Opinion
No. 279.
Argued January 9, 1970. —
Decided February 3, 1970.
APPEAL from a judgment of the circuit court for Dane county: WILLIAM C. SACHTJEN, Circuit Judge. Affirmed.
For the appellant there was a brief and oral argument by Henry B. Buslee, city attorney.
For the respondent the cause was argued by William F. Eich, assistant attorney general, with whom on the brief was Robert W. Warren, attorney general.
A brief amicus curiae was filed by St. Peter Hauer and Albert J. Hauer, all of Fond du Lac, for the town of Fond du Lac.
Petition by the city of Fond du Lac (hereinafter the "appellant") to review the action of the Department of Natural Resources (hereinafter the "department") denying petitioner's request for a declaratory ruling pursuant to sec. 227.06, Stats. The appeal is from the judgment dismissing the petition.
This case arises out of the long-standing pollution problem confronting the city of Fond du Lac and the neighboring town of Fond du Lac.
On March 9, 1967, the department issued the following notice:
"Whereas investigations have disclosed that polluting substances are being discharged to Lake Winnebago and its tributaries in Fond du Lac county, Wisconsin, creating conditions which tend to create a nuisance or menace to health or comfort,
"Now, therefore, notice is hereby given that a hearing on the matter of the pollution of Lake Winnebago and its tributaries will be held in the County Board Room, Fond du Lac County Court House, Fond du Lac, Wisconsin on Friday, April 7, 1967, commencing at 10 a.m., at which time and place all pertinent evidence with respect to said investigations will be received and ways and means of reducing pollution under sections 144.025 (2) (r) and 144.07, Wisconsin Statutes, will be considered and that orders with respect thereto will thereafter be issued if the evidence presented so requires.
"Any person desiring to present information pertinent to the above mentioned matter will be given an opportunity to do so." Signed for the department by Freeman Holmer, Director.
At the outset of the hearing held April 7, 1967, the presiding officer, Freeman Holmer, indicated that the purpose of the hearing was to review the problem and examine alternative solutions. After indicating that the hearing was essentially for the collection of facts, he stated:
". . . It is probable that no order will result from this hearing, but rather the Department and these communities will be informed of the alternatives available and we will then know what direction is most appropriate to be followed in the community. It may be that action will then proceed voluntarily on the part of the municipalities involved without the intervention of the Department. If there is to be an order issued by the Department to any of the municipalities involved at this point, we anticipate that there will be a second formal hearing with a more specific and explicit definition of the subject of the hearing, but we are here at this point really dealing with a basic problem with a significant number of alternatives from which to choose and on which we at this table need the benefit of your counsel and advice." (Emphasis supplied.)
After considerable testimony had been received at this initial hearing, the department, in keeping with its announced intention, did not order the enactment of any specific solution. Instead, it directed the town of Fond du Lac to proceed with the preparation of plans for the abatement of pollution, either separately or in cooperation with other local governments.
"`Findings of fact
"`The department finds:
"`1. That the existence of pollution and potential pollution of Lake Winnebago was conceded in the testimony of the representatives of the City of Fond du Lac, Town of Fond du Lac and the Town of Taycheedah.
"`2. That the Town of Fond du Lac has shown exemplary concern about the problems of water pollution, both singly and in the larger context of orderly state and local planning.
"`3. That the Town of Fond du Lac employed engineering counsel to investigate the needs for pollution abatement and to proposed methods for abatement.
"`4. That the recommendation of the Town's engineer was for the establishment of areawide collection and treatment of sewage either through a special district or through connection to the treatment facilities of the City of Fond du Lac.
"`Conclusions of law
"`1. The Department of Resource Development lacks authority to order annexation or to order the creation of a metropolitan sewerage district.
"`2. The Resource Development Board has authority to establish policy for the Department and has precluded an order to the City of Fond du Lac to provide a sewage connection for the Town of Fond du Lac.
