Alcona County v. Wolverine Environmental Production, Inc.Alcona County v. Wolverine Environmental Production, Inc.
Defendant, Wolverine Environmental Production, Inc., appeals by leave granted the trial court’s partial grants of summary disposition in favor of plaintiffs Alcona County (Alcona) in Docket No. 196934 and Alpena County (Alpena) in Docket No. 199408. In each of these cases, consolidated on appeal, defendant failed to obtain soil erosion and sedimentation permits as required by plaintiff coun ties in connection with earth changes relating to defendant’s natural gas well sites. In Docket No. 196934, the trial court determined that Alcona was not preempted by the Legislature from enforcing or implementing soil erosion programs, including a permit process; in Docket No. 199408, the trial court adopted the decision in Docket No. 196934 through collateral estoppel. We reverse and remand.
These cases involve a dispute over the authority granted by the Legislature to a county to manage soil erosion and sedimentation control under the Natural Resources and Environmental Protection Act (nrepa),
Defendant failed to obtain permits from plaintiff counties in which its wells and ancillary activities were located. Thereafter, Alcona
During the pendency of its suit for permanent injunctive relief, Alcona filed a motion for a preliminary injunction, then withdrew its motion when defendant agreed to file permit applications in accordance with Alcona’s ordinance and deposit permit fees into an escrow account. At this time, Alcona also filed a motion for summary disposition pursuant to MCR 2.116(C)(9) and (C)(10), regarding the issue of its authority to administer and enforce the statute. Defendant filed a motion to dismiss for failure to join the mdeq and the supervisor of wells as necessary parties. On June 24, 1996, the trial court heard oral arguments regarding the parties’ motions. The trial court stated that it would consider only the issue of jurisdiction between the county and the supervisor of wells, further stating that the question was whether the nrepa “grants jurisdiction [to counties] for the enforcement of . . . access roads and pipelines.” On July 17, 1996, the court issued its opinion and order, characterizing the case as a jurisdictional dispute between Alcona and the MDEQ/supervisor of wells regarding whether the supervisor of wells, under part 615, had essentially preempted Alcona’s jurisdiction under part 91. The court found that the Legislature did not intend to vest power over ancillary well activities exclusively with the supervisor of wells or preempt counties from implementing their own soil erosion programs. Thus, the trial court granted Alcona’s motion for partial summary disposition and struck defendant’s affirmative defenses regarding jurisdiction.
Alpena also filed a motion for a preliminary injunction, which the trial court granted in June 1996. 4 In August 1996, Alpena filed a motion for summary disposition, seeking to strike defendant’s affirmative defenses and jury demand. The trial court heard oral arguments on October 7, 1996, and Alpena asserted that collateral estoppel bound the trial court to follow its decision with regard to Alcona, because the issues were the same in both cases. On November 4, 1996, the trial court issued an order granting Alpena’s motion for summary disposition on the basis of collateral estoppel and granting Alpena’s motion to strike defendant’s jury demand without prejudice, but denying the motion to strike defendant’s entire answer. The court stayed the order pending the outcome on appeal. In April 1997, this Court granted leave to appeal in both cases and consolidated the appeals.
This Court reviews decisions on motions for summary disposition de novo to determine if the moving party was entitled to judgment as a matter of law.
Stehlik v Johnson (On Rehearing),
MCR 2.116(C)(10) permits summary disposition when, except for the amount of damages, there is no genuine issue concerning any material fact and the moving party is entitled to [judgment] as a matterof law. A court reviewing such a motion must consider the pleadings, affidavits, depositions, admissions, and any other evidence in favor of the opposing party and grant the benefit of any reasonable doubt to the opposing party. [Stehlik, supra at 85.]
Summary disposition on the basis of collateral estoppel, as in the Alpena case here, is pursuant to MCR 2.116(C)(7),
Lichon v American Universal Ins Co,
In these cases, we are faced with a question of statutory interpretation, which is a question of law that this Court also reviews de novo.
People v Denio,
In these cases, we must look to the nrepa to determine whether plaintiff counties had the authority to
require defendant to obtain a county permit pursuant to part 91 for “earth changes” to well access roads, pipelines, and processing facilities. Specifically, we must look to the interactions of part 91, the administrative rules enacted pursuant to part 91, 1979 AC, R 323.1701-323.1714, and part 615. The stated purpose of part 91 is to provide and implement “a unified statewide soil erosion and sedimentation control program.”
(1) A county is responsible for the administration and enforcement of the rules throughout the county except within a city, village, or charter township that has in effect an ordinance conforming to this section and except with regard to land uses of authorized public agencies approved by the department pursuant to section 9110.
