WOLVERINE POWER SUPPLY COOPERATIVE INC V DEPT OF ENVIRONMENTAL QUAnnotate this Case
STATE OF MICHIGAN
COURT OF APPEALS
WOLVERINE POWER SUPPLY
COOPERATIVE, INC, and MID-MICHIGAN
September 15, 2009
CONSUMERS ENERGY COMPANY,
Missaukee Circuit Court
LC No. 08-007064-CE
DEPARTMENT OF ENVIRONMENTAL
Advance Sheets Version
Before: Whitbeck, P.J., and Davis and Gleicher, JJ.
Defendant, Department of Environmental Quality (the Department), appeals as of right
the trial court’s order granting plaintiffs, Wolverine Power Supply Cooperative, Inc., and MidMichigan Energy, LLC, summary disposition under MCR 2.116(C)(10). Because we conclude
that the Department had no authority to promulgate the rule in question—which adds a contested
case procedure for permits to install major sources of air emissions—we affirm.
I. Basic Facts and Procedural History
The Department is a state agency that administers federal and state air quality standards.
The Department has promulgated rules for the prevention of significant deterioration of air
quality under which entities seeking to install new major sources of air emissions must obtain
permits from the Department. In 2006, the Department promulgated Rule 1830.1 Rule 1830
Mich Admin Code, R 336.2830.
allows persons to request a formal hearing, known as a contested case hearing, after receiving
notice of the Department’s approval or denial of a permit.
Plaintiffs Wolverine and Mid-Michigan are companies that provide electricity to
Michigan residents. Intervenor Consumers Energy Company is also a company that provides
electricity to Michigan residents. In September 2007, Wolverine and Mid-Michigan sought
permits from the Department regarding the proposed construction of new power plants that
would use coal and biomass fuels. While the permit applications were pending, Wolverine
requested a declaratory ruling from the Department that Rule 1830 was invalid or that it could
not be applied to Wolverine’s permit application. In June 2008, the Department denied
Wolverine’s request, stating that the request “does not meet the requirements for issuance of a
declaratory ruling.” The Department also stated that it “had no authority to strike down a rule,
nor does it have the authority to ignore its application to a particular licensee.”
Wolverine and Mid-Michigan then filed complaints against the Department, seeking a
declaratory judgment that Rule 1830 was invalid. At the subsequent summary disposition
hearing, Wolverine’s counsel asserted that the permitting program for the prevention of
significant deterioration of air quality had been in effect for more than 20 years. (The program
for the “prevention of significant deterioration” of air quality is “the major source
preconstruction permit program” for installation of sources of air emissions.2) According to
Wolverine’s counsel, during those 20 years, the Department conducted the permitting process as
a “delegated state,” meaning that the Department reviewed permit applications related to the
prevention of significant deterioration of air quality under the authority of the United States
Environmental Protection Agency. Wolverine’s counsel explained that the Department adopted
Rule 1830 as part of a set of rules to become an “approved state,” meaning that the Department
would review permit applications related to the prevention of significant deterioration of air
quality under its own authority.
Wolverine’s counsel argued that Rule 1830 was a “sweeping change” that was not
required by the federal notice and comment provisions and “does not effectuate the purposes of
the clean air act.”3 Counsel stated that a contested case hearing is vastly different from circuit
court review of administrative decisions, noting that a contested case hearing can be a lengthy
process that involves discovery and an evidentiary record. Mid-Michigan’s counsel presented
In response, the Department’s counsel argued that Rule 1830 merely “changed the point
in the permitting process where there is a final agency action.” The Department’s counsel
explained that before the promulgation of Rule 1830, applicants could appeal permit decisions
directly in circuit court. Rule 1830 “added a step”; that is, it allowed applicants or other
aggrieved persons to seek contested case hearings. Counsel indicated that after a decision on the
contested case hearing, permit applicants could appeal in circuit court. Counsel acknowledged
that the contested case hearing procedure could add substantial time to the permitting process.
Mich Admin Code, R 336.2801(jj).
42 USC 7470 et seq.
In ruling on the motions, the trial court determined that Rule 1830 was contrary to the
provisions of the enabling statute and that the rule would have no force or effect with respect to
plaintiffs’ permit applications. The Department now appeals.
