Kohler Co. v. DNR

2024 WI App 2COURT OF APPEALS OF WISCONSIN
PUBLISHED OPINION
Case No.: 2021AP1187
Complete Title of Case:
KOHLER CO.,
PETITIONER-APPELLANT,
V.
WISCONSIN DEPARTMENT OF NATURAL RESOURCES,
RESPONDENT-RESPONDENT,
CLAUDIA BRICKS AND FRIENDS OF THE BLACK RIVER FOREST,
INTERVENORS-RESPONDENTS.
Opinion Filed: December 5, 2023
Submitted on Briefs: March 15, 2022
Oral Argument:
JUDGES: Stark, P.J., Hruz and Gill, JJ.
Concurred:
Dissented:
Appellant
ATTORNEYS: On behalf of the petitioner-appellant, the cause was submitted on the
briefs of Deborah C. Tomczyk, Jessica Hutson Polakowski and Monica
A. Mark of Reinhart Boerner Van Deuren s.c., Madison.
Respondent
ATTORNEYS: On behalf of the respondent-respondent, the cause was submitted on
the brief of Joshua L. Kaul, attorney general, and Gabe Johnson-Karp,
assistant attorney general.
On behalf of the intervenors-respondents, the cause was submitted on
the brief of Christa O. Westerberg and Leslie A. Freehill of Pines Bach
LLP, Madison.
2
2024 WI App 2COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
December 5, 2023
A party may file with the Supreme Court a
Samuel A. Christensen petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10 and
RULE 809.62.
Appeal No. 2021AP1187 Cir. Ct. No. 2019CV199
STATE OF WISCONSIN IN COURT OF APPEALS
KOHLER CO.,
PETITIONER-APPELLANT,
V.
WISCONSIN DEPARTMENT OF NATURAL RESOURCES,
RESPONDENT-RESPONDENT,
CLAUDIA BRICKS AND FRIENDS OF THE BLACK RIVER FOREST,
INTERVENORS-RESPONDENTS.
APPEAL from an order of the circuit court for Sheboygan County:
L. EDWARD STENGEL, Judge. Affirmed.
Before Stark, P.J., Hruz and Gill, JJ.
¶1 GILL, J. In anticipation of building a new golf course, Kohler
Company sought approval from the Department of Natural Resources (DNR) for a
No. 2021AP1187
“wetland individual permit” to discharge dredged material or fill material into 3.69
acres of wetlands. Following a lengthy process, the DNR granted Kohler’s permit
request. Claudia Bricks and Friends of the Black River Forest (collectively, the
FBRF) then filed a petition for a contested case hearing, which the DNR granted.
Following the hearing, an administrative law judge (ALJ) issued a decision and
order reversing the DNR’s issuance of the permit, finding, among other things, that
the DNR did not have enough information at the time it issued the permit to
adequately analyze the “significant adverse impact[s]” to wetland functional values
(WFVs), water quality, or “other significant adverse environmental consequences.”
See WIS. STAT. § 281.36(3n)(c)3. (2021-22).1 Thereafter, the DNR adopted the
ALJ’s decision as its own final decision, and Kohler petitioned for judicial review.
The circuit court affirmed the ALJ’s decision.
¶2 On appeal, Kohler argues that the ALJ: (1) erred when he considered
the entire proposed project when assessing the permit application, including
wetlands and unregulated activities not related to the specific 3.69 acres of wetlands
to be filled; (2) incorrectly found that the DNR did not have enough information at
the time it issued the permit; (3) made findings that were unsupported by substantial
evidence (namely, that the proposed project would cause cumulative impacts and
that nutrients and pesticides would reach the groundwater and wetlands and would
cause significant adverse impacts); (4) improperly reversed the DNR’s decision
instead of modifying the permit; and (5) erred when he required the DNR and
Kohler to make “quantitative findings” with regard to secondary impacts.
1
All references to the Wisconsin Statutes are to the 2021-22 version unless otherwise
noted. WISCONSIN STAT. § 281.36 has been amended numerous times since Kohler’s permit
application process began in February 2017. See 2017 Wis. Act 21; 2017 Wis. Act 58; 2017 Wis.
Act 59; 2017 Wis. Act 115; 2017 Wis. Act 118; 2017 Wis. Act 183; 2019 Wis. Act 59. None of
the amendments are relevant to the issues on appeal.
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¶3 We first conclude that WIS. STAT. § 281.36(3n)(b) and (c) require the
DNR to consider the entirety of a “proposed project” when addressing a wetland
individual permit, not just the wetlands within a proposed project. By its plain
meaning, § 281.36(3n)(c) instructs the DNR to determine whether a proposed
project will result in “significant adverse impact[s]” to WFVs and water quality, and
whether the proposed project will result in “other significant adverse environmental
consequences.” As we will explain, this review necessarily requires the DNR to
consider impacts beyond the physical footprint of directly impacted wetlands. For
example, the DNR must consider “[p]otential secondary impacts” to WFVs and the
“net positive or negative environmental impact of the proposed project.” See
§ 281.36(3n)(b)3., 5. This conclusion is affirmed by WIS. ADMIN. CODE § NR
103.03(1) (July 2015),2 which defines WFVs to include the value of habitats for
birds and “scenic beauty.”
¶4 Second, we conclude that the ALJ’s decision that the DNR did not
have enough information at the time it issued the permit to adequately analyze the
“significant adverse impact[s]” to WFVs, water quality, or “other significant
adverse environmental consequences” is supported by substantial evidence.
Furthermore, the ALJ’s decision did not “depend[]” on a finding that significant
cumulative impacts to WFVs would occur if the project was approved and
completed. See WIS. STAT. § 227.57(6). Specifically, the ALJ’s ultimate
conclusion that the DNR did not have the information necessary to make a WIS.
STAT. § 281.36(3n)(c)3. determination did not depend on the finding that significant
cumulative impacts to WFVs could result from the proposed project’s construction.
Additionally, we conclude that there was substantial evidence to support the ALJ’s
2
All references to WIS. ADMIN. CODE ch. NR 103 are to the July 2015 register unless
otherwise noted.
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No. 2021AP1187
finding that the DNR lacked information to determine whether nutrients and
pesticides would reach the groundwater and wetlands, and whether the nutrients and
pesticides would cause significant adverse impacts.
¶5 We further conclude that the ALJ did not err by reversing the DNR’s
decision without first modifying the permit because Kohler never raised that issue
with the ALJ and therefore forfeited any argument that the ALJ should have
modified the permit. Lastly, we determine that the ALJ did not require the DNR or
Kohler to make “quantitative findings” with regard to secondary impacts. We
therefore affirm the circuit court’s order affirming the ALJ’s decision reversing the
DNR’s issuance of the wetland individual permit to Kohler.
BACKGROUND
I. The property
¶6 Kohler owns a 247-acre property in the City of Sheboygan.3 The
undeveloped property is bordered by Lake Michigan to the east, the Black River to
the west, and the Kohler-Andrae State Park to the south, and it is currently zoned as
suburban residential.
3
The property was formerly in the Town of Wilson, but it was annexed to the City of
Sheboygan in August 2017.
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No. 2021AP1187
¶7 The property includes eighty-one wetlands totaling approximately
forty-seven acres,4 which the DNR categorized into four wetland types5: floodplain
forest wetlands (44.167 acres), interdunal wetlands (0.4886 acres), ephemeral/relic
ridge and swale wetlands (hereinafter, “relic ridge and swale wetlands”) (0.104
acres), and Great Lakes ridge and swale wetlands (2.686 acres).
¶8 According to the wetland individual permit issued to Kohler, the
interdunal wetlands and both types of ridge and swale wetlands on the property “are
4
The ALJ stated in his decision that there are 44.91 acres of wetlands on the project site.
As noted in the ALJ’s decision, however, “[s]ome of the wetland assessment documents assess the
wetlands on the entire project site, not just the Kohler property. Thus[,] the acreage numbers for
the wetlands are not consistent throughout the record.” For example, the DNR stated in the final
Environmental Impact Statement (EIS) that “[t]here are 67 Great Lakes Ridge and Swale wetlands
delineated on the site, totaling approximately 5.24 acres.” However, the DNR’s Wisconsin
Wetland Rapid Assessment Methodology (WRAM) documents for the Great Lakes ridge and swale
wetlands stated that there are 2.686 acres.
On appeal, neither the FBRF nor the DNR cite how many total acres of wetlands exist on
the project site. Kohler, on the other hand, states in its brief-in-chief that there are 124.12 acres of
wetlands on the project site. After searching the record, it appears that this number includes acreage
belonging to the state park that is not part of the project site.
Based on our review of the record, including the initially issued permit, and because no
party previously challenged the total acreage calculation in the DNR’s WRAM documents, we will
use the approximate forty-seven-acre figure and the subsequent individual calculations for each
wetland found in the WRAM documents. Furthermore, because we use the figures from both
Kohler’s 247-acre property and the approximate acreage of land from the Kohler-Andrae State
Park, we will refer to both collectively as “the property.”
5
Similar to the total acreage of wetlands on the property, the types of wetlands on the
property have been characterized differently. For example, Dr. Quentin Carpenter—a senior
lecturer (emeritus) at the University of Wisconsin-Madison and a witness for the FBRF—wrote in
his prefiled testimony that there are three types of wetlands on the property: ridge and swale
wetlands; interdunal wetlands; and forested seep wetlands. Likewise, Dr. John Jansen—a senior
geophysicist and hydrogeologist at Collier Consulting and a witness for the FBRF—wrote in his
prefiled testimony that the property contains: Great Lakes ridge and swale wetlands; Great Lakes
interdunal wetlands; and a “wetland complex with alder thicket, southern sedge meadow, seepage
slope and northern hardwood swamp.” The final EIS identified the wetlands as Jansen identified
them. Like the acreage discrepancies, we will rely on the DNR’s wetland characterizations
contained in the WRAM documents, as no party disputes these characterizations on appeal. We
also note that most of the testimony at the contested hearing referred to the wetland types in the
manner we have in the body of this opinion.
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No. 2021AP1187
considered high to exceptional quality and globally rare.” Similarly, the DNR found
that the floodplain forest wetlands on the property are “high quality and rare in the
region because of the loss of ash trees and increase of invasive species.” In addition
to the wetlands, the DNR stated that the property “is almost entirely forested with
mature trees and has not been logged in over 150 years.”
¶9 The property contains three separate aquifers: a shallow sand aquifer,
a Silurian dolomite aquifer, and a deep Cambian-Ordovician aquifer. According to
the final EIS, all of the wetlands on the site are “directly connected” to the shallow
sand aquifer, which has “a depth to groundwater” level “of only a few feet.” The
Silurian dolomite aquifer is approximately 120 feet below the ground surface but it
“is typically under artesian conditions with water levels well above the top of the
aquifer and, in many instances, at or above the ground surface.” The deep Cambian-
Ordovician aquifer is approximately 750 to 950 feet below the ground surface.
