AP1523
inquiry." Id. However, if a statute is ambiguous——that is,
"capable of being understood by reasonably well-informed persons
in two or more senses"——then a reviewing court may turn to
scope, history, context, and purpose of the statute. Id., ¶¶47–
48.
¶128 Wis. Stat. ch. 31 does not define "property."38 If the
legislature does not provide a definition, we may resort to
dictionaries. DOR v. River City Refuse Removal, Inc., 2007 WI
27, ¶46, 299 Wis. 2d 561, 729 N.W.2d 396. However, dictionary
definitions are not especially helpful to us in this case. See,
e.g., The American Heritage Dictionary of the English Language
1452 (3d ed. 1992) (defining "property" as "1.a. Something
owned; a possession. b. A piece of real estate . . . c.
Something tangible or intangible to which its owner has legal
title"); Black's Law Dictionary 1232 (7th ed. 1999) (defining
"property" as "The right to possess, use, and enjoy a
determinate thing").
¶129 Regardless of how property is defined, certain rights
are traditionally associated with property ownership. These are
known as the "bundle of rights" and commonly include the right
"to possess, use and dispose" of the property, among other
38
As one legal scholar put it, "What is property? Nearly
every first-year property course [in law school] begins and ends
with this query. The instructor never answers the
question. . . . The question is unanswerable because the
meaning of the chameleon-like word property constantly changes
in time and space." John Edward Cribbet, Concepts in
Transition: The Search for a New Definition of Property, 1986 U.
Ill. L. Rev. 1, 1.
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rights. Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S.
419, 435–36 (1982) (citation and internal quotation marks
omitted); see also Mitchell Aero, Inc. v. City of Milwaukee, 42
Wis. 2d 656, 662, 168 N.W.2d 183 (1969) ("Ownership is often
referred to in legal philosophy as a bundle of sticks or
rights."); Denise R. Johnson, Reflections on the Bundle of
Rights, 32 Vt. L. Rev. 247, 253 (2007) (listing 11 incidents of
full ownership in property, including inter alia, the right to
possess, the right to use, the right to manage, the right to the
income, the right to capital, and the right to alienate); A.M.
Honoré, Ownership, in Oxford Essays in Jurisprudence, 107, 112–
24 (A.G. Guest ed., 1961).
¶130 In this case, we must determine whether the DNR must
consider the effects of a water level determination on the
economic incidents of "property." The meaning of the word
"property," as used in Wis. Stat. § 31.02(1), is not clear on
its face in the context presented. Thus, the word is ambiguous,
as the court of appeals initially concluded in its certification
to this court.
¶131 What does the word "protect" mean? Again, no
definition of the term exists in Wis. Stat. ch. 31. Definitions
in a standard dictionary are only marginally helpful. The
American Heritage Dictionary of the English Language 1456 (3d
ed. 1992) (defining "protect" as "1. To keep from being damaged,
attacked, stolen, or injured; guard.").
¶132 Given the lack of a plain meaning of
"protect . . . property," we must look further to interpret this
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phrase. We find that history, purpose, precedent, and the DNR's
past practice support a broad interpretation of the phrase
"protect . . . property" so that the DNR is not limited to
consideration of hydrologic damage to real property and riparian
rights when making a water level determination under Wis. Stat.
§ 31.02(1).
¶133 The construction and operation of dams, the water
levels upstream caused by dam placement, and a network of
navigable waters have played an important role in Wisconsin's
economic development since early statehood. See, e.g., Joseph
A. Ranney, Trusting Nothing to Providence: A History of
Wisconsin's Legal System 137 (1999) (discussing the use of dams
for lumber mills and transportation of goods on navigable waters
in nineteenth-century Wisconsin). The territorial legislature
recognized the role that dams and streams played in economic
development with its passage of the Milldam Act. DNR Waterway
and Wetland Handbook, ch. 140 Dams, at 2 (stating that the
purpose behind legislative regulation of dams was to "encourage
economic development").
¶134 This court also recognized the economic impacts of
dams and the resulting sustained water levels on impounded
bodies of water. In Fisher v. Horicon Iron & Manufacturing Co.,
this court, in considering the constitutionality of the Milldam
Act, noted that "enterprising towns and flourishing villages
have grown up" around dams and depend upon the dams for their
"wealth and prosperity." Fisher, 10 Wis. 293 (*351), 297 (*354)
(1860). In Smith v. Youmans, this court similarly recognized an
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interest that residential riparian owners acquired in higher
lake levels behind a dam maintained over a 40-year period.
Smith, 96 Wis. 103, 109, 70 N.W. 1115 (1897). These higher lake
levels led property owners to build summer homes, summer
resorts, and make other "sundry valuable improvements" on lake
lots. Id. at 106 (statement of facts). While these acts and
cases predate Wis. Stat. § 31.02, the history is instructive as
to the role dams and water levels played in economic
development.
¶135 In 1909 the legislature created a joint Special
Legislative Committee on Water Powers, Forestry, and Drainage.
A.J.R. 8, Laws of 1909. Two members of this joint committee,
state Senators Paul O. Husting and Henry Krumrey, issued a
report to the governor and legislature detailing their
observations of impounded lakes while touring the state with the
joint committee:
Summer resorts have sprung up along the lake shores
and summer homes have been built by people from
various parts of the state and of the United States.
Piers have been built into the lakes and other
improvements made by the riparian. By reason thereof
the shores are beginning to become very valuable and
property rights are becoming important.
Spec. Legis. Comm. on Water Powers, Forestry, and Drainage, 49th
Leg., Minority Rep. of Senators Paul O. Husting and Henry
Krumrey, at 24 (Wis. 1910). The report of the full committee
was even more expansive in its discussion of water power, the
resulting reservoirs of water and their importance to industry,
residential riparians, and commercial recreation interests. See
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generally Rep. of the Comm. on Water Powers, Forestry, and
Drainage of the Wis. Leg. 1910, 49th Leg. For example, the
committee report noted that impounded waters behind dams created
very favorable conditions for summer cottages on lake banks and
launches for tourists and hunters. Id. at 27.
¶136 The special legislative committee's full report
resulted in the Water Powers Acts of 1911, 1913, and 1915. DNR
Waterway and Wetland Handbook, at 4. The 1915 Water Powers Act
survived, while this court found the former two acts to be
unconstitutional.39 The 1915 act included the requirement that
the then-Railroad Commission protect property when setting water
levels. Wis. Stat. ch. 69m., § 1596——2. (1915). In 1917 the
legislature renumbered the Water Powers Law as Wis. Stat. ch.
31, with its requirement to protect property as it survives
today. § 3, ch. 474, Laws of 1917. In light of the legislative
reports giving rise to the Water Powers Act containing the
"protect . . . property" language of Wis. Stat. § 31.02(1), one
can reasonably infer that riparian residential property and
lake-based businesses were prime considerations for protecting
property.
39
Chapter 652, Laws of 1911 (the 1911 Water Powers Act) was
found unconstitutional as a taking of private property without
compensation. State ex rel. Wausau St. R.R. Co. v. Bancroft,
148 Wis. 124, 134 N.W. 330 (1912). The 1913 Water Powers Act
(ch. 755, Laws of 1913) was found unconstitutional because it
did not provide adequate due process. State ex rel. Owen v.