II. Rule 1830 and the Department’s Statutory Authority
A. Standard of Review
The Department argues that it has clear and broad statutory authority to promulgate rules
for hearings on air emission permitting decisions. According to the Department, this authority
includes the power to promulgate Rule 1830, which allows persons to request contested hearings
to challenge permitting decisions for new sources of air emissions. The Department asserts that
Rule 1830 is an appropriate exercise of its authority to develop an evidentiary record on
permitting issues before rendering a final agency decision. The Department contends that the
trial court misunderstood the statutory and regulatory structure applicable to Rule 1830 and
incorrectly declared the rule invalid.
Wolverine and Mid-Michigan argue that Rule 1830 is invalid. They assert that the rule
conflicts with the statutory section governing review of permitting decisions—MCL
324.5505(8)—that specifies that the exclusive review procedure for a new source permitting
decision is a petition in the circuit court. They contend that the section does not allow contested
case hearings for new source permitting decisions. They go on to argue that the Department
cannot rely on general statutory provisions for authority to promulgate the rule at issue for three
reasons. First, the Department failed to present this argument to the trial court, so the argument
is waived. Second, the general statutory provisions are reserved for the Commission of Natural
Resources, not the Department. Third, according to Wolverine, the Department’s position is
contrary to the position it took and prevailed on in unrelated litigation, and thus it is estopped
from pursuing its argument in the present case.
Consumers Energy additionally argues that this Court should reject the Department’s
proposed statutory interpretation because the interpretation violates well-established rules of
statutory construction. Statutory construction rules require this Court to adhere to unambiguous
statutory language, and, according to Consumers Energy, the enabling language here
unambiguously precludes contested case hearings on new source emission permits. Consumers
Energy asserts that the statutory construction rules also require the Court to apply the most
specific statute in a topic area, and the most specific statute applicable to new source permits
states that the exclusive means for review is a judicial review, not a contested case hearing.
According to Consumers Energy, aside from the rules of statutory construction, Rule
1830 is unnecessary and creates undue confusion regarding the review process for new source
emission permits because the application process for permits provides ample opportunity for
technical review and public comment, rendering later contested case hearings unnecessary.
Consumers Energy asserts that the Legislature intentionally excluded contested case hearings for
new source permits because those permits involve initial licenses and do not require the formal
due process protections available to holders of existing permits. Consumers Energy contends
that Rule 1830 conflates two distinct statutory methods of administrative procedure and is thus
The issue whether the Department was within its statutory authority in promulgating Rule
1830 is a question of law, which this Court reviews de novo.4
B. Issue Preservation
As a preliminary matter, we note that the Department preserved the basic issue here by
presenting it to the trial court in a summary disposition brief and at the summary disposition
hearing. However, on appeal the Department relies in part on MCL 324.1101, which it did not
rely on in the trial court. Therefore, Wolverine and Mid-Michigan claim that the Department
failed to preserve its argument concerning MCL 324.1101. But the Department maintains that
no preservation was required because reliance on MCL 324.1101 is merely part of a legal
argument applicable to the question whether it had statutory authority to promulgate Rule 1830.
Further, the Department points out that this Court may disregard preservation requirements when
the factual record presents the necessary issues or when consideration of the unpreserved
argument is necessary to the proper analysis of the appeal.5
This Court has previously allowed an appellant who challenged the validity of a
regulation to pursue an argument on appeal that had not been preserved in the trial court.6 In
McNeil v Charlevoix Co, this Court determined that the issue whether an agency had authority to
develop regulations was a question of law and that because the record contained the facts
necessary to address the question, this Court would review the appellant’s argument.7 Similarly,
the question presented here encompasses the Department’s authority to promulgate a regulation,
and consideration of MCL 324.1101 is necessary to a full and proper resolution of the appeal.
Accordingly, we will consider the Department’s argument regarding MCL 324.1101.