¶10 According to the final EIS, all of the wetlands “are hydrologically
connected to Lake Michigan.” Furthermore, the interdunal wetlands and both types
of ridge and swale wetlands “are dependent on groundwater for recharge and
maintenance of water levels and water quality.” Conversely, the floodplain forest
wetlands “are dependent on both groundwater and surface water runoff to maintain
water levels and determine water quality.”
II. The proposed project
¶11 Kohler proposes to construct and operate an 8,000-yard, eighteen-hole
golf course on the property. Kohler’s stated goal for this project is to build a world-
class golf course that is rated in the top fifty golf courses in the world and has the
potential to host major championship golf events.
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¶12 All of the parties on appeal agree that the proposed project would
completely fill 3.69 acres of wetlands, specifically: 0.1 acre of relic ridge and swale
wetlands, 1.36 acres of Great Lakes ridge and swale wetlands, and 2.23 acres of
forested floodplain wetlands. As part of the project, Kohler would clear
approximately 100 to 120 acres of forested land cover in order to build, among other
things, fairways, greens, and tees. Much of the disturbed area would be replaced
with “turfgrass,” specifically “Creeping Bentgrass,” a type of grass commonly used
on golf courses.
III. Procedural history
¶13 As discussed in more detail below, Kohler applied for, and received,
a wetland individual permit to fill the 3.69 acres of wetlands needed to construct the
golf course. The FBRF subsequently filed a petition for administrative review,
which the DNR granted. On review, the ALJ reversed the DNR’s decision to grant
Kohler the permit. Kohler petitioned for judicial review, and the circuit court
affirmed the ALJ’s decision to reverse the issuance of the permit. Kohler now
appeals.
DISCUSSION
¶14 “When an appeal is taken from a circuit court order reviewing an
agency decision, we review the decision of the agency, not the circuit court.” Hilton
ex rel. Pages Homeowners’ Ass’n v. DNR, 2006 WI 84, ¶15, 293 Wis. 2d 1, 717
N.W.2d 166. In this case, the DNR did not petition for judicial review of the ALJ’s
decision and therefore adopted the decision as its own pursuant to WIS. STAT.
§ 227.46(3)(a), and WIS. ADMIN. CODE § NR 2.155(1) (Feb. 2019).6 See also
6
All references to the WIS. ADMIN. CODE ch. NR 2 are to the February 2019 register
unless otherwise noted.
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No. 2021AP1187
Hilton, 293 Wis. 2d 1, ¶14; Meteor Timber, LLC v. DHA, 2022 WI App 5, ¶20,
400 Wis. 2d 451, 969 N.W.2d 746 (2021), review denied (WI Apr. 13, 2022)
(No. 2020AP1869). “Accordingly, we review the ALJ’s decision as the [DNR’s]
final decision.” See Meteor Timber, 400 Wis. 2d 451, ¶20.
¶15 WISCONSIN STAT. § 227.57 establishes the procedure for judicial
review of agency decisions. “Unless the court finds a ground for setting aside,
modifying, remanding or ordering agency action or ancillary relief under a specified
provision of this section, it shall affirm the agency’s action.” Sec. 227.57(2).
¶16 Our review of an agency’s factual findings is limited. Under WIS.
STAT. § 227.57(6),
[i]f [an] agency’s action depends on any fact found by the
agency in a contested case proceeding, the court shall not
substitute its judgment for that of the agency as to the weight
of the evidence on any disputed finding of fact. The court
shall, however, set aside agency action or remand the case to
the agency if it finds that the agency’s action depends on any
finding of fact that is not supported by substantial evidence
in the record.
“Substantial evidence does not mean a preponderance of the evidence.” Meteor
Timber, 400 Wis. 2d 451, ¶21 (citation omitted). Instead, “[a]n agency’s findings
are supported by substantial evidence if a reasonable person could arrive at the same
conclusion as the agency.” Clean Wis., Inc. v. PSC, 2005 WI 93, ¶46, 282 Wis. 2d
250, 700 N.W.2d 768.
¶17 “If we conclude ‘that the agency has erroneously interpreted a
provision of law and a correct interpretation compels a particular action,’ we will
‘set aside or modify the agency action’ or ‘remand the case to the agency for further
action under a correct interpretation of the provision of law.’” Town of Ledgeview
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v. Livestock Facility Siting Rev. Bd., 2022 WI App 58, ¶8, 405 Wis. 2d 269, 983
N.W.2d 685 (citing WIS. STAT. § 227.57(5)). “When reviewing questions of law
decided by an agency, including statutory interpretation, our review is de novo.”7
DOR v. Microsoft Corp., 2019 WI App 62, ¶13, 389 Wis. 2d 350, 936 N.W.2d 160(citing Tetra Tech EC, Inc. v. DOR, 2018 WI 75, ¶84, 382 Wis. 2d 496, 914
N.W.2d 21); § 227.57(11) (“Upon review of an agency action or decision, the court
shall accord no deference to the agency’s interpretation of law.”). Pursuant to
§ 227.57(11), we accord no deference to an agency’s interpretation of law.
However, “due weight shall be accorded [to] the experience, technical competence,
and specialized knowledge of the agency involved.” Sec. 227.57(10); see also Tetra
Tech, 382 Wis. 2d 496, ¶78 (“‘Due weight’ is a matter of persuasion, not
deference.”).
7
“Until recently, we also deferred to administrative agencies’ conclusions of law in many
circumstances.” Wisconsin Prop. Tax Consultants, Inc. v. DOR, 2022 WI 51, ¶8, 402 Wis. 2d
653, 976 N.W.2d 482. However, in Tetra Tech EC, Inc. v. DOR, 2018 WI 75, 382 Wis. 2d 496,
914 N.W.2d 21, our supreme court ended that practice, and the legislature has since codified the
new approach under WIS. STAT. § 227.57(11). Wisconsin Prop. Tax Consultants, 402 Wis. 2d
653, ¶8.
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No. 2021AP1187
I. Wetland individual permit
A. Wetland individual permit process
¶18 The DNR is required to issue a permit before an individual “may
discharge dredged material or fill material into a wetland.”8 WIS. STAT.
8
Kohler submitted supplemental authority pursuant to WIS. STAT. RULE 809.19(10),
citing the recent United States Supreme Court decision in Sackett v. EPA, 598 U.S. 651 (2023).
According to Kohler, “federal and state laws regulating wetlands are inextricably intertwined,”
Wisconsin “has been delegated authority to regulate ‘waters of the United States,’” and “[b]oth the
text of the underlying [wetland individual permit] and the final decision of the [ALJ] … confirm
that such permit was granted, not just pursuant to Wisconsin [law], but also pursuant to the [Clean
Water Act (CWA)].” We interpret Kohler’s contention to be that Sackett dictates reversal of the
ALJ’s decision because the wetlands on Kohler’s proposed golf course site are not subject to the
CWA and, therefore, cannot be regulated as wetlands under Wisconsin law.
It is true that Sackett altered the analysis for defining a wetland subject to the CWA.
Sackett, 598 U.S. at 678-79; see also 33 U.S.C. § 1362(7) (prohibiting the discharge of pollutants
into “the waters of the United States”). Kohler’s argument fails to acknowledge, however, that
Wisconsin law is not limited to regulating “waters of the United States.” Cf. Sackett, 598 U.S. 686(Thomas, J., concurring) (federal authority “over certain navigable waters is granted and limited by
the Commerce Clause”).
In Wisconsin, the legislature delegated to the DNR “general supervision and control over
the waters of the state.” WIS. STAT. § 281.12(1). The “waters of the state” include wetlands. A
“wetland” is “an area where water is at, near, or above the land surface long enough to be capable
of supporting aquatic or hydrophytic vegetation and which has soils indicative of wet conditions.”
WIS. STAT. §§ 23.32(1), 281.01(21). Importantly, WIS. STAT. § 281.36(4n)(c) provides that a
wetland individual permit does “not apply to any discharge into a nonfederal wetland that occurs
outside an urban area and to which” certain requirements apply, including that “[t]he discharge
does not affect a rare and high quality wetland.” (Emphasis added.) A “nonfederal wetland”
“means a wetland that is not subject to federal jurisdiction under 33 U.S.C. 1344.”
Sec. 281.36(1)(br); Sackett, 598 U.S. at 675 (explaining that § 1344 is part of the CWA). “A person
who proposes a project that may affect a wetland [under one of the exceptions to a wetland
individual permit] shall notify the [DNR] no fewer than 15 working days before initiating the
project,” and submit one of two things “to show that the wetland … is eligible for”
exemption: (1) “[a] statement issued by a professional who has investigated the wetland and who
is qualified to give such an opinion”; or (2) “[a] wetland delineation prepared by a qualified
professional showing the exact location and boundaries of the wetland.” Sec. 281.36(4n)(e)1.
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§ 281.36(3b)(b). As relevant here, the DNR may issue a “wetland individual
permit”9 only once it determines that “[t]he proposed project will not result in
significant adverse impact to [WFVs], in significant adverse impact to water quality,
or in other significant adverse environmental consequences.”10 WIS. STAT.
§ 281.36(3n)(c)3. WFVs are identified as:
(a) Storm and flood water storage and retention and the
moderation of water level fluctuation extremes;
(b) Hydrologic functions including the maintenance of dry
season streamflow, the discharge of groundwater to a
wetland, the recharge of groundwater from a wetland to
another area and the flow of groundwater through a
wetland;
(c) Filtration or storage of sediments, nutrients or toxic
substances that would otherwise adversely impact the
quality of other waters of the state;
(d) Shoreline protection against erosion through the
dissipation of wave energy and water velocity and
anchoring of sediments;
(e) Habitat for aquatic organisms in the food web including,
but not limited to fish, crustaceans, mollusks, insects,
annelids, planktonic organisms and the plants and
Here, even assuming that the affected wetlands on Kohler’s property are nonfederal under
Sackett’s analysis of the CWA (meaning the wetlands meet the definition of nonfederal wetlands
under WIS. STAT. § 281.36(1)(br)), the wetlands are not subject to any exemptions to a wetland
individual permit. Kohler did not comply with the notification requirements in § 281.36(4n)(e)1.,
and, even so, Kohler would be unable to demonstrate that the proposed discharge on its property
will “not affect a rare and high quality wetland.” See § 281.36(4n)(c). As explained, it is
undisputed that the wetlands on the property are “rare and high quality.” Kohler was therefore still
required to obtain a wetland individual permit, and Sackett is inapplicable to this case.
