DBA DNR lawsuit by Warren Bluhm

FILED 07-31-2017 Clerk of Circuit Court Brown County, WI

STATE OF WISCONSIN

CIRCUIT COURT

DAIRY BUSINESS ASSOCIATION, INC., 2763 MANITOWOC ROAD, SUITE B GREEN BAY, WI 54311-6633

2017CV001014 BROWN COUNTY

Case No. Case Code: 30703

Plaintiff, v. WISCONSIN DEPARTMENT OF NATURAL RESOURCES, 101 SOUTH WEBSTER STREET P.O. BOX 7921 MADISON, WI 53707-7921 Defendant. SUMMONS

THE STATE OF WISCONSIN to each person named above as a Defendant: You are hereby notified that the plaintiff named above has filed a lawsuit or other legal action against you. The Complaint, which is attached, states the nature and basis of the legal action. Within forty-five (45) days of receiving this Summons, you must respond with a written answer, as that term is used in Wis. Stat. ch. 802., to the Complaint. The Court may reject or disregard an answer that does not follow the requirements of the Statutes. The answer must be sent or delivered to the Court, whose address is 100 South Jefferson Street, Green Bay, WI 54305-3600 and to the plaintiffâ&#x20AC;&#x2122;s attorneys, Joseph L. Olson, Michael Best & Friedrich LLP, whose address is 100 E. Wisconsin Avenue, Suite 3300, Milwaukee, Wisconsin 53202. You may have an attorney help or represent you.

If you do not provide a proper answer within forty-five (45) days, the Court may grant judgment against you for the award of money or other legal action requested in the Complaint, and you may lose your right to object to anything that is or may be incorrect in the Complaint. A judgment may be enforced as provided by law. A judgment awarding money may become a lien against any real estate you own now or in the future, and may also be enforced by garnishment or seizure of property. Dated this 31st day of July, 2017. MICHAEL BEST & FRIEDRICH LLP

By: Electronically signed by Joseph L. Olson Joseph L. Olson, SBN 1046162 David A. Crass, SBN 1000731 Andrew C. Cook, SBN 1071146 100 East Wisconsin Avenue, Suite 3300 Milwaukee, WI 53202 T: 414.271-6560 F: 414.277.0656 jlolson@michaelbest.com dacrass@michaelbest.com accook@michaelbeststrategies.com Attorneys for Plaintiff Dairy Business Association, Inc.

024280-0038\21440627.1

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FILED 07-31-2017 Clerk of Circuit Court Brown County, WI

STATE OF WISCONSIN

CIRCUIT COURT

DAIRY BUSINESS ASSOCIATION, INC., 2763 MANITOWOC ROAD, SUITE B GREEN BAY, WI 54311-6633

2017CV001014 BROWN COUNTY

Case No. Case Code: 30703

Plaintiff, v. WISCONSIN DEPARTMENT OF NATURAL RESOURCES, 101 SOUTH WEBSTER STREET P.O. BOX 7921 MADISON, WI 53707-7921 Defendant. COMPLAINT

INTRODUCTION 1.

This case seeks to put an end to the Wisconsin Department of Natural Resources’

(“DNR”) practice of enforcing blatantly illegal rules related to the permitting and operation of large Wisconsin livestock farms. DNR’s actions exceed the scope of its lawful authority to promulgate and administer regulations to protect the waters of the state and serve only to increase costs and uncertainty for those farmers who wish to remain in operation, increase the size of their operations or start new operations. 2.

For many years DNR has systematically and illegally required large farmers to

apply for and follow a complex and costly regulatory process to obtain a Wisconsin Pollutant Discharge Elimination System Permit even if they do not discharge or intend to discharge any pollutants into the waters of the state.

In 2016, without going through the legally required rulemaking process, DNR

created a new rule by fiat governing the management of feed storage leachate1 runoff. This new rule is inconsistent with the text of the properly promulgated rule currently on the books. 4.

Likewise, in 2016, despite no changes in Wisconsin law, DNR declared via

issuing a statewide letter that it now had the authority to require calf hutches2 be stored only on engineered and approved storage structures essentially declaring calf hutches to be a “reviewable facility or system” under NR § 243.03(56), Wis. Admn. Code, and requiring such areas comply with standards nowhere incorporated into law. Moreover, DNR announced that calf hutch lots would be subject to the same illegal fiat-rule it was applying to feed storage leachate runoff. 5.

