In July 2013, the Wisconsin Supreme Court issued a notable decision involving navigable waters, dams, and the public trust doctrine of the Wisconsin Constitution.1 That decision, Rock-Koshkonong Lake District v. Wisconsin DNR,2 reversed a Wisconsin Department of Natural Resources (DNR) order establishing minimum and maximum water levels for Lake Koshkonong, an impounded reach of the Rock River near Janesville.
Reviewing the DNR’s order de novo, the majority in the 4-3 decision concluded that the DNR had erred as a matter of law in grounding its decision in the trust doctrine. The dissent decried the majority’s “unnecessary constricting” of the trust doctrine in strong terms, labeling the decision an attempt “to undermine this court’s precedent, recharacterize its holdings, and rewrite history.”3
While at first blush the Rock-Koshkonong decision appears to herald a significant shift in Wisconsin’s public trust law, it is better understood as confirming the primacy of the legislature, not the executive branch, as the trustee under the public trust. The majority’s opinion is consistent with a long line of cases that limit the scope of delegated authority under separation-of-powers principles. The decision marks a more circumscribed role for the DNR in water regulatory cases and a greater role for the courts to scrutinize agencies’ interpretations of the extent of their statutory authority. The standard of review the court used is supported by considerable precedent concerning the level of deference to be accorded to an agency’s decision.
Lake Koshkonong was enlarged in the 1850s when Clouden and Luke Stoughton constructed the Indianford dam pursuant to an act of the Territorial Legislature. The impounded waters submerged extensive marshlands, many of them home to storied duck hunting clubs that continue to own large tracts of wetland frontage.4 Over the decades, the area has also been the site of extensive residential and commercial development drawn by the lake’s recreational value.
Water levels on Lake Koshkonong, which are affected (but not always controlled) by the operation of the Indianford dam, have been the subject of dispute virtually since the time of impoundment.5 Duck hunters generally consider shallower waters to be preferable for waterfowl habitat, while riparian property owners and business enterprises support the improved boating conditions resulting from higher levels.
It was this preference for higher summer water levels that moved the Rock-Koshkonong Lake District (the district) to file a petition requesting that the DNR amend the Indianford dam operating order in April 2003. The resulting water-level order was an exercise of the DNR’s delegated authority under Wis. Stat. section 31.02(1) to “regulate and control the level and flow of water in all navigable waters.” In its order, the DNR denied the district’s petition, citing concerns that higher water levels would compromise the extent and quality of adjacent wetlands and associated habitat.
Appeals to the circuit court and the court of appeals followed, and both courts upheld the DNR’s order. But the supreme court reversed the DNR’s order in a decision that accorded no deference to the agency’s interpretation of its authority under Wis. Stat. section 31.02(1). The majority ruled that the DNR had erred as a matter of law in failing to consider impacts on the value of riparian property, commercial activity, and the local tax base under the statutory mandate in section 31.02(1) to “protect property” when establishing a water-level order.
In the portion of the opinion that garnered the greatest criticism from the dissent, the court also held that the DNR’s statutory mandate to consider “public rights in navigable water” provided no basis to protect nonnavigable wetlands above the ordinary high-water mark. However, the court held, the agency properly applied wetland water-quality regulations promulgated according to statute in establishing the water level.6
Standard of Review of Agency Decision Affecting Scope of Its Own Powers
The court reviewed the DNR’s order de novo, without deference to the department’s interpretation of the scope of its own powers. This standard of review is consistent with existing precedent. The Rock-Koshkonong decision is the culmination of a series of recent supreme court cases that safeguard the power of courts to “say what the law is” and that accord no deference to an agency’s interpretation of the scope of its delegated authority. Particularly with respect to the DNR, this position was previewed in Justice Prosser’s concurrence in 2006 in Hilton v. DNR, which quoted approvingly from earlier case law: “Expert discretion is the lifeblood of the administrative process, but unless we make the requirements for administrative action strict and demanding, expertise can became a monster which rules with no practical limits on its discretion.”7 Notably, in Lake Beulah Management District v. DNR, a 2011 case relied on by the dissent (which endorsed a more expansive view of the department’s delegated authority under the public trust doctrine), the court employed the same nondeferential standard of review to construe the scope of the DNR’s authority in a high-capacity-well permit proceeding.8
Geographical Limits of the Public Trust Doctrine
The issue in Rock-Koshkonong that has received the most attention by commentators and attorneys is the majority’s analysis of the DNR’s authority under the public trust doctrine. The water-level order was the product of the agency’s concept of its trust duties as extending to the consideration of impacts of the lake water level on nonnavigable wetlands located above the ordinary high-water mark.9
Mary Beth Peranteau, U.W. 1996 cum laude, is with Wheeler, Van Sickle & Anderson S.C., Madison. She assists individuals, associations, businesses, and local governments in matters relating to real estate, land use, property rights disputes, and water law. She also represents cooperative electric utilities in corporate and transactional matters, regulatory proceedings, and litigation and appeals before administrative agencies and in state and federal courts.
