July 1, 2025 – The Department of Natural Resources’ (DNR) communications that added PFAS chemicals to its enforcement of the Spills Law fell within acceptable guidance documents – not illegal regulations – a 5-2 Wisconsin Supreme Court majority recently decided in Wisconsin Manufacturers and Commerce, Inc. (WMC) v. Wisconsin Natural Resources Board, 2025 WI 26 (June 24, 2025).

Justice Janet C. Protasiewicz, writing for the majority, concluded that statutory definitions of an administrative rule did not require “the DNR to promulgate rules before issuing the communications about the Spills Law that WMC and Leather Rich Challenge.”

In concluding “the DNR has explicit authority to enforce a threshold for reporting the discharge of hazardous substances,” the Supreme Court reversed the Court of Appeals.

Justice Brian Hagedorn concurred, noting “that while guidance documents are not rules, they are not immune from judicial scrutiny.”

The dissent written by Justice Rebecca Grassl Bradley and joined by Justice Annette Kingsland Ziegler sought a return to fundamental constitutional principles.

“This case is about whether the People are entitled to know what the law requires of them before the government can subject them to the regulatory wringer,” the dissent said.

“The majority leaves the People at the mercy of unelected bureaucrats empowered not only to enforce the rules, but to make them.”

Spills Law

The Spills Law enacted in 1978 at Wis. Stat. section 292.11, requires “responsible parties,” such as a landowner, to notify the DNR of a discharge of a “hazardous substance.”

Wisconsin law defines a hazardous substance under Wis. Stat. section 292.01(5), in part, as substances that “may cause or significantly contribute to an increase in mortality” or illness, or pose a “hazard to human health or the environment.”

In the nearly 50 years of administering the Spills Law, the DNR said it has never “promulgat[ed] rules listing substances, quantities, and concentrations that it deems ‘hazardous substances.’”

“And in that time, the court twice required property owners to remediate hazardous substance discharges despite the lack of DNR rules declaring the contaminants at issue ‘hazardous substances.’”

DNR Volunteer

A responsible party may choose to participate in the Voluntary Party Remediation and Exemption from Liability (VPLE) program to work to remediate property under DNR supervision.

Under the program, DNR may issue broad liability exemptions or choose to issue partial liability exemptions.

Leather Rich, Inc., a dry cleaner in Oconomowoc, became a volunteer in 2019 after discovering volatile organic compounds on its property. The company’s hope was to obtain a broad liability exemption from the DNR.

Two days after the company’s application, DNR published an “Interim Decision” regarding emerging contaminants – contaminants that the scientific community more recently agrees are dangerous – specifically PFAS.

The DNR also said it would offer only partial exemptions from liability upon completing remediation for PFAS. It later sent a letter to the company and posted on its website that it now considered PFAS a hazardous substance.

Site investigation work showed that the company’s property had two PFAS chemicals on it. DNR conditionally approved the company’s supplemental work plan but added that future reports needed to show levels of PFAS.

Leather Rich withdrew from the voluntary program and with WMC sued the DNR alleging that the agency’s decisions on PFAS were illegal, unpromulgated rules. Plaintiffs won at summary judgment in Waukesha County Circuit Court, which the Court of Appeals affirmed.

Hazardous Substances

The definition for hazardous substances in Wis. Stat. section 292.01(5), the majority said, contains “broad and open-ended” terminology that limited the definition to those substances either increasing human illness or death, or creating a potential hazard.

The DNR may decide what is a hazardous substance, the majority said. Unlike in 18 other places in the Spills Law requiring rulemaking, the determination of what is a hazardous substance is not among them.

Nor did the majority find ambiguity, as argued by the plaintiffs, in the definition’s “judgment-laden terms” that lack specified thresholds.

Guidance Documents

All three types of DNR’s communications, the majority concluded, fit within the definition of guidance documents.

In Service Employees International Union (SEIU) v. Voss, 2020 WI 67, the court “recently explained that a guidance document inherently lacks the effect of law” – one of the five elements of an administrative rule as defined in Wis. Stat. section 227.01(13).