Plaintiff Dairy Business Association of Wisconsin, Inc. seeks a declaratory

judgment finding DNR’s actions illegal and an injunction preventing DNR from continuing to enforce these illegal rules against Wisconsin’s dairy farmers. PARTIES, JURISDICTION AND VENUE 6.

Plaintiff Dairy Business Association is a nonprofit organization organized as a

Wisconsin non-stock corporation with its principal place of business located at 2763 Manitowoc Road, Suite B, Green Bay WI, 54311-6633. The Dairy Business Association is comprised of Wisconsin dairy farmers, milk processors, vendors and supportive businesses that came together in 1999 to help reinvigorate the state’s then-lagging dairy community. The Dairy Business Association follows an integrated approach, with farmers alongside industry partners, in a unique model that fosters collaboration and innovation for the collective good. The Dairy Business Association works to guarantee Wisconsin dairy farmers of all sizes have the support they need 1

Leachate is water or moisture that is either contained within or has passed through a solid or a semisolid and leached out some of the constituents of the solid. In this case, the leachate runoff is water or moisture contained within or precipitation that has passed through stored feed and leached nutrients out of the feed. 2 Calf hutches are small portable huts that shelter individual calves during their early life. Calf hutch “lots” are the portion of the CAFO livestock production area that contains rows or groupings of calf hutches.

to thrive in the state’s economy, communities and food chain and to keep and expand Wisconsin’s $43.4 billion dairy industry. Consistent with its mission, the Dairy Business Association serves as an advocate for Wisconsin’s dairy farmers to encourage business development, capital investment, and job creation. The Dairy Business Association also exists to protect its members and the dairy community against legislative and administrative actions that violate their rights under state and federal law through informational meetings, community and public relations, political action and advocacy, and litigation if necessary. This assistance and protection is directly germane to the purpose of the Dairy Business Association. 7.

The Dairy Business Association has numerous members who are currently being

impacted and harmed by the illegal actions of the DNR outlined in this Complaint. Additionally, the Dairy Business Association has numerous members who may wish to expand their businesses and otherwise engage in activities that are currently the subject of the DNR’s illegal actions. 8.

Defendant DNR is an administrative agency of the state of Wisconsin, as that

term is defined by Wis. Stat. § 227.01(1), and as that term is used throughout Wis. Stat. ch. 227. DNR’s principal office is located at 101 South Webster Street, Madison, Wisconsin. DNR is responsible for administration of, inter alia, Wis. Stat. chs. 281 (Water and sewage) and 283 (Pollution Discharge Elimination) and is the primary regulator of environmental issues in the state of Wisconsin. Its only source of authority is that explicitly delegated to it by statute. 9.

This Court has jurisdiction to hear this matter pursuant to Wisconsin Stat. §

227.40, which provides in relevant part: “the exclusive means of judicial review of the validity of a rule shall be an action for declaratory judgment as to the validity of the rule brought in the circuit court for the county where the party asserting the invalidity of the rule resides or has its

principal place of business … A declaratory judgment may be rendered whether or not the plaintiff has first requested the agency to pass upon the validity of the rule in question.” 10.

Venue is appropriate in this Court pursuant to Wisconsin Stat. § 227.40 because

the Dairy Business Association has its principal place of business in Brown County. FACTS 11.

Administrative agencies, including DNR, are creatures of the legislature and have

only those powers delegated to them by the legislature. Wis. Citizens Concerned for Cranes & Doves v. DNR, 2004 WI 40, ¶ 14, 270 Wis. 2d 318, 677 N.W.2d 612. The self-aggrandizement by state agencies expanding their regulatory authority threatens the very nature of our republican form of government by undermining the representative democratic foundations upon which it is laid. 12.

The waters of the state of Wisconsin are held in trust for the public. See Wis.

Constitution Art. IX, sec. 1. 13.

The democratically elected legislature, not the unelected DNR, is the primary

administrator of that trust and “has the power of regulation to effectuate the purposes of the trust.” State v. Bleck, 114 Wis. 2d 454, 46, 338 N.W.2d 492 (1983). 14.

The federal Clean Water Act is the primary law that regulates the discharge of

pollutants to surface waters in the United States. 33 U.S.C. 1251 et seq. A major aspect of the legislation was the creation of a national permitting program to control discharges to waters of the United States. Congress delegated authority to the U.S. Environmental Protection Agency (EPA) to establish and operate the permit program, called the National Pollutant Discharge Elimination System. 33 U.S.C. § 1251(d). Congress also designed the Clean Water Act to be administered by the states through a delegation process from EPA. 33 U.S.C. § 1342(b).

15.

