Justia.com Opinion Summary: In the Wisconsin Department of Natural Resources (DNR) issued a permit to the village of East Troy to construct a municipal well. Lake Beulah Management District (LBMD) sought a declaratory action in circuit court seeking to enforce its ordinance, which purports to regulate and require permits for certain wells that withdraw water from the area around Lake Beulah. The village moved for summary judgment, asserting that the ordinance was invalid as preempted by state law. The circuit court granted the village's motion, and the court of appeals affirmed. The Supreme Court affirmed, holding that the ordinance was preempted by state law. The ordinance was invalid because it conflicted with, defeated the purpose of, and violated the spirit of the legislature's delegation of authority to the DNR to regulate high capacity wells.
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2011 WI 55
SUPREME COURT
CASE NO.:
COMPLETE TITLE:
OF
WISCONSIN
2009AP2021
Lake Beulah Management District,
Plaintiff-Appellant-Petitioner,
v.
Village of East Troy,
Defendant-Respondent.
REVIEW OF A DECISION OF THE COURT OF APPEALS
2010 WI App 127
Reported at: 329 Wis.2d 641, 791 N.W. 2d 385
(Ct. App. 2010 – Published)
OPINION FILED:
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:
July 6, 2011
April 13, 2011
SOURCE OF APPEAL:
COURT:
COUNTY:
JUDGE:
CIRCUIT COURT
WALWORTH COUNTY
ROBERT J. KENNEDY
JUSTICES:
CONCURRED:
DISSENTED:
NOT PARTICIPATING:
ATTORNEYS:
For
the
plaintiff-appellant-petitioner
there
were
briefs
and oral argument by Dean P. Laing, and O’Neil, Cannon, Hollman,
DeJong & Laing S.C.
For the defendant-respondent there was a brief and oral
argument
by
Rosenbaum LLP.
Paul
G.
Kent,
Barbara
A.
Neider
and
Stafford
2011 WI 55
NOTICE
This opinion is subject to further
editing and modification.
The final
version will appear in the bound
volume of the official reports.
No.
2009AP2021
(L.C. No.
2008CV915)
STATE OF WISCONSIN
:
IN SUPREME COURT
Lake Beulah Management District,
FILED
Plaintiff-Appellant-Petitioner,
v.
JUL 6, 2011
Village of East Troy,
A. John Voelker
Acting Clerk of Supreme
Court
Defendant-Respondent.
REVIEW of a decision of the Court of Appeals.
Affirmed.
¶1
review
N.
PATRICK
CROOKS,
J.
This
is
a
of
a
published decision of the court of appeals1 concluding that Lake
Beulah
Management
District's
(LBMD)
ordinance,
purporting
to
regulate and require permits for certain wells that withdraw
water from the area around Lake Beulah, was invalid as preempted
by the legislature's grant of authority to the Department of
Natural Resources (DNR) to regulate high capacity wells.
LBMD
brought a declaratory judgment action seeking to enforce the
1
Lake Beulah Mgmt. Dist. v. Vill. of E. Troy, 2010 WI App
127, 329 Wis. 2d 641, 791 N.W.2d 385.
No.
2009AP2021
ordinance in regard to a high capacity municipal well, Well No.
7, for which the Village of East Troy (the Village) had obtained
a permit from the DNR.
The Village moved the circuit court for
summary judgment, asserting, as relevant to our review, that the
ordinance was invalid as preempted by state law.
The circuit
court granted the Village's motion for summary judgment and the
court of appeals affirmed.
¶2
We conclude that the ordinance is invalid because it
conflicts with, defeats the purpose of, and violates the spirit
of
the
legislature's
delegation
of
authority
to
the
DNR
to
regulate high capacity wells in Wis. Stat. § 281.11 and § 281.12
(2007-08)2
and
its
creation
of
a
comprehensive
permitting
framework for high capacity wells in Wis. Stat. § 281.34 and
§ 281.35.
¶3
Thus, the ordinance is preempted by state law.
