Applegate-Bader Farm, LLC v. DOR ( 2021 )

2021 WI 26SUPREME COURT OF WISCONSIN
CASE NO.: 2018AP1239
COMPLETE TITLE: Applegate-Bader Farm, LLC,
Plaintiff-Respondent-Cross-Appellant-
Petitioner,
v.
Wisconsin Department of Revenue and Richard
Chandler in his capacity as Secretary of the
Department of Revenue,
Defendants-Appellants-Cross-
Respondents.
REVIEW OF DECISION OF THE COURT OF APPEALS
Reported at 390 Wis. 2d 708,940 N.W.2d 725PDC No:2020 WI App 7 - Published
OPINION FILED: March 16, 2021
SUBMITTED ON BRIEFS:
ORAL ARGUMENT: November 9, 2020
SOURCE OF APPEAL:
COURT: Circuit
COUNTY: Green
JUDGE: Thomas J. Vale
JUSTICES:
ROGGENSACK, C.J., delivered the majority opinion of the Court,
in which ANN WALSH BRADLEY, REBECCA GRASSL BRADLEY, DALLET, and
KAROFSKY, JJ., joined. HAGEDORN, J., filed a dissenting opinion.
NOT PARTICIPATING:
ZIEGLER, J., did not participate.
ATTORNEYS:
For the plaintiff-respondent-cross-appellant-petitioner,
there were briefs filed by Ryan L. Woody, Catherine Dowie, and
Matthiesen, Wickert & Lehrer, S.C., Hartford. There was an oral
argument by Ryan L. Woody.
For the defendants-appellants-cross-respondents, there was
a brief filed by Anthony D. Russomanno, assistant attorney
general; with whom on the brief was Joshua L. Kaul, attorney
general. There was an oral argument by Anthony D. Russomanno.
An amicus curiae brief was filed on behalf of Midwest
Environmental Advocates, Madison, by Adam Voskuil, and Clean
Wisconsin, Madison, by Evan Feinauer.
2
2021 WI 26NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2018AP1239
(L.C. No. 2016CV48)
STATE OF WISCONSIN : IN SUPREME COURT
Applegate-Bader Farm, LLC,
Plaintiff-Respondent-Cross-Appellant-
Petitioner, FILED
v.
MAR 16, 2021
Wisconsin Department of Revenue and
Richard Chandler in his capacity as Sheila T. Reiff
Clerk of Supreme Court
Secretary of the Department of Revenue,
Defendants-Appellants-Cross-
Respondents.
ROGGENSACK, C.J., delivered the majority opinion of the Court,
in which ANN WALSH BRADLEY, REBECCA GRASSL BRADLEY, DALLET, and
KAROFSKY, JJ., joined. HAGEDORN, J., filed a dissenting
opinion.
ZIEGLER, J., did not participate.
REVIEW of a decision of the Court of Appeals. Reversed and
cause remanded.
¶1 PATIENCE DRAKE ROGGENSACK, C.J. We review a decision
of the court appeals1 that affirmed the circuit court's2 grant of
1Applegate-Bader Farm, LLC v. DOR, 2020 WI App 7, 390
Wis. 2d 708, 940 N.W.2d 725.
2 The Honorable Thomas J. Vale of Green County presided.
No. 2018AP1239
summary judgment to the Department of Revenue (the Department)
against Applegate-Bader Farm, LLC (Applegate). As it relates to
this appeal, the circuit court and the court of appeals
determined that Applegate did not raise a claim that triggered
judicial review of the Department's decision not to prepare an
Environmental Impact Statement (EIS) under the Wisconsin
Environmental Policy Act (WEPA) when it promulgated the
administrative rule set out in Wis. Admin. Code § Tax
18.05(1)(d) (2015-16) ("the rule").3
¶2 The circuit court held that Applegate had not made a
threshold showing that there was an environmental injury. The
court of appeals affirmed and held that Applegate had not raised
a bona fide claim because it alleged only indirect environmental
effects.
¶3 We conclude that administrative agencies must consider
indirect, as well as direct, environmental effects of their
proposed rules when deciding whether to prepare an EIS.
Therefore, Applegate met its threshold burden even though it
alleged only indirect environmental effects of the rule. On
review of the Department's decision not to prepare an EIS, we
conclude that the Department failed to develop a reviewable
record that demonstrates that it made a preliminary
investigation and reached a reasonable conclusion about the
environmental consequences of its action. Therefore, the
All subsequent references to the Wisconsin Administrative
3
Code are to the 2015-16 version unless otherwise indicated.
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No. 2018AP1239
Department failed to comply with WEPA. Accordingly, we reverse
the court of appeals' decision that concludes to the contrary.
We remand the WEPA claim to the circuit court with instructions
to remand the WEPA matter to the Department for further actions
consistent with this decision. Additionally, we stay the
enforcement of Wis. Admin. Code § Tax 18.05(1)(d).
I. BACKGROUND
¶4 Applegate operates a farm in southern Wisconsin on
approximately 11,000 acres of land. Roughly 2,000 of those
acres are enrolled in a federal Wetland Reserve Easement
("easement") through the Agricultural Conservation Easement
Program. Applegate's easement is permanent, and therefore it is
unable to use the land subject to the easement for agricultural
purposes. This action arises out of a 2015 revision of Wis.
Admin. Code § Tax 18.05(1)(d) and the effect that that revision
had on landowners with certain conservation easements.
A. Wisconsin Admin. Code § Tax 18.05(1)(d)
¶5 The Wisconsin Constitution provides that land must be
taxed uniformly. Wis. Const. art VIII, § 1. Generally, this
requires that real property is taxed according to its fair
market value. Wis. Stat. § 70.32(1) (2019-20).4 However,
"[t]axation of agricultural land and undeveloped land, both as
defined by law, need not be uniform with the taxation of each
other nor with the taxation of other real property." Wis.
4 All subsequent references to the Wisconsin Statutes are to
the 2019-20 version unless otherwise indicated.
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No. 2018AP1239
Const. art. VIII, § 1. Accordingly, agricultural land is
assessed "according to the income that could be generated from
its rental for agricultural use." Wis. Stat. § 70.32(2r). This
is generally referred to as the land's "use value." Non-
agricultural, undeveloped land is assessed at "50 percent of its
full value, as determined under [§ 70.32](1)." § 70.32(4).