Wis.-Minn. Light & Power Co., 165 Wis. 430, 162 N.W. 433 (1917).
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¶137 One of the first cases to interpret the new
requirement to protect property was Town of Bear Lake v.
Wisconsin-Minnesota Light & Power Co., 16 W.R.C.R. 710 (1915).
In that case, riparian property owners brought a complaint to
the Railroad Commission over a plan for a new dam that the
owners claimed would cause flooding, destroying town highways
and "rendering valu[e]less much taxable property therein." Id.
at 710. The Railroad Commission held that property to be
protected from overflow was not limited to land downstream from
a dam, but applied upstream as well. Id. at 717. Furthermore,
the respondent power company urged the Railroad Commission to
accept an expansive view of property in the Water Powers Act;
namely, the property interests in a water level determination
are "of sufficient magnitude and importance to the community or
the state as to make those property interests a matter of public
concern." Id. at 719. Notably, while the decision discussed
the location of property to be protected and the importance of
property to the community, the decision did not explicitly limit
the protection of property to only direct physical impacts.
¶138 Another early Railroad Commission case discussing the
protection of property in the context of a water level
determination is informative. In In re Determining the High
Water Mark to be Established on the Rest Lake Reservoir Operated
by the Chippewa & Flambeau Improvement Co., riparian residents
opposed the raising of water levels on the Rest Lake reservoir
because it would result in "injury to their property." 16
W.R.C.R. 727, 731 (1915). The Railroad Commission recognized
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that the waters of the affected area were "among the most famous
summer resort and fishing waters in the state." Id. at 733.
Residents and resort owners invested "large sums of money" in
improvements on the waters. Id. at 733–34. The Railroad
Commission held:
We are of the opinion that the Commission is required
to take into consideration the effect of [water]
levels fixed by it upon property which may be affected
by those levels and that where the property to be so
affected includes the most valuable property in the
community, is large in acreage, and not shown to be
subject to overflow, the protection of such property
is a matter of more than private interest and becomes
a matter affecting the public welfare.
Id. at 736.40 Thus, the Railroad Commission in Rest Lake made a
direct link between protecting property in a water level
determination and economic damage to valuable land. While
initially the potential damage was physical in nature
(overflowing of land), the Commission was mindful of the
40
This court affirmed the Rest Lake water level order in
Chippewa & Flambeau Improvement Co. v. Railroad Commission of
Wisconsin, 164 Wis. 105, 159 N.W. 739 (1916).
The DNR correctly notes that this court's opinion in
Chippewa & Flambeau used the words "imperil[]," "injury," and
"damage" in relation to property. Id. The DNR argues that
these words "connote direct harm to property, not economic harm
to property values or taxes or business." We decline the
invitation to take such a narrow view of these words. While one
can certainly suffer physical injury, one can also undergo
economic or financial injury as well, particularly as a result
physical damage. See, e.g., U.S. Small Bus. Admin., Economic
Injury Disaster Loans, http://www.sba.gov/content/economic-
injury-disaster-loans (last visited July 8, 2013).
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improvements to the land that increased its value and that the
value would no doubt be affected by the level of the water.41
¶139 It is unreasonable to conclude, given the preceding
history, context, and interpretations of the phrase
"protect . . . property," that economic impacts cannot be
considered when making a water level determination under Wis.
Stat. § 31.02(1). The DNR, the agency currently charged with
making a water level determination under § 31.02(1), must
protect the same property interests as in 1915 and before——that
is, not only land itself, but improvements to the land, the
41
The DNR and court of appeals look to this court's
decision in City of New Lisbon v. Harebo, 224 Wis. 66, 271 N.W.
659 (1937) for support that "protect . . . property" applies
only to the protection of property from events like flooding.
Rock-Koshkonong Lake Dist., 336 Wis. 2d 677, ¶45. We disagree.
Harebo was about whether a permit for dam construction under
Wis. Stat. § 31.06(3) (1935) was required before condemnation
proceedings for flowage rights. Specifically, was condemnation
of all the flowage rights necessary before the grant of a permit
so as not to "endanger property"? Harebo, 224 Wis. at 70.
The Harebo court asked what is meant by property, and
looked to Wis. Stat. § 31.02, which has "precisely the same
formula" for protecting property as Wis. Stat. § 31.06(3)
(1935). Id. at 72. The court concluded, "It is not proper to
isolate the word 'property' and assert that injury to property
means normal flowage by the ordinary operation of the dam, since
this is the inevitable consequence of building and maintaining a
dam." Id. at 73.
The Harebo holding was limited to whether the Public
Service Commission (at the time, the agency tasked with
regulating flowage and water level) was required to protect
property from being flooded by normal dam operation in the
context of dam permit approval. While this holding obviously
implicates physical damage to property, it does not limit the
protection of property solely to physical impacts such as
flooding.
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community's interest in the land, and investments in and capital
derived from the land. These property interests have not
diminished in importance, but now they must be balanced against
impacts on wildlife, water quality, wetlands, recreation, and
other more modern considerations.
¶140 The DNR's own Waterway and Wetland Handbook has
guidelines in place for economic considerations when regulating
water levels under Wis. Stat. § 31.02(1). DNR Waterway and
Wetland Handbook, ch. 130, at 3 (stating that the DNR "may
regulate and control water level and flow to: . . . Minimize
economic losses resulting from too much or too little water").
We also note that the DNR considered economic impacts of water
levels on Lake Koshkonong when it conducted an EA for the
proposed 1982 water level order.42
¶141 Equally significant, the DNR's model shoreland zoning
ordinance (which was adopted by Marinette County in 1967 and was
at issue in the Just case) stated in the beginning and states
now:
1.2 Findings of Fact. Uncontrolled use of the
shorelands and pollution of the navigable waters of
_____ County will adversely affect the public health,
safety, convenience, and general welfare and impair
the tax base. The legislature of Wisconsin has
delegated responsibility to the counties to further
the maintenance of safe and healthful conditions;
prevent and control water pollution; protect spawning
grounds, fish and aquatic life; control building
42
The Environmental Impact Assessment Screening Worksheet
for the proposed 1982 water level order discussed how "taverns,
marinas, bait dealerships" and other commercial establishments
"will benefit from a stable recreational pond."
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sites, placement of structures and land uses; and to
preserve shore cover and natural beauty. This
responsibility is hereby recognized by _____ County,
Wisconsin.
Wis. Dep't of Natural Res., A Model County Shoreland Zoning
Ordinance for Wisconsin's Shoreland Protection Program at 5
(June 2010, rev. Dec. 2010) (emphasis added). This was
explicitly acknowledged by the Just court: "The Marinette county
shoreland zoning ordinance in secs. 1.2 and 1.3 states the
uncontrolled use of shorelands and pollution of navigable
waters . . . affect public health, safety, convenience, and
general welfare and impair the tax base." Just, 56 Wis. 2d at
11 (emphasis added). Reference to the tax base is generally
included in county shoreland zoning ordinances. See, e.g., Dane
Cnty., Wis., Code of Ordinances § 11.016(1) (2013); Marinette
Cnty., Wis., Code of Ordinances § 21.01(2) (2013); Code of
Ordinances, Rock Cnty., Wis. § 4.201(2) (2013). Consequently,
the DNR's stated position in the present case——disavowing any
consideration of the effects of water levels on the tax base——is
directly contrary to the statutory and case law authority it
relies on in the Decision.