Therefore,
we
affirm
the
decision
of
the
court
of
appeals.
I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
2
All subsequent references to the Wisconsin Statutes are to
the 2007-08 version unless otherwise indicated.
2
No.
¶4
surface
2009AP2021
The ordinance, while applicable to any diversion of
water
out
of
the
Lake
adopted primarily in response
Beulah
to
the
Hydrologic
Village
of
Basin,3
East
was
Troy's
plans to construct a high capacity municipal well, Well No. 7.
Initially, LBMD unsuccessfully petitioned for judicial review of
the DNR's decision to issue the 2003 permit for Well No. 7.4
While
continuing
with
its
appeal
of
that
decision
and
a
challenge to the DNR's subsequent 2005 permit for Well No. 7,
LBMD chose to pursue other methods to ensure that Well No. 7 did
not impact Lake Beulah.
¶5
On December 11, 2006, LBMD adopted an ordinance that
prohibits the diversion of water from the Lake Beulah Hydrologic
3
The ordinance defines the Lake Beulah Hydrologic Basin as
"the geographic region or territory whose boundaries include all
of the Lake Beulah Surface Water Drainage Basin and all of the
Lake Beulah Groundwater Basin."
The Lake Beulah Surface Water
Drainage Basin includes "[t]he geographic region or territory
whose boundaries include all those lands and waters on which
water deposited at the ground surface would, if prevented from
infiltrating into the soil, flow by gravity to a point where it
would enter into Lake Beulah."
The Lake Beulah Groundwater
Basin includes "[t]he three dimensional region whose boundaries
encompass that portion of the aquifer known variously as the
shallow, unconsolidated, or sand and gravel aquifer, within
which the groundwater, if it were unaffected by pumping or other
artificial inducement, would flow into, beneath or within the
Lake Beulah Surface Water Drainage Basin."
4
For a detailed history of LBMD's legal challenges to the
DNR's permits for Well No. 7, see our decision in the related
case reviewing the DNR's decision to issue the 2005 permit for
Well No. 7, Lake Beulah Management District v. Department of
Natural Resources (DNR), 2011 WI 54, ¶¶8-21, __ Wis. 2d __, __
N.W.2d __, and the court of appeals decision in this case, Lake
Beulah Management District v. Village of East Troy, 329
Wis. 2d 641, ¶¶2-3.
3
No.
Basin without a permit from LBMD.5
to
the
ordinance,
purpose
of
the
environmental
diversion
on
including
the
5
the
applicant
proposed
study"
Lake
Beulah
groundwater
To obtain a permit pursuant
is
diversion
emphasizing
and
2009AP2021
required
and
to
"include
the
potential
its
surrounding
aquifer.6
The
explain
a
impact
the
thorough
of
the
environment,
ordinance
further
The ordinance provides that the following are prohibited
acts:
It shall be unlawful and prohibited by this Ordinance
for any person or entity to do any of the following
unless such acts are authorized in advance by and
performed in conformance with a valid permit issued by
the District pursuant to this Ordinance:
A.
Divert or transfer surface water out of the Lake
Beulah Surface Water Drainage Basin.
B.
Divert, transfer, or induce
transfer of groundwater out of
Groundwater Basin.
the diversion or
the Lake Beulah
E.
Withdraw groundwater from within the Lake Beulah
Groundwater Basin and then divert or transfer said
water out of the Lake Beulah Groundwater Basin.
6
The portion of the ordinance describing the permit process
provides in relevant part:
No use or action may be initiated, undertaken or
continued that would be in violation of this Ordinance
except in accordance with a permit issued by the
District.
A request for a permit for such use or
action must be submitted to the Board of Commissioners
for approval.
The petition, together with any
documents or records that support the petition, must
clearly state the grounds upon which the petitioner
requests the permit including, at minimum, a concise
statement of the purpose of the request, the annual
volume of water to which the request applies and the
number of years the petitioner seeks for the approval
or permit to remain in effect.
In addition, said
4
No.