In 1974, Wisconsin was delegated authority by the EPA to implement the Clean

Water Act and issue permits, which are referred to as Wisconsin Pollutant Discharge Elimination System (WPDES) permits.3 16.

The legislature, through Wisconsin Stat. chs. 281 and 283 has exercised its power

as trustee in the area of pollution control by setting standards and requirements for pollution control through the issuance of permits. Likewise, pursuant to the Supremacy Clause of the United States Constitution, the state must regulate discharges of pollutants to navigable surface waters in a manner no less stringent than the Clean Water Act and its implementing federal regulations. U.S. Const., art. VI, cl. 2. 17.

Likewise, the legislature via Wis. Stat. ch. 283 has expressly delegated some

portions of its authority in this area to the DNR. That delegated authority is necessarily prescribed by the legislative grant. 18.

In order to implement any delegated authority in Wisconsin an agency must

formally adopt a rule through the detailed, lengthy and public process laid out in Wisconsin Stat. ch. 227. See Wis. Stat. § 227.10. 19.

This process includes no less than two checks by elected officials, the governor

and a joint committee of the legislature, prior to enactment to ensure the administrative agency is not aggrandizing itself. 20.

By design the rulemaking process is cumbersome and carried out in the public

eye: a.

First, the agency “shall prepare a statement of the scope of any rule that it

plans to promulgate.” Wis. Stat. § 227.135(1). The statement “shall include”: 3

Memorandum of Agreement between the U.S. Environmental Protection Agency and the Wisconsin Department of Natural Resources. (Feb. 4, 1974), at https://www.epa.gov/sites/production/files/2013-09/documents/wi-moanpdes.pdf.

i. A description of the objective of the rule. ii. A description of existing policies relevant to the rule and of new policies proposed to be included in the rule and an analysis of policy alternatives. iii. The statutory authority for the rule. iv. Estimates of the amount of time that state employees will spend to develop the rule and of other resources necessary to develop the rule. v. A description of all of the entities that may be affected by the rule. vi. A summary and preliminary comparison of any existing or proposed federal regulation that is intended to address the activities to be regulated by the rule. b.

Next, the agency shall “present the statement to the governor and to the

individual or body with policy-making powers over the subject matter of the proposed rule for approval.” Wis. Stat. § 227.135(2). c.

No action may be taken by the agency until the governor or the body with

policy-making powers over the subject matter of the proposed rule has approved the statement. Id. d.

If the governor approves the scope statement, the agency must then send

an electronic copy of the proposed rule to the legislative reference bureau for publication in the register and to the secretary of the department of administration. Wis. Stat. § 227.135(3). e.

The agency then must provide a notice of hearing and hold a public

hearing at the date, time, and place designated in the notice of hearing. Wis. Stat. §§ 227.17 and .18. f.

In addition, an economic impact analysis must be performed to determine

the economic effect of the proposed rule on specific businesses, business sectors, public utility ratepayers, local governmental units, and the state’s economy as a whole. Wis. Stat. § 227.137.

If an economic impact analysis indicates that a total of $20 million or

more in implementation and compliance costs are reasonably expected to be incurred by or passed along to businesses, local governmental units, and individuals as a result of the proposed rule, the department of administration shall review the proposed rule and issue a report of the agency’s findings. Id. h.

The final rule is then submitted to the governor for his or her final

approval. Wis. Stat. § 227.185. The governor, in his or her discretion, may approve or reject the proposed rule. Id. If the rule is approved, the governor shall provide the agency with a written notice of the approval. Id. i.

The rule is then submitted to the legislature for its review. Wis. Stat. §

227.19. j.

If the legislature approves the rule, the agency shall file a certified copy of

the rule with the legislative reference bureau. Wis. Stat. § 227.20. k.

Only after a rule survives all of these steps, is it presumed lawfully

promulgated. Wis. Stat. § 227.20(3)(a). 21.

In 2011, after decades of court decisions broadening the scope of delegated

authority that exceeded the actual language of various statutes, the legislature clarified the limited nature of delegated authority to agencies such as the DNR by adopting 2011 Wisconsin Act 21. 22.

Act 21 added § 227.10(2m), which states in relevant part:

No agency may implement or enforce any standard, requirement, or threshold, including as a term or condition of any license issued by the agency, unless that standard, requirement, or threshold is explicitly required or explicitly permitted by statute or by a rule that has been promulgated in accordance with this subchapter, except as provided

in s. 186.118 (2) (c) and (3) (b) 3. The governor, by executive order,4 may prescribe guidelines to ensure that rules are promulgated in compliance with this subchapter. 23.