¶6 Pursuant to Wis. Stat. § 70.32(2)(c)1i., "agricultural
use" is "defined by the department of revenue by rule and
includes the growing of short rotation woody crops, including
poplars and willows, using agronomic practices." The Department
defines agricultural use in Wis. Admin. Code § Tax 18.05(1). As
it relates to this appeal, paragraph (d) states as follows:
(d) Land without improvements subject to a
federal or state easement or enrolled in a federal or
state program if all of the following apply:
1. The land was in agricultural use under par.
(a), (b), or (c) when it was entered into the
qualifying easement or program, and
2. Qualifying easements and programs shall
adhere to standards and practices provided under the
January 31, 2014 No. 697 version of s. ATCP 50.04,
50.06, 50.71, 50.72, 50.83, 50.88, 50.91, 50.96, or
50.98. The Wisconsin Property Assessment Manual,
authorized under [Wis. Stat. §] 73.03(2a), shall list
the qualifying easements and programs according to the
ATCP provisions, and
3. a. The terms of the temporary easement or
program do not restrict the return of the land to
agricultural use under par. (a), (b), or (c) after the
easement or program is satisfactorily completed, or
b. The terms of the easement, contract,
compatible use agreement, or conservation plan for
that specific parcel authorized an agricultural use,
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No. 2018AP1239
as defined in par. (a), (b), or (c), for that parcel
in the prior year.
Wis. Admin. Code § Tax 18.05(1)(d). The Department adopted this
version of the rule in 2015.
¶7 Prior to the above quoted definition, the Department
listed easements by name that qualified for agricultural use
taxation. See Wis. Admin. Code § Tax 18.05(e) (1997). Several
of the previously named state and federal easement programs are
no longer in existence. Accordingly, the Department first
revised the agricultural use rule in 2000. See Wis. Admin. Code
§ Tax 18.05(1)(d) and (e) (2000). And, in 2013, the Department
undertook revising the rule again. According to the
Department's 2013 statement of scope:
The proposed rule will address changes in the
listed programs that have occurred since the rule was
enacted and will also identify general criteria for
determining what land that is in federal and state
pollution control and soil erosion programs qualifies
for agricultural use under the subchapter. This will
provide consistency and clear standards for property
owners and assessors.
691B Wis. Admin. Reg. SS 084-13 (July 31, 2013).
¶8 A draft of the 2013 rule included temporary and
permanent easements at both the state and federal level. 696B
Wis. Admin. Reg. CR 13-102 (Paragraph (e) explained
agricultural use as follows: "Commencing with the January 1,
2015 assessment, land without improvements subject to a
permanent federal or state easement or enrolled in a permanent
federal or state program if that land was in agricultural use
under par. (a), (b), or (c) when it was entered into the
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No. 2018AP1239
easement or program."). During the comment period, the
Department received feedback from several entities, Applegate
included. Some entities, including Applegate, supported the
broader definition that the proposed rule provided. However,
some entities opposed that broad definition; they argued that
those who permanently removed their lands from agricultural use
should not be permitted to take advantage of that agricultural
use definition.
¶9 The final rule appears to permit permanent state or
federal easement holders to claim agricultural use for taxation
only when the terms of an easement "authorized an agricultural
use, as defined in par. (a), (b), or (c), for that parcel in the
prior year." Wis. Admin. Code § Tax 18.05(1)(d)3.b.
B. This Litigation
¶10 In 2016, and after the Department issued the final
version of the rule, Applegate initiated this lawsuit.
Applegate's amended complaint raised nine claims for relief, two
of which were subject to appeal and one of which, the WEPA
claim, is now before us in this case.5
¶11 As it relates to Applegate's WEPA claim, Applegate
alleged the following:
206. The final rule order excluded wetlands
covered by the ACEP and WRE and completely removed
agricultural use value assessment from wetlands
enrolled in the Stream Bank Protection program under
[Wis. Stat. § 23.094]; the Conservation Reserve
5 The outstanding claims for relief remain pending in the
circuit court.
6
No. 2018AP1239
Enhancement program under [Wis. Stat. § 93.70], and
the Non-point Source Water Pollution Abatement program
under [Wis. Stat. § 281.65].
207. The Department ignored and/or failed to
consider evidence in its possession from the
Department of Natural Resources that the exclusion and
removal of wetlands in agricultural conservation
easements from Tax 18.05(1)'s definition of
"agricultural use" causes farmers to destroy sensitive
wetlands by placing cows within the wetlands to
achieve use value assessment.
208. The Department further ignored and/or
failed to consider evidence in its possession from the
[Department of] Natural Resources that the exclusion
of WRP/WRE easements from Tax 18.05(1) is causing
property owners to not enroll their wetlands into the
federal program.
209. The removal and exclusion of wetlands
conserved in agricultural easements from agricultural
use value will result in the further destruction,
degradation and loss of wetlands in this State.
210. The exclusion and removal of wetlands
conserved in agricultural easements from agricultural
use value has and will continue to have a significant
effect upon the environment, thus, necessitating
compliance with WEPA, Wis. Stat. [§] 1.11.
. . . .
212. WEPA is procedural in nature and does not
control agency decision making. Rather, it requires
that agencies consider and evaluate the environmental
consequences of alternatives available to them and
undertake that consideration in the framework provided
by [Wis. Stat. §] 1.11.
. . . .
215. The Defendants failed to fulfill their
independent duties under WEPA, Wis. Stat. § 1.11, to
evaluate the environmental impact of excluding
permanent conservation easements from Tax 18.05(1)(d)
and failed to consider [the] full range of reasonable
alternatives to minimize adverse social, economic and
7
No. 2018AP1239
environmental impacts to the Plaintiff, state
taxpayers, the effect on the State's wetlands and
associated wildlife.
216. The final decisions (and non-decisions) of
the Defendants relative to the passage of Tax
18.05(1)(d) were arbitrary, capricious, erroneous and
contrary to law under WEPA, Wis. Stat. § 1.11, and as
a result the Rule is void ab initio and must be set
aside or remanded with directions.
¶12 The parties filed cross motions for summary judgment.
The circuit court granted Applegate's motion for summary
judgment on the Wis. Stat. ch. 227 claim concluding that the
Department "failed to follow proper rulemaking procedures." The
court granted the Department's motion for summary judgment on
the WEPA claim, holding that Applegate failed to allege facts
that supported its claim of environmental effect of the rule.
Based on its decision that the Department violated rulemaking
procedures of ch. 227, the circuit court vacated the rule.
However, the court stayed its judgment pending appeal.
¶13 Both parties appealed the circuit court's summary
judgment decisions against them, and the court of appeals ruled
in favor of the Department on both claims. As it relates to
Applegate's cross-appeal, the court of appeals affirmed the
circuit court's decision against Applegate. The court of
appeals read our decision in Wisconsin's Environmental Decade,
Inc. v. DNR, 115 Wis. 2d 381, 340 N.W.2d 722 (1983) (WED IV) to
obviate the need for an EIS for indirect environmental effects.