(2) The county board of commissioners, by resolution, shall designate a county agency, or a soil conservation district upon the concurrence of the soil conservation district, as the county enforcing agencyresponsible for administration and enforcement in the name of the county. The resolution may set forth a schedule of fees for inspections, plan reviews, and permits and may set forth other matters relating to the administration and enforcement of this part and the rules. A copy of the resolution and all subsequent amendments to the resolution shall be forwarded to the department. [Emphasis added.]
The department, with the assistance of the department of agriculture, shall promulgate rules for a unified soil erosion and sedimentation control program, including provisions for the review and approval of site plans, land use plans, or permits relating to erosion control and sedimentation control. The department shall notify and make copies of proposed rules available to state, local, county, and public agencies affected by this part for review and comment before promulgation. [Emphasis added.]
In accordance with these provisions in part 91, the Department of Natural Resources (now the mdeq) promulgated administrative rules establishing, in part, permit requirements for certain “earth changes.” 5 1979 AC, R 323.1701-323.1714. Not all persons seeking to make “earth changes” are required to apply for a permit under part 91. Specifically, 1979 AC, R 323.1704 states, in pertinent part:
(1) A land owner or developer who contracts for, allows or engages in an earth change in this state shall obtain a permit from the appropriate enforcing agency prior to commencement of an earth change which is in connection with any of the following land use activities which disturb 1 or more acres of land, or if the earth change is within 500 feet of a lake or stream of this state:
(g) Oil, gas, and mineral wells, except the installation of those wells under permit from the supervisor of wells and wherein the owner-operator is found by supervisor of wells to be in compliance with the conditions of the sediment act. [Emphasis added.]
In part 615, the supervisor of wells is granted broad powers over all matters related to the regulation of
oil and gas wells, including the prevention of waste and the conservation of gas and oil.
The supervisor has jurisdiction and authority over the administration and enforcement of this part and all matters relating to the prevention of waste and to the conservation of oil and gas in this state. The supervisor also has jurisdiction and control of and over all persons and things necessary or proper to enforce effectively this part and all matters relating to the prevention of waste and the conservation of oil and gas. [Emphasis added.]
“Waste” is defined in the statute to include, in part, “unreasonable damage to underground fresh or mineral waters,”
In the Alcona case below, and thus the Alpena case by the application of collateral estoppel, the trial court characterized the casé as a jurisdictional dispute between Alcona and the supervisor of wells. The exact issue addressed by the trial court is not completely clear. The court seemed to believe that the issue was one of preemption, although the court mentioned preemption with regard to both enforcement of part 91 and implementation of a county’s own system. However, in our judgment, we must answer two questions to determine whether defendant was required to obtain permits from the plaintiff counties in these cases. First, we must determine whether counties are granted the authority under part 91 either to enforce the act or to implement their own rules regarding soil and sedimentation. Second, if counties cannot implement their own independent rules, we must determine whether part 91 limits a county’s authority to require permits for well access roads, pipelines, and processing facilities, in addition to wellheads.
Accordingly, to answer the first question and determine the authority of the counties here, we must look first to the language of part 91. “It is elementary that a county has only such powers as have been granted to it by the Constitution or the state Legislature.”
Alan v Wayne Co,
Second, looking to the context in which the language specific to county authority is found, we note that
Third, we recognize that the purpose of part 91 is to protect Michigan waters and soil from the pollution of soil erosion and sedimentation through the implementation of a
In our judgment, based on these factors, the trial court improperly determined that counties were allowed to implement their own soil erosion programs in the Alcona case and thus improperly applied that determination in the Alpena case by collateral estoppel. Instead, counties are only granted the authority by the Legislature to enforce the rules promulgated by the mdeq. Indeed, Alcona and Alpena do not seem to argue that they are granted any authority to implement their own rules. Rather, they argue that their actions were merely enforcement of part 91 and the administrative rules as they interpreted them. Defendant, however, asserts that even if the counties did have the power to enforce the rules, the permits issued under part 615 exempted it from the permit requirements for well pads, flow lines, surface facilities, and access roads. Accordingly, we must now address the second question at issue in these cases to determine whether plaintiffs were allowed to “enforce” part 91 permit requirements for ancillary well functions.
To determine whether the Legislature and the MDEQ intended that a part 91 permit be required for “earth changes” connected with the access roads, pipelines, and processing facilities of wells for which a part 615 permit has already been issued, we must again look first to the language of the statute and rules at issue.
A person shall not maintain or undertake a land use or earth change governed, by this part or the rules or governed by an applicable local ordinance, except in accordance with this part and the rules or with the applicable local ordinance and pursuant to a permit approved by the appropriate county or local enforcing agency. [Emphasis added.]