¶142 In this case, the DNR considered riparian access and
enjoyment when making the water level determination for Lake
Koshkonong under Wis. Stat. § 31.02(1) but excluded testimony on
economic impacts of lower water levels on both riparian and non-
riparian property owners and communities in close proximity to
the lake. At oral argument, the DNR claimed that economic
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interests were subsumed into the admitted testimony on riparian
interests.
¶143 The DNR's Decision and current position relies on this
court's previous opinion in Wisconsin's Environmental Decade
when it characterized the evidence of economic impacts as
"secondary or indirect economic impacts."43 In that case, the
court held that the DNR did not need to consider socioeconomic
impacts in determining whether to issue an EIS in connection
with Wis. Stat. ch. 30 permits. Wis.'s Envtl. Decade, 115
Wis. 2d at 395.
¶144 We disagree with the DNR's application of Wisconsin's
Environmental Decade to this case. First, the alleged
socioeconomic injuries in that case——a possible decline in
downtown Appleton's business because of a new shopping mall
outside of the city——did not have "a direct causal relationship
to the minor changes to the physical environment found by the
DNR." Id. at 404. Here, the decision to raise or lower water
levels has a direct economic impact on the riparian community.
Second, the case before us is not about issuing an EIS; this
43
Yet, the DNR did not exclude evidence of secondary
economic loss entirely; the ALJ admitted testimony on the loss
of board feet of green ash and diminished crop yields in
drainage districts. In fact, the testimony of diminished crop
yields that would result from higher waters is an explicit
finding of fact in the Decision.
It is inconsistent for the DNR to consider the economic
impacts of higher water level proposals like these, but refuse
to consider economic impacts from lower water levels under the
current order.
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case is about what the DNR should consider in protecting
property, as directed by Wis. Stat. § 31.02(1), when making a
water level determination.
¶145 It is important to note that the economic testimony
excluded at the contested case hearing supplemented the
testimony of residents and business owners that the ALJ allowed
to stay in. In other words, the excluded testimony was
different from the testimony that the ALJ accepted. The
included testimony spoke to how long the piers of lake-based
businesses have to be in order to make effective use of
navigable water, while the excluded expert testimony of John
Stockham spoke to the money lost by these businesses with water
levels on Lake Koshkonong reduced from their historical levels.
The included testimony covered riparian access and enjoyment,
while the excluded testimony of Stockham and Dr. Kashian
explained how property may have diminished in value or risen in
value more slowly than comparable lake property because of the
reduced access. The included testimony spoke to the natural
scenic beauty, hunting, fishing, camping, and boating on and
around Lake Koshkonong, while the excluded testimony talked
about the overall economic impact that lower water levels would
have on the community that depends on these enumerated
activities——not only the impact on businesses but also on the
municipalities that surround the lake. The DNR rightly
considered the direct impact of lower water levels on riparian
properties, but wrongly excluded the cumulative economic effect
of the lower water levels on these properties. It is a familiar
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principle of environmental law that secondary effects are often
more substantial than the primary effects of an action.
¶146 The DNR asks how it would go about an economic
analysis:44 How would it monetize the value of riparian
property? What would be its logical stopping point? We do not
hold that the DNR must consider remote economic impacts; a
reasonableness standard should apply. The DNR has discretion as
to which impacts are too attenuated to consider,45 and it can
refute any economic evidence. Moreover, evidence of economic
impacts is not dispositive in a water level determination;
hypothetically, on remand the DNR could still reject a petition
for higher water levels on Lake Koshkonong even after
considering the economic impacts of lower water levels on
property. However, it is clear that the DNR must consider the
economic impacts in the first place.
44
The DNR is capable of conducting an economic analysis in
other contexts. See, e.g., Wis. Stat. §§ 285.01(12) and
227.137. However, we are not requiring the DNR to conduct an
economic analysis, per se. We hold that the DNR must consider
economic impacts to property when making a water level
determination under Wis. Stat. § 31.02(1).
Furthermore, the DNR asserts that it cannot consider
economic impacts like property values on a proposed higher water
level order. This assertion would produce an absurd result in
the case of a proposed lower water level order. The DNR's
narrow interpretation of "protect . . . property" would mean
that only direct physical impacts to property could be
considered but no evidence of ruined property values or business
receipts could be considered.
45
It merits repeating that an ALJ must admit "all testimony
having reasonable probative value, but shall exclude immaterial,
irrelevant or unduly repetitious testimony or evidence." Wis.
Stat. § 227.45(1).
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No. 2008AP1523
¶147 We make one further observation. Raising and lowering
water levels, pursuant to Wis. Stat. § 31.02(1), is a classic
example of government regulation. A regulation may severely
diminish the value of property, but in a regulatory "taking"
under the Fifth Amendment, the "regulation or government action
'must deny the landowner all or substantially all practical uses
of a property in order to be considered a taking for which
compensation is required.'" Eberle v. Dane Cnty. Bd. Of
Adjustment, 227 Wis. 2d 609, 622, 595 N.W.2d 730 (1999). If the
economic impact of government regulation is not considered at
the time the regulation is initiated, when will it be
considered?
¶148 We conclude that the DNR erred when it excluded
testimony on economic impacts of lower water levels when making
a water level determination under Wis. Stat. § 31.02(1).
III. CONCLUSION
¶149 The DNR's conclusions of law are subject to de novo
review because the DNR's water level order under Wis. Stat.
§ 31.02(1) is heavily influenced by the DNR's interpretation of
the scope of its own powers, its interpretation of the Wisconsin
Constitution, its disputed interpretation of the statute it
utilized, and its reliance upon statutes and rules outside of
Wis. Stat. ch. 31.
¶150 The DNR properly considered the impact of the
Petition's proposed water levels on public and private wetlands
in and adjacent to Lake Koshkonong. However, the DNR
inappropriately relied on the public trust doctrine for its
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No. 2008AP1523
authority to protect non-navigable land and non-navigable water
above the ordinary high water mark. The DNR has broad statutory
authority grounded in the state's police power to protect non-
navigable wetlands and other non-navigable water resources.
Thus, the DNR may consider the water level impact on all
adjacent property under Wis. Stat. § 31.02(1).
¶151 The DNR was entitled to consider the water quality
standards in Wis. Admin. Code § NR 103, promulgated under Wis.
Stat. ch. 281, when making a Wis. Stat. § 31.02(1) water level
determination. By statute, the DNR is responsible for writing
and enforcing wetland water quality standards in this state.
Accordingly, it would be unreasonable for the DNR to ignore
statutes and its own administrative rules when making a water
level determination affecting wetlands. Therefore, the DNR may
consider § NR 103 water quality standards when making a water
level determination under Wis. Stat. § 31.02(1) that affects
wetlands and may apply these standards when appropriate after
weighing the factors in the statute. However, Wis. Stat.
§ 281.92 suggests that the DNR is not required to apply ch. 281
standards in making a determination under Wis. Stat. § 31.02because ch. 31 is excepted from the provisions of ch. 281.