Applegate-Bader Farm, LLC v. DOR, 2020 WI App 7, ¶86, 390
Wis. 2d 708. Because Applegate's claims of environmental harm
were all indirect, the court held that it had not raised a bona
8
No. 2018AP1239
fide WEPA claim. Id., ¶93. The court of appeals remanded the
case to the circuit court to consider the remaining claims for
relief. Id., ¶96.
¶14 Applegate filed a petition for review seeking review
of only the WEPA claim, and we granted review. As explained
below, we conclude that agencies are required to consider
indirect environmental effects when determining whether to
prepare an EIS. We also conclude that the Department did not
satisfy its WEPA requirements because it did not base its
decision not to prepare an EIS (the negative-EIS decision) on a
reviewable record as is required in Wisconsin's Environmental
Decade, Inc. v. Public Service Commission, 79 Wis. 2d 409, 256
N.W.2d 149 (1977) (WED III).
II. DISCUSSION
A. Standard of Review
¶15 This case is before us on appeal of a grant of summary
judgment to the Department. We independently review decisions
granting summary judgment. Sands v. Menard, 2017 WI 110, ¶28,
379 Wis. 2d 1, 904 N.W.2d 789. In so doing, we apply the same
methodology employed by the circuit court, while benefitting
from its discussion and that of the court of appeals. Id.Summary judgment is appropriate where there is no genuine issue
of material fact and the decision turns on a question of law.
Wis. Stat. § 802.08(2).
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No. 2018AP1239
B. The Negative-EIS Decision
¶16 When we review a challenge to an agency's negative-EIS
decision,6 our review is a two-step inquiry that tests the
reasonableness of the agency's decision:
First, has the agency developed a reviewable record
reflecting a preliminary factual investigation
covering the relevant areas of environmental concern
in sufficient depth to permit a reasonably informed
preliminary judgment of the environmental consequences
of the action proposed; second, giving due regard to
the agency's expertise where it appears actually to
have been applied, does the agency's determination
that the action is not a major action significantly
affecting the quality of the human environment follow
from the results of the agency's investigation in a
manner consistent with the exercise of reasonable
judgment by an agency committed to compliance with
WEPA's obligations?
WED III, 79 Wis. 2d at 425.
¶17 If the Department developed a reviewable record and
its negative-EIS decision is reasonable based on that record, we
will uphold its decision. However, before reaching whether the
Department's decision was reviewable, we address the court of
appeals' conclusion that Applegate failed to allege a bona fide
WEPA claim because it alleged that the rule had only indirect
6 Compare Wisconsin's Env't Decade, Inc. v. Pub. Serv.
Comm'n, 79 Wis. 2d 409, 424, 256 N.W.2d 149 (1977) (WED III)
(testing an agency's negative-EIS decision for whether there is
a reviewable record and, whether based on that record the
decision not to prepare an EIS is a reasonable exercise of its
judgment) with Clean Wisconsin, Inc. v. Pub. Serv. Comm'n, 2005
WI 93, ¶190, 282 Wis. 2d 250, 700 N.W.2d 768 ("[I]t is not our
role to evaluate the adequacy of the EIS; we instead evaluate
whether the [agency's] determination that the EIS was adequate
was reasonable.").
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No. 2018AP1239
environmental effects. The court of appeals was incorrect. As
we have consistently held, agencies must consider both direct
and indirect environmental effects of their major actions to
determine whether those effects will have a significant effect
on the human environment. Accordingly, we conclude that
Applegate met its threshold burden under WED III, and we
therefore address the record underlying the Department's
negative-EIS decision.7
7 The Department makes the additional argument that
Applegate lacks standing to challenge the Department's negative-
EIS decision. A party has standing to challenge an
administrative decision when "the decision of an agency directly
causes injury to the interest of the petitioner" and if the
"interest asserted is recognized by law." Fox v. DHS, 112
Wis. 2d 514, 524, 334 N.W.2d 532 (1983) (internal quotation
marks omitted). An alleged injury may be sufficiently direct
for the petitioner even when it is "remote in time or which will
[occur only] as an end result of a sequence of events set in
motion by the agency action challenged." Wisconsin's Env't
Decade, Inc. v. Pub. Serv. Comm'n, 69 Wis. 2d 1, 14, 230 N.W.2d
243 (1975) (WED I). Such injuries "must show a direct causal
relationship to a proposed change in the physical environment."
Fox, 112 Wis. 2d at 528. "An allegation of injury in fact
to . . . conservational and recreational interests has been
readily accepted as sufficient to confer standing." WED I, 69
Wis. 2d at 10. However, a WEPA petitioner must "resid[e] in the
area most likely to be affected by an agency action [to] have a
legally protected interest in the quality of their environment."
Fox, 112 Wis. 2d at 531.
"[S]tanding in Wisconsin should not be construed narrowly
or restrictively." WED I, 69 Wis. 2d at 13. We conclude that
Applegate has standing to challenge the Department's negative-
EIS decision. Applegate has alleged an injury to its
conservational interests based on a sequence of events caused by
the Department including certain conservation easements and
excluding others in the definition of agricultural use. If we
accept these allegations as true, Applegate has an injury in
fact to its legally protected conservational interest. See WED
I, 69 Wis. 2d at 17 (taking the alleged facts as true to
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No. 2018AP1239
1. Indirect Environmental Effects
¶18 "The purpose of WEPA is to insure that agencies
consider environmental impacts during decision making." State
ex rel. Boehm v. DNR, 174 Wis. 2d 657, 665, 497 N.W.2d 445(1993). In turn, "[t]he purpose of the EIS is to enable
agencies to take a 'hard look' at the environmental consequences
of a proposed action." Clean Wisconsin v. Pub. Serv. Comm'n,
2005 WI 93, ¶189, 282 Wis. 2d 250, 700 N.W.2d 768. Accordingly,
WEPA, which is set out in Wis. Stat. § 1.11, "constitutes a
clear legislative declaration that protection of the environment
is among the 'essential considerations of state policy,' and as
such, is an essential part of the mandate of every state
agency." WED III, 79 Wis. 2d at 416. WEPA directs that "to the
fullest extent possible," agencies shall include a "detailed
statement" for all "major actions significantly impacting the
human environment." §§ 1.11(1) and (2)(c).8 Significant effects
determine whether Wisconsin's Environmental Decade had
standing).
8 Wisconsin Stat. § 1.11(2)(c) provides in full:
[All agencies of the state shall:]
(c) Include in every recommendation or report on
proposals for legislation and other major actions
significantly affecting the quality of the human
environment, a detailed statement, substantially
following the guidelines issued by the Unites States
council on environmental quality under P.L. 91-190, 42
USC 4331, by the responsible official on:
1. The environmental impact of the proposed
action;
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No. 2018AP1239
may include both negative effects and beneficial effects of a
proposed action. See § 1.11(2)(c)6.; see also WED III, 79
Wis. 2d at 429 n.17 (quoting 40 C.F.R. § 1500.6).