Accordingly, we next examine the rules to determine what earth changes they govern. 1979 AC, R 323.1704 states:
(1) A land owner or developer who contracts for, allows or engages in an earth change in this state shall obtain a permit from the appropriate enforcing agency prior to commencement of an earth change which is in connection with any of the following land use activities which disturb 1 or more acres of land, or if the earth change is within 500 feet of a lake or stream of this state:
* * *
(g) Oil, gas, and mineral wells, except the installation of those wells under permit from the supervisor of wells and wherein the owner-operator is found by supervisor of wells to be in compliance with the conditions of the sediment act. [Emphasis added.]
As a preliminary matter, we assume, without deciding, that defendant’s earth changes fulfilled the conditions of subrule 1704(1) in order to address the exception to the permit requirement.
6
The exception
language at issue
Second, we note that the “installation of those wells” language cannot be viewed in isolation, but instead must be viewed in context. The rule itself does not simply limit the exception to the installation of wells, but further states that the exception applies to “those wells under permit from the supervisor of wells.” Thus, we must look to part 615, the supervisor of wells act, to determine whether part 615 permits
apply to the additional parts of a well at issue here. The supervisor of wells is granted broad powers over the administration of oil and wells in part 615. An important part of those powers is the prevention of waste, which includes, in part, “unreasonable damage to underground fresh or mineral waters,”
Third, we again look to the purpose of part 91 to determine whether our reading of the language of the exception is at odds with the stated intent of the Legislature here. The Executive Legislative Analysis, HB 4709, January 18, 1972, provides that “[t]he purpose of this bill is to provide for a statewide soil erosion and sedimentation control program with uniform rules and guidelines which may be used both statewide and by local entities to control soil erosion and sedimentation.” See Nemeth, supra at 27, n 4. With this purpose of uniformity in mind, it would not be logical for the Legislature to allow control over soil erosion and sedimentation to be placed with both the county enforcing agencies and the supervisor of wells. This dual control over access roads, pipelines, and processing facilities — which could come into conflict because the supervisor of wells has its own rules for the prevention of waste and broader authority to do whatever is necessary for such prevention of waste— would undermine the part 91 purpose of statewide uniformity in this regard. The logical reason for the permit exception, consistent with the purpose of uniformity, would be to avoid duplicate regulation by both the supervisor of wells and the counties. The supervisor of wells must already enforce pollution controls relating to soil erosion and sedimentation control and has special expertise with the problems of oil and gas well waste. Therefore, in our opinion, it is not surprising that the Legislature would provide for a regulatory framework whereby the supervisor of wells enforced all of the waste management policies in relation to oil and gas wells, including soil erosion and sedimentation control. Thus, in reading the exception to the county permit requirement logically with this purpose, we believe that earth changes in connection with wellheads, as well as access roads, pipelines, and processing facilities under permit from the supervisor of wells, are exempt from the additional permit requirements of the part 91 rules.
In support of our analysis of the intent of the exception to the earth changes permit requirement in subrule 1704(1), we rely on an April 2, 1996, memorandum from the Director of the MDEQ, Russell J. Harding. This memorandum states that it is the position of the MDEQ that “a Part 615 permit to drill and operate shall exempt the following from the requirement to obtain a Part 91 permit: . . . well pads[,] . . . flow lines [,] . . . surface facilities [, and] . . . roads constructed solely for the purpose of access to well sites and surface facilities.” In addition, the memorandum
“revise[d] and clarified]” a previous, 1993 memo from the DNR. The 1993 memorandum stated that counties were to have control over flow lines for Antrim gas projects because such projects were generally not in compliance with part 91 and, thus, they did not qualify under the well permit exception. However, Harding determined that this finding was too broad, including some projects that were in compliance with part 91and that would have been excepted from the permit requirement. Thus, Harding found that the 1993 memorandum did not comply with the requirements of the permit exception and that pipelines should generally be included within the permit exception. Also, the 1993 memorandum stated that counties had authority over access roads, a position with which Harding disagreed because access roads were a necessary and integral part of drilling and production operations, part 615 extended to all phases of oil and gas operations, including roads, and part 615 should take precedence under the exception.
