Rоbert W. LARSEN, Plaintiff-Appellant, v. MUNZ CORPORATION, and the State of Wisconsin Department of Administration, and its Secretary, James R. Klauser, Defendants-Respondents.†
No. 91-2811
Court of Appeals
Argued December 23, 1991.—Decided January 8, 1992.
480 N.W.2d 800
†Petition to review granted.
For the defendants-respondents the cause was submitted on the briefs of David J. Harth and Douglas B. Clark of Foley & Lardner of Madison. Oral argument by David J. Harth.
Before Eich, C.J., Gartzke, P.J., and Sundby, J.
GARTZKE, P.J. Robert W. Larsen appeals from an order dismissing his action against Munz Corporation and the Department of Administration (department) and its secretary James R. Klauser. Larsen sought a declaration that the department is required to file an
We conclude that the department failed to follow its own rules governing its compliance with WEPA. We therefore reverse and remand the matter, but without the injunction Larsen requested we issue against further construction.2
The building is near the west shore of Lake Monona. Larsen lives near the east shore. He alleges that the top floors of the building will obstruct his view of the Capitol building to a height of one-half to two-
To comply with WEPA, an agency contemplating a particular action must decide whether it is a major action significantly affecting the quality of the human environment. This “threshold decision . . . occupies a critical position within the context of WEPA‘s operation. A negative determination at the initial stage may eliminate to a significant degree environmental consideration by the agency and may curtail much of the input, which an EIS is designed to foster, of other governmental agencies and the public in the agency‘s decision process.” Wisconsin‘s Environmental Decade, Inc. v. Public Serv. Comm‘n, 79 Wis. 2d 409, 419, 256 N.W.2d 149, 155 (1977). An agency may comply with the “threshold decision” requirement by promulgating a rule categorizing
The facts are undisputed. Early in 1990 the department decided to lease a large block of office space in downtown Madison.4 It solicited proposals. Of the nineteen submitted, the department narrowed the list down to three, including one by Munz Corporation to construct a building on its site at 101 East Wilson Street. In early November 1990, the department hired a private firm of engineers, architects and planners to prepare a preliminary environmental impact assessment on the three potential building sites. On November 21,
The department‘s request stated that it proposed to consolidate various tenant agencies in leased or state-owned office space in Madison to accommodate about 1,100 employees. According to the request:
A 10-story facility will be constructed at 101 E. Wilson Street. Currently the site is used for surface parking. Included in the facility will be approximately 200 underground parking stalls. The building will have a gross area of 189,100 square feet, with a floor size of 18,910 square feet and a net rentable square footage of 160,418 square feet. The lease will be for 20 years and include purchase options at various periods. The purchase price at occupancy will be $18,274,000 or $113.92 per net assignable square feet. The first year rental rate will be $11.25 per square foot plus the cost to operate and maintain the facility. Those costs are estimated to be $4.95 per square foot for a total first year rate of $16.20. The annual first year rent paid to the lessor will be $1,800,000. Rent for the second year will remain the same. For years three through five, the rent will increase 3 percent. Subsequent years, the increase is 4 percent.
It is anticipated occupancy of the new facility will be August 1, 1992. The lease will also include approval of the building design by the State, including materials to be used in its construction.5
An environmental assessment [referring to the preliminary environmental impact assessment] has been completed for the 101 E. Wilson Street site. The conclusion of the assessment with regard to constructing the proposed facility is that there will be no significant impact on the quality of the human environment. This analysis fulfills the requirements of the Wisconsin Environmental Policy Act Wis. Statutes 1.11.
Consistently with that conclusion, the department has not prepared the EIS that
The parties agree, however, that the issue before us is whether the department has followed its own rules that it promulgated to comply with WEPA. In 1982, the department adopted
The department has declared the purpose of
To those ends, the department‘s rules prescribe how it will approаch the task of determining whether it will identify a major action significantly affecting the quality of the human environment which in turn necessitates preparation of an EIS.