¶19 To comply with WEPA's directive, agencies must
consider direct and indirect environmental effects when
determining whether to prepare an EIS. We explicitly so
concluded in WED III. There, we "reject[ed] any
intimation . . . that because the environmental
effects . . . are 'indirect' they need not be considered under
WEPA. There is nothing in the Act to suggest that only direct
environmental consequences need be considered." Id. at 428. In
so concluding, we reasoned that a construction that limited the
Act to direct environmental effects would be contrary to the
statute's plain meaning. Id. at 430.
¶20 As WEPA is based principally on the National
Environmental Policy Act (NEPA), we may look to federal law in
2. Any adverse environmental effects which
cannot be avoided should the proposal be implemented;
3. Alternatives to the proposed action;
4. The relationship between local short-term
uses of the human environment and the maintenance and
enhancement of long-term productivity;
5. Any irreversible and irretrievable
commitments of resources that would be involved in the
proposed action should it be implemented; and
6. Such statement shall also contain details of
the beneficial aspects of the proposed project, both
short term and long term, and the economic advantages
and disadvantages of the proposal.
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No. 2018AP1239
our quest to interpret WEPA's requirements. See id. at 419-24.
Under NEPA, "effects" include both direct and indirect effects,
and indirect effects are defined as those that "are caused by
the action and are later in time or farther removed in distance,
but are still reasonably foreseeable." 40 C.F.R. § 1508.8(b)
(2021). Especially pertinent to this case, "[i]ndirect effects
may include growth inducing effects and other effects related to
induced changes in the pattern of land use, population density
or growth rate, and related effects on air and water and other
natural systems, including ecosystems." § 1508.8(b).
Similarly, federal courts have long held that federal agencies
must consider both direct and indirect environmental effects of
major agency actions when determining whether to prepare an EIS.
See, e.g., Sierra Club v. Marsh, 769 F.2d 868, 878 (1st Cir.
1985) (stating that agencies must consider indirect "secondary
impacts").9
9 See also Colorado Env't Coal. v. Dombeck, 185 F.3d 1162,
1176 (10th Cir. 1999) (citing the former regulation, which
mandated an examination of indirect effects); Friends of
Boundary Waters Wilderness v. Dombeck, 164 F.3d 1115, 1128 (8th
Cir. 1999) (explaining that NEPA requires a detailed statement
"from which a court can determine whether the agency has made a
good faith effort to consider the values NEPA seeks to
protect"); Nat. Res. Defense Council, Inc. v. F.A.A., 564 F.3d
549, 558 (2d Cir. 2009) (stating that "[i]n determining the
scope of an EIS, the agency 'shall consider . . . 3 types of
impacts': direct, indirect, and cumulative."); Citizens for
Smart Growth v. Sec'y of Dep't of Transp., 669 F.3d 1203, 1214
(11th Cir. 2012) (discussing the indirect effects of state
action on wetlands).
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No. 2018AP1239
¶21 Despite what we thought was clear direction, the court
of appeals read part of our decision in WED IV, 115 Wis. 2d 381,
as requiring a WEPA petitioner, such as Applegate, to allege
that an agency action must have direct environmental effects in
order to raise a bona fide WEPA claim. Applegate, 390 Wis. 2d
708, ¶86. Specifically, the court of appeals concluded that
"Applying WED [IV] here, it is clear that [Applegate's] theory
of indirect effects of [Wis. Admin. Code] § Tax 18.05(1)(d) on
how farmers use easement program lands cannot, on its own, give
rise to a bona fide claim under WEPA." Id. The court of
appeals misread WED IV.
¶22 In WED IV, the issue we were tasked with deciding was
"whether the DNR has an obligation to [prepare] an EIS for a
project when investigation, research and public hearing reveal
that the project will have minor impacts on the environment, but
will have possible socioeconomic impacts." WED IV, 115 Wis. 2d
at 395. With that context, our statement on "indirect secondary
effects" becomes more clear.
¶23 We were not referring to indirect environmental
effects, but rather, we were referring to indirect, non-
environmental effects. Namely, we were determining whether the
socioeconomic effects surrounding the DNR's issuance of certain
permits that facilitated the development of a mall necessitated
an EIS when there were only minor, insignificant environmental
effects. We held that, alone, the alleged non-environmental
effects of the project did not necessitate an EIS. However,
that holding does not undermine the principle that indirect
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No. 2018AP1239
environmental effects may on their own become "significant" and
necessitate an EIS. See id. at 415 (Bablitch, J., dissenting)
(agreeing with the majority "that in making its determination,
the DNR must review the direct and indirect environmental
effects of the project" and reiterating that "[i]t is clear that
all of the law surrounding WEPA requires that both direct and
indirect effects on the physical environment must be
considered . . . in an EIS decision").
¶24 We again consider federal regulations to aid in our
explanation. Similar to Wis. Stat. § 1.11(2)(c), 40 C.F.R.
§ 1502.16 (2021) describes the required contents of an EIS. The
first requirement is that the discussion shall include "[t]he
environmental impacts of the proposed action and reasonable
alternatives to the proposed action and the significance of
those impacts." 40 C.F.R. § 1502.16(a)(1). Notably, the
federal regulations do not prioritize between direct and
indirect environmental effects. Subsection (b) relates to
indirect (non-environmental) effects. It states:
Economic or social effects by themselves do not
require preparation of an environmental impact
statement. However, when the agency determines that
economic or social and natural or physical
environmental effects are interrelated, the
environmental impact statement shall discuss and give
appropriate consideration to these effects on the
human environment.
40 C.F.R. § 1502.16(b). Subsection (b) is consistent with what
we stated in WED IV. Again, at issue there was whether the DNR
erred as a matter of law in not preparing an EIS despite a
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No. 2018AP1239
showing of indirect, non-environmental effects coupled with
minor, insignificant, environmental effects. Id. at 395. The
effects in WED IV were socioeconomic in nature. Id. The DNR
determined that the environmental effects were not significant,
and therefore, no EIS was necessary; the non-environmental
effects alone could not have changed that determination.
¶25 Read in context, our statement in WED IV does not
change the requirement of all state agencies to consider direct
and indirect environmental effects of their major actions.
Further, our statement in WED IV does not create a threshold
requirement that WEPA petitioners must allege direct
environmental effects to trigger judicial WEPA review.
Petitioners may, as Applegate did, argue that an agency
abdicated its WEPA obligations by failing to consider indirect
environmental effects in its negative-EIS decision.