William P. O’Connor, U.W. 1979, is also a shareholder at Wheeler, Van Sickle & Anderson. He has been actively involved in water resources law and public policy in Wisconsin for some 30 years, representing clients in several notable water law and public trust doctrine cases decided by the Wisconsin Supreme Court. He has served on Special Legislative Council Committees, local and statewide boards, and nonprofit organizations, including the Wisconsin Waterways Commission and the national Land Trust Alliance. He currently serves as a curator of the Wisconsin Historical Society.
The state argued that wetlands adjacent to navigable waters have long been included in “public rights in navigable waters” under the trust doctrine because of their “special relationship” to navigable waters, citing Just v. Marinette County.10
Following an extended discussion of the scope and historical basis of the trust doctrine, the majority rejected the DNR’s arguments. The majority held that the geographical reach of the public trust ends at the ordinary high-water mark and thus is not a source of authority to regulate nonnavigable wetlands.
The public trust doctrine defines and protects a publicly owned asset. Under the trust doctrine, the state owns legal title to navigable waters for the benefit of the public and has a duty to safeguard that property for commercial navigation as well as purely recreational use.11 The determination of navigability (of a stream) and the ordinary high-water mark of a lake or stream implicates the trust doctrine and triggers the DNR’s jurisdiction under numerous regulatory provisions, particularly under Wis. Stat. chapters 30 (Navigable Waters, Harbors and Navigation), 31 (Regulation of Dams and Bridges affecting Navigable Waters), and 281 (Water and Sewage). Numerous cases recognize the limit of navigability on a lake as the ordinary high-water mark.12
The majority in Rock-Koshkonong rejected the concept that the trust doctrine extends to nonnavigable waters based on their ecological interconnectedness. In a similar fashion, in 1975 the court rejected the argument that nonnavigable tributaries of a navigable stream are public trust property.13 The Rock-Koshkonong majority recognized that enlarging the trust doctrine to encompass privately owned upland property would have substantial implications for the scope of the DNR’s authority:
“Contemplating the question of ownership is important because the public trust doctrine implicates state ownership or virtual state ownership – by virtue of its trust responsibility – of land under navigable waters. If the public trust were extended to cover wetlands that are not navigable, it would create significant questions of ownership of and trespass on private land, and it would be difficult to confine expansion of the state’s new constitutionally based jurisdiction over private land.”14
The concept of the trust doctrine as a broad principle of environmental stewardship led the DNR in Rock-Koshkonong to argue that the trust doctrine extends to the protection of private, nonnavigable wetlands. But the doctrine is firmly rooted in a property interest – public ownership of navigable waters – and the access and use rights flowing from that property interest. The environmental protection aspect of the trust doctrine is based on preserving a constitutional right to use and enjoy public waters for navigation and recreational purposes. Thus, for example, regulations that limit the placement of piers in sensitive spawning areas protect the public’s fishing rights.
The legislature’s broad delegation of substantial authority to the DNR as trustee under the public trust means that courts will imply expansive authority in the sphere of water management. But, rooted as it is in navigable waters, the trust doctrine does not extend to protecting every area of ecological or aesthetic value connected to navigable waters.
The Legislature’s Duty and the Courts’ Role
The dissent in Rock-Koshkonong lamented that the majority’s holding relegated “the state’s affirmative duty to protect the public trust into a legislative choice.”15 But the dissent failed to acknowledge the issue more pointedly raised by the state’s argument, that is, whether the DNR has plenary power to protect wetlands under the public trust, akin to the legislature’s power to enact shoreland zoning, as described in the Just case. That argument implies that the agency’s power as trustee is coequal to that of the legislature. It further suggests that the many statutes by which the legislature has specifically delineated the DNR’s grant of water-related authority are superfluous.
The court’s earlier decision in Lake Beulah (a case relied on by the dissent), which carefully analyzes the scope of the agency’s delegated statutory authority, squarely refutes this concept of the agency’s powers. Wisconsin law consistently holds that, because agencies are creatures of statute, “they have only those powers as are expressly conferred or necessarily implied from the statutory provision under which they operate.”16
But what of the dissent’s expressed concern? What does it mean for the state to have an “affirmative duty” to protect the public trust? Numerous Wisconsin cases characterize the trustee’s duty using similar language. However, it is not clear that the trust doctrine imposes an affirmative duty on the part of the legislature to enact laws that best promote ecological values, such as water quality, habitat, or natural scenic beauty.
For example, if the legislature repealed all or substantial parts of the shoreland zoning statutes, could one assert a viable cause of action for “breach of fiduciary duty” under the trust doctrine? Did the legislature somehow act unconstitutionally by failing to enact shoreland zoning in the decades before its passage? Existing case law does not fully answer these questions, and certainly there would be other legal hurdles to overcome in bringing such a cause of action, including sovereign immunity.
