Larsen v. MUNZ CORP.

EICH, C.J.

(dissenting). The appellant, Robert Larsen, asks us to overturn the trial court's dismissal of his action against the Munz Construction Company and the Wisconsin Department of Administration. He acknowledges that he is pursuing a single "environmental" interest in this case: in his words, to "protect his view of the Capitol" from the yard of his lakeshore home. Specifically, he alleges in his complaint that, when completed, the office building now under construction on East Wilson Street by the Munz Corporation for eventual occupancy by the department will obstruct his view of "about one-half to two-thirds of the . . . columns supporting the Capitol dome . . .."He concedes that the action involves no other environmental concern.¹

The primary relief Larsen seeks is a ruling that the department is required to prepare an environmental impact statement (EIS) because its participation in the planning of the building — under a lease with option to purchase from Munz — fits the classification or "categorization" of actions set forth in its own rules as always requiring one.² As will be discussed in more detail below, an EIS — no matter what its content or outcome — would not necessarily require the department to alter its plans in any way. It is a procedural device, not a matter of substantive law; and it does not control the actions or decisions of state agencies.³

In any event, the department, after two preliminary environmental studies, determined that no EIS was required for its participation in the project, and the circuit court upheld that determination. On this appeal, however, the majority has concluded that because of what it sees as the department's failure to follow the specific requirements of its "pre-categorization" rules,⁴ it will pay no attention to the department's decision and will decide the matter itself. Doing so, the majority construes the applicable departmental rules in a manner resulting not only in reversal of the tried court's order, but, more importantly, in the creation of a precedent that I believe will not well serve the environment or the policies and purposes of the Wisconsin Environmental Policy Act (WEPA) in the future.

I, too, am troubled by the department's unexplained failure to follow the specific procedures it has set forth in its own rules for complying with WEPA. But it seems to me that, on the somewhat unusual facts of this case, the department has complied with both the letter and the spirit of the act and that its decision that WEPA did not require preparation of an EIS on those facts cannot be said to be irrational or unreasonable and thus was properly affirmed by the trial court.

The department determined that no EIS was needed for the project because, in the words of the Act itself, the building "would not significantly impact the human environment."⁵ And it made that determination at two points during the early planning and construction process for the new facility — first, after it had prepared a lengthy "Preliminary Environmental Assessment" of the Munz proposal and two others, and later, after it had prepared a more detailed "Environmental Assessment" of the Munz project alone⁶ — and had held public hearings and set aside time for receipt of comments from interested state agencies and members of the public.

It seems to me that two things flow from all this: First, that the department's determination that an EIS was not necessary was a de facto determination that it was not engaging in a "Type I" activity under its rule; and second, that the department could reasonably so conclude.

When a decision not to prepare an EIS is challenged, the court's basic task is to see "whether the agency . . . has complied with the letter and spirit of WEPA." Wis. Envtl. Decade v. Pub. Serv. Comm'n, 79 Wis. 2d 409, 419, 256 N.W.2d 149, 155 (1977) ("Decade I”). It is a question of reasonableness and good faith, and it looks less to the substance of the decision than to the agency's methods and procedures. Thus "the method by which an administrative agency chooses to comply with WEPA's mandate that it take environmental factors into account when undertaking its statutory duties should be affirmed if that method is a reasonable one in light of the purposes of WEPA and the agency's functions and duties." Wis. Envtl. Decade, Inc., v. DILHR, 104 Wis. 2d 640, 644-45, 312 N.W.2d 749, 751 (1981) (Decade III).

Decade III also tells us that we must defer to the agency's interpretation of WEPA requirements, and that we may not upset that interpretation "if there exists a rational basis for [the agency's] conclusion." Id., 104 Wis. 2d at 644, 312 N.W.2d at 751. The majority concludes that the Decade III deference rule is inapplicable here because the record does not indicate that the department followed the specific requirements of its own WEPA rules.

I agree that when an agency decides that an EIS is not necessary for a particular project, it must leave 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 action proposed. . .." Decade I, 79 Wis. 2d at 424-25, 256 N.W.2d at 158. That record, however, "need not follow any particular form," but need only "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, 256 N.W.2d at 158.