¶26 Before reaching our conclusion on the foundation for
this departmental decision, we determine whether Applegate has
alleged facts "constituting a bona fide challenge." See WED
III, 79 Wis. 2d at 424. "[A]llegations of environmental effect
which are patently trivial or frivolous [should not] subject the
agency decision to searching judicial review." Id. It is true
that "there may be cases where it will be obvious to agency and
court alike on the basis of facts that no EIS need be prepared."
Id. However, we are not persuaded that this is a case where it
is "obvious" that an EIS was not necessary. Rather, we conclude
that Applegate has alleged "issues of arguably significant
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No. 2018AP1239
environmental import" and therefore, "the agency must show
justification for its negative-EIS decision." Id.¶27 In its complaint, Applegate alleged several
environmental effects of the new rule. See ¶11, supra. For
example, Applegate alleged that "the exclusion and removal of
wetlands in agricultural conservation easements from [Wis.
Admin. Code §] Tax 18.05(1)'s definition of 'agricultural use'
causes farmers to destroy sensitive wetlands by placing cows
within the wetlands to achieve use value assessment." Applegate
further alleged that "the exclusion of the WRP/WRE easements
from Tax 18.05(1) is causing property owners not to enroll their
wetlands into the federal program," which in turn "will result
in the further destruction, degradation and loss of wetlands in
this State."
¶28 We conclude that Applegate's allegations describe
reasonably foreseeable consequences of the rule classifying
lands in a certain manner.10 Accordingly, Applegate has alleged
facts constituting a bona fide claim to trigger the Department's
actions under WEPA.
2. Reviewable Record
10 Once again, the federal guidelines cited above are
informative. Lest there be any doubt, we conclude that indirect
environmental effects such as "effects related to induced
changes in the pattern of land use, population density or growth
rate, and related effects on air and water and other natural
systems, including ecosystems" may be of a significant nature to
trigger a WEPA analysis. 40 C.F.R. § 1508.8(b). Therefore,
petitioners may allege such effects when challenging a negative-
EIS decision.
18
No. 2018AP1239
¶29 Having confirmed that indirect environmental effects
are to be considered in deciding whether to prepare an EIS and
that Applegate has made sufficient allegations to constitute a
bona fide WEPA challenge, we now consider the two-step review
that we apply to negative-EIS decisions. Once again, the steps
are: (1) whether the agency has developed a reviewable record,
and (2) whether the record reveals that the agency's
determination not to prepare an EIS was reasonable. We conclude
that, for the reasons discussed below, the Department failed the
first step of this analysis. It did not develop a record from
which we may conclude that its negative-EIS decision was
reasonable.
¶30 For a negative-EIS decision, an agency must "develop[]
a reviewable record reflecting a preliminary factual
investigation covering the relevant areas of environmental
concern in sufficient depth to permit a reasonably informed
preliminary judgment of the environmental consequences of the
action proposed." WED III, 79 Wis. 2d at 425. Although an
agency's record "need not follow any particular form," the
record that is produced "must reveal in a form susceptible of
meaningful evaluation by a court the nature and results of the
agency's investigation and the reasoning and basis of its
conclusion." Id. at 425 n.15. We agree with the Department
that in some circumstances the rulemaking record may be
sufficient to complete the first step of the test. See City of
New Richmond v. DNR, 145 Wis. 2d 535, 547-48, 428 N.W.2d 27919
No. 2018AP1239
(Ct. App. 1988). However, in order for an administrative record
to be sufficient, it must satisfy WED III's requirements.
¶31 We have, on several occasions, concluded that an
agency's record was satisfactory despite the record not having
the specific information or investigation that the petitioner
would have preferred. See WED IV, 115 Wis. 2d at 398-402;
Larsen v. Munz Corp., 167 Wis. 2d 583, 605, 482 N.W.2d 332(1992); Boehm, 174 Wis. 2d at 666-68. However, in each of those
cases, the record revealed that the respective agency's decision
was well reasoned and considered both the relevant environmental
effects and the consequences of those effects. WED IV, 115
Wis. 2d at 398-402 (examining the record); Larsen, 167 Wis. 2d
at 607 ("The procedure followed in this case resulted in a
reviewable record . . . ."); Boehm, 174 Wis. 2d at 667 ("There
was more than adequate documentation in the record reflecting a
good faith investigation into each of the environmental concerns
relevant to this project."). Such a record was not developed
here.
¶32 The Department's rulemaking record spans just over 800
pages. The Department argues that this record is sufficient to
permit judicial review of its negative-EIS decision. We
disagree. Upon a review of the record we notice documents and
information that would signal to an agency that its action may
have environmental effects and that it may need to take a "hard
look" at those potential effects.11 See Clean Wisconsin, 282
For
11 example, the Department received comment and
testimony regarding support for the Wetland Restoration Program
20
No. 2018AP1239
Wis. 2d 250, ¶189. However, what is not present within this
administrative record is any agency discussion of the
environmental effects of the rule. Nor is there any discussion,
memoranda, e-mail, transcript or other documentation that
explains the Department's rationale behind its negative-EIS
decision. Without anything in the record that demonstrates the
Department's reasoning for its negative-EIS decision, we are
unable to conclude that the Department satisfied the first step
of our required review.
¶33 The Department argues that we may infer that, based on
its record, its negative-EIS decision was reasonable. The
Department cites Larsen for its argument that its rulemaking
record may reveal such implicit conclusions. See Larsen, 167
Wis. 2d at 600-01 ("The DOA's actions reveal an implicit
determination that this lease/purchase technique was not a Type
I action for which an EIS was required."). We are unpersuaded.
The portion of our Larsen opinion that the Department cites is
wholly inapposite to our decision today.
¶34 It is true that at issue in Larsen was the
reasonableness of the Department of Administration's (DOA)
negative-EIS decision. Larsen, 167 Wis. 2d at 598. However, we
divided that issue into several sub-issues. Id. The first sub-
(WRP) (now Wetland Reserve Easements) being included in the
agricultural use definition under the rule. Many of these
comments centered on the environmental benefits of the WRP.
These comments alone should have alerted the Department that it
may need to consider the environmental effects of its rule,
regardless of whether those effects be positive or negative.
21
No. 2018AP1239
issue was whether the DOA's determination that its action was
not a "Type I" action was reasonable. Id. Under DOA rules,
certain actions will always require an EIS (Type I), certain
actions will never require an EIS (Type III), and some may or
may not require an EIS (Type II). Wis. Admin. Code § Adm 60.03.
The DOA concluded that its action was not a Type I action, and
therefore, it was not automatically required to conduct an EIS.