9
The DNR may also issue “wetland general permits,” which are not at issue in this appeal.
See WIS. STAT. § 281.36(3g). As such, we will refer to a “wetland individual permit” as a “permit”
throughout this opinion when appropriate.
10
As we have done previously, we occasionally refer to the three considerations under
WIS. STAT. § 281.36(3n)(c)3. collectively as “significant adverse environmental impacts.” See
Meteor Timber, LLC v. DHA, 2022 WI App 5, ¶31 n.6, 400 Wis. 2d 451, 969 N.W.2d 746 (2021),
review denied (WI Apr. 13, 2022) (No. 2020AP1869).
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No. 2021AP1187
animals upon which these aquatic organisms feed and
depend upon for their needs in all life stages;
(f) Habitat for resident and transient wildlife species,
including mammals, birds, reptiles and amphibians for
breeding, resting, nesting, escape cover, travel corridors
and food; and
(g) Recreational, cultural, educational, scientific and natural
scenic beauty values and uses.
WIS. ADMIN CODE § NR 103.03(1)(a)-(g); see also Meteor Timber, 400 Wis. 2d
451, ¶31 n.6. In evaluating the impacts to WFVs under § 281.36(3n)(c)3., the DNR
shall consider:
1. The direct impacts of the proposed project to [WFVs].
2. The cumulative impacts attributable to the proposed
project that may occur to [WFVs] based on past impacts
or reasonably anticipated impacts caused by similar
projects in the area affected by the project.
3. Potential secondary impacts of the proposed project to
[WFVs].
4. The impact on functional values resulting from the
mitigation that is required under [§ 281.36(3r)].
5. The net positive or negative environmental impact of the
proposed project.
Sec. 281.36(3n)(b).
¶19 As relevant to this appeal, after the DNR issues a decision on an
application for a wetland individual permit, “[a]ny interested person may file a
petition with the [DNR] for administrative review.” See WIS. STAT.
§ 281.36(3q)(b). If the DNR grants the petition for administrative review, it shall
refer the matter to the division of hearings and appeals, and the hearing shall be
treated as a contested case under WIS. STAT. ch. 227. Sec. 281.36(3q)(f)4., (g)1.
When a party challenges the DNR’s initial granting of a permit, it has the burden to
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No. 2021AP1187
demonstrate by a preponderance of the evidence that the DNR erred in its decision.
See § 281.36(3q)(g)5.; WIS. ADMIN. CODE § HA 1.17(2) (June 2023).
B. Kohler’s wetland individual permit process
¶20 In 2014, Kohler began discussing the idea of developing a golf course
on the property. Prior to the permit application process, Kohler submitted an
Environmental Impact Report (EIR) to the DNR in April 2015, the DNR prepared
a draft of the EIS, and the DNR conducted a public hearing on the draft in July 2016.
In February 2017, the DNR and Kohler began the actual application process and
held a pre-application meeting as required by WIS. STAT. § 281.36(3m)(a).
¶21 In March 2017, Kohler filed a permit application with the DNR
pursuant to WIS. STAT. § 281.36. The DNR determined that the application was
incomplete and requested additional information from Kohler, including a forest
management plan, a vegetative buffer planting plan, a grading plan, an erosion
control and stormwater management plan, a nutrient management plan, a pesticide
management plan, and a water table map.
¶22 In January 2018, the DNR granted Kohler’s application and issued a
wetland individual permit.11 In the permit, the DNR identified all WFVs associated
with the project site:
11
In addition to a wetland individual permit, the DNR stated in the final EIS that in order
to get full approval for the project, Kohler will need to receive six other permits and/or approvals
from the DNR relating to: shore protection, endangered and threatened species protection,
stormwater discharge, high-capacity well permits, conversion of Land and Water Conservation
Fund Act (LAWCON) lands, and potential tribal consultation.
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No. 2021AP1187
a. Floristic integrity rated high to exceptional with the plant
community integrity very high to exceptional with little
to no existing stressors, rare plant community, and low
level of invasive species present. The ridge and swale
type of wetland is imperiled in the state because of its
rarity. Native species generally dominate the swales
with a low percent cover of invasive species present.…
b. Human use values rated as exceptional due to the current
use of property for trails and potential elsewhere.
c. Wildlife habitat rated exceptional because of the unique
habitat for rare species and large block of high quality,
diverse wetland and contiguous habitat.
d. Groundwater processes rated as high due to it being
dependent on local groundwater fluctuations; intact
recharge and discharge functions which have positive
impacts on local groundwater and surface water quality.
e. Fish and aquatic life habitat rated as high because it
provides high value for amphibian use.
f. Water quali[t]y protection rated as low due to the
isolated nature of the wetlands.
g. Shoreline protection is rated high in the forested
floodplain wetland complex due to the dense vegetative
cover along the banks of the Black River providing
significant shoreline protection functions.
h. Flood and stormwater support and shoreline protection
are rated as low in the ridge and swale complex due to
[their] isolated nature, and provide[] limited flood and
stormwater storage functions. Flood and stormwater
storage are rated as medium in the floodplain forest
Outside of the DNR permitting process, the DNR stated in the final EIS that Kohler will
need permits and/or approval from other state and federal governing bodies in order to build the
proposed golf course, including from: the U.S. Army Corps of Engineers (relating to the CWA);
the National Park Service (relating to LAWCON); the U.S. Fish and Wildlife Service (relating to
the Federal Endangered Species Act and the Migratory Bird Treaty Act); the Federal Emergency
Management Agency (relating to a conditional letter of map revision and letter of map revision);
the Wisconsin State Historic Preservation Office (relating to an archaeologic consultation);
Sheboygan County (relating to a shoreland-floodplain conditional use permit, sanitary permit,
shoreland-wetland rezoning, erosion control permit, and county cutting notice); and the City of
Sheboygan (relating to a conditional use permit, stormwater permit, erosion control permit,
building permits, and architectural review board approval).
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No. 2021AP1187
because this wetland type provides moderate flood and
stormwater storage functions.
¶23 The DNR stated in the permit that 3.69 acres of wetlands would be
permanently lost, along with any WFVs associated with those wetlands.
Particularly, the DNR concluded that the ridge and swale wetlands and interdunal
wetlands “are ranked as S1 to S2, which means the communities are considered
imperiled in Wisconsin and globally due to a restricted range and few populations
or occurrences. This loss is expected to be irreversible and has high significance.”
¶24 In addition to WFVs associated with the 3.69 acres of wetlands that
would be permanently lost, the DNR concluded that secondary impacts to WFVs
“may affect 4.79 acres of wetland not covered by discharged material, and 0.03
acres of temporary wetland impact.” Specifically, the DNR stated that possible
secondary impacts to WFVs related to the 4.79 acres included “increased runoff of
nutrients, herbicides, and pesticides, and foot and cart traffic in the remaining
wetland complex”; “[p]ermanent alteration to wetland hydrology (change in grade
and removal of trees); decrease in habitat from increased invasive species, nutrient
loading, sediment deposition, potential disruption of wildlife use (breeding, nesting)
and movement through operation of the golf course”; and “[d]ecrease in wooded
cover converted to managed turf grass.” According to the permit, increased foot
and cart traffic, as well as runoff, would be “likely to provide a conduit for invasive
species establishment.” The DNR also noted that there could be secondary impacts
to WFVs due to a “well that could draw down the water table.”
¶25 Like the direct impacts to WFVs, the DNR recognized that the
secondary impacts to WFVs were “expected to be permanent and irreversible and
the significance of those impacts is high. Secondary impacts to [WFVs] are not
expected to be entirely offset under the proposed project.”
15
No. 2021AP1187
¶26 The DNR also considered cumulative impacts to WFVs, and it
determined that “significant cumulative impacts” might occur. Cumulative impacts
included the fact that approving a wetland individual permit for “an exceptional
quality ridge and swale complex, a globally rare community,” could “lead to
increased applications to fill rare, sensitive, and valuable wetland plant
communities” as well as“[t]he potential for additional development of the site and
further cutting of the wooded community.”
¶27 The permit also contained thirty-eight conditions that Kohler was
required to comply with during and after construction, including the following:
11. Construction shall be accomplished in such a manner as
to minimize erosion and siltation into surface waters.
Erosion control measures (such as silt fence and straw
bales) must meet or exceed the technical standards of
[WIS. ADMIN. CODE] ch. NR 151 [(July 2018)12].…
….
13. All equipment used for the project including but not
limited to tracked vehicles, barges, boats, hoses, sheet
pile and pumps shall be de-contaminated for invasive
and exotic viruses and species prior to use and after use.
….
19. You shall conduct a post construction wetland boundary
survey to document the wetland impacts. You shall
develop a wetland restoration plan for [DNR] review and
approval for any wetland impacts outside of the
authorized fill areas[.] The wetland restoration plan shall
include, but is not limited to, measurable performance
standards and a maintenance and monitoring plan of no
less than five years.
20. You shall hire Independent Environmental Monitors
(IEMs) approved by the [DNR]. The scope of work for
12
All references to the WIS. ADMIN. CODE ch. NR 151 are to the July 2018 register unless
otherwise noted.
16
No. 2021AP1187
the IEMs will be developed jointly with [Kohler and the
DNR].
….
22. Follow Best Management Practices [(BMPs)] for pest
management and the Integrated Pest Management plan
submitted to the [DNR] on October 27, 2017. Within 25
feet of surface water or wetland boundaries …[,] use
pesticides approved for aquatic use by [federal agencies]
and minimize drift. In areas with a shallow groundwater
aquifer[,] use chemicals that have a shorter half-life or
that will not persist in aquatic environments where
practicable.…
23. The Nutrient Management Plan shall follow [WIS.
ADMIN. CODE ch.] NR 151 and Technical Standard 1100
for application timing and as described in the Integrated
Golf Course Management Plan [(IGCMP)] submitted to
the [DNR] on October 27, 2017.…
….
25. Infiltration strips shall be installed and maintained
according to the Stormwater Management Plan
submitted with the application and dated December 7,
2016.
….
37. During any spectator events at the golf course, take
practical measures to avoid impacts to remaining
wetlands on the site.
C. The FBRF’s petition for administrative review and the ALJ’s decision
¶28 In response to the DNR granting Kohler’s permit request, the FBRF
filed a petition for administrative review under WIS. STAT. § 281.36(3q)(b) and
requested a stay of discharge pending the administrative review.
¶29 Prior to the administrative hearing, the parties narrowed the issues that
are relevant to this appeal to: (1) whether the permit satisfied the standard set forth
in WIS. STAT. § 281.36(3n)(c)3.; and (2) whether the DNR had sufficient
information to consider that standard.