¶152 The DNR erroneously excluded most testimony on the
economic impact of lower water levels in Lake Koshkonong on the
residents, businesses, and tax bases adjacent to and near Lake
Koshkonong. This evidence was relevant to the DNR's decision-
making under Wis. Stat. § 31.02(1). Although the DNR is granted
substantial discretion in its decision-making under the statute,
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No. 2008AP1523
it must consider all probative evidence when its decision is
likely to favor some interests but adversely affect others. In
this case, the DNR's exclusion of most economic evidence was
inconsistent with its acceptance of competing economic evidence
that helped sustain its water level decision.
By the Court.—The decision of the court of appeals is
reversed and the cause is remanded to the circuit court for
further proceedings consistent with this opinion.
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No. 2008AP1523.npc
¶153 N. PATRICK CROOKS, J. (dissenting). This case
presents a question that the majority can——indeed does——answer
by interpreting Wis. Stat. § 31.02(1) (2009-10). Yet the
majority unnecessarily reaches out to the constitutional
principle of the public trust doctrine from the Wisconsin
Constitution, constricting the doctrine and misreading this
court's precedent, especially the well-settled law articulated
in Just v. Marinette County, 56 Wis. 2d 7, 201 N.W.2d 761(1972). Wisconsin's long and robust history of protecting the
public trust is widely acknowledged and respected. The public
trust doctrine imposes on the state, as trustee, the affirmative
duty to protect, preserve, and promote the public's right to
Wisconsin's waters.
¶154 The majority opinion attempts to undermine this
court's precedent, recharacterize its holdings, and rewrite
history. Instead of limiting itself to addressing only what
must be addressed, the majority seizes this opportunity to limit
the public trust doctrine in an unforeseen way, transforming the
state's affirmative duty to protect the public trust into a
legislative choice. It needlessly unsettles our precedent and
weakens the public trust doctrine that is enshrined in the
Wisconsin Constitution. This represents a significant and
disturbing shift in Wisconsin law.
¶155 The majority also errs in expanding the type of
evidence that the Department of Natural Resources (DNR) must
consider in these cases. A straightforward interpretation of
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No. 2008AP1523.npc
Wis. Stat. § 31.02(1) would not require the DNR to consider
secondary or indirect economic impact when making water level
determinations. The economic evidence admitted during the ten-
day contested case hearing was sufficient to discharge the DNR's
duty to "protect . . . property," and the excluded evidence was
not relevant or required. The DNR has a difficult job to do
under this statute, and in this case, the DNR did it well. The
decisions of the DNR, the circuit court, and the court of
appeals each properly concluded that § 31.02(1) does not require
consideration of such secondary or indirect economic impact.
The fact is that the DNR sufficiently considered the protection
of property, and therefore, it was not error to strike the
secondary or indirect economic evidence that it struck.
¶156 For these reasons, I respectfully dissent.
I. WISCONSIN COURTS HAVE AGGRESSIVELY PROTECTED THE PUBLIC
TRUST DOCTRINE.
¶157 To understand the significance and to see the
potential implications of the majority's novel interpretation of
the Just case, it is necessary to appreciate how settled the
public trust doctrine has been in Wisconsin until now. This
court highlighted the constitutional basis of the public trust
doctrine in Muench v. Public Service Commission, 261 Wis. 492,
53 N.W.2d 514, aff'd on reh'g, 261 Wis. 492, 55 N.W.2d 40(1952). In that case, the court traced the history of the
public trust doctrine to the Northwest Ordinance of 1787.
Muench, 261 Wis. at 499. The language from the Northwest
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Ordinance of 1787 was then adopted by the territorial
constitutional convention in 1848, approved by an act of
Congress which admitted Wisconsin into the Union, and
incorporated in the Wisconsin Constitution as follows:
The state shall have concurrent jurisdiction on all
rivers and lakes bordering on this state so far as
such rivers or lakes shall form a common boundary to
the state and any other state or territory now or
hereafter to be formed, and bounded by the same; and
the river Mississippi and the navigable waters leading
into the Mississippi and St. Lawrence, and the
carrying places between the same, shall be common
highways and forever free, as well to the inhabitants
of the state as to the citizens of the United States,
without any tax, impost or duty therefor.
Wis. Const. art. IX, § 1.
¶158 Early on, this court declared that the public trust
not only required preservation of the trust, it also required
promotion of it. City of Milwaukee v. State, 193 Wis. 423, 449,
214 N.W. 820 (1927) ("The equitable title to these submerged
lands vests in the public at large, while the legal title vests
in the state, restricted only by the trust, and the trust, being
both active and administrative, requires the lawmaking body to
act in all cases where action is necessary, not only to preserve
the trust, but to promote it." (emphasis added)).
¶159 In Diana Shooting Club v. Husting, this court
described the state's responsibilities under the public trust
doctrine:
The wisdom of the policy which, in the organic laws of
our state, steadfastly and carefully preserved to the
people the full and free use of public waters cannot
be questioned. Nor should it be limited or curtailed
by narrow constructions. It should be interpreted in
the broad and beneficent spirit that gave rise to it
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in order that the people may fully enjoy the intended
benefits.
Diana Shooting Club, 156 Wis. 261, 271, 145 N.W. 816 (1914)
(emphasis added).
¶160 The court in Muench adopted the language from Diana
Shooting Club and demonstrated the growth of the public trust
doctrine over time by describing its own holding as "keeping
with the trend manifested in the development of the law of
navigable waters in this state to extend the rights of the
general public to the recreational use of the waters in this
state, and to protect the public in the enjoyment of such
rights." Muench, 261 Wis. at 512.
¶161 This court in Just v. Marinette County further
interpreted the doctrine while upholding a shoreland zoning
statute enacted pursuant to the state's public trust duty. The
court stated:
The active public trust duty of the state of Wisconsin
in respect to navigable waters requires the state not
only to promote navigation but also to protect and
preserve those waters for fishing, recreation, and
scenic beauty. To further this duty, the legislature
may delegate authority to local units of the
government, which the state did by requiring counties
to pass shoreland zoning ordinances.
Just, 56 Wis. 2d at 18 (emphasis added) (citations omitted).
This court explained that the purpose of the statute at issue in
that case was to "protect navigable waters and the public rights
therein from the degradation and deterioration which results
from uncontrolled use and development of shorelands." Id. at
10. We noted that the stated purpose of the shoreland
regulation program is to "aid in the fulfillment of the state's
4
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role as trustee of its navigable waters and to promote public
health, safety, convenience and general welfare." Id.¶162 Since then this court has consistently reiterated the
purpose and the significance of the public trust doctrine in its
cases. For example, Wisconsin's Environmental Decade, Inc. v.
DNR (Environmental Decade 1978), described the duties of the
state under the public trust as "not only to promote navigation
but also to protect and preserve its waters for fishing,
hunting, recreation, and scenic beauty." Envtl. Decade 1978, 85
Wis. 2d 518, 526, 271 N.W.2d 69 (1978). We described the
state's responsibility as long-acknowledged and highlighted the
legislature's delegation of water management to the DNR in
furtherance of "the state's affirmative obligations as trustee."
Id. at 526-27.