Additionally, Act 21 added §§ 227.11(2)(a)1.-3.: 1. A statutory or nonstatutory provision containing a statement or declaration of legislative intent, purpose, findings, or policy does not confer rule-making authority on the agency or augment the agency's rule-making authority beyond the rule-making authority that is explicitly conferred on the agency by the legislature. 2. A statutory provision describing the agency's general powers or duties does not confer rule-making authority on the agency or augment the agency's rule-making authority beyond the rule-making authority that is explicitly conferred on the agency by the legislature. 3. A statutory provision containing a specific standard, requirement, or threshold does not confer on the agency the authority to promulgate, enforce, or administer a rule that contains a standard, requirement, or threshold that is more restrictive than the standard, requirement, or threshold contained in the statutory provision.

24.

Thus, it is now clear that DNR has no implied authority and that absent a specific

legislative grant of authority the DNR may not act.5 25.

In carrying out its duties as trustee of the waters of the state, the legislature has

adopted a permitting system for those entities or persons who discharge pollutants into the waters of the state. Permits issued pursuant to this system are known as Wisconsin Pollutant Discharge Elimination System Permits (“WPDES permits”). 26.

Specifically, Wis. Stat. § 283.31(1) states:

The discharge of any pollutant into any waters of the state …. is unlawful unless such discharge … is done under a permit issued by the department [DNR] under this section …

Governor Walker issued Executive Order 50, which provides in relevant part that “Wis. Stat. § 227.10(1) requires that each agency statement of policy and each interpretation of a statute adopted to govern its enforcement or administration of that statute shall be promulgated as a rule” (emphasis added). See Executive Order 50: Relating to Guidelines for the Promulgation of Administrative Rules, Governor Scott Walker, Nov. 2, 2011, at https://docs.legis.wisconsin.gov/code/executive_orders/2011_scott_walker/2011-50.pdf. 5 DNR is well aware of impact of Act 21 on its former ability to claim implied powers as it formed the basis for a recent circuit court decision finding that DNR was imposing conditions on permits that exceeded its authority to regulate in the area of high capacity wells. (Ex. A).

27.

The touchstone of Wisconsin’s permitting system is parity with the federal

regulatory scheme under the Clean Water Act: Except for rules concerning storm water discharges for which permits are issued under s. 283.33, all rules promulgated by the department under this chapter as they relate to point source discharges, effluent limitations, municipal monitoring requirements, standards of performance for new sources, toxic effluent standards or prohibitions and pretreatment standards shall comply with and not exceed the requirements of the federal water pollution control act, 33 USC 1251 to 1387, and regulations adopted under that act. Wis. Stat. §283.11(2) (emphasis added). DNR’S ILLEGAL CAFO PERMITTING. 28.

Both federal and DNR regulations have identified large concentrated animal

feeding operations (“CAFO”)6 as possible point sources of pollution. 29.

Here, however, is where the federal law and the DNR’s regulations depart

significantly. Under federal law a CAFO only need apply for a permit from the EPA if it has an actual discharge into the waters of the United States. See 40 C.F.R. § 122.23(e). 30.

Dissimilarly, the DNR, relying on a pre-Act 21 rule, requires all persons owning

or operating a CAFO to apply for and receive a permit whether or not they actually discharge or intend to discharge any pollutants into any waters of the state. Wis. Admin. Code § NR 243.11(3). 31.

This rule violates the plain language of Wis. Stat. § 283.11(2) because it is more

stringent than the corollary federal regulation. 32.

This rule also violates the plain langue of Wis. Stat. § 283.31(1), which only

makes actual discharges into any waters of the state unlawful in the absence of a permit.

Whether a farm is or is not a CAFO is determined by the number of animal units on the farm and whether the farm stores manure or process wastewater at or below grade. Wis. Admin Code § NR 243.03(12).

33.

Plaintiff Dairy Business Association has members who own and operate CAFOs

who do not discharge or intend to discharge pollutants into the waters of the state but have been required to seek permits from the DNR. 34.

Accordingly, the current rule and practice of the DNR requiring all CAFOs to

apply for and receive a WPDES permit is ultra vires and, therefore, void and unenforceable. DNR’S ILLEGAL “RULEMAKING” BY GUIDANCE REGARDING FEED STORAGE LEACHATE RUNOFF 35.