17
No. 2021AP1187
¶30 Following the hearing and briefing from the parties, the ALJ reversed
the DNR’s decision to grant the permit. The ALJ concluded that the FBRF “carried
their burden of proof to show that the [DNR] did not have sufficient evidence to
support its determination” under WIS. STAT. § 281.36(3n)(c)3. That is, the DNR
did not have sufficient evidence to support its finding that the “proposed project”
would not result in significant adverse environmental impacts. See id. In reaching
this conclusion, the ALJ defined the “proposed project” under § 281.36(3n)(c)3. as
“the construction and operation of the proposed golf course.”13
¶31 Regarding secondary impacts to WFVs, the ALJ found that “there
[were] no conditions in the permit addressing the adverse impacts to wildlife and
stopover habitat resulting from the construction activities.” Accordingly, the ALJ
held that the DNR’s “determination that the proposed project w[ould] not result in
significant adverse impacts to [WFVs] cannot apply to the secondary impacts
resulting from the tree clearing, grading, and soil conversion activities.”
¶32 With regard to water quality, the ALJ found that “[i]t is undisputed
that the introduction of nitrates, phosphorus, pesticides, oil, grease, and other
contaminants into the groundwater and wetlands will adversely impact [WFVs] and
the water quality” on the property. According to the ALJ, the DNR did not consider
whether operation of the course would affect “the levels of the chemicals and
contaminants that [would] reach the groundwater and wetlands,” nor did it consider
13
The ALJ did not take issue with the DNR’s determination regarding the direct impacts
of Kohler’s project to WFVs because the loss of the 3.69 acres of wetlands was to be properly
mitigated “by the purchase of credits from the [DNR’s] in-lieu fee program.” See WIS. STAT.
§ 281.36(3r).
18
No. 2021AP1187
the direction of the groundwater flow and the separation between the surface and
groundwater.
¶33 Kohler commenced an action in the circuit court challenging the
ALJ’s decision to reverse the DNR’s permit issuance.14 See WIS. STAT.
§ 281.36(3q)(h)2. After briefing from the parties, the court denied Kohler’s request
to overturn the ALJ’s decision and dismissed Kohler’s lawsuit.15
II. The ALJ did not err in considering the entire proposed project, including
wetlands that were not proposed to be filled, under WIS. STAT.
§ 281.36(3n)(b) and (c).
¶34 Kohler first contends that the ALJ exceeded the scope of WIS. STAT.
§ 281.36 when he reversed the DNR’s decision to issue a permit by considering
“unregulated activities occurring outside the impacted wetlands.” In support of this
argument, Kohler argues that WIS. STAT. ch. 281’s statutory scheme is solely
concerned with water and that § 281.36 cannot be divorced from the chapter’s
statutory scheme. We construe Kohler’s argument to be that the DNR does not have
authority under § 281.36 to consider: (1) unregulated actions (such as tree
clearing); or (2) other significant adverse environmental impacts to wetlands other
14
Kohler attempted to present additional evidence during the circuit court proceedings,
and the court denied its motion to do so. Kohler does not challenge that decision in this appeal,
and the additional issue of whether this additional evidence should have been denied is therefore
not before us.
15
Because our review is limited to the ALJ’s decision, we will not give a detailed summary
of the circuit court’s decision. Instead, we will rely on and cite the court’s decision in our analysis
when appropriate.
19
No. 2021AP1187
than the wetlands subject to discharge.16 Conversely, the FBRF contends that “to
assess whether the [DNR] had sufficient information to determine whether the
standards in … § 281.36(3n)(b)3. were satisfied, [the ALJ] was compelled to review
the evidence and findings on the project’s secondary impacts to [WFVs] as directed
by” the statute. The DNR echoes the FBRF’s argument in this regard. We agree
with the FBRF and the DNR.
¶35 As previously noted, we independently review an ALJ’s interpretation
of statutes and administrative code provisions. See Microsoft Corp., 389 Wis. 2d
350, ¶13; Milwaukee Acad. v. DCF, 2018 WI App 13, ¶11, 380 Wis. 2d 227, 908
N.W.2d 189 (interpretation of administrative rules is “subject to principles of
statutory construction” (citation omitted)). We begin with the language of the
statute and give that language “its common, ordinary, and accepted meaning, except
that technical or specially-defined words or phrases are given their technical or
special definitional meaning.” State ex rel. Kalal v. Circuit Ct. for Dane Cnty.,
2004 WI 58, ¶45, 271 Wis. 2d 633, 681 N.W.2d 110. “We interpret statutory
language ‘in the context in which it is used; not in isolation but as part of a whole;
in relation to the language of surrounding or closely-related statutes; and reasonably,
to avoid absurd or unreasonable results.’” Citation Partners, LLC v. DOR, 2021
WI App 86, ¶16, 400 Wis. 2d 260, 968 N.W.2d 734 (citation omitted).
16
We pause to address the scope of Kohler’s arguments as to this issue on appeal because
its arguments in this regard are not entirely clear. In its reply brief, Kohler states that the FBRF
and the DNR “mischaracterize” Kohler’s argument regarding the DNR’s review of a permit
application under WIS. STAT. § 281.36. Kohler clarifies that it is not arguing that the DNR “can
consider only direct impacts caused by wetland fill. The [DNR] must, of course, consider potential
secondary and cumulative impacts ‘to [WFVs]’ stemming from a project.” Kohler contends “that
the [DNR’s] authority to consider such impacts is expressly limited to impacts that bear on
‘[WFVs].’” According to Kohler, the ALJ “improperly considered the environmental
consequences of unregulated actions throughout the 247-acre site, no matter their proximity to or
impact on the 3.69 acres of wetlands to be filled.” Based on Kohler’s clarifications, we interpret
Kohler’s argument as outlined in the body of this opinion.
20
No. 2021AP1187
¶36 We begin with the text of WIS. STAT. § 281.36(3n)(c)3., which
expressly requires the DNR to consider “[t]he proposed project” in assessing
significant adverse impacts to WFVs, water quality, and other environmental
consequences. Neither “water quality” nor “environmental consequences” are
defined by statute. However, § 281.36(3n)(b) identifies the factors the DNR must
consider when assessing impacts to WFVs. Specifically, the statute expressly
requires the DNR to consider, among other things, the “direct impacts to” WFVs,
“cumulative impacts” to WFVs, “secondary impacts” to WFVs, and “net positive
or negative environmental impact of the proposed project.” Sec. 281.36(3n)(b).
¶37 Both parties agree that direct impacts are those resulting from direct
wetland fill. The ALJ defined secondary impacts as “[i]mpacts that are not the result
of fill but result from how the land is used,” which closely matched testimony at the
contested hearing that defined secondary impacts as “impacts which are closely
linked or causally related to the activity but may occur over a longer period of time.”
See also Meteor Timber, 400 Wis. 2d 451, ¶41 (secondary impacts identified in
permit as those related to hydrology, presence of invasive species, and wildlife
habitat); Kalal, 271 Wis. 2d 633, ¶46 (“[T]echnical or specially-defined words or
phrases are given their technical or special definitional meaning.”). For example,
the DNR concluded in the permit at issue that secondary impacts to WFVs included
“[p]ermanent alteration to wetland hydrology (change in grade and removal of
trees); decrease in habitat from increased invasive species, … potential disruption
of wildlife use (breeding, nesting),” and “routine traffic along the proposed new
greens.” WISCONSIN ADMIN. CODE § NR 103.03(1), gives a list of WFVs that shall
be considered, including “[h]abitat for resident and transient wildlife species” and
“[r]ecreational, cultural, educational, scientific and natural scenic beauty values and
uses.”
21
No. 2021AP1187
¶38 It is clear that WIS. STAT. § 281.36 distinguishes between impacts
resulting from the regulated conduct (i.e., the direct discharge into the wetlands) and
impacts resulting from the proposed project (i.e., other impacts beyond direct
discharge). See Paul G. Kent & Jordan K. Lamb, Wisconsin’s Wetland Reform Act,
WIS. LAW., Feb. 1, 2013 (stating that prior to 2011 Wisconsin Act 118, “there was
tension between looking exclusively at the immediate wetland impact and looking
at both the immediate impact and overall environmental impacts. The Act provides
some additional flexibility in this area”). Section 281.36(3n)(c)3. does not state that
the DNR may issue a permit only once it determines that the “discharge” “will not
result in significant adverse impact to [WFVs], in significant adverse impact to
water quality, or in other significant adverse environmental consequences” to only
the wetlands themselves. See § 281.36(3n)(c)3. Nor does § 281.36(3n)(b) provide
that in evaluating the impacts to WFVs, the DNR must consider only the “secondary
impacts” of the discharge. See § 281.36(3n)(b). Rather, § 281.36(3n)(c)3. requires
the DNR to consider whether the “proposed project” will result in “significant
adverse impact to [WFVs], in significant adverse impact to water quality, or in other
significant adverse environmental consequences.” See § 281.36(3n)(c)3. This
review, in turn, requires the DNR to evaluate, for example, “secondary impacts of
the proposed project” to WFVs and the “net positive or negative environmental
impact of the proposed project.” See § 281.36(3n)(b)3., 5.
¶39 Indeed, the legislature chose to use the word “discharge” and “wetland
fill” in other areas of WIS. STAT. § 281.36, but it did not do so in § 281.36(3n)(b) or
(c) when instructing the DNR on how to evaluate a wetland individual permit. See,
e.g., § 281.36(3g)(d) (“In issuing wetland general permits under this subsection, the
[DNR] shall establish requirements, conditions, and exceptions to ensure that the
22
No. 2021AP1187
discharges will cause only minimal adverse environmental effects ….” (emphasis
added)).17
¶40 If adopted, Kohler’s interpretation would create superfluous language
in the statute. See Kalal, 271 Wis. 2d 633, ¶46 (“Statutory language is read where
possible to give reasonable effect to every word, in order to avoid surplusage.”). It
is undisputed that the direct impacts to WFVs on the property are those that stem
from the proposed discharge of material into the 3.69 acres of wetlands. See Meteor
Timber, 400 Wis. 2d 451, ¶40. Under Kohler’s interpretation, the DNR’s analysis
would essentially end at the consideration of direct impacts to WFVs (e.g., the direct
discharge of material into wetlands). All of the other considerations dictated by
WIS. STAT. § 281.36 would be meaningless because after the direct impacts take
place (i.e., the wetlands are filled with material), there would be no wetlands to be
impacted and nothing left for the DNR to consider. For example, there would be no
point in the DNR considering impacts to water quality because the only “water”
17
Kohler contends that WIS. STAT. § 281.36(3n)(c)3.’s reference to “other significant
adverse environmental consequences” “is no basis to deny wetland permits due to activities
unrelated to wetlands.” Citing a DNR guidance document, Kohler states that “other adverse
environmental consequences” means that “‘where the only practicable alternatives that would avoid
or minimize wetland impacts would cause other significant environmental harm’—such as
‘impact[ing] the last remaining upland habitat for an endangered species’—the [DNR] ‘may have
to balance those impacts and allow the wetland to be developed.’” (First alteration in original.) A
closer look at that document, however, demonstrates that “other adverse environmental
consequences” apply to analyses beyond wetlands. Specifically, the document states that “[t]his
sub-standard requires that the [DNR] look at issues other than wetland issues.”
