Enbridge Energy Co. v. Dane Cnty.

2018 WI App 39, 917 N.W.2d 232, 382 Wis. 2d 830
CourtCourt of Appeals of Wisconsin
DecidedMay 24, 2018
DocketAppeal Nos. 2016AP2503; 2017AP13
StatusPublished

This text of 2018 WI App 39 (Enbridge Energy Co. v. Dane Cnty.) is published on Counsel Stack Legal Research, covering Court of Appeals of Wisconsin primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Enbridge Energy Co. v. Dane Cnty., 2018 WI App 39, 917 N.W.2d 232, 382 Wis. 2d 830 (Wis. Ct. App. 2018).

Opinion

BLANCHARD, J.

¶ 1 This case involves a conditional use permit issued by a Dane County zoning committee that allows the operator of a crude oil pipeline to significantly expand the volume of oil pumped through the line. The permit contains conditions requiring Enbridge Energy Company to "procure and maintain" insurance with detailed specifications that would, in the view of the zoning committee, ensure the availability of sufficient funds for remediation, clean up, and payment for damages in the event of a crude oil spill.1

¶ 2 One notable feature of this case is that the state legislature enacted a new law in the midst of the County's consideration of the Enbridge permit. The new state law places a limitation on the insurance requirements that counties can include in conditional use permits issued to operators of interstate hazardous liquid pipelines, such as Enbridge, in one particular circumstance. See 2015 Wisconsin Act 55, § 1923e (Eff. July 14, 2015); WIS. STAT . §§ 59.70(25), 59.69(2)(bs) (2015-16).2 More specifically, under the Act 55 insurance limitation, a county may not require an interstate hazardous liquid pipeline operator to obtain insurance if the operator "carries comprehensive general liability insurance coverage that includes coverage for sudden and accidental pollution liability." § 59.70(25).

¶ 3 After the Act 55 insurance limitation took effect, Enbridge argued to the zoning committee that the new law required the committee to sever the insurance conditions from the permit, because Enbridge alleged that it "carries comprehensive general liability insurance coverage that includes coverage for sudden and accidental pollution liability."

¶ 4 The zoning committee voted to deny the request to sever the insurance conditions from the permit. The Dane County Board of Supervisors voted to sustain this zoning committee decision. In this certiorari review action, Enbridge relies on Act 55 to challenge the decision of the zoning committee to retain the insurance conditions in the permit.

¶ 5 A second notable feature of this case involves the role of seven pipeline-area landowners in both the certiorari review action and in a separate action that the landowners filed seeking an injunction to enforce the insurance conditions in the permit. The circuit court consolidated the landowners' injunction action and Enbridge's certiorari review action into this single case, and permitted the landowners to intervene and defend the county-required insurance conditions.

¶ 6 The circuit court dismissed the landowners' action and granted Enbridge the relief it seeks in the certiorari action, namely, severing the insurance conditions based on Act 55, leaving all other permit conditions in place.

¶ 7 We first conclude that the landowners are entitled to address all issues in the certiorari review action, as well as to pursue enforcement of proper permit conditions in the injunction action. Then, we reverse the order severing the insurance conditions from the permit. We agree with the landowners that the zoning committee proceeded under two separate incorrect interpretations of the Act 55 insurance limitation involving what a pipeline operator must show in order to trigger insurance limitation. We conclude that the operator must show that: (1) the operator "carries" the insurance specified in Act 55, making this showing initially and at all times required by the permit; and (2) the operator carries liability insurance for "abrupt or immediate" pollution and "unexpected and intended" pollution. We further conclude that Enbridge failed to make either showing.

¶ 8 Turning to the remedy, we conclude that it is necessary to remand to the circuit court, with directions to return this matter to the zoning committee, so that the committee can determine, for the first time applying these correct interpretations of the Act 55 insurance limitation, whether a permit should be issued to Enbridge that contains conditions sufficient to satisfy permitting standards established by ordinance. See DANE COUNTY ORDINANCE § 10.225(2)(h) (Apr. 30, 2017) (listing six safety and other standards).

BACKGROUND

¶ 9 The following pertinent facts are taken from the record.

Enbridge Project And Permit Application

¶ 10 For approximately a decade, Enbridge has owned and operated an interstate pipeline for the transport of crude oil, 12 miles of which runs through northeast Dane County, between Marshall and Waterloo.3 In August 2014, Enbridge applied to the County for a conditional use permit to allow expanded volume through the pipeline, which includes enlargement of a pumping station in the Town of Medina. The project is located within one of the County's "exclusive agricultural zoning districts," and, under County ordinances, operation of the pipeline is a conditional use in such a district. See DANE COUNTY ORDINANCE § 10.123(2)(b), (3)(c). As a result, Enbridge cannot expand pipeline volume without a conditional use permit from Dane County.

Zoning Committee Action Leading to April 2015 Permit Approval

¶ 11 The Enbridge permit application was taken up by the Dane County Zoning and Land Regulation Committee. In considering the Enbridge application, the zoning committee applied Dane County Ordinance § 10.255(2)(h), which lists six considerations for the issuance of a conditional use permit, including: potential risks to "the public health, safety, comfort or general welfare"; potential substantial impairment or diminishment of already permitted uses of other property in the neighborhood; and potential impediments to "normal and orderly development and improvement of the surrounding property for uses permitted in the district."

¶ 12 At a November 2014 meeting, the zoning committee directed county staff to refine a potential permit condition that would require Enbridge to obtain "a surety bond for assurances of spill clean up due to the increase[d] pressure that the pumping station will create on the existing line," which would "list Dane County as an insure[d]." The zoning committee also asked Enbridge to "produce documentation regarding proof of insurance."

¶ 13 At a January 27, 2015 meeting, the zoning committee considered, but did not pass, a motion to approve the permit with conditions that would include the County "as a named insured party of comprehensive Environmental Impairment Liability insurance" purchased by Enbridge, in order to ensure sufficient resources to cover "complete cleanup" and remediation in the event of a catastrophic spill. The committee decided to investigate "as soon as possible" the retention of an insurance expert, as well as an environmental risk assessment.

¶ 14 In a written report to the committee dated April 8, 2015, David Dybdahl, a chartered property casualty underwriter, summarized and analyzed Enbridge's purported general liability insurance coverage.4 Dybdahl explained that he understood the zoning committee's goal to be to ensure that "Enbridge, or other reliable sources, have money available to ensure the timely remediation and restoration of the environment in the event of a spill," "to pay for the damages they may incur as a result of an oil spill at the pumping station," and to avoid "unfunded potential liability or expenses to the county for granting a Conditional Use Permit or as a result of a spill from the pumping station."

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Bluebook (online)
2018 WI App 39, 917 N.W.2d 232, 382 Wis. 2d 830, Counsel Stack Legal Research, https://law.counselstack.com/opinion/enbridge-energy-co-v-dane-cnty-wisctapp-2018.