Id. at 595. Rather, the DOA determined that its action was a
Type II action. Id. Accordingly, the DOA conducted an
Environmental Assessment (EA) and subsequently determined that
an EIS was not necessary. Id.
¶35 Insofar as we held that an agency's rulemaking record
may reveal implicit conclusions, we concluded that an explicit
statement from the DOA that the action that the DOA undertook
was not a "Type I" action would "exalt form over substance."
Id. at 600-01. We concluded that the DOA's record implicitly
demonstrated that the action was not a Type I and that an EIS
was not automatically required. Id. However, when we arrived
at the third sub-issue, whether the DOA's negative-EIS decision
was reasonable, we made no mention of implicit determinations.
Instead, we stated:
We conclude the process followed in the instant
case sufficiently satisfied [WEPA] requirements. The
record reveals the agency decision in this case not to
prepare an EIS for this project was informed and
reasonable. It was based on the [Preliminary
Environmental Impact Assessment] and the subsequent
EA. We assume without deciding that the EA was
adequate. Once an agency has made its fully informed
and well-considered decision, a reviewing court may
22
No. 2018AP1239
not interfere with agency discretion choosing the
action to be taken, or as in this case, the decision
not to prepare an EIS.
Id. at 606-07. It is clear that the record in Larsen, which
included an EA, was satisfactory.
¶36 Larsen does not inform our decision here. We are not
deciding whether an unprecedented agency action falls within
certain environmental gatekeeping criteria that an agency has
set for itself. We are therefore unpersuaded that we may simply
infer that the Department's decision was "fully informed and
well-considered." Additionally, even if an agency's record
could reveal an implicit conclusion that a negative-EIS decision
was reasonable, here, unlike Larsen, we do not have the benefit
of an EA or any similar analysis in the record that reveals that
the Department considered the magnitude of the environmental
effects of the rule. Rather, other than the environmental
issues raised by others, there is nothing in the record that
demonstrates any agency consideration of those issues.
¶37 WEPA is a procedural statute. WED III, 79 Wis. 2d at
416. It is not intended to control agency decision making. Id.We continue to stand by that general understanding, and it may
be the case that on remand that the Department may conclude that
an EIS is unnecessary. However, we conclude that the record
before us is insufficient to support the Department's negative-
EIS decision.
C. Remedy
¶38 Applegate brought this challenge as a declaratory
judgment action under Wis. Stat. § 227.40. Section 227.40 is
23
No. 2018AP1239
ordinarily the "exclusive means of judicial review of the
validity of a rule." § 227.40(1). However, because Applegate
is challenging an agency's decision under WEPA, we are not
confined to the declaratory judgment action requirements of
§ 227.40. Rather, we may review the Department's action under
Wis. Stat. § 227.57. See Wisconsin's Env't Decade, Inc. v. PSC,
69 Wis. 2d 1, 230 N.W.2d 243 (1975) (WED I) (applying the
standing principles of the predecessor statutes to Wis. Stat.
§§ 227.52 and 227.53 to a WEPA challenge); see also Wisconsin's
Env't Decade, Inc. v. PSC, 98 Wis. 2d 682, 298 N.W.2d 205 (Ct.
App. 1980) (finding "little difference" between WED III's
reasonableness standard of review and the predecessor statute to
§ 227.57 and reviewing the adequacy of an EIS under that
statute).
¶39 Wisconsin Stat. § 227.57(2) commands that "[u]nless
the court finds a ground for setting aide, modifying, remanding
or ordering agency action or ancillary relief under a specified
provision of this section, it shall affirm the agency's action."
§ 227.57(2). However, "[t]he court shall reverse or remand the
case to the agency if it finds that the agency's exercise of
discretion is . . . in violation of a constitutional or
statutory provision." § 227.57(8). Thereafter, a court may
"make such interlocutory order as it finds necessary to preserve
the interests of any party and the public pending
further . . . agency action." § 227.57(9).
¶40 As discussed above, we have concluded that the
Department failed to comply with WEPA's requirements in regard
24
No. 2018AP1239
to its negative-EIS decision. Therefore, the Department has
violated its obligation to follow the law. Wis. Stat.
§ 227.57(8). Accordingly, we remand to the circuit court with
instruction to remand to the Department to determine whether an
EIS is necessary and to develop a record from which a court
could determine whether its decision is reasonable. See
Milwaukee Brewers Baseball Club v. DHSS, 130 Wis. 2d 56, 76, 387
N.W.2d 245 (1986) (remanding the cause to the circuit court to
remand to the agency); see also WED III, 79 Wis. 2d at 442-43(remanding the matter to the Public Service Commission).
Additionally, we stay the enforcement of Wis. Admin. Code § Tax
18.05(1)(d) to preserve the interests of Applegate and the
public pending further agency action. § 227.57(9); see
Milwaukee Brewers Baseball Club, 130 Wis. 2d at 76 (enjoining
further construction of a prison pending the agency's completion
of an adequate EIS).
III. CONCLUSION
¶41 We conclude that administrative agencies must consider
indirect, as well as direct, environmental effects of their
proposed rules when deciding whether to prepare an EIS.
Therefore, Applegate met its threshold burden even though it
alleged only indirect environmental effects of the rule. On
review of the Department's decision not to prepare an EIS, we
conclude that the Department failed to develop a reviewable
record that demonstrates that it made a preliminary
investigation and reached a reasonable conclusion about the
environmental consequences of its action. Therefore, the
25
No. 2018AP1239
Department failed to comply with WEPA. Accordingly, we reverse
the court of appeals' decision that concludes to the contrary.
We remand the WEPA claim to the circuit court with instructions
to remand the WEPA matter to the Department for further actions
consistent with this decision. Additionally, we stay the
enforcement of Wis. Admin. § Tax 18.05(1)(d) pending the
Department's compliance with WEPA.
By the Court.—The decision of the court of appeals is
reversed and the cause remanded to the circuit court with
instructions.
¶42 ANNETTE KINGSLAND ZIEGLER, J., did not participate.
26
No. 2018AP1239.bh
¶43 BRIAN HAGEDORN, J. (dissenting). The majority
concludes administrative agencies must consider both direct and
indirect environmental effects when deciding whether to prepare
an Environmental Impact Statement (EIS) under the Wisconsin
Environmental Protection Act (WEPA). Wis. Stat. § 1.11(2)(c)
(2019-20).1 I agree. I part ways with the majority, however,
because Applegate-Bader Farm, LLC (Applegate) did not assert a
bona fide challenge, and therefore the Department of Revenue
(DOR) was not required to prepare an EIS.
¶44 To raise a bona fide challenge, Applegate must
credibly allege that the rule change would significantly affect
the environment's status quo prior to the change. Applegate's
allegations do not come close to credibly alleging that the
policy under the new rule as compared to the old rule would
cause significant environmental impact. I respectfully dissent
because I conclude that the rule amendment was not promulgated
in violation of WEPA.