The department has categorized its actions into the following type list which shall determine or aid in the determination of the need for an EIS. Type I actions shall always require an EIS. Type II actions may or may not require an EIS . . .. Type III actions normally do not have the potential to cause significant environmental effects . . .. (Emphasis added.)
Accordingly, the department has determined that all Type I actions are, in the words of WEPA,
We have appended to this opinion the action type list promulgated as part of
The result in this appeal depends on a fundamental principle of administrative law: an administrative agency is bound by the rules which it itself has promulgated, Vitarelli v. Seaton, 359 U.S. 535, 539-40 (1959), and may not proceed without regard to its own rules. Service v. Dulles, 354 U.S. 363, 388 (1957). We applied the same principles in State v. Griffin, 126 Wis. 2d 183, 197, 376 N.W.2d 62, 69 (Ct. App. 1985), aff‘d, 131 Wis. 2d 41, 60, 388 N.W.2d 535, 542 (1986), aff‘d, 483 U.S. 868 (1987); Prahl v. Brosamle, 98 Wis. 2d 130, 155, 295 N.W.2d 768, 782 (Ct. App. 1980); State ex rel. Meeks v. Gagnon, 95 Wis. 2d 115, 119, 289 N.W.2d 357, 361 (Ct. App. 1980). Wisconsin‘s Administrative Procedure Act,
Consequently, if the East Wilson Street project is a Type I action, then it is a major action significantly affecting the quality of the human environment and the department must therefore prepare an EIS. In that event, we ignore the department‘s representation to the building commission in November 1990 that the projеct will have no significant impact on the quality of the
We construe administrative rules in the same manner as statutes. Law Enforcement Standards Bd. v. Village of Lyndon Station, 101 Wis. 2d 472, 489, 305 N.W.2d 89, 97 (1981). The facts being undisputed, whether the East Wilson Street project is a Type I action, as defined in
We, of course, are not bound by the trial court‘s answer to a question of law. Nor do we defer to it. Ball v. District No. 4, Area Bd. of Vocational, Technical & Adult Educ., 117 Wis. 2d 529, 537, 345 N.W.2d 389, 394 (1984). We decide the Type I question independently, unless we should defer to the department‘s interpretation of its rule. Ordinarily we defer to an agency‘s interpretation of a rule which it hаs written. Pfeiffer v. Board of Regents, 110 Wis. 2d 146, 155, 328 N.W.2d 279, 283 (1983).
That the department properly adopted
We conclude that, as a matter of law, the facts satisfy the Type I “action identification” elements of “planning, designing, contracting for and constructing physical facilities.” “Action” is the key word. WEPA requires an EIS for “major actiоns significantly affecting the quality of the human environment.”
It is undisputed that the department initiated the planning and contracting for the East Wilson Street site. It participated in the design. Munz‘s architects did most of the design, and Munz‘s contractor is performing the actual construction. However, the design and construction could not have occurred but for the department.8
Each of those activities, and surely their total, may affect the human environment. Since the department is the managing authority, as defined in
We turn to the “description/comments” section applicable to the Type I category. The building at 101 East Wilson Street is a new facility. According to the preliminary environmental impact assessment, the site was previously occupied only by a bituminous parking
This leaves for our consideration the parcel “not previously developed by the state” element in the “description/comments” section. The state need not own the parcel. Nothing in the Type I category refers to title or ownership.9 The verb “developed” in the “description/comments” section characterizes the primary elements in the “action identification” section: planning, designing, contracting for and constructing a physical facility. That is what “development” is about. Those elements constitute development, and we have already concluded that the facts satisfy each.
