The quiet revolution in Wisconsin administrative law

The late Justice Antonin Scalia, a former administrative law professor, once began an address on Chevron deference by warning his audience to “lean back, clutch the sides of your chairs, and steel yourselves for a pretty dull lecture.”[1] Perhaps that warning should preface this blog post, which also concerns administrative law. Of course Scalia’s comments that day turned out to be anything but “dull.” Broadly speaking, neither is the subject matter A view of EPA headquarters in Washington, DChe covered: as the discipline concerned with governmental decision-making, administrative law issues confront nearly every legal practice in areas as diverse as taxation, environmental permitting and litigation, labor relations, and countless others.

In Wisconsin, the past five years have seen an unprecedented makeover in longstanding principles of state-level administrative law. These changes shift power away from agencies and toward courts, the legislature, and the governor. In this post, I divide the changes into three categories: 1) reductions in agency authority; 2) additions to the rulemaking process that, among other things, allow the Legislature to indefinitely block new rules; and, perhaps most importantly, 3) fundamental revisions to the doctrine of judicial deference to agency interpretations of law. Taken together, these developments deeply change the balance of power between agencies and the three branches of Wisconsin government.

Reducing agency authority. The Legislature has acted to curb agency reliance on common law doctrines, especially in the field of environmental law. For example, I have previously written here about the eroding public trust doctrine, which dates back to Roman law and generally requires the state to act as “trustee” of certain natural resources, particularly the navigable waters of the state, and manage them for the trust beneficiaries—its people. In Wisconsin, “the legislature has delegated to the DNR broad authority to regulate under the public trust doctrine.”[2] But at a single stroke, the Legislature seriously undermined that authority by enacting Wis. Stat. § 227.10(2m). The statute provides that no agency may implement any “standard,” “requirement,” or permit condition unless the condition has been “explicitly required or explicitly permitted” by statute or by rule. The statute dates to 2011, but its consequences have come to a head much more recently. In a 2016 opinion, Attorney General Brad Schimel concluded that “[t]hrough these changes to the law, [DNR’s] public trust duty . . . reverts back to the Legislature, which is responsible for making rules and statutes necessary to protect the waters of the state.”[3] Thus, DNR’s power to exercise this ancient common law doctrine is now tightly circumscribed by its statutory powers.

Overhauling the rulemaking process. Five times, the United States House of Representatives has passed “REINS” (Regulations from the Executive In Need of Scrutiny) legislation, but it has never become law. Its supporters and opponents agree that it is fundamentally aligned with President Trump’s stated goal to “deconstruct the administrative state.” While the federal REINS Act couldn’t clear the Senate, earlier this year Wisconsin became the first in the nation to enact state-level REINS legislation. 2017 Wisconsin Act 57 makes agency rulemaking more difficult and complex by, among other things:

  • Subjecting an agency’s scope statement to review by the Department of Administration (DOA) and the co-Chairs of the Legislature’s Joint Committee for Review of Administrative Rules (JCRAR) to determine whether the agency has authority to promulgate the rule, prior to further review by the Governor. The Act also allows for a preliminary comment and hearing process on a scope statement, if the process is requested by a JCRAR Co-Chair or the agency.
  • Requiring agencies to determine whether a proposed rule has $10 million or more in implementation costs over a two-year period. If it does, the agency may not go forward with the rule absent authorizing legislation.
  • Allowing the Legislature, through the JCRAR, to indefinitely object to any proposed rule for the same reasons a temporary objection can be made under current law.

During the legislative process, the nonpartisan Wisconsin Legislative Council released an analysis suggesting that the portions of the bill allowing the Legislature to unilaterally and indefinitely block administrative rules  may run afoul of the Wisconsin Supreme Court’s 1992 decision in Martinez v. DILHR, which required both the Legislature and the governor to be involved in blocking a rule.

Minimizing judicial deference to agency interpretations of law. Wisconsin courts currently accord agency legal interpretations one of three potential levels of deference—great weight deference, due weight deference or no deference—depending on the agency’s level of experience and knowledge related to the statute, and the consistency of its interpretation over time.  This well-established framework is generally codified in Wis. Stat. § 227.57, which governs the scope of judicial review of administrative provisions and provides in part that “the court shall not substitute its judgment for that of the agency on an issue of discretion.”

In 2016, the Wisconsin Legislature changed that approach by enacting Wis. Stat. § 227.57(11). The statute provides that a “court shall accord no deference to the agency’s interpretation of law if the agency action or decision restricts the property owner’s free use of the property owner’s property.” The contours of this exception aren’t clear; the terms “restricts” and “free use” will no doubt provide ample fodder for disputes in the years to come.

Even greater changes may be coming. In April, the Supreme Court accepted review of Tetra Tech EC, Inc. v. Department of Revenue. The court’s website summarizes the issue as follows: “Does the practice of deferring to agency interpretations of statues comport with Article VII, Section 2 of the Wisconsin Constitution, which vests the judicial power in the unified court system?” If the court answers that question in the negative, it could completely erase deference to such interpretations in any context. That would be a sea change indeed.

These developments echo Justice David T. Prosser’s 2006 concurrence in Hilton ex rel. Pages Homeowners’ Ass’n v. DNR. Justice Prosser wrote that existing standards of review “frequently put reviewing courts in a straitjacket and are sometimes at odds with the role of courts” as the state’s “preeminent law developing court.” Prosser argued that the highly deferential standards of review often forced courts to “rubberstamp the agency’s decision unless the agency’s legal interpretation is plainly wrong. The result is that many litigants have lost their right to a decision by an independent judiciary.”[4]

At the federal level, the Chevron doctrine similarly requires courts to defer to an agency’s reasonable interpretation of an ambiguous statute. Justice Gorsuch has taken a view similar to that of Justice Prosser, denouncing Chevron as “the abdication of the judicial duty.” Efforts to legislatively overrule Chevron have typically been associated with Republicans, but of course both parties have reason to favor or disfavor the doctrine depending on shifting political winds. Democrats, for example, might hope the courts will not defer to the statutory interpretations advanced by the Trump EPA. The issue should be treated as a fundamental question about the balance of power instead of being reduced to coarse political disagreements.

Whatever the outcome of these issues on the national level, it seems clear that state reformers have already far outpaced their federal counterparts.

[1] Antonin Scalia, Judicial Deference to Administrative Interpretations of Law, 1989 Duke L.J. 511, 511 (1989).

[2] ABKA Ltd. P’ship v. WDNR, 2002 WI 106, ¶ 12, 255 Wis. 2d 486, 648 N.W.2d 854.

[3] Wis. OAG-01-16, p. 23, ¶ 53 (May 10, 2016).

[4] Hilton, ¶¶ 53-55 (Prosser, J., concurring) (emphasis in original).

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