C. Regulation of Air Emissions
The federal Clean Air Act requires states to regulate air emissions.8 The corresponding
Michigan statutes are codified in part 55 of Michigan’s Natural Resources and Environmental
Protection Act (NREPA).9 The NREPA delineates air emissions requirements and authorizes the
Department to promulgate rules governing permits to install facilities that produce air
emissions.10 The NREPA also authorizes the Department to promulgate rules governing
renewable permits to operate, as opposed to install, major sources of air emissions.11 The
McNeil v Charlevoix Co, 275 Mich App 686, 691; 741 NW2d 27 (2007), aff’d 484 Mich 69
(2009). See generally In re Complaint of Rovas Against SBC Michigan, 482 Mich 90, 100-109;
754 NW2d 259 (2008).
See Laurel Woods Apartments v Roumayah, 274 Mich App 631, 640; 734 NW2d 217 (2007).
McNeil, supra at 693-694.
Id. at 694 n 8.
42 USC 7407.
MCL 324.5501 et seq.
MCL 324.5506; see Mich Admin Code, R 336.1210 and 336.1211.
NREPA requires the Department to provide for public notice and comment on permit
applications and to provide for public hearings if there is a known public controversy about an
The Department adopted rules governing the prevention of significant
deterioration of air quality and the permitting process.13 The permitting process requires the
owner of a proposed project to submit “information required by the department on the
application form,” which includes information such as the topography, climatology, and
hydrology of the proposed site, as well as data on proposed fuels and projected emissions and a
modeling analysis of air quality effects.14
D. Rule 1830
Rule 1830 broadened the method for interested parties to challenge a permit to install a
new source of air emissions.15 Rule 1830 reads, in pertinent part:
A person aggrieved by an action or inaction of the department under
prevention of significant deterioration of air quality regulations may request a
formal hearing, under 1969 PA 306, MCL 24.201. The following apply:
(a) The request shall be received by the department within 30 days after
the person received notice of the decision to approve or deny the permit.
(b) The final decision in granting a contested case hearing lies with the
department. . . .
(c) When the department issues a permit . . . , the permit is valid upon
issuance and it is not automatically stayed if a person requests a formal hearing
pursuant to this rule. A permittee may immediately initiate construction after
permit issuance. However, the permittee faces the risk that a subsequent hearing
may alter the terms or conditions of the permit.
Thus, Rule 1830 allows aggrieved persons and permit applicants to seek a contested case hearing
to challenge the approval or denial of a permit to install.17
Mich Admin Code, R 336.2801 to 336.2830.
Mich Admin Code, R 336.1203 and 336.1205.
See MCL 324.5505(1); Mich Admin Code, R 336.1116(f).
Mich Admin Code, R 336.2830.
Mich Admin Code, R 336.2830(b).
E. The Administrative Procedures Act
In referring to “1969 PA 306, MCL 24.201,” Rule 1830 invokes the contested case
hearing provisions of Michigan’s Administrative Procedures Act.18 According to the
Administrative Procedures Act, a contested case hearing is
a proceeding, including rate-making, price-fixing, and licensing, in which a
determination of the legal rights, duties, or privileges of a named party is required
by law to be made by an agency after an opportunity for an evidentiary hearing.
When a hearing is held before an agency and an appeal from its decision is taken
to another agency, the hearing and the appeal are deemed to be a continuous
proceeding as though before a single agency.
F. The Department’s Rulemaking Authority
The Department’s rulemaking authority derives from powers that the Michigan
Legislature has granted.20 To determine whether a particular rule is a valid exercise of an
agency’s authority, this Court applies a three-part test: “(1) whether the rule is within the subject
matter of the enabling statute; (2) whether it complies with the legislative intent underlying the
enabling statute; and (3) whether it is arbitrary or capricious.”21 The parties’ arguments focus on
the first two parts of the test.