2009AP2021
provides that a permit may not be granted "if the net effect
would be adverse to Lake Beulah or the public health, comfort,
convenience, and welfare of the District."
Additionally, the
ordinance does not allow LBMD to grant a permit for a diversion
"unless a volume of water equal to at least 95% of the water
actually diverted or transferred is returned to the Hydrologic
Basin" in a manner that mitigates adverse effects.
¶6
The
Village
began
constructing
Well
after receiving the 2005 permit from the DNR.
No.
7
in
2006
The Village has
been operating Well No. 7 since August 1, 2008.
¶7
The parties do not dispute that Well No. 7 is within
the Lake Beulah Hydrologic Basin as that term is defined in the
ordinance.
However, shortly after LBMD enacted the ordinance,
the Village informed LBMD that the Village believed that LBMD
lacked the legal authority to promulgate the ordinance and, in
petition must include a thorough environmental study
of the proposed use or action with emphasis on the
potential impacts of such use or action on the
following: Lake Beulah; groundwater and surface water
contributing to Lake Beulah; wetlands adjacent to Lake
Beulah or any surface water tributary to Lake Beulah;
private wells in the District;
and
groundwater
supplying
any
private
well
in
the
District.
Petitioner may request an opportunity to testify and
present evidence at a hearing conducted by the Board
of Commissioners.
The permit shall be granted only
upon
the
majority
decision
of
the
Board
of
Commissioners
based
upon
the
[prescribed]
procedure[s].
5
No.
2009AP2021
any event, according to Wis. Stat. § 33.22(4),7 LBMD could not
exercise its powers in an incorporated municipality such as the
Village without the municipality's consent.
¶8
Given the Village's position, on July 22, 2008, LBMD
sought a declaratory judgment in the Walworth County Circuit
Court providing that the ordinance was valid and enforceable as
to the Village.
The Village moved for summary judgment arguing
that, under Wis. Stat. § 33.22, LBMD lacked the authority to
enact an ordinance regulating the Village and also lacked the
authority to exercise its powers extraterritorially.
Further,
the Village argued that the ordinance was preempted by state
law.
The Walworth County Circuit Court, the Honorable Robert J.
Kennedy
presiding,
granted
the
Village's
motion
for
summary
judgment and declared the ordinance "void and unenforceable in
that it conflicts with state law," and also "invalid as applied
to the Village."
¶9
LBMD appealed, and the court of appeals affirmed on
the basis that the ordinance is preempted by state law.
The
court of appeals noted
DNR
that
the
legislature
granted
the
broad authority to regulate waters of the state in Wis. Stat.
7
Wisconsin Stat. § 33.22(4) provides in relevant part:
"Districts shall not exercise the town sanitary district powers
authorized under sub. (3)
within the boundaries
of an
incorporated municipality unless the governing body of the
municipality consents."
LBMD was originally a sanitary district encompassing the
area around Lake Beulah, and in 1995 the Town of East Troy
converted the sanitary district into a lake district, LBMD,
pursuant to Wis. Stat. § 33.235(1m).
6
No.
chs. 280 and 281.
2009AP2021
Lake Beulah Mgmt. Dist. v. Vill. of E. Troy,
2010 WI App 127, ¶¶12-13, 329 Wis. 2d 641, 791 N.W.2d 385.
The
legislature explicitly stated that its goal was "to create a
'comprehensive
enhancement
program
of
the
under
quality
waters of the state.'"
a
single
state
management
and
agency
for
protection
the
of
all
Id., ¶13 (quoting Wis. Stat. § 281.11).
The court of appeals applied the test for preemption set forth
in
DeRosso
Landfill
Co.,
Inc.
v.
City
of
Oak
Creek,
200
Wis. 2d 642, 651-52, 547 N.W.2d 770 (1996), and concluded that
"the Ordinance logically conflicts with, defeats the purpose of,
and
violates
the
spirit
of
the
legislature's
authority to the DNR," and thus is preempted.
delegation
of
Lake Beulah Mgmt.