We therefore conclude that construction of the building at 101 East Wilson Street comes within the Type I EIS category established by
The issue remains of what, if anything, this court can and should do with respect to the East Wilson Street building construction while the department prepares an EIS. Larsen asks that we enjoin the defendants from continuing with construction of the State Administration Building pending preparation of the EIS. We have jurisdiction under
This court does not, except where the original jurisdiction of the court is directly invoked, grant temporary injunctions. The granting of such injunctions is more appropriately and properly left to the discretion of the trial courts, even if we have jurisdiction to grant injunctions where our original jurisdiction is not invoked in the first instance, which may be doubted and which we refrain from here deciding.
Larsen may apply to the trial court for a temporary injunction to restrain the defendants from proceeding with further construction pending the department‘s preparation and filing of an EIS. We express no opinion as to whether the trial court should grant the injunction.
The department has identified a Type I action as the “[p]lanning, designing, contracting for and constructing physical facilities” on parcels not previously developed by the state.
It is undisputed that this action was initiated by the department, could not have occurred but for the department, and may affect the human environment. Whether the planning, designing, contracting for and constructing a physical facility for the state is a mаjor action requiring an EIS does not depend on the form of the action taken by the state through the department to acquire a new physical facility. The agency which must make the initial determination as to whether an EIS is required and a reviewing court must look to the substance of the action taken. It would subvert WEPA if the department could avoid the requirement of making and filing an EIS by constructing a major facility through the turn-key device.
We do not give the deference usually accorded agency determinations to the department‘s construction of
We will give considerable weight to the agency‘s decision that an EIS is not required, if it is demonstrated to us that the agency‘s decision was conducted fully and in good faith. However, wе will not defer to an agency decision which excludes, by categorization, a major action from WEPA‘s application. I am aware that the executive order, as modified, pursuant to which the department adopted
1500.4(p) Using categorical exclusions to define categories of actions which do not individually or cumulatively have a significant effect on the human environment and which are therefore exempt from requirements to prepare an environmental impact statement.
See Wisconsin Envtl. Decade v. DILHR, 104 Wis. 2d 640, 664-65, 312 N.W.2d 749, 760-61 (1981) (Heffernan, J., dissenting).
However, the categorization or characterization process may not be used to shield major actions from the WEPA requirements. The use of “generic” or categorical environmental impact statements is discussed in Agency Decisionmaking Under the Wisconsin Environmental Policy Act, 1977 Wis. L. Rev. 111, 166-169. The article examines the Action List format developed by the
If rulemaking is initiated, care must be taken to ensure that rulemaking will not work to defeat WEPA‘s purposes. . . . If agency efforts to promulgate rules are combined with judicial efforts to scrutinize the effects of those rules carefully, agency rulemaking may be more successful in the future than it has been in the past. Judicial scrutiny of agency rulemaking procedures is consistent with new developments in administrative law [see Pedersen, Formal Records and Informal Rulemaking, 85 Yale L.J. 38, 50, 59-60 (1975)]. Moreover, the benchmark of NEPA litigation—Calvert Cliffs’ v. AEC—involved judicial refusal to acсept agency NEPA rules which did not advance the procedural aims of the statute. Close examination of agency WEPA rules by state courts would be consistent with these precedents.
Id. at 178 (footnotes omitted).
Further, it appears that the department‘s construction of
Finally, “[t]he power of an administrative agency to make rules must exist within the framework of the statute creating it and must accord with the policy of such statute.” Beloit Corp. v. LIRC, 152 Wis. 2d 579, 594, 449 N.W.2d 299, 306 (Ct. App. 1989). The department‘s suggested construction of
The primary relief Larsen seeks is a ruling that the department is required to prepare an environmental impact statement (EIS) because its participation in the planning of the building—under a lease with option to purchase from Munz—fits the classification or “categorization” of actions set forth in its own rules as always requiring one.2 As will be discussed in more detail below, an EIS—no matter what its content or outcome—would not necessarily require the department to alter its plans
In any event, the department, after two preliminary environmental studies, determined that no EIS was required for its participation in the project, and the circuit court upheld that determination. On this appeal, however, the majority has concluded that because of what it sees as the department‘s failure to follow the specific requirements of its “pre-categorization” rules,4 it will pay no attention to the department‘s decision and will decide the matter itself. Doing so, the majority construes the applicable departmental rules in a manner resulting not only in reversal of the trial court‘s order, but, more importantly, in the creation of a precedent that I believe will not well serve the environment or the policies and purposes of the Wisconsin Environmental Policy Act (WEPA) in the future.
