Opinion
No. 341310
12-18-2018
LAKESHORE GROUP, CHARLES ZOLPER, JANE UNDERWOOD, LUCIE HOYT, WILLIAM REININGA, KENNETH ALTMAN, DAWN SCHUMANN, GEORGE SCHUMANN, MARJORIE SCHUMANN, and LAKESHORE CAMPING, Plaintiffs-Appellants, v. STATE OF MICHIGAN, Defendant, and DEPARTMENT OF ENVIRONMENTAL QUALITY, Defendant-Appellee.
UNPUBLISHED Court of Claims
LC No. 17-000140-MZ Before: RIORDAN, P.J., and RONAYNE KRAUSE and SWARTZLE, JJ. PER CURIAM.
In this case involving a claim under the Michigan Environmental Protection Act (MEPA), plaintiffs appeal as of right the order of the Court of Claims granting summary disposition to the Michigan Department of Environmental Quality (MDEQ) under MCR 2.116(C)(8). We affirm.
I. BACKGROUND
Dune Ridge SA LP (Dune Ridge), a nonparty in this case but a defendant in related lawsuits, sought and received development permits from the MDEQ under the Sand Dunes Protection and Management Act (SDPMA), MCL 324.35301 et seq., to transform a critical sand dunes area into a residential subdivision. Plaintiffs are the owners of land adjacent to the sand dunes who challenged the permits in an administrative contested-case hearing under MCL 324.35305. Plaintiffs' administrative challenge was initially dismissed on standing grounds by the administrative law judge. Plaintiffs appealed the dismissal, however, and the Ingham Circuit Court reversed the decision of the administrative law judge. The administrative challenge was subsequently reopened and is not part of this appeal.
At the same time plaintiffs appealed the dismissal of the administrative proceedings, they filed a lawsuit against both the MDEQ and Dune Ridge in Ingham Circuit Court, arguing that the MDEQ's issuance of the permits to Dune Ridge violated MEPA. The claims against the MDEQ were severed from those against Dune Ridge and the former were subsequently transferred to the Court of Claims. The claims against Dune Ridge remained in the Ingham Circuit Court action, and these are also not at issue here.
In the instant case, the Court of Claims granted the MDEQ's motion for summary disposition under MCR 2.116(C)(8), concluding that our Supreme Court's decision in Preserve the Dunes v Dep't of Environmental Quality, 471 Mich 508; 684 NW2d 847 (2004), precluded plaintiffs from filing a direct judicial challenge to the MDEQ's permitting decision.
This appeal followed.
II. ANALYSIS
"We review de novo a trial court's grant or denial of summary disposition." Tomra of North America, Inc v Dep't of Treasury, ___ Mich App ___, ___; ___ NW2d ___ (2018) (Docket No. 336871); slip op at 2. "Summary disposition pursuant to MCR 2.116(C)(8) tests the legal basis of the claim and is granted if, considering the pleadings alone, the claim is so manifestly unenforceable as a matter of law that no factual progression could possibly support recovery." PIC Maint, Inc, v Dep't of Treasury, 293 Mich App 403, 407; 809 NW2d 669 (2011) (cleaned up). We review issues involving statutory interpretation de novo. Estes v Titus, 481 Mich 573, 578-579; 751 NW2d 493 (2008).
The Natural Resources and Environmental Protection Act (NREPA) is composed of several subsidiary provisions, including MEPA and SDPMA. MEPA grants the public a right to bring an action in circuit court for "declaratory and equitable relief against any person for the protection of the air, water, and other natural resources and the public trust in these resources from pollution, impairment, or destruction." MCL 324.1701(1). To prevail on a MEPA claim, the plaintiff must show "that the conduct of the defendant has polluted, impaired, or destroyed or is likely to pollute, impair, or destroy the air, water, or other natural resources, or the public trust in these resources." MCL 324.1703 (emphasis added). "MEPA provides for immediate judicial review of allegedly harmful conduct" and "does not require exhaustion of administrative remedies before a plaintiff files suit in circuit court." Preserve the Dunes, 471 Mich at 514, citing MCL 324.1701(2).
SDPMA governs land areas that have been designated as "critical dune areas." See MCL 324.35301(c). Under SDPMA, a person seeking to use a critical dune area must first obtain a permit. See MCL 324.35304. The MDEQ is required to issue a permit unless it determines that the proposed use "will significantly damage the public interest" in the area. MCL 324.35304(1)(g).