It is indeed unfortunate that the department did not pay more attention to its rules along the way. But the fact that it failed to place in the file a statement that it did not consider its participation in the project to constitute "Type I action" — or that it considered the action to be of the "Type II" or "Type III" variety — does not mean that the record in this regard is not "susceptible of meaningful evaluation" within the meaning of Decade I. Indeed, in City of New Richmond v. DNR, 145 Wis. 2d 535, 544-46, 428 N.W.2d 279, 283-84 (Ct. App. 1988), we upheld the adequacy of an agency's record of a negative EIS determination which was comprised primarily of an "Assessment" which appears to be much the same type of document as the department prepared in this case.

In addition, for an EIS to be required under its rule, the department must be engaged in planning, designing, contracting for and constructing a facility on land which it has not previously developed. I believe, as did the trial court, that it is neither irrational nor unreasonable to view that language as requiring the department to be the developer and builder, and excluding from the definition of "Type I Activity" a project in which the department's participation is limited to that of a lease/option holder participating in the design of the final structure.⁷ Nor, of course, was the project being developed on state land.

As a result, the rule of deference adopted by the supreme court in Decade III requires us to sustain the department's decision — whether or not we agree with it or consider it wise.

Beyond that, the department appears to have met the requirements of WEPA; and WEPA is, after all, the law the department's rules are designed to implement. The primary purpose of the act is to provide for environmentally-informed decisions in connection with state activities that may have a significant impact on the environment. A concomitant purpose of WEPA, of course, is to allow for comments from the public and other state agencies on the environmental issues associated with such activities. And, as noted above, the "bottom-line" test is one of reasonableness: did the agency's determination that an EIS was not necessary "follow from the results of [its] investigation in a manner consistent with the exercise of reasonable judgment . . .?" Decade I, 79 Wis. 2d at 425, 256 N.W.2d at 158.

In this case, the investigations undertaken by the department resulted in a thirty-six-page Preliminary Environmental Assessment and a subsequent forty-six-page Environmental Assessment. The latter document devotes several pages to a description and analysis of the effect of the project on Capitol views from across Lake Monona. And, considering Larsen's complaint and the affidavits he has filed in this case, the assessment appears to accurately describe the nature and extent of the "view obstruction" of which he complains.⁸

In this regard, it is important to keep in mind that WEPA requirements are "procedural in nature, [and do] not control agency decision-making." City of New Richmond, 145 Wis. 2d at 542, 428 N.W.2d at 282. WEPA does not mandate particular results or particular decisions in individual cases but simply exists to ensure that adverse environmental effects of a particular project are identified and evaluated during the planning stages. In simplest terms, the act does not prohibit unwise decisions, only uninformed ones. See Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350 (1989).⁹

Thus, while the department admittedly did not follow the Wis. Adm. Code sec. Adm. 60.03 procedures to the letter, it appears to have followed accepted WEPA procedures for determining whether an EIS is necessary, including the convening of public hearings. And because its conclusion that an EIS was not required under its rules was not irrational, but "was reasonable under the circumstances," the requirements of the act have been met. City of New Richmond, 145 Wis. 2d at 542, 428 N.W.2d at 282.

It is true that the partial obstruction of the base of the Capitol will diminish somewhat the view of the Capitol enjoyed by Larsen and several of his neighbors, and that is obviously a less-than-desirable result. And I, too, believe that state government should hold itself to a higher standard than private developers when preservation of the Capitol view is at stake. But we are a court of law and, as noted above, there is no claim in this case that the projected building size will violate the only existing law on the subject, the State Capitol View Preservation Act. In addition, as just discussed, the department appears to have followed the procedural mandates of WEPA. Whether either or both those laws are adequate or inadequate, wise or unwise, they govern not only the department's actions but this court's as well. If more is required, it is for the legislature, not this court, to declare.