That said, we are unpersuaded by Kohler’s reliance on the document. To begin, the
document lacks a publication date or author. It is possible the DNR’s interpretation of the statutory
text has changed over time. Second, while the parties agreed prehearing to admit the document,
there was no testimony during the contested hearing regarding the document. Therefore, the
information gaps described above remain. Lastly, we are not bound by guidance documents. “They
are not law, they do not have the force or effect of law, and they provide no authority for
implementing or enforcing standards or conditions.” Service Emps. Int’l Union, Loc. 1 v. Vos,
2020 WI 67, ¶102, 393 Wis. 2d 38, 946 N.W.2d 35. They are nonbinding documents produced by
the executive branch and are “nothing more than the knowledge and intentions of their authors.”
Id. As always, our focus is on the text of the statute when interpreting statutory language.
23
No. 2021AP1187
subject to consideration would be the water in the wetlands being filled with
material. Because the wetlands would be filled, there would be no water quality to
consider. Similarly, there would be no point in the DNR considering secondary
impacts to WFVs because there would be no WFVs to consider. Because the
wetland would be filled, there would be no hydrology to consider. Kohler fails to
explain what the statute’s purpose of including other impacts would be if the DNR
was not required to consider impacts beyond the direct discharge.
¶41 Kohler argues that the ALJ’s considerations in this case are
“ordinarily beyond the [DNR]’s regulatory authority under the wetlands statute.”
For example, Kohler contends that it would have been able to remove trees or
“certain rare plants” without DNR approval if it had not sought the permit in this
case. Kohler notes that Patricia Trochlell—a former DNR staff wetland ecologist
who worked on this particular permit application while employed with the agency—
testified that if “not for the application to [fill] 3.69 acres of wetlands, there would
be nothing to restrict [Kohler] from clear cutting this property[.]” The DNR largely
concedes this point, stating that “[t]here is no dispute that some of these activities,
if undertaken alone, would not require a separate permit.”
24
No. 2021AP1187
¶42 Kohler’s argument that “[t]he [l]egislature did not grant the [DNR]
boundless authority to regulate any aspect of a ‘project’” misses the mark. 18 As
discussed above, WIS. STAT. § 281.36(3n)(b) and (c) require the DNR to consider
the entire project, including its secondary impacts on WFVs, its impacts on water
quality, and any significantly adverse environmental consequences. Therefore,
even assuming, without deciding, that there is no regulation attached to, for
example, tree clearing in absence of a wetland individual permit application, Kohler
did apply for a wetland individual permit and therefore availed itself to the permit
application statutory process and administrative code. The permit system created
by the legislature permits the DNR to regulate construction and maintenance of the
entire project.
¶43 Kohler also argues that an interpretation allowing the DNR to review
an entire project, including “unregulated” activities, would yield absurd results.
Particularly, Kohler states that this “interpretation would have the perverse effect of
18
We are similarly unpersuaded by Kohler’s reliance on certain language from the permit
statutory scheme to argue that WIS. STAT. § 281.36 limits the DNR’s review to solely water-related
activities. In making its argument, Kohler cites a number of provisions, including the legislative
purpose stated in WIS. STAT. § 281.11, which in relevant part provides that 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.” (Emphasis added.) Similarly, Kohler cites WIS. ADMIN. CODE
§ NR 103.03(1)’s language that “water quality related functional values or uses of wetlands[]
within the range of natural variation of the affected wetland[] shall be protected” to argue, again,
that the DNR is limited to “water quality” considerations. As argued by Kohler, while WIS. STAT.
ch. 281 makes several references to “water” and “wetlands,” § 281.36 “does not mention grading
or deforestation.”
But WIS. STAT. § 281.36 is clear and unambiguous in its directive for the DNR. Simply
because the statute does not refer to every type of possible impact does not mean we can ignore its
clear meaning. In fact, we are “not at liberty to disregard the plain, clear words of the statute,”
State ex rel. Kalal v. Circuit Ct. for Dane Cnty., 2004 WI 58, ¶46, 271 Wis. 2d 633, 681 N.W.2d
110 (citation omitted), and we decline Kohler’s invitation to do so here. Furthermore, WIS. ADMIN.
CODE § NR 103.03(1) explicitly directs the DNR to protect “water quality related functional values
or uses of wetlands” of “the affected wetland.” (Emphasis added.) It does not limit the DNR’s
considerations to directly filled wetlands because other wetlands on a project site can constitute
“affected wetland[s].”
25
No. 2021AP1187
incentivizing applicants to clear trees, destroy plants, and the like before applying
for a wetland fill permit, rather than subjecting those otherwise-unregulated
activities to the [DNR’s] scrutiny.”
¶44 Assuming but without deciding that Kohler’s cited unregulated
activities are indeed unregulated, we conclude that the above interpretation does not
produce absurd results. “It is a well-settled proposition that statutory language be
read in context and in a reasonable manner so as ‘to avoid absurd or unreasonable
results.’” State v. Matthews, 2019 WI App 44, ¶17, 388 Wis. 2d 335, 933 N.W.2d
152 (citing Kalal, 271 Wis. 2d 633, ¶46).
When the statutory language is clear and straightforward, a
court would normally apply the plain meaning to the specific
set of facts in the case. However, if that application leads to
results that are absurd or unthinkable, then courts should
“look beyond the plain meaning” to avoid the absurd results.
Id., ¶17 (citation omitted). The standard for departing from clear statutory language
is high, “as it entails departing from the literal language of the statute.” Id. It is not
enough that an interpretation produces a “foolish” outcome. Id. (citation omitted).
“Instead, a court so finding must be convinced that the result is so absurd that [the
legislature], not the court, could not have intended such a result.” Id. (alteration in
original; citation omitted). Put differently, “it must be ‘unthinkable’ for the
legislature ‘to have intended the result commanded by the words of the statute.’”
Id. (citation omitted).
¶45 Our interpretation does not produce an absurd result in any sense.
While Kohler may find the result “foolish,” the interpretation does not produce a
result that the legislature could not have intended. See id. To the contrary, and as
described in detail above, the legislature clearly intended for the DNR to consider
impacts from a proposed project beyond direct wetland discharge. The notion that
26
No. 2021AP1187
upon someone applying to fill wetlands, otherwise unregulated environmental
activities are taken under consideration is a reasonable system. “We defer to the
legislature on policy, and ‘judicial deference to the policy choices enacted into law
by the legislature requires that statutory interpretation focus primarily on the
language of the statute.’” Id., ¶22 (citation omitted).
¶46 In all, nothing in the permit statutory system limits the DNR from
considering impacts only as they relate to the wetlands proposed to be filled. In
fact, WIS. STAT. § 281.36(3n)(b) and (c) require the DNR to consider impacts
beyond proposed wetland discharge.
III. The ALJ’s finding that the DNR did not have enough information at the
time it issued the permit is supported by substantial evidence, and its
decision did not “depend[]” on its finding that significant cumulative
impacts to WFVs would occur.
¶47 Kohler contends that the ALJ erroneously found that the DNR did not
have sufficient evidence to support its finding that the proposed project would “not
result in significant adverse impact to [WFVs], in significant adverse impact to
water quality, or in other significant adverse environmental consequences.”
Specifically, Kohler argues that the ALJ made “two critical findings” not supported
by substantial evidence, thereby warranting reversal of the ALJ’s decision: First,
the ALJ’s finding that the project would cause cumulative impacts; and, second, the
ALJ’s finding that nutrients and pesticides would reach the groundwater and
wetlands and cause significant adverse impacts.
¶48 As outlined previously, our review of agency fact finding is limited.
We must defer to the agency’s factual findings, as long as they are supported by
substantial evidence. See WIS. STAT. § 227.57(6). Moreover, Kohler must show
that the ALJ’s ultimate decision “depend[ed]” on the challenged factual findings.
27
No. 2021AP1187
See id. “Substantial evidence is less of a burden than preponderance of the evidence
in that any reasonable view of the evidence is sufficient.” Robles v. Thomas Hribar
Truck & Equip., Inc., 2020 WI App 74, ¶8, 394 Wis. 2d 761, 951 N.W.2d 853(citation omitted). In other words, we do not examine whether the ALJ’s findings
are more likely than not correct. See State v. Loayza, 2021 WI 11, ¶40, 395 Wis. 2d
521, 954 N.W.2d 358 (defining the preponderance of evidence standard). Instead,
our review is limited to “whether, after considering all the evidence of record,
reasonable minds could arrive at the same conclusion” as the ALJ. See Hilton, 293
Wis. 2d 1, ¶16.
A. Cumulative impacts finding under WIS. STAT. § 281.36(3n)(b)2.
¶49 Regarding the cumulative impacts on WFVs, the ALJ adopted the
DNR’s finding that significant cumulative impacts to WFVs could result from the
project. The ALJ noted, however, that “[t]he basis for [the DNR’s] conclusion [was]
not clear.” The ALJ cited the testimony of the DNR’s witness, Pamela Biersach—
the director of the DNR’s Office of Business Services in the Fish, Wildlife and Parks
Division—that granting the permit could generate more applications for filling
wetlands and have a precedential effect for future applications. The ALJ stated,
however, that precedent “is not identified as a component of cumulative impacts.”
Citing Kohler’s permit application, the ALJ noted that Kohler does not plan on
“additional development beyond the current proposed plan” and, “therefore, no
future wetland impacts in the affected area are expected to be caused by the
permitting of this [p]roject.”
¶50 Even if we agreed with Kohler that the ALJ’s finding regarding
cumulative impacts to WFVs is not supported by substantial evidence, we conclude,
for two reasons, that the ALJ’s overall decision did not “depend[]” on the
cumulative impacts finding. First, the cumulative impacts analysis consisted of a
28
No. 2021AP1187
single paragraph, separate from a much more in-depth and lengthy analysis of
missing information regarding secondary impacts.