The department determined that no EIS was needed for the project because, in the words of the Act itself, the building “would not significantly impact the human environment.”5 And it made that determination at two points during the early planning and construction process for the new facility—first, after it had prepared a lengthy “Preliminary Environmental Assessment” of the Munz proposal and two others, and later, after it had prepared a more detailed “Environmental Assessment” of the Munz project alone6—and had held public hearings and set aside time for receipt of comments from interested state agencies and members of the public.
It seems to me that two things flow from all this: First, that the department‘s determination that an EIS was not necessary was a de facto determination that it was not engaging in a “Type I” activity under its rule;
When a decision not to prеpare an EIS is challenged, the court‘s basic task is to see “whether the agency . . . has complied with the letter and spirit of WEPA.” Wis. Envtl. Decade v. Pub. Serv. Comm‘n, 79 Wis. 2d 409, 419, 256 N.W.2d 149, 155 (1977) (”Decade I“). It is a question of reasonableness and good faith, and it looks less to the substance of the decision than to the agency‘s methods and procedures. Thus “the method by which an administrative agency chooses to comply with WEPA‘s mandate that it take environmental factors into account when undertaking its statutory duties should be affirmed if that method is a reasonable one in light of the purposes of WEPA and the agency‘s functions and duties.” Wis. Envtl. Decade, Inc., v. DILHR, 104 Wis. 2d 640, 644-45, 312 N.W.2d 749, 751 (1981) (Decade III).
Decade III also tells us that we must defer to the agency‘s interpretation of WEPA requirements, and that we may not upset that interpretation “if there exists a rational basis for [the agency‘s] conclusion.” Id., 104 Wis. 2d at 644, 312 N.W.2d at 751. The majority concludes that the Decade III deference rule is inapplicable here because the record does not indicate that the department followed the specific requirements of its own WEPA rules.
I agree that when an agency decides that an EIS is not necessary for a particular project, it must leave a reviewable record “reflecting a preliminary factual investigation covering the relevant areas of environmental concern in sufficient depth to permit a reasonably informed preliminary judgment of the environmental consequences of action proposed . . . .” Decade I, 79 Wis. 2d at 424-25, 256 N.W.2d at 158. That record, however,
It is indeed unfortunate that the department did not pay more attention to its rules along the way. But the fact that it failed to place in the file a statement that it did not consider its participation in the project to constitute “Type I action“—or that it considered the action to be of the “Type II” or “Type III” variety—does not mean that the record in this regard is not “susceptible of meaningful evaluation” within the meaning оf Decade I. Indeed, in City of New Richmond v. DNR, 145 Wis. 2d 535, 544-46, 428 N.W.2d 279, 283-84 (Ct. App. 1988), we upheld the adequacy of an agency‘s record of a negative EIS determination which was comprised primarily of an “Assessment” which appears to be much the same type of document as the department prepared in this case.
In addition, for an EIS to be required under its rule, the department must be engaged in planning, designing, contracting for and constructing a facility on land which it has not previously developed. I believe, as did the trial court, that it is neither irrational nor unreasonable to view that language as requiring the department to be the developer and builder, and excluding from the definition of “Type I Activity” a project in which the department‘s participation is limited to that of a lease/option holder participating in the design of the final structure.7 Nor, of
As a result, the rule of deference adopted by the supreme court in Decade III requires us to sustain the department‘s decision—whether or not we agree with it or consider it wise.