¶163 Recently, this court reiterated these principles in
Lake Beulah Management District v. DNR, holding that under the
applicable statutes and the public trust duties, the DNR can and
must consider whether an inland well would harm waters of the
state before issuing a permit for the well. Lake Beulah, 2011
WI 54, ¶3, 335 Wis. 2d 47, 799 N.W.2d 73. This court explained
jurisprudence on the public trust doctrine:
We reaffirmed this maxim in Muench v. Public Service
Commission in our examination of the history and
evolution of the public trust doctrine, which
indicated a "trend to extend and protect the rights of
the public to the recreational enjoyment of the
navigable waters of the state." We have further
explained, "The trust doctrine is not a narrow or
crabbed concept of lakes and streams."
Id., ¶31 (emphasis added) (citations omitted).
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¶164 Our cases demonstrate that the scope of the public
trust doctrine is such that the state holds title to the land
between the ordinary high water marks, and state regulation
consistent with the public trust doctrine extends to surrounding
areas. The ownership of land was emphasized in Diana Shooting
Club, which was a case about trespass. In that case, there was
no trespass because the hunter was hunting between the ordinary
high water marks, land that was held in trust for the public.
Diana Shooting Club, 156 Wis. at 272. In contrast, regulation
consistent with the public trust doctrine was at issue in Just
because the shoreland zoning statute extended well beyond the
ordinary high water mark, and the court held that it could be
regulated pursuant to the public trust doctrine. Just, 56 Wis.
2d at 14, 17.
¶165 In furtherance of the state's trustee
responsibilities, the legislature has enacted statutes to
discharge its duties. As the court explained in Environmental
Decade 1978, several chapters of the Wisconsin statutes,
including Chapter 31, which is at issue in this case, were
enacted "[i]n furtherance of the state's affirmative obligations
as trustee of navigable waters." 85 Wis. 2d at 527. We dealt
with a similar situation in this court's unanimous decision in
Lake Beulah, where the legislature had used a statute to
implement its public trust duties. This court stated, "[W]e
conclude that, through Wis. Stat. §281.11 and § 281.12, the
legislature has delegated the State's public trust duties to the
DNR in the context of its regulation of high capacity wells and
6
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their potential effect on navigable waters such as Lake Beulah."
Lake Beulah, 335 Wis. 2d 47, ¶34 (emphasis added). That
decision dealt with non-navigable water, and explained its
relationship to the public trust doctrine. The statutes created
to preserve and promote the public trust doctrine allowed the
regulation of non-navigable waters because of the potential
effects non-navigable waters have on navigable waters.
II. THE MAJORITY UNNECESSARILY UNDERMINES WELL-SETTLED LAW ON
WISCONSIN'S PUBLIC TRUST DOCTRINE.
¶166 The heart of the public trust doctrine lies in
protecting, preserving, and promoting the public's right to
Wisconsin's waters, and this court has vigilantly guarded these
rights. The public trust doctrine entrusts to the state the
duty to protect, preserve, and promote the public trust. The
majority untethers our constitutional jurisprudence from its
foundation and attempts to transform 165 years of constitutional
precedent into a mere legislative exercise of the state's police
power. The citizens of Wisconsin may rightly wonder why the
majority is limiting the protection of Wisconsin's waters and
reaching a constitutional question that is not essential to its
holding. I refuse to unnecessarily constrict our holdings on
7
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this important constitutional doctrine, especially in a case
that should be decided on statutory grounds.1
¶167 The central issue in this case is one of statutory
interpretation——namely, whether the DNR can consider wetlands
above the ordinary high water mark when determining water levels
under Wis. Stat. § 31.02(1). Wisconsin Stat. § 31.02(1) states
in relevant part: "The department, in the interest of public
rights in navigable waters or to promote safety and protect
life, health and property[,] may regulate and control the level
and flow of water in all navigable waters . . . ." Both the
majority and the petitioner agree that a simple reading of
§ 31.02(1) demonstrates that the statute allows for
consideration of private wetlands. In fact, the majority
1
Two other issues are decided by the majority. The first
is the standard of review. The majority lays out the
appropriate framework to determine the standard of review. It
then determines that the standard of review here should be de
novo review because it believes that the DNR has not
consistently interpreted Wis. Stat. § 31.02(1) and that the
question presented is one of the scope of the DNR's power.
Majority op., ¶¶58-64. Because I would reach the same result
under any level of deference, I will not address the majority's
application of the oft-cited rules from Racine Harley-Davidson,
Inc. v. State, 2006 WI 86, 292 Wis. 2d 549, 717 N.W.2d 184. See
also Hilton ex rel. Pages Homeowners' Ass'n v. DNR, 2006 WI 84,
293 Wis. 2d 1, 717 N.W.2d 166 (discussing the standard of review
of an agency decision in a case related to the public trust
doctrine). Even applying de novo review, the DNR's
interpretations were reasonable and should therefore be
affirmed.
The second issue decided by the majority is whether Wis.
Stat. § 281.92 bars the DNR from considering water quality
standards from Wis. Admin. Code § NR 103 when making its
determination under § 31.02(1). I agree with the majority that
Wis. Stat. § 281.92 does not bar the DNR from such a
consideration.
8
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states: "The District acknowledges that 'privately owned
wetlands are entitled to consideration as "property" to be
protected in establishing a water level order.' There can be no
dispute that the DNR can 'consider' water level impact on all
adjacent property under Wis. Stat. § 31.02(1)." Majority op.,
¶109. Because that interpretation is dispositive of the issue,
I would stop the analysis there.
¶168 Instead, the majority reaches that conclusion and then
embarks on a constitutional analysis in which it reads the part
of the statute before the "or" to be a direct enactment of the
public trust doctrine and the part after the "or" as an exercise
of police powers. Majority op., ¶¶102-103. It speculates as to
how the statute could have been written so it "would be seen as
a direct enforcement mechanism for the public trust in navigable
waters" while explaining that the actual language could not be a
direct enforcement mechanism. Majority op., ¶103. The majority
does not cite any cases that interpret Wis. Stat. § 31.02(1) the
way it does now, and it ignores the cases that suggest that the
entire statute is an embodiment of the public trust doctrine.2
Reading the statute as the majority does attempts to strip the
state, trustee of the public trust doctrine, of the ability to
regulate anything that is not between the ordinary high water
marks pursuant to the public trust doctrine. The majority
reaches a constitutional issue that it is not required to reach,
2
See discussion of Wisconsin's Environmental Decade, Inc.,
v. DNR (Environmental Decade 1978), 85 Wis. 2d 518, 271 N.W.2d
69 (1978) and Lake Beulah Management Dist. v. DNR, 2011 WI 54,
335 Wis. 2d 47, 799 N.W.2d 73, at ¶165.
9
No. 2008AP1523.npc
and it engages in a strained analysis to bolster its holding.
Both Wis. Stat. § 31.02(1) and the long-settled public trust
doctrine support a consideration of the impact on wetlands
adjacent to Lake Koshkonong when regulating water levels
pursuant to the public trust doctrine.
¶169 To support its holding, the majority misconstrues Just
v. Marinette County. The majority calls the Just case "a
textbook example of using the state's police power [as opposed
to using the constitutional public trust doctrine] to support
legislation 'to protect navigable waters and the public rights
therein . . . .'" Majority op., ¶96. The majority uses this
interpretation of Just to explain that the statute at issue
here, § 31.02(1), is only half based on the public trust
doctrine; the rest, as the majority would have us believe,
derives only from the state's police power and is disconnected
3
from the public trust doctrine.