"`Order
"`It is therefore ordered:
"`That the Town of Fond du Lac proceed separately, jointly and/or in cooperation with other local governments affected with the preparation of plans for the abatement of pollution within their boundaries and that a program and time schedule for provision of a sewage collection system and treatment facilities be submitted for review and approval by the Department of Resource Development not later than January 1, 1968.
Department of Resource Development.'"
(This order has been omitted from the record, but was before the court below and is a proper subject of judicial notice. Respondent's Brief, pp. 11 and 12.)
Several months subsequent to the issuance of the department's directive, residents of the town petitioned the Fond du Lac county court to establish a metropolitan sewerage district. This petition was granted over the opposition of the city of Fond du Lac. Since it was the unyielding position of the city that annexation of the town and surrounding areas was the only acceptable solution to the problem, an appeal was taken to this court. It was then determined by this court that secs. 66.20 to 66.209, Stats., under which the metropolitan sewerage district had been created, were unconstitutional. In re City of Fond du Lac (1969), 42 Wis.2d 323, 166 N.W.2d 225.
Subsequent to the decision invalidating the establishment of a metropolitan sewerage district the department issued the following notice:
"Notice of hearing
"Please take notice that pursuant to the requirements and under authority of section 144.07 (1), Wisconsin Statutes, the Department of Natural Resources will hold a public hearing to consider the issuance of an order relating to the sewer systems of the City of Fond du Lac and the Town of Fond du Lac, Fond du Lac County, State of Wisconsin.
"Said hearing will be held in the City Council Chambers, City Hall, Fond du Lac, Wisconsin, on Tuesday, July 8, 1969, at 10 a.m.
"Dated at Madison, Wisconsin, May 21, 1969.
"State of Wisconsin Department of Natural Resources For the Secretary By /s/ Thomas G. Frangos, -------------------------------------- Thomas G. Frangos, Administrator Division of Environmental Protection." Upon receipt of this notice the appellant, pursuant to sec. 227.06, Stats., petitioned the department for a declaratory ruling concerning sec. 144.07 (1), and its applicability to the city. The department denied the petition.This appeal presents three issues:
(1) Was the department's 1967 hearing res judicata, thereby foreclosing it from conducting additional hearings;
(2) Did the department act arbitrarily and capriciously in denying the appellant's request for a declaratory ruling; and
(3) Did an additional hearing by the department constitute an unconstitutional usurpation of the judiciary's authority?
Applicability of the doctrine of res judicata.
It has long been established in this jurisdiction that the doctrine of res judicata has no application to the proceeding of an administrative agency such as the department. In Duel v. State Farm Mut. Automobile Ins. Co. (1942), 240 Wis. 161, 1 N.W.2d 887, 2 N.W.2d 871, an insurance commissioner refused to grant a license to a foreign corporation despite the fact that his predecessor had previously granted the license. In response to the company's assertion that the commission's previous determination was res judicata, this court stated at page 181:
"The extent of the power of an administrative body or agency to reconsider its own findings or orders has nothing to do with res adjudicata; the latter doctrine applies solely to courts. See Lange Canning Co. v. Industrial Comm. 183 Wis. 588, 197 N.W. 722; Hinrichs v. Industrial Comm. 225 Wis. 195, 273 N.W. 545; Maryland Casualty Co. v. Industrial Comm. 230 Wis. 363, 284 N.W. 36. . . ."
The appellant's reliance upon Buhler v. Department of Agriculture (1938), 229 Wis. 133, 280 N.W. 367, is misplaced. After citing Buhler for the proposition that one is entitled to a fair hearing before an agency, no showing of unfairness has been presented. Any expense or inconvenience which will be incurred by the appellant as a result of further hearing is justified by subsequent changes in such factors as population, water consumption and sewage volume.
Arbitrary and capricious action of the department.