¶51 Second, and relatedly, cumulative impacts did not have any bearing
on the ALJ’s decision. The ALJ was not ruling on the merits of the permit and
whether the statutory requirements of WIS. STAT. § 281.36(3n)(c)3. were met.19 Nor
did the ALJ rule on, or find, that the DNR lacked information regarding cumulative
impacts. Instead, the ALJ ultimately concluded that the FBRF “carried [its] burden
of proof to show that the [DNR] did not have sufficient evidence to support its
determination that the project will not result in significant adverse impact to
[WFVs], in significant adverse impact to water quality, or in other significant
adverse environmental consequences” at the time the DNR decided to issue the
permit.
B. Significant adverse impacts to WFVs under WIS. STAT. § 281.36(3n)(c)3.
¶52 Next, we address Kohler’s argument that “the ALJ’s ruling must be
overturned because there is no evidence that nutrients and pesticides applied to the
golf course would reach the groundwater and wetlands such that significant adverse
impacts will result.” In support, Kohler asserts that the ALJ “found that the
‘application of nutrients to the golf course at allowed levels will result in the
mitigation of nitrogen and phosphorous into the groundwater’”; that “rain events
and irrigation ‘will carry the nutrients, pesticides, and other contaminants applied to
the golf course in the groundwater’”; and that “‘two to twelve percent of nitrogen
19
Kohler responds to this conclusion by arguing that the ALJ would not have made
findings that “had no purpose” to its decision. Kohler does not, however, explain how or why
cumulative impacts applied to the ALJ’s ultimate decision regarding the DNR’s lack of information
and, in fact, admits that “[t]he ALJ’s overarching holding was that the [DNR] ‘did not have
sufficient information to determine the proposed project will not result in significant adverse
impact.’” We consider Kohler’s argument undeveloped on this issue. See State v. Pettit, 171
Wis. 2d 627, 646, 492 N.W.2d 633 (Ct. App. 1992).
29
No. 2021AP1187
applied to the course will leach below the root zone’ of the turf.” According to
Kohler, the ALJ failed to cite any “evidence that pesticides and nutrients will reach
the groundwater and wetlands in quantities significant enough to have any impact
at all.”
¶53 Kohler misunderstands both the ALJ’s ruling and the issue on appeal
with respect to our substantial evidence analysis. The ALJ’s decision did not
“depend[]” on its findings of facts regarding the merits of the permit. Rather, the
ALJ concluded that the DNR did not have sufficient evidence to support its
determination that the project would not result in significant adverse impacts to
WFVs at the time it decided to issue the permit. The ALJ did not conclude that the
project will result in significant adverse impacts to WFVs, as Kohler contends.
None of the three findings cited above by Kohler relate to the ALJ’s ultimate
conclusion.
¶54 In addition, the ALJ’s finding that the DNR lacked evidence with
respect to its findings regarding nutrients and pesticides is supported by substantial
evidence. According to the ALJ, “[i]t is undisputed that the introduction of nitrates,
phosphorus, pesticides, oil, grease, and other contaminants in the groundwater and
wetlands will adversely impact [WFVs] and the water quality” on the property.
Thus, the ALJ reasoned, and we agree, that “the critical question” in evaluating
whether the operation of the golf course would result in significant adverse impacts
was “the levels of the chemicals and contaminants that [would] reach the
groundwater and wetlands” as well as the direction of the groundwater flow and the
separation between the surface and groundwater.
¶55 The DNR sought to address these questions during the permit
application process by requesting a water table map from Kohler, as well as
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No. 2021AP1187
stormwater, nutrient, and pesticide management plans. Importantly, however, the
ALJ determined that “[a]t the time the [DNR] issued the permit, [it] had not received
the final versions of the various management plans or a reliable water table map.”
For example, Dr. Stuart Z. Cohen—the president of an “environmental and
agronomic service company”—testified at the contested hearing on behalf of Kohler
that a detailed IGCMP had yet to be finalized.20
¶56 While Kohler did supply a water table map on November 6, 2017, it
was not “until very late in the application process.” Additionally, testimony at the
hearing revealed that the map “may not be accurate” because, according to Jeff
Quast—the president of Excel Engineering who was hired by Kohler to provide civil
engineering services on the proposed project—the measurement information from
test pits and monitoring wells used to generate the map was not submitted to the
DNR. Furthermore, Quast testified that a cross-section groundwater map of the
property was incorrect, and Quast admitted that some groundwater elevations
submitted in the stormwater management plan were also incorrect.
¶57 The ALJ also criticized the permit for not providing mandatory
conditions to limit the risk of the impacts from pesticides and nutrients. While the
permit requires Kohler to use various BMPs in the operation of the course (e.g.,
“spoon feeding” chemicals), Dr. Cohen described the BMPs as “a set of concepts.”
For example, the permit allows Kohler to apply nitrogen at levels of eight pounds
per 1,000 square feet for ongoing turf maintenance. Cohen testified that he expects
Kohler to apply nitrogen at a much lower level, and he therefore did not conduct an
analysis of whether application of nitrogen at the permitted level would adversely
20
An IGCMP was submitted to the DNR in the fall of 2017. According to Dr. Cohen, the
IGCMP submitted to the DNR was a set of “basic concepts.”
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No. 2021AP1187
impact the groundwater or wetlands. According to the ALJ, the lower nitrogen
levels considered by Cohen were “speculative and not a permit condition. The
[DNR] must consider the impacts based on what Kohler is allowed to do, not on a
best case scenario.”
¶58 Similarly, the ALJ discredited testimony from the hearing that the
thatch and turf will capture the nutrients applied to the course. Doctor Cohen
testified that the only way water carrying nutrients and other chemicals could reach
the groundwater was if someone used a posthole digger to bypass the turf. The ALJ
concluded, however, that this statement was contrary to Cohen’s other testimony
that “two to twelve percent of the nitrogen applied to the course will leach below
the root zone.” The ALJ also expressed skepticism regarding the thatch and turf’s
capturing of nutrients because “at least three of the [BMPs] in the IGCMP are
intended to improve water infiltration by bypassing the turf. These practices are
aerification, topdressing, and verticutting.”
¶59 Even accepting that the thatch and turf would effectively capture
nutrients applied to the course, the ALJ stated that “there [would] be no filter until
the turf and thatch [were] established.” During the period of turf and thatch
establishment, the permit allows higher applications of nitrogen and phosphorus
because the sandy soils on the property are nutrient poor. As such, citing the
testimony of Dr. Carpenter, the ALJ concluded that “[a] larger portion of the applied
nutrients, particularly phosphorus, [would] leach through the permeable soil into the
groundwater during the period when the turf [was] becoming established.”
¶60 Regarding pesticide usage on the property, the ALJ cited the final EIS,
stating that “monitoring groundwater quality for pesticide contamination and
minimizing pesticide use through implementation of an [Integrated Pest
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No. 2021AP1187
Management] plan are potential ways to reduce the potential negative effects of
pesticide use.” (Formatting in original.) Yet, the ALJ reasoned that the permit
“includes no condition requiring groundwater monitoring.” The ALJ disregarded
Dr. Cohen’s additional pesticide evaluation, determining it was irrelevant because
it was dated May 18, 2018—four months after the permit was issued and only two
weeks before the administrative review hearing.
¶61 While the ALJ’s findings can be countered by other evidence in the
record, the record supports the ALJ’s finding that the DNR did not have sufficient
evidence to support its determination that the nutrients and pesticides applied as part
of the project would not result in significant adverse impacts to WFVs. See Hilton,
293 Wis. 2d 1, ¶16. We will not second-guess the ALJ’s ultimate decision because
it is supported by substantial evidence.
¶62 Kohler specifically takes issue with the ALJ’s finding that any amount
“of nitrogen or other contaminants entering the leachate” will have a significant
adverse impact to WFVs. Kohler points to Dr. Cohen’s testimony that small
amounts of these chemicals will have no impact. According to Kohler, it presented
“substantial evidence … to show that any impact on wetlands [would] be
insignificant.”
¶63 We first note that we are not considering whether Kohler presented
“substantial evidence.” Instead, we are tasked with determining whether the ALJ’s
finding regarding the DNR’s lack of information with respect to chemicals entering
the groundwater is supported by substantial evidence. We conclude that it is.
¶64 The permit itself stated that “4.79 acres of secondary impacts may
result from … increased runoff of nutrients, herbicides, and pesticides” and that
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No. 2021AP1187
“nutrient loading” was a secondary impact to WFVs. Additionally, the final EIS
stated:
The Kohler [p]roperty has predominantly sandy soils with
high infiltration rates and high hydraulic conductivity. This
combined with a shallow depth to the surficial groundwater
aquifer increases the potential for pesticides and fertilizer to
leach into the shallow aquifer which may additionally reach
the Black River, Lake Michigan, and the associated
wetlands.
The final EIS also noted that “irrigation water and fertilizer run-off into
the … wetlands would impact water quality by increasing nutrients and leading to
changes in the plant assemblages.” Notably, the DNR did not specify a certain
amount of chemicals that the wetlands would tolerate. Instead, it stated that “[i]t is
unknown to what extent stormwater infiltration and nutrient and pesticide
applications to fairways, tees and greens (for either establishment or maintenance)
would impact groundwater quality in this permeable soil and shallow water table
environment.” Trochlell testified at the contested hearing that “any nutrient
additions to these very sensitive wetlands will have an impact upon them.”
¶65 While Dr. Cohen may have disagreed with that finding, the ALJ was
not obligated to follow Cohen’s lead and find that small amounts of chemicals
would be harmless. Instead, the ALJ determined that the DNR was required to have
more information before it could resolve: (1) whether chemicals would reach the
wetlands through the soil; and (2) if so, whether those amounts would be harmful.
Without this information, the ALJ found the DNR could not have meaningfully
analyzed the secondary impacts to WFVs.
¶66 Kohler also argues that the permit conditions for BMPs would
“undisputedly have a major effect on limiting nutrient and pesticide penetration into
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No. 2021AP1187
groundwater.”21 In support, Kohler cites to a number of statements made by the
FBRF witnesses, such as Dr. Jansen, who stated, “I agree that slow release fertilizers
generally will reduce the risk of contamination.”22 Kohler also cites to “empirical
work” in the record.
¶67 Contrary to Kohler’s assertion, the effectiveness of the permit
conditions for BMPs was significantly disputed at the contested hearing. For
example, Dr. Jansen testified regarding condition 22—requiring Kohler to follow
BMPs—and stated he had not “seen any evaluation by the DNR … that connects
complying with these BMPs to compliance with water quality standards.” Doctor
Carpenter also stated in his prefiled testimony that condition 22 “seems to be quite
generic and contains no evidence that what is applied to the golf course will not end
up in the wetlands.” Similarly, Trochlell stated in her prefiled testimony that
condition 23—requiring Kohler to follow WIS. ADMIN. CODE ch. NR 151—is not
sufficient to protect wetland water quality because “this rule was not designed to
ensure [WFVs] are protected in all cases, and certainly not in this sensitive
21
Kohler also contends that the BMPs requiring “spoon feeding” will prevent chemicals
from reaching the groundwater, and, therefore, the DNR did not need any further information.