3
Although it does not answer why it matters in this case,
the majority leaves no doubt about the significance of its novel
interpretation of the Just case, namely that it changes the ease
with which the legislature can modify regulation and creates a
more lenient legal standard for this court to apply when it
reviews such changes:
The police power is potent, and legislation grounded
in the state's police power is presumed constitutional
and will be sustained unless it is deemed
unconstitutional beyond a reasonable doubt.
Nonetheless, as Just makes clear, the distinction
between the DNR's constitutionally based public trust
authority and the DNR's police power-based statutory
authority is that the latter is subject to
constitutional and statutory protections afforded to
property, may be modified from time to time by the
legislature, and requires some balancing of competing
interests in enforcement.
10
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¶170 The clear language of Just rebuts the majority's
conclusion that it was only a police power case.4 The thrust of
Majority op., ¶101. In other words, rights that are not
protected by the constitution are easier to take away. In
addition, the majority's interpretation transforms what was an
affirmative duty on the state as trustee into a right to
regulate when the legislature chooses to do so, allowing the
state to ignore its duty with respect to things that impact
navigable waters but are not physically located between the
ordinary high water marks.
4
Scholarship interpreting Just supports the conclusion that
this court extended the public trust doctrine through Just to
allow for regulation above the ordinary high water mark. See,
e.g., Melissa K. Scanlan, Implementing the Public Trust
Doctrine: A Lakeside View into the Trustees' World, 39 Ecology
L.Q. 123, 138 (2012) (explaining that "[a]s scientific knowledge
about the interconnectedness of hydrology has increased, courts
and the legislature have expanded the public trust doctrine to
cover activities on shorelands, wetlands, nonnavigable waters,
and groundwater adjacent to navigable waters."); Richard M.
Frank, The Public Trust Doctrine: Assessing Its Recent Past &
Charting Its Future, 45 U.C. Davis L. Rev. 665, 668 (2012)
("[I]n a controversial 1972 decision, the Wisconsin Supreme
Court expressly [held] that the public trust doctrine could be
asserted to bar the filling of privately-owned wetlands, in
order to preserve those wetlands in their natural condition.");
Jason J. Czarnezki, Environmentalism and the Wisconsin
Constitution, 90 Marq. L. Rev. 465, 470, 494 (2007) (referencing
Just to support a statement that the constitutionality of
shoreland and wetland protection via zoning ordinances was
upheld under the public trust doctrine and citing Just in
concluding that "the constitution might textually embrace the
notion that private property owners do not have inherent rights
to change the 'essential natural character of their land' for
development purposes.").
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the Just opinion showed that the court believed it was relying
on the public trust doctrine. The court explicitly held that
land above the ordinary high water mark is subject to the public
trust doctrine. Just, 56 Wis. 2d at 18-19 ("Lands adjacent to
or near navigable waters exist in a special relationship to the
state. They have been held subject to special taxation and are
subject to the state public trust powers . . . ." (emphasis
added) (citations omitted)).
¶171 In an attempt to circumvent the clear language of the
Just case, the majority makes a circular argument. The majority
imports its conclusion from earlier in the opinion——that the
public trust does not extend beyond the ordinary high water
See also Paul G. Kent & Tamara A. Dudiak, Wisconsin Water
Law: A Guide to Water Rights and Regulations 1, 12 (2d ed.
2001), http://learningstore.uwex.edu/assets/pdfs/g3622.pdf
(stating that "because of the importance of public trust, the
courts have used the public trust doctrine as a justification
for regulation of shoreland and wetland areas adjacent to
natural navigable waters on the theory that such regulation is
necessary to protect public trust waters and to ensure the right
of the public to access those waters." (citation omitted));
Melissa K. Scanlan, The Evolution of the Public Trust Doctrine
and the Degradation of Trust Resources: Courts, Trustees and
Political Power in Wisconsin, 27 Ecology L.Q. 135, 165 (2000)
(citing Just in a section entitled "Cases in Which Trustees
Acted to Further the Trust"); Patrick O. Dunphy, The Public
Trust Doctrine, 59 Marq. L. Rev. 787, 807 (1976) (explaining
Just, "The strong public trust doctrine in Wisconsin may have
been the most significant reason for the court’s initiative. . .
. By recognizing the interrelationship of the land and the water
and extending the trust to shorelands, the court has added a new
dimension to the trust.")
12
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mark——and applies it to support its subsequent conclusion.5
Regarding Just, it states:
If there is any question that the court was not
relying on the public trust doctrine to sustain the
shoreland zoning ordinance and its authorizing
legislation, the court noted that the Marinette County
ordinance applied to "lands within 1,000 feet of the
normal high-water elevation of navigable lakes, ponds,
or flowages and 300 feet from a navigable river or
stream." These dimensions far exceed the geographic
limitations of public trust jurisdiction.
Majority op., ¶100 (citation omitted). The majority's only
apparent support for its conclusion about the dimensions of the
public trust jurisdiction comes from its own earlier analysis.
The Just case establishes the opposite conclusion——that the DNR
pursuant to the public trust doctrine may consider the impact on
land above the ordinary high water mark.
¶172 Not only does an appropriate interpretation of Just
rebut the majority's conclusions, this court has repeatedly
interpreted the public trust doctrine more broadly than the
majority does today, and there is no compelling reason presented
in this case to change that interpretation. See supra, ¶¶161-
165. The case law indicates that the state has the power to
regulate lands beyond the ordinary high water mark in
discharging the duties entrusted to it under the public trust
doctrine. See, e.g., Lake Beulah, 335 Wis. 2d 47, ¶34.
Likewise, the cases demonstrate that the legislature has an
5
For an explanation of why the majority mistakenly believes
that the public trust doctrine cannot extend beyond the ordinary
high water marks, see infra, ¶172.
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affirmative duty as trustee to protect and promote the public
trust. See, e.g., City of Milwaukee, 193 Wis. at 449.
¶173 One explanation for the majority's puzzling holding is
that it appears to confuse the concepts of ownership of (or
title to) the land with regulation pursuant to the public trust
doctrine. In the cases the majority cites to support its
position that public trust jurisdiction is confined to limited
geographic areas, the idea of ownership of the land was
paramount, but here, ownership of the private wetlands is not at
issue.6 The issue is only whether the DNR has the authority
under the public trust doctrine to consider the impact on those
adjacent wetlands consistent with its duties under the public
trust doctrine. After citing cases it believes support its
proposition that the public trust doctrine is limited to water
between the ordinary high water marks, the majority explains the
problem it sees:
Contemplating the question of ownership is important
because the public trust doctrine implicates state
ownership or virtual state ownership——by virtue of its
trust responsibility——of land under navigable waters.
If the public trust were extended to cover wetlands
that are not navigable, it would create significant
new questions about ownership of and trespass on
private land, and it would be difficult to cabin
expansion of the state's new constitutionally based
jurisdiction over private land.
