Wolverine Power Supply Cooperative, Inc v. Department of Environmental Quality

777 N.W.2d 1, 285 Mich. App. 548
CourtMichigan Court of Appeals
DecidedSeptember 15, 2009
DocketDocket 287553
StatusPublished
Cited by12 cases

This text of 777 N.W.2d 1 (Wolverine Power Supply Cooperative, Inc v. Department of Environmental Quality) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wolverine Power Supply Cooperative, Inc v. Department of Environmental Quality, 777 N.W.2d 1, 285 Mich. App. 548 (Mich. Ct. App. 2009).

Opinion

Per Curiam.

Defendant, Department of Environmental Quality (the Department), appeals as of right the trial court’s order granting plaintiffs, Wolverine Power Supply Cooperative, Inc., and Mid-Michigan Energy, LLC, summary disposition under MCR 2.116(C)(10). Because we conclude that the Department had no authority to pro *550 mulgate the rule in question — which adds a contested case procedure for permits to install major sources of air emissions — we affirm.

I. BASIC FACTS AND PROCEDURAL HISTORY

The Department is a state agency that administers federal and state air quality standards. The Department has promulgated rules for the prevention of significant deterioration of air quality under which entities seeking to install new major sources of air emissions must obtain permits from the Department. In 2006, the Department promulgated Rule 1830. 1 Rule 1830 allows persons to request a formal hearing, known as a contested case hearing, after receiving notice of the Department’s approval or denial of a permit.

Plaintiffs Wolverine and Mid-Michigan are companies that provide electricity to Michigan residents. Intervenor Consumers Energy Company is also a company that provides electricity to Michigan residents. In September 2007, Wolverine and Mid-Michigan sought permits from the Department regarding the proposed construction of new power plants that would use coal and biomass fuels. While the permit applications were pending, Wolverine requested a declaratory ruling from the Department that Rule 1830 was invalid or that it could not be applied to Wolverine’s permit application. In June 2008, the Department denied Wolverine’s request, stating that the request “does not meet the requirements for issuance of a declaratory ruling.” The Department also stated that it “had no authority to strike down a rule, nor does it have the authority to ignore its application to a particular licensee.”

*551 Wolverine and Mid-Michigan then filed complaints against the Department, seeking a declaratory judgment that Rule 1830 was invalid. At the subsequent summary disposition hearing, Wolverine’s counsel asserted that the permitting program for the prevention of significant deterioration of air quality had been in effect for more than 20 years. (The program for the “prevention of significant deterioration” of air quality is “the major source preconstruction permit program” for installation of sources of air emissions. 2 ) According to Wolverine’s counsel, during those 20 years, the Department conducted the permitting process as a “delegated state,” meaning that the Department reviewed permit applications related to the prevention of significant deterioration of air quality under the authority of the United States Environmental Protection Agency. Wolverine’s counsel explained that the Department adopted Rule 1830 as part of a set of rules to become an “approved state,” meaning that the Department would review permit applications related to the prevention of significant deterioration of air quality under its own authority.

Wolverine’s counsel argued that Rule 1830 was a “sweeping change” that was not required by the federal notice and comment provisions and “does not effectuate the purposes of the clean air act.” 3 Counsel stated that a contested case hearing is vastly different from circuit court review of administrative decisions, noting that a contested case hearing can be a lengthy process that involves discovery and an evidentiary record. Mid-Michigan’s counsel presented similar arguments.

In response, the Department’s counsel argued that Rule 1830 merely “changed the point in the permitting *552 process where there is a final agency action.” The Department’s counsel explained that before the promulgation of Rule 1830, applicants could appeal permit decisions directly in circuit court. Rule 1830 “added a step”; that is, it allowed applicants or other aggrieved persons to seek contested case hearings. Counsel indicated that after a decision on the contested case hearing, permit applicants could appeal in circuit court. Counsel acknowledged that the contested case hearing procedure could add substantial time to the permitting process.

In ruling on the motions, the trial court determined that Rule 1830 was contrary to the provisions of the enabling statute and that the rule would have no force or effect with respect to plaintiffs’ permit applications. The Department now appeals.

II. RULE 1830 AND THE DEPARTMENT’S STATUTORY AUTHORITY

A. STANDARD OF REVIEW

The Department argues that it has clear and broad statutory authority to promulgate rules for hearings on air emission permitting decisions. According to the Department, this authority includes the power to promulgate Rule 1830, which allows persons to request contested hearings to challenge permitting decisions for new sources of air emissions. The Department asserts that Rule 1830 is an appropriate exercise of its authority to develop an evidentiary record on permitting issues before rendering a final agency decision. The Department contends that the trial court misunderstood the statutory and regulatory structure applicable to Rule 1830 and incorrectly declared the rule invalid.

Wolverine and Mid-Michigan argue that Rule 1830 is invalid. They assert that the rule conflicts with the statutory section governing review of permitting decisions *553 —MCL 324.5505(8) — that specifies that the exclusive review procedure for a new source permitting decision is a petition in the circuit comb. They contend that the section does not allow contested case hearings for new source permitting decisions. They go on to argue that the Department cannot rely on general statutory provisions for authority to promulgate the rule at issue for three reasons. First, the Department failed to present this argument to the trial court, so the argument is waived. Second, the general statutoiy provisions are reserved for the Commission of Natural Resources, not the Department. Third, according to Wolverine, the Department’s position is contrary to the position it took and prevailed on in unrelated litigation, and thus it is estopped from pursuing its argument in the present case.

Consumers Energy additionally argues that this Court should reject the Department’s proposed statutory interpretation because the interpretation violates well-established rules of statutory construction. Statutory construction rules require this Court to adhere to unambiguous statutory language, and, according to Consumers Energy, the enabling language here unambiguously precludes contested case hearings on new source emission permits. Consumers Energy asserts that the statutory construction rules also require the Court to apply the most specific statute in a topic area, and the most specific statute applicable to new source permits states that the exclusive means for review is a judicial review, not a contested case hearing.

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Bluebook (online)
777 N.W.2d 1, 285 Mich. App. 548, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wolverine-power-supply-cooperative-inc-v-department-of-environmental-michctapp-2009.