The following student post is by Kyle M. Peczynski (B.A., University of Michigan; J.D., Wayne State University Law School, expected 2014). While in law school, Kyle has worked at the US EPA and Wayne Law’s Transnational Environmental Law Clinic.

The Wisconsin Supreme Court in July limited the scope of the state’s public trust doctrine when it rejected the state Department of Natural Resources’ reasoning used in support of a water level regulation for Lake Koshkonong. In a 4-3 decision in Rock-Koshkonong Lake District v. State Department of Natural Resources, 833 N.W.2d 800 (2013), the Court held that the DNR improperly relied on the public trust doctrine in making its decision to reject the Rock-Koshkonong Lake District’s (the District) petition to increase the lake’s water level.

Lake Koshkonong is a large, shallow lake in south-central Wisconsin that has approximately 27 miles of shoreline, with 12 of them being comprised of wetlands. The lake was created when the Rock River was dammed in the 1800s. Various parties have owned the dam, the most recent of which is the District. In 2003, the District petitioned the DNR to allow an increase in the lake’s water level, claiming that the shallow water had been causing problems for boaters, riparians, and plants and wildlife. The DNR rejected the petition, a decision that was upheld upon challenge by an administrative law judge, circuit court, and court of appeals.

There were four issues for review on appeal to the Wisconsin Supreme Court: (1) the level of deference that should be accorded to the DNR; (2) whether the DNR exceeded its authority in making a water level determination “in the interest of public rights in navigable waters” by considering the impact of lake water levels on adjacent private wetlands above the lake’s ordinary high water mark; (3) whether the DNR exceeded its authority by considering the statutory wetland water quality standards; and (4) whether the DNR erred in its decision by not considering the water level impacts on residential property value, business income, and public revenue.

The Court promptly disposed of the first issue, holding that since the DNR and the District were in dispute over the scope of the agency’s power, the agency was entitled to no deference and the issue would be reviewed de novo.

The Court then ruled against the DNR on two of the remaining three substantive issues. It acknowledged that the state of Wisconsin’s public trust doctrine protects waters for the purposes of navigability and recreation. The basis for this authority is in the Wisconsin state constitution, art. IX, § 1, which says that “the state shall have concurrent jurisdiction” with other states over border waters and “the carrying places between them shall be common highways and forever free.” However, the Court held that the DNR’s effort to protect private wetlands above the ordinary high water mark went beyond its constitutional authority. Instead, the DNR has the authority to regulate non-navigable wetlands under Wisconsin statute and pursuant to its police power to protect property. The Court was careful to draw a distinction between constitutional public trust doctrine authority and the police power, stating that while the latter is “potent,” it is also “subject to constitutional and statutory protections afforded to property […] and requires some balancing of competing interests in enforcement.”

For the third issue, the District claimed that the DNR exceeded its authority in considering wetland water quality standards in its decision. The Court concluded, after a statutory interpretation analysis, that the DNR was not precluded from wetland water quality standard consideration under Wis. Admin. Code § NR 103.

Finally, the Court held that the DNR erred in excluding testimony on economic impacts when making its decision. In response to the DNR’s concern that the consideration of economic impacts has no logical stopping point, the Court merely stated that a “reasonableness standard” should apply. The Court also noted that since the raising and lowering of water levels is a government regulation, economic impacts would be critical to determining the outcome of any takings claims that would arise out of the DNR’s water level decisions.

Note: For more expert analysis of the decision, see this op-ed by Professor Melissa K. Scanlan, the Associate Dean of the Environmental Law Program and Director of the Environmental Law Center at Vermont Law School; and this analysis by Professor Robin Kundis Craig, the William H. Leary Professor of Law at the University of Utah S.J. Quinney College of Law. Further, the case is presented and analyzed in detail in our new casebook, Modern Water Law: Private Property, Public Rights, and Environmental Protections and the accompanying updated teachers manual.