I. ANALYSIS UNDER WEPA
¶45 Applegate's WEPA claim is rooted in a statutory
procedural requirement imposed on agencies before they take
certain actions that significantly affect the environment.
Wisconsin Stat. § 1.11(2)(c) provides the statutory command
relevant to this case. It requires that "[a]ll agencies of the
state"
1All subsequent references to the Wisconsin Statutes are to
the 2019-20 version.
1
No. 2018AP1239.bh
[i]nclude in every recommendation or report on
proposals for legislation and other major actions
significantly affecting the quality of the human
environment, a detailed statement, substantially
following the guidelines issued by the United States
council on environmental quality . . . .
§ 1.11(2)(c). In this case, everyone agrees that promulgating
the 2014 amendment to Wis. Admin. Code § Tax 18.05(1) (July
2018)2 was a major action under this statute. The disagreement
here is whether the rule amendment was one "significantly
affecting the quality of the human environment." If the rule
amendment met this standard, WEPA required the agency, as part
of its rulemaking process, to prepare "a detailed statement"
discussing the action's environmental impact, adverse effects,
alternatives, commitment of resources, and benefits, among other
factors. § 1.11(2)(c)1.-6.
¶46 But how is the judiciary to determine when an action
might have a significant effect on the environment such that an
EIS is required? State and federal courts analyzing this kind
of language have understood this statutory call to leave
significant room for agency discretion. To that end, this court
adopted the following approach for so-called negative-EIS
determinations:
We are of the opinion that the test of reasonableness
should be applied to review a negative threshold
decision under WEPA. Complete de novo review would be
akin to treating the entire question of significant
environmental effect as one of law. Where a question
of law is presented, the reviewing court of course
will determine the question independently regardless
All subsequent references to the Wisconsin Administrative
2
Code ch. Tax 18 are to the July 2018 register date unless
otherwise indicated.
2
No. 2018AP1239.bh
of the standard by which the agency's overall decision
is to be tested. However, the question whether there
is present in a given case a major action
significantly affecting the environment will in
general be a matter of both law and fact. . . .
[Wis. Stat. § 1.11(2)(c)] contemplates the exercise of
judgment by the agency, but that judgment must be
reasonably exercised within the limits imposed by the
Act.
Wisconsin's Env't Decade, Inc. v. PSC, 79 Wis. 2d 409, 423-24,
256 N.W.2d 149 (1977) (WED III) (citation omitted). This
reasonableness standard has governed review of WEPA claims ever
since.3 E.g., Wisconsin's Env't Decade, Inc. v. DNR, 115
Wis. 2d 381, 391, 340 N.W.2d 722 (1983); Larsen v. Munz Corp.,
167 Wis. 2d 583, 600, 482 N.W.2d 332 (1992).
¶47 Moving beyond the statutory command, we went further
in WED III and mandated a process for the express purpose of
enabling judicial review. Namely, an agency must create "a
reviewable record reflecting a preliminary factual investigation
covering the relevant areas of environmental concern." WED III,
79 Wis. 2d at 425 (footnote omitted). We then review that
In the years since our adoption of the reasonableness
3
standard of review for WEPA challenges, federal litigation under
the National Environmental Policy Act (NEPA) shifted its focus
from whether the agency's decision was reasonable to whether it
was "arbitrary and capricious." In Marsh v. Oregon Natural
Resources Council, the Supreme Court explicitly rejected the
reasonableness standard and held that as long as an agency's
decision not to prepare a supplemental impact statement "was not
'arbitrary or capricious,' it should not be set aside." 490
U.S. 360, 377 & n.23 (1989). In most contexts, federal courts
now review an agency's negative threshold determination under
the arbitrary and capricious standard. See Daniel R. Mandelker
et al., NEPA Law & Litigation § 8:7 (2020 ed.). Neither
Applegate nor DOR asks us to revisit our standard of review in
light of this federal development.
3
No. 2018AP1239.bh
record to determine whether the agency made a "reasonable
judgment" that no EIS is needed. Id. This court recognized,
however, that an agency need not undertake a preliminary
investigation for every single major agency action. We observed
that some alleged environmental challenges would be so "patently
trivial or frivolous" that an agency may reasonably conclude no
preliminary investigation is required to pass them over;
searching judicial review in that circumstance would be
inappropriate. Id. at 424. We explained that where it is clear
that an action will not significantly affect the quality of the
human environment, no bona fide challenge is made and an agency
may reasonably decide not to conduct any further investigation.
Id. at 425.
¶48 DOR has not challenged this framework here, and I
accept these basic principles. Nonetheless, it is worth
candidly observing that the preliminary investigation
requirement is a judicial creation, not a statutory mandate.
While the desire for courts to have something to work with is
understandable, and perhaps necessary, this judicially-imposed
preliminary procedure is a means to review compliance with
actual statutory commands, and should be understood in that
light.
¶49 This case raises the question of whether a bona fide
claim was made, thus requiring a preliminary investigation. In
my view, the majority's approach to this requirement is too
strict, and insufficiently attentive to the fact that we're a
judicially-created step removed from the statutory requirement
4
No. 2018AP1239.bh
itself. Again, WEPA requires an EIS for major actions
significantly impacting the environment, not a preliminary
investigation into whether an EIS is required.
¶50 This can be seen more clearly when understanding our
two points of comparison. A bona fide challenge must credibly
allege some difference between the baseline environmental
condition before the agency acts and the changed environmental
condition after the agency acts. Analyzing identical text in
the National Environmental Policy Act (NEPA), the Ninth Circuit
aptly explained: "Discretionary agency action that does not
alter the status quo does not require an EIS. In other words,
an EIS is not required in order to leave nature alone." Pit
River Tribe v. U.S. Forest Serv., 469 F.3d 768, 784 (9th Cir.
2006) (cleaned up). One highly regarded treatise elaborated on
the point this way:
In order to determine whether an action is
significant, an agency or a court must have a point of
comparison or "baseline." A new highway, for example,
brings noise and other intrusions into the surrounding
environment. If the environmental baseline is
unspoiled, the impact of the new highway on the
existing environmental baseline can be dramatic. An
example of this is a highway in a native forest. If
the environmental baseline is degraded, the impact of
a new highway will be less severe. An example of this
is a highway in an area substantially developed for
commercial and industrial uses.
Daniel R. Mandelker et al., NEPA Law & Litigation § 8:38 (2020
ed.). Put simply, a bona fide challenge is one that alleges
that the agency action caused some significant change from the
environmental baseline, not merely maintained that condition.