8
Thus, the agency that promulgated the rules in question supports the conclusion here that ancillary well facilities are
In contrast to this analysis, plaintiffs argue that two previous Attorney General opinions and the Supreme Court decision in
Addison Twp v Gout (On Rehearing),
With regard to the Supreme Court decision in
Addison, supra,
the Court held in that case that pursuant to the language of § 1 of the Township Rural Zoning Act (TRZA),
Fourth, the Addison Court determined that the purpose of the trza, to encourage or regulate the proper use of land and natural resources, did not conflict with that of the supervisor of wells to prevent waste and that uniformity was not necessary to effectuate the purposes. Addison, supra at 815. However, here, the logical reason for the permit exception, given the part 91 purpose of uniform rules, would be to avoid duplicate regulation by both the supervisor of wells and the counties. Thus, the different statutory purposes between part 91 and the trza also make Addison inapplicable to our cases. Fifth, in Addison, the dnr filed a brief in support of the township’s right to zone, because the regulation of the location and duration of a gas-processing plant in that case did not regulate or control the operation of oil or gas wells or interfere with the authority vested in the supervisor of wells. Addison, supra at 818, n 5; 821 (Levin, J., concurring). However, the DNR further stated that certain zoning regulations of ancillary facilities that affected activities “critical to the operation of the wells” might be impermissible. Thus, as defendant argues, the dnr itself would not have simply limited the preemption of township zoning under the TRZA to well sites, but rather would instead have allowed preemption of township zoning where the zoning actually affected the supervisor of wells’ exercise of jurisdiction relative to wells. This is consistent with our determination here, in part, that because the supervisor of wells has the authority to control soil erosion and sedimentation problems in ancillary well functions, the language of the permit exception applies to these ancillary well functions. Thus, although Addison appears in some respects to deal with an issue similar to that in the cases before us, we find the distinctions between these cases to be significant and, ultimately, dispositive that Addison does not compel a particular conclusion in the instant case.
On the basis of these factors, we conclude that the ancillary well facilities such as access roads, pipelines, and processing plants are included within the part 91 permit exception for “the installation of those wells under permit from the supervisor of wells . . . .” 1979 AC, R 323.1714(l)(g). Counties cannot require well owners and operators to obtain permits pursuant to part 91 for wellheads, access roads, pipelines, or processing facilities where they have a permit from the supervisor of wells and are found by the supervisor of wells to be in compliance with the conditions of the sediment act. Id. Allowing counties to require part 91 permits with regard to these ancillary well facilities would ignore the plain language of the exception, view such language in isolation in spite of the fact that the language refers to part 615, the supervisor of wells act, and thwart the purpose of the soil erosion and sedimentation control statute by allowing dual regulation. In our judgment, therefore, the trial court improperly granted Alcona’s and Alpena’s motions for summary disposition. 10
Reversed and remanded. We do not retain jurisdiction.
Notes
“ ‘Supervisor’ or ‘supervisor of wells’ means the department”
During the pendency of this case, the Department of Natural Resources was divided into two separate organizations: the Department of Natural Resources and the Department of Environmental Quality. Presently, the supervisor of wells is under the jurisdiction of the mdeq.
Alcona County contends that although its policy is labeled as an “ordinance,” it is actually only a regulation to enforce part 91 and its administrative rules.
The same trial judge presided over both cases consolidated in this appeal.
“Earth change” means a human-made change in the natural cover or topography of land, including cut and fill activities, that may result in or contribute to soil erosion or sedimentation of the waters of the state. Earth change does not include the practice of plowing and tilling soil for the purpose of crop production. [
On appeal, defendant argues that a factual dispute existed concerning whether defendant’s actual earth-moving activities were “earth changes” as defined by
Although the trial court in the Alcona case found that defendant did have a permit from the supervisor of wells, there was no such finding in the Alpena case. Defendant claims to hold part 615 permits for all of its wells.
Although an agency’s construction of a statute cannot be used to overcome a statute’s plain meaning,
WMU Bd, of Control, supra,
given that the position adopted by the mdeq is plausible and is consistent with the language of the statute, it is entitled to reasonable deference, see
Michigan ex rel Oakland Co Prosecutor v Dep’t of Corrections,
The trza states:
A township board shall not regulate or control the drilling, completion, or operation of oil or gas wells, or other wells drilled for oil or gas exploration purposes and shall not have jurisdiction with reference to the issuance of permits for the location, drilling, completion, operation, or abandonment of those wells. The jurisdiction relative to wells shall be vested exclusively in the supervisor of wells of this state. [MCL 125.271 ; MSA 5.2963(1) (emphasis added).]
Defendant appeals the trial court’s adoption of the Alcona decision through collateral estoppel. However, because we determine that no county has the authority to require part 91 permits for the ancillary well facilities at issue here, we need not address the collateral estoppel issue. Defendant also appeals the trial court’s order to strike its jury demand. Although we must remand this case for an application of this opinion, we have effectively disposed of the case through our detennination that counties cannot require well owners with part 615 permits to obtain part 91 permits from the counties. During oral arguments on appeal, Alpena’s counsel conceded that there was no reason to address the jury issue if this Court determined that Alpena could not require defendant to obtain a county permit for its ancillary well facilities that were under permit from the supervisor of wells. Thus, we will not address this issue either.