To address these arguments, this Court must examine the NREPA’s enabling sections and
determine whether the Department has authority to provide contested case hearings specifically
with respect to permits to install. The question whether the NREPA provides the requisite
authority is a matter of statutory construction.22 This Court recently reiterated the general
principles governing statutory construction in Oneida Charter Twp v Grand Ledge:
When interpreting the meaning of a statute, our main objective is to
ascertain and give effect to the Legislature’s intent. The first step is to determine
whether the language of the statute is plain and unambiguous. If the language is
unambiguous, we must assume that the Legislature intended its plain meaning
and, accordingly, we must apply the statute’s language as written. In such
instances, we must assume that every word has some meaning and we must give
effect to every provision, if possible. In doing so, we are to give words their plain
and ordinary meaning, unless otherwise defined by the Legislature. We may not
speculate regarding the Legislature’s probable intent, nor may we “inquire into
MCL 24.271 to 24.287.
See Citizens for Protection of Marriage v Bd of State Canvassers, 263 Mich App 487, 492;
688 NW2d 538 (2004).
Dykstra v Dep’t of Natural Resources, 198 Mich App 482, 484; 499 NW2d 367 (1993).
Verizon North, Inc v Pub Service Comm, 263 Mich App 567, 569; 689 NW2d 709 (2004).
the knowledge, motives, or methods of the Legislature.” It is only when the
statute’s language is ambiguous that this Court is permitted to look beyond the
statute’s language to determine the Legislature’s intent.
We must not consider the statute’s language in isolation; rather, we must
consider each word and phrase in light of its placement and purpose within the
statutory scheme. Subsections of a statute are not to be read discretely, but as part
of a whole. “[T]he entire act must be read, and the interpretation to be given to a
particular word in one section arrived at after due consideration of every other
section so as to produce, if possible, a harmonious and consistent enactment as a
Finally, we are mindful that “it is a settled rule of statutory construction
that where a statute contains a specific statutory provision and a related, but more
general, provision, the specific one controls.”
G. MCL 324.5505
(1) General Provisions
MCL 324.5505 is the section of NREPA’s air pollution control provisions that governs
permits to install. MCL 324.5505 expressly authorizes the Department to grant or deny permits
to install and to promulgate rules for issuing permits. The statute requires entities to obtain
permits from “the department.”24 The NREPA defines “department” as the director of the
Department of Natural Resources or the director’s designee.25 In 1995, an executive order
transferred the powers of the Air Quality Division of the Department of Natural Resources to the
Department.26 The executive order transferred all “statutory authority, powers, duties, functions
and responsibilities” of the Department of Natural Resources Air Quality Division, “including
but not limited to the authority, powers, duties, functions and responsibilities set forth in . . .
[MCL] 324.5501 et seq.”27
(2) Rulemaking Powers
Various subsections of MCL 324.5505 grant certain powers to the Department.
Subsection (2) states that the “department shall promulgate rules to establish a permit to install
Oneida Charter Twp v Grand Ledge, 282 Mich App 435, 442-443; 766 NW2d 291 (2009),
rev’d on other grounds 485 Mich ___ (Docket No. 138520, entered September 11, 2009)
MCL 324.99903, compiling Executive Reorganization Order 1995-16.
MCL 324.99903, ¶ 3(a).
program to be administered by the department.”28 Similarly, subsection (4) states that the
“department may promulgate rules to provide for the issuance of general permits”; subsection (5)
states that the “department may issue a permit to install”; and subsection (6) states that the
“department may promulgate rules to establish a program that authorizes issuance of
nonrenewable permits to operate for sources, processes, or process equipment that are not subject
to the requirement to obtain a renewable operating permit pursuant to [MCL 324.5506].”29
(3) Subsection (8)
MCL 324.5505(8), hereinafter “subsection (8),” addresses appeals from permitting
actions. Unlike the subsections quoted earlier, which expressly authorize the Department to take
certain actions, subsection (8) does not directly delegate authority to the Department. Rather,
subsection (8) delineates the appeal process applicable to permits to install, providing that any
person may seek judicial review of the issuance or denial of such a permit:
Any person may appeal the issuance or denial by the department of a
permit to install, a general permit, or a permit to operate authorized in rules
promulgated under subsection (6), for a new source in accordance with section
631 of the revised judicature act of 1961, 1961 PA 236, MCL 600.631. Petitions
for review shall be the exclusive means to obtain judicial review of such a permit
and shall be filed within 90 days after the final permit action, except that a
petition may be filed after that deadline only if the petition is based solely on
grounds arising after the deadline for judicial review. Such a petition shall be
filed no later than 90 days after the new grounds for review arise. Appeals of
permit actions for existing sources are subject to [MCL 324.5506(14)].
