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Wisconsin Supreme Court sides with developer on waste-to-energy plant conditional use permit dispute

June 16, 2015

"Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence." John Adams (1735 – 1826), ’Argument in defense of the soldiers of the Boston Massacre Trials,’ December 1770.

Developers of all types will be heartened by a recent decision of the Wisconsin Supreme Court. In Oneida Seven Generations Corporation et al. v. City of Green Bay, 2015 WI 50 (May 29, 2015), a 6-1 majority of the Supreme Court ruled that the city of Green Bay did not have discretion to revoke a conditional use permit whose conditions had been satisfied by the developer and rejected the city’s claim that the permit had been obtained through misrepresentation. The fact-intensive decision (which affirmed an equally thorough review by the intermediate Court of Appeals) demonstrates the Wisconsin appellate courts’ willingness to subject municipal decisions to meaningful scrutiny. It also emphasizes the importance of developing a record that will enable the applicant to later prove its transparency at all stages of the municipal proceedings.

Background

Encouraged by officials of the city of Green Bay, the Oneida Seven Generations Corporation (OSGC) and Green Bay Renewable Energy (GBRE) proposed constructing within the city’s borders a renewable energy facility that would convert municipal solid waste into energy through a type of gasification process known as "pyrolysis." In essence, ordinary household garbage collected by the city and surrounding municipalities would be heated in a sealed chamber until the volatile gasses were driven off. Those gases would be collected, "scrubbed," and then used to drive gas-fired electrical generators. The remaining inert ash would be recycled or landfilled. Not only would the electrical generation — enough to supply 3,000 to 5,000 households — produce far fewer emissions per kilowatt than a coal-fired plant, but the volume of solid waste would be reduced by 80 percent or more.

OSGC and GBRE applied to the city for a conditional use permit (CUP), as city ordinances required. After extensive review by city staff and the Plan Commission, the City Council issued the CUP and, at significant expense, the applicants obtained all necessary state and federal permits. Despite this, a vocal group of various individuals and citizen groups who had unsuccessfully opposed the permits urged the city to revoke the CUP, claiming that the applicants had falsely represented that the project would have no emissions and no smokestacks. Even though the Plan Commission considered these charges at length and unanimously determined that it had not been misled, the City Council revoked the CUP and the circuit court affirmed the city’s action.

OSGC and GBRE appealed.

The Appellate Courts’ review

The Court of Appeals reversed (in effect, reinstating the CUP) and, after granting the city’s petition for review, the Supreme Court affirmed that result. In reaching their decisions, both appellate courts closely examined the entire record and both concluded that there was no substantial evidence in the record to support the Common Council’s claims of "misrepresentation." Their observations are striking. For example, the Court of Appeals concluded that the city’s decision was based "not on a rational analysis of the statements Seven Generations made to the Plan Commission, but [on] the public pressure brought to bear on the Common Council after the CUP had been issued." The notion that OSGC had promised the facility would produce no emissions was not only unsupported by the record, but "unreasonable" and "untenable." In short, as the Supreme Court summarized,"[d]espite the city’s claim that [the developer] made intentional misrepresentations to government entities . . . we could find no such misrepresentations in the record."

Importance of decision

Although the case is clearly fact-driven, there are a number of lessons that can be drawn from it.

First and foremost, despite a well-established standard of review that favored the city, both the Court of Appeals and the Supreme Court went to impressive lengths to assess whether the record contained substantial evidence of the inflammatory allegations leveled against the applicants. Neither decision changes the standard, but both reflect a judicial commitment to the proposition that a deferential standard of review is not the equivalent of "rubber-stamp" affirmance. The watchword, instead, is "meaningful" review.

Second, both courts also rejected the notion that the deferential standard of review required them to affirm if portions of the record taken out of context appeared to support the city. No matter how deferential the courts’ review, it must be based on the entire record, and the truth of supposedly misleading statements must be evaluating in context, not in isolation.

Third, in conducting their review, neither court felt any obligation to disregard the laws of physics, even though the city chose to do so. Thus, for example, both reviewing courts recognized that no reasonable person could possibly have believed that a system designed to generate electricity through the combustion of hydrocarbon gases would produce no emissions or have no means of venting them.

Fourth, although neither court felt it necessary to determine whether the "vested rights" doctrine extends to conditional use permits (still an open question under Wisconsin law), it is probably fair to conclude that the applicants’ substantial reliance on the CUP and the fulfillment of all conditions in it played a role in the courts’ conclusions. The Court of Appeals made particular note of the fact that the city had chosen to address environmental concerns by requiring compliance with state and federal regulations as a condition of the CUP. If the city had wanted to impose other or stricter conditions, that Court observed, it could have done so but did not.

Finally, neither court’s conclusions would have been possible had the applicants not taken care to develop an extensive record, both in proceedings before the city and in the state and federal permitting process. It was this record that allowed the reviewing courts to reassure themselves that all characteristics of the proposed project had been fairly disclosed.

Land use decisions, especially those with environmental implications, are frequently controversial. Oneida Seven Generations does not guarantee that all developers will prevail in the face of vocal public opposition, but it provides substantial comfort that our appellate courts will take the time to ensure that they have been given a fair shake.1

1Godfrey & Kahn S.C. represented Oneida Seven Generations Corporation and Green Bay Renewable Energy, LLC in all proceedings up to and including the Supreme Court.

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