In this case, the investigations undertaken by the department resulted in a thirty-six-page Preliminary Environmental Assessment and a subsequent forty-six-page Environmental Assessment. The latter document devotes several pages to a description and analysis of the effect of the project on Capitol views from across Lake Monona. And, considering Larsen‘s complaint and the affidavits he has filed in this case, the assessment appears to accurately describe the nature and extent of the “view obstruction” of which he complains.8
As to the hearing and record requirements of WEPA, I note that in connection with its preparation of the Environmental Assessment the department convened public hearings on the project and kept the “record” open for thirty days thereafter to receive further comment from the public and other state agencies. As a result, department officials were well-informed of Larsen‘s concerns and that those concerns were shared, to one degree or another, by nearly 300 other people who contacted the agency to express their opinions in the wake of the public hearings.
It is true that the partial obstruction of the base of the Capitol will diminish somewhat the view of the Capitol enjoyed by Larsen and several of his neighbors, and that is obviously a less-than-desirable result. And I, too, believe that state government should hold itself to a higher standard than private developers when preservation of the Capitol view is at stake. But we are a court of law and, as noted above, there is no claim in this case that the projected building size will violate the only existing law on the subject, the State Capitol View Preservation Act. In addition, as just discussed, the department appears to have followed the procedural mandates of WEPA. Whether either or both those laws are adequate or inadequate, wise or unwise, they govern not only the department‘s actions but this court‘s as well. If more is required, it is for the legislature, not this court, to declare.
Finally, I am concerned about the analysis undertaken in the majority opinion. It may well be one that is forced by the “typing” procedures in the department‘s rules; but I believe that such a process raises serious questions for future cases. In this case, of course, the “typing” analysis will result in the preparation of another assessment of the project‘s environmental impact. And whilе that is undoubtedly a welcome result
By relying on a system of “typing” or “categorization” of various activities normally undertaken by the agency, and then keying the need for preparation of an EIS in a given case to whether the particular project fits the rule‘s description of a “type” of activity which always, sometimes, or practically never, requires one, the process de-emphasizes—indeed, it ignores—any actual environmental investigations undertaken by the agency in favor of simply “matching” the activity to a description in a preexisting administrative rule. I question whether adherence to such procedures will, in the long run, serve the environmental interests and policies established by WEPA.
The flaw in such an analysis is that it assumes that the purposes of WEPA are better served by looking only to whether the action fits a particular slot in a preexisting rule in determining whether an EIS is warranted, rather than by considering the conclusions and recommendations of actual environmental studies and assessments of the particular project. And although it reaches a result in this case that mandates a third environmental analysis—an EIS10—for the project, it does so only by
If, for example, the situation were only slightly different from the one presented here—if the classification slot into which the agency action appeared to fit indicated that no EIS was necessary, yet independent studies and assessments undertaken by the agency indicated that the action might well have a significant effect on the human environment—the analysis would never reach those studies and assessments; it would end with fitting the action to the predetermined category.11
I fear that such an approach may lead future courts to similarly ignore actual studies and assessments suggesting the need for a full EIS and reach the opposite result through a nonspecific “pre-categorization” process as long as the activity, in the court‘s view, fits a “no-EIS-necessary” category in a generally-worded administrative rule. Given the interests at stake in state agency decisions of this type, I would prefer an analysis relying on actual studies and assessments of the project at hand,
In sum I disagree with the majority‘s analysis more than its result. For the reasons just stated, however, I would affirm Judge Jones‘s order.
Notes
During the boat survey of the shoreline of the “impacted” shoreline property, it was determined that the new building will partially obstruct the view of the State Capitol from approximately 20 properties along the lakeshore. All of these properties will continue to have an unobstructed view of the Capitol dome. However, the view of the columns supporting the dome will be obstructed, to a greater or lesser degree, by the new building. The maximum obstruction, as viewed from approximately seven private residences and a small neighborhood park, will block the view of the lower 2/3 of the columns. The view obstruction will be particularly noticeable at night when the Capitol is lighted.