July 26, 2022 – The “zone-of-interests” inquiry historically conducted by Wisconsin courts to help decide whether a party has standing under Wis. Stat. ch. 227 (administrative procedure and review) has no statutory basis, the Wisconsin Supreme Court has ruled.
Instead of the “zone of interests” standard, in Friends of the Black River Forest v. DNR, 2022 WI 52 (June 30, 2022), the supreme court held (4-3) that to have standing under ch. 227, a party must show that an agency’s action has adversely affected an interest which the law either 1) recognizes or 2) seeks to protect or regulate.
Justice Rebecca Grassl Bradley wrote the majority opinion, joined by Chief Justice Annette Ziegler, Justice Patience Roggensack, and Justice Brian Hagedorn. Justice Hagedorn wrote a concurring opinion.
Justice Jill Karofsky wrote a dissenting opinion, joined by Justice Ann Walsh Bradley and Justice Rebecca Dallet.
Land Swap for Golf Course
Kohler, a manufacturer headquartered in Sheboygan County, announced plans in 2014 to build an 18-hole golf course near Kohler-Andrae State Park. The park encloses 988 acres of land along the shore of Lake Michigan.
Kohler requested to use park land for the golf course, so in June 2017, the state Department of Natural Resources began the master planning process required by state law before granting Kohler’s request.
As part of the master planning process, in February 2018 the DNR recommended that the state execute a land exchange agreement with Kohler, and sought approval for the exchange with the state Natural Resources Board (Board).
Later that month, the Board determined that a 4.59-acre parcel of upland woods inside the park was “‘not being used for any park functions’” and was no longer necessary to the state’s conservation use. Consequently, the Board removed the parcel from the park.
The Board then approved the land exchange agreement. Under the agreement, the state would transfer the 4.59-acre parcel and a 1.88-acre parcel to Kohler in exchange for 9.5 acres of the corporation’s land and a building, both of which are adjacent to the park.
Friends of Park Sue Board
In April 2018, the Friends of the Black River Forest (Friends), a nonprofit, filed a lawsuit in Sheboygan County Circuit Court under ch. 227, challenging the land exchange. Kohler intervened and filed a motion to dismiss, claiming that Friends lacked standing.
Friends filed an amended petition. In the amended petition, Friends claimed that the land exchange would: 1) permanently deprive its members of the opportunity to use the park land subject to the exchange; 2) shrink available habitat for plants, birds, and animals enjoyed by its members; 3) harm its members’ enjoyment of other park resources; and 4) lead to more traffic and noise in and around the park.
The Friends also questioned whether the DNR had followed the master planning process.
The circuit court ruled that Friends lacked standing and dismissed the group’s petition. The Wisconsin Court of Appeals reversed the circuit court in an unpublished per curiam opinion.
‘Zone of Interests’ Not Part of Ch. 227
In her opinion for the majority, Justice R.G. Bradley began by explaining that the two-pronged standing test historically employed by Wisconsin courts is similar to the standing analysis employed by federal courts.
Under the first prong of the Wisconsin analysis, when a party challenges an agency action, a court determines whether the agency action directly injured an interest of the party.
Under the second prong, a court determines whether the injured interest lies “‘within the zone of interests to be protected or regulated by the statute or constitutional guarantee in question.’”
But the term ‘zone of interests,’ Justice R.G. Bradley wrote, appears nowhere in ch. 227, the statutory scheme under which parties may challenge a state agency’s action.
“The determination of whether a statute protects, recognizes, or regulates the asserted interest is a purely statutory inquiry, from which the judicially subjective consideration of the ‘zone of interests’ is properly omitted,” R.G. Bradley wrote. “This has been our consistent jurisprudential practice and we do not depart from it now.”
The supreme court case that described the relevant component of the Wisconsin standing analysis as similar to the federal “zone of interests” component did so “with no support in the text of Chapter 227 or our prior enunciation of standing principles,” Justice R.G. Bradley wrote.
