Lake Beulah v. DNR: Court of Appeals Reinforces the Public Trust Doctrine

July 30, 2010

The Wisconsin Court of Appeals affirmed an expanded role for the Department of Natural Resources (DNR) in evaluating high-capacity well permit applications. In Lake Beulah Management District v. DNR, the Court reinforced DNR’s consideration of potential surface water impacts from groundwater usage under the Public Trust Doctrine.

The Public Trust Doctrine is a state constitutional provision that requires the state to protect and preserve surface water resources for public use. The legislature required DNR to administer the public trust in surface waters, primarily through Wisconsin Statutes Chapter 30 (relating to structures and deposits in navigable waters) and Chapter 283 (relating to water pollution).

In Lake Beulah, a local lake protection district sued DNR to challenge issuance of a high-capacity well permit to the Village of East Troy, arguing that the well would adversely affect water levels in Lake Beulah. DNR had concluded that it had the authority but not the obligation to consider such impacts, and that the lake district had not presented sufficient information to warrant further evaluation. The trial court agreed.

On appeal, the lake district argued that DNR always has to consider potential surface water impacts, irrespective of statutory grants of power. The Village argued the opposite extreme, that DNR does not have authority to consider surface water impacts because surface water impacts is not a criterion under the well permit statute. DNR argued that the legislature granted authority for DNR to consider surface water impacts under a broad statutory grant not specific to wells, but that DNR will only exercise that authority when a party has presented scientific evidence of potential impacts to surface water. That is, the mere allegation is not sufficient to invoke that duty.

The Court of Appeals agreed with DNR, reasoning that the broad statutory grant of public trust responsibilities to DNR was not inconsistent with the specific well statute. They also agreed that one must do more than merely allege adverse surface water impacts before DNR has any obligation to evaluate surface water impacts. However, the Court of Appeals did not articulate a specific threshold or standard, deferring to DNR as having the requisite expertise to make that scientific judgment.

The Court disagreed with DNR as to whether the lake district had presented evidence that triggered an evaluation requirement. While the lake district had not submitted any such evidence to DNR in the permit proceeding, it sent information in the form of an expert affidavit to DNR’s in-house attorney in connection with a related, albeit different, court case. The Court held that the information given to the DNR attorney was imputed to DNR, and that DNR was therefore required to consider the significance of that information. Accordingly, the Court of Appeals remanded the matter to DNR to consider that affidavit information and conduct appropriate additional investigation.

This case is significant because, for the first time, a court interpreted state statutes as conveying broad public trust authority and responsibilities to DNR. Additionally, these responsibilities apply not only to activities directly affecting surface waters, but also to those that may have indirect adverse impacts to surface waters. Because of its significance, we expect that the Village will petition the Supreme Court for further review.