Dist. v. Vill. of E. Troy, 329 Wis. 2d 641, ¶17.
¶10
granted.
LBMD
petitioned
this
court
for
review,
which
we
We review whether the ordinance is preempted by state
law.8
II. ANALYSIS
¶11
"The
question
of
whether
a
statute
preempts
a
municipal ordinance raises a question of law which we review
independently,
benefitting
from
court and the court of appeals."
¶12
the
analyses
of
the
circuit
DeRosso, 200 Wis. 2d at 652.
LBMD's argument regarding preemption is related to the
Village's argument in a related case before this court regarding
8
The parties also address LBMD's authority to enact the
ordinance and enforce it as to the Village. Because we conclude
that the ordinance is preempted by state law, we do not address
the arguments regarding LBMD's authority.
7
No.
2009AP2021
LBMD's challenge to the 2005 permit for Well No. 7.
See Lake
Beulah Mgmt. Dist. v. Dep't of Natural Res. (DNR), 2011 WI 54,
__ Wis. 2d __, __ N.W.2d __.
that
where
no
formal
In that case, the Village argued
environmental
review
or
findings
are
required, the DNR lacked the authority to consider the impact of
a proposed high capacity well for which a permit is required
under Wis. Stat. § 281.34(2).
Id., ¶28.
In this case, LBMD
argues that if the DNR does not have the authority to consider
the impact of a proposed well on Lake Beulah, then the ordinance
cannot conflict with the DNR's regulatory authority for high
capacity
wells
in
Wis.
Stat.
ch.
281.
Significantly,
LBMD
conceded in its briefs, and at oral argument, that if the DNR
does have the authority to consider the impact of a proposed
high capacity well on waters of the state such as Lake Beulah,
then the ordinance conflicts with the state statute providing
such authority, Wis. Stat. ch. 281.
¶13
The
directing
the
capacity
wells
Village
DNR
argues
to
that
regulate
precludes
and
conflicting
the
statutory
framework
issue
permits
for
local
regulation.
high
The
Village asserts that the ordinance's permitting framework, which
imposes requirements on wells authorized by the statute and the
DNR, conflicts with and contravenes the statute.
For example,
the Village notes that, according to its interpretation of the
statute, the permitting framework requires environmental review
only for three specific categories of wells with a capacity of
between 100,000 and 2,000,000 gallons per day (gpd), and wells
with
a
capacity
of
over
2,000,000
8
gpd,
and
the
ordinance
No.
2009AP2021
purports to require environmental review for wells when that is
not required by the statute.
The Village further argues that
the 2005 permit for Well No. 7 provides a specific example of
the ordinance's conflict with the statute because, while the DNR
authorized Well
additional
No. 7, the
permit
and
would
ordinance
also
purports
prohibit
to
the
require an
well
as
it
currently operates because the Village does not return the water
to Lake Beulah.
¶14
We addressed the question of the DNR's authority and
duty to consider the potential harm to waters of the state when
evaluating an application for a proposed high capacity well in a
related case
in which LBMD
challenged
issue the 2005 permit for Well No. 7.
v. DNR, __ Wis. 2d __, ¶¶1-5.
the
DNR's
decision
to
Lake Beulah Mgmt. Dist.
In that case, we held that "the
DNR has the authority and a general duty to consider whether a
proposed high capacity well may harm waters of the state."
¶3
(footnote
omitted).
Given
our
holding
in
Lake
Id.,
Beulah
Management District v. DNR, and despite LBMD's concession noted
herein that its ordinance, based on our holding, conflicts with
and
is
preempted
appropriate
to
by
Wis.
examine
Stat.
ch.
independently
281,
the
we
feel
issue.
it
Is
is
the
ordinance preempted by the legislature's grant of authority to
the DNR to regulate wells and manage and protect waters of the
state pursuant to Wis. Stat. ch. 281?
¶15
the
Local regulation is preempted by state law when "(1)
legislature
has
expressly
withdrawn
the
power
of
municipalities to act; (2) it logically conflicts with state
9
No.