Finally, I am concerned about the analysis undertaken in the majority opinion. It may well be one that is forced by the "typing" procedures in the department's rules; but I believe that such a process raises serious questions for future cases. In this case, of course, the "typing" analysis will result in the preparation of another assessment of the project's environmental impact. And while that is undoubtedly a welcome result in any case in which significant environmental interests are at stake, the underlying analysis, if relied on in the future, as it is in the majority opinion, to the exclusion of actual environmental studies of the project in question, can lead to far less desirable results.

By relying on a system of "typing" or "categorization" of various activities normally undertaken by the agency, and then keying the need for preparation of an EIS in a given case to whether the particular project fits the rule's description of a "type" of activity which always, sometimes, or practically never, requires one, the process de-emphasizes — indeed, it ignores — any actual environmental investigations undertaken by the agency in favor of simply "matching" the activity to a description in a preexisting administrative rule. I question whether adherence to such procedures will, in the long run, serve the environmental interests and policies established by WEPA.

The flaw in such an analysis is that it assumes that the purposes of WEPA are better served by looking only to whether the action fits a particular slot in a preexisting rule in determining whether an EIS is warranted, rather than by considering the conclusions and recommendations of actual environmental studies and assessments of the particular project. And although it reaches a result in this case that mandates a third environmental analysis — an EIS¹⁰ — for the project, it does so only by happenstance.

If, for example, the situation were only slightly different from the one presented here — if the classification slot into which the agency action appeared to fit indicated that no EIS was necessary, yet independent studies and assessments undertaken by the agency indicated that the action might well have a significant effect on the human environment — the analysis would never reach those studies and assessments; it would end with fitting the action to the predetermined category.¹¹

I fear that such an approach may lead future courts to similarly ignore actual studies and assessments suggesting the need for a full EIS and reach the opposite result through a nonspecific "pre-categorization" process as long as the activity, in the court's view, fits a "no-EIS-necessary" category in a generally-worded administrative rule. Given the interests at stake in state agency decisions of this type, I would prefer an analysis relying on actual studies and assessments of the project at hand, rather than one looking only to see whether a general description of agency's activity is round enough to fit a round hole in some preexisting section of the administrative code. It may be time to reevaluate the process.

In sum I disagree with the majority's analysis more than its result. For the reasons just stated, however, I would affirm Judge Jones's order.

1 Similarly, because the building will not reach a prohibited height under the State Capitol View Preservation Act, no issue of violation of that law is present in this case. To the extent Larsen complains about an elevator\mechanical "penthouse" on the building's roof, he is pursuing that claim in a separate action. A third action challenges the adequacy of the environmental assessment prepared by the department for the project. None of those issues are before us.

2 The majority opinion has explained the requirements of the Wisconsin Environmental Policy Act and discussed the facts underlying adoption of Wis. Adm. Code sec. Adm. 60.03 and those points need not be remade here.

3 Larsen also asks us to halt or reverse construction of the building — something we lack authority to do in this action, as the majority opinion indicates.

4 In brief, the rule classifies activities typically engaged in by the department into three categories. The first category, designated as "Type I Activities," is said to always require preparation of environmental impact statements. "Type II" activities may or may not require an EIS under the rule, depending upon their particular characteristics. For these activities, the rule contemplates preparation of a detailed "Environmental Assessment" to enable the department to determine whether an EIS is warranted in a particular case. The third category — "Type III" activities — are those in which an EIS is probably never necessary (although, again, the rule recognizes that, depending on the particular case, an EIS may be necessary; and where this appears to be so, it directs preparation of a Preliminary Environmental Assessment).

5 WEPA requires preparation of an environmental impact statement for major state agency actions "significantly affecting the quality of the human environment . . ..” Sec. l.ll(2)(c), Stats.

6 The Environmental Assessment was prepared after the trial court ruled that this was a "Type II" activity — one that may or may not require an EIS, depending on the results of an environmental assessment. Regardless of the impetus behind the preparation of the assessment, it is part and parcel of the department's decisionmaking process.