The appeal process to which subsection (8) refers is a direct appeal in the circuit court
under the Revised Judicature Act. Under that act,
[a]n appeal shall lie from any order, decision, or opinion of any state board,
commission, or agency . . . to the circuit court of the county of which the
appellant is a resident or to the circuit court of Ingham county, which court shall
have and exercise jurisdiction with respect thereto as in nonjury cases.”
Wolverine, Mid-Michigan, and Consumers Energy argue that subsection (8), through its
pronouncement that “[p]etitions for review shall be the exclusive means to obtain judicial review
of such a permit,” plainly and unambiguously limits permit-to-install appeals to the review
procedure available under the Revised Judicature Act; that is, appeals in circuit court. They
assert that, given the reference to this “exclusive” procedure, the Department’s attempt to add a
MCL 324.5505(4) to (6).
contested case hearing procedure is invalid. But the terms of subsection (8) do not, in and of
themselves, support this argument.
There can be no dispute that the statutory term “shall” is mandatory; it expresses a
directive, not an option.32 Also, the term “exclusive” is unambiguous; it means “limited to that
which is designated[.]”33 However, when read in context, these words simply provide that a
petition for review, as opposed to some other means of review, shall be the exclusive means to
obtain judicial (that is, circuit court) review of the Department’s permit issuance or denial.
Contrary to how Wolverine, Mid-Michigan, and Consumers Energy would have us read the
provision, subsection (8), on its face, does not state that judicial review is the exclusive means to
obtain review. In other words, subsection (8) does not, by itself, limit review exclusively to a
judicial review procedure. Therefore, when read alone, subsection (8) might arguably permit
administrative, as well as judicial, review. But, as we will explain, when compared with MCL
324.5506(14), it becomes clear that the Legislature knows how to allow for both administrative
and judicial review of Department decisions, yet chose not to provide for both of those
procedures in subsection (8).
H. MCL 324.5506(14)
MCL 324.5506 governs operating permits for sources of air emissions. It authorizes the
Department to promulgate rules to establish an operating-permit program, including inspections,
monitoring, and compliance plans.34 MCL 324.5506(14), hereinafter “subsection (14),”
addresses review of operating-permit decisions. Unlike subsection (8), subsection (14) mandates
two separate review procedures for two types of entities that may seek review concerning
operating permits. The first review procedure is a contested case hearing, which is available
only to owners or operators of a facility seeking review of the denial of an operating permit.35
The second procedure is judicial review, which is available to any person seeking review of the
issuance or denial of an operating permit. Subsection (14) reads:
A person who owns or operates an existing source that is required to
obtain an operating permit under this section, a general permit, or a permit to
operate authorized under rules promulgated under [MCL 324.5505(6) (issuance of
nonrenewable permits to operate)] may file a petition with the department for
review of the denial of his or her application for such a permit, the revision of any
emissions limitation, standard, or condition, or a proposed revocation of his or her
permit. This review shall be conducted pursuant to the contested case and judicial
review procedures of the administrative procedures act of 1969, Act No. 306 of
the Public Acts of 1969, being sections 24.201 to 24.328 of the Michigan
Compiled Laws. Any person may appeal the issuance or denial of an operating
In re Kostin Estate, 278 Mich App 47, 57; 748 NW2d 583 (2008).
Random House Webster’s College Dictionary (1997).
MCL 324.5506(4)(b) and (d).
permit in accordance with section 631 of the revised judicature act of 1961, Act
No. 236 of the Public Acts of 1961, being section 600.631 of the Michigan
Compiled Laws. A petition for judicial review is the exclusive means of
obtaining judicial review of a permit and shall be filed within 90 days after the
final permit action. Such a petition may be filed after that deadline only if it is
based solely on grounds arising after the deadline for judicial review and if the
appeal does not involve applicable standards and requirements of the acid rain
program under title IV. Such a petition shall be filed within 90 days after the new
grounds for review arise.