Wis. Admin. Code § NR 243.13(2) contains the current rule related to a CAFO’s

discharge of leachate runoff. That rule states: Except as provided in par. (b) or (c), a large CAFO may not discharge manure or process wastewater pollutants to navigable waters from the production area, unless all of the following apply: 1. Precipitation causes an overflow of manure or process wastewater from a containment or storage structure. 2. The containment or storage structure is properly designed, constructed and maintained to contain all manure and process wastewater from the operation, including the runoff and the direct precipitation from a 25-year, 24-hour applicable rainfall event. 3. The production area is operated in accordance with the inspection, maintenance and record keeping requirements in s. NR 243.19. 36.

Per existing rule, a CAFO may discharge leachate runoff to navigable waters if it

meets the three conditions in NR § 243.13(2).7 This standard is consistent with the federal rule on the same subject. See 40 C.F.R. Part 412.31. 37.

In order to make this standard usable the DNR has adopted by formal rule a

definition of a 25-year, 24-hour rainfall event and has established a corresponding rainfall table. 7

NR 243.12(1) also provides: A Large CAFO may not discharge pollutants from manure or process wastewater to waters of the state unless the discharge is covered by and in compliance with a WPDES permit. See also, NR 151.055 which prohibits any “significant discharge” of process wastewaters to waters of the state. However, DNR does not have authority to regulate feed leachate runoff because feed leachate does not meet the definition of “process wastewater” under NR § 243.03(53) or “wastewater” under Wis. Stat. § 281.01(17).

See Wis. Admin. Code § NR 243.03(70) (“25-year, 24-hour rainfall event" means a rainfall event measured in terms of the depth of rainfall occurring within a 24-hour period and having an expected recurrence interval of once in 25 years as identified in Table 1.”); § NR 243.04 (“The design rainfall amount and probable intensity of 25-year, 24-hour and 100-year, 24-hour rainfall events for locations in Wisconsin shall be determined from the data in Table 1, or for a particular location, the determination may be made on the basis of more recent rainfall probability data verified by a government agency and approved by the department for this purpose.”). 38.

In an effort to provide additional guidance to CAFOs to help comply with these

discharge limitations, DNR has adopted specific Conservation Practice Standards promulgated by the Natural Resources Conservation Services (“NRCS”). The NRCS is a division of the United States Department of Agriculture. 39.

With regard to complying with NR § 243.13(2) discharge limits, DNR has

expressly adopted the NRCS 635 standard with a publication date of January 2002. See Wis. Admin. Code NR § 243.07(2)(g) (“NRCS Standard 635, dated January 2002.”) This standard allows a CAFO to utilize a wastewater treatment strip or a land-based Vegetated Treatment Area (“VTA”) as a method of managing captured or contained leachate runoff. This application was approved even if there is the potential for or an incidental discharge of leachate runoff from the VTA off of the CAFO production area. For a VTA to function appropriately it must be adequately maintained. Such a determination is site-specific. Relying on these standards, numerous farmers who qualify as CAFOs have designed and built leachate runoff management systems compliant with these standards as approved by the DNR and have received permits. Many of these CAFOs are members of the Dairy Business Association.

40.

In February 2016, DNR informed the professional engineering community that it

was going to change the standards and that it was “hesitant to approve new projects which may be deemed non-complaint at a later date.” (Ex. B) 41.

The DNR also warned that existing facilities will be required to be reworked to

meet these soon to be announced new standards. Id. Statewide, DNR refused to approve of VTAs designed in compliance with Wis. Admin. Code NR § 243.07(2)(g). 42.

The DNR has not proposed any new rules or changes to existing rules. Instead,

the DNR has completely bypassed the requirements of the rulemaking process by issuing the proposed guidance. (Ex. C) 43.

This new guidance is now in the final drafting stage according to DNR’s website.

See http://dnr.wi.gov/news/input/guidance.html (last visited July 25, 2017). The DNR, however, has been enforcing the new standards announced by the guidance since at least March of 2016. 44.

This new guidance amends and alters the existing rules in at least two ways.

45.

First, the guidance alters the standard for calculating a 25-year, 24-hour rainfall

event. The guidance expressly states, “the DNR is requiring the use of rainfall depths and storm distributions from NOAA Atlas 14 (in lieu of the rainfall data in Table 1).” (Ex. C) 46.

Second, the guidance essentially repeals and replaces § NR 243.07(2)(g), which

expressly incorporates NRCS 635 with a publication date of January 2002. (Ex. D) Indeed, the guidance expressly rejects NRCS 635 (January 2002) and announces that a new version of NRCS will be published and that applicants will need to comply with the new version of NRCS 635. (Ex. C) 8

A new version of NRCS 635 was adopted in Wisconsin in September 2016 in part in reaction to DNR’s new unpublished rule rejecting VTAs designed or constructed pursuant to the previously properly promulgated standard. (Ex. E)

47.

