Michigan Farm Bureau v. Dept of Environment Great Lakes and Energy
997 N.W.2d 467
Mich. Ct. App.2022Background
- Plaintiffs: Michigan farm groups and numerous CAFO-operated farms challenged EGLE’s March 27, 2020 NPDES CAFO general permit (the 2020 general permit).
- The 2020 permit added conditions: reduced phosphorus application limits (especially in TMDL watersheds), presumptive Jan–Mar winter land-application prohibition and transfer ban, mandatory 35-foot permanent vegetated buffers, and expanded 100-foot setbacks from various conduits to surface waters.
- Plaintiffs filed a petition for a contested-case hearing with EGLE and then sued in the Court of Claims seeking declaratory and injunctive relief, arguing the new permit conditions were effectively unpromulgated rules (violating the APA), arbitrary/capricious, beyond EGLE’s authority, and raised constitutional claims.
- EGLE moved for summary disposition under MCR 2.116(C)(4) and (C)(8), arguing plaintiffs had not exhausted administrative remedies and the Court of Claims lacked jurisdiction.
- The Court of Claims dismissed for lack of jurisdiction because plaintiffs had not completed the available administrative process (contested case still pending).
- On appeal the Court of Appeals affirmed dismissal but on a different ground: plaintiffs failed to comply with MCL 24.264’s presuit requirement to first request a declaratory ruling from the agency before commencing a declaratory-judgment action.
Issues
| Issue | Plaintiffs' Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs could challenge the 2020 permit conditions in Court of Claims under MCL 24.264 without first seeking an agency declaratory ruling | Plaintiffs argued MCL 24.264 allows direct declaratory-judgment actions challenging agency rules and exhaustion was unnecessary because the conditions were invalid rules and presented pure legal questions | EGLE argued plaintiffs must exhaust administrative remedies (contested case) and MCL 24.264 requires a presuit request for a declaratory ruling; the agency process should run first | Held: Plaintiffs failed to request a declaratory ruling as required by MCL 24.264; dismissal affirmed (without prejudice) for lack of jurisdiction |
| Whether the 2020 permit conditions were "rules" subject to MCL 24.264 | Plaintiffs: Conditions function as rules (binding, general applicability) and thus are challengeable under MCL 24.264 | EGLE: Conditions were permit decisions better resolved in the administrative contested-case process; plaintiffs must exhaust | Held: Court agreed conditions have the force of rules but emphasized statutory presuit requirement of MCL 24.264 controls; plaintiffs still needed to request an agency declaratory ruling first |
| Whether failure to exhaust administrative remedies (contested case) deprived court of jurisdiction | Plaintiffs: Contested case was pending; exhaustion should not be required for purely legal or constitutional challenges | EGLE: Contested case must conclude; agency record development is necessary; exhaustion required | Held: Although trial court dismissed on exhaustion grounds, appellate court affirmed dismissal on MCL 24.264 presuit ground; exhaustion in contested case remains relevant but was not the appellate court’s controlling rationale |
| Whether constitutional claims (due process, separation/nondelegation, takings) excused exhaustion | Plaintiffs: Constitutional issues are pure law and can excuse exhaustion | EGLE: Constitutional claims involve factual permit standards and are suited for administrative record development | Held: Characterizing claims as constitutional does not automatically excuse presuit/statutory requirements when factual issues remain; plaintiffs still needed to seek agency declaratory ruling first |
Key Cases Cited
- Travelers Ins. Co. v. Detroit Edison Co., 465 Mich 185 (standards for de novo review of C(4) jurisdictional motions)
- Jones v. Dep’t of Corrections, 185 Mich App 134 (discussed exhaustion and whether nonpromulgated directives qualify as APA rules)
- Mich. Farm Bureau v. Dep’t of Environmental Quality, 292 Mich App 106 (discussed agency declaratory rulings and challenges to rule validity; distinguishing facts)
- Sierra Club Mackinac Chapter v. Dep’t of Environmental Quality, 277 Mich App 531 (background on Michigan CAFO/NPDES regulatory framework)
- Gleason v. Dep’t of Transportation, 256 Mich App 1 (appellate principle affirming correct result for different reasons)