As Wolverine, Mid-Michigan, and Consumers Energy point out, there is a striking
distinction between the review procedures provided in subsection (8), concerning permits to
install, and those provided in subsection (14), concerning operating permits. Subsection (8)
allows “[a]ny person” to “appeal the issuance or denial” of a permit to install by seeking a
review under the Revised Judicature Act.37 By contrast, subsection (14) allows owners or
operators to seek a contested case hearing under the Administrative Procedures Act on an
operating-permit denial and allows “[a]ny person” to seek a review under the Revised Judicature
Act of the “issuance or denial of an operating permit . . . .”38 When the Legislature includes a
provision in one statute and omits the provision in a related statute, the Court should construe the
omission as intentional and should not include an omitted provision where none exists.39 We
conclude that the inclusion of the contested case procedure in subsection (14), concerning
operating permits, but not in subsection (8), concerning permits to install, demonstrates the
Legislature’s decision that contested case hearings are appropriate for denials of permits to
operate, but are not appropriate for decisions on permits to install.
The Department maintains that because subsection (8) is silent with regard to contested
case hearings, the Legislature made no conclusion on the contested case procedure for permits to
install. This argument is plausible if subsection (8) is read in isolation. Subsection (8) states that
a person may “appeal the issuance or denial” of a permit pursuant to the Revised Judicature Act
and states that a petition for review under the Revised Judicature Act is the exclusive means to
obtain “judicial review.”40 Therefore, as stated earlier, subsection (8) does not expressly prohibit
administrative review; the subsection simply states that the Revised Judicature Act procedure is
the exclusive means of judicial review. However, when read in combination with the provision
for contested case hearings in subsection (14), the omission of contested case hearings in
subsection (8) is purposeful. That omission, combined with the Legislature’s reference to the
“exclusive” means of judicial review, demonstrates to us that the contested case procedure is not
available for decisions on permits to install.
Donkers v Kovach, 277 Mich App 366, 371; 745 NW2d 154 (2007).
I. MCL 324.5503
MCL 324.5503 addresses the Department’s general authority for air quality regulation.
The Department argues that MCL 324.5503 provides broad authority to promulgate rules. In
particular, the Department cites subdivisions (b), (e), and (u), which read:
The department may do 1 or more of the following:
(b) Issue permits for the construction and operation of sources, processes,
and process equipment, subject to enforceable emission limitations and standards
and other conditions reasonably necessary to assure compliance with all
applicable requirements of this part, rules promulgated under this part, and the
clean air act.
(e) Make findings of fact and determinations.
(u) Do such other things as the department considers necessary, proper, or
desirable to enforce this part, a rule promulgated under this part, or any
determination, permit, or order issued under this part, or the clean air act.
We conclude that the Department’s reliance on MCL 324.5503 is misplaced for two
reasons. First, nothing in the provisions that the Department cites relates to promulgating rules
for review of agency decisions. The provisions that the Department cites allow it to issue
permits, to make findings of fact, and to do other things necessary to enforce clean air standards.
The issuance and enforcement of rules, however, does not necessarily include an administrative
review procedure after issuance of a permit.
Second, the provisions in MCL 324.5503 are general in nature; that is, they are not tied to
the Department’s administration of any particular type of permits or to its review procedures. By
contrast, the provisions of subsection (8) are specific in nature, governing the Department’s
administration of permits to install. When a statutory scheme provides both general and specific
provisions, the more specific provisions control.42 Accordingly, the specific provisions of
subsection (8) control the Department’s authority to establish review procedures. The
Department cannot rely on the general provisions in MCL 324.5503 as authority for the
contested case procedures in Rule 1830.
Miller v Allstate Ins Co, 481 Mich 601, 613; 751 NW2d 463 (2008).