A guidance document may be a directive or informational bulletin that either “[e]xplains the agency’s implementation of a statute or rule” or “[p]rovides guidance or advice with respect to how the agency is likely to apply a statute or rule.”

Guidance documents only communicate the law, SEIU holds. “They ‘are simply the written record of the executive’s thoughts about the law and its execution.’”

DNR’s website statements and letters to responsible parties defining PFAS as hazardous substances “communicat[ed] about the law.” The DNR couldn’t cite such statements as legal authority about PFAS in an enforcement action, the majority said.

DNR’s choice to award only partial liability exemptions fits within agency discretion granted by the Legislature, under Wis. Stat. section 292.15(2)(am), the majority said.

The DNR’s letter to Leather Rich requiring reports identifying PFAS beyond acceptable amounts affected only the company, not generally as a regulation would, the majority said.

In addition, Wis. Stat. section 227.10(1), which requires rulemaking for “each statement of general policy and each interpretation of a statute which it specifically adopts to govern” agency enforcement, also didn’t require DNR to make rules to define PFAS as a hazardous substance.

“Thus by definition, § 227.10(1) does not apply to guidance documents,” the majority concluded.

Caselaw did not change this determination, the majority said, because the DNR’s decision to include PFAS as hazardous substances was not a change in interpretation of the statute but applied the statute to new facts.

‘Legislative Branch Informing’

Among the ways a guidance document can be legally challenged, Justice Hagedorn described in his concurrence, are through declaratory judgment, failure to comply with notice-and-comment requirements in Wis. Stat. section 227.112(1), and reasonable reliance on the guidance when an agency fails to comply with its own guidance document under Wis. Stat. section 227.112(4).

About statutory relief, “[i]n 2020, however, this court narrowly ruled that these and related provisions are facially unconstitutional,” Hagedorn explained from SEIU, because guidance documents are a core executive branch power.

Referencing the DNR’s guidance documents, Hagedorn said, “this case highlights the important role guidance documents can play in notifying the public of new intended applications of the law.”

“It is not so much about executive branch thinking as it is executive branch informing, which may not raise the same constitutional concerns that animated the majority’s conclusion in SEIU.”

‘Vague and Shifting Directives’

Justice R.G. Bradley’s dissent highlighted the hardship DNR’s decision had on “a small family-owned dry cleaning business” that had operated for more than 40 years but that the wife was closing after her husband’s death.

DNR’s PFAS enforcement, the dissent explained, has thwarted the property’s sale and cost the widow at least $300,000.

The DNR’s action, the dissent said, failed to give, as our legal system requires, “fair notice of conduct that is forbidden or required.”

DNR’s communications had the effect of law, the dissent distinguished from the majority. “An agency action has the ‘effect of law’ when: ‘criminal or civil sanctions can result [from] a violation’; ‘licensure can be denied’; or ‘the interest of individuals in a class can be legally affected through enforcement of the agency action.’”

“By newly declaring PFAS ‘hazardous substances,’ impairing the interests of property owners in receiving [Certificates of Completion], imposing legal obligations binding the regulated community of property owners whose land contains them, and threatening to penalize those who do not comply, the DNR’s statements have the force of law,” the dissent wrote.

The need for rulemaking is more acute, the dissent described, because DNR changed its position in regulating PFAS, which have existed since the 1940s.

“The majority allows agencies to bypass the law’s requirement that agencies promulgate rules whenever they adopt an interpretation of a statute under Wis. Stat. section 227.10(1), enabling the DNR to blindside the regulatory community with vague and shifting directions and associated penalties with noncompliance.”

This article was originally published on the State Bar of Wisconsin’s Wisbar Court Review blog, which covers case decisions and other developments in the Wisconsin Supreme Court, the Wisconsin Court of Appeals, and the U.S. Court of Appeals for the Seventh Circuit. To contribute to this blog, contact Joe Forward.