7 In hindsight, it is tempting to look back at the history of this enterprise and, based on the department's participation in its planning and design, conclude that because — in one view, at least — it has looked, walked and quacked like a "Type I" state construction project from the very start, it must always have been one. The fact remains, however, that when this project began, Munz — who, as a private entity, is not subject to any of the provisions of WEPA — agreed to build the building on its land in an overall size and format that would meet the department's space needs; and it agreed to "personalize" the building to a significant extent — doing so, I presume, on the strength of the state's agreement to lease the building for twenty years (with an option to pinchase).

Given that agreement, it seems to me only natural that the department would participate in the planning and interior design of the building to a substantial degree in order to assure that its general needs were met. And, again, it would not be irrational or unreasonable to conclude that such participation would not necessarily elevate the department to the status of "develop[er]" or "constructor]" within the meaning of the rule.

Nor does the department's subsequent exercise of the option to purchase necessarily change that conclusion. In the early planning and construction phases of the project — the time when, under the law, the EIS decision is to be made — the department was no more than a lessor of the property, albeit one with a purchase option. Surely it cannot be said that had the department waited as long as two or three — or five or ten — years to exercise the option, we could reasonably be asked to go back and order preparation of an EIS. The same result would ensue, I am sure, if only one year had elapsed. I see no difference here, where the department conditionally announced its intent to exercise the option some four or five months after entering into the agreement and formally exercised it some months later upon the legislature's passage of a state budget containing funds for that purpose. Thus, the fact that the department has since exercised its option to purchase seems to be of little consequence.

8 The document states at one point:

During the boat survey of the shoreline of the "impacted" shoreline property, it was determined that the new building will partially obstruct the view of the State Capitol from approximately 20 properties along the lakeshore. All of these properties will continue to have an unobstructed view of the Capitol dome. However, the view of the columns supporting the dome will be obstructed, to a greater or lesser degree, by the new building. The maximum obstruction, as viewed from approximately seven private residences and a small neighborhood park, will block the view of the lower 2/3 of the columns. The view obstruction will be particularly noticeable at night when the Capitol is lighted.

As to the hearing and record requirements of WEPA, I note that in connection with its preparation of the Environmental Assessment the department convened public hearings on the project and kept the "record" open for thirty days thereafter to receive further comment from the public and other state agencies. As a result, department officials were well-informed of Larsen's concerns and that those concerns were shared, to one degree or another, by nearly 300 other people who contacted the agency to express their opinions in the wake of the public hearings.

9 Indeed, cases tell us that once the agency has informed itself of the environmental consequences of the proposed action, "the Court may not interfere with the agency's discretion in choosing the action to be taken." City of Oak Creek v. Milwaukee Metropolitan Sewerage District, 576 F. Supp. 482, 488 (E.D. Wis. 1983). See also River Road Alliance, Inc., v. Corps of Engineers, 764 F.2d 445, 450 (7th Cir. 1985), cert. denied, 475 U.S. 1055 (1986), where the court recognized that the question on appeal is not whether the particular activity will affect the environment, or whether some or all members of the court would take a different action under the circumstances, but only whether the agency "exceeded the bounds of its decision-making authority" in concluding that the project would not significantly affect the environment.

10 I have indicated the extent to which the department's Preliminary Environmental Impact Assessment and its Environmental Assessment have covered the subject of obstructions to the Capitol view from across Lake Monona. Because in the preparation of a final EIS the department may, under its rules, engage in a "scoping process" to narrow the issues in the statement so as to "eliminate from detailed study [those] which are not significant or which have been covered by prior environmental review," Wis. Adm. Code sec. Adm. 60.05, it is doubtful that, given the prior review undertaken by the department, its discussion of the "view" issue in the EIS will add significantly to the analyses contained in the prior documents.

11 This case furnishes an example. The majority opinion correctly emphasizes that the "declared . . . purpose" of the department's rules — and WEPA itself — is "to ensure . . . consideration of . . . environmental and economic effects of department actions" and to "identif[y]. . . major actions significantly affecting the quality of the human environment and the need for an environmental impact statement. . .." (Maj. op. at 758-59.) Yet the issue is decided in this case without giving any consideration to the two particularized environmental studies that were prepared for the project, in favor of ascertaining only whether, in the view of an appellate court, the department's participation in the project fit the preexisting, nonspecific descriptions found in the administrative code.