J. MCL 324.1101
(1) Judicial Estoppel
MCL 324.1101 governs general appellate rights of matters under the NREPA. Wolverine
argues that this Court should judicially estop the Department from presenting an argument
concerning MCL 324.1101. Judicial estoppel is an equitable doctrine that the Court may raise to
preclude inconsistent judicial rulings.43 The doctrine allows courts to bar parties who have
prevailed on a position in one proceeding from asserting wholly inconsistent positions in
subsequent proceedings.44 According to Wolverine, the Department took the position in a prior
proceeding that MCL 324.1101 does not authorize contested case hearings on permit-to-install
However, the proceeding in which the Department took this position45 was unrelated to
the present proceeding. Generally, the judicial estoppel doctrine applies when a party’s position
conflicts with “a position taken earlier in the same or related litigation.”46 Moreover, as the
Department correctly points out, the position it took in the prior proceeding was not wholly
inconsistent with the position it takes here.
(2) The Department’s Authority Under Executive Orders
The agencies that have authority over natural resources have changed over time. In 1991,
an executive reorganization order consolidated various boards and commissions into the
Department of Natural Resources.47 The order transferred authority that had been vested in the
Commission of Natural Resources and other agencies to the Department of Natural Resources.48
The order retained certain authority in the Commission of Natural Resources, in particular, that a
final decision of the Department of Natural Resources relating to the issuance of permits would
be subject to review by the Commission of Natural Resources.49
Opland v Kiesgan, 234 Mich App 352, 365; 594 NW2d 505 (1999).
Paschke v Retool Industries, 445 Mich 502, 509-510; 519 NW2d 441 (1994).
In re Appelt, unpublished order of the Department of Environmental Quality, entered August
14, 1996 (File No. 990-90).
Detroit Edison Co v Pub Service Comm, 221 Mich App 370, 382; 562 NW2d 224 (1997)
(emphasis added); see also Michigan Gas Utilities v Pub Service Comm, 200 Mich App 576,
583; 505 NW2d 27 (1993); but see Opland, supra at 363 n 8 (noting in dicta that privity is not
required for judicial estoppel).
Executive Reorganization Order 1991-22, compiled at MCL 299.13; House Speaker v
Governor, 443 Mich 560, 564-565; 506 NW2d 190 (1993).
ERO 1991-22, part III.
ERO 1991-22, part IV(B)(2)(b).
In 1995, another executive reorganization order created the Department.50 That order
transferred all of the Air Quality Division’s authority to the Department, “including but not
limited to . . . authority under [MCL] 324.5501 et seq.”51 Wolverine, Mid-Michigan, and
Consumers Energy claim that the Department has no authority for administrative appeals under
the 1995 order because the Department’s predecessor under the 1991 order had no authority for
administrative appeals. We disagree. The 1995 order transferred the Commission of Natural
Resources’ authority for administrative appeals to the Department, as follows:
All authority to make decisions regarding administrative appeals
associated with the transfers referred to in paragraphs 3 [including the transfer of
the Air Quality Division], 5 and 6 above, which reside with the Commission of
Natural Resources or the Michigan Department of Natural Resources, are
transferred to the Director of the Michigan Department of Environmental Quality.
In the event the Director is directly involved in an initial decision which is
subsequently appealed through the Office of Administrative Hearings and to the
Director for a decision, the Director shall appoint an individual within or outside
the Michigan Department of Environmental Quality to decide the appeal.
(3) Interpretation of MCL 324.1101
The Department argues that MCL 324.1101 “broadly authorizes [the Department] to
review challenges to permitting decisions for both new and existing sources by conducting case
hearings when the agency chooses to do so.” According to the Department, the lack of reference
to contested case hearings in MCL 324.5505 must therefore be read in the context of MCL
324.1101. MCL 324.1101 provides two procedures for review of agency decisions, the first
applicable to a “final decision” of the Department regarding permits and the second applicable to
other Department decisions:
(1) If a person has legal standing to challenge a final decision of the
department under this act regarding the issuance, denial, suspension, revocation,
annulment, withdrawal, recall, cancellation, or amendment of a permit or
operating license, the commission, upon request of that person, shall review the
decision and make the final agency decision. A preliminary, procedural, or
intermediate decision of the department is reviewable by the commission only if
the commission elects to grant a review. If a person is granted review by the
commission under this section, the person is considered to have exhausted his or
her administrative remedies with regard to that matter. The commission may
utilize administrative law judges or hearing officers to conduct the review of
decisions as contested case hearings and to issue proposals for decisions as
provided by law or rule.