6
See, e.g., Diana Shooting Club v. Husting, 156 Wis. 261,
272, 145 N.W. 816 (1914) (holding that no trespass occurred
because the hunter was located between the ordinary high water
marks, property which was land held in trust for the public
pursuant to the public trust doctrine).
14
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Majority op., ¶84. The quotation from the majority demonstrates
its misunderstanding of the argument of the DNR. The DNR in
this case was not asserting that the public trust doctrine gives
the state ownership of the private wetlands; rather it argues
that the public trust doctrine allows the DNR to consider the
impact on the wetlands when determining water levels. It quotes
the Just court's statement that "[l]ands adjacent to or near
navigable waters . . . are subject to the state public trust
powers" and emphasizes the Just decision's reference to the
wetlands "adjacent to" not "within" navigable waters.
¶174 Allowing the trustee to discharge its public trust
duties by considering things that affect navigable waters is
consistent with our precedent. If it could not, how then would
the state discharge its extensive duties "not only to promote
navigation but also to protect and preserve its waters for
fishing, hunting, recreation, and scenic beauty"? Envtl. Decade
1978, 85 Wis. 2d at 526 (citations omitted). Therefore, the DNR
did not err in relying on its public trust power to consider the
impact of raising the water levels on adjacent private wetlands
even when the wetlands are above the ordinary high water mark.
The conclusion the majority reaches is a novel interpretation
that cannot be squared with the extensive public trust doctrine
case law.
III. THE "PROTECT . . . PROPERTY" ELEMENT OF WIS. STAT.
§ 31.02(1) DOES NOT REQUIRE ADMISSION OF THE STRICKEN
EVIDENCE.
15
No. 2008AP1523.npc
¶175 Despite acknowledging that the decision adopted by the
DNR was "meticulous [and] comprehensive," the majority reverses,
holding that the DNR was required to consider additional
evidence on the secondary or indirect economic impacts of
raising the water level when making its determination under Wis.
Stat. § 31.02(1).7 Because I do not believe the statute requires
the DNR to consider the evidence that was stricken to discharge
its duty to "protect . . . property," I dissent.
¶176 During the ten-day contested case hearing, a
significant amount of evidence was heard. The parties presented
testimony and other evidence related to the economic impact of
the change in the water level, including testimony on the
implications for navigation, information about the impact on use
and enjoyment of riparian property by riparian owners, impact on
fish and fowl, and information about the impact on natural
beauty and recreation. Some evidence was later stricken from
the record on the grounds that the "[s]econdary or indirect
economic impacts of a water level determination do not bear on
the statutory standard set forth in section 31.02(1)." The
stricken evidence included testimony and exhibits from experts
who testified as to the potential economic effects of the water
level determination on residential property values, business
incomes, and tax revenues. However, the DNR's decision
7
The majority holds: "We find that history, purpose,
precedent, and the DNR's past practice support a broad
interpretation of the phrase 'protect . . . property' so that
the DNR is not limited to consideration of hydrologic damage to
real property and riparian rights when making a water level
determination under Wis. Stat. § 31.02(1)." Majority op., ¶132.
16
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specifically noted its consideration of riparian property
owner's interests in their property:
The diminished ease of access experienced by many
riparians and their desire for higher water levels,
reflects their diminished utility and enjoyment of
their property, which doubtless reduces the value of
that property to them. This diminished utility and
enjoyment of the property, and the expectation that
higher water would enhance the utility and enjoyment
of riparian property, has been considered and weighed
under the standards of Wis. Stat. § 31.02(1).
(Emphasis added).
¶177 As explained above, Wis. Stat. § 31.02(1) states:
"The department, in the interest of public rights in navigable
waters or to promote safety and protect life, health and
property[,] may regulate and control the level and flow of water
in all navigable waters . . . ." Wis. Stat. § 31.02(1)
(emphasis added). The majority focuses on "protect . . .
property" and interprets it to mean that striking the secondary
or indirect economic impact evidence constituted reversible
error. The more reasonable interpretation of the statute, as
demonstrated by the quotation set forth above, is that the DNR
sufficiently considered the protection of property when making
its determination under Wis. Stat. § 31.02(1).
¶178 In other statutes that the DNR administers, the
legislature has specifically included language about such
economic impact, whereas in § 31.02(1) the legislature has not
signaled that the DNR must consider such secondary or indirect
economic impact. For example, Wis. Stat. § 30.195(2)(c)2
requires consideration of whether the proposed change "will
improve the economic or aesthetic value of the applicant's
17
No. 2008AP1523.npc
land." Wisconsin Stat. § 285.01(12) requires the DNR to
consider "energy, economic and environmental impacts and other
costs" to determine air-pollution regulation. The DNR's
permitting process for dams under Wis. Stat. § 31.06(3)(b) looks
at whether the proposal is "in the public interest, considering
ecological, aesthetic, economic and recreational values." None
of this language is present in Wis. Stat. § 31.02(1). If the
legislature intended that the DNR must consider such secondary
or indirect economic impact, the legislature would have drafted
the statute to signal such a requirement.8
¶179 As the court of appeals aptly observed, the District's
interpretation, now adopted by the majority, has no logical
stopping point. Rock-Koshkonong Lake Dist. v. DNR, 2011 WI App
115, ¶43, 336 Wis. 2d 677, 803 N.W.2d 853. If it is reversible
error not to consider this type of secondary or indirect
economic impact, what evidence is the fact-finder, in its
discretion, allowed to exclude? The court of appeals explained
this problem:
For example, it is unclear under the District's
construction whether the DNR's consideration of
economic effects on real property would be limited to
property values of riparian owners or would also
include the values of adjacent or area properties not
situated directly on the lake. Similarly, if the DNR
were required to consider revenues of businesses
directly linked to lake recreational activities, like
8
Further support for this proposition is found in the
majority's explanation of zoning ordinances which explicitly
require a consideration of the "tax base" when making zoning
decisions. Majority op., ¶141. Wisconsin Stat. § 31.02(1)
contains no such language evincing the legislature's intent that
the DNR consider secondary or indirect economic evidence.
18
No. 2008AP1523.npc
marinas and bait shops, would it also be required to
consider revenues of businesses with less direct links
to use of navigable waters, such as gas stations and
convenience stores?
Id., ¶43. The majority's interpretation of this statute adds an
unnecessary layer of confusion for the DNR when reviewing these
cases.
¶180 Instead of applying the governing statute or this
court's interpretation of similar statutes, the majority relies
on language from Railroad Commission cases from the early 1900s
to support its conclusion that the legislature in 1915 did not
intend to exclude riparian rights from consideration in Wis.
Stat. § 31.02(1), and that therefore, it was reversible error to
exclude evidence of such secondary or indirect economic impact
to water level changes.9 The language in these Railroad
Commission decisions, on closer examination, supports the DNR's
position that the duty to protect property requires
consideration of only physical impacts on property. The
9
The majority also relies on a legislative report from
1910, Report of the Comm. on Water Powers, Forestry, and
Drainage of the Wis. Leg. 1910, 49th Leg., which explained that
land near the shores of lakes was becoming very valuable. See
majority op., ¶135. The majority then states: "In light of the
legislative reports giving rise to the Water Powers Act
containing the 'protect . . . property' language of Wis. Stat.