The effect of the guidance is that § NR 243.13(2) has been amended and altered

without going through the proper formal rulemaking process established under Wis. Stat. ch. 227. Previously, § NR 243.13(2) could rightfully be understood as a system by which a CAFO could obtain a permit that would allow a discharge of leachate runoff via the natural filtration of a VTA and during a 25-year, 24-hour rain event. Now, § NR 243.13(2) is transformed into a rigid “no discharge” system with an extremely limited and narrow exception for a discharge under a significant storm event. It has also functionally been amended by DNR fiat to be more stringent than the federal counterpart rule in violation of the statutory mandate of Wis. Stat. 283.11(2). 48.

This is made clear by the guidance itself. The guidance lists a series of options

for compliance. Notably, the guidance states: “VTAs designed according to the previous NRCS 635 standard could possibly be considered compliant with the ‘no discharge’ requirement by the Department on a case by case basis if the ultimate destination of the VTA discharge is an internally drained area. It must be demonstrated that the internally drained area has enough capacity to hold all of the runoff from the entire drainage area (including the feed storage area) up to and including the 25-yr, 24-hr storm prior to flowing beyond the internally drained area.” (Ex. C). 49.

Likewise the guidance provides a method for attempting to retrofit an existing

system that uses application to a VTA as a primary management tool: “Option 2 - Runoff Storage with N[utrient] M[anagement] P[lan] Managed Application onto a VTA. This may be used to retrofit an existing VTA.” (Ex. C). 50.

This is, however, not really a workable retrofit as it not only limits application of

the leachate runoff only to the growing season of the plants in the VTA but also imposes the

following limitations: “During runoff application, no discharge is allowed to exit the VTA, and the runoff is not allowed to pond. Runoff application volumes and rates must balance with the capacity of VTA soil to retain the runoff within the root zone. The exception is if there is excess surface runoff which is appropriately collected. Infiltration past the root zone to groundwater is not allowed.” (Ex. C). 51.

The effect of the guidance is that VTAs are no longer tools that can be effectively

used for leachate runoff management. 52.

None of these changes have gone through the formal rulemaking process but

DNR is moving forward with forced compliance statewide anyway. 53.

The guidance itself declares the mandatory nature of this so-called guidance: IMPLEMENTATION

WPDES Permitted CAFOs: 

CAFOs with VTA projects approved by DNR prior to January 1, 2016, but not yet built, should reassess their planned construction for compliance with the “no discharge” requirement and contact DNR.



Projects currently under review by the DNR that do not yet meet “no discharge” will be required to modify their design. Evaluations currently under review will also be asked to evaluate the design consistent with “no discharge”.



At reissuance, a permittee will need to evaluate existing facilities and provide interim measures to meet “no discharge” as well as implement any long term solutions.



All new permittees will need to meet the “no discharge” standard either with an appropriately designed facility or with interim practices and a construction schedule to evaluate any existing facilities and provide designs under a schedule. If the permit is for a “green site” (all new facilities), then all new facilities need to meet the “no discharge” requirement.



Longer term implementation will result in all feed storage runoff control engineering plans meeting the “no discharge” requirement.9

(Ex. C. is titled “Feed Storage Runoff Controls for CAFOs, Bureau of Watershed Management Program Guidance,” Wisconsin Department of Natural Resources, and is available at http://dnr.wi.gov/news/input/documents/guidance/FeedStorageRunoffGuidance.pdf.)

54.

The DNR has also informed individual applicants that their applications for a

WPDES permit would not be approved unless their leachate runoff management systems were redesigned to comply with the new guidance. (Exs. F & G). Since March of 2016, DNR has also issued Notices of Noncompliance, Notices of Violation, held Enforcement Conferences and taken further enforcement actions against dairy farmers based on this new statewide policy. 55.

In an effort to disguise their illegal rulemaking through guidance, the DNR has

returned the application packets as “incomplete” and has instructed the applicants that in order to complete the application packets the applicants must address the new standards in the guidance. Id. 56.

Larson Acres and Wagner Dairy Farm, the recipients of the letters attached as

Exhibits F and G, are members of the Dairy Business Association. 57.