See MCL 324.99903.
MCL 324.99903, ¶ 3(a).
MCL 324.99903, ¶ 7.
(2) In all instances, except those described in subsection (1), if a person
has legal standing to challenge a final decision of the department under this act,
that person may seek direct review by the courts as provided by law. Direct
review by the courts is available to that person as an alternative to any
administrative remedy that is provided in this act. A preliminary, procedural, or
intermediate action or ruling of the department is not immediately reviewable,
except that the court may grant leave for review of a preliminary, procedural, or
intermediate action or ruling if the court determines that review of the final
decision would not provide an adequate remedy. If a person is granted direct
review by the courts under this section, the person is considered to have exhausted
his or her administrative remedies with regard to that matter.
MCL 324.1101 is general in scope, in that it applies to all permits and licenses that may
issue under the NREPA, including, among many others, those for floodplain alteration, sewer
systems, pesticide sales, soil erosion, and fur dealing.54 In contrast, the rules on prevention of
significant deterioration of air quality, which include Rule 1830, do not list MCL 324.1101 as an
enabling authority. The preface to the rules on prevention of significant deterioration of air
quality state that they are “[b]y authority conferred on the director of the department of
environmental quality by sections 5503, 5505(4), and 5512 of 1994 PA 451, MCL 324.5503,
324.5505(4), and 324.5512, and Executive Reorganization Order No. 1995-18, MCL
324.99903.”55 Applying the principle that a specific statutory provision will control over a
related general provision, MCL 324.1101 cannot be deemed to grant the Department authority to
provide a review process for permits to install.56
In sum, the Department’s reliance on the general structure of the NREPA and the general
enabling statutes is unpersuasive. The Legislature designated a specific review procedure for
decisions on permit to install, and the Department must adhere to that procedure unless and until
the Legislature amends the specified review.
We note, however, that during the pendency of this appeal Governor Granholm issued an
executive directive addressing the processing of air permit applications.57 The directive declares,
among other things, that the need for additional coal-fired generating plants has been reduced,
A. Before issuing a permit to install under Part 55 of the National
Resources and Environmental Protection Act, 1994 PA 451, MCL 324.5501 to
324.5542, for the construction of a new coal-fired electricity generating plant, the
Department of Environmental Quality shall determine whether there is a feasible
MCL 324.1101(1) and (2).
See MCL 324.1301(d).
2006 Mich Reg 23 (January 1, 2007), p 2.
Miller, supra at 613.
Executive Directive No. 2009-2 (February 13, 2009).
and prudent alternative consistent with the reasonable requirements of the public
health, safety, and welfare that would better protect the air, water, and other
natural resources of this state from pollution than the proposed coal-fired
electricity generating plant.
B. Before making the determination required by Paragraph A, the
Department shall first determine whether a reasonable electricity generation need
exists in this state that would be served by the proposed coal-fired electricity
generating plant. If a reasonable electricity generation need exists in this state,
the Department shall estimate the extent of the reasonable electricity generation
D. If the Department determines that a feasible and prudent alternative to
the construction of a new proposed coal-fired electricity generating plant exists
consistent with the reasonable requirements of the public health, safety, and
welfare that would better protect the air, water, and other natural resources of this
state than the proposed coal-fired electricity generating plant, the Department
shall not issue a permit to install.
Although the directive does not address review procedures, it appears to establish an
additional fact-finding requirement before the issuance of a permit to install. As the issue is not
before us, we take no position on whether the directive requires contested case hearings to
establish the necessary factual record for a challenge to a permit-to-install decision.
Rule 1830 directly conflicts with subsection (8). When read in conjunction with
subsection (14), subsection (8) provides the exclusive means for obtaining review of the
Department’s decisions on permits to install. That procedure is a judicial review under the
Revised Judicature Act. Accordingly, the Department had no authority to promulgate the
provisions of Rule 1830 setting out a contested case hearing procedure for permits to install.
/s/ William C. Whitbeck
/s/ Alton T. Davis
/s/ Elizabeth L. Gleicher
ED 2009-2, ¶¶ A, B, and D.