Unlike under MEPA, the public generally does not have a right to challenge the issuance of a permit under SDPMA. Rather, SDMPA provides aggrieved owners of property immediately adjacent to the proposed use the right to challenge the issuance of a permit via an administrative contested-case hearing under the Administrative Procedures Act. MCL 324.35305(1); MCL 24.201 et seq. If the property owner does not prevail after all administrative remedies are exhausted, then the property owner may seek judicial review of the administrative decision. MCL 324.35305(2). This judicial review is limited, and the administrative decision will only be reversed if the decision is statutorily or constitutionally impermissible; arbitrary, capricious, or clearly an abuse of discretion; or is not supported by competent, material, and substantial evidence. MCL 24.306.
As noted supra, there are two other challenges involving the proposed sand-dune project. At issue in this appeal is whether plaintiffs can sue the MDEQ under MEPA for issuing the permit to Dune Ridge. Contrary to plaintiff's position, we find the Supreme Court's decision in Preserve the Dunes dispositive here.
Preserve the Dunes was overturned by the Supreme Court in Anglers of the AuSable, Inc v Dep't of Environmental Quality, 488 Mich 69; 793 NW2d 596 (2010). Subsequently, the Supreme Court vacated its decision in Anglers, thereby reviving Preserve the Dunes. Anglers of AuSable, Inc v Dep't of Environmental Quality, 489 Mich 884; 796 NW2d 240 (2011). Accordingly, Preserve the Dunes is binding precedent on this Court. MCR 7.315.
Our Supreme Court held in Preserve the Dunes, 471 Mich at 519, that "MEPA provides no private cause of action in circuit court for plaintiffs to challenge the DEQ's determination of permit eligibility." Plaintiffs acknowledge this holding, but argue that the holding is limited to challenges to a permit based on procedural, not substantive matters. According to plaintiffs, Preserve the Dunes does not preclude an action under MEPA when the plaintiff alleges that the issuance of the permit will cause imminent environmental harm. We do not read Preserve the Dunes so narrowly.
In Preserve the Dunes, the MDEQ issued a permit to a mining company to mine in a critical dune area. Id. at 511. The plaintiffs—"an ad hoc organization of local citizens"—sued the MDEQ alleging that the department violated MEPA when it approved the mining permit. Id. at 512. The trial court analyzed the claim under MEPA, but found that plaintiffs had failed to make a prima facie showing that the adverse impact of the permit would impair or destroy natural resources. Id. at 513. This Court reversed the trial court, concluding that the MDEQ permitting decision could be challenged under MEPA and that the MDEQ's permit was invalid. Id. The Supreme Court then granted leave to appeal and reversed the Court of Appeals. Id.
The Supreme Court reasoned that the "focus of MEPA is on the defendant's conduct." Id. at 514 (emphasis added). It noted that MEPA controls the MDEQ's permitting decisions because the MDEQ is prohibited from approving a permit if the applicant's conduct violates MEPA. Id. at 515-516, citing MCL 324.63709. The Supreme Court distinguished MDEQ's conduct in approving a permit from the applicant's conduct in carrying out the permitted action. The Supreme Court noted that, to violate MEPA, the challenged conduct must "be likely to pollute, impair, or destroy" natural resources. Id. at 518. It then reasoned that an administrative decision, such as the issuance of a permit, "standing alone, does not harm the environment"; rather, only the applicant's conduct (permitted by the administrative decision) actually harms the environment. Id. at 519.
The Preserve the Dunes Court rejected the notion that factual causation is enough to offend MEPA. Rather, the Supreme Court focused on the Legislature's use of the word "conduct" in MCL 324.1703. "Conduct" is not defined by MEPA or NREPA. The Oxford English Dictionary (2d ed), p 690, defines "conduct" to mean the "action or manner of conducting, directing, managing, or carrying on." Thus, it is clear that, to be actionable under MEPA, the defendant's actions must pollute, impair, or destroy natural resources. As our Supreme Court pointed out, the "action" of an administrative decision does not pollute, impair, or destroy natural resources; at most, the "action" of an administrative decision authorizes conduct that does so. Simply put, the issuance of a permit is too far removed from the environmental harm to be actionable as "conduct" under MEPA.
Our Legislature created a bifurcated scheme for challenging a project like the one at issue here. A plaintiff can challenge the MDEQ's permitting decision at the administrative level with limited judicial review. MCL 324.35305(1); MCL 24.201 et seq. A plaintiff can also challenge the permit holder's actual conduct in a separate lawsuit without having to go through any administrative review. MCL 324.1701. What a plaintiff cannot do, however, is challenge the MDEQ's permitting decision in a lawsuit without first going through the administrative review process. With this lawsuit, plaintiffs tried to by-pass the administrative review process, and, accordingly, the Court of Claims properly granted summary disposition to the MDEQ under MCR 2.116(C)(8).
Affirmed.
/s/ Michael J. Riordan
/s/ Brock A. Swartzle