According to Kohler, “[o]ne cannot both ‘spoon feed’ fertilizer and dramatically over-apply
fertilizer at the same time.” Kohler does not cite to the record or any other authority to support its
assertion. Additionally, Dr. Jansen testified that “spoon feeding” as used in the BMPs is
subjective: “[T]hat’s how [Kohler] described it, but they’re talking about a pound per 1,000 square
feet. We have references that show that that rate can lead to 3.8 parts per million … in the
lysimeters.”
22
As has been the case throughout Kohler’s briefing, Kohler’s citations here to the FBRF’s
witnesses’ testimony are either taken out of context or are completely misleading. One example is
Kohler’s citation to Dr. Jansen’s testimony. Kohler claims that Jansen agreed that, in Kohler’s
words, “turf [is] effective at absorbing nutrients and pesticides.” To the contrary, Jansen actually
said, “I’ll agree that turf does a better job of absorbing nutrients and pesticides than some other
things like row crops. But it is not an excellent system for removing nitrogen and pesticides. It
can easily be bypassed.”
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No. 2021AP1187
environment.” Additionally, Dr. Cohen described the BMPs as a set of concepts,
not mandatory conditions. The testimony above comports with the IGCMP. For
example, one BMP states that Kohler will “[u]se slow release or organic fertilizers
with 50% or less soluble Nitrogen when possible.” (Emphasis added.) As such, the
ALJ’s determination regarding the permit conditions for BMPs is supported by
substantial evidence.23
¶68 Regarding the ALJ’s findings on phosphorus, Kohler argues that
“even [the FBRF’s] own witnesses confirmed that phosphorous will not pose a
problem.” This assertion completely ignores Dr. Carpenter’s testimony that
phosphorous is “always … a potential problem mix. It’s a more powerful agent
generally in change than even nitrogen because it acts at lower levels.” Carpenter
went on to state that phosphorous will need to be applied at a higher rate initially in
order to establish the golf course grasses. According to Carpenter, “because you
can’t apply [phosphorous] by the dropper at the root, you’re going to have granules
of phosphate material hitting empty, sandy patches” and eventually dissolving into
water. Carpenter also stated he did not believe phosphorous would be an easily
managed problem on the proposed golf course. Therefore, the ALJ’s finding that
the DNR did not have sufficient evidence to support its determination pursuant to
WIS. STAT. § 281.36(3n)3. at the time it decided to issue the permit is supported by
substantial evidence.
¶69 Next, Kohler contends that the ALJ’s finding regarding nitrogen is not
supported by substantial evidence because Kohler “expressly committed to applying
far less than eight pounds of nitrogen per one thousand square feet.” Doctor Cohen
23
Kohler cites “its longstanding focus on environmental preservation” and its “minimalist
approach to pesticides and fertilization.” Kohler does not explain how this history affects the ALJ’s
findings, and we will not consider it further. See Pettit, 171 Wis. 2d at 646.
36
No. 2021AP1187
testified at the contested hearing that Kohler will use less than that amount based on
“35 years of experience and talking to the superintendents of the Kohler golf
courses.” According to Cohen, Kohler will apply “[l]ess than 3 pounds per 1,000
square feet over the managed turf.”
¶70 We disagree that the testimony of a witness—who does not work for
Kohler—is an “express[] commit[ment]” on behalf of Kohler. In any event, the ALJ
concluded that Dr. Cohen’s testimony about nitrogen levels was “speculative and
not a permit condition.” Kohler does not explain how this finding is not supported
by substantial evidence.
¶71 Kohler also argues that it “presented undisputed evidence about how
its irrigation systems further defend against groundwater contamination.”
According to Kohler, the only opposition to Kohler’s irrigation system related to
quickly changing weather and how a computerized irrigation system will not be able
to adapt in such situations. We disagree that this affects our conclusion. While
there was testimony supporting Kohler’s claim, there was also evidence disputing
the irrigation system’s effectiveness.
¶72 In all, Kohler provides no basis for us to conclude that the ALJ’s
finding that the DNR lacked sufficient information to meaningfully analyze the
proposed project pursuant to WIS. STAT. § 281.36(3n)3. is not supported by
substantial evidence. In other words, “after considering all the evidence of record,
reasonable minds could arrive at the same conclusion” as the ALJ did in this case.
See Hilton, 293 Wis. 2d 1, ¶16.
¶73 Kohler attempts to refute the above evidence by arguing that the ALJ
declined to consider evidence that Kohler argues would have met the requirements
of WIS. STAT. § 281.36(3n)(c). In other words, Kohler argues that although the ALJ
37
No. 2021AP1187
determined that the DNR lacked sufficient information to issue the permit, the ALJ
should have considered additional evidence that Kohler submitted during the
contested hearing.
¶74 According to Kohler, the ALJ identified three areas of information
that the DNR lacked at the time it issued the permit: (1) the levels of nitrogen to be
applied to the course; (2) the types of pesticides to be applied to the course, as well
as pesticide impacts; and (3) whether Kohler planned on using groundwater
monitoring to avoid potential pesticide impact.24
¶75 Kohler states that it “definitively” provided sufficient information at
the contested hearing for the ALJ to determine all three of these issues. For
example, Kohler cites the IGCMP and the pesticide risk assessment that were
introduced at the contested hearing. Citing the fact that contested hearings are akin
to trials, Kohler argues that “[t]he ALJ erred as a matter of law in ignoring this
evidence merely because it was developed as part of the contested[]case hearing.
This rule flatly misapplies the very nature of contested[]case proceedings, the
purpose of which is to adjudicate disputed facts in a trial-like manner.” In making
these arguments, Kohler posits that the ALJ “repeatedly considered new evidence
presented by the [FBRF] during the contested[]case hearing” but ignored the
additional evidence presented by Kohler.
24
Although not necessary to our decision on this issue, we note that the ALJ also found
other pieces of information lacking from the permit process, including that the DNR lacked a
reliable water table map. Additionally, the DNR and the FBRF argue that Kohler’s submitted
evidence did not resolve the deficiencies in the information the ALJ noted. Because we decide this
issue on narrower grounds, we need not address whether Kohler’s supplemental information
provided the DNR with sufficient information to make a decision under WIS. STAT. § 281.36. See
Patrick Fur Farm, Inc. v. United Vaccines, Inc., 2005 WI App 190, ¶8 n.1, 286 Wis. 2d 774, 703
N.W.2d 707.
38
No. 2021AP1187
¶76 Kohler ignores the fact that all three issues the ALJ identified related
to whether the DNR had sufficient information to issue a permit at the time the
decision was made. The evidence submitted by the DNR and Kohler at the
contested hearing attempted to fill the information gaps that the DNR did not have
at the time the permit was issued. Put differently, the DNR and Kohler were
attempting to retroactively fix errors in the permit process.
¶77 For example, Kohler submitted Exhibit 208, titled “Ground Water
Contamination Risk Assessment Screen for Pesticides at the Proposed Kohler Golf
Course in Sheboygan.” Doctor Cohen testified that he prepared the report, that he
performed the risk assessment “[a] few weeks” before the contested hearing, that its
purpose was essentially to confirm that Kohler “would comply with condition 22 of
the permit,” and that the DNR did not have the exhibit before it when it made the
permit decision. By submitting exhibits prepared after the permit was granted,
Kohler tacitly acknowledged that the DNR was missing information at the time it
issued the permit.
¶78 Conversely, the evidence submitted by the FBRF of which Kohler
complains was presented in order to display the deficiencies in the DNR’s decision
based on information the DNR did not have at the time it issued the permit. For
example, the FBRF submitted a number of exhibits regarding internal DNR
communications about Kohler’s permit application. Exhibits 9, 25, and 26, for
example, were internal DNR emails from staff members concerning missing
information that the DNR was requesting from Kohler but, according to the FBRF,
was never received. As such, the ALJ’s factual findings are supported by substantial
evidence.
IV. The ALJ did not err in reversing the DNR’s decision instead of modifying
the permit sua sponte.
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No. 2021AP1187
¶79 Kohler also contends that the ALJ erred by not modifying the permit’s
conditions to account for what the ALJ perceived as deficiencies. According to
Kohler, the ALJ violated WIS. STAT. § 281.36(3n)(c) by not modifying the permit
sua sponte after concluding that the permit lacked sufficient conditions.25 Kohler
argues that the ALJ “had the power” and “the obligation” to modify the permit.
Specifically, Kohler reasons that the ALJ was required to make findings “that may
be adopted as the final decision in the case.” See WIS. STAT. § 227.46(2). This
requirement is particularly crucial, says Kohler, because the DNR did not petition
for judicial review and therefore adopted the ALJ’s decision as its own. In other
words, Kohler states that the ALJ “stood in the shoes of the [DNR]” as the final
decision maker.
¶80 We conclude the ALJ did not possess the authority to modify the
permit conditions sua sponte. WISCONSIN STAT. § 281.36(3q)(g) states that an
administrative hearing on a challenge to a DNR wetland permit “shall be treated as
a contested case under [WIS. STAT.] ch. 227.” Prior to the hearing, a notice shall be
sent out defining the issues to be decided. See WIS. STAT. § 227.44(2)(c). We have
previously held that a failure to provide notice for a contested hearing under
§ 227.44(2)(c) of all of the issues involved can constitute a deprivation of a party’s
due process rights. See Bracegirdle v. DRL, 159 Wis. 2d 402, 411-12, 419-20, 464
25
Kohler contends in its brief-in-chief that “[t]he ALJ expressly acknowledged that ‘[t]he
permit could be amended’ … ‘either by stipulation or order.’” The ALJ’s statement, as cited by
Kohler, is taken out of context. The statement was made in response to an objection the FBRF
made regarding an updated IGCMP which Kohler was using in an attempt to elicit witness
testimony. The FBRF noted that the IGCMP in question was not the same IGCMP cited in the
permit. In response, the ALJ inquired of Kohler whether “at some point is this, I guess, the
upgraded or updated plan that would be in place if the permit was approved?” Kohler answered in
the affirmative, and the ALJ stated that—in the context of whether the permit was approved after
the contested hearing—“[t]he permit could be amended. The condition could be amended either
by stipulation or order.”
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No. 2021AP1187
N.W.2d 111 (Ct. App. 1990) (board violated nurse’s right to fair notice and
opportunity to be heard when it found that she violated conduct not charged).