2009AP2021
legislation; (3) it defeats the purpose of state legislation; or
(4) it violates the spirit of state legislation."
Wis. 2d at 651-52 (footnotes omitted).
DeRosso, 200
Examining the ordinance
in light of the legislature's delegation of authority to the DNR
to regulate wells, we conclude that it is preempted based on the
second, third, and fourth prongs of the DeRosso test.
¶16
The
ordinance
legislature's
framework
logically
directing
conflicts
the
DNR
to
with
the
regulate
high
capacity wells and also granting the DNR the authority to manage
waters of the state.
The legislature has chosen the DNR to
"serve
unit
as
the
central
of
state
government
to
protect,
maintain and improve the quality and management of the waters of
the state, ground and surface, public and private."
§ 281.11.
Wis. Stat.
The legislature has further provided that the purpose
of Wis. Stat. ch. 281 is "to organize a comprehensive program
under a single state agency for the enhancement of the quality
management and protection of all waters of the state."
The
Id.
framework for the comprehensive program within which the DNR
regulates
high
capacity
wells
is
set
forth
in
Wis.
Stat.
§ 281.34 and § 281.35.
¶17
This case provides an example of how the ordinance
runs counter to the state statute.
The DNR has issued a permit
to the Village to operate Well No. 7 pursuant to Wis. Stat.
§ 281.34(2).
The ordinance purports to require an additional
permit
LBMD,
from
information
in
which
addition to
would
what
require
the
the
Village
submission
was
of
required to
submit to the DNR, and would actually prohibit Well No. 7 from
10
No.
2009AP2021
operating as it currently does, because the Village does not
return the water to the Lake Beulah Hydrologic Basin.
¶18
For
the
same
legislature's
purpose
scheme
the
under
context,
if
a
reason,
in
creating
DNR.
local
the
As
we
ordinance
ordinance
a
frustrates
the
comprehensive
explained
have
regulatory
a
prohibits
in
what
the
similar
DNR
has
authorized pursuant to the statutes, its rules, and its role as
manager of water resources, that ordinance is preempted because
it frustrates the purpose of the state law.
Inc.
v.
N.W.2d 69
Dep't
of
(1978)
Natural
Res.,
("Allowing
the
85
Wis. Envtl. Decade,
Wis. 2d 518,
City
of
535-36,
Madison
to
271
prevent
treatment which the DNR has authorized, and thereby frustrate
the [DNR's] program of water resource management, defeats clear
legislative purpose to establish the [DNR] as 'the central unit
of state government' with 'general supervision and control over
the waters of the state.'").
¶19
The permitting scheme that the ordinance imposes in
addition to the comprehensive permitting scheme in Wis. Stat.
§ 281.34
and
§ 281.35
does
not
merely
provide
additional
requirements, but as this case demonstrates, may prohibit the
operation of a high capacity well that is authorized by the DNR
under the statute.
Where the legislature has "adopted a complex
and comprehensive statutory structure," an ordinance that runs
counter to that structure violates the spirit of the legislation
and is preempted.
DeRosso,
Anchor Sav. &
Ass'n
Loan
v.
200
Wis. 2d at
Equal
Opportunities
Wis. 2d 391, 397, 355 N.W.2d 234 (1984)).
11
652
n.8
(quoting
Comm'n,
120
No.
2009AP2021
III. CONCLUSION
¶20
We conclude that the ordinance is invalid because it
conflicts with, defeats the purpose of, and violates the spirit
of
the
legislature's
delegation
of
authority
to
the
DNR
to
regulate high capacity wells in Wis. Stat. § 281.11 and § 281.12
and its creation of a comprehensive permitting framework for
high capacity wells in Wis. Stat. § 281.34 and § 281.35.
Thus,
the ordinance is preempted by state law.
¶21
Therefore,
we
affirm
the
decision
of
the
court
of
appeals
is
appeals.
By
the
Court.—The
decision
affirmed.
12
of
the
court
of
No.
1
2009AP2021
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