5
No. 2018AP1239.bh
If it were otherwise, even renumbering an administrative code
provision could be enough to trigger WEPA procedures.
¶51 Additionally, as a matter of consistency with the
statute, a bona fide challenge should also demonstrate that the
agency knew or should have known of the significant
environmental effect at the time it considered the major action.
Unless the agency is presented the information during the
rulemaking process, it may not learn of the alleged effect until
long after the rule has been promulgated. WEPA does not require
invalidation of already-promulgated rules based on information
about the environment that was not known, constructively or
otherwise, before the rule was adopted. Therefore, the bona
fide challenge requirement should demand credible allegations
that the agency knew or should have known of the particular and
potentially significant environmental effects alleged in the
challenger's complaint.
II. APPLIED HERE
¶52 In this case, Applegate's complaint references
documents found in the rulemaking record, but it nevertheless
falls short of stating a bona fide challenge. Even assuming DOR
knew of Applegate's allegations during the rulemaking process,
these allegations, as articulated in the majority's citation to
Applegate's complaint, do not rise to the level where DOR needed
to prepare an EIS or even investigate further.
¶53 In ¶206 of its complaint, Applegate points to the
difference between DOR's initially proposed rule and the rule
6
No. 2018AP1239.bh
DOR ultimately adopted, noting that the final version excluded
certain lands included in the proposed rule (but not the
original rule). This makes no reference to the baseline
environmental condition, only a proposed rule that was never in
effect.
¶54 In ¶207, Applegate alleges that "the exclusion and
removal of wetlands in agricultural easements" from the rule
"causes farmers to destroy sensitive wetlands." This also
compares the amended rule to the proposed rule and not to the
baseline environmental condition.
¶55 In ¶208, Applegate alleges that the prior (and
possibly current) version of Wis. Admin. Code § Tax 18.05(1) "is
causing" environmental harm. This merely alleges a baseline
environmental condition, without saying anything about the 2014
rule amendment's effect on that baseline condition.
¶56 In ¶209, Applegate again discusses the baseline
environmental condition without identifying a change to it,
stating that both the old and amended versions of the rule
"result in the further destruction, degradation and loss of
wetlands."
¶57 Finally, in ¶210, Applegate alleges that the
"exclusion and removal of wetlands conserved in the agricultural
easements from agricultural use value has and will continue to
have a significant effect." This paragraph seems to undercut
any challenge that the rule amendment caused a significant
change to the baseline environmental condition because it
alleges a continuous effect under both the old and amended
7
No. 2018AP1239.bh
versions of the rule. Again, no effort is made to show how the
2014 amendment caused a significant change in the preexisting
baseline condition.
¶58 These allegations at most support the proposition that
promulgating the old version of Wis. Admin Code § Tax 18.05(1)
might have had some significant effect on the environment. And
perhaps it did. But promulgation of the old version of § Tax
18.05 is not the challenged action; the 2014 amendment to that
rule is. The environmental condition under the old version of
§ Tax 18.05 is the baseline condition against which the 2014
amendment's effect must be compared. Nowhere does Applegate
explain how the 2014 amendment to § Tax 18.05 altered that
baseline environmental condition (or for that matter how DOR
should have evaluated such an effect). Therefore, I conclude
Applegate failed to state a bona fide WEPA challenge.4
4 A review of DOR's rulemaking record confirms that DOR
reasonably declined to conduct a preliminary investigation into
the environmental effect Applegate now alleges. Applegate
points us to two studies in the record detailing how the old
version of Wis. Admin. Code § Tax 18.05(1) caused property taxes
on agricultural wetlands to increase. The first, published on
April 11, 2000, explained that the taxation scheme of the former
§ Tax 18.05(1) incentivized farming rather than preservation of
wetlands. The second, prepared by Wisconsin Wetlands
Association, listed the percentage of wetlands assessed as
agricultural land in five counties, ranging from 38.27 percent
to 88.86 percent. From these, Applegate argues that § Tax
18.05(1)'s exclusion of certain lands from favorable tax
treatment available for other lands must significantly affect
the environment because it incentivizes farming of wetlands
rather than enrolling them in certain preservation programs.
But as with the allegations in Applegate's complaint, these
studies also fall short of stating a bona fide challenge because
they do not show that the agency action——the 2014 rule
amendment——caused any significant change from the environmental
baseline.
8
No. 2018AP1239.bh
III. CONCLUSION
¶59 I agree with much of the majority opinion. Its
conclusion that indirect environmental effects may trigger
WEPA's EIS requirement is a correct statement of law. However,
Applegate failed to assert a bona fide challenge because it did
not compare the effect of the previous version of the rule to
the amended rule. Therefore the rule amendment was not
promulgated in violation of WEPA.5
5While I need not address the remedy Applegate is entitled
to, I nonetheless harbor some skepticism of the majority's
decision to remand to the circuit court with directions to
remand to DOR to develop a reviewable record. The 2014
amendment to Wis. Admin. Code § Tax 18.05(1) was promulgated——
and its rulemaking record closed——more than six years ago. Our
statutes explain that once a rule is promulgated, "the exclusive
means of judicial review of the validity of a rule . . . shall
be by an action for declaratory judgment as to the validity of
the rule." Wis. Stat. § 227.40(1) (emphasis added). The
Uniform Declaratory Judgments Act defines the scope of our
declaratory power "to declare rights, status, and other legal
relations." Wis. Stat. § 806.04(1). It's perplexing,
therefore, that the majority does not issue a declaration, but
instead orders a stay and a remand to DOR. If there is a
justification for the majority's approach, it is not presented
in the court's opinion or in its citations to authority. So far
as I can tell, no court has done what the majority does here.
9
No. 2018AP1239.bh
It's also unclear what the majority thinks DOR will
accomplish on remand. Ordering development of a reviewable
record of a negative-EIS determination made more than six years
ago risks impermissible post hoc rationalization of agency
action. See Dept. of Homeland Sec. v. Regents of the Univ. of
Cal., 140 S. Ct. 1891, 1909 (2020) (noting that justifications
provided after the agency has acted "can be viewed only as
impermissible post hoc rationalizations and thus are not
properly before us"); see also Flung v. LIRC, 2017 WI 72, ¶105,
376 Wis. 2d 571, 898 N.W.2d 91 (A.W. Bradley, J., dissenting)
(referring to the rule against post hoc rationalization as
"well-established precedent on administrative agency review").
I suspect DOR will simply compile some relevant documents and
conclude no EIS was required using largely the reasoning
presented to us in briefing. If this is all WEPA requires, so
be it. But I find this an odd approach to ensuring an agency
made a reasonable determination that no EIS was required years
earlier.
10
No. 2018AP1239.bh
1