The guidance is a “rule,” as defined in Wis. Stat. § 227.01(13) and the court of

appeals in Cholvin v. Wis. Dep’t of Health & Family Servs., 2008 WI App 127, ¶ 21, 313 Wis. 2d 749, 758 N.W.2d 118. Accordingly, it was required to go through the rulemaking process detailed above. Because it was not promulgated as a rule pursuant to Wis. Stat. ch. 227, the guidance is ultra vires, void and unenforceable. DNR’S ILLEGAL “RULEMAKING” BY GUIDANCE REGARDING CALF HUTCH LOT RUNOFF 58.

On March 9, 2016, the DNR announced statewide that calf hutch lots operated by

WPDES permittees would for the first time be subject to engineering plan and specification review and approval as a “reviewable facility or system” under Wis. Admin. Code NR § 243.03(56) and requiring that such areas must comply with standards not incorporated into law. (Ex H).

59.

The DNR has cited ground water contamination as its main concern and the main

reason for now regulating calf hutch lots. (Ex. H). 60.

This is an invalid justification for the regulation. Wis. Stat. § 283.11(2) requires

that DNR rules related to the management of water pollution be no more stringent than federal rules. The corresponding federal rules only regulate discharges to navigable surface water. Accordingly, the DNR guidance creating new requirements for calf hutch lots is ultra vires, void and unenforceable as it exceeds the DNR’s regulatory authority. 61.

Moreover, the calf hutch lot guidance imposes the same ultra vires “no discharge”

standard the DNR announced for leachate runoff management described above in detail. 62.

As explained above, this guidance creates a new standard that is by definition a

rule that was not legally promulgated. It is therefore ultra vires, void and unenforceable. The fact that it is being applied to calf hutch lots does not alter that analysis or the necessary result. 63.

Calf hutch lots are not “reviewable facilities or systems” under existing law;

consequently, the March 9, 2016 statewide letter constitutes the adoption of a rule or the revision of existing rules without following the statutorily required process. COUNT I – DECLARATORY JUDGMENT DUTY TO APPLY 64.

The Dairy Business Association realleges and incorporates herein fully by

reference the allegations set forth in paragraphs 1 through 63 above. 65.

The DNR’s requirement, codified as a rule at Wis. Admin. Code § NR 243.11(3),

that all CAFOs that store manure or process wastewater at or below ground level or land apply manure are required to apply for and receive a WPDES permit is ultra vires because Wisconsin statutes expressly limit and cabin the DNR’s regulatory authority by declaring that all DNR rules

shall “not exceed the requirements of the federal water pollution control act, 33 USC 1251 to 1387, and regulations adopted under that act.” Wis. Stat. § 283.11(2). 66.

The federal government only requires a CAFO to apply for a permit if the CAFO

has an actual discharge or intends to discharge to navigable waters. See 40 C.F.R. § 122.23(e). 67.

The Dairy Business Association’s members have been forced to comply with this

complex and costly illegal permitting system for years. 68.

In order to satisfy the DNR’s permitting requirements, CAFOs have had to hire

professional engineers to design manure and wastewater management plans and facilities. The implementation of these plans is expensive, time consuming and burdensome. 69.

Pursuant to Wis. Stat. §§ 806.04 and 227.40, the Dairy Business Association

seeks and is entitled to a declaratory judgment stating that Wis. Admin. Code § NR 243.11(3) is invalid, ultra vires, and unenforceable. 70.

There exists a substantial, present, and justiciable controversy between the Dairy

Business Association, its members, and the DNR with respect to the validity of Wis. Admin Code § NR 243.11(3). COUNT II – DECLARATORY JUDGEMENT FEED STORAGE LEACHATE RUN OFF STANDARD 71.

The Dairy Business Association realleges and incorporates herein fully by

reference the allegations set forth in paragraphs 1 through 70 above. 72.

The new standards for feed storage leachate runoff management announced in the

proposed guidance attached as Exhibit C are, by statutory and case law definition, rules. See Wis. Stat. § 227.01(13); Cholvin v. Wis. Dep’t of Health & Family Servs., 2008 WI App 127, ¶ 21, 313 Wis. 2d 749, 758 N.W.2d 118

73.

Indeed, these new standards meet each element of the test to determine if

something is a rule because they are: (1) a regulation, standard, statement of policy or general order; (2) of general application; (3) having the effect of law; (4) issued by an agency; (5) to implement, interpret or make specific legislation enforced or administered by such agency.” Wis. Stat. § 227.01(13) 74.

To the extent there was any doubt the new standards are being applied as rules,

the DNR has effectively denied individual applicants permits for failing to comply with the new standards. (Exs. F & G). In effort to disguise their illegal rulemaking by guidance, the DNR has returned the application packets as “incomplete” and has instructed the applicants that in order to complete the application packets the applicants would need to address the new standards in the guidance. Id. 75.

