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Real Estate Development Projects Run Aground on the Shores of Public Trust Doctrine

Fall 1995

Wisconsin has many unique land use restrictions that cannot be found in other states. One of the most unique is grounded in what is known as the "Public Trust Doctrine." Under this Doctrine, the State of Wisconsin acts as the public trustee in a capacity designed to protect navigable surface waters from any use that is not related to authorized public uses of the waterbody.

The authorized public uses of the navigable stream that are protected by the Public Trust Doctrine include the following: fishing, swimming, recreational and commercial navigation, viewing the aesthetic beauty of the water body, and pollution abatement projects designed to protect the quality of the water body.

The Public Trust Doctrine has been interpreted by the Wisconsin courts to apply not only to the existing navigable waterway, but also the existing bed underlying the waterway. More important for real estate development purposes in Wisconsin, the courts have also suggested that the Doctrine is designed to protect the underlying beds of the former waterbody even after the surface water is displaced by fill.

This Doctrine has its "roots" in the Northwest Ordinance as well as the Wisconsin Constitution. These two important historical documents contain almost identical language which states that waterways that have a connection with the Mississippi and the Great Lakes are to be preserved for the free flow of commercial navigation and are not to be burdened by taxes or tolls of any kind.

These provisions have been expanded through interpretation to apply to all surface waters that qualify as "navigable" even if those water bodies have no connection with interstate commerce. Under Wisconsin law, a surface water is considered to be "navigable" if it can support the floating of a canoe for any portion of the year.

The Doctrine has the most significant implications for real estate development near water that is proposed for filled stream/lakebed. The fact that the area has been filled for many years does not, generally speaking, displace the operation of the Public Trust Doctrine for the filled area. If the Doctrine applies to the filled area, private real estate development (such as condominiums or commercial development) is prohibited in the filled area. Indeed, since the Doctrine has its basis in the Wisconsin Constitution, the legislature may not have adequate authority to issue a lakebed grant to a private developer to authorize a project otherwise prohibited by the Public Trust Doctrine.

Recently, the State of Wisconsin has taken an aggressive posture to prevent unauthorized private development in a filled lakebed areas. Indeed, in one recent case, the State obtained an injunction against a developer in filled lakebed area which resulted in the removal of condominium improvements in the filled area.

There are a number of theories which can be utilized to avoid the application of the Public Trust Doctrine in filled areas. These include an accretion theory where filling has been caused by third parties (e.g., dredging from the Corp of Engineers), the establishment of a bulkhead line in accordance with an authorized statutory procedure or determination of the original high water mark prior to filling and any artificially induced changes in the water level.

Nonetheless, the safest course of action is to carefully research the history, as it pertains to, the filling of any land located near an existing surface water body before development is commenced. If the research suggests a history of filling, a prudent course of conduct may include negotiation with the DNR on the application of the Doctrine to the proposed development prior to construction.

For more information on the application of the Doctrine, please feel free to contact any member of the Environmental Practice Group.

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