§ 31.02(1), one can reasonably infer that riparian residential
property and lake-based businesses were prime considerations for
protecting property." Id., ¶136. The majority fails to connect
the observations in the legislative report with its "reasonable
inference." One could just as reasonably infer that protection
from physical damage to lakeshore property was the prime
consideration for including language about protecting property
in the statute and that the legislature did not expect the
Railroad Commission to consider such secondary or indirect
economic impact from changing water levels.
19
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majority finds its support, in one case, by focusing on what the
Railroad Commission did not say—which is dubious support at
best. It finds its support in the second case by focusing on a
passing reference to private development, while not
acknowledging the actual basis given by the Railroad Commission
for its holding—which clearly focuses on the potential for
shoreline and property "to be destroyed."
¶181 The first of the Railroad Commission cases on which
the majority relies, Town of Bear Lake v. Wisconsin-Minnesota
Light & Power Co., 16 W.R.C.R. 710 (1915), involved a dispute
over the water level maintained by a dam and that level's
physical impact on surrounding land. The Railroad Commission
stated: "[t]his level will not endanger life or health . . .
[i]t will, however, affect property and overflow a large acreage
of land . . . ." Id. at 716. The majority explains that the
Railroad Commission's decision "did not explicitly limit the
protection of property to only direct physical impacts."
Majority op., ¶137. The absence of an explicit limitation is
not evidence that the statute requires consideration of such
secondary or indirect economic impact; it is the natural result
of the fact that Bear Lake was about physical flooding of
property.
¶182 The other Railroad Commission case, In re Determining
the High Water Mark to be Established on the Rest Lake Reservoir
Operated by the Chippewa and Flambeau Improvement Co., 16
W.R.C.R. 727, 731 (1915), considered Rest Lake's water level,
and like the Bear Lake decision, involved severe physical damage
20
No. 2008AP1523.npc
to property. The Chippewa & Flambeau Improvement Company
requested permission from the Railroad Commission to adopt
certain high and low water marks, but property owners vigorously
protested——arguing that the wide variation in water levels
negatively affected their property. Id. at 731. The Railroad
Commission agreed with property owners that the "disastrous
effects upon shore property are only too plainly visible" from
such a great variation in the water level. Id. at 734. It
described the consequences as follows:
Banks are lined with dead trees, logs, rocks and
debris in an effort to prevent the shore lines from
being obliterated. . . . When the banks give away
large trees fall into the water. In one instance,
thirty large green timber trees were counted lying in
the lake where the shore had been taken away this
year. . . . In places the old shore lines have
disappeared . . . . The gradual disappearance of what
are now islands was fully shown by the testimony.
Id. While the Railroad Commission briefly mentioned that large
sums of money were used to improve private homes along the lake,
its ultimate reason for protecting this property was concern for
potential physical damage rather than secondary or indirect
economic impact. In denying the petition, the Railroad
Commission found, "[t]he effect of [the proposed water level]
will be to give a very wide variation in levels, tending to
destroy the shore line and property around the lakes." Id. at
738 (emphasis added). Neither of these cases supports the
majority's conclusion about the legislative intent in 1915.
¶183 Further, the majority minimizes this court's past
interpretation of similar statutory language, which has
explicitly limited its reading to a narrow interpretation of the
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language. In City of New Lisbon v. Harebo, this Court held that
a dam may "endanger property" when "by reason of its location,
or manner of construction, or the character of the soil upon
which it is built . . . it [would] tend to flood cities or
villages or [would be] likely to give way and create havoc and
destruction below the dam . . . ." New Lisbon, 224 Wis. 66, 73,
271 N.W. 659 (1937). We made sure to point out that "we are of
the opinion that this is as much as the section can be held to
mean." Id. Thus, this court expressly limited the construction
of "endanger property," and concluded that a dam would not
endanger property if injury to the property resulted from
"normal flowage by the ordinary operation of the dam." Id. The
court's narrow reading of "endanger property" as applying to
only physical damage and hydrologic events supports a limited
reading of "protect . . . property" in Wis. Stat. § 31.02.10¶184 It is illogical and contrary to the plain meaning of
the statute to hold, as the majority does, that language
referring to "protect[ing] life, health and property" requires
the DNR to consider such secondary or indirect economic impacts.
10
Another case that provides support for the conclusion
that such secondary or indirect economic impact is not required
to be considered is Wisconsin's Environmental Decade, Inc., v.
DNR (Environmental Decade 1983), 115 Wis. 2d 381, 340 N.W.2d 722(1983). In Environmental Decade 1983, this court held that the
DNR did not need to consider socioeconomic impact in determining
whether it needed to issue an environmental impact study in
connection with a permit. Id. at 395. While it is
distinguishable on its facts (as noted by the majority), I agree
with the DNR decision's assessment that this court's reasoning
in Environmental Decade 1983 "applies with similar force here,
even though that case involved action by the DNR under Chapter
30, not Chapter 31, Stats."
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It is apparent that the cases relied on by the majority do not
lead to its conclusion. Further, contrary to the majority's
position, the plain language is clear and certainly does not
compel the majority's conclusion. The fact is that the DNR
sufficiently considered the protection of property, and
therefore, I conclude that it was not error to strike the
secondary or indirect economic evidence that it struck.
IV. CONCLUSION
¶185 This case presents a question that the majority can——
indeed does——answer by interpreting Wis. Stat. § 31.02(1). Yet
the majority unnecessarily reaches out to the constitutional
principle of the public trust doctrine from the Wisconsin
Constitution, constricting the doctrine and misreading this
court's precedent, especially the well-settled law articulated
in Just v. Marinette County. Wisconsin's long and robust
history of protecting the public trust is widely acknowledged
and respected. The public trust doctrine imposes on the state,
as trustee, the affirmative duty to protect, preserve, and
promote the public's right to Wisconsin's waters.
¶186 The majority opinion attempts to undermine this
court's precedent, recharacterize its holdings, and rewrite
history. Instead of limiting itself to addressing only what
must be addressed, the majority seizes this opportunity to limit
the public trust doctrine in an unforeseen way, transforming the
state's affirmative duty to protect the public trust into a
legislative choice. It needlessly unsettles our precedent and
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weakens the public trust doctrine that is enshrined in the
Wisconsin Constitution. This represents a significant and
disturbing shift in Wisconsin law.
¶187 The majority also errs in expanding the type of
evidence that the DNR must consider in these cases. A
straightforward interpretation of Wis. Stat. § 31.02(1) would
not require the DNR to consider secondary or indirect economic
impact when making water level determinations. The economic
evidence admitted during the ten-day contested case hearing was
sufficient to discharge the DNR's duty to "protect . . .
property," and the excluded evidence was not relevant or
required. The DNR has a difficult job to do under this statute,
and in this case, the DNR did it well. The decisions of the
DNR, the circuit court, and the court of appeals each properly
concluded that § 31.02(1) does not require consideration of such
secondary or indirect economic impact. The fact is that the DNR
sufficiently considered the protection of property, and
therefore, it was not error to strike the secondary or indirect
economic evidence that it struck.
¶188 For the foregoing reasons I respectfully dissent.
¶189 I am authorized to state that Chief Justice SHIRLEY S.
ABRAHAMSON and Justice ANN WALSH BRADLEY join this dissent.
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