Larson Acres and Wagner Dairy Farm, the recipients of the letters attached as

Exhibits F and G are members of the Dairy Business Association. They and numerous other members of the Dairy Business Association have been and continue to be subjected to these new fiat-rules. The DNR has also undertaken significant enforcement actions against dozens of dairy farmers across the state alleging failure to comply with these new rules. 76.

In order to satisfy the DNR’s fiat-rules, CAFOs have had to hire professional

engineers to design feed storage leachate runoff management plans and facilities. The implementation of these plans is expensive, time consuming and burdensome. 77.

By its own terms the guidance makes clear that systems designed under the

properly adopted rules will no longer be considered compliant.

78.

The standards announced in the guidance have not been created by the statutory

rule making process outlined in Wis. Stat. ch. 227. 79.

Pursuant to Wis. Stat. §§ 806.04 and 227.40, the Dairy Business Association

seeks and is entitled to a declaratory judgment stating that the guidance and the standards set forth therein are invalid, ultra vires and unenforceable fiat-rules. 80.

There exists a substantial, present, and justiciable controversy between the Dairy

Business Association, its members, and the DNR with respect to the validity of the standards announced in the guidance. COUNT III – DECLARATORY JUDGMENT CALF HUTCH LOT REGULATION 81.

The Dairy Business Association realleges and incorporates herein fully by

reference the allegations set forth in paragraphs 1 through 80 above. 82.

The DNR’s regulation of calf hutch lots as a point source of pollution based on

ground water contamination concerns is ultra vires because the legislature, via Wis. Stat. § 283.11(2), has expressly declared that DNR’s rules related to the management of water pollution can be no more stringent than federal rules and the corresponding federal rules only regulate discharges to navigable surface water. Accordingly, the DNR guidance announcing the regulation of calf hutch lots is ultra vires, void and unenforceable as it exceeds the DNR’s legitimate authority. 83.

Moreover, the calf hutch lot guidance imposes the same ultra vires “no discharge”

standard the DNR announced for feed storage leachate runoff management described above in detail. 84.

As explained above, that feed storage leachate guidance creates a new standard

that is by definition a rule. But it is a rule that was not legally promulgated pursuant to Wis. Stat. 19

ch. 227. It is therefore ultra vires, void and unenforceable. The fact that it is being applied to calf hutch lots does not alter that analysis or the necessary result. 85.

Calf hutch lots are not “reviewable facilities or systems” under existing law;

consequently, the March 9, 2016 statewide letter constitutes the adoption of a rule or the revision of existing rules without following the statutorily required process. 86.

Pursuant to Wis. Stat. §§ 806.04 and 227.40, the Dairy Business Association

seeks and is entitled to a declaratory judgment stating that DNR’s regulation of calf hutch lots as a point source of pollution and the DNR’s application of the new “no discharge” runoff rules found in the feed storage leachate runoff guidance is invalid, ultra vires and unenforceable as it both exceeds the DNR’s legal authority and seeks to impose rules that have not been properly promulgated. 87.

There exists a substantial, present, and justiciable controversy between the Dairy

Business Association, its members, and the DNR with respect to the DNR’s regulation of calf hutch lots. WHEREFORE, the Dairy Business Association respectfully requests that this Court: A.

Declare Wis. Admin. Code § NR 243.11(3) invalid and unenforceable because it

exceeds the authority properly delegated to the DNR. B.

Declare the Feed Storage Leachate Runoff Guidance and the “no discharge”

standard announced therein invalid and unenforceable fiat-rules because they have not been properly promulgated pursuant to Wis. Stat. ch 227. C.

Declare the DNR’s regulation of calf hutch lots invalid and unenforceable

because the legislature has not delegated to DNR authority to regulate based on concerns not also addressed in federal regulations such as ground water concerns and because the DNR is

imposing the same ultra vires fiat-rules announced in the Feed Storage Leachate Runoff Guidance to calf hutch lots. D.

Issue temporary and permanent injunctions enjoining the DNR from enforcing the

invalid rules contained in the guidance document. E. Issue temporary and permanent injunctions enjoining the DNR from treating calf hutch lots as â&#x20AC;&#x153;reviewable facilitiesâ&#x20AC;? and attempting to require compliance concerning these lots with standards not properly incorporated into law; and E.

Grant such other legal and equitable relief as the Court deems just and proper.

Dated this 31st day of July, 2017. MICHAEL BEST & FRIEDRICH LLP

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