¶81 Here, the parties limited the issues to: (1) whether the permit satisfied
the standard set forth in WIS. STAT. § 281.36(3n)(c)3.; and (2) whether the DNR had
sufficient information to make a decision under that standard. Missing from this list
is whether the ALJ could, or should, amend the conditions if it found them lacking
in scope. The ALJ therefore did not possess the authority to raise an issue sua sponte
without it first being presented as an issue under WIS. STAT. § 227.44(2)(c).
¶82 Kohler relies on Clean Wisconsin, Inc. v. DNR, 2021 WI 71, 398
Wis. 2d 386, 961 N.W.2d 346, to argue that the ALJ “ignored his statutory
obligation” by not amending the permit in this case. Clean Wisconsin involved the
DNR granting a Wisconsin Pollutant Discharge Elimination System (WPDES)
permit to a dairy operation applicant. Id., ¶1. Petitioners challenged the permit
based on missing conditions. Namely, the permit lacked two conditions related to
the “maximum number of animal units” and “monitoring to evaluate impacts to
groundwater.” Id., ¶4. Following a contested hearing, an “ALJ determined that,
based on the facts presented, the DNR had ‘clear regulatory authority’ to impose the
two conditions disputed in this action upon [the dairy operator’s] … WPDES
permit.” Id., ¶7. The ALJ “ordered” the DNR to modify the permit to include the
two conditions. Id., ¶¶8-9. On review, our supreme court concluded that the DNR
had the authority to impose the two conditions. See id., ¶40.
¶83 We conclude that Clean Wisconsin is inapposite to the case at hand
because in Clean Wisconsin the permit was lawfully issued from its inception. The
ALJ in Clean Wisconsin did not conclude the permit was unlawfully issued.
Conversely, the ALJ in this case found exactly that—i.e., that the DNR did not have
41
No. 2021AP1187
sufficient information to issue the permit. Furthermore, the ALJ in Clean
Wisconsin merely ordered the DNR to modify the permit; the ALJ did not modify
the permit.
¶84 The issue here is better framed as whether the DNR “is authorized to
issue an amended permit when there is no valid permit to amend.” See Meteor
Timber, 400 Wis. 2d 451, ¶90. Ultimately, we need not answer that particular
question because we conclude that the issue of amending the permit’s conditions
was not presented to the ALJ under WIS. STAT. § 227.44(2)(c). We also note,
however, that like the permit applicant in Meteor Timber, Kohler points to no law
supporting the proposition that an ALJ is authorized to amend a wetland permit after
concluding that it was not lawfully issued and was therefore invalid.26 “In the
absence of any such citation, and in light of our conclusion that the [DNR’s]
decision to issue the permit was properly reversed, we conclude that the” ALJ did
not err by not revising the DNR’s permit after concluding that the agency
improperly issued the permit in the first place.27 See Meteor Timber, 400 Wis. 2d
451, ¶90.
26
Notably, Kohler does not raise an argument on appeal regarding WIS. ADMIN. CODE
§ NR 2.14(2), which states that “[e]vidence submitted at the time of hearing need not be limited to
matters set forth in pleadings, petitions or applications. If variances of this nature occur, then the
pleadings, petitions or applications shall be considered amended by the record.” We therefore will
not consider the relevance of § NR 2.14(2) further.
27
Following the issuance of our decision in Meteor Timber, the FBRF filed a citation of
supplemental authority, and Kohler responded. Kohler attempts to distinguish Meteor Timber by
arguing that unlike in Meteor Timber, here “the [DNR] determined that Kohler’s application was
complete and issued the permit in compliance with [WIS. STAT.] § 281.36(3m)(i); it did not purport
to issue a permit that by its own terms required the submission of additional information necessary
for the [DNR] to make the prerequisite determinations for permit issuance.” We disagree. In both
Meteor Timber and this case, the DNR unlawfully issued a permit. Therefore, as we held in Meteor
Timber, the question becomes whether the ALJ can amend an invalid permit. The DNR’s
subjective reasoning does not guide our analysis.
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No. 2021AP1187
¶85 Even if we concluded that the ALJ could have amended the permit
and erred in failing to do so, Kohler forfeited this argument by not raising it before
the ALJ. See DOJ v. DWD, 2015 WI App 22, ¶18, 361 Wis. 2d 196, 861 N.W.2d
789 (“Because our review of an administrative agency’s decision contemplates
review of the record developed before the agency, a party’s failure to properly raise
an issue before the administrative agency generally forfeits the right to raise that
issue before a reviewing court.”); see also Amazon Logistics, Inc. v. LIRC, 2023
WI App 26, ¶72, 407 Wis. 2d 807, 992 N.W.2d 168.
¶86 Without citation, Kohler argues it could not have forfeited the
amendment issue during the administrative proceedings because it was not the
petitioner. Although unclear, it appears Kohler is relying on case law that states a
respondent on appeal may raise any argument that would support the circuit court’s
action, even if the argument was not previously raised in the circuit court. See State
v. Holt, 128 Wis. 2d 110, 124-25, 382 N.W.2d 679 (Ct. App. 1985), superseded by
statute on other grounds, WIS. STAT. § 940.225(7). Here, Kohler is not the
respondent on appeal, and we are reviewing an ALJ decision. Kohler’s argument
that we should not apply the forfeiture doctrine under the circumstances of this case
is undeveloped and unsupported by legal authority. We will not develop an
argument on its behalf. See State v. Pettit, 171 Wis. 2d 627, 646, 492 N.W.2d 633(Ct. App. 1992).
V. The ALJ did not err in making a single reference to “quantitative findings.”
¶87 Lastly, Kohler focuses on a single sentence in the ALJ’s decision to
argue that the decision is based on a misrepresentation of law because the ALJ,
according to Kohler, “required” the DNR to make “quantitative findings as to at
what point the secondary adverse impacts would become significant,” which is not
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No. 2021AP1187
a required analysis in the wetland permitting process.28 Kohler argues that
“[a]nalyzing secondary impacts of a future project necessarily involves some level
of uncertainty, and certain impacts cannot be quantified at all.”
¶88 In full, the ALJ’s reference to quantitative findings reads:
The [DNR] did not make any quantitative findings as to at
what point the secondary adverse impacts would become
significant or explain how the [permit] conditions would
reduce the adverse impacts below the level of significance
either in the permit itself or through [DNR] staff testimony
at the hearing.
(Emphasis added.) According to Kohler, the ALJ’s statement is significant as it
involved a “key issue in the contested case,” and it contends the ALJ concluded
“that the [DNR’s] decision to grant the permit failed for a lack of quantitative
findings.” We disagree.
¶89 When considered in the context of the ALJ’s entire discussion of
secondary impacts, it is clear the ALJ did not “require” Kohler or the DNR to
produce a quantitative analysis of secondary impacts. Instead, the ALJ was
concerned with the lack of information regarding significant adverse impacts. The
remainder of the paragraph cited by Kohler reads:
The [DNR] may be confident that Kohler’s management
plans will ultimately be sufficient to protect the wetlands;
however the [DNR] should be making its determinations
based on completed plans, not trusting that management
plans that will be prepared will adequately protect the
groundwater and wetlands. Once the golf course is
constructed[,] the adverse impacts will be permanent and
irreversible. The [DNR] is required to make a determination
28
The DNR urges this court not to consider Kohler’s argument in this regard because
Kohler fails to frame the issue as reviewable error under WIS. STAT. § 227.57. We, conclude,
however, that Kohler challenges the ALJ’s decision as an incorrect interpretation of law, and we
will analyze the merits of that claim. See § 227.57(11).
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No. 2021AP1187
that the project will not result in significant adverse impacts.
It is unable to do so based on incomplete information.
Kohler contends that the processing of the instant permit was
unusually long and thorough. The process has been long,
but it was still incomplete at the time the [DNR] closed the
application process.
(Emphasis added.) It is clear that the ALJ’s single reference to “quantitative
findings” was based on a much larger critique of the DNR’s lack of information
regarding secondary impacts. The ALJ correctly stated that the DNR was
“required” to make a determination that the project would not result in significant
adverse impacts to WFVs.
¶90 In further support of its argument, Kohler cites to other isolated
references that the ALJ made regarding “levels” and “amounts” of chemicals. These
citations further demonstrate, however, that the ALJ was not requiring Kohler or the
DNR to provide specific numerical findings regarding what level of, for example,
nitrogen would reach the wetlands. Generally speaking, the ALJ noted that the
“critical question [was] the levels of … chemicals and contaminants that [would]
reach the groundwater and wetlands.” The ALJ did not say that the DNR or Kohler
was required to provide the specific numbers that would reach the groundwater or
wetlands, but only that the information before the DNR lacked sufficient specificity
for the DNR to determine whether whatever level did reach the groundwater would
be significant.
¶91 The ALJ expressly stated that the
[i]mportant pieces of information needed to predict these
levels [(i.e., the levels that would cause significant adverse
impacts to WFVs) are] the levels at which nutrients will be
applied to the course, the identity of the pesticides that will
be used by Kohler, the direction of groundwater flow, and
the separation between the surface and the groundwater.
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No. 2021AP1187
Nowhere did the ALJ state that the DNR or Kohler was “required” to make
“quantitative findings” as to what chemicals would reach the groundwater or
wetlands and in what amounts. Instead, the ALJ’s focus was on the lack of
information regarding levels applied to the course and the other information noted
like the groundwater flow. Without this information, it was impossible for the DNR
to know whether the operation of the golf course would result in significant adverse
impacts to WFVs.
¶92 As described, the ALJ’s reference to quantitative findings was just
that—a reference. Despite Kohler’s best efforts to characterize the statement as the
be-all and end-all finding, the statement did not constitute the reason the ALJ
decided the DNR lacked sufficient information on secondary impacts to issue the
permit. The statement came after a lengthy discussion of the information regarding
pesticides and nutrients to be used on the site that was missing when the DNR issued
the permit. For the reasons stated, there was no error of law.
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No. 2021AP1187
CONCLUSION
¶93 In all, we conclude that WIS. STAT. § 281.36(3n)(b) and (c) require
the DNR to consider impacts and activities beyond regulated, direct wetland fill.
See also WIS. ADMIN. CODE § NR 103.03(1). Additionally, the ALJ’s decision is
supported by substantial evidence. Namely, the ALJ’s decision that the DNR did
not have the information necessary to make a § 281.36(3n)(c)3. determination is
supported by substantial evidence—i.e., one that reasonable minds could reach—
and the decision did not “depend[]” on cumulative impact findings. Further, the
ALJ did not err in reversing the DNR’s decision without modifying the permit.
Lastly, the ALJ did not require Kohler or the DNR to make “quantitative findings”
with regard to secondary impacts.
By the Court.—Order affirmed.
47