The appellant contends that the department's refusal to issue a declaratory ruling authorized by sec. 227.06, Stats., was arbitrary and capricious. This contention is predicated upon the assumption that all necessary information was acquired at the 1967 hearing and upon the fact that another hearing will result in additional expense to the city.
"Declaratory rulings. (1) Any agency may, on petition by any interested person, issue a declaratory ruling with respect to the applicability to any person, property or state of facts of any rule or statute enforced by it. Full opportunity for hearing shall be afforded to interested parties. A declaratory ruling shall bind the agency and all parties to the proceedings on the statement of facts alleged, unless it is altered or set aside by a court. A ruling shall be subject to review in the circuit court in the manner provided for the review of administrative decisions.
"(2) Petitions for declaratory rulings shall conform to the following requirements:
"(a) The petition shall be in writing and its caption shall include the name of the agency and a reference to the nature of the petition.
"(b) The petition shall contain a reference to the rule or statute with respect to which the declaratory ruling is requested, a concise statement of facts describing the situation as to which the declaratory ruling is requested, the reasons for the requested ruling, and the names and addresses of persons other than the petitioner, if any, upon whom it is sought to make the declaratory ruling binding.
"(c) The petition shall be signed by one or more persons, with each signer's address set forth opposite his name, and shall be verified by at least one of the signers. If a person signs on behalf of a corporation or association, that fact also shall be indicated opposite his name.
"(3) The petition shall be filed with the administrative head of the agency or with a member of the agency's policy board.
"(4) Within a reasonable time after receipt of a petition pursuant to this section, an agency shall either deny the petition in writing or schedule the matter for hearing. If the agency denies the petition, it shall promptly notify the person who filed the petition of its decision, including a brief statement of the reasons therefor."
In Jabs v. State Board of Personnel (1967), 34 Wis.2d 245, 251, 148 N.W.2d 853, this court described an arbitrary or capricious decision as "`. . . one which either so unreasonable as to be without a rational basis or the result of an unconsidered, wilful and irrational choice of conduct.'. . ." See also: Robertson Transportation Co. v. Public Service Comm. (1968), 39 Wis.2d 653, 661, 159 N.W.2d 636.
In the instant case the department did exactly as required by sec. 227.06, Stats. It denied the petition in writing, promptly notified the appellant of its decision and briefly stated its reasons for denial. One such reason was the change in circumstances since the 1967 hearing.
Prior to the commencement of the 1967 hearing it was specifically noted that such hearing was for informational purposes only and that additional hearings might be necessary before the issuance of mandatory orders. Clearly, the department's refusal to grant a declaratory ruling that it had no authority to conduct another hearing was consistent with its initial pronouncement and not "an unconsidered, wilful and irrational choice of conduct." The problem of pollution in the Fond du Lac area has existed for many years and grows worse each day. The department has been vested with the responsibility of abating pollution and should be allowed to exercise its discretion in the discharge of this responsibility.
Usurpation of judicial functions.
Citing In re City of Fond du Lac, supra, the appellant argues that the county court has determined the facts of the case and that any further hearings by the department would constitute usurpation of the judiciary's power to make factual determinations.
In re City of Fond du Lac, supra, simply declared the statutory procedure for the formation of metropolitan sewerage systems unconstitutional in that they unlawfully granted courts authority to decide questions which were "political" rather than "factual" in nature.
Secs. 66.20 to 66.209, Stats.
In determining that the county court could not, as a matter of law, decide what was the "best" solution to the pollution problem, this court did not intend that the county court's "factual" determination should foreclose the department from conducting additional hearings. To have so held would have been in direct conflict with the legislature's express intention to vest pollution abatement authority in the department.
We conclude that the department's 1967 hearing was not res judicata, that the department did not act arbitrarily and capriciously in denying the appellant's quest for a declaratory ruling, and that any additional hearing would not constitute an unconstitutional usurpation of the judiciary's authority.
By the Court. — Judgment affirmed.