Use of the “zone of interest” test “risks an improper judicial overextension of our well-established standing requirement that a person aggrieved by an agency decision must allege an injury ‘to an interest which the law recognizes or seeks to regulate or protect,’” Justice R.G. Bradley wrote, quoting a supreme court case decided after the case that first discussed the “zone of interests” component.
Friends’ Interests Not Protected
Justice R.G. Bradley explained that the statutory interests identified by Friends were not ones which the relevant laws recognized or sought to regulate or protect.
Section 27.01, which describes the purpose of the state park system, merely expressed a legislative purpose and did not create “‘substantive criteria’” applicable to a challenge of a decision by the DNR affecting a state park, R.G. Bradley explained.
The same was true, Justice R.G. Bradley wrote, of section 23.11, which obligates the DNR to protect and supervise state parks.
And while section 23.15 established procedures under which the Board may sell state-owned lands, it “contains no textual indication that this statute protects, recognizes, or regulates any individual’s interests that might be injured by a decision to exchange state-owned land for privately-owned land, nor does it provide any standards by which to do so,” R.G. Bradley wrote.
Friends also argued that Wis. Admin. Code section 44.04(9) requires the public to participate in the planning process for state lands but the DNR approved the land exchange before the master planning process was completed.
But nothing in that section, Justice R.G. Bradley pointed out, required the land exchange to be approved as part of the park’s master plan.
Concurrence: New Prong Closer to Statute
In his concurrence, Justice Hagedorn emphasized that “refocusing” the “zone of interests” prong from standing analysis of actions filed under ch. 227 “rightly turns the analytical framework closer to the statutory text it implements,” citing section 227.52.
Dissent: Majority Slams Shut Courthouse Doors
In her dissent, Justice Karofsky wrote that “a majority of this court prefers to slam shut the courthouse doors and reworks the law to reach its desired result.”
State statutes governing DNR’s management of state parks exist solely “for the sake of the public’s interest in conserving, enjoying, and Wisconsin’s cherished natural resources,” Karofsky wrote. “These laws were precipitated by concerns that our state had done too little to protect this paramount interest.”
The majority hadn’t “realign[ed]” the zone-of-interests component of the standing analysis, Justice Karofsky argued, so much as re-label it “substantial interests” to match wording from ch. 227 without considering the actual meaning of “substantial interests.”
Three Problems With ‘Substantive Criteria’
The majority’s search for “substantive criteria” in a statute as part of the protects/recognizes/regulates component had three problems, Justice Karofsky argued: 1) it was based on one court of appeals decision that cited no authority for the new component; 2) it conflated standing with a judgment on the merits; and 3) it was contrary to the text of ch. 227.
“Never has this court held, and certainly no statute directs, that the only reviewable agency decisions are those that implicated substantive laws containing their own judicial-review criteria and procedures,” Karofsky wrote.
“Why would the right to judicial review depend on substantive statutes containing their own judicial-review criteria and procedures when those criteria and procedures already appear in a statutory chapter entirely dedicated to judicial review?”
Friends Interests Were Protected
Justice Karofsky also argued that Friends’ interests were protected, recognized, or regulated by state laws.
For instance, Karofsky wrote that the requirement of section 23.15 that the DNR determine that the parcels exchanged with Kohler were unnecessary for conservation purposes “plainly protects, recognizes, and regulates the conservational interest of any member of the public.”
Justice Karofsky also wrote that the requirement in Wis. Admin. Code 44.04(9) that only activities mentioned in a master plan may be pursued by the DNR “makes clear that the process to adopt or alter the plan exists to protect the affected public.”
Karofsky closed her dissent by issuing a warning about the implications of the majority opinion.
“Taken to its logical conclusion, the majority’s new approach to Wis. Stat. ch. 227 standing grants DNR the unfettered right to redraw all state park boundaries,” Justice Karofsky wrote.
“In redrawing the boundaries, DNR will be able to remove, and then sell off, every last inch of this cherished land to private entities, and not a single Wisconsin citizen—for whom the parks exist—could challenge that conduct in court.”