Nevertheless, Wisconsin case law reassures us that the dissent’s concern regarding unconfined “legislative choice” is overstated. Nothing in the Rock-Koshkonong decision threatens to impair the state’s powers as an active trustee under the public trust doctrine. As Professor Joseph Sax wrote, the key to understanding the public trust doctrine is its role as a check and balance.17 The founders recognized the need for a senate whose members held longer terms of office, as a check against the lower house whose members now no sooner take their oath of office than they begin campaigning for the next term.
The public trust doctrine has been similarly used by the courts to cool the passions of legislatures that sometimes react to present perceived needs in ways that lose sight of enduring values. For example, in Muench v. Public Service Commission,18 the court struck down as unconstitutional a statute that would have allowed a county board to override the Public Service Commission of Wisconsin’s authority to deny a permit for the construction of a dam on the basis of its impairment of public rights in fishing, hunting, and the stream’s scenic beauty.
The court in State v. Deetz characterized the trust doctrine as essentially a rule of standing: “In effect, the state has the usual powers of a trustee. A trustee, by virtue of such position, has standing to take legal action on behalf of the trust where some grievance recognized by the law gives rise to a cause of action. Its mere standing, however, does not create a cause of action.”19
This description of the trust doctrine does not support the thesis that the legislature has an affirmative duty to enact legislation consistent with public trust values. It does, however, confirm that the court is the ultimate guardian of the trust. As Professor Sax wrote, “public trust law is not so much a substantive set of standards for dealing with the public domain as it is a technique by which courts may mend perceived imperfections in the legislative and administrative process.”20
The Rock-Koshkonong court rejected the DNR’s more expansive concept of “public rights in navigable waters” under the trust doctrine. As such, the majority’s decision may appear to be a startling break with precedent that construes the trust doctrine in the “broad and beneficent spirit that gave rise to it.”21 On the contrary, the bedrock principles of the public trust doctrine in Wisconsin – the civil right of the public to use and enjoy navigable waters, and the broad rule of standing to protect that right – remain firmly intact. The majority’s holding simply reaffirms a cardinal separation-of-powers principle: that agency power derives from the legislature. The public trust doctrine is not a direct delegation of executive authority. The Constitution of 1848 could not have granted powers to an agency created in the 1960s. Nor does the “affirmative duty” of the trustee compel the regulation of navigable waters so as to protect or benefit nonnavigable uplands. Rather, the agency’s powers in the exercise of public trust responsibilities must be expressed or implied by statute.
1 Wis. Const., art. IX, sec. 1.
2 Rock-Koshkonong Lake Dist. v. DNR, 2013 WI 74, 350 Wis. 2d 45, 833 N.W.2d 800.
3 Id. ¶¶ 153-154.
4 See Walter A. Frautschi, Early Wisconsin Shooting Clubs, 28 Wis. Mag. of History, vol. 4, at 391 (1945).
5 See Shearer v. DNR, 151 Wis. 2d 153, 443 N.W.2d 669 (Ct. App. 1989).
6 See Rock-Koshkonong Lake Dist., 2013 WI 74, ¶¶ 11-13, 350 Wis. 2d 45.
7 Hilton ex rel. Pages Homeowners’ Ass’n v. DNR, 2006 WI 84, ¶ 61, 293 Wis. 2d 1, 717 N.W.2d 166 (Prosser, J., concurring).
8 See 2011 WI 54, ¶ 23, 335 Wis. 2d 47, 799 N.W.2d 73.
9 2013 WI 74, ¶ 68, 350 Wis. 2d 45.
10 56 Wis. 2d 7, 16-19, 201 N.W.2d 761 (1972).
11 State v. Bleck, 114 Wis. 2d 454, 465, 338 N.W.2d 492 (1983).
12 See, e.g., Diana Shooting Club v. Husting, 156 Wis. 261, 272, 145 N.W. 816 (1914); State v. Trudeau, 139 Wis. 2d 91, 102, 408 N.W.2d 337 (1987).
13 DeGayner & Co. v. DNR, 70 Wis. 2d 936, 236 N.W.2d 217 (1975).
14 2013 WI 74, ¶ 84, 350 Wis. 2d 45.
15 Id. ¶ 154 (Crooks, J., dissenting).
16 Lake Beulah Mgmt. Dist., 2011 WI 54, ¶ 23, 335 Wis. 2d 47.
17 See Joseph L. Sax, The Public Trust Doctrine In Natural Resource Law: Effective Judicial Intervention, 68 Mich. L. Rev. 471 (1970).
18 Muench v. Public Serv. Comm’n, 261 Wis. 492, 55 N.W.2d 40 (1952).
19 State v. Deetz, 66 Wis. 2d 1, 12, 224 N.W.2d 407 (1974).
20 Sax, supra note 17, at 509.
21 Diana Shooting Club, 156 Wis. at 271.